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Home My WebLink About1741 - RECOMMEND APPROVAL_TRANSFER OF DEVELOPMENT RIGHTS FOR NORTH NEWPORT CENTERFj RESOLUTION NO. 1741 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH RECOMMENDING APPROVAL OF THE TRANSFER OF DEVELOPMENT RIGHTS FOR NORTH NEWPORT CENTER WHEREAS, The Irvine Company has applied to the City of Newport Beach for the Zoning Amendment specified in the North Newport Center Planned Community Development Plan to allow future development in North Newport Center, which consists of parts of Newport Center Block 500, Newport Center Block 600, parts of San Joaquin Plaza, and Fashion Island ('Property "). WHEREAS, as part of its application, The Irvine Company requests approval of the Development Agreement entitled Zoning Implementation and Public Benefit Agreement Between the City of Newport Beach and The Irvine Company LLC Concerning North Newport Center (Fashion Island, Block 500, Block 600, and San Joaquin Plaza). WHEREAS, as part of its application, The Irvine Company also requests approval of the transfer of development rights specified in the Development Agreement as follows: (1) The transfer to North Newport Center Block 500 of development rights for development of approximately 277,161 square feet currently assigned to Newport Center Block 600 and designated for office, hotel, and supporting retail uses, of which up to 72,000 square feet may be utilized by the City for a City Hall building at a site in Newport Center Block 500 if the City exercises the option to purchase that site, as specified in the Development Agreement. (2) Upon transfer to North Newport Center Block 500, the development rights will be designated only for uses permitted under the development regulations applicable to the Property. (3) This transfer of development rights will occur in new or modified buildings that comply with the development regulations applicable to the Property. WHEREAS, General Plan Policy LU 6.14.3 permits development rights to be transferred within Newport Center as long as the transfer is consistent with the intent of the General Plan and will not result in any adverse traffic impacts. WHEREAS, a traffic study, entitled Newport Center Trip Transfer Traffic Study (Austin -Foust Associates, Inc., November 6, 2007) was prepared for the application for the transfer of development rights in compliance with General Plan Policy LU 6.14.3. WHEREAS, the traffic study found that consistent with General Plan Policy LU 6.14.3, the transfer of development rights will not result in any adverse traffic impacts. WHEREAS, an intensity analysis was prepared by the Planning Department and demonstrates that the transfer of development rights will not result in greater intensity than development allowed without the transfer. WHEREAS, the Planning Commission held a public hearing on November 15 and November 29, 2007, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California, at which time the Planning Commission considered the transfer of development rights specified in the Development Agreement, as well as the traffic and intensity studies. A notice of time, place, and purpose of the meeting was duly given in accordance with the Municipal Code. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting, including the evidence and arguments submitted by the City staff, The Irvine Company, and all interested parties. WHEREAS, the Planning Commission finds that: (1) Consistent with General Plan development rights will not result documented in the traffic study. Policy LU 6.14.3, the transfer of in any adverse traffic impacts, as (2) Consistent with General Plan Policy LU 6.14.3, the transfer of development rights will not result in greater intensity than that which is allowed without the transfer, as documented in the intensity study, and is consistent with the intent of the General Plan. NOW THEREFORE BE IT RESOLVED, that: (1) The Planning Commission recommend approval of the transfer of development rights specified in Development Agreement No. DA2007- 002, based on the weight of the evidence in the administrative record, including the traffic and intensity studies. (2) The transfer of development rights specified in the Development Agreement shall not go into effect until the City Council approves or adopts all of the following: (1) the North Newport Center Planned Community Affordable Housing Implementation Plan; (2) the North Newport Center Planned Community Development Plan; (3) the Block 500 Planned Community District Regulations; (4) the San Joaquin Plaza Planned Community District Regulations; (5) Traffic Study No. TS2007- 001; and (6) the Development Agreement entitled Zoning Implementation and Public Benefit Agreement Between the City of Newport Beach and The Irvine Company LLC Concerning North Newport Center (Fashion Island, Block 500, Block 600, and San Joaquin Plaza). 2 PASSED, APPROVED AND ADOPTED THIS 29TH DAY OF NOVEMBER 2007. �� o � AYES: Peotter, Cole, McDaniel and Hillgren NOES: Eaton and Hawkins ABSENT: Toerge FINAL City of Newport Beach NEWPORT CENTER TRIP TRANSFER TRAFFIC STUDY Prepared by: Austin -Foust Associates, Inc. 2223 Wellington Avenue, Suite 300 Santa Ana, Califomia 92701 -3161 (714) 667 -0496 November 7, 2007 City of Newport Beach NEWPORT CENTER TRIP TRANSFER TRAFFIC STUDY As part of the proposed North Newport Center Project, The Irvine Company is proposing to remove some existing and entitled uses in Block 600 and replace them with office uses in Block 500. As pan of the proposed transfer of uses, The Irvine Company and the City wish to reserve 72,000 square feet of the converted uses for a new City Hall building in Block 500. The transfer of development rights within Newport Center is allowed in accordance with the City of Newport Beach General Plan Policy LU 6.143 provided the transfer will not result in any adverse traffic impacts. Austin -Foust Associates, Inc. (AFA) examined the conversion and transfer of the entitled uses into equivalent office uses on the basis of a PM peak hour trip generation equivalency basis. ANALYSIS The transfer involves existing uses including a health club, restaurant, and office as well as remaining, but as yet unused entitlement for hotel uses in Block 600, which will be replaced by office use in Block 500. The existing uses in Block 600 amount to 42,036 square feet (sf) of office, restaurant and health club uses. The unused entitlement in Block 600 is 195 hotel rooms. These entitled uses in Block 600 are to be replaced in Block 500 with office use, 72,000 sf of which may be used for a new City Hall. The analysis is based upon use of the worst case PM peak hour trip rates. Rates for the analysis were taken from ITE's 7 "' Edition Trip Generation publication. The trips generated by the uses proposed to be eliminated are calculated in Table I, As indicated, the uses included as the basis of the proposed transfer are projected to generate 339 PM peak hour trips. A potential new City Hall of 72,000 sf would generate 108 peak hour trips (based on a rate of 1.5 trips per thousand square feet) leaving 231 trips, which can be allocated toward other uses. These 231 PM peak hour trips equate to 206,000± sf of office use based on a trip rate of 1.12 trips /TSF. The proposed project consists of 205,161 sf of office space in Block 500. Therefore, the total PM peak hour trip generation associated with the convened uses proposed for Block 500 would be 338 trips. Newport Center Trip T2nsfer I Austin -Foust Associates, Inc. Traffic study 0 1 7080rpt.doc Table I CONVERTED USES Use Entitled in Block 600 PM Peak Hour Rate PM Peak Trips Hotel 195 Rooms — Unbuilt Entitlement 0.70 HTE 3 10 ' 136 Family Fitness 17,300* s — Existing 4.05 ITE 492' 70 Palm Gardens 16,447* s — Existing 7.49 HTE 931 ' 123 Eliminated Office 6,789* si) — Existing 1.12 ITE 7 10 4 8 Eliminated Office 1,500 s — Existing 1.12 ITE 710 4 2 TOTAL 339 Use (Proposed in Block 500) Office 205,161 s 1.12 ITE 7 10 4 230 City Hall 72,000 s 1.50 ITE 750' 108 TOTAL 338 * Per building permit information. Hotel (rates applied for each occupied room) ' Health Club (rates per TSF) ' Quality Restaurant (rates per TSF) Trip rate per TSF determined from applying the ITE office regression equation to the existing (408 TSF) and proposed future (614 TSF) office use, and calculating the rate based on the square footage increment (206 TSF) Closest ITE rate (in both function and magnitude) to match the GP assumption for City Hall trip generation. Newport Center Trip Transfer Traffic Study Austin. Funst Associates, Inc. 017080rpt.doc CONCLUSION In summary, it is concluded that the currently entitled uses in Block 600 Newport Center (i.e., 195 hotel rooms and 42,036 sf of health club, retail, and office uses) proposed for transfer to Block 500 equate to 339 PM peak hour trips. These 339 trips would match the amount of PM peak hour trips projected to be generated by a new 72,000 sf City Hall plus another 205,161 sf of office use. Therefore, the proposed transfer of development rights will not result in any adverse traffic impacts. Newport Center Trip Transfer 3 Austin -Foust Associates, Inc. Traffic Study 01 7090rpt.doc RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of'Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 -3884 Attn: Citv Clerk (Space Above This Line Is for Recorder's Use Only) This Agreement is recorded at the request and for the benefit of the City of Newport Beach and is exempt from the payment of a recording fee pursuant to Government Code §§ 6103 and 27383. ZONING IMPLEMENTATION AND PUBLIC BENEFIT AGREEMENT between CITY OF NEWPORT BEACH, and THE IRVINE COMPANY LLC CONCERNING PROPERTIES LOCATED IN NORTH NEWPORT CENTER (BLOCK 600 AND PORTIONS OF FASHION ISLAND, BLOCK 500, AND SAN JOAQUIN PLAZA) 659296 v.5 V907 TABLE OF CONTENTS RECITALS AGREEMENT Definitions..................................... ............................... 1.1 " AHIP............................................................... 1.2 "Bonita Canyon Development Agreement ....... 1.3 " CEQA" ............................ ............................... 1.4 " CIOSA" ........................... ............................... 1.5 "City Council" .................. ............................... 1.6 "Design Regulations" ........ ............................... 1.7 "Development Fees" ......... ............................... 1.8 "Development Plan" ......... ............................... 1.9 "Development Regulations ............................. 1.10 "Effective Date" ................ ............................... 1.11 "Fair Share Traffic Contribution Ordinance ".. 1.12 "Fair Share Traffic Fees" .. ............................... 1.13 "First Building Permit" ..... ............................... 1.14 "First Residential Building Permit .. ................. 1.15 "General Pl an" .................. ............................... 1.16 "Initial Fee Increase" ........ ............................... 1.17 "Initial Park Fee" .............. ............................... 1.18 "Initial Public Benefit Fee .. .............................. 1.19 "Initiative Condition" ........ ............................... 1.20 "Mortgage" ....................... ............................... 1.21 " Mortgagee" ...................... ............................... 1.22 "Operative Date" ............... ............................... 1.23 "Option Agreement" ......... ............................... 1.24 "Option Period" ................ ............................... 1.25 "Option Site" ..................... ............................... 1.26 "Park Fees" ....................... ............................... 1.27 "Parking Structure" ........... ............................... 1.28 "Parking Structure Provisions .. ........................ 1.29 "Parking Structure Site" .... ............................... 1.30 "Party' or " Parkes" ........... ............................... 1.31 "Per Unit Park Fees" ......... ............................... 1.32 " Project ............................................................. 1.33 " Properry:• .......................... ............................... 1.34 "Public Benefit Fee" ......... ............................... 1.35 "Term" .............................. ............................... 1.36 "Traffic Phasing Ordinance " ............................. 137 "Transfer of Development Rights' ................... T Page 1 4 ................4 ................4 ................4 ................4 ................4 ................4 ................4 ................4 ................4 ................5 ................5 ................5 ................5 ................5 ................5 ................5 ................5 ................6 ................6 ................6 .................... 6 ....................6 ......................6 ......................6 ......................6 ......................7 ...................... 7 ...................... 7 ...................... 7 ......................7 ...................... 7 ..................7 ...................... 7 ......................7 2. General Plan Consistency, Zoning Implementation, and Extinguishment of/\oyof Landowner's Remaining Development Rights Under the C{()8A and Bonita l Affordable Housing Obligation ........................................................................................... 7 4. Public Benefits ..................................................................................................................... 8 4.1 In-Lieu Park Fees for Renovation of Oasis Senior Center and for Park Uses.......................................................................................................................... 8 42 Public Benefit Fee .................................................................................................... 8 43 Fair Share Traffic Fees ............................................................................................. 0 4A Circulation Enhancements to Public Right of Way ................................................. 9 4,5 Dedication of Public Right of Way North of San Miguel Drive Between MacArthur Boulevard and Avocado Avenue ........................................................ |O 4.0 Conditional Open Space Dedication ...................................................................... ]| 47 Maintenance ofC%()S/\Pre-Paid Transportation Fund ......................................... ]| 4.8 City's Option to Purchase New City Hall Site; Parking Structure ........................ ]| 49 Retrofit Sprinkler Syyxeu`v----------------.—..—.---.---]4 4.10 Cooperation of Landowner if City Hall Constructed ou Property North of Library.................................................................................................................... |5 5, Fees .................................................................................................................................... |5 5,1 Fees Applicable k> Property ,.----.---,....----..---------.|5 5.2 Permitted Increases iu Development Fees Applicable k>Proport� / ........................ |6 0. Development of Property ................................ .............. .................................................. ]6 0.1 Applicable Regulations .......................................................................................... |6 02 Landowner's Vested Rights ................................................................................... |7 0.3 Project Components ............................................................................................... |x 0.4 Police Power . ......................................................................................................... x 0.5 Time-Share Developments ..................................................................................... |9 0.0 Available Use iu Newport Center Block 50V for City Hall Building .................... l9 0.7 Available Use iu Newport Center Block 50Vi[ City Does Not Develop a City Hall ou the Option Site ................................................................................... |9 0.8 Effect of Agreement ou Applications for Land Use Approvals ............................ I0 0.0 Mello-Roos Community Facilities District ............................................................ I0 0.10 No Conflicting Enactments .................................................................................... ZO 0.11 Benefits k> Landowner ........................................................................................... ] 0.12 Tentative Subdivision Maps .................................................................................. ] 0.13 Compliance with California Government Code Section 058V7.5(o)oo WaterSupply ......................................................................................................... 2] 6.14 Cancellation o[CI()SA and Bonita Canyon Development Agreement ................. 2] 6.15 No Payments Due from City .................................................................................. ] 7. Compliance with Traffic Phasing Ordinance ..................................................................... 22 TIScope of Traffic Study ........................................................................................... Z 72 Sufficiency of Traffic Study .................................................................................. Z2 7.3 Circulation Improvements ..................................................................................... 22 In 8. Reservations of Authority ..................................................................... .............................22 8.1 Procedural Regulations ............................................................. .............................22 8.2 Consistent Future City Regulations .......................................... .............................23 8.3 Overriding Federal and State Laws and Regulations ................ .............................23 8.4 Public Health and Safety ........................................................... .............................23 8.5 Uniform Building Standards ..................................................... .............................23 9. Utility Capacity ..................................................................................... .............................24 10. Project as Private Undertaking ................. ............................... .......... .............................24 11. Effective Date and Operative Date of Agreement; Term ..................... .............................24 12. Amendment or Cancellation of Agreement .......................................... .............................25 13. Enforcement .......................................................................................... .............................25 14. Periodic Review of Compliance ................... .................................... .............................26 15. Events of Default .................................................................................. .............................26 15.1 Default by Landowner .............................................................. .............................26 15.2 Default by City .......................................................................... .............................26 15.3 Specific Performance and Damages Remedies ......................... .............................27 15.4 Limited Recovery of Legal Expenses by Prevailing Party in Any Action ............27 16. Cooperation ........................................................................................ ............................... 27 17. Force Majeure ....................................................................................... .............................27 18. Indemnity ................................... ............................... ....................... .............................27 19. Third Party Legal Challenge ................................................................. .............................28 20. Mortgagee Rights .................................... ............................... • ........ .............................28 20.1 Encumbrances on Property ..................... ............................... • • .........................28 20.2 Mortgagee Protection ................................................................ .............................28 20.3 Mortgagee Not Obligated ......................................................... .............................28 20.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure .. .............................28 21. Transfers and Assignments .................................................................. .......................... ....29 21.1 Right to Assign ......................................................................... .............................29 21.2 Agreement Binding on Successors and Assigns ....................... .............................29 22. Estoppel Certificate ............................................................................... .............................30 23. Further Actions and Instruments ........................................................... .............................30 24. Notices .................................................................................................. .............................30 25. Rules of Construction and Miscellaneous Terms ................................. .............................31 ME � r 26. 25.1 Rules of Construction ............................ ............................... 25.2 Time Is of the Essence ........................... ............................... 25.3 Waiver .................................................... ............................... 25.4 Counterparts ........................................... ............................... 25.5 Entire Agreement ................................... ............................... 25.6 Severability ............................................ ............................... 25.7 Construct ion ........................................... ............................... 25.8 Constructive Notice and Acceptance ..... ............................... 25.9 No Third Party Beneficiaries ................. ............................... 25.10 Applicable Law and Venue .................... ............................... 25.11 Non - Liability of City Officers and Employees ..................... 25.12 Section Headings ................................... ............................... 25.13 Incorporation of Recitals and Exhibits .. ............................... Authority to Execute ......................................... ............................... 27. Recordation............ -iv- .................. 31 ..................31 ..................31 ..................31 ..................31 ..................31 ..................31 ..................32 ..................32 ..................32 ..................32 ..................32 ..................32 .33 .................................... .............................33 ZONING IMPLEMENTATION AND PUBLIC BENEFIT AGREEMENT (Pursuant to California Government Code sections 65864- 65869.5) This ZONING IMPLEMENTATION AND PUBLIC BENEFIT AGREEMENT (the "Agreement ") is entered into on December , 2007, by and between: (1) CITY OF NEWPORT BEACH ( "City"), and (2) THE IRVINE COMPANY LLC ( "Landowner"). City and Landowner are sometimes collectively referred to in this Agreement as the "Parties" and individually as a "Party." RECITALS A. Landowner is the owner of the parcels of real property (collectively, the "Pro e ") that are described in the legal description attached hereto as Exhibit A and depicted on the site map attached hereto as Exhibit B. The Property is under City's jurisdiction and is located in North Newport Center. The Property consists of the following sub - areas: portions of Newport Center Block 500, Newport Center Block 600, portions of San Joaquin Plaza, and portions of Fashion Island. No part of the Property is located in the coastal zone. B. On September 14, 1992, the City Council of the City of Newport Beach ( "City Council ") adopted Ordinance No. 92 -35, through which City and Landowner entered into the Circulation Improvement and Open Space Agreement pertaining to twelve (12) parcels of real property located in City, including the four parcels owned by Landowner in North Newport Center that comprise the Property subject to this Agreement. City subsequently adopted the Amendment to the Circulation Improvement and Open Space Agreement dated May 12, 1996. The original Circulation Improvement and Open Space Agreement and the May 12, 1996 Amendment are collectively referred to herein as the "CIOSA." C. Under the CIOSA, Landowner: (1) committed to road improvements adjacent to proposed projects, made an interest -free loan to City, and pre -paid required fair share road improvement fees that City used as matching funds when obtaining outside transportation funding; and (2) committed to dedicating more public open space than required for the twelve (12) parcels under the City of Newport Beach General Plan and the City of Newport Beach Park Dedication Ordinance, as detailed in Exhibit C. D. The CIOSA provided Landowner with certain building entitlements with respect to the properties addressed therein. Landowner has not utilized all of the building entitlements provided by the CIOSA, including the building entitlements for Newport Center Block 600, as detailed in Exhibit C. E. Although Landowner did not utilize all of the building entitlements provided by the CIOSA, it fulfilled all the public benefits listed in Recital C as if it had done so. F. On November 10, 1997, the City Council adopted Ordinance 97 -77, through which City and Landowner entered into the Bonita Canyon Annexation and Development Agreement pertaining to the Bonita Canyon property (the "Bonita Canvon Development Agreement "). Approximately concurrent to adoption of Ordinance 97 -77, the Bonita Canyon property was detached from the City of Irvine and annexed by City. G. Under the Bonita Canyon Development Agreement, Landowner: (I) constructed roads and other circulation improvements designed for the capacity of a larger project that had previously been approved by the City of Irvine; (2) sold some of the land that it agreed not to develop to City for open space purposes and cooperated in the formation of a community facilities district to provide funding to City for improvement of the park site between Ford Road and Bonita Canyon Road; and (3) made park dedications. H. The Bonita Canyon Development Agreement provided Landowner with certain building entitlements with respect to the properties addressed therein, which entitlements were to be implemented through a Planned Community Development Plan. Landowner has not utilized all of the building entitlements provided by the applicable development plan, as detailed in Exhibit C. 1. Although Landowner did not utilize all of the building entitlements provided by the Bonita Canyon Development Agreement, it fulfilled all the public benefits listed in Recital G as if it had done so. J. This Agreement effectuates General Plan policies and goals by extinguishing Landowners remaining building entitlements under the CIOSA and the Bonita Canyon Development Agreement. This Agreement provides for the rescission and cancellation of the Landowners remaining rights and obligations under the CIOSA and the Bonita Canyon Development Agreement on the Operative Date (collectively, the "Cancellation"). K. The Cancellation eliminates conflicts that exist among the CIOSA, the Bonita Canyon Development Agreement, and the General Plan. The Cancellation, together with this Agreement, also ensures that zoning implementation and utilization of the building entitlements applicable to the Property are consistent with the General Plan's standards for land use, housing, circulation, open space, noise, safety, and conservation, and with the General Plan's goals of improving and providing transportation infrastructure, parks, public services, open space, water resources, and environmental resources. Notably, existing utility capacity, circulation infrastructure, and other public services, together with the circulation improvements referenced in this Agreement, support development consistent with the Development Regulations. L. As detailed in Section 4 below, Landowner has agreed to provide public benefits as consideration for this Agreement, including the following: in -lieu park fees in advance of the time that the fees otherwise would be due to provide for matching funds for the renovation of the Oasis Senior Center and to provide funds for other qualified park uses, development fees to fund construction of a new City Hall building or other municipal use, circulation enhancements, a conditional dedication of a public right of way as specified in Section 4.6, and the conditional dedication to City of an open space parcel within Newport Center. Landowner has also agreed to grant City an option to acquire a site in Newport Center Block 500 for the purpose of constructing a new City Hall building. -2- M. On March 13, 2007, the City Council adopted Ordinance No. 2007 -6, entitled "Ordinance Amending Chapter 15.45 of City of Newport Beach Municipal Code Regarding Development Agreements" (the "Development Agreement Ordinance "). This Agreement is consistent with the Development Agreement Ordinance, which requires a development agreement for certain types of projects, including: (1) projects that include development of 50 or more residential units, and (2) projects that include new non - residential development in Newport Center. N. This Agreement is consistent with the City of Newport Beach General Plan Policy LU 6.14.8, which applies to Newport Center and requires the execution of development agreements for residential projects and mixed -use development projects with a residential component. O. This Agreement is consistent with provisions of state law (California Government Code sections 65864- 65869.5) and local law (City of Newport Beach Municipal Code chapter 15.45) that authorize binding agreements that: (1) encourage investment in, and commitment to, comprehensive planning and public facilities financing; (2) strengthen the public planning process and encourage private implementation of the local general plan; (3) provide certainty in the approval of projects in order to avoid waste of time and resources; and (4) reduce the economic costs of development by providing assurance to property owners that they may proceed with projects consistent with existing policies, rules, and regulations. P. The Parties intend that, concurrently with their approval of this Agreement, the Parties will approve and execute a separate Affordable Housing Implementation Plan ( "AHIP ") for the Property, in the form attached hereto as Exhibit D, that reflects the terms of this Agreement regarding Landowner's affordable housing requirements. The Parties intend that Landowner's performance under the AHIP will satisfy Landowner's obligations for the Property under the City of Newport Beach General Plan Housing Program 2.2.1. The Parties intend that the AHIP and this Agreement shall be interdependent and neither shall be effective unless each is approved and the Operative Date occurs. The adopted AHIP may be amended by the mutual consent of the Parties without requiring an amendment to this Agreement. Q. In recognition of the significant public benefits that this Agreement provides, the City Council has found that this Agreement: (1) is consistent with the City of Newport Beach General Plan as of the date of this Agreement; (2) is in the best interests of the health, safety, and general welfare of City, its residents, and the public; (3) is entered into pursuant to, and constitutes a present exercise of, City's police power; (4) is consistent and has been approved consistent with the Final Environmental Impact Report for the City of Newport Beach General Plan 2006 Update (State Clearinghouse No. 2006011119) and the North Newport Center Addendum to EIR for General Plan 2006 Update (State Clearinghouse No. 2006011119), both of which analyze the environmental effects of the proposed development of the Project on the Property; and -3- (5) is consistent and has been approved consistent with provisions of California Government Code section 65867 and City of Newport Beach Municipal Code chapter 15.45. R. On November 15, 2007, City's Planning Commission held a public hearing on this Agreement, made findings and determinations with respect to this Agreement, and recommended to the City Council that the City Council approve this Agreement. S. On November 27, 2007, the City Council also held a public hearing on this Agreement, considered the Planning Commission's recommendations. On December 18, 2007, pursuant to the applicable state law (California Government Code sections 65864- 65869.5) and local law (City of Newport Beach Municipal Code chapter 15.45), the City Council adopted its Ordinance No. _, finding this Agreement consistent with the City of Newport Beach General Plan and approving this Agreement. AGREEMENT NOW, THEREFORE, City and Landowner agree as follows I. Definitions. The following terms when used in this Agreement shall have the meanings set forth below: 1.1 "AHIP" shall mean the Affordable Housing Implementation Plan that is attached hereto as Exhibit D, which has been approved and executed by Landowner and is being considered for approval by the City Council of City concurrently with its consideration of this Agreement. 1.2 "Bonita Canyon Development Agreement" shall have the meaning ascribed in Recital F of this Agreement. 1.3 "CEQA "shall mean the California Environmental Quality Act (California Public Resources Code sections 21000 - 21177). 1.4 "CIOSA" shall have the meaning ascribed in Recital B of this Agreement. 1.5 "City Coancil" shall mean the governing body of City. 1.6 "Design Regulations" shall mean the North Newport Center Design Regulations, that are being approved by the City Council of City concurrently with its approval of this Agreement. 1.7 "Development Fees" shall have the meaning ascribed in Section 5.1 of this Agreement. 1.8 "Development Plan" shall mean the North Newport Center Planned Community Development Plan that is being approved by the City Coancil of City concurrently with its approval of this Agreement. -4- 1.9 "Development Regulations" shall mean the following regulations that are in effect as of the Effective Date (notwithstanding that some of the regulations do not become operative until the Operative Date): the General Plan; the Development Plan; the Design Regulations; the AHIP; the Transfer of Development Rights; and, to the extent not expressly superseded by the Development Plan or this Agreement, all other land use and subdivision regulations governing the permitted uses, density and intensity of use, design, improvement and construction standards and specifications, procedures for obtaining required City permits and approvals for development, payment of Development Fees, and similar matters that may apply to development of the Project on the Property during the Term of this Agreement that are set forth in Title 15 of the Municipal Code (buildings and construction), Title 19 of the Municipal Code (subdivisions), and Title 20 of the Municipal Code (planning and zoning), but specifically excluding all other sections of the Municipal Code including Title 5 of the Municipal Code (business licenses and regulations). 1.10 "Effective Date" shall mean the thirty-first (31 ") day following the date the City Council adopts the ordinance approving this Agreement or such other date that the ordinance becomes effective by applicable law. 1.11 "Fair Share Traffic Contribution Ordinance" shall mean City's Fair Share Traffic Contribution Ordinance, codified in Chapter 15.38 of City's Municipal Code, together with resolutions implementing said ordinance. 1.12 "Fair Share Traffic Fees" shall have the meaning ascribed in Section 4.3 of this Agreement. 1.13 "First Building Permit" shall mean the building permit that is first issued for either (i) the Parking Structure; or (ii) residential, office, or hotel development on any portion of the Property located in Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza, provided the building permit is for new development that did not exist as of the Operative Date of this Agreement on the property for which the permit is being issued and not for the renovation, repair, or improvement of an existing building that does not increase the building's square footage. 1.14 "First Residential Building Permit" shall mean the first building permit issued for residential development in any portion of the Property located in Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza, provided the building permit is for new development and not for the renovation, repair, or improvement of an existing residential unit that does not increase the unit's square footage. 1.15 "General Plan" shall mean City's 2006 General Plan adopted by the City Council on July 25, 2006, by Resolution No. 2006 -76. The Land Use Plan of the Land Use Element of the General Plan was approved by City voters in a general election on November 7, 2006. 1.16 "Initial Fee Increase" shall have the meaning ascribed in Section 4.3 of this Agreement. -5- L 17 "Initial Park Fee" shall mean the portion of the Park Fees that is to be paid by Landowner to City upon the issuance of the First Residential Building Permit for any portion of the Property located in Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza, as more fully explained in Section 4.1 of this Agreement. 1.18 "Initial Public Benefit Fee" shall mean the portion of the Public Benefit Fee that is to be paid by Landowner to City upon the issuance of the First Building Permit for any portion of the Property located in Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza, as more fully explained in Section 4.2 of this Agreement. 1.19 "Initiative Condition" shall have the meaning ascribed in Section 4.8 of this Agreement. 1.20 `Mortgage" shall mean a mortgage, deed of trust, sale and leaseback arrangement, or any other form of conveyance in which the Property, or a part or interest in the Property, is pledged as security and contracted for in good faith and for fair value. 1.21 "Mortgagee'' shall mean the holder of a beneficial interest under a Mortgage or any successor or assignee of the Mortgagee. 1.22 "Operative Date" shall mean the date upon which all of the conditions precedent to the commencement of the Term are satisfied, as set forth in Section 11 of this Agreement. 1.23 "Option Agreement" shall mean that certain Option Agreement in the form substantially the same as that attached hereto as Exhibit F to be entered into by City and Landowner for Landowner to grant to City an option to acquire the Option Site, as more fully explained in Section 4.8.1. 1.24 "Option Period" shall mean the period of time during which City may exercise the option to acquire the Option Site, as more fully explained in Section 4.8.1 of this Agreement. 1.25 "Option Site" shall mean that certain real property that will be the subject of the Option Agreement and that is defined in Section 4.8.1. 1.26 "Park Fees" shall collectively refer to the Initial Park Fee and the Per Unit Park Fees, payable in accordance with Section 4.1. 1.27 "Parking Stnicture" shall mean the multilevel parking structure to be developed on the Parking Stricture Site in the event City exercises its option to acquire the Option Site. 1.28 "Parking Structure Provisions" shall mean the right and obligations of the Parties with respect to the construction and operation of the Parking Structure, as more fully explained in Section 4.8.2 of this Agreement. M2 1.29 "Parking Structure Site" shall mean that certain real property located adjacent to the Option Site and depicted on Exhibit E attached hereto, as further described in Section 4.8. 1.30 "Pat " or "Parties" shall mean either City or Landowner or both, as determined by the context. 1.31 "Per Unit Park Fees" shall mean the portion of the Park Fees that are to be paid by Landowner to City upon the issuance of residential building permits for development of any portion of the Property located within Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza, as more fully explained in Section 4.1 of this Agreement. 1.32 "Project" shall mean all on -site and off -site improvements (including new development and replacement development for existing buildings that may be demolished) that Landowner is authorized and/or required to construct with respect to each parcel of the Property, as provided in this Agreement and the Development Regulations. 1.33 "Property' is described in Exhibit A and depicted on Exhibit B. 1.34 "Public Benefit Fee" shall have the meaning ascribed in Section 4.2 of this Agreement. 1.35 "Term" shall have the meaning ascribed in Section I I of this Agreement. 1.36 "Traffic Phasing Ordinance" shall mean City's Traffic Phasing Ordinance, codified in Chapter 15.40 of City's Municipal Code and including Appendix A to Chapter 15.40, together with any resolutions implementing said ordinance. 1.37 "Transfer of Development Rights" shall mean the resolution approving the transfer to Newport Center Block 500 of development rights for development of approximately 277,161 square feet currently assigned to Newport Center Block 600 (of which up to 72,000 square feet may be utilized by City for the City Hall building to be situated on the Option Site if City exercises the Option), that the City Council is considering for approval concurrently with its approval of this Agreement. 2. General Plan Consistency, Zoning Implementation, and Extinguishment of Any of Landowner's Remaining Development Rights Under the CIOSA and Bonita Can yo Development Agreement. This Agreement and the Development Regidations applicable to the Property will cause City's zoning and other land use regulations for the Property to be consistent with the General Plan. Although development already completed under the CIOSA and the Bonita Canyon Development Agreement remains vested as a conforming use, the CIOSA and the Bonita Canyon Development Agreement provided for vested development rights that Landowner has not yet used and that are inconsistent with the General Plan. The Cancellation of those agreements on the Operative Date will eliminate this inconsistency. 3. Affordable Housing Obligation. The Parties agree that Landowner's compliance with the AHIP constitutes satisfaction of any obligation of Landowner to City under the City of Newport -7- Beach General Plan Housing Program 2.2.1 with respect to the development of the Property pursuant to and during the Term of this Agreement. This Agreement does not authorize Landowner to transfer any affordable housing credits to any property that is outside the Property. 4. Public Benefits. 4.1 In -Lieu Park Fees for Renovation of Oasis Senior Center and for Park Uses. Landowner agrees to process subdivision maps for any residential development to be developed in Newport Center Block 500, Newport Center Block 600, and San Joaquin Plaza. Landowner also agrees to pay to City the Initial Park Fee and the Per Unit Park Fees as set forth in this Section 4.1 (collectively, the "Park Fees "), regardless of whether a subdivision map is approved for any or all of the residential units. Prior to and as a condition to City's issuance of the First Residential Building Permit, but in no event earlier than the Operative Date, Landowner shall pay to City the sum of $3,733,333.33 (which is 1/3 of the total Park Fees to be paid to City under this Agreement) ( "Initial Park Fee"). In addition to the foregoing, and notwithstanding any other provision set forth in this Section, if, on the date that City awards a contract for renovation of the Oasis Senior Center, the total sum of both the Initial Park Fee and the Per Unit Park Fees paid by Landowner to City to the date of award is less than the sum of $5,600,000 (the amount of the matching challenge grant referred to below), then within five (5) days after City's award of the contract, Landowner shall pay to City the difference ( "Park Fee Advancement "). Landowner's payment of the Initial Park Fee and Park Fee Advancment shall entitle Landowner to a credit against payment of the Per Unit Park Fees for the first 215 residential units to be developed on the Property. Prior to and as a condition to City's issuance of the 216`h building permit and thereafter each subsequent building permit for residential development on any portion of the Property located in Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza, Landowner shall pay to City the sum of $26,046.51 per unit ( "Per Unit Park Fees"), subject to adjustment of said Per Unit Park Fee in accordance with Section 5.2. In the event City has received sufficient Park Fees from Landowner prior to the award of the contract for the renovation of the Oasis Senior Center, City shall earmark up to $5,600,000 (which is one -half of the total Park Fees to be paid to City, without taking into consideration future adjustments to the Park Fee provided for in Section 5.2) as a matching challenge grant to apply toward contributions to the renovation of the Oasis Senior Center. City shall apply any Park Fees not spent by City on the renovation of the Oasis Senior Center to any park use as determined by City. Landowner acknowledges that the actual amount of funds raised through the matching challenge may be less than $5,600,000 and that the amount rose shall not affect the amount of Park Fees payable by Landowner to City. 4.2 Public Benefit Fee. Landowner shall pay to City the sum of $27,090,000 as set forth in this Section 4.2 ( "Public Benefit Fee "). Prior to and as a condition to the issuance of the First Building Permit, Landowner shall pay to City the sum of IM $13,545,000, which is one -half of the Public Benefit Fee ( "Initial Public Benefit Fee "). The balance of the Public Benefit Fee shall be paid to City upon the issuance of building permits for the 430 residential units authorized for development within the Property. The amount payable by Landowner to City for each such residential unit shall be the sum of $31,500. City shall use the Public Benefit Fee for any of the following expenses: the design, engineering and construction of a new City Hall building anywhere within City, the costs to acquire the Option Site if City exercises the option under the Option Agreement, City's pro rata share of the costs to design and construct the Parking Structure if City builds a City Hall on the Option Site, and any other municipal purpose as determined by City. 4.3 Fair Share Traffic Fees. Landowner acknowledges that the Property is subject to City's Fair Share Traffic Contribution Ordinance, which requires the payment of certain fair share traffic fees for development ("Fair Share Traffic Fees "). Landowner further acknowledges that City is in the process of considering updates and amendments to its Traffic Contribution Ordinance and its Fair Share Traffic Fees and that as a result of such updates and amendments the Fair Share Traffic Fee charged by City may be increased (the "Initial Fee Increase ") and Landowner agrees that the Property shall be subject to the modified Fair Share Traffic Contribution Ordinance including the increased fees payable pursuant to the Initial Fee Increase, provided that (i) these fees are generally applicable to all substantially similar new development within City on the same basis that they are applicable to the Property, or (ii) if City elects to impose Fair Share Traffic Fees on a zone by zone basis, these fees are generally applicable to all substantially similar new development within the zone within which the Property is located on the same basis that they are applicable to the Property. Landowner's responsibility to pay any increases made to the Fair Share Traffic Fees after the Initial Fee Increase shall, however, be limited by percentage increases in the California Department of Transportation Construction Index from and after the date that the Initial Fee Increase becomes effective to the date the applicable adjustment is made, as more fully explained in Section 5.2. Nothing herein is intended to preclude Landowner from satisfying its obligation to pay Fair Share Traffic Fees through in -lieu contributions, subject to and in accordance with the Fair Share Traffic Contribution Ordinance and any modifications thereto, which Landowner acknowledges requires the approval of City's Planning Commission. The improvements and dedication to be made under this Agreement shall not be eligible for consideration as an in lieu contribution under the Traffic Contribution Ordinance. City acknowledges that the Fair Share Traffic Fees cover all fair share traffic fees associated with development of the Property, and that during the Term of this Agreement, City shall not require additional fair share traffic fees associated with development of the Property other than the Fair Share Traffic Fees described in this Agreement. 4.4 Circulation Enhancements to Public Right of Way. Landowner shall coordinate with the City on the design and development of the following circulation improvements, which shall be subject to approval by City, including appropriate environmental review. Landowner and City shall exercise diligent efforts to agree upon the exact timing during the sixty (60) month period following the issuance of the First Building Permit (but 0 specifically excluding the building permit for the Parking Structure), that Landowner will construct the individual Circulation Enhancements. (1) widening of Avocado Avenue between San Miguel Drive and San Nicolas Drive; (2) enhancement of San Miguel Drive between MacArthur Boulevard and Avocado Avenue; (3) installation of traffic signal at the intersection of Newport Center Drive and San Nicolas Drive; (4) installation of traffic signal at the intersection of Newport Center Drive and Center Drive; and(5) other improvements mutually agreed upon by City's Director of Public Works and Landowner. Landowners commitment to undertake the circulation enhancements to the public right of way described in this Section are in addition to Landowner's obligation to pay Fair Share Traffic Fees under the Fair Share Traffic Contribution Ordinance, and to any actions Landowner takes to improve access to private property in Newport Center. Landowner's commitment to undertake the circulation enhancements to the public right of way described in this Section are in addition to Landowner's obligation to pay Fair Share Traffic Fees under the Fair Share Traffic Contribution Ordinance and to any actions Landowner takes to improve access to private property in Newport Center. 4.5 Dedication of Public Right of Way North of San Miguel Drive Between MacArthur Boulevard and Avocado Avenue. Landowner shall dedicate to City a public right of way necessary for circulation improvements on the north side of San Miguel Drive between MacArthur Boulevard and Avocado Avenue at such time as City provides a specific design for the necessary circulation improvements for this public right of way. Landowner shall convey the public right of way to City (through the recordation of a grant deed) free and clear of all recorded and unrecorded monetary liens, any delinquent property taxes or assessments, and all tenancies, lessees, occupants, licensees, and all possessory rights of any kind or nature. In addition, upon the conveyance, there shall not be any violation of any law, rate, or regulation affecting the public right of way or its use, including any environmental law or regulation, and Landowner shall be responsible for causing said condition to be satisfied. Landowner shall have the right, to the extent necessary and subject to obtaining an encroachment agreement from City, to install, maintain, repair, and replace a Newport Center entry sign at a location mutually acceptable to City and Landowner. Landowner's dedication of the public right of way described in this Section is in addition to Landowner's obligation to pay Fair Share Traffic Fees under the Fair Share Traffic Contribution Ordinance, to mitigate traffic impacts under the Traffic Phasing Ordinance (City of Newport Beach Municipal Code chapter 15.40, including Appendix A to chapter 15.40), and to any actions Landowner takes to improve access to private property in Newport Center. -10- 4.6 Conditional Open Space Dedication. If City determines it will construct a City Hall at the current Orange County Transportation Authority site in Newport Center Block 500 or on the property located on the east side of Avocado Avenue, north of the Central Library, Landowner shall within thirty (30) days after City notifies Landowner that City has made that determination, dedicate to City (through the recordation of a grant deed) the open space parcel in Newport Center comprised of approximately 3.18 acres of land area, bounded on the north by the Orange County Transportation Authority site, the east by MacArthur Boulevard, the south by San Miguel Drive, and the west by Avocado Avenue ( "Open Space Parcel "). Landowner shall convey the Open Space Parcel to City free and clear of all recorded and unrecorded monetary liens, any delinquent property taxes or assessments, and all tenancies, lessees, occupants, licensees, and all possessory rights of any kind or nature. In addition, upon the conveyance, there shall not be any violation of any law, rule, or regulation affecting the Open Space Parcel or its use, including any environmental law or regulation, and Landowner shall be responsible for causing said condition to be satisfied. Landowner shall, at its sole cost and expense, cause a title company selected by City to issue to City an owner's policy of title insurance for the Open Space Parcel with liability in an amount reasonably determined by City (but not exceeding the fair market value of the Open Space Parcel) showing fee title to the Open Space Parcel vested in City, free and clear of the liens, rights, and encumbrances referred to above. If the Open Space Parcel is dedicated to City, Landowner shall have the right, to the extent necessary and subject to obtaining an encroachment agreement from City, to install, maintain, repair, and replace a Newport Center entry sign at a location mutually acceptable to City and Landowner. 4.7 Maintenance of CIOSA Pre -Paid Transportation Fund. The Cancellation referred to in Section 6.14 terminates the Parties' remaining rights and obligations under the CIOSA, including any obligation of City to repay Landowner for funds that Landowner provided pursuant to the CIOSA. In connection therewith, Landowner agrees that City may retain any balance of pre -paid transportation funds City may be holding as a result of unused CIOSA mitigation. In the event any payments on the loan are due between the Effective Date and the Operative Date, such payments shall be suspended and shall not be required to be made unless the Operative Date does not occur and this Agreement terminates pursuant to Section 11. City may use any such remaining balance of prepaid transportation funds for transportation improvements in accordance with the Protocol Agreement for the Circulation Improvement and Open Space Agreement dated December 11, 1995, and the Protocol Agreement Memorandum dated December 11, 2001. 4.8 City's Option to Purchase New City Hall Site: Parking Structure. 4.8.1 Option to Purchase Option Site. No later than ten (10) days after the Effective Date, Landowner and City shall enter into the Option Agreement, which provides for Landowner to grant to City an option to acquire the Option Site for the sum of One Hundred Forty-Five Dollars ($145.00) per square foot of net land area for the purpose of constructing a new City Hall building thereon. The Option Site is not yet subdivided. For purposes of this Agreement, until such time as the exact boundaries of the Option Site are established, the term "Option Site" shall be deemed to mean that certain real property consisting of approximately 46,175 square feet legally described in Exhibit E ( "Legal Parcel "), plus any contiguous property adjacent to the Legal Parcel. City shall have the right to establish the boundaries of the Option Site within the land area described in the preceding sentence provided that the Option Site shall not exceed 54,000 square feet of net land area as further explained in the Option Agreement. Once the boundaries of the Option Site are established by City, the term "Option Site" shall be deemed to refer to the land located with the boundaries of the established Option Site. The term of the option to be granted by Landowner to City under the Option Agreement (the "Option Period ") will commence on the date of the Option Agreement and will expire on the earliest of the following dates: (i) the date that is four (4) years after the Operative Date; (ii) upon City's termination of the Option Agreement by delivery of written notice of termination to Landowner, which notice City shall have the right to deliver at any time during the Option Period prior to City's exercise of the Option; or the date City's electorate approves and City implements an initiative restricting the location of a new City Hall building to a site outside of Newport Center Block 500, with such initiative to be deemed implemented upon the issuance of a certificate of occupancy for a City Hall building at that site; or (iv) if this Agreement does not become operative in accordance with the terms set forth in Section l l and this Agreement is terminated in accordance with the second to last paragraph of Section 11, then on the date of termination. As more fully explained in the Option Agreement, City's right to exercise the option is subject to the Operative Date occurring and to City awarding a contract for the construction of a new City Hall on the Option Site. If City exercises the option during the Option Period and acquires the Option Site, this Agreement shall terminate as to the Option Site and shall be removed as an encumbrance upon title to the Option Site upon City's acquisition thereof. City agrees that the required parking ratio for a City Hall building developed on the Option Site shall be a minimum of 4.17 spaces per 1,000 square feet of building improvements. 4.8.2 Parking Structure Provisions. If a new City Hall building is developed on the Option Site, the parking for the City Hall shall be located on the Parking Structure Site and Landowner and City shall perform and implement the provisions set forth in this Section 4.8.2 (collectively, the "Parking Structure Provisions "): (i) Landowner shall construct and operate a new multilevel parking structure on the Parking Structure Site ( "Parking Structure'). (ii) Landowner shall grant to City an exclusive easement, in recordable form, for exclusive use of 300 to 375 parking spaces for City Hall parking, without charge (except as otherwise provided herein), with the exact number of City parking spaces to be determined by City in its sole discretion, and provided that a minimum o£4.17 parkin; spaces per 1,000 square feet of building improvements on the Option Site shall be provided. Landowner shall designate the location of the required spaces within an area located within the first three floors of the Parking Structure at locations within the Parking Structure nearest to City Hall. The City's parking spaces shall be segregated from the rest of the parking though specific markings, signs, and/or barriers. City shall have the right to establish rules and regulations governing the use of its designated spaces. (iii) Landowner shall grant to City appropriate easements in the Parking Structure and on the Parking Structure Site to enable City to access its parking spaces. 12- (iv) City shall have the right to review and approve the plans and specifications for the Parking Structure (in its capacity as a regulatory agency and as a property owner) and the Parking Structure shall be constructed in accordance with the approved plans. So long as the Option Period has not otherwise expired, City shall have the right to approve the plans for the Parking Structure regardless of whether Landowner commences the design or constriction of the Parking Structure before the option is exercised. (v) No later than ninety (90) days after City occupies the City Hall building on the Option Site, City shall pay a pro rata share of the costs to design and construct the Parking Structure, including costs of required utility relocation and costs for offsite improvements necessary to provide access to the Parking Structure, but not including any charge for the value of the land comprising the Parking Structure Site or any other charge or payment. City's pro rata share shall be based on the ratio that the number of City designated parking spaces bears to the total number of parking spaces in the Parking Structure. City shall have the right to review and approve the costs incurred by Landowner for which the Landowner seeks reimbursement for City's pro rata share. It is understood and agreed that City shall have no obligation to pay for any of the costs to construct, maintain, operate or repair the Parking Structure if City does not acquire the Option Site. (vi) For cost reference purposes, the design of the Parking Structure shall be substantially similar to the parking structure constructed in 2007 on the north side of Fashion Island ("Fashion Island 2007 Parking Structure "), including the level of landscaping, elevators, quality of materials used, design features, etc. (vii) Regardless of Landowner's timing for any development in the vicinity of the Property, Landowner shall commence and complete construction of the Parking Structure such that it is operational by the time construction of a new City Hall building at the Option Site is completed and ready for occupancy, and the Parties shall cooperate in keeping one another informed of their plans and construction schedules as needed to enable Landowner to satisfy such obligation. (viii) Landowner shall maintain and operate the Parking Structure and City shall pay a pro rata share of the maintenance and operation costs based on the ratio that the number of City designated parking spaces bears to the total number of parking spaces in the Parking Structure. (ix) Landowner shall establish a capital replacement reserve account for the improvement and repair of the Parking Structure. The amount of the capital replacement reserve shall be mutually determined by the Parties and shall be consistent with the capital replacement reserve maintained for the Fashion Island 2007 Parking Structure. The funds in the capital replacement reserve shall be placed in a separate account of Landowner and shall not be commingled with any other funds. City's contribution to the capital replacement reserve shall be based on the ratio that the number of City designated parking spaces bears to the total number of parking spaces in the Parking Structure. Landowner shall fund or cause to be funded the balance of the capital replacement reserve. -13- (x) The obligations of Landowner and City with respect to the operation, maintenance, repair, and replacement of the Parking Structure shall be evidenced by a recordable document that runs with the land and benefits and burdens all of the property owned by Landowner in Block 500 and the Option Site. (xi) Landowner shall, at its sole cost and expense, satisfy any parking obligations it may have to other property owners or parties that may be affected by the development of the Parking Structure on the Parking Structure Site, without creating a burden on City or City's rights to exclusive use of the City designated parking spaces within the Parking Structure and without any cost to City. (xii) The foregoing rights and obligations shall terminate upon the expiration or termination of City's option under the Option Agreement if City does not exercise the option. Although the rights and obligations of the Parties under the Parking Structure Provisions are intended to be final and binding, from and after the Effective Date, the Parties shall exercise diligent efforts to enter into agreements to implement, and set forth in greater detail, these Parking Structure Provisions. The foregoing agreements shall terminate in the event City does not exercise the option during the Option Period or the Option Agreement otherwise terminates prior to City's exercise of the option. 4.9 Retrofit Sprinkler Systems. No later than June 2008, Landowner shall retrofit the existing sprinkler systems in the Newport Center Drive parkways and medians to low flow technology with the following specifications: Control System (1) The control system shall monitor and adjust itself not less than daily, using either evapotranspiration rates for the Corona del Mar microclimate or soil moisture levels monitored at enough locations in the irrigation area as to cover each soil and slope type in Newport Center; (2) The control system shall self - monitor for broken lines or sprinkler heads so that the system shuts down in the event of a break; (3) The control system shall adjust to wind and rain conditions to limit or eliminate watering during windy times or rain events; and (4) The control system shall separate irrigation valves for hydrozones. Sprinkler Hearts: (1) The sprinkler heads shall eliminate overspray onto roads, sidewalks, and other hardscape either by using highly targeted heads that only water the plant material or by using a sprinkler -like wicking system; and (2) Suggested sprinkler heads; rotor heads drip /micro irrigation on all medians -14- Supervision: (1) The performance of the sprinkler systems shall be monitored daily; and (2) The soil shall be tested monthly to determine if it is adequate vs. saturated The specifications listed above will enhance water quality by reducing surface runoff into storm drains in Newport Center. 4.10 Cooperation of Landowner if City Hall Constructed on Property North of Library. If City elects to construct a new City Hall on the property located on the east side of Avocado Avenue, north of the Central Library, Landowner shall cooperate in good faith with City to implement any necessary land use regulations, including zoning amendments, and to release and terminate the use restrictions contained in the deed for the property to allow for and accommodate construction of a new City Hall on that site. 5. Fees. 5.1 Fees Applicable to Property. During the Term of this Agreement, the affordable housing fee assessable against the Property shall be as set forth in the AHIP and the Development Fees assessable against the Property shall be Park Fees, the Public Benefit Fee, and the Fair Share Traffic Fees, and City shall not levy or require any additional affordable housing fees or Development Fees for the development of the Property. City shall retain the right to assess such Development Fees as it may adopt, and whatever applicable rate City may adopt, to any development of the Property beyond the development of the Property authorized in the Development Plan and contemplated by this Agreement. As used herein, the term "Development Fees" shall mean the monetary exactions charged by City in connection with a development project for the purpose of defraying all or a portion of the cost of public facilities related to development of the project. The Parties acknowledge that the following fees, taxes, and charges do not constitute Development Fees and that nothing in this Agreement is intended or shall be construed to release Landowner from the obligation to pay such fees, taxes, and charges, including increases, if and when they become due: (1) City's normal fees for processing, environmental assessment and review, tentative tract and parcel map review, plan checking, site review and approval, administrative review, building permit, grading permit, inspection, and similar fees imposed to recover City's costs associated with processing, reviewing, and inspectin; project applications, plans, and specifications; and (2) fees and charges levied by any other public agency, utility, district, or joint powers authority, regardless of whether City collects those fees and charges; and (3) community facility district special taxes or special district assessments or similar assessments, business license fees, bonds or other security required for public improvements, transient occupancy taxes, sales taxes, property taxes, sewer lateral connection fees, water service connection fees, new water meter fees, and the Property Development Tax payable under Section 3.12 of City's Municipal Code. -15- This Agreement does not authorize Landowner to transfer any fees paid or fee credits to any other property outside the Property that is the subject of this Agreement. Once the Term of this Agreement has ended, Landowner shall not receive any credit for future planned development of the Property based on the fees paid pursuant to this Agreement. 5.2 Permitted Increases in Development Fees Applicable to Property. During the Term of this Agreement, City shall not increase the amount of the Public Benefit Fee, nor shall City increase the amount of the Park Fees or the Fair Share Traffic Fees (the three Development Fees applicable to the Property after the Operative Date) except as set forth in Sections 4.1 and 4.3 and this Section. If Landowner sells any residential unit to a third party purchaser in other than a bulk sale of all of the units in a single residential building, then Landowner shall pay to the City at the time of such sale of an individual residential unit the then applicable Park Fee for construction of such unit, as may be in effect at that time within the City of Newport Beach, less a credit for the amount of any per unit Park Fee previously paid to City pursuant to Section 4.1 of this Agreement for such unit. Landowner's obligation to pay such fee upon individual sale under this Agreement shall be described in a memorandum and recorded against the title of each unit at the time that a subdivision map creating the condominium unit is recorded by Landowner, in a form acceptable to the City. Pursuant to Section 4.3, the Property shall be subject to increases in the Fair Share Traffic Fee made pursuant to the Initial Fee Increase. As to any subsequent increases in Fair Share Traffic Fees, the Property shall be subject to the increases; provided, however, that in no event shall Landowner's Fair Share Traffic Fee be increased by an amount that exceeds the percentage increase in the California Department of Transportation Construction Index from the date the Initial Fee Increase becomes effective to the date the adjustment is made. If at any time the Engineering the California Department of Transportation Construction Index is discontinued or no longer available, City shall substitute an official index that is most nearly equivalent thereto. This Agreement does not vest Landowner against increases in any other fees other than Development Fees that are payable by Landowner, including without limitation the Property Development Tax referred to in subparagraph (3) of Section 5. I. 6. Development of Property. 6.1 Applicable Regulations. Other than as expressly set forth in this Agreement, during the Term of this Agreement, the terms and conditions of development applicable to the Property, including but not limited to the permitted uses, the density and intensity of use, and the maximum height, size, and location of proposed buildings, shall be those set forth in the Development Regulations and this Agreement. The permitted uses, density and intensity of development, and the maximum height, location, and size of proposed buildings permitted under the Development Regulations conform with the development studied and contemplated by the Final Environmental Impact Report for the City of Newport Beach General Plan 2006 Update (State Clearinghouse No. 200601 1 1 1 9) and the North Newport Center Addendum to EIR for General Plan 2006 -16- Update (State Clearinghouse No. 2006011119). During the Term of this Agreement, the Development Fees applicable to the Property, and increases in said fees, shall be as set forth in Sections 4.1, 4.2, 4.3, and 5.2. The affordable housing requirements applicable to the Property shall be as set forth in the AHIP. During the Term of this Agreement, City shall not prevent development of the Property that is in compliance with the Development Regulations, or require the Landowner to modify or redesign any building which complies with the Development Regulations, regardless of whether City exercises the option to acquire the Option Site. Landowner may apply to City for permits or approvals necessary to modify or amend the development specified in the Development Regulations, provided that the request does not propose an increase in the maximum density, intensity, height, or size of proposed structures, or a change in use that generates more peak hour traffic or more daily traffic and, in addition, Landowner may apply to City for approval of minor amendments to existing tentative tract maps, tentative parcel maps, or associated conditions of approval, consistent with City of Newport Beach Municipal Code section 19.12.090. This Agreement does not constitute a promise or commitment by City to approve any such permit or approval, or to approve the same with or without any particular requirements or conditions, and City's discretion with respect to such matters shall be the same as it would be in the absence of this Agreement. City acknowledges that the Development Regulations provide a process for the transfer of development rights among parcels within the Property, consistent with City's General Plan Policy LU 6.14.3, and that if Landowner eliminates any of the existing uses on the Property which are set forth in Exhibit G and the associated development rights, Landowner shall retain the right to rebuild the use and development rights elsewhere on the Property or transfer the development rights among parcels within the Property, subject to and consistent with the Development Regulations and said policy. Notwithstanding any other provision in this Agreement to the contrary, if at any time during the Term of this Agreement, Landowner transfers a development right from a building or buildings anywhere within the Property to any other building within the Property, the building(s) from which the development right is transferred must be demolished and cleared or transformed into an authorized non - habitable use that does not count as development intensity under the General Plan before Landowner can obtain a certificate of occupancy for the new building(s). Nothing set forth herein is intended to prohibit or restrict the transfer of development rights elsewhere in Newport Center, consistent with and subject to City's normal rules and regulations. 6.2 Landowner's Vested Rights. During the Term of this Agreement, except to the extent City reserves its discretion as expressly set forth in this Agreement or in the applicable Development Regulations, Landowner shall have the vested right to exercise its discretion within the limits and constraints of the Development Regulations in designing any buildings, structures, streets, sidewalks, buildings, and development within the Property. City shall not exercise or require any design review approval for Landowner's use of the Property unless expressly set forth in the Development Regulations. Landowner acknowledges that the Development Regulations provide for a design review process for the Property pursuant to which City has certain discretionary 17- authority. In connection therewith, Landowner acknowledges that nothing in this Agreement is intended to override any review and approval requirements contained in the Development Regulations or to preclude City from the exercise of any discretionary authority it has under the Development Regulations. In addition to the foregoing, Landowner acknowledges and agrees that nothing herein is intended to vest Landowner with any environmental approvals that may be required in connection with the fixture development of the Property and Landowner must submit and process and obtain the approval of all documentation and information required to comply with the California Environmental Quality Act (California Public Resources Code § 21000 et seq.) with regard to any development of the Property. The Parties acknowledge that the environmental approvals for the improvements described in Section 6.3 are being processed concurrently with this Agreement. 6.3 Project Components. During the Term of this Agreement, subject to any approvals required under the Development Regulations, Landowner shall have a vested right to develop the following improvements on the Property: (1) 75,000 square feet in Fashion Island. This square footage will be available for uses, including hotel and retail, that are consistent with the Development Regulations. (2) 430 residential units in Newport Center Block 500, Newport Center Block 600, or San Joaquin Plaza; provided, however, that to the extent Landowner desires to develop any of said residential units in Newport Center Block 500 or San Joaquin Plaza, it shall be required to comply with the Traffic Phasing Ordinance. (3) The transfer to Newport Center Block 500 of development rights for development of approximately 277,161 square feet currently assigned to Newport Center Block 600 and designated for office, hotel, and supporting retail uses, of which up to 72,000 square feet may be utilized by City for the City Hall building to be situated on the Option Site if City exercises the Option. Upon transfer to Newport Center Block 500, the development rights will be designated only for uses permitted under the Development Regulations and, to the extent City exercises the option to acquire the Option Site, for a City Hall on the Option Site. The foregoing development and/or transfer of development rights will occur in new or modified buildings that comply with the Development Regulations. Consistent with the City of Newport Beach General Plan Policy LU 6.14.3, the transfer of the foregoing development rights is consistent with the General Plan and will not result in any adverse traffic impacts, 6.4 Police Power. In all respects not provided for in this Agreement, City shall retain full rights to exercise its police power to regulate the development of the Property. Any uses or developments requiring a use permit, tentative tract map, or other discretionary permit or approval in accordance with the Development Regulations shall require a permit or approval pursuant to this Agreement, and, notwithstanding any other provision 18- set forth herein, this Agreement is not intended to vest Landowner's right to the issuance of such permit or approval nor to restrict City's exercise of discretion with respect thereto. Not by way of limitation of the foregoing, it is specifically understood that City reserves the right to amend, pursuant to procedures provided by law and this Agreement, City laws, rules, regulations, and policies applicable to the Property as to which Landowner's rights are not expressly vested and such amendment or amendments shall be binding on the Property except to the extent that the same conflict with the express provisions of this Agreement. 6.5 Time -Share Developments. If Landowner desires to establish time -share developments within the Property in the future, Landowner shall be required to comply with the City of Newport Beach Time -Share Developments Ordinance (City of Newport Beach Municipal Code chapter 20.84), including the requirement for a separate development agreement under the City of Newport Beach Municipal Code section 20.84.050. City retains its full discretion with respect to such matters, including without limitation, the imposition of an in -lieu of transient occupancy tax fee in accordance with section 20.84.050 of the Municipal Code, and nothing herein constitutes a promise or commitment by City to approve such use or enter into any such development agreement. 6.6 Available Use in Newport Center Block 500 for City Hall Building. If a new City Hall building is developed on the Option Site, the development intensity for the Property available to Landowner will not be reduced by more than 72,000 square feet, regardless of whether the size of the City Hall building exceeds 72,000 square feet. As of the date of this Agreement, City intends that any new City Hall building constructed on the Option Site will contain approximately 72,000 square feet of building area; provided, however, that nothing in this Agreement shall be deemed to prohibit City from constructing a smaller City Hall building or from constructing a larger building so long as such building maintains the minimum parking ratio provided for in Section 4.8. If City acquires the Option Site, City shall be responsible for conducting a traffic analysis and providing traffic mitigation if required to comply with the Traffic Phasing Ordinance with respect to the construction of a City Hall building on the Option Site. City acknowledges and agreed that Landowner shall not be responsible for the payment of any fees for any development by City on the Option Site. 6.7 Available Use in Newport Center Block 500 if City Does Not Develop a City Hall on the Option Site. If City does not exercise the option to acquire the Option Site during the Option Period, then the 72,000 square feet of development intensity available to Landowner that otherwise would have been utilized on the Option Site shall remain part of the development intensity designated for office use in Newport Center Block 500, to which Landowner has an exclusive vested right in accordance with this Agreement. In addition, if City acquires the Option Site and the City Hall building developed on the Option Site is less than 72,000 square feet, then the unused square footage remains part of the development intensity designated for office use in Newport Center Block 500 and to which Landowner has an exclusive vested right in accordance with this Agreement. If City does not exercise the option to acquire the Option Site dyring the Option Period, then Landowner shall be responsible for conducting a traffic analysis and providing traffic mitigation with the Traffic Phasing Ordinance and paying applicable Fair Share 19- Traffic Fees with regard to the 72,000 square feet of development intensity referred to herein. 6.8 Effect of Agreement on Applications for Land Use Approvals. In connection with any approval that City is required, permitted, or has the right to give relating to the Project, or otherwise under its ordinances, resolutions, and codes, including without limitation the approval of a tentative tract map under the Subdivision Map Act (California Government Code sections 66410- 66499.58), City shall not impose any condition or restriction that prevents Landowner from developing and subdividing the Property with the uses, density, intensity, maximum height, and size of proposed structures permitted by the Development Regulations. Subject to review for completeness, City shall accept for processing and shall timely review and act on all applications for further land use entitlement approvals with respect to the Project called for or required under this Agreement. Unless expressly required by the Subdivision Map Act, the Development Regulations, or overriding federal or state law, City in considering any proposed tentative tract map shall not require any decrease or increase in density, intensity, size, relocation, or setback of a proposed development or require any modification of the design of any buildings, condominiums, parcels, units, or other uses located in the proposed subdivision. 6.9 Mello -Roos Community Facilities District. Pursuant to the Mello -Roos Community Facilities Act of 1982 (California Government Code sections 53311 - 53368.3), Landowner may petition the City Council to establish one or more community facilities districts including some or all of the Property for the purpose of financing Landowner's obligations under this Agreement. City shall have the sole discretion to determine whether to establish a community facilities district, the improvements to be financed, and the method of financing these improvements. 6.10 No Conflicting Enactments. Except to the extent City reserves its discretion as expressly set forth in this Agreement, during the Term of this Agreement City shall not apply to the Project any ordinance, policy, rule, regulation, or other measure relating to development of the Project that is enacted or becomes effective after the Effective Date to the extent it conflicts with this Agreement. This Section shall not restrict City's ability to enact an ordinance, policy, rule, regulation, or other measure applicable to the Project pursuant to California Government Code section 65866 consistent with the procedures specified in Section 8. In Pardee Construction Co. v. City of Camarillo (1984) 37 Cal. 3d 465, the California Supreme Court held that a construction company was not exempt from a city's growth control ordinance even though City and construction company had entered into a consent judgment (tantamount to a contract under California law) establishing the company's vested rights to develop its property consistent with the zoning. The California Supreme Court reached this result because the consent judgment failed to address the timing of development. The Parties intend to avoid the result of the Pardee case by acknowledging and providing in this Agreement that Landowner shall have the vested right to develop the Property at the rate, timing, and sequencing that Landowner deems appropriate within the exercise of Landowner's sole subjective business judgment provided that such development occurs in accordance with this Agreement and the Development Regulations, notwithstanding adoption by City's electorate of an initiative to the contrary after the Effective Date. No City moratorium or -20- other similar limitation relating to the rate, timing, or sequencing of the development or construction of all or any part of the Project and whether enacted by initiative or another method, affecting subdivision maps, building permits, occupancy certificates, or other entitlement to use, shall apply to the Project to the extent such moratorium or other similar limitation restricts Landowner's vested rights in this Agreement or otherwise conflicts with the express provisions of this Agreement. 6.11 Benefits to Landowner. Landowner has expended and will continue to expend substantial amounts of time and money on the planning of the Project and construction of infrastructure for and in conjunction with the Project. Landowner represents and City acknowledges that Landowner would not make these expenditures without this Agreement, and that Landowner makes these expenditures in reliance upon this Agreement. A benefit to Landowner under this Agreement is the assurance that Landowner will preserve the right to develop the Property in accordance with the terms of this Agreement. City acknowledges that Landowner will be investing money and planning efforts in the Project in reliance on City's covenants and representations in this Agreement. City agrees that Landowner may reasonably and justifiably rely on City's covenants and representations in this Agreement and on the enforceability of this Agreement. 6.12 Tentative Subdivision Mans. City agrees that Landowner may file and process new and existing vesting tentative maps for the Property consistent with California Government Code sections 66498.1- 66498.9 and City of Newport Beach Municipal Code chapter 19?0. Pursuant to the applicable provision of the California Subdivision Map Act (California Government Code section 66452.6(a)), any tentative subdivision map approved for the Property, whether designated a "vesting tentative map" or otherwise, shall be extended for the Term of this Agreement. 6.13 Compliance with California Government Code Section 65897.5(c) on Water Supply. Pursuant to California Government Code section 65897.5(c), the tentative map prepared for any subdivision of the Property shall comply with the provisions of California Government Code section 66473.7 relating to the availability of water supply, as enacted as of the Effective Date. 6.14 Cancellation of CIOSA and Bonita Canyon Development Agreement. Pursuant to the ordinance adopted by the City Council approving this Agreement, the CIOSA and the Bonita Canyon Development Agreement shall automatically terminate on the Operative Date ( "Cancellation "). Within ten (10) days after the Operative Date, the Parties shall cooperate in executing and recording aga nst the properties owned by Landowner that are encumbered by the CIOSA and the Bonita Canyon Development Agreement a written instrument memorializing the termination of said agreements in such form as to permit the agreements to be removed as encumbrances upon title. The Cancellation shall not affect the rights and obligations of any third parties under the CIOSA or the Bonita Canyon Development Agreement. 6.15 No Payments Due from City. The Parties acknowledge that City is not required to make any reimbursement payments to Landowner and that no funding is otherwise due -21- from City to Landowner for improvements made by or at the direction of Landowner to Back Bay View Park, located at Jamboree Road and Pacific Coast Highway. Compliance with Traffic Phasing Ordinance. 7.1 Scope of Traffic Study. The traffic study prepared in conjunction with this Agreement covers all development authorized by this Agreement (including new development and replacement development for existing buildings that may be demolished), with the exception of (i) construction of a City Hall building in Newport Center Block 500 if and to the extent that City is required to comply with the Traffic Phasing Ordinance if City exercises the option to acquire the Option Site and construct the City Hall building thereon, (ii) construction of any residential units in Newport Center Block 500 or San Joaquin Plaza, and (iii) the development by Landowner of 72,000 square feet of office space within Newport Center Block 500 (if City does not acquire the Option Site and the development rights to said site revert to Landowner, as provided herein). 7.2 Sufficiency of Traffic Study. City acknowledges that the traffic study for the Property prepared prior to the Effective Date satisfies the provisions of the Traffic Phasing Ordinance, Specifically, City acknowledges that the traffic study establishes that the project considered in the traffic study meets the requirements for a Comprehensive Phased Land Use Development and Circulation System Improvement Plan with all phases not anticipated to be complete within 60 months of project approval and subject to a development agreement that requires circulation improvements, as defined in City of Newport Beach Municipal Code section 15.40.030(B)(2). With the exception of the need for traffic studies for the three items listed in Section 7. 1, City shall not require any additional traffic studies in conjunction with any application for approvals or permits necessary to construct development authorized by this Agreement as long as the application is consistent with the provisions of this Agreement and the relevant Development Regulations. 7.3 Circulation Improvements No later than the earlier of (i) the date City issues the certificate of occupancy for any new development under the First Building Permit (but specifically excluding the building permit for the Parking Structure), or (ii) that date that is sixty (60) months after the Operative Date, Landowner shall, in compliance with all City requirements, complete construction of a third eastbound left turn lane at the intersection of MacArthur Boulevard and San Joaquin Hills Road, to mitigate traffic impacts pursuant to the Traffic Phasing Ordinance. Reservations of Authority. Notwithstanding any provisions set forth in this Agreement to the contrary, the laws, rules, regulations, and official policies set forth in this Section 8 shall apply to and govem the development of the Property. 8.1 Procedural Regulations. Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals, and any other matter of procedure, provided that they are adopted and applied City-wide or to all other properties similarly situated in City. _22_ 8.2 Consistent Future City Regulations. City ordinances, resolutions, regulations, and official policies governing development and building which do not conflict with the Development Regulations, or with respect to such regulations that do conflict, where Landowner has consented in writing to the regulations. 8.3 Overriding Federal and State Laws and Regulations. Federal and state laws and regulations that override Landowner's vested rights set forth in this Agreement shall apply to the Property, together with any City ordinances, resolutions, regulations, and official policies that are necessary to enable City to comply with the overriding federal and state laws and regulations, provided that: (1) Landowner does not waive its right to challenge or contest the validity of any such federal, state, or local laws, regulations, or official policies; and (2) Upon the discovery of a federal or state law or regulation (or City ordinance, resolution, regulation, or official policy undertaken pursuant to those laws and regulations), that prevents or precludes compliance with any provision of this Agreement, City or Landowner shall provide the other Party with written notice of the state or federal law or regulation, provide a copy of the law or regulation, and a written statement of conflict(s) with the provisions of this Agreement. Promptly thereafter City and Landowner shall meet and confer in good faith in a reasonable attempt to determine whether a modification or suspension of this Agreement, in whole or in part, is necessary to comply with such federal or state law or regulation. In such negotiations, City and Landowner agree to preserve the terms of this Agreement and the rights of Landowner as derived from this Agreement to the maximum feasible extent while resolving the conflict. City agrees to cooperate with Landowner at no cost to City in resolving the conflict in a manner which minimizes any financial impact of the conflict upon Landowner. City also agrees to process in a prompt manner Landowner's proposed changes to the Project and any of the Development Regulations as may be necessary to comply with such federal or state law; provided, however, that the approval of such changes by City shall be subject to the discretion of City, consistent with this Agreement. 8.4 Public Health and Safety. Any City ordinance, resolution, rule, regulation, program, or official policy, that is necessary to protect persons on the Property or in the immediate community from conditions dangerous to their health or safety shall apply to the Property, even though the application of the ordinance, resolution, rule regulation, program, or official policy would result in the im,)airment of Landowner's vested rights under this Agreement. 8.5 Uniform Building Standards. Existing and future building and building - related standards set forth in the uniform codes adopted and amended by City from time to time, including building, plumbing, mechanical, electrical, housing, swimming pool, and fire codes, and any modifications and amendments thereof. 8.6 Public Works Improvements. To the extent Landowner constructs or installs public works or facilities, the City standards in effect for such public works or facilities at -23- the time of City's issuance of a permit, license, or other authorization for construction or installation of same shall apply. 9. Utility Capacity. With respect to utility services provided by an entity other than City, in the event of a reduction of interruption of said service by the utility provider, City shall require no greater reduction in utility service to any parcel of the Property than the general provider of the service requires. Nothing in this Agreement limits City's ability to impose reasonable conditions on any fixture development or building permits or approvals that require Landowner to install utility lines and appurtenances servicing the Property. City shall not take any action to obstruct development on the Property on the basis of utility capacity, provided that City is not guaranteeing water supply or the Orange County Sanitation District's ability to provide wastewater treatment services for new development planned for the Property. If, as a result of City Action and after Landowner has paid the Initial Park Fee and/or Initial Public Benefit Fee to City, sufficient sewer and water hookups, water supplies, and sewage treatment capacity ( "Sewer and Water Service ") is not available to allow building permits and/or certificates of occupancy to be issued for construction or occupancy of the residential units authorized for development under this Agreement, City shall refund to Landowner the per unit fee ($26,046.51 and/or $63,000) for each such residential unit. As used herein, the term "City Action" shall mean affirmative action taken by City to reduce the Sewer and Water Service currently available, and shall not include any action or event that is outside City's control, including without limitation, any action taken or regulation adopted by any other governmental agency or City ordinances, resolutions, regulations, and official policies that are necessary to enable City to comply with any overriding federal or state laws and regulations. The refunds referred to in this Section shall be made at the time Landowner is otherwise entitled to issuance of the building permit or certificate of occupancy, whichever is applicable, and City is not able to issue the permit because of the City Action taken. 10. Project as Private Undertaking. The development of the Project is a private undertaking. Neither Party is acting as the agent of the other in any respect, and each Party is an independent contracting entity with respect to the terms, covenants, and conditions contained in this Agreement. This Agreement forms no partnership, joint venture, or other association of any kind. The only relationship between the Parties is that of a government entity regulating the development of private property by the owner of the property. 11. Effective Date and Operative Date of Agreement, Term. This Agreement shall become effective on the thirty -first (31") day following the City Council's adoption of its ordinance approving this Agreement or such other date that the ordinance becomes effective by applicable law ( "Effective Date "). Notwithstanding the forgoing, this Agreement shall not become operative and neither Party shall have any rights or obligations hereunder, with the exception of the obligations in Section 4.8 to execute the Option Agreement and to negotiate the agreements to implement the Parking Structure Provisions, until the "Operative Date," which for purposes of this Agreement shall mean the latest of the following dates: (i) the date the AH1P becomes operative after approval or adoption by the City Council; (ii) the date the Development Plan becomes operative after approval or adoption by the City Council; (iii) the date the Design Regulations become operative after approval or adoption by the City Council; (iv) the date the Transfer of -24- Development Rights Resolution becomes operative after approval or adoption by the City Council; or (v) the date the time period for appealing or challenging this Agreement, the AHIP, the Development Plan, the Design Regulations, the Transfer of Development Rights Resolution, and the environmental documents approved by City in connection with all of said agreements and land use approvals has expired with no challenge having been timely filed or, if any such challenge is timely filed, the date such action is concluded and the validity of the agreement or regulation that was the subject of the challenge is upheld. The Parties shall have the right to make this Agreement become operative while litigation is pending upon mutual agreement of the Parties in writing in the sole and absolute discretion of each of them, in which case the date agreed upon by the Parties shall be the Operative Date. The Parties shall cooperate by executing in recordable form an appropriate memorandum providing notice of the occurrence of the Operative Date as soon as the Operative Date has occurred. The Parties acknowledge that the resolutions and ordinances adopting the AHIP, the Development Plan, the Design Regulations, and the Transfer of Development Rights provide that the foregoing plans and regulations do not become operative until the Operative Date of this Agreement. If this Agreement, the AHIP, the Development Plan, the Design Regulations or the Transfer of Development Rights are challenged and the applicable agreement or regulation is not upheld at the conclusion of the action, and the Operative Date has not otherwise occurred by mutual agreement by the parties in accordance with clause (v) of the first sentence of the second paragraph of this Section 11, either Party not then in default may, by delivery of written notice to the other Party, terminate this Agreement, in which event neither Party shall have any further rights or obligations hereunder, the AHIP, the Development Plan, the Design Regulations, and the Transfer of Development Rights shall be null and void, and the Parties shall execute and record against the Property a written instrument memorializing the termination of this Agreement in such form as to permit this Agreement to be removed as an encumbrance upon title to the Property. The term of this Agreement ( "Term ") shall commence on the Operative Date and shall continue thereafter until the earlier of the following: (i) the date that is twenty (20) years after the Effective Date; or (ii) the date this Agreement is terminated pursuant to Sections 12 or 15.1. 12. Amendment or Cancellation of Agreement. Other than modifications of this Agreement under Section 8.3, this Agreement may be amended or canceled in whole or in part only by mutual written and executed consent of the Parties in compliance with California Government Code section 65868 and City of Newport Beach Municipal Code section 15.45.060 or by unilateral termination by City in the event of an uncured default • )f Owner. 13. Enforcement. Unless amended or canceled as provided in Section 12, or modified or suspended pursuant to California Government Code section 65869.5, this Agreement is enforceable by either Party despite any change in any applicable general or specific plan, zoning, subdivision, or building regulation or other applicable ordinance or regulation adopted by City (including by City's electorate) that purports to apply to any or all of the Property. -25- 14. Periodic Review of Compliance. The Parties shall review this Agreement at least once every 12 months from the Operative Date consistent with California Government Code sections 65865 and 65865.1 and City of Newport Beach Municipal Code section 15.45.070. At the reviews, Landowner shall demonstrate its good faith compliance with this Agreement and shall document the current status of its entitlement use and its provision of the public benefits referred to in Section 4 of this Agreement. Landowner also agrees to furnish evidence of good faith compliance as City may require in the reasonable exercise of its discretion and after reasonable notice to Landowner. 15. Events of Default. 15.1 Default by Landowner. Pursuant to California Government Code section 65865. 1, if City determines following a noticed public hearing and on the basis of substantial evidence that Landowner has not complied in good faith with Landowner's obligations pursuant to this Agreement, City shall by written notice to Landowner specify the manner in which Landowner has failed to comply and state the steps Landowner must take to bring itself into compliance. If Landowner does not commence all steps reasonably necessary to bring itself into compliance as required and diligently pursue steps to completion within 30 days after receipt of the written notice from City specifying the manner in which Landowner has failed to comply, then Landowner shall be deemed to be in default under the terms of this Agreement. City may then: (1) seek a modification of this Agreement, or (2) seek any other available remedies as provided in Section 15.3. 15.2 Default by City. if City has not complied with any of its obligations and limitations under this Agreement, Landowner shall by written notice to City specify the manner in which City has failed to comply and state the steps necessary for City to bring itself into compliance. If City does not commence all steps reasonably necessary to bring itself into compliance as required and diligently pursue steps to completion within 30 days after receipt of the written notice from Landowner specifying the manner in which City has failed to comply, then City shall be deemed to be in default under the terms of this Agreement. City may then: (1) seek a modification of this Agreement, (2) terminate this Agreement, or (3) seek a specific performance or similar equitable remedy as provided in Section 15.3. Except as provided below, if City adopts or enforces any moratorium, de facto or de jure, or other similar limitation (whether relating to the rate, timing, or sequencing of the development or construction of all or any part of the Project and whether enacted by initiative or otherwise) affecting the processing or approval of subdivision maps, building permits, occupancy certificates, or other entitlement to use which is applied to the Project, then Landowner may immediately seek a modification of this Agreement, terminate this Agreement, or seek any other available remedy as provided in Section 15.3. City shall not be in default pursuant to this Section if (1) It adopts a temporary City -wide moratorium on development due to its inability to supply sufficient water, sewer or other utilities to then - current customers as necessary to maintain minimum levels of health, safety, and sanitation; -26- (2) It is required to enforce a moratorium because of a law, rule, regulation, or plan identified in Section 8.3; or (3) The enactment of the moratorium or other limitation is the result of a court order. 15.3 Specific Performance and Damages Remedies. Due to the size, nature, and scope of the Project and the potential impracticality or impossibility of restoring the Property to its natural condition once implementation of this Agreement has begun, the Parties acknowledge that, except as provided in this Section and in Section 15.4, money damages and remedies at law generally are inadequate and that specific performance is appropriate for the enforcement of this Agreement. The remedy of specific performance or, in the alternative, a writ of mandate, shall be the sole and exclusive remedy available to either Party in the event of the default or alleged default by the other, with the exception that City shall be entitled to damages against Landowner for Landowner's breach or its obligations under Sections 18 or 19 of this Agreement. The limitations on the remedy of damages in this Agreement shall not prevent City from enforcing Landowner's monetary obligations hereunder. 15.4 Limited Recovery of Legal Expenses by Prevailing Party in Any Action. In any judicial proceeding, arbitration, or mediation (collectively, "Action') between the Parties that seeks to enforce the provisions of this Agreement, the prevailing Party shall recover all of its actual and reasonable costs and expenses, regardless of whether they would be recoverable under California Code of Civil Procedure section 1033.5 or Civil Code section 1717 in the absence of this Agreement. These costs and expenses include expert witness fees, attorneys' fees, and costs of investigation and preparation before initiation of the Action. The right to recover these costs and expenses shall accrue upon initiation of the Action, regardless of whether the Action is prosecuted to a final judgment or decision. 16. Cooperation. Each Party covenants to take reasonable actions and execute all documents that may be necessary to achieve the purposes and objectives of this Agreement. 17. Force Majeure. Neither Party shall be deemed to be in default where failure or delay in performance of any of its obligations under this Agreement is caused, through no fault of the Party whose performance is prevented or delayed, by floods, earthquakes, other acts of God, fires, wars, riots or similar hostilities, strikes or other labor difficulties, state or federal regulations, or court actions. Except as specified above, nonperformance shall not be excused because of the act or omission of a third person. In no event shall the occurrence of an event of force majeure operate to extend the Term of this Agreement. 18. Indemnitv. Landowner agrees to indemnify, defend, and hold harmless City, City's designee, and their respective elected and appointed councils, boards, commissions, officers, agents, and employees from all actions, suits, claims, liabilities, losses, damages, penalties, obligations, and expenses (including but not limited to attorneys' fees and costs) that may arise, directly or indirectly, from the acts, omissions, or operations of the Landowner or Landowner's agents, contractors, subcontractors, agents, or employees pursuant to this Agreement. City shall have the right to select and retain counsel to defend any actions, and Landowner shall pay the -27- reasonable cost for this defense. The indemnity provisions in this Section shall survive termination of this Agreement. 19. Third Party Legal Challenge. If a third party brings a legal action challenging the validity or enforceability of any provision of this Agreement or the Project approvals under the Development Regulations ( "Third Party Legal Challenge "), City shall defend the Third Party Legal Challenge, and Landowner shall be responsible for the reasonable legal expenses incurred by City in connection with the challenge. As long as Landowner is not in default under this Agreement, City shall not allow any default or-judgment to be taken against it or compromise the defense of the action without Landowner's prior written approval. Landowner shall also have the right to settle a Third Party Legal Challenge, provided that nothing in this Agreement shall authorize Landowner to settle the Third Party Legal Challenge on terms that would constitute an amendment or modification of this Agreement or the AHIP, the Development Plan, the Design Regulations, or the Transfer of Development Rights Resolution unless City approves the amendment or modification consistent with applicable legal requirements. City reserves its full legislative discretion to make this approval. 20. Mortgagee Rights. 20.1 Encumbrances on Property. The Parties agree that this Agreement shall not prevent or limit Landowner in any manner from encumbering the Property, any part of the Property, or any improvements on the Property with any Mortgage securing financing with respect to the construction, development, use, or operation of the Project. 20.2 Mortgagee Protection. This Agreement shall be superior and senior to the lien of any Mortgage. Nevertheless, no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value. Any acquisition or acceptance of title or any right or interest in the Property or part of the Property by a Mortgagee (whether due to foreclosure, trustee's sale, deed in lieu of foreclosure, lease termination, or otherwise) shall be subject to all of the terms and conditions of this Agreement. Any Mortgagee who takes title to the Property or any part of the Property shall be entitled to the benefits arising under this Agreement. 203 Mortgagee Not Obligated. Notwithstanding the provisions of this Section, a Mortgagee will not have any obligation or duty under the terms of this Agreement to perform the obligations of Landowner or other affirmative covenants of Landowner, or to guarantee this performance except that: (1) The Mortgagee shall have no right to develop the Property under the Development Regulations without fully complying with the terms of this Agreement; and (2) To the extent that any covenant to be performed by Landowner is a condition to the performance of a covenant by City, that performance shall continue to be a condition precedent to City's performance. 20.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure. Each Mortgagee shall, upon written request to City, be entitled to receive written notice from City of: -28- (1) The results of the periodic review of compliance specified in Section 14, and (2) Any default by Landowner of its obligations set forth in this Agreement. Each Mortgagee shall have a further right, but not an obligation, to cure the default within 10 days after receiving notice of monetary defaults and within 30 days after receiving notice of non - monetary defaults. if Mortgagee can only remedy or cure the default by obtaining possession of the Property, then Mortgagee shall have the right to seek to obtain possession with diligence and continuity through a receiver or otherwise, and to remedy or cure the default within 30 days after obtaining possession. Except in case of emergency or to protect the public health or safety, City may not exercise any of its judicial remedies set forth in this Agreement until expiration of the 30 -day period. But in the case of a default that cannot with diligence be remedied or cured within 30 days, the Mortgagee shall have additional time as is reasonably necessary to remedy or cure the default, provided Mortgagee promptly commences to cure the default within 30 days and diligently prosecutes the cure to completion. Landowner shall not be released from performing its obligations in Sections 3 and 4 of this Agreement in the event of a foreclosure by a Mortgagee. 21. Transfers and Assignments. 21.1 Right to Assign. Subject to the last sentence of this Section 21.1, Landowner shall have the right to sell, lease, transfer, or assign the Property in whole or in part to any person, partnership, joint venture, firm, or corporation at any time during the Term of this Agreement without the consent of City, provided that no partial transfer shall violate the Subdivision Map Act (California Government Code sections 66410- 66499.58). Upon the effective date of any such sale, lease, transfer or assignment of the Property, the transferor /assignor shall notify of the name and address of the transferee. Any assignment of this Agreement must be pursuant to a sale or transfer of the Property. Any sale or transfer of the Property shall include the assignment and assumption of the rights, duties, and obligations arising from this Agreement to the transferee with respect to that part of the Property transferred. Landowner shall no longer be obligated under this Agreement for the part of the Property that was sold or transferred if Landowner is not in default under this Agreement at the time of the sale or transfer. In no event, however, shall Landowner be relieved from its obligations under this Agreement to pay the Public Benefit Fee, Park Fees, and Fair Share Traffic Fees or to fulfill its obligations under Sections 3 and 4 of this Agreement. Notwithstanding the foregoing, from and after the date of this Agreement, Landowner shall not have the right to sell, lease, transfer, or assign (i) the Option Site until the expiration of the Option Period withow City having elected to exercise the option to acquire the Option Site, or (ii) the Parking Structure Site until the expiration of the Option Period without City having elected to exercise the option, or if City does exercise the Option, until the construction of the Parking Structure is complete and the Parking Structure is operational. 21.2 Agreement Binding on Successors and Assigns. The burdens of this Agreement are binding upon, and the benefits of this Agreement inure to, all successors in interest of the Parties to this Agreement, and constitute covenants that run with the Property. In -29- order to provide continued notice, the Parties will record this Agreement and any subsequent amendments to it. 22. Estoppel Certificate. At any time, either Party may deliver written notice to the other Party requesting that the Party certify in writing that, to the best of its knowledge: (1) this Agreement is in full force and effect and is binding on the Party; (2) this Agreement has not been amended or modified either orally or in writing. If this Agreement has been amended, the Party providing the certification shall identify the amendments; and (3) the requesting Party is not in default in the performance of its obligations under this Agreement. If the requesting Party is in default, the other Party must describe the nature and amount of the default. The requesting Party shall execute and return the certificate within 60 days following receipt. Any assignee of a Party's rights and obligations hereunder, as referred to in Section 22, and any Mortgagee, shall be entitled to rely on the certificate. 23. Further Actions and Instruments. Each Party shall cooperate with and provide reasonable assistance to the other Party to the extent consistent with and necessary to implement this Agreement. Upon the request of a Party at any time, the other Party shall promptly execute, with acknowledgement or affidavit if reasonably required, and file or record the required instruments and writings and take any actions as may be reasonably necessary to implement this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 24. Notices. Any notice or demand that shall be required or permitted by law or any provision of this Agreement shall be in writing. If the notice or demand will be served upon a Party, it either shall be personally delivered to the Party; deposited in the United States mail, certified, return receipt requested, and postage prepaid; or delivered by a reliable courier service that provides a receipt showing date and time of delivery with courier charges prepaid. The notice or demand shall be addressed as follows: TO CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, California 92663 -3884 Attn: City Manager With a copy to: City Attorney City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, California 92663 -3884 -30- TO LANDOWNER: The Irvine Company LLC 550 Newport Center Drive Newport Beach, California 92660 -0015 Attn: General Counsel With a copy to: Latham & Watkins LLP 600 West Broadway, Suite 1800 San Diego, California 92101 -3375 Ann: Christopher W. Garrett Either Party may change the address stated in this Section by notice to the other Parry in the manner provided in this Section, and notices shall be addressed and submitted to the new address. Notice shall be deemed to be delivered upon the earlier of: (1) the date received or (2) three business days after deposit in the mail as provided above. 25. Rules of Construction and Miscellaneous Terms. 25.1 Rules of Construction. The singular includes the plural; the masculine and neuter include the feminine; "shall" is mandatory; "may" is permissive. 25.2 Time Is of the Essence. Time is of the essence regarding each provision of this Agreement in which time is an element. 25.3 Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party, and failure by a Parry to exercise its rights upon a default by the other Party, shall not constitute a waiver of that Party's right to demand strict compliance by the other Party in the future. 25.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be identical and may be introduced in evidence or used for any other purpose without any other counterpart, but all of which shall together constitute one and the same agreement. 25.5 Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter addressed in this Agreement. 25.6 Severability. if any provision of this Agreement or the application of the provision to any party or circumstances shall be held invalid or unenforceable to any extent, the remainder of this Agreement or the application of the provision to persons or circumstances other than those to whom it is held invalid or unenforceable shall not be affected. Each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 25.7 Construction. This Agreement has been drafted after extensive negotiation and revision. Both City and Landowner are sophisticated parties who were represented by independent counsel throughout the negotiations. City and Landowner each agree and acknowledge that the terms of this Agreement are fair and reasonable, taking into account -31- their respective purposes, terms, and conditions. This Agreement shall therefore be construed as a whole consistent with its fair meaning, and no principle or presumption of contract construction or interpretation shall be used to construe the whole or any part of this Agreement in favor of or against either Parry. 25.8 Constructive Notice and Acceptance. Every person who now or later owns or acquires any right, title, or interest in any part of the Project or the Property is and shall be conclusively deemed to have consented and agreed to every provision of this Agreement. This Section applies regardless of whether the instrument by which the person acquires the interest references this Agreement. 25.9 No Third Party Beneficiaries. The only parties to this Agreement are City and Landowner. This Agreement does not involve any third party beneficiaries, and it is not intended and shall not be construed to benefit or be enforceable by any other person or entity. 25.10 Applicable Law and Venue. This Agreement shall be construed and enforced consistent with the internal laws of the State of California. Any action at law or in equity arising under this Agreement or brought by any Party for the purpose of enforcing, construing, or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Orange, State of California, or the United States District Court for the Central District of California. The Parties waive all provisions of law providing for the removal or change of venue to any other court. 25.11 Non - Liability of City Officers and Employees. No official, officer, employee, agent, or representative of City shall be personally liable to Landowner or its successors and assigns for any loss arising out of or connected with this Agreement or the Development Regulations. 25.12 Section Headinys. All section headings and subheadings are inserted for convenience only and shall not affect construction or interpretation of this Agreement. 25.13 Incorporation of Recitals and Exhibits. Recitals A through S are incorporated into this Agreement by this reference. Exhibits A through G are attached to this Agreement and incorporated by this reference as follows: EXHIBIT DESCRIPTION DESIGNATION A Legal Description of Property B Depiction of the Property Development Status, Transportation Improvements and C Open Space Dedications Under the CIOSA and Bonita Canyon Development Agreements D Affordable Housing Implementation Plan -32- EXHIBIT DESIGNATION DESCRIPTION E Location of Option Site and Associated Parking Structure F Option Agreement G Existing Development on Property 26. Authority to Execute. The persons executing this Agreement warrant and represent that they have the authority to execute this Agreement on behalf of the entity for which they are executing this Agreement. They further warrant and represent that they have the authority to bind their respective Party to the performance of its obligations under this Agreement. 27. Recordation. This Agreement and any amendment, modification, or cancellation to it shall be recorded in the Office of the County Recorder of the County of Orange, by City Clerk within the period required by California Government Code section 65868.5 and City of Newport Beach Municipal Code section 15.45.090. [SIGNATURE PAGE FOLLOWS] -33- SIGNATURE PAGE TO ZONING IMPLEMENTATION AND PUBLIC BENEFIT SPACE AGREEMENT ATTEST: City Clerk APPROVED AS TO FORM: Robin Clauson City Attorney "LANDOWNER" THE IRVINE COMPANY LLC m Its: "CITY" -34- CITY OF NEWPORT BEACH m Its: Mayor STATE OF CALIFORNIA COUNTY OF ORANGE On , before me, the undersigned, a Notary Public in and for said State, personally appeared and , personally known to me to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities and that by their signature on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. Witness my hand and official seal. Notary Public in and for said County and State STATE OF CALIFORNIA COUNTY OF ORANGE On , before me, the undersigned, a Notary Public in and for said State, personally appeared and , personally known to me to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities and that by their signature on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. Witness my hand and official seal. Notary Public in and for said County and State -35- EXHIBIT A: LEGAL DESCRIPTION OF PROPERTY Newport Center Block 500: PARCEL AP NO. 442 - 082 -07: THOSE PORTIONS OF BLOCK 93 OF IRVINE'S SUBDIVISION, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 1, PAGE 88, OF NESCELLANEOUS RECORD MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE NORTHERLY RIGHT -OF -WAY LINE OF SAN NICOLAS DRIVE SHOWN AS "SOUTH 800 14'38" EAST 91.45 "` ON MAP OF TRACT NO. 6015 FILED IN BOOK 239, PAGES 28 THROUGH 41 OF MISCELLANEOUS MAPS, IN THE OFFICE OF SAID COUNTY RECORDER; THENCE ALONG THE RIGHT -OF -WAY LINES OF SAID SAN NICOLAS DRIVE, NEWPORT CENTER DRIVE EAST AND SANTA ROSA DRIVE, AS SHOWN ON SAID MAP, THE FOLLOWING COURSES AND DISTANCES: NORTH 80° 14'38" WEST 91.45 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 25.00 FEET; NORTHWESTERLY 38.16 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 870 2649" TO THE BEGINNING OF A REVERSE CURVE CONCAVE WESTERLY HAVING A RADIUS OF 1670.00 FEET; NORTHERLY 472.13 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 160 l l' 54" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 25.00 FEET; NORTHEASTERLY 38.16 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 87° 26' 49'; NORTH 78° 27' 06" EAST 69.97 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET; NORTHEASTERLY 195.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 130 33' 11" TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 25.00 FEET, A RADIAL TO SAID POINT BEARS NORTH 35° 38' 46" EAST; THENCE SOUTHEASTERLY 4.81 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 110 01' 42" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 161.00 FEET; THENCE SOUTHEASTERLY 91.20 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 320 27' 16" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHERLY 32.67 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 74° 53'02"; THENCE SOUTH 0° 53'46" EAST 25.50 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00' 00" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 0'00"; THENCE SOUTH 00 53' 46" EAST 179.75 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 10.00 FEET; THENCE SOUTHWESTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 37'45'40"; THENCE SOUTH 360 5I' 54" WEST 9.49 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF I0.00 FEET; THENCE SOUTHERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 37' 45'40"; THENCE SOUTH 0' 53'46" EAST 3I.50 FEET; THENCE CONTINUING SOUTH 0' 53'46" EAST 3I.50 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF I0.00 FEET; THENCE SOUTHEASTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45' 40'; THENCE SOUTH 38' 39' 26" EAST 9.49 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF I0.0 FEET; THENCE SOUTHERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 37' 45'40"; THENCE SOUTH 0' 53'46" EAST 2I2.75 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY 24.40 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 550 55' 53" TO THE BEGINNING OF A REVERSE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF I47.00 FEET; THENCE SOUTHWESTERLY 66.40 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 250 52'43" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY 9.78 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 220 24' 25" TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 950.50 FEET AND THE NORTHERLY RIGHT -OF -WAY LINE OF SAID SAN NICOLAS DRIVE, A RADIAL TO SAID POINT BEARS NORTH 22° I2' 47" EAST; THENCE WESTERLY 206.65 FEET ALONG SAID CURVE THROUGH AN ANGLE OF I20 27' 25" TO THE POINT OF BEGINNING. PARCEL AP NO, 442 - 082 -08: THOSE PORTIONS OF BLOCK 93 OF IRVINE'S SUBDIVISION, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK I, PAGE 88, OF MISCELLANEOUS RECORD MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. DESCRIBED AS FOLLOWS: COMMENCING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE SOUTHERLY RIGHT OF WAY LINE OF SANTA ROSA DRIVE SHOWN AS "NORTH 780 27' 06" EAST 69.97' " ON A MAP OF TRACT 60I5 FILED IN BOOK 239, PAGES 28 THROUGH 4I OF MISCELLANEOUS MAPS IN THE OFFICE OF SAID COUNTY RECORDER, SAID EASTERLY 'TERMINUS BEING THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET; THENCE NORTHEASTERLY I95.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF I30 33' 11 " TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 25.00 FEET AND THE TRUE POINT OF BEGINNING, A RADIAL TO SAID POINT BEARS NORTH 35' 38'46" EAST; THENCE SOUTHEASTERLY 4.8I FEET ALONG SAID CURVE THROUGH AN ANGLE OF II° 01' 42" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF I6I.00 FEET; THENCE SOUTHEASTERLY 9I.20 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 320 27' I6" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHERLY 32.67 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 74' 53'02"; THENCE SOUTH 0' -2- 53' 46" EAST 25.50 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00' 00" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 2.00 FEET; THENCE SOUTHWESTERLY 3.14 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00' 00 "; THENCE SOUTH 0° 53' 46" EAST 179.75 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 10.00 FEET; THENCE SOUTHWESTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45' 40 "; THENCE SOUTH 36° 51' 54" WEST 9.49 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 10.00 FEET; THENCE SOUTHEASTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45' 40' ; THENCE SOUTH 0° 53'46" EAST 63.00 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 10.00 FEET; THENCE SOUTHEASTERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45'40"; THENCE SOUTH 38° 39'26" EAST 9.49 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 10.00 FEET; THENCE SOUTHERLY 6.59 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 370 45' 40'; THENCE SOUTH 00 53' 46" EAST 212.75 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY 24.40 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 550 55' 53" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 147.00 FEET; THENCE SOUTHWESTERLY 66.40 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 250 52' 43" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY 9.78 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 220 24' 25' TO A POINT ON A NON - TANGENT CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 950.50 FEET AND THE NORTHERLY RIGHT OF WAY LINE OF SAN NICOLAS DRIVE AS SHOWN ON SAID MAP OF TRACT 6015, A RADIAL TO SAID POINT BEARS NORTH 220 12' 47" EAST; THENCE SOUTHEASTERLY 55.46 FEET ALONG SAID CURVE AND SAID RIGHT OF WAY LINE THROUGH AN ANGLE OF 30 20'36" TO A POINT ON A NON - TANGENT CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET; A RADIAL TO SAID POINT BEARS SOUTH 86° 12'25" WEST; THENCE NORTHERLY 9.44 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 210 37'37" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 95.00 FEET; THENCE NORTHEASTERLY 122.78 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 740 02' 54" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 262.03 FEET; THENCE SOUTHEASTERLY 193.09 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 420 13' 18'; THENCE SOUTH 450 53' 46" EAST 109.58 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHEASTERLY AND SOUTHWESTERLY 39.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00'00"; THENCE SOUTH 44'06'14" WEST 100.91 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY 12.72 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 290 09' 46 ", THENCE NON - TANGENT SOUTH 460 44' 00" EAST 56.70 FEET TO A POINT OF A NON - TANGENT CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 25.00 FEET, A RADIAL TO SAID POINT BEARS NORTH 760 44' 00" WEST; THENCE NORTHEASTERLY 13.45 FEET ALONG -3- SAID CURVE THROUGH AN ANGLE OF 300 50' 14'; THENCE NORTH 44° 06' 14" EAST 99.45 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 25.00 FEET; THENCE NORTHEASTERLY AND SOUTHEASTERLY 39.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 90° 00'00"; THENCE SOUTH 45° 53'46" EAST 15.01 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 40.00 FEET; THENCE SOUTHEASTERLY AND NORTHEASTERLY 62.83 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00' 00'; THENCE NORTH 44° 06' 14" EAST 289.00 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 40.00 FEET; THENCE NORTHEASTERLY AND NORTHWESTERLY 62.83 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 90° 00' 00'; THENCE NORTH 45° 53'46" WEST 254.09 FEET TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET; THENCE NORTHWESTERLY AND NORTHEASTERLY 39.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 90° 00'00"; THENCE NORTH 44° 06' 14" EAST 104.09 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 25.00 FEET; THENCE NORTHEASTERLY 13.00 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 290 4741" TO THE SOUTHWESTERLY RIGHT OF WAY LINE OF SAN JOAQUIN HILLS ROAD AS SHOWN ON SAID MAP OF TRACT 6015; THENCE NON - TANGENT NORTH 460 41' 16" WEST ALONG SAID RIGHT OF WAY LINE 48.72 FEET TO A POINT ON A NON - TANGENT CURVE IN THE BOUNDARY OF THAT CERTAIN PARCEL SHOWN ON A MAP FILED IN BOOK 13, PAGE 41 OF PARCEL MAPS IN THE OFFICE OF SAID COUNTY RECORDER, SAID CURVE BEING CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET, A RADIAL TO SAID POINT BEARS SOUTH 760 12'47" EAST; THENCE SOUTHWESTERLY 13.23 FEET ALONG SAID CURVE AND SAID BOUNDARY THROUGH AN ANGLE OF 30° 19' 01 "; THENCE CONTINUING ALONG SAID BOUNDARY SOUTH 440 06'14" WEST 103.60 FEET TO THE BEGINNING OF A CURVE IN SAID BOUNDARY CONCAVE NORTHERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY AND NORTHWESTERLY 39.27 FEET ALONG SAID CURVE AND SAID BOUNDARY THROUGH AN ANGLE OF 900 00' 00 "; THENCE NORTH 45° 53' 46" WEST ALONG SAID BOUNDARY AND ITS NORTHWESTERLY PROLONGATION 190.00 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 313.67 FEET; THENCE NORTHWESTERLY 111.43 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 200 21' 13" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 121.38 FEET; THENCE NORTHWESTERLY 108.34 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 510 08'217'; THENCE NORTH 76° 40'54" WEST 100.00 FEET; THENCE NORTH 75° 3641" WEST 53.00 FEET TO THE BEGINNING OF A NON - TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 66.00 FEET; A RADIAL TO SAID POINT BEARS SOUTH 13° 19' 06" WEST; THENCE NORTHWESTERLY 62.51 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 540 16' 02' TO THE BEGINNING OF A COMPOUND CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET; THENCE NORTHWESTERLY 9.79 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 220 26 33" TO A POINT ON THE SOUTHEASTERLY RIGHT OF WAY LINE OF SAID SANTA ROSA DRIVE, SAID POINT BEGINNING ON A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET, A RADIAL TO SAID POINT BEARS SOUTH 290 13'23" EAST; THENCE SOUTHWESTERLY 59.38 FEET ALONG SAID CURVE AND SAID RIGHT OF WAY LINE THROUGH AN ANGLE OF 40 0T 18" TO THE TRUE POINT OF BEGINNING. -4- PARCEL AP NO. 442 - 082 -06: THOSE PORTIONS OF BLOCK 93 OF IRVINE'S SUBDIVISION, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 1, PAGE 88, OF MISCELLANEOUS RECORD MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE NORTHERLY RIGHT OF WAY LINE OF SAN NICOLAS DRIVE SHOWN AS "SOUTH 800 14' 38" EAST 91.45' " ON A MAP OF TRACT 6015 FILED IN BOOK 239, PAGES 28 THROUGH 41 OF MISCELLANEOUS MAPS IN THE OFFICE OF SAID COUNTY RECORDER, SAID EASTERLY TERMINUS BEING THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 950.50 FEET; THENCE SOUTHEASTERLY 262.11 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 150 48' 01" TO A POINT ON A NON - TANGENT CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET AND THE TRUE POINT OF BEGINNING, A RADIAL TO SAID POINT BEARS SOUTH 86° 12' 25" WEST; THENCE NORTHERLY 9.44 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 210 37' 37" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 95.00 FEET; THENCE NORTHEASTERLY 122.78 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 740 02' 54" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 262.03 FEET; THENCE SOUTHEASTERLY 193.09 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 420 13' 18 "; THENCE SOUTH 450 53'46" EAST 109.58 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHEASTERLY AND SOUTHWESTERLY 39.27 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 900 00' 00 "; THENCE SOUTH 44'06'14" WEST 100.91 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY 12.72 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 290 09' 46 "; THENCE NON - TANGENT NORTH 460 44' 00" WEST 34.74 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 950.50 FEET AND BEING THE SOUTHEASTERLY CONTINUATION OF THE NORTHERLY RIGHT OF WAY LINE OF SAID SAN NICOLAS DRIVE; THENCE NORTHWESTERLY 293.80 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 170 42' 37" TO THE TRUE POINT OF BEGINNING. PARCEL AP NO. 442 - 082 -01: THOSE PORTIONS OF BLOCK 93 OF IRVINE'S SUBDIVISION, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 1, PAGE 88, OF MISCELLANEOUS RECORD MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWESTERLY TERMINLS OF THAT CERTAIN COURSE IN THE SOUTHWESTERLY RIGHT OF WAY LINE OF SAN JOAQUIN HILLS ROAD SHOWN AS "SOUTH 460 14' 16" EAST 286.60 "` ON A MAP OF TRACT 6015 FILED IN BOOK 239, -5- PAGES 28 THROUGH 41 OF MISCELLANEOUS MAPS IN THE OFFICE OF SAID COUNTY RECORDER; THENCE SOUTH 46° 14' 16" EAST 236.39 FEET ALONG SAID RIGHT OF WAY LINE AND ALONG THE BOUNDARY OF THAT CERTAIN PARCEL SHOWN ON A MAP FILED IN BOOK 13, PAGE 41 OF PARCEL MAPS IN THE OFFICE OF SAID COUNTY RECORDER TO A POINT ON A NON - TANGENT CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25.00 FEET; A RADIAL TO SAID POINT BEARS SOUTH 760 12' 47" EAST; THENCE SOUTHWESTERLY 13.23 FEET ALONG SAID CURVE AND SAID BOUNDARY THROUGH AN ANGLE OF 30° 19'01"; THENCE CONTINUING ALONG SAID BOUNDARY SOUTH 440 06' 14" WEST 103.60 FEET TO THE BEGINNING OF A CURVE IN SAID BOUNDARY CONCAVE NORTHERLY HAVING A RADIUS OF 25.00 FEET; THENCE SOUTHWESTERLY AND NORTHWESTERLY 39.27 FEET ALONG SAID CURVE AND SAID BOUNDARY THROUGH AN ANGLE OF 900 00'00" THENCE NORTH 450 53'46" WEST ALONG SAID BOUNDARY AND ITS NORTHWESTERLY PROLONGATION 190.00 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 313.67 FEET; THENCE NORTHWESTERLY 111.43 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 200 21' 13" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 121.38 FEET; THENCE NORTHWESTERLY 108.34 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 510 08'21"; THENCE NORTH 76° 40' 54" WEST 100.00 FEET; THENCE NORTH 750 36,41" WEST 53.00 FEET TO THE BEGINNING OF A NON - TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 66.00 FEET; A RADIAL TO SAID POINT BEARS SOUTH 130 19' 06" WEST; THENCE NORTHWESTERLY 62.51 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 540 16' 02" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE EASTERLY HAVING A RADIUS OF 25.00 FEET; THENCE NORTHWESTERLY 9.79 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 220 26' 33" TO A POINT ON THE SOUTHEASTERLY RIGHT OF WAY LINE OF SANTA ROSA DRIVE AS SHOWN ON THE MAP OF SAID TRACT 6015; SAID POINT BEING ON A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 825.50 FEET; A RADIAL TO SAID POINT BEARS SOUTH 290 13' 23" EAST; THENCE NORTHEASTERLY 190.16 FEET ALONG SAID CURVE AND SAID RIGHT OF WAY LINE THROUGH AN ANGLE OF 130 11' 54'; THENCE NORTH 47° 37'43" EAST 2.20 FEET CONTINUING ALONG SAID RIGHT OF WAY LINE TO THE BEGINNING OF A CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 25.00 FEET THENCE NORTHEASTERLY AND SOUTHEASTERLY 38.96 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 890 1726" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 6072.50 FEET AND THE SOUTHWESTERLY RIGHT OF WAY LINE OF SAID SAN JOAQUIN HILLS ROAD; THENCE SOUTHEASTERLY 529.29 FEET ALONG SAID CURVE AND SAID RIGHT OF WAY LINE THROUGH AN ANGLE OF 30 06' 25" TO THE POINT OF BEGINNING. EXCEPTING THAT PORTION SHOWN ON A MAP FILED IN BOOK 13, PAGE 41, PARCEL MAPS, RECORDS OF SAID COUNTY. PARCEL AP NO. 442 - 082 -02: -6- PARCEL I, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 13, PAGE 41 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL AP NO. 442 - 082 -03: PARCEL I, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 21, PAGE 18 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL AP NO. 442 - 082 -05: PARCEL I, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 27, PAGE 43 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL AP NO. 442-082-09: PARCEL I, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 54, PAGE 23 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL AP NO'S 442-082-11, 442-082-12,442-082-13 and 442 - 082 -14: PARCELS I TO 4 OF PARCEL MAP NO. 84 -706, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 192, PAGES I AND 2 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY Newport Center Block 600: )Replace with legal descriptions) 442 - 101 -09 442 - 101 -19 442 - 101 -11 442 - 101 -20 442 - 101 -13 442-101-21 442 - 101 -14 442 - 101 -22 -7- 442 - 101 -16 442 - 101 -23 442 - 101 -18 442 - 101 -24 San Joaquin Plaza: ]Replace with legal descriptions] 442 - 261 -01 442 - 261 -19 442 - 261 -16 Fashion Island: ]Replace with legal descriptions] 442 - 021 -08 442 - 021 -28 442 - 021 -10 442 - 021 -29 442-021-11 442 -021 -30 442 - 021 -13 442 - 021 -31 442 - 021 -16 442 - 021 -32 442 - 021 -17 442 - 021 -33 442 - 021 -21 442 - 021 -34 442 - 021 -25 442 - 021 -35 442 - 021 -26 442 - 021 -36 442 - 021 -27 m EXHIBIT B: DEPICTION OF PROPERTY [Map of parcels attached.] EXHIBIT C: DEVELOPMENT STATUS TRANSPORTATION IMPROVEMENTS AND OPEN SPACE DEDICATIONS UNDER CIOSA AND THE BONITA CANYON DEVELOPMENT AGREEMENT CIOSA Open Space Dedication Requirement: Actual Open Space Completion Status: Amount Available for Conveyed /Offered: Funding Requirement: 138.1 acres 146.0 acres 106% Transportation Improvements Total Program Expended or Amount Available for Required: Funding Requirement: Committed to Date: Future Projects: Frontage $5,220,360 $5,220,360 $0 Improvements Fair Share $1,398,428 $1,398,428 $0 Contribution Advancement $14,295,572 $12,191,740 $0 Total $21,014,360 $21,014,360 $0 Outside Funds Used $0 $30,108,183 to Complete CIOSA Improvements Total CIOSA Related Funding Expended $51,122,543 -1- Approved Development: Completed Completion Status: 100% Development: 88% 1076 residential units 945 residential units 88% 94,000 office square feet 94,000 office square 100% feet 30,000 regional retail square feet 30,000 office square 100% feet 68 hotel units 0 hotel units 0% BONITA CANYON DEVELOPMENT AGREEMENT Park Dedication Requirement: Completion Status: Acquisition and improvement of Bonita Canyon Sports Park 100% Transportation Improvements Required: Completion Status: Dedication of required right of way and widening of Bonita Canyon Road, Bison Road, and MacArthur Boulevard 100% Approved Development: Completed Development: Completion Status: 1521 residential units 1339 residential 88% units 55,000 general commercial square feet 54,000 general 98% commercial square feet -2- Approved Development: Completed Completion Status: Development: 1076 residential units 945 residential units 88% 94,000 office square feet 94,000 office square 100% feet 30,000 regional retail square feet 30,000 office square 100% feet 68 hotel units 0 hotel units 0% -3- EXHIBIT D: AFFORDABLE HOUSING IMPLEMENTATION PLAN [Attached] EXHIBIT E: LOCATION OF OPTION SITE AND ASSOCIATED PARKING STRUCTURE [Insert legal description of parcel that will be included in option site and attach depiction of parcel and associated parking structure] EXHIBIT F: OPTION AGREEMENT [Attached] EXHIBIT G: EXISTING DEVELOPMENT ON PROPERTY As of Date of Approval of the City of Newport Beach General Plan 2006 Update (July 25, 2006) Sub -Area Existing Development Block 500 285,142 square feet of office and commercial development 952,673 square feet of office and commercial Block 600 development 295 hotel rooms San Joaquin Plaza 330,989 square feet of office and commercial development 1,331,268 square feet of regional retail development Fashion Island 1700 theater seats Within an area of 27,000 square feet. OPTION AGREEMENT This OPTION AGREEMENT ( "Agreement ") is entered into as of this day of December 2007, by and between THE IRVINE COMPANY LLC, a Delaware limited liability company, successor -in- interest to The Irvine Company, a Michigan corporation ( "Optionor "), and the CITY OF NEWPORT BEACH, a California municipal corporation ( "City "), RECITALS A. Optionor is the owner of that certain real property located in the City of Newport Beach, County of Orange, State of California, consisting of approximately 46,175 square feet of land area more particularly described in the legal description attached hereto as Exhibit "I" and depicted on the Site Map attached hereto as Exhibit "21', and the property adjacent to said property (collectively, the "Parcel"), B. Optionor and City desire to enter into this Agreement to provide for Optionor to grant to City and City to obtain from Optionor, upon the terms set forth in this Agreement, an option to purchase a portion of the Parcel not to exceed 54,000 square feet of net land area, the boundaries of which shall be established by City in accordance with this Agreement, together with all improvements thereon, all easements, licenses, and interests appurtenant thereto, and all development rights, governmental approvals, and land entitlements, owned or held by Optionor in connection with the Land (collectively, the "Property"), C. City and Optionor are entering into this Agreement pursuant to Section 4.8.1 of that certain Zoning Implementation and Public Benefit Agreement between City and Optionor dated December 18, 2007 ( "Development Agreement"). AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, Optionor and City agree as follows: OPTION TO ACQUIRE. 1.1 Survey; Lesal Description of Land; Compliance with Subdivision Map Act. City shall have the right to establish the boundaries of the Property within the Parcel provided that the Land shall not exceed 54,000 square feet of net land area (as defined in Section 2). Within sixty (60) days after the date of this Agreement, City shall notify Optionor of the land area that City has determined will comprise the Property through an exhibit depicting the Property boundaries and, within thirty (30) days thereafter, Optionor shall obtain and deliver to City a current survey of the Property ( "Survey ") prepared by a licensed civil engineer or registered surveyor in accordance with the current ALTA/ACSM standards, and shall be certified to City, Optionor, and First American Title Company ( "Title Company "). The Survey shall establish both the gross land area and net land area of the Property for purposes of confirming the Purchase Price pursuant to Section 2 of this Agreement. As used herein, the term "net land area" shall mean the gross land area of the Property excluding any areas that have been dedicated to City for road or Error! Unknown document properly nameJError! Unknown document property name.Error! Unknown document property name. Error! Unknown document property name-Error! Unknown document properly name. a! U09i07 -1 - sidewalk purposes (i.e., if the legal parcel in which the Property is situated includes the half width of the abutting street). In addition, the Survey shall show a metes and bounds description of the Property, consistent with the description provided by City, and shall show all easements encumbering and easements appurtenant to the Property, visible or recorded, and roads and other means of physical and record ingress and egress to and from the Property. Within thirty (30) days after City's receipt of the Survey, City shall deliver written notice to Optionor approving or disapproving the same. In the event that City disapproves the Survey, said disapproval shall identify in detail any changes that are required to be made in order to obtain City's approval thereof and Optionor shall promptly make said changes, provided that the land area of the Land as described in the metes and bounds description shall be consistent with the land area depicted on the Site Map. Upon City's approval of the Survey, the term "Property" as used in this Agreement shall mean the land described in the approved metes and bounds description. City's approval of the Survey shall be for the purpose of establishing the metes and bounds description of the Property and the net land area for purposes of establishing the Purchase Price in accordance with Section 2, and shall not constitute City's approval of any easements or encumbrances on the Property. The parties acknowledge that the Property is not an existing "legal lot" under the Subdivision Map Act. Accordingly, promptly following the approval of the Survey, Optionor and City shall take such steps as may be appropriate to effect such lot line adjustments as reasonably may be proposed by Optionor or City to (a) establish and/or confirm that the Property, as described and approved per the Survey, thereafter shall consist exclusively of one or more legal lots under the Subdivision Map Act, and (b) establish and/or confirm that any property adjoining the Land and retained by Optionor (any such property, the "Retained Property"), including any property that remains from a former legal lot after adjustments of boundary lines so as to establish the Property, thereafter shall consist exclusively of one or more legal lots under the Subdivision Map Act. At the request of Optionor and subject to any public review process, such steps may include any actions that reasonably may be required of City, at no cost to City, in order to establish or confirm that the Retained Property shall be in compliance with the Subdivision Map Act (e.g., the issuance by City of a certificate of compliance with respect to the Retained Property). The completion of the above described steps in accordance with applicable law sometimes is referred to herein as the "Subdivision Map Act Condition." Optionor acknowledges that minor boundary adjustments may need to be made to the existing rights -of -way within the vicinity of the Property in order to accommodate the creation of the Property as a separate parcel and the construction of a City Hall thereon, and Optionor shall, within thirty (30) days after written request by City, dedicate to City the rights -of -way necessary to accommodate said boundary adjustments. 1.2 Grant of Option. Optionor hereby grants to City an option to purchase the Property upon all of the terms, covenants, and conditions contained in this Agreement ( "Option ") and in the Escrow Instructions to be executed in accordance with Section 1.5 below. The Option created hereby shall be irrevocable by Optionor and shall be binding upon the successors and assigns of Optionor. Optionor's granting of the Option to City shall be in consideration of City's performance of its obligations set forth in that certain Zoning Implementation and Public Benefit Agreement between Optionor and City dated December 18, 2007 (the "Development Agreement "), and City shall not be required to pay any option fee, or pay or provide any other Error! Unknown document properly nomelError! Unknown document properly name. Error! Unknown document property onme. Error! Unknown document property name..Error! Unknown document properly name. al 1109/07 -2- consideration or purchase price for the Option. Optionee hereby represents and warrants to Optionor that the Development Agreement has been duly executed and delivered by City, that all steps and approvals have been taken and obtained under applicable law in order for the Development Agreement to become effective and to become the binding obligation of City, and that the Development Agreement constitutes a valid and binding obligation of City, fully enforceable against City in accordance with its terms. 1.3 Option Period. The term of this Option ( "Option Period ") shall commence on the date of this Agreement and expire on the earliest of the following dates: (i) the date that is 48 months after the Operative Date; (ii) upon City's termination of this Agreement by delivery of written notice of termination to Optionor, which notice City shall have the right to deliver at any time during the Option Period prior to City's exercise of the Option; (iii) the date City's electorate approves and City implements an initiative restricting the location of a new City Hall building to a site outside of Newport Center Block 500, with such initiative to be deemed implemented upon the issuance of a certificate of occupancy for a City Hall building at that site; or (iv) if the Development Agreement does not become operative in accordance with the terms set forth in Section I I of the Development Agreement and the Development Agreement is terminated in accordance with the second to last paragraph of Section 11, then on the date of such termination. 1.4 Conditions to Exercise of Option. City's right to exercise the Option shall be subject to the satisfaction of the following conditions: (i) the Operative Date under the Development Agreement shall have occurred, and (ii) City shall have awarded a contract for the construction of a new City Hall on the Option Site. 1.5 Manner of Exercise of Option. In the event this Agreement has not earlier terminated pursuant to the provisions of Section 1.3 above, City shall have the right to exercise the Option during the Option Period by delivering to Optionor or Optionor's counsel written notice of City's election to acquire the Property, together with three (3) originals of the Agreement for Purchase and Sale of Real Property and Escrow Instructions in the form attached hereto as Exhibit "4° ( "Escrow Instructions "), with each original of said Escrow Instructions fully executed by City. Optionor shall thereupon promptly execute the Escrow Instructions, with Section 6 initialed in the space provided for the Seller's initials, and deliver, within seven (7) days after receipt thereof, one filly executed original to City and one fully executed original to First American Title Company at its offices located at 2 First American Way, Santa Ana, CA 92707 ("Escrow Holder "), and shall retain one fully executed original for Optionor's records. Thereafter, Optionor and City shall cooperate in executing any additional and supplemental escrow instructions as may be required by the Escrow Holder to perform its duties with respect to the escrow, provided that in the event of any conflict between the form of Escrow Holder's standard escrow instructions and the Escrow Instructions, the Escrow Instructions shall govern. The date that the Escrow Instructions are executed and delivered by City to Optionor shall be the date inserted on the first page of the Escrow Instructions as the date of the Opening of Escrow. The Close of Escrow shall occur within thirty (30) days following the exercise of the Option by City, as more particularly provided in the Escrow Instructions. 1.6 Recordation of Memorandum. Within five (5) business days after the date the metes and bounds description of the Property is determined in accordance with Section 1.1 of Error! Unknown document properly nameJError! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. al 1!09109 -3- this Agreement, Optionor shall execute and deliver to City a short form memorandum of this Agreement ("Memorandum ") in the form attached hereto as Exhibit "3 ". Upon receipt of the Memorandum from Optionor, City shall execute the Memorandum and cause it to be recorded in the Official Records of Orange County, California. 1.7 Document to Remove Cloud. This Agreement constitutes only an Option to purchase the Property, and although the Option granted hereby shall automatically terminate with respect to the Property unless exercised within the time and in accordance with the other provisions set forth herein, City agrees that upon termination or expiration of the Option Period or, if City timely exercises the Option but the Closing provided for in the Escrow Instructions does not occur for any reason other than an uncured material default by Optionor, City shall execute, acknowledge, and deliver to Optionor upon Optionor's request therefor, a quitclaim deed or such other document(s) required by a reputable title company to remove any cloud from Optionor's title to the Property that might arise as a result of the Option. 2. PURCHASE PRICE. In the event that City exercises the Option, the purchase price payable by City to Optionor for the Property shall be the sum of One Hundred Forty-Five Dollars ($145.00) per square foot of net land area ( "Purchase Price "). The net land area of the Property shall be determined by the Survey to be obtained by Optionor and approved by City pursuant to Section 1.1 of this Agreement. Within five (5) days after City's approval of the Survey as provided for in Section 1.I, City and Optionor each shall execute and deliver to the other a written instrument confirming the net land area of the Property and the Purchase Price resulting therefrom. Prior to executing the Escrow Instructions, the parties shall insert the amount of the Purchase Price into the blank in Section 2.1 of the Escrow Instructions. If City exercises the Option, the Purchase Price shall be paid by City to Optionor at the Closing in accordance with the terms set forth in the Escrow Instructions. As used herein, the terms "Closing," "Close of Escrow" and "Closing Date" shall have the meaning ascribed in Section 3.1 of the Escrow Instructions. 3. INSPECTIONS AND REVIEW. 3.1 Delivery of Property Documents. Within five (5) days after the date of this Agreement, Optionor shall deliver to City all documents, reports, agreements or other items in its possession or control relating to the Property, including without limitation the following (collectively, the "Property Documents "): all information and docmments relating to the condition of the soils, groundwater, subsurface improvements, including without limitation building foundations and underground utility lines, and subsurface physical and environmental conditions on and under the Property, including copies of all asbestos, lead -based pain., soils, seismic, geologic, drainage, toxic waste, engineering, environmental and similar type reports and surveys; all information and documents relating to the physical and environmental condition of the structures located on the Property; any survey of the Property; and all engineering reports and studies relating to the physical and environmental condition of the Property. During the Option Period, Optionor shall promptly deliver to City any additional Property Documents that Optionor comes to posses or control after the date of this Agreement. Optionor makes no representations as to the accuracy or completeness of such information or to any analyses based on such information. Error! Unknown document property mameArror! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name..Errod Unknown document property name. al 1109107 -4- 3.2 Condition of Title. Prior to the date of this Agreement, City reviewed that certain preliminary title report dated 2007, issued by the Title Company under Order No. ( "Title Report"). City agrees it shall accept title to the Property on the Close of Escrow subject to the following title exceptions (collectively, the "Approved Title Exceptions "): (i) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company; (ii) the exceptions disclosed as items of the Title Report; (iii) the Grant Deed attached as Exhibit 'B" to the Escrow Instructions; and (iv) any other exceptions to title that may be approved in writing by City in its sole and absolute discretion. If City exercises the Option to purchase the Property, Optionor shall be responsible for removing prior to the Close of Escrow all title exceptions that do not constitute Approved Title Exceptions. Without City's written consent, Optionor shall not allow any new title exceptions or defects to be created that will not be eliminated or removed by Optionor prior to the Closing (if City timely exercises the Option). 3.3 Right of En". During the Option Period (and, if City timely exercises the Option, from that date until the Closing or the termination of the Escrow Instructions, whichever first occurs), City (either directly or through and City's employees, representatives, agents, engineers, consultants, contractors, and designees) shall have the right to enter onto the Property to make such independent investigations, inspections, tests, reviews, studies or surveys as City deems necessary or appropriate, including without limitation, any desired investigations of the site work, soil, subsurface soils, drainage, seismic and other geological and topographical matters, and location of any asbestos, toxic substances, hazardous materials or wastes, provided, however, that: (i) all of the foregoing inspections, investigations, tests, etc. shall be performed by City at City's sole cost and expense; (ii) City shall not enter the Property for any such purposes unless it first has provided Optionor with evidence reasonably satisfactory to Optionor that City (and its employees, representatives, agents, engineers, consultants, contractors or designees, as the case may be) possess insurance reasonably appropriate in scope and coverage to protect against damages or losses that may be suffered in connection with such activities, and that Optionor has been made an additional insured with respect to such policies; (iii) City shall provide written notice to Optionor at least 48 hours prior to inspection and any on -site inspection must be conducted in the company of a representative of Optionor; (iv) with respect to any invasive inspections, City shall obtain the prior written approval of Optionor prior to conducting such inspections, investigations, tests, etc. which approval shall not be unreasonably withheld, conditioned or delayed; (v) City shall, in a timely manner, repair any and all damage to the Property caused by such inspections, investigations, tests, etc. and return the Property to its original condition prior to City's entry, unless such repair would be legally prohibited under any environmental or other applicable laws; (vi) City shall keep the Property free of all liens in connection with its inspection of the Property and shall cause all such li °ns to be removed immediately upon its being notified of same; and (vii) City shall not materially disrupt the ordinary course of Optionor's businesses and /or activities on the Property during any such inspections, investigations, tests, etc. (including without limitation parking of automobiles or any business or activities conducted by any tenants or other third parties on the Property with the permission of Optionor, although Optionor agrees that it shall cooperate reasonably with City (subject to any contractual limitations which may be binding upon Optionor) in order to permit City to undertake its desired inspections, inspections, tests, etc.). City shall indemnify, defend and hold harmless Optionor from and against any and all damage, liability or expense arising from the entries of City, its agents, contractors, consultants, and employees upon the Property; Error! Unknown document property namejError! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name. a! 1109/07 -5- provided, that the foregoing indemnity shall not apply to any damage, liability or expense arising from or related to (a) the mere discovery of matters by City during its investigation of the Property, including any latent defects in or Hazardous Materials on or in the Property or any diminution in value of the Property as a result thereof, or (b) negligent or wrongful acts or omissions of the Optionor or its agents, representatives or employees. 4. REPRESENTATIONS AND WARRANTIES; CONDITION OF PROPERTY. . 4.1 Optionor's Representations and Warranties. Optionor hereby makes the following representation and warranties as of the date hereof and acknowledges that the execution of this Agreement by City has been made and, if the Option is exercised, the acquisition by City of the Property will be made in material reliance by City on such covenants, representations and warranties: (a) Power Consents. Optionor has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, to perform its obligations hereunder and to consummate the transaction contemplated hereby, and all documents to be executed by Optionor hereunder, including the Escrow Instructions if City exercises the Option, are and at the time of Closing will be duly executed and delivered by Optionor, are and at the time of Closing will be legal, valid and binding obligations of Optionor enforceable against Optionor in accordance with their respective terms and do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Optionor or the Property is subject. Optionor has obtained all necessary authorizations, approvals and consents to the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. (b) No Litigation. Optionor has not received written notice of any pending or threatened claims, allegations, lawsuits or governmental investigations of any kind, whether for personal injury, property damage, property taxes or otherwise affecting or relating to the Property, nor to the actual knowledge of Optionor, any such action or proceeding pending or threatened. (c) Compliance with Laws. To Optionor's actual knowledge, the Property is not in violation of any applicable law, rule, statrrte, ordinance or regulation, and Optionor has not received any written notification from any applicable governmental authority having jurisdiction over the Property of any existing, past or potential violation of applicable law. (d) Hazardous Materials. Optionor has no actual knowledge, and has not received any written notice or communication from any governmental agency having jurisdiction over the Property notifying Optionor, of the presence of surface or subsurface zone Hazardous Materials in, on, under or adjacent to the Property or any portion thereof. The term "Hazardous Materials" shall mean (i) hazardous wastes, hazardous materials, hazardous substances, hazardous constituents, toxic substances or related materials, whether solids, liquids or gases, including, but not limited to, substances deemed as "hazardous wastes," "hazardous materials," "hazardous substances," "toxic substances," Error! Unknown document property nemvArrur! Unknown document property name: Error! Unknown derumeet property name. Error! Unknown document property name-Error! Unknown document property a me. al V09107 -6- "pollutants," "contaminants," "radioactive materials," or other similar designations in, or otherwise subject to regulation under, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ( "CERCLA "), 42 U.S.C. § 9601 et seq.; the Toxic Substance Control Act ( "TSCA "), 15 U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1802; the Resource Conservation and Recovery Act ( "RCRA "), 42 U.S.C. § 9601, et seq.; the Clean Water Act ( "CWA "), 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300 et seq.; the Clean Air Act ( "CAA "), 42 U.S.C. § 7401 et seq.; the Hazardous Waste Control Law, California Health and Safety Code § 25025 et seq., the Carpenter - Presley- Tanner Hazardous Substance Account Act, California Health and Safety Code, Division 20, Chapter 6.8, the Hazardous Materials Release Response Plans and Inventory Act, California Health and Safety Code, Division 20, Chapter 6.95, The Underground Storage of Hazardous Substances Act, California Health and Safety Code, Division 20, Chapter 6.7, the Porter - Cologne Act, California Water Code § 13050 et seq. and in any permits, licenses, approvals, plans, rules, regulations or ordinances adopted, or other criteria and guidelines promulgated pursuant to the preceding laws or other similar federal, state or local laws, regulations, ndes or ordinances now or hereafter in effect relating to environmental matters (collectively, `Environmental Laws "); including without limitation (A) petroleum, (B) refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle fuel, (E) asbestos, or (F) lead -based paint. (e) Rights of Third Parties. Optionor has not entered into any lease or other agreement for possession or sale with any person or entity, except City, pursuant to which such person or entity has any interest or future right or interest to occupancy, possession or use of all or any portion of the Property, except for those agreements listed on Exhibit °4" or any other agreements that may be listed in the Title Report, all of which City is encouraged to review in accordance with the provisions of this Agreement. (f) Bankruntcv. Optionor has not, and as of the Closing if City exercises the Option, Optionor shall not have (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Optionor's creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Optionor's assets, which remains pending as of such time, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Optionor's assets, which remains pending as of such time, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally. For purposes of this Agreement, whenever any representation, warranty, certification or other statement of Optionor is stated to be made to the "knowledge," "best knowledge," or "actual knowledge" of Optionor or any of its agents or representatives, such statement shall be deemed to refer to, and to be strictly limited and confined to, the present actual knowledge of [specify Irvine Company points of contact] of Optionor, and without any obligation on the part of such person to undertake any further investigation or inquiry (including without limitation any investigation or inquiry into files or into the content or effect of applicable laws). In no event shall such individuals have any personal liability on account of such knowledge or their designation for purposes of this paragraph. If Optionor becomes aware of any act or Error! Unknown document property oameJError! Unknown document property name..Frror! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. at 1rWV -7- circumstance which would materially change or render materially incorrect, in whole or in part, any representation or warranty made by Optionor under this Agreement, whether as of the date given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon Optionor's actual knowledge and/or belief as of a certain date, Optionor shall immediately deliver written notice of such changed fact or circumstance to City. 4.2 Survival. All representations and warranties contained in Section 4.1 shall be true and correct on the date hereof, and Optionor's liability for misrepresentation of or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing for a period of twelve (12) months from the Closing Date, and thereafter Optionor shall have no liability with respect thereto; and provided further, however, Optionor shall have no liability whatsoever to City with respect to a breach of any of the representations and warranties herein contained if City obtains knowledge of a fact or circumstance the existence of which would constitute a breach of Optionor's representations and warranties hereunder prior to the Closing Date and City proceeds to Closing, in which event each representation or warranty shall be deemed automatically amended to conform with the knowledge of City as of the Closing Date, and Optionor shall have no liability whatsoever for such previously inaccurate representation or warranty. For the purposes hereof, City shall be deemed to have knowledge of any fact or circumstance set forth in any environmental assessment, soils, geological, physical condition or other report received by City prior to Closing, and the representations and warranties herein contained shall be deemed automatically modified to the extent information contained in any environmental assessment, soils, geological, physical condition or other report received by City prior to Closing is inconsistent with the matters covered herein. 4.3 Disclaimer of Further Renresentations or Warranties; AS -IS Sale. if City elects to exercise the Option to acquire the Property, City acknowledges it will have had an adequate opportunity to inspect the Property, and all aspects thereof, and to investigate its physical characteristics and conditions and all other matters related or relevant to such property, including, without limitation, City's ability to develop same. Upon the Close of Escrow, and except as otherwise expressly provided in this Agreement, City shall be deemed to have waived any and all objections to the condition of the Property and to have accepted the Property in its present "AS -IS," "WHERE -IS" condition. 5. OPTIONOWS COVENANTS DURING OPTION PERIOD. During the Option Period (and, if City timely exercises the Option, from that date until the Closing), (i) Optionor shall not further encumber or place any further liens or encumbrances on the i'roperty, including, but not limited to, covenants, conditions, restrictions, easements, liens, leases, tenancies, or other possessory interests without the prior written consent of City which consent may be withheld by City in its sole discretion; provided, however, that City agrees that City's consent shall not be required, and Optionor shall have the right to proceed with, any such encumbrances which by their terms shall terminate at or before the Closing (and provided further that to the extent any such encumbrances cause any material damage to the Property, Optionor shall repair such damage at or before the Closing); (ii) Optionor shall not take any affirmative action to cause physical damage to the Property, and shall not place or authorize to be deposited, stored, or placed on, in, or under any portion of the Property any Hazardous Error! Unknown document property namelError! Unknown document property name. Error! Unknowu tloeument property name. Error! Unknown document property name..Error! Uuknowu document property uame. a[ D09107 _g_ Materials other than in strict compliance with applicable federal, state, and local environmental laws and as may be appropriate and necessary to maintain and repair the Property (e.g., the use of minor amounts of pesticides to control weeds); and (iii) Optionor shall not take or permit to be taken any actions constituting waste of the Property and shall maintain or cause to be maintained the Property in substantially the same condition as exists on the date of this Agreement and, except in the ordinary course of business, Optionor shall not make any alterations to the Property. 6. DESIGN AND CONSTRUCTION OF CITY HALL. In the event City exercises the option and acquires the Option Site, all construction by City on the Option Site shall be completed at no cost to Optionor and shall be performed in a manner reasonably tailored to minimize the disruption of the operation of neighboring properties. With respect to the City Hall improvements to be constructed by City on the Property if City exercises the Option, City agrees (i) prior to the award of any design contract for the proposed improvements, Optionor shall have thirty (30) days to review and comment on the proposed improvements and design plan, and (ii) after the design plans have been completed and prior to soliciting public bids for such improvements, Optionor shall have sixty (60) days' to review and comment on City's designed improvements or any significant changes thereto. Upon receipt of OptionoCs comments, City shall give reasonable consideration to any suggestions provided by Optionor regarding the proposed improvements; provided, however, City is not required under this Agreement to implement any suggestions made by Optionor. LIKE -KIND EXCHANGE. Notwithstanding anything to the contrary in this Agreement, City acknowledges and agrees that Optionor shall have the right at Closing, in lieu of receiving the Purchase Price for the sale of the Property, to exchange the Property (the "Tax -Free Exchange ") in a transaction intended to qualify as a tax -free exchange under Section 1031 of the Internal Revenue Code of 1986, as amended from time to time, and any regulations, rulings and guidance issued by the lntemal Revenue Service (collectively, the "Code"). if Optionor elects to effect a Tax -Free Exchange pursuant to this Section, Optionor shall provide written notice to City prior to Closing, in which case Optionor shall enter into an exchange agreement and other exchange documents with a "qualified intermediary" (as defined in Treas. Reg. § 1.1031(k)- I(g)(4) of the Code) (the "Exchange Party"), pursuant to which Optionor shall assign all of its right, title and interest under this Agreement to the Exchange Party. City shall execute and deliver such documents as may be required to complete the transactions contemplated by the Tax -Free Exchange which are in form and substance reasonably acceptable to City, and otherwise cooperate with Optionor in all reasonable respects to effect the Tax -Free Exchange. City agrees that if Optionor elects to effect a Tax -Free Exchange pursuant to this Section, at Closing, City shall pay the Purchase Price to the Exchange Party and direct Escrow Agent to disburse the Purchase Price to the Exchange Party. Notwithstanding the foregoing, (i) the Tax -Free Exchange shall not diminish City's rights, nor increase City's liabilities or obligations, under this Agreement, nor delay the Closing; (ii) Optionor shall pay for all fees, costs and expenses in connection with the Tax -Free Exchange; (iii) ) the purchase and sale of the Property shall not be conditioned upon the consummation of the 1031 exchange; (iv) in no event shall Optionor be relieved from liability under the Agreement or the Escrow Instructions to be executed in connection herewith including, Error! Unknown document property nomed Error! Unknown document property name.-Error! Unknown doeument properly name. Error! Unknown doenmenr property oaroe..Error! Unknown ducument property name. ul I 109rD7 -9- without limitation, with respect to representations and warranties of Optionor to City under this Agreement and its exhibits; (v) the consummation of the 1031 exchanges shall be at no liability, risk, fee or expense to the City; and (vi) the Optionor shall protect, indemnify, defend and hold City free and harmless from all losses, costs, claims, liabilities, lawsuits, demands and damages, including any attorneys' fees and expenses, incurred in connection therewith. S. MISCELLANEOUS. 8.1 Attorney's Fees. If either party commences an action against the other to enforce any of the terms of this Agreement or because of the breach by either party of any of the terms of this Agreement, the losing party shall pay to the prevailing party its expert witness fees and its reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action, including appeal of and/or enforcement of a judgment. 8.2 Notices. All notices required to be delivered under this Agreement to the other party must be in writing and shall be effective (i) when personally delivered by the other party or messenger or courier thereof; (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to the respective parties as set forth below or to such other address and to such other persons as the parties may hereafter designate by written notice to the other parties hereto. Notices delivered after 5:00 PM on a business day shall not be deemed to have been delivered until the following business day. As used herein, business days shall exclude weekends and state and federal holidays. The parties' respective addresses for notices are as set forth below, (with such addresses subject to change from time to time if a notice of change of address is delivered in accordance with the notice provisions set forth herein: To Optionor. The Irvine Company LLC 550 Newport Center Drive Newport Beach, CA 92660 -0015 Attn: General Counsel Facsimile: (949) 760 -0896 Copy to: Latham & Watkins LLP 600 West Broadway, Suite 1800 San Diego, CA 9210 1 -3375 Attn: Christopher W. Garrett Facsimile: (619) 696 -7419 To City: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Manager Facsimile: f Error! Unknown document property nameArror! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. al 1109107 -10- Copy to: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Attorney Facsimile: (949) 644 -3139 8.3 Assignment. Neither party shall, whether voluntarily, involuntarily, or by operation of law, assign all or any part of this Agreement or any rights hereunder without the other party's written approval, which approval may be withheld in the other party's sole and absolute discretion; except that City many assign its rights to another governmental entity solely for financing purposes. Also, City may specify a nominee to whom title will be conveyed on the Closing Date if the Option is exercised. In connection with any assignment, any assignee shall execute all documents reasonably necessary to assume all of the obligations imposed under this Agreement as if the assignee were the original party to this Agreement. 8.4 Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Agreement. 8.5 Binding on Heirs. Subject to the limitations set forth in Section 6.3 above, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto. 8.6 Entire Agreement. With the exception of the Zoning Implementation and Public Benefit Agreement, and the Escrow Instructions if the Option is exercised by City, this Agreement contains the entire agreement of the parties hereto with respect to the matters covered hereby, and all negotiations and agreements, statements or promises between the parties hereto or their agents with respect to this transaction are merged in this Agreement, which alone expresses the parties' rights and obligations. No other prior agreements or understandings not contained or incorporated herein shall be binding or valid against either of the parties hereto. 8.7 Modification. Any amendments or modifications to this Agreement must be in writing and executed by both parties to this Agreement. 8.8 Waivers. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either parry hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions thereof. 8.9 Interpretation; Governing Law; Forum. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. Title and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. This Agreement shall be construed in accordance with the internal laws of the State of California in effect at the Error! Unknown document property name.Trror! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name-Error! Unknown document property name. a[ 1109!07 -11- time of the execution of this Agreement without regard to conflict of law principles. Venue and jurisdiction of any action arising out of this Agreement shall exclusively be in any state or federal court sitting in the County of Orange, State of California. 8.10 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 8.11 Authority to Execute. Each individual executing this Agreement on behalf of a party hereto warrants that (i) such party is duly organized and existing, (ii) he or she is duly authorized to execute and deliver this Agreement on behalf of said parry, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which said party is bound. 8.12 Execution in Countervart. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. [signature page follows] Error! Unknown document property name)F.rror! Unknown document property name,Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. at 1109107 -12- IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of the day and year first above written. "OPTIONOR" THE IRVINE COMPANY LLC, a Delaware limited liability company By: Its: By: Its: "CITY" CITY OF NEWPORT BEACH, a California municipal corporation By: Its: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Error! I lnAnown document property nameArrod Unknown document property name: Errnd Unknown document property name. Error! Unknown document property name..Errar! Unknown document property name. a11/00107 -13- EXHIBIT "I" TO OPTION AGREEMENT LEGAL DESCRIPTION OF LEGAL LOT INCLUDED WITHIN PARCEL [to be inserted] Error! Unknown document property namc)Error! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name-Error! Unknown document property name. at V09107 ' I' EXHIBIT "2" TO OPTION AGREEMENT SITE MAP [Attached] Error! Unknown document property name: Error! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. al 1/09107 EXHIBIT "3" TO OPTION AGREEMENT MEMORANDUM OF OPTION AGREEMENT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Clerk (Space Above For Recorder's Use) Exempt from the payment of a recording fee pursuant to Government Code Section 27383. MEMORANDUM OF OPTION AGREEMENT By this MEMORANDUM OF OPTION AGREEMENT ( "Memorandum ") entered into as of the day of , 2008, THE IRVINE COMPANY LLC, a Delaware limited liability company ( "Optionor "), and the CITY OF NEWPORT BEACH, a California municipal corporation ( "City"), the parties hereby agree as follows: I. Optionor has granted to City an option (the "Option ") to acquire, that real property located in the City of Newport Beach, County of Orange, State of California, more particularly described in the legal description attached hereto as Exhibit "A" ( "Property "), in accordance with and subject to the terms and conditions set forth in that certain unrecorded Option Agreement dated December _, 2007 ( "Option Agreement "). The terms and provisions of the Option Agreement are incorporated herein by this reference as if fully set forth below. Capitalized terms utilized in this Memorandum which are not expressly defined herein shall have the meaning given to them in the Option Agreement. 2. The Option to purchase shall terminate, to the extent not exercised, on the date set forth in the aforesaid Option Agreement and shall otherwise be subject to the terms and conditions contained therein. In any client, this Memorandum shall terminate no later than 3. This Memorandum is intended only to memorialize the existence of the Option Agreement and does not constitute an amendment or modification thereof. In the event of any inconsistency between this Memorandum and the terms and conditions set forth in the Option Agreement, the Option Agreement shall prevail and control. [signature page follows) Error! Unknown document property nomejUrror! Unknown document property name.- Error! Unknown document property name. Error! Unknown document properp name..Error! Unknown document property name. at U0909 - I - IN WITNESS WHEREOF, Optionor and City have entered into this Agreement as of the date set forth above. "OPTIONOR" THE IRVINE COMPANY LLC, a Delaware limited liability company By Its: By Its: "CITY" CITY OF NEWPORT BEACH, a California municipal corporation La Its: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Error! Unknown document property name✓Error! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name-Error! Unknown document property name. a[ 1109/07 -2- STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On , before me, , Notary Public, personally appeared personally ]mown to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA COUNTY OF ORANGE On personally appeared personally known to me (or person(s) whose name(s) is /ar e he /she /they executed the same signature(s) on the instrumen t acted, executed the instrument. Notary Public ss. before me, , Notary Public, proved to me on the basis of satisfactory evidence) to be the subscribed to the within instrument and acknowledged to me that in his/her /their authorized capacity(ies), and that by his/her /their the person(s) or the entity upon behalf of which the person(s) Witness my hand and official seal. Notary Public [SEAL] Error! Unknown doe ument property name. /Error. Unknown document property name: Error! Unknwn document property mmne. Error! llnknown document property neme..Error! Unknown document property name. .11109/07 -3- STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /tbey executed the same in his /her /their authorized capacity(ies), and that by his /her /their signawre(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] Error! Unknown document property nameArror! Unknown document prope'tY oume: Error! Enknown document p ruperty name. Error! Unknown document property name..Error! Unknown ducumem property name. at 1109107 -4- EXHIBIT "A" TO MEMORANDUM LEGAL DESCRIPTION OF PROPERTY That certain real property located in the City of Newport Beach, County of Orange, State of California, described as follows: [to be inserted] Error! Unknown document property namelFrror: Unknown document property name. Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. at 1109107 ' i' EXHIBIT "4" TO OPTION AGREEMENT AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS Escrow No. Date of Opening of Escrow: To: First American Title Company ( "Escrow Holder'') 2 First American Way Santa Ana, CA 92707 Attention: Escrow Officer Telephone: This AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS ("Agreement ") is made this day of _, by and between THE IRVINE COMPANY LLC, a Delaware limited liability company ( "Seller "), and the CITY OF NEWPORT BEACH, a California municipal corporation ( "Buyer"). RECITALS: A. Seller is the owner of that certain real property comprised of approximately 53,000 square feet of land area, located in the City of Newport Beach, County of Orange, State of California, more particularly described in Exhibit "A" attached hereto ( "Property"). B. Seller and Buyer previously executed that certain Option Agreement dated December , 2007. All of the terms, conditions, provisions and covenants of the Option Agreement are incorporated in this Agreement by reference as though written out at length herein and the Option Agreement and this Agreement shall be deemed to constitute a single instrument or document. Capitalized terms used herein and not otherwise defined shall have the same meaning as set forth in the Option Agreement. C. By its execution of this Agreement, Buyer has exercised its option to purchase the Property. NOW, THEREFORE, the parties hereto agree as follows: L Purchase and Sale of Property. Subject to all of the terms, conditions, and provisions of this Agreement, and for the consideration herein set forth, Seller agrees to convey the Property to Buyer and Buyer agrees to purchase the Property from Seller. 2. Purchase Price. 2.1 Amount of Purchase Price. The purchase price which Seller agrees to accept and Buyer agrees to pay for the Property is I and shall not be subject to any escalation or increase for any reason. The Purchase Price is all - inclusive of Seller's interest in the Property and the rights and obligations which exist or may arise out of the acquisition of the Property, as more fully explained in Section 6 of this Agreement. Error! Unknown document property uame.'Error! Unknown document property name. Errm! Unknown document property name. Error! Unknown document property uame..Error! Unknown document property name. al 1/09/07 4- - 2.2 Payment of Purchase Price. On the Closing Date, Buyer shall deposit with Escrow Holder in "good funds" payable to Seller a sum equal to the Purchase Price. The term "good funds" shall mean a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a financial institution located in the State of California, or cash. 3. Escrow 3.1 Opening of Escrow; Closing Date. Pursuant to Section 1.5 of the Option Agreement, the Escrow shall be deemed opened on the date that Buyer executed and delivered this Agreement to Seller and that date shall be inserted on the first page of this Agreement as the date of the Opening of Escrow. Escrow shall close on or before the date that is thirty (30) days after the Opening of Escrow ( "Closing Date "). The terms the "Close of Escrow," and/or the "Closing" as used herein shall mean the date Seller's Grant Deed is filed for record by the Escrow Holder in the Office of the County Recorder of Orange County, California. 3.2 Escrow Instructions. This Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Seller and Buyer to Escrow Holder as well as an agreement between Seller and Buyer. In the event of any conflict between the provisions of this Agreement and Escrow Holder's standard instructions, this Agreement shall prevail. 3.3. Deliveries by Seller. On or before 1:00 p.m. on the business day preceding the Closing Date, Seller shall will deposit with Escrow Holder the following: (a) an executed and acknowledged grant deed conveying fee title to the Property to Buyer in the form attached hereto as Exhibit "B" ( "Grant Deed "); (b) a certificate of non - foreign status and California Franchise Tax Board Form 597, each executed by Seller and prepared by Escrow Holder; and (c) such funds and other items and instruments, executed and acknowledged if appropriate, as may be reasonably necessary in order for the Escrow Holder to comply with this Agreement. 3.4 Deliveries by Buyer. On or before 1:00 p.m. on the business day preceding the Closing Date, Buyer shall deposit with Escrow Holder the following: (a) a Preliminary Change of Ownership Statement completed in the manner required in Orange County; and (b) all additional funds and/or documents, executed and acknowledged (if appropriate) which are reasonably necessary to comply with the terms of this Agreement, other than the Purchase Price. On the Closing Date and provided Escrow Holder has received all closing documents and is in a position to close the Escrow, Buyer shall deliver the Purchase Price to Escrow Holder. 3.5 Closing, Recording and Disbursements. On the Closing Date, and provided all of the conditions to closing set forth in Sections 4.1 and 4.2 of this Agreement have been satisfied or waived in writing by the appropriate party, Escrow Holder shall take the following actions: (a) Recording. Escrow Holder shall insert the Purchase Price in the blank in Section 4.1 of the Grant Deed and thereafter cause the Grant Deed to be recorded in the Official Records of Orange County, California. Error! Unknown document property nameJError! Unknown document property name. Error! Unknown document proper m ty m,e. Error! Unknown document property name..Error! Unknown document property name, a1 t/09/0] -2- (b) Disbursement of Purchase Price. Escrow Holder shall disburse the Purchase Price to Seller after deducting therefrom the escrow and closing costs and prorations chargeable to Seller under Sections 3.7 and 3.8 of this Agreement. (c) Title Policy. Escrow Holder shall deliver to Buyer the Title Policy referred to in Section 4.2(b) of this Agreement. (d) Delivery of Documents. Escrow Holder shall deliver to the parties conformed copies of the Grant Deed and any other documents (or copies thereof) deposited by the parties with Escrow Holder pursuant to this Agreement. The original of the Grant Deed shall be returned to Buyer after recordation. 3.6 Possession. Seller shall deliver the Property to Buyer at the Close of Escrow, free and clear of all tenancies, lessees, occupants, licensees, and all possessory rights of any kind or nature. 3.7 Payment of Costs. The premium for the Title Policy attributable to CLTA standard owners coverage shall be paid by Seller. Buyer shall pay for any additional title coverage requested by Buyer, including the difference between a CLTA standard owner's policy and an ALTA extended owner's policy, and any endorsements required by Buyer. Seller shall pay all documentary transfer taxes payable in connection with the recordation of the Grant Deed. The escrow fee of Escrow Holder shall be shared equally by Seller and Buyer; provided, however, if the Close of Escrow has not occurred by the Closing Date by reason of a default hereunder, the defaulting party shall bear all Escrow cancellation charges. All other costs and expenses of Escrow not specifically allocated in this Agreement shall be allocated between Buyer and Seller in accordance with customary practice in the county in which the Property is located. 3.8 Real Property Taxes. Buyer is a public entity and is not required to pay property taxes. Seller shall cause all property taxes and assessments as of Closing to be paid when due. Seller may apply for a refund for any portion of taxes and assessments paid by Seller and allocated to any period after the Closing Date, in accordance with the applicable provisions of the Revenue and Taxation Code. 3.9 IRS Reporting Responsibilities. Any returns, statements or reports required to be filed under Section 6045(e) of the Internal Revenue Code of 1986 (or any similar reports required by state or local law) relating to the Property shall be filed by Escrow Holder. In no event shall this Agreement be construed so as to require that such returns, reports or statements be filed by Seller or Seller's counsel or Buyer or Buyer's counsel. Escrow Holder shall provide evidence to Seller and Buyer of its compliance with the provisions of this Section 3.9. 4. Conditions Precedent to Close of Escrow. 4.1 Conditions to Seller's Obligations. Seller's obligations to convey the Property and close the Escrow shall be subject to the satisfaction or written waiver by Seller of each of the following conditions precedent: Error! Unknown document property namejError! Unknown document property name.-Error! Unknown document property name. Error! Unknown document properly name..Error! Unknown document properly name. at lip9107 -3- (a) Escrow Holder holds and will deliver to Seller the instruments and funds accruing to Seller pursuant to this Agreement; and (c) Buyer is not in default of any term or condition of this Agreement or the Option Agreement. 4.2 Conditions to Buyer's Obligations. Buyer's obligation to purchase the Property and close the Escrow shall be subject to the satisfaction or written waiver by Buyer of each of the following conditions precedent: (a) Escrow Holder holds and will deliver to Buyer the instruments and fimds, if any, accruing to Buyer pursuant to this Agreement; (b) First American Title Company is irrevocably committed to issue to Buyer a CLTA standard, or at Buyer's election, an ALTA extended coverage owner's policy of insurance, with liability in the amount of the Purchase Price, showing fee title to the Property vested in Buyer, subject only to the Approved Title Exceptions referred to in Section 3.2 of the Option Agreement ( "Title Policy "); and (c) all representations and warranties made by Seller in this Agreement and the Option Agreement are true and correct as of the Closing as thought made at that time, and Seller is not in default of any term or condition of this Agreement or the Option Agreement. (d) Buyer shall have approved, subject to acquisition of the Property, the award of a construction contract for construction of the City Hall of the City of Newport Beach. 4.3 Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by Seller or Buyer, each party shall use its diligent efforts, in good faith, and at its own cost, to satisfy such condition. 4.4 Termination. In the event each of the conditions set forth in Section 4.1 is not fulfilled on the Closing Date or waived by Seller, Seller may, at its election, terminate this Agreement and the Escrow opened hereunder. In the event that the conditions set forth in Section 4.2 are not fulfilled on the Closing Date or waived by Buyer, Buyer may, at its election, terminate this Agreement and the Escrow opened hereunder. Notwithstanding the foregoing, if Escrow is not in a position to close due to a party's failure to deposit into Escrow any documents or funds required to close Escrow, the non - defaulting party shall have tho right to terminate this Agreement without first having given the defaulting party notice of the default and seven (7) days to cure the default, with the understanding that it is the parties' desire that this Agreement not terminate as a result of a technicality such as a party's inadvertent failure to timely make a deposit into Escrow. In the event this Agreement is terminated, all documents delivered by Seller to Buyer or Escrow Holder shall be resumed immediately to Seller and all documents and funds delivered by Buyer to Seller or Escrow Holder shall be returned immediately to Buyer. Nothing in this Section 4.4 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement or the Option Agreement occurring prior to the termination of this Agreement and/or the Escrow. Error! Unknown document property nameJError! Unknown document property name. Error! Unknown document propery name. Error! Unknown document property name..Error! Unknown document property name. A 1109107 -4- 5. Property Purchased "AS -IS ". Buyer hereby confirms and acknowledges that, except for Sellers express representations and warranties set forth in this Agreement or the Option Agreement (or in any other agreement expressly incorporated into the Option Agreement), it is acquiring the Property in "AS -IS," "WHERE -IS" condition, "WITH ALL FAULTS," and without representation or warranty of any kind from Seller, as more particularly provided for in the Option Agreement. Further, Seller shall have no liability whatsoever to Buyer with respect to a breach of any of the representations and warranties set forth in this Agreement or the Option Agreement if Buyer obtains actual knowledge of a fact or circumstance the existence of which would constitute a breach of Seller's representations and warranties hereunder prior to the Closing Date and Buyer proceeds to Closing, in which event each representation or warranty shall be deemed automatically amended to conform with the knowledge of Buyer as of the Closing Date, and Seller shall have no liability whatsoever for such previously inaccurate representation or warranty. For the purposes hereof, Buyer shall be deemed to have actual knowledge of any fact or circumstance set forth in any environmental assessment, soils, geological, physical condition or other report received by Buyer prior to Closing, and the representations and warranties herein contained shall be deemed automatically modified to the extent information contained in any environmental assessment, soils, geological, physical condition or other report received by Buyer prior to Closing is inconsistent with the matters covered herein. 6. Relocation; Release. Seller acknowledges and agrees that a portion of the Purchase Price represents Buyer's payment to Seller for Seller's relocation from the Property. Buyer's payment to Seller of said amount shall constitute full and complete satisfaction of any obligation Buyer may have for providing relocation assistance to Seller and paying its relocation costs required to comply with all applicable federal, state and local laws, rules and regulations arising out of, based upon, or relating to, relocation assistance or benefits owing under Government Code § 7260 et seq., Title 25 of the California Code of Regulations, Section 6000 et seq., or under any other federal, state or local relocation statutes, regulations or guidelines, including but not limited to, any such regulations or guidelines of Buyer. Seller, for itself and for its agents, successors, assigns, and all entities related to any of the foregoing, and on behalf of all persons claiming any interest in the Property or this Agreement fully releases, acquits and discharges the Buyer and its officers, officials, members, directors, employees, attorneys, accountants, other professionals, insurers, and agents, and all entities, boards, commissions, and bodies related to any of them (all of the foregoing, collectively, the "Released Parties "), from all rights, claims, demands, actions or causes of action that Seller, or any of them, has or may have against the Released Parties arising out of or related to Buyer's acquisition of the Property or the displacement of Seller from the Property, including, but not limited to all of Seller's property rights and interests in the Property, and including but not limited to relocation benefits and assistance, all leasehold interests and rights of tenancy or occupancy, all improvements, all improvements pertaining to the realty, furniture, fixture, and equipment, business goodwill, lost income (past or future), failure to locate a suitable replacement location, lost rental income or sublease or license income, severance damages, pre - condemnation damages, if any, economic or consequential damages, professional consultant fees, attorney's fees and costs, expert witness fees and costs, interest , all other costs, and any and all compensable interests, and/or damages, and /or claims, of any kind and nature, claimed or Error! 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Seller, on behalf of itself and its agents, successors, assigns, and all entities related to any of the foregoing, and on behalf of all persons claiming any interest in the Property or this Agreement, and as owner, principal, director, partner, shareholder, agent, or representative of any business, enterprise, or venture, expressly waive any and all rights under Section 1542 of the Civil Code of the State of California, or any other federal or state statutory rights or rules, or principles of common law or equity, or those of any jurisdiction, government, or political subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision "). Thus, Seller and each of them, and any business, enterprise, or venture in which it is involved, may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or assert in any manner claims released hereunder. Section 1542 provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY, AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Seller's Initials: In the event any occupants or lessees of the Property shall be entitled to relocation assistance, Seller shall have the sole and exclusive responsibility for providing relocation assistance and paying all relocation costs required to comply with all applicable federal and state laws, rules, and regulations. Seller shall indemnify, defend, and hold Buyer and the Buyer harmless from and against any claims, liabilities, damages, or losses made against it by tenants or occupants of the Property, including without limitation claims for relocation assistance and inverse condemnation. 7. Miscellaneous. 7.1 Attorney's Fees. if either party commences an action against the other to enforce any of the terms of this Agreement or because of the breach by either party of any of the terms of this Agreement, the losing party shall pay to the prevailing party its expert witness fees and its reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action, including appeal of and/or enforcement of a judgment. 7.2 Notices. All notices required to be delivered under this Agreement to the other party must be in writing and shall be effective (i) when personally delivered by the other party or messenger or courier thereof, (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty -four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to the respective parties as set forth below or to such other address and to such other Error! Unknown document property namaArror! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document propery name. al 1/09107 -6- persons as the parties may hereafter designate by written notice to the other parties hereto. Notices delivered after 5:00 PM on a business day shall not be deemed to have been delivered until the following business day. As used herein, business days shall exclude weekends and state and federal holidays. The parties' respective addresses for notices are as set forth below, (with such addresses subject to change from time to time if a notice of change of address is delivered in accordance with the notice provisions set forth herein: To Seller: The Irvine Company LLC 550 Newport Center Drive Newport Beach, CA 92660 -0015 Attn: General Counsel Facsimile: (949) 760 -0896 Copy to: Latham & Watkins LLP 600 West Broadway, Suite 1800 San Diego, CA 9210 1 -3375 Attn: Christopher W. Garrett Facsimile: (619) 696 -7419 To Buyer: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Manager Facsimile: I Copy to: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Attorney Facsimile: (949) 644 -3139 7.3 Assignment. Neither party shall, whether voluntarily, involuntarily, or by operation of law, assign all or any part of this Agreement or any rights hereunder without the other party's written approval, which approval may be withheld in the other party's sole and absolute discretion, except that Buyer many assign its rights to another governmental entity solely for financing purposes. Also, Buyer may specify a nominee to whom title will be conveyed on the Closing Date. In connection with any assignment, any assignee shall execute all documents reasonably necessary to assume all of the obligations imposed under this Agreement as if the assignee were the original party to this Agreement. 7.4 Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Agreement. Error! Unknown document property name. /Error! Unknown document property name. Error! Unknown document property name. Error! Unknown document property tome-Error! Unknown document property name. al P09.'07 -7- 7.5 Binding on Heirs. Subject to the limitations set forth in Section 7.3 above, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto. 7.6 Entire Agreement. With the exception of the Development Agreement and the Option Agreement, this Agreement contains the entire agreement of the parties hereto with respect to the matters covered hereby, and all negotiations and agreements, statements or promises between the parties hereto or their agents with respect to this transaction are merged in this Agreement, which alone expresses the parties' rights and obligations. No other prior agreements or understandings not contained or incorporated herein shall be binding or valid against either of the parties hereto. 7.7 Modification. Any amendments or modifications to this Agreement must be in writing and executed by both parties to this Agreement. 7.8 Waivers. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions thereof 7.9 Interpretation; Governing Law; Forum. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. Title and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. This Agreement shall be construed in accordance with the internal laws of the State of California in effect at the time of the execution of this Agreement without regard to conflict of law principles. Venue and jurisdiction of any action arising out of this Agreement shall exclusively be in any state or federal court sitting in the County of Orange, State of California. 7.10 Severability. if any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted b i law. 7.11 No Merger. Subject to Section 4.2 of the Option Agreement, the provisions of this Purchase Agreement and the Option Agreement shall survive the Close of Escrow and shall not be merged with the Grant Deed. 7.12 Broker Commissions. Seller and Buyer each represent and warrant to the other that it has not engaged any broker or finder in this transaction and that no broker or finder is entitled to any commission or finder's fee in connection with this transaction as a result of its Error! Unknown document property nemeArror' Unknown document property name: Error! Unknown document property name. Er. or! Uokoown document property name..Error! Unknown document property name. al 1!09!07 -8- actions or agreement, and Seller and Buyer shall indemnify, defend and hold harmless each other from any claim to any such commission or fee resulting from any action or agreement of or by the indemnifying party. 7,13 Authority to Execute. Each individual executing this Agreement on behalf of a party hereto warrants that (i) such party is duly organized and existing, (ii) he or she is duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which said party is bound. 7.14 Execution in Counterpart. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. [signature page follows) Error! Unknown document property name.lError! Unknown document property name. Error! Unknown document property lame. Error! Unknown document property name-Error! Unknown document property name. al 1;09107 -9- IN WITNESS WHEREOF, the parties hereto have executed this Agreement of Purchase and Sale of Real Property and Escrow Instructions as of the date first above written. "SELLER" THE IRVINE COMPANY LLC, a Delaware limited liability company By Its: By Its: "BUYER" CITY OF NEWPORT BEACH, a California municipal corporation By: Its: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Error! Unknown document property name. Error! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. a i 1109109 -10- EXHIBIT "A" TO ESCROW INSTRUCTIONS LEGAL DESCRIPTION OF PROPERTY That certain real property located in the City of Newport Beach, County of Orange, State of Califonria, described as follows: [to be inserted] Error! Unknown document property nameArror! Unknown document property name.- Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. at 1109107 EXHIBIT "B" TO ESCROW INSTRUCTIONS GRANT DEED City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attn: City Clerk (Space Above For Recorder's Use) The undersigned grantor(s) declare(s) that this transaction is This document is being recorded for the benefit exempt from the payment of a documentary transfer tax of the City of Newport Beach and is exempt pursuant to Revenue and Taxation Code Section 11922 from payment of a recordation fee pursuant to Government Code Section 27383. GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE IRVINE COMPANY LLC, a Delaware limited liability company, successor -in- interest to The Irvine Company, a Michigan corporation ( "Grantor "), hereby grants to the CITY OF NEWPORT BEACH, a California municipal corporation ("Grantee "), that certain real property located in the City of Newport Beach, County of Orange, State of California, described in the legal description attached hereto as Exhibit "1" and incorporated herein by this reference (the "Property "), subject to: (A) all exceptions of record; and (B) reserving to Grantor, for the benefit of the owner (the "Benefited Party") of fee title to the real property comprised of one legal parcel described in Exhibit "2" (the `Benefited Property"), the rights set forth in this Section (B). In the event the Benefited Party is comprised of more than one person or entity, Grantee shall be entitled to rely on the actions and statements of any such person or entity as binding the Benefited Party. 1. Use Restrictions. Grantee, as owner of the Property, hereby agrees for the benefit of the Benefited Party as follows with respect to specific uses of the Property. For a period of twenty -five (25) years following the recordation of this Deed, unless otherwise agreed by Benefited Party: (i) the Property may not be used for any purpose other than a City Hall and other civic uses including without limitation uses which are reasonably ancillary to, and customary in connection with, the operation of a City Hall and are not unreasonably disruptive to the use of the Benefited Property; (ii) the Property shall be the primary seat of government for the City of Newport Beach and shall contain the chambers of the City Council and the primary offices of the Mayor, the City Councilmembers and the City Manager. City will not develop or use the Property for any other use or purpose during the twenty -five (25) year period following the recordation of this Deed. The foregoing is a use restriction and not an operating covenant. 2. In accepting this Deed, Grantee hereby agrees to all of the rights and obligations described above in this Deed. The terms and conditions of Deed shall create equitable servitudes Error! Unknown document properly nameArror! Unknown document propery name. Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. a] 1109107 - 1- upon the Property; shall bind the owners of the Property (and each person or entity having any interest therein); and shall run with the land. The benefits provide to Grantor (and any Benefited Party) under this Deed shall run with the land. [This provision will include the concept that Grantor shall have a right to repurchase in the event of breach of the terms and conditions of Deed, but that if Grantor decides not to repurchase, the use restriction preventing Grantee from selling property is removed.] (C) MISCELLANEOUS; 3. Attorney's Fees. if either parry commences an action against the other to enforce any of the terms of this Deed or because of the breach by either party of any of the terms of this Deed, the losing party shall pay to the prevailing party its expert witness fees and its reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action, including appeal of and /or enforcement of a judgment. 4. Notices. All notices required to be delivered under this Deed to the other party must be in writing and shall be effective (i) when personally delivered by the other party or messenger or courier thereof, (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty -four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to the respective parties as set forth below or to such other address and to such other persons as the parties may hereafter designate by written notice to the other parties hereto. Notices delivered after 5:00 PM on a business day shall not be deemed to have been delivered until the following business day. As used herein, business days shall exclude weekends and state and federal holidays. The parties' respective addresses for notices are as set forth below, (with such addresses subject to change from time to time if a notice of change of address is delivered in accordance with the notice provisions set forth herein: To Grantor: The Irvine Company LLC 550 Newport Center Drive Newport Beach, CA 92660 -0015 Attn: General Counsel Facsimile: (949) 760 -0896 Copy to: Latham & Watkins LLP 600 West Broadway, Suite 1800 San Diego, CA 92101 -3375 Attn: Christopher W. Garrett Facsimile: (619) 696 -7419 Error! Unknown doeumenl properly nameArror! Unknown document properly name.-Error! Unknown diwureenl property name. Error! Unknown document properly name..Errur! Unknown doeumenl property name. 11 1/00107 -�- To Grantee: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Manager Facsimile: I Copy to: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92663 -3884 Attn: City Attorney Facsimile: (949) 644 -3139 5. Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Deed. 6. Binding on Heirs. Subject to the limitations set forth in Section 3 above, this Deed shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto. 7. Entire Agreement. With the exception of the Development Agreement, the Option Agreement, and the Agreement for Purchase and Sale of Real Property and Escrow Instructions between Grantor and Grantee dated this Deed contains the entire agreement of the parties hereto with respect to the matters covered hereby. No other prior agreements or understandings not contained or incorporated herein shall be binding or valid against either of the parties hereto with respect to the subject matter set forth herein. 8. Modification. Any amendments or modifications to this Deed must be in writing and executed by both Grantee and Benefited Party. 9. Waivers. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Deed shall impair any such right or power or be construed to be a waiver thereof. A waiver by either parry hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions thereof. 10. Interpretation; Governing Law; Forum. This Deed shall be construed according to its fair meaning and as if prepared by both parties hereto. Title and captions are for convenience only and shall not constitute a portion of this Deed. As used in this Deed, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. This Deed shall be construed in accordance with the internal laws of the State of California in effect at the time of the execution of this Deed without regard to conflict of law principles. Venue and jurisdiction of any action arising out of this Deed shall exclusively be in any state or federal court sitting in the County of Orange, State of California. Error! Unknown document propery name✓Error! Unknown document property name.-Error! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name. a11109107 -3- f f l L Severability. If any term, provision, condition or covenant of this Deed or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Deed shall be valid and enforceable to the fullest extent permitted by law. 12. Authority to Execute. Each individual executing this Deed on behalf of a party hereto warrants that (i) such party is duly organized and existing, (ii) he or she is duly authorized to execute and deliver this Deed on behalf of said party, (iii) by so executing this Deed, such party is formally bound to the provisions of this Deed, and (iv) the entering into this Deed does not violate any provision of any other agreement to which said party is bound. 13. Execution in Counterpart. This Deed may be executed in several counterparts, and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. Dated THE IRVINE COMPANY LLC, a Delaware limited liability company 0 By: Its: Error! Unknown document properly name.lError! Unknown document property name.-Error! Unknown document property name. Error! Unknown document properly nnme..Error! Unknown document property name. a)! /0910] -4- e tr STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] Error! Unknown document property namelError! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. at 1109107 -5- r. A. CERTIFICATE OF ACCEPTANCE This to certify that the interest in real property conveyed by the foregoing Grant Deed, from The Irvine Company LLC to the City of Newport Beach is hereby accepted by the undersigned officer of the City of Newport Beach, on behalf of the City of Newport Beach, pursuant to authority conferred by Resolution No. of the City Council of the City of Newport Beach adopted on and the grantee consents to the recordation thereof by its undersigned duly authorized officer. CITY OF NEWPORT BEACH, a California municipal corporation 0 Dated: ATTEST: City Clerk STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On before me, , Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] Error! Unknown document property namelError! Unknown document property name. Error! Unknown document property name. Error! Unknown document property name..Error! Unknown document property name. al 1109 /07 -6- , EXHIBIT "1" TO GRANT DEED LEGAL DESCRIPTION OF PROPERTY That certain real property located in the City of Newport Beach, County of Orange, State of California legally described as follows: [to be inserted] Error! Unknown document property nameJError! Unknown document property nome,Error! Unknown document property name. Error! Unknown document property name-Error! Unknown document property name. al 1/0M07 -7-