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O1503 4 . CA:RMM:rmd995/hpca City Council Meeting 11-28-89 Santa Monica, California ORDINANCE NUMBER l503 teeS) (City council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA APPROVING THE DEVELOPMENT AGREEMENT BETWEEN RELIANCE DEVELOPMENT GROUP, INC. AND THE CITY OF SANTA MONICA THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. The Development Agreement attached hereto as Exhibit "An and incorporated herein by reference between Reliance Development Group, Inc., a Delaware corporation, and the city of Santa Monica, a municipal corporation, is hereby approved. SECTION 2. Each and every term and condition of the Development Agreement approved in section 1 of this Ordinance shall be and is made a part of the Santa Monica Municipal Code and any appendices thereto. The city Council of the City of Santa Monica finds that public necessity, public convenience, and general welfare require that any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Development Agreement, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to make fully effective the provisions of this Development Agreement. - 1 - e e SECTION 3 . Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The city council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Mayor shall sign and the city Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be publ ished once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective after 30 days from its adoption. SECTION 6. This Ordinance and the attached Development Agreement between ReI iance Development Group, Inc., a Delaware corporation, and the City of Santa Monica shall be void and of no further force or effect if, following a referendum petition: (1) the City Council repeals Resolution Number 7917 (CCS) in lieu of submitting it to the voters for their approval as provided for in - 2 - e e Elections Code Section 4055 or (2) a majority of voters voting on the Resolution fail to approve Resolution Number 7917 (CCS). APPROVED AS TO FORM: ~~~ ROBERT M. MYERS city Attorney - 3 - e e Adopted and approved this 28th day of November, 1989. f).sa-, Ma::! ~ ~ I hereby certify that the foregoing Ordinance No. 1503(CCS} was duly and regularly introduced a t a meeting" of the City Council on the 14th day of November 1989; that the said Ordinance was thereafter duly adopted at a meeting of the City Council on the 28th day of November 1989 by the following council vote: Ayes: Councilmembers: Abdo, Jennings, Reed, Mayor Zane Noes: Councilmembers: Finkel, Genser, Katz Abstain: Councilmembers: None Absent: Councilmembers: None ATTEST: L~ --- ' City Clerk I . . EXHIBIT A To Ordinance Approv1ng the Development Agreement Between Reliance Development Group, Inc. and the City of Santa Monica DEVELOPMENT AGREEMENT between RELIANCE DEVELOPMENT GROUP, INC. a Delaware corporation and lHE CITY OF SANTA MONICA, CALIFORNIA a municipal corporation . . Recording Requested By: Richard A Lawrence, Esq. CONTRACT NO. _ (CCS) When Recorded Return To: Richard A Lawrence, Esq. LAWRENCE & HARDING 1250 6th Street, Suite 300 Santa Monica, CA 90401 DEVELOPMENT AGREEMENT between REUANCE DEVEWPMENT GROUP, INC. a Delaware corporation and THE CITY OF SANTA MONICA, CALIFORNIA a municipal corporation . . TABLE OF CONTENTS 1.. Defini tions ... II- . III .. . III . .. . , .. .. . , .. .. I , .. .. .. .. . . .. .. . .. . .. . .. .. .. . .. . .. .. .. .. .. .. . .. 3 Accrued IDM Fee ....,............................... III . .. .. . . . .. . .. .. .. .. .. .. . . 3 ACD Amendments ..................................... 3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Airport Commercial District .............................. 3 Airport Surplus Parcel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Ancillary Commercial ................................... 3 Applicable Phase ...........,........................................................ 4 Application Date ...................................... 4 ARB ....................................................... 4 Arts Commission ...................................... 4 At-Grade Footprint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Average Finished Grade ................................. 4 ~ Building Height ....................................... 4 Building Pad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 CC&Rs ............................................. 4 Certificate of Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 CEQA .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Child Care Facility ..................................... 4 Child Care Facility Sublease .............................. 4 City .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 City Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 City Defaults ......................................... 4 City Manager ................. . . . . . . . . . . . . . . . . . . . . . . . . 4 Contingency Date .............. . . . . . . . . . . . . . . . . . . . . . . . . 5 County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CPI ................................................ 5 DDA .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Designated Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Detention Basins ...................................... 5 Developer ........................................... 5 Developer Art ........................................ 5 Developer Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Effective Date ........................................ 5 Effluent ............................................. 5 EIR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Excess Restaurant Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Existing Regulations .................................... 6 FAA ............. ................................. 6 Fast-Food or Take-Out Restaurant ......................... 6 Floor Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Floor Area Ratio or FAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreclosure Date ...................................... 8 -i- . . General Commercial Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 General Plan ......................................... 8 Ground !..ease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Homeless Assistance Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Impact Fee .. .. . .. .. . .. .. .. .. .. .. .. .. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ,. 8 Institutionall..ender .................................... 8 l..a..w .. .. .. .. 01- .. .. .. II It .. .. .. .. . .. .. .. .. ... ... .. .. .. .. . .. .. .. .. .. .. " .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 8 l..easehold Mortgage .................................... 8 !..easehold Mortgagee ................................... 8 ws Angeles Portion ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 LUCE ....................................................,............ II .. ... .. .. .. .. .. ... .. .. .. .. 9 Net Rentable Floor Area ................................ 9 Off-Site Art .........................,........... II .. .. .. .. .. .. .. ,. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 9 Off-Site Traffic Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Parking Ratio Reduction Application . . . . . . . . . . . . . . . . . . . . . . . . 9 Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Planning Commission ................................... 9 Proj ect .. .. .. .. .. .. .. .. .. .. .. .. .. It " .. .. .. ,.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . II .. .. ... .. .. .. .. .. .. .. .. 9 Proj ect Site Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Projected Traffic Impact ................................. 9 Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Public Arts Fee ....................................... 9 Recycling System ...................................... 9 Restaurant ........................................... 9 Santa Monica Airport Residual Land . . . . . . . . . . . . . . . . . . . . . . .. 10 Santa Monica Portion ............. . . . . . . . . . . . . . . . . . . . . .. 10 Second Consultant ..................................... 10 Semi-Subterranean Level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 Senior Leasehold Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 Space Sublessee ....................................... 10 Subdivided Parcel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 Subsequent Code Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 Subterranean Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 Subterranean Parking Area ............................... 10 Tandem Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 1D M Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 TDM Fee . . . . . . . . . . . . . . . . . . . . . . . . . .. ................ 11 1D M Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 TOM Program ........................................ 11 TO M Program Goal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 Test Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 Test Period .......................................... 11 Test Spaces .......................................... 11 Third Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 Water Feature ........................................ 11 Zoning Administrator ................................... 11 Zoning Ordinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 -ii- 2. . . Description of PrQPf;rty. ... ......................... ................. ................ 11 3. Descriotion of Proiect. ....................................... 11 - - (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (1) 4. Uses (a) (b) (c) Components of Phases .................................. Maximum Floor Area ................ . . . . . . . . . . . . . . . . . . . Building Height. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minimum Setbacks ..................................... Minimum Distance Between Buildings ... . . . . . . . . . . . . . . . . . . . . Maximum Site Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Access and Circulation .................................. 11 14 14 14 15 15 15 I..andscaping .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 Parking .. 01- ... .. .. . .. .. .. . .. ... ... . ... ... .. .. .. ... I . .. ... .. . .. .. .. ... .. . . .. .. .. . . . ... ... ... . .... 16 Pedestrian Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20 Administrative and Technical Construction Codes . . . . . . . . . . . . . .. 20 Prohibition of Construction on Los Angeles Portion ............. 20 .. ... .. .. .. ... ... .. ... ... ... It . .. .. .. ... ... II ... .. .. ... . .. ... ... ... ... ... ... II . ... .. .. . .. . .. .. . .. .. It .. ... .. .. . .... 20 Permitted and Prohibited Uses ............................ 20 Sale and Consumption of Alcoholic Beverages. . . . . . . . . . . . . . . . .. 21 Maximum Floor Area Devoted to Uses ...................... 22 5. Phases of Construction_ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 6. Project Mitigation Measur~s. ....... . . . . . . . . . . . . . . . . . . . . . . . . . . .. 24 (a) Housing and Parks Impact Mitigation Fee .................... 24 (b) On-Site Child Care Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 24 (c) Contaminated Soils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 27 (d) Air Quality During Construction ........................... 27 (e) Security Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 27 (f) Water Conservation .................................... 27 (g) Impacts on Traffic During Construction ...................... 28 (h) Traffic Demand Management ......................... ... 28 (i) Off-Site Traffic Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34 Cj) On-Site Traffic Improvements ............................. 34 (k) Energy Conservation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34 (I) Accessibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 35 (m) On-Site Wastewater Recycling System ....................... 35 (n) Non-Discrimination, Affirmative Action and Job Training . . . . . . . .. 41 (0) Noise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 42 (p) Art. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 42 ( q) Design Standards ...................................... 44 (r) Storm Water Detention Basins ......... '" . . . . . . . . . . . . .. 44 (s) Emergency Features .................................... 44 (u) No Additional Mitigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 45 -iii- . . 7. General Services Reauirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 45 (a) Compliance with Requirements ................. . . . . . . . . . .. 45 (b) Building Moratoria and Public Sewer Capacity Allocation . . . . . . . .. 45 (c) Exemption from Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 46 (d) Priority for Sewer Connection Permit. . . . . . . . . . . . . . . . . . . . . . .. 46 8. Changes to Project and Project Site Phm. . . . . . . . . . . . . . . . . . . . . . . . . .. 46 ( a) Minor Changes. ....................................... 46 (b) Moderate Changes. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 47 (c) Major Changes. ....................................... 47 (d) Limitation on Minor and Moderate Changes .................. 47 (e) Procedure for Approving Moderate Change ................... 48 9. Assignment: Binding: Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49 10. Effect of Agreement on Land Use Reglll~tiom. ................. ... 50 (a) Application of Existing Regulations ......................... 50 (b) Processing and Permit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50 (c) Inconsistent Code Provisions .............................. 51 (d) Architectural Review Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 51 (e) Special Assessments .................................... 51 11. Certificates of Occu!Jam;y. ......... . . . . . . . . . . . . . . . . . . . . . . . . . . .. 51 12. Permits and ADorovals. ....................................... 51 (a) Issuance of Necessary Permits and Approvals .. . . . . . . . . . . . . . . .. 51 (b) Proprietary Capacity ......................... . . . . . . . . . .. 52 (c) Agreements with Other Agencies . . . . . . . . . . . . . . . . . . . . . . . . . .. 53 13. Periodic Review of COffioliance with AQreement. .................... 53 - - (a) Ci ty Review .......................................... 53 (b) Required Findings ..................................... 53 (c) Evidence of Good Faith Compliance ........................ 54 (d) Public Hearing ............ . . . . . . . . . . . . . . . . . . . . . . . . . . .. 54 14. Enforcement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 55 15. Validity of Agreem~nt. ....................................... 55 -lV- . . 16. Default.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 55 (a) Developer Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 55 (b) City Defaults ......................................... 56 17. Procedure Upon D~fault .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56 (a) Termination by City .................................... 56 (b) Termination by Developer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56 (c) Application of Termination ... . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56 (d) Remedies Cumulative ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 56 (e) Cessation of Rights and Obligations . . . . . . . . . . . . . . . . . . . . . . . .. 57 (f) Completion of Improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 57 (g) Survival of Obligations .................................. 57 18. Excusable Delavs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 57 19. Noti<;~ of Termination. ....................................... 58 20. Leasehold Mortgagees. ....................................... 58 (a) Notice to Leasehold Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . .. 58 (b) Cure of Default by Leasehold Mortgagee. . . . . . . . . . . . . . . . . . . .. 58 ( c) Extension of Time to Cure ............................... 59 (d) Liability of Leasehold Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . .. 59 (e) Subordination of Accrued TDM Fee ........................ 59 21. Duration of AQreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 60 22. Sunersedure bv Subseauent Laws. ............................... 60 - ~ - 23. Estoooel Certificate. ......................................... 60 24. Recording of Agre~ment. ..................................... 61 25. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 26. Indemnification.. . . . . . . . . . . . . . . . . . . . . . . .. .................. 62 (a) Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 62 (b) Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 63 27. l..ate Pavrnents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 64 28. Restriction of New Commercial Office Develooment on Aimort SumIus Parce164 - -- 29. Entire Ae:reement. 64 ~v- 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. . . 64 64 64 64 65 65 65 65 65 65 65 65 65 66 66 66 46. FundinQ for Neh!hl,JQrhood Tr~ffi~ Prot~~tion Plan and for Recreation:!l Improvements to Airport Surplus Parf;~l . . . . . . . . . . . . . . . . . . . . . . . . . .. 66 47. Redesign of Internal Access to Airport. . . . . . . . . . . . . . . . . . . . . . . . . . .. 66 48. No Oral Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of Contents and Section Headinp~. ....... . . . . . . . . . . . . . . . . . . . Severabilitv: Invaliditv of Particular Provision!\. ...................... - - No Partnershio or Joint Venture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attorneys' F ee~. ............................................ ..... ......... ...... ............ ............. ........................ Construction .. .. .. .. .. . .. . .. .. .. .. .. .. . .. .. .. .. .. . . . .. .. . .. .. .. .. .. .. .. ,. . , .. .. .. .. .. .. .. .. .. .. .. Governin~ Law. ............................................ CountelJ)arts. .............................................. Citv's Rie:hts to Defense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - Binding Effect. ............................................. Failure to Develop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1!:reement to Coooerate. ..................................... - - No Third Party Beneficiary .................................... Constitution of F~es ......................................... Sunset Park Neighborhood Traffic Prot~~tion Plan Ac;lOPtiQn . . . . . . . . . . . . Reauirement to Execute Document~ .. ......~...................... ............... -vi- 67 - - DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into this day of . 19 ("Effective Date"). between REliANCE DEVELOPMENT GROUP, INC., a Delaware corporation ("Developer"), and the CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica ("City"), with reference to the following facts: R E C I TAL S: A Pursuant to California Government Code Section 65864 et sea. and Santa Monica Municipal Code Section 9800 et seq., the City is authorized to enter Into binding development agreements with persons having legal or equitable interests in real property for the development of such property. B. ,The City is the legal owner of certain real property ("Santa Monica Airport Residual Land") approximately 37 acres of which is located in the City of Santa Monica, California, and approximately 0.83 acres of which is located in the City of Los Angeles, California, as more particularly described in Exhibit "AI" attached hereto and incorporated herein by this reference. C. Pursuant to the Disposition and Development Agreement ("DDA") of even date herewith between the City and Developer, the City has agreed to ground lease that portion of the Santa Monica Airport Residual Land particularly described in Exhibit "A2" which is attached hereto and incorporated herein by this reference ("Property") in Phases to Developer upon and subject to the tenns and conditions described in the DDA, this Agreement and the form(s) of ground lease attached as an exhibit to the DDA. Approximately 25.95 acres of the Property is located in the City of Santa Monica and approximately 0.83 acres of the Property is located in the City of Los Angeles. D. Required procedures were initiated under Santa Monica Municipal Code Section 9413 to amend the text of the Land Use and Circulation Elements ("LUCE") of the General Plan ("General Plant!) and the Land Use Map of the LUCE to create an Airport Commercial District ("Airport Commercial District") and to establish property development standards applicable to the Santa Monica Airport Residual Land (collectively, "ACD Amendments"). E. The Planning Commission held a duly-noticed public hearing on the ACD Amendments on September 13, 1989 and recommended adoption of the ACD Amendments to the Santa Monica City Council ("City Councir') on September 21, 1989. Following a duly-noticed public hearing, the City Council adopted the ACD Amendments on October 10, 1989. F. On March 30, 1988, Developer filed with the City an Application for Development Agreement ("Application"), whIch was "deemed complete" by the City on April 27, 1988. By the express terms of Ordinance No. 1481(CCS), which imposed a moratorium on non-residential development in the City of Santa Monica, the provisions of . ,e that Ordinance do not govern development agreement applications which have been filed on or before May 2t 1989 and therefore do not govern or apply to the Application filed by Developer. G. Developer has paid all necessary costs and fees associated with the Citis processing of the Application and this Agreement. H. The City has complied with all procedures required by Government Code Section 65864 ~t seC!. and Santa Monica Municipal Code Section 9800 ~tseC!. regarding the processing of the Application and this Agreementt including the following: (1) The Planning Commission held duly-noticed public hearings on the Application and this Agreement on November 30, 1988t December 7, 1988 and September 13t 1989 and made its written recommendation to the City Council in accordance with Santa Monica Municipal Code Section 9812; and (2) The City Council held a duly-noticed public hearing on the Application and this Agreement on October 3, 1989. Following completion of the public hearing and consideration of the recommendation of the Planning Commissiont the City Council adopted an ordinance on t 1989: (a) approving the Application and this Agreement; (b) finding that this Agreement is consistent with the General Plan; (c) authorizing the City Manager to execute this Agreement; and (d) certifying the final Environmental Impact Report ("EIR") for the Project and the ACD Amendments. I. The final EIR certified by the City Council analyzes in detail the significant environmental effects of all aspects of the proposed development of the Property. In certifying the final EIR: (1) The City Council determined that the final EIR has been prepared in compliance with the California Environmental Quality Act (Public Resources Code Section 21000 et seC!.) ["CEQN'], the State CEQA Guidelinest and the City of Santa Monica Guidelines for Implementation of CEQ^ adopted by City Council Resolution No. 6694(CCS) on May 24, 1983. (2) The City Council reviewed and considered the information contained in the final EIR prior to approving the Application and this Agreement. J. The City Council has determined that a development agreement is appropriate for the proposed development of the Property. The Property shall be developed in up to three (3) phases ("Phases"). The proposed development of the Property ("Project") has been designed to create a common architectural style and theme within each -2- . e Phase of the Project and among the Phases and to ensure relative consistency in the size and scope of the Phases. The Project incorporates a common infrastructure for the Phases which is designed to accommodate both the size and design of the entire Project. This Agreement shall eliminate uncertainty in planning for, and securing orderly development of, the Project, assure progressive installation of necessary improvements, provide for public services appropriate to each stage of development of the Project, ensure attainment of the maximum effective utilization of resources within the City at the least economic cost to its citizens and otherwise achieve the goals and purposes for which Government Code Section 65864 et se<!. and Santa Monica Municipal Code Section 9800 et seq. were enacted. In exchange for these benefits to the City, the Developer desires to receive the assurance that it may proceed with the Project in accordance with existing ordinances, resolutions and regulations applicable to such developments, subject to the terms and conditions contained in this Agreement. K. By entering into this Agreement the City acknowledges that it shall receive substantial benefits conferred as a result of development of the Property in accordance with the terms, conditions and obligations of this Agreement without interdicting the right of the City to act in accordance with its powers, duties and obligations. NOW THEREFORE, in consideration for the covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms and phrases shall be interpreted as hereinafter defined, unless the context clearly indicates a contrary intent of the parties: Accrued TOM Fee: As defined in Section 20(e). ACD Amendments: The amendments to the text of the LUCE of the General Plan and the Land Use Map of the LUCE which were adopted by the City Council on October 10, 1989 to create the Airport Commercial District and to establish property development standards applicable to the Airport Commercial District. Agreement: This Development Agreement entered into between the City and the Developer as of the Effective Date. Airport Commercial District: The commercial district created by the ACD Amendments in which the Project is located. Airport Surplus Parcel: The real property legally described in Exhibit nA3" which is attached hereto and incorporated herein by this reference. The Airport Surplus Parcel is comprised of all portions of the Santa Monica Airport Residual Land other than the Property. The total area of the Airport Surplus Parcel is approximately 11.05 acres or approximately 481,435 square feet. The Airport Surplus Property is located entirely within the City of Santa Monica. . Commercial: Business machine sales, display and services, drafting and blueprint services, travel, insurance, real estate and brokerage services, the customer service area of banks and savings and loans, and related uses. -3- . e ADolicable Phase: As defined in Section 3(i)(v) herein. ADDlication Date: As defined in Section 3(i)(v)(A) herein. ARB: As defmed in Section lO(d) herein. Arts Commission: As defined in Section 6(p )(ii)(B) herein. At-Grade Footprint: The at-grade perimeter outline of a building or parking structure based upon the perpendicular projection to the ground of all portions of that building or parking structure. Avera~e Finished Grade: The average elevation of the ground level of each Building Pad after finished grading is complete consistent with the Project Site Plan, as measured from the highest and lowest points of each Building Pad. Building Height: The vertical distance of each building or parking structure measured from the Average Finished Grade of the Building Pad for such building or parking structure to the highest point of the roof. Measurement of Building Height shall not include those physical features set forth in Section 3(c). Buildin~ Pad: For each building or parking structure within the Project, that portion of the Property covered by the At-Grade Footprint of that building or parking structure. CC&Rs: The Declaration of Covenants, Conditions and Restrictions and Reciprocal Easements for the Project to which the City and the Developer are parties. Certific~te of Occu!,ancy: A temporary or final certificate of occupancy which is required to be issued by the City as a condition precedent to the occupancy of a building or parking structure in the Project. CEOA: The California Environmental Quality Act (Public Resources Code Section 21000 ~ seq.) Child Care Facility: As defined in Section 6(b)(i) herein. Child Care Facility Sublease: As defined in Section 6(b)(ii) herein. City: The City of Santa Monica., a municipal corporation, organized and conducting business pursuant to the laws of the State of California and the Charter of the City of Santa Monica. City Council: The City Council of the City of Santa Monica. City Defau1t~: As defined in Section 16(b) herein. City Man~ger: The City Manager of the City of Santa Monica. 4- . e Contingency Date: As defined in Section 6(n)(xiii) herein. County: The County of Los Angeles. CPI: The United States Department of Labor, Bureau of Labor Statistics Consumer Price Index for the Los Angeles-Anaheim-Riverside area (Urban Wage Earners and Clerical Workers, All Items) (1982-84=100). If the CPI format should be revised, such revised CPI shall be modified, if necessary, by making such adjustments as may be required to produce substantially equivalent financial results as would have been obtained by application of the current CPI format. If the CPI should be so revised that such adjust- ment cannot reasonably be made, or if the CPI shall be discontinued, there shall be sub- stituted for the CPI a reasonably reliable and comparable index or other information furnished by a government or independent third party source evaluating changes in the cost of living or purchasing power of the consumer dollar. DDA: The Disposition and Development Agreement between City and Developer dated as of the Effective Date of this Agreement. Desi~ated Area: The area of the Property established for each building and parking structure of the Project within which the At-Grade Footprint of that building or parking structure must be fully situated, as shown by the shaded areas on Drawing 10c of the Project Site Plan. Detention Basins: As defined in Section 6(r) herein. Developer: Reliance Development Group, Inc., a Delaware corporation, and any and all successors and assigns as authorized or approved under the DDA and the Ground Leases. Developer Art: As defined in Section 6(p )(ii)(B). Developer Def31,Ilts: As defined in Section 16(a) herein. Effective Date: The date listed in the introductory paragraph of this Agreement as the date as of which this Agreement was entered into by and between the City and the Developer. Effluent: As defined in Section 6(m)(ii) herein. Em.: The Final Environmental Impact Report for the Project and the ACD Amendments certified by the City Council on October 10, 1989 as being prepared in compliance with CEQA, the State CEQA Guidelines, and the City of Santa Monica Guidelines for Implementation of CEQA, adopted by the City Council Resolution No. 6694 (CCS) on May 24, 1983. Event of Default: As defined in Section 16 herein. Excess Restaurant Area: As defined in Section 4(c)(i)(A) herein. -5- e e Existin~ Regulations: The General Plan (including, without limitation, the LUCE) and any and all codes, ordinances, rules, regulations, standards, specifications and official policies of the City governing or affecting the development, density, height, permitted uses, intensity of uses and improvements which are in force and effect as of the Effective Date of this Agreement (specifically including the ACD Amendments to the LUCE adopted by the Oty Council on October 10, 1989). FAA: The Federal Aviation Administration. Fast-Food or Take-Out Restaurant: A restaurant in which customers purchase food at a walk-up window or counter and either consume the food on the restaurant premises within a short period of time, or take the food off the restaurant premises. A restaurant shall not be considered a Fast-Food or Take-Out Restaurant solely on the basis of incidental or occasional take-out sales. Floor Area: The total gross horiwntal areas of all floors of a building or parking structure below the roof and measured from the interior face of exterior walls, or a wall separating two abutting buildings or structures. (i) Floor Area shall specifically include, without limitation, the following areas occupied by: (A) useable basements and cellars; (B) restrooms, lounges, lobbies, kitchens, storage areas, and interior hallways and corridors; (C) interior courtyards, atria, paseos, walkways and corridors covered by a roof or skylight; (D) at-grade parking covered by a building, structure or roof; and (E) above grade parking. (ii) Floor Area shall specifically exclude the following: (A) stairways and stairwells; (B) elevators; elevator shafts and elevator equipment rooms; (C) ramps to a subterranean or semi-subterranean parking structure or ramps between floors of a parking structure, provided that the ramp is not utilized for the parking of vehicles. -6- e e (D) unenclosed decks, ba1conies~ and platforms which are not used for commercial or restaurant activity, whether or not covered by a roof; (E) exterior courtyards~ arcades~ atria, paseos, walkways, and corridors which are not used for commercial or restaurant activity, whether or not covered by a roof; (F) the volume above interior courtyards~ atria, paseos, walkwa~ and corridors, whether or not covered by a building structure or roof; (G) Subterranean Levels and Semi-Subterranean Levels devoted exclusively for parking, uses associated with that parking, and loading and unloading; (H) at-grade parking not covered by a building, structqre or roof; (I) loading docks covered by a roof or canopy, but otherwise open or unenclosed and used primarily for loading and unloading; and (J) mechanical equipment rooms, electrical rooms, telephone rooms and similar space located below grade. For purposes of subsections (D) and (E) of this subsection (ii), the active buying and selling of products or food constitutes "commercial activity" but the use of exterior areas adjacent to General Commercial Office space for ancillary office purposes such as balconies does not constitute "commercial activity". (Hi) For purposes of Section 3(b)(ii), Floor Area devoted to at-grade parking covered by a building, structure or roof shall be counted as two-thirds (2/3) of the actual square footage of Floor Area so utilized if the following conditions are met: CA) the floor devoted to at.grade parking does not exceed ten (10) feet in height; (B) there is at least one (1) level of Subterranean Parking Area provided on the Property; (C) the at-grade and above grade parking levels are screened from view; (D) there is no at-grade parking within forty (40) feet of the front property line for the Property along Bundy Drive; and .7- - e (E) the Architectural Review Board determines that the design of any building, structure or roof which covers the at-grade parking is compatible with the other buildings and parking structures in the Project under the Project Site Plan. Floor Area Ratio or FAR: The Floor Area of all buildings and parking sttuc. tures within the Project divided by the square foot area of the Santa Monica Portion of the Property. Foreclosure Date: As defined in Section 20(e) General Commercial Qffice: General offices and related uses, including cafeterias and dining rooms not open to the general public and designed primarily to serve the employees and guests of a single Space Sublessee. General Plan: The comprehensive, long-term General Plan for the physical development of the City of Santa Monica adopted pursuant to California Government Code Section 65300 et seq. and Santa Monica Municipal Code Section 9400 et seq. including all elements of the General Plan. Ground Lease: A ground lease or ground leases pursuant to the nDA of any Phase of the Property or portion thereof, by and between City, as landlord, and Developer, as tenant. Homeless Assistance Fee: As defined in Section 6(t) herein. Impact Fee: As defined in Section 6(a)(i) herein. Institution~l Lender: A foreign or domestic savings and loan association, a savings bank or trust company, an insurance company, a religious, charitable or educational institution, a state, municipal or private employees' welfare, pension or retirement fund or system, investment banking firm or other financial institution, provided that such entity is subject to, or submits to service of process within, the State of California and has total assets of at least $200,000,000. Notwithstanding the preceding sentence, no entity in which the Developer has an ownership interest of more than five percent (5%) shall be an Institutional Lender. Law: As defined in Section 22 herein. Leasehold Mortgage: Any mortgage, deed of trust, pledge, encumbrance or other security interest granted to an Institutional Lender from time to time encumbering all or any part of Developer's leasehold estate in the Property. Leasehold Mortgagee: Any Institutional Lender which holds a Leasehold Mortgage. Los Angeles Portion: That portion of the Property which is located within the City of Los Angeles and which, as of the Effective Date, consists of approximately 0.83 acres or approximately 36.155 square feet of land. -8. e e LUCE: The Land Use and Circulation Elements of the General Plan. Neillhborhood Traffic Protection Plan: As defined in Section 45 herein. Net Rentable Floor Area: Floor Area less (i) load bearing walls; (ii) the amount of Floor Area attributable to parking and uses necessary to operate and maintain such parking; and (Hi) equipment rooms. Off-Site Art: As defined in Section 6(p ) (ii)(C) herein. Off-Site Traffic Improvements: The traffic system, street and intersection improvements described in Exhibit "D" to this Agreement and specifically designated therein as "Off-Site Traffic Improvements" and such other traffic system, street and intersection improvements which may be required by the final, non-appealable judgment of a court of competent jurisdiction in connection with the development of the Project. Parking Ratio Reduction Application: As defined in Section 3(i)(v)(A). Phase: One of the three (3) parts of the Project, as described in Section 3 of this Agreement and shown on the Project Site Plan. Each Phase may be developed at a different time from the other Phases of the Project pursuant to provisions of the DDA. Planning Commission: The Planning Commission of the City of Santa Monica. Project: The proposed development of the Santa Monica Portion of the Property as is more particularly described in Section 3 of this Agreement and in the Project Site Plan. Project Site Plan: That certain Project Site Plan dated March 11, 1989 [including Drawings 2d, 8d, 9d, and lOd, inclusive] prepared by Kahn Pederson Fox Associates, P.c. (as the same may be amended from time to time in accordance with the terms of this Agreement and the DDA) which is attached hereto as Exhibit "B" and incorporated herein by this reference and which sets forth the basic guidelines and scope for the development of the Project. Projected Traffic Impact: As defined in Section 6(h)(v) herein. Prooertv: As defined in Section 2 herein. Public Arts Fee: As defined in Section 6(p)(i) herein. Recycling System: As defined in Section 6(n) herein. Restaurant: Any building, room., space, or portion thereof, where food is sold for consumption on-site. A Restaurant does not include Incidental Food Service, as defined in the Zoning Ordinance in effect as of the Effective Date. -9- 41 e Santa Monica Airport Residual Land: The real property which is legally described in Exhibit "AI" hereto, and which has a total area of approximately 37.83 acres or approximately 1,647,875 square feet. As of the Effective Date, the City of Santa Monica is the legal owner of the Santa Monica Airport Residual Land. The Santa Monica Residual Land is entirely comprised of the Property and the Airport Surplus Parcel. Santa Monica Portion: That portion of the Property which is located within the City of Santa Monica and which, as of the Effective Date, consists of approximately 25.95 acres or approximately 1,130,382 square feet of land. Second Consultant: As defmed in Section 6(b)(viii)(B) herein. Semi~Sllbterranean Lev~l: Any level in a parking structure in which the height of the finh;hed floor of the level immediately above does not exceed three (3) feet above the Average Finished Grade of the Building Pad for the parking structure~ except for openings for ingress and egress. Senior Leasehold MortQaQe: As defined in Section 20( e) herein. Space Sublessee: Any person or entity with an express or implied agreement with the Developer relating to the use or occupancy by such person or entity of any portion of the buildings and parking structures within the Project. The Developer shall be deemed to be a Space Sublessee for purposes of this Agreement to the extent that the Developer occupies space within buildings and parking structures in the Project. Subdivided Parc~l: As defined in Section 3(i)(ix) herein. Subsequent Code Changes: As defined in Section 10(a) herein. Subterranean Level: Any level in a parking structure in which the height of the finished floor of the level immediately above does not exceed the Average Finished Grade of the Building Pad for the parking structure, except for openings for ingress and egress. Subterranean Parking Area: The total gross horizontal areas of all Subterranean Levels and Semi-Subterranean Levels designed or devoted for parking and uses associated with such parking, measured from the interior face of exterior walls~ excluding: (i) stairways and stairwells; (ii) elevators. elevator shafts and elevator equipment rooms; and (iii) ramps between levels or floors provided that the ramp is not utilized for the parking of vehicles. -10- e e Sunset Park: As dermed in Section 45 herein. Tandem Parking: A group of two or more parking spaces arranged one behind the other where one space blocks access to the other space. IDM Consultant: As defined in Section 6(h)(vii) herein. IDM Fee: As defined in Section 6(h)(vi) herein. TOM ManaQer: As defined in Section 6(h)(i)(A) herein. TOM PrOlrram: As defined in Section 6(h)(i) herein. TDM Program Goal: As defined in Section 6(h)(iv) herein. Test Area: As defined in Section 3(i)(v)(c)(3) herein. Test Period: As defined in Section 3(i)(v)(c)(1) herein. Test Soaces: As defined in Section 3(i)(v)(c)(I) herein. Third Consultant: As defined in Section 6(h)(viii)(C) herein. Water Feature: As defined in Section 3(h) herein. Zoning Administrator: The Director of Planning of the City of Santa Monica. Zoning Or~inanc;~: The City of Santa Monica Comprehensive Land Use and Zoning Ordinance (Santa Monica MuniCIpal Code Section 9000.1 et seq.) which was adopted by the City Council on August 9, 1988. In addition, other terms and phrases defined in this Agreement shall have the meanings attributed thereto in this Agreement. 2. Description of Property. The Property described in Exhibit rtA2:' hereto which has a total area of approximately 26.78 acres or approximately 1,166,458 square feet. The Property is comprised of the Santa Monica Portion and the Los Angeles Portion. 3. Descriotion of Pro1ect. - - (a) Components of Phases. The Project includes all aspects of the proposed development of the Property as more particularly described herein and in the Project Site Plan, including the following components: (i) Phase 1. (A) "Building I" shall be in Phase 1 of the Project and shall not exceed 193,215 square feet of Floor Area. Building 1 shall not exceed six (6) stories and a Building Height of 84 feet. The At-Grade -11- e e Footprint of Building 1 shall be entirely situated within the Designated Area for Building 1 shown on Drawing lOd of the Project Site Plan. (B) "Building 2" shall be in Phase 1 of the Project and shall not exceed 194,480 square feet of Floor Area. Building 2 shall not exceed six (6) stories and a Building Height of 84 feet. The At-Grade Footprint of Building 2 shall be entirely situated within the Designated Area for Building 2 shown on Drawing 10d of the Project Site Plan. (e) "Building 3" shall be in Phase 1 of the Project and shall not exceed 4,165 square feet of Floor Area. Building 3 shall not exceed one (1) story and a Building Height of 35 feet. The At-Grade Footprint of Building 3 shall be entirely situated within the Designated Area for Building 3 shown on Drawing lOd of the Project Site Plan. (D) "Building 4" shall be in Phase 1 of the Project and shall not exceed 9,000 square feet of Floor Area. Building 4 shall not exceed a Building Height of 27 feet. The At-Grade Footprint of Building 4 shall be entirely situated within the Designated Area for Building 4 shown on Draw- ing lOd of the Project Site Plan. (E) "Parking Structure r' shall be in Phase 1 of the Project. The structure shall contain approximately 124,980 square feet of Subterranean Parking Area and shall not exceed 102,802 square feet of Floor Area at grade and above grade. Parking Structure 1 shall provide not less than 690 parking spaces. Parking Structure 1 shall not exceed a Building Height of 37 feet. Parking Structure 1 shall not exceed six (6) levels, which shall consist of three (3) Subterranean Levels and Semi-Subterranean Levels and three (3) levels of at-grade or above-grade parking. Roof~top parking is expressly permitted for Parking Structure 1 and, if utilized, shall be counted as a parking level. The At-Grade Footprint of Parking Structure 1 shall be entirely situated within the Designated Area for Parking Structure 1 shown on Drawing 10d of the Project SIte Plan. (F) "Parking Structure 2" shall be in Phase 1 of the Project. The structure shall contain approximately 122,945 square feet of Subterranean Parking Area and shall not exceed 101,126 square feet of Floor Area at-grade and above-grade. Parking Structure 2 shall provide not less than 679 parking spaces. Parking Structure 2 shall not exceed a Building Height of 42 feet. Parking Structure 2 shall not exceed six (6) levels, which shall consist of three (3) Subterranean Levels and Semi-Subterranean Levels and three (3) levels of at-grade and above-grade parking. Roof-top parking is expressly permitted for Parking Structure 2 and, if utilized, shall be counted as a parking level. The At-Grade Footprint for the structure shall be entirely situated within the Designated Area for Parking Structure 2 shown on Draw- ing 10d of the Project Site Plan. -12- e e (ii) Phase 2. (A) "Buildings 5,6, and 7" each shall be in Phase 2 of the Project and shall each not exceed 130,900 square feet of Floor Area per building. Buildings 5, 6, and 7 shall not exceed six (6) stories and a Building Height of 84 feet. The At-Grade Footprints of each of these buildings shall be situated entirely within the Designated Areas for Buildings 5, 6 and 7, respectively, shown on Drawing 10d of the Project Site Plan. Buildings 5, 6 and 7 shall be designed to be architecturally similar to one another. Buildings 5, 6 and 7 must be aligned with each other on the front of each building (that side which faces the interior portion of the Property). No alignment is required on the side of each building which faces the perimeter of the Property. (B) "Building 8" shall be in Phase 2 of the Project and shall not exceed 21,370 square feet of Floor Area. Building 8 shall not exceed one (1) story and a Building Height of 20 feet. The At-Grade Footprint of Building 8 shall be entirely situated within the Designated Area for Building 8 shown on Drawing 10d of the Project Site Plan. (C) "Parking Structure 4" shall be in Phase 2 of the Project. Except as otherwise provided in Section 3(i)(v) of this Agreement, the structure shall contain approximately 201,795 square feet of Subterranean Parking Area, shall not exceed 251,955 square feet of Floor Area at-grade and above-grade, and shall provide not less than 1,310 parking spaces. Parking Structure 4 shall not exceed a Building Height of 37 feet. The parking struc- ture shall not exceed six (6) levels, which shall consist of three (3) Subter- ranean Levels and Semi-Subterranean Levels and three (3) levels of at-grade and above-grade parking. Roof-top parking is expressly permitted for Parking Structure 4 and, if utilIzed, shall be counted as a parking level. The At-Grade Footprint of the parking structure shall be entirely situated within the Designated Area for Parking Structure 4 shown on Drawing 10d of the Project Si te Plan. (Hi) Phase 3. (A) "Building 9" shall be in Phase 3 of the Project and shall not exceed 164,445 square feet of Floor Area. Building 9 shall not exceed six (6) stories and a Building Height of 84 feet. The At-Grade Footprint of Building 9 shall be entirely situated within the Designated Area for Building 9 shown on Drawing lOd of the Project Site Plan. (B) "Building 10" shall be in Phase 3 of the Project and shall not exceed 4,180 square feet of Floor Area. Building 10 shall not exceed two (2) stories and a Building Height of 46 feet. The At-Grade Footprint of Building 10 shall be entirely situated within the Designated Area for Building 10 shown on Drawing lOd of the Project Site Plan. -13- e e (C) "Parking Structure 5" shall be in Phase 3 of the Project. Parking Structure 5 shall not exceed 196,875 square feet of Floor Area at grade and above grade. Except as otherwise provided in Section 3(i)(v) of this Agreement, the structure shall provide not less than 597 parking spaces. The parking structure shall not exceed a Building Height of 62 feet. Parking Structure 5 shall not exceed six (6) levels of at-grade or above-grade parking. Roof-top parking is expressly permitted for Parking Structure 5 and, if utilized, shall be counted as a parking level. The At-Grade Footprint of Parking Structure 5 shall be entirely situated within the Designated Area for Parking Structure 5 shown on Drawing 10d of the Project Site Plan. (b) Maximum Floor Area. The total Floor Area of the Project shall not to exceed: (i) A Floor Area Ratio of 0.75 times the square foot area of the Santa Monica Portion (Le., the total Floor Area of the Project shall not exceed 822,000 square feet); and (ii) an additional Floor Area Ratio of 1.02 times the square foot area of the Santa Monica Portion only if all of the additional Floor Area permitted under this subsection (ii) is devoted exclusively to covered at-grade and above-grade parking and such uses necessary to operate and maintain such parking (Le., additional aggregate Floor Area attributable to such parking in the Project shall not exceed 1,256,900 square feet). (c) Builc;ling Height. The Building Height of each building and parking structure in the Project shall not exceed the maximum Building Height set forth for each such building or parking structure in subsection (a). Penthouse or roof structures for the housing of elevators, stairways, tanks, ventilating fans or similar equipment required to operate and maintain a building or parking structure, and fire or parapet walls, skylights, steeples, flagpoles, or other similar structures shall not be included in measuring Building Height. Such structures shall not exceed fourteen (14) feet above the permitted Building Height for a building. The Building Heights for any buildings or parking structures in the Project are subject to approval by the FAA under Federal Aviation Regulations for height and clearance around the Santa Monica Airport. (d) Minimum Setbacks. The setbacks of each building or parking structure listed below from the perimeter of the Property shall not be less than the following distances: BuildinQ' Pronertv Boundarv Setback - - - 1 Bundy Drive 140' 2 Bundy Drive 100 ' 3 Bundy Drive 100' 5. 6, 7 North 80' 9 South 100' -14- e West e 0' 10 South 80' ParlrinlP Structure 1 North 0' - Bundy Drive 120' Parking Structure 2 South 30' Bundy Drive 35' Parking Structure 4 South 35' Parking Structure S North 0' For the purposes of this subsection (e) the "perimeter- of the Property shall be based on the legal description of the Property CODtRin~d in Exlnbit 1tA2". (e) Minimum Distance Between Buildin~s. Notwithstanding the Project Site PIan, the distances between the buildings listed below shall not be less than the following distances: Buildin, to Buildi.Q& Distance 1 2 lOS' S 6 6f1 6 7 40' 7 8 165' With respect to Building 9 and Building 10, the distance between such buildings shall not be less than 40 feet, except at those points in which Building 9 and Building 10 form the nonhero and southern boundal)' of the Orange Grove Garden, in which case the distance between such buildings shall be not less than 105 feet. (f) Maximum Site Covera~e. The aggregate square footage of the At-Grade Footprints of all buildings and parking structures in the Project shall not exceed fifty percent (50%) of the total square footage of the Santa Monica Portion. (g) Access and Circulation. Points of vehicular and pedestrian ingress and egress to and from the interior of the Project and the vehicular and pedestrian circulation system within the Project shall be generally in accordance with the Project Site Plan. All vehicular ingress and egress to and from the interior of the project shall be from Bundy Drive, except that emergency vehicles may points of ingress and egress other than Bundy Drive. Airport Avenue shall be closed to through traffic following the date on which the building permit for Building 1 or Building 2 in Phase 1 is issued, whichever occurs first. As used in this subsection (9), "through traffic" shall mean (1) any traffic travelling between Bundy Drive and Walgrove/23rd street whose destination is not Santa Monica Airport or the Airport Surplus Parcel ~ (2) any traffic travelling from Walgrove/23rd Street whose destination is the Airport Residual Landi (3) any traffic travelling from the Airport Residual Land whose exiting destination is Walgrove/23rd street. As used in this subsection (g), "through traffic" shall not include emergency vehicular traffic or traffic using Airport Avenue to access or exit the Project via Bundy Drive. All Project-related traffic (including construction-related traffic) shall access and exit the Project from roads (including Airport Avenue) leading directly to Bundy Drive. (h) IAn~s~il\I. The Project shall be fully landscaped in a park-like manner which shall be substantially in accordance with the landscape plan included as part of the Project Site Plan and in conformance with the design criteria attached as ExIn"bit "C" to this Agreement. Landscaping for the Project shall include the use of mature trees and other landscaping in open space areas within the Project and on the perimeter of the -15-- e e Property. Substantial open space shall be provided which shall include courtyards, gardens and, subject to Section 6(f)(ii). a large. terraced pool of water to be generally situated in the interior portion of the Property ("Water Feature"). The public shall be afforded access to the courtyards, gardens and other open areas of the Project subject to reasonable conditions imposed by the Developer related to maintenance and security. as approved by the City. which approval shall not be unreasonably withheld or delayed. For the purposes of this subsection (h), "mature trees" shall mean: (i) for palm trees, trees with between 15 feet and 22 feet of brown trunk:, and (ll) for all other trees, trees with a box size of not less than 36 inches.2 (i) Parking. Parking for the Project shall be provided as follows: (i) Except as provided in subsection (v) below, subterranean; semi-subterranean. at-grade and above-grade parking shall provide a minimum of 3.3 parking spaces (including standard, compact and tandem spaces) for each 1,000 square feet of Floor Area developed in the Project pursuant to this Agreement (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking). (ii) Standard size parking spaces shall be at least eight and one-half (8.5) feet wide by eighteen (18) feet deep. Compact size parking spaces shall be at least seven and one-half (7.5) feet wide by fifteen (15) feet deep. Tandem parking spaces shall be at least eight and one-half (8.5) feet wide by thirty-two (32) feet deep. (Hi) No more than forty percent (40%) of the parking spaces provided in any parking structure under this Agreement shall be striped for compact cars. No more than twenty percent (20%) of the parking spaces provided in any parking structure under this Agreement shall be tandem spaces. An attendant shall monitor all areas of a parking structure in which tandem parking is used from the hours of 8:00 a.m. to 6:00 p.m. (iv) In the construction of Phase 1 of the Project, Developer shall be required to construct not less than 3.3 parking spaces per 1,000 square feet of Floor Area developed in Phase 1 (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking). (v) With respect to each Phase after Phase 1 (respectively. the "Applicable Phase"): (A) Prior to the date that the Developer applies for a building permit from the City for the construction of the initial buildings and parking structures to be constructed within the Applicable Phase ("Application Datel1), Developer may elect to apply to the Zoning Administrator to utilize the parking ratio standard set forth in subsection (B) rather than the standard set forth in subsection (i) ["Parking Ratio Reduction Application"]. -16- e e (B) Upon approval by the Zoning Administrator of the Parking Ratio Reduction Application, the Developer shall be required to construct in the Applicable Phase the number of parking spaces which, when combined with the number of parking spaces constructed in the Project as of the Application Date, shall result in an aggregate number of parking spaces in the Applicable Phase and in all prior developed Phases which is not less than the ratio of 2.9 parking spaces per 1,000 square feet of Floor Area in such Phases (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking). (C) The Zoning Administrator shall approve the Parking Ratio Reduction Application of the Developer under subsection (A) if all of the following conditions are met: (1) In any Phase of the Project prior to the Applicable Phase in which the Developer was required to provide parking at a ratio of not less than 3.3 parking spaces for each 1,000 square feet of Floor Area in the Phase, the Developer has, on its own election, withheld from use by employees or guests of space sublessees or other visitors to the Project any parking spaces which were constructed in that Phase in excess of the ratio of 2.9 parking spaces for each 1,000 square feet of Floor Area in the Phase ('Test Spacesl1). All such spaces must be withheld from such use for a period of at least one (1) year prior to the preparation of the parking adequacy analysis pursuant to subsection (3) (I1Test Period"). The Test Period shall be deemed to commence upon delivery by the Developer to the City of a written notice designating the Test Spaces and advising the City that the Developer has commenced the withholding of the Test Spaces pursuant to this subsection (1). The requirement in this subsection (1) shall not apply, however, to any prior Phase in WhICh certain parking spaces are not required to be withheld as Test Spaces pursuant to another Ratio Reduction Application which was approved by the Zoning Administrator prior to the Application Date. (2) The Project has met the TOM Goal under Section 6(h)(iv) for every measured period prior to the Application Date, based upon the written reports submitted to the City pursuant to Section 6(h)(vii). (3) A parking adequacy analysis, prepared by a consultant selected and employed by the City at the Developer's request and expense, within ninety (90) days prior to the Application Date, certifies that the Project has adequate parking during the Test Period for full occupancy, assuming that full occupancy of the Project is 95% of Net Rentable Floor Area constructed in the Project as of the -17- e e Application Date and making appropriate adjustments to the analysis to the extent that the actual occupancy is less than 95%. The parking adequacy analysis shall contain a neighborhood parking intrusion analysis which must conclude that there is no significant problem during the Test Period with Space Sublessees of the Project and their employees, visitors and guests parking their vehicles on the adjacent Santa Monica Airport or in the residential neighborhood south of the Project bounded by Centinela Avenue on the east, Rose Avenue on the south, Walgrove Avenue on the west and the Project boundary on the north ("Test Area"). (4) If the Property has been divided into one or more legal parcels pursuant to Section 12(a) prior to the Application Date and the aggregate number of parking spaces constructed or to be constructed within the boundaries of the Applicable Phase is less than the ratio of 2.9 parking spaces for each 1,000 square feet of Floor Area in the Applicable Phase (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking), Developer shall execute and record covenants in form and content reasonably satisfactory to the City to make permanently available during the term of this Agreement a sufficient number of reasonably accessible parking spaces in prior developed Phases which, when combined with the parking spaces constructed or to be constructed within the Applicable Phase, results in an aggregate number of parking spaces which is not less than 2.9 spaces for each 1,000 square feet of Floor Area in the Applicable Phase (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking). Upon approval of the Parking Ratio Reduction Application for the Applicable Phase, the Developer shall thereafter have no obligation under subsection (1) to withhold any parking spaces in the Applicable Phase or any prior Phase during any Test Period related to a Parking Ratio Reduction ApplIcation which is filed by the Developer for a subsequent Phase. During any Test Period, the Developer may offer any of the Test Spaces for use by persons other than employees or guests of Space Sublessees or other visitors to the Project, provided that such use shall produce only intermittent traffic and shall not measurably increase peak hour trips to and from the Project. (D) If the Developer does not timely file the Parking Ratio Reduction Application with the Zoning Administrator under subsection (A) or if all of the conditions set forth in subsection (C) are not satisfied as of the Application Date, Developer shall be required to construct, in and for the Applicable Phase, not less than 3.3 parking spaces per 1,000 square feet of Floor Area developed in the applicable Phase (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking). -18- e e (E) If the ratio of required parking spaces in an Applicable Phase is reduced pursuant to this subsection (v), the number of parking spaces required to be provided in each parking structure to be constructed in the Applicable Phase under Section 3(a) shall be reduced by the same percentage as the percentage reduction in that ratio. (vi) Final layout of, and specifications for, the parking structures shall be submitted for review and approval of the City's Parking and Traffic Engineer, which shall not be unreasonably withheld or delayed. (vii) No at-grade parking area not covered by a roof or structure shall be permitted on the Property. (viii) Not less than 12 months nor more than 15 months after 95% of the Net Rentable Floor Area in each Phase of the Project is first occupied, the Developer shall conduct a survey of the Test Area to determine the number of Space Sublessees of the Project, and their employees, visitors and guests who park their vehicles in the Test Area. The Developer shall provide the City with a written report of the survey within one (1) month following completion of the survey. If the total number of vehicles parked in the Test Area by Space Sublessees of the Project and their employees, visitors and guests exceeds 50% of the total number of vehicles parked in the Test Area, Developer shall prepare a Parking Intrusion Reduction Plan for submission to the City Manager for his approval, which shall not be unreasonably withheld or delayed. The Parking Intrusion Reduction Plan shall recommend proposals to reduce the number of vehicles parked in the Test Area by Space Sublessees of the Project and their employees, visitors and guests to below 50% of the vehicles parked in the Test Area, which proposals may include Developer working with representatives of the City of Los Angeles to implement either of the following programs: (A) Posted time limits for on-street parking in the Test Area. (B) A preferential parking district in the Test Area implemented by the standard process of the City of Los Angeles. (ix) If the Developer applies to divide the Property into one or more legal parcels pursuant to Section 12(a), the City shall condition the approval of such application(s) upon either of the following: (A) the construction within the boundaries of each proposed subdivided parcel ("SubdIvided Parcel") of an aggregate number of parking spaces at a ratio which is not less than the parking ratio standard established pursuant to subsections (i) or (v), as applicable. of each 1,000 square feet of Floor Area 10 the Subdivided Parcel (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking); or (B) if the aggregate number of parking spaces constructed within the boundaries of the Subdivided Parcel does not meet the condition set forth ~19- e e in subsection (A), the Developer shall execute and record covenants in form and content reasonably satisfactory to the City to make permanently available during the term of this Agreement a sufficient number of reasonably accessible parking spaces in parking structures located on portions of the Property other than the Subdivided Parcel which, when combined with the parking spaces constructed within the boundaries of the Subdivided Parcel, results in an aggregate number of parking spaces in a ratio which is not less than the parking ratio established pursuant to subsections (i) or (v), as applicable, for each 1,000 square feet of Floor Area in the Subdivided Parcel (exclusive of Floor Area devoted to parking and uses necessary to operate and maintain such parking). (j) Pedestrian Acc~SS. The Developer shall provide safe and attractive pedestrian access between the parking structures and adjacent commercial buildings. The Project Site Plan may include subterranean connections between any of the buildings and parking structures and at-grade and above-grade bridge connections between Building 5 and Building 6 and Building 6 and Buildmg 7, subject to review and approval by the Zoning Administrator of the height and placement of such bridge connections. which approval shall not be unreasonably withheld or delayed. (k) Administrative and Technical Constf\lction Codes. Except as otherwise specifically provided herein, the Project shall be designed and constructed in compliance with the Administrative and Technical Construction Codes of the City (Article vrn, Chapter 1 of the Santa Monica Municipal Code) in effect in the City at the time of any application by Developer for issuance by the City of a building permit for construction of any building. parking structure or other improvement in the Project. (1) Prohibition of Construction on Los Angeles Portion. No portion of the Project shall be constructed on any part of the Los Angeles Portion, except for access roadways and landscape/hardscape. 4. Uses. (a) Permitted and Prohibited Uses. (i) By the execution of this Agreement, the City specifically approves, as permitted uses, the use of the Property and Project for General Commercial Office use, Ancillary Commercial use, child care facilities, retail use (including, without limitation, art galleries) and Restaurant use (including Fast Food and Take-Out Restaurants, but excluding Drive-Through or Drive- In Restaurants, as defined in the Zoning Ordinance), parking and uses necessary to operate and maintain such parking, other uses associated with and related to parking which may be approved by the Zoning Administrator, and any other use permitted under the General Plan for the Airport Commercial District which the Zoning Administrator deems acceptable for the District. Such permitted uses shall be consistent with the Existing Regula- tions, except as modified by this Agreement. Except as otherwise provided in this Agreement, no City permits or approvals are required to use the Property and Project for these permitted uses. including without limitation, a use permit. conditional use permit, performance standard permit, zone -20- e e variance, zone change or any other permit or approval, whether ministerial or discretionary; provided that conditional use permits shall be required in connection with the dispensing of alcoholic beverages on the Property pursuant to subsection (b). Nothing in this subsection (i) is intended, nor should be construed, to obviate any requirements under codes, ordinances, rules, regulations or official policies of the City to obtain licenses and permits in connection with, and as a condition of, the operation of businesses within the City. (ii) Prohibited Uses. The use of the Property and the Project for the following uses is expressly prohibited: (A) Medical, dental and optometrist offices. (B) Drive-Through or Drive-In Restaurants as defined in the Zoning Ordinance. (C) Any sale of alcoholic beverages, except as expressly provided under subsection (b). (D) Liquor stores. (E) Movie theaters. (F) Any use not authorized in, or pursuant to, this Agreement. (b) Sale and Consumotion of Alcoholic BeveraQes. - - (i) The City hereby agrees that sale and consumption of alcoholic beverages is a conditionally permitted use in subleased premises devoted to Restaurant use in the Project, provided that the sale and consumption of aIcohohc beverages in such subleased premises is incidental to the sale and consumption of food. The City agrees to expeditiously review applications for any conditional use permit(s) authorizing such use upon the filing by the Developer or a Space Sublessee of an application for such permits. Such review by the City shall be based upon the rules and procedures then uniformly in effect in the City. The parties agree that the sale and consumption of alcoholic beverages in subleased premises devoted to Restaurant use in the Project is an appropriate use. The purpose of requiring a conditional use permit for such use is to determine reasonable conditions as to operations and location which should be applied in connection with such use. (ii) The City and the Developer further agree that the Developer or any Space Sublessee of subleased premises devoted to retail use in the Project may apply for a conditional use permit for the sale of alcoholic beverages for consumption either on or off the subleased premises, including without limitation, containers of beverages, provided that the sale of such .21- e e beverages is incidental to the sale of other food and retail products in those subleased premises. The City agrees to expeditiously and reasonably review any such applications based upon the rules and procedures then uniformly in effect in the City, and to either approve, conditionally approve or deny such applications based upon those rules and procedures. In its review, the City may examine and consider whether the proposed sale of alcoholic beverages for consumption either on or off the subleased premises devoted to retail use which is incidental to the sale of food and retail products in those subleased premises should be an appropriate and permitted use in the Project. (c) Maximum Floor Area Devoted to Uses. (i) Except as provided in subsection (ii) and in Section 8 below, the Floor Area for the following uses shall not exceed the amounts set forth below. (A) Restaurant -- 8,200 square feet of interior and exterior Floor Area; provided, however, that: (1) the Developer may, in its discretion, increase the interior and exterior Floor Area allocated for Restaurant use above 8,200 square feet to a maximum of 15,000 square feet ("Excess Restaurant Area") under the condition set forth in subsection (ii); and (2) if the Developer does not utilize all or any portion of the permitted 8,200 square feet of interior and exterior Floor Area for Restaurant use, Developer may, in its discretion, utilize such square footage for retail use. Any square footage so utilized by Developer for retail use shall be in addition to the square footage limits set forth in subsection (B). (B) Retail, to serve primarily employees and guests of, or visitors to, the space sublessees of the Project -- 22,000 square feet. (C) Ancillary Commercial, to serve primarily employees and guests of, or visitors to, the space sublessees of the Project -- 30,000 square feet. In order to utilize any Floor Area for any Ancillary Commercial use, the Developer must satisfy one of the following conditions: (1) the Developer must demonstrate that total peak hour trip rate predicted per 1,000 square feet of the specifically proposed Ancillary Commercial use (calculated upon the then current rates published by the Institute of Traffic Engineers or a comparable index) does not exceed 1.38 (the rate for General Commercial Office use); -22- e e (2) the Developer satisfies the condition set forth in subsection (ii); or (3) the Oty grants discretionary approval of an application for a change of use permit filed by the Developer with the City for change of Floor Area from one permitted use to the specifically proposed Ancillary Commercial use. (D) Child Care Facility -- 9.000 square feet. (E) General Commercial Office and any other use per- mitted under the General Plan for the Airport Commercial District which the Zoning Administrator deems acceptable for the District - the maximum Floor Area permitted for the Project less (1) the amount of the Floor Area actually utilized for the uses identified in subsections (A) through (C). inclusive. and (2) any reduction in square footage of Floor Area required under subsection (ii). (ii) The Developer may elect to utilize Floor Area in the Project for Ancillary Commercial use [up to the maximum Floor Area for Ancillary Commercial use under subsection (i)(C)], even if the total peak hour trip rate for the particular Ancillary Commercial use would exceed the peak hour trip rate set forth in subsection (i)(C)(l), or utilize Floor Area in the Project for Excess Restaurant Area, in each case provided that: (A) The Developer elects to reduce the total square footage of permitted General Commercial Office use which may be developed in the Project under subsection (i) (E) so as to totally offset any increase in predicted peak hour trips to the Floor Area utilized for Ancillary Commercial use or Excess Restaurant Area over the trips which would have been generated had the same Floor Area been utilized for General Commercial Office use. (B) The election by the Developer under subsection (A) must be by written notice from the Developer to the City specifying the amount of increase in Floor Area of Excess Restaurant Area or Ancillary Commercial use and the amount of decrease in Floor Area of permitted General Commercial use. Such written notice must be delivered prior to the issuance by the City of the first building permit for construction of a building in the Phase in which the AnciIIary Commercial use or Excess Restaurant Area is proposed by Developer. If the Developer elects to utilize Floor Area for Ancillary Commercial Use, the notice shall state the specifically proposed Ancillary Commercial use and the applicable peak hour trip rate for that proposed use. The notice shall also specify the Phase in which the required reduction shall occur and the building or buildings from which the required reduced Floor Area shall be applied pursuant to subsection (A). Upon delivery of the written notice to the City under this subsection (B), the election of the Developer under subsection (A) shall be deemed irrevocable. ~23- e e 5. Phases of COl1struction. The Project may be developed in up to three (3) separate Phases in accordance with the DDA and this Agreement. The components of each of the Phases are generally described in Section 3 of this Agreement and certain requirements applicable to specified Phases are described elsewhere in this Agreement. If the Developer fails to commence construction of improvements to any Phase within 13 years following the Effective DateJ the rights of the Developer to further develop such Phase or subsequent Phases under this Agreement and the DDA may be subject to termination under the provisions of, and in accordance with, the DDA and any applicable Ground Lease for such Phase. 6. Project Mitigation Measures. To comply with applicable provisions of the General Plan and to mitigate specific burdens upon the community resulting from development of the Project, Developer agrees to provide the following Project mitigation measures: (a) Housing: and Parks Imoact MitiQation Fee. - -- (i) Developer shall pay to the City a Housing and Parks Impact Mitigation Fee ("Impact Fee") in Santa Monica Municipal Code Sections 9046.1 through 9046.4, inclusive, in effect on the Effective Date. The Impact Fee shall be calculated as $2.25 per square foot for the first 15,000 square feet of Net Rentable Floor Area utilized for General Commercial Office space, or Ancillary Commercial space plus $5.00 per square foot of the remaining Net Rentable Floor Area of any additional General Commercial Office space or Ancillary Commercial space in excess of 15,000 square feet. For purposes of this AgreementJ a separate Impact Fee shall be calculated and paid for each Phase of the Project except that the $2.25 per square foot rate shall apply only to the first 15,000 square feet of Net Rentable Floor Area of General Commercial Office space or Ancillary Commercial Space in the Project. The amount of the Impact Fee due for any Phase of the Project or portion thereof, shall be based upon the amount of Net Rentable Floor Area of such space approved in each building permit or permits issued for such Phase or any portion thereof of the Project. For any building constructed in Phase 1 of the Project, Developer shall pay the Impact Fee attributable to that building upon issuance of the building permit for the building. For any building constructed in Phase 2 or Phase 3, Developer may elect, in its sole discretion, to either pay the Impact Fee attributable to each building permit in full prior to, or concurrent with, the issuance of the building permit by the City or to pay the Impact Fee in the manner specified in Section 9046.2( d) of tbe Santa Monica Municipal Code in effect on tbe Effective Date. (ii) The amount of each portion of the Impact Fee due pur- suant to this Agreement shall be increased by the same percentage as the percentage increase in CPI as of the second full month preceding the date of payment over the CPI as of October 1984. -24- e e (b) On-Site Child Care Facilitv. (i) Developer shall design and construct an on-site infant and child care facility in the Project (ItChild Care Facility"). The Child Care Facility shall be designed for occupancy by one hundred (100) children in accordance with the interior and exterior space requirements established in Title 22 of the California Code of Regulations in effect as of the date of the issuance of the building permit for construction of the Child Care Facility. The Child Care F acili ty shall also be designed so as to provide adequate space for vehicular movements for drop-off and pick-up of children which shall be approved by the City's Parking and Traffic Engineer and the Zoning Adtrlinl5;.trator prior to the issuance by the City of any building permit for the Child Care Facility or any building in which the Child Care Facility may be contained. Such approval shall not be unreasonably withheld or delayed by the City. Developer shall also initially equip the Child Care Facility comparable to other high quality child care centers in the City, which shall consist of finished interior space and generallightmg and bathroom fixtures (but not including interior furnishings), finished indoor and outdoor storage, kitchen, office space, landscaping, outdoor play structures and washer/dryer hookup facilities. The Child Care Facility shall be located by the Developer in Building 4 in Phase 1 or at such other location in Phase 1 which may be selected by the Developer and approved by the City, which approval shall not be unreasonably withheld or delayed. Construction of the Child Care Facility shall be completed and possession of the Child Care Facility shall be delivered to the City for occupancy and operation pursuant to the sublease which is the subject of subsection (H) within four (4) months after the date of issuance of a Certificate of Occupancy for Building 1 or Building 2, whichever occurs first, subject, however, to excusable delays as set forth in Section 18. (ii) Developer shall either sublease or assign (as determined by Developer in its reasonable discretion) the Child Care Facility to the City under the terms and conditions set forth in the written sublease or assignment, dated as of the date of the Ground Lease for Phase 1 or the legally subdivided parcel in Phase 1 in which the Child Care Facility shall be located, between the Developer and the City ("Child Care Facility Sublease"). The term of the Child Care Facility Sublease shall commence upon delivery of possession of the Child Care Facility to the City by the Developer pursuant to subsection (i) and shall terminate upon expiration of the Ground Lease for Phase 1 or the legally subdivided parcel in Phase 1 in which the Child Care Facility is located. The Child Care Facility Sublease shall provide for an annual rental rate of One Dollar ($1.00) during the term of the Sublease. The Child Care Facility Sublease shall not be terminable by the Developer. (Hi) The City shall use good faith reasonable efforts to select the initial qualified operator for the Child Care Facility and to replace any operator of the Child Care Facility during the term of the Child Care Facility Sublease upon expiration or termination of the operating agreement between the City and the operator. The operation of the Child Care Facility shall be -25- It e in a manner comparable to other high quality child care centers in the City. In no event shall the Child Care Facility be operated without a qualified operator or in the absence of any valid operational licenses and approvals required by the State of California and other applicable governmental agencies. Developer shall have no obligation to operate, manage or supervise the Child Care Facility or to locate, select, supervise or replace the operator. The Child Care Facility shall be operated on business days during the term of this Agreement except (A) if a qualified operator is not available, (B) for circumstances or events outside of the reasonable control of the City (including without limitation the Oty's inability to fmd a qualified operator to operate the Child Care Facility on economic and other terms acceptable to the City) or (C) as may otherwise be provided in this Agreement. (iv) The Developer shall have the right to review and approve (which approval shall not be umeasonably withheld or delayed) the insurance requirements imposed by the Oty on the operator of the Child Care Facility in the operating agreement between the City and the operator, which insurance, at a minimum, shall include comprehensive general liability insurance against claims for bodily injury, personal injury or death and property damage occurring upon, in, or about, the Child Care Facility or arising in connection with the operations thereof, in an amount and type which is comparable to insurance coverage maintained by operators of high quality child care centers in the City. (v) Developer shall pay to the CIty an annual fee which shall be utilized by the City in connection with the implementation and operation of a program under which the child care services at the Child Care Facility shall be made available to families demonstrating financial need. This annual fee shall be due and payable for each twelve (12) month period during the term of the Child Care Facility Sublease in which the Child Care Facility is operated and maintained in the manner set forth in subsection (iii), beginning on the date on which the Child Care Facility commences operations and thereafter on each anniversary thereof. The initial annual fee shall be Twenty Thousand Dollars ($20,000), prorated for any partial twelve (12) month period. The annual fee shall be increased and compounded annually at the rate of four percent (4%) per annum for the first thirty (30) years of the term of the Child Care Facility Sublease. For the balance of the term of the Child Care Facility Sublease, the annual fee shall be increased annually by a simple interest factor of four percent (4%), which shall not be compounded. (vi) No less than fifty percent (50%) of the capacity of the Child Care Facility shall be allocated on a priority basis for infants and children whose parents work in businesses which are Space Sublessees within the Project and no less than twenty-five percent (25%) of the capacity shall be allocated on a priority basis for infants and children of parents who reside within the area bounded by Pearl Street on the north, Palms Boulevard on the south, 23rd Street/Walgrove Avenue on the west and Barrington Drive on the east. The balance of the capacity of the Child Care Facility and any unused priority allocations shall be allocated in the discretion of the operator -26- e e of the Child Care Facilityt provided that the City can require the operator to reserve up to twenty-five percent (25%) of the capacity of the Child. Care Facility for children and infants whose father or mother is a City employee or City resident. (c) .. . Contaminated soil on the Property in each Phase shall be treated on-site or removed and disposed of in accordance with all applicable laws, ordinances and regulations of the City, State of California and federal government prior to issuance of any building permit for development within such Phase. The respective rights and responsibilities of the City and the Developer for treatment, removal and disposal of contaminated soil on the Property shall be governed by the DDA and the Ground Leases (d) Air Ouality During Construction. Equipment engines shall be kept in proper tune to reduce exhaust emissions. Such equipment shall not be operated during first or second~stage smog alerts within the Northwest Coastal area as identified by the South Coast Air Quality Management District, or if such designation ceases to existt another area of similar size and location. During excavation, the construction area on the Property shall be watered at least twice daily to prevent excessive dust, and watering shall be increased during periods that wind speeds exceed 15 miles per hour. Mud and dirt shall be removed from the surrounding streets and publicly used sidewalks on a daily basis. (e) Security Services. The Developer shall design the Project in a manner that maximizes public surveillance of public areas of the Project and minimizes recessed or hidden areas where criminal activity can occur. Developer shall operate, contract for, or otherwise provide private security services for those Phases of the Project which have been ground leased to the Developer. Such security services shall be consistent with services provided at other first-class office buildings. Prior to issuance of the Certificate of Occupancy for any building or parking structure in such Phases, Developer shall submit for the review and approval of the Chief of Police of the Cityt which approval shall not be unreasonably withheld or delayed, a plan for security lighting and security services for that Phase of the Project. The Developer shall have the right to appeal to the City Manager any decision, action or inaction of the Chief of Police of the City in the review, approval or disapproval of the plan submitted by the Developer. Any decision of the City Manager shall be final. Security lighting shall be shielded and directed away from residential property near the Project. (f) Water Conservation. Developer shall prepare a water conservation program for the Project for submission to the City for its review and approval, which shall not be unreasonably withheld or delayed. The water conservation program shall include the following components: (i) Automatic sprinklers shall be set to water landscaping only during evening and early morning hours to reduce excessive water requirements due to water loss by evaporation. (ii) Project design shall incorporate measures to allow the use of: (A) storm drain water, as permitted or approved by applicable governmental agenciest (B) recirculated water, or (C) other systems acceptable to the Department of General Services of the City, for the purpose -27~ e '-' - of maintaining the level of water in the Water Feature of the Project. Not less than fifty percent (50%) of the water requirements of the water feature depicted in the Project Site Plan shall be met by non-potable water, provided that the Recycling System, as defined in Section 6{m), is installed on the Property. If the Recycling System is not installed on the Property, and other sources of non-potable water cannot be obtained by the Developer without material cost or delay, the Developer can elect to modify or eliminate the Water Feature depicted on the Project Site Plan. In the event of such a modification or elimination of the Water Feature, the Developer shall submit for review and approval of the Architectural Review Board an alternative landscaping plan for any area of the Property previously covered by the water feature on the Project Site Plan. (iii) Ultra-low water use plumbing fixtures or such other fixtures acceptable to the City's Department of General Services shall be used. (iv) To the extent feasible and consistent with the water reclamation needs of the Project, landscaping shall consist primarily of drought-resistant plants and the landscaping plans shall be subject to the approval of the Director of the City's Department of General Services as to the water conservation features of such landscaping, which approval shall not be unreasonably withheld or delayed. (g) Impacts on Traffic During: Construction. Developer shall maintain a staging area on the Property for use by construction firms and vehicles and shall design traffic patterns for construction vehicles, both on-site and off-site, in order to minimize the impact of construction activities on adjacent streets and the Santa Monica Municipal Airport. Developer shall cooperate with the City's Department of General Services in order to develop other mutually acceptable means for minimizing such impact. (h) Traffic Demand Manal!ement. (i) Developer shall prepare and submit to the City for approval by the City Manager prior to the issuance of any certificate of occupancy for any building within Phase 1 of the Project a Traffic Demand Management Program ('TOM Program") designed to actively encourage and promote among the Space Sublessees of the Project measures to reduce the traffic to and from the Project. The TOM Program shall include, at a mini- mum: (A) One qualified employee ("lDM Manager") of the Project whose primary responsibility shall be to promote and manage the TOM Program. A qualified person shall be employed for this purpose throughout the term of this Agreement. (B) Compilation and distnbution of ride-share lists and computer scheduling of carpools and van-pools for aU employees of Space Sublessees in the Project. -28- . e' (C) Staggered hours or "flextime" among different Space Sublessees and/or within divisions or departments of larger Space Sublessees. (D) Reduced parking rates and designated parking in preferred locations for car-pools and van-pools. (E) A reduced-fare public trSln!i:it program in which bus tokens for the Santa Monica Municipal Bus Line and Southern California Rapid Transit District are made available on demand for travel to and from the Project for up to 350 persons who are employed by Space Sublessees within the Project at a price not more than fifty percent (50%) of the price normally available to the public. (F) Use of public transit facilities, including: (1) actively working with the Santa Monica Municipal Bus Line and the Southern California Rapid Transit District or their respective designees to improve service to and from the Project, and (2) actively coordinating with existing companies providing van or bus service to Los Angeles International Airport to include the Project as a regular stop along their routes in Santa Monica. (G) Readily available bicycle parking areas with adequate facilities for secure parking of bicycles. (H) In addition to the required elements of the TOM Program which are set forth in subsection (i), Developer may elect to include as a component of the TDM Program other measures that Developer determines may reduce traffic impacts of the Project (e.g. -- vans and employee shuttles to major transportation points). (Hi) Developer shall be entitled to substitute other measures to reduce traffic impacts for those described in subsection (i) or otherwise contained in the approved TDM Program upon approval of the City Manager following submission by the Developer of documentation to the City Manager demonstrating that said substitute measure is at least as effective as the measure it is proposed to replace. Developer shall also be entitled to delete any required or approved TOM measures upon approval of the City Manager following submission by the Developer of documentation to the Oty Manager demonstrating that such measure does not effectively reduce traffic impact. (iv) The TDM Program shall contain a goal of reducing actual vehicle trips going to and from the Project during the peak traffic periods occurring between 6:00 a.m. and 8:00 a.m. and between 4:00 p.m. and 6:00 p.m. to an amount which would be no more than eighty.five percent (85%) of the peak hour trips which would be predicted to be generated without a lDM Program from the General Commercial Office use and ninety-five percent (95%) of the predicted peak hour trips from other uses -29- e e ("TOM Program Goal'l Developer shall, in good faith, comply with the IDM Program to achieve the established performance goal. (v) The trips generated by the Project which would be predicted if no TOM Program were implemented f'Projected Traffic Impact") shall be determined by multiplying the total Floor Area in the Project of each of the uses listed below for which a Certificate of Occupancy has been issued as of the time of the annual report under subsection (vi) below, by the trip generation factor listed below, and then adding the products of such calculations. Use Projected Vehicle Trips (vt) per 1,000 sq. ft. of Floor Area Child Care Facility 1.38 vtJhour 2.84 vt/hour 3.73 vt/hour 6.44 vt/hour General Commercial Office Retail Restaurant The Vehicle Trips rate for Ancillary Commercial use shall be based upon the rates established by the Institute of Traffic Engineers or a comparable index for each particular use which constitutes an Ancillary Commercial use. (vi) As an additional impact mitigation, Developer shall pay to the City an annual fee ("TDM Fee") for each Phase in the Project for which a Ground Lease or Ground Leases between the City and the Developer has been in full force and effect as of one (1) year prior to the date on which the TOM Fee is due and payable. The TOM Fee for each Phase shall be calculated as follows: $176,400 x Total Floor Area of Buildings (other than Parking Structures) in the Phase for which Certificate(s) of Occupancy have been issued 822,000 Except as adjusted for intervening changes in the CPI as provided in this subsection (vi), the TOM Fee shall not exceed One Hundred Seventy-Six Thousand Four Hundred Dollars ($176,400). The TOM Fee shall be due and payable within forty-five (45) days after the date on which the annual report described in subsection (vii) below is due. The TOM Fee shall be adjusted by the intervening changes in the CPI between the date on which the first -30- e e annual report described in subsection (vii) below is due and the date on which the then applicable annual report is due. Developer shall receive a credit against the TOM Fee in each year for which the actual vehicle trips generated to and from the Project are below the Projected Traffic Impact. The credit shall be determined annually by multiplying the TDM Fee, as ad- justed, by a fraction, the numerator of which is the Projected Traffic Impact expected to be generated by the Project less the number of actual vehicle trips generated by the Project, and the denominator of which is the Projected Traffic Impact less the TOM Program Goal. The credit earned in any year shall apply to that year only and shall not exceed the amount of the TDM Fee under any circumstances. For purposes of example only, assume that the maximum permitted project size is 822,000 square feet and that at the time that the first annual TDM report is due, Ground Leases for two (2) Phases of the Project between the City and the Developer have been in effect for at least one (1) year and that Certificates of Occupancy have been issued for buildings in those Phases which contain an aggregate of 411,000 square feet of Floor Area. The TDM Fee would be Eighty-Eight Thousand Two Hundred Dollars ($88,200) [$176,400 x 1/2 (411,000/822,000)]. Assume further that the Project has 3,000 square feet of Restaurant, 8,000 square feet of retail and 400,000 square feet of General Commercial Office. The Projected Traffic Impact would be 586 vt/hour [(400 x 1.38) + (3 x 3.73) + (8 x 2.84)]. The TOM Program Goal would be 501 vt/hour [(400 x 1.38 x .85) + (3 x 3.73 x .95) + (8 x 2.84 x .95)]. If the annual report pursuant to subsection (vii) determined that the Project generated 586 vt/hour or more, the entire TDM Fee of $88,200 would be due for that year. If the annual report determined that the Project generated 543.5 vt/hour, the TDM Fee would be credited by 50% [(586- 543.5) divided by (586 - 501) = 42.5/85 = .50 of the TDM Fee] resulting in a net TDM Fee of $44,100. If the annual report determined that the Project generated 501 vt/hour or less, the TOM Goal would be met and a credit against the entire IDM Fee for that year, but no more, would arise. (vii) During the term of this Agreement, City shall employ, at the Developer's expense, a qualified traffic engineering consultant ("TOM Consultant") to prepare and submit to the City Manager a report on the effectiveness of the TDM Program and compliance with the TOM Program Goal. The City shall obtain at least three (3) written proposals from qualified consultants to prepare each report and shall select as the TDM Consultant the consultant who has submitted the lowest responsible proposal unless the City and Developer shall mutually agree to the contrary. The report of the TDM Consultant shall be submitted not less than 120 days after Space Sublessees have occupied Dot less than fifty percent (50%) of the Floor Area of Phase 1 of the Project (exclusive of parking and uses necessary to operate and maintain such parking), and thereafter on an annual basis. Developer shall provide to the TOM Consultant any information requested by the TOM Consultant which is reasonably necessary to prepare each such report. Such report shall include a description of the mechanisms employed to reduce traffic, an evaluation of the effectiveness of those mechanisms, recommenda- tions for changes or improvements to the TOM Progra~ determination of -31- e e the actual peak hour vehicle trips generated by the Project. and calculation of the TDM Fee. if any. which would be payable according to the formula set forth in subsection (vi). The TOM Consultant shall utilize methodology commonly utilized by competent traffic engineering professionals in the preparation of the written report. (viii) If Developer disputes the determination of the actual peak hour trips generated by the Project or the calculation of the TOM Fee in the written report prepared by the TDM Consultant, the Developer may contest such conclusions only upon compliance with the following procedures. which procedures are not intended to be, and should not be construed as, arbitration between the City and the Developer: (A) Within the time period required to pay the TOM Fee. the Developer shall file with the City a written protest indicating that it disputes the determination of actual peak hour trips generated by the Project and the calculation of the IDM Fee. Along with the filing of the written protest, the Developer shall deposit with the City Treasurer of the City the amount of the TOM Fee calculated in the written report prepared by the TDM Consultant. (B) Within fifteen (15) days following the filing of the written protest, the Developer shall employ, at Developer's expense, a qualified traffic engineering consultant f'Second Consultant") to prepare a separate independent report to determine the actual peak hour trips generated by the Project, utilizing methodology utilized by competent traffic engineering professionals, and to calculate the TOM Fee. Within thirty (30) days following delivery to the City of the written report prepared by the Second Consultant, the TOM Consultant and the Second Consultant shall meet and confer and attempt to agree on the number of actual peak hour trips generated by the Project and the calculation of the IDM Fee. If the TOM Consultant and the Second Consultant agree on these matters within the thirty (30) day period, their mutual determination shall prevail. (C) If the roM Consultant and the Second Consultant do not reach an agreement on these matters within the thirty (30) day period, the IDM Consultant and the Second Consultant shall have fifteen (15) days to appoint a third qualified traffic consultant ("Third Consultant"). The cost of the Third Consultant shall be borne equally by the City and the Developer. If, the TOM Consultant and the Second Consultant fail to appoint the Third Consultant within said fifteen (15) day period, either the City or the Developer shall be entitled to apply to the Presiding Judge of the Superior Court of the County of Los Angeles, California for the selection of the Third Consultant who shall be chosen from a list of names of experienced traffic consultants submitted by the City or from a list of names of experienced traffic consultants submitted by the Developer as the case may be, unless both the Oty and the Developer submit lists of names, in which case the Court, in its sole discretion, shall select the Third Consultant from either list. Within thirty (30) days following the appointment of the Third Consultant, the Third -32- .' e Consultant shall review the respective written reports prepared by the TDM Consultant and the Second Consultant and shall issue a written opinion as to which of those consultant's report most closely determines the actual peak hour trips generated by the Project. The trip generation figure in the report so selected by the Third Consultant shall be the figure utilized in the formula set forth in subsection (vi) for computation of the TOM Fee. The decision of the Third Consultant shall be final and binding upon the parties. (D) In the event that the TDM Fee recalculated utilizing the actual trip generation figure in the written report selected by the Third Consultant is less than the TOM Fee deposited by the Developer with the City pursuant to subsection (A), the City shall refund the excess amount of the deposited TDM Fee to the Developer within fifteen (15) days following delivery of the written opinion of the Third Consultant to the City. If the roM Fee, pursuant to said recalculation, is greater than the amount of the deposited TDM Fee under subsection (A), the Developer shall pay the amount of the deficiency to the City within fifteen (15) days following delivery of the written opinion of the Third Consultant to the Developer. (ix) Nothing in this Agreement shall exempt any Space Sublessee within the Project from complying with any "traffic system management ordinance" adopted by the City Council after the Effective Date so long as such ordinance: (A) is umformly applicable to all similar uses throughout a reasonably defined geographical area of the City, which shall, at a minimum, include all comparable projects located in the Special Office District (or if the Special Office District is eliminated, a district of the City which is substantially equivalent), as well as the Airport Commercial District, and (B) if a distinction is made between "new" or "propos- ed" development and "existing" development, the entire Project (including Phases which have not then been ground leased to the Developer and portions of ground leased Phases on which construction has not commenced) shall be considered as "existing development". A "traffic system management ordinance" shall be an ordinance which adopts measures intended to reduce the number of vehicle trips at peak traffic hours through the encouragement of ride-sharing, van-pools, use of public transportation, shuttle services, and other similar means. In the event of a conflict between such traffic system management ordinance and the provisions of Section 6(h) of this Agreement, the former shall prevail unless the parties mutually agree otherwise. (x) Developer shall provide in each Space Sublease for any portion of the Project, that each Space Sublessee shall undertake to cooperate and participate in the TDM Program and establish procedures for the employees of each Space Sublessee to be identified to the TOM Manager -33- e tit with such information as shall enable the TOM Manager to assist all employees of such Space Sublessees in alternative forms of tran"portation to the Project. [n the event that Developer shall be deemed a Space Sublessee pursuant to the definition set forth in Section 1 of this Agreement, Developer shall cooperate and participate in the IDM Program and shall similarly provide such information to the TOM Manager. (xi) No service deliveries shall be allowed between the hours of 6:00 a.m. and 8:00 a.m. and between 4:00 p.m. to 6:00 p.rn. on any day other than a Saturday, Sunday or holiday, except for messenger or courier services, delivery of furniture or furnishings and deliveries during periods of construction of improvements in the Project. (i) Off-Site Traffic Improvements. In connection with the development by the Developer of each Phase of the Project, the Off-Site Traffic Improvements for such Phase shall be performed in accordance with the provisions of Exhibit "E" which is attached to this Agreement and incorporated by this reference. (j) On-Site Traffic Imorovements. In connection with the development by the Developer of each Phase of the Project, Developer, at its sole expense, shall perfor~ or cause to be performed, all on-site traffic, access and circulation system improvements reflected on the Project Site Plan for such Phase. All such improvements shall be designed and constructed in accordance with the standards, requirements and common practices generally employed by the City. (k) Energy Conservation. Each building in the Project shall comply with all provisions of Title 24 of the California Code of Regulations relating to energy conserva- tion and shall include as a minimum the following features: (i) All air conditioning and other mechanical equipment and motors shall be started and stopped from the system console and water and air temperatures can be remotely reset. The foregoing, in conjunction with remote sensing of outside conditions and of inside conditions on a sampling basis, shall permit system operation refinements resulting in energy optimization and shall prevent unnecessary energy consumption during business and non-business hours. This system shall also be used to control the use of lighting. (ii) An economizer or "free cooling" cycle shall be used which shall enable the use of outdoor air rather than mechanically refrigerated air whenever outside temperature permits. Variable volume air distribution systems shall allow air supply quantities to be reduced as cooling loads decrease resulting in reduced fan power consumption at reduced loads. Air supply to periodically unoccupied areas, such as conference rooms, shall be minimized. Low pressure air distribution systems shall be utilized to minimize fan horse-power. Cold plenum temperature at air conditioning units shall be reset automatically to a higher temperature when air conditions warrant with resultant energy savings. -34- e e (iii) High efficiency fluorescent land/ballast lighting systems shall be used to minimize energy consumption. Maximum provisions for local light switching shall be provided to permit use of lighting only when space is occupied. Photo cell control lighting in exterior areas shaU be provided. Exterior and certain operational lighting shall be controlled from the energy management system to optimize operation and minimize energy consumption. Where decor or function dictate the use of incandescent or tungsten halide lighting, extension control equipment shall be provided to optimize operation and increase lamp life. (iv) High efficiency roof and wall insulation as well as heat absorbing glass shall be utilized to reduce cooling and heating loads. All air supply ducts shall be insulated to reduce energy losses to air-conditioned spaces. Hot water piping and storage tanks shall be fully insulated. Water-saving flush valves shall be provided for toilet fixtures. Interior shading of windows shall be incorporated where appropriate to further reduce air conditioning requirements. (v) The Developer shall be entitled to substitute other energy management measures in the Project for those described above upon submission of an application to the City Building and Safety Division demon- strating to the Division's reasonable satisfaction that said substitutIon is at least as energy efficient as the measure it is proposed to replace. The Developer's application shall state the specific substitution being proposed and attach such plans, specifications and supporting materials as may be reasonably required by the City Building and Safety Division to demonstrate the appropriateness of the substitution. (1) The Project, including all areas available for public use, shall be accessible to handicapped persons in accordance with Title 24 of the California Code of Regulations. (m) On-Site Wastewater RecvclinQ Svstem. (i) The Developer shall install and operate on the Property at all times during the term of this Agreement (except for periods of repairs, emergencies and required maintenance) a system of comparable quality and price to the Cycle-let Wastewater Recycling System manufactured by Thetford, Inc. which must be reasonably acceptable to the City's Department of General Services and which shall be designed to clean and recirculate all wastewater and other material from sinks, drinking fountains, toilets and other similar sources in the Project ("Recycling System") if either: (A) The Developer voluntarily elects to utilize the Recycling System; or (B) The City requires the installation of the Recycling System upon written notice to the Developer within 120 days following the Effective Date. Developer agrees to provide the City with written notice of -35- e e the last day of this 120 period no less than ten (to) days nor more than thirty (30) days prior to the end of that period. In the event that the Developer fails to timely provide such notice to the City~ the rights of the City to require installation of the Recycling System under this subsection (B) shall be extended until ten (10) days after delivery of such notice. (ii) Subject to any necessary approvals by the County and any other applicable governmental entityJ the cleaned and recirculated wastewater ("effluent") from the Recycling System shall be used for the uses set forth below in the following priorities: (A) First~ for irrigation of landscaping in the Project. (B) Then, for use in the Water Feature in the interior of the Project. (C) Then, for irrigation oflandscaping at Clover ParkJ the Airport Surplus Parcel, or, subject to City approval, other City-owned property in the immediate vicinity of the Project. The costs to connect the Recycling System to the irrigation system at Clover Park~ the Airport Surplus ParceL or other City-owned property shall be the sole obligation of the Developer. (D) Then, for recirculation into the toilet system, if either (1) voluntarily elected by the Developer or (2) required by the City prior to issuance of the budding permit for the first building to be constructed in a Phase~ based upon a reasonable determination that all of the actual effluent produced from prior Phases and the projected effluent for the current Phase shall not be fully utilized for the uses set forth in subsections (A), (B), and (C). (E) Then, for discharge into the public storm drain system provided that the effluent satisfies the standards set forth in Title 22 of the California Administrative Code or any successor law~ and that necessary approvals are obtained from all applicable governmental entities. (F) Finally~ any remaining effluent that cannot be used for the purposes described in subsections (A) through (E)~ inclusiveJ may be discharged into the public sewer system. City and Developer mutually agree that~ except as provided in subsection (xiii)~ effluent from the Recycling System may be discharged into the public sewer system only for emergenCYJ stand-by or overflow purposes. Upon written notice to the City~ prior to connection of the Recycling System to the irrigation system at Clover Park, the Airport Surplus Parcel, or other City-owned property Developer may elect to reverse the priorities under subsections (C) and (D). -36- e e (Hi) Developer shall bear all responsibility and costs for the purchase and installation of the Recycling System. The Recycling System shall be placed in two (2) or more locations on the Property~ which must be mutually approved by the Developer and the Director of the City's Department of General Services. (iv) Except as otherwise provided herein, the Recycling System shall be installed on the Property prior to the issuance by the Oty of the Certificate of Occupancy for Building 1 or Building 2 in Phase 1~ whichever occurs first. If the Recycling System is a modular system, that system may be purchased and installed by the Developer in components for each Phase of the Project so long as: (A) the components to be installed for the then current Phase together with the components installed in any prior Phase have the capacity to effectively clean all effluent to the required standards of all applicable agencies and recirculate the effluent from all buildings and parking structures in such Phases; and (B) the necessary components for any Phase are installed prior to the issuance of any Certificate of Occupancy for any building or parking structure in the Phase. (v) If, at any time during the term of this Agreement, the County or any other applicable governmental agency requires that ownership of the Recycling System be held by the City or that responsibility for the operation and maintenance of the Recycling System to be WIth the City~ the City agrees that, in the event that the City required the Developer to install the Recycling System pursuant to subsection (i) (B), the City shall accept from the Developer transfer of ownership of the Recycling System or any operational modular component thereof which has been or shall be installed on the Property by the Developer as of the date of the proposed transfer or shall be installed by Developer thereafter. In such event, for all times during the term of this Agreement subsequent to said transfer in which City ownership or operation and maintenance of the Recycling System is either required by the County or other applicable governmental agency or is mutually desired by the City and the Developer: (A) The City shall own, and hold title in its name only to, the entire Recycling System which has been installed upon the Property; and (B) The City shall bear full responsibility for the maintenance, operation and repair of the Recycling System which has been or shall be installed by Developer, subject to subsections (vii) and (x). In the event that the City did not require the Developer to install the Recycling System pursuant to subsection (i)(B). but the Developer voluntarily elected to install the Recycling System pursuant to subsection -37- e, e (i)(A), the City shall have no obligation to accept ownership of the Recycling System from the Developer or bear responsibility for the operation and maintenance of the Recycling System under this subsection (v). (vi) At any time during the term of this Agreement in which the City is required to own the Recycling System or be responsible for the operation and maintenance thereof under subsection (v), the City agrees to identify itself as the owner and operator of the Recycling System on all applications to obtain any permits and approvals from the County or any other applicable governmental agencies which may be required in connection with the installation of the Recycling System or any component part thereof or the operation and maintenance thereof. (vii) In the event that the City owns and holds title to the Recycling System or is responsible for the operation and maintenance thereof pursuant to the requirements set forth in subsection (v), Developer shall indemnify. defend and hold harmless the City in connection with any claim, loss or liability incurred by the City directly related to the period of such ownership or to the performance of such operation or maintenance responsibilities except for claims, losses or liabilities attributable to the wilful misconduct of the City or its agents or employees. (viii) The City may not transfer ownership of the Recycling System to any other person or entity without the prior written consent of the Developer, provided that the City may transfer and assign ownership of the Recycling System and all operational and maintenance obligations associated therewith without the consent of the Developer to a Sanitation District which may be established after the Effective Date and which includes the Property (or to a comparable entity which may be established after the Effective Date with the consent of the Developer, which consent shall not be unreasonably withheld or delayed) if the City can provide satisfactory evidence that: (A) the assignment and transfer is approved by the County and any other applicable governmental entities; and (B) the assignee Sanitation District or other approved comparable entity agrees to be bound by all of the provisions of this subsection (m) and any separate written agreement between the City and the Developer with respect to ownership or operation and maintenance of the Recycling System. (ix) In the event that, at any time during the term of this Agreement after the City has accepted and held title to the Recycling System and assumed sole responsibIlity for all operations and maintenance of the Recycling System, City ownership of the Recycling System and responsibility for operation and maintenance thereof by the City is no longer required by the County or other applicable governmental entities, the City may, on its own election, and shall, on the election of the Developer, transfer ownership and title to the Recycling System to the Developer and the Developer shall ~38- - e thereafter assume responsibility for operation and maintenance of the Recycling System. (x) The Developer shall reimburse the City for all actual expenses paid by the City to third parties or entities in connection with its maintenance and repair obligation of the Recycling System under this subsection (m). In the event that the City contracts with an outside person or entity to perform maintenance and repair services for the Recycling System during the period of ownership of the Recycling System by the City, the Developer shall reimburse the City for the actual costs paid by the City under that contract. Subject to the foregoing and to subsection (vii), the City shall cooperate with the Developer in its efforts to have the City enter into cost effective maintenance and repair contracts. (xi) The City agrees to reasonably cooperate with the Developer in the filing and processing of any application for necessary permits and approvals from the County Health Department and any other applicable governmental agencies for the installation or operation of the Recycling System. Developer shall bear all filing and processing fees and out-of-pocket expenses in connection with such permits and applications. (xii) In addition to its obligation to install and operate the Recycling System on the Property pursuant to this subsection (m). Developer shall be required to apply to the City for sewer connection permits for connection of the Project or any Phases or portions thereof to the public sewer system to discharge effluent and wastewater into the public sewer system for emergency, stand-by or overflow purposes. The sewer connection fee paid by the Developer for such sewer connection permits shall be an amount equal to ten percent (10%) of the standard sewer connection fee then charged by the City. Two (2) years after the issuance of the first Certificate of Occupancy issued by the City for a building in the Project, the Developer shall cause a test of the Recycling System to be conducted by a qualified professional to determine the average actual reduction in wastewater discharge into the public sewer system from the Project during the prior two (2) year period as a result of the installation and operation of the Recycling System. If the average actual percentage reduction of wastewater discharge into the public sewer system during the two (2) year period is less than 90% of the discharge which would have resulted from the Project in the absence of the Recycling System, the Developer shall pay to the City a one-time supplemental fee in addition to the sewer connection fee originally paid by Developer for issuance of the sewer connection permit. The supplemental fee shall be the product of the standard sewer connection fee charged by the City at the time of the original issuance of the sewer connection permit to the Developer and the percentage difference between 90% and the average actual percentage reduction of wastewater discharge from the Project into the public sewer system as a result of the installation and operation of the Recycling System during the two (2) year test period. For purposes of example only, assume that the standard sewer connection fee charged by the City at the time of the application by Developer for a public sewer connection permit for -39- -- e the Project pursuant to this subsection (xii) is $1,000,000. The original fee paid by the Developer would be $100,000 ($100,000 x 10%). If the test conducted pursuant to this subsection (xii) concluded that the average actual percentage reduction of wastewater discharge into the public sewer system was 75%, the Developer would be required to pay to the City a one-time supplemental fee of $150,000 [$1,000,000 x 15% (90%-75%)]. In no event shall Developer be entitled to receive any refund of the sewer connection fee originally paid by Developer for issuance of the sewer connection permit as a result of the test. For as long as the Recycling System remains operational on the Property and the Developer pays all costs thereof pursuant to this subsection (m), the City shall also allow a credit to the Developer against the monthly sewer usage fees then uniformly charged by the City in an amount proportionate to the reduction in use of the public sewer system as a result of the installation and operation of the Recycling System. (xiii) The respective rights and obligations of the Developer and the City under subsections (i) through (xii) as to the installation, maintenance and operation of the Recycling System or any modular component thereof with respect to any Phase of the Project are expressly contingent upon both of the following conditions being met within ninety (90) days following submission of an application (including any legally required environmental analysis) for the issuance of any required permits or approvals by the County and any other applicable governmental agencies for installation and operation of the Recycling System ("Contingency Date"): (A) the issuance of any required permits or approvals pursuant to the submitted applications; and (B) the availability of the Recycling System or any modular component part thereof for purchase by the Developer. Prior to the submission to the County and any other applicable governmental agencies of any applications required for the installation and ownership of the Recycling System, the Developer shall submit such applications to the City for its review and approval, which approval shall not be unreasonably withheld or delayed. In the event that both of the above two (2) conditions cannot be satisfied with respect to a Phase on or prior to the Contingency Date for that Phase, despite the good faith diligent efforts of the Developer, the Developer shall be authorized to apply to the City with due diligence following the Contingency Date [or earlier upon notification of denial by the County or any other applicable governmental agencies of any required permits or approvals under this subsection (xiii)] for the issuance of any necessary permits and approvals to connect the improvements constructed within the Phase to the public sewer system. The City agrees to expeditiously review and process said application pursuant to this subsection (xiii) and Section 7(d) of this Agreement and the uniform rules and procedures of the City then in effect for such applications and to approve such application upon compliance -40- - e by Developer therewith, subject only to the availability of sewer capacity for the Project requested under the applications. In the event that the Developer files applications with the City for any required permits for connection of the Project or any portion thereof to the public sewer system pursuant to this subsection (xiii) and Section 7(d) of this Agreement, the Developer shall use its best efforts to identify opportunities for the retrofitting of off-site buildings and facilities in the City with ultra low-flush toilets and low-flow showerheads so as to reduce the projected sewage flows from the Project to a t'net zero flow". Except as provided in the following sentence, if such retrofit opportunities to reduce the projected sewage flow from the Project to a net zero flow are identified by the Developer or independently identified by the City and presented to the Developer the City may condition the approval of any application for the issuance of a required sewer connected permit for the Project on the Developer performing or causing to be performed sufficient retrofitting of off-site buildings and facilities in the City at Developer's sole cost and expense to reduce the projected sewage flows from the Project to a "net zero flowtt. Notwithstanding the preceding sentence, if the combined cost of such retrofitting plus the amount of any sewer connection fee which must be paid by the Developer in connection with the sewer connection permit would exceed the projected capital cost of the installation of the Recycling System plus the projected sewer connection fee which would have been payable by the Developer under subsection (xi), the Developer shall have no obligation to pay such excess costs or to perform the retrofitting of off-site buildings and facilities which would relate to such excess costs and the City shall not condition the approval of applications of Developer for the issuance of sewer connection permits for the Project or any portion thereof on such an obligation. Upon approval of the applications by the City and the issuance of the sewer connection permit for that Phase, the respective obligations of the Developer and the City under subsections (i) through (xii) shall terminate as to the particular Phase. The period of time between the Contingency Date for a Phase and the date on which the conditions in subsections (A) and (B) are both met for that Phase or a sewer connection permit is issued for the Phase, whichever occurs first. shall constitute an excusable delay for the purposes of Section 18. (n) (i) Developer shall not discriminate against any employee or applicant for employment on the basis of race, religion or creed, sex, marital status, national origin, sexual orientation, acquired immune deficiency syndrome, or handicap, and shall cause a similar provision to be inserted in any contract for work entered into by Developer relating to the Project other than purchase orders for standard commercial supplies, materials or goods. (ii) Subject to the provisions of subsection (i) above, Developer shall develop and submit to the City for approval prior to the commencement of construction of the Project a suitable affirmative action program for the hiring of labor and the obtaining of materials during construction relating to employment, upgrading, demotion or transfer, -41- e e recruitment or recruitment advertising, lay..off or termination, rates of payor other forms of compensation and selection for training, including appren- ticeship. Any such plan shall recognize the necessity of compliance with standard union hiring practices and shall not establish quotas of any kind. (ill) Prior to the completion of Phase 1 of the Project, and each Phase thereafter, Developer shall designate a representative whose responsibility it shall be to identify those employment opportunities suitable for affirmative action and to develop and submit to the City for approval a program designed to effectively address affirmative action. Developer's representative shall, in consultation with appropriate neighborhood organizations, design and actively promote among the Space Sub lessees of the Project job training programs that address the needs of the neighborhoods surrounding the Project. (iv) Developer shall, in aU solicitations or advertisements for employees in connection with the Project placed by or on behalf of Developer, state that all qU.fIl1fied applicants shall receive consideration for employment without regard to race, religion or creed, sex, marital status, na. tional origin, sexual orientation, acquired immune deficiency syndrome. or handicap. (0) Noise. Developer shall comply with the Noise Element of the General Plan and the City Noise Ordinance [Ordinance No. 1406(CCS)]. (P) Art. (i) Developer shall make contributions and expenditures for public art in an amount equal to One Dollar ($1) for each square foot of the maximum gross square footage of the Project exclusive of square footage devoted to parking and uses necessary to operate and maintain such parking (i.e., 873,000 gross square feet) ["Public Arts Fee"). The Public Arts Fee shall constitute the total public art obligation of the Developer in connection with the Project. Except for monies attributable to Developer Art, as defined in subsection (ii)(B), the Public Arts Fee shall be payable to the City. (ii) The Public Arts Fee shall be allocated by the City for the following uses and purposes: (A) Not more than One Hundred Thousand Dollars ($ 100,000) in conjunction with the restoration and transportation of the Stanton McDonald Wright Murals; (B) One Hundred Fifty Thousand Dollars ($150,000) shall be expended directly by the Developer in connection with public art to be located within the Project ("Developer An"). The selectIon, designation and placement of Developer Art shall require the prior approval of the Santa Monica Arts Commis,.')ion ("Arts CommiJ\Sion"). 42- e: e (C) The balance of the Public Arts Fee, following expenditure of all monies pursuant to subsections (A) and (B), shall be allocated as follows ("Off-Site Art"); (1) Three Hundred Thousand Dollars ($300,000) for use in cooperation with the Santa Monica- Malibu Unified School District for arts and music programming, supplies or other arts and music projects for the educational benefit of school age children. The Arts Commission shall prepare a plan for City Council approval on the allocation of these funds. The Council's approval shall be only for the plan and not the specific art projects. (2) The balance of the fees shall be allocated by the Arts Commission for general public arts purposes. (Hi) Subject to Section 1St Developer shall pay the Public Arts Fee according to the following schedule; (A) The portion of the Public Arts Fee to be used primarily for the murals in accordance with subsection (ii)(A), shall be paid to the City not more than forty-five (45) days after the second reading by the City Council of the ordinance adopting this Agreement. (B) The portion of the Public Arts Fee to be expended by the Developer for Developer Art in accordance with subsection (ii)(B) shall be made in full by the Developer in accordance with subsection (ii)(B) no later than six (6) months following issuance of the Certificate of Occupancy for Building 1 or Building 2, whichever occurs last, or such other date upon which the City and the Developer may mutually agree. On or prior to the above-determined date, the Developer shall provide the City with satisfactory documentation evidencing the expenditure of monies by Developer for Developer Art. (C) The portion of the Public Arts Fee to be utilized for Off-Site Art in accordance with subsection (ii)(C) shall be paid as follows: (1) One Hundred Thousand Dollars ($100,000) shall be paid to the City on the earlier of: (A) the date on which the building permit for Building 1 or Building 2 in Phase 1 is issued, whichever occurs first, or (B) two (2) years after the second reading by the City Council of the ordinance adopting this Agreement. One-half of this payment shall be allocated to the school arts and music program provided in subsection (ii)(C)(l) and one-half shall be allocated to the Arts Commission as provided in subsection (ii)(C)(2). -43- e e (2) The balance of the Public Arts Fee related to the Off-Site Art [following credit for monies paid pursuant to subsection (1) shall be paid in full by the Developer to the Oty on the earlier of: (A) one (1) year after the date on which the building permit for Building 1 or Building 2 in Phase 1 of the Project is issued, whichever occurs first; or (B) three (3) years after the second reading by the City Council of the ordinance adopting this Agreement. (iv) The Developer shall own all of the Developer Art. Neither the City nor the Arts Commission shall have any ownership interest in the Developer Art. Except for the Developer Art, the Developer shall have no ownership interest in any public art acquired by the City with the Public Arts Fee, whether placed in the Project or outside the boundaries of the Property. (v) Any expendItures by the Developer in connection with art in and for the Project in excess of amounts set forth in subsection (i) above shall be in the sole and absolute discretion of the Developer. (q) Desi~n Standards. The Developer shall comply with all of the requirements enumerated in Exhibit "e" in connection with the design and development of the Project. (r) Storm Water Detention B&~ins. The Developer shall construct on the Property, the Airport Surplus Parcel, or both, at a location or locations mutually approved by the City and the Developer, one or more storm water detention basins (collectively, "Detention Basins"), which may include, at Developer's election, the Water Feature in the interior of the Project. The Detention Basins shall have an aggregate retention capacity determined pursuant to a site specific drainage study of the Property provided by the Developer and reasonably approved by the City prior to issuance of any building permit for the Project. In no event shall the aggregate capacity of the Detention Basins exceed the capacity required to retain the storm water from a ''25 year storm" without the Developer's consent. Developer shall not be required to make any improvements to the downstream public storm sewer system or to pay any fees, costs or other charges in connection with any improvements made or proposed to be made to that system, except that Developer shall be required to pay any normal and customary public storm sewer system usage charges which are uniformly applied on a City-wide basis and any special assessments which satisfy the requirements of Section 10(e). (s) Emergency Features. Fire and life safety features to be included in the Project shall be approved with respect to each Phase by the City's Fire Chief, which approval shall not be unreasonably withheld or delayed, prior to issuance of a building permit for the first building or parking structure in each Phase. The Developer shall prepare an emergency response plan that provides for the safe evacuation and care of employees and visitors of Space Sublessees or other visitors to the Project in the event of an earthquake, fire, other disaster or emergency. The emergency response plan shall be submitted for approval by the City prior to the issuance of any Certificate of Occupancy for any building in the Project, which approval shall not be unreasonably withheld or delayed. .44- e e In the event of a major rehabilitation, reconstruction or alteration of any building or parking structure for which an emergency response plan has previously been approved by the City Fire Chief, the emergency response plan shall be revised and submitted for the City Fire Cbiers approval, which approval shall not be unreasonably withheld or delayed. (t) Homeless Assistance Fee. Developer shall pay to the City a fee of Three Hundred Thousand Dollars ($300,OOO) to assist the City in establishing and operating facilities and services for the homeless population in the City ("Homeless Assistance Fee"). Subject to Section 18, the Homeless Assistance Fee shall be payable in full on the earlier of: (i) The date on which a building permit for Building 1 or Building 2 in Phase 1 of the Project is issued, whichever occurs first; or (ii) Two (2) years after the second reading by the City Council of the ordinance adopting this Agreement. (u) No Additional Mitig:ations. Except as specifically set forth in this Section 6 or otherwise provided in this Agreement, including without limitation, Section 10 hereof, the City shall not be entitled to impose any mitigation measures or fees in lieu thereof on the Project for impacts caused by development of the Project. 7. General Services Reauirements. (a) Compliance with Requirements. Developer shall comply With all requirements of the City's Department of General Services as enumerated in Exhibit "0". Developer's right to develop the Project shall not be conditioned upon any other requirements of the Department of General Services. (b) Building Moratoria and Public Sewer Capacity Allocation. Except as provided in subsections (c) and (d) below, nothing in this Agreement shall require the City to: (i) issue a building permit for any building or parking structure on the Property during any building moratorium generally applicable throughout the City resulting from the lack of capacity of the public sewer system to handle additional sewage; or (ii) issue a public sewer connection permit or building permit during any period in which public sewer capacity is not available for the Project in accordance with City Ordinance No. 1451(CCS) or any successor ordinance or any codes, ordinances, rules, regulations and official policies and conditions of the City which limit or regulate the issuance of such permits based upon limited public sewer capacity. Nothing in this Section 7 shall impair or preclude any rights which the Developer may have to challenge any moratorium under subsection (i) or the applicability of the moratorium to the Project. -45- e e (c) Exem!ltion from Moratorium. If the Recycling System is installed on the Property and the effluent from the Recycling System is exclusively utilized for the uses set forth in Section 6(m)(ii), the Project shall be exempt from any building moratorium established by the City as a result of limited or reduced public sewer capacity allocated to the City, unless such exemption would violate any federal or state law or any laws of the City of Los Angeles which govern or purport to govern the use of public sewer facilities or agreements between the City and the City of Los Angeles related to use of public sewer facilities. (d) Priority for Sewer Connection Permit. Any application by the Developer which is authorized under this Agreement for sewer connection permits for connection of the Project or any Phases or portions thereof to the public sewer system shall receive priority over applications related to all other developments in the City in the allocation by the City of any public sewer capacity available in the City pursuant to any codes, ordinances, rules, regulations and official policies and conditions of approval of the City which limit or regulate the issuance of sewer connection permits or building permits based upon limited public sewer capacity, except for the following types of developments - - low and moderate income housing projects, shelters for the homeless, daycare centers, public and private non-profit schools, non-profit or City-sponsored community service institutions, City constructed public restrooms and residential housing projects (four units or less) which have an estimated total wastewater flow increase of no more than five hundred fifty (550) gallons per day. For purposes of this subsection (d), an application by the Developer for a sewer connection permit is authorized under this Agreement if the connection applied for by the Developer: (i) is required for emergency, stand-by or overflow purposes, as discussed in Section 6(m)(ii)(F), in the event that the Recycling System is installed on the Property; (ii) is permitted under the specific circumstances set forth in Section 6(m)(xiii); or discretion. (Hi) is otherwise approved by the City in its sole and absolute 8. Chang:es to Project and ProJect Site Plan. If Developer desires to make any changes to the Project or the Project Site Plan during the term of this Agreement, Developer shall do so in accordance with the provisions of this Section. (a) Minor ChanEes. Subject to the express limitations which are set forth in subsection (d) below, Developer may, in its sole and absolute discretion, make the following changes to the Project or the Project Site Plan without amending this Agreement upon written notice to the Zoning Administrator and the Director of the Community and Economic Development Department and submission of plans showing such changes: (i) Increase the number of parking spaces provided in any parking structure above the spaces for that structure set forth in Section 3(a); provided such increase in spaces does not increase the Maximum Floor Area of at-grade and above-grade parking for the Project. -46- e e (ii) Increase the Subterranean Parking Area. (Hi) Subject to any requirements for Developer to apply for, and obtain City approval of, any subdivision map, parcel map or lot line adjustment pursuant to Section 12(a), move a line delineating any Phases by not more than five (5) feet in any direction so long as: (A) the total square foot area comprising each Phase, as reflected on the Project Site Plan, shall not be altered; (B) the movement does not cause any portion of the Designated Area for any building or parking structure to be included in a different Phase; (C) the movement does not materially alter the configuration of any Phase; and (D) the movement is within the Property. (b) Moderate Ch~nges. Subject to the express limitations which are set forth in subsection (d) below, upon approval of the Zoning Administrator (or the Planning Commission on appeal), Developer may, without amending this Agreement, increase the Floor Area of any building or parking structure by five percent (5%) of the maximum Floor Area of the building or structure set forth in Section 3(a), provided that any such increase shall be wholly offset by a reduction in the permitted Floor Area of other building(s) or structure(s) which are set forth in Section 3(a), which reduction shall be specified by the Developer in its application to the Zoning Administrator. (c) Major Changes. Except as otherwise provided in this Agreement, any other changes to the Project or the Project SIte Plan shall require an amendment to this Agreement in accordance with the proViSIOns of Santa Monica Municipal Code Section 9800 et seq., Government Code SectioIl5 65864 et St;q and this Agreement. (d) Limitation on Minor and Moderate Changes. None of the minor changes discussed in subsection (a) may be made unilaterally by Developer if such change would also result in or cause a moderate change or major change to the Project unless the Developer obtains approval for the moderate change or major change pursuant to subsections (b) or (c), respectively. No moderate change discussed in subsection (b) may be approved by the Zoning Administrator (or by the Planning Commission upon appeal) if such change would also result in or cause a major change to the Project unless the Developer obtains approval for the major change pursuant to subsection (c). (e) Procedure for Approving Mo~erate Change: (i) The Developer shall file a letter application with the City Planning Division. The application shall specify the specific changes being -47- e e requested and shall include plans describing such changes in a form approved by the Zoning Administrator. (ii) The fee for any such application shall be the then current fee uniformly established by the City for the filing and processing of variance applications. (iii) The Zoning Administrator shall have thirty (30) days within which to determine the completeness of the application. If the Zoning Administrator determines the application to be incomplete, the Zoning Administrator shall promptly provide the Developer with written notice that the application has been deemed incomplete, and such notice shall itemi7:e the grounds upon which the Zoning Administrator has determined the application to be incomplete. Upon a determination of incompleteness, the application may be resubmitted by the Developer providing the Zoning Administrator with the supplemental information requested in the notice of incompleteness. The Zoning Administrator shall then have an additional thirty (30) days to determine whether the application is complete. (iv) A public hearing before the Zoning Administrator shall be conducted not less than ten (10) days nor more than sixty (60) days after the application is determined to be complete, and notice of such hearing shall be given in a manner consistent with the City's standard noticing procedures for a variance application. (v) Following the public hearing, the Zoning Administrator shall prepare a written decision within thirty (30) days which shall contain the findings of fact upon which such decision is based and, in the case of approval, any conditions of approval. In order to approve such an application, the Zoning Administrator shall make findings that the proposed change: (A) is consistent with the purposes and goals of this Agreement; (B) is not detrimental to the public health, safety; convenience or general welfare; and (e) will not significantly and adversely affect the ar- chitectural integrity of the Project or the public benefits associated with the Project. (vi) A statement of official action shall be issued by the Zoning Administrator on the date of the Zoning Administrator's decision. A copy of the statement of official action shall be provided to the Developer by the Zoning Administrator in accordance with Section 25. (vii) Any person may appeal the approval, conditions of approval or denial of the application to the Planning Commission if a written notice of appeal is filed with the Planning Division within fourteen (14) days -48- e e following the date of decision. The appellant shall state, in the written notice of appeal, the specific reasons for the appeal. Any such appeal shall utilize the procedure then uniformly established by the City for the appeal of variance applications and shall be accompanied by the filing fee then requir- ed under that procedure. Public notice of an appeal hearing shall conform to the manner in which notice of the original hearing was given. A copy of the written notice of appeal shall be provided to the Developer by the City in accordance with Section 25. (viii) A public hearing on the appeal shall be held by the Planning Commission no more than sixty (60) days after the notice of appeal is filed with the Planning Division. Following the public hearing, the Planning Commission shall either affirm, reverse or modify the decision of the Zoning Administrator. A statement of official action shall be issued by the Planning Commission within thirty (30) days following the public hearing. The deci- sion of the Planning Commission shall contain the same findings required for a decision of the Zoning Administrator under subsection (v). (ix) All public hearings conducted pursuant to this subsection 8( e) shall be conducted in accordance with the then applicable procedural rules of the hearing body. (x) Once an appeal is filed, the appellant body may review and take action on all determinations, interpretations, decisions, judgments, or similar actions taken which were in the purview of the original hearing body on the application and is not limited to only the matters appealed or grounds for the appeal as stated in the notice of appeal. 9. Assignment; BinQing Effect. Developer shall not sell, transfer, exchange, hypothecate, encumber or otherwise dispose of its interest in the Property or the Project, or any portion thereof, except as permitted under the DDA and the Ground Leases. Any transfer of Developer's interest under the DDA or Developer's leasehold interest under the applicable Ground Lease(s) which is permitted or required under or pursuant to the nDA and/or the applicable Ground Lease(s) shall automatically operate to transfer with such interest the benefits, rights, burdens, duties and obligations of this Agreement. This Agreement shall not be severable from Developer's interest in the Property and the Project. In the event of a permitted transfer to a third party transferee, Developer shall be released from its obligations under this Agreement with respect to the portion of the Property and Project so transferred, except for those obligations which have accrued or matured prior to the date of such transfer. The transferee shall be required to execute and deliver to the City a written agreement in which the transferee expressly and unconditionally assumes all of the obligations of Developer under this Agreement with respect to the portion of the Property and the Project so transferred. to. Effect of AQreement on Land Use Relrulations. - - (a) Application of Existing: Regulations. Except as provided in this Section 10 or otherwise in this Agreement, development of the Property and the Project, includmg without limitation, density, permitted uses, intensity of use, design and improvement shall -49- e e be governed by the Existing Regulations. Development of the Property and the Project shall not be governed by any amendments, revisions, additions or deletions to the Existing Regulations or new laws or regulations of the City governing or affecting development adopted subsequent to the Effective Date (sometimes collectively, "Subsequent Code Changes"), unless: (i) the City and the Developer mutually agree in writing; (ii) the Subsequent Code Changes are mandated and required by changes in state or federal laws or regulations as provided in Government Code Section 65869.5; (iii) the Subsequent Code Changes satisfy each of the following conditions: (A) The Subsequent Code Changes do not impair the rights of the Developer to develop the Property as contemplated in this Agreement; (B) If Subsequent Code Changes distinguish between "existing't development and "new" or "proposed" development, the entire Project is considered as "existing" development (including Phases which have not then been ground leased to the Developer and legally subdivided parcels of the Property which have been ground leased but for which no building permit has been issued; and (C) The Subsequent Code Changes are uniformly applicable to all businesses, uses, buildings and structures which are similar to the businesses, uses, buildings and structures permitted in the Project throughout a reasonably defined geographical area of the City, which shall include, in addition to the Airport Commercial District, comparable districts and areas. (b) Processmg and Permit Fees. Except as otherwise specifically provided in this Agreement, Developer shall be subject to all City-imposed application, processing and permit fees and charges, including utility connection fees, with respect to applications for development and construction within the Property which are in effect on the date on which each application is filed, so long as such fees and charges are in force and effect on a City-wide basis. (c) Inconsistent Code Provisions. As applied to this Agreement and the Project, any provisions of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Agreement, to the extent of such inconsistencies and not further, are hereby modified to that extent necessary to effect the provisions of this Agreement. (d) Architectural Review Board. Building colors and materials, design elements, signage, trash enclosures and screening and the landscape and hardscape plan for the Project shall be reviewed and approved or conditionally approved by City's ~50- e e Architectural Review Board ("ARB") in accordance with design review procedures in effect under the Existing Regulations. The ARB shall approve all features which are specifically approved by this Agreement or in the Project Site Plan. The ARB shall have no authority to disapprove or conditionally approve any features or matters which have been specifically approved by this Agreement or in the Project Site Plan. (e) S!,ecial Assessments. Notwithstanding anything to the contrary in this Agreement, the Developer shall be subject to special assessments of general application in the City, provided that such special assessments meet the same three (3) requirements to which Subsequent Code Changes are subject in order for such Subsequent Code Changes to govern development of the Property and the Project under subsection (a)(iii). 11. Certificates of Occu!,&n~. Upon completion of any portion of the Project for which a separate building permit has been issued in compliance with such building permit, and compliance with the Existing Regulations, this Agreement and other applicable agreements between City and Developer, and completion of parking for such portion of the Project according to the ratio established in Section 3(i), the City shall promptly issue a Temporary or Final Certificate of Occupancy therefor to Developer. 12. Permits and Auorovals. of: (a) Issuance of Ne~essary P~rmits and Ap!lrovals. Upon the occurrence (i) satisfactory completion by the Developer of all actions required prior thereto under (A) this Agreement, (B) Existing Regulations, (C) any Subsequent Code Changes applicable to the development of the Property and the Project pursuant to Section lO(b) and (D) any codes, ordinances, rules, regulations and official policies and conditions of approval of the City which do not affect development of the Property and the Project; (ii) the Issuance of any and all approvals of the City which are required prior thereto by this Agreement and which this Agreement specifically provides are discretionary with the City, and (iii) the payment of applicable processing fees, if any, the City shall promptly commence and diligently proceed to complete all applicable Oty procedures and processes then uniformly in effect to grant or issue any approvals, consents, or permits which are necessary or reasonably desired by the Developer for the development by the Developer of the Project and the Property in accordance with the Project Site Plan and this Agreement, including, but not limited to the following: (A) The processing, checking and approval of all applications, plans, land use and zoning permits, building plans and specifications and other plans relating to the development of the Project and the Property which have been filed by the Developer. ~51- -- e (B) The processing, checking and approval of all applications for tentative subdivision maps, vesting tentative maps, parcel maps, final subdivision maps and lot line adjustments for the Property or any Phases or portion thereof to divide the Property into various legal parcels which may be requested by the Developer and which are consistent with this Agreement, the DDA, and the Ground Lease for that Phase or portion of the Property. No applications by Developer for such maps to divide the Property into various legal parcels shall be approved by the City unless such applications and maps are consistent with this Agreement, the DDA and the Ground Lease for the applicable Phase or portion of the Property. (C) The processing, checking and approval of all applications for building and related mechanical, electrical, plumbing and other ancillary permits necessary for the completion of the development of each Phase or portions thereof comprising the Project. H requested by Developer, the City shall promptly review and thereafter issue a separate building permit and ancillary permits for each building, parking structure or other structure of the Project upon Developer's submission to the City of plans which conform to the Administrative and Technical Construction Codes of the City (Article VIII, Chapter 1 of the Santa Monica Municipal Code) in effect at the time of the permit application. Such permits shall allow for the commencement of construction of the permitted improvements within six (6) months of the date of issuance thereof. In the event that construction has not commenced within six (6) months, the building permits may be renewed for six (6) additional months with the payment of a new permit fee as long as the plans satisfy any changes in the Administrative and Technical Construction Code of the City which are adopted subsequent to the issuance of the permits, either as those plans were originally submitted by the Developer or as later amended to comply. (D) The processing, checking and approval of applications by the Developer for demolition permits and excavation or grading permits for the Project without the necessity of applying for or receiving a building permit to replace the structure to be demolished, if any; provided, howevert that Developer shall obtain approval of a property maintenance plan in accordance with Santa Monica Municipal Code Section 9048.1, which approval shall not be unreasonably withheld or delayed. (b) rrQ!>rietary Ca!,a~ity. Notwithstanding subsection (a), the CitYs obliga- tions in its governmental capacity as provided in this Agreement shall not impair or result in any diminution of City's rights in its proprietary capacity as provided in the DDA and the Ground Leases, and no approval by City in its governmental capacity shall satisfy or be deemed to satisfy any requirement for City's approval in its proprietary capacity as provided in the DnA or any applicable Ground Lease. (c) Agreements WIth Other Agencies. The Developer shall apply for such other permits and approvals as may be required from other governmental or quasi-governmental agencies having jurisdiction over the Project and the Property which are necessary or are reasonably desired by the Developer for the development of, or the -52- It e proVlSlOn of services to] the Project. The City shall reasonably cooperate with the Developer and the Developer's endeavors to obtain such permits and approvals and shall from time to time at the request of the Developer negotiate to enter into binding agreements with any such agencies to assure the availability of such permits and approvals or the provision of such services (provided that such agreements are reasonable and not in any way detrimental to the City in the City]s sole judgment). To the extent allowed by law, the Developer may elect to be a party to any such agreement or a third party beneficiary thereof entitled to enforce for its benefit on behalf of the City or in its own name the rights of the City or the Developer thereunder or the duties and obligations of the parties thereto. Except as otherwise specifically provided in this Agreement, the DDA or the Ground Leas- es or \mless prior to the commencement by the City of negotiations for such agreement (insofar as Developer's indemnity, defense and reimbursement obligations relate to negotiations) or the execution by the City of such agreement (insofar as Developer's indemnity, defense and reimbursement obligations relate to execution or performance of the agreement) the Developer has notified the City in writing that Developer does not desire the City to negotiate or execute, as the case may be, such agreement: (i) the Developer shall indemnify, defend and hold harmless the City in connection with any claim, loss or liability alleged by or against, or incurred by, the City in connection with the negotiation, execution and performance of any agreement entered into pursuant to this subsection (c); and (ii) the Developer shall reimburse the City for all fees, assessments and other amounts payable by the City in connection with the negotiation, execution or performance of any such agreement. In the event that such negotiations or agreements may expose the City, in its reasonable judgment, to any liability, the City may require the Developer to provide reasonable security for the obligations of Developer under subsections (i) and (ii) as a condition precedent to the performance by the City of its obligations under this subsection (c). 13. Periodic Review of Comnliance with Ae:reement. - - (a) City Review. The City shall review this Agreement at least once every 12 month period from the Effective Date. (b) R~quired Finding:s. During each periodic review by the City, Developer shall be required to demonstrate good faith compliance with the terms of this Agreement. In connection therewith. on or before July 1st of each calendar year during the term of this Agreement, the Developer shall provide a written report to the City in which an officer of the Developer certifies good faith compliance by the Developer with the terms of this Agreement during the prior calendar year, except for those areas of non-compliance which are specifically set forth in the written report together with the reasons advanced by the Developer for non-compliance. During each periodic review by the City. in connection with the mitigation measures for which the City is responsible, City shall prepare a written report regarding implementation of all such mitigation measures. Prior to a Certificate of Occupancy for the last building in Phase 3 of the Project. each periodic review shall include -53- e e a status report submitted by the Developer on the implementation of all environmental mitigation measures required under this Agreement. The Qty Council shall evaluate said status report and me its fmdings with regard to implementation of required mitigation measures with the City Clerk. lit as a result of such periodic review, the City Council finds and determines, on the basis of substantial evidencet that the Developer has not complied in good faith with the terms or conditions of this Agreementt the City Council shall commence proceedings to enforce, modify or terminate this Agreement. (c) Evidence of Good Faith Comoliance. Evidence of good faith compliance by the Developer under this Section 13 -may include, but is not necessarily limited tOt the following~ (i) Conformance with the requirements of the Existing Regulations, except as otherwise modified by this Agreement; (ii) Conformance by the Developer with the terms and conditions of this Agreement; and (Hi) The existence of any specified excusable delays under this Agreement which prevented or delayed the timely performance by Developer of any of its obligations under this Agreement. (d) Public Hearing. If the City should determine on the basis of substantial evidence that the Developer has not complied in good faith with the terms and conditions of this Agreement, and further determines to proceed with modification or termination of this Agreement in accordance with subsection (b), the City shall provide written notice to the Developer of its intention to modify or terminate this Agreement unless the Developer cures or corrects the acts or omissions that constitute the basis of such determinations by the City. The notice shall be delivered by the City to the Developer in accordance with Section 25 and shall contain: (i) The time and place of a public hearing to be held by the City Council, no less than thirty (30) days after delivery of the notice to Developer, on the determination of the City to proceed with modification or termination of this Agreement; (ii) A statement as to whether the City proposes to modify or terminate this Agreement; and (iii) Any proposed modifications to this Agreement. li, following the conclusion of the public hearing, the City Counc1l determines that the Developer has not been in good faith compliance with this Agreement and further determines that the Developer has not cured the acts or omissions that constitute the basis of that determination (or, if those acts or omissions could not be reasonably remedied prior to the public hearing, that Developer has not in good faith commenced to cure or correct such acts or omissions prior to the public hearing or is not diligently and continuously ~54. e e proceeding therewith to completion), the City Council may take such action as it deems necessary to protect the interests of the City pursuant to this Agreement. 14. Enforcement. This Agreement is enforceable by any party to it notwithstanding a change in any applicable general or specific plan, zoning, subdivision or building regulations adopted by the City which alter or amend the Existing Regulations. 15. Validity of Agreement. In any litigation concerning this Agreement, neither party hereto shall assert as a claim or defense the invalidity of this Agreement. 16. Default. The City or the Developer shall be in default under this Agreement upon the happening of one or more of the following events or conditions ("Event of Default"): (a) Developer Defaults. Developer shall be in default under this Agreement ("Developer Defaults") if: (i) The Developer shall fail to pay the City any amount due under this Agreement as and when due, and such failure to pay continues for a period of ten (10) days after written notice from City; (ii) The Developer shall fail to perform or comply in good faith with any of the other agreements, terms, covenants or conditions of this Agreement on Developer's part to be performed or complied with, and such nonperformance or noncompliance shall continue for a period of thirty (30) days after written notice from City, or, if such performance cannot reasonably be completed within such thirty (30) day period, Developer shall not in good faith have commenced such performance \\ithin such thirty (30) day period or shall not diligently and continuously proceed therewith to completion; provided, however, that in no event shall such cure period be extended beyond one hundred twenty (120) days from the date of such notice; (Hi) A finding and determinatIon by the City Council is made upon the basis of substantial evidence following a periodic review under Section 13 that Developer has not complied in good faith with the terms or conditions of this Agreement and has not cured or corrected the act(s) or omission(s) which were the basis for sllch determination; or (iv) An express repudiation, refusal or renunciation of this Agreement is made by Developer, if the same is in writing and signed by the Developer. (b) City Defaults. The City shall be in default under this Agreement ("City Defaultst') if: (i) The City shall fail to comply in good faith with the re- quirements of any of the agreements, terms, covenants or conditions of this Agreement on the City's part to be performed or with which the City must comply and such failure shall continue for a period of thirty (30) days after -55- e . written notice from the Developer, or, if such failure cannot reasonably be remedied by City within such thirty (30) day period, City shall not in good faith have commenced to cure such failure within such thirty (30) day period or shall not diligently and continuously proceed therewith to completion (provide~ however, that in no event shall such cure period be extended beyond one hundred twenty (120) days from the date of such notice); or (ii) An express repudiation, refusal or renunciation of this Agreement is made by the City, if the same is in writing and signed by the City. 17. Procedure Uoon Default. (a) Termination by City. Subject to subsection (c), upon the occurrence of a Developer Default, the City may terminate this Agreement upon written notice to Developer or, in the case of a Developer Default under Section 16(a)(iii) hereof, the City may modify or terminate this Agreement pursuant to procedures set forth in Section 13. (b) Termination by Developer. Subject to subsection (c), upon the occurrence of a City Default for failure to comply in good faith with the requirements of Sections 6(c), 6(n), 12(c) or Exhibit "E" of this Agreement to be performed by the City, or upon the failure by the City to comply in good faith with the requirements of this Agreement regarding the permitted use and development of the Property, including without limitation, the obligations of the City under this Agreement to review and issue permits and approvals applied for by Developer in connection with the development of the Project or use of the Property, Developer may terminate this Agreement upon written notice to the City. (c) Application of Termination. The termination of this Agreement by the City under subsection (a) or by the Developer under subsection (b) shall apply to the legally subdivided parcel or parcels of the Property to which the Event of Default relates (provided that no building permit has been issued for any such parcel or parcels) and to all other legally subdivided parcels of the Property for which no building permit has been issued at the time of termination but shall not apply to any legally subdivided parcel or parcels for which any building permit has been issued as of, or prior to, the date of such termination. No termination shall impair the continuing applicability of this Agreement to legally subdivided parcels of the Property for which any building permit has been issued at the time of termination. (d) Remedies Cumulative. Any right or remedy of the parties under this Agreement and any other right or remedy that either party may have at law or equity, including, without limitation, specific performance and injunctive relief, and also including any remedies under the Existing Regulations, upon the breach of any covenant, agreement, term, provision or condition in this Agreement by the defaulting party shall be distinct, separate and cumulative rights or remedies available to the parties and no one of such remedies, whether exercised by the non-defaulting party or not, shall be deemed to be in exclusion of any other. The non-defaulting party may, in its discretion, exercise any and all of its rights and remedies, at once or in succession, at such time or times as the non-defaulting party considers appropriate. -56- . . (e) Cessation of Rights and Obligations. If this Agreement is terminated on account of an Event of Default. except as otherwise provided in this Agreement, the rights, duties and obligations of the parties hereunder shall cease as of the date of such termination as to the portions of the Property to which the termination applies pursuant to subsection (c). If the City is the terminating party, then any and all benefits, including money received by the City, shall be retained by City. If Developer is the terminating party, then Developer shall be entitled to any amounts paid by the Developer to the City which are attributable to the legally subdivided parcels of the Property to which the termination applies pursuant to subsection (c). (f) Comoletion of Imorovements. Notwithstanding the provisions of subsections (a) through (c) above, inclUSIve, no termination of this Agreement shall prevent Developer from completing, occupying and using buildings or other improvements authorized pursuant to building permits previously approved by City and under construction at the time of termination, and all of Developer's rights, duties and obligations hereunder with respect to completion, occupancy and use of such buildings and other improvements shall remain in full force and effect, provided that the Developer complies with all applicable provisions of this Agreement (as if this Agreement were not terminated) in the completion, occupancy and use of the buildings and improvements. (g) Survival of Obligations_ Notwithstanding any other provision of this Agreement to the contrary, Developer's and City's obligations to payor perform obligations incurred or accrued prior to the date of any termination of this Agreement shall survive any such termination and shall be enforceable after such termination. 18. Excusable D~lays. In addition to any specific provisions of this Agreement, neither the City nor the Developer shall be deemed to be in default for any delay in the performance of their respective obligations under Sections 5 or 6(b) where delays or de- faults are due to: (a) War, insurrection, strikes, walk-outs, riots, floods, earthquakes, fires, casualtiest acts of God, or simIlar grounds for excused performances which are not within the reasonable control of the paTty to be excused; (b) Governmental restrictions or moratoria imposed by the City [including without limitation, any moratorium which is more specifically discussed in Section 7(b)], or by other governmental entities, the enactment of conflicting State or Federal laws or regulations, or the acts or failures to act of any governmental agency or entity; (c) Restrictions or moratoria imposed by judicial decisions, litigation (contesting the validity, or seeking the enforcement or clarification of, this Agreement whether instituted by Developer, the City or any other person or entity). (d) The institution of a referendum pursuant to Government Code Section 65867.5 or a similar public action seeking to in any way invalidatet alter, modify or amend the ordinance adopted by the City Council approving and implementing this Agreement; or ~57- . . (e) Inability to secure necessary labor, materials or tools, strikes, lockouts. other labor disputes. Under no circumstances shall the inability of the Developer to secure financing be an excusable delay to the obligations of the Developer. With respect to the obligations of the Developer to pay fees or charges to the City under Section 6(p), a delay in the performance of such obligations shall be permitted only for the reasons set forth in subsections (b), (c) and (d). In order for an extension of time to be granted pursuant to this Section, written notice of the excusable delay must be given by the requesting party within thirty (30) days of the commencement of the delay. The extension of time for the excusable delay shall be for the period of the delay. 19. Notice of Termination. Upon termination of this Agreement as to the Property and the Project, or any portion thereof, the parties hereto shall execute an appropriate notice of termination suitable for recording in the official records of Los Angeles County. 20. Leasehold Mortg:ag~es. (a) Notice to Le~sehold Mortgagee. A Leasehold Mortgagee may give notice to City, specifying the name and address of such Leasehold Mortgagee and attach- ing thereto a true and complete copy of the Leasehold Mortgage held by such Leasehold Mortgagee. If such notice shall be given. the City shall thereafter send to such Leasehold Mortgagee a copy of each notice of default by Developer which relates to. affects, or potentially may adversely affect, the leasehold interest of Developer in the Property or portion thereof which serves as security for the Leasehold Mortgage at the same time as and whenever any such notice of default shall be given by City to Developer, addressed to such Leasehold Mortgagee at its address last furnished to City, and the period within which a Leasehold Mortgagee may cure a particular default hereunder, as set out in subsection (b) below, shall not begin to run until City has sent to the Leasehold Mortgagee such copy of a notice of such default. (b) Cure of Default l;>y Leas~hold Mortgagee. Such Leasehold Mortgagee, after such notice has been given, shall thereupon have an additional period of twenty (20) days in the case of any default in the payment of money, and an additional forty-five (45) days in the case of any other default, for remedying the default or causing the same to be remedied. If Developer shall be in default hereunder, such Leasehold Mortgagee shall have the right to remedy such default, or cause the same to be remedied within the period and otherwise as herein provided. City shall accept performance by any such Leasehold Mortgagee of any covenant, condition, or agreement on Developer's part to be performed hereunder with the same force and effect as though performed by Developer. No Developer Default with respect to the performance of work required to be performed, or acts to be done, or conditions to be remedied shall be deemed to exist, so long as such Leasehold Mortgagee shall. in good faith, have commenced promptly to rectify the same and shall thereafter prosecute the same to completion with diligence and continuity. -58- . . (c) Extension of Time to One:. The period ohime given to the Leasehold Mortgagee to cure any default by Developer which reasonably requires that said Leasehold Mortgagee be in possession of the Property to do so, shall be deemed extended to include the period of time reasonably required by said Leasehold Mortgagee to obtain such possession (by foreclosure, the appointment of a receiver of otherwise) promptly and with due diligence; provided, however, that during such period all other obligations of Developer under this Agreement, including, without limitation, payment of all amounts due, are being duly and promptly performed. (d) liability of Leasehold Mortgagee. No Leasehold Mortgagee shall become liable under the provisions of this Agreement unless and until such time as it takes possession or becomes the owner of the leasehold estate covered by its Leasehold Mortgage, and then only for obligations arising or accruing during or with respect to the time it is in possession or a lessee under such leasehold estate; but the preceding portion of this sentence shall not limit or restrict in any way City's authority to terminate this Agreement, as against any Leasehold Mortgagee as well as against Developer if any curable default hereunder (including, without limitation, any default in the payment of any amount due) is not completely cured within the time period allowed hereunder for such cure. (e) Subordination of Accrued TOM Fee. The allocable portion of any IDM Fee which has accrued pursuant to Section 6(h) prior to such time ("Foreclosure Date") as the Leasehold Mortgagee under the Leasehold Mortgage which is the most senior mortgage lien on the interest of the Developer in and to the Property or the applicable portion of the Property ("Senior Leasehold Mortgage") or any party acting on its behalf, acquires title or possession to the Property or the applicable portion or sells such Property or the applicable portion pursuant to a trustee's or judicial sale in the event of foreclosure of the Senior Leasehold Mortgage ("Accrued TOM Fee") shall be subordinate to the Senior Leasehold Mortgage. All principal, interest and other payments to be made pursuant to the Senior Leasehold Mortgage shall have priority over the Accrued roM Fee. In the event of foreclosure of the Senior Leasehold Mortgage: (i) the amounts owing under the Senior Leasehold Mortgage shall be paid from any available sale proceeds before any payment of the Accrued TOM Fee. (ii) a good faith purchaser of the leasehold estate which serves as security for the Senior Leasehold Mortgage at a trustee's or judicial sale of the Property in the event of foreclosure of the Senior Leasehold Mortgage shall receive title to such leasehold estate free and clear of any Accrued TOM Fee. From and after the Foreclosure Date, the obligation to pay the TOM Fee, prorated for the year in which the Foreclosure Date occurs, shall recommence and continue pursuant to the provisions of Section 6(h) and any new Senior Leasehold Mortgage shall have the subordination benefits set forth in this subsection (ii). 21. Duration of Agreement. This Agreement shall expire fifty-five (55) years from execution hereof; provided that, with respect to each separate legal parcel in the Property which is the subject of a Ground Lease from the City to the Developer, the term -59- , e of this Agreement shall be extended through and including the last day of the term (including any option periods) of that Ground Lease. The provisions of this Agreement shall not apply, however, to those separate legal parcels in the Property for which the term of the applicable Ground Lease has expired by its own terms. After expiration or full satisfaction of this Agreement the parties shall execute an appropriate certificate of termination which shall be recorded in the official records of Los Angeles County. 22. Supersedure by Subsequent Laws. H any agency (including, without limitation, the Federal Aviation Administration or the City of Los Angeles) other than the City passes any law or regulation ("Law") after the date of this Agreement or takes or refuses to take any action which prevents, precludes or impairs compliance with one or more provisions of this Agreement, then the parties shall meet and confer in good faith to determine the feasibility of modifying or suspending one or more provisions of this Agreement to comply with such new Law or to address the action or refusal to act based upon the effect such modification or suspension would have on the purposes and intent of this Agreement. In addition, Developer shall have the right to challenge the new Law or the action or refusal to act which prevents compliance with the terms of this Agreement, and, in the event such challenge is successful, this Agreement shall remain unmodified and in full force and effect. 23. Estoppel Certificate. Either party may, at any time, and from time to time, deliver written notice to the other party requesting such party to certify in writing: (a) that this Agreement is in full force and effect, (b) that this Agreement has not been amended or modified either orally or in writing. or if so amended, identifying the amendments, (c) whether or not, to the knowledge of such party, the requesting party is in default or claimed default in the performance of its obligations under this Agreement, and, if so, describing the nature and amount of any such default or claimed default, and (d) whether or not, to the knowledge of such party, any event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute a default and, if so, specifying each such event. A party receiving a request hereunder shall execute and return such certificate within thirty (30) days following the receipt thereof. The City Manager shall have the right to execute any certificate requested by Developer hereunder. The City acknowledges that a certificate hereunder may be relied upon by transferee, Leasehold Mortgagees or other parties. 24. Recording of Agreement. The parties hereto shall cause this Agreement to be recorded in the Official Records of the County of Los Angeles. The COS4 if any, of recording this Agreement shall be borne by Developer. 25. Notices. Any notice, demand, request, consent, approval or communication which either party is required to or may give to the other hereunder shall be in writing and shall be delivered or addressed to the other at the address below set forth or to such other address as either party may from time to time direct by written notice given in the manner ~60- . e herein prescribed, and such notice or communication shall be deemed to have been given or made when communicated by personal delivery or by independent courier service or by facsimile or if by mail on the second business day after the deposit thereof in the United States Mail in Los Angeles County, California, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests, consents, approvals or communications from Developer to City shall be addressed to City at: City of Santa Monica 1685 Main Street Santa Monica, California 90401 Attention: City Manager With copies to: City Attorney City of Santa Monica 1685 Main Street Santa Monica, California 90401 And, Director of Community and Economic Development City of Santa Monica 1685 Main Street Santa Monica, California 90401 And, Skadden, Arps, Slate, Meagher & Flom 300 South Grand Avenue Los Angeles. California 90071-3144 AttentIOn: Richard S. Volpert, Esq. All notices, demands, requests, consents, approvals or communications from City to Developer shall be addressed to Developer at: Reliance Development Group, Inc. 55 East 52nd Street New York, New York 10055 Attention: Henry A Lambert, President With copies to: Reliance Development Group, Inc. 900 Wilshire Boulevard, Suite 1200 . Los Angeles, California 90017 Attention: D. Michael Gray -61- . e And, Lawrence & Harding, P.c. 1250 Sixth Street, Suite 300 Santa Monica, CA 90401 Attention: Richard A Lawrence, Esq. 26. (a) Excul!>ation. Except for the obligations of the City specifically set forth in this Agreement, the DDA or the Ground Leases. City shall have no liability of any kind whatsoever for. in connection with, or as a result of, the Project or any portion of the Pro- perty ground leased to Developer, or the condition thereof, or the ownership or operation thereof, or any act or occurrence that occurs thereat, or in connection therewith, at any time during the term of this Agreement. whether for any damage or injury to any persons whatsoever or to any property of Developer. or of any other person, for any reason whatsoever, for any injury to Developer's business or any loss of income therefrom, or otherwise including. without limitation, those occasioned by or arising from: (i) the demolition of existing buildings, if any, or the construction, operation or maintenance of the Project or any improvements upon any portion of the Property ground leased to Developer, or the condition of any portion of the Property ground leased to Developer or any part of the Project; (ii) acts or neglect of Developer or any Space Sublessee. occupant, user, licensee or invitee of any portion of the Property ground leased to Developer or of all, or any part, of the Project; or (Hi) any conduct, act or omission of the City, its agents or employees (except for any claim against the City for any injury or damage to Developer or any other person which was caused solely by the gross negligence or wilful misconduct of City or any of its agents or employees, to the extent not covered by insurance). (b) Indemnity. Except as otherwise provided in this Agreement, the DOA or the Ground Leases, Developer agrees to indemnify, defend and hold harmless the City, its City Council,. boards and commissions, officers, agents and employees from and against: (i) any and all actions, causes of action, obligations. losses, liabilities, damages, injuries, claims and demands of any kind whatsoever that may result from any claim, assertion or imposition against the City by any person of any liability (or claim therefor) for any matter or of any kind as to which the City is to have no liability as provided in subsection (a) of this -62- . e Section, as well as all costs and expenses (including, without limitation, attorneys' fees) relating thereto regardless of the merit or outcome thereof, and (ii) any and all non-criminal penalties, fines and prosecu- tions, suits for abatement of any public or private nuisance and the imposition against the City or any portion of the Property ground leased to Developer or any part of the Project of any liens, as well as any costs or expenses (including, without limitation, attorneys' fees) related to any such claims, penalties, fines, prosecutions, suits and impositions, regardless of the merit or outcome thereof, which occur during or relate to the term of this Agreement, and which arise out of the Developer's business or any other acts or omissions of the Developer with respect to any portion of the Property ground leased to Developer or any portion of the Project, or out of any use or occupancy of any portion of the Property by the Developer or any other person during the term of this Agreement. or out of any condition of any portion of the Property ground leased to the Developer or any portion of the Project during the term of this Agreement, or out of any default by the Developer in the performance or observance of any obligation on the Developer's part to be performed under this Agreement or out of any failure by the Developer to comply with any legal requirements or applicable agreements or covenants with respect to any use. occupancy or condition on, or about any portion of Property ground leased to the Developer or any portion of the Project; provided, however, that City, its City Council, boards and commissions, officers, agents and employees shall not be entitled to indemnification for damage caused to such indemnified party by reason of such indemnified party's own gross negligence or wilful misconduct. 27. Late Payments. If the Developer fails to pay any amount when due under this Agreement and such failure to pay continues for five (5) days past such due date, the Developer shall pay to City on demand, in addition to the amount due. interest equal to the product obtained by multiplying (i) the lesser of (A) five percent over the rate announced from time to time by Union Bank or its successor (or, if no successor, by an equivalent California Bank) as its prime rate or (B) the maximum interest rate permitted by law, by (ii) the amount of such unpaid item. which amount shall accrue from the day the amount was due until the date such item is paid in full. The City and the Developer agree that such charges are fair and reasonable compensation for costs incurred by the City when there is default in a payment due under this Agreement. Such costs are extremely difficult to estimate and ascertain but include processing and accounting charges. Notwithstanding payment of such late charges, the Developer shall not be excused from any default nor shall there be any waiver of any Developer Default under this Agreement. 28. Restriction of New Commercial Office Develooment on Airuort SumIus Parcel. City agrees that during the term of this Agreement. - City will not -authorize or approve the development of new structures on the Airport Surplus Parcel for non-aviation commercial office uses. 29. Entire Agreement. This Agreement sets forth all of the agreements, conditions and understandings between the City and the Developer relative to the Property and the Project (except for the DDA, the Ground Leases and the CC&R's) and there are ~63- . e no promises, agreements, conditions or understandings, oral or written, expressed or implied, between them other than as set forth or as referred to herein, other than in the DDA, the Ground Leases and the CC&Rs. 30. No Oral Modification. No statement, action or agreement hereafter made shall be effective to change, amend, waive, modify, discharge, terminate or effect an abandonment of this Agreement in whole or in part unless such statement, action or agreement is in writing and signed by the party against whom such change, amendment, waiver, modification, discharge, termination or abandonment is sought to be enforced. 31. Table of Contents and Section Headimls. The table of contents and section headings are inserted herein only for convenience and are in no way to be construed as part of this Agreement, or an indicative of the meaning of the provisions of this Agreement or the intention of the parties, or as a limitation in the scope of the particular sections to which they refer. 32. Severability: Invalidity Of P~rticu]ar Provisions. If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each other term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 33. No Partnership or Joint Venture. Nothing in this Agreement shall be deemed to create a partnership or JOint venture between the City and the Developer or to render either party liable in any manner for the debts or obligations of the other. 34. Attorneys' Fees. If any suit shall be brought because of breach or alleged breach of any covenant or condition herein contained on the part of Developer or City to be kept or performed, the prevailing party shall be entitled to reasonable attorneys' fees in addition to court costs and any and all other costs recoverable in said action. Such attorneys' fees shall be deemed to have accrued on the commencement of such action and shall be paid whether or not such action is prosecuted to judgement. In any case where this Agreement provides that the City or the Developer is entitled to recover attorneys' fees from the other, the party so entitled shall be entitled to recover an amount equal to the fair market value of services provided by attorneys employed by it as well as any attorneys' fees actually paid by it to third parties. 35. Exhibits. All exhibits attached hereto and/or referred to in this Agreement are incorporated herein as though set forth in full. 36. Construction. The parties agree that each party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. 37. Governing u,w. This Agreement shall be governed exclusively by the provisions hereof and by the laws of the State of California. -64- . e 38. CounteI"!'arts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and such counterparts shall constitute but one and the same instrument. 39. City's Rights to Defense. The City shall have the right to approve counsel retained by Developer to defend any claim, action or proceeding which the Developer is obligated under this Agreement to defend. In the event that any conflict of interest results during the mutual representation of the City and the Developer in defense of any such action, or in the event of the City's reasonable dissatisfaction with counsel retained by the Developer, the City shall have the right, at the Developer's cost and expense, and without its consent, to have the City Attorney undertake and continue the City's defense, or with the Developer's approval, which shall not be unreasonably withheld or delayed, to select separate outside legal counsel to undertake and continue the City's defense. 40. Binding Effect. It is intended and determined that the provisions of this Agreement shall constitute covenants which shall run with the land comprising the Property for the benefit thereof and that the burdens and benefits thereof shall bind and enure to the benefit of all successors-in-interest to the parties hereto, including without limitation, the City and its assigns if for any reason the Developer's interest in this Agreement is transferred to the City. 41. Failure to Develo!l. Except as provided in this Agreement, the DDA or the Ground Leases, the failure by the Developer to develop all or any portion of the Project shall not result in a default by the Developer under this Agreement. 42. Agreement to Coo!lera1~. In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement, the parties hereby agree to cooperate in defending said action. 43. No Third Party B~neficiary. Nothing in this Agreement shall create any rights, as a third party beneficiary or otherwise, in any person or entity not a party to this Agreement. 44. Constitution of Fees. City and Developer mutually acknowledge and agree that the fees to be paid by Developer which are specifically set forth in this Agreement constitute "fees collected under development agreements adopted pursuant to Article 2.5 (commencing with Section 65864) of Chapter 4" for the purposes of Government Code Section 66000(b). 45. Sunset Park Neii:!hborhood Traffic Protection Plan Adontion. Not later than two (2) years following the Effective Date, the City Council shall adopt and the City shall implement a plan ("Neighborhood Traffic Protection Plan") of measures designed to minimize vehicle trips cutting through the neighborhood of the City bounded by Uncoln Boulevard on the west, Pico Boulevard on the north, and the City limits on the east and south ("Sunset Parkj. Prior to the adoption of the Neighborhood Traffic Protection Plan for Sunset Park, the City shall conduct community meetings and workshops in the Sunset Park area for the purpose of consulting with and obtaining guidance from the residents of the area in the formation of the Neighborhood Traffic Protection Plan and the City shall conduct at least one duly-noticed public hearing. -65- . . 46. Fundimz for NeilZhborhood Traffic Protection Plan and for Recreational Im!>rovements to AlI"!>ort Sui!>lus Parcel. The City agrees to fund the following improvements either from revenues available to the City from sources other than the Project or from the revenues from the first three (3) years of the Project as follows: (a) the improve nents and measures delineated in the Neighborhood Traffic Protection Plan; and (b) improvem~nts to the Airport Surplus Parcel, consistent with an improvement program approved by the City Council pursuant to a public process to be determined, includi ng appropriate environmental review, to establish various recreational uses such as soccer field(s) and baseball diamond(s). 47. Redesign of Internal Access to Airport. Developer agrees to cooperate with the City in a good faith effort :0 redesign and modify the internal access road to the Santa Monica Municipal Airport from the Project in order to facilitate equal or improved internal access to and from the Airpm t from the Project if such redesign is deemed desirable and feasible by the City and if the redesign satisfies all of the following conditions: (a) The City provides evidence reasonably satisfactory to the Developer that the redesign does not (onstitute a Moderate Change or Major Change pursuant to this Agreement or Obl ains or commits to obtain approval of the redesign as a Moderate Change or ~ fajor Change pursuant to this Agreement. (b) The redesiJ;n does not result in any material adverse impact to (i) the ingress to or egress it om the Project and Bundy Drive, (ii) the internal traffic circulation system of :he Project, or (iii) the orientation, layout design of the Buildings, the Parking Structures and the common areas of the Project. (c) The rede:iign does not have any material adverse effect on the environmental impacts of the Project studied in the EIR nor the measures studied and recommended thel ein to mitigate said environmental impacts. (d) The redesign does not result in any material delay or increase in the cost to the Developer of: (i) design. construction or development of any improvements for the Project, including, without limitation, anyon-site traffic improvements or the internal circulation system, (ii) operation and maintenance of the Project, or (iii) the performance or construction of the mitigation measures by the Developer under this Agreement. 48. Requirement to Execute Documents. City and the Developer shall execute this Agreement within seven days after the later to occur of (i) the effective date of the Oty Ordinance approving this Agreernentt or (ii) thirty (30) days after the filing of the Notice of Determination for the EIR, provided that no lawsuit challenging the approval of the EIR has been filed within such thirty (30) day period. -66- . . IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. CITY: CITY OF SANTA MONICA: By: JOHN JALTLT Its City Manager ATTEST: City Clerk .67. e APPROVED AS TO FORM: Robert M. Myers, CIty Attorney DEVELOPER: RAL:ncv:em:RDGDAFNS.336 e RELIANCE DEVELOPMENT GROUP, INe., a Delaware corporation By: HENRY A LAMBERT Its President -68- e e EXHIBIT "AI" DEVELOPMENT AGREEMENT between lHE CITY OF SANTA MONICA and RELIANCE DEVEWPMENT GROUP. INC. Lellal Descriotion of Aimort Residuall..and - - - Those portions of Lots 127, 128, 129, 154 to 164, inclusive, 169 and 170, all of Lots 130 to 153, inclusive, all in Tract No. 10529, in the City of Santa Monica, County of Los Angeles, State of California, as per map recorded in Book 160, Pages 21 to 25, inclusive, of Maps, in the office of the County Recorder of said County; that portion of Centinela Avenue, vacated, and that portion of Lots 2 to 5, inclusive, of Ocean Park Heights, in the City of Los Angeles, in the County of Los Angeles, State of California, as per map recorded in Book 5, Page 130 of Maps, in the office of the County Recorder of said County, all included within the following described lInes: Beginning at the intersection of the Southwesterly line of Bundy Drive, with the Southeasterly line of said Lot 164, as shown on Map of Tract No. 17636, recorded in Book 482, Page 33, of Maps, of said County; thence along the Southeasterly line of said Lots 164, 169 and 170, as follows: South 5'? 33' 26" West 2004.31 feet and South 57049' 34" West 393.00 feet; thence North 320 10' 26" West 230.00 feet; thence North 51046' 49" East 251.15 feet; thence North 320 10' 26" West 373.70 feet; thence North 440 38' SO" East 705.00 feet, to the beginning of a tangent curve concave Southerly, and having a radius of 54.00 feet; thence Easterly and Southeasterly along said curve, through a central angle of 90000' 00" an arc length of 84.82 feet; thence tangent to said curve South 450 21' 10" East 110.00 feet, to the beginning of a tangent curve concave Northerly and having a radius of 87.50 feet; thence Southeasterly and Easterly along said curve through a central angle of 900 00' 00", an arc distance of 137.44 feet; thence tangent to said curve North 440 38' 50't East 636.50 feet, to the beginning of a tangent curve concave Northwesterly and having a radius of 241.00 feet; thence Northeasterly along said curve through a central angle 2go 42' 09", an arc distance of 124.94 feet to the beginning of a reverse curve concave Southeasterly and having a radius of 209.00 feet; thence Northeasterly along said curve through a central angle 2go 42' 0911 an arc distance of 108.35 feet; thence tangent to said curve North 44Q 38' 50" East 575.65 feet to the Southwesterly line of said Bundy Drive; thence Southeasterly along the Southwesterly line of said Bundy Drive through its various courses and curves, to the point of beginning. . e EXHIBIT uA2" DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and RELIANCE DEVELOPMENT GROUP. INC. Legal Descriotion of Prooertv -- - ...- That part of Lots 127 to 164, inclusive, 169 and 170 in Tract Number 10529, City of Santa Monica, Book 160 of Maps, pages 21 to 25, inclusive, Records of Los Angeles County, California AND that part of Centinela Avenue, abandoned, AND that part of lots 2 to 5, inclusive, of Ocean Park Heights, City of Los Angeles, Book 5 of Maps, page 130, Records of Los Angeles County, California, being more particularly described as follows: BEGINNING at the intersection of the southwesterly line of Bundy Drive (said line being 40.00' distantJrom the center line of Bundy Drive) with the southeasterly line of said Lot 164, as shown on Map of Tract Number 17636, Book 482 of Maps, page 33 of said County; Thence South 5r 33' 261. West along the southeasterly line of said Lots 164, 169 and 170 a distance of 1527.30 feet; Thence North 45021' 10" West a distance of 423.18 feet; Thence North 44038' 50" East a distance of 155.00 feet; Thence North 450 21' 10" West a distance of 329.78 feet; Thence North 44038' 50" East a distance of 88.50 feet to a curve whose radius bears South 450 21' 10" East a distance of 54.00 feet; Thence northeasterly, east and southeasterly along said curve through a central angle of 900 00' 00" a distance of 84.82 feet to a point of tangency; Thence South 450 21' 10" East a distance of 110.00 feet to a curve whose radius bears North 440 38' 50" East a distance of 87.50 feet; Thence southeasterly, easterly and northeasterly along said curve through a central angle of 900 00' 00" a distance of 137.44 feet to a point of tangency; Thence North 440 38' 50" East a distance of 636.50 feet to a curve whose radius bears North 450 21' 10" East a distance 241.00 feet; Thence northeasterly along said curve through a central angel of 290 42' 09" a distance of 124.94 feet to a reverse curve whose radius bears South 750 03' 19" East a distance of 209.00 feet; Thence northeasterly along said curve through a central angle of 290 42' 09" a distance of 108.35 feet to a point of tangency; e - Thence North 44038' 50" East a distance of 575.36 feet to the southwesterly line of Bundy Drive (said line being 40.00 feet distance from the centerline of Bundy Drive) and the beginning of a non-tangent curve whose radius bears North 770 27' 24" East a distance of 2040.00 feet; Thence southerly and southeasterly along said curve and said southwesterly line of Bundy Drive through a central angle of 190 47' 53" a distance of 704.90 feet to a point of tangency; Thence continuing along said southwesterly line of Bundy Drive South 320 20' 29" East a distance of 78.50 feet to the boundary line common to the cities of Santa Monica and Los Angeles; Thence continuing along said boundary line South 340 31' 19" West a distance of 184.10 feet; Thence South sr 33' 26" West a distance of 7.00 feet to the TRUE POINT OF BEGINNING. -2- . e EXHIBIT "A3" DEVEWPMENT AGREEMENT between TIlE CITY OF SANTA MONICA and RELIANCE DEVELOPMENT GROUP. INC. Lel!al Descrintion of Aimort Sumlus Parcel - - - - That part of Lot 170 in Tract Number 10529, City of Santa Monica, Book 160 of Maps, Pages 21 to 25 inclusive, Records of Los Angeles County, California, being more particularly described as follows: Commencing at the intersection of the southeasterly line of Lot 164 in said Tract with the southwesterly line of Bundy Drive (said line being 40.00 feet distant from the center line of Bundy Drive) as shown on Map of Tract Number 17636, Book 482 of Maps, Page 33, Records of Los Angeles County; Thence South 570 33' 26" West along the southeasterly line of Lots 164, 169 and 170 in said Tract Number 10529 a distance of 1527.30 feet to the TRUE POINT OF BEGINNING; Thence continuing South 5T 33' 26" West a distance of 477.77 feet; Thence South 570 49' 34" West a distance of 393.00 feet; Thence North 320 10' 2611 West a distance of 230.00 feet; Thence North 510 46' 49" East a distance of 251.15 feet; Thence North 320 10' 26" West a distance of 373.70 feet; Thence North 440 38' 50" East a distance of 616.50 feet; Thence South 450 21' 10" East a distance of 329.78 feet; Thence South 440 21' 50" West a distance of 155.00 feet; Thence South 450 21' 10" East a distance of 423.18 feet to the TRUE POINT OF BEGINNING. . e EXHIBIT "B" DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and RELIANCE DEVEWPMENT GROUP. INC. Proiect Site Plan ,. - EXHIBIT "e' DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and RELIANCE DEVELOPMENT GROUP. INC. D~sign Features The Project shall be in compliance with the following design standards: 1. Reflective Materials. No more than 25% of the surface area of any facade on any building shall contain black or mirrored glass or other mirror~1ike material that is highly reflective. Materials for roofing shall be of a nonreflective nature. Glazing on the ground floor street frontage facade shall be cleaT untinted glass. 2. Fence. Wall. Hedge. Flagpole. Any fence, wall) hedge, or flagpole shall comply with the following standards: (a) Fences, walls, or hedges shall not exceed six feet in height when located on a property line. Fences or walls may extend up to eight feet in height upon the written consent of all current properties owner(s) and residents living on the parcel adjacent to the wall. The consent shall be on the form approved by the Director of Planning and shall be rued with the City prior to installation of the fence or wall. (b) Fences, walls, or hedges shall not exceed 42 inches in height when located between Bundy Drive and the buildings located in Phase 1. (c) Fence, wall, or hedge height shall be measured from the finished grade on the side of the fence, wall or hedge, which faces the perimeter of the Property and shall be measured in a continuum at each point along the fence, wall, or hedge. (d) Free-standing flagpoles may not exceed the maximum height permitted for the Project. 3. Hazardous Visual Obstructions. The Project shall not contain any fence, wall, hedge, tree, plantings, or other obstructions, to obscure or block the visibility of drivers of automobiles entering or exiting a driveway, parking lot, or other vehicle accessway or to constitute an unreasonable or unnecessary hazard to persons lawfully using an adjacent sidewalk, street, or other right~of-way. Any fence, wall, hedge tree, planing, or other obstructions shall be located at least 5 feet from the closest intersection of any parcel line with the street, driveway, or garage entrance. 4. Screening Stor~ge Areas. All storage of materials, wares, crates, bottles, or similar items necessary to or part of a business or commercial operation shall be screened from view on at least three sides by a solid opaque impact-resistant wall not less than 5 feet in height and not more than 8 feet in height and on the fourth side by a solid opaque impact-resistant gate not less than 5 feet in height or more than 8 feet in height or, alternatively, such other material or design approved by the Architectural Review Board. e ~ 5. Screening Mechanical Equipment. All mechanical equipment that extends more than 12 inches above the roof parapet shall be screened from view. Equipment shall be screened as viewed from a horizontal plane on all sides with an impact resistant wall. 6. Refuse and Screening Of Refuse Storage Areas. The Project shall provide and maintain one or more trash receptacles on the Property. The trash receptacles shall be of sufficient size to accommodate the trash generated by the uses in the Project consistent with guidelines prepared by the Department of General Services. All outdoor storage of trash, garbage, refuse, and other items or material intended to be discarded or for collection shall be screened from public view on at least three sides by a solid opaque impact-resistant wall not less than S feet in height or more than 8 feet in height, and on the 4th side by a solid opaque resistant gate not less than 5 feet in height or more than 8 feet in height or of such other material or design approved by the Architectural Review Board. The gate shall be maintained in working order and shall remain closed except when in use. All outdoor storage for refuse shall be located not more than 10 feet from the roadway which is closest to the refuse collection point. 7. Drainag~. The Project must drain to the street or directly into a public storm drainage system in a manner approved by the Department of General Services. No surface drainage may be discharged into abutting properties. 8. Solar Energy Design Standards. The following standards shall apply to the design of all solar energy systems included in the Project: (a) Roof-mounted solar collectors shall be placed in the location least visible from a public right-of-way without reducing the operating efficiency of the collectors. Wall-mounted and ground-mounted solar collectors shall be screened from public view. (b) When feasible, collectors shall be integrated into the design of a building. Structural support for the collectors shall be screened in a manner that is compatible with the design of a building. (c) Appurtenant equipment, particularly plumbing and related fixtures, shall be installed in an attic or basement where feasible. (d) Large accessory fixtures which must be exposed (e.g., storage tanks) shall be screened where possible through architectural features that harmonize with other design elements of the structure. (e) Storage tanks shall not be visible from any public right-of-way. (f) Exterior surfaces shall have a matte finish and shall be color-coordinated to harmonize with roof materials or other dominant colors of the structure. 9. Lighting. All outdoor lighting associated with the Project shall be shielded and directed away from surrounding residential uses. Such lighting shall not exceed 0.5 foot-candles of illumination beyond the Property and shall not blink, flash, oscillate or be of unusually high intensity of brightness. -2- - e All surface parking areas of five or more spaces shall have a 1.0 foot-candle illumination per square foot of parking area for visibility and security during hours of darkness. Wiring for the illumination shall be underground. Searchlights for advertising purposes and overhead rooftop lighting shall be prohibited between midnight and dawn. 10. Glare. Every use shall be so operated that any significant, direct glare incidental to the operation of the use shall not be visible beyond the boundaries of the Property. 11. s.1.gm. All signs on the Property shall comply with the provisions of Article 9 of the Santa Monica Municipal Code. 12. Reauired Landscaoe For ExteriQr Paved Areas. A minimum of 10% of the total exterior paved area thai accommodates vehicular traffic including accessways, driveways, loading areas, and service areas shall be devoted to landscaped islands, peninsulas, or medians distributed throughout the paved area. A minimum of one tree for each 1,200 square feet of paved area that accommodates vehicular traffic shall be provided and maintained. 13. Landscane Maintenance and Protection. (a) All landscaped areas shall be protected from vehicular damage by raised concrete or other curbing of at least six inches in height. (b) All newly planted trees shall be planted in permeable soil. (c) Low volume irrigation systems with automatic controllers shall be required. Such irrigation includes, but is not limited to, low volume sprinkler heads, drip emitters, and bubbler emitters. (d) Sprinkler spacing for both turf and non-turf areas shall be 50% of the diameter of the throw. (e) Anti-drain valve shall be installed in sloping areas with elevation differences of more than 5 feet. (f) Landscape materials which have different watering needs shall be irrigated by separate control valves. Water coverage shall be limited to plant areas only. (g) Automatic controllers shall be set to water between 5:00 p.m. and 10:00 a.m. to reduce evaporation. (h) An annual maintenance program with seasonal water schedule shall be required to assist any landscape manager. The water schedule shall include run time and frequency of irrigation for planted areas with similar characteristics. The watering period shall not exceed the point at which runoff begins. A maintenance program shall not be required for systems with soil moisture sensors that are installed and properly adjusted. -3- . -- (i) A minimum of PVC Schedule 40 or equivalent shall be used for main lines and under driveway areas, and a minimum of PVC Schedule 200 or equivalent shall be used for lateral lines. (j) All landscaped areas shall be permanently maintained and kept free of weeds, debris, and litter. All plant materials shall be maintained in a healthy growing condition and diseased or dead plant materials shall be replaced, in kind, pursuant to the approved plans within 30 days. 14. Water Conservation Landscaoim!. (a) The maximum area permitted for turf shall be 20% of the total area landscaped on the site. Higher percentages may be permitted when turf is an essential part of the development as determined by the Architectural Review Board. Large areas of turf shall use soil moisture sensors as part of the irrigation system. (b) Turf shall not be permitted in areas difficult to irrigate, such as sidewalk strips, slopes, or narrow pathways. (c) Turf usage shall only be permitted when used for highly visual and functional use areas. Lower water usage turn or warm season grasses are recommended for aU turf areas. (d) Plants used in non-turf areas shall be water conserving plant material. Flowering ornamentals that are not low water using plants shall be counted as turf when calculating turf areas. Appropriate low water plant varieties shall be approved by the Director of General Services. (e) Fresh water bodies and fountains where water is sprayed into the air shall be prohibited. The Director of general Services may vary this requirement when the water to be used is not fresh water. 15. Design Standards for TYRO ~nd Microwave Antennas. (a) Any TVRO or microwave antenna shall be installed, modified, and maintained in accordance with the following standards: (i) Only one antenna is permitted per Phase. (il) The diameter of a TVRO antenna shall not exceed the 3.0 meters and the diameter of a microwave antenna shall not exceed 1.0 meters. (iii) The antenna shall comply with all height and setback requirements specified for buildings within the Project. (iv) The antenna shall be finished in a color to neutralize and blend it with the immediate surroundings. -4- e e (v) The installation shall be located in such a way as to prevent obstruction of the antenna's reception window from potential permitted development on adjoining parcels. (vi) A building permit shall be obtained prior to installation. (vii) The display of signs or any other graphics on an antenna is prohibited. (viii) Subject to the approval of a conditional use permit, the following may be permitted: <A) Two or more antennas. (B) An antenna with a diameter greater than that permitted by this section. (C) Placement of the antenna in any required setback provided the Developer demonstrates that compliance with this Section would result in interference or technical infeasibility beyond the control of the Developer. (D) Installation of the antenna in excess of the permitted height provided the Developer demonstrates that compliance with this Section would result in interference or technical infeasibility beyond the control of the developer. (E) Any requirement imposed upon the installation of an antenna shall not operate to impose unreasonable limitations on or prevent reception or operate to impose costs on the users of such antennas that are excessive in light of the purchase and installation costs of such antennas. (b) The installation of any satellite uplink antenna shall be subject to review and approval of a conditional use permit. (c) Any stand alone antenna shall be prohibited. 16. Handicap Access. The Developer design the Project to provide access for the disabled in accordance with all applicable laws, including those set forth in Title 24, Part 2 of the California Administrative Code. 17. Barrier Along Southern Border of Project. The Developer shall provide a wall, fence, or other barrier to the satisfaction of the City along the southern property line of the Project to prevent motorists and pedestrians from traveling between the Project and the neighborhood to the south. The wall, fence or barrier shaU provide for access to the Lear Sieglar parking lot south of the Project. .5- - -- 18. Foundation Design. In preparing the foundation design for any building or parking structure in the Project, the Developer shall provide for: (a) the removal of all existing paving, vegetation and debris from the sudace of the parcel prior to excavation; (b) the removal of debris and organic material from the excavated soil prior to reusing it as fill; and (c) the recornpaction of all fill and natural soils used for foundation support to 90% of maximum obtainable density. 19. Loading. The Developer shall provide three (3) Loading Spaces, as defined in the Zoning Ordinance in effect on the Effective Date, for each building in the Project of 100,000 square feet or more. -6- - . EXHIBIT liD" DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and RELIANCE DEVEWPMENT GROUP. INC. Rel!uirements of the G~neral Services Department OFF-SITE TRAFFIC IMPROVEMENTS 1. The Developer shall design and construct the following street and intersection improvements in the City of Santa Monica, the City of Los Angeles and Culver City. Phase 1 · Bundv Drive & Santa Monica Freewav Eastbo\Jnd on-ramo - - Cut-back the raised. median on the northbound Bundy Drive approach and re-stripe both the northbound and southbound approaches to provide a second left-turn lane in the southbound approach. This would result in dual left-turn lanes and two through lanes in the southbound approach. · Bundy Drive & Ocean Park Boulevard - - Re-stripe the exterior eastbound through lane to a shared through/right-turn lane. · Bundy Drive & National Boulevard - - Widen (and re-stripe both approaches) on Bundy Drive between Airport Avenue and a point north of National Boulevard on the west side (using Santa Monica Municipal Airport Property) to provide three through lanes on both the northbound and southbound approaches. This would result in three through lanes and an exclusive right- turn lane on the northbound approach and two left-turn lanes and three through lanes on the southbound approach. · Bundy Drive & Airport Avenue - - Widen (and re-stripe both approaches) Bundy Drive between National Boulevard and a point 400 feet south of Airport Avenue on the west side to provide three through lanes on both Bundy Drive approaches. This would result in three through lanes and two exclusive right-turn lanes on the southbound approach and one left-turn lane and three through lanes on the northbound approach. Widen Airport Avenue to provide three left-turn lanes and a right-turn lane. · Centinela Avenue & Palms Boulevard - - Re-stripe both Centinela Avenue approaches to provide a southbound right-turn lane. · Sawtelle Boulevard & National Boulevard - - Widen both the northbound and southbound Sawtelle Boulevard approaches to add an exclusive right-turn lane. This would result in a single left-turn lane, two through lanes and a single right-turn lane for both the northbound and southbound Sawtelle Boulevard approaches and a single left-turn lane, two through lanes and a shared through/right-turn lane for the National Boulevard eastbound approach. Widen the eastbound National Boulevard approach to the San -- It Diego Freeway Southbound on-ramp to add a third through lane. The Developer and the City of Santa Monica mutually recognize that the eastbound curb lane must operate as an exclusive right turn lane until the San Diego Freeway southbound on-ramp approach is widened in connection with Phase 2. Phase 2 23rd Street & Ocean Park Boulevard - - Re-stripe and remove parking on eastbound Ocean Park Boulevard approach to provide two through lanes and a right turn lane. · Centinela Avenue & S(.Inta Monica Freewav westbound on/off ramDS - - Remove the existing raised median and re-stripe the northbound Centinela Avenue approach to provide a second exclusive left-turn lane resulting in a dual left-turn lane and one through lane. In conjunction with this improvement, the median on the westbound on-ramp should be cutback to better facilitate the northbound dualleft-tum lane. · Centinela Avenue & Ocean Park Boulevard - - Remove the existing raised center median on the eastbound Ocean Park Boulevard approach and re- stripe both eastbound and westbound approaches to provide a second eastbound left-turn lane. This would result in two left-turn lanes, one through lane, and a shared through/right-turn lane on the eastbound approach. In addition, the signal should be modified to provide a fully-actuated left-turn east~west phase resulting in a three-phase signal. · Bundy Drive & Olympic Boulevarq - - Widen the northbound Bundy Drive approach to provide an exclusive right-turn lane resulting in a single left-turn lane, three through lanes and a single right-turn lane. · Centinela Avenue & Rose Av~nue - - Re-stripe both Centinela Avenue approaches to provide a southbound right-turn lane. · San Diel!o Freewav southbound on-ramo & National Boulevard - - Widen the eastbound Nation3.I Boulevard approach to provide an exclusive right-turn lane resulting in one through lane, one shared through/right-turn lane and a single right- turn lane. In conjunction with this improvement, cutback the southbound on- ramp curb lane to better facilitate the eastbound dual right-turn lanes. · San Diego Freeway northbound off-ram!> & National Boulevard - - Re-stripe off-ramp to provide a left-turn lane and a shared left/right-turn lane. Phase 3 · Barrington Avenue &. National Boulevarc;l - - Re-stripe the southbound Barrington Avenue approach to provide an exclusive right-turn lane. -2- e . · Barrington Av~m,JC &. Galcway Boulevard - Re-stripe the northbound Barrington Avenue approach to provide a second left-turn lane resulting in two left-turn lanes, two through lanes, and a right-turn lane. The signal should also be modified to provide a left-turn east/west, protected phase resulting in a three-phase signal. 2. The Developer shall construct and install aU necessary equipment at each of the following intersections to link those intersections to the City of Los Angeles' Depart~ ment of Transportation Automated Traffic Surveillance and Control (A TSAC) system: Phase 1 · Each of the following intersections located in the Oty of Los Angeles: Bundy Drive and Ocean Park Boulevard Bundy Drive and National Boulevard Bundy Drive and Airport Avenue Centinela Avenue and Palms Boulevard Centinela Avenue and Venice Boulevard · Each of the following intersections located in Culver City: Centinela Avenue and Washington Place Centinela Avenue and Washington Boulevard Phase Z · Each of the following intersections located in the Oty of Los Angeles: Centinela Avenue and Rose Avenue Bundy Drive and Pico Boulevard OTHER 1RAFFIC 3. The Developer shall maintain a two lane, improved, paved, and constructed roadway from Bundy/Centinela to the Airport Administration Building without interruption throughout construction of the Project and thereafter. 4. The Developer shall maintain a two lane access roadway to the Lear Astronics parking lot without interruption throughout construction of the Project and thereafter. 5. No Project traffic (either commuter or construction) shall be permitted onto the Airport perimeter roadway or the Airport taxiways. 6. The Developer shall obtain all permits and approvals for the use, restriction or closure of any public streets which may be required in connection with the construction of the Project or the Off-Site Traffic Improvements. -3- e . 7. The Developer shall maintain access to the building at 3300 Airport Avenue through April 30, 1990. ENGINEERING 8. The Developer shall prepare civil engineering plans for all on-site and off-site traffic improvements, infrastructure improvements and utilities located the City of Santa Monica. Such plans shall be submitted to the City Engineer for review and approval in accordance with standards and conditions which are consistent with those imposed on similar projects. The Developer shall prepare civil engineering plans for all off- site improvements located in the City of Los Angeles and Culver City. Such plans shall be submitted to the appropriate Los Angeles City or Culver City department or agency, as applicable, for review and approval. 9. The Developer shall submit for the review and approval by the Director of General Services a shoring plan, where shoring may be requiredJ to be prepared by a competent registered engineer. The Developer shall pay a fee for tiebacks in the public right-of-way which shall be $300 for each tieback that extends 20 feet or less below grade and $150 for each tieback that extends greater than 20 feet below grade. 10. The Developer shall submit for review and approval by the Director of General Services a comprehensive soil erosion control plan prepared by a competent registered engineer. The plan shall provide specific designs, measures, and improvements that will mitigate potential gullying and sediment caused by water run-off from the site both during construction and after the Project is complete. WATER AND WASTEWATER 11. The Developer shall install new sewer mains within the Project which shall be built to City standards and which shall additionally serve existing facilities at the Santa Monica Municipal Airport south of the runway as of the Effective Date. The location and size of these sewers shall be determined when the location, size, and extent of on-site Recycling System, discussed in the Agreement are finalized. The Developer shall improve the existing sewer line below Airport Avenue extending from the Project to the sewer line located below 23rd Street and Walgrove Avenue on the west side of the Airport to the extent necessary to serve the Project (or, with the consent of the City Engineer extending from the Project to the existing sewer line located along the western boundary of the Property). New on-site sewer mains shall connect to the City system below Airport Avenue west of the development. The Developer shall grant to the City easements and access to all sewers and appurtenances which are to become a part of the City sewer system. 12. The Developer shall install a new 12" water main which shall be built to City standards below the service road along the northerly boundary of the Project from the west end of the Project to approximately the Los Angeles City Limits, where it -4- e e will reconnect with the existing 12" main around the east end of the Airport runway. The Developer shall pay the cost of relocating any Airpon service connections to the new main as required, and of abandoning the old main. The City shall have the option of keeping title to any of the abandoned materials, but shall not be required to dispose of any abandoned materials not wanted. The Developer shall install to Oty standards allan-site mains, service connections, meters and backflow prevention devices which may be required for water service to the Project. The Developer shall grant to the City easements and access to all water mains and appurtenances which are to become part of the City water distribution system. 13. The Developer shall install to City standards fire hydrants along the northerly perimeter water main and within the Project site as required by the Director of General Services and the Fire Department. 14. Water and sewer utilities shall be maintained to serve the Airport without interruption throughout construction of the Project and thereafter. MISCELLANEOUS 15. Power, gas, and telephone utility services shall be maintained to serve the Airport without interruption throughout construction of the Project and thereafter, except such interruptions which receive the prior written approval of the Santa Monica Airport Director. 16. The Developer shall install street lighting improvements as required by the Director of General Services. All street lighting improvements must be in conformance with the llIuminating Engineers Society Standards for collector streets. Project street lighting shall not create glare for pilots landing at or taking off from the Airport. 17. The Developer shall prepare and submit a refuse collection site and access plans to be reviewed and approved by the Director of General Services. 18. The Developer shall provide an on-site recycling system within each building designed to capture aluminum cans, office paper, newspaper, glass bottles, corrugated paper, and other waste products for collection by a recycling agency. The on-site system shall accommodate the use by businesses located in the Project as well as provide drop-off recycling areas for use by employees who bring recyclable material to the Project for collection. The Developer shall prepare a plan to minimize organic waste that includes the composting of landscaping wastes at an off-site location if a compost site is provided by the City within 1000' of the Project or legally divided parcel therein. 19. The Developer shall construct or install one or more covered, but not enclosed, bus stop shelter(s) along the sidewalk adjacent to Bundy Drive bordering the Project subject to approval by the Director of Transportation for the City of Santa Monica -5- - . and in cooperation with the appropriate agency in the City of Los Angeles. In designing the bus shelter(s), the Developer shall consider pollution levels adjacent to the Project. The bus sheIter(s) shall be within the public right of way on a site specially dedicated for this purpose. The bus shelter(s) shall be designed to complement the design of the Project. 20. The Developer shall plant street trees on the portion of the Property located along Bundy Drive in accordance with City of Los Angeles regulations concerning street tree plantings along that street. 21. The Director of General Services and Developer may agree upon substitute improvements for any of the foregoing (except those improvements and mitigations which are required by the Environmental Impact Report for the Project), which are designed to improve traffic, utility, drainage, or erosion conditions related to the Project so long as the total cost of such substitute improvements does not exceed the total estimated cost of the deleted requirements, computed on the date upon which a contract is entered into for the substitute improvements. -6- - tJ EXHIBIT "E" DEVELOPMENT AGREEMENT between THE CITY OF SANTA MONICA and REUANCE DEVELOPMENT GROUP. INC. Off-Site Traffic Improvem~nts and Traffic Capital Costs 1. Desien and Construction of Off-Site Traffic Imorovements. Except as otherwise specifically provided in the Agreement, as hereinafter defined, or this Exhibit "E" thereto, the Developer, at its sole cost and expense, shall design and construct the Off-Site Traffic Improvements which are listed in Exhibit "D" to the Agreement for each Phase of the Project in connection with the development by the Developer of such Phase. 2. Definitions. For purposes of this Exhibit "E", the following terms and phrases shall be interpreted as hereinafter defined, unless the context clearly indicates a contrary intent of the parties: Agreement: The Development Agreement entered into between the City of Santa Monica and Reliance Development Group to which this Exhibit "E" is attached and incorporated therein. Applicable Jurisdiction: For the Los Angeles Improvements, the City of Los Angeles and for the Culver City Improvements, Culver City. Applicable Jurisdiction Selected Contractor: As defined in Section 5(e) of this Exhibit "E". Approved Contractors: As defined in Section 3(c) of this Exhibit t'E". Approved Plans: As defined in Section 3(c) of this Exhibit "E". Culver City Imnrovements: Those Off-Site Traffic Improvements to be located in Culver City. - Excess Traffic Capital Costs: As defined in Section 8(a)(ii) of this Exhibit "En.. Final Certificate: The Certificate of Occupancy issued by the Oty of Santa Monica for the last building or parking structure to be constructed in the last Phase of the Project. First Certificate: The first Certificate of Occupancy issued by the City of Santa Monica for a building or parking structure in a Phase of the Project. First Certificate Issuance Date: The date upon which the First Certificate for a Phase is issued by the City of Santa Monica. Imorovements Contract: As defined in Section 5(e) of this Exhibit "E". e e Los Angeles Im!'rovements: Those Off-Site Traffic Improvements to be located in the City of Los Angeles. plan Revision~: As defined in Section Sea) of this Exhibit liE". Rejected Im!'rovements: As defined in Section 5(f) of this Exhibit "E". ~ejected Im!'rovements Lett~r of Credit: As defined in Section S(f) of this Exhibit "E". Exhibit "E". Reserved Improvements: As defined in Section 5(c)(i) of this Exhibit "E". Reserved Improvements Payment: As defined in Section 5( c)(i) of this Santa Monica Im!Jrovements: Those Off-Site Traffic Improvements to be located in the City of Santa Monica. Santa Monica Improv~ments Contract: As defmed in Section 4(b) of this Exhibit "E". Selected Contractor: As defined in Section 4(b) of this Exhibit "E". Traffic Ca!Jital Costs: The total costs, which are properly characterized as capital expenditures in accordance with generally accepted accounting principles consistently applied, and which are demonstrated by the Developer to have been expended or paid by the Developer or for the account of the Developer for the following Off-Site Traffic Improvements and Traffic Mitigation Parking Spaces and not reimbursed or reimbursable to the Developer by third parties: (i) The following dIrect costs properly attributable to construction of the Off-Site Traffic Improvements: (A) All reasonable fees and costs paid to engineers and engineering firms in connection with the design of the Off-Site Traffic Improvements. (B) All right of way acquisition costs which have been reasonably approved by the City of Santa Monica prior to the expenditure of such costs by the Developer. With respect to each particular right of way acquisition, the Developer shall submit to the City of Santa Monica an initial written recommendation of the proposed maximum acquisition cost and, if the Developer subsequently desires to increase the proposed maximum acquisition cost, Developer shall submit a supplemental written recommendation. The City of Santa Monica shall review the initial written recommendation within sixty (60) days and any supplemental written recommendation within ten (10) days following submission to the City of Santa Monica and shall approve the proposed maximum cost for each right of way acquisition in those recommendations WIthin those time periods, unless the City of Santa Monica -2- e . can establish that the proposed maximum acquisition cost is excessive under the circumstances (in which case the City of Santa Monica shall be deemed to have approved the proposed maximum acquisition cost in the written recommendations except for that portion which the City of Santa Monica can establish is excessive). The parties hereto expressly acknowledge that it may be reasonable and necessary for the Developer to recommend a proposed maximum cost for acquisition of a particular required right of way which is significantly higher than the market or appraised value for that right of way in order to facilitate the development of the Project in a diligent manner and that such proposed maximum acquisition cost shall not be deemed excessive under such circumstances. (C) All fees and costs paid to Selected Contractor(s) under Santa Monica Improvements Contract(s) and Applicable Jurisdiction Selected Contractor(s) under Applicable Jurisdiction Improvements Contract(s) entered into by the Developer pursuant to this Exhibit "E". including fees and costs in excess of the original contract amount of such Improvement Contracts so long as such excess fees and costs are paid pursuant to the terms of such Improvement Contracts or approved by the City, which approval shall not be unreasonably withheld or delayed. (D) The total sum of all Reserved Improvements Payments under Section 5(c) of this Exhibit "Ell. (E) Any amounts drawn by the City of Santa Monica from the Rejected Improvements Letter of Credit and paid to the Applicable Jurisdiction under Section 5(f)(iv) of this Exhibit "E". (F) The following fees and costs incurred as a result of a final nonappealable judgment pursuant to Section 7 of this Exhibit "E": (1) all fees and costs described in subsections (A), (B) or (C); and (2) the amount of any judgment to be paid in lieu of performing the Off-Site Traffic Improvements. (G) The total sum of any such other fees or costs paid to third parties or entities which the City of Santa Monica and the Developer mutually agree in writing, with specific reference to this Exhibit "E", constitute Traffic Capital Costs. (ii) All direct construction costs for labor, materials and equipment, including costs paid to contractors and subcontractors, properly attributable to the construction of the Traffic Mitigation Parking Spaces. Notwithstanding anything to the contrary above, no fees or costs paid to attorneys, architects, accountants or other professionals (other than engineers or engineering firms) and no financing costs shall be included in Traffic Capital Costs. -3- e tit Traffic Capital Costs Base: As defined in Section 8(a)(i) of this Exhibit "E". Traffic Mitigation Fee: As defined in Section 8(b) of this Exhibit "E". Traffic Mitigation Parking Spaces: Parking spaces at the Project that, pursuant to Developer's TDM Program under Section 6(h) of the Agreement, as approved by the Gty Manager of the Gty of Santa Monica, are dedicated during the entire term of the Agreement for use exclusively by car-pools and van-pools or, if approved in writing by the City Manager with specific reference to this Exhibit ffE'\ for other similar traffic mitigation purposes, provided in any case that no fee, rent or other charge is imposed for the use of such spaces during the term of the Agreement. In addition, other defined terms and phrases in this Exhibit "E" shall have the meanings attributed thereto in the Agreement. 3. Plans and Bids. With respect to all of the Off-Site Traffic Improvements, including the Santa Monica Improvements, the Los Angeles Improvements, and the Culver City Improvements prior to the issuance by the City of Santa Monica of a building permit for the construction of any building or parking structure in any Phase of the Project or any portion thereof: (a) Developer shall submit for approval of the City of Santa Monica detailed plans and specifications prepared by a qualified licensed civil engineer selected by Developer for all of the Off-Site Traffic Improvements required for that Phase. The plans and specifications for the Santa Monica Improvements shall be generally in accordance with the standards, requirements and common practices of the City of Santa Monica. The plans and specifications for the Los Angeles Improvements and the Culver City Improvements shall be generally in accordance with the standards, requirements and common practices of the Applicable Jurisdiction. The City of Santa Monica shall not unreasonably withhold or delay its approval of the plans and specifications submitted by the Developer under this subsection (a). (b) Developer shall submit for approval of the City of Santa Monica a list of licensed contractors whom Developer believes are qualified to perform the Off-Site Traffic Improvements required for the Phase, which approval shall not be unreasonably withheld or delayed. (c) Following approval by the City of Santa Monica of the licensed contractor(s) pursuant to subsection (b) ("Approved Contractors") and the plans and specifications for aU of the Off-Site Traffic Improvements required for the Phase pursuant to subsection (a) ("Approved Plans"), Developer shall obtain written bids from at least three (3) of the Approved Contractors to perform the necessary work under the Approved Plans for the required Off-Site Traffic Improvements for the Phase and shall submit such written bids to the City of Santa Monica. Each written bid shall separately delineate the amount of the bid attributable to each particular Off-Site Traffic Improvement which is part of the required Off-Site Traffic Improvements for the Phase. -4- e . 4. Santa Monica Improvements. The Developer may enter into a written contract ("Santa Monica Improvements Contract") with the Approved Contractor who has submitted the lowest responsible written bid or another Approved Contractor mutually agreed upon by the City of Santa Monica and the Developer ("Selected Contractor") to perform all of the Santa Monica Improvements required for the Phase pursuant to the Approved Plans. Unless mutually approved by the City of Santa Monica and the Developer, the Santa Monica Improvements Contract shall be for an amount not to exceed the written bid submitted by the Selected Contractor for performance of the Santa Monica Improvements. The City of Santa Monica shall have the right to review and approve the Santa Monica Improvements Contract, which approval shall not be unreasonably withheld or delayed. 5. Los Angeles Improvements and Culver City Improvements. With respect to any of the Los Angeles Improvements and the Culver City Improvements: (a) All of the Los Angeles Improvements and Culver City Improvements required for a Phase shall be constructed in accordance with the Approved Plans and any revisions to the Approved Plans upon which the City of Santa Monica, the Developer and the Applicable Jurisdiction may mutually agree ("Plan Revisions"). In the event that the City of Santa Monica, the Developer and the Applicable Jurisdiction mutually agree upon Plan Revisions to the Approved Plans, the Developer shall obtain and submit to the City of Santa Monica written bids from at least three (3) of the Approved Contractors to perform the required Los Angeles Improvements and the Culver City Improvements for the Phase under the Approved Plans, as modifIed by the Plan Revisions. Each written bid shall separately delineate the amount of the bid attributable to each particular Los Angeles Improvements or Culver City Improvements which is part of the required Los Angeles Improvements and Culver City Improvements for the Phase. (b) Developer agrees to use due dIligence to apply for, and Developer's best efforts to obtain, any necessary permIts and approvals from the Applicable Jurisdiction to construct the Los Angeles Improvements and Culver City Improvements required for a Phase in accordance with the Approved Plans and any Plan Revisions thereto. In connection with any application to the Applicable Jurisdiction for the issuance of permits and approvals to construct the required Los Angeles Improvements and Culver City Improvements for a Phase, the Developer shall submit to the Applicable Jurisdiction the Approved Plans and any Plan Revisions thereto for such Los Angeles Improvements or Culver City Improvements, as applicable and the lowest responsible written bid submitted by an Approved Contractor to perform such Los Angeles Improvements or Culver City Improvements in accordance with the Approved Plans and any Plan Revisions thereto. (c) In the event that: (i) The Applicable Jurisdiction determines that it desires to have: (A) all or any portion of the Los Angeles Improvements or the Culver City Improvements, as applicable, constructed directly by the Applicable Jurisdiction or its contractors ("Reserved Improvements"); and -5- - e (B) the cost of the Reserved Improvements, as estimated by the Applicable Jurisdiction, paid directly to the Applicable Jurisdiction ("Reserved Improvements Payment"), (ii) The Applicable Jurisdiction delivers a written notice of its determination under subsection (i) to the City of Santa Monica and the Developer specifying the Reserved Improvements for the Phase within thirty (30) days following submission by the Developer to the Applicable Jurisdiction of the lowest responsible written bid from an Approved Contractor to perform the Los Angeles Improvements or the Culver City Improvements, as applicable, pursuant to subsection (b), (ill) The amount of the Reserved Improvements Payment does not exceed the total amount of the lowest responsible written bid from the Approved Contractor to perform the Reserved Improvements which was submitted by the Developer pursuant to subsection (b) or such other amount as may be mutually agreed upon by the City of Santa Monica and the Developer, and (iv) The Applicable Jurisdiction enters into a written agreement with the City of Santa Monica and the Developer upon terms and conditions which are acceptable to the City of Santa Monica and the Developer, in their reasonable judgment, which provides written assurances to the City of Santa Monica and the Developer of the full and timely completion of the Reserved Improvements by the Applicable Jurisdiction and releases the City of Santa Monica and the Developer from any responsibility for the performance of the Reserved Improvements or for the payment or reimbursement of any costs or expenses in connection therewith, other than the Reserved Improvements Payment, then the Developer shall pay to the Applicable Jurisdiction within thirty (30) days following execution of the written agreement under subsection (iv), a sum equal to the Reserved Improvements Payment. Upon payment by Developer to the Applicable Jurisdiction of the Reserved Improvements Payment, the City of Santa Monica shall not withhold or delay the issuance of the First Certificate or any subsequent Certificate of Occupancy which may be required in connection with any bUIlding or parking structure in the Phase on the basis of non-completion of any Reserved Improvements. If the Applicable Jurisdiction fails to deliver timely written notice to the City of Santa Monica and the Developer under subsec- tion (ii) or otherwise fails to comply with the provisions of this subsection (c), the Developer shall have no obligatIOn to pay the Reserved Improvements Payment to the Applicable Jurisdiction or to consent to any request or proposal from the Applicable Jurisdiction to have the Los Angeles Improvements or the Culver City Improvements, as applicable, for the Phase performed by the Applicable Jurisdiction or its contractor. (d) The obligation of the Developer to construct the Los Angeles Improvements and the Culver City Improvements for any Phase (other than the Reserved Improvements) and, except as expressly provided in Sections 5(c) and 7, the obligation of the Developer to bear any cost and expense in connection with the Los Angeles Improvements and the Culver City Improvements for any Phase [other than costs and -6- e . expenses for acts required under Sections 3t 5(a), 5(b), S(c) and S(f)] is expressly contingent upon the prior issuance by the Applicable Jurisdiction of all necessary permits and approvals for the performance of such Los Angeles Improvements and the Culver City Improvements. ( e) In the event that the Applicable Jurisdiction issues the necessary permits and approvals to construct the los Angeles Improvements and the Culver City Improvements for any Phase of the Project in accordance with the Approved Plans and any Plan Revisions thereto at any time prior to the issuance of the Final Certificate for a building or parking structure in the last Phase of the Project, the Developer shall enter into a written contract (It Applicable Jurisdiction Improvements Contract") with the Approved Contractor who has submitted the lowest responsible written bid or another contractor mutually agreed upon by the City and the Developer ("Applicable Jurisdiction Selected Contractor") to perform the Los Angeles Improvements and the Culver City Improvements which are covered by such bid and which are the subject of the permits and approvals issued by the Applicable Jurisdiction. In the event that at the time of tbe issuance of the necessary permits and approvals by the Applicable Jurisdictio~ the lowest responsible written bid from an Approved Contractor to construct tbe Los Angeles Improvements and the Culver City Improvements which was submitted by the Developer to the City of Santa Monica under subsection (b) is no longer validt the Developer shall obtain and submit to the City of Santa Monica new written bids from at least three (3) of the Approved Contractors to perform the Los Angeles Improvements and the Culver Clty Improvements to which the permits and approvals relate. In such event, the Developer shall enter into the Applicable Jurisdiction Improvements Contract with the Approved Contractor who has submitted the new lowest responsible written bid or another Approved Contractor mutually agreed upon by the City of Santa Monica and the Developer and that Approved Contractor shall be deemed the Applicable Jurisdiction Selected Contractor. Unless mutually approved by the City of Santa Monica and the Developer, the Applicable Jurisdiction Improvements Contract shall be for an amount not to exceed the written bid submitted by the Applicable Jurisdiction Selected Contractor to perform the Los Angeles Improvements and the Culver City Improvements which are the subject of the Applicable Jurisdiction Improvements Contract. The City of Santa Monica shall have the right to review and approve the Applicable Jurisdiction Improvements Contract, which approval shall not be unreasonably withheld or delayed. Unless otherwise determined by the final nonappealable judgment of a court of competent jurisdiction pursuant to Section 7, neither the Developer nor the City of Santa Monica shall be obligated to payor incur any costs in connection with the performance of the los Angeles Improvements and the Culver City Improvements which would not have been paid or incurred if the Applicable Jurisdiction had issued necessary permits and approvals to construct the Los Angeles Improvements and the Culver City Improvements in due course upon Developer's proper application therefor made in accordance with the provisions of this Agreement, provided, however, that if the Developer actually pays or incurs such costs in accordance with this Exhibit "E" (whether or not pursuant to a fmal nonapplicable judgment of a court of competent jurisdiction) and if such costs would otherwise qualify as "Traffic Capital Costs" as defined herein, such costs shall constitute Traffic Capital Costs for which the Developer may be entitled to reimbursement under the provisions of Section 8 of this Exhibit "E", (f) If the Developer has used due diligence and its best efforts to apply for and obtain the necessary permits and approvals from the Applicable Jurisdiction to -7- e e construct the Los Angeles Improvements and the Culver City Improvements for a Phase in accordance with the Approved Plans and any Plan Revisions thereto, but the Applicable Jurisdiction has declined or refused to issue the necessary permits and approvals for performance of any of the Los Angeles Improvements and the Culver Oty Improvements, except for the Reserved Improvements, as of the date on which the First Certificate would be issued for a building or parking structure in that Phase but for noncompletion of such Los Angeles Improvements and the Culver City Improvements ("Rejected Improvements"), the City of Santa Monica shall not withhold or delay the issuance of the First Certificate or any subsequent Certificate of Occupancy which may be required in connection with any building or parking structure in the Phase on the basis of the non-completion of the Rejected Improvements. As a condition precedent to the issuance by the City of Santa Monica of the First Certificate or any subsequent Certificate of Occupancy for the Phase under this subsection (f), the Developer shall deposit with the City of Santa Monica an unconditional irrevocable letter of credit as security for the obligations of the Developer to perform the Los Angeles Improvements and the Culver City Improvements under subsection (e) ("Rejected Improvements Letter of Credit"). Each Rejected Improvements Letter of Credit shall meet the following requirements: (i) The Rejected Improvements Letter of Credit must be an irrevocable letter of credit issued by a national bank and in a form and content approved by the City Manager of the City of Santa Monica, which approval shall not be unreasonably withheld or delayed. (ii) The initial Rejected Improvements Letter of Credit shall have an expiration date which is the first anniversary date of the First Certificate Issuance Date for the Phase. (iii) The amount of each Rejected Improvements Letter of Credit shall be a sum equal to the total amount attributable to the Rejected Improvements in the then most current lowest responsible written bid submitted by an Approved Contractor, which amount shall be increased by the same percentage as the percentage increase, if any, in the Dodge Building Cost Index for Los Angeles as of the second full month preceding the date of the Rejected Improvements Letter of Credit over the Dodge Building Cost Index for Los Angeles as of the date of the then most current lowest responsible written bid, provided that, in the event that as of the First Certificate Issuance Date, the Developer has submitted a written report pursuant to subsection (8)(a)(ii) demonstrating that the Developer has paid Traffic Capital Costs equal to or in excess of the Traffic Capital Costs Base defined and determined pursuant to Section (8)(a)(i), the amount of the Rejected Improvements Letter of Credit shall be equal to one-half (1/2) of the then most current lowest responsible written bid, which amount shall similarly be increased by the Dodge Building Cost Index, as provided in this subsection (iii). (iv) In the event that the Developer fails to timely perform any of the Los Angeles Improvements and the Culver City Improvements following issuance of all necessary permits and approvals therefor from the Applicable Jurisdiction and fails to cure its nonperformance follov.ing thirty -8- e . (30) days written notice from the City Manager of the City of Santa Monica to the Developer, the City Manager or his designee may unilaterally draw upon the Rejected Improvements Letter of Credit upon presentation of a sight draft to the issuing national bank to the extent required (as determined by the City Manager in his sole discretion) to complete performance of the Los Angeles Improvements and the Culver City Improvements which are the subject of the notice from the City Manager to the Developer. Nothing in this subsection (iv) is intended. nor should be construed, to limit the obligation of the Developer to perform the Los Angeles Improvements and the Culver City Improvements for which the necessary permits and approvals have been issued by the Applicable Jurisdiction nor to limit the obligation of the Developer to pay for the costs and expenses in connection therewith to the amount of the Rejected Improvements Letter of Credit. (v) If all of the funds represented by the initial Rejected Improvements Letter of Credit or any successor letter of credit hereunder have not been drawn by the City of Santa Monica prior to expiration thereof pursuant to subsection (iv), then at least twenty (20) days prior to expiration of the initial Rejected Improvements Letter of Credit or any successor letter of credit hereunder, the Developer shall obtain and deliver to the Qty of Santa Monica a successor letter of credit which is identical to the then current Rejected Improvements Letter of Credit except for the issue date (which shall be the date of issuance of the successor letter of credit), the expiration date (which shall be the fIrst anniversary of the date of the successor letter of credit) and the amount (which shall be an amount equal to the sum of the principal amount of the then current Rejected Improvements Letter of Credit less amounts drawn by the City of Santa Monica therefrom under subsection (iv), which sum shall be increased by the same percentage as the percentage increase, if any, in the Dodge Building Cost Index for Los Angeles as of the second full month preceding the issue date of the successor letter of credit over the Index as of the second full month preceding the issue date of the then current Rejected Improvements Letter of Credit). Upon delivery by the Developer of a successor letter of credit to the City of Santa Monica, the City of Santa Monica shall return the then current Rejected Improvements Letter of Credit to the Developer and the successor letter of credit shall thereafter be deemed the Rejected Improvements Letter of Credit for purposes of this subsection (f). In the event that the Developer fails to provide a successor letter of credit at least twenty (20) days prior to the expiration date of the then current Rejected Improvements Letter of Credit in accordance with the provisions of this subsections (v) above and (g)(i) below, the City Manager, upon presentation of a sight draft to the issuing national bank, may draw aU funds represented by the then current Rejected Improvements Letter of Credit. Any funds so drawn shall be held by the City of Santa Monica for use in accordance with subsection (iv) and, if any of the funds are not so utilized by the City of Santa Monica as of the date of issuance of the Final Certificate for the last Phase, such funds shall be returned by the City of Santa Monica to the Developer. -9- . ~ (g) In the event that Developer has used due diligence and its best efforts to apply for and obtain the necessary permits and approvals from the Applicable Jurisdiction to construct the Los Angeles Improvements and the Culver City Improvements in accordance with the Approved Plans and any Plan Revisions thereto, but the Applicable Jurisdiction has declined or refused to issue the necessary permits and approvals for performance of any of the Los Angeles Improvements and the Culver City Improvements as of the date on which the Final Certificate is issued for a building or parking structure in the last Phase of the Project: (i) The then current Rejected Improvements Letter of Credit and all funds represented thereby which have not been drawn by the City of Santa Monica in accordance with subsections (f)(iv)and (f)(v) [and if the City of Santa Monica has drawn on the Rejected Improvements Letter of Credit, all funds, if any, which have not been applied by the City of Santa Monica as of the issuance date of the Final Certificate for performance of the Rejected Improvements or which the City of Santa Monica is not obligated to apply for such purpose pursuant to binding legal agreements in effect as of that date] shall be returned to the Developer and the Developer shall have no obligation to replace or renew the Rejected Improvements Letter of Credit or provide any other irrevocable letter of credit or other form of security for the performance of any of the Los Angeles Improvements and the Culver City Improvements under Section 5( e) or otherwise in this Exhibit "E"; (ii) Except as provided in SectIon 7, the Developer shall have no obligation to construct such Los Angeles Improvements and the Culver City Improvements; and (iii) Except as provided in Section 7, the Developer shall have no obligation to bear any costs and expenses in connection with such Los Angeles Improvements and the Culver City Improvements. 6. Issuance of Building Permits and Certificates of Occupancy. Neither the commencement nor the completion of any of the Off-Site Traffic Improvements whIch are required for a Phase are a condition precedent for the issuance by the City of Santa Monica of any building permit or any related permit for the construction of a building or parking structure in that Phase. However, no Certificate of Occupancy for any building or parking structure in the Phase will be issued by the City of Santa Monica until full completion of all required Off-Site Traffic Improvements for that Phase, except: (a) As specifically provided in this Exhibit "E"; or (b) With respect to Los Angeles Improvements and the Culver City Improvements for which all necessary permits and approvals have been issued by the Applicable Jurisdiction prior to the First Certificate Issuance Date for that Phase, in the event that the Developer has used due diligence to apply for and obtain such required permits and approvals and, if obtained, has then proceeded in a diligent manner to perform the Los Angeles Improvements and the Culver City Improvements pursuant to such permits or approvals but: -10- . . (i) all of such Los Angeles Improvements and the Culver City Improvements have not been fully completed as of the date on which the First Certificate for that Phase would be issued by the City of Santa Monica but for the non-completion of the Los Angeles Improvements and the Culver City Improvements, and (ii) such non-completion is principally related to delays by the Applicable Jurisdiction in the issuance of the necessary permits and approvals to construct the Los Angeles Improvements and the Culver City Improvements, then the City of Santa Monica shall not withhold or delay the issuance of the First Certificate or any subsequent Certificate of Occupancy required in connection with any building or parking structure for the Phase on the basis of the non-completion of such Los Angeles Improvements and the Culver City Improvements for which permits and approvals have been issued, provided that prior to issuance of the First Certificate the Developer delivers a bond acceptable to the City of Santa Monica in its reasonable judgment for completion of such Los Angeles Improvements and the Culver City Improvements for the Phase and a written guaranty acceptable to the City of Santa Monica in its reasonable judgment of the full completion by the Developer of such Los Angeles Improvements and the Culver City Improvements. 7. Final Judicial Action. In the event that a final nonappealable judgment of a court of competent jurisdiction holds that: (a) notwithstanding the provisions of Section 5(g)(ii) of this Exhibit "E", the Developer has obligations to construct the Los Angeles Improvements and the Culver City Improvements for a Phase subsequent to the issuance of the Final Certificate for the last Phase of the Project, or (b) notwithstanding the provisions of Section S(g)(ii) of this Exhibit "E", the Developer has obligations to pay for the costs and expenses of the Rejected Improvements for a Phase subsequent to the issuance of the Final Certificate for a building or parking structure in the last Phase of the Project, or (c) notwithstanding the provisions of Section 5(e), the Developer has obligations to pay any increase in costs in the performance of the Los Angeles Improvements and the Culver City Improvements which the Developer reasonably believes would not have been incurred if the Applicable Jurisdiction had issued the necessary permits and approvals to construct such Los Angeles Improvements and the Culver City Improvements in due course upon the Developer's proper application therefor, then the Developer shall comply with the terms and conditions of the final nonappealable judgment. Except as otherwise specifically provided in this Agreement, the DDA, the Ground Leases or other applicable agreements between the City of Santa Monica and the Developer, the City of Santa Monica and the Developer shall each bear their respective attorneys' fees and court costs in connection with any legal action related to their respective rights and obligations pursuant to this Exhibit "E". -11- . . 8. Traffic CaoitaI Costs (a) With respect to the responsibilities of the Developer and the City of Santa Monica as to the payment and reimbursement of any Traffic Capital Costs incurred in connection with the Project: (i) The Developer shall pay all Traffic Capital Costs until the total of the Traffic Capital Costs equals the sum of One Million Seven Hundred Ninety-One Thousand Two Hundred Dollars ($1,791,200) ["Traffic Capital Cost Base"], provided that if the Maximum Floor Area of the Project listed under subsection 3(b)(i) of the Agreement is less than 1,015,000 square feet, the Traffic Capital Cost Base shall be reduced by a percentage equal to one-half (1/2) of the percentage decrease in the listed Floor Area below 1,015,000 square feet. (ii) If the total amount of aU Traffic Capital Costs paid by the Developer in connection with the Project exceeds the Traffic Capital Cost Base ("Excess Traffic Capital Costs") the Developer shall be entitled to reimbursement from the City of Santa Monica for one-half (1/2) of the amount of the Excess Traffic Capital Costs paid by the Developer. As a condition precedent to the CIty of Santa Monica's obligation to reimburse the Developer for the City of Santa Monica's one-half (1/2) share of the Excess Traffic Capital Costs, within five (5) years after the applicable Traffic Capital Costs are paid by the Developer, the Developer must submit to the City of Santa Monica a written report of an independent Certified Public Accoun- tant, who shall be satisfactory to the City of Santa Monica, certified as true and correct by the Developer's Chief financial Officer, showing in detail the amounts actually paid by the Developer for Traffic Capital Costs as of the date of the written report together with a written request for reimbursement by the Developer. Such written report shall be prepared in accordance with generally accepted accounting principles applied on a consistent basis. Within thirty (30) days following receipt of such written report and written request for reimbursement, the City of Santa Monica shall refund to the Developer one-half (1/2) of the Excess Traffic Capital Costs paid by the Developer as shown by such written report. The Developer shall request reimbursement of the City of Santa Monica's one-half (1/2) share of the Excess Traffic Capital Costs no more frequently than once each calendar year quarter. With respect to each written report and request for reimbursement submitted by the Developer, the CIty of Santa Monica have the right to perform or have performed an audit of the Traffic Capital Costs expended by the Developer for the Project and, if the amount of the Excess Traffic Capital Costs requested by the Developer exceeds the actual amount determined by the audit report of the City of Santa Monica to be reimbursable by the Oty of Santa Monica under this subsection (b), the Developer shall promptly refund such excess amount to the City of Santa Monica together with interest on the amount of the excess reimbursement from the date of receipt thereof by the Developer at the rate announced from time to time by Union Bank or its successor (or, if no successor, by an equivalent California bank). In addition, if the amount of the excess Traffic Capital Costs requested by the Developer -12- . . exceeds the actual amount that is reimbursable according to the audit report of the City of Santa Monica by two percent (2%) or more, the Developer shall pay the audit costs incurred by tbe City of Santa Monica. (iii) In addition to the written report required under subsection (ii), within thirty (30) days following the end of each calendar quarter during the term of the Agreement, the Developer shall provide the City of Santa Monica with a quarterly status report of Traffic Capital Costs, if any, incurred in the prior calendar quarter as well as copies of documentation evidencing such costs. Failure by the Developer to timely provide such a quarterly report and documentation shall not excuse, reduce or delay the obligations of the City of Santa Monica to reimburse the Developer for one-half (1/2) of any Excess Traffic Capital Costs pursuant to subsection (ii), provided however that for any quarterly period for whicb the Developer fails to timely provide the City of Santa Monica with the quarterly report and documentation pursuant to this subsection (iii), any written report required under subsection (ii) which relates to Traffic Capital Costs incurred in that quarterly period, shall be an audited report. (b) Prior, and as a condition precedent to, the issuance the First Certificate for Phase 1 of the Project, the Developer shall submit to the City of Santa Monica a written report which meets the requirements of subsection 8(a)(ii) detailing the amounts actually paid by the Developer for Traffic Capital Costs as of the date of the report. If the aggregate amount actually paid by the Developer for Traffic Capital Costs as demonstrated by such written report is less than the Traffic Capital Cost Base, then as an additional condition precedent to the issuance of a First Certificate for Phase 1, the Developer shall pay to the City of Santa Monica the amount of the difference between the Traffic Capital Cost Base and the aggregate amount theretofore actually paid by the Developer for Traffic Capital Costs ("Traffic Mitigation Fee") as demonstrated by such written report. The City of Santa Monica may elect by written notice to Developer to utilize all or any portion of the Traffic Mitigation Fee for such purposes as the City of Santa Monica may determine in its sole and absolute discretion. If, subsequent to Developer's payment of the Traffic Mitigation Fee, the Developer actually pays additional Traffic Capital Costs in connection with the development of the Project and provides a request for reimbursement and a written report pursuant to subsection (a)(ii), the City of Santa Monica shall refund to the Developer the amount or amounts of such costs in the aggregate not exceeding the amount of the Traffic Mitigation Fee paid to the City of Santa Monica. -13- I-~ . , I ; II ii; ~--'. ~~ i O!~ l 0..;;' : V> , V> i i . ~ ; ~ ' i LJ . 'I. "I I' ~ 0 1m Hllll! ~ ~ --~, ~~ 08 . >- ;! g :r~ ~o ii if ,'; 00 0 [J 00l] o 00 'lJ i. '-, ,-- ~" SJ I 0 0 r::J, i_LJ i L..J I [] -- [lu: u u IUD jo [,] Do D'ICQ U ... Q ! 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