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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Primestor Norwalk Entertainment, LLC
9950 Jefferson Blvd., Building 2
Culver City, California 90232
Attn: David Abasta
SPACE ABOVE RESERVED FOR RECORDER’S USE
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
AND
ESTABLISHMENT OF EASEMENTS
FOR
NORWALK ENTERTAINMENT DISTRICT MIXED-USE DEVELOPMENT
(PLAZA)
ATTACHMENT NO. 4
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i
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS .......................................................................................................... 3 ARTICLE 2 EASEMENTS ........................................................................................................ 11
2.1 Ownership and Easements ................................................................................ 11
2.2 Limitations.......................................................................................................... 11
2.3 Non-Exclusive Easements for Access to and from Master Project ..................... 11
2.4 Non-Exclusive Easements for Access to and from Affordable Housing Project ............................................................................................................... 11
2.5 Non-Exclusive Easements for Use of Plaza Improvements Area ....................... 12
2.6 Non-Exclusive Parking Easement ...................................................................... 12
2.7 Temporary Construction Easement .................................................................... 12
2.8 Individual Nature of Easements ......................................................................... 12
2.9 Ownership: No Separate Transfer ...................................................................... 12
2.10 Duration of Easements; Rights of Permitted Users and Benefited Parties ............................................................................................................... 12
2.11 Limitations on Easement Rights ......................................................................... 13 ARTICLE 3 OPERATION AND MANAGEMENT ...................................................................... 14
3.1 Operation and Management .............................................................................. 14
3.2 Powers of the Common Area Manager .............................................................. 14
3.3 Duties of the Common Area Manager ................................................................ 15 ARTICLE 4 OWNER APPROVALS .......................................................................................... 16
4.1 Approval Rights ................................................................................................. 16
4.2 Major Decisions ................................................................................................. 16
4.3 Requirements for Consent by Owners ............................................................... 17
4.4 Resolution of Disputes ....................................................................................... 17 ARTICLE 5 MAINTENANCE .................................................................................................... 17
5.1 Maintenance ...................................................................................................... 17
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5.2 Commencement of Maintenance Obligations ..................................................... 17
5.3 Maintenance Obligations .................................................................................... 17
5.4 Willful or Negligent Acts or Omissions ................................................................ 18
5.5 Take-Over Rights ............................................................................................... 19
5.6 Manner of Maintenance ..................................................................................... 19 ARTICLE 6 PAYMENTS, ASSESSMENTS, BUDGETS AND LIENS ....................................... 20
6.1 Personal Obligation for Assessments; Creation of Lien for Assessments ..................................................................................................... 20
7.1 Purpose of Assessments ................................................................................... 21
7.2 Annual Operating Budget and Assessment Commencement Date .................... 21
7.3 Regular Assessments ........................................................................................ 22
7.4 Updated Budget; Special Assessments ............................................................. 22
7.5 Compliance Assessments .................................................................................. 22
7.6 Allocable Shares and Allocation of Assessments; Welfare Exemption; Plaza Improvements .......................................................................................... 22
7.7 Late Payment ..................................................................................................... 23
7.8 Notice and Assessment Installment Due Dates .................................................. 23
7.9 Collection of Assessments ................................................................................. 23
7.10 Reconciliation and Audit Rights .......................................................................... 25
7.11 Subordination of Lien to Mortgages ................................................................... 25
7.12 No Offsets .......................................................................................................... 25
7.13 Transfer of Leasehold Interest ........................................................................... 26
7.14 Failure to Levy Assessments ............................................................................. 26
7.15 Additional Remedies .......................................................................................... 26 ARTICLE 8 USE RESTRICTIONS ............................................................................................ 26
8.1 Compliance with Applicable Laws and Project Entitlements and Requirements .................................................................................................... 26
8.2 No Changes to Entitlements .............................................................................. 26
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8.3 Variances and Conditional Use Permits ............................................................. 26
8.4 Further Subdivisions .......................................................................................... 26
8.5 Occupants and Permitted Users ........................................................................ 27
8.6 Insurance Requirements .................................................................................... 27
8.7 Hazardous Materials .......................................................................................... 27
8.8 Refuse Removal ................................................................................................ 27
8.9 Emissions .......................................................................................................... 27
8.10 Non-Smoking ..................................................................................................... 27
8.11 Oil and Mineral Rights ........................................................................................ 27
8.12 Drainage and Use of Project Drainage Facilities ................................................ 28
8.13 Signage ............................................................................................................. 28
8.14 Trash Disposal ................................................................................................... 28
8.15 Use Restrictions ................................................................................................. 28
8.16 Construction Work ............................................................................................. 28 ARTICLE 9 DESIGN APPROVALS AND CONSTRUCTION .................................................... 29
9.1 Non-Applicability ................................................................................................ 29
9.2 Design Review Requirements ............................................................................ 29
9.3 Design and Construction Guidelines .................................................................. 30
9.4 Performance of Construction ............................................................................. 31
9.5 Conflict With Applicable Laws ............................................................................ 32
9.6 Separation of Work ............................................................................................ 32
9.7 Liability ............................................................................................................... 32 ARTICLE 10 INSURANCE ....................................................................................................... 32
10.1 Property/Casualty Insurance .............................................................................. 32
10.2 Liability Insurance .............................................................................................. 32
10.3 Provisions Applicable to Insurance Requirements.............................................. 33
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10.4 Claims ................................................................................................................ 33
10.5 Unavailability of Insurance ................................................................................. 34
10.6 Right of Owner to Procure Insurance ................................................................. 34
10.7 Owner’s Insurance Obligations .......................................................................... 34 ARTICLE 11 CASUALTY ......................................................................................................... 35
11.1 Repair and Reconstruction ................................................................................. 35
11.2 Repair to Plaza Improvements Area................................................................... 36
11.3 Repair Work ....................................................................................................... 36
11.4 Cooperation ....................................................................................................... 36
11.5 Completion of Repairs ....................................................................................... 37 ARTICLE 12 CONDEMNATION ............................................................................................... 37
12.1 Taking of Property .............................................................................................. 37
12.2 Temporary Takings ............................................................................................ 37
12.3 Restoration ........................................................................................................ 37 ARTICLE 13 RIGHTS OF MORTGAGEES AND TAX CREDIT INVESTORS ........................... 38
13.1 Conflict ............................................................................................................... 38
13.2 Subordination of Lien to Mortgages; Liability for Unpaid Assessments ............... 38
13.3 Mortgagee Protection ......................................................................................... 38
13.4 Voting Rights on Default .................................................................................... 38
13.5 Right to Furnish Information ............................................................................... 38
13.6 Notice and Cure for Mortgagees and Tax Credit Investor ................................... 38 ARTICLE 14 AMENDMENTS AND SUPPLEMENTARY DECLARATIONS ............................. 39
14.1 Amendments ...................................................................................................... 39
14.2 Reliance on Amendments .................................................................................. 39
14.3 Supplementary Declarations .............................................................................. 39
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ARTICLE 15 TERM AND ENFORCEMENT ............................................................................. 39
15.1 Term .................................................................................................................. 39
15.2 Enforcement and Nonwaiver .............................................................................. 39
15.3 Operational Disputes ......................................................................................... 40 ARTICLE 16 COVENANTS OF COOPERATION ..................................................................... 41
16.1 No Discrimination ............................................................................................... 41
16.2 Estoppel Certificates .......................................................................................... 41
16.3 Exchange of Information .................................................................................... 41
16.4 Limitation on Liability .......................................................................................... 41 ARTICLE 17 GENERAL PROVISIONS .................................................................................... 42
17.1 Headings ........................................................................................................... 42
17.2 Severability ........................................................................................................ 42
17.3 Cumulative Remedies; No Waiver ..................................................................... 42
17.4 Adjustments for Inflation ..................................................................................... 42
17.5 Liberal Construction ........................................................................................... 42
17.6 Notice ................................................................................................................ 42
17.7 Joint and Several Liability .................................................................................. 42
17.8 Number; Gender ................................................................................................ 43
17.9 Exhibits; Schedules ............................................................................................ 43
17.10 Statutory References ......................................................................................... 43
17.11 Conflict ............................................................................................................... 43
17.12 Indemnity ........................................................................................................... 43
17.13 Binding Effect ..................................................................................................... 43
17.14 Third Party Beneficiaries .................................................................................... 43
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DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
AND ESTABLISHMENT OF EASEMENTS
FOR
NORWALK ENTERTAINMENT DISTRICT MIXED-USE DEVELOPMENT
(PLAZA)
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND
ESTABLISHMENT OF EASEMENTS FOR NORWALK ENTERTAINMENT DISTRICT MIXED - USE DEVELOPMENT (PLAZA) (this “Declaration”) is made as of the ___ day of ________, 2025 by PRIMESTOR NORWALK ENTERTAINMENT LLC, a Delaware limited liability company (“Master Project Owner”), RESIDENCES AT THE WALK LP, a California limited partnership (“Affordable Housing Project Owner ”), and collectively with the Master Project Owner, the “Owners”), THE CITY OF NORWALK, a Calif ornia municipal corporation (the “ City”), with reference to the facts set forth below. Each of the Owners and the City are occasionally referred to herein as the “Parties” and individually as a “Party.”
RECITALS
All initially capitalized terms used but not defined in the Recitals shall have the meanings set forth in Article 1.
A. The City is the owner of certain real property located in the City of Norwalk, County of Los Angeles, State of California, more particularly described on Exhibit A, (the “City Property”), a portion of which is currently improved with the City’s City Hall building.
B. The City and Master Project Owner are parties to that certain Ground Lease dated December 19, 2022 (the “ Original Agreement”), as amended by that certain First Amendment to Ground Lease dated March 19, 2025 (the “ First Amendment” and together with the Original Agreement, the “Original Ground Lease”), and by that certain Second Amendment to Ground Lease dated _____, 2025 (the “ Second Amendment” and together with the Original Ground Lease, the “Ground Lease”). Pursuant to the Original Ground Lease, the City ground leased to the Master Project Owner a portion of the City Property (the “ Original Premises”), for the development of a mixed-use development (the “Original Project”) consisting of (i) approximately three hundred seventy-four (374) residential units; (ii) approximately ninety -four thousand three hundred ninety-eight (94,398) square feet of commercial uses, which may include, but not be limited to, food and beverage establishments, retail, health and wellness facilities, and grocery or supermarket uses; and (iii) approximately one hundred nineteen thousand six hundred forty-three (119,643) square feet of ground- floor open space/plaza area that is publicly accessible but privately maintained and operated. Portions of the Original Project are to be constructed on portions of the City Property that are outside of the Original Premises.
C. Pursuant to that certain [ Assignment and Assumption of Ground Lease dated ______], and in accordance with Section 2.6 of the Original Ground Lease, Master Project Owner assigned to Affordable Housing Project Owner all of Master Project Owner’s rights, title, and interest in, to and under the Original Ground Lease with respect to the portion of the Original Premises identified as Parcel 7 (the “Affordable Housing Premises”) with an affordable housing project (the “Affordable Housing Project” and together with the Master Project, the “ Project”) consisting of fifty-six (56) residential units, including not less than fifty-three (53) income restricted residential units and one (1) manager’s unit. The term “Master Project” shall refer to the Original Project less the improvements that constitute the Affordable Housing Project.
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2 D. Pursuant to that certain [Restricted Residential Ground Lease dated _______], by and between Affordable Housing Project Owner and the City (the “Affordable Housing Ground Lease”), the City ground leased the Affordable Housing Premises to the Affordable Housing Project Owner for the development of the Affordable Housing Project.
E. Pursuant to the Second Amendment, the City and Master Project Owner confirmed that, upon execution of the Affordable Housing Ground Lease, the Affordable Housing Premises were released from the Original Premises and that the Original Premises were expanded to include an additional portion of the City Property, such that the ground leased premises include Parcels 1, 2, 3, 4, 5, 6, 8, and 10, as more particularly described in the Second Amendment (the “Ground Lease Premises”).
F. As part of the Master Project, the Master Project Owner will develop a portion of the Ground Lease Premises, as depicted on Exhibit C attached hereto (the “Ground Lease Plaza Improvements Area”), with a plaza, sidewalks, driveways, landscaping, and other improvements from time to time (the “Ground Lease Plaza Improvements”), including but not limited to a paseo in the area depicted on Exhibit C (the “Paseo”), but excluding all Buildings (defined below) thereon and all improvements located within any Building; provided, however, Ground Lease Plaza Improvements shall not include improvements within the Ground Lease Premises dedicated for Master Project Owner’s exclusive and/or dedicated use consistent with the Specific Plan and other associated City approvals.
G. Pursuant to that certain Easement Agreement dated _______2025, by and between Master Project Owner and the City (the “Easement Agreement”), the City has provided Master Project Owner with an irrevocable, perpetual, non-exclusive easement in, on, over, and across a portion of
the City Property, as more particularly identified on Exhibit B (the “City Easement Area”) for the development, construction, use, operation, and maintenance of certain parking and plaza improvements for the Master Project (collectively, the “ Easement Plaza Improvements”), including but not limited to a surface parking lot in the area depicted in Exhibit C (the “Retail Parking Area”), sidewalks, driveways, landscaping, and other improvements from time to time.
The Ground Lease Plaza Improvements together with the Easement Plaza Improvements shall be referred to herein as the “ Plaza Improvements.” The City Easement Area together with the Ground Lease Plaza Improvement Area shall be referred to herein as the “Plaza Improvements Area.”
H. This Declaration establishes easements for the benefit of the Ground Lease Premises and the Affordable Housing Premises subject to the covenants, restrictions, reservations, and limitations contained herein. This Declaration shall be liberally construed t o effectuate its purpose of creating a flexible plan for the maintenance, operation and governance of the Plaza Improvements Area. To achieve these goals and to ensure a flexible governance structure, further rights, obligations, allocations, easements and other matters affecting the Plaza Improvements Area may be identified in Supplementary Declarations recorded in the future.
DECLARATION
NOW, THEREFORE, in consideration of the foregoing Recitals, which are hereby incorporated into this Declaration as if set forth in full herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Declarants declare that their respective interests in the City Property, as applicable, shall be, held, conveyed, hypothecated, encumbered, leased, rented, used and occupied subject to the following
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3 limitations, restrictions, easements, covenants, conditions, liens and charges, all of which are declared and agreed to be in furtherance of a plan of ownership as described in California Civil Code Section 6562 et seq., and all of which are declared and agreed to be for the purpose of enhancing, maintaining and protecting the value and attractiveness of the City Property and the improvements thereon. All of the limitations, restrictions, easements, covenants, conditions, liens and charges herein shall run with the land, shall be binding on and inure to the benefit of all Parties and their respective successors and assigns under, as applicable, the Ground Leases, shall be enforceable equitable servitudes and covenants running with the land and shall be binding on and inure to the benefit of the Parties and their respective successors in interest.
ARTICLE 1
DEFINITIONS
Unless the context otherwise specifies or requires, or except as expressly specified in this Declaration, the terms defined in this Article shall, for all purposes of this Declaration, have the meanings specified herein.
1.1 “Actual Expenses” has the meaning set forth in Section 6.11.1.
1.2 “Additional Charges” means costs, fees, charges and expenditures, including, without limitation, reasonable attorneys’ fees and costs and interest actually incurred in collecting and/or enforcing payment of Assessments by the Common Area Manager and, to the extent specifically authorized hereunder, fines and similar charges.
1.3 “Affiliate” means with respect to a specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified Person. “Control”, as used herein, is defined as possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
1.4 “Affordable Housing Ground Lease” has the meaning set forth in Recital D.
1.5 “Affordable Housing Premises” has the meaning set forth in Recital C.
1.6 “Affordable Housing Project” has the meaning set forth in Recital C.
1.7 “Affordable Housing Project Owner” has the meaning set forth in the Preamble.
1.8 “Allocable Share ” means the respective percentage of Common Expenses allocated and charged to each Party as set forth on Schedule 1.8, as the same may be adjusted for particular expense items in any Annual Operating Budget in accordance with the terms and conditions of this Declaration.
1.9 “Alteration Work” has the meaning set forth in Section 8.2.
1.10 “Annual Operating Budget” means an annual operating budget prepared by the Common Area Manager and approved by the Parties in accordance with Article 6 below, with respect to all reasonably anticipated costs and expenses relating to the maintenance, repair, and operation of the Plaza Improvements and other services provided by the Common Area Manager for the overall benefit of the Parties and the Master Project.
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4 1.11 “Applicable Laws” means the applicable laws, regulations, rules, orders and/or ordinances of any Governmental Agencies having jurisdiction over the City Property, now in effect or as hereafter promulgated.
1.12 “Applicable Rate” means the rate of interest chargeable under this Declaration equal to the rate of ten percent (10%) per annum, but not to exceed the maximum rate allowed by Applicable Laws.
1.13 “Assessment Commencement Date” has the meaning set forth in Section 6.3.2.
1.14 “Assessments” means the assessments levied by the Common Area Manager after the Assessment Commencement Date to cover the Common Expenses pursuant to Article 6 or other assessments permitted to be levied under this Declaration, including the Assessments described below.
1.14.1 “Regular Assessments” means the regular Assessments that are levied pursuant to Article 6.
1.14.2 “Special Assessments” has the meaning set forth in Article 6.
1.14.3 “Compliance Assessments” has the meaning set forth in Article 6.
1.15 “Authorized Users ” means each of the respective employees, consultants, contractors, students, subcontractors, representatives and agents of a Party.
1.16 “Budget Disapproval Notice” has the meaning set forth in Section 6.3.1.
1.17 “Building” means any building that is part of the Master Project or the Affordable Housing Project.
1.18 “Casualty” means any damage to any of the Project Improvements resulting from an event such as fire, unusual weather causing damage, thefts, riots, vandalism, terrorism or other similar causes.
1.19 “City” means the City of Norwalk, California.
1.20 “City Easement Area” has the meaning set forth in Recital G.
1.21 “City Property” has the meaning set forth in Recital A.
1.22 “Claims” means all claims, actions, demands, liabilities, damages, costs, penalties, forfeitures, losses and/or expenses, including, without limitation, reasonable attorneys’ fees and costs and the costs and expenses of enforcing any indemnification, defense or hold harmless obligations under this Declaration and/or the Ground Leases.
1.23 “Common Area Manager” means Master Project Owner, and its successors and assigns as applicable, in its capacity as manager of the Plaza Improvements pursuant to and in accordance with the terms and conditions of this Declaration.
1.24 “Common Expenses” means the costs and expenses incurred by the Common Area Manager for the maintenance, repair, operation, and services provided by the Common Area Manager with respect to the Plaza Improvements Area, which shall be levied based upon the
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5 Parties’ applicable Allocable Shares and/or as set forth in the Annual Operating Budget (as updated and approved from time to time in accordance with this Declaration). Common Expenses may include, without limitation, the following:
1.24.1 expenses incurred for the maintenance, management, operation, repair and replacement of the Plaza Improvements, and any other areas and facilities which are expressly required to be maintained by the Common Area Manager under this Declaration or for which services are expressly required to be provided by the Common Area Manager under this Declaration;
1.24.2 expenses incurred for the maintenance, management, operation, repair and replacement of all fixtures, equipment and installations, included in the Plaza Improvements Area;
1.24.3 expenses incurred for any services provided by the Common Area Manager relating to any portion of the Plaza Improvements Area;
1.24.4 expenses incurred in complying with ongoing operational requirements of the Project Entitlements and Applicable Laws as they relate to the Plaza Improvements Area;
1.24.5 expenses incurred to cover due but unpaid Assessments and to enforce the collection of such Assessments, which recovered funds, less costs of collection, shall be credited to the expenses incurred;
1.24.6 reasonable operating and replacement reserves for the Plaza Improvements, to the extent set forth in an Annual Operating Budget adopted pursuant to the terms and conditions of this Declaration;
1.24.7 expenses incurred for any Utility Facilities serving the Plaza Improvements Area;
1.24.8 expenses incurred for any patrols or security provided for the Plaza Improvements Area;
1.24.9 expenses incurred for any pest control or similar services provided by the Common Area Manager with respect to any portion of the Plaza Improvements Area;
1.24.10 expenses of maintenance, repair and replacement and for performing any inspections required by Governmental Requirements for any Project Drainage Facilities;
1.24.11 expenses of insurance obtained and maintained by the Common Area Manager with respect to the Plaza Improvements Area (including such costs related to any Master Policy), as required under this Declaration; and
1.24.12 expenses of any other services or items designated in the Annual Operating Budget or incurred by the Common Area Manager in connection with the repair and maintenance of the Plaza Improvements Area (consistent with an approved Annual Operating Budget or Updated Budget, as applicable, or due to an emergency).
1.25 “Compliance Assessment” has the meaning set forth in Section 6.6.
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6 1.26 “Conditional Use Permit” has the meaning set forth in Section 7.3.
1.27 “Constructing Party” has the meaning set forth in Section 8.2.
1.28 “Contracting Party” has the meaning set forth in Section 5.6.3.
1.29 “CPI” means the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (CPl-U), Los Angeles, California, All Items, Base 1982-1984=100 (the “Index”), published by the United States Department of Labor, Bureau of Labor Statistics. If at any time the Index does not exist in the format recited herein, the Owners shall mutually agree, in their reasonable discretion, on a substitute index.
1.30 “CPI Increase” has the meaning set forth in Section 6.3.1.
1.31 “Declarants” means, collectively, Master Project Owner (with respect to the Ground Lease Premises) and Affordable Housing Project Owner (with respect to the Affordable Housing Premises), and the City (with respect to the City Easement Area).
1.32 “Declaration” has the meaning set forth in the Preamble.
1.33 “Design and Construction Guidelines” means the design and construction standards, guidelines and procedures which shall be unanimously adopted by the Owners and any amendments or supplements thereto that are unanimously approved by the Owners.
1.34 “Easement” has the meaning set forth in Recital G.
1.35 “Easement Agreement” has the meaning set forth in Recital G.
1.36 “Easement Plaza Improvements” has the meaning set forth in Recital G.
1.37 “Eligible Holder” means any Mortgagee with respect to a Mortgage encumbering a Leasehold Interest in and to the Ground Lease Premises or the Affordable Housing Premises who has given written notice to the Parties specifying its name, address and the property encumbered by its Mortgage and requesting written notice of certain events specified in Article
12. Any Mortgagee of a Mortgage as of the date of recordation of this Declaration is an Eligible Holder and no further notice shall be required to be delivered by such Mortgagee.
1.38 “Emergency” means any situation, condition or event which threatens imminent damage or injury to Persons or any portion of the Plaza.
1.39 “Emergency Expense Situation” has the meaning set forth in Section 6.5.
1.40 “Equipment Rooms” means all the rooms and areas within the Plaza containing equipment for the operation and use of the Plaza.
1.41 “Fire Life Safety System ” means any fire life safety equipment and facilities serving any portion of the Plaza, including, without limitation, fire panels and the fire sprinkler system, the fire water storage tank, the fire pump equipment, fire monitoring system, fire alarm system, and related equipment and facilities.
1.42 “First Amendment” has the meaning set forth in Recital B.
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7 1.43 “Fiscal Year” means a calendar year, unless the Declarants agree, in their reasonable discretion, on a different fiscal accounting and reporting period, in which case Fiscal Year means the period so selected by the Declarants.
1.44 “Governmental Agencies” means each federal, state, county, city or local governmental or quasi -governmental authority, entity or body (or any departmental agency thereof) exercising jurisdiction over a particular subject matter or any portion of the City Property.
1.45 “Governmental Requirements” means all Applicable Laws and other applicable rules, regulations, orders, ordinances, subdivision requirements, zoning restrictions, and all other applicable requirements (including all applicable requirements to have or to obtain permits) of any Governmental Agencies which are applicable to the City Property, or any portion thereof.
1.46 “Ground Lease” or “Ground Leases” has the meaning set forth in Recital B.
1.47 “Ground Lease Premises” has the meaning set forth in Recital E.
1.48 “Ground Lease Plaza Improvements” has the meaning set forth in Recital F.
1.49 “Ground Lease Plaza Improvements Area” has the meaning set forth in Recital F.
1.50 “Hazardous Materials” means any substance, material or waste which is or becomes (a) regulated by any governmental authority because of its toxicity, ignitability, corrosivity or reactivity; or (b) defined as a “hazardous substance,” “extremely hazardous substance,” “hazardous waste,” “extremely hazardous waste,” “restricted hazardous waste,” “Non-RCRA hazardous waste,” “RCRA hazardous waste,” “recyclable material,” “mixed waste,” “medical waste” or similar material under any applicable federal, state or local statute or regulation promulgated thereunder. Hazardous Material shall expressly exclude substances routinely used in the construction, operation, and maintenance of a housing development or commercial (retail and/or office) development, provided that such substances are used in full compliance with all Applicable Laws and Governmental Requirements governing or applicable to such substances.
1.51 “Insurance Proceeds” has the meaning set forth in Section 10.1.1.
1.52 “Insurance Trustee” has the meaning set forth in Section 9.4.2.
1.53 “Insured Property” has the meaning set forth in Section 9.1.
1.54 “Lease” or “Leases” means any lease, sublease, license or other agreement whereby a Person acquires rights to use or occupy any portion of a Ground Lease Premises or the Affordable Housing Premises.
1.55 “Leasehold Interest” means an Owner’s interest in a Ground Lease.
1.56 “Lessee” means any tenant or lessee holding the right to occupy a portion of the Ground Lease Premises or the Affordable Housing Premises pursuant to a Lease.
1.57 “Liability Insurance” has the meaning set forth in Section 9.2.
1.58 “Maintenance Commencement Date” has the meaning set forth in Section 5.2.
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8 1.59 “Maintenance Obligations” means the obligations of the Declarants to perform (a) all maintenance, repair, demolition, and replacement obligations imposed under Governmental Requirements, the Project Entitlements and this Declaration, and (b) any other commonly accepted maintenance, repair and replacement practices in furtherance of the Maintenance Standards.
1.60 “Maintenance Standards” means the standards required to maintain the Plaza Improvements Area in a condition of maintenance and repair consistent with similar public plazas serving projects similar to the Master Project in the Los Angeles metropolitan area, and in compliance with Applicable Laws, Governmental Requirements, the Project Entitlements, the Ground Leases, and this Declaration.
1.61 “Major Decisions” means the decisions requiring the approval of all Parties as described in Section 4.2 below.
1.62 “Management Company” means any property management company engaged by Common Area Manager, with the unanimous approval of all Parties, to provide services and/or coordinate the performance of the obligations of Common Area Manager under this Declaration, which Management Company may be an Affiliate of either Declarant or of any other Owner.
1.63 “Master Policy” has the meaning set forth in Section 9.3.1.
1.64 “Master Project” has the meaning set forth in Recital C.
1.65 “Master Project Owner” has the meaning set forth in the Preamble.
1.66 “Mortgage” means any duly recorded mortgage or deed of trust encumbering a Leasehold Interest in and to the Ground Lease Premises and/or the Affordable Housing Premises.
1.67 “Mortgagee” means each mortgagee or beneficiary of a Mortgage.
1.68 “Notice of Delinquent Assessment” has the meaning set forth in Section 6.10.4.
1.69 “Occupant” means: (i) with respect to each Owner, each Lessee and any other Person entitled by a Lease to use and occupy or operate any portion of the Ground Lease Premises or the Affordable Housing Premises, and any other Authorized User of an Owner, and (ii) City.
1.70 “Official Records” means the Official Records for Los Angeles County.
1.71 “Operational Dispute” has the meaning set forth in Section 14.3.
1.72 “Operational Dispute Notice” has the meaning set forth in Section 14.3.
1.73 “Original Agreement” has the meaning set forth in Recital B.
1.74 “Original Ground Lease” has the meaning set forth in Recital B.
1.75 “Original Premises” has the meaning set forth in Recital B.
1.76 “Original Project” has the meaning set forth in Recital B.
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9 1.77 “Owner” or “Owners” has the meaning set forth in the Preamble.
1.78 “Parcel” or “Parcels” means the Ground Lease Premises, the Affordable Housing Premises, and the City Hall Parcel.
1.79 “Parties” or “Party” has the meaning set forth in the Preamble.
1.80 “Paseo” has the meaning set forth in Recital F.
1.81 “Permitted Users ” means all Occupants and any Person whose presence is approved by or is at the request of any Party or Lessee, including, without limitation, the respective employees, agents, contractors, customers, family, guests, invitees, tenants and licensees and concessionaires of a Party or Lessee. Unless the context otherwise requires, Permitted Users include Authorized Users.
1.82 “Person” means a natural individual or any legal entity recognized under California law and which is in good standing in the State of California, including a foreign entity which has qualified to do business in the State of California. When the word “person” is not capitalized, the word refers only to natural persons.
1.83 “Plans and Specifications” has the meaning set forth in Section 8.3.8.
1.84 “Plaza Events” has the meaning set forth in Section 2.5.
1.85 “Plaza Improvements” has the meaning set forth in Recital G.
1.86 “Plaza Improvements Area” has the meaning set forth in Recital G.
1.87 “Plaza Welfare Exemption” has the meaning set forth in Section 6.7.
1.88 “Project” has the meaning set forth in Recital B.
1.89 “Project Drainage Facilities” means any drainage facilities, including pumps and any related equipment and improvements, if any, serving the Plaza.
1.90 “Project Entitlements” means all approvals, licenses, consents, conditions of approval, encroachments and other restrictions granted or imposed by the City, County, or other agencies with jurisdiction over the Plaza Improvements Area.
1.91 “Project Improvements” or “Improvements” means any or all, as the context requires, of the improvements constructed within and as part of the Plaza Improvements ARea, including, without limitation, the Plaza Improvements, and any walkways, landscaped and hardscaped areas (including any planters), sidewalks, driveways, ramps, amenities, irrigation systems, poles, signs, exterior lighting and light standards, antennae, generators, stairwells, elevators, equipment and Equipment Rooms, any Fire Life Safety System, railings, ramps and Utility Facilities, and any replacements, additions, repairs or alterations thereto of any kind whatsoever.
1.92 “Project Rules” means any reasonable rules and regulations that are consistent with the terms of this Declaration, and any amendments and/or supplements thereto, which are determined by Master Project Owner, in Master Project Owner’s sole and absolute discretion.
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10 The Parties hereby acknowledge and agree that the Project Rules will contain specific rules for the Retail Parking Area, Plaza Improvements Area, and Plaza Events, including but not limited to restrictions on hours of use and closures thereof, as well as when Plaza Events may occur, and requirements limiting amplified sound, and frequency of events.
1.93 “Project Signage” means any way-finding signage, directional signage and other signage at any time located in the Plaza Improvements Area.
1.94 “Property Insurance” has the meaning set forth in Section 9.1.
1.95 “Reconciliation” has the meaning set forth in Section 6.11.1.
1.96 “Retail Parking Area” has the meaning set forth in Recital G.
1.97 “Reviewing Party” has the meaning set forth in Section 8.2.
1.98 “Second Amendment” has the meaning set forth in Recital B.
1.99 “Special Assessments” has the meaning set forth in Section 6.5.
1.100 “Specific Plan” means the Norwalk Entertainment District – Civic Center Specific Plan.
1.101 “Supplementary Declaration” means any supplementary declaration signed by all Parties and recorded by the Declarant in the Official Records to do any or all of the following:
(a) further describe or delineate other elements, restrictions or easements applicable to the Plaza Improvements Area; (b) reflect any adjustments made to the Allocable Shares in accordance with the terms and conditions of this Declaration; (c) impose obligations or requirements required by Governmental Agencies or to conform this Dec laration to any requirements of Governmental Agencies or Applicable Laws; (d) revise, supplement or amend any exhibits or schedules to this Declaration, or any previously recorded Supplementary Declarations to correct errors or omissions; (e) make corrections to the provisions of this Declaration or any previously recorded Supplementary Declarations including any exhibits attached to this Declaration; and/or (f) for any of the other purposes for which a Supplementary Declaration may be recorded under this Declaration.
1.102 “Take-Over Notice” has the meaning set forth in Section 5.5.
1.103 “Take-Over Owner” has the meaning set forth in Section 5.5.
1.104 “Take-Over Period” has the meaning set forth in Section 5.5.
1.105 “Take-Over Rights” means the rights of an Owner (but not City) to take -over the Maintenance Obligations otherwise being performed by the Common Area Manager pursuant to this Declaration.
1.106 “Tax Credit Investor” means, collectively and individually, the limited partner of each of the Affordable Housing Project Owner.
1.107 “Updated Budget” has the meaning set forth in Section 6.5.
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11 1.108 “Utility Facilities” means all utility, communication, heating and ventilation and other similar facilities including, without limitation, intake and exhaust systems, any back flow preventers, ducting systems for ventilation and utility services, water systems, sanitary sewer systems, natural gas systems, electrical systems, fire life safety systems, exhaust fans, vaults and switchgears, heating, ventilation and air conditioning systems (including, without limitation, all machinery controls and vents relating thereto), emergency generators, central utility services and all other utility systems, communications and data transmission facilities, conduits, cabling and facilities servicing the Master Project and/or Affordable Housing Project, which are situated in, on, over and under the Plaza Improvements Area.
1.109 “Work” or “Construction Work” means, after substantial completion of the initial construction of the Project Improvements, any construction, alteration, repair, restoration, rebuilding, demolition, removal and razing thereof, including, without limitation, in connection with any of the easements granted by the Declaration with respect to any portion of the Plaza Improvements Area. Unless otherwise provided for herein, “Work” shall not include any work or construction with respect to any Building or the interior thereof.
ARTICLE 2
EASEMENTS
2.1 Ownership and Easements. Each of the easements and licenses reserved or granted in this Declaration shall be deemed established upon recordation of this Declaration, but shall commence on the date a temporary or final certificate of occupancy has been issued by the City for the initial Project Improvements (to the extent applicable)). Each of the easements established hereunder shall be deemed to be covenants running with the land for the use and benefit of the Parties, as applicable, and shall benefit the Owners and their respective successors and assigns with respect to the Ground Lease Premises and/or the Affordable Housing Premises.
2.2 Limitations. All of the easements and licenses described in this Article 2 are subject to the limitations set forth in this Declaration.
2.3 Non-Exclusive Easements for Access to and from Master Project . Master Project Owner hereby grants to each Party, for such Party’s benefit and the benefit of such Party’s Permitted Users, a non-exclusive easement appurtenant to each Owner’s respective Leasehold Interest in, on, over, through and across publicly accessible areas within the Ground Lease Premises for pedestrian ingress and egress to and from the Buildings on the Master Project or Affordable Housing Project, all subject to the limitations, restrictions, and other applicable terms and conditions of this Declaration, including all applicable Project Rules. Notwithstanding the foregoing, Master Project Owner reserves the right to relocate, close and/or restrict access to any portion of the Ground Lease Premises for its exclusive and/or dedicated use, in its sole and absolute discretion.
2.4 Non-Exclusive Easements for Access to and from Affordable Housing Project. Affordable Housing Project Owner hereby grants to each Party, for such Party’s benefit and the benefit of such Party’s Permitted Users, a non-exclusive easement appurtenant to each Owner’s respective Leasehold Interest in, on, over, through and across publicly accessible areas within the Affordable Housing Premises for pedestrian ingress and egress to and from the Buildings on the Affordable Housing Project or the Master Project, al l subject to the limitations, restrictions, and other applicable terms and conditions of this Declaration, including all applicable Project Rules. Notwithstanding the foregoing, Affordable Housing Project Owner reserves the
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12 right to relocate, close and/or restrict access to any portion of the Affordable Housing Premises for its exclusive and/or dedicated use, in its sole and absolute discretion.
2.5 Non-Exclusive Easements for Use of Plaza Improvements Area. Master Project Owner hereby grants to each Party, for such Party’s benefit and for the benefit of such Party’s Permitted Users, a non- exclusive easement appurtenant to each Owner’s respective Leasehold Interest in, on, over, through and across the Plaza Improvements Area for pedestrian ingress and egress to and from the Buildings on the Master Project or Affordable Housing Project, to access and use the Improvements provided from time to time within the Plaza Improvements Area, including to attend plaza events organized by Master Project Owner, as described on Schedule 2.5 (“Plaza Events”), all subject to the limitations, restrictions, and other applicable terms and conditions of this Declaration, including all applicable Project Rules. Notwithstanding the foregoing, Master Project Owner reserves the right to relocate, close and/or restrict access to any portion of the Plaza Improvements Area for its exclusive and/or dedicated use, in Master Project Owner’s sole and absolute discretion.
2.6 Non-Exclusive Parking Easement. Master Project Owner hereby grants to the Affordable Housing Project Owner,
a non-exclusive easement
in, on, over, across and through the Retail Parking Area, for the purpose of vehicular parking in, on, and at the Retail Parking Area, and for vehicular and pedestrian ingress and egress to and from the Retail Parking Ar ea and the Affordable Housing Premises, subject to the limitations, restrictions, and other applicable terms and conditions of this Declaration, including all applicable Project Rules.
2.7 Temporary Construction Easement. Each of Master Project Owner, Affordable Housing Project Owner, and the City hereby grants to each Owner and their respective successors and assigns easements a non -exclusive, temporary easement for access to, and ingress and egress over and across, the Ground Lease Premises, Affordable Housing Premises, or the City Easement Area, as applicable, and to the extent reasonably necessary to undertake and complete the work of completing the initial development and construction of the improvements comprising the Master Project and/or the Affordable Housing Project, as applicable, subject to the limitations, restrictions, and other applicable terms and conditions of this Declaration, including all applicable Project Rules.
2.8 Individual Nature of Easements. Each of the above described easements and licenses specified above shall constitute individual, distinct and separate easements that are appurtenant to the benefitted Leasehold Interest as applicable.
2.9 Ownership: No Separate Transfer . Ownership of a Leasehold Interest shall include any exclusive or non- exclusive easement or easements appurtenant to such Leasehold Interest, as applicable, as described in this Declaration. Each of the easements reserved or granted in this Declaration shall be deemed to be established upon recordation of this Declaration and shall thereafter be deemed to be covenants running with the land (as applicable) for the use and benefit of the Parties as set forth herein. None of the easements described above shall be conveyed, transferred, assigned, or encumbered separately from Party’s respective interest in the City Property, as applicable, to which they are appurtenant.
2.10 Duration of Easements; Rights of Permitted Users and Benefited Parties.
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13 2.10.1 Duration of Easements. Each easement established herein shall exist by virtue of this Declaration, without the necessity of confirmation by any other document. Likewise, upon the termination of any easement (in whole or in part) or its release in respect of all or any part of any Parcel or Leasehold Interest as provided in this Declaration, the easements contained herein shall survive such termination and the Parties shall execute any instruments to memorialize such easements. Upon the request of any other Party, each Party will also sign and acknowledge a document, in form and substance reasonably approved by each Party, memorializing the existence (including the location and any conditions), or confirming prior termination (in whole or in part) or release (in whole or in part), as the case may be, of any easement.
2.10.2 Rights to Permit Occupants and Permitted Users to Exercise Easement and License Rights. Unless otherwise provided in this Declaration, each easement established herein shall be used by the Parties as an appurtenance to and for the benefit of the benefitted Leasehold Interest and applicable underlying real property, and solely for, the purpose of using and operating the benefited Leasehold Interest and applicable underlying real property(s) as provided in this Declaration. The foregoing notwithstanding, each Party may permit, from time to time, its Permitted Users to exercise certain of the easement rights set forth in this Article 2 provided that no such permission shall authorize a use of the easements in excess of the uses authorized under this Declaration or that conflicts with any provisions of this Declaration, the Ground Leases, Applicable Laws, and/or Governmental Requirements, or result in the grant of any easement rights to any Permitted User. Any such permission shall not relieve the Party of its duties and obligations with respect thereto. None of the easements established in this Declaration or any of the other provisions of this Declaration are intended to grant any rights to any members of the public or to be a gift or dedication for public use.
2.10.3 Benefitted Parties. Each easement granted pursuant to the provisions hereof is expressly for the benefit of the applicable Leasehold Interest, and the applicable Leasehold Interest so benefited shall be the dominant estate and the Ground Lease Premises, Affordable Housing Premises, and City Easement Area upon which such easement is located shall be the servient estate, but where only a portion thereof is bound and burdened, or benefited, by a particular easement, only that portion so bound and burdened, or benefited, as the case may be, shall be deemed to be the servient or dominant tenement, as the case may be.
2.11 Limitations on Easement Rights. The easement rights herein granted or reserved, including, without limitation, each and all of the easement rights enumerated above in the separate sections of this Article 2, are granted and reserved expressly subject to the limitations set forth below.
2.11.1 Matters of Record . Each of the easements and licenses granted and reserved hereunder is subject to all covenants, conditions, restrictions, encumbrances, easements, dedications, and rights of way, if any, set forth in any matters of record as of the time of recordation hereof in the Official Records and any of the Project Entitlements recorded against the Ground Lease Premises, the Affordable Housing Premises, the City Hall Parcel, and/or the Leasehold Interests.
2.11.2 Project Entitlements, Ground Leases . Each of the easements and licenses granted and reserved herein are subject to the Project Entitlements and to the Ground Leases affecting the applicable parcel that are in effect as of the Effective Date or amendments thereto. Notwithstanding the foregoing, the expiration, amendment, or termination of any Project Entitlement or Ground Leases shall not, by itself, terminate or impair the easements or licenses
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14 granted herein, except to the extent expressly required by such Project Entitlement or Ground Lease.
2.11.3 Exercise of Rights. All of the easements granted herein are subject to the rights of any Owner to exercise any rights and obligations granted under this Declaration.
2.11.4 Limitation on Access Rights in Connection with Maintenance and Repair. The Common Area Manager may temporarily relocate, close or restrict access to any portion of the Plaza Improvements Area ( including any areas subject to exclusive and/or dedicated use), subject to such conditions as may be reasonably necessary in connection with the exercise of any construction, maintenance, repair or replacement obligations under this Declaration, for such limited periods of time reasonably necessary to facilitate such activities and provided that commercially reasonable measures are implemented to minimize any interference which such closure or restriction may have on the impacted Party(ies).
2.11.5 Casualty. The easement rights granted or reserved herein are subject to any interruption or impairment during any period of repair and or rebuilding as provided under Article 10.
2.11.6 Use and Operation. Each Party shall use commercially reasonable efforts (taking into account the nature of the rights which are being exercised) and shall cause their Permitted Users to exercise the easement rights granted or reserved in this Article 2 in a manner which will not unreasonably and adversely impact or disrupt the use of the Plaza by any other Party.
2.11.7 Project Rules. All of the easement and other rights under this Article 2 are subject to the rules, regulations and guidelines set forth in the Project Rules.
ARTICLE 3
OPERATION AND MANAGEMENT
3.1 Operation and Management. The Plaza Improvements Area shall be maintained, repaired, managed, and operated by the Master Project Owner in accordance with the terms and conditions of this Declaration and Applicable Laws; provided the Parties hereby acknowledge that the Master Project Owner has the right to delegate its obligations hereunder to the Common Area Manager, and has elected to do so.
3.2 Powers of the Common Area Manager. Subject to the limitations set forth in this Declaration, the Common Area Manager shall have the powers necessary to exercise its rights and obligations under this Declaration. The powers of the Common Area Manager shall include the power and duties set forth below.
3.2.1 Performance of Duties . The Common Area Manager shall have the power to undertake all of the express duties required under Section 3.3 below to be done by the Common Area Manager.
3.2.2 Enforcement. The Common Area Manager shall have the power to enforce the restrictions and obligations set forth in this Declaration which rights of enforcement are in addition to the enforcement rights of the Parties set forth in Section 14.2.
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15 3.2.3 Provide Services. The Common Area Manager shall have the power to engage Persons necessary for the effective operation and maintenance of the Plaza Improvements Area; provided that such Persons are engaged at rates, and upon terms, that would ordinarily be entered into with unaffiliated parties. Any Management Company selected by the Common Area Manager may be an Affiliate of either Declarant provided that such Persons are engaged at rates, and upon terms, that would ordinarily be entered into with unaffi liated parties.
3.2.4 Restrict Access for Maintenance . The Common Area Manager shall have the right and authority to temporarily restrict access on or to any portion of the Plaza Improvements Area to the extent reasonably required for purposes of facilitating maintenance, repair or replacement, or otherwise performing its obligations hereunder.
3.2.5 Easements and Rights of Way. The Common Area Manager shall have the power to exercise any of the easement and other rights granted to it under Article 2, including, without limitation, the right to grant licenses to its Permitted Users to the extent necessary for the performance of the obligations and services of the Common Area Manager under this Declaration.
3.2.6 Delegation of Powers. The Common Area Manager shall have the power to delegate its rights, authority and powers, in whole or in part, under this Declaration to professional managers, committees, officers or consultants, as may reasonably be deemed necessary by the Common Area Manager in order to perform its obligations and services under this Declaration, subject to the prior written approval of all Parties, which approval shall not be unreasonably withheld, conditioned, or delayed.
3.3 Duties of the Common Area Manager . In addition to the powers enumerated above and its other duties set forth in this Declaration, the Common Area Manager has the obligation to perform each of the duties set forth below.
3.3.1 Applicable Laws and Governmental Requirements. In connection with the performance of its duties and obligations and exercise of rights under this Declaration, the Common Area Manager shall comply with all Applicable Laws and Governmental Requirements, including, without limitation, all the Project Entitlements.
3.3.2 Security Services. To the extent included in the Annual Operating Budget, the Common Area Manager shall engage the services of a security service company to provide security service for the Plaza Improvements Area; provided, however, the provision by the Common Area Manager of any security personnel or security equipment shall not constitute a warranty or representation by the Common Area Manager as to security and in no event shall the Common Area Manager be liable for injury to persons or property as a r esult of incidents on any portion of the Plaza Improvements Area.
3.3.3 Assessments. The Common Area Manager shall establish, levy and collect Assessments in accordance with Article 6 and shall enforce payment of such Assessments in accordance with the provisions of this Declaration. The Common Area Manager shall allocate Common Expenses based upon the Allocable Shares and consistent with the approved Annual Operating Budget. For the Affordable Housing Project, in no event shall the Assessments for Common Expenses controllable by Common Area Manager increase by more than five percent (5%) in each Fiscal Year without the prior written consent of the Affordable Housing Project Owner.
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16 3.3.4 Operation and Maintenance. The Common Area Manager shall perform all of the Maintenance Obligations required to be performed by the Common Area Manager under this Declaration with respect to the Plaza Improvements Area.
3.3.5 Insurance and Casualty. The Common Area Manager shall obtain and maintain the insurance described in Article 9 and shall coordinate any rebuilding in the event of a Casualty as provided in and subject to the provisions of Article 10.
3.3.6 Annual Operating Budget . In accordance with Article 6 , the Common Area Manager shall prepare the Annual Operating Budget, reconciliations, balance sheets and operating statements for the maintenance, repair, operation and management of the Plaza Improvements Area and the Common Expenses incurred by Common Area Manager in connection with performing its obligations and services under this Declaration.
ARTICLE 4
OWNER APPROVALS
4.1 Approval Rights . Whenever approval of the Parties is required under this Declaration, unless expressly set forth otherwise in this Declaration (i) such approvals shall not be unreasonably withheld, conditioned, or delayed, and (ii) such approval shall require approval of the majority of the Parties based on their respective Allocable Shares as set forth in as set forth on Schedule 1.8. Notwithstanding the foregoing, nothing in this Declaration shall be interpreted to require a Party to consent or give suc h Party’s approval to matters resulting in such Party relinquishing rights or benefits set forth in this Declaration. Any disapproval of or failure of consent to any matter hereunder shall be in writing and shall state in reasonable detail the reason or reasons therefor.
4.2 Major Decisions . Notwithstanding anything to the contrary set forth in this Declaration, and without limiting any restrictions and requirements set forth elsewhere in this Declaration, the Common Area Manager shall not take any of the actions set forth below without the prior written consent of all Parties:
4.2.1 Use and Operation. Except for any restrictions contemplated under the Project Entitlements, Governmental Requirements or required to comply with Applicable Laws, the imposition, elimination, or modification of any requirements, or the exercise of any rights, power, or authority, the effect of which is to materially and adversely restrict or impact the use or operation of the Project Improvements, the businesses operating within the Plaza Improvements Area, the residential tenants of either the Master Project or the Affordable Housing Project, or which would otherwise materially and adversely impact (i) an Owner’s ability to use and operate its Parcel, or (ii) any Party’s financial obligations under this Declaration;
4.2.2 Insurance Requirements. Any action to eliminate or materially reduce or increase (unless required under the Ground Leases) insurance coverage required to be maintained by the Owners and/or Common Area Manager under Article 9;
4.2.3 Mortgagee/Tax Credit Investor Rights . Any action to eliminate or materially reduce any of the rights of any Mortgagees or Tax Credit Investors under Article 12 hereof (which shall only require the approval of all Owners and the approval of all Mortgagees instead of all Parties);
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17 4.2.4 Common Area Manager . Selection or replacement of Common Area Manager;
4.2.5 Budgets; Special Assessments. Any approvals of any Annual Operating Budget, Updated Budget, and/or Special Assessments; and/or
4.2.6 Additional Provisions. Any other action that, pursuant to the express terms and conditions of this Declaration, requires the approval of all Owners or Parties, as applicable.
4.3 Requirements for Consent by Owners. Except as expressly provided otherwise in this Declaration, to the extent that the consent of any of the Parties is expressly required under this Declaration, the Parties shall have twenty (20) business days from receipt of request of written notice to provide notice of approval or disapproval of the item for which consent is required. If a Party fails to respond within such twenty (20) business day period and a reminder notice is provided to the Party which states: “THE FAILURE TO RESPOND WITHIN TEN (10) BUSINESS
DAYS OF RECEIPT OF THIS NOTICE SHALL CONSTITUTE APPROVAL OF THE MATTER FOR WHICH APPROVAL IS REQUESTED” and if the Party fails to respond within such additional ten (10) business day period, then the matter shall be deemed approved. If a Party delivers a notice of disapproval, such notice shall state with reasonable specificity, the basis for disapproval.
Any third (3
rd) party approval that a Party is required to obtain prior to giving its approval or consent hereunder, whether from a Lessee, a Mortgagee, a Tax Credit Investor, or otherwise, shall be the obligation, at its sole cost and expense, of the applicable Party that is required to obtain such third (3
rd) party approval, and the other Parties shall not be liable for such Party’s failure to obtain any such required third (3rd) party approvals.
4.4 Resolution of Disputes . Any dispute relating to any Party approvals required under this Declaration, including those set forth above, shall be Operational Disputes and shall be resolved in accordance with the terms and conditions of Article 14.
ARTICLE 5
MAINTENANCE
5.1 Maintenance. Unless the context otherwise requires, as used in this Article 5, “maintenance,” “maintain” or “maintaining” means the operation, inspection, maintenance, repair, restoration and replacement of the areas and facilities designated for maintenance. To the extent repair, restoration or replacement is required as a result of a Casualty, then the repair, restoration and replacement shall be governed by the provisions of Article 10 . All maintenance shall be performed in conformance with the Maintenance Standards and in substantial compliance with the terms and conditions of this Declaration, the Project Entitlements, Applicable Laws and all Governmental Requirements.
5.2 Commencement of Maintenance Obligations. The Maintenance Obligations of the Common Area Manager shall commence upon the substantial completion of construction of the initial Project Improvements (the “Maintenance Commencement Date”).
5.3 Maintenance Obligations. The Common Area Manager shall maintain the Plaza Improvements Area in conformance with the standards and obligations set forth in this Declaration. The Common Expenses incurred by the Common Area Manager shall be allocated to each Party in accordance with its respective Allocable Share, except for any particular expense items which may be allocated in a different manner in accordance with the express terms and
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18 conditions of this Declaration. Without limiting the foregoing, the Common Area Manager shall perform the Maintenance Obligations described below.
5.3.1 Project Signage. The Common Area Manager shall clean and maintain any Project Signage. Any signage which is for the benefit solely of a Party (e.g., signs designating the name of a Party) shall be maintained by such Party at its sole cost and expense in accordance with the terms and conditions of this Declaration. Any signage placed on the Plaza shall be subject to Master Project Owner’s reasonable discretion.
5.3.2 Plaza Improvements Area. The Common Area Manager shall maintain the Plaza Improvements Area in a clean and attractive condition, including the regular removal of trash, and the sweeping and power washing of any hardscape within the Plaza Improvements Area. The obligations for maintenance of the Plaza Improvements Area include, but are not limited to, the Maintenance Obligations described below. (a) Landscaped Areas. The Common Area Manager shall maintain all landscaping and planters in the Plaza Improvements Area in a healthy condition and in conformance with any water quality requirements imposed by any Governmental Agency, and shall replace diseased vegetation as may be necessary from time to time. (b) Project Furniture and Equipment. The Common Area Manager shall maintain any furniture and equipment located within the Plaza Improvements Area from time to time, including without limitation, benches, seating areas and any receptacles for trash or other debris.
(c) Lighting Fixtures. The Common Area Manager shall maintain any lighting fixtures that are part of the Plaza Improvements Area. (d) Graffiti Removal . The Common Area Manager shall promptly remove or cause to be removed any graffiti on any portion of the Plaza Improvements Area.
5.3.3 Project Drainage Facilities. The Common Area Manager shall maintain any Project Drainage Facilities in good working order, free of debris and obstructions, and in accordance with all Applicable Laws, and Governmental Requirements, as applicable.
5.3.4 Interior; Gates/Doors . The Common Area Manager shall maintain all floors, ramps, driveways, parking spaces and areas, walkways, and other interior portions of the vehicular parking areas, including maintenance and repair of all striping and any gates and doors (including entry systems).
5.3.5 Other Obligations. The Common Area Manager shall perform all such other actions which it reasonably deems necessary to preserve and protect the Plaza Improvements Area in accordance with the general purposes specified in this Declaration and the Project Entitlements.
5.4 Willful or Negligent Acts or Omissions . Notwithstanding the obligation of the Common Area Manager to maintain the Plaza Improvements Area and any other areas, if the need for maintenance of such areas or facilities is caused by the willful or negligent act or omission of a Party or its Permitted Users, and if the cost of the repair is not covered by the insurance required to be obtained by the Common Area Manager under this Declaration or is less than the deductible amount under any such insurance policy, the responsible Party shall be responsible
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19 for the uninsured cost or deductible portion thereof, and shall reimburse the other Party(ies) or the Common Area Manager (as applicable) for all costs incurred within fifteen (15) business days after receipt of a statement therefor from the other Party(ies) or the Common Area Manager pursuant to the terms of this Declaration. If a Party or its Permitted Users causes damage to the Project Improvements, then, notwithstanding anything to the contrary set forth in this Declaration, such Party shall be liable for any uninsured cost or deductible portion of the costs and expenses actually incurred by the other Party(ies) and/or the Common Area Manager resulting from such damage.
5.5 Take-Over Rights. Notwithstanding the obligations of the Common Area Manager to perform all of the Maintenance Obligations for the Plaza Improvements Area, if the Common Area Manager fails in the performance of such obligations or services as and when required under this Declaration, the other Owners (but not City) shall have the right to send the Common Area Manager a notice of its default and Common Area Manager shall have ten (10) business days after receipt of such written notice to cure such failure; provided if such cure reasonably requires more than ten (10) business days to complete, then Common Area Manager shall have such additional time as is reasonably required so long as it commenced meaningful cure efforts prior to the end of such ten (10) bus iness day period and thereafter diligently completes such cure; provided if such cure is not reasonably capable of being completed within thirty (30) days after receipt of written notice of a default, then Common Area Manager shall provide written notice t o the Owners informing them of the additional time that is reasonably needed to complete such cure, and shall thereafter provide no less than monthly written updates to the Owners until such time as such cure is completed. If Common Area Manager does not complete such cure within the time periods set forth above, then one or more of the other Owners (but not City), in addition to their other rights and remedies under this Declaration and/or Applicable Laws, may elect to take-over and assume the obligation to perform the Maintenance Obligations of the Common Area Manager, or the performance of any services provided by the Common Area Manager pursuant to this Declaration, which exercise of such rights is referred to herein as the “Take-Over Right(s).” If one or more Owners (but not City) elect to exercise their respective Take-Over Right (which Owner(s) are referred to herein as the “Take-Over Owners”), the Take- Over Owner(s) shall deliver written notice to the Common Area Manager which specifies the Maintenance Obligations that such Take-Over Owner(s) elect to take over (“Take-Over Notice”) and the period of time when the Take-Over Owner(s) will be performing the Maintenance Obligations on behalf of Common Area Manager (the “ Take-Over Period”). If the Take-Over Owner(s) exercise the Take-Over Rights then they shall be obligated to provide the Common Area Manager with appropriate evidence of insurance, and all maintenance, repair, replacement, management and inspection records and any other documentation related to maintenance, management, repair replacement and inspection performed during the Take-Over Period, and shall, during their Take- Over Period, be entitled to receive all applicable payments (including Assessments) that would otherwise be payable to Common Area Manager during such time, and to exercise all rights and remedies under this Declaration relating to any Party’s failure to make any such payments as and when due hereunder, such that the Take -Over Owner(s) are able to perform such duties and obligations of the Common Area Managers. All maintenance, management and inspection contracts entered into by the Take -Over Owner(s) shall be assignable to the Common Area Manager and the Common Area Manager may, in its sole and absolute discretion, elect to accept an assignment of such contracts. The Take-Over Owner(s) shall have the right to engage a third party to perform the Maintenance Obligations and other services so long as such third party charges a price that is reasonable, competitive, and fair to the Take- Over Owner(s) for the performance of such Maintenance Obligations.
5.6 Manner of Maintenance.
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20 5.6.1 Maintenance Obligation. All Maintenance Obligations or providing of services required to be performed by the Common Area Manager with respect to the Plaza Improvements Area, or otherwise under this Declaration, shall be performed in a first -class and workmanlike manner in accordance with the Maintenance Standards. All maintenance shall be performed, to the extent reasonably practicable, in such a manner as to minimize any noise, vibration, particulates and dust infiltration or other disturbances which would unreasonably disturb Occupants of the Buildings in the Master Project or the Affordable Housing Project.
5.6.2 Replacement. When replaced, Project Improvements shall be replaced with materials at least equal to the quality of the materials being repaired or replaced so as to maintain the architectural and aesthetic harmony of the Plaza Improvements Area and the Master Project as a whole in conformance with the Maintenance Standards.
5.6.3 Duty to Protect Against Mechanics’ Liens . In performing their respective obligations for maintenance as provided in this Declaration or in exercising any easement rights under this Declaration, each Party (for the purposes of this paragraph, the “Contracting Party”, as applicable) shall promptly pay all costs, expenses, liabilities and liens arising out of or in any way connected with contracts for any service, labor or materials provided or supplied for the construction of any Project Improvements authori zed or undertaken by the Contracting Party. The Contracting Party shall not cause or permit any mechanic’s lien to be filed against any portion of the City Property not owned by the Contracting Party for labor or materials alleged to have been furnished or delivered to the City Property by the Contracting Party. If any Contracting Party causes a lien to be filed, such Contracting Party shall: (a) within ten (10) business days after notice to such Contracting Party by any Owner(s), either cause the lien to be discharged or, if acceptable to the affected Owner and its Mortgagees, post a bond which protects the title of each of the affected Owner’s Leasehold Interest or City’s Contingent Interest, as applicable; (b) indemnify, protect, defend and hold harmless the other Owners, their Mortgagees and Parties from any Claims by reason of any such lien; and (c) pay all expenses actually incurred by the other Owner, their respective Mortgagees and Parties in connection therewith, including, without limitation, reasonable attorneys’ fees and costs of defending against the foregoing Claims by the other Owner(s) and Parties, and any costs of enforcing this indemnity.
ARTICLE 6
PAYMENTS, ASSESSMENTS, BUDGETS AND LIENS
6.1 Personal Obligation for Assessments; Creation of Lien for Assessments .
Each Party shall pay to the Common Area Manager its Allocable Share of Assessments levied hereunder. All Assessments permitted to be levied pursuant to this Declaration, together with all Additional Charges attributable thereto, shall be a continuing lien upon the Party’s Leasehold Interest in such Parcel, the lien to be effective upon recordation of a Notice of Delinquent Assessments (as hereinafter defined), with any such lien and any recording thereof in all events subject to the applicable terms and conditions (including limitations) set forth in this Declaration.
Each such Assessment, together with all Additional Charges, shall be the personal obligation of the Person who was the Owner of the Parcel at the time the Assessment fell due and shall bind such Person’s heirs, devisees, personal representatives, successors and assigns. No assumption of personal liability by a successor Party shall relieve any Party from personal liability for delinquent Assessments that were due during the prior Party’s period of ownership. If more than one Person was the Owner of a Leasehold Interest in the Ground Lease Premises or the Affordable Housing Premises, the personal obligation to pay such Assessment shall be both joint and several. No Owner of a Leasehold Interest shall be exempt from liability for Assessments by
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21 waiver of the use of any of the Project Improvements or by the destruction or abandonment of the improvements that are subject to such Leasehold Interest.
ARTICLE 7
7.1 Purpose of Assessments. The Assessments levied by the Common Area Manager shall be used to perform the obligations and duties of the Common Area Manager under this Declaration and for such other purposes as provided for in this Declaration.
7.2 Annual Operating Budget and Assessment Commencement Date.
7.2.1 No later than October 1st of each calendar year, commencing within the year of achievement of substantial completion, the Common Area Manager shall submit to the Parties a detailed proposed Annual Operating Budget for the upcoming calendar year. Each Annual Operating Budget shall be prepared in accordance with the provisions of this Declaration and Applicable Laws. Each Party hereby acknowledges and agrees that is has received a preliminary draft of the initial Annual Operating Budget, and further agrees that such initial draft is subject to revision and further subject to approval by the Parties in accordance with the applicable terms and conditions of this Declaration. Each Party shall have the right, within thirty (30) days following receipt of a proposed Annual Operating Budget, to review the same and provide written notice to the Common Area Manager of its approval or its disapproval, provided that any disapproval notice (a “Budget Disapproval Notice”) shall set forth in reasonable detail the reasons for such disapproval and the changes required for approval, and provided further that no approval shall be unreasonably withheld, conditioned or delayed. If a Party properly delivers a Budget Disapproval Notice, then within ten (10) business days after receipt of the Budget Disapproval Notice the Common Area Manager shall address the reasons for disapproval set forth in the Budget Disapproval Notice and provide a revised proposed Annual Operating Budget to all Parties. Each Party shall have ten (10) business days from receipt of the revised proposed Annual Operating Budget to respond by written notice in the same manner as provided above with respect to the original proposed Annual Operating Budget. All Parties and the Common Area Manager shall mutually cooperate in good faith to promptly resolve any disapproved items in a proposed Annual Operating Budget and generate an Annual Operating Budget reasonably acceptable to all Parties. Time is of the essence with respect to the delivery of any Budget Disapproval Notice and any subsequent objections, and any failure to properly object in writing in accordance with the provisions above shall be deemed approval by a Party. If for any reason the Parties have not all agreed upon (or be deemed to have agreed upon) a new Annual Operating Budget prior to the beginning of the new calendar year, the approved Annual Operating Budget for the prior year, plus an increase equal to the percentage increase (but not decrease) in the local Consumer Price Index during the prior year (the ”CPI Increase”), shall be used until the new Annual Operating Budget is approved pursuant to this paragraph. Upon approval of the new Annual Operating Budget by all Parties, Assessments shall be retroactive to the first day of the Fiscal Year. If the amount paid utilizing the approved Annual Operating Budget for the prior year (plus any CPI Increase) exceeds the new Annual Operating Budget, the Common Area Manager shall apply such excess amounts against Assessments to be levied as of the date of the new Annual Operating Budget approval and for the following months until the excess amounts are applied in full. If the amount paid utilizing the approved Annual Operating Budget for the prior year (plus any CPI Increase) shall be less than the new Annual Operating Budget, the Parties shall pay the balance of such deficiency within thirty (30) days after the date of the new Annual Operating Budget approval. If the Parties are unable, despite good faith and commercially reasonable efforts, to agree upon an Annual Operating Budget by March 31 st of any calendar
year, it shall be an Operational Dispute (defined below) subject to arbitration under Section 14.3.
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22 7.2.2 A Party’s obligation to pay Regular Assessments levied under this Declaration shall commence upon the first day of the first month after the Maintenance Commencement Date ( “Assessment Commencement Date” ). Special Assessments and Compliance Assessments may be levied by Common Area Manager as and when required by the pursuant to this Declaration, subject to the Parties’ approval rights set forth herein.
7.3 Regular Assessments. Regular Assessments shall be payable in equal monthly installments. Regular Assessments shall be established based upon the approved Annual Operating Budget for the applicable Fiscal Year and shall be levied based upon the Allocable Share for the applicable Common Expenses.
7.4 Updated Budget; Special Assessments. If at any time the Common Area Manager reasonably determines that the estimated Common Expenses set forth in an approved Annual Operating Budget will not be adequate to pay all Common Expenses for a calendar year, the Common Area Manager shall promptly provide written notice thereof and an updated proposed Annual Operating Budget (an ”Updated Budget”) to each of the Parties for review and approval in the same manner for the initial review and approval of an Annual Opera ting Budget as set forth in Section 6.3.1 above. To the extent that an Updated Budget approved by the Parties includes Common Expenses in excess of those set forth in an Approved Operating Budget, then the Common Area Manager shall be permitted to levy a special assessment ( “Special Assessments”) in order to raise the funds set forth in the approved Updated Budget. Special Assessments shall be allocated in the same manner as Regular Assessments based upon the Parties’ respective Allocable Shares. Pending approval of any Updated Budget the Common Area Manager shall comply with the agreed upon Annual Operating Budget; provided if there is an Emergency Expense Situation (defined below) and an Updated Budget has not yet been approved, then Common Area Manager may, in its reasonable discretion, incur such expenses as may be reasonably required to mitigate the Emergency Expense Situation with prior notice to the Parties (which notice may be delivered by email). The term “Emergency Expense Situation” means a situation which, if not immediately addressed, would be reasonably expected to pose a threat to cause serious bodily harm, material property damage, or a material violation of Applicable Laws or the terms and conditions of a Ground Lease.
7.5 Compliance Assessments. The Common Area Manager may levy an assessment (“Compliance Assessment”) against any Party who causes or whose Permitted Users cause a violation of Applicable Laws, or Government Requirements, where such violation results in Common Area Manager incurring any costs or expenses to cure such violation. Such Compliance Assessmen t may include all reasonable costs incurred by the Common Area Manager in curing the violation, including Additional Charges as applicable.
7.6 Allocable Shares and Allocation of Assessments; Welfare Exemption; Plaza Improvements. All Regular Assessments set forth in the Annual Operating Budget and any Special Assessments set forth in any approved Updated Budget shall be determined and assessed based upon the Annual Operating Budget or Updated Budget, as applicable, agreed upon by the Parties. Notwithstanding the foregoing or any other provision of this Declaration to the contrary, if and to the extent that the Plaza Improvements Area receives a welfare exemption from ad valorem property taxes (a “ Plaza Welfare Exemption ”), then although the entire ad valorem property taxes actually payable with respect to the Plaza Improvements Area shall be included for the purpose of calculating the applicable Assessments, the entire amount of the Plaza Welfare Exemption actually received will be allocated solely to the Affordable Housing Project and not shared pro rata among the Declarant, Owners, or any other Parties.
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23 7.7 Late Payment. If a Party shall fail to pay such Party’s Allocable Share or any other amounts due under this Declaration within fifteen (15) business days after the due dates specified herein, and if such amounts remain delinquent for a period in excess of ten (10) business days after written notice to the delinquent Party, then (i) interest may be charged on the delinquent amount at the Applicable Rate commencing from the expiration of such 10 -business day period until the payment has been made, and (ii) Additional Charges actually incurred, including reasonable costs of collection and reasonable attorneys’ fees and costs, shall be levied by the Common Area Manager, together with a late fee in an amount equal to five percent (5%) of the delinquent payment.
7.8 Notice and Assessment Installment Due Dates. The due dates for the payment of Regular Assessments normally shall be the first day of each month. The Common Area Manager may require Special Assessments to be payable in one payment or in installments. The Common Area Manager shall provide at least thirty (30) days’ prior notice of any Special Assessment, which notice shall specify the date for the payment of such Special Assessments.
In connection with the levy of any Compliance Assessment, the Common Area Manager shall specify, in a notice provided to the Party, the date for the payment of the Compliance Assessments (which shall be no later than fifteen (15) business days after such notice is received by the affected Party). Each installment of Assessments shall become delinquent if not paid within fifteen (15) business days after its due date, and shall be subject to the provisions of Section 6.8 above.
7.9 Collection of Assessments. The rights set forth below shall be expressly subject to Section 6.13 and Article 12 below with respect to protections of Mortgagees and Tax Credit Investors.
7.9.1 Right to Enforce. The right to collect and enforce Assessments is vested in the Common Area Manager. The Common Area Manager may enforce the remedies set forth in this Section 6.10 by commencement and maintenance of a suit at law or in equity, or may pursue the other remedies provided for hereunder including the right to pursue foreclosure by judicial proceedings or through the exercise of the power of sale pursuant to Section 6.10.5, and enforce the lien rights created.
7.9.2 Notice of Assessments and Foreclosure. The Common Area Manager shall distribute a written notice to the defaulting Party regarding Assessments and foreclosure as set forth in California Civil Code Section 6812.1 during the sixty (60) day period immediately preceding the beginning of the firs t Fiscal Year, or portion thereof, after the Maintenance Commencement Date and must simultaneously provide a copy of any such notice to all Eligible Holders.
7.9.3 Delinquent Assessments. In collecting delinquent Assessments, the Common Area Manager shall comply with the requirements of this Declaration and California law, including, without limitation, California Civil Code Sections 6800 et. seq.
7.9.4 Creation of Lien. If there is a delinquency in the payment of any approved Assessment or installments of approved Assessments, any amounts that are delinquent for a period of more than sixty (60) days after written notice to the defaulting Party, together with any Additional Charges, shall be a lien against such Leasehold Interest upon the recordation in the Official Records of a notice of delinquent Assessment (“Notice of Delinquent Assessment”) as provided in, and subject to the requirements of, California Civil Code Sections 6800 et. seq ; provided, however, that any such assessment lien shall be subject and subordinate to (i) liens for
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24 taxes and other public charges which by Applicable Law are expressly made superior, (ii) all Mortgages recorded prior to the date of recordation of said notice of lien, and to all amendments and modifications to any Mortgages, regardless of when made, and to all advances, whether obligatory, optional or protective, pursuant to documents or obligations secured by any Mortgages, regardless of when made and regardless of whether any such Mortgage has been subordinated to this Declaration, and (iii) all leases entered into, whether or not recorded, prior to the date of recordation of said notice of lien. All liens recorded subsequent to the recordation of the notice of lien described herein shall be junior and subordinate to any assessment lien. Upon the timel y curing by the defaulting Party (or by its Mortgagees or Tax Credit Investors, as applicable, on its behalf) of any default for which a notice of lien was recorded, the party recording same shall record an appropriate release of such notice of lien and assessment lien. For sake of clarification, the Parties hereby agree that an “approved” Assessment shall mean an Assessment approved by the Parties pursuant to the applicable terms and conditions of this Article 6 , and/or an Assessment that is approved pursuant to the dispute resolution provisions of Section 14.3.
7.9.5 Notice of Default; Foreclosure. If the Common Area Manager is entitled to file a lien as provided above, the Common Area Manager may record a Notice of Delinquent Assessment and, subject to the requirements and limitations of this Declaration and those set forth in California Civil Code Sections 6800 et. seq. including Sections 6812 and 6814, may cause the Leasehold Interest with respect to which a Notice of Delinquent Assessment has been recorded to be sold either in the same manner as a sale is conducted under California Civil Code Sections 2924, 2924b and 2924c, or through judicial foreclosure, and as provided in the California Civil Code. However, as a condition precedent to the holding of any such sale under Section 2924c, appropriate publication shall be made, any Eligible Holder must be given at least sixty (60) days’ prior written notice thereof, and any Eligible Holder must be given at least sixty (60) days to cure such default. In connection with any such sale, the Common Area Manager is authorized to appoint a trustee for purposes of conducting the sale. If a delinquency is cured before sale of the Leasehold Interest, or before completing a judicial foreclosure, or if it is determined that a lien previously recorded against a Leasehold Interest was recorded in error, the Common Area Manager shall apply payments and follow the procedures set forth in California Civil Code Section 6800 et. seq., as applicable. The Common Area Manager, acting on behalf of the Parties, shall have the power to bid upon the Leasehold Interest at foreclosure sale and to acquire, hold, lease, mortgage and convey the Leasehold Interest and vote as the holder of the Leasehold Interest. Notwithstanding the foregoing provisions of this Section 6.10.5 or those contained in Section 6.10.4 or elsewhere in this Declaration, the Parties hereby agree that (i) any liens shall be subject and subordinate to any then-existing financing or other liens and the related rights of any Mortgagee (and Tax Credit Investors if applicable), (ii) with respect to any Leasehold Interest, shall be further subject to the rights of City and any other ground lessor, (iii) no foreclosure action whatsoever may be commenced without the prior written consent of the Eligible Holders, (iv) until the defaulting Party (and its Mortgagees and Tax Credit Investors, as applicable), and the City being given at least sixty (60) days’ prior written notice, and (v) until the Eligible Holders have been given at least sixty (60) days to cure.
7.9.6 Application of Payments. Any payments of sums due under this Article 6 shall first be applied to Assessments owed by the Party making such payment, and only after Assessments owed by such Party have been paid in full shall the payments be applied to the Additional Charges owed by such Party. If any Party requests a receipt after payment of a delinquent Assessment, the Common Area Manager shall provide a receipt which sets forth the date of payment and the individual who received such payment.
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25 7.10 Reconciliation and Audit Rights.
7.10.1 Reconciliation. Within ninety (90) days after the end of each Fiscal Year, or portion thereof the Common Area Manager shall provide each Party with a statement setting forth the actual Common Expenses paid by the Common Area Manager for the operation and maintenance of the Plaza and performance of its other obligations hereunder and such Party’s applicable Allocable Share (such statement and supporting data are collectively called the “Reconciliation”). The Reconciliation shall separately identify cost categories for the various Common Expenses and the applicable Allocable Shares. If the amount paid by a Party for such Fiscal Year shall have exceeded the expenses incurred by the Common Area Manager for the applicable Allocable Shares ( “Actual Expenses”), the Common Area Manager may refund the excess to the Parties at the time the Reconciliation is delivered or apply such amounts against Assessments to be levied for the next Fiscal Year. If the amount paid for such Fiscal Year shall be less than the Actual Expenses, the Party shall pay the balance of such Party’s Allocable Share to the Common Area Manager within sixty (60) days after receipt of such Reconciliation, it being understood and agreed that the sixty (60) day period only establishes the period for payment and is not to be construed as an acceptance of the Reconciliation.
7.10.2 Audit Rights. Within two (2) years after the date of receipt of a Reconciliation, the Parties shall each have the right to audit the books and records pertaining to the Common Expenses for the Fiscal Year covered by such Reconciliation. In connection therewith, the Common Area Manager shall cause to be maintained at its offices or at the Los Angeles County offices of any Management Company it engages to perform its services hereunder, all books and records pertaining to the operation and maintenance of the Plaza Improvements Area. Such Parties shall notify the Common Area Manager of their intent to audit at least fifteen (15) business days prior to the designated audit date. Any such audit shall be provided to the Common Area Manager upon completion. In the event that such audit shall disclose any error in the determination of the Common Expenses, or the allocation thereof to a Party, leading to an overestimate or underestimate of the Assessment of any Party, then an appropriate adjustment shall be made f orthwith. Notwithstanding anything to the contrary, the approval of a prior Reconciliation, or any line item comprising a part thereof, shall not be a waiver of a Party’s right to challenge subsequent Reconciliations regarding such line item. The cost of any audit shall be assumed by the auditing Party or Parties unless such Party or Parties shall be entitled to a refund in excess of three percent (3%) of the amount calculated by the Common Area Manager as such Party or Parties’ Allocable Share for the applicable Fiscal Year, in which case the Common Area Manager shall pay the reasonable cost of such audit. The Common Area Manager shall retain the right to dispute the results of such audit for a period of sixty (60) days following receipt of such audit, and the Common Area Manager’s election not to contest the results of such audit during the sixty (60) day period shall be deemed acceptance of such audit. If any dispute remains thirty (30) days after receipt by the Parties of the Common Area Manager’s written notice of such dispute, then such dispute shall be deemed to be an Operational Dispute which shall be resolved pursuant to Section 14.3.
7.11 Subordination of Lien to Mortgages. In addition to the provisions of Article 12 below, the lien of Assessments herein shall be subordinate to any Mortgage, and shall in no way affect the rights of any Mortgagee.
7.12 No Offsets. All Assessments shall be payable in the amounts specified by the particular Assessment and no offsets against such amounts shall be permitted for any reasons, including, without limitation, a claim that the Common Area Manager is not properly exercising its duties of maintenance, operation or enforcement.
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26 7.13 Transfer of Leasehold Interest . After transfer or sale of a Leasehold Interest, the transferring Party shall not be liable for any Assessment levied on such Party or the Party’s Leasehold Interest after the date of such transfer of ownership and written notice of such transfer is delivered to the other Parties. The selling Party shall still be responsible for all Assessments and charges levied on its Leasehold Interest prior to any such transfer.
7.14 Failure to Levy Assessments. The omission by the Common Area Manager to levy the Assessments hereunder before the expiration of any Fiscal Year, for that or the next Fiscal Year, shall not be deemed either a waiver or modification in any respect of the provisions of this Declaration or a release of the Parties from the obligation to pay the Assessments or any installment thereof for that or any subsequent Fiscal Year, but the Assessment levied for the preceding Fiscal Year shall continue until a new Assessment is determined.
7.15 Additional Remedies. In addition to the remedies set forth above in this Article 6 or set forth elsewhere in this Declaration with respect to a Party’s failure to pay an Assessment in full as and when due hereunder, where such payment remains delinquent for more than ninety (90) days after written notice, then each Declarant shall have the right to suspend the defaulting Party’s rights to use any portion of the Plaza Improvements Area may take all reasonable steps to prevent the continued use of the Plaza Improvements Area by such defaulting Party. In addition to any indemnities set forth elsewhere in this Declaration, in such instance a defaulting Party shall indemnify, defend, and hold the non -defaulting Parties harmless from and against any and all Claims relating to the exercise of such remedies so long as they are exercised in accordance with Applicable Laws.
ARTICLE 8
USE RESTRICTIONS
8.1 Compliance with Applicable Laws and Project Entitlements and Requirements. Each Party shall comply with, and such Parties shall use commercially reasonable efforts to ensure that its Permitted Users comply with, all Applicable Laws, the Project Entitlements, and the applicable Ground Leases relative to their use of the Plaza I mprovements Area. No illegal activities shall be conducted within the Plaza Improvements Area. The Plaza Improvements Area shall be used and operated in accordance with the provisions of this Declaration, the Project Entitlements, Applicable Laws.
8.2 No Changes to Entitlements. No applications or requests for amending, revising or otherwise changing the zoning, land use or other regulations affecting the Plaza Improvements Area shall be made by any Party without the prior written approval of the Owners.
8.3 Variances and Conditional Use Permits. No Owner shall submit an application for a conditional use permit or variance for their respective portion of the Plaza Improvements Area (“Conditional Use Permit”) unless such application is approved by all of the Owners in their reasonable discretion prior to submittal to the applicable Governmental Agency. Each Owner shall be responsible for all costs incurred in obtaining and satisfying requirements imposed under a Conditional Use Permit for its portion of the Plaza Improvements Area. Any Owner obtaining a Conditional Use Permit for its portion of the Plaza Improvements Area shall provide such Conditional Use Permit to the other Owners and each of the Owners shall have the right to enforce the terms of the Conditional Use Permit.
8.4 Further Subdivisions. In no event may any Declarant further subdivide its Parcel without the approval of all of the Owners.
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27 8.5 Occupants and Permitted Users. Each Party is responsible for the compliance by its Lessees and Occupants, and each of their Permitted Users, with all the obligations and restrictions in this Declaration, including, without limitation, the use restrictions set forth in this Article 7.
8.6 Insurance Requirements. The Parties shall not, without the prior written approval of the Owners, do anything that would materially increase the premiums of any policy of insurance maintained by any Declarant or other Owner or would render any portion of the Plaza Improvements Area uninsurable, or create any valid defense to any Owner’s right to collect Insurance Proceeds (as hereinafter defined), or cause any insurance policy to be cancelled, or cause a refusal to renew the same.
8.7 Hazardous Materials . No Party shall, and no Party shall allow any of its Occupants and other Permitted Users to, release, generate, use, store, dump, transport, handle or dispose of any Hazardous Materials within the City Property in violation of Applicable Laws or otherwise permit the presence of any Hazardous Material on, under, or about the City Property in violation of Applicable Laws. If Hazardous Materials are released within the City Property in violation of any Applicable Laws and such release occ urred as a direct or indirect result of a Party’s or such Party’s Permitted Users’ use, handling, storage or transportation of such Hazardous Materials, such Party shall be solely responsible and liable for the prompt cleanup and remediation of any resulting contamination and will indemnify, protect, defend and hold the other Parties harmless from any and all Claims suffered by or incurred by such parties.
8.8 Refuse Removal. All waste, recycling, packing materials, debris and other refuse (except for Hazardous Materials, which shall be governed by the provision of Section 7.7) shall promptly be removed from the Plaza Improvements Area, in compliance with all Governmental Requirements.
8.9 Emissions. No use shall be permitted on or within any portion of the City Property which: (a) emits unreasonable amounts of dust, debris, dirt, cinders, fumes, odors, radiation, gases, or vapors; (b) discharges contaminated liquid or solid wastes or other toxic, noxious or harmful matter into the atmosphere or any Utility Facilities of the Master Project or the Affordable Housing Project, which may adversely affect (i) the health or safety of persons or (ii) the use or enjoyment of the Master Project and/ or the Affordable Housing Project or any part thereof; or (c) causes obstructions to the Project Drainage Facilities. The foregoing shall not include emissions resulting from work permitted to be performed hereunder so long as appropriate construction practices are adhered to and so long as the Person performing the work conforms to the requirements of this Declaration.
8.10 Non-Smoking. The Master Project and the Affordable Housing Project are non - smoking projects and no smoking shall be permitted in any Project Exterior Areas or any portion of the Plaza Improvements Area.
8.11 Oil and Mineral Rights. No oil drilling, oil development operations, oil refining, quarrying, or mining operations of any kind shall be permitted upon or in any portion of the City Property nor, subsequent to the recording of this Declaration, shall oil wells, tanks, tunnels, or mineral excavations or shafts be installed upon the surface of any portion of the City Property or within five hundred feet (500’) below the surface of such portion of the City Property. No derrick or other structure designed for use in boring for water, oil or natural gas shall be erected, maintained or permitted upon any portion of the City Property.
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28 8.12 Drainage and Use of Project Drainage Facilities.
8.12.1 Compliance With Requirements Regarding Stormwater Pollution. The Parties shall not discharge or allow their respective agents and employees to discharge any toxic chemicals or hydrocarbon compounds such as gasoline, motor oil, anti -freeze, solvents, paints, paint thinners, detergents, pet waste, and such other ma terials and pollutants into any of the Project Drainage Facilities or any other portions of the City Property including any system that connects to the Project Drainage Facilities or any other portions of the City Property. The disposal of such pollutants and materials into the Project Drainage Facilities or any other portions of the City Property may result in significant penalties and fines and such Party shall be responsible for any activities by such Party or by such Party’s Permitted Users of such pollutants and materials into the Project Drainage Facilities or any other portions of the City Property, and shall indemnify, protect, defend and hold the other Parties harmless from and against any Claims arising from a violation of this restriction. The Parties shall at all times perform all maintenance that may be imposed by any water quality management plan that may affect the City Property, if any.
8.12.2 Project Drainage Facilities. Each Party and Occupant shall not commit any act that would materially damage or interfere with the operation of any of the filters or other aspects of the Project Drainage Facilities, or divert or otherwise cause drainage to occur or flow other than through the Project Drainage Facilities. Each Party shall cooperate with each other Party to prevent damage or obstructions to the Project Drainage Facilities. Any modification to the Project Drainage Facilities shall not materially result in an increase in the flow of water into the Project Drainage Facilities in a manner which will overburden such Project Drainage Facilities or cause a material change in the operation or use of the Project Drainage Facilities.
8.13 Signage. Signage on the Plaza Improvements Area shall (a) comply with the requirements of Applicable Laws and the Project Entitlements and (b) be installed and maintained in a manner consistent with the requirements of the Project Rules.
8.14 Trash Disposal . Trash, garbage or other waste shall be deposited in the appropriate trash rooms or other receptacles.
8.15 Use Restrictions. Any use restrictions with respect to any Parcel shall be limited to those restrictions, if any, under Applicable Laws or Governmental Requirements and there are no additional use restrictions set forth in this Declaration. The Declarants each hereby agree to comply with, and to cause all of their respective Permitted Users to comply with, any use restrictions that apply to their respective Parcel, as well as any that apply to the Plaza Improvements Area as a whole.
8.16 Construction Work.
8.16.1 Performance of Work. All work being performed by either Declarant on its respective Parcel, after the initial Construction Work, shall be performed: (a) during the time frames permitted in the Design and Construction Guidelines and in a manner that does not unreasonably impair or unreasonably interfere with the use, operation, occupancy or enjoyment or ingress to and egress from any portion of any Project Improvements located thereon by any Party or its Permitted Users; (b) in a good and workmanlike manner ; (c) in conformity with this Declaration, the Project Entitlements, and all Governmental Requirements; (d) in a manner so that all safety measures reasonably required to protect the Parties and their respective Permitted Users from injury or damage that m ay be caused by or result from such Construction Work are taken; (e) so as not to cause any unreasonable disruption on any portion of the Master Project or
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29 the Affordable Housing Project through the placement or operation of any equipment, construction materials, debris or loose dirt related to such work; and (f) in accordance with Plans and Specifications (as hereinafter defined) approved pursuant to the ter ms of Article 8 . Upon commencement of any Work, a Declarant shall diligently pursue the Work to completion. Any damage occurring to any portion of the City Property as a result of Construction Work shall be the responsibility of the Declarant performing such Construction Work or causing such Construction Work to be performed and shall be repaired by such Declarant promptly upon the completion of such Construction Work , at such Declarant’s sole cost and expense, to the same condition as existed immediately prior to such Work.
8.16.2 Dust. Dust from all Construction Work shall be controlled at all times by watering down the construction site or by any other method permitted under Governmental Requirements and approved by any Governmental Agencies in connection with the issuance of a const ruction permit (to the extent such approval is required). Each Owner shall prevent construction debris from entering into any of the Project Drainage Facilities. The Owner on whose behalf such Construction Work is being performed shall be responsible at its sole cost and expense for keeping all portions of the Plaza Improvements Area if affected by the Work (or causing the same to be kept) reasonably clean and free of dust, debris and mud caused by such Construction Work on a daily basis.
8.16.3 Orderly Site. Any Person performing any Construction Work shall keep the exterior portions of the Plaza Improvements Area affected by such Construction Work in a neat and orderly condition during construction periods; provided, however, that normal construction activities and parking in connection with Construction Work conducted in accordance with this Declaration, the Desig n and Construction Guidelines and all applicable Governmental Requirements shall not be considered a nuisance or otherwise prohibited by this Declaration.
Trash and debris related to the Construction Work shall not be permitted to accumulate on or within any Parcel.
8.16.4 Emergency Work. Notwithstanding any other requirement contained in this Declaration, in the event of an Emergency, a Declarant may undertake any Construction Work reasonably necessary to remedy the Emergency, provided that such Declarant acts in good faith and in accordance with all Applicable Laws and gives notice thereof to any affected Parties upon the occurrence of the Emergency or as soon thereafter as reasonably possible and otherwise conforms, to the extent practicable, to the applicable provisions of this Article 7.
ARTICLE 9
DESIGN APPROVALS AND CONSTRUCTION
9.1 Non-Applicability. The provisions of this Article 8 shall not apply to any Building or the interior thereof or the plans and specifications for the construction of the initial improvements to the City Property.
9.2 Design Review Requirements. Prior written approval by the Owners, not to be unreasonably withheld, conditioned, or delayed, shall be required for any Project Improvements or Work within the Plaza Improvements Area that involves any improvement, construction, installation, remodeling or reconstruction (other than to substantially repair or replace Improvements to their then currently approved state) that will or may do any of the following: (a) affect ingress or egress to any of the Parcels or Buildings; (b) affect visibility of Project Signage; (c) require use or storage of Hazardous Materials; (d) create higher than normal impact from construction work, including, but not limited to, excessive or loud noise, dust, or traffic flow issues;
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30 and/or (e) any other Project Improvements or Work specified in the Design and Construction Guidelines (any such Work, “Alteration Work ”). As used herein, the Owner performing the Alteration Work is referred to as the “Constructing Party” and the other Owners are collectively referred to herein as the “Reviewing Party.” The Reviewing Party’s approval rights set forth in this Section 8.2 must be exercised reasonably.
9.3 Design and Construction Guidelines.
The Owners shall adopt the Design and Construction Guidelines.
9.3.1 Application Requirements. The Design and Construction Guidelines shall set forth the documents required to be submitted by the Constructing Party to the Reviewing Party.
9.3.2 Construction within the Project . The Design and Construction Guidelines include the procedures and requirements dealing with and pertaining to such issues as:
(a) hours of construction;
(b) scheduling of construction activities;
(c) parking of vehicles used in construction activities; (d) cleanup of Construction Work;
(e) limitations and prevention of dust and debris from Construction Work;
(f) the qualification of contractors that undertake any such Construction Work including without limitation requirements for review by structural engineers for any changes affecting the Building Structural Elements; and (g) the amounts and types of insurance and/or bonds that must be maintained by any party who undertakes any such Construction Work.
9.3.3 Completion of Work. The Design and Construction Guidelines shall set forth time periods for commencement and completion of the Work and the appropriate certification that will be required to be issued upon completion of any Construction Work.
9.3.4 Inspections. The Design and Construction Guidelines shall set forth procedures for inspections by the Reviewing Party.
9.3.5 Time Periods for Review. The Design and Construction Guidelines shall set forth time periods for review and approval of applications submitted to the Reviewing Party.
9.3.6 Application Fee. The Design and Construction Guidelines may require that the application be accompanied by a reasonable application fee to pay for any out-of-pocket costs incurred by the Reviewing Party in reviewing any Plans and Specifications (as defined below). This fee may include the cost of retaining outside consultants for purposes of assisting the Reviewing Party in reviewing the Plans and Specifications. The Design and Construction Guidelines may require that that, if, during the review process, the Reviewing Party reasonably
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31 determines that additional reasonable review fees will be necessary to cover additional out of pocket costs, the Reviewing Party may require the Constructing Party to advance such reasonable additional fees before the review can be completed.
9.3.7 Guidelines. The Design and Construction Guidelines may include guidelines for any proposed Work that are not inconsistent with any use restriction contained in this Declaration or Applicable Laws.
9.3.8 Procedure for Approval. To obtain approval for any Alteration Work, the Constructing Party shall submit to the Reviewing Party complete plans and specifications showing the nature, kind, shape, scope, materials and any other information reasonably required by the Reviewing Party (“Plans and Specifications”). The Constructing Party shall deliver the Plans and Specifications to the Reviewing Party in the manner specified in the Design and Construction Guidelines. The Reviewing Party shall review the Plans and Specifications in accordance with the procedures set forth in the Design and Constructions Guidelines.
9.3.9 Effect of Review . To the extent any of the proposed Alteration Work potentially affects any of the Building Structural Elements or involves the installation of heavy equipment (such as a vault), the Reviewing Party may require the Constructing Party to have such Plans and Specifications reviewed by a structural engineer, at the cost of the Constructing Party, licensed in the State of California, with at least ten (10) years’ experience with comparable buildings; provided, however, that such review shall be conducted as soon as reasonably practicable and, in any event, to permit compliance by the Reviewing Party with the time periods for review and approval set forth in the Design and Construction Guidelines. The Reviewing Party shall not be liable for any damage, loss or prejudice suffered or claimed by the Constructing Party as a result of the Reviewing Party’s approval of Plans and Specifications submitted by or on behalf of the Constructing Party. The Constructing Party’s application to the Reviewing Party for review and approval of any Plans and Specifications shall in no way be deemed to be satisfaction of or compliance with any Applicable Laws. Nothing stated in this Section 8.3.9 is intended to limit the Reviewing Party’s liability under this Declaration or otherwise for such Reviewing Party’s breach of its obligations under this Declaration.
9.4 Performance of Construction. The Constructing Party shall perform all Alteration Work in the following manner: (a) in accordance with Plans and Specifications approved under this Article 8 ; (b) with due diligence and in a good and workmanlike manner in accordance with good construction practices; (c) in accordance with practices observed in a first class mixed-use project; and (d) in compliance with all Applicable Laws, the Project Entitlements, the Ground Leases, and, to the extent applicable, any express conditions to the approval of such Alteration Work imposed by the Reviewing Party. Each Owner shall require all contractors and subcontractors performing construction activities within the Master Project and/or the Affordable Housing Project for or at the request of such Owner to carry appropriate liability and course of construction insurance that names each Owner as an additional insured and shall provide a certificate of such coverage to each Owner prior to the commencement of such construction. An Owner performing any such Alteration Work or other Work shall not allow the accumulation of any refuse on the balance of the Master Project or Affordable Housing Project and shall not unreasonably interfere with any other construction being performed by any other Owner. Any Alteration Work performed shall not unreasonably or materially impair ingress to or egress from the Ground Lease Premises, Affordable Housing Premises, the City Easement Area or any other portion of the Master Project or Affordable Housing Project and shall not unreasonably disrupt operations of the other Owners or the visibility to or access to its Parcel.
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32 9.5 Conflict With Applicable Laws. In the event there is any conflict between the requirements or actions of the Reviewing Party and any Applicable Laws, the Applicable Law, to the extent that it is more restrictive, shall control and the Reviewing Party shall modify its requirements or actions to conform to the Applicable Law; provided, however, that if the Applicable Law is less restrictive, the provisions of this Declaration, including, without limitation, any limitations or restrictions on the requirements or actions of the Reviewing Party, shall nonetheless apply.
9.6 Separation of Work. For all purposes applicable to the provisions of statutory law of the State of California, the construction of any Project Improvements shall nevertheless be deemed to be a separate and distinct work of improvement.
9.7 Liability. The Reviewing Party shall not be liable to any Owner for any damage, loss or prejudice suffered or claimed on account of: (a) the approval or disapproval of any Plans and Specifications or other submittals, whether or not defective; (b) the construction or performance of any Work, whether or not pursuant to approved Plans and Specifications; (c) the inspection of any Work; (d) damage to the Project or any property within the Project; or (e) the execution and delivery of an estoppel certificate pursuant to Section 15.2, whether or not the facts therein are correct, to the extent that the Reviewing Party has acted in good faith on the basis of such information as may be possessed by him or her; provided, however, that any such estoppel certificate shall bind the Reviewing Party.
ARTICLE 10
INSURANCE
10.1 Property/Casualty Insurance. Each Owner shall, at its sole cost and expense, maintain one or more policies of property insurance covering its portion of the Improvements on the Ground Lease Premises, Affordable Housing Premises, and City Easement Area (collectively, the ”Insured Property” ) in accordance with all of the terms and conditions of the applicable Ground Lease, the Easement Agreement, and any applicable Mortgage, as well as the requirements of any Tax Credit Investor (“Property Insurance”). Notwithstanding the foregoing, the Common Area Manager shall obtain and maintain, or cause to be obtained and maintained, the Property Insurance on behalf of all of the Owners through a Master Policy (defined below), unless the Owner’s instead unanimously agree to maintain separate policies of insurance as required under their respective Ground Leases. Notwithstanding the foregoing, the term “Insured Property” shall specifically exclude all furniture, fixtures, and other personal property that an Owner is not required to insure pursuant to the terms and conditions of the applicable Ground Lease, and/or Mortgage.
10.2 Liability Insurance. Each Owner shall maintain, at its sole cost and expense, all policies of liability insurance required under their respective Ground Lease, and any applicable Mortgages. Notwithstanding the foregoing, the Common Area Manager shall obtain and maintain or cause to be obtained and maintained commercial general liability insurance ( “Liability Insurance”) insuring the Common Area Manager and Owners against liability arising from the operation, maintenance and use of the Plaza Improvements Area or exercise of any of the rights and obligations under this Declaration or incidental to the use, maintenance and/or management of the Plaza Improvements Area. Minimum limits for the Liability Insurance shall be the greater of (i) $1,000,000 per occurrence and $2,000,000 general aggregate with a $2,000,000 umbrella/excess liability policy(ies), and (ii) the minimum requirements under the Ground Leases.
Coverage for such matters shall be primary to any coverage provided by any other liability
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33 insurance policy maintained by Owners and all insurance maintained by Owners will be excess and non-contributory.
10.3 Provisions Applicable to Insurance Requirements.
10.3.1 The Owners shall maintain separate policies of insurance as required under their respective Ground Leases, unless t he Owners unanimously agree to cause the Common Area Manager to obtain the Property Insurance and/or Liability Insurance through a blanket or master policy of insurance coverage (“Master Policy”). To the extent that the Property Insurance and or Liability Insurance is included in a Master Policy of insurance, the Common Area Manager shall ensure that there is an allocation of the coverage for the Insured Property and/ or the liabilities insured under the Liability Insurance indicating the amount of the applicable premium which is attributable to such coverage required to be obtained and for which the cost is to be so included in Common Expenses.
10.3.2 The Master Policy of the Property Insurance shall contain such coverages as are required under the applicable Ground Leases and Mortgages, and shall otherwise satisfy all applicable requirements of such Ground Leases and Mortgages, and the requirements of any Tax Credit Investor (if applicable).
10.3.3 The Master Policy of Property Insurance shall name the Common Area Manager as a first named insured, each Owner as additional named insureds, and each Mortgagee of each Owner as loss payee with respect to such Owner’s interest in the proceeds from such policies.
10.3.4 The insurance policies, certificates of insurance and detailed summaries of the policies of the Common Area Manager pursuant to this Declaration shall be retained by the Common Area Manager and be available for inspection by Owners at reasonable times, and will be available for review by Owners upon request. In addition to the foregoing, the Common Area Manager shall provide to the Owners such information regarding the insurance as may be required by Applicable Laws.
10.4 Claims.
10.4.1 Subject to the need to obtain the prior written consent of all Owners as set forth below, the Common Area Manager is authorized to negotiate and agree on the value and extent of any loss to the Insured Property and/or any claims under any other insurance policies carried by the Common Area Manager or if part of a Master Policy, under such Master Policy, including, without limitation, the rights for settlement approval as it relates to the Property Insurance and Insured Property and/or any liabilities covered under the Liability Insurance, and any other insurance carried hereunder. To the extent required for the Common Area Manager to perform its duties hereunder, each Owner irrevocably appoints the Common Area Manager as that Owner’s attorney -in-fact for pu rposes of procuring, negotiating, accepting, compromising, releasing, settling, distributing and taking other related actions in connection with the Property insurance and Insured Property and/or any liabilities covered under the Liability Insurance and/or any other insurance carried by the Common Area Manager hereunder, and any losses or claims related thereto; provided notwithstanding the foregoing, the approval of all Owners shall be required prior to Common Area Manager taking any of the actions set forth above.
10.4.2 The proceeds from Property Insurance shall be payable to an insurance trustee approved by all Owners, and each first priority Mortgagee holding a Mortgage on either
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34 the Master Project Premises and related Improvements and the Affordable Housing Premises and related Improvements, which trustee shall be a commercial lending institution or other well - known “fund-control” specialist experienced in the disbursement of construction loan funds (“Insurance Trustee”), to be held and expended pursuant to this Declaration for the benefit of, as applicable, the Owners, Mortgagees, and Tax Credit Investors, based upon the determination of value and loss by the insurance company or its claims adjustor based upon the determination of value and loss; provided, however, if insurance proceeds are received and are attributable to a Casualty affecting the Affordable Housing Premises and related Improvements such insurance proceeds shall be promptly remitted to the first priority Mortgagee with respect to the Affordable Housing Premises and applied in accordance with its loan documents. To the extent the costs of such Insurance Trustee are not covered by the Property Insurance, the costs shall be a Common Expense which shall be allocated to all Owners in accordance with this Declaration. Any Insurance Trustee shall cooperate with the Owners and the Owners shall cooperate with the Insurance Trustee to ensure the coordinated rebuilding of the applicable Building(s) and the other Project Improvements, subject to the applicable loan documents in favor of each Mortgagee.
10.4.3 The Owners shall reasonably cooperate with any adjustor engaged by the Common Area Manager pursuant to this Article 9. The Owners shall also reasonably cooperate with the requirements of any Mortgagee and Tax Credit Investor in connection with the settlements of any insurance claims, subject to any limitations set forth herein.
10.5 Unavailability of Insurance. The Common Area Manager, and its directors and officers, shall have no liability to any Owner, Mortgagee or Tax Credit Investor if, after a good faith effort, it is unable to obtain any portion of the insurance required hereunder because the insurance is no longer commercially reasonably available. In such event, the Common Area Manager shall immediately notify each Owner and any Mortgagee and Tax Credit Investor entitled to notice that the insurance will not be obtained or renewed.
10.6 Right of Owner to Procure Insurance. The Common Area Manager shall at all times be obligated to ensure that the insurance policy for the Property Insurance and Liability Insurance are in full force and effect. If the Common Area Manager fails at any time to maintain any or all of the poli cies of insurance required by this Article 9 , any Owner may obtain the insurance if, within five (5) business days after the date the Owner delivers written notice to the Common Area Manager of its intent to obtain the insurance, the Common Area Manager fails to provide the Owner reasonably satisfactory evidence that it has obtained all of such insurance or has determined such insurance to be unavailable in accordance with the provisions above. If the Common Area Manager fails to provide such evidence and the Owner obtains any or all of the insurance required hereunder, all costs and expenses incurred by such Owner in doing so, together with interest at the Applicable Rate, shall be reimbursed to the procuring Owner within ten (10) business days after receipt of written demand therefor. The rights under this paragraph do not include any right to challenge a determination made by the Common Area Manager in accordance with the provisions above that any portion of the insurance required by this Declaration is unavailable.
10.7 Owner’s Insurance Obligations . Subject to the Common Area Manager obtaining insurance as set forth above on behalf of all Owners subject to and in accordance with the provisions of this Article 9 , each Owner shall maintain all insurance required under their applicable Ground Lease, as applicable, in full conformance with the applicable terms and conditions thereof.
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35 ARTICLE 11
CASUALTY
11.1 Repair and Reconstruction. Except as otherwise stated in this Article 10, if any of the Insured Property is damaged or destroyed by fire or other Casualty, the Common Area Manager shall effect or cause the repair of such Insured Property in accordance with the requirements set forth in this Article 10. Any such repair or replacement shall be performed in a manner which (a) restores the Insured Property to substantially the same condition that existed prior to the Casualty, (b) causes the restoration to be completed within a reasonable period of time after the Casualty causes the restoration to be completed within a reasonable period of time after the Casualty (including, without limitation, within any applicable time period required by any Mortgagee and/or Tax Credit Investor), and (c) provide alternat ive access (to the extent reasonably feasible given the scope of the damage and destruction) to the Owners during the restoration. Any such Work of construction shall be performed with the consent of all of the Owners (but not City), including, without limitation, the schedule for performance of the work, the identity of the contractor, and approval of plans and specifications to the extent they deviate from the original plans and specifications used to construct the Initial Improvements.
11.1.1 Restoration of Insured Property When Insurance Proceeds Are Sufficient. Where insurance proceeds received for the Insured Property (“Insurance Proceeds”) are sufficient to complete the repairs of the Insured Property so damaged or destroyed (excluding deductibles, which shall be considered an Emergency Expense Situation in accordance with Section 6.5), the Common Area Manager shall repair the applicable Insured Property.
11.1.2 Insurance Depository for Insurance Proceeds. If the cost of repair exceeds the greater of (i) ten percent (10%) of the Replacement Value of the applicable Insured Property, and (ii) the amount required under any Mortgage or by any Tax Credit Investor (as applicable), then all Insurance Proceeds shall be deposited with the Insurance Trustee. Funds shall be disbursed in accordance with the normal and commercially reasonable construction loan fund disbursement practices of the Insurance Trustee, and approved by each first priority Mortgagee holding a Mortgage on either the Ground Lease Premises or the Affordable Housing Premises, and which shall require, as a minimum, that the construction consultant, general contractor and, if applicable, the architect certi fy prior to any disbursement substantially the following:
(a) That all of the Work completed as of the date of such request for disbursement has been done in compliance with the approved Plans and Specifications; (b) That such disbursement request represents monies which either have been paid by or on behalf of the construction consultant, the general contractor or the architect and/or are justly due to contractors, subcontractors, materialmen, engineers, or other persons (whose name and address shall be stated) who have rendered or furnished certain services or materials for the Work of repair. Such certificate shall give a brief description of such services and materials and the principal subdivisions or categories thereof and the respective amounts paid or due to each of said persons in respect thereof and stating the progress of the work up to the date of said certificate; (c) That the sum then requested to be disbursed plus all sums previously disbursed does not exceed the cost of the Work insofar as actually accomplished up to the date of such certificate;
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36 (d) That no part of the cost of the services and materials described in this Section 10.1 has been or is being made the basis for the disbursement of any funds in any previous or then pending application; and
(e) That the amount held by the Insurance Trustee, after payment of the amount requested in the pending disbursement request, will be sufficient to pay in full the costs necessary to complete the repair.
11.1.3 No Insurance Trustee. If the cost of repair is less than the greater of (i) ten percent (10%) of the Replacement Value and (ii) the amount required under any Mortgage or by any Tax Credit Investor (as applicable), then the Common Area Manager shall disburse the available funds for the repair under such procedures as the Common Area Manager reasonably deems appropriate under the circumstances.
11.1.4 Repair of Insured Property Where Funds Are Not Sufficient . If Insurance Proceeds and other funds available to the Common Area Manager for effecting the required repairs of the applicable Insured Property are not adequate to complete such repair, the Common Area Manager shall levy a Special Assessment to and against each Party. The Parties acknowledge that the restoration of the Insured Property is essential to the operation of the Plaza Improvements Area and other portions of the Master Project and Affordable Housing Project. If a Special Assessment is not timely paid by any Party, the Common Area Manager may pursue remedies under Article 6 for failure to pay Assessments when due. In addition, if any Party fails to pay a Special Assessment, the Common Area Manager or any other Owner (but not City), upon ten (10) business days’ written notice to the defaulting Party shall have the right, but not the obligation, to pay some or all of the defaulting Party’s Special Assessment for application to the costs of repair, in which case such contributing Owner shall have the right to seek any remedies available at law or in equity against the defaulting Party to recover such contribution and any damages resulting from such default, which may include exercise of the remedies set forth in Article 6.
11.2 Repair to Plaza Improvements Area. If there is damage to any portion of the Plaza Improvements Area that are covered by Insurance Proceeds, the Common Area Manager shall have the right, in lieu of performing the repair, to permit the Master Project Owner to perform all or portions of the repair to such Plaza Improvements Area. In the event Master Project Owner is to perform such repairs in accordance with this Section 10.2, the Common Area Manager shall make Insurance Proceeds paid to the Common Area Manager with respect to such loss available to Master Project Owner, either through establishment of a depository or other controls deemed necessary by the Common Area Manager for the disbursement of the Insurance Proceeds.
11.3 Repair Work. Any repair or restoration work which is required hereunder shall comply with the requirements of this Declaration, modified as may be required by applicable building codes and regulations in force at the time of such repair. Any changes which require approval under Article 8 shall be obtained prior to commencing the repair; provided, however, that no approval shall be required for an Owner to repair and/or rebuild any damaged or destroyed Project Improvements within its Parcel so long as the restoration substantially conforms to the Building and Project Improvements located within its Parcel prior to the damage and destruction.
11.4 Cooperation. In the event of damage to Project Improvements on more than one Parcel, or if there is damage to both Insured Property and Project Improvements which are not Insured Property, the Owners and Occupants of each of the affected Parcels shall each cooperate in the repair of the Project Improvements located within their respective Parcels and their
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37 respective areas of responsibility by coordinating repair Work and providing access where necessary over and across the Project. The Owners acknowledge that since the Common Area Manager has the primary obligation for repair of Insured Property, where Ins ured Property has been damaged, the Common Area Manager shall have primary control over any construction and that, subject to the provisions of this Section 10.4, the Owners shall comply with any reasonable scheduling or other requirements imposed by the Common Area Manager to assure the timely reconstruction of the components of the Insured Property which require repair. The Owners shall take commercially reasonable steps before all repairs are completed to erect necessary barriers and take such precautions as are reasonable to preclude unauthorized access to the areas which are being repaired, and otherwise mitigate dangerous or hazardous conditions within the Project.
11.5 Completion of Repairs. Repairs to the Project that are to be undertaken by any of the Owners shall be undertaken and completed as promptly as reasonably possible under the circumstances, subject to delays that are beyond the reasonable control of the affected Owner(s), as the case may be, and shall be diligently pursued to completion in a good and workmanlike manner, and in accordance with all Applicable Laws and then- existing good building practices and within the time required by any Mortgagee and/or Tax Credit Investor. If repairs to any portion of the Project require that repairs first be made to the Plaza or other portions of the Project that the Common Area Manager is required to repair hereunder, then the requirements of any Owner to complete any repairs shall be subject to and contingent upon completion of those repairs to the Plaza and all other portions of the Project required to be repaired by the Common Area Manager.
ARTICLE 12
CONDEMNATION
12.1 Taking of Property. If any portion of the City Property are taken by eminent domain, the impacted Parties shall represent themselves in any condemnation proceedings and in negotiations, settlements and agreements with the condemning authority for acquisition of such portion of the City Property. The Parties shall separately be entitled to pursue, negotiate and/or settle any claim the Parties have against the condemning authority with respect to their interests in the City Property pursuant to this Declaration.
12.2 Temporary Takings. In the case of a temporary taking of any portion of the City Property, any award shall belong to the Owner(s) of the affected Parcels, subject to the rights of any Mortgagees and/or Tax Credit Investors, and subject to the rights of the other Parties to make independent claims with respect to their rights under this Declaration.
12.3 Restoration. If all or any part of the Plaza Improvements Area are taken by eminent domain, then the proceeds of condemnation, after payment of any and all fees and expenses incurred by the applicable Owner relating to such condemnation, shall be used to restore or replace the portion of the Plaza Improvements Area affected by condemnation in a manner as will effect and permit the reasonable on- going operation of the Plaza Improvements Area (excluding the portions of the Plaza Improvements Area which are so taken) and in order to maintain the Master Project and Affordable Housing Project as viable and operable developments, if such restoration or replacement is reasonably possible, and any remaining funds shall be distributed to the impacted Owners (and such Owners’ Mortgagees and/or Tax Credit Investors, as their interests may appear) based upon the valuation of loss to each Owner’s Leasehold Interest, and the other Parties shall be allowed to pursue separate actions with respect to their interests under this Declaration.
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38 ARTICLE 13
RIGHTS OF MORTGAGEES AND TAX CREDIT INVESTORS
13.1 Conflict. Notwithstanding any contrary provision contained elsewhere in this Declaration, the provisions of this Article 12 shall control with respect to the rights and obligations of Mortgagees and Tax Credit Investors as specified herein.
13.2 Subordination of Lien to Mortgages; Liability for Unpaid Assessments. If any Leasehold Interest is encumbered by a Mortgage made in good faith and for value, the foreclosure of any lien created by any provision set forth in this Declaration by power of sale or judicial foreclosure for Assessments, or installments of Assessments, shall not affect or impair the lien of the Mortgage. The lien of Assessments shall be subordinate to the lien of any Mortgage now or hereafter placed upon any Leasehold Interest s ubject to Assessment. Any Mortgagee or other purchaser who obtains title to the Leasehold Interest pursuant to the remedies provided in the Mortgage (including foreclosure of the Mortgage or acceptance of deed in lieu thereof) shall take the property free of any claims for unpaid Assessments or charges against the Leasehold Interest which became due and payable prior to the date such Mortgagee or other purchaser acquired title. No such sale or transfer shall relieve the Leasehold Interest from any Assessm ents thereafter becoming due or from the lien of any subsequent Assessment, nor relieve any Owner from the personal obligation for any Assessments becoming due during such Owner’s ownership of the relevant Leasehold Interest. A Mortgagee or other purchaser who obtains title to a Leasehold Interest pursuant to the remedies provided in the Mortgage shall be obligated to pay any Assessments that become due and payable on or after the date it acquires title to the Leasehold Interest and as long as it remains in title, including any Special Assessments levied to raise operating, reserve or other funds needed because of uncollected delinquent Assessments.
13.3 Mortgagee Protection . A breach of any of the conditions contained in this Declaration shall not defeat nor render invalid the lien of any Mortgage made in good faith and for value as to any Leasehold Interest; provided, however, that the conditions contained in this Declaration shall be binding upon and effective against any Party holding a Leasehold Interest from and after such Party’s acquisition of the Leasehold Interest by foreclosure, trustee’s sale or otherwise.
13.4 Voting Rights on Default. In case of default by any Owner, a Mortgagee and Tax Credit Investor may pay any Assessments or take any action reasonably necessary to cure any other default by such Owner with the same effect as such cure by the Owner itself. A Mortgagee and Tax Credit Investor shall be entitled to exercise a defaulting Owner’s voting rights if it delivers a notice to the applicable Owner certifying that such a default has occurred and that such Mortgagee or Tax Credit Investor is entitled to exercise such rights.
13.5 Right to Furnish Information. Any Mortgagee can furnish information to the Owners concerning the status of any Mortgage. Any Tax Credit Investors can furnish information to the Owners concerning the rights of such Tax Credit Investor.
13.6 Notice and Cure for Mortgagees and Tax Credit Investor . The Owners and Common Area Manager shall provide copies of any notices of default served on the Master Project Owner and/or Affordable Housing Project Owner to the Mortgagees and Tax Credit Investor, as applicable, in accordance with Section 16.6, and provided that the Master Project Owner and/or Affordable Housing Project Owner, as applicable, have provided the other Owners and Common Area Manager with written notice of the address(es) for the Mortgagees and Tax Credit Investor(s). The Mortgagees and Tax Credit Investor(s) shall have an additional sixty (60)
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39 days after the expiration of any cure period provided to the Master Project Owner and/or Affordable Housing Project Owner, as applicable, to cure any default under or breach of this Declaration by the Master Project Owner and/or Affordable Housing Owner, as applicable, on behalf of such Master Project Owner and/or Affordable Housing Project Owner, as applicable; provided such additional cure period shall not apply (i) in the event of an emergency, (ii) if such additional cure period would extend beyond any deadline for completing a cure under any Ground Lease, Mortgage, or other material agreement impacting the Project, (iii) could be reasonably expected to result in a cancellation of any insurance policy, (iv) could be reasonably expected to result in a violation of Applicable Laws, or (v) otherwise could be reasonably expected to result in material increase in the liability of the non-defaulting Owners.
ARTICLE 14
AMENDMENTS AND SUPPLEMENTARY DECLARATIONS
14.1 Amendments. Except as may otherwise be stated in this Declaration, this Declaration may be amended at any time and from time to time with the approval of all of the Parties. Such amendment shall become effective upon the recording thereof in the Official Records. Any third party approval that a Party is required to obtain prior to amending this Declaration, whether from a Lessee, a Mortgagee, a Tax Credit Investor, or otherwise, shall be the obligation, at its sole cost and expense, of the applicable Party that is required to obtain such third party approval, and the other Parties shall not be liable for such Party’s failure to obtain any such required third party approvals. This Declaration may not be amended without the prior written consent of each Mortgagee holding a first priority Mortgage on either the Ground Lease Premises and/or the Affordable Housing Premises.
14.2 Reliance on Amendments. Any amendments made in accordance with the terms of this Declaration shall be presumed valid by anyone relying on them in good faith.
14.3 Supplementary Declarations. A Supplementary Declaration may be recorded for the purposes described in the definition of such term, or for any other purpose with the approval of the Parties as a Major Decision to the extent required pursuant to Article 4.
ARTICLE 15
TERM AND ENFORCEMENT
15.1 Term. The easements, covenants, conditions and restrictions of this Declaration shall run with and bind the Ground Lease Premises, the Affordable Housing Premises, and the City Hall Parcel and shall inure to the benefit of and be enforceable by the Parties, their respective legal representatives, heirs, successors and assigns, for a term that is coterminous with the terms of all of the Ground Leases.
15.2 Enforcement and Nonwaiver.
15.2.1 Parties. Each Party shall be entitled to enforce by any proceeding at law or in equity, (a) the restrictions, conditions, covenants, reservations, liens, and charges, now or hereafter imposed by the provisions of this Declaration, as such provisions pertain to the rights of the Party with respect to the use and operation of the Plaza Improvements Area, (b) any rights expressly granted to a Party, and (c) any obligations of a Party under this Declaration, and to the extent such Party prevails in such action, such Party shall be entitled to recover reasonable attorneys’ fees and costs as are ordered by the court. Failure by an Party to enforce any equitable servitudes, restrictions, conditions, covenants, reservations, liens, and charges herein contained
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40 shall in no event be deemed a waiver of the right to do so thereafter nor impose any liability upon that Party.
15.2.2 All Parties and Occupants Bound. All Parties are subject to and bound by the provisions of this Declaration. All Parties shall use commercially reasonable efforts to cause their Occupants and Permitted Users to observe all applicable provisions of this Declaration and shall incorporate this Declaration into all commercial Leases. All Parties shall remain liable for all actions and damages caused by a Party’s Occupants or Permitted Users, but nothing contained herein shall limit in any respect the right o f a Party to also proceed against any other Party as a result of any actions, damages or violations of the Declaration.
15.2.3 Procedure for Enforcement. Notwithstanding anything to the contrary set forth above, in enforcing any action under this Declaration for injunctive relief, declaratory relief and/or monetary damages (excluding actions in small claims court), the parties shall comply with the appli cable notice and delivery requirements and other provisions of California Civil Code Section 4000 et. seq. relating to such enforcement action.
15.2.4 Limitation on Damages. Notwithstanding anything to the contrary set forth in this Declaration, in no event shall any action for damages include consequential, special or punitive damages.
15.3 Operational Disputes. Any Operational Dispute between the Parties shall be resolved in accordance with the procedures set forth below. As used herein, “Operational Dispute” means the following: (a) any dispute regarding a failure to maintain, repair or replace any portion of the Plaza Improvements Area in accordance with the terms of this Declaration; (b) any dispute regarding the Annual Operating Budget, Assessments or imposition of other monetary charges hereunder; (c) any dispute regarding distribution of insurance or condemnation proceeds; (d) any dispute regarding Project Improvements or Alteration Work to the Plaza Improvements Area; (e) any dispute regarding Major Decisions; (f) any dispute regarding amendments to this Declaration, (g) any dispute regarding the Project Rules, or (h) any other dispute in which the disputing Party(ies) agree to resolve in accordance with the procedures set forth in this Section 14.3. In no event does an Operational Dispute include any action to collect Assessments levied pursuant to this Declaration where such Assessments have been approved by (or deemed approved by) the Parties. The Parties shall use commercially reasonable effort s to resolve any Operational Dispute through the process described in this paragraph. Upon the occurrence of an Operational Dispute, the Party raising such Operational Dispute shall provide written notice thereof ( “Operational Dispute Notice ”) to the other affected Party(ies). Within fifteen (15) business days following delivery of the Operational Dispute Notice, such Parties shall consult and negotiate with each other in good faith to reach a just and equitable solution satisfactory to all P arties to the Operational Dispute. In the event that the Operational Dispute cannot be settled through such discussions within such fifteen (15) business day period, except as the Parties may otherwise agree, then the matter shall be referred to and resolved by a Resolution Party as described below. Each Party to the Operational Dispute shall have ten (10) business days from the end of such fifteen (15) business day period to submit the Operational Dispute to the Los Angeles, California office of JAMS for resolution v ia arbitration under its commercial procedures. The decision of the arbitrator shall be binding on the Parties, may include both monetary damages and an award of equitable relief (including, but not limited to, specific performance and injunctive relief) and may be enforced by the prevailing Party in a court of competent jurisdiction. The involved Parties shall share equally in the initial cost of the arbitration, but if the matter is resolved in favor of one Party, the other Party(ies) shall reimburse the prevailing Party for the costs and expenses of the arbitration. Notwithstanding the foregoing,
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41 where a Party reasonably believes that another Party’s noncompliance with their obligations under this Declaration requires injunctive relief pursuant to then applicable legal standards for temporary restraining orders in the State of California, such Party may seek such injunctive relief in a court of competent jurisdiction and is not required to first initiate the Operational Dispute process.
ARTICLE 16
COVENANTS OF COOPERATION
16.1 No Discrimination. Each Declarant hereby covenants by and for itself, its successors and assigns, and all Persons claiming under or through them, covenants and agrees that this Declaration and each instrument by which any Leasehold Interest or other interest in this Declaration is transferred is made and accepted upon and subject to the following conditions: that there shall be no discrimination against or segregation of any person or group of persons, on account of sex, sexual orientation, marital status, race, color, creed, religion, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of any portion of the City Property, nor shall any Declarant itself, or any Person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees of any portion of the City Property.
16.2 Estoppel Certificates. Each Party, at any time and from time to time, upon not less than twenty (20) business days’ prior written notice from any Party, shall execute, acknowledge and deliver to the requesting Person and to any prospective purchaser, Lessee, Mortgagee, or Tax Credit Investor, an estoppel certificate stating: (a) that this Declaration is unmodified and in full force and effect; (b) to the best of such Person’s actual knowledge, whether or not there are then existing any defaults by the Com mon Area Manager or any other Party in the performance of its respective obligations under this Declaration (and, if so, specifying same); (c) the dates, if any, to which Assessments and other charges under this Declaration have been paid by the requesting Person and the amounts of the most recently charged Assessments; and (d) any other information that may reasonably be requested by any of such Persons (including an acknowledgment that such Person is an Eligible Holder). It is intended that any such cert ificate delivered pursuant to this Section 15.2 may be relied upon the requesting Party or any prospective purchaser, Lessee or Mortgagee of any portion of the Project, or of any prospective Tax Credit Investor.
16.3 Exchange of Information. Where reasonable and appropriate, a Party shall from time to time after the date hereof furnish, execute and acknowledge without charge (except where elsewhere provided herein) such other instruments, documents, materials and information as another Party may reasonably request, including grants of rights of way or easements, in order to confirm to such requesting Party the benefits contemplated by this Declaration, so long as any such request does not restrict or abridge the benefits granted to any Party hereunder.
16.4 Limitation on Liability. Except to the extent of any available Insurance Proceeds hereunder (if applicable), the Declarants and other Owners, and their respective agents, employees and consultants shall not be liable to any Party or their Occupants or Permitted Users for any failure of any Utility Facilities or other services which are to be obtained or provided by any Owner, or paid for as a Common Expense hereunder, or for injury or damage to Person or property caused by the elements or by the holder of any Leasehold Interest, or any other Person, or resulting from electricity, water, ice or other elements which may leak or flow from or over any portion of the Plaza Improvements Area or from any pipe, drain, conduit, appliance or equipment
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42 within the Plaza Improvements Area. Notwithstanding the foregoing, the provisions of this Section 15.4 shall not exculpate the Declarants, and their agents, employees or consultants from, or otherwise limit, liability for negligent, intentional or other willful conduct to the extent any damage so caused is not covered by insurance. No diminution or abatement of any Assessments shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements hereunder, or from any action taken by an Owner to comply with any Applicable Laws.
ARTICLE 17
GENERAL PROVISIONS
17.1 Headings. The headings used in this Declaration are for convenience only and are not to be used to interpret the meaning of any of the provisions of this Declaration.
17.2 Severability. The provisions of this Declaration shall be deemed independent and severable, and the invalidity or partial invalidity or unenforceability of any provision or provisions of it shall not invalidate any other provisions. In the event that any phrase, clause, sentence, paragraph, section, article or other portion of this Declaration shall be or become illegal, null, void, against public policy, or otherwise unenforceable, for any reason, the remaining portions of this Declaration shall not be affected thereby and shall remain in force and effect to the fullest extent permissible by Applicable Laws.
17.3 Cumulative Remedies; No Waiver. Each remedy provided for in this Declaration shall be cumulative and not exclusive. Failure to exercise any remedy provided for in this Declaration shall not, under any circumstances, be construed as a waiver.
17.4 Adjustments for Inflation. Any dollar amounts specified in this Declaration shall be increased proportionately every five (5) years after the recordation of this Declaration by the increase in the CPI to adjust for any changes in the value of the dollar after the effective date of this Declaration.
17.5 Liberal Construction . The provisions of this Declaration shall be liberally construed to effectuate its purpose so that the Plaza Improvements Area and other portions of the Master Project and Affordable Housing Project shall operate as a mixed-use commercial and residential development.
17.6 Notice. All notices required by this Declaration shall be in writing and either (a) personally served at the appropriate address (including by means of professional messenger service or recognized overnight delivery service, provided that any such delivery is confirmed by written receipts signed on behalf of the receiving Party or by adequate proof of service), (b) deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested, or (c) nationally recognized overnight courier, addressed to the appropriate addressee, and shall be deemed received and effective upon actual receipt or refusal of delivery.
17.7 Joint and Several Liability. If a Party consists of more than one (1) Person, each such Person shall be jointly and severally liable for payment of Assessments, and performance of all obligations (including, without limitation, indemnification obligations) arising under any provision of this Declaration.
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43 17.8 Number; Gender. The singular shall include the plural and the plural the singular unless the context requires the contrary, and the masculine, feminine and neuter shall each include the masculine, feminine or neuter, as the context requires.
17.9 Exhibits; Schedules. All exhibits and schedules referred to in this Declaration and attached to this Declaration are incorporated by reference.
17.10 Statutory References. All references in this Declaration to various statutes, codes, regulations, ordinances and other laws shall be deemed to include those laws in effect as of the date of this Declaration and any successor laws as may be amended from time to time.
17.11 Conflict. In the event of any conflict between this Declaration and the requirements imposed under any Applicable Laws, the more restrictive provisions of the Applicable Laws or this Declaration shall control.
17.12 Indemnity. Each Party shall indemnify, protect, defend and hold the Common Area Manager and its Affiliates entirely free and harmless from and against any and all Claims arising from its performance of the maintenance and service obligations set forth in this Declaration which are to be performed for the benefit of all Parties and/or the Plaza Improvements Area, excluding Claims to the extent resulting from the negligence or willful misconduct of the Common Area Manager or its Affiliates, or the breach of this Declaration by Common Area Manager.
17.13 Binding Effect. This Declaration shall inure to the benefit of and be binding on the successors and assigns of the Declarant, and the heirs, personal representatives, grantees, tenants, successors and assigns of the Parties.
17.14 Third Party Beneficiaries. Each Mortgagee shall be deemed an intended third party beneficiary solely with respect to Sections 12.6 and 13.1 of this Declaration, and any other provisions that reference such Mortgage, with full power and standing to enforce such provisions as if were a direct party hereto.
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Signature Page
IN WITNESS WHEREOF, the Declarant and other Parties have executed this Declaration as of the date first set forth above.
Master Project Owner:
Primestor Norwalk Entertainment, LLC,
a Delaware limited liability company
By: Primestor Development, Inc.,
a Nevada corporation
By:
Arturo Sneider
Founding Partner and CEO
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Signature Page
Affordable Housing Project Owner:
RESIDENCES AT THE WALK, LP,
a California limited partnership
By: Residences at the Walk, LLC,
a California limited liability company,
its Administrative General Partner
By: Primestor Development, LLC,
a Delaware limited liability company,
its Sole Member
By: Primestor Development, Inc.,
a Nevada corporation,
its Manager
By:
Arturo Sneider, CEO
By: Kingdom Golden Circle, LLC,
a California limited liability company,
its Managing General Partner
By: Kingdom Development, Inc.,
a California nonprofit public benefit
corporation,
its Sole Managing Member
By:
William Leach, President
By: Diversity Builders Alliance, Inc.,
a California nonprofit public benefit corporation,
its co-Managing General Partner
By:
Dalila Sotelo, CEO
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Signature Page
City:
CITY OF NORWALK,
a California municipal corporation
By:
Jesus Gomez
City Manager
APPROVED AS TO FORM:
By:
Arnold M. Alvarez Glasman
City Attorney
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Exhibit B
EXHIBIT A
City Property
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Exhibit B
EXHIBIT B
City Easement Area
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Exhibit C
EXHIBIT C
Plaza Improvements Area
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Schedule 1.8
SCHEDULE 1.8
Allocable Shares
See attached.
SCHEDULE 2.5
Plaza Events
See attached.
Plaza Event Schedule
Month Event Notes
March Easter – Community celebration in a pop up style event with arts & crafts, photos with the Easter bunny, facepainting, a performance from local organization, and a egg hunt.
April April Community Event – Event with local partnerships. We can invite city officials, fire fighters, teachers, etc.
May Workout Series – 3 workout events (40 minute workouts). We will partner with local health providers to allow access to information and resources. We will offer HIIT, Yoga and Zumba workouts.
June June Community Event – Event with local partnerships. We can invite city officials, fire fighters, teachers, etc.
July Summer Series – We will continue the tradition that currently happens at the lawn and have talent come out to perform every Wednesday for the month of July
August Backpack Giveaway – We will giveaway backpacks to the community and have activities for the kids to enjoy.
September September Community Event – Event with local partnerships. We can invite city officials, fire fighters, teachers, etc.
October Halloween and Dia De Los Muertos – Event will consist of traditional altar where we will encourage the community to come out and leave photos of their loved ones as well as having Aztec dancers and local Folclórico performance. We will also have a costume contest with giveaways to those who participate and win. This will also be the first time we encourage pet costume contests.
November Annual turkey giveaway – There will be a registration- based turkey voucher distribution. First come first serve and promoted on social media.
December Holiday Market Event – crafting; giveaways and activities from all local partners and tenants.