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Memorandum of Owner Participation Agreement 1999-05640541305 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO. POWAY REDEVELOPMENT AGENCY 13325 Civic Center Drive Poway, California 92064 Attention: Executive Director Par..h�i pct i -b -i h - . tj u H 9 ti_, 0 .. a =J OFFICIAL RECORDS SAN D1E6O COUNT'S RECORDER 0 OFFICi. C;F.EGORY j.SifITNn COUNTY RECORDER FEES. Dago This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. MEMORANDUM OF OWNER PARTICIPATION AGREEMENT This MEMORANDUM OF OWNER PARTICIPATION AGREEMENT ("Memorandum"), dated for identification purposes as of June 22 , 19991 is entered into by and between the POWAY REDEVELOPMENT AGENCY, a public body, :+v�✓ .: i.=r,uGn `:01A:Hyl` iia TECH IE TSIY E'''S CENTER v; av;it�y utiaViliiG: t:i a:la.tt liability company (the "Participant"). 1. Amended and Restated Owner Participation Agreement. Agency and Participant have executed an Amended and Restated Owner Participation Agreement (the "OPA') dated for identification purposes as of June 22 3 1999, which provides for the development; operation and maintenance of that certain real property located in the City of Poway, County of San Diego, State of California, more fully described in Exhibit "A" attached hereto and incorporated herein by this reference. The OPA is available for public inspection and copying at the office of the City Clerk, Poway Cay Haii, 13325 Civic Center DriJvrl: VVay, vaii vs.ui: �2��. All ^fthA tAm,crnnrjitjn7l$, provisions and covenants of the OPA are incorporated in this Memorandum by reference as though written out at length herein, and the OPA and this Memorandum shall be deemed to constitute a single instrument or document. 2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the OPA. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the OPA, the terms, conditions, provisions and covenants of the OPA shall prevail. 1306 The parties have executed this Memorandum on the dates specified immediately adjacent to their respective signatures. Dated: August 3 11999 ATTEST: 7�c.t. A )0 &n Agyeiicy Secretary AS TO FORM: Straoing, Yocca,'Carlson & Rauth Agency Special Counsel Dated: tgmz , 1999 Dated:_ 6/'1999 661171.7\22345.0071 AGENCY: POWAY REDEVELOPMENT AGENCY, a public body, corporate and politic PARTICIPANT: TECH BUSINESS CENTER LLC, a California limited liability company By: Techbilt Construction, a California corporation, as Managing Member Name: Its: By: Bothwell International Ltd., a California limited partnership, as Member ►i 1307 STATE OF CALIFORNIA ) ss. COUNTY OF San Diego ) On July27, 1999 , before me, Susan E. Eubank , Notary Public, (Print Name of Notary Public) personally appeared Paul K. Tchang and Neville F. Bothwell © personally known to me -or- ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. SUSAN E. EUBANK COMM. # 1208548 VOTARY PUBLIC -CALIFORNIA SAN DIEGO COUNTY n COMM. EXP. FEB. 13, 2003 :+ WITNESS my hand and official seal. OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. ❑ Individual ❑ Corporate Officer Title(s) ❑ Partner(s) ❑ Limited ❑ General ❑ Attorney -In -Fact ❑ Trustee(s) ❑ Guardian/Conservator ❑ Other: Signer is representing: Name Of Person(s) Or Entity(ies) 03/09/99 661171.7\22345.0071 DESCRIPTION OF ATTACHED DOCUMENT Amended and Reinstated Owner Participa Title Or Type Of Document Agreement Number Of Pages Date Of Document Signer(s) Other Than Named Above STATE OF CALIFORNIA ) n , ) ss. COUNTY OF y��--°� ) On �, ��cl�j , before me, V 1 V bta% M74G2,(� , Notary Public, (Print Name of Notary Public) personally appeared M l% j� personally known to me .or - proved to me on the basis of satisfactory evidence to be the person whose nameZ44 is are subscribed to the within instrument and acknowledged to me tha{ie he/they executed the same .Jher/their authorized capacity, and that by is er/their signature�n the instrument the person or the entity upon behalf of which the person( acted, executed the instrument. WITNESS my hand and official seal. OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ❑ Individual ❑ Corporate Officer DESCRIPTION OF ATTACHED DOCUMENT Title(s) Title Or Type Of Document ❑ Partner(s) ❑ Limited ❑ General ❑ Attorney -In -Fact Number Of Pages El Trustee(s) ❑ Guardian/Conservator ❑ Other: Signer is representing: Date Of Document Name Of Person(s) Or Entity(ies) Signer(s) Other Than Named Above 661171.7\22345.0071 1309 EXHIBIT "A" TO ATTACHMENT NO.6 LEGAL DESCRIPTION 1. A PORTION OF THE NORTH'/2 OF THE NORTHWEST'/4 OF SECTION 25, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, AND A PORTION OF THE NORTHEAST'/4 OF THE NORTHEAST'/4 OF SECTION 26, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN. (PHASES 2 AND 3, POWAY CORPORATE CENTER.) 2. LOTS 17 6, 7, 12 AND 13 OF CITY OF POWAY TRACT 86-02R(2), POWAY CORPORATE CENTER UNIT 1, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12853, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AUGUST 19, 1991. 3. PARCELS 3.5.6. 7 AND 8 OF PARCEL MAP NO. 16740, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 10, 1992 AS FILE NO. 1992- 0016041 OF OFFICIAL RECORDS. 4. PARCEL "A" OF CITY OF POWAY BOUNDARY ADJUSTMENT AND CERTIFICATE OF COMPLIANCE NO. 93-03, RECORDED JULY 8, 1993 AS FILE NO. 1993-0436552, OF OFFICIAL RECORDS FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, BEING IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA. (TECH BUSINESS CENTER.) - 661171.7\22345.0071 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: POWAY REDEVELOPMENT AGENCY 13325 Civic Center Drive Poway, California 92064 Attention: Executive Director OFFICIAL RECORDS SAN DIEGO COINTY RECORDER'S OFFICE GREGORY L SHIM COUNTY F'ECORDER FEESU OU00 1111111111111111111111111111111111111 1999-0564055 This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103, AGREEMENT TO BE RECORDED AFFECTING REAL PROPERTY This AGREEMENT TO BE RECORDED AFFECTING REAL PROPERTY (this "Agreement") is entered into this 22 day of June 1999 by and between the POWAY REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency") (and the City of Poway shall be an intended third party beneficiary of this Agreement), and TECH BUSINESS CENTER LLC, a California limited liability company (the "Participant"), with reference to the following recitals which are deemed to be a substantive part hereof: A. The Participant is the fee owner of that certain real property in the City of Poway and legally described in the Legal Description which is attached hereto as Exhibit "A" and incorporated herein by this reference (the "Site"). B. The Site is within the Paguay Redevelopment Project in the City and is subject to the provisions of the Paguay Redevelopment Plan. C. The Agency and Participant have entered that certain Amended and Restated Owner Participation Agreement dated as of June 22 , 1999 (the "OPA") concerning the development, use and operation of improvements upon the Site, which agreement is available for public inspection at the Agency's offices located at 13325 Civic Center Drive, Poway, California 92064. D. Participant has agreed with Agency to execute and record this Agreement in order to bind itself and future owners of the Site to certain obligations regarding the on-going use, operation and maintenance of the Site and certain other covenants, all as more particularly set forth herein. 1311 E. The enforcement of the covenants and requirements set forth herein will ensure the proper implementation of the Paguay Redevelopment Plan and will, therefore, benefit the Participant, the City of Poway, the Agency and the properties located within the Paguay Redevelopment Project. F. Capitalized terms shall have the respective meanings set forth in the OPA unless the context in which they are used clearly requires otherwise. Section 1. Purpose of Agreement. The purpose of this Agreement is to set forth the general use and operations covenants, maintenance standards and obligations of Participant in the use, operation and maintenance of the improvements on and within the Site. Section 2. Construction Covenants. The Participant shall construct the Improvements in accordance with the OPA, Entitlements, the City Municipal Code and the plans, drawings and documents submitted by the Participant and approved by the Agency as set forth in the OPA. Section 3. Use and Operations Covenants. 3.1 Use in Accordance with Redevelopment Plan, The Participant covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that until the expiration of the Redevelopment Plan, the Participant shall devote the Site to the uses specified in the Redevelopment Plan and this Agreement for the periods of time specified therein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Participant pursuant to the OPA and this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City Municipal Code. 3.2 Covenant to Pay Taxes and Assessments. The Participant shall pay prior to delinquency all ad valorem real estate taxes, special taxes, assessments and special assessments on the Site, subject to the Participant's right to contest in good faith any such taxes. The Participant shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof as soon as practicable. 3.3 Covenant re Assessed Valuation of the Project. The Participant shall perform the construction of the Improvements in such a manner that the initial reassessed value of the Site or any portion thereof, together with the improvements and equipment located thereon, is not less than the assessed value for the Site or such portion thereof for fiscal year 1999-2000. Fora ten (10) year period beginning upon the first assessment of the Site after the completion of the construction of the Improvements, the Participant shall not take any action (or direct any other person to take any action) to decrease the property tax assessment of the Site below the initially assessed sum. 3.4 Maintenance Covenants. The Participant shall maintain the Site and all improvements thereon, including lighting and signage, in good condition, free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan and with all applicable provisions of the City of Poway Municipal Code. Participant shall maintain in accordance with the "Maintenance Standards," as hereinafter defined, all improvements and landscaping on the Site. Such Maintenance Standards shall apply to all buildings, signage, lighting, landscaping, irrigation of landscaping, architectural elements identifying the Site and any and all other improvements on the Site. To accomplish the maintenance, Participant shall either staff or contract with and hire licensed and 661171.7\22345.0071 1312 or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Participant itself or any person claiming under or through Participant establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Participant shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." C, In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 3.6 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The Agency is deemed the beneficiary of the terms and provisions of 661171.7\22345.0071 1313 this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. The covenants contained in this Agreement shall remain in effect as follows: a. The covenants pertaining to use and operation of the Site which are set forth in Section 3.1 shall remain in effect until the expiration of the Redevelopment Plan, as applicable to the Site, and shall bind the Participant and each successor owner with respect to the portion of the Site owned by such party during such parry's period of ownership thereof. b. The covenants pertaining to the payment of ad valorem taxes on the Site which are set forth in Section 3.2 shall remain in effect in perpetuity, and shall bind the Participant and each successor owner with respect to the portion of the Site owned by such party during such party's period of ownership thereof. C. The covenants pertaining to the assessed valuation of the Site which are set forth in Section 3.3 shall remain in effect for a term of ten (10) years from the date of the first assessment of the Site following the completion of construction of the Improvements, and shall bind the Participant and each successor owner with respect to the portion of the Site owned by such party during such party's period of ownership thereof. d. The covenants pertaining to maintenance of the Site and all improvements thereon, as set forth in Section 3.4 shall remain in effect until the termination date of the Redevelopment Plan and shall bind the Participant and each successor owner with respect to the portion of the Site owned by such parry during such party's period of ownership thereof. e. The covenants against discrimination, as set forth in Section 3.5, shall remain in effect in perpetuity and shall bind the Participant and each successor owner with respect to the portion of the Site owned by such party during such party's period of ownership thereof. Section 4. Compliance with Law. Participant shall comply with all local, state and federal laws relating to the uses of or condition of the Site. Local laws for the purposes of this section shall include only those ordinances which are nondiscriminatory in nature and applicable to the public welfare, health, safety and aesthetics. If any new local laws relating to uses of or condition of the improvements create a condition or situation that constitutes a lawful nonconforming use as defined by local ordinance with respect to the Site or any portion thereof, then so long as the lawful nonconforming use status remains in effect (i.e., until such lawful status is properly terminated by amortization as provided for in the new local law or otherwise), Participant shall be entitled to enjoy the benefits of such lawful nonconforming use pursuant to the lawful nonconforming uses ordinance. Section 5. Covenants Run with the Land. The provisions of this Agreement touch and concern the Site and apply to any and all present or successive owners of the Site. Therefore, 661171.7\22345.0071 1314 11 whenever the word "Participant" is used herein, it shall include the owner as of date of execution of this Agreement, and any and all successive owners or assigns of the Site, and the provisions hereof are expressly binding upon all such successive owners or assigns with respect to the portion of the Site owned by each such party during such party's period of ownership, and the parties agree all such provisions shall run with the land. Agency or City shall cause a fully executed copy of this Agreement to be recorded in the Office of the San Diego County Recorder. In the event Participant or its successors or assigns shall convey their fee interest in all or any portion of the Site, the conveying owner shall be free from and after the date of recording such conveyance of all liabilities, respecting the performance of the restrictions, covenants or conditions contained in this Agreement thereafter to be performed with respect to the Site, or portion thereof conveyed, it being intended that the restrictions, covenants and conditions shall be binding upon the record owners of the Site only during such time as they own the same, provided that the conveying owner shall remain liable for any actions prior to the date of the conveyance. The requirements of this Agreement shall terminate upon the date of expiration of the effectiveness of the Poway Community Redevelopment Plan, as applicable to the Site. Section 6. Indemnification. Participant agrees to protect, defend, indemnify and hold harmless City and Agency and their elective and appointive boards, officers, employees, agents, representatives and volunteers from any and all claims, liabilities, expenses or damages of any nature, including reasonable attorneys' fees, (a) for injury to, or death of, any person, and for injury to any property, including consequential damages of any nature resulting therefrom, arising out of or in any way connected with the performance of this Agreement by Participant or their agents, servants, employees or contractors, but not to the extent caused by (i) the sole negligence or intentional acts of the City or Agency, or their agents, servants, employees or contractors in connection with supervision or direction of the work, or (ii) third parties unrelated to Participant or their agents, servants, employees or contractors, but not by the City or Agency or their respective agents, servants, employees or contractors and (b) from violation of any statute, law regulation or other legal requirement concerning a safe place for employment of workers by Participant or their agents, servants, employees or contractors, but not by (i) the City or the Agency or their respective agents, servants, employees or contractors or (ii) third parties unrelated to Participant or its agents, servants, employees or contractors. Participant shall comply with all of the provisions of the Workers' Compensation Insurance and Safety in Employment laws of the State of California, including the applicable provisions of Divisions 4 and 5 of the California Labor Code and all amendments thereto, and all similar state, federal or local laws applicable; and shall indemnify and hold harmless City and Agency from and against all claims, liabilities, expenses, damages, suits, actions, proceedings and judgments of every nature and description, including reasonable attomeys' fees, presented, brought or recovered against City or Agency, for or on account of any liability under any of said laws which may be incurred by reason of work performed under this Agreement by Participant or its agents, servants, employees, contractors, but not by the sole acts of City and/or the Agency or if available, their respective agents, servants, employees or contractors. City and Agency do not, and shall not, waive any rights against Participant which they may have by reason of the aforesaid hold harmless agreements because of the acceptance by Agency or City or the deposit with the Agency or City by Participant of any insurance policies or certificate of insurance purporting to indemnify for the aforesaid losses. The aforesaid hold harmless agreements by Participant shall apply to all liabilities, claims, expenses and damages of every kind arising from the 661171.7\22345.0071 1315 activities indemnified against as described' above, including but not limited to reasonable attorney fees, suffered or alleged to have been suffered, by reason of the aforesaid operations by Participant or any of their agents, servants, employees or contractors, regardless of whether or not such insurance policies are applicable. Similarly, the Agency shall protect, defend, indemnify, and hold harmless Participant, its successors and assigns, and/or if available, its respective boards, officers, agents and employees from any and all claims, liabilities, expenses or damages of any nature, including reasonable attorneys' fees, (a) for injury to, or death of, any person, and for injury to any property, including consequential damages of any nature resulting therefrom, arising out of or in any way connected with the acts or inactions taken by the Agency pursuant to the terms of this Agreement, but not the negligence or intentional acts of Participant, or its agents, servants, employees or contractors; and (b) from violation of any statute, law, regulation, or other legal requirement concerning a safe place for employment of workers by the Agency, or their respective agents, servants, employees or contractors but not by (i) Participant or its agents, servants, employees or contractors or (ii) third parties unrelated to the Agency or their respective agents, servants, employees or contractors. The Agency shall comply with all the provisions of the Workers' Compensation Insurance and Safety and Employment Laws of the State of California, including the applicable provisions of Divisions 4 and 5 of the California Labor Code an all amendments thereto, and all similar state, federal or local laws applicable; and shall indemnify and hold harmless Participant and its successors and assigns, from and against any and all claims, liabilities, expenses, damages, suits, actions, proceedings and judgments of every nature and description, including reasonable attorneys' fees, presented, brought or recovered against Participant or its successors and assigns, for or on account of any liability under any of said laws which may be incurred by reason of any work performed under1his Agreement by Agency, or its agents, servants, employees or contractors, but not by (i) Participant or its agents, servants, employees or contractors or (ii) third parties unrelated to the City or Agency or their respective agents, servants, employees or contractors. Participant or its successors or assigns do not, and shall not, waive any rights against the City and/or the Agency which it (they) may have by reason of the aforesaid hold harmless agreement because of any insurance policies or certificates of insurance purporting to indemnify for the aforesaid losses. The aforesaid hold harmless agreement by the Agency shall apply to all liabilities, claims, expenses and damages of every kind, including, but not limited to, reasonable attorney's fees, suffered or alleged to have been suffered, by reason of the aforesaid operations by the Agency, or its agents, servants, employees or contractors, regardless of whether or not such insurance policies are applicable. Section 7. Workers' Compensation Insurance Requirements. Participant shall obtain and maintain during the life of this Agreement workers' compensation insurance and if any work is sublet by Participant, then Participant shall require the subcontractor similarly to provide workers' compensation insurance. Participant agrees to indemnify City and Agency for any damages resulting to them from failure of either Participant or any subcontractor to obtain or maintain such insurance. 661171.7\22345.0071 1316 Section 8. Condition of the Site. 8.1 Hazardous Materials. Participant shall not cause or permit the presence, use generation, release, discharge, storage, or disposal of any Hazardous Materials on, under, in, or about, or the transportation of any Hazardous Materials to or from, the Site in violation of applicable Environmental Law. 8.2 Indemnity. Participant agrees to and hereby does indemnify, defend and hold Agency and the City and their respective officers, employees and agents harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees) (hereinafter collectively the "Claims"), resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage, or disposal of any Hazardous Materials on, under, in, or about, or the transportation of any such materials to or from, the Site in violation of applicable Environmental Law or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment, or license relating to the use, generation, release, discharge, storage, disposal, or transportation of Hazardous Materials on, under, in, or about, to or from, the Site. This indemnity shall include, without limitation, any Claims for personal injury including sickness, disease or death, tangible or intangible property damage, compensation or lost wages, business income, profits or other economic loss; damage to the natural resource or the environment, nuisance, pollution, contamination, leak, spill, release, or other adverse effect on the environment. This indemnity shall not include any Claims resulting from, arising out of, or based upon the activities of Agency, City, or any of their officers, employees, or agents. Section 9. Bodily Injury and Damage Insurance Requirements. The Participant shall defend, assume all responsibility for and hold the Agency and the City and their officers, employees, agents, representatives and volunteers harmless from, all claims or suits for, and damages to, property and injuries to persons, including accidental death (including attorneys fees and costs), which may be caused by any of the Participant's activities under this Agreement, whether such activities or performance thereof be by the Participant or anyone directly or indirectly employed or contracted with by the Participant and whether such damage shall accrue or be discovered before or after termination of this Agreement. Section 10. Waiver. Failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The aggrieved party shall give written notice of the default to the party in default as set forth in Section 13 hereof. The defaulting party must within a reasonable time commence to cure, correct, or remedy such default, and shall complete such cure, correction or remedy with reasonable and due diligence, and during such period or curing shall not be in default. The waiver by one party of the performance of any covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a waiver by such party of any other covenant, condition or promise hereunder. The exercise of any remedy shall not preclude the exercise of other remedies City, Agency, or Participant may have at law or at equity. Section 11. Modification. This Agreement may be modified only by subsequent mutual written agreement executed by Participant and the Agency. 661171.7\22345.0071 131' Section 12. Attorneys' Fees. In the event of litigation arising out of any breach of this Agreement, the prevailing party shall be entitled to recover reasonable costs and attorneys' fees. Section 13. Representatives of the Parties and Service of Notices. The representatives of the respective parries who are authorized to administer this Agreement and to whom formal notices, demands and communications shall be given are as follows: Agency: Poway Redevelopment Agency 13325 Civic Center Drive Poway, California 92064 Attention: Executive Director Participant: Tech Business Center LLC 3575 Kenyon Street P.O. Box 80036 San Diego, CA 92138 Attention: Neville Bothwell Paul K. Tchang Ted Tchang Formal notices, demands and communications to be given hereunder by any party shall be made in writing and may be effected by personal delivery, telecopy, overnight delivery service or by registered or certified mail, postage prepaid, return receipt requested. Any written notice, demand or communication is effective upon receipt. If the name of the person designated to receive the notices, demands or communications or the address is changed, written notice shall be given, in accord with this section, within five (5) working days of such change. Section 14. Remedies. The Agency, in an event of any breach of any of the covenants contained herein, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of the breach. Section 15. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 16. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement. Section 17. Priority. This Agreement shall be a lien against the Site prior and superior to the lien of any permanent financing, if any, and this Agreement shall not be subordinated. 661171.7\22345.0071 1.31.8 Section 18. Agreement Binding Upon Successors. This Agreement and the terms, conditions, covenants and agreements set forth herein, shall apply to Participant and the successors and assigns of the Participant as follows: 18.1 Third Party Purchasers. The terms, conditions, covenants and agreements contained in this Agreement shall apply to and bind the Participant and its heirs, successors, executors, administrators, assigns and grantees of Participant with respect to the Site permitted under section 603.2 of the OPA only with respect to that portion of the Site owned by Participant or such heir, successor, executor, administrator, assign or grantee of Participant during the period of such party's ownership thereof 18.2 Agreement Binding on Successors. The obligation of Participant set forth in section 2 of this Agreement shall be and remain the sole responsibility of Participant or any assignee of Participant's interest in the OPA. 661171.7\22345.0071 1319 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first written above. Dated: �� , 1999 ATTEST: 2 Age cy Secretary APPROVED AS TO FORM: StrAing, Yocca, Carlson & Rauth Agency Special Counsel Dated: G _, 1999 Dated: `7 12 1999 661171.7\22345.0071 AGENCY: POWAY REDEVELOPMENT AGENCY, a public body, corporate and politic PARTICIPANT: TECH BUSINESS CENTER LLC, a California limited liability company By: Techbilt Construction, a California corporation, as Managing Me e Name: By: Bothwell International Ltd., a California limited partnership, as Njember W 1320 STATE OF CALIFORNIA ) ss. COUNTY OF San Diego ) On July 27, 1999 , before me, Susan E. Eubank , Notary Public, (Print Name of Notary Public) personally appeared Paul K. Tchang and Neville F. Bothwell ® personally known to me .or - proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. SUSAN E. EUBANK WITNESS my hand and official seal. V COMM. # 1208548 S s, s NOTARY PUBLIC -CALIFORNIA C) G SAN DIEGO COUNTY 2W COMM. EXP. FEB. 13, 2003 %�7TTa OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ❑ Individual ❑ Corporate Officer Title(s) ❑ Partner(s) ❑ Limited ❑ General ❑ Attorney -In -Fact ❑ Trustee(s) ❑ Guardian/Conservator ❑ Other: Signer is representing: Name Of Person(s) Or Entity(ies) 661171.7\22345.0071 DESCRIPTION OF ATTACHED DOCUMENT Attachment No. 7 Agreement Affecting Real Property Title Or Type Of Document Number Of Pages Date Of Document Signer(s) Other Than Named Above 1321 STATE OF CALIFORNIA ) j ss. COUNTY OF On 91_x, before me,y� !//,4—/i/ Mi4-n 7_/ s ,Notary Public, (Print Name of Notary Public) personally appeared 1 personally known to me M or - proved to me on the basis of satisfactory evidence to be the person v those nameQ 1 Vare subscribed to the within instrument and acknowledged to me tha l�e he/they executed the same iris ler/their authorized capacity 11 and that byis! er/their signatureKon the instrument the persons), or the entity upon behalf of which the person acted, executed the instrument. o�VIVIAN MACZIS WITNESS my hand ,. • and official r • r+• r• .N OPTIONAL. Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ❑ Individual ❑ Corporate Officer DESCRIPTION OF ATTACHED DOCUMENT Title(s) Title Or Type Of Document ❑ Partner(s) ❑ Limited ❑ General ❑ Attorney -In -Fact ❑ Number Of Pages Trustee(s) ❑ Guardian/Conservator ❑ Other: Signer is representing: Date Of Document Name Of Person(s) Or Entity(ies) Signer(s) Other Than Named Above 661171.7\22345.0071 1322 EXHIBIT "A" TO ATTACHMENT N09 7 LEGAL DESCRIPTION 1. A PORTION OF THE NORTH '/z OF THE NORTHWEST'/4 OF SECTION 25, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, AND A PORTION OF THE NORTHEAST'/40F THE NORTHEAST'/4 OF SECTION 26, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN. (PHASES 2 AND 3, POWAY CORPORATE CENTER) 2, LOTS 1, 6, 7112 AND 13 OF CITY OF POWAY TRACT 86=02R(2), POWAY CORPORATE CENTER UNIT 1, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12853, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AUGUST 19, 1991. 3. PARCELS 3.5. 67 7 AND 8 OF PARCEL MAP NO. 16740, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 10, 1992 AS FILE NO, 1992- 0016041 OF OFFICIAL RECORDS. 4. PARCEL "A" OF CITY OF POWAY BOUNDARY ADJUSTMENT AND CERTIFICATE OF COMPLIANCE NO. 93-03, RECORDED JULY 8, 1993 AS FILE NO. 1993-0436552, OF OFFICIAL RECORDS FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, BEING IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA. (TECH BUSINESS CENTER:) 661171.7\22345.0071 AMENDED AND RESTATED OWNER PARTICIPATION AGREEMENT By and Between the POWAY REDEVELOPMENT AGENCY and TECH BUSINESS CENTER LLC 661171.7\22345.0071 TABLE OF CONTENTS 100. INTRODUCTORY PROVISIONS........................................................................................... 2 101. Definitions.....................................................................................................................2 200. PROVISION OF AGENCY ASSISTANCE AND ISSUANCE OF PROJECT BONDS....................................................................................................................................10 201. Annual Agency Assistance..........................................................................................10 202. Conditions Precedent to Payment.................................................................................10 203. Reduction in Amount of Agency Assistance................................................................11 203.1 Reduction in Amount of Agency Assistance Prior to Foreclosure......................................................................................................11 203.2 Reduction in Amount of Agency Assistance Following Foreclosure......................................................................................................12 203.3 Amount of Net Property Tax Increment Available for Project Bonds..............................................................................................................12 204. Termination of Agency Assistance...............................................................................13 205. Participant's Options Request Issuance of Project Bonds............................................13 205.1 Request for Issuance Prior to the Sales Threshold Date..................................13 205.2 Verification of Actual Sales Income................................................................13 205.3 Bonding Contingency and Taxable Status of Bonds........................................14 206. Representations and Warranties...................................................................................14 206.1 Agency Representations..................................................................................14 206.2 Participant's Representations...........................................................................15 300. DEVELOPMENT OF THE SITE...........................................................................................16 301. Scope of Development.................................................................................................16 302. Land Use Approvals....................................................................................................16 303. Schedule of Performance.............................................................................................16 304. Cost of Construction....................................................................................................16 305. Insurance Requirements...............................................................................................16 306. Rights of Access..........................................................................................................17 307. Compliance With Laws................................................................................................17 307.1 Nondiscrimination in Employment..................................................................17 307.2 Relocation; Obligations...................................................................................18 308. Liens and Stop Notices................................................................................................18 309. Release of Construction Covenants..............................................................................18 310. Financing of the Improvements....................................................................................19 661171.7\22345.0071 .1. 400. COVENANTS AND RESTRICTIONS..................................................................................20 401. Use in Accordance with Redevelopment Plan .............................................................20 402. Covenant to Pay Taxes and Assessments..................................................................... 20 403. Covenant re Assessed Valuation of the Project............................................................20 404. Maintenance Covenants...............................................................................................20 405. Nondiscrimination Covenants......................................................................................21 406. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction................................................................................ 22 500. DEFAULTS AND REMEDIES..............................................................................................23 501. Defaults.......................................................................................................................23 502. Institution of Legal Actions..........................................................................................24 503. Termination of Annual Payments.................................................................................24 504. Acceptance of Service of Process................................................................................24 505. Rights and Remedies Are Cumulative.........................................................................24 506. Inaction Not a Waiver of Default................................................................................. 24 507. Applicable Law............................................................................................................24 508. Participant's Indemnity.................................................................................................24 600. GENERAL PROVISIONS.........................................................................4............................ 25 601. Notices, Demands and Communications Between the Parties.....................................25 602. Enforced Delay; Extension of Times of Performance. ................................................. 25 603. Transfers of Interest in Site or Agreement................................................................... 26 603.1 Prohibition.......................................................................................................26 603.2 Permitted Transfers.........................................................................................26 603.3 Agency Consideration of Requested Transfer... a a ........................ 44 ................ 4.27 603.4 Successors and Assigns...................................................................................28 603.5 Assignment by Agency.................................................................................... 28 604. Memorandum of Agreement........................................................................................ 28 605. Relationship Between Agency and Participant.............................................................28 606. Agency Approvals and Actions....................................................................................28 607. Counterparts. .... m ........... m ...... M ....... a ......................... M ..... a ............ 4 ........... 44 ............ 4.4 ...... 28 608. Integration.................................................................................................................... 28 609. Real Estate Brokerage Commission..... ......... m ........ a ............ 4 ...................... 4.4 ............... 29 610. Attorneys' Fees............................................................................................................29 611. Titles and Captions......................................................................................................29 612. Interpretation.................................................................................. 4 ................... 4 ......... 29 613. No Waiver...................................................................................................................29 614. Modifications. ................................... 44..44 ............. 4 ..... 4 ................................... m ... a ......... 29 615. Severability..................................................................................................................29 616. Computation of Time................................................................................................... 29 617. Legal Advice., I ................... ..................................................................................... 29 661171.722345.0071 -ii- 618. Time of Essence...........................................................................................................30 619. Cooperation..................................................................................................................30 620. Conflicts of Interest......................................................................................................30 621. Time for Acceptance of Agreement by Agency...........................................................30 622. Non -Liability of Officials and Employees of the Agency and the Participant.................................................................................................................... 30 623. Offer............................................................................................................................ 30 661171.7\22345.0071 -111- ATTACHMENTS Attachment No. 1 Site Map Attachment No. 2 Legal Description Attachment No. 3 Schedule of Performance Attachment No. 4 Scope of Development Attachment No. 5 Release of Construction Covenants Attachment No. 6 Memorandum of Agreement Attachment No. 7 Agreement to be Recorded Affecting Real Property 661171.7\22345.0071 -Iv- OWNER PARTICIPATION AGREEMENT This AMENDED AND RESTATED OWNER PARTICIPATION AGREEMENT (this "Agreement") is entered into as of June 22 , 1999, by and between the POWAY REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency"), and TECH BUSINESS CENTER LLC, a California limited liability company (the "Participant"). RECITALS The following recitals are a substantive part of this Agreement; capitalized terms used herein and not otherwise defined are defined in Section 101 hereof. A. The Redevelopment Plan (the "Plan") for the Paguay Redevelopment Project (the "Project Area") was approved and adopted by Ordinance No. 117 of the City Council of the City of Poway, and said Ordinance and Plan are hereby incorporated by reference. B. Pursuant to Section 33445 of the Community Redevelopment Law, the Agency is permitted, with the consent of the City Council of the City, to pay all or part of the cost of construction of public improvements upon making certain determinations. C. Pursuant to Section 33444.6 of the Community Redevelopment Law, the Agency is permitted to assist with the financing of facilities or capital equipment for industrial or manufacturing purposes upon making certain determinations. D. Participant is the developer of certain real property comprising approximately one hundred ninety five (195) acres (hereinafter defined as the "Original Development"), subdivided into a one hundred eighteen (118) acre industrial park development (the "Tech Business Center" or "TBC"), and a seventy seven (77) acre integrated business/industrial park development (the "Poway Corporate Center" or "PCC"). This Agreement covers a portion of the Original Development consisting of thirty three (33) acres within TBC and eighty five (85) acres within PCC (the "Site"). Participant currently owns a portion of the Site consisting of approximately twenty six and four tenths (26.4) acres within TBC and approximately sixty one (61) acres within PCC (collectively, the "Participant Parcels"). E. In accordance with the above authority, Agency entered into two owner participation agreements, the Poway Corporate Center Owner Participation Agreement (the "PCCOPA") and the Tech Business Center Owner Participation Agreement (the "TBCOPA") (collectively, the "OPAs") with Participant's predecessor in interest (the "Developer") on November 27, 1990 with respect to the Site. F. Pursuant to the OPAs, the Developer agreed to construct certain public improvements (the "Public Improvements") required by the City of Poway as a condition of development of the TBC and the PCC, and certain private improvements (the "Private Improvements") (collectively, the "Improvements"), a portion of which have been completed pursuant to the OPAs, which Improvements are described further in the Scope of Development, attached hereto as Attachment No. 4 and incorporated herein by reference, and the Agency agreed to purchase the Public Improvements, with 03/09/99 41 the purchase price thereof evidenced by a promissory note in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (the "PCC Promissory Note") executed by Agency in favor of Developer, pursuant to which the Agency agreed to pay to the Developer certain tax increment revenues paid to Agency pursuant to Health and Safety Code Section 33670(b), or alternatively, by issuing tax allocation bonds and paying certain proceeds of such bonds to Developer upon completion of the Public Improvements. G. Since the execution of the OPAs, a number of economic factors have resulted in a slower rate of absorption of the Site and consequently a slower development thereof , and meanwhile, the costs to construct the Improvements has increased, requiring additional investment on the part of Developer. H. Agency and Participant desire to enter into this Amended and Restated Owner Participation Agreement in order to provide for Participant to assume certain rights and obligations of the Developer, and to amend, restate, and supercede the OPAs on the terms set forth in more detail hereinbelow. I. The Agency and City have determined that (i) the Public Improvements are of benefit to the Project Area, (ii) no other reasonable means of financing such Public Improvements other than Agency's provision of the Agency Assistance and/or the issuance of the Project Bonds are available to the community, and (iii) the payment of the Agency Assistance and/or the issuance of the Project Bonds in order to facilitate payment for such public improvements will assist in the elimination of blight. J. The Agency has determined that the provision of the Agency Assistance in order to assist in the financing of facilities and capital equipment for the Project (as defined hereinbelow) is necessary for the economic feasibility of the development of the Project and such assistance cannot be obtained on economically feasible terms in the private market. K. The Agency and City have determined that the Agency's provision of the Agency Assistance pursuant to the terms of this Agreement are in the vital and best interest of the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the redevelopment of the Project Area has been undertaken. NOW, THEREFORE, the Agency and the Participant hereby agree as follows: 100. INTRODUCTORY PROVISIONS 101. Definitions. Capitalized terms used herein shall have the meanings set forth in this Section 101, or if not defined herein shall have the meanings ascribed to them when first used herein. "Agency" means the Poway Redevelopment Agency, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State, and any assignee of or successor to its rights, powers and responsibilities. 661171.M2345.0071 -2- "Agency Assistance" means the total of the Annual Payments to be made by the Agency to the Participant in accordance with Sections 201, 202, 203, and 204 hereof. "Agency Assistance Cap" means the maximum amount of Agency Assistance, which shall not exceed the aggregate amount of Fourteen Million Two Hundred Fifty Thousand Dollars ($14,250,000) plus interest accrued on the PCC Promissory Note from April 20, 1993 to July 1, 1999, at a rate of eight percent (8%) per annum, compounded annually, minus any unpaid portion of the Participant Contribution, as defined in the PCCOPA ($620,000 as of the Date of Agreement), and all interest thereon at a rate of eight percent (8%) annually compounded from April 20, 1993 to July 1, 1999, and minus fifty percent (50%) of the total Sales Income in excess of Forty Two Million Dollars ($422000,000). "Agreement" means this Amended and Restated Owner Participation Agreement between the Agency and the Participant. "Agreement To Be Recorded Affecting Real Property" means that agreement substantially in the form attached hereto as Attachment No. 7 and incorporated herein which (i) sets forth the covenants, conditions, maintenance obligations and other restrictions affecting the Site and (ii) shall be recorded on the Closing as a lien on the Site prior and superior to any and all monetary liens other than non -delinquent taxes and assessments, including without limitation the lien of permitted and approved permanent financing, if any. "Annual Payment" means, as and when eligible, the annual payment of the Agency Assistance which the Agency shall make on the corresponding Annual Payment Date as more fully set forth in Section 201 hereof, each of which Annual Payment shall be equal to one hundred percent (100%) of the Net Property Tax Increment allocated to and received by the Agency with respect to the Site for the previous fiscal year ending on the June 30th preceding the Annual Payment Date. "Annual Payment Date" means September 30th. "Certificate of Occupancy" means the final certificate of occupancy issued by the City Official with authority over such issuance for the Project. "City" means the City of Poway, a California municipal corporation. "Claims" is defined in Section 202(f) hereof. "Community Redevelopment Law" means California Health and Safety Code Sections 33000, et seq., as the same now exists or may hereafter be amended. "Conditions Precedent to Annual Payments" means the conditions precedent to the disbursement of the Agency Assistance to be fully satisfied by the Participant and continued to be satisfied in connection with each Annual Payment, as set forth in Section 202 hereof. "County" means the County of San Diego. 661171.7\22345.0071 -3- "Date of Agreement" means the date upon which this Agreement shall have been duly approved by the City Council and the Agency Board. "Default" is defined in Section 501 hereof. The term "default" shall be an act or omission which would constitute a Default after prior notice and an opportunity to cure. "Delinquencies" is defined in Section 203.1 hereof. "Entitlements" means any and all land use and other entitlements, permits and approvals which may be required for the construction of the Improvements, and operation of the Project at the Site by the City or any other governmental agency affected by such construction, work, use or operations as more fully set forth in Section 302 hereof. "Existing Senior Lien Bonded Indebtedness" means (i) the $104,710,000 Poway Redevelopment Agency, Paguay Redevelopment Project, Subordinated Tax Allocation Refunding Bonds, Series 1993 and (ii) the $21,595,000 Poway Redevelopment Agency, Paguay Redevelopment Project, Tax Allocation Refunding Bonds, Series 1990A. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees, of the United States, the State, the County, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Participant or the Site. "Hazardous Materials " mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the State, or the "United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or "extremely hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley - Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous"; or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as a "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601), (xii) Methyl-tert Butyl Ether, or (xiii) any other substance, whether in the form of a solid, liquid, gas or 661171.7\22345.0071 4- "Eligible Persons" means any individual, partnership, corporation or association which qualifies as a "displaced person" and any individual, partnership, corporation, or association which qualifies for any temporary relocation benefits or assistance pursuant to the Relocation Laws. "Entitlements" means any and all land use and other entitlements, permits and approvals which may be required for the construction of the Improvements, and operation of the Project at the Site by the City or any other governmental agency affected by such construction, work, use or operations as more fully set forth in Section 302 hereof. "Existing Senior Lien Bonded Indebtedness" means (i) the $104,710,000 Poway Redevelopment Agency, Paguay Redevelopment Project, Subordinated Tax Allocation Refunding Bonds, Series 1993 and (ii) the $21,595,000 Poway Redevelopment Agency, Paguay Redevelopment Project, Tax Allocation Refunding Bonds, Series 1990A. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees, of the United States, the State, the County, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Participant or the Site. "Hazardous Materials " mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the State, or the "United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or "extremely hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley - Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous"; or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as a "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601), (xii) Methyl-tert Butyl Ether, or (xiii) any other substance, whether in the form of a solid, liquid, gas or 661171.7\22345.0071 4- any other form whatsoever, which by any Governmental Requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. "Housing Settlement Agreement" means the judgment entered April 6, 1995, judgment book number 2438, page 434, Smith v. All Persons, Case No. 667691. "Improvements" means all of the Private Improvements and Public Improvements to be constructed by the Participant upon the Site as described in the Scope of Development. "Legal Description" means the legal description of the Site, which is attached hereto as Attachment No. 2 and incorporated herein by this reference. "Liens" is defined in Section 202(f) hereof. "Memorandum of Agreement" means that certain memorandum of agreement substantially in the form attached hereto as Attachment No. 6 and incorporated herein which shall be recorded against the Participant Parcels prior to and superior to any and all monetary liens other than nondelinquent taxes and assessments, including without limitation the lien of permitted and approved permanent financing, if any. "Net Proceeds" shall mean proceeds available from the sale of Project Bonds net of all costs of issuance, reserves and any other funds from the proceeds of the Project Bonds not available to pay to the Participant. "Net Property Tax Increment" means the property tax increment revenues allocated to and received by the Agency pursuant to Section 33670(b) of the Community Redevelopment Law, as said statute may be amended from time to time, by application of the one percent (I%) tax levied against real property as permitted by Article XMA of the California Constitution, in an amount attributable by the San Diego County Assessor to the Site, but specifically excluding therefrom the following: (i) charges for County administrative charges, fees, or costs; and (ii) the portion of tax increment revenues from the Site attributable to any special taxes or assessments or voter -approved indebtedness; and (iii) the portion of the tax increment revenues from the Site (currently twenty percent [20%]) equal to the percentage of such revenues that the Agency is required by Sections 33334.2, et seq. of the Community Redevelopment Law, (as it may be amended from time to time) to expend and set aside in the Agency's Low and Moderate Income Housing Fund for affordable housing purposes, pursuant to the Community Redevelopment Law; and (iv) a portion of the tax increment revenues from the Site equal to the percentage of such revenue that the Agency is required to pay to any and all governmental entities by contract and/or as required by the Community Redevelopment Law; and (v) the portion of tax increment revenues from the Site equal to the percentage of such revenues in the Redevelopment Project Area, as a whole, which payments the State may mandate that the Agency pay from time to time in the future, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Sections 33681, et seq., of the Community Redevelopment Law; and (vi) an additional three percent (3%) of tax increment revenues from the Site which the Agency intends to utilize for payment of amounts owed under the Housing Settlement Agreement and administrative costs. 661171.722345.0071 -5- It is expressly understood by the parties hereto that, as set forth in the preceding paragraph of this definition of Net Property Tax Increment and for purposes of this Agreement, any rights of Participant under this Agreement to receive payment(s) of an amount equal to the Net Property Tax Increment generated from the Site and the obligations of the Agency to make such payment(s) to Participant are and will be subordinate to the Existing Senior Lien Bonded Indebtedness and the refunding or refinancing thereof. Participant hereby agrees to execute any and all documents reasonably deemed necessary by the Agency to acknowledge and/or affirm the subordination of Participant's interest in the Net Property Tax Increment as set forth in the previous sentence. Notwithstanding the preceding paragraph, the Agency hereby covenants and agrees not to issue future bonded indebtedness secured by a pledge of Net Property Tax Increment superior to the pledge of Net Property Tax Increment under this Agreement other than (i) the Project Bonds and the refunding and/or refinancing of such indebtedness and (ii) the refunding or refinancing of the Existing Senior Lien Bonded Indebtedness. The Agency further covenants and agrees not to pledge, transfer or otherwise assign Net Property Tax Increment for any purpose inconsistent with the purposes of this Agreement. "Notice" shall mean a notice in the form prescribed by Section 601 hereof. "Option" means Participant's option to request that Agency issue Project Bonds as more fully set forth in Section 205 hereof. "Participant" means Tech Business Center LLC, a California limited liability "Participant Contribution" means the sum of Eight Hundred Thousand Twenty Thousand Dollars ($820,000) which Developer agreed to contribute toward the construction of regional improvements and the extension of South Poway Parkway pursuant to the PCCOPA, and which obligation Participant is assuming pursuant to this Agreement. "Participant Parcels" means that portion of the Site consisting of approximately twenty six and four tenths (26.4) acres within TBC and approximately sixty one (61) acres within PCC (collectively, the "Participant Parcels") described in°Attachment 2-B attached hereto and incorporated herein by reference. "Participant's Knowledge" shall mean and refer to the cumulative knowledge of Neville Bothwell, Paul Tchang, and Ted Tchang. "PCCAssistance Cap" means the maximum Agency Assistance to be paid to Participant prior to the completion by Participant, and certification and acceptance by the Poway City Engineer of improvements to Kirkham Way described in the Scope of Development and more particularly described in the conditions of approval by the City Council of the Tentative Maps, which Agency Assistance shall not exceed Ten Million Dollars ($10,000,000). "PCC Promissory Note" means that promissory note dated April 20, 1993 executed by Agency in favor of Developer in a principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000) evidencing Agency's obligation to provide certain financial assistance to Developer 661171.7\22345.0071 -6- pursuant to the PCCOPA, which PCC Promissory Note is, as of the Date of Agreement, superceded by the Agency's obligation to pay the Agency Assistance pursuant to this Agreement. "Private Improvements" means all of the Improvements which are not Public Improvements. "Project" shall mean the construction of the Improvements and the sale of finished lots on the Site pursuant to this Agreement. "Project Bond Cap Amount" shall mean the maximum principal amount of the Project Bonds based on the market conditions at time of issuance, which shall not exceed the lesser of (a) the total Net Property Tax Increment allocated to and paid to the Agency over the life of the Project Bonds or (b) the Agency Assistance Cap, less Agency Assistance paid to Participant hereunder prior to the issuance of the Project Bonds. "Project Bonds" shall mean and refer to the bonds issued in accordance with Section 205 hereof. "Public Improvements" means those improvements required by the City or the Agency to be constructed, which are more specifically set forth in Attachment No. 4 attached hereto and incorporated herein by reference. "Redevelopment Plan" means the Redevelopment Plan for the Paguay Redevelopment Project, adopted by Ordinance No. 117 of the City Council of the City, and amended by Ordinance Nos. 415 and 439 of the City Council of the -City, and incorporated herein by reference. "Redevelopment Project Area" means Paguay Redevelopment Project, adopted by the City pursuant to the Redevelopment Plan. "Release of Construction Covenants" means the document which evidences the Participant's satisfactory completion of all of the Improvements, as set forth in Section 309 hereof, substantially in the form attached hereto as Attachment No. 5 and incorporated herein. "Relocation Laws " means the Federal Uniform Relocation and Real Property Acquisition Act, 42 U.S.C. Sections 4201, et seq., the California Relocation Assistance Law, California Government Code Sections 7260, et seq., and all federal, state and local regulations implementing such laws, and any other applicable federal, state, and local laws and regulations relating to relocation and the displacement of eligible persons and businesses. "Sale of the Project" means the conveyance by the Participant of all or any portion of the Project at arms length to a third party, not affiliated with the Participant or any entity which comprises the Participant. The term "Sale of the Project" as utilized herein shall also include the lease of all or any portion of the Project by the Participant at arms length to a third parry, not affiliated with the Participant or any entity which comprises the Participant whether the portion of the Project subject to the lease is in an improved or unimproved condition or is leased "build to suit." The term "Sale of the Project" as utilized herein may also mean, at the sole option of the Agency's Executive Director, or his/her designee, the sale or lease of all or any portion of the Project to an entity affiliated with the 661171.7\22345.0071 -7- Participant for "build to suit." A "portion of the Project" includes without limitation (a) less than all of the acreage of the Site and (b) one or more lots within the Site. "Sales Income" shall mean any and all income received by the Participant from the Sale of the Project. The term Sales Income, as utilized herein, shall mean the gross Sales Income received by the Participant. In the event that the Sale of the Project involves the lease of all or a portion of the Project, the term "Sales Income" as utilized herein shall mean and refer to the fair market value for the portion of the Project so leased based upon then existing market conditions. In addition to the foregoing, in the event that the Agency determines that a "Sale of the Project" shall include a sale or lease of all or a portion of the Project to an entity affiliated with the Participant for "build to suit, " the term "Sales Income" as utilized herein shall mean and refer to the fair market value for the portion of the Project so sold or leased based upon then existing market conditions. In the event that the Agency and the Participant disagree over the amount of the fair market value to be utilized hereunder as "Sales Income," or any amount to be excluded from the definition of Sales Income for improvements, other than the Improvements, such dispute shall be settled and decided by arbitration conducted by the American Arbitration Association in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as then in effect, except as provided below. Any such arbitration shall be held and conducted in San Diego County, California, before one (1) arbitrator (unless either party requests three (3) arbitrators) who shall be selected by mutual agreement of the parties; if agreement is not reached on the election of the arbitrator/or arbitrators within fifteen (15) days, then such arbitrator(s) shall be appointed in accordance with the rules of the American Arbitration Association. The provisions of the Commercial Arbitration Rules of the American Arbitration Association shall apply and govern such arbitration, subject, however, to the following: (i) Any demand for arbitration shall be in writing and must be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date that institution of legal or equitable proceedings based on such claim, dispute, or other matter would be barred by the applicable statute of limitations. (ii) The arbitrator or arbitrators appointed must be former or retired judges or members of the State Bar of California with at least ten (10) years' experience in real property and commercial matters, or other persons with like experience in the subject matter of the dispute. (iii) All proceedings involving the parties shall be reported by a certified shorthand court reporter and written transcripts of the proceedings shall be prepared and made available to the parties. (iv) The arbitrator or arbitrators shall prepare in writing and provide to the parties factual findings and the reasons on which the decision of the arbitrator or arbitrators is based. (v) Final decision by the arbitrator or arbitrators must be made within sixty (60) days from the date the arbitration proceedings are initiated. 661171.722345.0071 -8- (vi) The prevailing parry, if there shall be one, shall be awarded reasonable attorneys' fees, expert and nonexpert witness costs and expenses, and other costs and expenses, and other costs and expenses incurred in connection with the arbitration, unless the arbitrator or arbitrators for good cause determine otherwise. (vii) Costs and fees of the arbitrator or arbitrators shall be borne by the non -prevailing parry, if there shall be one, unless the arbitrator or arbitrators for good cause determine otherwise. (viii) The award or decision of the arbitrator or arbitrators, which may include equitable relief, shall be final and judgment may be entered on it in accordance with applicable law in any court having jurisdiction over the matter. The provisions of Title 9 of Part 3 of the California Code of Civil Procedure, including Section 1283.05, and successor statutes, permitting expanded discovery proceedings shall be applicable to all disputes which are arbitrated regarding the determination of the amount of Sales Income. "Schedule of Performance" means that certain Schedule of Performance attached hereto as Attachment No. 3 and incorporated herein by reference, which schedule, subject to the provisions of this Agreement sets out the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Participant and the Agency's Executive Director, and the Agency's Executive Director is authorized on behalf of the Agency to agree to make such revisions as he or she deems reasonably necessary. It is understood that the Schedule of Performance is subject to all of the terms and conditions set forth in the text of this Agreement. The summary of the items of performance in the Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any inconsistency between the Schedule of Performance and the text of this Agreement, the text shall govern. "Scope of Development" means that certain Scope of Development attached hereto as Attachment No. 4 and incorporated by reference, which describes the scope, amount and quality of the Improvements to be constructed and completed on the Site by the Participant pursuant to the terms and conditions of this Agreement and the Entitlements. The Scope of Development is subject to revision only as provided herein. "Site" means that real property situated within the Project Area, composed of approximately one hundred eighteen (118) acres, as delineated on the Site Map attached hereto as Attachment No. 1 and as more particularly described in the Legal Description attached hereto as Attachment No. 2-A. "Site Map" means the maps of the Site which are attached hereto as Attachment No. 1 and incorporated herein by this reference. "State" means the State of California. 661171.722345.0071 -9- "Tentative Map" means collectively, Tentative Maps TTM 86-02R2, TTM 97-01, and TPM 95-03. 200. PROVISION OF AGENCY ASSISTANCE AND ISSUANCE OF PROJECT BONDS 201. Annual Agency Assistance. In order to induce Participant to pay for and construct the Project including certain public improvements associated therewith, and subject to the terms and conditions set forth herein, including the satisfaction or written waiver by Agency of all of the Conditions Precedent (as defined hereinbelow) to each Annual Payment, Agency shall pay to Participant, as and when eligible, on each Annual Payment Date, commencing in 1999, an Annual Payment. The total of all Annual Payments shall not exceed (a) the PCC Assistance Cap, or (b) the Agency Assistance Cap, whichever is applicable pursuant to Section 202. Each Annual Payment is an "indebtedness" as that term is used in the Community Redevelopment Law. 202. Conditions Precedent to Payment. Agency's obligation to make each of the Annual Payments of the Agency Assistance, up to the amount of the PCC Assistance Cap, shall be subject to the fulfillment by Participant (or written waiver by Agency) on or before each Annual Payment Date, of each and every one of the conditions precedent (a) through (h), inclusive, described below, which are solely for the benefit of Agency: (a) Fee Title. Participant shall hold fee title to the Participant Parcels, subject only to the provisions of Section 603. (b) Execution of Documents. The Agreement to be Recorded Affecting Real Property and the Memorandum of Agreement shall have been recorded against the Site in accordance with the priority set forth in this Agreement. (c) Relocation Obligations. The Participant, at its sole cost and expense, shall have provided all eligible relocation assistance and benefits to all Eligible Persons in occupancy or previously in occupancy on the Site, if any, in full compliance with the Relocation Laws. (d) Commencement of Construction of the Improvements. The Participant shall have commenced construction of the Improvements by July 1, 1999. (e) Completion of Construction of Improvements. To the extent applicable to the Annual Payment Date at issue, the Participant shall have completed construction of the Improvements scheduled to be completed by such Annual Payment Date and the Agency shall have issued a Release of Construction Covenants or Partial Release, as applicable, for such Improvements. (f) Mechanics Liens. There shall not exist against the Site, or any portion thereof, any design professional's, mechanic's, materialmen's, contractor's or subcontractor's liens (collectively, "Liens"). Notwithstanding the foregoing, in the event that the Participant legitimately disputes the underlying facts giving rise to the recordation of a Lien against the Site, the Participant may provide the Agency with a bond reasonably acceptable in form and amount to the Agency's Executive Director, or his/her designee in satisfaction of the Participant's obligations under this Section 202(f). Participant agrees to and hereby does indemnify, defend and hold Agency and the City and their respective officers, employees and agents harmless from and against any claim, action, suit, 661171.7\22345.0071 -10- proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage or expense (including, without limitation, attorneys' fees) (collectively, "Claims") resulting from, arising out of, or based upon any Liens. Agency reserves the right, at its sole cost and expense, at any time and from time to time, to post and maintain on the Site, or any portion thereof, or on the improvements thereon, notices of non -responsibility or other notices as may be desirable to protect the Agency against such liability. (g) Sale of the Project. The Participant shall be utilizing commercially reasonable efforts to diligently pursue and cause the Sale of each portion of the Project upon the completion of the construction of the Improvements. (h) No Default. Participant shall not be in default of any of its obligations under the terms of this Agreement, and all representations and warranties of Participant contained herein shall be true and correct in all material respects. 202.1 Condition Precedent to Agency Assistance in Excess of PCC Assistance Cap. In addition to conditions precedent (a) through (h), Agency's obligation to make each Annual Payment of the Agency Assistance in excess of the PCC Assistance Cap, up to the Agency Assistance Cap, shall be subject to the additional condition precedent that Participant shall have completed all improvements to Kirkham Way set forth in the Scope of Development, and such improvements shall have been certified and accepted by the City Engineer. 202.2 Opportunity to Cure. To the extent the Participant is diligently and in good faith pursuing fulfillment of the conditions precedent set forth in Section 202 and 202.1 (collectively, the "Conditions Precedent") but has not satisfied one or more of the applicable Conditions Precedent on or before an Annual Payment Date, Agency agrees that Participant shall become eligible for such Annual Payment if Participant fulfills all applicable Conditions Precedent within thirty (30) days after the Annual Payment Date on which such Annual Payment would otherwise have been made. 203. Reduction in Amount of Agency Assistance. 203.1 Reduction in Amount of Agency Assistance Prior to Foreclosure. In the event that the Participant fails to pay all taxes and assessments with respect to those portions of the Site owned by the Participant in accordance with Section 402 hereof as and when such payments are due: (i) the amount of the Annual Payments of the Agency Assistance made to the Participant by the Agency with respect to those portions of the Site on or with respect to which the Participant has constructed the Improvements and which the Participant has sold shall be reduced by an amount equal to twenty-five percent (25%) of such Annual Payments; and (ii) the Participant shall no longer be entitled to receive any Annual Payments of Agency Assistance with respect to those portions of the Site which were owned by the Participant at the time Participant fails to make the required payment. In the event that the Participant cures its failure to pay all taxes and assessments together with any and all penalties and interest in connection with such failure to pay ("Delinquencies") prior to the first foreclosure sale held with respect to that portion of the Site owned by the Participant and the Agency and City receive such Delinquencies, the Agency shall pay to the Participant all amounts of the Annual Payment(s) withheld by the Agency (less the amount, if any, necessary to reimburse the City and/or the Agency for any costs expended by the City and/or the Agency in connection with Participant's failure to pay for which the City and/or the Agency are not otherwise reimbursed by the Participant's cure of its failure to pay such 661171.'T22345.0071 -11- taxes and/or assessments) pursuant to this Section 203.1; provided, however, that the Participant specifically acknowledges and agrees that the Participant shall not be entitled to any interest with respect to those portions of the Annual Payment(s) withheld by the Agency and that interest earned, if any, on such amount shall accrue solely to the benefit of the Agency. In the event that the Participant does not cure its failure to pay any and all taxes and assessments with respect to that portion of the Site owned by the Participant, the reduction in the amount of the Annual Payments of the Agency Assistance shall be as set forth in Section 203.2 hereof. 203.2 Reduction in Amount of Agency Assistance Following Foreclosure. In the event that the Participant fails to pay all taxes and assessments with respect to those portions of the Site owned by the Participant in accordance with Section 402 hereof as and when such payments are due and provided that such failure to pay is not cured by the Participant together with any and all penalties and interest in connection with such failure to pay prior to the first foreclosure sale held with respect to that portion of the Site owned by the Participant, whether or not such property is actually sold at such foreclosure sale, the amount of any and all Annual Payments of Agency Assistance following the first such foreclosure sale shall be reduced as follows: (i) the amount of the Annual Payments of the Agency Assistance made to the Participant by the Agency with respect to those portions of the Site on or with respect to which the Participant has constructed the Improvements and which the Participant has sold prior to the Participant's failure to pay taxes and/or assessments and prior to the first such foreclosure sale shall be reduced by an amount equal to twenty five percent (25%) of such Annual Payments; and (ii) the Participant shall no longer be entitled to receive any Annual Payments of Agency Assistance with respect to those portions of the Site which were: (a) owned by the Participant at the time of such foreclosure sale; and/or (b) which were sold by the Participant following the Participant's failure to pay taxes and/or assessments and prior to the foreclosure sale in the event that the taxes and/or assessments with respect to that portion of the Site so sold by the Participant are not paid in full along with any and all penalties and interest prior to the foreclosure sale and such amounts are received by the City and Agency. 203.3 Amount of Net Property Tax Increment Available for Project Bonds. In addition to the foregoing, the Participant expressly acknowledges and agrees that in the event that the amount of the Annual Payments of the Agency Assistance are reduced in accordance with Section 203.2 hereof, then, the amount of the Net Property Tax Increment utilized to issue the Project Bonds shall also be reduced as set forth in subsections (i) and (ii) of Section 203.2. 204. Termination of Agency Assistance. The Agency's obligation to make any further Annual Payments of the Agency Assistance shall immediately terminate upon the earlier to occur of the issuance of the Project Bonds or December 31, 2034, or the payment of Agency Assistance totaling the Agency Assistance Cap. 205. Participant's Option to Request Issuance of Project Bonds. 205.1 Request for Issuance of Project Bonds. At any time following the issuance of a Release of Construction Covenants with respect to the Public Improvements in accordance with Section 309 hereof, but in no event later than December 31, 2003, or to the extent allowed by the California Community Redevelopment Law (Health and Safety Code Sections 33000 et seq.) and the Redevelopment Plan, December 31, 2009, the Participant may request that the Agency issue bonds in a 661171.722345.0071 -12- principal amount of up to the Project Bond Cap Amount (the "Project Bond") the principal amount of which shall be paid to Participant in full satisfaction of Agency's obligation to pay Agency Assistance; provided, however, that the actual amount of the Project Bond shall be determined in accordance with market conditions existing at the time of the Project Bond issuance. In the event that the Release of Construction Covenants with respect to the Public Improvements has not been issued prior to December 31, 2003 or December 31, 2009, as applicable, then, in that event, the Participant's right to request the issuance of Project Bonds shall terminate. Notwithstanding the foregoing, if, at any time prior to the issuance of Project Bonds but following the date on which Participant may request the issuance of Project Bonds hereunder, the Community Redevelopment Law prohibits the issuance of Project Bonds after a specified date which date is prior to December 31, 2003 or December 31, 2009, as applicable, then, to the extent permitted by state and federal law, at the request of Participant, Agency shall use its best efforts to issue "Escrow Bonds." For purposes of this Section 205.1 "Escrow Bonds" shall mean Project Bonds the principal amounts of which shall be based on the tax increment reasonably expected to be available for debt service in the last fiscal year in which such bonds may legally be issued, which principal amount shall be released to Participant as Agency Assistance only when tax increment is actually available for payment of debt service in an amount sufficient, as determined by the Agency's financial consultant, to support repayment of the principal amount so released. Notwithstanding anything to the contrary herein, all references in this Agreement to amounts of Project Bonds and to the Project Bond Cap Amount shall be deemed to refer to only the amount of the Net Proceeds of any Project Bonds that are available for payment to Participant. 205.2 Verification of Actual Sales Income. Within thirty (30) days after the completion of a Sale of the Project, the Participant shall provide the Agency with true and correct copies of (a) a closing statement setting forth the Sales Income received for the property sold; and (b) all other such documentation as may be reasonably requested by the Agency documenting the amount of the actual Sales Income received by the Participant in connection with the subject Sale of the Project. In addition, the Participant shall provide the Agency every six (6) months following the date of this Agreement, a report of each transaction constituting a Sale of the Project as defined herein which has been consummated within the preceding six (6) month period, which report shall detail, at minimum, the acreage sold in each transaction, whether the property sold was improved or unimproved, and the Sales Income received for each transaction. 205.3 Bonding Contingency and Taxable Status of Bonds. Notwithstanding the foregoing, the provisions of this Section 205 are not and shall not be construed to be a guaranty on the part of the Agency regarding the ability of the Agency to issue the Project Bonds. The Agency shall utilize best efforts to cause the Project Bonds to be tax exempt based upon then existing applicable laws, however, the Agency in no way guarantees such tax exempt status. In the event that the Agency is unable to issue Project Bonds in any amount due to then existing market conditions or due to a change in the law and provided that the Participant would otherwise be entitled to request that the Agency issue the Project Bonds as set forth in Section 205. 1, the Participant may from time to time renew its request that the Agency issue the Project Bonds subject to the provisions of this Agreement, including without limitation, this Section 205.3; provided further, that in no event shall the Agency be obligated to issue the Project Bonds under this Section 205 following the date set forth in the Redevelopment Plan as the time limit in connection with the Agency's ability to re -pay indebtedness which, as of the Date of this Agreement, is the year 2034. 661171.7\22345.0071 -13- 206. Representations and Warranties. 206.1 Agency Representations. Agency represents and warrants to Participant as follows: (a) Authority. Agency is a public body, corporate and politic, existing pursuant to the Community Redevelopment Law, which has been authorized to transact business pursuant to action of the City. Performance and delivery of this Agreement by Agency has been fully authorized by all requisite actions on the part of Agency. (b) No Conflict. To the best of Agency's actual knowledge, Agency's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Agency is a party or by which it is bound. (c) No Agency Bankruptcy. Agency is not the subject of a bankruptcy proceeding. (d) Prior Pledge of Net Property Tax Increment. With the exception of the existing Senior Lien Bonded Indebtedness, and the Tax Sharing Agreement by and between the Agency and the County Library District, dated December 14, 1993, the Agency has not pledged the Net Property Tax Increment. Notwithstanding such prior pledges, the Net Property Tax Increment shall be available to comply with the Agency's obligations under this Agreement. (e) Housing Fund Obligations. As of the Date of this Agreement, the Agency is not in default of its obligations under Section 33334.2 of the Community Redevelopment Law to set aside twenty percent (20%) of all taxes which are allocated to the Agency pursuant to Section 33670 of the Community Redevelopment Law for the purpose of increasing, improving, and preserving the community's supply of low- and moderate -income housing. (f) Education Revenue Augmentation Fund Obligations. As of the Date of this Agreement, the Agency is not in default of its obligations under Section 33681 of the Community Redevelopment Law. During the term of this Agreement, Agency shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 206.1 not to be true, immediately give written notice of such fact or condition to Participant. 206.2 Participant's Representations. Participant represents and warrants to Agency as follows: (a) Authority. Participant has fee simple and marketable title to the Participant Parcels and has the full right, power and lawful authority to undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Participant has been fully authorized by all requisite actions on the part of the Participant. 661171.722345.0071 -14- (b) No Conflict. To the best of Participant's Knowledge, Participant's execution, delivery and performance of their obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Participant is a party or by which it is bound. (c) No Participant Bankruptcy. The Participant is not the subject of a bankruptcy proceeding. (d) Leases and Other Interests. As of the Date of Agreement, there are no tenants or other persons who possess lawful interests in the Participant Parcels which have not been disclosed to the Agency. (e) Litigation. To the best of Participant's Knowledge, there are no other actions, suits, material claims, legal proceedings, or any other proceedings affecting the Participant Parcels or any portion thereof, at law or in equity before any court or governmental agency, domestic or foreign. (f) Governmental Compliance. To the best of Participant's Knowledge, Participant has not received any notice from any governmental agency or authority alleging that any portion of the Participant Parcels is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. If any such notice or notices are received by Participant following the date this Agreement is signed by the Agency, Participant shall, within ten (10) days of receipt of such notice notify Agency. Throughout the term of this Agreement, Participant shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 206.2 not to be true, immediately give written notice of such fact or condition to Agency. 661171.722345.0071 -15- 300. DEVELOPMENT OF THE SITE 301. Scope of Development. The Participant shall construct the Improvements in phases and in accordance with the Entitlements, and such other plans, drawings and documents which have been approved by the City. The Improvements shall consist of those improvements set forth in the Scope of Development. 302. Land Use Approvals. Before commencement of the construction of each phase of the Improvements or other works of improvement upon the Site, the Participant shall, at Participant's own expense, secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for the construction of such phase of Improvements through completion, and operation thereof, by the City or any other governmental agency affected by such construction, work, use or operations (collectively, the "Entitlements"). The Participant shall, without limitation, apply for and secure the following, and pay all costs, charges and fees associated therewith: (a) All permits and fees required by the City, the County, and other governmental agencies with jurisdiction over the Improvements and the operation of the Project; (b) Any environmental studies and documents required pursuant to the California Environmental Quality Act, if applicable; if applicable; and (c) A Conditional Use Permit, including necessary variances and waivers, (d) Subdivision Map Act compliance. The Agency staff will work cooperatively with the Participant to assist in coordinating the expeditious processing and consideration of all necessary permits, entitlements and approvals. However, the execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals required by the Agency or the City or any other governmental agencies. 303. Schedule of Performance. The Participant shall commence and complete all construction of the Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefor in the Schedule of Performance. 304. Cost of Construction. Except to the extent otherwise expressly set forth in this Agreement, none of the cost of planning, designing, developing and constructing any of the Improvements in conformance with the Tentative Map and the Entitlements, including any applicable offsite improvements, shall be borne by the Agency or City. 305. Insurance Requirements. The Participant shall take out and maintain, until the later of three (3) years following the date of issuance of a Release of Construction Covenants as to all of the Improvements, or so long as the Agency is obligated to make any payment of Agency Assistance to Participant, a commercial general liability policy in the amount of One Million Dollars ($1,000,000.00) combined single limit policy, with an excess policy in the amount of Two Million Dollars ($2,000,000) 661171.7\22345.0071 -16- for a total coverage of Three Million Dollars ($3,000,000), and a comprehensive automobile liability policy in the amount of One Million Dollars ($1,000,000.00), combined single limit, or such other policy limits as the Agency may approve at its discretion, including contractual liability, as shall protect the Participant, City and Agency from claims for damages for bodily injury or property damages arising from the negligence or willful misconduct of Participant or its officers, employees, agents, or contractors. Such policy or policies shall be written on an occurrence form. The Participant shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that Participant and any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. The Participant shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by the Agency setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency and their respective officers, agents, and employees as additional insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency at least thirty (30) days in advance of the effective date of any nonrenewal, reduction in coverage, change in deductible, change in policy from an occurrence policy to a claims made policy, cancellation or termination. Coverage provided hereunder by the Participant shall be primary insurance and not be contributing with any insurance maintained by the Agency or City, and the policy shall contain such an endorsement. The general liability insurance policy or the general liability endorsement shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall be furnished by the Participant at the time set forth therefor in the Schedule of Performance. 306. Rights of Access. Prior to the issuance of a Release of Construction Covenants (as specified in Section 309 of this Agreement) as to all of the Improvements, for purposes of assuring compliance with this Agreement, representatives of the Agency shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Improvements so long as Agency representatives comply with all safety rules. The Agency (or its representatives) shall, except in emergency situations, notify the Participant prior to exercising its rights pursuant to this Section 306. 307. Compliance With Laws. The Participant shall carry out the design, construction and operation of the Improvements in conformity with all Governmental Requirements, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City of Poway Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Sections 4450, et seq., Government Code Sections 11135, et seq., and the Unruh Civil Rights Act, Civil Code Sections 51, et seq. 307.1 Nondiscrimination in Employment. Participant certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related 661171.722345.0071 -17- medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sections 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Sections 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Sections 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Sections 12101, et seq., and all other anti -discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. Participant shall allow representatives of the Agency access to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by the Agency. 307.2 Relocation; Obligations. The Participant expressly acknowledges and agrees that Participant is and shall be solely responsible for any and all costs and expenses incurred by Participant and/or the Agency for complying and/or causing compliance with all applicable Relocation Laws or other applicable federal, state and local laws and regulations concerning the displacement and/or relocation of all Eligible Persons from the Site, if any. Participant agrees to and hereby does indemnify, defend and hold Agency and the City and their respective officers, employees and agents harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees) (hereinafter collectively "Claims"), resulting from, arising out of, or based upon (i) compliance with the Relocation Laws and any relocation obligations by the Agency and/or Participant to any person or business possessing any interest in or to the Site, from and after the Date of this Agreement and thereafter, or (ii) any obligation to provide any person, business, or tenant payments or assistance pursuant to the Relocation Laws, from and after the date of this Agreement and thereafter. 308. Liens and Stop Notices. The Participant shall not allow to be placed on the Site or any part thereof any Lien or stop notice. If a claim of a Lien or stop notice is given or recorded affecting the Improvements the Participant shall within thirty (30) days of such recording or service or within five (5) days of the Agency's demand whichever last occurs: (a) pay and discharge the same; (b) affect the release thereof by recording and delivering to the Agency a surety bond in sufficient form and amount, or otherwise; or (c) provide the Agency with other assurance which the Agency deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Agency from the effect of such lien or bonded stop notice. 309. Release of Construction Covenants. Promptly after completion of each approved phase of the Improvements in conformity with this Agreement and submittal to Agency of reasonably satisfactory evidence that all Improvement costs associated with such approved phase of the Improvements have been paid in full and no Liens exist as to the portion of the Site on which such phase of Improvements have been constructed, the Agency shall furnish the Participant with a Release of Construction Covenants as to such completed phase of the Improvements (a "Partial Release"). The Agency shall not unreasonably withhold such Partial Release. The Partial Release shall be a conclusive 661171.7\22345.0071 -18- determination of satisfactory completion of the phase of the Improvements to which such Partial Release is applicable and the Partial Release shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the portion of the Site for which such Partial Release has been issued shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement as to such portion of the Site for which a Partial Release has been issued, except for those continuing covenants as set forth in Section 400 of this Agreement. If the Agency refuses or fails to furnish a Partial Release or, after written request from the Participant, the Agency shall, within thirty (30) days of written request therefor, provide the Participant with a written statement of the reasons the Agency refused or failed to furnish the Partial Release. The statement shall also contain the Agency's opinion of the actions the Participant must take to obtain such Partial Release. Even if the Agency shall have failed to provide such written statement within such thirty (30) day period, the Participant shall not be deemed entitled to a Partial Release. A Partial Release shall not constitute evidence of compliance with or satisfaction of any obligation of the Participant to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements, or any part thereof. A Partial Release is not a notice of completion as referred to in Section 3093 of the California Civil Code. 310. Financing of the Improvements. Prior to the commencement of the construction of the Improvements, the Participant shall submit to the Agency's Executive Director evidence that Participant has obtained sufficient equity capital or has obtained firm and binding commitments for construction and permanent financing necessary to undertake the development of the Improvements in accordance with this Agreement. The Agency's Executive Director, or his/her designee, shall approve or disapprove such evidence of financing commitments within ten (10) days of receipt of a complete submission. Approval shall not be unreasonably withheld or conditioned; provided that the loan shall not exceed the cost to construct the Improvements and the aggregate amount of commercially reasonable loan fees, interest reserves and other transactional costs associated with the loan (or in the case of a permanent loan, the outstanding amount of the construction loan and the aggregate amount of commercially reasonable loan fees, interest reserves and other transactional costs associated with the loan) and be made by a lender which the Agency may approve at its reasonable discretion. If the Agency's Executive Director or his/her designee shall disapprove any such evidence of financing, the Agency's Executive Director or his/her designee shall do so by written notice to Participant stating the reasons for such disapproval and Participant shall promptly obtain and submit to Agency new evidence of financing. Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 309 for the approval or disapproval of the evidence of financing as initially submitted to Agency's Executive Director. Such evidence of financing shall include the following: (a) a copy of a legally binding, firm and enforceable loan commitment(s) obtained by Participant from one or more financial institutions for the mortgage loan or loans for financing to fund the construction, completion, operation and maintenance of the Improvements and/or the remainder of the Improvements respectively, subject to such lenders' reasonable, customary and normal conditions and terms, or (b) a certification from the chief financial officer of Participant that Participant has sufficient funds for such construction, and that such funds have been committed to such construction, or (c) other documentation satisfactory to the Agency as evidence of other sources of capital sufficient to demonstrate that Participant has adequate 661171.7\22345.0071 -19- funds to cover the difference between the total cost of the construction and completion of the Improvements and/or the remainder of the Improvements respectively. 400. COVENANTS AND RESTRICTIONS 401. Use in Accordance with Redevelopment Plan. The Participant covenants and agrees for itself, its successors, assigns, and every successor in interest to the Participant Parcels or any part thereof, that during construction, operation, and thereafter, and ending upon the expiration of the Redevelopment Plan, as applicable to the Participant Parcels, the Participant shall devote the Participant Parcels to the uses specified in the Redevelopment Plan, this Agreement and the Agreement to be Recorded Affecting Real Property for the periods of time specified therein. All uses conducted on the Participant Parcels, including, without limitation, all activities undertaken by the Participant pursuant to this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City Municipal Code. 402. Covenant to Pay Taxes and Assessments. The Participant shall pay prior to delinquency all ad valorem real estate taxes, special taxes, assessments and special assessments on the Participant Parcels, subject to the Participant's right to contest in good faith any such taxes. The Participant shall remove or have removed any levy or attachment made on any of the Participant Parcels or any part thereof, or assure the satisfaction thereof as soon as practicable. 403. Covenant re Assessed Valuation of the Project. The Participant shall perform the construction of the Improvements in such a manner that the initial reassessed value of the Participant Parcels or any portion thereof, together with the Improvements located thereon, is not less than the assessed value of the Participant Parcels or such portion thereof for fiscal year 1999-2000. For a ten (10) year period beginning upon the first assessment of the Participant Parcels after the completion of construction of the Improvements, the Participant shall not take any action (or direct any other person to take any action) to decrease the property tax assessment of the Participant Parcels or any portion thereof below the initially assessed sum. 404. Maintenance Covenants. Subject to the provisions of Section 406(d), the Participant shall maintain the Participant Parcels and all improvements thereon, including lighting and signage, in good condition, free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan and with all applicable provisions of the City of Poway Municipal Code. Participant shall maintain in accordance with the "Maintenance Standards," as hereinafter defined, all improvements and landscaping on the Participant Parcels. Such Maintenance Standards shall apply to all buildings, signage, lighting, landscaping, irrigation of landscaping, architectural elements identifying the Participant Parcels and any and all other improvements on the Participant Parcels. To accomplish the maintenance, Participant shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Agreement. The following Maintenance Standards shall be complied with by Participant and its maintenance staff, contractors or subcontractors: (a) All improvements shall be maintained in conformance and in compliance with reasonable commercial development maintenance standards for projects of a similar 661171.722345.0071 -20- type in San Diego County, including but not limited to: painting and cleaning of all exterior surfaces and other exterior facades comprising all private improvements and public improvements to the curbline. The improvements shall be maintained in good condition and in accordance with the custom and practice generally applicable to comparable facilities located within San Diego County, California. (b) Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (c) Clean-up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. Agency agrees to notify Participant in writing if the condition of the improvements do not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Participant to cure the deficiencies. Upon notification of any maintenance deficiency, Participant shall have thirty (30) days within which to correct, remedy or cure the deficiency, or, to the extent such deficiency is not susceptible of cure within such thirty (30) day period, to commence to cure, and thereafter diligently pursue to completion the cure of such deficiency. If the written notification states the problem is urgent relating to the public health and safety of the City or the Agency, then Participant shall have forty-eight (48) hours to rectify the problem, or, to the extent such problem is not capable of being rectified within such forty-eight (48) hour period, Participant shall have twenty-four (24) hours to commence to rectify the problem, and thereafter shall use its best efforts to rectify such problem as quickly as possible. In the event Participant does not maintain the improvements in the manner set forth herein and in accordance with the Maintenance Standards, Agency shall have, in addition to any other rights and remedies hereunder, the right to maintain such improvements, or to contract for the correction of such deficiencies, after written notice to Participant, and the Participant shall be responsible for the payment of all such costs incurred by the Agency. 405. Nondiscrimination Covenants. The Participant covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Participant itself or any person claiming under or through them establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. 661171.7\22345.0071 -21- The Participant shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 406. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of 661171.7\22345.0071 -22- this Agreement and covenants may be entitled. The covenants contained in this Agreement shall remain in effect as follows: (a) The covenants pertaining to use and operation of the Participant Parcels which are set forth in Section 401 shall remain in effect until the expiration of the Redevelopment Plan, as applicable to the Participant Parcels, and shall bind the Participant and each successor owner with respect to the portion of the Participant Parcels owned by such parry during such party's period of ownership thereof. (b) The covenants pertaining to the payment of ad valorem taxes on the Participant Parcels which are set forth in Section 402 shall remain in effect in perpetuity and shall bind the Participant and each successor owner with respect to the portion of the Participant Parcels owned by such party during such party's period of ownership thereof. (c) The covenants pertaining to the assessed valuation of the Site which are set forth in Section 403 shall remain in effect for a term of ten (10) years from the date of the first assessment of the Participant Parcels after the completion of construction of the Improvements, and shall bind the Participant and each successor owner with respect to the portion of the Participant Parcels owned by such parry during such parry's period of ownership thereof. (d) The covenants pertaining to maintenance of the Participant Parcels and all improvements thereon, as set forth in Section 404 shall remain in effect until the termination date of the Redevelopment Plan and shall bind the Participant and each successor owner with respect to the portion of the Participant Parcels owned by such parry during such parry's period of ownership thereof. (e) The covenants against discrimination, as set forth in Section 405, shall remain in effect in perpetuity and shall bind the Participant and each successor owner with respect to the portion of the Participant Parcels owned by such party during such party's period of ownership thereof. 500. DEFAULTS AND REMEDIES 501. Defaults. Subject to the extensions of time set forth in Section 602 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A parry claiming a default shall give written notice of default to the other parry specifying the default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such parry within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. In the event that a default hereunder is not susceptible of being cured in such thirty (30) day period, the party claimed to be in default hereof shall commence to cure the default within thirty (30) days from receipt of such notice and shall thereafter complete such cure, correction or remedy with diligence and within ninety (90) days of such notice. 502. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or 661171.722345.0071 -23- equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Diego, State of California, in an appropriate municipal court in that county, or in the United States District Court for District of California in which San Diego County is located. 503. Termination of Annual Payments. The Agency's obligation to make further disbursements of Annual Payments shall immediately terminate upon the occurrence of a Default by Participant or of any of the events set forth in Section 204 hereof. 504. Acceptance of Service of Process. In the event that any legal action is commenced by the Participant against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Participant, service of process on the Participant shall be made by personal service upon Paul K. Tchang or in such other manner as may be provided by law. 505. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 506. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 507. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 508. Participant's Indemnity. The Participant shall defend, indemnify, assume all responsibility for, and hold the Agency, its officers, employees and agents, harmless from, all claims, demands, damages, defense costs or liability of any kind or nature relating to the subject matter of this Agreement or the implementation hereof and for any damages to property or injuries to persons, including accidental death (including attorneys fees and costs) (collectively referenced to herein as the "Claims"), which are caused by any of the Participant's activities under this Agreement, whether such activities or performance thereof be by the Participant or by anyone directly or indirectly employed or contracted with by the Participant and whether such damage shall accrue or be discovered before or after termination of this Agreement; provided, however, that the Participant's indemnity under this Section 508 shall not extend to Claims to the extent caused by the sole negligence or willful misconduct of the Agency or the City or their designated agents, employees or contractors. 600. GENERAL PROVISIONS 601. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable 661171.722345.0071 -24- means to the parry to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. To Agency: Poway Redevelopment Agency 13325 Civic Center Drive Poway, CA 92064 Attention: Executive Director With a copy to: Stradling, Yocca, Carlson & Rauth 660 Newport Center Drive, Suite 1660 Newport Beach, CA 92660 Attention: Thomas P. Clark, Jr., Esq. To Participant: Tech Business Center LLC 3575 Kenyon Street P.O. Box 80036 San Diego, CA 92138 Attention: Neville Bothwell Paul K. Tchang Ted Tchang With a copy to: Ellen B. Spellman, Esq. Allen, Matkins, Leck, Gamble & Mallory LLP 501 West Broadway, Ninth Floor San Diego, California 92101 Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 602. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either parry hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation (but specifically excluding any litigation filed by either party); unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the parry claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this 661171.722345.0071 -25- Agreement may also be extended in writing by the mutual agreement of Agency and Participant. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Improvements shall not constitute grounds of enforced delay pursuant to this Section 602. 603. Transfers of Interest in Site or Agreement. 603.1 Prohibition. The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those unique qualifications and identity that the Agency has entered into this Agreement with the Participant. For the period commencing upon the Date of this Agreement and until the issuance by the Agency of Release of Construction Covenants as to all of the Improvements, no voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement, nor shall the Participant make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Participant Parcels or the Improvements thereon (a "Transfer") without prior written approval of the Agency, except as expressly set forth herein. Any transfer without Agency's prior written approval shall entitle the Agency to its right of termination of this Agreement. 603.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or conveyance of the Participant Parcels or Improvements, or any part thereof, shall not be required in connection with any of the following: (a) Any transfers to an entity or entities in which the Participant, or Paul K. Tchang or Ted Tchang retains a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Participant Parcels or the Improvements to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Improvements. (c) Any requested assignment for financing purposes (subject to such financing being considered and approved by the Agency pursuant to Section 309 herein), including the grant of a deed of trust to secure the funds necessary for land acquisition, construction and permanent financing of the Improvements. (d) The sale of limited liability company interests and/or assets of Participant provided that Participant retains management and control of the operation of the Participant Parcels. (e) The sale of individual finished lots which comprise the Participant Parcels upon which the Improvements have been completed and for which a Partial Release has been issued, provided that the Agency is provided with a true and correct copy of the closing statement within thirty (30) days after the close of escrow of such sale. In the event of an assignment by Participant under subparagraphs (a) through (d), inclusive, above not requiring the Agency's prior approval, Participant nevertheless agrees that at least thirty (30) days prior to such assignment it shall give written notice to Agency of such 661171.722345.0071 -26- assignment. In the case of a transfer under subparagraph (e) above, Participant agrees to provide a true and accurate Closing Statement as to such sale pursuant to Section 205.2 within thirty (30) days after the completion of such sale. Prior to an assignment by Participant under subparagraphs (a) or (d), an assignment and assumption agreement transferring all of the rights and obligations of the Participant hereunder applicable to the interests being transferred, in form satisfactory to Agency's legal counsel, shall be required. The assignment and assumption agreement may upon the mutual agreement of the parties, include a provision for the proration of the Annual Payments based upon the percentage of the Improvements completed by the Participant at such time. With the exception of the terms, conditions, covenants and agreements set forth in the Agreement to Be Recorded Affecting Real Property, assignees of portions of Participant's interest in the Site pursuant to subparagraph (e), above, shall not be subject to the terms, conditions, covenants and agreements of Participant under this Agreement, and Participant shall be relieved of such obligations set forth therein with respect to the portion so transferred. 603.3 Agency Consideration of Requested Transfer. The Agency reserves sole and absolute discretion to approve or disapprove a request for transfer made pursuant to this Section 603, upon Participant's delivery of written notice to the Agency requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's or purchaser's development and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the Agency to evaluate the proposed assignee's or purchaser's ability to perform under this Agreement and other criteria as reasonably determined by the Agency. An assignment and assumption agreement transferring all of the rights and obligations of the Participant hereunder in form satisfactory to the Agency's legal counsel shall also be required for all proposed assignments. The assignment and assumption agreement may upon the mutual agreement of the parties include a provision for the proration of the Annual Payments based upon the percentage of the Improvements completed by the Participant at such time. Within thirty (30) days after the receipt of the Participant's written notice requesting Agency approval of an assignment or transfer pursuant to this Section 603, the Agency shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, the Participant shall promptly furnish to the Agency such further information as may be reasonably requested. 603.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Participant and its permitted successors and assigns as provided in this Agreement. Whenever the term "Participant" is used in this Agreement, except as otherwise expressly set forth herein, such term shall include any other permitted successors and assigns as herein provided. 603.5 Assignment by Agency. The Agency may assign or transfer any of its rights or obligations under this Agreement with the approval of the Participant, which approval shall not be unreasonably withheld; provided, however, that the Agency may assign or transfer any of its interests hereunder to the City or any public or private entity controlled by the City at any time without the consent of the Participant. 661171.7\22345.0071 -27- 604. Memorandum of Agreement. Participant and Agency agree to cause to be recorded against the Participant Parcels in the Official Records of San Diego County, California, the Memorandum of Agreement attached hereto as Attachment No. 6 and incorporated herein. 605. Relationship Between Agency and Participant. It is hereby acknowledged that the relationship between the Agency and the Participant is not that of a partnership or joint venture and that the Agency and the Participant shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the Agency shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. The Participant agrees to indemnify, hold harmless and defend the Agency from any claim made against the Agency arising from a claimed relationship of partnership or joint venture between the Agency and the Participant with respect to the development, operation, maintenance or management of the Site or the Project. 606. Agency Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by the Agency, the Executive Director of the Agency or his or her designee is authorized to act on behalf of the Agency unless specifically provided otherwise or the context should require otherwise. 607. Counterparts. This Agreement maybe signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in five (5) originals, each of which is deemed to be an original. 608. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. This Agreement includes pages 1 through 29 and Attachment Nos. 1 through 7, which constitute the entire understanding and agreement of the parries, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 609. Real Estate Brokerage Commission. The Agency and the Participant each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with this transaction, and each agrees to defend and hold harmless the other from any claim to any such commission or fee resulting from any action on its part. 610. Attorneys' Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. 611. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 661171.T22345,0071 -28- 612. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. 613. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other parry shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 614. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each parry. 615. Severability. If any term, provision, condition or covenant of this Agreement or its application to any parry or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 616. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 617. Legal Advice. Each parry represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 618. Time of Essence. Time is expressly made of the essence with respect to the performance by the Agency and the Participant of each and every obligation and condition of this Agreement. 619. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 620. Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee 661171.7\22345.0071 -29- participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 621. Time for Acceptance of Agreement by Agency. This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before forty-five (45) days after signing and delivery of this Agreement by the Participant or this Agreement shall be void, except to the extent that the Participant shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. 622. Non -Liability of Officials and Employees of the Agency and the Participant. No member, official or employee of the Agency or the City shall be personally liable to the Participant, or any successor in interest, in the event of any default or breach by the Agency (or the City) or for any amount which may become due to the Participant or its successors, or on any obligations under the terms of this Agreement. Participant hereby waives and releases any claim they may have against the members, officials or employees of the Agency and the City with respect to any default or breach by the Agency (or the City) or for any amount which may become due to the Participant or its successors, or on any obligations under the terms of this Agreement. The Participant makes such release with full knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 623. Offer. Any delivery of unsigned copies of this Agreement is solely for the purpose of review by the party to whom delivered, and neither the delivery nor any prior communications between the parties, whether oral or written, shall in any way be construed as an offer by Participant or Agency, nor in any way imply that Participant or Agency is under any obligation to enter the transaction which is the subject of this Agreement. The signing of this Agreement by Participant constitutes an offer which shall not be deemed accepted by Agency unless and until Participant has validly executed this Agreement. 661171.7\22345.0071 -30- IN WITNESS WHEREOF, the Agency and the Participant have executed this Owner Participation Agreement on the respective dates set forth below. Dated: , 1999 ATTEST: • _� Agen y Secretary APPROVED AS TO FORM: Agency Special Counsel Dated: % -11999 Dated: =' 1999 AGENCY: POWAY REDEVELOPMENT AGENCY, a public body, corporate and politic so PARTICIPANT: TECH BUSINESS CENTER LLC, a California limited liability company By: Techbilt Construction, a California corporation, as Managing Meb#r, Name: Its: By: Bothwell International Ltd., a California limited partnership, as Member N� Its 661171.7\22345.0071 -31- TO 0 m POWAY CORPORATE CENTER 661171.7\22345.0071 ATTACHMENT NO. 1 SITE MAP NORTH ATTACHMENT NO. 1 Page (1 of 1) TO IIWY-67 SOUTIIPOWAY COMMUNITY ATTACHMENT NO, 2-A LEGAL DESCRIPTION OF THE SITE 1. A PORTION OF THE NORTH/20F THE NORTHWEST'/4 OF SECTION 25, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, AND A PORTION OF THE NORTHEAST'/40F THE NORTHEAST/40F SECTION 26, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN. (PHASES 2 AND 3, POWAY CORPORATE CENTER.) 2. A PORTION OF THE SOUTHWEST/40F THE SOUTHEAST/40F SECTION 24, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN. (PHASE 1, POWAY CORPORATE CENTER.) 3. PARCEL "A" OF CITY OF POWAY BOUNDARY ADJUSTMENT AND CERTIFICATE OF COMPLIANCE NO. 93-03, RECORDED JULY 87 1993 AS FILE NO. 1993-04365522 OF OFFICIAL RECORDS FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, BEING IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA. (TECH BUSINESS CENTER.) 4. PARCEL 1 OF PARCEL MAP NO. 176072 IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON OCTOBER 20, 19957 AS FILE NO. 1995-0473968 OF OFFICIAL RECORDS. (WATKINS PARCEL.) 661171.7\22345.0071 ATTACHMENT NO.2 (Page 1 of 1) ATTACHMENT 2-13 LEGAL DESCRIPTION OF PARTICIPANT PARCELS 1. A PORTION OF THE NORTH'/2 OF THE NORTHWEST/40F SECTION 25, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, AND A PORTION OF THE NORTHEAST'/40F THE NORTHEAST/40F SECTION 26, TOWNSHW 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN. (PHASES 2 AND 3, POWAY CORPORATE CENTER.) 2. LOTS 1, 6, 7712 AND 13 OF CITY OF POWAY TRACT 86-02R(2), POWAY CORPORATE CENTER UNIT 1, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12853, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AUGUST 19, 1991. 3. PARCELS 3, 5, 6, 7 AND 8 OF PARCEL MAP NO. 16740, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 10, 1992 AS FILE NO. 1992- 0016041 OF OFFICIAL RECORDS. 4. PARCEL "A" OF CITY OF POWAY BOUNDARY ADJUSTMENT AND CERTIFICATE OF COMPLIANCE NO. 93-03, RECORDED JULY 8, 1993 AS FILE NO. 1993-0436552, OF OFFICIAL RECORDS FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, BEING IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA. (TECH BUSINESS CENTER.) 661171.7\22345.0071 ATTACHMENT NO.2 (Page 1 of 1) ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE I. GENERAL PROVISIONS 1. Consideration of Agreement by the Agency Board. The Agency Board shall consider the approval of this Agreement. 2. Execution of Agreement by the AaencX. If approved by the Agency Board, the Agency shall execute this Agreement and shall deliver one (1) executed copy thereof to the Participant. II. CONSTRUCTION 3. Commencement of Construction. Participant shall commence construction of the Improvements to be constructed on the Property. 4. Completion of Construction. Participant shall complete construction of the Improvements. On June 22, 1999 or as soon thereafter as may be practicable. Within twenty (20) days of the approval of this Agreement by the Agency Board. On or before July 1, 1999. On or before September 30, 2000 for PCC, and on or before September 30, 20002 for TBC and the Kirkham Way improvements. 03/09/99 ATTACHMENT NO.3 (Page 1 of 1) ATTACHMENT NO.4 SCOPE OF DEVELOPMENT THE CONSTRUCTION OF PUBLIC AND PRIVATE IMPROVEMENTS INCLUDING GRADING, SANITARY SEWER, WATER, STORM DRAINAGE, CURBS, GUTTERS AND SIDEWALKS, PAVED ROADWAYS, LANDSCAPING, UTILITIES, DESIGN AND CONSTRUCTION STAKING AND SUPERVISION, CITY PLAN CHECKS AND INSPECTION, FEES PAYABLE TO THE CITY, REDEVELOPMENT AGENCY AND OTHER PUBLIC AGENCIES, ALL AS REQUIRED UNDER THE APPROVAL CONDITIONS OF TENTATIVE MAP 86-02(R)(2) AS APPROVED BY CITY COUNCIL ON FEBRUARY 27, 1990, TENTATIVE MAP 97-01 AS APPROVED BY CITY COUNCIL ON NOVEMBER 10, 1998, AND TENTATIVE PARCEL MAP 95-03 AS APPROVED BY CITY COUNCIL ON OCTOBER 3, 1995. 661171.722345.0071 ATTACHMENT NO.4 (Page 1 of 1) ATTACHMENT NO.5 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO. Attn: This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. RELEASE OF CONSTRUCTION COVENANTS This RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the POWAY REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency"), in favor of TECH BUSINESS CENTER LLC, a California limited liability company (the "Participant"), as of the date set forth below. RECITALS A. The Agency and the Participant have entered into that certain Amended and Restated Owner Participation Agreement (the "OPA") dated , 1999 concerning the redevelopment of certain real property situated in the City of Poway, California as more fully described in Exhibit "A" attached hereto and made a part hereof. B. As referenced in Section 309 of the OPA, the Agency is required to furnish the Participant or its successors with a Release of Construction Covenants upon completion of construction of the Improvements (as defined in Section 101 of the OPA) or an approved phase thereof, which Release is required to be in such form as to permit it to be recorded in the Recorder's Office of San Diego County. This Release is conclusive determination of satisfactory completion of the construction and development of that phase of the Improvements described in Exhibit `B" attached hereto and incorporated herein by reference, as required by the OPA. C. The Agency has conclusively determined the construction and development described in Exhibit `B" has been satisfactorily completed. NOW, THEREFORE, the Agency hereby certifies as follows: 1. The Improvements described in Exhibit `B" have been fully and satisfactorily completed in conformance with the OPA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in the OPA shall remain in effect and enforceable according to their terms. 661171.7\22345M71 ATTACHMENT NO. 5 (Page 1 of 2) 2. Nothing contained in this instrument shall modify in any other way any other provisions of the OPA. 3. This Release shall not constitute evidence of compliance with or satisfaction of any obligation of the Participant to any holder of any mortgage, or any insurer of a mortgage loaned to finance the Improvements, or any part thereof. 4. Section 3093. Dated: This Release is not a notice of completion as referred to in California Civil Code IN WITNESS WHEREOF, the Agency has executed this Release this day of POWAY REDEVELOPMENT AGENCY, a public body, corporate and politic 1999 By: Its: APPROVED AS TO FORM: Stradling, Yocca, Carlson & Rauth Agency Special Counsel 661171.7\22345.0071 ATTACHMENT NO. 5 (Page 2 of 2) EXHIBIT "A" TO ATTACHMENT NO.5 LEGAL DESCRIPTION 1. A PORTION OF THE NORTH/20F THE NORTHWEST'/4 OF SECTION 25, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, AND A PORTION OF THE NORTHEAST '/4 OF THE NORTHEAST '/4 OF SECTION 26, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN. (PHASES 2 AND 3, POWAY CORPORATE CENTER.) 2. LOTS 1, 6, 7, 12 AND 13 OF CITY OF POWAY TRACT 86-02R(2), POWAY CORPORATE CENTER UNIT 1, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12853, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AUGUST 19, 1991. 3. PARCELS 3, 5, 6, 7 AND 8 OF PARCEL MAP NO. 16740, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 10, 1992 AS FILE NO. 1992- 0016041 OF OFFICIAL RECORDS. 4. PARCEL "A" OF CITY OF POWAY BOUNDARY ADJUSTMENT AND CERTIFICATE OF COMPLIANCE NO. 93-03, RECORDED JULY 8, 1993 AS FILE NO. 1993-0436552, OF OFFICIAL RECORDS FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, BEING IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA. (TECH BUSINESS CENTER.) 661171.7\22345.0071 EXHIBIT A TO ATTACHMENT NO. 5