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Home My WebLink About10/10/2017 PC AgendaPLANNING COMMISSION AGENDA October 10, 2017 7:00 P.M. City Hall, Windmill Community Room 21810 Copley Drive Diamond Bar, CA 91765 Chairperson Vice Chairperson Commissioner Commissioner Commissioner Raymond Wolfe Ken Mok Naila Barlas Frank Farago Jennifer "Fred" Mahlke Copies of staff reports or other written documentation relating to agenda items are on file in the Planning Division of the Community Development Department, located at 21810 Copley Drive, and are available for public inspection. If you have questions regarding an agenda item, please call (909) 839-7030 during regular business hours. Written materials distributed to the Planning Commission within 72 hours of the Planning Commission meeting are available for public inspection immediately upon distribution in the City Clerk's office at 21810 Copley Drive, Diamond Bar, California, during normal business hours. In an effort to comply with the requirements of Title 11 of the Americans with Disabilities Act of 1990, the City of Diamond Bar requires that any person in need of any type of special equipment, assistance or accommodation(s) in order to communicate at a City public meeting must inform the Community Development Department at (909) 839-7030 a minimum of 72 hours prior to the scheduled meeting. m nt� HAR Please refrain from smoking, eating or The City of Diamond Bar uses recycled drinking in the Windmill Community Room paper and encourages you to do the same City of Diamond Bar Planning Commission MEETING RULES PUBLIC INPUT The meetings of the Diamond Bar Planning Commission are open to the public. A member of the public may address the Commission on the subject of one or more agenda items and/or other items of which are within the subject matter jurisdiction of the Diamond Bar Planning Commission. A request to address the Commission should be submitted in writing at the public hearing, to the Secretary of the Commission. As a general rule, the opportunity for public comments will take place at the discretion of the Chair. However, in order to facilitate the meeting, persons who are interested parties for an item may be requested to give their presentation at the time the item is called on the calendar. The Chair may limit individual public input to five minutes on any item; or the Chair may limit the total amount of time allocated for public testimony based on the number of people requesting to speak and the business of the Commission. Individuals are requested to conduct themselves in a professional and businesslike manner. Comments and questions are welcome so that all points of view are considered prior to the Commission making recommendations to the staff and City Council. In accordance with State Law (Brown Act), all matters to be acted on by the Commission must be posted at least 72 hours prior to the Commission meeting. In case of emergency or when a subject matter arises subsequent to the posting of the agenda, upon making certain findings, the Commission may act on item that is not on the posted agenda. INFORMATION RELATING TO AGENDAS AND ACTIONS OF THE COMMISSION Agendas for Diamond Bar Planning Commission meetings are prepared by the Planning Division of the Community Development Department. Agendas are available 72 hours prior to the meeting at City Hall and the public library, and may be accessed by personal computer at the contact information below. Every meeting of the Planning Commission is recorded and duplicate recordings are available for a nominal charge. ADA REQUIREMENTS A cordless microphone is available for those persons with mobility impairments who cannot access the public speaking area. The service of the cordless microphone and sign language interpreter services are available by giving notice at least three business days in advance of the meeting. Please telephone (909) 839-7030 between 7:30 a.m. and 5:30 p.m., Monday through Thursday, and 7:30 a.m. and 4:30 p.m., Friday. HELPFUL CONTACT INFORMATION Copies of Agenda, Rules of the Commission, CDs of Meetings (909) 839-7030 Email: infoPdiamondbarca.gov Website: www.diamondbarca.gov CITY OF DIAMOND BAR PLANNING COMMISSION Tuesday, October 10, 2017 AGENDA CALL TO ORDER: 7:00 p.m. PLEDGE OF ALLEGIANCE: Next Resolution No. 2017-26 1. ROLL CALL: COMMISSIONERS: Naila Barlas, Frank Farago, Jennifer "Fred" Mahlke, Vice Chairperson Ken Mok, Chairperson Raymond Wolfe 2. MATTERS FROM THE AUDIENCE/PUBLIC COMMENTS: This is the time and place for the general public to address the members of the Planning Commission on any item that is within their jurisdiction, allowing the public an opportunity to speak on non-public hearing and non -agenda items. Please complete a Speaker's 3. APPROVAL OF AGENDA: Chairperson 4. CONSENT CALENDAR: The following items listed on the consent calendar are considered routine and are approved by a single motion. Consent calendar items may be removed from the agenda by request of the Commission only: 4.1 Minutes of Regular Meeting: September 12, 2017 5. OLD BUSINESS: None 6. NEW BUSINESS: 6.1 Property Subject: Approximately 730 acres located in the easternmost portion of Diamond Bar (Tres Hermanos) Recommendation: Adopt the Resolution finding that the Applicant has not provided sufficient and/or accurate information pertaining to the purpose of its proposed acquisition of Tres Hermanos Ranch for the Planning Commission to determine such acquisition's conformity with the General Plan. 7. = PUBLIC HEARING(S): None OCTOBER 10, 2017 PAGE 2 PLANNING COMMISSION 8. PLANNING COMMISSION COMMENTS / INFORMATIONAL ITEMS: 9. STAFF COMMENTS / INFORMATIONAL ITEMS: 9.1 Public Hearing dates for future projects 10. SCHEDULE OF FUTURE EVENTS: TRAFFIC AND TRANSPORTATION COMMISSION MEETING: BARKTOBER FEST: CITY COUNCIL MEETING: Thursday, October 12, 2017, 7:00 pm Diamond Bar City Hall Windmill Community Room 21810 Copley Drive Saturday, October 14, 2017 9:00 am — 1:00 pm Pantera Park Tuesday, October 17, 2017 — 6:30 pm South Coast Air Quality Management District Auditorium 21825 Copley Drive GENERAL PLAN UPDATE COMMUNITY Thursday, October 19, 2017 WORKSHOP #2: 6:30 pm — 8:30 pm Diamond Bar Center Grand Ballroom 1600 Grand Avenue PLANNING COMMISSION MEETING: PARKS AND RECREATION COMMISSION MEETING: Tuesday, October 24, 2017, 7:00 pm Diamond Bar City Hall Windmill Community Room 21810 Copley Drive Thursday, October 26, 2017, 7:00 pm Diamond Bar City Hall Windmill Community Room 21810 Copley Drive OCTOBER 10, 2017 PAGE 3 PLANNING COMMISSION FALL FUN FESTIVAL: GPAC MEETING: 11. ADJOURNMENT: Tuesday, October 31, 2017 4:30 pm — 8:30 pm Heritage Park Thursday, November 30, 2017, 6:30 pm — 8:30 pm Windmill Community Room 21810 Copley Drive MINUTES OF THE CITY OF DIAMOND BAR MEETING OF THE PLANNING COMMISSION SEPTEMBER 12, 2017 CALL TO ORDER: Chair/Wolfe called the meeting to order at 7:00 p.m. in the City Hall Windmill Room, 21810 Copley Drive, Diamond Bar, CA 91765. PLEDGE OF ALLEGIANCE: Vice Chair Mok led the Pledge of Allegiance. 1. ROLL CALL: Present: Commissioners Naila Barlas, Frank Farago, Jennifer "Fred" Mahlke, Vice Chair Ken Mok, and Chair Raymond Wolfe Also present: Greg Gubman, Community Development Director; James Eggart, Assistant City Attorney; Grace Lee, Senior Planner; May Nakajima, Associate Planner; Natalie T. Espinoza, Assistant Planner; and Stella Marquez, Administrative Coordinator. 2. MATTERS FROM THE AUDIENCE/PUBLIC COMMENTS: None 3 4. APPROVAL OF AGENDA: As presented. CONSENT CALENDAR: 4.1 Minutes of the Regular Meeting of August 22, 2017: C/Farago moved, C/Mahlke seconded, to approve the Minutes of the Regular Meeting of August 22, 2017, as presented. Motion carried by the following Roll Call vote: AYES: NOES: ABSENT: 5. OLD BUSINESS: 6. NEW BUSINESS: COMMISSIONERS: COMMISSIONERS: COMMISSIONERS: None None Barlas, Farago, Mahlke VC/Mok, Chair/Wolfe None None SEPTEMBER 12, 2017 PAGE 2 PLANNING COMMISSION 7. PUBLIC HEARING(S): 7.1 Conditional Use Permit No. PL2017-35 — Under the authority of Diamond Bar Municipal Code Section 22.58, the property owner and applicant requested a Conditional Use Permit to operate a 4,800 square -foot child daycare center with an existing 30,643 square -foot, multi -tenant commercial center. The subject property is zoned Community Commercial (C-2) with an underlying General Plan land use designation of General Commercial (C). PROJECT ADDRESS: 23373-23377 Golden Springs Drive Diamond Bar, CA 91765 PROPERTY OWNER: Chang Chih International Investment, LLC 430 S. Garfield Avenue #338 Alhambra, CA 91801 APPLICANT: Roy Foo 20911 E. Walnut Canyon Road Walnut, CA 91789 AP/Espinoza presented staff's report and recommended Planning Commission approval of Conditional Use Permit No. PL2017-35, based on the Findings of Fact, and subject to the conditions of approval as listed within the resolution. C/Mahlke asked who participated in the reciprocal parking agreement and whether it is a contract that expires or changes if the property changes ownership. AP/Espinoza said she had a copy of the agreement which was recorded in 2003. CDD/bubman stated that the Reciprocal Parking Agreement contains a provision which is an Access Agreement that has been recorded giving the initial term of 30 -years from the date of recordation and remains valid until October 28, 2033. At that time, the provision states that it would automatically be renewed for successive 10 -year periods unless the parties elect to "not -renew" the contract. Chair/Wolfe opened the public hearing. Chair/Wolfe closed the public hearing. SEPTEMBER 12, 2017 PAGE 3 PLANNING COMMISSION 7.2 Chair/Wolfe said he believed that Exhibit 5, the Parking Survey contained in the parking analysis sheds great light on what the real demand is. In fact, the peak demand in the evening pickup hours which are still well below the current required parking. Chair/Wolfe moved, VC/Mok seconded, to approve Conditional Use Permit PL2017-35, based on the Findings of Fact, and subject to the conditions of approval as listed within the resolution. Motion carried by the following Roll Call vote: AYES: COMMISSIONERS: NOES: COMMISSIONERS: ABSENT: COMMISSIONERS: Barlas, Farago, Chair//Wolfe None None Mahlke, VC/Mok Under the authority of Diamond Bar Municipal Code Title 21, the applicant requested to subdivide an existing 13.35 -acre lot developed with two existing three-story office buildings into three separate parcels. No new construction or physical changes are proposed. The purpose of the proposed subdivision is to create a separate parcel for each building as well as, a third common -interest parcel for the parking lot to serve the two buildings. The property is zoned Business Office (OB), and the underlying General Plan land use designation is Professional Office (OP). PROJECT ADDRESS: 21680 and 21688 Gateway Center Drive Diamond Bar, CA 91765 PROPERTY OWNER: Kimberly Kanen BSP Senita Gateway Center, LLC 3501 Jamboree Road #4200 Newport Beach, CA 92660 APPLICANT: Kurt Troxell Fuscoe Engineering 16795 Von Karman #100 Irvine, CA 92606 AP/Nakajima presented staff's report and recommended that the Planning Commission adopt the attached resolution recommending approval of SEPTEMBER 12, 2017 PAGE 4r a I✓a NTNG COMMISSION Tentative Parcel Map No. 74368 — Planning Case No. PL2017-25 to the City Council, based on the Findings of Fact, and subject to the conditions of approval as listed within the resolution. Chair/Wolfe opened the public hearing. Chair/Wolfe closed the public hearing. C/Mahlke moved, C/Barlas seconded to approve Tentative Parcel Map No. 74368 — Planning Case No. PL2017-25, based on the Findings of Fact, and subject to the conditions of approval as listed within the resolution. Motion carried by the following Roll Call vote: AYES: COMMISSIONERS: Barlas, Farago, Mahlke, VC/Mok Chair//Wolfe NOES: COMMISSIONERS: None ABSENT: COMMISSIONERS: None PLANNING COMMISSION COMMENTS/INFORMATIONAL ITEMS: C/Mahlke noted that this Thursday is Diamond Bar Day at the Fair. She encouraged everyone to attend the day. C/Barlas said she has been attending the Fair for many years with the kids from the Diamond Bar 4 Youth group. STAFF COMMENTS/INFORMATIONAL ITEMS: 9.1 Public Hearing dates for future projects. CDD/Gubman advised the Commission that no meeting will be held on September 26 and staff will advise the Commissioners about whether or not there will be a meeting scheduled for October 10 for which scheduled items is tentative at this point. CDD/Gubman referred the Commissioners to copies of a letter from the City of Industry which was cc'd to the Planning Commission and distributed on the dais. The correspondence concerns Industry's proposed purchase of Tres Hermanos Ranch from its former redevelopment agency. Staff is looking into the matter and when appropriate, it will be placed on a future Planning Commission agenda for the General Plan Consistency finding. SEPTEMBER 12, 2017 PAGE 5 PLANNING COMMISSION ACA/Eggart added that any, further discussion of this matter by Commissioners should take place when the item is placed on the Commission's agenda for consideration. 10. SCHEDULE OF FUTURE EVENTS: As posted in the Agenda. ADJOURNMENT: With no further business before the Planning Commission, Chair/Wolfe adjourned the regular meeting at 7:31 p.m. The foregoing minutes are hereby approved this 10th day of October, 2017. Attest: Respectfully Submitted, Greg Gubman Community Development Director Raymond Wolfe, Chairperson PLANNING COMMISSION AGENDA REPORT CITY OF DIAMOND BAR - 21810 COPLEY DRIVE -DIAMOND BAR, CA 91765 -TEL. (909) 839-7030 -FAX (909) 861-3117 AGENDA ITEM: MEETING DATE: CASE NUMBER: SUBJECT PROPERTY: GENERAL PLAN DESIGNATIONS: ZONING DISTRICTS: PROPERTY OWNER: APPLICANT: 6.1 October 10, 2017 PL2017-155 Approximately 730 acres located in the easternmost portion of Diamond Bar (APN 8701-021-271,8701-022-270,8701-022-273) Planning Area 1 (PA-1/SP) Planning Area 5 (PA-5/RH-30) Agricultural (AG) High Density Residential -30 units/Acre (RH-30) Successor Agency to the Industry -Urban Development Agency 15625 East Stafford Street City of Industry, CA 91744 City of Industry P.O. Box 3366 City of industry CA 91744-0366 SUBJECT: Review of the City of Industry's Proposed Acquisition of the Subject Property for Conformity with the Diamond Bar General Plan DATION: Adopt the attached Resolution (Attachment 1) finding that the Applicant has not provided sufficient information pertaining to the purpose of its proposed acquisition of Tres Hermanos Ranch for the Planning Commission to determine whether or not the proposed acquisition is in conformance with the General Plan. BACKGROUND: The City of Industry is seeking the purchase of approximately 2,450 acres of property, commonly known as Tres Hermanos Ranch, from the Successor Agency to the Industry - Urban Development Agency (the "Successor Agency"). Approximately 730 acres of the Tres Hermanos Ranch property is located within Diamond Bar's corporate limits (the "Subject Property"); the balance of Tres Hermanos Ranch is located within Chino Hills (see Attachment 2). Pursuant to California Government Code Section 65402(b), the proposed acquisition of the Subject Property by the City of Industry is subject to review by the Diamond Bar Planning Commission for conformity with the Diamond Bar General Plan. The full text of Government Code Section 65402 is provided in Attachment 3. In a letter dated September 1, 2017 (Attachment 4), Industry City Manager Paul Philips requested that this matter be placed on the Planning Commission agenda for the purpose set forth under Government Code Section 65402. This letter constitutes Industry's "Application" for the Planning Commission's review of Industry's proposed acquisition of the Subject Property for conformity with the Diamond Bar General Plan ANALYSIS: California Government Code Section 65402(b) states that a city shall not acquire real property in another city with an adopted general plan, for any public purpose, "until the location, purpose and extent of such acquisition... (has) been submitted to and reported upon by the planning agency having jurisdiction, as to conformity with said adopted general plan or part thereof." Diamond Bar General Plan The Subject Property is located within two General Plan land use designations, as illustrated and described below: Lf SUBJECT PROPERTY GRAND AVE -.6 mi. The area comprising approximately 30 acres adjacent to the southern boundary of Diamond Ranch High School is designated Planning Area 5/RH-30. The City adopted this land use designation in 2013 to meet Diamond Bar's obligation to comply with the State's Regional Housing Needs Assessment (RHNA) requirements. During the last Housing Element Cycle (covering the years 2013 to 2021), SCAG allocated 490 units of the region's lower-income housing obligation to Diamond Bar, which required the City do designate enough land to accommodate residential development at a net density of 30 dwelling units per acre. The net buildable area in the PA-5/RH-30 designation is approximately 16.3 acres, which would thus yield the required 490 units. The balance of the Subject Property is designated Planning Area (PA -1). All areas having a PA designation must be master -planned prior to development so that the unique characteristics of those areas area carefully considered. The full text of General Plan Strategy 1.6.1(a), which applies exclusively to the Subject Property, is provided below: PA -1 is located within the incorporated City south of the Pomona Freeway west of Chino Hills Parkway. This 720± acre vacant area is part of the larger Tres Hermanos Ranch property spanning Grand Avenue, including property within the City of Chino Hills. PA -1 incorporates the Agriculture (AG) land use designation permitting single family residential at a maximum density of 1.0 dwelling unit per 5 gross acres. Facilities appropriate for this site should be designed based upon a vision for the future and not merely extend the patterns of the past. Such facilities may include educational institutions, reservoir for practical and aesthetic purposes, commercial developments which are not typical of those found in the area and a variety of residential, churches, institutional and other uses which are complimentary to the overall objective of having a master planned area. Development within the Tres Hermanos area should be designed so as to be a part of the Diamond Bar community as well as compatible with adjacent lands. Intended Use of the Subject Property In the Application, Mr. Philips states that Industry's purpose for acquiring the entirety of Tres Hermanos Ranch is for "open space, preservation, public facility or other public purposes..." This letter further states that the City of Industry "does not have any more definitive plans for the future use of Tres Hermanos." Mr. Philips reiterates the "open space, preservation, public facility or other public purposes" statement in a follow-up letter dated September 21, 2017 (Attachment 6), in response to the City's request for definitive plans for the Subject Property (Attachment 5). Mr. Philips' statement purporting that Industry does not have any definitive plans for Tres Hermanos Ranch is problematic on several fronts. First, Government Code Section 65402(b) requires as part of its submission that Industry identify the "location, purpose and extent of such acquisition..." prior to acquiring the Subject Property. The Letter, however, does not identify Industry's "purpose" in acquiring the Subject Property or any other portion of Tres Hermanos Ranch. Given that by definition a general plan is a land use document, a determination as to whether Industry's acquisition is consistent can only be made if Industry identifies and provides reasonable details regarding the purpose (i.e., the use) for which it is acquiring the Subject Property. Merely identifying PL 2017-155 Page 3 of 5 the location and extent of the acquisition without identifying the purpose, does not provide the Planning Commission with adequate information to perform its statutory duty. Second, the Letter states that Industry is purchasing the Subject Property in "compliance with Government code Section 37351." Section 37351 permits Industry to purchase property outside its jurisdiction "as is necessary or proper for municipal purposes." It is unclear how it is that Industry can, on the one hand, state it is acquiring the Property in accordance with Section 37351 and on the other hand, state it has no definitive plans for the Property. The Letter's mention of a deed restriction to be imposed on Tres Hermanos Ranch limiting the use of the land to public use or open space is superfluous in that it places no limits whatsoever on Industry's future use of the land which didn't already exist under State law. Third, the statement that Industry has no definitive plans for the Subject Property is contradicted by the fully executed and apparently binding "Master Ground Lease" between Industry and San Gabriel Water and Power, LLC, a private entity (the "Lease," Attachment 7). By way of the Lease, it appears that upon acquisition of the Property, Industry has committed itself to leasing Tres Hermanos Ranch to San Gabriel Water and Power, LLC, for a minimum of 25 years for a "solar farm and a reservoir." In particular, the Lease requires San Gabriel Water and Power to prepare an initial study for a "photovoltaic solar project totaling, in the aggregate, at least... 450... megawatts of rated annual output..." In addition, the Lease provides that San Gabriel Water and Power must use the Subject Property only for the purposes set forth in the Lease. Attached as Attachment 8 are articles from the San Gabriel Tribune evidencing that Industry has definitive plans to develop the property for a solar farm. In addition, a number of consultants have performed environmental and other work for the San Gabriel Water and Power project. Attached as Attachment 9 are: (1) an invoice from Helix Environmental Planning to San Gabriel Water and Power, LLC, in the amount of $300,000 for environmental work through February 2017 for the "Tres Hermanos Project"; (2) a proposal for geotechnical engineering services from Terracon for the "Proposed Tres Hermanos Solar Project", dated January 6, 2017, in the amount of $99,900; (3) an invoice from Ambient Communities to San Gabriel Valley Water and Power LLC, in the amount of $110,000 for "EIR completion" dated February 1, 2017; and (4) a list of "Entitlement Consultants" for San Gabriel Valley Water & Power, including law firms, real estate firms and environmental firms with a facsimile date of April 21, 2017. These are all records received from Industry as part of a Public Records Act request to Industry. Given the above, City staff does not believe there is sufficient or accurate information for the Planning Commission to render its General Plan conformity finding. Other than essentially reciting a proposed deed restriction on the Subject Property, the Application does not identify the municipal purpose for which Industry proposes for the Subject Property and the representations made in the Application are not credible, given all the documentation, much provided by Industry itself, that Industry does have a definitive purpose for the Subject Property. It is not Diamond Bar's role to attempt to guess Industry's purpose or consider a purpose which is not listed on the Application itself, although clearly a solar farm is not consistent with the General Plan. Finally, the Application is also untimely. The purpose of Government Code Section 65402 is for the Planning Commission's finding to be considered by the Industry City Council as part of its decision-making process in deciding whether or not to purchase the Property. We understand that Industry's City Council has already approved the purchase of the Subject Property with the deed restriction. CONCLUSION Given that the Applicant does not identify the purpose for the City of Industry's proposed acquisition of the Subject Property and the Applicant's representation that Industry does not have any definitive plans for the Subject Property appears not credible, it is City staffs recommendation that the Planning Commission adopt the attached Resolution finding that the Applicant has submitted both insufficient and inaccurate information making it impractical for the Planning Commission to render its finding and direct that the Applicant re -submit the Application in conformance with Government Code Section 65402. Prepared by: �I Greg Gubman, ICP Community Development Director Attachments: 1. Resolution No. 2017 -XX 2. Aerial view of Tres Hermanos Ranch 3. California Government Code Section 65402 4. Letter from Paul Philips to Greg Gubman, dated September 1, 2017 ("Application") 5. Letter from Greg Gubman to Paul Philips, dated September 13, 2017 6. Letter from Paul Philips to Greg Gubman, dated September 21, 2017 7. Master Ground Lease between City of Industry and San Gabriel Valley Water and Power, LLC 8. San Gabriel Valley Tribune articles regarding Industry's plans to develop a solar farm on Tres Hermanos Ranch 9. Documents related to consulting services for a planned solar farm on Tres Hermanos Ranch. ATTACHMENT PLANNING COMMISSION RESOLUTION NO. 2017 -XX A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DIAMOND BAR, CALIFORNIA ("PLANNING COMMISSION"), FINDING THAT THE CITY OF INDUSTRY FAILED TO PROVIDE SUFFICIENT AND/OR ACCURATE INFORMATION PERTAINING TO THE PURPOSE OF ITS PROPOSED AQCUISITION OF TRES HERMANOS RANCH TO ENABLE THE PLANNING COMMISSION TO DETERMINE SUCH ACQUISITION'S CONFORMITY WITH THE GENERAL PLAN OF THE CITY OF DIAMOND BAR ("GENERAL PLAN"). A. RECITALS 1. WHEREAS, on April 18, 1989, the City of Diamond Bar ("City') was established as a duly organized municipal corporation of the State of California; 2. WHEREAS, on July 25, 1995, the City adopted its General Plan incorporating all State mandated elements, and periodically adopted updates to portions of the General Plan when appropriate and necessary; 3. WHEREAS, as of the date of this Resolution's adoption, the Successor Agency to the Industry -Urban Development Agency ("Successor Agency") is the owner in fee of approximately 2,450 acres of real property, commonly known as Tres Hermanos, shown as Exhibit "A," attached hereto; 4. WHEREAS, the northernmost portion of Tres Hermanos Ranch, comprising approximately 730 acres (the "Subject Property"), is located within the corporate limits of the City, while the balance of the Tres Hermanos Ranch acreage is located entirely within the corporate limits of the city of Chino Hills. The parcels comprising the Subject Property are further identified by Los Angeles County Assessor's Parcel Numbers 8701-021-271, 8701-022-270 and 8701- 022-273; 5. WHEREAS, the Subject Property is located within two General Plan land use designations, identified as Planning Area 1 ("PA-1/SP") and "Planning Area 5 ("PA-5/RH-30"), as shown in Exhibit "B," attached hereto; 6. WHEREAS, General Plan Land Use Element Strategy 1.6.1 describes the land use policies for PA-1/SP and PA-5/RH-30 as follows: a. PA -1 incorporates the Agriculture (AG) land use designation permitting single family residential at a maximum density of 1.0 dwelling unit per 5 gross acres. Facilities appropriate for this site should be designed based upon a vision for the future and not merely extend the patterns of the past. Such facilities may include educational institutions, reservoir for practical and aesthetic purposes, commercial developments which are not typical of those found in the area and a variety of residential, churches, institutional and other uses which are complimentary to the overall objective of having a master planned area. Development within the Tres Hermanos area should be designed so as to be a part of the Diamond Bar community as well as compatible with adjacent lands. b. PA -5 incorporates a 30 -acre (gross) area designated RH-30 to accommodate a maximum of 490 high density multi -family housing units consistent with the Regional Housing Needs Assessment and the Housing Element; 7. WHEREAS, the City of Industry ("Industry") proposes to acquire the Subject Property from the Successor Agency ("Proposed Acquisition") and both Industry and the Successor Agency have already approved the Proposed Acquisition; 8. WHEREAS, Section 65402(b) of the Government Code of the State of California ["Section 65402(b)"] mandates that a city shall not acquire real property in another city with an adopted general plan, for any public purpose, "until the location, purpose and extent of such acquisition... (has) been submitted to and reported upon by the planning agency having jurisdiction, as to conformity with said adopted general plan or part thereof;" 9. WHEREAS, in a letter to the City dated September 1, 2017 ("Industry Letter #1"), Industry City Manager Paul Philips requested that the Planning Commission consider the matter of the Proposed Acquisition for conformity with the General Plan in accordance with Section 65402(b). Industry Letter#1 states that Industry "is acquiring Tres Hermanos Ranch for open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351..." Industry Letter #1 further states that "(a)t this time, the City (of Industry) does not have any more definitive plans for the future use of Tres Hermanos." A copy of Industry Letter #1 is attached hereto as Exhibit "C"; 10. WHEREAS, in a letter to Industry dated September 13, 2017, the City requested that Industry identify its purpose for the Proposed Acquisition as required under Section 65402(b) ("City's Request"). A copy of the City's Request is attached hereto as Exhibit "D"; 11. WHEREAS, in a letter to the City dated September 21, 2017 ("Industry Letter #2"), Mr. Philips responded to the City's Request by stating that "Section 65402(b)'s requirement has been satisfied," and repeated Industry Letter #1's claim ad verbum that purpose for the Proposed Acquisition is "open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351..." A copy of Industry Letter #2 is attached hereto as Exhibit "E"; 12. WHEREAS, substantial evidence has been submitted into the record evidencing that Industry does, in direct contradiction to Mr. Philips' representation, have definitive plans for the Subject Property for a solar facility, although the evidence does not establish the exact size or location of the solar facility; 13. WHEREAS, on October 10, 2017, at a regularly scheduled meeting, the Planning Commission, considered the matter of the Proposed Acquisition, and concluded said review prior to the adoption of this Resolution. B. RESOLUTION NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF DIAMOND BAR DOES HEREBY RESOLVE AS FOLLOWS: 1. The Planning Commission hereby specifically finds that all of the facts set forth in the Recitals, Part A, of this Resolution are true and correct. 2. The Planning Commission hereby finds that Industry has not provided sufficient information pertaining to the purpose of the Proposed Acquisition for the Planning Commission to determine whether or not the proposed acquisition is in conformance with the General Plan. Further, the Planning Commission finds that Industry has made material misrepresentations to the Planning Commission as to its plans for the Subject Property. Finally, the Planning Commission finds that Industry's application is untimely and does not comply with Government Code Section 65402(b). These findings are made on the basis of the following facts: 2 Planning Commission Resolution No. 2017 -XX a. Government Code Section 65402(b) requires Industry to identify the "location, purpose and extent of such acquisition..." prior to acquiring the Subject Property. The documentation submitted to the City (i.e., Industry Letters #1 and #2), however, does not identify Industry's "purpose" in acquiring the Subject Property or any other portion of Tres Hermanos Ranch. Given that by definition a general plan is a land use document, a determination as to whether the Proposed Acquisition is consistent with the General Plan can only be made if Industry identifies and provides reasonable details regarding the purpose, i.e., the use, for which it is acquiring the Subject Property. Merely identifying the location and extent of the acquisition and reciting a proposed deed restriction on the Subject Property which could entail a number of different uses for the Subject Property, does not provide the Planning Commission with adequate information to perform its statutory duty. b. Industry asserts that the Proposed Acquisition is in "compliance with Government code Section 37351." Section 37351 permits Industry to purchase property outside its jurisdiction "as is necessary or proper for municipal purposes." It is unclear how it is that Industry can, on the one hand, state it is acquiring the Property in accordance with Section 37351 and on the other hand, state it has no definitive plans for the Property. Mention of a deed restriction in Industry Letters #1 and #2 to be imposed on Tres Hermanos Ranch limiting the use of the land to public use or open space is of no informational value in that it places no limits whatsoever on Industry's future use of Tres Hermanos Ranch, inclusive of the Subject Property, which did not already exist under State law. c. The statement that Industry has no definitive plans for the Subject Property is contradicted by substantial evidence in the record that Industry intends to use some unidentified portion of the Subject Property for a solar facility. The Applicant is directed to re -submit the Application containing sufficient details of its proposed use to enable the Planning Commission to make its determination. d. The City Council of the City of Industry has already approved the Proposed Acquisition without taking into consideration and having the benefit of the Planning Commission's General Plan conformance finding, thereby undermining the intent of Government Code Section 65402. The City Council of the City of Industry should withdraw its approval of the Proposed Acquisition until such time as it has the benefit of the Planning Commission's determination. The Planning Commission shall: (a) Certify as to the adoption of this Resolution; and (b) Forthwith transmit a certified copy of this Resolution to Paul Philips, City Manager, P.O. Box 3366, City of Industry, CA 91744-0366. APPROVED AND ADOPTED THIS 10th DAY OF OCTOBER, 2017, BY THE PLANNING COMMISSION OF THE CITY OF DIAMOND BAR. I:i71 Raymond Wolfe, Chairman 3 Planning Commission Resolution No. 2017 -XX I, Greg Gubman, Planning Commission Secretary, do hereby certify that the foregoing Resolution was duly introduced, passed, and adopted by the Planning Commission of the City of Diamond Bar, at a regular meeting of the Planning Commission held on the 10th day of October, 2017, by the following vote: AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Greg Gubman, Secretary 4 Planning Commission Resolution No. 2017 -XX EXHIBIT V1 SUBJECT PROPERTY GENERAL PLAN DESIGNATIONS J� - PA-1/SP i 0 _ _ u SUBJECT if PROPERTY GRAND AVE -.6 mi. EXHIBIT W1 CITY OF INDUSTRY Incorporated June 18, 1957 September 1, 2017 RECEIVED VIA HAND DELIVERY SEP 0 � 2057 Greg Gubman CITY OF DIAMOND BAR Director, Community Development Department City of Diamond Bar 21810 Copley Drive Diamond Bar, CA 91765 Dear Mr. Gubman: On August 24, 2017, the Oversight Board of the Successor Agency to the Industry Utban-Development Agency (the "Ovetsight Board") approved the sale to the City of Industry ("COI") of the 2,450 -acre property commonly known as "Tres Hermans Ranch," a portion of which lies within the City of Diamond Bar, Diamond Bar Assistant City Manager, Ryan McLean, attended the Oversight Board meeting and provided testimony. In addition, Diamond Bar City Attorney, David Deberry, provided written testimony. Pursuant to Government Code Section 65402(b), COI hereby submits to the Diamond Bar Planning Commission and the Community Development Department notice of (a) the location of the Tres Hermans Ranch: it is shown on Exhibit A attached hereto, (b) the extent of COI's purchase of the Tres Hermanos Ranch: COI is acquiring the fee interest in the entire Tres Hermanos Ranch, and (c) COI's purpose for acquiring the Tres Hermans Ranch: COI is acquiring Tres Hermanos Ranch for open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351 and the deed restriction that will be imposed by the Oversight Board. At this time, the City does not have any more definitive plans for the future use of Tres Hermanos. Please be advised that any future uses of all or any portion of the Tres Hermanos Ranch will comply with the Oversight Board's deed restriction and all applicable laws, including, without limitation, the California Environmental Quality Act. On August 3, 2017, Diamond Bar's City Manager, Daniel Fox, informed me that the Planning Commission would promptly place this report on its agenda for its review and consideration. If requested, I would be happy to appear before the Planning Commission to discuss this submittal. Please note that a copy of this letter is being submitted to the Diamond Bar Planning Commissioners and Mr. Fox. Thank you for your prompt attention to this submittal. I look forward to hearing from you. Very truly yours, Pa J. P 'ps City Manager P.O. Box 3366, City of Industry, California 91744-0366 • Administrative Offices: 15625 E. Stafford St. • (626) 333-2211 • Fax (626) 961-6795 Enclosure cc: Raymond Wolfe, Diamond Bax Planning Commission Chairman Ken Mok, Diamond Bar Planning Commission Vice Chairman Naila Barlas, Diamond Bar Planning Commissioner Frank Farago, Diamond Bar Planning Commissioner Jen "Fred" Mahlke, Diamond Bar Planning Commissioner Daniel Fox, City Manager Jimmy Lin Mayor Ruth M. Low Mayor Pro Tem Carol Herrera Council Member Nancy A. Lyons Council Member Steve Tye Council Member September 13, 2017 EXHIBIT "D" iamond Bar 21610 Copley Drive • Diamond Bar, CA 91765-4176 Paul J. Philips, City Manager City of Industry P.O. Box 3366 City of Industry, CA 91744-0366 (909) 839.7000 • Fax (909) 861-3117 www.DiamondBarCA.gov Re: City of Industry Request for General Plan Conformance Determination Tres Hermanos Ranch Dated September 1, 2017 Dear Mr. Philips: This is in response to your letter of the above date ("Letter"). The City of Diamond Bar ("Diamond Bar") has adopted a general plan which is applicable to approximately 730 of the 2,450 acres of property (the "Property") referenced in your letter and thus, it is appropriate to place this matter before Diamond Bar's Planning Commission for a general plan conformance finding. Initially, Industry's request appears to be untimely. I am informed that Industry's City Council may have already approved the purchase of the Property. The clear intent of Government Code Section 65402 is that the general plan conformity finding be submitted to Diamond Bar's Planning Commission prior to Industry approving the acquisition of real property so that Industry's City Council has that determination before it and considers it during its deliberations concerning the Property. Submitting it after such determination undermines the clear intent of the statute. As such, after Diamond Bar's Planning Commission makes its determination, the purchase of the Property should be placed back on Industry's City Council agenda and the purchase of the Property reconsidered. The Letter states that Industry does not have any definitive plans for the Property, which is problematic on several fronts. Initially, Government Code Section 65402(b) requires that as part of its submission that Industry identify the "location, purpose and extent of such acquisition ..." prior to acquiring the Property. The Letter, however, does not identify Industry's "purpose" in acquiring the Property. Given that by definition a general plan is a land use document, a determination as to whether Industry's acquisition is consistent can Paul J. Philips, City Manager City of Industry September 13, 2017 Page 2 only be made if Industry identifies and provides reasonable details regarding the purpose, i.e., the use, for which it is acquiring the Property. Merely identifying the location and extent of the acquisition without identifying the purpose, does not provide the Planning Commission with adequate information to perform its statutory duty. Second, the Letter states that Industry is purchasing the Property in "compliance with Government code Section 37351." Section 37351 permits Industry to purchase property outside its jurisdiction "as is necessary or proper for municipal purposes." It is unclear how it is that Industry can, on the one hand, state it is acquiring the Property in accordance with Section 37351 and on the other hand, state it has no definitive plans for the Property. Third, the statement that Industry has no definitive plans for the Property appears contradicted by the fully executed and apparently binding "MASTER GROUND LEASE" between Industry and San Gabriel Water and Power, LLC, a private entity (the "Lease"), which Diamond Bar just recently received a copy. Byway of the Lease it appears that upon acquisition of the Property Industry has committed itself to leasing the Property to San Gabriel Water and Power, LLC, for a minimum of 25 years for a "solar farm and a reservoir." In particular the Lease requires San Gabriel Water and Power to prepare an initial study for a "photovoltaic solar project totaling, in the aggregate, at least ... 450 ... megawatts of rated annual output ...." In addition the Lease provides that San Gabriel Water and Power must use the Property only for the purposes set forth in the Lease. Please apprise the undersigned if this Lease has in fact been approved by the City Council and whether Industry considers it binding. Additional information that will assist the Planning Commission would be the meeting date the City Council approved the Lease and the agenda materials relating thereto and how this Lease may constitute a public use as set forth in Section 37351. Given that the Letter does not identify the purpose for which Industry is acquiring the Property or provide any details regarding that use, the matter has not been properly "submitted" to Diamond Bar, therefore, does not comply with Government Code Section 65402(b). As such, the 40 -day period for planning commission review has not commenced. Once a Letter is submitted in compliance with Section 65402(b), this matter will be placed on the Diamond Bar Planning Commission's agenda for review. Sincerely, 1i Greg Gubman, AICP Community Development Director EXHIBIT CITY OF INDUSTRY oh Incorporated June 111, 1957 September 21, 2017 VIA EMAIL, only Greg Gubman Director, Community Development Department City of Diamond Bar 21810 Copley Drive Diamond Bar, CA 91765 Dear Mr. Gubman: Thank you for your letter of September 13, 2017, responding to the City of Industry's ("Industry") written request for a Government Code Section 65402(b) determination by the Diamond Bar Planning Commission regarding its notice of intention to acquire the Tres Hermans Ranch ("Tres Hermans"). Contrary to your letter, Industry has not acquired Tres Hetmanos, and in fact, it has yet to even open escrow. Given that Industry has not yet acquired Tres Hetmanos, its submittal to Diamond Bat's Planning Commission was timely and compliant with Section 65402(b), While I appreciate your desire fors. more detailed and definitive statement of the purpose of the acquisition, Section 65402(b)'s requirement for statement of a purpose has been satisfied. As set forth in Industry's submittal on September 1, 2017, the purpose of the acquisition is open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351 and the deed restriction that has been imposed by the Oversight Board. Your statement that you are unilaterally refusing to allow your planning commission to fulfill its obligation under Section 65402(b) is not authorized by law. The standard you have set for demanding details of the purpose of the Industty's proposed uses are not supported by the statute, Moreover, the 40 -day period for review that was established by the statute, began when my September 1, 2017 letter was hand delivered to you. No statutory authorityis granted for you to ignore or halt the period for further consideration or a demand for additional information. Please be aware that the State Legislature has deemed 40 days sufficient for Diamond Bar's Planning Commission to consider Industry's request and, if the Planning Commission does not timely act, that failure will be conclusively deemed to be a finding that the acquisition is in conformity with Diamond Bar's General Plan. P.O. Box 3366, City of Industry, California 91744-0366 • Administrative Offices: 15625 E. Stafford St. • (626) 333-2211 • Fax (626) 961-6795 Thank you for your continued prompt attention to Industry's September 1, 2017, submittal. I look forward to hearing from you. Very truly yours, )�� Paul J. Philips City Manager cc: Raymond Wolfe, Diamond Bar Planning Commission Chairman Ken Mok, Diamond Bar Planning Commission Vice Chairman Naila Barlas, Diamond Bar Planning Commissioner Frank Farago, Diamond Bar Planning Commissioner Jen "Fred" Mahlke, Diamond Bar Planning Commissioner Daniel Fox, City Manager ATTACHMENT 3 CALIFORNIA GOVERNMENT CODE SECTION 65402 65402. (a) If a general plan or part thereof has been adopted, no real property shall be acquired by dedication or otherwise for street, square, park or other public purposes, and no real property shall be disposed of, no street shall be vacated or abandoned, and no public building or structure shall be constructed or authorized, if the adopted general plan or part thereof applies thereto, until the location, purpose and extent of such acquisition or disposition, such street vacation or abandonment, or such public building or structure have been submitted to and reported upon by the planning agency as to conformity with said adopted general plan or part thereof. The planning agency shall render its report as to conformity with said adopted general plan or part thereof within forty (40) days after the matter was submitted to it, or such longer period of time as may be designated by the legislative body. If the legislative body so provides, by ordinance or resolution, the provisions of this subdivision shall not apply to: (1) the disposition of the remainder of a larger parcel which was acquired and used in part for street purposes; (2) acquisitions, dispositions, or abandonments for street widening; or (3) alignment projects, provided such dispositions for street purposes, acquisitions, dispositions, or abandonments for street widening, or alignment projects are of a minor nature. (b) A county shall not acquire real property for any of the purposes specified in paragraph (a), nor dispose of any real property, nor constructor authorize a public building or structure, in another county or within the corporate limits of a city, if such city or other county has adopted a general plan or part thereof and such general plan or part thereof is applicable thereto, and a city shall not acquire real property for any of the purposes specified in paragraph (a), nor dispose of any real property, nor construct or authorize a public building or structure, in another city or in unincorporated territory, if such other city or the county in which such unincorporated territory is situated has adopted a general plan or part thereof and such general plan or part thereof is applicable thereto, until the location, purpose and extent of such acquisition, disposition, or such public building or structure have been submitted to and reported upon by the planning agency having jurisdiction, as to conformity with said adopted general plan or part thereof. Failure of the planning agency to report within forty (40) days after the matter has been submitted to it shall be conclusively deemed a finding that the proposed acquisition, disposition, or public building or structure is in conformity with said adopted general plan or part thereof. The provisions of this paragraph (b) shall not apply to acquisition or abandonment for street widening or alignment projects of a minor nature if the legislative body having the real property within its boundaries so provides by ordinance or resolution. (c) A local agency shall not acquire real property for any of the purposes specified in paragraph (a) nor dispose of any real property, nor construct or authorize a public building or structure, in any county or city, if such county or city has adopted a general plan or part thereof and such general plan or part thereof is applicable thereto, until the location, purpose and extent of such acquisition, disposition, or such public building or structure have been submitted to and reported upon by the planning agency having jurisdiction, as to conformity with said adopted general plan or part thereof. Failure of the planning agency to report within forty (40) days after the matter has been submitted to it shall be conclusively deemed a finding that the proposed acquisition, disposition, or public building or structure is in conformity with said adopted general plan or part thereof. If the planning, agency disapproves the location, purpose or extent of such acquisition, disposition, or the public building or structure, the disapproval may be overruled by the local agency. Local agency as used in this paragraph (c) means an agency of the state for the local performance of governmental or proprietary functions within limited boundaries. Local agency does not include the state, or county, or a city. ATTACHMENT 4 CITY OF INDUSTRY Incorporated June 18, 1957 September 1, 2017 RECEIVED VIA HAND DELIVERY SEp 0 5 20T/ Greg Gubman CITY OF DIAMOND BAR Director, Community Development Department City of Diamond Bar 21810 Copley Drive Diamond Bar, CA 91765 Dear Mr. Gubman: On August 24, 2017, the Oversight Board of the Successor Agency to the Industry Urban -Development Agency (the "Oversight Boatd") approved the sale to the City of Industry ("COI") of the 2,450 -acre property commonly known as "Ties Hermanos Ranch," a portion of which lies within the City of Diamond Bar. Diamond Bar Assistant City Manager, Ryan McLean, attended the Oversight Board meeting and provided testimony. In addition, Diamond Bar City Attorney, David Deberry, provided written testimony. Pursuant to Government Code Section 65402(b), COI hereby submits to the Diamond Bar Planning Commission and the Community Development Department notice of (a) the location of the Tres Hermans Ranch: it is shown on Exhibit A attached hereto, (b) the extent of COI's purchase of the Tres Hermanos Ranch: COI is acquiring the fee interest in the entire Tres Hermanos Ranch, and (c) COI's purpose for acquiring the Tres Hermanos Ranch: COI is acquiring Tres Hermans Ranch for open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351 and the deed restriction that will be imposed by the Oversight Board. At this time, the City does not have any more definitive plans for the future use of Tres Hermans. Please be advised that any future uses of all or any portion of the Tres Hermanos Ranch will comply with the Oversight Board's deed restriction and all applicable laws, including, without limitation, the California Environmental Quality Act. On August 3, 2017, Diamond Bar's City Manager, Daniel Fox, informed me that the Planning Commission would promptly place this report on its agenda for its review and consideration. If requested, I would be happy to appear before the Planning Commission to discuss this submittal. Please note that a copy of this letter is being submitted to the Diamond Bar Planning Commissioners and Mr. Fox. Thank you for your prompt attention to this submittal. I look forward to hearing from you. Very truly yours, Pa J. P 'ps City Manager P.O. Box 3366, City of Industry, California 91744-0366 • Administrative Offices: 15625 E. Stafford St. • (626) 333-2211 • Fax (626) 961-6795 Jimmy Lin Mayor Ruth M. Low Mayor Pro Tem Carol Herrera Council Member Nancy A*Lyons Council Member Steve Tye Council Member September 13, 2017 ATTACHMENT City of Diamond Bar 21810 Copley Drive • Diamond Bar, CA 91765-4178 Paul J. Philips, City Manager City of Industry P.O. Box 3366 City of Industry, CA 91744-0366 (909)839-7000• Fax(909)861-3117 www.DiamondBarCA.gov Re: City of Industry Request for General Plan Conformance Determination Tres Hermanos Ranch Dated September 1, 2017 Dear Mr. Philips: This is in response to your letter of the above date ("Letter"). The City of Diamond Bar ("Diamond Bar") has adopted a general plan which is applicable to approximately 730 of the 2,450 acres of property (the "Property") referenced in your letter and thus, it is appropriate to place this matter before Diamond Bar's Planning Commission for a general plan conformance finding. Initially, Industry's request appears to be untimely. I am informed that Industry's City Council may have already approved the purchase of the Property. The clear intent of Government Code Section 65402 is that the general plan conformity finding be submitted to Diamond Bar's Planning Commission prior to Industry approving the acquisition of real property so that Industry's City Council has that determination before it and considers it during its deliberations concerning the Property. Submitting it after such determination undermines the clear intent of the statute. As such, after Diamond Bar's Planning Commission makes its determination, the purchase of the Property should be placed back on Industry's City Council agenda and the purchase of the Property reconsidered. The Letter states that Industry does not have any definitive plans for the Property, which is problematic on several fronts. Initially, Government Code Section 65402(b) requires that as part of its submission that Industry identify the "location, purpose and extent of such acquisition ..." prior to acquiring the Property. The Letter, however, does not identify Industry's "purpose" in acquiring the Property. Given that by definition a general plan is a land use document, a determination as to whether Industry's acquisition is consistent can Paul J. Philips, City Manager City of Industry September 13, 2017 Page 2 only be made if Industry identifies and provides reasonable details regarding the purpose, i.e., the use, for which it is acquiring the Property. Merely identifying the location and extent of the acquisition without identifying the purpose, does not provide the Planning Commission with adequate information to perform its statutory duty. Second, the Letter states that Industry is purchasing the Property in "compliance with Government code Section 37351." Section 37351 permits Industry to purchase property outside its jurisdiction "as is necessary or proper for municipal purposes." It is unclear how it is that Industry can, on the one hand, state it is acquiring the Property in accordance with Section 37351 and on the other hand, state it has no definitive plans for the Property. Third, the statement that Industry has no definitive plans for the Property appears contradicted by the fully executed and apparently binding "MASTER GROUND LEASE" between Industry and San Gabriel Water and Power, LLC, a private entity (the "Lease"), which Diamond Bar just recently received a copy. By way of the Lease it appears that upon acquisition of the Property Industry has committed itself to leasing the Property to San Gabriel Water and Power, LLC, for a minimum of 25 years for a "solar farm and a reservoir." In particular the Lease requires San Gabriel Water and Power to prepare an initial study for a "photovoltaic solar project totaling, in the aggregate, at least ... 450 ... megawatts of rated annual output ...." In addition the Lease provides that San Gabriel Water and Power must use the Property only for the purposes set forth in the Lease. Please apprise the undersigned if this Lease has in fact been approved by the City Council and whether Industry considers it binding. Additional information that will assist the Planning Commission would be the meeting date the City Council approved the Lease and the agenda materials relating thereto and how this Lease may constitute a public use as set forth in Section 37351. Given that the Letter does not identify the purpose for which Industry is acquiring the Property or provide any details regarding that use, the matter has not been properly "submitted" to Diamond Bar, therefore, does not comply with Government Code Section 65402(b). As such, the 40 -day period for planning commission review has not commenced. Once a Letter is submitted in compliance with Section 65402(b), this matter will be placed on the Diamond Bar Planning Commission's agenda for review. Sincerely, �i Greg Gubman, AICP Community Development Director YIA EMAIL only ATTACHMENT 6 CITY OF INDUSTRY Incorporated June 19, 1957 September 21, 2017 Greg Gubman Director, Community Development Department City of Diamond Bar 21810 Copley Drive Diamond Bar, CA 91765 Dear Mr. Gubman: Thank you for your letter of September 13, 2017, responding to the City of Industry's ("Industry") written request for a Government Code Section 65402(b) determination by the Diamond Bat Planning Commission regarding its notice of intention to acquire the Tres Hermans Ranch ("Tres Hermans"). Contrary to your letter, Industry has not acquired Tres Hermanos, and in fact, it has yet to even open escrow, Given that Industry has not yet acquired Tres Hermans, its submittal to Diamond Bar's Planning Commission was timely and compliant with Section 65402(b), While I appreciate your desire for a mote detailed and definitive statement of the purpose of the acquisition, Section 65402(b)'s requitement for statement of a purpose has been satisfied. As set forth in Industry's submittal on September 1, 2017, the purpose of the acquisition is open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351 and the deed restriction that has been imposed by the Oversight Board. Your statement that you are unilaterally refusing to allow your planning commission to fulfill its obligation under Section 65402(b) is not authorized by law, The standard you have set for demanding details of the purpose of the Industry's proposed uses are not supported by the statute. Moreover, the 40 -day period for review that was established by the statute, began when my September 1, 2017 letter was hand delivered to you. No statutory authority is granted for you to ignore or halt the period for further consideration or a demand for additional information. Please be aware that the State Legislature has deemed 40 days sufficient for Diamond Bar's Planning Commission to consider Industry's request and, if the Planning Commission does not timely act, that failure will be conclusively deemed to be a finding that the acquisition is in conformity with Diamond Bat's General Plan. F.O. Box 3366, City of Industry, California 91744-0366 • Administrative Offices: 15625 E. Stafford St. • (626) 333-2211 • Fax (626) 961.6795 Thank you for your continued prompt attention to Industry's September 1, 2017, submittal. I look forward to hearing from you. Very truly yours, 4AAJ Paul J. Philips City Manager cc: Raymond Wolfe, Diamond Bar Planning Commission Chairman Ken Mok, Diamond Bar Planning Commission Vice Chairman Nails Barlas, Diamond Bar Planning Commissioner Frank Farago, Diamond Bar Planning Commissioner Jen "Fred" Mahle, Diamond Bar Planning Commissioner Daniel Fox, City Manager ATTACHMENT [Dechert draft 518116] MASTER GROUND ESE THIS MASTER GROUND LEASE ("Lease") is made and entered into as of 17th day of May, 2016 ("Effective Date"), by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GAERIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant"), RECITALS: A. Landlord is the owner of that certain real property located in the Counties of Los Angeles, San Bernardino and Orange, State of California, which is more particularly described on Exhibit "A" attached hereto (as such real properly may be reduced for portions thereof that are excluded and subjected to a Project Lease and increased with respect to the Scout Properly and Agency Property, as defined below, the "Total Site"). b. Landlord may acquire all or potions of two (2) additional parcels of real property that are shown of the Site Plan and referred to herein as the "Scout Property" and the "Agency Property". If Landlord timely acquires either the Scout Property or the Agency Property, or any portion of either, then such property shall be added to, and become part of, the Total Site in accordance herewith. C. Landlord and Tenant intend to permit Tenant to develop such portions of the Total Site as the Tenant shall determine desirable and which Landlord approves in accordance herewith for various public infrastructure projects including, without limitation, a solar farm and a reservoir. D. To facilitate Tenant's development of such projects on the Total Site, Landlord shall allow Tenant or an Affiliate or Permitted Assignee, as each are defined below (as applicable, the "Project Tenant") to enter into ground leases of portions of the Total Site in the form to be agreed upon between Landlord and Tenant by the Due Diligence Date and attached to this Lease as art exhibit by supplement hereto, with such revisions as the parties shall approve for each Project, as defined below (each, a "Project Lease"), whereupon the premises thereunder shall be excluded from the Total Site. E. In furtherance of the foregoing, Landlord and Tenant wish to enter into this Lease with respect to the Total Site. AGREF,MENT NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the foregoing recitals and of the mutual covenants, conditions and agreements herein contained to be done, kept and performed, Landlord and Tenant hereby agree as follows: 21193068.10.aUSINaSS ARTICLE 1 PROPERTY 1.1 Demise. Landlord, for and in consideration of the rents, covenants and agreements to be paid, kept, performed and observed by Tenant under this Lease, hereby demises and ]eases unto Tenant, and Tenant hereby leases from Landlord, the Total Site upon and subject to the terms, covenants and conditions hercin set forth. Landlord and'fenant mutually covenant as a material part of the consideration for this Lease to keep and pctd'onn each and all of said terns, covenants, and conditions. 1.1.1 Scout Pr reny and Aaencv Prone . If Landlord acquires fee title to all or any portion of the Scout Property and/or the Agency Property on or before December 31, 2018 (which Landlord may elect not to do in its sole discretion), then Landlord shall provide prompt notice thereof to Tenant and the parties shall supplement this Lease to demise such property whereupon such property shall become part of the Total Site and subject to the terms of this Lease; provided, however, that (a) the failure of Landlord to acquire all or any portion of the Scout Property and/or the Agency Property on or before December 31, 2018, for any reason whatsoever shall not constitute a breach or defittdt by Landlord under this Lease, nor shall it constitute the failure of a condition precedent to any of Tenant's obligations under this Lease, (b) Tenant's rights under Section 1.4 below shall not be renewed or extended as the result of all or any portion of the Scott Property and/or the Agency Property becoming pail of the Total Site, and (e) the provisions of Sections I.5 and Lb shall apply to the Scout Property and/or the Agency Property if either becomes part of the Total Site. 1.1.2 Project ses. Upon the execution and delivery by the parties thereto of a Project Lease and the satisfaction or waiver of the conditions precedent to the effectiveness thereof, if any, the portion of the Total Site that is the subject of such Project Lease shall be excluded from the Total Site and this Lease. 1.2 Recorded Documeat .. This Lease, the interests of Tenant thereunder and the Total Site are in all respects subject to and bound by all the terns and provisions of the recorded covenants, conditions and restrictions and any other recoiled documents now affecting the'1'otal Site or hereaRer affecting the Total Site (collectively, the "Restrictions"); provided, however, that, except (a) in connection with ubtaining financing secured by the fee interest in the Total Site in accordance with this Lease, (b) for matters affecting the Scout Property andior the Agency Property that are executed :in connection with the acquisition thereof, or (c) as required by law, Landlord shall not voluntarily record any further documents with respect to the Total Site that would materially increase Tenant's obligations hereunder or materially decrease Tenant's rights hereunder or with respect to a Project, without Tenant's prior written consent, which Tenant may withhold in its sole discretion„ Tenant shall comply with all requirements of the Restrictions that apply to the Total Site at Tenant's sok expense, 1.3 Due Diligence. Provided that no event of default has occurred and is continuing hereunder and Tenant has obtained and provided the liability insurance coverages required by this Lease, from and after the Effective Date and until lire date that is ninety (90) days -2- thereafter (the "Due Diligence Date") date hereof through the earlier of the termination of this Lease or the Commencement Date, Tenant and its agents, consultants, contractors and subcontractors shall have the right to conduct or make any and all inspections, tests, studies, investigations, analyses, reports, surveys, searches and the like of, on or about the Total Site as may be necessary or desirable to determine the suitability of the Total Site for Tenant's proposed use (the "Site Diligence"); provided, however, that the scope of any test or analysis which requires physical sampling, testing or drilling into the subsurface of all or any part of the Total Site shall be subject to the requirement that Tenant dispose of all such test samples in accordance with applicable law and at no cost or liability to Landlord and restore the affected portion of the Total Site to its original condition prior to the Due Diligence Date. At the reasonable request and expense of Tenant, Landlord shall cooperate with the Site Diligence and promptly provide to Tenant information, materials, data and reports available to Landlord which Tenant may request and which is not subject to confidentiality or other similar restrictions ("Duc Diligence Material"), all of which shall be provided as a courtesy and without any liability to Landlord. Tenant shall obtain or cause its consultants to obtain, at Tenant's sole cost and expense, prior to commencement of any investigative activities on the Total Site, a policy of commercial general liability insurance covering any and all liability of Tenant and Landlord with respect to or arising out of any investigative activities with liability limits of not less than Onc Million Dollars ($1,000,000.00) combined single limit per occurrence for bodily injury, personal injury and property damage liability, Such policy of insurance shall be kept and maintained in force during the occurrence of such activities. Tenant's liability shall not be limited by the amount of any insurance coverage. Tenant shall deliver to Landlord, without any representation or warlanty whatsoever, a copy of all results from the Site Diligence obtained and/or prepared pursuant to the provisions of this Section 1.3, and which shall also be addressed to Landlord. Tenant shall keep the results of all such Site Diligence confidential except as required by law. Tenant hereby indemnifies and holds the Total Site, Landlord and Landlord's officers, directors, shareholders, participants, affiliates, employers, representatives, invitees, agents and contractors free and harmless from and against any and all claims, liabilities, losses, damages, causes of action, judgments, liens, costs and/or expenses including reasonable attorneys' fees (collectively, "Claims") arising out of or resulting from the exercise of its rights under this Section 1.3 by Tenant, its agents, consultants, contractors and subcontractors. Tenant shall keep the Total Site and the 'total Site free and clear of any mechanics' lions or materiahnen's liens related to the exercise of such rights. The Tenant's indemnification obligations set forth in this Section 1.3 shall survive any termination of this the Lease pursuant to Section 1.4 provided, however, in no event shall Tenant be liable to Landlord or be required to indemnify Landlord in respect of the mere discovery of any condition relating to the Property. 1.4 'Termination Right. If Tenunt, in its sole discretion, is dissatisfied with the results of Tenant's due diligence with respect to the Total Site, then Tenant shall have the right to terminate this Lease by delivering written notice thereof prior to the Due Diligence Date; otherwise, Tenant shall be dacmed to have irrevocably waived such right. Notwithstanding the fact that Landlord might acquire the Scout property and/or the Agency Property after the Due Diligence Date, Tenant shall not have the right to terminate this Lease as the result of causing the 0 Scout Property and/or the Agency Property to become part of the Total Site, and'fenant acknowledges that it hereby waives its right to conduct due diligence with respect to the Scout Property and/or the Agency Properly. 1.5 No Representations. Except as expressly provided in this Lease, Landlord makes no representations or warranties of any kind or nature as to the Total Site nor as to the nature, size, location, or time of construction of any structures thereon. Landlord makes no representations or warranties that Tenant will be able to obtain any licenses, permits or other authorizations necessary or required to conduct the uses permitted herein on the Total Site or that the Total Site is suitable for the uses permitted herein. Prior to the Due Diligence Date, Tenant shall satisfy itself that the Total Site is suitable for its intended uses, LG AL -1g. As a material inducement to the execution and delivery of this Lease by landlord and the performance by Landlord of its duties and obligations hereunder, Tenant does hereby acknowledge, represent, warrant and agree, to and with the Landlord, that, except as expressly set forth in this Lease: (i) Tenant is leasing the Total Site in an "AS -IS" condition as of the Due Diligence Dale with respect to any facts, circumstances, conditions and defects; (ii) Landlord has no obligation to repair or correct any such facts, circumstances, conditions or defects or compensate Tenant for same; (iii) by the Due Diligence Date, Tenant shall have undertaken all such inspections and examinations of the Total Site as Tenant deems necessary or appropriate under the circumstances, and that based upon same, Tenant is and will be relying strictly and solely upon such inspections and examinations and the advice and counsel of its agents and officers, and Tenant is and will be fully satisfied that the "Rent" (i. e., the base rent described in Section 3.1 below together with all sums payable, or expenses incurable, by Tenant under this Lease) is fair and adequate consideration for the lease of the Total Site; (iv) except as expressly set forth below in this Lease and for the limited duration thereof, Landlord is not making and has not made any warranty or representation with respect to all or any pail of the Total Site (including, bill not limited to, any matters contained in documents made available or delivered to Tenant in connection with this Lease) as an inducement to Tenant to enter into this Lease or for any other purpose; and (v) by reason of all of the foregoing, except as expressly set forth in this Lease, Tenant shall assume the full risk of any loss or damage occasioned by any fact, circumstance, condition or defect pertaining to the condition of the Total Site, including without limitation the presence of any asbestos containing material, huzardous toxic or radioactive waste, substance or materials in, on, under or about the Total Site, and, except as expressly set forth below in this Lease, Tenant hereby expressly and unconditionally waives and releases Landlord and all of its parents, subsidiaries, affiliates and partnerships, and its and their respective officers, directors, shareholders, partners, agents and employees, and their respective successors, heirs and assigns and each of them (individually and collectively, the "Released Parties") from any and all Claims against Landlord and/or the Released Patties with respect to the condition of the Total Site, including without limitation any rights of Tenant wider the State or Federal Comprehensive F.nviromnental Response, Compensation and liability Act, as amended from time to time, or similar laws. Tenant acknowledges and agrees that, except as expressly set forth in this Lease, the foregoing waiver and release includes all Claims of Tenant against Landlord pertaining to the condition of lhe'rotal Site, whether heretofore or now existing or hereafter arising, or which could, might, or may be claimed to exist, of whatever kind or nature, whether Mown or unknown, suspected or unsuspected, liquidated or unliquidated, each -4- nature, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length, which in any way arise out of, or are connected with, or relate to, the condition of the Total Site; except that such release shall not relieve Landlord of its liability for (a) fraud, or (b) any breach by Landlord of its express representations and warranties or covenants set forth in this Lease prior to the expiration thereof. Tenant hereby waives, releases, acquits and forever discharges Landlord, its shareholders, directors, agents, employees, consultant, trustee, successor and assigns from any and all Claims which have arisen or may arise in the future with respect to the Total Site, regardless of whether Tenant is presently aware of any Claims; except that such release shall not relieve Landlord of its liability for fraud, intentional misrepresentation, gross negligence, willful misconduct or any breach by Landlord of its express representations and warranties or covenants set forth in this Lease prior to the expiration thereof. In connection with the foregoing release, Tenant specifically and expressly waives all of its rights under Section 1542 of the California Civil Code, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR, 1.7 —Acquisition of Agency Property. Subject to completing satisfactory due diligence and entering into an agreement in form and substance satisfactory to Landlord in its sole discretion on or before November 1, 2018, that includes a closing date not later than December 31 2018, Landlord shall acquire all or any portion of the Agency Property from the current owner thereof at a purchase price less than an appraised value that is approved by Landlord in its sole discretion ("FMV"), whereupon it shall become part of the Total Site and subject to this Lease. At the reasonable expense of Landlord (which shall be approved in advance in writing), Tenant shall cooperate with Landlord's efforts to acquire the Agency Property. If the proposed purchase price for the Agency Properly exceeds the FMV, then Landlord shall notify Tenant, which shall have thirty (30) days to elect to provide all the costs of acquiring the Agency Property in excess of the FMV. If Tenant elects to provide such excess, and provides security therefor in form and substance acceptable to landlord, then Landlord shall acquire the Agency Property, whereupon it shall become part of the Total Site and subject to this Lease in accordance with Section 1.1.1 hereof, and Tenant shall bear (and not receive any reimbursement or other repayment) of the amount by which the price exceeds the FMV. If Tenant elects not to provide such excess costs but Landlord acquires the Agency Property, then the Agency Property shall be considered part of the Total Site and shall be subject to this Lease. If the acquisition price for the Agency Property is less than the FMV, then, concurrently with the Ism 1.8 Title Insurance. Tenant shall have the right to obtain title insurance policies with respect to the Total Site from time to time at its expense to confirm its interest in the Total Site. Landlord shall cooperate with any reasonable requests of the title insurance company with respect to its issuance of such policies. ARTICLE II LEASE TERM 2.1 7.ernt. The term of this Lease ("Teri") shall commence upon the Effective Date (the "Commencement Date") and shall continue for a period of twenty-five (25) years unless earlier terminated pursuant to the terms of this Lease. 2.2 Promect Lease Term. During the Term, each Project Lease shall have a term specified by Tenant of not more than sixty-five (65) years in the aggregate from the commencement date thereunder; provided, however, that "tenant shall have the right to divide each such Project Lease into not more than three (3) leases in favor of Tenant or an Affiliate thereof or one or more Project Tenants, the terms of which shall be specified in each Project Lease, each of which (a) shall be not less than ten (10) years, and (b) shall be consecutive. 2.3 project Lea Requirements/Landbrd's Termination Rights. To ensure that Landlord receives the benefits anticipated from the various public infrastructure projects described above to be completed pursuant to a Project Lease (together with any other project requested by "tenant for approval by Landlord pursuant to Section 24.1 hereof, each a "Project"), Landlord shall have the right to terminate this Lease (but not tiny of the Project Leases) by providing sixty (60) days' written notice thereof to Tenant at any time if Tenant (or its Affiliates or any Project Tenant) has not: (a) prepared and submitted a request for an initial study and a notice of preparation under the California Environmental Quality Act ("CEQA") for photovoltaic solar project totaling, in the aggregate, at least four hundred fifty (450) megawatts of rated annual output ("Minimum Project") with the applicable governmental agency with jurisdiction over the relevant portion of the Total Site as defined under CEQA within six (6) months after the Effective Date; (b) completed and submitted to the Lead Agency any other studies required under CEQA (i.e., not an BIR) within six (6) months after receipt of a request from the lead agency "Load Agency" (if an EIR is not required); (c) completed and submitted to the Lead Agency a draft Environmental Impact Report ("EIII") for the Minimum Project (if an EIR is required) (f) within two (2) years after the Effective Date if the Lead Agency allows Tenant to prepare the draft MR, or (ii) within three (3) years after the Effective Dale if the lead Agency does not allow Tenant to prepare the draft EIR; (d) received certification of the FIR or other CEQA clearance document (e.g., negative declaration or mitigated negative declaration) for the Minimum Project within one (l) -6- year after the applicable document (e.g., FIR, negative declaration or mitigated negative declaration) is completed (which deadline shall be delayed for one (1) year as the result of a third party challenge under CEQA, and for up to an additional two (2) years (for an aggregate of three (3) years) thereafter if the results of such CEQA challenge are appealed to the appellate court by a third party); (e) commenced physical construction of a Project of within one (1) year alter the Lead Agency certifies the EIR or other CEQA clearance document therefor and the appeal or challenge period has expired without any third party challenge or appeal (subject to the delays provided for in subsection (e)) (the "Construction Commencement Date"); provided, however, that if Tenant (or such Affiliate or Project Tenant) commences physical construction of one or more Projects prior to the termination date specified in such notice, then this Lease shall not terminate as the result of such notice if such Project(s) areprosecuted diligently to completion; or (f) Tenant does not generate and pay or cause to be generated and paid to Landlord net earnings (through Project Lease rent or otherwise) in amounts equal to or greater than (i) two million dollars ($2,000,000) per annum within three (3) years of the Construction Commencement Date, or (ii) four million dollars ($4,000,000) per annum within ten years of the Construction Commencement Date, Notwithstanding the foregoing, upon the completion of one or more operating Projects for solar photovoltaic electricity production of at least fifty (50) megawatts per year (in the aggregate), Landlord's right to terminate this Lease under this Section 2.3 shall expire. Landlord's failure to approve a Project shall not restrict or otherwise affect Landlord's rights tinder this Section 2.3 so long as Landlord shall timely perform its obligations with respect to Project approvals and the entering into of Project Leases pursuant to Section 24. "Affiliate" as used herein shall mean with respect to any Person, as defined below, any other Person which directly or indirectly through one or more intermediaries, controls, or is controlled by, or is wider comnnon control with, such first Person or any of its subsidiaries. The team "control" shall mean the possession, directly or indirectly, of any power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. ARTICLE III MN7 3.1 13ase Annual Ren Di1rhi ; Term, From the Effective Date until expiration or earlier ,termination of this tease, Tenant shall pay Landlord on tire Ed%ctive Date and on or before each anniversary thereof base rent of One Dollar ($1.00) per year, in advance, without demand, deduction or setoff. Landlord hereby acknowledges receipt of the payment of all base rent for the entire Term. 3.2 Place and Mall aid aFPavrrtcttt. All payrttents ofWaIR) aural other amrxmis due under this Lease shall he made without notice (except as expressly set forth herein), demand, deduction or offset by Tenant to Iamdlnrd at the address set forth in Article XXV for the giving of notices to Landlord, or at such other place as Landlord may designate from time to time in writing, anti shall be payable in current legal tender of the Unitod States of America, as the sante 7- is then by law constituted. If the deadline for payment of any amount due hereunder between the patties occurs on a date that is not it business day, then such amount shall be due and payable on the immediately succeeding business day without interest or penalty. 3.3 All Obligations of Tenant Considered Additional Kent. All costs and expenses which Tenant is required to pay hereunder, together with all interest and penalties that may accrue thereon in the event of Tenant's failure to pay such amounts (including interest and late charges as described below), and all damages, costs and expenses which Landlord may incur by reason of any default of Tenant or failure on Tenant's part to comply with the terms of this Lease, shall be deemed to be additional rent and, in the event of nonpayment by Tenant, Landlord shall have all rights and remedies with respect thereto as Landlord has for the nonpayment of the base annual rent. 3.4 Interest on Tenant's Obligations, Tenant agrees that any payment due from Tenant to Landlord after notice thereof from Landlord (other than with respect to the annual base rent set forth in Section 3.1 above) which is not paid when due shall bear interest from the due date to the date of payment at a rate of interest equal to the lesser of four percent (4%) above the "prime" lending rate of Wells Fargo Bank, N.A. or any comparable bank or lending institution selected by Landlord, or the maximum non -usurious rate permitted by law. Landlord's acceptance of any such interest shall not constitute a waiver of Tenant's default with respect to the overdue amount or prevent Landlord from exercising any of the other rights and remedies available to Landlord under this Lease or any law now or hereafter in effect. 3.5 Late Charge. In the event that Tenant fails to pay any installment of base rent or other payment for which Tenant is obligated to Landlord under this Lease after notice thereof fi-om Landlord (other than with respect to the annual base rent set forth in Section 3.1 above) within five (5) days after such rent or other payment becomes due, Tenant shall pay to Landlord as additional rent a late charge equal to rive percent (5%) of the amount due to compensate Landlord for the extra costs incurred as a result of such late payment. ARTICLE IV 135E Off' THE PREMISES 4.1 Use of "total Site. Tenant shall use the Total Site only for the purposes of determining the suitability of portions thereof for Projects and Tenant shall not Ilse or permit the 'dotal Site to be used for any other purpose or purposes whatsoever. 4.2 Restrictions on Use. Tenant shall not do or permit anything to be done in or about the Total Site, nor bring or keep anything therein, which is not within the authorized use of the Total Site set forth in Section 4.1 above. Tenant shall not use or allow the Total Site to be a+sed for any improper, immoral, unlawful or objectionable ptwpose nor Shall Tenant cause, maintain or permit any public nuisance in, on or about the Total Site. Tenant shall not cause or commit, nor allow to be caused or committed, tiny waste in, upon or about the Total Site. 5.111 4.3 Compliance ith Laws. Tenant covenants that during the Term of this Lease, Tenant will comply, at no cost or expense to Landlord, with all covenants, conditions and restrictions of record as of the Effective Date hereof and hereafter (pursuant to and subject to Section 1.2 above) affecting the Total Site, and with all laws, ordinances, orders, rules regulations and requirements of all federal, state and municipal governments and appropriate departments, commissions, boards and offices thereof having the effect of law, which may apply to the Total Site or the use or manner of use of the Total Site now or at any time during the Term and regardless of the cost thereof of the fact that such matter could not have been foreseen or anticipated. 4.4 Intentionally Omitted. 4.5 Environmental and Industrial Hygiene Compliance. 4.5.1 Landlord's Covenants. To satisfy its obligations under California Health and Safety Code 325359.7, landlord has provided Tenant with a copy of the reports in the possession of the Landlord with respect to the Total Site (collectively, the "Reports") relating to "Fiazm•dous Materials" (as dcfncd below) in, on or about the Total Site. Tenant acknowledges that Landlord delivered the Reports to Tenant without any representation or warranty whatsoever about the Reports, except that Landlord represents and warrants to 'Tenant that the Reports constitute all such reports prepared for Landlord with respect to the Total Site. Landlord represents to Tenant that, as of the date of this Lease and except as disclosed in the Reports, landlord has no actual knowledge that any Hazardous Materials exist on the Total Site in violation of any governmental law, rule or regulation relating to Hazardous Materials ("Hazardous Materials Laws"). For the purposes of this Lease, all references to "Landlord's knowledge" and similar phrases shall mean the actual, present knowledge of the City Manager of the City of Industry without any duty of inquiry; provided, however, that such individual shall not have any personal liability as the result of being so identified. The parties hereby acknowledge and agree that (a) the limited uses to which Landlord con put the Total Site, and (b) Tenant's exclusive control of the location and nature of proposed Projects (except to the extent set forth in Section 25.8 hereof) make it unlikely that Tenant would be affected by any violation of Hazardous Materials Laws existing as of the Effective Date (or, with respect to the Scout Property and/or the Agency Property, the date upon which such properties become pati of the Total Site), so Landlord shall not be required to indemnify Tenant with respect thereto except to the limited extent set forth below in Section 4.5.2. 4.5.2 Landlord's Indemnity and Right of Entry, if (a) any portion of the Total Site is in violation of Hazardous Materials Laws as of the Effective Data (or, with respect to the Scout Property and/or the Agency Property, the date upon which such properties become part of the Total Site), (b) such violations were not disclosed in the Reports or during Tenant's due diligence (and were not otherwise actually known to'renant), and (c) remediation thereof is required by Hazardous Materials Laws even in the absence of any development or use of the affected portion of the Total Site, thou Landlord shall, at Landlord's sole cost and expense, diligently remediate such condition. The foregoing shall only obligate Landlord to bear the cost of any remediation required and shall not subject Landlord to any liability for any other damages or remedies whatsoever. If Tenant becomes aware of any potential Claim under this Section 9- 4.5.2, Tenant shall provide prompt, written notice thereof to Landlord provided, however, the failure of Tenant to so provide such notice shall not relieve Landlord of its obligations hereunder. If Landlord is required or elects to take any action on or about the'I'otal Site in connection with this Section 4.5.2, then Tenant hereby grants Landlord, subject to the terns and conditions set forth in Section 25.8 hereof, a license to enter and use the 'Total Site in the locations and for purposes and durations specified by Landlord to Tenant in writing from time to time to test, monitor and/or remediate such conditions at Landlord's expenses, all of which shall occur without any compensation to Tenant. "Pre -Existing Environmental Conditions" means, collectively, any Hazardous Materials existing on the Total Site as of the Effective Date (or, with respect to the Scout Property and/or the Agency, the date upon which such properties become part of the Total Site), other than conditions disclosed in the Reports or during Tenant's due diligence (m' were otherwise actually known to Tenant). 4.5.3 Tenant's Covenants. Subject to the foregoing, Tenant, at its sole cost and expense, shall comply with all laws, ordinances and regulations relating to industrial hygiene and to the environmental conditions in, on, under or about the Total Site, including, but not limited to, soil and groundwater conditions and Hazardous Materials. Tenant shall not cause or permit any Hazardous Materials to be brought, kept or used in, on, under or about the Total Site by 'tenant, its agents, employees, contactors, licensees, sublessees, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 ltereol), unless (a) the use of such Hazardous Materials is necessary and incident to Tenant's business on the Total Site, and (b) such Hazardous Materials are used, kept, monitored, stored and disposed of in a manner that (i) complies with all laws relating to such Hazardous Materials, (ii) will not endanger any other Persons or property, and (iii) will not invalidate, limit the coverage or increase the pretniums of, any insurance policy affecting or covering the Total Site, (iv) such action satisfies Landlord's reasonable requirements specified in writing after receipt of a specific written request therefor from 'tenant, which must precede any such action, [F Tenant breaches the obligations stated in the foregoing provisions of this Section 4.5, or if the presence of any Hazardous Materials in, on, under or about the Total Site caused or permitted by Tenant or Tenant's agents, employees, contractors, licensees, sublessees, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof) results in contamination in breach of Hazardous Materials Laws of all or any portion of the Total Site exclusive of any Pre -Existing Conditions, then Tenant shall be solely responsible for and shall indemnify, protect, defend and hold Landlord harmless from and against any and all Claims which arise during or after the Term of this Lease as a result of such contamination This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, stale or local govermnental agency or political subdivision having jurisdiction with respect to the applicable portion of the Total Site because of the presence of any Hazardous Materials on or about the Total Site caused or permitted by Tenant or Tenants agents, employee%, contractors, licensees, sublessees, assignees, concessionaires or invitees. Upon Landlord's request, with respect to contamination for which Tenant is responsible as described above in this Section 4.5.2, Tenant shall promptly take all actions, at its sole cost and expense, as are, reasonably necessary to comply with Hazardous Materials Laws, provided Landlord's approval, not to be unreasonably withheld, delayed or conditioned, of such actions shall first be obtained. Furthermom, each party to- shall promptly notify the other party of any inquiry, test, investigation or enforcement proceeding by or against such party or the Total Site concerning the presence of any Hazardous Material of which it has actual knowledge provided, however, the failure of either such party to so provide such notice to the other party shall not relieve such party of their respective obligations hereunder and under Section 4.5.1 hereof. 4.5.4 Hazardous Materials Defined. As used herein, the term "Hazardons Materials" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority having jurisdiction with respect to the applicable portion of the Total Site, the State of California or the United States Government including, without limitation, (a) petroleum or any petroleum product including refined gasoline, motor oil, waste oil and diesel fuel, (b) asbestos, (c) formaldehyde, and (d) polychlorinated biphenyls. 4.5.5 Survival. The parties hereby agree that the provisions of this Section 4.5 shall survive the expiration or earlier termination of this Lease. ARTICLE V ALTERATIONS 5.1 Alterations. Because of Tenant's limited rights to use the Total Site, Tenant shall not have the right to make any improvements, alterations, or modifications to the Total Site (except in connection with Project Leases) without obtaining Landlord's prior written consent, which Landlord may condition or withhold in its sole discretion. ARTICLE VI MECHANICS' LIENS 6.1 Lim. Tenant shall not suffer or permit any liens against the Total Site, against Tenant's leasehold interest therein or against any other portion of the Total Site, by reason of work, labor, services or materials supplied or claimed to have been supplied to Tenant or anyone holding the Total Site, or any part thereof, through or under Tenant, and 'Tenant agrees to indemnify, protect and defend Landlord against any such liens and from any and all other Claims arising out of or in any way connected with the performance of such work or the supply of such services. If any such lien shall at any time be filed against the Total Site or against any portion thereof, Tenant shall promptly cause the lien to be discharged of record; provided, however, that Tenant shall have the right to contest the amount or validity, in whole or in part, of any such lien by appropriate proceedings, but in such even(, 'Conant shall first notify Landlord and shall promptly bond such lien in the manner authorized by law with a responsible surety company qualified to do business in the State of California. 6.2 Nomosponsibility. Landlord shall have the right at any time and from time to time to post and maintain on the Total Site such notices as may be necessary to protect the Total Site and Landlord from mechanics' liens, materiahnen's liens or liens of a similar nature. WKE Not less than fiileen (15) days prior to the commencement of any work of improvement by Tenant upon the 'total Site, Tenant shall give written notice thereof to Landlord. If (a) Tenant fails to give such notice on a timely basis, or (b) the cost of such work exceeds One Hundred Thousand Dollars (5100,000), then Landlord, at its option, may require Tenant to immediately post or cause to be posted in favor of Landlord, Completion and Labor and Material bonds in an amount equal to one hundred twenty-five percent (125%) of the estimated cost of construction and issued by a financially sound bonding company licensed to do business in the State of California; the condition to post such bonds may be satisfied, at Tenant's sole discretion, by bonds provided by Tenant's contractor(s). Landlord's request for the posting of the aforementioned bonds shall be in wriling delivered to Tenant as provided for in the "Notice" Section of this Lease. As between Landlord and Tenant, Tenant shall bear the full cost and expense of posting any such bonds. At Landlord's reasonable request and to the extent permitted by applicable law, Tenant shall require any party providing materials or performing work in connection with the Total Site to modify its agreement to irrevocably waive any right to impose any lien on all or any part ofthe Total Site, 6.3 No Consent pf Landlord. Nothing in this Lease shall be deemed to be, or construed in any way to constitute, the consent or request of Landlord, express or implied, by inference or otherwise, to any person, entity, trust, company, partnership, firm or corporation (collectively, a "Person") for the performance of any labor or the furtinishing of any materials for any construction, rebuilding, alteration or repair oror to the Total Site or any part thereof, nor as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials, which might in .any way give rise to the right to file any lien against Landlord's interest in the Total Site. Landlord shall have the right to post and keep posted at all reasonable times on the Tolal Site any notices which Landlord shall be required to post for the protection of Landlord and its interest in the Total Site from any such lien. ARTICLE V11 TAXES AND ASSESSMENTS 7.1 Real Property 'faxes. As used herein, the tern "Real Property Taxes" shall mean all real estate taxes, assessments for land and improvements to the Total Site, municipal or county water and sewer rates and charges and other govennnental levies and charges, general and special, ordinary and extraordinary, of any kind, which shall be levied against the Total Site which become a lien thereon and any tax or assessment in any way levied or assessed with respect to the possessory interest of Tenant or any Person holding under Tenant pursuant to the terms of this Lease, and any increases thereof regardless of the reason therefor, but excluding any such taxes, assessments, rates, charges based upon or measured by any Person's gross or net income, gross or net receipts or that are in the nature of, or are imposed with respect to, capital, net worth, excess profits, accumulated earnings capital gains, franchise or conduct of business of such Person. If, during the Term of this Lease, taxes are imposed, assessed or levied on the gross rents derived Brom the Total Site, Tenant shall pay such taxes in the manner provided below for real property taxes and assessments, 12- 7.2 Payment of Real Property Taxes. Througbout the Terni of this Lease, ILandlord/Tenaatl shall pay or cause to be paid, before any fine, penalty, interest or cost that may be added thereto for the nonpayment thereof, all Real Property Taxes levied against the Total Site. To the extent that Landlord receives invoices, bills, assessments or charges for Real Estate Taxes from any taxing authority with jurisdiction over the Total Site, it shall promptly but, in any event, within thirty (30) days, deliver the same to Tenant. Tenant shall send Landlord copies of the tax bills, with receipt for payment, or other evidence of payment of such portion Real Property Taxes, 7.3 Installment Payments. If any Real Property Taxes, general or special, are at any time during the Term of this Lease levied or assessed against the Total Site, which upon exercise of any option permitted by the assessing authority may be paid in installments or converted to an installment payment basis (irrespective of whether interest shall accrue on unpaid installments), Tenant may elect to pay such Read Property Taxes in installments with accrued interest thereon. In the event of such election, and subject to Section 7.4, Tenant shall be liable only for those installments which become payable during the Term of this Lease, and Tenant shall not be required to pay any such installment which becomes due and payable alter the expiration of the Term of this Lease. Landlord shall execute whatever documents may be reasonably necessary to convert any Real Property Taxes to such an installment payment basis upon written request by Tenant. 7.4 Proration. Any Real Property Taxes which are payable by Tenant hereunder or which may be reimbursed to Landlord by Tenant hereunder shall be appropriately prorated between Landlord and Tenant as of the Commencement Date and then again as of the expiration or earlier termination of the Term of this Lease. 7.5 Right LQ, Contest. Tenant shall have the right to contest the amount or validity of any Real Property Taxes, in whole or in part, by appropriate administrative and legal proceedings, either in its own name, Landlord's name or jointly with Landlord, without ally liability, cost or expense to Landlord, and Tenant may postpone payment of any such contested Real Property 'faxes pending the prosecution of such proceedings and ally appeals so long as such proceedings shall operate to prevent the collection of such Real Property Taxes and the sale of the Total Site to satisfy any lien arising out of the nonpayment of the same; provided, however, that if at any time payment of the whole or any part thereof shall become necessary to prevent the termination of the right of redemption of any property affected thereby, or if there is to be an eviction of either Landlord or Tenant because of nonpayment thereof, Tenant .shall pity the same to prevent such termination of the right of redemption or such eviction. Any such contest shall be at no cost or expense to Landlord. Each refund of any Real Estate Tax so contested shall be paid to Tenant unless attributable to the portion thereof for which Landlord is responsible pursuant to Section 7.2 hereof. 7.6 hnotelvement or Special Assessment District. ff any governmental subdivision with taxing authority shall undertake to create an improvement or special assessment district the proposed boundaries of which shall include any portion of the Total Site, Landlord and Tenant shall each be entitled to appear in any proceeding relating thereto and to present their respective positions as to whether the Total Site should be included or excluded from the _13_ proposed improvement or assessment district and as to the degree of benefit to the Total Site resulting therefrom. Landlord or Tenant shall each promptly advise the other in writing of the receipt of any notice or other information relating to the proposed creation of any such improvement or special assessment district, the boundaries of which include any portion of the Total Site. 7.7 personal property Taxes. Tenant agrees to pay before delinquency all personal property taxes and assessments of whatsoever kind or nature, and penalties and interest thereon, if any, levied against the ail equipment, furniture, fixtures, alterations, improvements and any other personal property of whatsoever kind and to whomsoever belonging, situated or installed in and upon the Total Site, whether or not affixed to the realty, exclusive of any portion thereof attributable to improvements installed by Landlord on the Total Site (except to the extent otherwise indicated in a project Lease). Tenant shall have the right to contest the amount or validity of any such personal property taxes andlor assessments, in whole or in part, by appropriate administrative or legal proceedings, either in its own name, Landlord's name or jointly with Landlord, without any liability, cost or expense to Landlord, and Tenant may postpone payment of any such contested personal property taxes or assessments pending the prosecution of such proceedings and any appeal so long as such proceedings shall operate to prevent the collection of such personal property taxes or assessments and the sale of the Total Site to satisfy any lice arising out of the non-payment of the same; provided, however, that if at any time payment of the whole or any part thereof shall become necessary to prevent the termination of the right of redemption of any property affected thereby or if there is to be an eviction of either Landlord or Tenant because of non-payment thereof, Tenant shall pay the same to prevent such termination of the right of redemption or such eviction. Any such contest shall be at no cost or expense to landlord. I-Ach refund of any such personal property tax or assessments so contested shall be paid to Tenant unless attributable to the portion thereof for which Landlord is responsible pursuant to Section 7.2 hereof Landlord shall not, without the prior approval of Tenant, discontinue or agree to any disposition of any contest or accept any credit or other adjustment of any such tax or assessment as a result of such contest. ARTICLE VIII UTILITIES Landlord shall have no obligation to Tenant under this Lease to fumish any utilities or services to the Total Site. Throughout the Term of this Lease, to the extent applicable (and approved by Landlord) Tenant shall contract for, furnish and pay, at its sole cost and expense, all water, gas, heat, light, power and sewer charges, telephone service and all other services and utilities supplied to or consumed in or on the Total Site, together with any taxes thereon. Landlord shnll not be liable in damages or otherwise, and Tenant shall not be entitled to any abatement or reduction of rent, for any failure or interruption of any utility or service being furnished to the Total Situ, and no such failure or interruption shall entitle Tenant to terminate this Lease. 14- ARTICLE IX REPAIRS AND MAINTENANCE The parties agree that, except as provided in Section 4.5 above, Landlord shall have no obligation to make any repairs, alterations or improvements to or upon the Total Site or any part thereof at any time. Except as provided in Section 4.5 above, Tenant shall, at Tenant's sole cost and expense at all times during the Term hereof, keep and maintain the Total Site, and every pail thereof in clean, good order, condition and repair and in compliance with all laws and regulations applicable thereto, Should 'Tenant fail to make any repairs which are the obligation of Tenant hereunder, after Tenant is provided notice of default and opportunity to cure in accordance with the terms provided for herein, and if Tenant is in default by virtue of having failed to make said repair within the time provided for in this Lease, Landlord may, but shall not be required to, enter the Total Site and make the repairs necessary to restore the Total Site to good order, condition and repair, and the cost of such repairs shall become due and payable by Tenant to Landlord upon demand. Tenant shall, upon the expiration or sooner termination of the Term of this Lease, surrender the Total Site and all alterations, additions, changes and improvements therein, thereto and thereof to Landlord in good condition order mrd repair, ordinary wear and tear excepted. ARTICLE X INDEMNIFICATION AND NONLIABILITY 10.1 Indemnification by'renant, Except with respect to Hazardous Materials, which the parties hereby agree are governed by the provisions of Section 4.5 hereof, 'tenant hereby agrees to and shall indemnify, protect, defend and hold harmless Landlord, its agents, contractors, employees, licensees and invitees, as their respective interests may appear, from and against any and ail Claims arising out of or in connection with Tenant's use of Elie Total Site, or the conduct of its business thereon, or from any activity, work or thing dont, permitted or suffered by 'Tenant, its agents, contractors, employees, licensees, subtenants, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof), on or about the Total Site or any part thereof. Tenant shall further indemnify, protect, defend and hold harmless Landlord, its agents, contractors, employees, licensees, and invitees from and against nny and all Claims arising out of or in connection with any breach or default in the performance of any obligation on Tenant's par to be performed under this Lease, or any act, neglect, fault or omission of Tenant or of its agents, contractors, employees, licensees, sublenanis, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof). If any action or proceeding is brought against Landlord by reason or any such Claim, upon notice from Landlord, Tenant shall defend the same at Tcnant's expense by counsel reasonably satisfactory to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to Tenant's and other property or injury to Tenant and other Persons in, upon or about the Total Site from any cause whatsoever, except to the extent such damage or injury is caused by Landlord's Gaud, intentional misrepresentation, gross negligence, willfid misconduct or any breach by Landlord of its express representations rad warranties or covenants set forth in this Lease prior to the expiration thereof, Notwithstanding anything to the contrary herein, in no 15- event shall Tenant be liable to Landlord or be required to indemnify Landlord in respect of any matters related to Pre -Existing Environmental Conditions, which the parties agree are governed solely by the provisions of Section 4.5 hereof. 10.2 Exemption of Landlord from Liability. Except to the extent (a) caused by Landlord's fraud, intentional misrepresentation, gross negligence, willful misconduct, and (b) not covered by insurance required hereunder to be carried by the parties hereto, Landlord shall not be liable to Tenant for any Claim which may be sustainer] by the person, goods, wares, merchandise or property of Tenant, its agents, contractors, employees, licensees, concessionaires, invitees or customers, or any other Person in or about the Total Site. In any event, under no circumstances shall Landlord shall be liable for any damage to Tenant's business, improvements, or personal property, regardless of the cause thereof, and Tenant hereby releases Landlord from all liability for such Claims. Notwithstanding any provision of this Lease or any applicable law to the contrary, in no event shall Landlord be liable under any circumstances for any speculative, punitive, or consequential damages incurred by Tenant, including, without limitation, any injury to, or interference with, Tenant's business (including any loss of profits) arising in connection with this Lease. 10.3 Survival. The parties hereby expressly agree that the provisions of this Article 10 shall survive the expiration or earlier termination of this Lease. ARTICLE XI INSURANCE, 11.1 Tenant's General InsUtance Requirremenls. All insurance required to be carried by Tenant hereunder shall be issued by responsible insurance companies reasonably acceptable to Landlord and the holder of any deed of trust secured by the fee interest of Landlord with respect to any portion of the 'rotal Site (herein referred to as a "Mortgagee"). Unless otherwise required by Mortgagee, all policies of insurance required to be obtained by Tenant herein shall be issued by insurance companies with general policy holder's rating of not less than A— and a financial rating of not less than Class VIII as rated in the most current available "Best Insurance Reports" or other similar insurance rating guide, Each such policy shall name Landlord and at Landlord's request any Mortgagee of the Total Site as additional insureds, as their respective interests may appear, and a duplicate original of all policies or certificates evidencing the existence and amounts of such insurance shall be delivered to Landlord by Tenant at least ten (10) days prior to Tenant's occupancy of the Total Site. Each such policy must contain a provision that the company writing said policy will give to Landlord, and at Landlord's request any Mortgagee of the Total Site, not less than thirty (30) days' notice in writing in advance of any modification, cancellation or lapse of such insurance or any reduction in the amounts thereof. All of 'tenant's insurance policies shall be written as primary policies, not contributing with, and not in excess of, coverage which Landlord may carry, and shall provide 1'or severability of intermis. Tenant shall furnish Landlord with renewals or "binders" of each such policy at least thirty (30) days prior to ilia expiration thereof. Tenant agrees that if Tenant does not procure and maintain such insurance, Landlord may (but shall not be required to) obtain such insurance on Tenant's behalf and charge Tenant premiums therefor together with a ten percent 1&- (10%) handling charge, payable upon demand. Tenant may carry such insurance under a blanket policy, provided such blanket policy expressly affords the full amount and type of coverage required by this Lease by a Landlord's protective liability endorsement or otherwise. Tenant shall not do, or permit to be done, anything which shall invalidate the insurance policies required hereunder. 11.2 Property Insurance. At all times during the Tom hereof in which Tenant maintains any improvements on the Total Site, Landlord shall, at Tenant's sole cost and expense, maintain in effect policies of property insurance coveting (a) all improvements in, on or to the Total Site, and (b) all trade fixtures, furniture, merchandise and other personal property which may be situated from time to time in, on or upon the Total Site, in an amount not less than one hundred percent (100%) of their actual replacement cost from time to time during the Term of this Lease, providing protection against any perll included within the classification "Fire and Extended Coverage", together with insurance against sprinkler damage, vandalism, and malicious mischief, including cost of debris removal and demolition. During Tenant's construction of any permitted alterations within the Total Site, Landlord shall, at Tenant's sole costs and expense, maintain a course of construction endorsement to such property insurance politics and liability insurance policies. If Landlord informs Tenant that Landlord earmot obtain such insurance, then 'tenant shall obtain such insurance at its sole expense. Subject to Article XII hereof, the proceeds of such insurance shall be used for repair and replacement of the property so insured. 11.3 Liailk Insurance. At all times during the Tenn hereof, Landlord shall, at Tenant's sole cost and expense, obtain and continue in force commercial liability insurance or comprehensive general liability insurance with respect to the Total Site and the activities and use thereof and (hereon by Tenant and'fenant's employees, agents, contractors, licensees, subtenants, assignees, concessionaires and hrvitees. Such insurance shall include coverage for personal injury (including employees and false arrest coverage), bodily injury, broad form property damage, Total Site/operations, owner's protective coverage, blanket contractual liability, products and completed operations liability, and owned/non-owned auto liability in an amount not less than Three Million Dollars ($3,000,000.00) combined single limit. The limits of such insurance shall not, however, limit the liability of Tenant hereunder. All liability and property damage policies shall contain a provision that Landlord, although named as an additional insured, shall nevertheless be entitled to recovery under said policies for any loss occasioned to it, its servants, agents and employees by reason of the negligence of Tenant and/or Tenant's employees, agents, contractors, licensees, subtenants, assignees, concessionaires and invitees. Notwithstanding the foregoing or anything set forth in this Article XI to the contrary, the parties agree that Tenant may satisfy its insurance requirements hereunder through policies maintained and to be maintained by Landlord with respect to the liability risks set foth herein unless Landlord informs Tenant that Landlord is unable to obtain such policies, To the extent feasible, Landlord agrees to carry such liability insurance set froth above in this Section 11.3 for tite Tenn, which shall include Tenant and, to the extent feasible, Tenant's employees, agents, contractors, licensees, subtenants, assignees, concessionaires and invitees, as additional insureds thereto. Tenant shall be responsible for the cost of any such insurance policies as they relate to the Total Site. 11.4 Worker's Compensation. Tenant shall at all times during the Tenn hereof, at its own cost and expense, obtain and maintain in effect workors compensation insurance and _17, employer's liability insurance as required by law, with full waiver of the insurer's rights of subrogation against Landlord and Landlord's officers, partners, agents, contractors, employees and representatives. 11.5 Other Insurance.. Tenant shall at all times during the Term hereof at its own cost and expense obtain and maintain in effect any other form or ferns or amounts of insurance as Landlord or its Mortgagee may reasonably require from time to time. 11.6 Adiustmen . Not more frequently than once every five (5) years during the Tenn of this Lease, Tenant shall, at Landlord's request, increase the insurance policy limits for the insurance to be carried by Tenant as set forth in this Article t I in an amount reasonably determined by Landlord in light of the nature of risks covered thereby provided, however, that no such increase in coverage shall exceed twenty percent (20%) of the previous limit therefor unless the nature of the use of the Total Site has materially changed or improvements have been constructed thereon. 11.7 Waiver of Subroaatiglt. Landlord and Tenant agree to have their respective insurance companies issuing property damage and loss of insurance and extra expense insurance waive any rights of subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance carried by Landlord and Tenant, respectively, is not invalidated thereby. Landlord and Tenant hereby waive any right that either may have against the other on account of any loss or damage to the extent such loss or damage is insurable under such policies of insurance. ARTICLE X11 DAMAGE OR DESTRUCTION 12.1 Damage and Duty to Restore, In case of damage to or destruction of tiny improvements, in whole or in pail, by fire or any other casually whatsoever, whether or not insured against by any policy or policies (including required endorsements) required to he carried under the provisions of Article XI of this Lease, all of Tenant's obligations hereunder, including, without limitation, the obligation to pay rent, shall continue as provided for in this Lease. Tenant shall have no obligation to restore, replace, rebuild, demolish or remove any improvements, except that, promptly following uny such damage or destruction, Tenant shall clear the Total Site of all debris and .hazardous conditions caused by such damage or destruction using the proceeds of any insurance and the balance thereof shall be delivered to landlord, 12.2 No Obligation of Landlord to Restore. Landlord shall in no event be under any duty or obligation to restore, replace or rebuild any improvements, or any portion thereof, at any time. 12.7 Waiver by Tenant. Tenant shall have on right to terminate this Lease as a result of any statutory provisions now or hereafter in effect pertaining to the damage and destruction of all or any part of the Total Site, including, without limitation, the provisions of Section 1932(2) and 1933(4) of the California Civil Code. 'Tenant shall not be entitled to any 18- compensation or damages from Landlord for the loss of the use of the whole or any part of the Total Site, or of Tenant's personal property or any inconvenience or annoyance occasioned by such damage, destruction repair, reconstruction or restoration. ARTICLE XIII TRADE FIXTURES Throughout the Term of this Lease, all trade fixtures, equipment, signs and furnishings installed by 'renanl in or on the Total Site shall be and remain the property of Tenant and, provided Tenant is not in default under this Lease, such items shall be removable at any time during the Term of this Lease at Tenant's sole cost, provided Tenant hereby agrees to repair or cause to be repaired any damage or injury to the Total Site occasioned by any such removal. Upon the expiration or earlier termination of this Lease, at Landlord's request. Tenant shall remove any such items at its sole expense. ARTICLE XIV ASSIGNMENT AND SUBLETTING 14,1 Restrictions on Transfers. Tenant shall not voluntarily or involuntarily assign its interest in this lease or its leasehold interest in the Total Site, sublease all or any part of the Total Site, sell or lease all or any part of any improvements, transfer any direct or indirect interest in Tenant, or allow any other Person to occupy or use all or any part of the Total Site (collectively referred to as a "'1'ransrer" ), without fust obtaining Landlord's prior written consent, which Landlord may withhold in its sole discretion or upon the instruction of Landlord's Mortgagee. A Transfer shall also include an Ownership Change (as defined in tile next sentence) but shall exclude (a) a sale or transfer of any direct or indirect interest in Tenant by devise or descent or by operation of law upon the death of an owner of any direct or indirect interest in Tenant, and (b) a sale or transfer of any direct or indirect ownership interest in Tenant by a current owner to a trust for the benefit of such owner or an immediate family member (i.e., parents, spouses, siblings, children or grandchildren) of such owner for estate planning purposes. An "Ownership Change " means the direct or indirect transfer (any level) by sale, assignnent, mortgage, deed of trust, trust, operation of law, or otherwise of any shares, voting rights or ownership interest which will result in a change in the identity of the person or Persons exercising, or who may exercise, voting rights or control of (or receive the economic benefits of) Tenant Any Transfer without Landlord's prior written consent shall be voidable, at Landlord's election, and shall constitute a material default. No consent to an assignment or sublease shall constitute a further waiver of the provisions of this Article. Notwithstanding the foregoing, without the need for obtaining Landlord's prior written consent, but upon thirty (30) days' prior written notice to Landlord, Tenant shall have the right to hypothecate its interest in the leasehold estate created by this Lease as provided in Article XV. 14.2 Rfetuired Provisions. Any and all agrwments in respect of a direct Transfer of Tenant's rights and obligations under this Lease shall (a) impose the same obligations and conditions on the Transferee as are imposed on Tenant by this Lease (except as to Rent and 19- term or as otherwise agreed by landlord in its sole discretion), with an express assumption of such obligations by said Transferee, (b) be expressly subject and subordinate to each and every provision of this Lease, (c) have a term that expires on or before the expiration of the Term of this Lease, and (d) expressly provide that Tenant shall not he released from any or all of its obligations under this Lease notwithstanding such Transfer and/or Landlord's consent thereto and that Tenant remains jointly and severally liable for the tenant's obligations under the Lease. 14.3 Pees for Review. In connection with any proposed Transfer, 'tenant shall pay to Landlord a non-refundable fee as reimburscrrrenl for expenses incurred by Landlord in connection with reviewing each such transaction (including any administrative expenses for Landlord's property manager), in the amount of Five hundred Dollars ($500.00). In addition to such reimbursement, if Landlord retains the services of an attorney to review the transaction, Tenant shall pay to Landlord all reasonable attorneys' foes incurred by Landlord in connection therewith. Tcnant shall pay such fees to Landlord within thirty (30) days after its receipt of written request therefor from Landlord and regardless of whether such'Fransfer is approved. 14.4 No Release of Tenant. Except as otherwise expressly set Fath therein, no consent by Landlord to any Transfer by Tenant shall relieve Tenant of any obligation to be performed by Tenant under this Lease, whether occurring before or after such consent, transfer or subletting. The consent by Landlord to any Transfer shall not relieve Tenant from the obligation to obtain Landlord's express prior written consent to any other Transfer. The acceptance by Landlord of payment from any other Person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any subsequent Transfer, or to be a release of Tenant from any obligation under this Lease. 14.5 Assumption of Obligations. Each direct transferee of all of Tenant's rights and obligations hereunder shall assume all obligations of Tenant under this Lease and shall be and remain liable jointly and severally with Tenant for the payment of the rent and the performance of all the terms, covenants, conditions and agreements herein contained on Tenant's part to be performed for the Term of this Lease. Landlord shall have no obligation whatsoever to perforce any duty or respond to any request from any sublessee, it being the obligation of Tenant to administer the terms of its subleases. 14.6 Waiver. If Tenant requests Landlord's consent to a Transfer, and Landlord's consent is impermissibly withheld, Tenant waives any right to seek damages under California Civil Code Section 1995.310, or any similar law now or hereafter in effect, it being the intention of the parties that Tenant's rights in such event shall be limited to seeking an injunction or specific performance. 15.1 Hypothecation. ARTICLE XV HYPOTHECATION -20- 15.1.1 Landlord agrees and consents that Tenant may, at any time and from time to time, without obtaining any further consent of Landlord, but upon not less than thirty (30) days' prior written notice to Landlord, mortgage, encumber, assign and hypothecate by mortgage, deed of trust or otherwise (any of which is herein called, together with its successors and assigns, a "Tenant Mortgage") all right, title and interest of Tenant in the leasehold estate created by this Lease or portion thereof (the "Tenant Mortgage Collateral') to a commercial bank, finance company, insurance company, or other institutional lender or other Person reasonably acceptable to Landlord (herein called "Tenant Mortgagee") on non -participating and non -convertible terns, with no "equity -kicker" or equity level interest rates, in the principal amount of not more than Twenty -Five Million Dollars ($25,000,000), which will mature and be repaid in full prior to the fifth (516) anniversary of the Affective Date. Tenant shall bear the entire cost of any such loan and the proceeds thereof shall be used to reimburse Tenant and its principals for fees, costs and expenses previously incurred by Tenant and its principals in connection with this Lease, and the planning and development, and proposed planning and development, of the Total Site and Projects. In addition, any such loan shall provide for the termination of any security interest in the portion of the Total Site that is approved for a Project upon the execution and delivery of a Project Lease. Under no circumstances may Tenant hypothecate the fee interest in the Total Site nor will Landlord subordinate this Lease to any such Tenant Mortgage obtained by Tenant. 15.1.2 Except as hereinafter otherwise provided, and except as otherwise approved by Landlord in writing in its sole discretion, the Tenant Mortgage and all rights thereunder shall be subject to each and every of the covenants, conditions and restrictions of this Lease, and the Tenant Mortgage shall also be subject to all the rights and interest of landlord hereunder, none of which shall be deemed waived by the foregoing consent. Tenant agrees to famish to Landlord topics of all instruments, deeds of trust, indentures or agreements executed by Tenant to perfect the hypothecation of the leasehold estate to Tenant Mortgagee. 15.2 Notice to and Rights of Tenant Mortgaacc. 15.2.1 Any Tenant Mortgagee shall have the right at any time during the Term: (a) to do any act required of Tenant hereunder, including to cure any defaults by Tenant hereunder, and all such acts done or performed shall be effective to prevent a forfeiture of Tenant's rights hereunder as if the same had been done or performed by Tenant; and (b) to rely on the security afforded by the leasehold estate and to acquire and to succeed to the interest of Tenant hereunder by foreclosure, whether by judicial sale, by power of sale contained in any security instrument, or by deed given in lieu of foreclosure, and to thereafter convey or assign title to the leasehold estate so acquired to any other Person that agrees to accept such assignment of rights and delegation of duties by written instrument, a copy of which shall be delivered to Landlord. 15.2.2 Landlord shall provide any Tenant Mortgagee with notice of any default by Tenant hereunder at such address as may be provided by Tenant Mortgagee to tender in writing. Landlord shall not terminate this ],ease by reason of any default of Tenant hereunder if, after delivery of such notice, the Tenant Mortgagee shall: -21 - (a) cure such default within sixty (60) days after service on Tenant Mortgagee of written notice from landlord of Landlord's intention to terminate this Lease (if the same cannot be cured within sixty (60) days, Tenant Mortgagee shall have a reasonable time after sixty (60) days within which to cure such default so long as Tenant Mortgagee is proceeding and continuing to cure such default with reasonable diligence; provided, however, that in no event shall such cure period exceed one hundred and twenty (120) days subject to Section 15.2.3 below); and (b) undertake on or before tine expiration of said thirty (30) days, in writing, to perform thereafter on a timcly basis all covenants contained in this Lease capable of performance by Tenant Mortgagee in the course of exercise of its remedies against Tenant. 15.2.3 If, following 3cnant Mortgagee's written undertaking provided for in Section 15.2.2(b) above, it is determined there are performances called for and due under this Lease that arc not susceptible of being performed by Tenant Mortgagee, or if any default contemplated in Section 15.2.2(a) above is not susceptible of being cured by Tenant Mortgagee, then such performance shall be deemed rendered or such default shall be deemed cured if Tenant Mortgagee shall proceed in a timely and diligent manner to accomplish the foreclosure or other acquisition of Tenant's interest under this Lease; provided, however, that if said foreclosure proceedings shall be restrained by any court (as in the case of a bankruptcy proceeding) and relief from any such restraint shall have been diligently and timely sought but not successfully obtained by Tenant Mortgagee, any such performance shall be deemed rendered and any such default shall be deemed cured nevertheless. The obligation of Tenant Mortgagee for the performance of the terms of this lease shall terminate upon the sale, transfer or assignment of the right, title and interest and delegation and acceptance of the duties of Tenant Mortgagee in the leasehold estate to any other person. 15.2.4 Any provisions contained in this lease to the contrary notwithstanding, any Tenant Mortgagee or its assigns may enforce such Tenant Mortgage and acquire title to the leasehold estate in any lawful manner and, pending foreclosure of any such Tenant Mortgage, may take possession of and rent the Total Site, and upon foreclosure of such Tenant Mortgage may sell, transfer or assign the Icaschold estate or sublet the Total Site without the consent of the Landlord; provided, however, any such sale, transfer or assignment shall be subject to all other terms and conditions of this Lease including, without limitation, the restrictions on change of use of the Tula[ Site contained in Article IV of the Lease. Any Person acquiring the right, title and interest of the Tenant's Icaschold estate under this [,ease from Tenant Mortgagee or any Person claiming or deriving its interest through or under Tenant Mortgagee shall assume the liability for the performance of the obligations imposed upon Tenant by the terms of this Lease. 15.2.5 Notwithstanding the acquisition by Tenant Mortgagee of Tetanl"s interest in this Lease by judicial or non judicial foreclosure, assignment in lieu of foreclosure or any other manner, Tenant shall remain primarily liable to Landlord for all obligations of Tenant under this Lease unless and until Tenant Mortgagee or its assigns (i) voluntarily accepts all such obligations, and (ii) performs all such obligations which have accrued under this [.case. -22- 15.3 New LeaseonTerminatian of this Lease. If Landlord elects to terminate this Lease and Tenant's rights hereunder pursuant to the provisions of Article XVII or if this Lease is terminated for any reason or is rejected or disaffirmed pursuant to bankruptcy law or other law affecting creditors' rights, Landlord shall first serve written notice of such event on Tenant Mortgagee, and Tenant Mortgagee shall have thirty (30) days after receipt of such notice within which Tenant Mortgagee may elect in writing delivered to Landlord to demand that Landlord execute a new lease of the Total Site with Tenant Mortgagee (or such other Person as may be designated by Tenant Mortgagee) as tenant or Tenant Mortgagee may elect to exercise its rights set forth in Section 15 If Tenant Mortgagee elects to lease the Total Site Landlord and Tenant Mortgagee shall execute a new lease which shall be for the unexpired Term of this Lease and shall otherwise be identical with the terms of this Lease and shall have the same priority as this Lease. Landlord's election to so terminate shall not be effective against Tenant Mortgagee until after the expiration of such thirty (30) clay notice period. Such new lease shall be executed and delivered by Landlord to Tenant Mortgagee within thirty (30) days after receipt by Landlord of written notice from Tenant Mortgagee of such timely election 10 obtain a new lease and upon payment by Tenant Mortgagee of Landlord's reasonable attorneys' fees and all sums owing by Tenant under the provisions of this Lease (less the rent and other intone actually collected by Landlord in the meantime from any subtenants or other occupants of the Total Site) and upon performance by'renanl Mortgagee of all other obligations of Tenant under the provisions of this Lease with respect to which perfonnance is then due and which are susceptible of being cured by the Tenant Mortgagee. 15.4 Consent of Tenant Mortgage . Notwithstanding the foregoing provisions, until such time as the indebtedness of Tenant to Tenant Mortgagee shall have been fully paid, Landlord shall not. without the prior written consent of Tenant Mortgagee first had and obtained at Tenant's expense, accept any surrender, cancellation or termination of this Lease, consent to any modification hereof or consent to the assignment hereof by Tenant of any interest of Tenant herein. 15.5 No Encumbrance of Fee Title. At all times herein stated, landlord's fee title to the Total Site shall not be encumbered or affected in any manner directly or indirectly by any Tenant Mortgage regardless of whether such Tenant Mortgage is subordinate to this Lease, and the rights of any Tenant Mortgage in and to the Total Site and shall at no time be greater than the right of Tenant hereunder except as otherwise provided in this Article XV, 15.6 Direct Agreement with Tenant Mortgagee. Landlord will, upon request of the Tenant, enter into an agreement with any Tenant Mortgagee confirming the rights of the Tenant Mortgagee hereunder in form and substance reasonably acceptable to Landlord and such Tenant Mortgagee 15.7 Encumbrance by Landlord. Subject to the provisions of Section 20.2 below, Landlord shall have the right to encumber the fec interest in the Total Site with any Mortgage. -23- ARTICLE XVI CONDEMNATION 16.1 !a"in If less than the entire Total Site is taken or appropriated for public or quasi -public use by the right of eminent domain or otherwise by a taking in the nature of a condemnation or inverse condemnation, with or without litigation, or is transferred by agreement under the threat thereof (any of the foregoing being referred to herein as a "Tatting"), then this Lease shall terminale as to the part taken and this Lease shall remain in effect. If the entire Total Site is the subject of a "faking or such portion thereof as to render the use of the remainder of the Total Site uneconomic for its intended purpose as determined by Tenant, then this Lease shall tenninale. No lemporary Taking of all or any pan of the Total Site shall terminate this Lease or give Tenant any right to any abatement of any sums due hereunder, and Landlord shall be entitled to the entire award for such temporary Taking. Each party hereto waives the provisions of California Code of Civil Procedure Section 126.5.130 allowing either party to petition the court to terminate this Cease for a partial Taking. 16.2 Division of Award. In the event that an award is made for an entire or partial Taking of the Total Site or any interest therein or due to any action in direct or inverse condemnation or in the event of a Taking as herein defined, the parties hereto agree that their respective rights to the award or compensation paid shall be as follows: 16.2.1 If the portion of The Total Site that Is the subject of the Taking is encumbered by any Tenant's Mortgage approved by Landlord or permitted by this Lease, then Tenant shall be entitled to a prorated portion of the award equal to the amount of collateral taken. 16.2.2 Landlord shall be entitled to the balance of any award. Neither party will do any act or make any agreement which will impair the legal obligation of the condemnor to bear the cost of such proceeding. Both parties agree, however, that in the event such a proceeding is used, the rights of the respective parties hereto shall be governed by the formula set forth herein. 16.3 Costs. Each party shall bear its own costs, attorneys' fees, appraisers' fees and all other costs in connection with any matter contained in this Article, except as may be otherwise provided. 16.4 Covenant by Landlord .''Landlord covenants and agrees with Tenant that, to the extent Landlord has, or at any time in the future obtains, any rights of eminent domain with tcspect to all or any portion of the Total Site, Landlord will not persue any taking or commence any eminent domain proceeding of any portion of the Total Site 1. I Note; need to confirm that City can waive this right. -24- ARTICLE XVII DEFAULT PROVISIONS 17.1 Events of Default. Tenant shall be deemed to be in default under the terns of this Lease as follows (such circumstances herein called an "event of default"): 17.1.1 If Tenant shall fail to pay any installment of rent or other sum when due and such failure shall continue fora period of five (5) business days after Landlord delivers written notice thereof to Tenant specifying [lie default, the applicable cure period, and Landlord's opinion of any actions needed to cure such default, which notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 (or any successor or similar statute); or 17.1.2 If Tenant shall fail to promptly perform or observe any covenant, condition or agreement to be perforated by Tenant under this Lease, and such failure shall continue for a period of thirty (30) days (or such longer period of time as may be necessuy to cure such default provided Tenant diligently commences and thereafter diligently pursues the cure thereof, provided, however, that in no event shall such period exceed ninety (90) days) after Landlord delivers written notice thereof to Tenant specifying the default, the applicable cure period, and Landlord's opinion of any actions needed to cure such default; or 17.1.3 If any petition shall be filed against Tenant in any court, whether or not pursuant to any statute of the United States of America or of any state, in any bankruptcy, reorganization, composition, extension, arrangement or insolvency proceedings, and Tenant shall therealter be adjudicated bankrupt, or if said proceedings shall not be dismissed within sixty (60) days after the institution of the same, or if any such petition shall be filed by Tenant; or 17.1.4 If, in any third party creditor proceedings wherein the Tenant is a defendant, a receiver, receiver and manager, trustee or liquidator shall be appointed for all or a substantial portion of the Total Site, and such receiver, receiver and manager, trustee or liquidator shall not be discharged within sixty (60) days after the appointment of such receiver, receiver and manager, trustee or liquidator; or 17.1.5 If Tenant makes an assignment for the benefit of creditors. 17.2 Remedies. Upon the occurrence of and during the continuance of any event of default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity, the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever, 17.2.1 Landlord shall have the right to terminate this ].ease, in which event Tenant shall immediately surrender the Total Site to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Total Site and expel or remove 'tenant 25- and any other Person who may be occupying the 'total Site or any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from Tenant the following: (i) The worth at the time of award of any unpaid rent which has been carried at the time of such termination; plus (ii) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus (iii) The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus (iv) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Total Site or any portion thereof for a new tenmml, whether for the same or a different use, and any special concessions made to obtain a new tenant; and (v) At Landlord's election, such other amounts in addition to or in lieu of (fie foregoing as may be permitted from time to time by applicable law. The term "rent" as used in this Section 17.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 17.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by allowing interest at the maximum amount of such interest permitted by law. As used in Section 17.2.1 (iii) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). Notwilhstunding anything to the contrary in this Section 17.2, if Tenant fuils to timely vacate and surrender the Premises, then the term "rent" as used in this Section 17.2 shall be deemed not to be or mean any interest in the Lease related to a bonus value (i.e., that the fair rental value of the Total Site for all or any potion of the remainder of the Term thereof exceeded the rental reserved under this Lease for such period). 17,2.2 Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any defslllt by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedics under this Lease, including the right to recover all rent as it becomes clue. -26- 17.3 Remedies Cumulative. The remedies of Landlord, as hereinabove provided, are cumulative and in addition to and not exclusive of any other remedy of Landlord herein given or which may be permitted by law. The remedies of Landlord, as hereinabove provided, are subject to the other provisions herein and are particularly subject to the provisions of Article XV hereinabove. Nothing contained in this Article XVII shall constitute a waiver of Landlord's right to recover damages by reason ol'Landlord's efforts to mitigate the damage to it caused by Tenant's default; nor shall anything herein adversely affect Landlord's right, as in this Lease elsewhere provided, to indemnification against liability for injury or damage to Persons or property occurring prior to the termination of this Lease. 17.4 Performance by T'enatlt. All covenants and agreements to be performed by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any offset to or abatement of rent. IF Tenant fails to pay any sum of money, including rent, required to be paid by it hereunder or fails to perform any other act on its part to be performed hereunder, and such failure continues alter written notice thereof to Tenant (if required) and the expiration of any period expressly provided for in this lease during which Tenant may cure such Failure, Landlord may, without waiving or releasing Tenant from any obligation of Tenant, make any such payment or perform any such act and all sums so paid by Landlord and all costs incurred by Landlord in performing such act (including attorneys' fees), shall be payable by Tenant on demand and Tenant hereby covenants to pay any and all such sums. Landlord shall have in addition to any other right or remedy of Landlord the same rights and remedies in tine event of nonpayment of sutns clue under this Article XViI as in the case of default by Tenant in the payment of rent. 17.5 nd ord's Default. Landlord shall not be in default in the performance of any obligation under this Lease unless and until (a) it has failed to perform its obligations under Section 24.4.1 hereof to enter into a Project Lease within ten (10) days after receipt of written notice by Tenant to Landlord specifying such failure, (b) it has failed to perform its other obligations under Section 24 within twenty (20) days after receipt of written notice by Tenant to Landlord specifying such failure, or (c) it has failed to perform any other obligation hereunder within thirty (30) days after receipt of written notice by Tenant to Landlord specifying such failure; provided, however, that if the nature of Landlord's default is such that more than thirty (30) days are required for its cure; then Landlord shall not be deemed to be in default if it commences such cure within the thirty (30) day period and thereaner diligently prosecutes such cure to completion provided Landlord diligently commences and thereafter diligently pursues the cure thereof. Tenant agrees to give any Mortgagee of Landlord's estate a copy, by registered mail, of any notice of delault served upon Landlord, provided that prior to such notice Tenant has been notified in writing of the address of such Mortgagee. Tenant further agrees that if Landlord shall have failed to cure such default within the time period provided in this Lease, then any such Mortgagee shall have an additional sixty (60) days within which to cure such default on the part of the Landlord or if such default cannot be cured within that time, then such additional time as nmy be necessary if within that sixty (60) days the Mortgagee has commenced and is pursuing the remedies necessary to cure such default (including, but not limited to, commencement of foreclosure proceedings, if necessary to effect such cure), in which event this lease shall not be terminated while such remedies are being so pursued. Notwithstanding anything to the contrary in this Lease, Tenant agrees that in the event of default by landlord hereunder, there shall be -27- absolutely no personal liability of any partners, officers, employees, managers, councilmen or agents who or which constitutes or comprises Landlord, and Tenant shall, subject to the rights of Landlord's Mortgagees, look solely to the interest of Landlord in the Total Site and any proceeds of Landlord's liability insurance policies applicable and payable with respect to Landlord's ownership of the Total Site for the satisfaction of each and every remedy of Tenant therefor. In this regard, none of Landlord's partners, officers, employees, managers, councilmen or agents shall be personally liable for any such default or for any deficiency nor shall other assets of Landlord be available with respect to such default or deficiency. ARTIOL , XVIII SALE OF TOTAL SITE BY LANDLORD 18.1 Right of First Refusal for Sale to Privia e t . if Landlord elects to sell the fee interest in the Total Site to a "Private Party" (e.g., a party that is not a governmental, quasi - governmental, or other similar Person, or an entity that is majority owned and controlled by such an entity or that is established solely for the purpose of obtaining tax-exempt financing), then Tenant shall have, and Landlord hereby grants, a right of first refusal with respect to the sale of the fee interest of the Total Site. In connection with such right of first refusal, if, at any time during the Term, Landlord receives a bona -fide offer to purchase all or any portion of the 'total Site from a Private Party which Landlord intends to accept, Landlord shall deliver a copy of such offer to Tenant (the "ROFR Notice"), which offer must contain all material terms and conditions related to such purchase and sale (including, without limitation, a description of that portion of the Total Site to which the offer pertains, the purchase price and the anticipated closing date). Upon receipt of the ROFR Notice, Tenant shall have thirty (30) days in which td elect to purchase such portion of the Total Site as described in the ROFR Notice, on the same terms and conditions as noted in the ROFR Notice (the "rimint ROFR") without, however, any due diligence period, and which notice shall be accompanied by a non-refundable deposit, in immediately available funds, in the amount of the aggregate deposits under the ROFR Notice. If Tenant elects to exercise the Tenant ROFR, Landlord and Tenant shall be deemed to have entered into an agreement of purchase and sale containing those conditions set forth in the ROFR Notice, with such modifications as Landlord and Tenant may agree to, and, on the closing date specified in such ROFR Notice, Landlord and Tenant shall complete the transfer or such portion of the'fotal Site to Tenant (or an affiliate of Tenant, as designated by'fenant). If Tenant does not respond within such thirty (30) days, or Tenant elects not to exercise the'renant ROFR, Landlord shall be permitted to sell that portion of the Total Site described in the ROFR Notice,, subject to tine material terms and conditions of Section 18.2 hereof, on and subject to the terms and conditions set forth in the ROFR Notice, witbout amendment; provided that, if Landlord Is unable to complete such sale by the date specified in the ROFR Notice plus ninety (90) days, such portion of the Total Site shall once again be subject to the terms and conditions of this Section 18.1 and Tenant's right of first refusal. Tenant's rights under this Section 18.1 shall not apply in connection with a foreclosure, deed -in -lieu of foreclosure, or a subsequent conveyance by Landlord's Mortgagee. 18.2 Release of landlord. Landlord shall have the right to sell all or any portion of the Total Site to a non -Private Nuty without triggering the Tenant's right of first refusal set -28- forth above. In the event of any sale by Landlord of its fee interest in all or any, portion of the Total Site to any Person, Landlord shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and unaccued obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; provided that the purchaser, at such sale of all or any portion of the Total Site, shall in writing covenant in favor of Tenant to carry out and assume any and all of the covenants and obligations of Landlord under this Lease. ARTICLE XIX NON -MERGER "There shall be no merger of this Lease, nor of the leasehold estate created by this Lease, with Landlord's fee estate in the Total Site by reason of the fact that this Lease or the leasehold estate created by this Lease or any interest in this Lease or any such leasehold estate may be held, directly or indirectly, by or for the account of any Person who shall own the fee estate in the Total Site or any interest in such fee estate, and no such merger shall occur unless and until all Persons at the time having an interest in the fee estate in the Total Site and all Persons (including any leasehold Mortgagee) having tin interest in this Lease or in the leasehold estate created by the Lease shall join in a written instrument effecting such merger and shall duly record the same. ARTICLE XX ESTOPPEL CERTIRCATES AND SUBORDINATION 20.1 Tenant's Certificate. Tenant agrees at any time and from time to time, upon not less than ten (10) days written notice by Landlord, to execute, acknowledge and deliver to Landlord a statement in writing certifying (a) that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same are in full force and effect as modified and stating the modifications); (b) whether nor not, to the best knowledge of Tenant, there are then existing any offsets or defenses against the enforcement of any of the terms, covenants or conditions hereof upon the part of Tenant to be perforrned and if so specifying the same); (c) the dates to which the rent and other charges have been paid; (d) whether or not, to the best knowledge of'I'enant, Landlord is in default in the performance of any covenant, agreement or condition contained in this lease and, if so, specifying each such default of which Tenant cony have knowledge; and (c) such other matters as may be reasonably required by Landlord or any Mortgagee, it being intended that any such statement delivered pursuant to this section may be relied upon by any prospective purchasers or Mortgagee of the fee of the Total Site. 20.2 Subordination. This Lease shall be subject and subordinate to the lien of any mortgage or trust deed, now or hereafter in force against Landlord's interest in the Total Site; and to all renewals, extensions, modifications, consolidations and replacements flwrenl; and to all advances made or hereafter to be made upon the security of such mortgages or [rust deeds, unless the holders of such mortgages or trust deeds require in writing that this Lease be superior thereto. With respect to any Stich instruments entered into by Landlord after the execution of this -29- Lease, Tenant's subordination of this Lease shall be subject to receiving assurance (a "non- disturbance agreement") from Landlord's Mortgagee in commercially reasonable form and substance that Tenant's use and possession and this Lease will not be disturbed so long as no event of default occurs and is continuing and Tenant agrees to altom to Landlord's mortgagee to the extent it becomes the record owner of the Total Site. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any mortgage or deed in lieu thereof by any Landlord Mortgagee, to attorn, without any deductions or set -offs whatsoever, to the purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof if so requested to do so by such purchaser, and to recognize such purchaser as the Landlord under this Lease. Tenant shall, within five (S) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the attomment and subordination of this Lease to any such mortgages or trust deeds. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale. ARTICLE XXI MEMORANDUM OF LEAS Concurrently with [lie execution of this Lease, both parties shall execute and acknowledge a Memorandum of this Lease in recordable form which shall be substantially in the form attached hereto as Exhibit "D" ("Memorandum") which shall be recorded at Tenant's election (and expense, including, without limitation, all recording charges and documentary transfer taxes, and the like) in the official records; in which the Total Site is located ("Offlcial Records") after the Due Diligence Date (or earlier provided that Tenant concurrently executes and delivers to Landlord an executed, acknowledged, original of a quitclaim deed or other instrument prepared by Landlord to terminate the effect of the Memorandum, which (a) Landlord may record in time Official Records if Tenant terminates this Lease pursuant to Section 1.3 above, or (b) Landlord shall return to Tenant if Tenant does not terminate this Lease pursuant to Section 1.3 above) provided that this Lease has not previously terminated. Concurrently with the execution of any supplement to this Lease pursuant to Section 1.1.1, the parties shall execute and record in the Official Records a supplement to the Memorandum with respect to the Scout Property or the Agency Property or any portion thereof that is subjected to this Lease thereunder Concurrently with the execution of cacti Project Lease, the parties shall execute and record in the Official Rccomds a partial termination of the Memorandum with respect to the portion of the Total Site that is the subject of the Project Lease. ARTICLE XXII QUIET POSSESSION Landlord covenants that Tenant, upon payment of the rental heroin reserved, and $o long as no event of default shall have occurred and be continuing, shall and may at all times, for itself and its subtenants, peaceably and quietly have, hold and enjoy the Total Site doing the Tornm of this Lease. -30- AR'l I CLE XX111 SIGNS Tenant may not erect or affix permanent or temporary signage on or about the Total. Site without the prior written reasonable approval of Landlord as to content, number, cola, size, type, quality, location, materials and graphics provided, however, that such signage must also comply with any applicable Restrictions, covenants, conditions and restrictions and all applicable laws, rules, regulations and ordinances and shall not be used for advertising of any type. Tenant shall be responsible, at its sole cost and expense, for maintaining and repairing any such signage. Upon the expiration or earlier termination of this Lease, Tenant shall remove, at Tenant's sole cost and expense, all such signage from the Total Site. If Tenant fails to so remove such signage, Landlord may do so and charge the cost of such removal to Tenant. The foregoing obligations shall survive the expiration or earlier termination of this Lease. ARTICLE XXIV PROJECTS 24.1 Landlord`s Approval of Proposed Non -Solar Proieets. Dining the Tenn so long as no event of default has occurred and is continuing, from time to time Tenant shall have the right to propose a Project that is not a photovoltaic solar for a portion of the Total Site by delivering a written request therefor to Landlord that (a) identifies the portion of the Total Site upon which the Project would be developed (and excluded from this Lease and become the subject of a Project Lease), (b) provides any proposed changes to the form of Project lease attached hereto (which shall redlined to show such changes) that would be included in the Project Lease, and (c) includes the materials and information about the proposed Project set forth below in Sections 24.2.1 through 24.2.10 (to the extent applicable). Landlord shall have the right to approve or disapprove any such request in its sole discretion. 24.2 Proposed Solar Proieets. During the Term and so long as no event of default shall have occurred and be continuing, from time to time Tenant shall have the right to propose photovoltaic solar Projects (a "Solar Project') for a portion of the Total Site by delivering to landlord a written request for Landlord to participate therein and contribute financially thereto ("Request") which also (a) identifies the portion of the'rotal Site upon which the Solar Project would be developed (and excluded from this Lease and become the subject of Project Lease) and the term thereof, (b) provides any proposed changes to the form of Project Lease attached hereto (which shall be redlined to show such changes) that would be included in the Project Lease, and (c) includes the following materials and information about the proposed Solar Project: 24.2.1 A thorough, detailed, narrative description of the Solar Project: 24.2.2 A detailed map showing the applicable potion ofthe Total Site that would be subject to the applicable Project lease and a legal description of the applicable parcel; 24.2.3 An entitlement analysis and schedule showing the entitlements, approvals, authorizations and/or permits (including, without limitation, clearances under CEQA or NEPA) required from any Federal, State, County, municipal, or other govenunental or quasi - governmental authority required for such Solar Project (including evidence that the applicable portion of the Total Site that would be subject to the applicable Project Lease complies with the California Subdivision Map Act) and evidence that all such entitlements, approvals, authorizations and/or permits have been issued or are ready to issue upon the payment of the applicable fees; 24.2.4 A detailed schedule (from execution of the Project Lease through the commencement of the economic productivity of such Solar Project) showing, inter alfa, the entitlement, development, construction and other phases of such Solar Project, and who (i.e. Landlord or Tenant) will be responsible for the costs of entitling and constructing the infrastructure required for such Solar Project (arid if Landlord shall be responsible therefor, the proposed cost thereof) and the timing of such events; 24.2.5 A detailed development and construction budget for the entire Solar Project (e.g., interconnection, inverters, panels and mounting), including, without limitation, a budget for any infrastructure required for such Solar Project, and the costs of providing any required completion bonds, and the estimated timing, sources, and amounts of revenue to be generated by such Solar Project (e.g., pursuant to a power purchase agreement), in any form and whether such power is expected to be prepaid; 24.2.6 The environmental impact and, to (he extent required by law, mitigation plans fo • such Solar Project; 24.2.7 The proposes sources and uses of funds, including, without limitation, proposed debt levels and whether secured or unsecured, equity contributions (in the form of a tenant improvement allowance or otherwise), and/or equity for such Solar Project; 24.2.8 a description of number, type and design of solar modules to be constructed thereon and the reasonably anticipated aggregate armual output thereof with certain probabilities; 24.2.9 the Power Purchase Agreement with the PUC and, to the extent available, a copy of a power purchase agreement between the related Project Tenant and the PUC for such Solar Project; and 24.2. 10 a financial model including long-term estimate of operation and maintenance costs, degradation assumptions, spare parts inventory costs, estimated rate of return with proposed debt levels (and expected terms, which shall not include any indemnities or guaranties of any sort by Landlord). 24.3 Landlord Review and Approval. Landlord shall have forty-five (45) days from receipt of a Request and all the relevant materials and accompanying data (the "Review Period") to approve or disapprove such Request in its sole discretion. if Landlord timely -32- approves the Request, then Landlord shall have agreed to participate in the Solar Project and (a) contribute fifty percent (50%) of the capital expenditure required to develop and construct such Solar Project net of any third patty indebtedness identified under Section 24.2.7, as such level of indebtedness may be increased prior to consummation of the Solar Project financing, (b) develop, construct and pay for the specified inkashucture improvements, as set forth in Section 24.2.4, and (c) agree to share in fifty percent (50%) of any "construction cast" overruns for such Solar Project (i, e., Landlord would be responsible for hard cost overruns of not more than five (50/6)). The sum of the amounts described in the preceding sentence are herein called (the "Landlord Contribution"). Unless otherwise agreed to by Landlord and Tenant, such contribution by Landlord shall be made as a tenant improvement allowance under the related Project Lease concurrently with the corresponding contributions by Tenant. In return for such participation and the Landlord Contribution, Landlord shall be entitled to receive the greatest of (i) the fair market rental value of the portion of the Total Site to be subjected to such Project Lease plus twelve percent (I 21/o) of the net operating income generated by the related Project Tenant with respect to such Solar Project (revenues net of operating expenses, required reserves, debt service and tax equity payments), payable as a percentage rent under the related Project Lease, (ii) six percent (G%) return per annum on the Landlord Contribution, and (iii) fifty percent (50%) of (x) the net operating income generated by the related Project Tenant with respect to such Solar Project (revenues net of operating expenses, required reserves, debt service and tax equity payments), payable as a percentage rent tinder the related Project Lease plus (y) any net extraordinary gains (e.g., sale of Project Tenant or the sale or refinancing of such Solar Project), as adjusted for any continued rent payable thereafter to Landlord (provided, however, that the sale of the Solar Project that is not a permitted transfer of not more than 49% of Tenant's interest shall require Landlord's consent, which landlord may withhold in its sole discretion). Landlord shall execute and deliver to Tenant within fifteen (15) days of request therefor following the Review Period, the Project Lease related to such Solar Project which reflects the foregoing election by Landlord. 24.4 Landlord Review andDisapproval If Landlord disapproves such Request in its sole discretion during the Review Period or fails to approve or respond to Tenant's Request within the Review Period, then (a) for one (1) year thereafter, Tenant shall have the right to consummate an agreement with a reputable, third party investor on the terms and conditions set forth in the Request, which, if materially altered, shall require "renant to resubmit the Request as set forth above in Section 24.2 provided, however, that the Review Period shall be limited to thirty (30) days, (b) Tenant shall commence construction of such Solar Project within one (1) year thereafter, (c) Landlord shall not be required to make any financial contribution to such Solar Project whatsoever under this Lease, and (d) the rent to which Landlord shall be entitled under the related Project Lease shall equal (i) the fair market rental value of the portion of the Total Site to be subjected to such Project Lease, plus (if) ten percent (10%) of the net operating income generated by the corresponding Project Tenant with respect to such Solar Project (revenues net of operating expenses, required reserves, debt service and tax equity payments), payable as percentage rent under the related Project Lease, as such amount shall be increased by an amount agreed to by Landlord end such Project Tenant as a ntum on the cost to Landlord to develop, construct and pity for any substation and/or interconnection lines that shall be used by and allocated to such Solar Project. Notwithstanding such disapproval or deemed disapproval, Landlord shall execute and deliver to Tenant within fifteen (15) days of request therefor -33- following the Review Period, the Project Lease related to such Solar Project which shall reflect the rent to be paid to Landlord pursuant to the prior sentence, ARTICLE XXV LANDLORD FUNDING OF CERTAIN COSTS 25.1 Landlord Funding of Certain Costs. Provided that no event of default has occurred and is continuing, from the Due Diligence Date until the fifth (5°') Anniversary thereof, Landlord shall reimburse Tenant for the actual, documented, and reasonable third -party tees and costs incurred by Tenant in connection with exploring the feasibility of, and seeking approvals for, the planning and development of Solar Projects in advance of the execution of one or more Project Leases, in an aggregate amount of not more than Five Million Dollars ($5,000,000), which sums shall be reimbursed not more often than quarterly, and, in each case, subject to complying with the following conditions: 25.1.1 Tenant has completed and delivered a written request for payment setting forth the dates, amounts, and payees with respect to all payments made by "Tenant, and a description of the work performed by each payee, plus, at Landlord's request, a copy of any such work performed (to the extent applicable). 25.1.2 Tenant has furnished, in satisfactory form mid substance, (a) conditional mechanics' lien releases and waivers for the amounts being requested and valid full and final mechanics' lien releases and waivers for all other work performed (which shall only be provided with respect to aspects of such work that could result in a lien under applicable [aw), (b) copies of bills and invoices covering work for which a reimbursement is made, and (c) an affidavit from Tenant confirming the foregoing and that the work for which payment is requested is authorized for reintbursetnent under this Lease. 25.2 Advance Funding. Provided that no event of default has occurred and is continuing, from and after the Effective Date, Landlord shall reimburse (or provide advances to) Tenant for, in the aggregate, not more than ten percent (10%) of the funds specified above in Section 25.1 for the uses permitted thereby, which Tenant shall immediately refund to Landlord if Tenant terminates this Lease pursuant to Section 1.3 above. Any such fundings shall be part or, not additions to, Landlord's aggregate funding obligations set forth above in Section 25.1. ARTICLE XXVI GENERAL PROVISIONS 26.1 Notices. Any notice to be givers or other document to be delivered by either party to the other hereunder may be delivered in person to either party, may be delivered by commercial express delivery service, facsimile or United Slates mail duly certified, return receipt requested, with postage prepaid, and addressed to the party for whom intended as follows; -34- To Landlord: _Paul J. Philips,City Manager 15625 F. Stafford Street Suite 100 City of Industry, CA 91744-0366 Fax: With a Copy to: James M. Casso Casso S Sparks 13200 Crossroads Parkway North, Suite 345 City of Industry, CA 91746 To Tenant: San Gabriel Valley Water and Power, LLC 2917 Canon Street San Diego, CA 92106 Attn.: Mr. Robert Anselmo With a Copy to: Dechert, LLP One International Place, 4011 Floor 100 Oliver Street Boston, MA 02110 Atm.: Bruce Hickey, Esq, F,ither party hereto may from time to time by writteh notice to the other party designate a different address which shall be substituted for the one above specified. If any notice or other document is sent by certified mail, as aforesaid, the same shall be effective upon receipt at the appropriate address. The address to which notices are sent may be changed by providing notice thereof in the manner specified in this Section 26.1. From time to time, parties may designate attorneys that are au0iori2ed to provide notices on their behalf, which shall be valid until terminated by written notice from such party or such designated attorney. 26.2 (Intentionally Omittedl 26.3 Litigation. In tine event of the bringing of tiny action or suit by either party against the other arising out of this Lease, the party in whose favor final judgment shall be entered shall be entitled to recover fiom the other party all casts and expenses of suit, including reasonable attorneys' fees. 2.6.4 Waiver. No delay or omission by either party hereto in exercising any right or power accruing upon the non-conipliauce or failure of performance by either party hereto under the provisions of the Lease shall impair any such right or power to be construed to be a waiver thereof. A waiver by either party hereto of any of the covenants, conditions or agreements thereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the sante or other covenants, agreements, restrictions and conditions hereof. 26.5 Holding Over. Il' Tenant shall remain in possession of the Total Site alien the expiration or earlier termination of lha Term of this Lease without the express written consent of Landlord, 'Tenant will be deemed to be occupying the Total Situ as a tenant -at -sufferance only 35- subject to nil covenants and obligations of this Lease and at a daily rental equal to one hundred and fifty percent of the fair market rental value therefor, prorated on the basis of such portion of the Total Site which is surrendered in accordance with Section 26.6 hereof, plus all other amounts of rent and all items of additional rent which are payable hereunder, during the period of any such holding over. Acceptance by Landlord of rent after such expiration or earlier termination shall not constitute a holdover or result in a renewal, and shall not affect Landlord's right of re-entry or any rights of Landlord hereunder or as otherwise provided by law. If any property not belonging to Landlord remains at the Total Site alter the expiration of the term of this Lease, Tenant hereby authorizes landlord, without liability for compensation or damages to Tenant, to retain all or any portion thereof (and title thereto shall thereupon be vested in Landlord), or remove such property and make such disposition thereof as Landlord may desire. Tenant shall, upon demand by Landlord, pay Landlord for the expense of any such removal and disposition plus the cost of repair of any and all damages to the Total Site resulting from or caused by such removal. ht the event that such property belongs to someone other than Tenant, Tenant agrees to indemnify and hold Landlord harmless from all Claims in connection with or incident to any removal, exercise of dominion over and/or disposition of such property by Landlord. Tenant shall indemnify and hold landlord harmless from any and all Claims resulting front Tenant's failure to surrender the Total Site upon the expiration or earlier termination of the Lease. 26.6 Surren er. Subject to the provisions of Section 5.1, upon the end of the Tem of this Lease, as provided herein, or any extension thereof, or sooner termination of this Lease, Tenant shall surrender and quitclaim to Landlord the Total Site, together with the Improvements. 26.7 Luse Binding Upon Successors and Assigns. Subject to the limitations herein set forth, each of the terms, covenants and conditions of this Lease shall extend to and be binding on and inure to the benefit of not only Landlord and Tenant, but also each of their successors and assigns. Whenever in this Lease reference is made to either Landlord or Tenant, the reference shall be deemed to include, wherever applicable, die successors and assigns and the parties hereto the same as if in every case expressed. 26.8 Entry. Landlord reserves for itself and its agents the right to peaceably enter the Total Site to inspect the Ramo, to submit the Total Site to prospective purchasers, lenders or tenants, to post notices of non -responsibility and to take such other actions and perform such duties as Landlord may be required or permitted under this /.case provided that Landlord shall use all reasonable efforts to not interfere unreasonably with the business of Tenant. Tenant hereby waives any claim for damages or for any injury or inconvenience to a]- interference, rinterference with Tenant's business, any loss of occupancy or quiet enjoyment of the'rotal Site, and any other loss occasioned by Landlord's entry except to repair any damage to property resulting therefrom. Any entry to the Total Site obtained by Landlord by any means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Total Site, or an eviction of Tenant from the Total Site or any portion thereof. Except in Ute event of an emergency, (i) landlord shall not enter the Total Site during nonbusiness howl, and (ii) Landlord shall provide Tenant not less than twenty-four (21) hours prior notice before entering the Total Site. -36- 26.9 Relationship, of Parties. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant's business or otherwise, and that the provisions of any agreement between Landlord and Tenant relating to rent are solely for the purpose of providing a method whereby rental payments are to be measured and ascertained. 26.10 Tinte of the Essence. Time is expressly declared to be of the essence of this Lease with regard to all obligations hereunder. 26.11 Quitclaim, At the expiration or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord within ten (10) days after written demand from Landlord to Tenant, any quitclaim deed or other document required by any reputable title company to remove the cloud of this Lease from the Total Site, 26.12 Number and Gender. Whenever the singular number is used in this lease and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and the word "Person" shall include corporation, film or association. if there be more than one tenant, the obligations imposed under this Lease upon Tenant shall be joint and several. 26.13 Headings, and Titles. The section headings of this lease are inserted as a matter of convenience and references only and in no way define, limit or describe the scope or, intent of this Lease or in any way effect the terms and provisions hereof. 26.14 Covenants and Conditions. Each of the covenants in this lease shall be deemed and construed as conditions and each and every covenant shall be deemed covenants running with the land. 26.15 lEntire Agreement Agreement. This Lease contains the final expression of and the entire agreement between the patties hereto with respect to the matters covered hereby, and no other previous agreement, statement or promise made by any party hereto which is not contained herein shall be binding or valid. 26.16 Partial Invalidity. If any term, provision, condition or covenant of this Lease, or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this Lease, or the application of such term, provision, condition or covenant to Persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each terns and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 26.17 Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law provisions. 20.18 Modifications, Any alteration, change or modification of or to this Lease, in order to become cfl'eetive, shall be made by written instrument or endorsement hereon and in each such instance executed on behalf of each patty hereto. -37- 26.19 Brokers. Landlord represents and warrants to Tenant, and Tenant represents and warrants to Landlord, that no broker or tinder has been engaged by it, respectively, in connection with any of the transactions contemplated by this Lease, or to its knowledge is in any way connected with any of such transactions. In the event of any such claims for brokers' or finders' fees or commissions in connection with the negotiation, execution or consummation of this lease, Tenant shall indemnify, save harmless and defend Landlord from and against such claims if they shall be based upon any statement or representation or agreement by Tenant, and Landlord shall indemnify, save harmless and defend Tenant if such claims shall be based upon any statement, representation or agreement made by Landlord. 26.20 Nxecution or Lease. The submission of this Lease to Tenant for examination or execution does not constitute a reservation of or option on the Total Site, or an agreement of Landlord to lease the Total Site. This Lease shall become effective as a Lease, and Landlord shall become obligated hereunder, only upon the execution and delivery of this Lease by both parties, which neither party shall have any obligation to do. Submission of this Lease to Tenant in no way constitutes an offer to lease by Landlord. 26.21 Accord and Satisfaction, No payment by Tenant or receipt by Landlord of a lesser amount than the rent payments herein stipulated shall be deemed to be other than on account of the rent, nor shall any endorsement or statement on any cheek u, any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease. 26.22 Construction. It is understood that there are no oral or written agreements or representations between the parties hereto affecting this Lease (other than this Lease and the exhibits attached hereto), and that this Lease supersedes and cancels any and all previous negotiations, arrangements, representations, brochures, displays, projections, estimates, agreements and understandings, if any, made by or between Landlord and Tenant with respect to the subject [natter thereof, and none thereof shall be used to interpret, construe, supplement or contradict this Lease, including, without limitation, any term sheet or letter of intent. The parties hereto hereby acknowledge and agree that (a) each party hereto is of equal bargaining strength, (b) each such party has actively participated in the drafting, preparation and negotiation of this Lease, (c) each such party has been (or Inas had the opportunity to be) represented by, and Consulted, with such party's own, independent counsel, and such other professional advisor as such party has deemed appropriate, relating to any and all matters contemplated under this Lease, (d)each such party and such party's counsel and advisors have reviewed (or have had the opportunity to review) this Lease, (e) each such party has agreed to enter into this Lease following such review and the rendering of such advice (or the opportunity to receive such advice), and (1) any rule of construction to the effect that ambiguities are to be resolved against the drafting parties shall not apply in the interpretation of this Lease, or any portions hereof, or any amendments hereto. The parties agree that any deletion of language from this Lease prior to its mutual execution by Landlord and Tenant shall not be construed to have any particular meaning or to raise any presumption, canon of construction or implication, including, without limitation, any implication that the parties intended thereby to state the converse of the deleted language. 18- 26.23 Authority. 'tenant does hereby represent and warrant to Landlorxi that Tenant has all requisite power and authority to own, lease, hold and operate properties and conduct business in the State of California. 26.24 ti.xhhibits. All Exhibits attached to this Lease are hereby incorporated herein by this reference. 26.25 ADA DlaelOsnrc. Landlord hereby represents to Tenant that the 'Fetal Site has not undergone inspection by a Certified Access Specialist (as such term is defined in California Civil Code Section 1938} and, no Certified Access Specialist has determined whether the Total Site currently meets all applicable construction related accessibility standards pursuant to California Civil Code Section 55.53, Tenant assumes all risks that the 'Fetal Site does not comply with all applicable construction related accessibility standards pursuant to California, Federal or local law, and shall be solely responsible for the cost of any modifications required to comply therewith. 26.261{oldine Over. If Tenant fails to surrender the Total Site at the expiration or earlier termination of this Lease, such tenancy shall be a tenancy at sufferance only, and shall not constitute a renewal mr an extension of the tern hereof. Rent during such tenancy at sufferance shall be payable at a rate of $5.00 per acre that Tenant has not surrendered per day. Stich tenancy at sufferance shall be subject to every other applicable tern, condition and covenant contained in this Lease. Nothing contained in this Section 26.26 shall be construed as consent by Landlord to any holding over by Tenant and Landlord expressly reserves the right to require Tenant to surrender possession of the Total Site to the landlord pursuant to the ternts and conditions of this Lease upon expiration or earlier termination of this Lease. Nothing in this Section 26.26 shall be deemed to limit or constitute a waiver of any rights or remedies of Landlord tinder this Lease or at lay. [Balance of page intentionally left blank, Signatures appear on next page.] -39- IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date and year first set forth above. "LANDLORD" "TENANT" THE CITY OF INDUSTRY, SAN GABRIEL VALLEY WATER AND a municipality organized under the laws of the POWER, LLC, a California limited liability State of California company By: By: Ambient SM I LP LLC, a California Name: limited liability company Its: Its: Non-member manager By: Ambient Communities LLC, a Delaware li ited liability company r /� Its: Sole Mnt n 11 By: Name: 'v " Its: Name:�n>��wY� Its: np,�la 4D- A notary public or other oflieer completing this certificate verifies only the identity of the Individual who signed the document to Which this certificate is attached, and not the truthfulness, accuracy, or validity of that document, ACKNOWLEDGMENT State of California County of San Diego on q e 1_ lam_before me,�AJ I . \jt' U (insert nam{}e�andd title of the officer) personally appeared who proved tome on the basis ofsatisfactory evidence to bethe petson(s) whose ramie(s) islare subscribed to the within instrument and acknowledged to methat h0stre/they executed the same in histiter/their authorized capacity(ics), and that by his/her/their signatures) entire instrument the person(s), or the entity upon behalf ofwhich the persons) acted, executed the instrument. I certify under PENALTY OF PERJURY under lite latus of the State of California that the foregoing paragraph Is true and correct. WITNESS my hand and official seal. & WOLOOTT Signature (Seal) clom talon l X0180? Wfty Pu01k • Crrt OMIA Can DIW Cou* My Canm. 6yPha Mot 14.2017 IN WIT'NE'SS WHEREOF, the parties hereto have executed this Lease as of the date and year first set forth above. "LANDLORD" "T1 NAK " TI IE CITY OF INDUSTRY, a municipality organized under the laws of the State of Califomia .r Bki Namc: Pau J. Philip I S- City Manager SAN GABRIEL WATER AND POWER, LLC, a California limited liability company -40- By: Ambient SHE LP LLC, a California limited liability company Its: Non-member manager By; Ambient Communities H.C, a Delaware limited liability cumpany Its: Sole Member By: Name: Its: Name: Its CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1199 A notary public or other officer completing this certificate verifies only the Identity of the individual who signed the document to which this certificate Is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of Los Angeles ) On Mgy 17, 2016-_beforeme,_Diane M. Schlichting, a Notary Public Date Here Insert Name and Ttfle of the Officer personally oppeored Paul J. Philips - - - - - - - - - - - - - - - - - - Name(sJ of slgner(s) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - who proved to me on the basis of satisfactory evidence to he the porson(sy'whosa name subscribed to the within Instrument and acknowledged to me than 52heAtwy executed the s me in ,rtS erFHheUauthorized capadty(lae}, and that byet Ywirsignature(s}on the instrument the person(nl; or the entity upon behalf of which the persoiga}acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph DIANE M. 9CHUCHTINO Is true and correct. Commlelon 0 1970339 WITNESS my hand and official seal. Notify Public - cllllornll Los Angtl+s County I%rMg Comm Expires Jun 10. 2016 Place Notary Seat Above Sfgnelure of Ncfary Publrc / ®2014 National Notary Association • wwwMallonalNotary.org • 1.800 -US NOTARY (1-800.876.8827) Item 95907 OPTIONAL Though this section is optional, completing this Information can deter alteration of the document or fraudulent reattachment of this form to an anfntendad document. Description of Atinched Document Title or Type of Document; _ _. _ ____ Document Data: _,.., Number of Pages: Signer(s) Other Than Named Above: Capadity(ins) Claimed by Signer(s) Signer's Name: _._ Signer'sName: CJ Corporate Officer -- T91o(s): 0 Corporate Officer - Title(s): Cl Partner - !'; Limited CI General CJ Partner - LI Limited ❑ Genarel ❑ Individual LJ Attorney In Fact Ci Individual 0 Attorney In Fact CI Trustee FJ Guardian or Conservator Il Trustee Cl Guardian or Conservator L) Other ______ J 1 Otber. - - Signer Is Representing: Signer Is Representing: ®2014 National Notary Association • wwwMallonalNotary.org • 1.800 -US NOTARY (1-800.876.8827) Item 95907 EXHIBIT "A" TOTAL. SITE (LEGAL DESCRIPTION TO BE INSERTED BV I.ANDLORDI A-1 M95069 RI ISINNS EXHIBIT I'D" FORM OF MEMORANDUM OF LEASE RECORDING REQUESTED BY AND WHEN RECORDED MAIL T0: REAL ESTATE LENDER Attn: Antic Pyke Dechert LLP One Bush Street, Suite 1600 San Francisco, CA 94104 MEMORANDUM OF LEASE This Memorandum Of Lease (this "Memorandum") is made and entered into as of May ,, 2016 by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN UABR1EL VALLEY WATER AND POWER, LLC, a Calirornia limited liability company ("Tenant"), with reference to the following facts: A. Landlord and Tenant are the landlord and tenant, respectively, under that ceratin Lease dated as of May _, 2016 (the "Lease"), relating to certain real properly located in the Counties of Los Angeles, Sat Bernardino and Orange, State of California, more particularly described in Exhibit "A" attached hereto (the "Property"). B. Pursuant to Article 18 of the Lease, Landlord has granted to Tenant a limited right of first rellrsal to purchase (the "Right of First Rerusal"), with respect to all or any portion of the Properly and One improvements and certain other properly located thereon. C. Landlord and Tenant desire to have this Memorandum recorded in the Official Records of [Orange/Los Angeles/San Bernardino] County, California, in order to put interested parties on notice of the estate of the Tenant in the Propertyand the Right of First Refusal. NOW, THERKFORE, in consideration of the rents and covenants provided for in the Lease to be perforated by the Tenant, the Landlord hereby demises and leases the Promises to 'Penal, subject to the terms and conditions of the Lease. 1. Term. The term of the Lease is Twenty -Five (25) years commencing on May _, 2016, and terminating Twenty -Five (25) years thereafter, all subject to and on terns and conditions more fully set forth in the Lease. B-1 22195068.10 11115tNP%% 2. Right of First Refusal. Landlord has granted, and hereby grants, to Tenant the Right of First Refusal described in Recital B above during the time, for the price, and on the terms and conditions contained in the Lease, the terms and conditions of which are incorporated herein by this reference in their entirety. The Right of Mrst Refusal must be exercised on or before the dates specified in the Lease. 3. Incorporation of Lease. All of the terms, conditions, provisions and covenants of the Lease are incorporated in this Memorandum by reference, as though written out in length herein. In the event of any conllict beiwcen the terns and provisions of this Meoiorandutn and the Lease, the terms of the Lease shall govern. R-2 EXHIBIT "A" TOTAL. SITE (LEGAL DESCRIPTION TO BE INSERTED BY LANDLORD) B-4 22 19 51169 10AUS(NESS ATTACHMENT ATTACHMENT 8 SAN GABRIEL VALLEY TRIBUNE ARTICLES REGARDING INDUSTRY'S PLANS TO DEVELOP A SOLAR FARM ON TRES HERMANOS RANCH 8.11 MAY 26, 2017 8.2 1 AUGUST 3, 2017 8.3 1 AUGUST 5, 2017 8.4 1 SEPTEMBER 13, 2017 8.51 SEPTEMBER 26, 2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page I of 9 8.1 NEWS Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diamond Bar? Here's their plan. By JASON HENRY I jhenry@scng.com scng.com and STEVE 0 COMMENTS SCAUZILLO I sscauzillo@scng.com I Pasadena Star News PUBLISHED: May 26, 2017 at 9:41 pm I UPDATED: August 30, 2017 at 5:56 am Despite claiming that no such plans existed, the City of Industry has been working quietly and out of public view on a multimillion -dollar proposal to build a massive solar farm amid more than 2,000 acres of undeveloped rolling hills along the shared borders of Los Angeles, Orange and San Bernardino counties. http: //www. sgvtri bune. com/2017/05/26/why-do es -c ity-of-i ndustry-want-thousands-o f -acre... 10/6/2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page 2 of 9 Over the past year, the politically tight -knit manufacturing city of about 200 ............................. residents spent more than $1 million on leases, reimbursements and studies aimed at building an estimated 440 -megawatt solar power facility, according to documents obtained by the Southern California News Group. The previously unreported scope of the potential project — along with the planning activity and taxpayer spending that has taken place — caught off guard the elected officials, nearby homeowners and conservationists who have long monitored proposals for the open space. As outlined in city documents, the solar farm would be among the biggest in Southern California, an unusually large-scale green energy project in the heart of a developed urban region. The facility could generate enough power to serve nearly a dozen UCLA campuses, or 10 percent of the power consumed by Los Angeles, the nation's second largest city, experts said. The news of the city's plans have intensified criticism of the manner in which Industry has controlled information about possible future uses of such a large and unique piece of publicly owned land. "If I was attempting to do what they are doing, I'd be run out on a rail," said Konradt Bartlam, city manager of Chino Hills, which has jurisdiction over a portion of the potential projects site. Industry officials said the contract met legal requirements. The city has not yet developed detailed plans to share with the public. Industry council members are committed to "protecting one of the largest swaths of open space remaining in our region for open and recreation space, as well as pursuing unobtrusive renewable and green energy opportunities," City Manager Paul Philips said in a statement Thursday. He said the city is engaged in due diligence and research "to learn what is possible." The solar farm proposal is the latest turn in a long battle over control and development of the tract of unspoiled ranchland, canyons and pastures that form a major respite from the surrounding suburban and industrial sprawl of the San Gabriel and Chino valleys and northern Orange County. http://www.sgvtribune.com/2Ol7/O5/26/why-does-city-of-industry-want-thousands-of-acre... 10/6/2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page 3 of 9 It also represents a benchmark in an ongoing political struggle over the future of historic and coveted pieces of land: the 2,450 -acre Tres Herinanos ranch, .......... currently controlled by an independent state panel, and a neighboring 3,800 acres of parcels owned by the City of Industry. Both properties lie miles outside Industry's city limits and partially within the boundaries of Diamond Bar, Chino Hills and unincorporated Orange County near Brea, along the 57 and 60 freeways. Tres Hermanos, a cattle ranch and one-time private hunting grounds owned for generations by wealthy Los Angeles scions, including the late Los Angeles Times Publisher Harry Chandler, was purchased by Industry's redevelopment agency in 1978 — before the state shut down such entities and put the land up for sale. Industry leaders have been trying to buy back the ranch so it can be added to the city s adjacent Termer Canyon holdings for use in the green energy project, records show. A state -created panel tasked with selling off Tres Hermanos has delayed a decision on Industry's $100 million offerbecause city officials haven't .............................. ........... disclosed their plans for the property. Panel members have indicated that ............................. they could consider other offers. Philips, Industry's city manager, said officials hope the state panel will approve their purchase rather than an alternative bid by a housing development investment group that wants to build 1,881 new tract homes. .............................. "We do not believe the region is best served with a multimillion -dollar housing development that will only further clog our roads and slow down our goods movement," he said. A spokeswoman for Industry could not provide details on Philips' suggestion that the project would include "open and recreation" space. Over the years, Tres Hermanos has served at times as a retreat for Industry's city leaders and their allies. Plans for Tres Hermanos Among the newly obtained city documents is a master ground lease signed in May 2016 with San Gabriel Valley Water and Power LLC, an entity created for ............................................................................................................................. the solar project. Industry officials and a company spokesperson have refused to disclose investors in the limited liability corporation. http://www.sgvtribune.com/2O l7/O5/26/why-does-city-of-industry-want-thousands-of-acre... 10/6/2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page 4 of 9 The ground lease includes the Tonner Canyon land already owned by Industry and states that if the city succeeds in acquiring Tres Hermanos, "then such property shall be added to, and become part of the property for the project. The lease extends up to 65 years and gives the water and power firm "the right of first refusal" to buy the land if Industry opts to sell. A separate professional services agreement with the design firm Kimley- Horn, executed last October, clarifies Industry's intention to put the solar farm on Tres Hermanos ranchland. "The Client is looking into the feasibility of constructing solar Photovoltaic Generation Facilities on 2,300 acres of undeveloped land, generally located in the hills of Chino Hills and Diamond Bar," the agreement states. It includes a map outlining the Tres Hermanos borders. Records related to the land show payments of more than $1 million on studies and consultants, including to a London-based law firm whose partners billed $1,200 an hour for 40 -hour work weeks. Michael Gregoryk, vice chair of the state oversight panel charged with disposing of Tres Hermanos, said in an interview that he was unaware of Industry's solar farm plans. "I guess they can do it, but they have to be the successful bidder," he said. "Our role as an oversight board is to find the highest and best use. "At least we got some information," he said. "It's kind of too bad that the city wouldn't share it with us. There is an unwillingness from them to share anything with the oversight board." Multiple experts in solar power, shown maps and aerial video of Tres Hermanos, said the ranch is the most viable space in the hills for the solar panels because it is sun -drenched, flat and less ecologically sensitive after decades of cattle grazing. The rest of the city's property in Tonner Canyon includes steeper terrain that may cast too much shade, they said. One megawatt of solar power requires about 100,000 square feet of space for solar panels, said Rajit Gadh, a professor of UCLA's Henry Samueli School of Engineering and Applied Sciences. The entire 440 -megawatt solar farm would require about 1,100 acres of land, or an area about 2 miles by 1 mile, he said. "That is assuming everything is a tidy fit," Gadh said. http://www.sgvtribune.coml2O l7/05/26/why-does-city-of-industry-want-thousands-of-acre... 10/6/2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page 5 of 9 Regional power supply The estimated output of the proposed solar farm would equal a large chunk of the 2,000 megawatts to 3,000 megawatts of electricity that county officials expect to seek for a new, government -backed power supply network, dubbed Los Angeles Community Choice Energy. The ambitious program, expected to start in 2018, will offer electricity to cities through an interagency joint Powers Authority being organized by L.A. County. Projections are that the program, partly intended to encourage development of more green energy, would serve more than 1 million residents and 200,000 businesses. The Industry project in Tonner Canyon could be a potential supplier, officials said. "That's a quarter of our total need," said Gary Gero, Los Angeles County s chief sustainability officer. "That's as big as they come." Gero's office shaped the guidelines for the new energy program. A board of directors, representing member cities, is expected to be formed later this year and decide where to buy power. Representatives of the Cordoba Corporation, a contractor running Industry's public utility and working on the Tres Hermanos project, met with Gero in March to learn more about the program, Gero said. But Cordoba officials didn't raise the possibility of selling electricity to Community Choice, he said. Industry began expanding its public utility last year, as activity on the solar project picked up, records show. Under the terms of the ground lease, Industry would be paid up to $4 million a year by San Gabriel Valley Water and Power. An update to the lease last June would allow Industry to purchase all of the energy produced. Even if Industry does not sell to Community Choice, the solar farm could benefit the region. If the industrial city went 100 percent green with power from the solar farm, it would help the environment and reduce electricity costs, Gero said. "You would be saving an awful lot and you would be reducing a lot of greenhouse gas emissions," he said. http://www.sgvtribune.com/2017/05/26/why-does-city-of-industry-want-thousands-of-acre... 10/6/2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page 6 of 9 Hydroelectric alternative City documents show that, if the solar project doesn't proceed, Industry officials would consider allowing San Gabriel Valley Water and Power to construct an 89 -billion -gallon reservoir and hydroelectric dam. The project would generate between 50 and 75 megawatts and take up more than 2,000 acres of land. The possibility of a power -generating reservoir in Tonner Canyon has cropped ......................... uP repeatedly for decades, ever since Industry first bought Tres Hermanos. Neighboring cities, particularly Brea, have opposed that idea, noting the property is near an earthquake fault. Brea leaders have warned that flooding from a dam failure could threaten Orange County residents. "We want to have a seat at the table as to what is going on," said Bill Gallardo, Brea's city manager. "We are absolutely opposed to anything that puts our residents in harm's way." Officials in the dark City leaders in Diamond Bar, Chino Hills and Brea have largely pieced together what they know about the future of Tres Hermanos from news reports, public records requests and Industry s public meetings. Orange County Supervisor Shawn Nelson, whose district includes Brea, said Industry hasn't yet shared their plans with county officials. But he said he is generally likes the idea of Industry offsetting its carbon footprint. In Los Angeles County, representatives of area Supervisor Janice Haws office have toured the land. In a statement, Hahn said she hopes the open space will be protected "to the greatest extent possible for the preservation of wildlife sanctuary and the enjoyment of all." In Chino Hills, City Manager Bartlam and his staff said they resorted to filing dozens of public records requests with Industry city hall because officials there refused to discuss their plans for the hills. Industry would have to submit plans to Diamond Bar and Chino Hills for any public infrastructure project in Tres Hermanos because current zoning doesn't permit utility projects. http://www.sgvtribune.com/2017/05/26/why-does-city-of-industry-want-thousands-of-acre... 10/6/2017 Why does City of Industry want thousands of acres of ranchland in Chino Hills and Diam... Page 7 of 9 Bartlam said he was surprised to learn from Industry documents that the city has begun work on a draft environmental impact study for the solar project. He said Chino Hills would likely reject such an assessment outright because, like most cities, it oversees environmental review contractors, rather than allowing a project applicant to hire such analysts. "They have tried to paint this picture of their intent, but by the records they've produced, it is anything but open space," Bartlam said. "From a public policy standpoint, what they are doing is wrong." Industry hasn't held public hearings on the San Gabriel Valley Water and Power ground lease, which was signed last May, and includes one of the first references to a solar farm, records show. City records aren't clear on when or how city council members agreed to enter into the lease. When Southern California News Group asked for clarification, City Attorney Jamie Casso pointed to a Feb. 11, 2016 agenda for the City Council. However, the agenda lists only a closed -session discussion about "significant exposure to litigation" related to "two potential cases." It doesn't mention the nature of the potential litigation, or the parties involved. Casso declined to elaborate on the legal threat but said he and the city manager were given direction to resolve the matter. He said that complied with the requirements of the state's open government laws. Kelly Aviles, an attorney who has challenged governmental agencies for their handling of similar closed -door decisions, said a city generally has to be more specific in identifying the nature of the legal threat and the parties involved. Aviles added that leases of government property normally involve a separate and specific approval by elected officials even if it is related to litigation. But both Aviles and Terry Francke, general counsel for Californians Aware — a nonprofit group dedicated to government transparency — also said that the statute of limitations would have expired for criminal charges or civil remedies, as more than a year has passed. Editor's note: This story has been updated to reflect the correct amount of space needed to produce 1 megawatt ofsolarpower. http://www.sgvtribune.com/2O l7/O5/26/why-does-city-of-industry-want-thousands-of-acre... 10/6/2017 Industry meets with Tres Hermans neighboring cities to discuss solar plant proposal — Sa... Page 1 of 6 LOCAL NEWS 8.2 Industry meets with Tres Hermanos neighboring cities to discuss solar plant proposal This Nov. 7, 2016 staff file photo shows Longhorn cattle sunbathing at Tres Hermanos Ranch, a 2,450 -acre preserve owned by City of Industry, between Diamond Bar and Chino Hills. 0 COMMENTS http://www.sgvtribune.com/2017/08/03/industry-meets-with-tres-hermanos-neighboring-ci... 10/6/2017 Industry meets with Tres Hermanos neighboring cities to discuss solar plant proposal — Sa... Page 2 of 6 By JASON HENRY I jhenry@scng.com and STEVE SCAUZILLO sscauzillo@scng.com I Pasadena Star News PUBLISHED: August 3, 2017 at 11:04 pm I UPDATED: August 30, 2017 at 5:29 am At a meeting with representatives from four surrounding cities, City of Industry City Manager Paul Philips broke the silence about the city's plans for developing Tres Hermanos ranch, confirming publicly for the first time that the city is pursuing a massive solar farm on the property. Philips met with city managers or executive staff from Brea, Diamond Bar, Chino Hills and Walnut along with State Sen. Josh Newman, D -Brea, at a closed -door meeting July 27 at Red Restaurant at Pacific Palms Resort in Industry. Those in attendance said Philips confirmed the city wants to erect a solar energy plant consisting of thousands of ground-based photo voltaic panels to be placed on the 2,450 -acre ranch, which is located partially in Diamond Bar ........................................................ and in Chino Hills, on the border of Los Angeles, San Bernardino and Orange ........................................................................................................................................................................................................................................... counties. The city has offered to buv the land for $100 million from its former redevelopment agency during a liquidation process ordered by state law. Although discussed in a contentious meeting in January, sale of the property has not yet been approved by the county oversight board in charge of selling off assets. The delay, compounded by the previously unreported scope of the potential project — along with the planning activity and taxpayer spending that has taken place since March 2016 — has caught off guard elected officials, nearby homeowners and conservationists, who have long monitored proposals for the vast swath of open space. While some at the July 27 meeting described Philips as not very forthcoming, he did not deny that the city is moving forward with plans for a 444 -megawatt plant, according to interviews with two in attendance. Experts in the solar field said the amount of energy would equal 10 percent of all the electricity consumed by the city of Los Angeles. http://www.sgvtribune.com/2017/08/03/industry-meets-with-tres-hermanos-neighboring-ci... 10/6/2017 Industry meets with Tres Hermans neighboring cities to discuss solar plant proposal — Sa... Page 3 of 6 Newman, who asked for the meeting to bring himself and surrounding cities up to date on the project, said it started a dialogue and could possibly allay concerns that the industrial city of 200 people is not being transparent. "The consensus was that 444 megawatts is a very large project. So, the questions were what would it look like, where would it be sited," Newman said. Philips, in a prepared statement, wrote on Thursday that pursuing a solar project was an option, but not a sure thing since the city has not secured the property. "The city has always maintained that we are interested in a possible solar project as well as open space and recreation space," he wrote. Konradt Bartlam, city manager of Chino Hills, said Philips mostly repeated the city line, that there would be a public use and some open space. Prior to the meeting, Bartlam had a touch time getting Philips to return phone calls about the project. "He did not dispute the solar farm project, and he did not dispute the size," Bardam said. Newman said he was told much of the work is still in the preliminary stage. Philips confirmed that if a solar project were built, it would be in Tres Hermanos, not in Tonner Canyon, land the city owns south of the ranch. Tres Hermanos is a cattle ranch consisting of dusty flatlands, some rolling hills and a small reservoir east of the 57 Freeway within the cities of Diamond Bar and Chino Hills. He told the group that the City of Industry would not have to grade the property to install the solar panels and that the project would cover about 20 percent of the 2,450 acres. Bartlam said he didn't think that was possible and a project that size would have to span about 1,000 acres or about 41 percent of the Tres Hermanos property. http://www.sgvtribune.coml2O l7/08/03/industry-meets-with-fres-hermanos-neighboring-ci... 10/6/2017 Industry meets with Tres Hermanos neighboring cities to discuss solar plant proposal — Sa... Page 4 of 6 He called out Philips, who said developers interested in buying the land had proposed as many as 10,000 homes. But Bartlam said Chino Hills' general plan, or blueprint for development, would allow a maximum of 675 houses, and Diamond Bar's general plan calls for about 500 maximum, for a total of 1,175 homes. "7 said at the very least, he has been disingenuous with the community. He wasn't appreciative of that," Bartlam said. He said the meeting provided him some confirmation of plans that have never been revealed to the public. "That perhaps makes it a little more real. I still have some doubts about certain facts." Tags: Echo Code, Environment Jason Henry Jason Henry is a staff reporter for the San Gabriel Valley Tribune and Pasadena Star -News. He covers Pasadena, the Jet Propulsion Laboratory, Caltech and the City of Industry. Raised in Ohio, Jason began his career at a suburban daily near Cleveland before moving to California in 2013. He is a self -identified technophile, data nerd and a wannabe drone pilot. The 2011 graduate of Bowling Green State University likes to shock his city friends by sharing his hometown's population. 9 Follow Jason Henry @JasonMHenry SPONSORED CONTENT The Best Way to Buy New Tires: 3 Things to Know Before By Chevrolet Certified Service Tires are one of your vehicle's most important safety and performance features, but if you're like many people, you... http://www.sgvtribune.com/2017/08/03/industry-meets-with-tres-hermanos-neighboring-ci... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 1 of 10 8.3 LOCAL NEWS How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch By JASON HENRY Ijhenry a@scng.com and STEVE 0 COMMENTS SCAUZILLO I sscauzillo@scng.com I Pasadena Star News PUBLISHED: August 5, 2017 at 9:05 pm I UPDATED: August 30.2017 at 5:38 am The City of Industry has quietly put more than $9 million in public funds at risk as it pursues an ambitious and uncertain proposal to develop a sprawling solar farm in the open hills connecting Los Angeles, Orange and San Bernardino counties. The spending, in the form of advances to a private energy firm formed last year, has steadily increased despite extended delays in securing key property for the project, warnings that needed zoning changes aren't guaranteed and questions raised by the city controller about reimbursements requested by the company. http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 2 of 10 Authorization for the outlays came in closed -door City Council sessions that weren't always clearly reflected in official meeting minutes, according to interviews and a review by Southern California News Group. And an initial cap on spending for the solar project was recently doubled to $11.5 million, city officials confirmed. If the project fails to proceed, the insular, business -centric town with fewer than 100 voters could lose its investment in the proposed 444 -megawatt power .............................................................................................. generating array envisioned for ranchland and canyons in the Chino Hills area east of the 57 freeway, according to an attorney for the city's utility commission. `"that's the risk," said the panel's lawyer, Tony Bouza. Bouza argued the city is taking a calculated chance. The deal struck with San ............ Gabriel Valley Water and Power LLC favors the city, he said, because Industry ................................................................................................................ will recover both its upfront advances and up to $4 million a year for the life of the 65 -year land lease, if construction begins on the solar farm and it succeeds as envisioned. Still, in a unusual public criticism from within Industry's City Hall, one council member has warned the multimillion dollar outlays could be a "waste of taxpayer money" if Industry's bid to purchase a historical, 2,450 -acre Chino Hills ranch, Tres Hermanos, is rejected. Solar experts say sun -drenched Tres Hermanos, which was owned by Industry's former redevelopment agency for decades but is now being liquidated by the state, is the ideal location for photovoltaic panels because the land is flat and has few of the environmental concerns related to contiguous parcels already owned by Industry. "Too much money is being spent without having secured the land," said Councilman Newell Ruggles, who has pushed for greater financial transparency in the city and echoed the city controller's concerns about billings submitted for the solar farm project. Elsewhere, state State Sen. Ed Hernandez, D -West Covina, has asked for a fuller accounting of public spending on the solar farm project, proposed outside Industry's city limits. Hernandez made the request in a letter to former state attorney general William Lockyer, who was appointed to monitor a series of financial reforms in Industry following a highly critical state ..................................................... .............. controller's audit of the city s contracting and spending practices. .................................................... http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 3 of 10 The senator, whose district includes Industry, said news reports about the solar project have raised questions that "go to the heart of the (audit's) findings and the key reforms" state and local officials agreed were necessary in Industry. In a statement, City Manager Paul Philips said the city uses best management practices consistent with other municipalities and verifies the city receives the services for which it has paid. The proposal The solar farm would spread across open pastures and hills in one of the more prized remnants of Southern California urban open space, and is one of the largest green energy projects proposed for the region. Some estimates suggest Industry would need at least 1,000 acres for the panels and that the energy production could equate to 10 percent of Los Angeles' power needs. On Thursday, Industry confirmed for the first time that Tres Hermanos is central to their solar ambitions, but officials stressed the details and scope of the project remain uncertain because they have yet to acquire the ranch. If purchased, Tres Hermanos would be added to more than 4,000 acres of land already owned by Industry in the adjacent Tonner Canyon area. Industry officials and some environmentalists say a solar farm is a smart and needed alternative to other potential uses, which could include construction of hundreds — and perhaps even thousands — of new homes. Industry ................................................ officials have also said the project could help conserve open space and recreational land. Philips recently told neighboring city leaders he believed Industry may only need to use about 20 percent, or 500 acres, of the property for solar panels. It remains unclear who could benefit financially from the project. Ambient Communities, a San Diego company with a background in housing, ..................................................-.................. has been hired to manage the private energy firm behind the deal. But Ambient and San Gabriel Valley Water and Power have declined to identify the owners of the company formed in March 2016. http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 4 of 10 Industry's city leaders do not know who the investors or members of the company are, but a spokeswoman said they will request more information if the proposal moves forward. A review of city records indicates the firm was chosen without a competitive proposal process, which the city attorney said was not required in this instance. Ties to a developer and Democrat donor A La Jolla real estate developer, William Barkett, has served as a point person for the energy firm's interactions with the city, including on financial matters and requests for funds, according to interviews and city documents obtained under the California Public Records Act. Barkett declined an interview request. He did not respond to inquiries about the ownership of the private firm, or whether he is shareholder. In an email, he described himself as an unpaid San Gabriel Valley Water and Power adviser with a "very limited" role. He said he brings 35 years of development experience, domestically and internationally, to the project, as well as familiarity with the area. "My knowledge and expertise regarding the Tres Hermanos property spans almost a decade," Barkett wrote. "Information sharing is provided at no cost to bring key stakeholders up to date." Barkett and limited liability companies he created have defaulted on a number of development loans. Lenders have won judgments against him and his companies for more than $50 million in the last decade, according to court records. In an email, he attributed the setbacks to the recession and said he is working through the repayments. The son of a once -prominent Central Valley Democratic Party leader, Barkett and his companies have donated more than $450,000 to candidates and political committees throughout California since the early 2000s, records show. http://www. sgvtribune. com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 5 of 10 That included $70,000 to Lockyer, the former attorney general now working as Industry's reform monitor. "It would be hard to find a major Democrat Barkett hasn't donated to," Lockyer said in an interview. Barkett's family members have also been appointed to prominent committees by Gov. Jerry Brown. In 2013, Barkett was one of several dozen business people who accompanied Brown on a trip to China. Also that year, he led a group of Industry representatives to Sacramento to meet Ken Alex, the director of the Governor's Office of Planning and Research, to discuss using Tres Hermans as a solar farm and possible reservoir, city records show. Alex confirmed he met Barkett and city representatives in 2013, but said he has not had contact with anyone about the current solar project proposal. The state capital meeting came during a period when Industry officials considered and then ultimately rejected a proposal for a smaller Tres Hermanos solar farm put forward by another Barkett-affiliated company, Industry Water and Power LLC, records show. The city ended an exclusive development agreement with that firm after an energy consultant criticized the deal, saying the company overestimated the city's future returns and underestimated the risks. The consultants warned that Barkett's "sizable management fee" added to the city's burden, city records show. Industry's leaders did not respond to requests for details concerning how San Gabriel Valley Water and Power, with Barkett as an adviser, was chosen to develop the latest proposal. City Attorney Jamie Casso said the current agreement was negotiated in a closed session as result of threatened litigation, but declined to elaborate. San Gabriel Valley Water and Power and Barkett's experience developing solar projects is unclear. Barkett did not respond to questions about his background in the energy industry. Officials in Chino Hills, who control the zoning on part of the Tres Hermanos property, say they have been researching parties associated with the project and found no records suggesting Barkett has a track record in large solar projects. http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 6 of 10 If a city wants to build a solar farm, they should "find the most expert green energy company out there," said Konradt Bartlam, Chino Hills' city manager. A lack of tranparancy? Industry's bet on San Gabriel Valley Water and Power hinges partly on acquiring Tres Hermanos. But a state oversight board tasked with selling the land has delayed voting on Industry's $100 million offer for nearly eight . ......................................................................................... months. Members of the panel have demanded — and not yet received — ................................. details on Industry's plans for the land. Officials in Industry contend state law does not give the board the power to make such a request. Also, Chino Hills and Diamond Bar have jurisdiction over the ranchland, and neither city's zoning allows for a solar farm. Officials in those communities say they aren't necessarily opposed to the idea but have criticized Industry for a lack of transparency. City records don't offer a clear picture of San Gabriel Valley Water and Power's assets and company officials declined to provide additional financial details about the firm. To reduce the city s financial risks of the solar project, Industry's agreement with the company includes provisions intended to protect the city if the project runs into trouble. San Gabriel Valley Water and Power is liable for any city costs associated with collecting payments due to Industry, the lease says. Another provision prevents a lender from taking control of the land in the event of a default by the company, although the agreement's rights and obligations can be transferred to a lender, with Industry's approval. Payments questioned A review of 1,700 pages of city documents related to the San Gabriel Valley Water and Powers dealings with Industry, including ledgers submitted to support millions of dollars in city -backed expenditures, shows some money went toward studying potentially protected species in the project area, including the burrowing owl, that could complicate Industry's plans. http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 7 of 10 Others records reference a draft Environmental Impact Report that was scheduled to be completed earlier this year. Thus far, Industry hasn't released the report or held public hearings on the study. Other city money went toward completing topographic maps and defining easements on the property, according to a city spokeswoman. The documents submitted to the city also support hundreds of thousands in payments to consultants, some with business ties to Barkett, who have been placed on retainer for the project, records show. City monies, which can only be spent on work related to the project, also are merged in the ledgers with deposits from an outside lender. Some of the payments listed were unrelated to Industry's solar farm, but properly segregated, the company says. For example, in the early months after the first city allocation of funds, several partially redacted entries indicate a total of $230,000 was "due to Wasco Investments LLC," a company started by Barkett in 2004. That company proposed a Kern County shopping plaza that ended in a court battle, according court records. According to ledgers the city provided, during that period, the company had a total of $640,000 available in that account, the bulk of it $500,000 from the city, with $140,000 added by an outside lender. Wade Hall, a principal at the company serving as the manager of San Gabriel Valley Water and Power, said the payments to Wasco were not connected to the Industry project. The ledger copies released by the city offer an incomplete picture of the energy firm's spending and use of taxpayer funds, he said. "It is one of many accounts that does many things," Hall said. "It is not an exclusive account for city funds." Tracking the total outlays for the solar farm project isn't easy based on spending records typically available to the public. City officials said San Gabriel Valley Water and Power payments are made via wire transfers, approved in closed -door council sessions, and not included in monthly financial reports publicly approved by city lawmakers. Obtaining total reimbursements for the projects requires submitting a special request to City Hall. http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermancs Ranch — San Gabriel ... Page 8 of 10 An internal voice of criticism Industry's city controller Susan Paragas repeatedly has criticized invoices submitted by Barkett, records show, even as millions have continued to flow to the energy company. Last year, she asked for a detailed accounting of the $9 million paid to the company. On Friday, Paragas said she still hadn't received the documentation for San Gabriel Valley Water and Power's expenditures, but expected to soon. City emails show she has complained that ledgers and other records provided to the city showed "only an accrual of outstanding invoices" rather than payments actually made to vendors. Paragas also expressed concerns about several invoices to other city employees and to an attorney working for the city's public utility, records show. Industry reviewed more than $100,000 in invoices after a reporter inquired about invoices on the letterhead of a law firm that had shut down a year before the work occurred. The city controller determined the invoices erroneously used the defunct law firm's letterhead and the work was performed by a former partner now acting as a project consultant. Recent invoices have been corrected as a result. Among Paragas' worries was that lack of proper accounting for solar project spending could revive criticisms raised by the state controller in last .yea's ............................ audit. .................. The city can't afford to be written up by its auditors for failing to get appropriate records justifying public expenditures, she warned in an August 2016 email to Bouza, the attorney for the city utility commission. "A majority of the invoices are not acceptable the way they were submitted," she wrote. They "will fall into the findings of the State Controller's Office audit report that cited a lack of information reflected on invoices paid to contractors," she added. In a recent interview, Paragas said she remains committed to resolving the billing and accounting shortcomings on the project. "They're going to comply if they want to keep doing business with the city," she said. http://www.sgvtribune.com/2017/08/05/how-industry-could-lose-a-9m-bet-on-solar-farm-a... 10/6/2017 How Industry could lose a $9M bet on solar farm at Tres Hermanos Ranch — San Gabriel ... Page 9 of 10 Despite the ongoing issues, Industry�s City Council voted in a closed session in May to increase the cap on the advances to $11.5 million, after the company exceeded the original reimbursement limit of $5 million in less than a year. Councilman Ruggles said he wants the city to be more aggressive in tracking where the city's money is going. "I personally believe the bills need to be thoroughly audited by the city to make sure the services are being rendered," Ruggles said. So far, none of his colleagues has endorsed the idea. Tags: city council, Environment Jason Henry Jason Henry is a staff reporter for the San Gabriel Valley Tribune and Pasadena Star -News. He covers Pasadena, the Jet Propulsion Laboratory, Caltech and the City of Industry. Raised in Ohio, Jason began his career at a suburban daily near Cleveland before moving to California in 2013. He is a self -identified technophile, data nerd and a wannabe drone pilot. The 2011 graduate of Bowling Green State University likes to shock his city friends by sharing his hometown's population. V Follow Jason Henry anJasontdHenry SPONSORED CONTENT Why This Super -Busy Entrepreneur Makes 9Me' Time a Priority By Glamour GLAMOUR "And how checking out occasionally helps her slay the rest of her day." Produced by Glamour with Rodan + Fields. Steve Scauzillo http://www. sgvtribune.com/2017/08/05/how-industry-co u Id -lose -a -9m -bet -on -solar -farm -a... 10/6/2017 City of Industry's secrecy deserves challenges — San Gabriel Valley Tribune OPINION City of Industry's secrecy deserves challenges Commuters travel along Grand Avenue near Arnold Reservoir, part of Tres Hermanos Ranch, in this November 2016 file photo. (Photo by Watchara Phomicinda / Southern California News Group) By THE EDITORIAL BOARD I 0 COMMENTS opinion@Dlcingnews.com PUBLISHED: September 13, 2017 at 1:30 pm I UPDATED: September 18, 2017 at 3:09 pm We're pleased to see Chino Hills and Diamond Bar petition the state to block City of Industry's purchase of 2,450 acres of ranchland. Page 1 of 4 8.4 http://www.sgvtribune.com/2Ol7/O9/l3/city-of-industiys-secrecy-deserves-challenges/ 10/6/2017 City of Industry's secrecy deserves challenges — San Gabriel Valley Tribune Page 2 of 4 It's not that we necessarily think the sale should not go through. It's rather that we think that Industry's plans for the land known as Tres Hermanos Ranch should be challenged whenever possible — at least until Industry becomes more forthcoming about what it's up to, and stops acting like a secretive private company instead of the public agency that it is supposed to be. Tres Hermanos Ranch lies within the boundaries of Chino Hills and Diamond Bar, so they have a vested interest in the land. They're challenging what happened in an August meeting of the seven -member state oversight board tasked with selling off the ranchland. That board decided, by a 4-3 vote, that Industry would pay only $41.6 million for the land on which it plans to build a massive solar farm, even though the city earlier offered to pay the appraised value of $100 million. Chino Hills and Diamond Bar, in separate letters, asked the state Department of Finance to reject the sale, or to begin a 60 -day review to determine whether the sale is legal. The two cities argue that the discounted price amounts to a gift of public funds, and that they are being robbed of tax dollars that should flow from the sale of land within their boundaries. Diamond Bar's letter said it had lost $2 million because of the price cut, charged that the oversight board "violated its fiduciary duty" by not getting the highest price it could, and claimed Industry City Manager Paul Phillips' presence on the board constituted a conflict of interest. It was Phillips' motion that the price be lowered, saying Industry would attach a covenant restricting housing development but allowing public uses such as a solar farm. Industry refused for months to disclose its plans for Tres Hermanos Ranch until a Southern California News Group investigation uncovered a year's worth of work quietly done by a limited liability corporation. Some oversight board members said they learned of the project for the first time from that coverage. No city government should operate in secrecy. Unless Industry makes its plans for the land transparent, it should expect to be opposed at every turn. http://www.sgvtribune.com/2017/09/l3/city-of-industrys-secrecy-deserves-challenges/ 10/6/2017 City of Industry's $60 million discount on Tres Hermanos Ranch sale has state reviewing ... Page 1 of 6 8.5 LOCAL NEWS City of Industry's $60 million discount on Tres Hermanos Ranch sale has state reviewing decision Longhorn cattle sunbathe on Tres Hermanos Ranch. a 2,450 -acre preserve owned by City of Industry, between Diamond Bar and Chino Hills on Nov. 7, 2016. The property spans the two bedroom communities on the edges of Los Angeles, Orange and San Bernardino counties.(File photo by Watchara Phomicinda, San Gabriel Valley Tribune/SCNG) By JASON HENRY I jhenry@scng.com and STEVE SCAUZILLO I sseauzillo@scng.com I Pasadena Star News PUBLISHED: September 26, 2017 at 7:06 pm I UPDATED: September 28, 2017 at 9:26 am http://www. sgvtrib une. com/2017/09/26/state-stal I s-tres-hermano s -sale -be gins -rev iew-of-h... 10/6/2017 City of Industry's $60 million discount on Tres Hermanos Ranch sale has state reviewing ... Page 2 of 6 The state has launched a review of an oversight board's decision to sell 2,450 acres of ranch land to the City of Industry for $60 million less than the appraised value, a spokesman confirmed Tuesday. California Department of Finance spokesman H.D. Palmer said the review was initiated, in part, because the board's resolution approving the sale included a clause requiring the Department of Finance to sign off on the deal. "This is not a normal course of business," Palmer said. Becky Warren, Industry's spokeswoman, declined to comment on the state's review. The former Tres Hermanos ranch is 2,450 acres of rolling hills situated within ................................................ the cities of Diamond Bar and Chino Hills, near the intersection of Los Angeles, Orange and San Bernardino counties at the 57 and 60 freeways. Views of Tres Hormones, a 2,450 -acre ranch with rolling hills and a reservoir. (Photo courtesy Teresa Wang filo) The state forced Industry's redevelopment agency to put the land up for sale as part of the dissolution of redevelopment agencies statewide in 2012. http://W ww.sgvtribune.com/2017/09/26/state-stalls-tres-hermanos-sale-begins-review-of-h... 10/6/2017 City of Industry's $60 million discount on Tres Hermanos Ranch sale has state reviewing ... Page 3 of 6 Industry initially offered to pay up $100 million to keep Tres Hermanos. After ............................................................ months of delays, a state -mandated oversight board, in a split decision, voted to sell the land for $41.6 million in exchange for a covenant that would limit the use of the land to public facilities and open space in perpetuity. Two appointees of Los Angeles Supervisor Hilda Solis cast the deciding votes, along with Industry's two representatives, in the 4-3 decision. The Department of Finance's review examines whether the sale of the property follows state law and is line with a 2014 plan for disposing of the city s redevelopment assets, Palmer said. The Lang Range Property Management Plan governing the sale values Tres Hermanos between $85.7 million to $122.5 million, according to the document. State law requires the land to be sold "expeditiously and in a manner aimed at maximizing value." Officials in neighboring Diamond Bar and Chino Hills have said the sale does not maximize the value and shortchanges the taxing agencies that would benefit from the proceeds. The state finance department's redevelopment experts have 40 days to examine the sale, but the process is not expected to take that long, Palmer said. Immediately after the oversight board's vote, the city managers of Diamond Bar and Chino Hills wrote letters urging the Department of Finance to reject ....................................... the deal, saying the price amounts to a gift of public funds. Palmer declined to say whether his department has the power to stop the sale. Industry has refused to provide details about plans to build a 444 -megawatt ................................................ solar farm on more than 900 acres of the land, as officials say they're not far ................................ enough along in the development process. Industry has spent more than $10 million on the energy project, with a dozen .................................................................... contractors carrying out studies on the property even before the sale was approved, according to documents obtained in a public records request. The records show the city is working on an Environmental Impact Report, a study that would require officials to know the project's specifications. The city councils in Diamond Bar and Chino Hills have since announced plans to sue the City of Industry, the Department of Finance and the oversight board over the decision. http://W wv.sgvtribune.com/2017/09/26/state-stalls-tres-hermanos-sale-begins-review-of-h... 10/6/2017 City of Industry's $60 million discount on Tres Hermanos Ranch sale has state reviewing ... Page 4 of 6 "It seems more clear, almost daily, that Industry intends to bully their way through and do whatever they please, as opposed to what the communities desire for the property," said Konradt Bartlam, Chino Hill's city manager. Industry also did not disclose its plans for property to Diamond Bar or Chino Hills before the sale was approved. Bardam said developers buying land in the city are required to outline their projects, so the city can verify if it is in compliance with zoning codes. When Industry finally sent details to the cities earlier this month, the plans were still too vague, officials in both cities said. Neither city's zoning for Tres Hermanos allows a solar farm. Both have zoned their portions for a combined total of about 1,200 homes. Through the lawsuits, Chino Hills hopes to force Industry to "follow the law," Bartlam said. Chino Hills City Attorney Mark Hensley said officials there believe Industry repeatedly violated the law through its secretive work on the solar farm. Industry officials approved lease agreements for the solar farm in closed session in what Hensley called a potential violation of the state's open government laws. They appear to have moved forward with the project without meeting the California Environmental Quality Act too, he said. "There's a lot of documents and there's a lot of things that they have done. We're reviewing all of those very carefully," Hensley said. Chino Hills voted unanimously Sept. 12 to file a lawsuit against those involved in the sale following a closed session meeting. The following week, Diamond Bar's City Council set aside $250,000 and hired a special legal counsel for its own brewing legal battle. Neither has filed a complaint, but both expect to do so in the coming months, according to officials. They may delay the filings until the state makes a decision on their review. Diamond Bar City Manager Dan Fox said he believes state law gives the Department of Finance power to reject the sale. "We hope they take a close look at it, particularly the change in the offered price versus the sales price," he said. http://www.sgvtribune.coml2O l7/09/26/state-stalls-tres-hermanos-sale-begins-review-of-h... 10/6/2017 City of Industry's $60 million discount on Tres Hermanos Ranch sale has state reviewing ... Page 5 of 6 Both cities estimate they could lose millions in property taxes from the discounted price. In a statement provided by the city spokeswoman, Industry officials said they were baffled by Diamond Bar and Chino Hill's lawsuits and questioned why they would spent taxpayer dollars to oppose "open space, recreation and public purpose" uses. The unattributed statement questioned Diamond Bar and Chino Hill's intentions for the property. Industry has used the two cities' current zoning for the property to claim they would let a developer build up to 10,000 homes. Bartlam, Chino Hill's city manager, sees the heavily discounted price as a missed opportunity. He believes Diamond Bar and Chino Hills could have bought the land and turned it into parks for $41.6 million had they been allowed to bid. "I would think the community would be better off having the cities of Chino Hills and Diamond Bar own it, than the City of Industry," he said. Tags: San Gabriel Valley, Top Stories IVDB, Top Stories OCR, Top Stoi Jason Henry Jason Henry is a staff reporter for the San Gabriel Valley Tribune and Pasader News. He covers Pasadena, the Jet Propulsion Laboratory, Caltech and the Cit Industry. Raised in Ohio, Jason began his career at a suburban daily near CleN before moving to California in 2013. He is a self -identified technophile, data n wannabe drone pilot. The 2011 graduate of Bowling Green State University likes to shock his by sharing his hometown's population. V Fallow Jason Henry @Jai Steve Scauzillo Steve Scauzillo covers environment and transportation for the Southern Califi Group. He has won two journalist of the year awards from the Angeles Chapte Sierra Club and is a recipient of the Aldo Leopold Award for Distinguished Ed- Writing dWriting on environmental issues. Steve studied biology/chemistry when atten Meadow High School and Nassau College in New York (he actually loved botany!) and then m social ecology at UCI until switching to journalism. He also earned a master's degree in media State Fullerton. He has been an adjunct professor since 2005. Steve likes to take the train, suk bicycle - sometimes all three - to assignments and the newsroom. He is married to Karen E. http://www.sgvtribune.com/2017/09/26/state-stalls-tres-herntanos-sale-begins-review-of-h... 10/6/2017 ATTACHMENT ATTACHMENT 9 DOCUMENTS RELATING TO CONSULTING SERVICES FOR A PLANNED SOLAR FARM ON TRES HERMANOS RANCH 9.11 LIST AND DESCRIPTION OF CONSULTANTS 9.21 SUSTAINABLE WATER AND POWER LLC INVOICE FOR ENVIRONMENTAL CONSULTING SERVICES 9.31 TERRACON GEOTECHNICAL PROPOSAL 9.41 HELIX ENVIRONMENTAL PLANNING INVOICE FOR DRAFT EIR 04/21/2017 FRI 7:44 FAX SAN GABRIEL VALLEY WATER & POWER ENT111EMENT CONSULTANTS: 0002/003 9.1 Ambient Communities- Total Environmental process including negotiating sub -contractor agreements. Manage hiring of vendors. Managing of biological and construction scheduling and costs. MR completion. DAMG— Provide advice regarding project financing, budget financing, contract negotiation, preparation of Executive Summary on project financing as well as proformas. Negotiating of all financing with construction and bridge lenders as well as negotiate SGVW&P and City of Industry agreements to assure structuring of agreements financeable in the current markets. JGM— Consulting, Environmental Surveying, Civil Engineering, Planning Services and related out of pocket services. Survey, Topography, easement placing property markers. Field Survey control measurements to control record data property lines and boundary (Cadestral) Network) with respect to the aerial survey control points. Construction management and advice. ' ZGlobal — "Pre -Application" to SCE; IR studies; develop and submit Interconnection Requests (IRs) to the CAISO and S.EC, Blue Oalc— Geotechnical Engineering and Exploration Services: Soil Borings, Field ilectrical Resistivity, Percolation Testing, Evaluation & Suitability for Slope Stability, Thermal Resistivity Testing, Corrosion Laboratory Testing, Pile Installation, Pile Testing, Pile Extraction. ICimley Horn — Pre -design site visit, desktop research and Base map preparation, preliminary civil engineering, conceptual site plan and preliminary energy modeling. -including, but not limited to, surveying services, environmental & biological services, geotechnical analysis, entitlement and permitting coordination (incl. CEQA and FEMA), final engineering design, conduit design and layout, utility coordination. Terracon — Geology, boring soil analysis Solar Engineering Consultants — Specializing in solar energy and storage projects. Early stages of siting and interconnection. Expertise throughout the commercial and industrial and utility scale market segments, working with a wide range of solar and energy storage technologies. Helix — Preparation of draft MR. Coordinating biology studies to engineering layouts and studying impacts. Studying visual impacts to neighbors and corresponding open space. Mitigate analysis and solation. Kitehell — Construction company, advisor. Arcadia — Independent technical, environmental, engineering and business advisory support services on the development of this project which mayinclude, but not limited to business case development, Development management, delivery structure advice, operation and maintenance advice, tender's support, statutory compliance advice and/or technical and environmental due diligence. 04/21/2017 FRI 7,45 FAX 12003/003 LAWFIRMS: Downey Brand — Environmental and water attorneys. Dechert— General Corporate advice, financial structure, tax advice. Day Carter & Murphy — Interconnection Regulatory Issues. Orrick Herrington —Bond Counsel, preparation/review the procedures for issuance of bonds, notes or other evidence of indebtedness and to provide an expert legal opinion with respect to the validity thereof. To provide an objective judgment on the matters addressed rather than the partisan position of an advocate. Dongell Lawrence — Governmental relations with regard to ISO and potential issues with public utilities commission. Advising on interconnection and best possible paths toward approvals. INTERNAL CONSULTANTS: Randall MacDougall — Direct and assess entity assets and opportunities in renewable energy, water retention and nature conservancy. Oversee Modeling of project finances and project architecture. Asset management monitoring and improving the existing portfolio and analyzing potential investment opportunities. Reviewing consultants' and other service providers' plans and proposals. Forward Realty — Real estate advice. Management of consultants. Consulting with regard to land use, potential customers and products to be implemented. Brooks Kincaid —Modeling project finances, modeling project architecture, coordinating activities w/ Ambient Communities and other consultants, researching component technologies, corresponding w/ tech manufacturers, Review of consultants' and other service providers' plans and proposals, providing general project management services. Sonia Wolcott— Organizational filing; updating' inner office bookkeeping; tracking of permits. Dennis & Dennis —Accounting- general ledger; quarterly tax filing; State and Federal. compliance 9.2 Sustainable Water and Power LLC 179 Calle Magdalena Ste 201 Encinitas, CA 92024 US (760) 230.1000 khurd0amblent.emall INVOICE BILL TO San Gabriel Valley Water and Power LLC 300 Sllverado St La Jolla, CA 92037 United Slates ACTIVI FV Consulting Monthly Consulting Fees - 2/1/17 •2128/17 FEB 2017 AMMIINI'TIE$ INVOICE # 1010 DATE 0210112017 DUE DATE 02/25/2017 TERMS Due on receipt 01Y HA"IE AMOUNT 1 110, 0 00.00 110,000.00 Total environmental process Including negotiating all sub -contractor agreements. Manage hiring of vendors Managing of all biological and construction scheduling and costs EIR completion r Ceneelllne Feee•FEe2o17 BALANCE DUE $110,000-00 9.3 1 1 rerrecon January 6, 2017 / BLUE OAK y" \ 1560 DrewAvenue Davis, CA 95618 Attn: Mr. Sam Laughlin, PE P: (530)747-2026 x227 E: samOblueoakenemv.com Re: Proposal for Geotechnical Engineering Services Proposed Tres Hermance Solar Project Tonner Canyon Road between Haskell Road and Chino Hills Parkway Los Angeles and San Bernardino County, California Terracon Proposal No. P60165282 Dear Mr. Laughlin: Terracon Consultants, Inc. (Terracon) appreciates the opportunity to submit this proposal to provide geotechnical engineering and pile load testing services forthe proposed solarfarm known as the Tres Hermanos Solar Project located between Diamond Bar and Chino Hills, California. The purpose of our services will be to perform geotechnical exploration and pile testing services in collaboration with Blue Oak Energy. This proposal outlines our understanding of the project and scope of services and provides our fees for the services to be performed on the site. A. PROJECT INFORMATION ITEM I DESCRIPTION The site is located between Diamond Bar and Chino Hills, California. The project site is an irregularly shaped parcel located in the vicinity of Tonner Location Canyon and extends approximately 1.4 miles north of Grand Avenue to 2 miles south of Grand Avenue. The site has a total acreage of approximately 2,640 acres, but the proposed solar array fields occupy and area of approximately 900 acres. The site is located in rolling hills topography. The proposed arrays are Existing topography located within the hills and valleys through the site. Based on available topographic maps, the proposed arrays are generally located on slopes with grades flatter than 4H (horizontal): 1V (vertical). Terracon Consullanls, Inc 1421 Edinger Avenue, Swle C Tustin, California 92780 P 194912610051 F 19491261 6110 lerracon.com Proposal for Geotechnical Engineering Services 1 rerraeon Proposed Tres Hermanos Solar Project Los Angeles and San Bernardino County, California January 6, 2017 Terracon Proposal No. P60165282 ITEM DESCRIPTION The proposed solar farm Is to be developed using fixed tilt racking systems in the PV array field. These systems will be supported on driven steel piles (W -section). The project will also Include invertors and self- contained electrical equipment. It is our understanding that two substations are planned for this site and Project Descriptions an overhead transmission line is proposed to connect the two substations. The substations are anticipated to have transformers, bus structures and end towers supported on shallow foundations and drilled piers. The overhead transmission line is anticipated to be either direct embed or reinforced concrete drilled shaft foundations. The total length of the proposed transmission line alignment is approximately 2'h miles. Foundation Loads Blue Oak will provide the racking system and anticipated substation loads. Maximum deflection criteria for lateral and axial loading conditions at the Foundation Criteria ground surface or at the top of pile will be provided by Blue Oak for the specific racking system to be used. It is our understanding that along the base of the canyon in the southern Infiltration Systems portion of the site (south of Grand Avenue), basins are proposed to retain stormwater runoff. Based on our review of the State of California Seismic Hazards Zones map (CGS) and County of San Bernardino Geologic Hazard maps the project site is not located within an Alquist-Priolo Earthquake Fault Zone or County designated fault zones. Anticipated Seismic However, portions of the project site (primarily within the valleys) are Hazards located in liquefaction hazard potential zones. Furthermore, multiple slopes within the project site are mapped for earthquake -induced landslide hazards by both the CGS and County maps. Should any of the above information or assumptions be inconsistent with the planned construction, please let us know so that we may make any necessary modifications to this proposal. S. SCOPE OF SERVICES Our understanding of the scope of services required for this project is based on our conversations with Blue Oak Energy and our experience with solar facilities in the vicinity of the project site. Based on our review of this information, and our understanding of the requirements, the services to be provided by Terracon are summarized in the following paragraphs. Resourceful . Responsive . Reliahle Proposal for Geotechnical Engineering Services 1 rerraeon Proposed Tres Hermance Solar Project Los Angeles and San Bernardino County, California January 6, 2017 Terracon Proposal No. P60165282 Geotechnical Enolneerincl Exploration Services Soil Borings: In order to assess the subsurface conditions, we recommend that exploration criteria meet a minimum of 1 exploration point per approximately 20 acres. Therefore, we propose to perform a total of 44 soil borings to an approximate depth of 15 feet below the ground surface (bgs). In addition, two borings will be drilled at each substation location (four borings total) to approximate depths of 20 and 50 feet bgs. The deep boring will be utilized for liquefaction potential evaluation. Furthermore, four (4) borings will be drilled along the proposed transmission line alignment to an approximate depth of 50 feel. Borings will be extended to the proposed depths unless auger refusal is encountered prior to full boring advancement. If augur refusal is encountered within the upper 10 feet, we will conduct one offset boring to further assess the refusal materials. Test samples will be collected during drilling in general accordance with the appropriate ASTM methods. Standard Penetration Testing (SPT) and sampling using either standard split -spoon or Modified California samplers will be performed at approximately 2-Y2 Toot intervals for the upper 10 feet followed by samples at 5 -foot intervals to the maximum depths drilled. Bulk samples will be collected from the upper soils of each boring. In addition, we will observe and record groundwater levels during and after drilling. Once the samples have been collected and classified in the field, they will be placed in appropriate sample containers for transport to our laboratory. Field Electrical Resistivity: Soil electrical resistivity data will be obtained in accordance with ASTM G57 Wenner Four Electrode Method at 24 locations at the project site. We will utilize electrode "a" spacings of 2, 4, 6, and 8 feet at 22 locations, and "a" spacings of 2, 4, 6, 8, 12, 20, 30, 50, and 100 at the two substation locations. Two perpendicular survey lines will be perfromed at each location. If alternative spacings are desired. Terracon should be notified. Percolation Testing: Based on the preliminary maps provided by BOE, ten (10) percolation tests will be performed to approximate depths of 5 to 10 feet bgs across the southern portion of the site, in locations to be determined by the Civil Engineer. A 2 -inch thick layer of gravel will be placed in the bottom of each boring after the borings are drilled to investigate the soil profile. A 3 -inch diameter perforated pipe will be installed on top of the gravel layer in each boring. Gravel will be used to backfill between the perforated pipes and the boring sidewall. The borings then will be filled with water ReeeUrRehil . Responsive .- Reliable 3 Proposal for Geotechnical Engineering Services lrerraeon Proposed Tres Hermanos Solar Project Los Angeles and San Bernardino County, California January6, 2017 Terracon Proposal No. P60165282 for a pre-soak period. At the beginning of each test, the pipes will be refilled with water and readings will be taken at a standardized time intervals. Evaluation and Suitability for Sloae Stability: Based on the nature of the proposed development, which is comprised of non -human occupancy and minor structures it is unlikely that slope stability analysis will be required for the new development. Therefore slope stability analysis will not be performed. Terracon should be notified, if necessary, to include this service for an additional fee. Thermal Resistivity Testing: We recommend performing eight (8) laboratory thermal resistivity tests on soil samples collected from the upper 3 feet of onsite soils. Samples obtained from eight (8) representative borings, including one at each substation, will be tested to 90% relative compaction of the maximum dry density according to ASTM D-1557 (Modified Proctor). Terracon should be notified if thermal dry - out curves are required for different relative compaction values. Geotechnical Laboratory Testing: The samples will be tested in our laboratory to determine physical engineering characteristics. Laboratory testing will be performed under the direction of a professional engineer and may include visual classification, moisture content, dry density, sieve analysis, Atterberg limits, R - value, and consolidation/collapse potential, as appropriate. The actual number of tests performed may vary and will be determined based on the type of soils encountered and the quantity and quality of samples obtained. Corrosion Laboratory Testing: Laboratory corrosion testing sets Including pH, sulfides, sulfates, chlorides, and Oxidation - Reduction potential will be performed on 23 samples collected from the upper 3 feet within 23 test boring locations. Pile Load Testing Services Based on the variability anticipated between the hills and valleys across the site, we propose to perform a pile load -test program to verify and evaluate pile embedment depth. The field program will Include supplying eighty-eight (88) 8 -ft to12-ft long steel piles (W6xg), pile installation, vertical load testing, horizontal load testing, and pile extraction. The services to be provided by Terracon are summarized in the following paragraphs. Resourceful > Responsive . Reliable Proposal for Geotechnical Engineering Services 1 rerraeon Proposed Tres Hermanos Solar Project Los Angeles and San Bernardino County, California January 6, 2017 Terracon Proposal No. P60165282 Pile Installation: For location of pile tests and exploration points, Terracon will use hand-held recreational GPS equipment accurate to within 15 feet of the locations. The final locations of the tests will be marked on the Pile Test Location Plan and submitted with the Pile Testing report. Coordinates will be provided on a separate table. Terracon will hire a sub -contractor to install a total of 88 piles at 44 locations. The piles will be installed to a range of embedment depths, and will let set for a minimum of 24 hours priorto testing. The test piles will be advanced with a rubber tracked GAYK HIRE 1000 Hydraulic Hammer Rig or equivalent. During pile installation, we will record the type/model of driving equipment used, drive energy (foot - lbs.), and pile drive productions in terms of number of seconds. If the piles will be installed and supplied by others, this proposal provides an optional fee for installation monitors only. Pile Testing: Testing will be performed by a qualified Terracon personnel and will generally follow procedures in ASTM D 3689-07, Standard Test Method for Deep Foundations under Static Axial Tensile Load and ASTM D 3966-07, Standard Test Method for Deep Foundations under Lateral Load. Results of horizontal load tests and vertical load tests will be plotted on load vs. deflection charts documenting the measurement of the vertical and horizontal displacement at various loads. No pre -drill hole equipment has been included as part of this scope. Axial uplift pile testing will be performed at load increments of 500 lbs up to a maximum vertical uplift load of 7,000 lbs or the limits of the soil capacity, whichever occurs first. The limit of soil capacity during an uplift test is defined as movement in excess of 0.75 -inches at top of pile. Permanent deflection will be measured by unloading and allowing the pile to rebound at the end of the test. Lateral pile testing will be performed at load increments of 500 lbs up to a maximum horizontal load of 7,000 lbs orthe limits of the soil capacity, whichever occurs first. Measurements of deflection will be recorded near the ground level and top of pile (maximum 3'/2 feet high) while the lateral load will be applied at the top of the pile. The limit of soil capacity during a lateral test is defined as movement in excess of 1/2" at ground level and/or 3'/s' at top of post. Permanent deflection will be measured by unloading and allowing the pile to rebound at the end of the test. Resourceful . Responsive . Reliable 5 Proposal for Geotechnical Engineering Services Irerraeon Proposed Tres Hermanos Solar Project Los Angeles and San Bernardino County, California January6, 2017 Terracon Proposal No. P60166282 Pile Extraction: Terracon will hire a backhoe service to extract the piles after testing. Unless otherwise requested by Blue Oak, piles will be collected and placed in one location and left onsite for disposal during construction. Conditions/items to be Provided by the Client: Items to be provided by the client include the right of entry to conduct the exploration and an awareness and/or location of any private subsurface utilities existing in the area. Site contact name and number should be provided to schedule access. We will contact <Underground Services Alert (USA) for location of utilities in public easements. Location of private lines on the property is not part of the USA or Terracon scope. If there are any other restrictions or special requirements regarding this site or exploration, these also should be made known to us prior to commencing the fieldwork. Our fee is based on the site being accessible to truck mounted rig and pile driving equipment; additional costs may result if this is not the case. Our fees also do not include services associated with additional site clearing, wet ground conditions, tree or shrub clearing, damage of existing landscape or location of underground utilities beyond contacting the USA locate service. If such conditions are known to exist on the site, Terracon should be notified so that we may adjust our scope of services and fee, If necessary. Our proposal assumes that the field exploration will be performed with Level (D) personal protective equipment. Should additional personal protective equipment become necessary, our fee will be discussed with you prior to commencing further drilling. Terracon will take reasonable efforts to reduce damage to the property, such as rutting of the ground surface. However, it should also be understood that in the normal course of our work some such disturbance could occur. We have not budgeted to restore the site beyond backfilling our boreholes. If there are any restrictions or special requirements regarding this site or exploration, these should be known prior to commencing field work. It is our understanding that the project area is located within private land. Therefore, we have not budgeted for any training or standby time associated with biological, cultural, and environmental monitoring. Engineering and Report Preparation The results of our field and laboratory programs will be evaluated by a professional engineer licensed in the State of California. Based on the results of our evaluation, a geotechnical Resourceful . Responsive . Relinhle 6 Proposal for Geotechnical Engineering Services lr'erraeon Proposed Tres Hermanos Solar Project , Los Angeles and San Bernardino County, California January 6, 2017 . Terrecon Proposal No. P60165282 engineering report will be prepared. In general, the following will be included / addressed in the geotechnical report: • Site location and description; • Site diagram with boring and test locations; • Discussion of known geologic! seismic hazards; • Results of laboratory testing; • Soil and groundwater conditions; • Soil corrosivity and field resistivity test results; Foundation design parameters for static load conditions; Lateral earth pressure coefficients and recommended factors of safety; Seismic design parameters per the 2016 California Building Code; Site preparation procedures; Recommendations for addressing groundwater Issues (if any); Recommendations for construction observations and testing; Design recommendations for pavement sections (including aggregate base roadways, asphalt concrete pavement sections, and unpaved access roads); Driven Pile and/or alternate foundation recommendations for PV panels; Recommended shallow and deep foundation type(s) and design parameters, including axial and uplift capacities, and parameters for lateral foundation design. (LPILE parameters) Liquefaction Potential Analysis Pile testing results (axial and Horizontal) Design parameters for use in L -Pile analyses C. SCHEDULE Task I Starting Day from NTP" I End Day from NTP" NTP: Notice to Proceed Mobilization of Field Testing 1-2 Field Work and Testing 2-3 25 Draft Field Geotechnical Report Submittal 20 40 -Number of days reflect business days Final report will be provided within 5 business days from receiving questions and/or comments by the client and the design team. Resourceful . Responsive a Reliable Proposal for Geotechnical Engineering Services 1 Terracon Proposed Tres Hermanos Solar Project Los Angeles and San Bernardino County, California January 6, 2017 Terracon Proposal No. P60165282 D. COMPENSATION GEOTECHNICAL SERVICES FEE Geotechnical Engineering Exploration Services (Sol] borings and Geotechnical laboratory Testing) $30,000 Thermal Laboratory Testing $6,100 Corrosion Laboratory Testing $3,250 Electrical Resistivity Testing $2,900 Pile Installation (includes pile procurement, delivery and installation)' $22,200 Pile Testing I $21,500 Pile Extraction I $6,300 Geotechnical Engineering and Reports Preparation $7,650 TOTAL GEOTECHNICAL ENGINEERING SERVICES $99,900 'If piles are to be installed and supplied by others, Pile Installation observation fees are $2,700. Unless instructed otherwise, the invoice will be sent to your attention at the above address. Should it be necessary to expand our services beyond those outlined in this proposal, we will notify you, then send a supplemental proposal stating the additional services and fee. We will not proceed Wth any additional work, unless authorized by your signature on the Supplement Agreement form. E. AUTHORIZATION Terracon is prepared to commence work upon receipt of a fully executed Activating Letter issued in accordance with the Master Services Agreement between Blue Oak Energy and Terracon. We appreciate the opportunity to provide this proposal and look forward to working with you on this project. Please call the undersigned if you have any questions or comments regarding this proposal. Sincerely, Terracon Consultants, Inc. � Ll Joshua R. Morgan, RE, Senior Staff Engineer Copies to: Addressee (1 via email) Resourceful . Responsive • Reliable F. Fred Buhamdan, P.E. Principal ��/OL I.W%rz191947:ds,ll,atn I�ns:x,,cnsis4a 614462 1311 f,I frwlrmlmental planning 6NA6 w? 9.4 Itrvolce San Gabriel Wader and Prue[, I I C 2017 291 r Cmmn Street Project Mo, WHC-04 Sari Diego, CA 0210(', Projnod 1VHCG04 Tros Honnrmos Projoct Professional Services through February 2017 Professional Services This 500.000.80 approximates one fodh to oue third of the contracted work Final draft should be prepared by the end of March. Coordinating biology studies to engineering layouts and studying Impacts Studying visual Impacts to neighbors and corresponding - open space. Studying how the discovery of the Burrowing Owl affects solar panel layout. RAW $300,000.00 II D][AMOND BA MEMORANDUM TO: Chair Wolfe and Members of the Planning Commission FROM: Greg Gubman, Community Development Director DATE: October 10, 2017 SUBJECT: October 10, 2017 Planning Commission Agenda Item No. 6.1 The purpose of this memorandum is to: 1) Provide additional evidence to support a finding that Industry's application for a General Plan conformity finding is incomplete. 2) Propose additional language to the Agenda Item 6.1 Resolution regarding the inadequacy of Industry's request for a General Plan conformity finding. INDUSTRY CITY COUNCIL AGENDA FOR OCTOBER 12, 2017 The agenda for the upcoming City Council meeting includes Item No. 5.2, titled "Ratification of the Master Ground Lease with San Gabriel Valley Water and Power and Amendment Nos. 14" (the "Lease"). Copies of the agenda and staff report for this matter are attached; the electronic version of this memorandum includes a searchable pdf of the Lease. These documents are provided to the Commission as further evidence attesting to Industry's intent to establish a solar farm on Tres Hermanos Ranch. The agenda item's cover memorandum states that the Lease was previously executed by Industry's city manager. The Lease attached to the Industry Council report appears to be substantially the same document that was included in the Commission's agenda packet for tonight's meeting as Attachment 8 to Item 6.1, particularly with respect to the pertinent language referenced in the Planning Commission staff report, but also includes: • EXHIBIT "A"/TOTAL SITE, consisting of a legal description for 5,500 acres of land. • EXHIBIT "B," consisting of a legal description for 2,500 acres comprised of two subareas named "SCOUT PROPERTY" and "AGENCY PROPERTY." • EXHIBIT "C," which appears to be identical to EXHIBIT "B" in the Commission's agenda packet attachment (the footers are still numbered B-1, et seq.). • Four amendments to the Lease, all of which have been fully executed. Planning Commission Memorandum October 10, 2017 Paae 2 ADDENDUM TO DRAFT PLANNING COMMISSION RESOLUTION F Staff recommends that the Commission adopt the resolution attached to the Item 6.1 staff report with the addition of the following sentence to Finding 2.a. (highlighted): 'Because the application is incomplete, the 40 -day period for the Planning Commission to make the General Plan conformance finding has not begun to run." Although a substantial basis for the finding that Industry has failed to comply with Government Code Section 65402(b), the proposed added language further emphasizes that Industry has failed to start the 40 - day "shot clock' referenced in the statute. Attachments: 1) Appended Finding 2.a. to the draft Planning Commission Resolution 2) October 12, 2017 Industry City Council Meeting Agenda 3) October 12, 2017 Industry City Council Agenda Item 5.2 ATTACHMENT Appended Finding 2.a. to the Draft Planning Commission Resolution PLANNING COMMISSION RESOLUTION NO. 2017 -XX A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DIAMOND BAR, CALIFORNIA ("PLANNING COMMISSION"), FINDING THAT THE CITY OF INDUSTRY FAILED TO PROVIDE SUFFICIENT AND/OR ACCURATE INFORMATION PERTAINING TO THE PURPOSE OF ITS PROPOSED AQCUISITION OF TRES HERMANOS RANCH TO ENABLE THE PLANNING COMMISSION TO DETERMINE SUCH ACQUISITION'S CONFORMITY WITH THE GENERAL PLAN OF THE CITY OF DIAMOND BAR ("GENERAL PLAN"). A. RECITALS 1. WHEREAS, on April 18, 1989, the City of Diamond Bar ("City") was established as a duly organized municipal corporation of the State of California; 2. WHEREAS, on July 25, 1995, the City adopted its General Plan incorporating all State mandated elements, and periodically adopted updates to portions of the General Plan when appropriate and necessary; 3. WHEREAS, as of the date of this Resolution's adoption, the Successor Agency to the Industry -Urban Development Agency ("Successor Agency") is the owner in fee of approximately 2,450 acres of real property, commonly known as Tres Hermanos, shown as Exhibit "A," attached hereto; 4. WHEREAS, the northernmost portion of Tres Hermanos Ranch, comprising approximately 730 acres (the "Subject Property"), is located within the corporate limits of the City, while the balance of the Tres Hermanos Ranch acreage is located entirely within the corporate limits of the city of Chino Hills. The parcels comprising the Subject Property are further identified by Los Angeles County Assessor's Parcel Numbers 8701-021-271, 8701-022-270 and 8701- 022-273; 5. WHEREAS, the Subject Property is located within two General Plan land use designations, identified as Planning Area 1 ("PA-1/SP") and "Planning Area 5 ("PA-5/RH-30"), as shown in Exhibit "B," attached hereto; 6. WHEREAS, General Plan Land Use Element Strategy 1.6.1 describes the land use policies for PA-1/SP and PA-5/RH-30 as follows: a. PA -1 incorporates the Agriculture (AG) land use designation permitting single family residential at a maximum density of 1.0 dwelling unit per 5 gross acres. Facilities appropriate for this site should be designed based upon a vision for the future and not merely extend the patterns of the past. Such facilities may include educational institutions, reservoir for practical and aesthetic purposes, commercial developments which are not typical of those found in the area and a variety of residential, churches, institutional and other uses which are complimentary to the overall objective of having a master planned area. Development within the Tres Hermanos area should be designed so as to be a part of the Diamond Bar community as well as compatible with adjacent lands. b. PA -5 incorporates a 30 -acre (gross) area designated RH-30 to accommodate a maximum of 490 high density multi -family housing units consistent with the Regional Housing Needs Assessment and the Housing Element; 7. WHEREAS, the City of Industry ("Industry") proposes to acquire the Subject Property from the Successor Agency ("Proposed Acquisition") and both Industry and the Successor Agency have already approved the Proposed Acquisition; 8. WHEREAS, Section 65402(b) of the Government Code of the State of California ["Section 65402(b)"j mandates that a city shall not acquire real property in another city with an adopted general plan, for any public purpose, "until the location, purpose and extent of such acquisition... (has) been submitted to and reported upon by the planning agency having jurisdiction, as to conformity with said adopted general plan or part thereof;" 9. WHEREAS, in a letter to the City dated September 1, 2017 ("Industry Letter #1"), Industry City Manager Paul Philips requested that the Planning Commission consider the matter of the Proposed Acquisition for conformity with the General Plan in accordance with Section 65402(b). Industry Letter #1 states that Industry "is acquiring Tres Hermanos Ranch for open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351..." Industry Letter #1 further states that "(a)t this time, the City (of Industry) does not have any more definitive plans for the future use of Tres Hermanos." A copy of Industry Letter #1 is attached hereto as Exhibit "C"; 10. WHEREAS, in a letter to Industry dated September 13, 2017, the City requested that Industry identify its purpose for the Proposed Acquisition as required under Section 65402(b) ("City's Request"). A copy of the City's Request is attached hereto as Exhibit "U'; 11. WHEREAS, in a letter to the City dated September 21, 2017 ("Industry Letter #2"), Mr. Philips responded to the City's Request by stating that "Section 65402(b)'s requirement has been satisfied," and repeated Industry Letter #1's claim ad verbum that purpose for the Proposed Acquisition is "open space, preservation, public facility or other public purposes, in compliance with Government Code Section 37351..." A copy of Industry Letter #2 is attached hereto as Exhibit "E"; 12. WHEREAS, substantial evidence has been submitted into the record evidencing that Industry does, in direct contradiction to Mr. Philips' representation, have definitive plans for the Subject Property for a solar facility, although the evidence does not establish the exact size or location of the solar facility; 13. WHEREAS, on October 10, 2017, at a regularly scheduled meeting, the Planning Commission, considered the matter of the Proposed Acquisition, and concluded said review prior to the adoption of this Resolution. B. RESOLUTION NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF DIAMOND BAR DOES HEREBY RESOLVE AS FOLLOWS: 1. The Planning Commission hereby specifically finds that all of the facts set forth in the Recitals, Part A, of this Resolution are true and correct. 2. The Planning Commission hereby finds that Industry has not provided sufficient information pertaining to the purpose of the Proposed Acquisition for the Planning Commission to determine whether or not the proposed acquisition is in conformance with the General Plan. Further, the Planning Commission finds that Industry has made material misrepresentations to the Planning Commission as to its plans for the Subject Property. Finally, the Planning Commission finds that Industry's application is untimely and does not comply with Government Code Section 65402(b). These findings are made on the basis of the following facts: L PL2017-155 a. 'Government Code Section 65402(b) requires Industry to identify the "location, purpose and extent of such acquisition..." prior to acquiring the Subject Property. The documentation submitted to the City (i.e., Industry Letters #1 and #2), however, does not identify Industry's "purpose" in acquiring the Subject Property or any other portion of Tres Hermanos Ranch. Given that by definition a general plan is a land use document, a determination as to whether the Proposed Acquisition is consistent with the General Plan can only be made if Industry identifies and provides reasonable details regarding the purpose, i.e., the use, for which it is acquiring the Subject Property. Merely identifying the location and extent of the acquisition and reciting a proposed deed restriction on the Subject Property which could entail a number of different uses for the Subject Property, does not provide the Plannina Commission with adeauate information to perform its b. Industry asserts that the Proposed Acquisition is in "compliance with Government code Section 37351." Section 37351 permits Industry to purchase property outside its jurisdiction "as is necessary or proper for municipal purposes." It is unclear how it is that Industry can, on the one hand, state it is acquiring the Property in accordance with Section 37351 and on the other hand, state it has no definitive plans for the Property. Mention of a deed restriction in Industry Letters #1 and #2 to be imposed on Tres Hermanos Ranch limiting the use of the land to public use or open space is of no informational value in that it places no limits whatsoever on Industry's future use of Tres Hermanos Ranch, inclusive of the Subject Property, which did not already exist under State law. c. The statement that Industry has no definitive plans for the Subject Property is contradicted by substantial evidence in the record that Industry intends to use some unidentified portion of the Subject Property for a solar facility. The Applicant is directed to re -submit the Application containing sufficient details of its proposed use to enable the Planning Commission to make its determination. d. The City Council of the City of Industry has already approved the Proposed Acquisition without taking into consideration and having the benefit of the Planning Commission's General Plan conformance finding, thereby undermining the intent of Government Code Section 65402. The City Council of the City of Industry should withdraw its approval of the Proposed Acquisition until such time as it has the benefit of the Planning Commission's determination. The Planning Commission shall: (a) Certify as to the adoption of this Resolution; and (b) Forthwith transmit a certified copy of this Resolution to Paul Philips, City Manager, P.O. Box 3366, City of Industry, CA 91744-0366. APPROVED AND ADOPTED THIS 10" DAY OF OCTOBER, 2017, BY THE PLANNING COMMISSION OF THE CITY OF DIAMOND BAR. go Raymond Wolfe, Chairman 3 PL2017-155 I, Greg Gubman, Planning Commission Secretary, do hereby certify that the foregoing Resolution was duly introduced, passed, and adopted by the Planning Commission of the City of Diamond Bar, at a regular meeting of the Planning Commission held on the 10th day of October, 2017, by the following vote: AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Greg Gubman, Secretary 4 PL2017-155 ATTACHMENT 2 October 12, 2017 Industry City Council Meeting Agenda CITY OF INDUSTRY CITY COUNCIL Mayor Mark Radecki REGULAR MEETING AGENDA Mayor Pro Tem Cory Moss Council Member Abraham Cruz NX OCTOBER 12, 2017 Council Member Catherine Marcucci 9:00 AM Council Member Newell Ruggles Location: City Council Chamber, 15651 East Stafford Street, City of Industry, California 91744 Addressing the City Council: Agenda Items: Members of the public may address the City Council on any matter listed on the Agenda. In order to conduct a timely meeting, there will be a three-minute time limit per person for any matter listed on the Agenda. Anyone wishing to speak to the City Council is asked to complete a Speakers Card which can be found at the back of the room and at the podium. The completed card should be submitted to the City Clerk prior to the Agenda item being called and prior to the individual being heard by the City Council. Public Comments (Non -Agenda items): Anyone wishing to address the City Council on an item not on the Agenda may do so during the 'Public Comments" period. In order to conduct a timely meeting, there will be a three-minute time limit per person for the Public Comments portion of the Agenda. State law prohibits the City Council from taking action on a specific Item unless it appears on the posted Agenda. Anyone wishing to speak to the City Council is asked to complete a Speaker's Card which can be found at the back of the room and at the podium. The completed card should be submitted to the City Clerk prior to the Agenda Item being called by the City Clerk and prior to the Individual being heard by the City Council. Americans with Disabilities Act: in compliance with the ADA, If you need special assistance to participate in any City meeting (including assisted listening devices), please contact the City Clerk's Office (626) 333-2211. Notification of at least 48 hours prior to the meeting will assist staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting. Agendas and other writings: In compliance with SB 343, staff.reports and other public records permissible for disclosure related to open session agenda Items are available at City Hall, 15625 East Stafford Street Suite 100, City of Industry, California, at the office of the City Clerk during regular business hours, Monday through Friday 9:00 a.m. to 5:00 p.m. Any person with a question concerning any agenda item may call the City Clerk's Office at (626) 333-2211. Call to Order Flag Salute Roll Call CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA OCTOBER 12, 2017 PAGE NO. 1 4. Public Comments 5. CONSENT CALENDAR All matters listed under the Consent Calendar are considered to be routine and will be enacted by one vote. There will be no separate discussion of these items unless members of the City Council, the public, or staff request specific items be removed from the Consent Calendar for separate action. 5.1 Consideration of the Register of Demands for October 12, 2017 RECOMMENDED ACTION: Approve the Register of Demands and authorize the appropriate City Officials to pay the bills. 5.2 Ratification of the Master Ground Lease with San Gabriel Valley Water and Power and Amendment Nos. 1-4 RECOMMENDED ACTION: Ratify the Lease and Amendments. 5.3 Consideration of the minutes of the April 14, 2016 regular meeting; April 28, 2016 regular meeting; May 10, 2016 special meeting; May 19, 2016 special meeting; May 26, 2016 regular meeting; June 9, 2016 regular meeting; June 23, 2016 regular meeting; June 23, 2016 special meeting, July 14, 2016 regular meeting; July 28, 2016 regular meeting; and August 11, 2016 regular meeting RECOMMENDED ACTION: Approve as submitted. 6. ACTION ITEMS 6.1 Discussion and consideration of appointments to the City of Industry Planning Commission. RECOMMENDED ACTION: Discuss and make the appointments to the Planning Commission. 6.2 Consideration of a Memorandum of Understanding between the City of Industry and the City of La Puente for the Valley Boulevard Street and Related Improvements. RECOMMENDED ACTION: Approve the Memorandum of Understanding. 6.3 Consideration of award of Contract No. 2017-1004, Design -Build Services for Emergency Standby Power Generator at City of Industry City Hall to MasTek, Inc., in an amount not -to -exceed $361,930.00 CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA OCTOBER 12,2017 PAGE NO.2 RECOMMENDED ACTION: Award the contract to MasTek, Inc., in the amount of $361,930.00. 6.4 Consideration of award of Contract No. CITY -1435, Citywide Basin Retrofits - Phase 1, to United Storm Water, Inc., in an amount not -to - exceed $199,836.80 RECOMMENDED ACTION: Award the contract to United Storm Water, Inc., in the amount of $199,836.80. 6.5 Consideration of award of Contract No. CITY -1425. 2016 Cleanout of Storm Water Treatment Devices to United Storm Water, Inc., in an amount not -to -exceed $85,838.50 RECOMMENDED ACTION: Award the contract to United Storm Water, Inc., in the amount of $85,838.50. 6.6 Consideration of the Request to Publish and Receive Proposals, Contract No. 2017-1036, Design -Build for Solar Rooftop and Carport Canopy Power Generation System for the City of Industry RECOMMENDED ACTION: Approve release of the RFP. 7. CITY COUNCIL COMMITTEE REPORTS 8. AB 1234 REPORTS 9. CITY COUNCIL COMMUNICATIONS 10. CLOSED SESSION 10.1 CONFERENCE WITH LEGAL COUNSEL — EXISTING LITIGATION Pursuant to Government Code Section 54956.9(d)(1) Case: City of Industry v. Burke Williams & Sorensen, LLP, et al. Los Angeles Superior Court Case No. KC068777 11. The City Council will recess pursuant to Government Code Section 54954(b)(2) and the City Council will inspect Hacienda -La Puente Unified School District's Willow Campus, 14101 East Nelson Avenue, La Puente. Adjournment will follow the inspection. 12. Adjournment to Thursday, October 26, 2017 at 9:00 a.m. CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA OCTOBER 12, 2017 PAGE NO.3 ATTACHMENT October 12, 2017 Industry City Council Agenda Item 5.2 CITY OF INDUSTRY Inarporaled Juno 1e, 1967 MEMORANDUM TO: Honorable Mayor Radecki and Members of the City Council FROM: Paul J., Philips, City Manag�J - 4 i STAFF: Roberto Ramirez, Contract City Engineer, Cordoba Corporation DATE: October 12, 2017 SUBJECT: Ratification of the Master Ground Lease with San Gabriel Valley Water and Power and Amendments Nos. 1-4 Before the City Council is the Master Ground Lease ("Lease") with Sen Gabriel Valley Water and Power. City Staff is recommending that the City Council ratify the Lease and related amendments that were previously executed by the City Manager at the Council's direction. Fiscal Impacts Funding for the City's payments under the Lease are included In the FY"2017-1 8 budget. Recommendation: 1) City Staff recommends that the Clty Council ratify the Lease and related amendments. Exhibit: A. Master Ground Lease B. Amendment 1 C, Amendment 2 D Amendment 3 E, Amendment 4 110, Box 3366, City of Inldostry; California 01744-0366.-Adminlalrative. UFlices: 15625 K Stafrird 5t. (626) 331-2211 - Nx (626) 961-6795 Execution Copy MASTER GROUND LEASE THIS MASTER GROUND LEASE ("Lease") is made and entered into as of 17th day of May, 2016 ("Effective Date"), by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant"). RECITALS: A. Landlord is the owner of that certain real property located in the Counties of Los Angeles, San Bernardino and Orange, State of California, which is more particularly described on Exhibit "A" attached hereto (as such real property may be reduced for portions thereof that are excluded and subjected to a Project Lease and increased with respect to the Scout Properly and Agency Property, as defined below, the "Total Site"). B. Landlord may acquire all or portions of two (2) additional parcels of real property that are described on Exhibit `B" attached hereto and referred to herein as the "Scout Property" and the "Agency Property". If Landlord timely acquires either the Scout Property or the Agency Property, or any portion of either, then such property shall be added to, and become part of, the Total Site in accordance herewith. C. Landlord and Tenant intend to permit Tenant to develop such portions of the Total Site as the Tenant shall determine desirable and which Landlord approves in accordance herewith for various public infrastructure projects including, without limitation, a solar farm and a reservoir. D. To facilitate Tenant's development of such projects on the Total Site, Landlord shall allow Tenant or an Affiliate or Permitted Assignee, as each are defined below (as applicable, the "Project Tenant") to enter into ground leases of portions of the Total Site in the form to be agreed upon between Landlord and Tenant by the Due Diligence Date and attached to this Lease as an exhibit by supplement hereto, with such revisions as the parties shall approve for each Project, as defined below (each, a "Project Lease"), whereupon the premises thereunder shall be excluded from the Total Site. E. hi furtherance of the foregoing, Landlord and Tenant wish to enter into this Lease with respect to the Total Site. AGREEMENT NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the foregoing recitals and of the mutual covenants, conditions and agreements herein contained to be done, kept and performed, Landlord and Tenant hereby agree as follows: 22195068.14.BUSMSS ARTICLE I PROPERTY 1.1 Demise. Landlord, for and in consideration of the rents, covenants and agreements to be paid, kept, performed and observed by Tenant under this Lease, hereby demises and leases unto Tenant, and Tenant hereby leases from Landlord, the Total Site upon and subject to the terms, covenants and conditions herein set forth. Landlord and Tenant mutually covenant as a material part of the consideration for this Lease to keep and perform each and all of said terms, covenants, and conditions. 1.1.1 Scout Property and Agency Property. If Landlord acquires fee title to all or any portion of the Scout Property and/or the Agency Property on or before December 31, 2018 (which Landlord may elect not to do in its sole discretion), then Landlord shall provide prompt notice thereof to Tenant and the parties shall supplement this Lease to demise such property whereupon such property shall become part of the Total Site and subject to the terms of this Lease; provided, however, that (a) the failure of Landlord to acquire all or any portion of the Scout Property and/or the Agency Property on or before December 31, 2018, for any reason whatsoever shall not constitute a breach or default by Landlord under this Lease, nor shall it constitute the failure of a condition precedent to any of Tenant's obligations under this Lease, (b) Tenant's rights under Section 1.4 below shall not be renewed or extended as the result of all or any potion of the Scout Property and/or the Agency Property becoming part of the Total Site, and (c) the provisions of Sections 1.5 and 1.6 shall apply to the Scout Property and/or the Agency Property if either becomes part of the Total Site. 1.1.2 Project Leases. Upon the execution and delivery by the parties thereto of a Project Lease and the satisfaction or waiver of the conditions precedent to the effectiveness thereof, if any, the portion of the Total Site that is the subject of such Project Lease shall be excluded from the Total Site and this Lease. 1.2 Recorded Documents. This Lease, the interests of Tenant thereunder and the Total Site are in all respects subject to and bound by all the terms and provisions of the recorded covenants, conditions and restrictions and any other recorded documents now affecting the Total Site or hereafter affecting the Total Site (collectively, the "Restrictions"); provided, however, that, except (a) in connection with obtaining financing secured by the fee interest in the Total Site in accordance with this Lease, (b) for matters affecting the Scout Property and/or the Agency Property that are executed in connection with the acquisition thereof, or (c) as required by law, Landlord shall not voluntarily record any further documents with respect to the Total Site that would materially increase Tenant's obligations hereunder or materially decrease Tenant's rights hereunder or with respect to a Project, without Tenant's prior written consent, which Tenant may withhold in its sole discretion,. Tenant shall comply with all requirements of the Restrictions that apply to the Total Site at Tenant's sole expense. 1.3 Due Diligence. Provided that no event of default has occurred and is continuing hereunder and Tenant has obtained and provided the liability insurance coverages required by this Lease, from and after the Effective Date and until the date that is ninety (90) days -2- thereafter (the "Due Diligence Date") date hereof through the earlier of the termination of this Lease or the Commencement Date, Tenant and its agents, consultants, contractors and subcontractors shall have the right to conduct or make any and all inspections, tests, studies, investigations, analyses, reports, surveys, searches and the like of, on or about the Total Site as may be necessary or desirable to determine the suitability of the Total Site for Tenant's proposed use (the "Site Diligence"); provided, however, that the scope of any test or analysis which requires physical sampling, testing or drilling into the subsurface of all or any part of the Total Site shall be subject to the requirement that Tenant dispose of all such test samples in accordance with applicable law and at no cost or liability to Landlord and restore the affected portion of the Total Site to its original condition prior to the Due Diligence Date. At the reasonable request and expense of Tenant, Landlord shall cooperate with the Site Diligence and promptly provide to Tenant information, materials, data and reports available to Landlord which Tenant may request and which is not subject to confidentiality or other similar restrictions ("Due Diligence Material"), all of which shall be provided as a courtesy and without any liability to Landlord. Tenant shall obtain or cause its consultants to obtain, at Tenant's sole cost and expense, prior to commencement of any investigative activities on the Total Site, a policy of commercial general liability insurance covering any and all liability of Tenant and Landlord with respect to or arising out of any investigative activities with liability limits of not less than One Million Dollars ($1,000,000.00) combined single limit per occurrence for bodily injury, personal injury and property damage liability. Such policy of insurance shall be kept and maintained in force during the occurrence of such activities. Tenant's liability shall not be limited by the amount of any insurance coverage. Tenant shall deliver to Landlord, without any representation or warranty whatsoever, a copy of all results from the Site Diligence obtained and/or prepared pursuant to the provisions of this Section 1.3, and which shall also be addressed to Landlord. Tenant shall keep the results of all such Site Diligence confidential except as required by law. Tenant hereby indemnifies and holds the Total Site, Landlord and Landlord's officers, directors, shareholders, participants, affiliates, employers, representatives, invitees, agents and contractors free and harmless from and against any and all claims, liabilities, losses, damages, causes of action, judgments, liens, costs and/or expenses including reasonable attorneys' fees (collectively, "Claims") arising out of or resulting from the exercise of its rights under this Section 1.3 by Tenant, its agents, consultants, contractors and subcontractors. Tenant shall keep the Total Site and the Total Site free and clear of any mechanics' liens or materialmen's liens related to the exercise of such rights. The Tenant's indemnification obligations set forth in this Section 1.3 shall survive any termination of this the Lease pursuant to Section 1.4 provided, however, in no event shall Tenant be liable to Landlord or be required to indemnify Landlord in respect of the mere discovery of any condition relating to the Property. 1.4 Termination Rieht. If Tenant, in its sole discretion, is dissatisfied with the results of Tenant's due diligence with respect to the Total Site or with respect to any amendments and/or modifications made to this Lease pursuant to Section 26.26, then Tenant shall have the right to terminate this Lease by delivering written notice thereof prior to the Due Diligence Date; otherwise, Tenant shall be deemed to have irrevocably waived such right. Notwithstanding the fact that Landlord might acquire the Scout Property and/or the Agency Property after the Due -3- Diligence Date, Tenant shall not have the right to terminate this Lease as the result of causing the Scout Property and/or the Agency Property to become part of the Total Site, and Tenant acknowledges that it hereby waives its right to conduct due diligence with respect to the Scout Property and/or the Agency Property. 1.5 No Representations. Except as expressly provided in this Lease, Landlord makes no representations or warranties of any kind or nature as to the Total Site nor as to the nature, size, location, or time of construction of any structures thereon. Landlord makes no representations or warranties that Tenant will be able to obtain any licenses, permits or other authorizations necessary or required to conduct the uses permitted herein on the Total Site or that the Total Site is suitable for the uses permitted herein. Prior to the Due Diligence Date, Tenant shall satisfy itself that the Total Site is suitable for its intended uses. 1.6 As -Is. As a material inducement to the execution and delivery of this Lease by Landlord and the performance by Landlord of its duties and obligations hereunder, Tenant does hereby acknowledge, represent, warrant and agree, to and with the Landlord, that, except as expressly set forth in this Lease: (i) Tenant is leasing the Total Site in an "AS -IS" condition as of the Due Diligence Date with respect to any facts, circumstances, conditions and defects; (ii) Landlord has no obligation to repair or correct any such facts, circumstances, conditions or defects or compensate Tenant for same; (iii) by the Due Diligence Date, Tenant shall have undertaken all such inspections and examinations of the Total Site as Tenant deems necessary or appropriate under the circumstances, and that based upon same, Tenant is and will be relying strictly and solely upon such inspections and examinations and the advice and counsel of its agents and officers, and Tenant is and will be fully satisfied that the "Rent' (i.e., the base rent described in Section 3.1 below together with all sums payable, or expenses incurable, by Tenant under this Lease) is fair and adequate consideration for the lease of the Total Site; (iv) except as expressly set forth below in this Lease and for the limited duration thereof, Landlord is not malting and has not made any warranty or representation with respect to all or any part of the Total Site (including, but not limited to, any matters contained in documents made available or delivered to Tenant in connection with this Lease) as an inducement to Tenant to enter into this Lease or for any other purpose; and (v) by reason of all of the foregoing, except as expressly set forth in this Lease, Tenant shall assume the full risk of any loss or damage occasioned by any fact, circumstance, condition or defect pertaining to the condition of the Total Site, including without limitation the presence of any asbestos containing material, hazardous toxic or radioactive waste, substance or materials in, on, under or about the Total Site, and, except as expressly set forth below in this Lease, Tenant hereby expressly and unconditionally waives and releases Landlord and all of its parents, subsidiaries, affiliates and partnerships, and its and their respective officers, directors, shareholders, partners, agents and employees, and their respective successors, heirs and assigns and each of them (individually and collectively, the "Released Parties") from any and all Claims against Landlord and/or the Released Parties with respect to the condition of the Total Site, including without limitation any rights of Tenant under the State or Federal Comprehensive Environmental Response, Compensation and Liability Act, as amended from time to time, or similar laws. Tenant acknowledges and agrees that, except as expressly set forth in this Lease, the foregoing waiver and release includes all Claims of Tenant against Landlord pertaining to the condition of the Total Site, whether heretofore or now existing or hereafter arising, or which could, might, or may be claimed to exist, of whatever kind or -4- nature, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length, which in any way arise out of, or are connected with, or relate to, the condition of the Total Site; except that such release shall not relieve Landlord of its liability for (a) fraud, or (b) any breach by Landlord of its express representations and warranties or covenants set forth in this Lease prior to the expiration thereof. Tenant hereby waives, releases, acquits and forever discharges Landlord, its shareholders, directors, agents, employees, consultant, trustee, successor and assigns from any and all Claims which have arisen or may arise in the future with respect to the Total Site, regardless of whether Tenant is presently aware of any Claims; except that such release shall not relieve Landlord of its liability for fraud, intentional misrepresentation, gross negligence, willful misconduct or any breach by Landlord of its express representations and warranties or covenants set forth in this Lease prior to the expiration thereof. In connection with the foregoing release, Tenant specifically and expressly waives all of its rights under Section 1542 of the California Civil Code, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. T ITIA S 1.7 Acquisition of Aeency Property. Subject to completing satisfactory due diligence and entering into an agreement in form and substance satisfactory to Landlord in its sole discretion on or before November 1, 2018, that includes a closing date not later than December 31 2018, Landlord shall acquire all or any portion of the Agency Property from the current owner thereof at a purchase price less than an appraised value that is approved by Landlord in its sole discretion (" FMV"), whereupon it shall become part of the Total Site and subject to this Lease. At the reasonable expense of Landlord (which shall be approved in advance in writing), Tenant shall cooperate with Landlord's efforts to acquire the Agency Property. If the proposed purchase price for the Agency Property exceeds the FMV, then Landlord shall notify Tenant, which shall have thirty (30) days to elect to provide all the costs of acquiring the Agency Property in excess of the FMV. If Tenant elects to provide such excess, and provides security therefor in form and substance acceptable to Landlord, then Landlord shall acquire the Agency Property, whereupon it shall become part of the Total Site and subject to this Lease in accordance with Section 1.1.1 hereof, and Tenant shall bear (and not receive any reimbursement or other repayment) of the amount by which the price exceeds the FMV. If Tenant elects not to provide such excess costs but Landlord acquires the Agency Property, then the Agency Property shall be considered part of the Total Site and shall be subject to this Lease. If the acquisition price for the Agency Property is less than the FMV, then, concurrently with the -5- acquisition of the Agency Property, Landlord shall pay to Tenant a sum equal to one-half (1/2) of the positive difference between the FMV and actual, total acquisition cost of Agency Property. 1.8 Title Insurance. Tenant shall have the right to obtain title insurance policies with respect to the Total Site from time to time at its expense to confirm its interest in the Total Site. Landlord shall cooperate with any reasonable requests of the title insurance company with respect to its issuance of such policies. ARTICLE II LEASE TERM 2.1 Term. The term of this Lease ("Term") shall commence upon the Effective Date (the "Commencement Date") and shall continue for a period of twenty-five (25) years unless earlier terminated pursuant to the terms of this Lease. 2.2 Project Lease Term. During the Term, each Project Lease shall have a term specified by Tenant of not more than sixty-five (65) years in the aggregate firm the commencement date thereunder; provided, however, that Tenant shall have the right to divide each such Project Lease into not more than three (3) leases in favor of Tenant or an Affiliate thereof or one or more Project Tenants, the terms of which shall be specified in each Project Lease, each of which (a) shall be not less than ten (10) years, and (b) shall be consecutive. 2.3 Project Lease Requirements/Landlord's Termination Rights. To ensure that Landlord receives the benefits anticipated from the various public infrastructure projects described above to be completed pursuant to a Project Lease (together with any other project requested by Tenant for approval by Landlord pursuant to Section 24.1 hereof, each a "Project"), Landlord shall have the right to terminate this Lease (but not any of the Project Leases) by providing sixty (60) days' written notice thereof to Tenant at any time if Tenant (or its Affiliates or any Project Tenant) has not: (a) prepared and submitted a request for an initial study and a notice of preparation under the California Environmental Quality Act ("CEQA") for photovoltaic solar project totaling, in the aggregate, at least four hundred fifty (450) megawatts of rated annual output ("Minimum Project") with the applicable governmental agency with jurisdiction over the relevant portion of the Total Site as defined under CEQA within six (6) months after the Effective Date; (b) completed and submitted to the Lead Agency any other studies required under CEQA (i.e., not an EIR) within six (6) months after receipt of a request from the lead agency "Lead Agency" (if an EIR is not required); (c) completed and submitted to the Lead Agency a draft Environmental Impact Report ("EIR") for the Minimum Project (if an EIR is required) (i) within two (2) years after the Effective Date if the Lead Agency allows Tenant to prepare the draft EIR, or (ii) within three (3) years after the Effective Date if the Lead Agency does not allow Tenant to prepare the draft EIR; (d) received certification of the EIR or other CEQA clearance document (e.g., negative declaration or mitigated negative declaration) for the Minimum Project within one (1) year after the applicable document (e.g., EIR, negative declaration or mitigated negative declaration) is completed (which deadline shall be delayed for one (1) year as the result of a third party challenge under CEQA, and for up to an additional two (2) years (for an aggregate of three (3) years) thereafter if the results of such CEQA challenge are appealed to the appellate court by a third party); (e) commenced physical construction of a Project of within one (1) year after the Lead Agency certifies the EIR or other CEQA clearance document therefor and the appeal or challenge period has expired without any third party challenge or appeal (subject to the delays provided for in subsection (e)) (the "Construction Commencement Date"); provided, however, that if Tenant (or such Affiliate or Project Tenant) commences physical construction of one or more Projects prior to the termination date specified in such notice, then this Lease shall not terminate as the result of such notice if such Project(s) are prosecuted diligently to completion; or (f) Tenant does not generate and pay or cause to be generated and paid to Landlord net earnings (through Project Lease rent or otherwise) in amounts equal to or greater than (i) two million dollars ($2,000,000) per annum within three (3) years of the Construction Commencement Date, or (ii) four million dollars ($4,000,000) per annum within ten years of the Construction Commencement Date. Notwithstanding the foregoing, upon the completion of one or more operating Projects for solar photovoltaic electricity production of at least fifty (50) megawatts per year (in the aggregate), Landlord's right to terminate this Lease under this Section 2.3 shall expire. Landlord's failure to approve a Project shall not restrict or otherwise affect Landlord's rights under this Section 2.3 so long as Landlord shall timely perform its obligations with respect to Project approvals and the entering into of Project Leases pursuant to Section 24. "Affiliate" as used herein shall mean with respect to any Person, as defined below, any other Person which directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person or any of its subsidiaries. The term "control" shall mean the possession, directly or indirectly, of any power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. ARTICLE III RENT 3.1 Base Annual Rent During Term. From the Effective Date until expiration or earlier termination of this Lease, Tenant shall pay Landlord on the Effective Date and on or before each anniversary thereof base rent of One Dollar ($1.00) per year, in advance, without demand, deduction or setoff. Landlord hereby acknowledges receipt of the payment of all base rent for the entire Term. 3.2 Place and Method of Payment. All payments of rental and other amounts due under this Lease shall be made without notice (except as expressly set forth herein), demand, deduction or offset by Tenant to Landlord at the address set forth in Article XXV for the giving -7- of notices to Landlord, or at such other place as Landlord may designate from time to time in writing, and shall be payable in current legal tender of the United States of America, as the same is then by law constituted. If the deadline for payment of any amount due hereunder between the parties occurs on a date that is not a business day, then such amount shall be due and payable on the immediately succeeding business day without interest or penalty. 3.3 All Obligations of Tenant Considered Additional Rent. All costs and expenses which Tenant is required to pay hereunder, together with all interest and penalties that may accrue thereon in the event of Tenant's failure to pay such amounts (including interest and late charges as described below), and all damages, costs and expenses which Landlord may incur by reason of any default of Tenant or failure on Tenant's part to comply with the terms of this Lease, shall be deemed to be additional rent and, in the event of nonpayment by Tenant, Landlord shall have all rights and remedies with respect thereto as Landlord has for the nonpayment of the base annual rent. 3.4 Interest on Tenant's Obligations. Tenant agrees that any payment due from Tenant to Landlord after notice thereof from Landlord (other than with respect to the annual base rent set forth in Section 3.1 above) which is not paid when due shall bear interest from the due date to the date of payment at a rate of interest equal to the lesser of four percent (4%) above the "prime" lending rate of Wells Fargo Bank, N.A. or any comparable bank or lending institution selected by Landlord, or the maximum non -usurious rate permitted by law. Landlord's acceptance of any such interest shall not constitute a waiver of Tenant's default with respect to the overdue amount or prevent Landlord from exercising any of the other rights and remedies available to Landlord under this Lease or any law now or hereafter in effect. 3.5 Late Charee. In the event that Tenant fails to pay any installment of base rent or other payment for which Tenant is obligated to Landlord under this Lease after notice thereof from Landlord (other than with respect to the annual base rent set forth in Section 3.1 above) within five (5) days after such rent or other payment becomes due, Tenant shall pay to Landlord as additional rent a late charge equal to five percent (5%) of the amount due to compensate Landlord for the extra costs incurred as a result of such late payment. ARTICLE IV USE OF THE PREMISES 4.1 Use of Total Site. Tenant shall use the Total Site only for the purposes of determining the suitability of portions thereof for Projects and Tenant shall not use or permit the Total Site to be used for any other purpose or purposes whatsoever. 4.2 Restrictions on Use. Tenant shall not do or permit anything to be done in or about the Total Site, nor bring or keep anything therein, which is not within the authorized use of the Total Site set forth in Section 4.1 above. Tenant shall not use or allow the Total Site to be used for any improper, immoral, unlawful or objectionable purpose nor shall Tenant cause, maintain or permit any public nuisance in, on or about the Total Site. Tenant shall not cause or commit, nor allow to be caused or committed, any waste in, upon or about the Total Site. 4.3 Compliance with Laws. Tenant covenants that during the Term of this Lease, Tenant will comply, at no cost or expense to Landlord, with all covenants, conditions and restrictions of record as of the Effective Date hereof and hereafter (pursuant to and subject to Section 1.2 above) affecting the Total Site, and with all laws, ordinances, orders, rules regulations and requirements of all federal, state and municipal governments and appropriate departments, commissions, boards and offices thereof having the effect of law, which may apply to the Total Site or the use or maimer of use of the Total Site now or at any time during the Term and regardless of the cost thereof of the fact that such matter could not have been foreseen or anticipated. 4.4 Intentionally Omitted. 4.5 Environmental and Industrial Hygiene Compliance. 4.5.1 Landlord's Covenants. To satisfy its obligations under California Health and Safety Code §25359.7, Landlord has provided Tenant with a copy of the reports in the possession of the Landlord with respect to the Total Site (collectively, the "Reports") relating to "Hazardous Materials" (as defined below) in, on or about the Total Site. Tenant acknowledges that Landlord delivered the Reports to Tenant without any representation or warranty whatsoever about the Reports, except that Landlord represents and warrants to Tenant that the Reports constitute all such reports prepared for Landlord with respect to the Total Site. Landlord represents to Tenant that, as of the date of this Lease and except as disclosed in the Reports, Landlord has no actual knowledge that any Hazardous Materials exist on the Total Site in violation of any governmental law, rule or regulation relating to Hazardous Materials ("Hazardous Materials Laws"). For the purposes of this Lease, all references to "Landlord's knowledge" and similar phrases shall mean the actual, present knowledge of the City Manager of the City of Industry without any duty of inquiry; provided, however, that such individual shall not have any personal liability as the result of being so identified. The parties hereby acknowledge and agree that (a) the limited uses to which Landlord can put the Total Site, and (b) Tenant's exclusive control of the location and nature of proposed Projects (except to the extent set forth in Section 25.8 hereof) make it unlikely that Tenant would be affected by any violation of Hazardous Materials Laws existing as of the Effective Date (or, with respect to the Scout Property and/or the Agency Property, the date upon which such properties become part of the Total Site), so Landlord shall not be required to indemnify Tenant with respect thereto except to the limited extent set forth below in Section 4.5.2, 4.5.2 Landlord's Indemnity and Right of Entry. If (a) any portion of the Total Site is in violation of Hazardous Materials Laws as of the Effective Date (or, with respect to the Scout Property and/or the Agency Property, the date upon which such properties become part of the Total Site), (b) such violations were not disclosed in the Reports or during Tenant's due diligence (and were not otherwise actually known to Tenant), and (c) remediation thereof is required by Hazardous Materials Laws even in the absence of any development or use of the affected portion of the Total Site, then Landlord shall, at Landlord's sole cost and expense, diligently remediate such condition. The foregoing shall only obligate Landlord to bear the cost of any remediation required and shall not subject Landlord to any liability for any other damages or remedies whatsoever. If Tenant becomes aware of any potential Claim under this Section 4.5.2, Tenant shall provide prompt, written notice thereof to Landlord provided, however, the failure of Tenant to so provide such notice shall not relieve Landlord of its obligations hereunder. If Landlord is required or elects to take any action on or about the Total Site in comiection with this Section 4.5.2, then Tenant hereby grants Landlord, subject to the terms and conditions set forth in Section 25.8 hereof, a license to enter and use the Total Site in the locations and for purposes and durations specified by Landlord to Tenant in writing from time to time to test, monitor and/or remediate such conditions at Landlord's expenses, all of which shall occur without any compensation to Tenant. "Pre -Existing Environmental Conditions" means, collectively, any Hazardous Materials existing on the Total Site as of the Effective Date (or, with respect to the Scout Property and/or the Agency, the date upon which such properties become part of the Total Site), other than conditions disclosed in the Reports or during Tenant's due diligence (or were otherwise actually known to Tenant). 4.5.3 Tenant's Covenants. Subject to the foregoing, Tenant, at its sole cost and expense, shall comply with all laws, ordinances and regulations relating to industrial hygiene and to the environmental conditions in, on, under or about the Total Site, including, but not limited to, soil and groundwater conditions and Hazardous Materials. Tenant shall not cause or permit any Hazardous Materials to be brought, kept or used in, on, under or about the Total Site by Tenant, its agents, employees, contractors, licensees, sublessees, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof), unless (a) the use of such Hazardous Materials is necessary and incident to Tenant's business on the Total Site, and (b) such Hazardous Materials are used, kept, monitored, stored and disposed of in a manner that (i) complies with all laws relating to such Hazardous Materials, (ii) will not endanger any other Persons or property, and (iii) will not invalidate, limit the coverage or increase the premiums of, any insurance policy affecting or covering the Total Site, (iv) such action satisfies Landlord's reasonable requirements specified in writing after receipt of a specific written request therefor from Tenant, which must precede any such action. If Tenant breaches the obligations stated in the foregoing provisions of this Section 4.5, or if the presence of any Hazardous Materials in, on, under or about the Total Site caused or permitted by Tenant or Tenant's agents, employees, contractors, licensees, sublessees, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof) results in contamination in breach of Hazardous Materials Laws of all or any portion of the Total Site exclusive of any Pre -Existing Conditions, then Tenant shall be solely responsible for and shall indemnify, protect, defend and hold Landlord harmless from and against any and all Claims which arise during or after the Term of this Lease as a result of such contamination, This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision having jurisdiction with respect to the applicable portion of the Total Site because of the presence of any Hazardous Materials on or about the Total Site caused or permitted by Tenant or Tenant's agents, employees, contractors, licensees, sublessees, assignees, concessionaires or invitees. Upon Landlord's request, with respect to contamination for which Tenant is responsible as described above in this Section 4.5.2, Tenant shall promptly take all actions, at its sole cost and expense, as are reasonably necessary to comply with Hazardous Materials Laws, provided Landlord's approval, not to be unreasonably withheld, delayed or conditioned, of such actions shall first be obtained. Furthermore, each party to- shall promptly notify the other party of any inquiry, test, investigation 'or enforcement proceeding by or against such party or the Total Site concerning the presence of any Hazardous Material of which it has actual knowledge provided, however, the failure of either such party to so provide such notice to the other party shall not relieve such party of their respective obligations hereunder and under Section 4.5.1 hereof. 4.5.4 Hazardous Materials Defined. As used herein, the term "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority having jurisdiction with respect to the applicable portion of the Total Site, the State of California or the United States Government including, without limitation, (a) petroleum or any petroleum product including refined gasoline, motor oil, waste oil and diesel fuel, (b) asbestos, (c) formaldehyde, and (d) polychlorinated biphenyls. 4.5.5 Survival. The parties hereby agree that the provisions of this Section 4.5 shall survive the expiration or earlier termination of this Lease. ARTICLE V ALTERATIONS 5.1 Alterations. Because of Tenant's limited rights to use the Total Site, Tenant shall not have the right to make any improvements, alterations, or modifications to the Total Site (except in connection with Project Leases) without obtaining Landlord's prior written consent, which Landlord may condition or withhold in its sole discretion. ARTICLE VI MECHANICS' LIENS 6.1 Liens. Tenant shall not suffer or permit any liens against the Total Site, against Tenant's leasehold interest therein or against any other portion of the Total Site, by reason of work, labor, services or materials supplied or claimed to have been supplied to Tenant or anyone holding the Total Site, or any part thereof, through or under Tenant, and Tenant agrees to indemnify, protect and defend Landlord against any such liens and fiom any and all other Claims arising out of or in any way comiected with the performance of such work or the supply of such services. If any such lien shall at any time be filed against the Total Site or against any portion thereof, Tenant shall promptly cause the lien to be discharged of record; provided, however, that Tenant shall have the right to contest the amount or validity, in whole or in part, of any such lien by appropriate proceedings, but in such event, Tenant shall first notify Landlord and shall promptly bond such lien in the manner authorized by law with a responsible surety company qualified to do business in the State of California. 6.2 Nonresponsibility. Landlord shall have the right at any time and from time to time to post and maintain on the Total Site such notices as may be necessary to protect the Total Site and Landlord from mechanics' liens, materialmen's liens or liens of a similar nature. -I1- Not less than fifteen (15) days prior to the commencement of any work of improvement by Tenant upon the Total Site, Tenant shall give written notice thereof to Landlord. If (a) Tenant fails to give such notice on a timely basis, or (b) the cost of such work exceeds One Hundred Thousand Dollars ($100,000), then Landlord, at its option, may require Tenant to immediately post or cause to be posted in favor of Landlord, Completion and Labor and Material bonds in an amount equal to one hundred twenty-five percent (1251/o) of the estimated cost of construction and issued by a financially sound bonding company licensed to do business in the State of California; the condition to post such bonds may be satisfied, at Tenant's sole discretion, by bonds provided by Tenant's, contractor(s). Landlord's request for the posting of the aforementioned bonds shall be in writing delivered to Tenant as provided for in the "Notice" Section of this Lease. As between Landlord and Tenant, Tenant shall bear the full cost and expense of posting any such bonds. At Landlord's reasonable request and to the extent permitted by applicable law, Tenant shall require any party providing materials or performing work in connection with the Total Site to modify its agreement to irrevocably waive any right to impose any lien on all or any part of the Total Site. 6.3 No Consent of Landlord. Nothing in this Lease shall be deemed to be, or construed in any way to constitute, the consent or request of Landlord, express or implied, by inference or otherwise, to any person, entity, trust, company, partnership, firm or corporation (collectively, a "Person") for the performance of any labor or the furnishing of any materials for any construction, rebuilding, alteration or repair of or to the Total Site or any part thereof, nor as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials, which might in any way give rise to the right to file any lien against Landlord's interest in the Total Site. Landlord shall have the right to post and keep posted at all reasonable times on the Total Site any notices which Landlord shall be required to post for the protection of Landlord and its interest in the Total Site from any such lien. ARTICLE VII TAXES AND ASSESSMENTS 7.1 Real Property Taxes. As used herein, the term "Real Property Taxes" shall mean all real estate taxes, assessments for land and improvements to the Total Site, municipal or county water and sewer rates and charges and other governmental levies and charges, general and special, ordinary and extraordinary, of any kind, which shall be levied against the Total Site which become a lien thereon and any tax or assessment in any way levied or assessed with respect to the possessory interest of Tenant or any Person holding under Tenant pursuant to the terms of this Lease, and any increases thereof regardless of the reason therefor, but excluding any such taxes, assessments, rates, charges based upon or measured by any Person's gross or net income, gross or net receipts or that are in the nature of, or are imposed with respect to, capital, net worth, excess profits, accumulated earnings capital gains, franchise or conduct of business of such Person. If, during the Term of this Lease, taxes are imposed, assessed or levied on the gross rents derived from the Total Site, Tenant shall pay such taxes in the manner provided below for real property taxes and assessments. -12- 7.2 Payment of Real Property Taxes. Throughout the Term of this Lease, Landlord shall pay or cause to be paid, before any fine, penalty, interest or cost that may be added thereto for the nonpayment thereof, all Real Property Taxes levied against the Total Site. To the extent that Landlord receives invoices, bills, assessments or charges for Real Estate Taxes from any taxing authority with jurisdiction over the Total Site, it shall promptly but, in any event, within thirty (30) days, deliver the same to Tenant. Landlord shall send Landlord copies of the tax bills, with receipt for payment, or other evidence of payment of such portion Real Property Taxes. 7.3 Installment Pam. If any Real Property Taxes, general or special, are at any time during the Term of this Lease levied or assessed against the Total Site, which upon exercise of any option permitted by the assessing authority may be paid in installments or converted to an installment payment basis (irrespective of whether interest shall accrue on unpaid installments), Tenant may elect to pay such Real Property Taxes in installments with accrued interest thereon. In the event of such election, and subject to Section 7.4, Tenant shall be liable only for those installments which become payable during the Term of this Lease, and Tenant shall not be required to pay any such installment which becomes due and payable after the expiration of the Term of this Lease. Landlord shall execute whatever documents may be reasonably necessary to convert any Real Property Taxes to such an installment payment basis upon written request by Tenant. 7.4 Proration. Any Real Property Taxes which are payable by Tenant hereunder or which may be reimbursed to Landlord by Tenant hereunder shall be appropriately prorated between Landlord and Tenant as of the Commencement Date and then again as of the expiration or earlier termination of the Term of this Lease. 7.5 Right to Contest. Tenant shall have the right to contest the amount or validity of any Real Property Taxes, in whole or in part, by appropriate administrative and legal proceedings, either in its own name, Landlord's name or jointly with Landlord, without any liability, cost or expense to Landlord, and Tenant may postpone payment of any such contested Real Property Taxes pending the prosecution of such proceedings and any appeals so long as such proceedings shall operate to prevent the collection of such Real Property Taxes and the sale of the Total Site to satisfy any lien arising out of the nonpayment of the same; provided, however, that if at any time payment of the whole or any part thereof shall become necessary to prevent the termination of the right of redemption of any property affected thereby, or if there is to be an eviction of either Landlord or Tenant because of nonpayment thereof, Tenant shall pay the same to prevent such termination of the right of redemption or such eviction. Any such contest shall be at no cost or expense to Landlord. Each refund of any Real Estate Tax so contested shall be paid to Tenant unless attributable to the portion thereof for which Landlord is responsible pursuant to Section 7.2 hereof. 7.6 Improvement or Special Assessment District. If any governmental subdivision with taxing authority shall undertake to create an improvement or special assessment district the proposed boundaries of which shall include any portion of the Total Site, Landlord and Tenant shall each be entitled to appear in any proceeding relating thereto and to present their respective positions as to whether the Total Site should be included or excluded from the -13- proposed improvement or assessment district and as to the degree of benefit to the Total Site resulting therefrom. Landlord or Tenant shall each promptly advise the other in writing of the receipt of any notice or other information relating to the proposed creation of any such improvement or special assessment district, the boundaries of which include any portion of the Total Site. 7.7 Personal Property Taxes. Tenant agrees to pay before delinquency all personal property taxes and assessments of whatsoever kind or nature, and penalties and interest thereon, if any, levied against the all equipment, furniture, fixtures, alterations, improvements and any other personal property of whatsoever kind and to whomsoever belonging, situated or installed in and upon the Total Site, whether or not affixed to the realty, exclusive of any portion thereof attributable to improvements installed by Landlord on the Total Site (except to the extent otherwise indicated in a Project Lease). Tenant shall have the right to contest the amount or validity of any such personal property taxes and/or assessments, in whole or in part, by appropriate administrative or legal proceedings, either in its own name, Landlord's name or jointly with Landlord, without any liability, cost or expense to Landlord, and Tenant may postpone payment of any such contested personal property taxes or assessments pending the prosecution of such proceedings and any appeal so long as such proceedings shall operate to prevent the collection of such personal property taxes or assessments and the sale of the Total Site to satisfy any lien arising out of the non-payment of the same; provided, however, that if at any time payment of the whole or any part thereof shall become necessary to prevent the termination of the right of redemption of any property affected thereby or if there is to be an eviction of either Landlord or Tenant because of non-payment thereof, Tenant shall pay the same to prevent such termination of the right of redemption or such eviction. Any such contest shall be at no cost or expense to Landlord. Each refund of any such personal property tax or assessments so contested shall be paid to Tenant unless attributable to the portion thereof for which Landlord is responsible pursuant to Section 7.2 hereof, Landlord shall not, without the prior approval of Tenant, discontinue or agree to any disposition of any contest or accept any credit or other adjustment of any such tax or assessment as a result of such contest. ARTICLE VIII UTILITIES Landlord shall have no obligation to Tenant under this Lease to furnish any utilities or services to the Total Site. Throughout the Term of this Lease, to the extent applicable (and approved by Landlord) Tenant shall contract for, furnish and pay, at its sole cost and expense, all water, gas, heat, light, power and sewer charges, telephone service and all other services and utilities supplied to or consumed in or on the Total Site, together with any taxes thereon. Landlord shall not be liable in damages or otherwise, and Tenant shall not be entitled to any abatement or reduction of rent, for any failure or interruption of any utility or service being fimrished to the Total Site, and no such failure or interruption shall entitle Tenant to terminate this Lease. -14- ARTICLE IX REPAIRS AND MAINTENANCE The parties agree that, except as provided in Section 4.5 above, Landlord shall have no obligation to make any repairs, alterations or improvements to or upon the Total Site or any part thereof at any time. Except as provided in Section 4.5 above, Tenant shall, at Tenant's sole cost and expense at all times during the Term hereof, keep and maintain the Total Site, and every part thereof in clean, good order, condition and repair and in compliance with all laws and regulations applicable thereto. Should Tenant fail to make any repairs which are the obligation of Tenant hereunder, after Tenant is provided notice of default and opportunity to cure in accordance with the terms provided for herein, and if Tenant is in default by virtue of having failed to make said repair within the time provided for in this Lease, Landlord may, but shall not be required to, enter the Total Site and make the repairs necessary to restore the Total Site to good order, condition and repair, and the cost of such repairs shall become due and payable by Tenant to Landlord upon demand. Tenant shall, upon the expiration or sooner termination of the Term of this Lease, surrender the Total Site and all alterations, additions, changes and improvements therein, thereto and thereof to Landlord in good condition order and repair, ordinary wear and tear excepted. ARTICLE X INDEMNIFICATION AND NONLIABILITY 10.1 Indemnification by Tenant. Except with respect to Hazardous Materials, which the parties hereby agree are governed by the provisions of Section 4.5 hereof, Tenant hereby agrees to and shall indemnify, protect, defend and hold harmless Landlord, its agents, contractors, employees, licensees and invitees, as their respective interests may appear, from and against any and all Claims arising out of or in connection with Tenant's use of the Total Site, or the conduct of its business thereon, or from any activity, work or thing done, permitted or suffered by Tenant, its agents, contractors, employees, licensees, subtenants, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof), on or about the Total Site or any part thereof. Tenant shall further indemnify, protect, defend and hold harmless Landlord, its agents, contractors, employees, licensees, and invitees from and against any and all Claims arising out of or in connection with any breach or default in the performance of any obligation on Tenant's part to be performed under this Lease, or any act, neglect, fault or omission of Tenant or of its agents, contractors, employees, licensees, subtenants, assignees, concessionaires or invitees (other than Landlord pursuant to Section 25.8 hereof). If any action or proceeding is brought against Landlord by reason of any such Claim, upon notice from Landlord, Tenant shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to Tenant's and other property or injury to Tenant and other Persons in, upon or about the Total Site from any cause whatsoever, except to the extent such damage or injury is caused by Landlord's fraud, intentional misrepresentation, gross negligence, willful misconduct or any breach by Landlord of its express representations and warranties or covenants set forth in this Lease prior to the expiration thereof Notwithstanding anything to the contrary herein, in no -15- event shall Tenant be liable to Landlord or be required to indemnify Landlord in respect of any matters related to Pre -Existing Environmental Conditions, which the parties agree are governed solely by the provisions of Section 4.5 hereof. 10.2 Exemption of Landlord from Liability. Except to the extent (a) caused by Landlord's fraud, intentional misrepresentation, gross negligence, willful misconduct, and (b) not covered by insurance required hereunder to be carried by the parties hereto, Landlord shall not be liable to Tenant for any Claim which may be sustained by the person, goods, wares, merchandise or property of Tenant, its agents, contractors, employees, licensees, concessionaires, invitees or customers, or any other Person in or about the Total Site. In any event, under no circumstances shall Landlord shall be liable for any damage to Tenant's business, improvements, or personal property, regardless of the cause thereof, and Tenant hereby releases Landlord from all liability for such Claims. Notwithstanding any provision of this Lease or any applicable law to the contrary, in no event shall Landlord be liable under any circumstances for any speculative, punitive, or consequential damages incurred by Tenant, including, without limitation, any injury to, or interference with, Tenant's business (including any loss of profits) arising in connection with this Lease. 10.3 Survival. The parties hereby expressly agree that the provisions of this Article 10 shall survive the expiration or earlier termination of this Lease. ARTICLE XI INSURANCE 11.1 Tenant's General Insurance Requirements. All insurance required to be carried by Tenant hereunder shall be issued by responsible insurance companies reasonably acceptable to Landlord and the holder of any deed of trust secured by the fee interest of Landlord with respect to any portion of the Total Site (herein referred to as a "Mortgagee"). Unless otherwise required by Mortgagee, all policies of insurance required to be obtained by Tenant herein shall be issued by insurance companies with general policy holder's rating of not less than A— and a financial rating of not less than Class VIII as rated in the most current available "Best Insurance Reports" or other similar insurance rating guide. Each such policy shall name Landlord and at Landlord's request any Mortgagee of the Total Site as additional insureds, as their respective interests may appear, and a duplicate original of all policies or certificates evidencing the existence and amounts of such insurance shall be delivered to Landlord by Tenant at least ten (10) days prior to Tenant's occupancy of the Total Site. Each such policy must contain a provision that the company writing said policy will give to Landlord, and at Landlord's request any Mortgagee of the Total Site, not less than thirty (30) days' notice in writing in advance of any modification, cancellation or lapse of such insurance or any reduction in the amounts thereof. All of Tenant's insurance policies shall be written as primary policies, not contributing with, and not in excess of, coverage which Landlord may carry, and shall provide for severability of interests. Tenant shall furnish Landlord with renewals or "binders" of each such policy at least thirty (30) days prior to the expiration thereof Tenant agrees that if Tenant does not procure and maintain such insurance, Landlord may (but shall not be required to) obtain such insurance on Tenant's behalf and charge Tenant premiums therefor together with a ten percent -16- (10%) handling charge, payable upon demand. Tenant may carry such insurance under a blanket policy, provided such blanket policy expressly affords the full amount and type of coverage required by this Lease by a Landlord's protective liability endorsement or otherwise. Tenant shall not do, or permit to be done, anything which shall invalidate the insurance policies required hereunder. 11.2 Property Insurance. At all times during the Term hereof in which Tenant maintains any improvements on the Total Site, Landlord shall, at Tenant's sole cost and expense, maintain in effect policies of property insurance covering (a) all improvements in, on or to the Total Site, and (b) all trade fixtures, furniture, merchandise and other personal property which may be situated from time to time in, on or upon the Total Site, in an amount not less than one hundred percent (100%) of their actual replacement cost from time to time during the Term of this Lease, providing protection against any peril included within the classification "Fire and Extended Coverage", together with insurance against sprinkler damage, vandalism, and malicious mischief, including cost of debris removal and demolition. During Tenant's construction of any permitted alterations within the Total Site, Landlord shall, at Tenant's sole costs and expense, maintain a course of construction endorsement to such property insurance policies and liability insurance policies. If Landlord informs Tenant that Landlord cannot obtain such insurance, then Tenant shall obtain such insurance at its sole expense. Subject to Article XII hereof, the proceeds of such insurance shall be used for repair and replacement of the property so insured. 11.3 Liability Insurance. At all times during the Term hereof, Landlord shall, at Tenant's sole cost and expense, obtain and continue in force commercial liability insurance or comprehensive general liability insurance with respect to the Total Site and the activities and use thereof and thereon by Tenant and Tenant's employees, agents, contractors, licensees, subtenants, assignees, concessionaires and invitees. Such insurance shall include coverage for personal injury (including employees and false arrest coverage), bodily injury, broad form property damage, Total Site/operations, owner's protective coverage, blanket contractual liability, products and completed operations liability, and owned/non-owned auto liability in an amount not less than Three Million Dollars ($3,000,000.00) combined single limit. The limits of such insurance shall not, however, limit the liability of Tenant hereunder. All liability and property damage policies shall contain a provision that Landlord, although named as an additional insured, shall nevertheless be entitled to recovery under said policies for any loss occasioned to it, its servants, agents and employees by reason of the negligence of Tenant and/or Tenant's employees, agents, contractors, licensees, subtenants, assignees, concessionaires and invitees. Notwithstanding the foregoing or anything set forth in this Article XI to the contrary, the parties agree that Tenant may satisfy its insurance requirements hereunder through policies maintained and to be maintained by Landlord with respect to the liability risks set forth herein unless Landlord informs Tenant that Landlord is unable to obtain such policies. To the extent feasible, Landlord agrees to carry such liability insurance set forth above in this Section 11.3 for the Term, which shall include Tenant and, to the extent feasible, Tenant's employees, agents, contractors, licensees, subtenants, assignees, concessionaires and invitees, as additional insureds thereto. Tenant shall be responsible for the cost of any such insurance policies as they relate to the Total Site. 11.4 Worker's Compensation. Tenant shall at all times during the Term hereof, at its own cost and expense, obtain and maintain in effect worker's compensation insurance and -17- employer's liability insurance as required by law, with full waiver of the insurer's rights of subrogation against Landlord and Landlord's officers, partners, agents, contractors, employees and representatives. 11.5 Other Insurance. Tenant shall at all times during the Term hereof at its own cost and expense obtain and maintain in effect any other form or forms or amounts of insurance as Landlord or its Mortgagee may reasonably require from time to time. 11.6 Adiustment. Not more frequently than once every five (5) years during the Term of this Lease, Tenant shall, at Landlord's request, increase the insurance policy limits for the insurance to be carried by Tenant as set forth in this Article 11 in an amount reasonably determined by Landlord in light of the nature of risks covered thereby provided, however, that no such increase in coverage shall exceed twenty percent (20%) of the previous limit therefor unless the nature of the use of the Total Site has materially changed or improvements have been constructed thereon. 11.7 Waiver of Subro ation. Landlord and Tenant agree to have their respective insurance companies issuing property damage and loss of insurance and extra expense insurance waive any rights of subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance carried by Landlord and Tenant, respectively, is not invalidated thereby. Landlord and Tenant hereby waive any right that either may have against the other on account of any loss or damage to the extent such loss or damage is insurable under such policies of insurance. ARTICLE XII DAMAGE OR DESTRUCTION 12.1 Damage and Duty to Restore. In case of damage to or destruction of any improvements, in whole or in part, by fire or any other casualty whatsoever, whether or not insured against by any policy or policies (including required endorsements) required to be carried under the provisions of Article XI of this Lease, all of Tenant's obligations hereunder, including, without limitation, the obligation to pay rent, shall continue as provided for in this Lease. Tenant shall have no obligation to restore, replace, rebuild, demolish or remove any improvements, except that, promptly following any such damage or destruction, Tenant shall clear the Total Site of all debris and hazardous conditions caused by such damage or destruction using the proceeds of any insurance and the balance thereof shall be delivered to Landlord. 12.2 No Obligation of Landlord to Restore. Landlord shall in no event be under any duty or obligation to restore, replace or rebuild any improvements, or any portion thereof, at any time. 12.3 Waiver by Tenant, Tenant shall have no right to terminate this Lease as a result of any statutory provisions now or hereafter in effect pertaining to the damage and destruction of all or any part of the Total Site, including, without limitation, the provisions of Section 1932(2) and 1933(4) of the California Civil Code. Tenant shall not be entitled to any compensation or damages from Landlord for the loss of the use of the whole or any part of the Total Site, or of Tenant's personal property or any inconvenience or annoyance occasioned by such damage, destruction repair, reconstruction or restoration. ARTICLE XIII TRADE FIXTURES Throughout the Term of this Lease, all trade fixtures, equipment, signs and furnishings installed by Tenant in or on the Total Site shall be and remain the property of Tenant and, provided Tenant is not in default under this Lease, such items shall be removable at any time during the Term of this Lease at Tenant's sole cost, provided Tenant hereby agrees to repair or cause to be repaired any damage or injury to the Total Site occasioned by any such removal. Upon the expiration or earlier termination of this Lease, at Landlord's request, Tenant shall remove any such items at its sole expense. ARTICLE XIV ASSIGNMENT AND SUBLETTING 14.1 Restrictions on Transfers. Tenant shall not voluntarily or involuntarily assign its interest in this Lease or its leasehold interest in the Total Site, sublease all or any part of the Total Site, sell or lease all or any part of any improvements, transfer any direct or indirect interest in Tenant, or allow any other Person to occupy or use all or any part of the Total Site (collectively referred to as a "Transfer"), without first obtaining Landlord's prior written consent, which Landlord may withhold in its sole discretion or upon the instruction of Landlord's Mortgagee, A Transfer shall also include an Ownership Change (as defined in the next sentence) but shall exclude (a) a sale or transfer of any direct or indirect interest in Tenant by devise or descent or by operation of law upon the death of an owner of any direct or indirect interest in Tenant, and (b) a sale or transfer of any direct or indirect ownership interest in Tenant by a current owner to a trust for the benefit of such owner or an immediate family member (i.e., parents, spouses, siblings, children or grandchildren) of such owner for estate planning purposes. An "Ownership Change " means the direct or indirect transfer (any level) by sale, assignment, mortgage, deed of trust, trust, operation of law, or otherwise of any shares, voting rights or ownership interest which will result in a change in the identity of the Person or Persons exercising, or who may exercise, voting rights or control of (or receive the economic benefits of) Tenant. Any Transfer without Landlord's prior written consent shall be voidable, at Landlord's election, and shall constitute a material default. No consent to an assignment or sublease shall constitute a further waiver of the provisions of this Article. Notwithstanding the foregoing, without the need for obtaining Landlord's prior written consent, but upon thirty (30) days' prior written notice to Landlord, Tenant shall have the right to hypothecate its interest in the leasehold estate created by this Lease as provided in Article XV. 14.2 Required Provisions. Any and all agreements in respect of a direct Transfer of Tenant's rights and obligations under this Lease shall (a) impose the same obligations and conditions on the Transferee as are imposed on Tenant by this Lease (except as to Rent and term or as otherwise agreed by Landlord in its sole discretion), with an express assumption of such obligations by said Transferee, (b) be expressly subject and subordinate to each and every provision of this Lease, (c) have a term that expires on or before the expiration of the Term of this Lease, and (d) expressly provide that Tenant shall not be released from any or all of its obligations under this Lease notwithstanding such Transfer and/or Landlord's consent thereto and that Tenant remains jointly and severally liable for the tenant's obligations under the Lease. 14.3 Fees for Review. In connection with any proposed Transfer, Tenant shall pay to Landlord a non-refundable fee as reimbursement for expenses incurred by Landlord in connection with reviewing each such transaction (including any administrative expenses for Landlord's property manager), in the amount of Five Hundred Dollars ($500.00). In addition to such reimbursement, if Landlord retains the services of an attorney to review the transaction, Tenant shall pay to Landlord all reasonable attorneys' fees incurred by Landlord in connection therewith. Tenant shall pay such fees to Landlord within thirty (30) days after its receipt of written request therefor from Landlord and regardless of whether such Transfer is approved. 14.4 No Release of Tenant. Except as otherwise expressly set forth therein, no consent by Landlord to any Transfer by Tenant shall relieve Tenant of any obligation to be performed by Tenant under this Lease, whether occurring before or after such consent, transfer or subletting. The consent by Landlord to any Transfer shall not relieve Tenant from the obligation to obtain Landlord's express prior written consent to any other Transfer. The acceptance by Landlord of payment from any other Person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any subsequent Transfer, or to be a release of Tenant from any obligation under this Lease. 14.5 Assumption of Obligations. Each direct transferee of all of Tenant's rights and obligations hereunder shall assume all obligations of Tenant under this Lease and shall be and remain liable jointly and severally with Tenant for the payment of the rent and the performance of all the terms, covenants, conditions and agreements herein contained on Tenant's part to be performed for the Term of this Lease. Landlord shall have no obligation whatsoever to perform any duty or respond to any request from any sublessee, it being the obligation of Tenant to administer the terms of its subleases. 14.6 Waiver. If Tenant requests Landlord's consent to a Transfer, and Landlord's consent is impermissibly withheld, Tenant waives any right to seek damages under California Civil Code Section 1995.310, or any similar law now or hereafter in effect, it being the intention of the parties that Tenant's rights in such event shall be limited to seeking an injunction or specific performance. ARTICLE XV HYPOTHECATION 15.1 Hypothecation. -20- 15.1.1 Landlord agrees and consents that Tenant may, at any time and from time to time, without obtaining any further consent of Landlord, but upon not less than thirty (30) days' prior written notice to Landlord, mortgage, encumber, assign and hypothecate by mortgage, deed of trust or otherwise (any of which is herein called, together with its successors and assigns, a "Tenant Mortgage") all right, title and interest of Tenant in the leasehold estate created by this Lease or portion thereof (the "Tenant Mortgage Collateral") to a commercial bank, finance company, insurance company, or other institutional lender or other Person reasonably acceptable to Landlord (herein called "Tenant Mortgagee") on non -participating and non -convertible terms, with no "equity -kicker" or equity level interest rates, in the principal amount of not more than Twenty -Five Million Dollars ($25,000,000), which will mature and be repaid in full prior to the fifth (5th) anniversary of the Effective Date. Tenant shall bear the entire cost of any such loan and the proceeds thereof shall be used to reimburse Tenant and its principals for fees, costs and expenses previously incurred by Tenant and its principals in connection with this Lease, and the planning and development, and proposed planning and development, of the Total Site and Projects. In addition, any such loan shall provide for the termination of any security interest in the portion of the Total Site that is approved for a Project upon the execution and delivery of a Project Lease. Under no circumstances may Tenant hypothecate the fee interest in the Total Site nor will Landlord subordinate this Lease to any such Tenant Mortgage obtained by Tenant. 15.1.2 Except as hereinafter otherwise provided, and except as otherwise approved by Landlord in writing in its sole discretion, the Tenant Mortgage and all rights thereunder shall be subject to each and every of the covenants, conditions and restrictions of this Lease, and the Tenant Mortgage shall also be subject to all the rights and interest of Landlord hereunder, none of which shall be deemed waived by the foregoing consent. Tenant agrees to furnish to Landlord copies of all instruments, deeds of trust, indentures or agreements executed by Tenant to perfect the hypothecation of the leasehold estate to Tenant Mortgagee. 15.2 Notice to and Rights of Tenant Mortgagee. 15.2.1 Any Tenant Mortgagee shall have the right at any time during the Term: (a) to do any act required of Tenant hereunder, including to cure any defaults by Tenant hereunder, and all such acts done or performed shall be effective to prevent a forfeiture of Tenant's rights hereunder as if the same had been done or performed by Tenant; and (b) to rely on the security afforded by the leasehold estate and to acquire and to succeed to the interest of Tenant hereunder by foreclosure, whether by judicial sale, by power of sale contained in any security instrument, or by deed given in lieu of foreclosure, and to thereafter convey or assign title to the leasehold estate so acquired to any other Person that agrees to accept such assignment of rights and delegation of duties by written instrument, a copy of which shall be delivered to Landlord. 15.2.2 Landlord shall provide any Tenant Mortgagee with notice of any default by Tenant hereunder at such address as may be provided by Tenant Mortgagee to Lender in writing. Landlord shall not terminate this Lease by reason of any default of Tenant hereunder if, after delivery of such notice, the Tenant Mortgagee shall: -21- (a) cure such default within sixty (60) days after service on Tenant Mortgagee of written notice from Landlord of Landlord's intention to terminate this Lease (if the same cannot be cured within sixty (60) days, Tenant Mortgagee shall have a reasonable time after, sixty (60) days within which to cure such default so long as Tenant Mortgagee is proceeding and continuing to cure such default with reasonable diligence; provided, however, that in no event shall such cure period exceed one hundred and twenty (120) days subject to Section 15.2.3 below); and (b) undertake on or before the expiration of said thirty (30) days, in writing, to perform thereafter on a timely basis all covenants contained in this Lease capable of performance by Tenant Mortgagee in the course of exercise of its remedies against Tenant. 15.2.3 If, following Tenant Mortgagee's written undertaking provided for in Section 15.2.2(b) above, it is determined there are performances called for and due under this Lease that are not susceptible of being performed by Tenant Mortgagee, or if any default contemplated in Section 15.2.2(a) above is not susceptible of being cured by Tenant Mortgagee, then such performance shall be deemed rendered or such default shall be deemed cured if Tenant Mortgagee shall proceed in a timely and diligent manner to accomplish the foreclosure or other acquisition of Tenant's interest under this Lease; provided, however, that if said foreclosure proceedings shall be restrained by any court (as in the case of a bankruptcy proceeding) and relief from any such restraint shall have been diligently and timely sought but not successfully obtained by Tenant Mortgagee, any such performance shall be deemed rendered and any such default shall be deemed cured nevertheless. The obligation of Tenant Mortgagee for the performance of the terms of this Lease shall terminate upon the sale, transfer or assignment of the right, title and interest and delegation and acceptance of the duties of Tenant Mortgagee in the leasehold estate to any other Person. 15.2.4 Any provisions contained in this Lease to the contrary notwithstanding, any Tenant Mortgagee or its assigns may enforce such Tenant Mortgage and acquire title to the leasehold estate in any lawful manner and, pending foreclosure of any such Tenant Mortgage, may take possession of and rent the Total Site, and upon foreclosure of such Tenant Mortgage may sell, transfer or assign the leasehold estate or sublet the Total Site without the consent of the Landlord; provided, however, any such sale, transfer or assignment shall be subject to all other terms and conditions of this Lease including, without limitation, the restrictions on change of use of the Total Site contained in Article IV of the Lease. Any Person acquiring the right, title and interest of the Tenant's leasehold estate under this Lease from Tenant Mortgagee or any Person claiming or deriving its interest through or under Tenant Mortgagee shall assume the liability for the performance of the obligations imposed upon Tenant by the terms of this Lease. 15.2.5 Notwithstanding the acquisition by Tenant Mortgagee of Tenant's interest in this Lease by judicial or non judicial foreclosure, assignment in lieu of foreclosure or any other manner, Tenant shall remain primarily liable to Landlord for all obligations of Tenant under this Lease unless and until Tenant Mortgagee or its assigns (i) voluntarily accepts all such obligations, and (ii) performs all such obligations which have accrued under this Lease. -22- 15.3 New Lease on Termination of this Lease. If Landlord elects to terminate this Lease and Tenant's rights hereunder pursuant to the provisions of Article XVII or if this Lease is terminated for any reason or is rejected or disaffirmed pursuant to bankruptcy law or other law affecting creditors' rights, Landlord shall first serve written notice of such event on Tenant Mortgagee, and Tenant Mortgagee shall have thirty (30) days after receipt of such notice within which Tenant Mortgagee may elect in writing delivered to Landlord to demand that Landlord execute a new lease of the Total Site with Tenant Mortgagee (or such other Person as may be designated by Tenant Mortgagee) as tenant or Tenant Mortgagee may elect to exercise its rights set forth in Section 15.2. If Tenant Mortgagee elects to lease the Total Site Landlord and Tenant Mortgagee shall execute a new lease which shall be for the unexpired Term of this Lease and shall otherwise be identical with the terms of this Lease and shall have the same priority as this Lease. Landlord's election to so terminate shall not be effective against Tenant Mortgagee until after the expiration of such thirty (30) day notice period. Such new lease shall be executed and delivered by Landlord to Tenant Mortgagee within thirty (30) days after receipt by Landlord of written notice from Tenant Mortgagee of such timely election to obtain a new lease and upon payment by Tenant Mortgagee of Landlord's reasonable attorneys' fees and all sums owing by Tenant under the provisions of this Lease (less the rent and other income actually collected by Landlord in the meantime from any subtenants or other occupants of the Total Site) and upon performance by Tenant Mortgagee of all other obligations of Tenant under the provisions of this Lease with respect to which performance is then due and which are susceptible of being cured by the Tenant Mortgagee. 15.4 Consent of Tenant Mortgagee. Notwithstanding the foregoing provisions, until such time as the indebtedness of Tenant to Tenant Mortgagee shall have been fully paid, Landlord shall not, without the prior written consent of Tenant Mortgagee first had and obtained at Tenant's expense, accept any surrender, cancellation or termination of this Lease, consent to any modification hereof or consent to the assignment hereof by Tenant of any interest of Tenant herein. 15.5 No Encumbrance of Fee Title. At all times herein stated, Landlord's fee title to the Total Site shall not be encumbered or affected in any manner directly or indirectly by any Tenant Mortgage regardless of whether such Tenant Mortgage is subordinate to this Lease, and the rights of any Tenant Mortgage in and to the Total Site and shall at no time be greater than the right of Tenant hereunder except as otherwise provided in this Article XV, 15.6 Direct Agreement with Tenant Mortgagee. Landlord will, upon request of the Tenant, enter into an agreement with any Tenant Mortgagee confirming the rights of the Tenant Mortgagee hereunder in form and substance reasonably acceptable to Landlord and such Tenant Mortgagee 15.7 Encumbrance by Landlord. Subject to the provisions of Section 20.2 below, Landlord shall have the right to encumber the fee interest in the Total Site with any Mortgage. -23- ARTICLE XVI CONDEMNATION 16.1 Taking. If less than the entire Total Site is taken or appropriated for public or quasi -public use by the right of eminent domain or otherwise by a taking in the nature of a condemnation or inverse condemnation, with or without litigation, or is transferred by agreement under the threat thereof (any of the foregoing being referred to herein as a "Taking"), then this Lease shall terminate as to the part taken and this Lease shall remain in effect. If the entire Total Site is the subject of a Taking or such portion thereof as to render the use of the remainder of the Total Site uneconomic for its intended purpose as determined by Tenant, then this Lease shall terminate. No temporary Taking of all or any part of the Total Site shall terminate this Lease or give Tenant any right to any abatement of any sums due hereunder, and Landlord shall be entitled to the entire award for such temporary Taking. Each party hereto waives the provisions of California Code of Civil Procedure Section 1265.130 allowing either party to petition the court to terminate this Lease for a partial Taking. 16.2 Division of Award. In the event that an award is made for an entire or partial Taking of the Total Site or any interest therein or due to any action in direct or inverse condemnation or in the event of a Taking as herein defined, the parties hereto agree that their respective rights to the award or compensation paid shall be as follows: 16.2.1 If the portion of the Total Site that is the subject of the Taking is encumbered by any Tenant's Mortgage approved by Landlord or permitted by this Lease, then Tenant shall be entitled to a prorated portion of the award equal to the amount of collateral taken. 16.2.2 Landlord shall be entitled to the balance of any award. Neither party will do any act or make any agreement which will impair the legal obligation of the condemnor to bear the cost of such proceeding. Both parties agree, however, that in the event such a proceeding is used, the rights of the respective parties hereto shall be governed by the formula set forth herein. 16.3 Costs. Each party shall bear its own costs, attorneys' fees, appraisers' fees and all other costs in connection with any matter contained in this Article, except as may be otherwise provided. 16.4 Covenant by Landlord. Landlord covenants and agrees with Tenant that, to the extent Landlord has, or at any time in the future obtains, any rights of eminent domain with respect to all or any portion of the Total Site, Landlord will not pursue any taking or commence any eminent domain proceeding of any portion of the Total Site. -24- ARTICLE XVII DEFAULT PROVISIONS 17.1 Events of Default. Tenant shall be deemed to be in default under the terms of this Lease as follows (such circumstances herein called an "event of default"): 17.1.1 If Tenant shall fail to pay any installment of rent or other sum when due and such failure shall continue for a period of five (5) business days after Landlord delivers written notice thereof to Tenant specifying the default, the applicable cure period, and Landlord's opinion of any actions needed to cure such default, which notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 (or any successor or similar statute); or 17.1.2 If Tenant shall fail to promptly perform or observe any covenant, condition or agreement to be performed by Tenant under this Lease, and such failure shall continue for a period of thirty (30) days (or such longer period of time as may be necessary to cure such default provided Tenant diligently commences and thereafter diligently pursues the cure thereof, provided, however, that in no event shall such period exceed ninety (90) days) after Landlord delivers written notice thereof to Tenant specifying the default, the applicable cure period, and Landlord's opinion of any actions needed to cure such default; or 17.1.3 If any petition shall be filed against Tenant in any court, whether or not pursuant to any statute of the United States of America or of any state, in any bankruptcy, reorganization, composition, extension, arrangement or insolvency proceedings, and Tenant shall thereafter be adjudicated bankrupt, or if said proceedings shall not be dismissed within sixty (60) days after the institution of the same, or if any such petition shall be filed by Tenant; or 17.1.4 If, in any third party creditor proceedings wherein the Tenant is a defendant, a receiver, receiver and manager, trustee or liquidator shall be appointed for all or a substantial portion of the Total Site, and such receiver, receiver and manager, trustee or liquidator shall not be discharged within sixty (60) days after the appointment of such receiver, receiver and manager, trustee or liquidator; or 17.1.5 If Tenant makes an assignment for the benefit of creditors. 17.2 Remedies. Upon the occurrence of and during the continuance of any event of default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity, the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever. 17.2.1 Landlord shall have the right to terminate this Lease, in which event Tenant shall immediately surrender the Total Site to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Total Site and expel or remove Tenant 25- and any other Person who may be occupying the Total Site or any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from Tenant the following: (i) The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus (ii) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus (iii) The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus (iv) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Total Site or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and (v) At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law. The term "rent" as used in this Section 17.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 17.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by allowing interest at the maximum amount of such interest permitted by law. As used in Section 17.2.1(iii) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). Notwithstanding anything to the contrary in this Section 17.2, if Tenant fails to timely vacate and surrender the Premises, then the term "rent" as used in this Section 17.2 shall be deemed not to be or mean any interest in the Lease related to a bonus value (i.e., that the fair rental value of the Total Site for all or any portion of the remainder of the Term thereof exceeded the rental reserved under this Lease for such period). 17.2.2 Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time So time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due. -26- 17.3 Remedies Cumulative. The remedies of Landlord, as hereinabove provided, are cumulative and in addition to and not exclusive of any other remedy of Landlord herein given or which may be permitted by law. The remedies of Landlord, as hereinabove provided, are subject to the other provisions herein and are particularly subject to the provisions of Article XV hereinabove. Nothing contained in this Article XVII shall constitute a waiver of Landlord's right to recover damages by reason of Landlord's efforts to mitigate the damage to it caused by Tenant's default; nor shall anything herein adversely affect Landlord's right, as in this Lease elsewhere provided, to indemnification against liability for injury or damage to Persons or property occurring prior to the termination of this Lease. 17.4 Performance by Tenant. All covenants and agreements to be performed by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any offset to or abatement of rent. If Tenant fails to pay any sum of money, including rent, required to be paid by it hereunder or fails to perform any other act on its part to be performed hereunder, and such failure continues after written notice thereof to Tenant (if required) and the expiration of any period expressly provided for in this Lease during which Tenant may cure such failure, Landlord may, without waiving or releasing Tenant from any obligation of Tenant, make any such payment or perform any such act and all sums so paid by Landlord and all costs incurred by Landlord in performing such act (including attorneys' fees), shall be payable by Tenant on demand and Tenant hereby covenants to pay any and all such sums. Landlord shall have in addition to any other right or remedy of Landlord the same rights and remedies in the event of nonpayment of sums due under this Article XVII as in the case of default by Tenant in the payment of rent. 17.5 Landlord's Default, Landlord shall not be in default in the performance of any obligation under this Lease unless and until (a) it has failed to perform its obligations under Section 24.4.1 hereof to enter into a Project Lease within ten (10) days after receipt of written notice by Tenant to Landlord specifying such failure, (b) it has failed to perform its other obligations under Section 24 within twenty (20) days after receipt of written notice by Tenant to Landlord specifying such failure, or (c) it has failed to perform any other obligation hereunder within thirty (30) days after receipt of written notice by Tenant to Landlord specifying such failure; provided, however, that if the nature of Landlord's default is such that more than thirty (30) days are required for its cure, then Landlord shall not be deemed to be in default if it commences such cure within the thirty (30) day period and thereafter diligently prosecutes such cure to completion provided Landlord diligently commences and thereafter diligently pursues the cure thereof. Tenant agrees to give any Mortgagee of Landlord's estate a copy, by registered mail, of any notice of default served upon Landlord, provided that prior to such notice Tenant has been notified in writing of the address of such Mortgagee. Tenant further agrees that if Landlord shall have failed to cure such default within the time period provided in this Lease, then any such Mortgagee shall have an additional sixty (60) days within which to cure such default on the part of the Landlord or if such default cannot be cured within that time, then such additional time as may be necessary if within that sixty (60) days the Mortgagee has commenced and is pursuing the remedies necessary to cure such default (including, but not limited to, commencement of foreclosure proceedings, if necessary to effect such cure), in which event this Lease shall not be terminated while such remedies are being so pursued. Notwithstanding anything to the contrary in this Lease, Tenant agrees that in the event of default by Landlord hereunder, there shall be _27_ absolutely no personal liability of any partners, officers, employees, managers, councilmen or agents who or which constitutes or comprises Landlord, and Tenant shall, subject to the rights of Landlord's Mortgagees, look solely to the interest of Landlord in the Total Site and any proceeds of Landlord's liability insurance policies applicable and payable with respect to Landlord's ownership of the Total Site for the satisfaction of each and every remedy of Tenant therefor. In this regard, none of Landlord's partners, officers, employees, managers, councilmen or agents shall be personally liable for any such default or for any deficiency nor shall other assets of Landlord be available with respect to such default or deficiency. ARTICLE XVIII SALE OF TOTAL SITE BY LANDLORD 18.1 Right of First Refusal for Sale to Private Party. If Landlord elects to sell the fee interest in the Total Site to a "Private Party" (e.g., a party that is not a governmental, quasi - governmental, or other similar Person, or an entity that is majority owned and controlled by such an entity or that is established solely for the purpose of obtaining tax-exempt financing), then Tenant shall have, and Landlord hereby grants, a right of first refusal with respect to the sale of the fee interest of the Total Site. In connection with such right of first refusal, if, at any time during the Term, Landlord receives a bona -fide offer to purchase all or any portion of the Total Site from a Private Party which Landlord intends to accept, Landlord shall deliver a copy of such offer to Tenant (the "ROFR Notice"), which offer must contain all material terms and conditions related to such purchase and sale (including, without limitation, a description of that portion of the Total Site to which the offer pertains, the purchase price and the anticipated closing date). Upon receipt of the ROFR Notice, Tenant shall have thirty (30) days in which to elect to purchase such portion of the Total Site as described in the ROFR Notice, on the same terms and conditions as noted in the ROFR Notice (the "Tenant ROFR") without, however, any due diligence period, and which notice shall be accompanied by a non-refundable deposit, in immediately available funds, in the amount of the aggregate deposits under the ROFR Notice. If Tenant elects to exercise the Tenant ROFR, Landlord and Tenant shall be deemed to have entered into an agreement of purchase and sale containing those conditions set forth in the ROFR Notice, with such modifications as Landlord and Tenant may agree to, and, on the closing date specified in such ROFR Notice, Landlord and Tenant shall complete the transfer of such portion of the Total Site to Tenant (or an affiliate of Tenant, as designated by Tenant). If Tenant does not respond within such thirty (30) days, or Tenant elects not to exercise the Tenant ROFR, Landlord shall be permitted to sell that portion of the Total Site described in the ROFR Notice, subject to the material terms and conditions of Section 18.2 hereof, on and subject to the terms and conditions set forth in the ROFR Notice, without amendment; provided that, if Landlord is unable to complete such sale by the date specified in the ROFR Notice plus ninety (90) days, such portion of the Total Site shall once again be subject to the terms and conditions of this Section 18.1 and Tenant's right of first refusal. Tenant's rights under this Section 18.1 shall not apply in connection with a foreclosure, deed -in -lieu of foreclosure, or a subsequent conveyance by Landlord's Mortgagee. 18.2 Release of Landlord. Landlord shall have the right to sell all or any portion of the Total Site to a non -Private Party without triggering the Tenant's right of first refusal set forth above. In the event of any sale by Landlord of its fee interest in all or any portion of the Total Site to any Person, Landlord shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and unaccrued obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; provided that the purchaser, at such sale of all or any portion of the Total Site, shall in writing covenant in favor of Tenant to carry out and assume any and all of the covenants and obligations of Landlord under this Lease. ARTICLE XIX NON -MERGER There shall be no merger of this Lease, nor of the leasehold estate created by this Lease, with Landlord's fee estate in the Total Site by reason of the fact that this Lease or the leasehold estate created by this Lease or any interest in this Lease or any such leasehold estate may be held, directly or indirectly, by or for the account of any Person who shall own the fee estate in the Total Site or any interest in such fee estate, and no such merger shall occur unless and until all Persons at the time having an interest in the fee estate in the Total Site and all Persons (including any leasehold Mortgagee) having an interest in this Lease or in the leasehold estate created by the Lease shall join in a written instrument effecting such merger and shall duly record the same. ARTICLE XX ESTOPPEL CERTIFICATES AND SUBORDINATION 20.1 Tenant's Certificate. Tenant agrees at any time and from time to time, upon not less than ten (10) days written notice by Landlord, to execute, acknowledge and deliver to Landlord a statement in writing certifying (a) that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same are in full force and effect as modified and stating the modifications); (b) whether nor not, to the best knowledge of Tenant, there are then existing any offsets or defenses against the enforcement of any of the terms, covenants or conditions hereof upon the part of Tenant to be performed and if so specifying the same); (c) the dates to which the rent and other charges have been paid; (d) whether or not, to the best knowledge of Tenant, Landlord is in default in the performance of any covenant, agreement or condition contained in this Lease and, if so, specifying each such default of which Tenant may have knowledge; and (e) such other matters as may be reasonably required by Landlord or any Mortgagee, it being intended that any such statement delivered pursuant to this section may be relied upon by any prospective purchasers or Mortgagee of the fee of the Total Site. 20.2 Subordination. This Lease shall be subject and subordinate to the lien of any mortgage or trust deed, now or hereafter in force against Landlord's interest in the Total Site, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgages or trust deeds, unless the holders of such mortgages or trust deeds require in writing that this Lease be superior thereto. With respect to any such instruments entered into by Landlord after the execution of this 29- Lease, Tenant's subordination of this Lease shall be subject to receiving assurance (a "non- disturbance agreement") from Landlord's Mortgagee in commercially reasonable form and substance that Tenant's use and possession and this Lease will not be disturbed so long as no event of default occurs and is continuing and Tenant agrees to attorn to Landlord's mortgagee to the extent it becomes the record owner of the Total Site. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any mortgage or deed in lieu thereof by any Landlord Mortgagee, to attorn, without any deductions or set -offs whatsoever, to the purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof if so requested to do so by such purchaser, and to recognize such purchaser as the Landlord under this Lease. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the attornment and subordination of this Lease to any such mortgages or trust deeds. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale. ARTICLE XXI MEMORANDUM OF LEASE Concurrently with the execution of this Lease, both parties shall execute and acknowledge a Memorandum of this Lease in recordable form which shall be substantially in the form attached hereto as Exhibit "C" ("Memorandum") which shall be recorded at Tenant's election (and expense, including, without limitation, all recording charges and documentary transfer taxes, and the like) in the official records in which the Total Site is located ("Official Records") after the Due Diligence Date (or earlier provided that Tenant concurrently executes and delivers to Landlord an executed, acknowledged, original of a quitclaim deed or other instrument prepared by Landlord to terminate the effect of the Memorandum, which (a) Landlord may record in the Official Records if Tenant terminates this Lease pursuant to Section 1.3 above, or (b) Landlord shall return to Tenant if Tenant does not terminate this Lease pursuant to Section 1.3 above) provided that this Lease has not previously terminated. Concurrently with the execution of any supplement to this Lease pursuant to Section 1.1.1, the parties shall execute and record in the Official Records a supplement to the Memorandum with respect to the Scout Property or the Agency Property or any portion thereof that is subjected to this Lease thereunder. Concurrently with the execution of each Project Lease, the parties shall execute and record in the Official Records a partial termination of the Memorandum with respect to the portion of the Total Site that is the subject of the Project Lease. ARTICLE XXII QUIET POSSESSION Landlord covenants that Tenant, upon payment of the rental herein reserved, and so long as no event of default shall have occurred and be continuing, shall and may at all times, for itself and its subtenants, peaceably and quietly have, hold and enjoy the Total Site during the Term of this Lease. -30- ARTICLE XXIII SIGNS Tenant may not erect or affix permanent or temporary signage on or about the Total Site without the prior written reasonable approval of Landlord as to content, number, color, size, type, quality, location, materials and graphics provided, however, that such signage must also comply with any applicable Restrictions, covenants, conditions and restrictions and all applicable laws, rules, regulations and ordinances and shall not be used for advertising of any type. Tenant shall be responsible, at its sole cost and expense, for maintaining and repairing any such signage. Upon the expiration or earlier termination of this Lease, Tenant shall remove, at Tenant's sole cost and expense, all such signage from the Total Site. If Tenant fails to so remove such signage, Landlord may do so and charge the cost of such removal to Tenant. The foregoing obligations shall survive the expiration or earlier termination of this Lease. ARTICLE XXIV PROJECTS 24.1 Landlord's Approval of Proposed Non -Solar Projects. During the Term so long as no event of default has occurred and is continuing, from time to time Tenant shall have the right to propose a Project that is not a photovoltaic solar for a portion of the Total Site by delivering a written request therefor to Landlord that (a) identifies the portion of the Total Site upon which the Project would be developed (and excluded fi•om this Lease and become the subject of a Project Lease), (b) provides any proposed changes to the form of Project Lease attached hereto (which shall redlined to show such changes) that would be included in the Project Lease, and (c) includes the materials and information about the proposed Project set forth below in Sections 24.2.1 through 24.2.10 (to the extent applicable). Landlord shall have the right to approve or disapprove any such request in its sole discretion. 24.2 Proposed Solar Projects. During the Term and so long as no event of default shall have occurred and be continuing, from time to time Tenant shall have the right to propose photovoltaic solar Projects (a "Solar Project") for a portion of the Total Site by delivering to Landlord a written request for Landlord to participate therein and contribute financially thereto ("Request") which also (a) identifies the portion of the Total Site upon which the Solar Project would be developed (and excluded from this Lease and become the subject of a Project Lease) and the term thereof, (b) provides any proposed changes to the form of Project Lease attached hereto (which shall be redlined to show such changes) that would be included in the Project Lease, and (c) includes the following materials and information about the proposed Solar Project: 24.2.1 A thorough, detailed, narrative description of the Solar Project; 24.2.2 A detailed map showing the applicable portion of the Total Site that would be subject to the applicable Project Lease and a legal description of the applicable parcel; -31- 24.2.3 An entitlement analysis and schedule showing the entitlements, approvals, authorizations and/or permits (including, without limitation, clearances under CEQA or NEPA) required from any Federal, State, County, municipal, or other governmental or quasi - governmental authority required for such Solar Project (including evidence that the applicable portion of the Total Site that would be subject to the applicable Project Lease complies with the California Subdivision Map Act) and evidence that all such entitlements, approvals, authorizations and/or permits have been issued or are ready to issue upon the payment of the applicable fees; 24.2.4 A detailed schedule (from execution of the Project Lease through the commencement of the economic productivity of such Solar Project) showing, inter alfa, the entitlement, development, construction and other phases of such Solar Project, and who (i.e. Landlord or Tenant) will be responsible for the costs of entitling and constructing the infrastructure required for such Solar Project (and if Landlord shall be responsible therefor, the proposed cost thereof) and the timing of such events; 24.2.5 A detailed development and construction budget for the entire Solar Project (e.g., interconnection, inverters, panels and mounting), including, without limitation, a budget for any infrastructure required for such Solar Project, and the costs of providing any required completion bonds, and the estimated timing, sources, and amounts of revenue to be generated by such Solar Project (e.g., pursuant to a power purchase agreement), in any form and whether such power is expected to be prepaid; 24.2.6 The environmental impact and, to the extent required by law, mitigation plans for such Solar Project; 24.23 The proposes sources and uses of funds, including, without limitation, proposed debt levels and whether secured or unsecured, equity contributions (in the form of a tenant improvement allowance or otherwise), and/or equity for such Solar Project; 24.2.8 a description of number, type and design of solar modules to be constructed thereon and the reasonably anticipated aggregate annual output thereof with certain probabilities; 24.2.9 the Power Purchase Agreement with the PUC and, to the extent available, a copy of a power purchase agreement between the related Project Tenant and the PUC for such Solar Project; and 24.2. 10 a financial model including long-term estimate of operation and maintenance costs, degradation assumptions, spare parts inventory costs, estimated rate of return with proposed debt levels (and expected terms, which shall not include any indemnities or guaranties of any sort by Landlord). 24.3 Landlord Review and Approval. Landlord shall have forty-five (45) days from receipt of a Request and all the relevant materials and accompanying data (the "Review Period") to approve or disapprove such Request in its sole discretion. If Landlord timely -32- approves the Request, then Landlord shall have agreed to participate in the Solar Project and (a) contribute fifty percent (50%) of the capital expenditure required to develop and construct such Solar Project net of any third party indebtedness identified under Section 24.2.7, as such level of indebtedness may be increased prior to consummation of the Solar Project financing, (b) develop, construct and pay for the specified infrastructure improvements, as set forth in Section 24.2.4, and (c) agree to share in fifty percent (50%) of any "construction cost" overruns for such Solar Project (i.e., Landlord would be responsible for hard cost overruns of not more than five (5%)). The sum of the amounts described in the preceding sentence are herein called (the "Landlord Contribution"). Unless otherwise agreed to by Landlord and Tenant, such contribution by Landlord shall be made as a tenant improvement allowance under the related Project Lease concurrently with the corresponding contributions by Tenant. In return for such participation and the Landlord Contribution, Landlord shall be entitled to receive the greatest of (i) the fair market rental value of the portion of the Total Site to be subjected to such Project Lease plus twelve percent (12%) of the net operating income generated by the related Project Tenant with respect to such Solar Project (revenues net of operating expenses, required reserves, debt service and tax equity payments), payable as a percentage rent under the related Project Lease, (ii) six percent (6%) return per annum on the Landlord Contribution, and (iii) fifty percent (50%) of (x) the net operating income generated by the related Project Tenant with respect to such Solar Project (revenues net of operating expenses, required reserves, debt service and tax equity payments), payable as a percentage rent under the related Project Lease plus (y) any net extraordinary gains (e.g., sale of Project Tenant or the sale or refinancing of such Solar Project), as adjusted for any continued rent payable thereafter to Landlord (provided, however, that the sale of the Solar Project that is not a permitted transfer of not more than 49% of Tenant's interest shall require Landlord's consent, which Landlord may withhold in its sole discretion). Landlord shall execute and deliver to Tenant within fifteen (15) days of request therefor following the Review Period, the Project Lease related to such Solar Project which reflects the foregoing election by Landlord. 24.4 Landlord Review and Disapproval. If Landlord disapproves such Request in its sole discretion during the Review Period or fails to approve or respond to Tenant's Requesi within the Review Period, then (a) for one (1) year thereafter, Tenant shall have the right to consummate an agreement with a reputable, third party investor on the terms and conditions set forth in the Request, which, if materially altered, shall require Tenant to resubmit the Request as set forth above in Section 24.2 provided, however, that the Review Period shall be limited to thirty (30) days, (b) Tenant shall commence construction of such Solar Project within one (1) year thereafter, (c) Landlord shall not be required to make any financial contribution to such Solar Project whatsoever under this Lease, and (d) the rent to which Landlord shall be entitled under the related Project Lease shall equal (i) the fair market rental value of the portion of the Total Site to be subjected to such Project Lease, plus (ii) ten percent (10%) of the net operating income generated by the corresponding Project Tenant with respect to such Solar Project (revenues net of operating expenses, required reserves, debt service and tax equity payments), payable as percentage rent under the related Project Lease, as such amount shall be increased by an amount agreed to by Landlord and such Project Tenant as a return on the cost to Landlord to develop, construct and pay for any substation and/or interconnection lines that shall be used by and allocated to such Solar Project. Notwithstanding such disapproval or deemed disapproval, Landlord shall execute and deliver to Tenant within fifteen (15) days of request therefor 33 - following the Review Period, the Project Lease related to such Solar Project which shall reflect the rent to be paid to Landlord pursuant to the prior sentence. ARTICLE XXV LANDLORD FUNDING OF CERTAIN COSTS 25.1 Landlord Funding of Certain Costs. Provided that no event of default has occurred and is continuing, from the Due Diligence Date until the fifth (51h) anniversary thereof, Landlord shall reimburse Tenant for the actual, documented, and reasonable third -party fees and costs incurred by Tenant in connection with exploring the feasibility of, and seeking approvals for, the planning and development of Solar Projects in advance of the execution of one or more Project Leases, in an aggregate amount of not more than Five Million Dollars ($5,000,000), which sums shall be reimbursed not more often than quarterly, and, in each case, subject to complying with the following conditions: 25.1.1 Tenant has completed and delivered a written request for payment setting forth the dates, amounts, and payees with respect to all payments made by Tenant, and a description of the work performed by each payee, plus, at Landlord's request, a copy of any such work performed (to the extent applicable). 25.1.2 Tenant has furnished, in satisfactory form and substance, (a) conditional. mechanics' lien releases and waivers for the amounts being requested and valid full and final mechanics' lien releases and waivers for all other work performed (which shall only be provided with respect to aspects of such work that could result in a lien under applicable law), (b) copies of bills and invoices covering work for which a reimbursement is made, and (c) an affidavit from Tenant confirming the foregoing and that the work for which payment is requested is authorized for reimbursement under this Lease. 25.2 Advance Funding. Provided that no event of default has occurred and is continuing, from and after the Effective Date, Landlord shall reimburse (or provide advances to) Tenant for, in the aggregate, not more than ten percent (10%) of the funds specified above in Section 25.1 for the uses permitted thereby, which Tenant shall immediately refund to Landlord if Tenant terminates this Lease pursuant to Section 1.3 above. Any such fundings shall be part of, not additions to, Landlord's aggregate funding obligations set forth above in Section 25.1. ARTICLE XXVI GENERAL PROVISIONS 26.1 Notices. Any notice to be given or other document to be delivered by either party to the other hereunder may be delivered in person to either party, may be delivered by commercial express delivery service, facsimile or United States mail duly certified, return receipt requested, with postage prepaid, and addressed to the party for whom intended as follows: -34- To Landlord: Paul J. Phillips, City Manager 15626 E. Stafford Street Suite 100 City of Industry, CA 91744-0366 With a Copy to: James M. Casso Casso & Sparks 13200 Crossroads Parkway North, Suite 345 City of industry, CA 91746 To Tenant: San Gabriel Valley Water and Power, LLC 2917 Canon Street San Diego, CA 92106 Attn.: Mr. Robert Anselmo With a Copy to: Dechert, LLP One International Place, 40`h Floor 100 Oliver Street Boston, MA 02110 Attn.: Bruce Hickey, Esq. Either party hereto may from time to time by written notice to the other parry designate a different address which shall be substituted for the one above specified. If any notice or other document is sent by certified mail, as aforesaid, the same shall be effective upon receipt at the appropriate address. The address to which notices are sent may be changed by providing notice thereof in the manner specified in this Section 26.1. From time to time, parties may designate attorneys that are authorized to provide notices on their behalf, which shall be valid until terminated by written notice from such party or such designated attorney. 26.2 Leeal Descriptions. The parties believe that the legal descriptions of the Total Site attached hereto as Exhibit A and the legal descriptions of the Scout Property and the Agency Property attached hereto as Exhibit B accurately describe the real property currently owned (i.e., the Total Site as of the Effective Date), or that may be subsequently acquired (i.e., the Agency Property and/or the Scout Property), by Landlord that will be subject to this Lease; those parcels are generally depicted on Exhibit D attached hereto. Nevertheless, if, prior to the Due Diligence Date, the parties conclude that the legal description of the Total Site is incorrect, then the parties shall promptly correct any such inaccuracies on Exhibit A and replace it with a corrected version. If (a) Landlord acquires the Agency Property or the Scout Property prior to December 31, 2018, and (b) prior to such acquisition(s) or the Due Diligence Date, whichever is later, the parties conclude that the legal description of the Agency Property or the Scout Property, as applicable, is incorrect, then the parties shall promptly correct any such inaccuracies on Exhibit B and replace it with a corrected version. 26.3 Liti ag tion, In the event of the bringing of any action or suit by either party against the other arising out of this Lease, the party in whose favor final judgment shall be entered shall be entitled to recover from the other party all costs and expenses of suit, including reasonable attorneys' fees. -35- 26.4 Waiver. No delay or omission by either party hereto in exercising any right or power accruing upon the non-compliance or failure of performance by either party hereto under the provisions of the Lease shall impair any such right or power to be construed to be a waiver thereof. A waiver by either party hereto of any of the covenants, conditions or agreements thereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions and conditions hereof. 26.5 Holding Over. If Tenant shall remain in possession of the Total Site after the expiration or earlier termination of the Term of this Lease without the express written consent of Landlord, Tenant will be deemed to be occupying the Total Site as a tenant -at -sufferance only subject to all covenants and obligations of this Lease and at a daily rental equal to $5.00 per acre that the Tenant has not surrendered per day, plus all other amounts of rent and all items of additional rent which are payable hereunder, during the period of any such holding over. Acceptance by Landlord of rent after such expiration or earlier termination shall not constitute a holdover or result in a renewal, and shall not affect Landlord's right of re-entry or any rights of Landlord hereunder or as otherwise provided by law. If any property not belonging to Landlord remains at the Total Site after the expiration of the term of this Lease, Tenant hereby authorizes Landlord, without liability for compensation or damages to Tenant, to retain all or any portion thereof (and title thereto shall thereupon be vested in Landlord), or remove such property and make such disposition thereof as Landlord may desire. Tenant shall, upon demand by Landlord, pay Landlord for the expense of any such removal and disposition plus the cost of repair of any and all damages to the Total Site resulting from or caused by such removal. In the event that such property belongs to someone other than Tenant, Tenant agrees to indemnify and hold Landlord harmless from all Claims in connection with or incident to any removal, exercise of dominion over and/or disposition of such property by Landlord. Tenant shall indemnify and hold Landlord harmless from any and all Claims resulting from Tenant's failure to surrender the Total Site upon the expiration or earlier termination of the Lease. 26.6 Surrender. Subject to the provisions of Section 5.1, upon the end of the Term of this Lease, as provided herein, or any extension thereof, or sooner termination of this Lease, Tenant shall surrender and quitclaim to Landlord the Total Site, together with the Improvements. 26.7 Lease Binding Upon Successors and Assigns. Subject to the limitations herein set forth, each of the terms, covenants and conditions of this Lease shall extend to and be binding on and inure to the benefit of not only Landlord and Tenant, but also each of their successors and assigns. Whenever in this Lease reference is made to either Landlord or Tenant, the reference shall be deemed to include, wherever applicable, the successors and assigns and the parties hereto the same as if in every case expressed. 26.8 Ems. Landlord reserves for itself and its agents the right to peaceably enter the Total Site to inspect the same, to submit the Total Site to prospective purchasers, lenders or tenants, to post notices of non -responsibility and to take such other actions and perform such duties as Landlord may be required or permitted under this Lease provided that Landlord shall use all reasonable efforts to not interfere unreasonably with the business of Tenant. Tenant hereby waives any claim for damages or for any injury or inconvenience to or -36- interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Total Site, and any other loss occasioned by Landlord's entry except to repair any damage to property resulting therefrom. Any entry to the Total Site obtained by Landlord by any means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Total Site, or an eviction of Tenant from the Total Site or any portion thereof. Except in the event of an emergency, (i) Landlord shall not enter the Total Site during non -business hours, and (ii) Landlord shall provide Tenant not less than twenty-four (24) hours prior notice before entering the Total Site. 26.9 Relationship of Parties. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant's business or otherwise, and that the provisions of any agreement between Landlord and Tenant relating to rent are solely for the purpose of providing a method whereby rental payments are to be measured and ascertained. 26.10 Time of the Essence. Time is expressly declared to be of the essence of this Lease with regard to all obligations hereunder. 26.11 Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord within ten (10) days after written demand from Landlord to Tenant, any quitclaim deed or other document required by any reputable title company to remove the cloud of this Lease from the Total Site. 26.12 Number and Gender. Whenever the singular number is used in this Lease and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and the word "Person" shall include corporation, firm or association. If there be more than one tenant, the obligations imposed under this Lease upon Tenant shall be joint and several. 26.13 Headings and Titles. The section headings of this Lease are inserted as a matter of convenience and references only and in no way define, limit or describe the scope or intent of this Lease or in any way effect the terms and provisions hereof. 26.14 Covenants and Conditions. Each of the covenants in this Lease shall be deemed and construed as conditions and each and every covenant shall be deemed covenants running with the land. 26.15 Entire Agreement. This Lease contains the final expression of and the entire agreement between the parties hereto with respect to the matters covered hereby, and no other previous agreement, statement or promise made by any party hereto which is not contained herein shall be binding or valid. 26.16 Partial Invalidity. If any term, provision, condition or covenant of this Lease, or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this Lease, or the application of such term, provision, -37- condition or covenant to Persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 26.17 Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law provisions. 26.18 Modifications. Any alteration, change or modification of or to this Lease, in order to become effective, shall be made by written instrument or endorsement hereon and in each such instance executed on behalf of each party hereto. 26.19 Brokers. Landlord represents and warrants to Tenant, and Tenant represents and warrants to Landlord, that no broker or finder has been engaged by it, respectively, in connection with any of the transactions contemplated by this Lease, or to its knowledge is in any way connected with any of such transactions. In the event of any such claims for brokers' or finders' fees or commissions in connection with the negotiation, execution or consummation of this Lease, Tenant shall indemnify, save harmless and defend Landlord from and against such claims if they shall be based upon any statement or representation or agreement by Tenant, and Landlord shall indemnify, save harmless and defend Tenant if such claims shall be based upon any statement, representation or agreement made by Landlord. 26.20 Execution of Lease. The submission of this Lease to Tenant for examination or execution does not constitute a reservation of or option on the Total Site, or an agreement of Landlord to lease the Total Site. This Lease shall become effective as a Lease, and Landlord shall become obligated hereunder, only upon the execution and delivery of this Lease by both parties, which neither party shall have any obligation to do. Submission of this Lease to Tenant in no way constitutes an offer to lease by Landlord. 26.21 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the rent payments herein stipulated shall be deemed to be other than on account of the rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease. 26.22 Construction. It is understood that there are no oral or written agreements or representations between the parties hereto affecting this Lease (other than this Lease and the exhibits attached hereto), and that this Lease supersedes and cancels any and all previous negotiations, arrangements, representations, brochures, displays, projections, estimates, agreements and understandings, if any, made by or between Landlord and Tenant with respect to the subject matter thereof, and none thereof shall be used to interpret, construe, supplement or contradict this Lease, including, without limitation, any term sheet or letter of intent. The parties hereto hereby acknowledge and agree that (a) each party hereto is of equal bargaining strength, (b) each such party has actively participated in the drafting, preparation and negotiation of this Lease, (c) each such party has been (or has had the opportunity to be) represented by, and consulted, with such parry's own, independent counsel, and such other professional advisors as such party has deemed appropriate, relating to any and all matters contemplated under this Lease, (d) each such party and such party's counsel and advisors have reviewed (or have had the opportunity to review) this Lease, (e) each such party has agreed to enter into this Lease following such review and the rendering of such advice (or the opportunity to receive such advice), and (f) any rule of construction to the effect that ambiguities are to be resolved against the drafting parties shall not apply in the interpretation of this Lease, or any portions hereof, or any amendments hereto. The parties agree that any deletion of language from this Lease prior to its mutual execution by Landlord and Tenant shall not be construed to have any particular meaning or to raise any presumption, canon of construction or implication, including, without limitation, any implication that the parties intended thereby to state the converse of the deleted language. 26.23 Authori Tenant does hereby represent and warrant to Landlord that Tenant has all requisite power and authority to own, lease, hold and operate properties and conduct business in the State of California. 26.24 Exhibits, All Exhibits attached to this Lease are hereby incorporated herein by this reference. 26.25 ADA Disclosure. Landlord hereby represents to Tenant that the Total Site has not undergone inspection by a Certified Access Specialist (as such term is defined in California Civil Code Section 1938) and, no Certified Access Specialist has determined whether the Total Site currently meets all applicable construction related accessibility standards pursuant to California Civil Code Section 55.53. Tenant assumes all risks that the Total Site does not comply with all applicable construction related accessibility standards pursuant to California, Federal or local law, and shall be solely responsible for the cost of any modifications required to comply therewith. 26.26 Municipal Laws. Within thirty (30) days after the Effective Date, the parties shall make such additions, deletions, or modifications to this Agreement as shall be specified by Landlord's City Attorney to make this Lease comply with any applicable laws, rules, regulations or ordinances that apply to Landlord, as determined by Landlord's City Attorney. The parties shall enter into such amendment within such thirty (30) day period. If Tenant refuses to timely execute such an amendment in form and content acceptable to Landlord, then this Lease shall automatically terminate (and Tenant shall immediately refund any sums advanced by Landlord pursuant to Section 25 of this Lease). [Balance of page intentionally left blank. Signatures appear on next page.] -39- IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date and year first set forth above. "LANDLORD" THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California B Name: Paul J. Philip Its: City Manager "TENANT" SAN GABRIEL WATER AND POWER, LLC, a California limited liability company By: Ambient SHE LP LLC, a California limited liability company Its: Non-member manager By: Ambient Communities LLC, a Delaware limited liability company Its: Sole Member IC Name: Its: Name: Its: A notary public or other officer completing this certificate verifies only the Identity of the Individual who signed the dooumant to which this cetilficate Is attached, and not the trulhlulness, aecursoy, or validity of that document, State bf California J County of Los Angeles On May 17, 2616 beforome, Diane M. Schiichting, a Notary Public Date Here insert Name and Title of the Officer personally appeared Paul J. Philips - - - - - - - - - - - - - - - Nams(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the ersortWwhose name(s re- subscrlbed to the within instrument and acknowledged to me tate executed the same in :dggawwhlslrauthorizedcapaclty and that by s rslgnatura*ontile Instrument the person(sj; or the entity upon behalf of which the persolt(ayacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph INtd, 80NLICNTINO is true and correct ANE Oomminion # 1079328 WITNESS my hand and official seal. Notary Putrlio • Oalftarals too Appcle@ County-"Nota � ht Demur. Ea Ires Junto, 2019 Signature 5lgnafu Place Notary Seal Above oFt'loNAr. Though this $action is optional, completing this information can dolor alteration of the document or fraudulent raattaclarrent of this form to an unintended document. Description of Attached Document Title or Type of Document: _- Document We: Number of Pages: Signer(s) Other Than Named Above: capacity(les) Claimed by Signor(s) signer's Name: ❑ Corporate Officer - Tite(s): ❑ partner - ❑ Limited ❑ General CI Individual Caa Attorney In Fact 0 Trustee 0 Guardian or Conservator 0 Other: Signer 1a Representing: Signor'sName: - -- o Oorporate Officer - Tltle(s): -s n Partner fJ Limited ® General 0 Individual 0 Attorney In Fact D Trustee 9 Guardian or Conservator 0 Other. Signer Is.Representirng: - — 1 -860 -US NOTARY (1.800.878-6627) Item M907 IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date and year first set forth above, "LANDLORD" THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California By: _ Name: Its: "TENANT" SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company -40- By: Ambient SEH LP LLC, a California limited liability company Its: Non-member manager. By: Ambient Communities LLC, a Delaware li . ited liability company Its: Sole Mg t, By: ` Name: Its: Name: Its: �}hY� p+l/tw A notary pablic or other officer completing this certificate verities only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT State of California County of San Diego On 'rpt J � before me,A11t� &.. V�telCn�� i�LS�Y (insert name and title of the officer) personally appeared "�'-- who proved to me on the basis ofsatisfactory evidence. to bethe person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to methat helshe/they executed the same in Itis 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 persons) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature o C-0) (Seat) Comminbn #2012027 No" puw • CdNOmN Smn ow County M Comm. Explrts Mar 14.2011 EXHIBIT "A" TOTAL SITE THE 5,500 ACRES REFERRED TO HEREIN BELOW IS SITUATED IN LOS ANGELES COUNTY, ORANGE COUNTY, AND SAN BERNARDINO COUNTY, STATE OF CALIFORNIA AND MORE PARTICULARLY DESCRIBED BELOW: PARCEL 4: (APN: 308-031-24): THAT PORTION OF FRACTIONAL SECTION 5, TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT FILED IN THE DISTRICT LAND OFFICE ON FEBRUARY 17, 1868, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEASTERLY CORNER OF LOT 2 OF SAID SECTION AS SAID LOT IS SHOWN ON SHEET 2 OF THE MAP FILED IN BOOK 99 PAGES 29 THROUGH 35 INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE NORTH 98'44'14" WEST 1311.27 FEET ALONG THE SOUTH LINE OF SAID LOT TO THE SOUTHWEST CORNER THEREOF; THENCE SOUTH 1048'38" WEST, 1316.46 FEET ALONG THE EAST LINE OF LOT 4 OF SAID SECTION AS SHOWN ON SAID RECORD OF SURVEY MAP TO THE SOUTHEAST CORNER OF SAID LOT 4; THENCE NORTH 42011'13" EAST, 883.86 FEET; THENCE NORTH 50°12'57" EAST, 987.69 FEET TO THE POINT OF BEGINNING. PARCEL 5 (APN: 308-031-32): LOTS 1 THROUGH 5 INCLUSIVE OF SECTION 5, TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE. EXCEPT THEREFROM ANY PORTION LYING WITHIN THE LAND DESCRIBED AS "PARCEL 13.01" IN THE DEED TO THE COUNTY OF ORANGE, RECORDED JANUARY 11 1985 AS INSTRUMENT NO. 85- 009660 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION OF THE LAND INCLUDED WITHIN "PARCELS 19 AND 20" IN DEED TO THE COUNTY OF ORANGE RECORDED AUGUST 31. 1999 AS INSTRUMENT NO. 19990630774 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM ALL OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS, WHETHER SIMILAR TO THOSE HEREIN SPECIFIED OR NOT, WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY 500 FEET IN WIDTH, PROVIDED, HOWEVER, THAT THE SURFACE OF SAID PROPERTY SHALL NEVER BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, REMOVAL OR STORAGE OF SAID OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS AS RESERVED IN THE DEEDS FROM STANDARD OIL COMPANY OF CALIFORNIA, RECORDED DECEMBER 23 1970 AS INSTRUMENT NO. 18288, IN BOOK A-1 22195068.14.BUSINESS 9498, PAGE 328, AND DECEMBER 23 1970 AS INSTRUMENT NO. 18289 IN BOOK 9498 PAGE 331, BOTH OF OFFICIAL RECORDS THE RIGHTS OF STANDARD OIL COMPANY OF CALIFORNIA HAVE BEEN GRANTED TO CALIFORNIA MINERALS, L.P., A TEXAS LIMITED PARTNERSHIP, BY A MINERAL DEED RECORDED DECEMBER 30, 1998 AS INSTRUMENT NO 19980903509 OF OFFICIAL RECORDS. NOTE: PORTIONS OF SAID OIL RIGHTS HAVE BEEN QUITCLAIMED TO BOY SCOUTS OF AMERICA, LOS ANGELES REGIONAL COUNCIL, A CORPORATION, BY QUITCLAIM DEED RECORDED MAY 05- 1999 AS INSTRUMENT NO. 19990327032 OF OFFICIAL RECORDS, PARCEL 6 (APN: A PORTION OF 306-021-16): THAT PORTION OF THE RANCHO RINCON DE LA BREA, AS PER MAP RECORDED IN BOOK 1, PAGES 195 AND 196 OF PATENTS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT CORNER "G.P. 416", BEING THE NORTHEAST CORNER OF THE LAND DESCRIBED IN THE DEED TO GENERAL PETROLEUM COMPANY, RECORDED MARCH 18 1913 IN BOOK 231, PAGE 106 OF DEEDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; THENCE SOUTH 0037'37" EAST 1175.00 FEET TO THE NORTHEAST CORNER OF THE LAND DESCRIBED IN THE DEED TO SOUTHERN CALIFORNIA EDISON COMPANY, RECORDED MAY 28 1952 AS INSTRUMENT NO 27061 IN BOOK 2336 PAGE 91 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY; THENCE SOUTH 89022'23" WEST 741.00 FEET ALONG THE NORTHERLY LINE OF SAID LAND, AND PROLONGATION THEREOF; THENCE NORTH 0°37'37" 1194.95 FEET PARALLEL WITH THE EASTERLY LINE OF THE LAND DESCRIBED IN SAID DEED TO GENERAL PETROLEUM TO THE NORTHERLY LINE OF SAID LAND; THENCE SOUTH 89005'06" EAST 741.39 FEET TO THE POINT OF BEGINNING, EXCEPTING THEREFROM ALL MINERALS, PETROLEUM, OIL, ASPHALTUM, GAS AND OTHER HYDROCARBON SUBSTANCES, INCLUDING HELIUM, TOGETHER WITH THE EXCLUSIVE RIGHT TO PROSPECT AND DRILL FOR AND PRODUCE THE SAME FROM THE SURFACE OF SAID LANDS OR FROM THE SURFACE OF ADJOINING OR ADJACENT LAND, AS RESERVED BY SOCONY MOBIL OIL COMPANY, INC., A CORPORATION, IN DEED RECORDED DECEMBER 22 1961 AS INSTRUMENT NO. 15712 IN BOOK 5953 PAGE 554 OF OFFICIAL RECORDS. PARCEL 7 (APN: A PORTION OF308-031-18): LOT 4 IN SECTION 4, TOWNSHIP 3 SOUTH, RANGE 9 WEST, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE FEBRUARY 17, 1868, PARCEL 8 (APN: A PORTION OF 308-031-18): LOT 3 IN SECTION 4, TOWNSHIP 3 SOUTH, RANGE 9 WEST, OF THE SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE ON FEBRUARY 17, 1868. EXCEPT THEREFROM ANY PORTION LYING EASTERLY OF THE WESTERLY LINE OF THE LAND DESCRIBED AS "PARCEL 7.04" IN THE DEED TO THE COUNTY OF ORANGE RECORDED JANUARY 11, 1985 AS INSTRUMENT NO. 85-009660 OF OFFICIAL RECORDS, ALSO EXCEPT ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LANDS, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFORE AND REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL OR MINE FROM THE SURFACE OF SAID LANDS INTO OTHER LANDS AND THE RIGHT TO REDRILL RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINES OR WELLS, AS RESERVED IN THE DEED FROM SHELL OIL COMPANY, A CORPORATION, RECORDED DECEMBER 05 1962 AS INSTRUMENT NO 2240 IN BOOK 6347 PAGE 273 OF OFFICIAL RECORDS, REFERENCE TO SAID DEED BEING HEREBY MADE FOR FURTHER PARTICULARS THEREIN RELATIVE TO THE USE OF THE SURFACE OF THE LAND WITH RESPECT TO SAID RIGHTS AND INTEREST. PARCEL 9A (APN: 306-021-19): LOT 21 OF "SUBDIVISION OF THE PUENTE CRUDE OIL CO.'S LAND", AS PER MAP RECORDED IN BOOK 3 PAGES 11 AND 12 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LANDS AND ALL WATER OR WATERS LYING BELOW SAID LANDS, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFORE AND REMOVING THE SAME FROM SAID LANDS OR ANY OTHER LANDS BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN SAID LANDS WITH OIL WELLS, GAS WELLS, TUNNELS OR SIiAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL OR MINE FROM THE SURFACE OF SAID LANDS INTO OTHER LANDS AND THE RIGHT TO REDRILL RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINES OR WELLS, AS RESERVED IN THE DEED FROM SHELL OIL COMPANY, A CORPORATION, RECORDED DECEMBER 05 1962 AS INSTRUMENT NO 2240 IN BOOK 6347, PAGE 273 OF OFFICIAL RECORDS, REFERENCE TO SAID DEED BEING HEREBY MADE FOR FURTHER PARTICULARS THEREIN RELATIVE TO THE USE OF THE SURFACE OF THE LAND WITH RESPECT TO SAID RIGHTS AND INTEREST. PARCEL 9B (APN: 306-021-17): LOT 20 AND THAT PORTION OF LOT 25, BOTH OF "SUBDIVISION OF THE PUENTE CRUDE OIL CO.'S LAND", AS PER MAP RECORDED IN BOOK 3 PAGES I1 AND 12 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING BETWEEN THE SOUTHERLY EXTENSIONS OF THE EASTERLY AND WESTERLY LINES OF SAID LOT 20. EXCEPT ALL OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS, WHETHER SIMILAR TO THOSE HEREIN SPECIFIED OR NOT, WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY 500 FEET IN DEPTH; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID PROPERTY SHALL NEVER BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, REMOVAL OR STORAGE OF SAID OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS AS RESERVED IN THE DEED FROM STANDARD OIL COMPANY OF CALIFORNIA, A DELAWARE CORPORATION, RECORDED DECEMBER 211970 AS INSTRUMENT NO 18288. IN BOOK 9498 PAGE 328 OF OFFICIAL RECORDS. THE RIGHTS OF STANDARD OIL COMPANY OF CALIFORNIA HAVE BEEN GRANTED TO CALIFORNIA MINERALS, L.P., A TEXAS LIMITED PARTNERSHIP, BY A MINERAL DEED RECORDED DECEMBER 30, 1998 AS INSTRUMENT NO. 19980903509 OF OFFICIAL RECORDS. PARCEL 10 (APN: A PORTION OF 306-021-16): THAT PORTION OF THE RANCHO RINCON DE LA BREA, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SECTION 5, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN SAID RANCHO, AS SHOWN ON A MAP OF THE BOUNDARY LINE BETWEEN THE COUNTIES OF LOS ANGELES AND ORANGE, KNOWN AS LOS ANGELES COUNTY SURVEYOR'S MAP NO. 8175 AND RECORDED IN BOOK 39 PAGES 52 THROUGH 59 INCLUSIVE OF MISCELLANEOUS RECORDS IN THE SAID OFFICE OF THE LOS ANGELES COUNTY RECORDER; THENCE SOUTH 00°54'54" WEST 1152.93 FEET; THENCE SOUTH 89005'06" EAST 1025.64 FEET TO THE NORTHEASTERLY CORNER OF THE GENERAL PETROLEUM CORPORATION LAND AS DESCRIBED IN PARCEL 3 IN DEED RECORDED MARCH 18 1913 IN BOOK 231, PAGE 106 OF DEEDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CORNER BEING MARKED BY A MONUMENT NUMBERED "16'; THENCE SOUTH 00037'37" EAST 1175.00 FEET ALONG THE EAST LINE OF SAID GENERAL PETROLEUM CORPORATION LAND TO THE NORTHEASTERLY CORNER OF THE LAND DESCRIBED IN DEED TO SOUTHERN CALIFORNIA EDISON COMPANY, RECORDED MAY 28 1952 AS INSTRUMENT NO. 27061 IN BOOK 2336 PAGE 91 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, AND THE TRUE POINT OF BEGINNING; THENCE SOUTH 89022'23" WEST 133.53 FEET ALONG THE NORTH LINE OF SAID SOUTHERN CALIFORNIA EDISON COMPANY LAND TO A POINT ON A NON -TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 351.43 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 80°00'45" WEST; THENCE SOUTHERLY 73.69 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 12°00'50'; THENCE SOUTH 02°01'35" EAST 176.57 FEET; THENCE SOUTH 62°10'48" WEST 73.97 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 100.46 FEET; THENCE WESTERLY 31.21 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 17048'09" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 425.30 FEET; THENCE WESTERLY 79.16 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 1099'52'; THENCE NORTH 89°2I'11" WEST 140.74 FEET TO A POINT ON THE WEST LINE OF THE LAND DESCRIBED IN SAID DEED TO SOUTHERN CALIFORNIA EDISON COMPANY, NORTH 00°37'37" WEST 104.14 FEET TO THE SOUTHWEST CORNER THEREOF; THENCE SOUTH 99°37'37" EAST 104.14 FEET TO SAID SOUTHWEST CORNER; THENCE SOUTH 89°22'23" EAST 450.00 FEET ALONG THE SOUTH LINE THEREOF TO THE SOUTHEAST CORNER THEREOF; THENCE NORTH 00°37'37" WEST 400.00 FEET TO THE TRUE POINT OF BEGINNING. '0 EXCEPT ALL OIL, GAS, PETROLEUM AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND, TOGETHER WITH THE RIGHT TO USE THAT PORTION ONLY OF SAID LAND WHICH UNDERLIES A PLANE PARALLEL TO AND 100 FEET BELOW THE PRESENT SURFACE OF SAID LAND, FOR THE PURPOSE OF PROSPECTING FOR, DEVELOPING AND/OR EXTRACTING SAID OIL, GAS, PETROLEUM AND OTHER MINERAL OR HYDROCARBON SUBSTANCES FROM SAID LAND BY MEANS OF WELLS DRILLED INTO SAID SUBSURFACE OF SAID LAND FROM DRILL SITES LOCATED ON OTHER LAND, IT BEING EXPRESSLY UNDERSTOOD AND AGREED THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL HAVE NO RIGHT TO ENTER UPON THE SURFACE OF SAID LAND, OR TO USE SAID LAND OR ANY PORTION THEREOF, TO SAID DEPTH OF 100 FEET, FOR ANY PURPOSE WHATSOEVER, AND THAT THEY, OR ANY OF THEM, WILL NOT CONSTRUCT, PLACE OR MAINTAIN, OR CAUSE OR PERMIT TO BE CONSTRUCTED, PLACED OR MAINTAINED ON ANY OTHER LAND NOW OWNED BY THEM OR ANY OF THEM, ANY OIL OR MUD SUMP, DERRICK, DRILLING RIG, OIL STORAGE OR TANK, OR OTHER STRUCTURE FOR USE IN CONNECTION WITH THE PROSPECTING FOR, DEVELOPING, EXTRACTING AND/OR REFINING OF OIL, GAS, PETROLEUM, AND/OR OTHER MINERAL OR HYDROCARBON SUBSTANCES, WITHIN A DISTANCE OF 100 FEET FROM THE BOUNDARY LINES OF THE LAND HEREBY CONVEYED, AS RESERVED IN THE DEED FROM GENERAL PETROLEUM CORPORATION, RECORDED MAY 28 1952 AS INSTRUMENT NO. 2706L IN BOOK 2336 PAGE 91 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL I1 (APN: A PORTION OF 306-021-16): THAT PORTION OF THE RANCHO RINCON DE LA BREA, AS PER MAP RECORDED IN BOOK L PAGES 195 AND 196 OF PATENTS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SECTION 5, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN SAID RANCHO, AS SHOWN ON A MAP OF THE BOUNDARY LINE BETWEEN THE COUNTIES OF LOS ANGELES AND ORANGE, KNOWN AS LOS ANGELES COUNTY SURVEYOR'S MAP NO. 8175 AND RECORDED IN BOOK 39 PAGES 52 THROUGH 59 INCLUSIVE OF MISCELLANEOUS RECORDS IN THE SAID OFFICE OF THE LOS ANGELES COUNTY RECORDER; THENCE SOUTH 0054'54" WEST 1152.93 FEET; THENCE SOUTH 89005'06" EAST 1025.64 FEET TO THE NORTHEASTERLY CORNER OF THE GENERAL PETROLEUM CORPORATION LAND AS DESCRIBED IN PARCEL 3 IN DEED RECORDED MARCH 18 1913 IN BOOK 231, PAGE 106 OF DEEDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CORNER BEING MARKED BY A MONUMENT NUMBERED "16'; THENCE SOUTH 00037'37" EAST 1175.00 FEET ALONG THE EAST LINE OF SAID GENERAL PETROLEUM CORPORATION LAND TO THE NORTHEASTERLY CORNER OF THE LAND DESCRIBED IN DEED TO SOUTHERN CALIFORNIA EDISON COMPANY, RECORDED MAY 28 1952 AS INSTRUMENT NO 27061 IN BOOK 2336 PAGE 91 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; THENCE SOUTH 89°22'23" WEST 133.53 FEET ALONG THE NORTH LINE OF SAID SOUTHERN CALIFORNIA EDISON COMPANY LAND TO A POINT ON A NON -TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 351.43 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 80000'45" WEST, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE SOUTHERLY 73.69 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 12°00'50"; THENCE SOUTH 02°01'35" EAST 176.57 FEET; THENCE SOUTH 62°10'48" WEST 73.97 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 100.46 FEET; THENCE WESTERLY 31.21 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 17048'09" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 425.30 FEET; THENCE WESTERLY 79.16 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10039'52'; THENCE NORTH 89°21'11" WEST 140.74 FEET TO A POINT ON THE WEST LINE OF THE LAND DESCRIBED IN SAID DEED TO SOUTHERN CALIFORNIA EDISON COMPANY, NORTH 00°37'37" WEST 104.14 FEET FROM THE SOUTHWEST CORNER THEREOF, NORTH 00037'37" WEST 25.61 FEET; THENCE NORTH 89034'23" EAST 214.10 FEET; THENCE NORTH 46002'29" EAST 83.18 FEET; THENCE NORTH 00026'08" WEST 214.32 FEET TO A POINT ON THE NORTH LINE OF THE LAND IN SAID DEED TO SOUTHERN CALIFORNIA EDISON COMPANY, SOUTH 89°22'23" WEST 35.15 FEET FROM THE TRUE POINT OF BEGINNING; THENCE NORTH 89°22'23" EAST 35.15 FEET TO THE TRUE POINT OF BEGINNING. EXCEPT ALL OIL, GAS, PETROLEUM AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND, TOGETHER WITH THE RIGHT TO USE THAT PORTION ONLY OF SAID LAND WHICH UNDERLIES A PLANE PARALLEL TO AND 100 FEET BELOW THE PRESENT SURFACE OF SAID LAND, FOR THE PURPOSE OF PROSPECTING FOR, DEVELOPING AND/OR EXTRACTING SAID OIL, GAS, PETROLEUM AND OTHER MINERAL OR HYDROCARBON SUBSTANCES FROM SAID LAND BY MEANS OF WELLS DRILLED INTO SAID SUBSURFACE OF SAID LAND FROM DRILL SITES LOCATED ON OTHER LAND, IT BEING EXPRESSLY UNDERSTOOD AND AGREED THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL HAVE NO RIGHT TO ENTER UPON THE SURFACE OF SAID LAND, OR TO USE SAID LAND OR ANY PORTION THEREOF, TO SAID DEPTH OF 100 FEET, FOR ANY PURPOSE WHATSOEVER, AND THAT THEY, OR ANY OF THEM, WILL NOT CONSTRUCT, PLACE OR MAINTAIN, OR CAUSE OR PERMIT TO BE CONSTRUCTED, PLACED OR MAINTAINED ON ANY OTHER LAND NOW OWNED BY THEM OR ANY OF THEM, ANY OIL OR MUD SUMP, DERRICK, DRILLING RIG, OIL STORAGE OR TANK, OR OTHER STRUCTURE FOR USE IN CONNECTION WITH THE PROSPECTING FOR, DEVELOPING, EXTRACTING AND/OR REFINING OF OIL, GAS, PETROLEUM, AND/OR OTHER MINERAL OR HYDROCARBON SUBSTANCES, WITHIN A DISTANCE OF 100 FEET FROM THE BOUNDARY LINES OF THE LAND HEREBY CONVEYED, AS RESERVED IN THE DEED FROM GENERAL PETROLEUM CORPORATION, RECORDED MAY 28 1952 AS INSTRUMENT NO 27061, IN BOOK 2336, PAGE 91 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL 12 (APN: 306-021-18): LOT 19 OF PUENTE CRUDE OIL CO.'S LAND, AS SHOWN ON A MAP FILED IN BOOK2, PAGES 29 AND 30 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA. EXCEPT ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LAND, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFORE AND REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OT14ER THAN SAID LANDS WITH OIL WELLS, GAS WELLS, TUNNELS OR SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCICED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL OR MINE FROM THE SURFACE OF SAID LANDS INTO OTHER LANDS AND THE RIGHT TO REDRILL RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINES OR WELLS, AS RESERVED BY SHELL OIL COMPANY, A CORPORATION, BY DEED RECORDED DECEMBER 05 1962 AS INSTRUMENT NO 1648 IN BOOK M-1844 PAGE 673 OF OFFICIAL RECORDS OF LOS ANGELES COUNTY. PARCEL 13 (APN: A PORTION OF 8714-026-271; 8714-028-270; 8714-027-270): THOSE PORTIONS OF LAND IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: LOTS 3 AND 4 IN SECTION 32, THE SOUTHEAST QUARTER OF SECTION 32, THE EAST HALF OF THE NORTHEAST QUARTER, ALL OF THE SOUTHEAST QUARTER, THE EAST HALF OF THE SOUTHWEST QUARTER AND THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 33, THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 34, THE SOUTHWEST QUARTER, THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 27, AND THE NORTH HALF OF THE SOUTHEAST QUARTER OF SECTION 28, THE SOUTH HALF OF SECTION 34, THE NORTH HALF OF THE NORTHWEST QUARTER AND THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER, AND THE NORTHEAST QUARTER OF SECTION 34, ALL IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE SEPTEMBER 28, 1968. EXCEPT THAT PORTION OF SAID SECTION 28, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WEST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 28, DISTANT THEREON NORTH 00005'57" WEST 1174.12 FEET FROM THE SOUTHERLY QUARTER CORNER OF SAID SECTION 28; THENCE ALONG SAID WEST LINE NORTH 00°05'57" WEST 1465.20 FEET TO THE CENTER OF SAID SECTION 28; THENCE ALONG THE NORTH LINE OF THE AFOREMENTIONED SOUTHEAST QUARTER OF SECTION 28, SOUTH 89°08'09" EAST 1484.54 FEET; THENCE SOUTH 45045'52" WEST 2068,22 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THOSE PORTIONS LYING SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT A 2 INCH IRON PIPE WITH BRASS CAP IN CONCRETE AT THE CENTER OF SAID SECTION 26 AS SHOWN ON THE LOS ANGELES COUNTY SURVEYOR'S MAP C. S. 8580 FILED IN THE OFFICE OF THE DIRECTOR OF PUBLIC WORKS OF SAID COUNTY; THENCE ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF LAST SAID SECTION SOUTH 00°18'50" EAST 1170.79 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID EAST LINE SOUTH 25036'25" WEST 79.99 FEET; THENCE SOUTH 88°04'14" WEST 81.81 FEET; THENCE SOUTH 65°51'07" WEST 117.69 FEET; THENCE SOUTH 64001'22" WEST 100.66 FEET; THENCE SOUTH 72012'58" WEST 65.15 FEET; THENCE NORTH 82022'19" WEST 318.40 FEET; THENCE SOUTH 66°08'44" WEST 291.45 FEET; THENCE NORTH 60057'06" WEST 138.16 FEET; THENCE SOUTH 74°02'49" WEST 283.15 FEET; THENCE SOUTH 67°05'03" WEST 694.43 FEET; THENCE SOUTH 67°23'18" WEST 141.24 FEET; THENCE SOUTH 28043'35" WEST 228.33 FEET; THENCE SOUTH 58°10'01" WEST 41.27 FEET; THENCE NORTH 87°24'40" WEST 190.48 FEET; THENCE SOUTH 72°57'39" WEST 411.84 FEET; THENCE SOUTH 54°58'27" WEST 292.37 FEET; THENCE SOUTH 83053'26" WEST 129.97 FEET; THENCE NORTH 79'19'13" WEST 167.52 FEET; THENCE SOUTH 76056'58" WEST 191.09 FEET; THENCE SOUTH 56041'58" WEST 213.70 FEET; THENCE SOUTH 69°48'31" WEST 205.88 FEET; THENCE SOUTH 38011'23" WEST 204.69 FEET; THENCE SOUTH 43°36'59" WEST 217.43 FEET; THENCE SOUTH 52012'56" WEST 624.84 FEET; THENCE SOUTH 29°56'10" WEST 340.97 FEET; THENCE SOUTH 54°46'50" WEST 1113.97 FEET; THENCE SOUTH 60041'00" WEST 240.86 FEET; THENCE NORTH 85°50'49" WEST 434,07 FEET; THENCE SOUTH 6834'49" WEST 228.98 FEET; THENCE SOUTH 45013'16" WEST 111.28 FEET; THENCE SOUTH 79'06'17" WEST 190.89 FEET; THENCE SOUTH 43°16'15',' WEST 155.35 FEET; THENCE SOUTH 89°36'28" WEST 107.30 FEET; THENCE SOUTH 52036'47" WEST 295.83 FEET; THENCE SOUTH 39051'34" WEST 253.31 FEET; THENCE SOUTH 08°49'28" WEST 288.86 FEET; THENCE SOUTH 43°22'04" WEST 211.30 FEET; THENCE SOUTH 28°22'04" WEST 72.87 FEET; THENCE SOUTH 08°29'53" WEST 718.80 FEET; THENCE SOUTH 13°54'37" WEST 265.68 FEET; THENCE SOUTH 37°23'04" WEST 124.48 FEET; THENCE SOUTH 2152'15" WEST 164.75 FEET; THENCE SOUTH 41018'08" WEST 233.05 FEET; THENCE SOUTH 15'45'12" WEST 11.80 FEET; THENCE SOUTH 31033'19" WEST 371.37 FEET; THENCE SOUTH 22°47'05" WEST 198.75 FEET; THENCE SOUTH 45055'46" WEST 271.16 FEET; THENCE NORTH 88°32'46" WEST 264.11 FEET; THENCE SOUTH 00°07'50" WEST 178.08 FEET TO THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, SAID PARCEL SHOWN AS PARCEL 2 ON CERTIFICATE OF COMPLIANCE RECORDED JUNE 09 2000 AS INSTRUMENT NO. 00-0893206 OF OFFICIAL RECORDS, AS AMENDED BY THE CORRECTION OF CERTIFICATE OF COMPLIANCE RECORDED JANUARY 05 2001 AS INSTRUMENT NO. 01-0031377 OF OFFICIAL RECORDS. ALSO EXCEPT ALL KINDS OF PETROLEUM, OIL, ASPHALTUM, MALTHA, TAR GAS AND OTHER BITUMINOUS AND OTHER HYDROCARBON SUBSTANCES, WATER, STONE, ROCK, GYPSUM, CLAY, SAND, AND ALL MINERALS AND MINERAL SUBSTANCES, IN, UNDER, OR UPON SAID LAND, AND ANY AND ALL THEREOF; ALSO THE RIGHT AT ANY AND ALL TIMES, AND BY ANY AND ALL MEANS, TO ENTER UPON ANY AND ALL PORTIONS OF SAID LANDS, AND USE AND ENJOY THE SAME IN ANY AND ALL WAYS IT MAY DEEM NECESSARY, CONVENIENT OR EXPEDIENT IN, OR IN CONNECTION WITH THE TRANSACTION OF ITS BUSINESS, AS EXCEPTED AND RESERVED IN THE DEED FROM PUENTE OIL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 05. 1903 IN BOOK 1917, PAGE 137 OF DEEDS. THE INTEREST OF THE PUENTE OIL COMPANY, A CORPORATION, HAS PASSED TO AND IS NOW VESTED 1N SHELL OIL COMPANY, A DELAWARE CORPORATION, BY DEED RECORDED JULY 12 1922 IN BOOK 1196, PAGE 278 OF OFFICIAL RECORDS AND MESNE CONVEYANCES OF RECORD, ALSO EXCEPT ALL RIGHTS TO SUBSURFACE HYDROCARBON (OIL), AND OTHER MINERAL SUBSTANCES, TOGETHER WITH THE RIGHT TO ENTER UPON SAID PROPERTY TO DRILL FOR AND PRODUCE SAID HYDROCARBON OR MINERAL SUBSTANCES, AS RESERVED BY SUSAN HUNTER FERRY HAAS, WILLIAM EDWARD FERRY, GEORGE S. ST. CLAIR, CLARITA ODETTE, HELEN M. SMITH, FRANCES SWAN REGETS, AND LOUIS BOTTI, ACTING AS GUARDIAN OF THE PERSON AND ESTATE OF VIVIAN MORRIS BOTTI; AND VIVIAN MORRIS BOTTI, AN INCOMPETENT PERSON WHO ACQUIRED TITLE AS VIVIAN MORRIS, IN DEED RECORDED MARCH 08. 1960 AS INSTRUMENT NO. 1048 IN BOOK D-774 PAGE 312 OF OFFICIAL RECORDS. THE RIGHTS TO ENTER UPON THE SURFACE OF SAID LAND WERE RELINQUISHED BY A DEED RECORDED NOVEMBER 09 1961 AS INSTRUMENT NO 1506 IN BOOK D-1415 PAGE 139 OF OFFICIAL RECORDS. ALSO EXCEPT THE RIGHT TO SUBSURFACE HYDROCARBON (OIL) AND OTHER MINERAL SUBSTANCES CONTAINED IN SAID REAL PROPERTY, TOGETHER WITH THE RIGHT TO ENTER UPON SAID PROPERTY TO DRILL FOR AND PRODUCE SAID HYDROCARBON OR MINERAL SUBSTANCES AND TO ASSIGN SAID RIGHT TO OTHER PERSONS, PARTNERSHIPS OR CORPORATIONS AS RESERVED IN DEED RECORDED SEPTEMBER 12 1961 AS INSTRUMENT NO 4247 OF OFFICIAL RECORDS. PARCEL 14 (APN: A PORTION OF 8714-028-270): THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33, IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE SEPTEMBER 28, 1868. EXCEPT THEREFROM ALL OIL, GAS AND OTHER HYDROCARBONS AND MINERALS NOW OR AT ANY TIME HEREAFTER SITUATED THEREIN OR THEREUNDER OR PRODUCIBLE THEREFROM, TOGETHER WITH THE RIGHT TO MINE, STORE, DRILL AND BORE BENEATH THE SURFACE OF SAID REAL PROPERTY FOR THE PURPOSE OF DISCOVERING, DEVELOPING OR REMOVING SUCH SUBSTANCES, AS RESERVED BY CALIFORNIA HARDWARE COMPANY, IN DEED RECORDED SEPTEMBER 05 1969 AS INSTRUMENT NO 2641 IN BOOK D-4489 PAGE 162 OF OFFICIAL RECORDS, WHICH CONVEYED AN UNDIVIDED ONE-HALF INTEREST OF THE FEE TITLE. PARCEL 15 (APN: A PORTION OF 8714-028-270): THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER AND THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT THEREOF. EXCEPT AN UNDIVIDED ONE -TWELFTH INTEREST IN AND TO ALL MINERALS AND ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY CAROLYN HICKS LAUTEN, AS HER SEPARATE PROPERTY, IN THE DEED RECORDED DECEMBER 28 1973 AS INSTRUMENT NO. 491 OF OFFICIAL RECORDS. ALSO EXCEPT AN UNDIVIDED ONE-FOURTH INTEREST IN AND TO ALL MINERALS AND ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY LAURITA GEORGINA HICKS, AS HER SEPARATE PROPERTY, IN TFIE DEED RECORDED DECEMBER 28, 1973 AS INSTRUMENT NO. 492 OF OFFICIAL RECORDS. ALSO EXCEPT AN UNDIVIDED ONE -TWELFTH INTEREST IN AND TO ALL MINERALS AND ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY JAMES EDWARD HICKS, AS HIS SEPARATE PROPERTY, IN THE DEED RECORDED DECEMBER 28 1973 AS INSTRUMENT NO. 493 OF OFFICIAL RECORDS. ALSO EXCEPT AN UNDIVIDED ONE -TWELFTH INTEREST IN AND TO ALL MINERALS AND ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY JOHN KIMBALL HICKS, AS HIS SEPARATE PROPERTY, IN THE DEED RECORDED DECEMBER 28 1973 AS INSTRUMENT NO. 494 OF OFFICIAL RECORDS. ALSO EXCEPT AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL MINERALS AND ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY ROOD KELSEY, AS TRUSTEE, UNDER THAT CERTAIN DECLARATION OF TRUST DATED APRIL 09, 1968, AN UNDIVIDED ONE- EIGHTH INTEREST; RODD KELSEY, AS TRUSTEE UNDER THAT CERTAIN DECLARATION OF TRUST DATED MAY 14, 1968, AN UNDIVIDED ONE-EIGHTH INTEREST; RODD KELSEY, AS TRUSTEE, UNDER THAT CERTAIN DECLARATION OF TRUST DATED MAY 14, 1968, AN UNDIVIDED ONE-EIGHTH INTEREST; AND ANITA BRODRICK AND LUCY BRODRICK DUNLAP, AS CO -TRUSTEES UNDER THE WILL OF EUGENE C. BRODRICK, ALSO KNOWN AS EUGENE CARLISLE BRODRICK, DECEASED, AND THE DECREE OF DISTRIBUTION OF HIS ESTATE, A CERTIFIED COPY THEREOF BEING RECORDED MARCH 04 1970 AS INSTRUMENT NO. 2779, IN BOOK D-4648. PAGE 856 OF OFFICIAL RECORDS, AN UNDIVIDED ONE-EIGHTH INTEREST, IN THE DEED RECORDED DECEMBER 28, 1973 AS INSTRUMENT NO. 495 OF OFFICIAL RECORDS. PARCEL 16 (APN: A PORTION OF 8714-028-270): THE SURFACE AND 500 FEET OF THE SUBSURFACE VERTICALLY IN DEPTH BELOW THE SURFACE OF THE FOLLOWING DESCRIBED PROPERTY: THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER AND THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 33, IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND. EXCEPT ALL OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS, WHETHER SIMILAR TO THOSE HEREIN SPECIFIED OR NOT, WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY 500 FEET IN DEPTH; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID PROPERTY SHALL NEVER BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, REMOVAL OR STORAGE OF SAID OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND OTHER MINERALS, AS RESERVED BY STANDARD OIL COMPANY OF CALIFORNIA, IN DEED RECORDED DECEMBER 23. 1970 AS INSTRUMENT NO. 287 OF OFFICIAL RECORDS. PARCEL 17 (APN: A PORTION OF 8714.028-270): THE SURFACE AND 500 FEET OF THE SUBSURFACE VERTICALLY IN DEPTH BELOW THE SURFACE OF THE FOLLOWING DESCRIBED PROPERTY: THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER AND THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 33, IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND. EXCEPT ALL OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS, WHETHER SIMILAR TO THOSE HEREIN SPECIFIED OR NOT, WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY 500 FEET IN DEPTH; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID PROPERTY SHALL NEVER BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, REMOVAL OR STORAGE OF SAID OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND OTHER MINERALS, AS RESERVED BY STANDARD OIL COMPANY OF CALIFORNIA, IN DEED RECORDED DECEMBER 23 1970 AS INSTRUMENT NO 288 OF OFFICIAL RECORDS. PARCEL 18 (APN: A PORTION OF 8714-028-270; 8714-029-270): ALL OF LOTS 1, 6,12 AND 19 OF PUENTE CRUDE OIL CO.'S LAND, AS PER MAP RECORDED IN BOOK 2 PAGE 29 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THOSE PORTIONS OF LOTS 2, 3, 4, 7, 8, 9, 10 AND 13, AS SHOWN ON SAID MAP, LYING SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE: 10 BEGINNING AT A POINT IN THE NORTH LINE OF SAID LOT 2 DISTANT THEREON SOUTH 88019'10.25" WEST 1824.54 FEET FROM THE NORTHEASTERLY CORNER OF SAID LOT 1; THENCE SOUTH 21022'05" WEST 344.32 FEET; THENCE SOUTH 45°25'45" WEST 556.89 FEET; THENCE SOUTH 65023'23" WEST 2038.07 FEET; THENCE SOUTH 38°37'40" WEST 961.90 FEET; THENCE SOUTH 30055'41" WEST 1463.64 FEET; THENCE SOUTH 85°48'12" WEST 508.32 FEET TO THE WESTERLY LINE OF SAID LOT 13; THENCE ALONG THE SAID WESTERLY LINE, SOUTH 0091'00" EAST TO THE SOUTHWEST CORNER OF SAID LOT 13. EXCEPT ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LAND, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFORE AND REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN SAID LANDS WITH OIL WELLS, GAS WELLS, TUNNELS OR SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL OR MINE FROM THE SURFACE OF SAID LANDS INTO OTHER LANDS AND THE RIGHT TO REDRILL RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINES OR WELLS, AS RESERVED BY SHELL OIL COMPANY, A CORPORATION, IN DEED RECORDED DECEMBER 05 1962 AS INSTRUMENT NO. 164& IN BOOK M-1844 PAGE 673 OF OFFICIAL RECORDS. PARCEL 19 (APN: 8714-026-270; 8714-026-273; A PORTION OF 8714-026-271): THOSE PORTIONS OF LAND IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THE SOUTHWEST QUARTER OF SECTION 26, THE NORTH HALF OF SECTION 27, THE NORTH HALF OF THE SOUTHEAST QUARTER AND THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 27, THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 35, ALL IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE SEPTEMBER 28, 1868. EXCEPT FROM SAID NORTH HALF OF SECTION 27 THOSE PORTIONS LYING WITHIN TRACT NO. 30578, AS PER MAP RECORDED IN BOOK 785 PAGES 1 THROUGH 25, INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. ALSO EXCEPT FROM SAID NORTH HALF OF SECTION 27 THOSE PORTIONS LYING WITHIN PARCEL MAP NO. 1528, AS PER MAP FILED IN BOOK 26 PAGES 19 THROUGH 30, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. ALSO EXCEPT THAT PORTION OF SAID SOUTHWEST QUARTER OF SECTION 26 DESCRIBED IN THE DEED RECORDED MARCH 19 1973 AS INSTRUMENT NO 226 OF OFFICIAL RECORDS, AS FOLLOWS: BEGINNING AT A POINT ON THE EAST -WEST CENTER LINE OF SAID SECTION 26, SAID POINT BEING DISTANT HEREON NORTH 88046'40" WEST 1371.20 FEET FROM THE CENTER OF SAID SECTION 26; THENCE SOUTH 88°46'40" EAST ALONG SAID EAST -WEST CENTER LINE 126.08 FEET; 11 THENCE SOUTH 38044'09" WEST 229.66 FEET; THENCE SOUTH 05016'38" WEST 39.68 FEET; THENCE NORTH 84043'22" WEST 160.00 FEET; THENCE NORTH 05°16'38" EAST 196.60 FEET; THENCE NORTH 38044'09" EAST 18,06 FEET TO SAID EAST -WEST CENTER LINE; THENCE SOUTH 88°46'40" EAST ALONG SAID EAST -WEST CENTER LINE 151.28 FEET TO THE POINT OF BEGINNING. TOGETHER WITH THAT PORTION OF SECTION 28, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, DESCRIBED AS FOLLOWS: BEGINNING AT THE EASTERLY QUARTER CORNER OF SAID SECTION 28; THENCE NORTH 00°28'30" WEST 1161.63 FEET ALONG THE EAST LINE OF SAID SECTION 28; THENCE SOUTH 45°49'18" WEST 1641.12 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 28 BEING DISTANT EASTERLY 1484.54 FEET FROM THE CENTER OF SAID SECTION 28; THENCE SOUTH 89008'09" EAST 1186.74 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THOSE PORTIONS LYING SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT A 2 INCH IRON PIPE WITH BRASS CAP IN CONCRETE AT THE CENTER OF SAID SECTION 26 AS SHOWN ON THE LOS ANGELES COUNTY SURVEYOR'S MAP C. S. 8580 FILED IN THE OFFICE OF THE DIRECTOR OF PUBLIC WORKS OF SAID COUNTY; THENCE ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF LAST SAID SECTION SOUTH 00°18'50" EAST 1170.79 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID EAST LINE SOUTH 25°36'25" WEST 79.99 FEET; THENCE SOUTH 88°04'14" WEST 81.81 FEET; THENCE SOUTH 65°51'07" WEST 117.69 FEET; THENCE SOUTH 64001'22" WEST 100.66 FEET; THENCE SOUTH 72°12'58" WEST 65.15 FEET; THENCE NORTH 82022'19" WEST 318.40 FEET; THENCE SOUTH 66°08'44" WEST 291.45 FEET; THENCE NORTH 60057'06" WEST 138.16 FEET; THENCE SOUTH 74°02'49" WEST 283.15 FEET; THENCE SOUTH 67°05'03" WEST 694.43 FEET; THENCE SOUTH 67°23'18" WEST 141.24 FEET; THENCE SOUTH 28043'35" WEST 228.33 FEET; THENCE SOUTH 58°10'01" WEST 41.27 FEET; THENCE NORTH 87°24'40" WEST 190.48 FEET; THENCE SOUTH 72057'39" WEST 411.84 FEET; THENCE SOUTH 5458'27" WEST 29237 FEET; THENCE SOUTH 83053'26" WEST 129.97 FEET; THENCE NORTH 79019'13" WEST 167.52 FEET; THENCE SOUTH 76056'58" WEST 191.09 FEET; THENCE SOUTH 56041'58" WEST 213.70 FEET; THENCE SOUTH 69048'31" WEST 205.88 FEET; THENCE SOUTH 38011'23" WEST 204.69 FEET; THENCE SOUTH 43036'59" WEST 217.43 FEET; THENCE SOUTH 52012'56" WEST 624.84 FEET; THENCE SOUTH 29056'10" WEST 340.97 FEET; THENCE SOUTH 54046'50 WEST 1113.97 FEET; THENCE SOUTH 60041'00" WEST 240.86 FEET; THENCE NORTH 85050'49" WEST 434.07 FEET; THENCE SOUTH 68034'49" WEST 228.98 FEET; THENCE SOUTH 45013'16" WEST 111.28 FEET; THENCE SOUTH 79006'17" WEST 190.89 FEET; THENCE SOUTH 43016'15" WEST 155.35 FEET; TPIENCE SOUTH 89036'28" WEST 107.30 FEET; THENCE SOUTH 52036'47" WEST 295.83 FEET; THENCE SOUTH 39051'34" WEST 253.31 FEET; THENCE SOUTH 08049'28" WEST 288.86 FEET; THENCE SOUTH 43022'04" WEST 211.30 FEET; THENCE SOUTH 28022'04" WEST 72.87 FEET; THENCE SOUTH 08029'53" WEST 718.80 FEET; THENCE SOUTH 13054'37" WEST 265.68 FEET; THENCE SOUTH 37°23'04" WEST 124.48 FEET; THENCE NORTH 21052'15" WEST 164.75 FEET; THENCE SOUTH 41018'08" WEST 233.05 FEET; THENCE SOUTH 15'45'12" WEST 111.80 FEET; THENCE SOUTH 31033'19" WEST 371.37 FEET; THENCE SOUTH 22047'05" WEST 198.75 FEET; THENCE SOUTH 45055'46" WEST 271.16 FEET; THENCE NORTH 88°32'46" WEST 264.11 FEET; THENCE SOUTH 00007'50" WEST 178.08 FEET TO THE SOUTH LINE OF THE SOUTI4EAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, SAID PARCEL SHOWN AS PARCEL 2 ON CERTIFICATE OF COMPLIANCE RECORDED JUNE 09 2000 AS INSTRUMENT NO 00-893206 OF OFFICIAL RECORDS. 12 AS AMENDED BY THE CORRECTION OF CERTIFICATE OF COMPLIANCE RECODED JANUARY 05, 2001 AS INSTRUMENT NO.01-0031377 OF OFFICIAL RECORDS. ALSO EXCEPT ANY AND AL KINDS OF PETROLEUM, OIL, ASPHALTUM, MALTHA, TAR, GAS AND OTHER BITUMINOUS AND OTHER HYDROCARBON SUBSTANCES, WATER, STONE, ROCK, GYPSUM, CLAY, SAND AND ALL MINERALS AND MINERAL SUBSTANCES, IN, UNDER OR UPON SAID LAND, AND ANY AND ALL THEREOF; ALSO THE RIGHT AT ANY AND ALL TIMES, AND BY ANY AND ALL MEANS, TO ENTER UPON ANY AND ALL PORTIONS OF SAID LANDS, AND USE AND ENJOY THE SAME IN ANY AND ALL WAYS IT MAY SEEM NECESSARY, CONVENIENT OR EXPEDIENT IN, OR IN CONNECTION WITH THE TRANSACTION OF ITS BUSINESS, AS EXCEPTED AND RESERVED IN THE DEED FROM PUENTE OIL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 05. 1903 IN BOOK 1917, PAGE 137 OF DEEDS. ALSO EXCEPT ALL SUBSURFACE MINERALS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES WITHOUT RIGHT TO USE THE SURFACE OF SAID LAND FOR THE PURPOSE OF EXTRACTING AND REMOVING THE RESERVED MINERALS, OIL, GAS OR OTHER HYDROCARBON SUBSTANCES, AS EXCEPTED AND RESERVED BY CAPITAL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 09 1961 AS INSTRUMENT NO, 1522 OF OFFICIAL RECORDS. PARCEL 20 (APN; A PORTION OF 8714-026-271): THE SURFACE AND 500 FEET OF THE SUBSURFACE OF THE SOUTH HALF OF THE SOUTHEAST QUARTER OF SECTION 28, IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND. EXCEPT ALL OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS, WHETHER SIMILAR TO THOSE HEREIN SPECIFIED OR NOT, WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY 500 FEET IN DEPTH; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID PROPERTY SHALL NEVER BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, REMOVAL OR STORAGE OF SAID OIL, GAS, ASPHALTUM, AND OTHER HYDROCARBONS AND OTHER MINERALS, AS RESERVED BY STANDARD OIL COMPANY OF CALIFORNIA, RECORDED OCTOBER 31 1967 AS INSTRUMENT NO. 596 OF OFFICIAL RECORDS. PARCEL 21 (APN: 8714-026-272): THAT PORTION OF SECTION 28, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, AS SHOWN ON RECORD OF SURVEY FILED IN BOOK 76 PAGES 51 THROUGH 56. INCLUSIVE OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID SECTION 28; THENCE NORTH 89050103.391.' EAST 2617.18 FEET TO THE SOUTHERLY QUARTER CORNER OF SAID SECTION 28; THENCE NORTH 0029'07.35" WEST 1174.12 FEET ALONG THE WEST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 28; THENCE SOUTH 45°28'03.88" WEST 735.29 FEET; THENCE PARALLEL WITH THE SOUTH LINE OF SAID SECTION 28 SOUTH 89050'03.39" WEST 2093.26 FEET; THENCE SOUTH 0052'58.46" EAST 660.00 FEET TO THE POINT OF BEGINNING. 13 EXCEPT ALL SUBSURFACE MINERALS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES WITHOUT RIGHT TO USE THE SURFACE OF SAID LAND FOR THE PURPOSE OF EXTRACTING AND REMOVING THE RESERVED MINERALS, OIL, GAS OR OTHER HYDROCARBON SUBSTANCES, AS EXCEPTED AND RESERVED BY CAPITAL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 09 1961 AS INSTRUMENT NO. 1522 OF OFFICIAL RECORDS. PARCEL 23 (APN: 306-021-01; 306-021-02): THAT PORTION OF THE RANCHO RINCON DE LA BREA, AS SHOWN ON A MAP RECORDED IN BOOK 1, PAGES 195 AND 196 OF PATENTS, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA, AND THAT PORTION OF SECTION 1, TOWNSHIP 3 SOUTH, RANGE 10 WEST, AND OF SECTIONS 5 AND 6, TOWNSHIP 3 SOUTH, RANGE 9 WEST, IN THE RANCHO SAN JUAN CAJON DE SANTA ANA, AS SHOWN ON A MAP RECORDED IN BOOK 51 PAGE 7 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE RANCHO RINCON DE LA BREA AND BEING STATION 3 OF THE EXTERIOR BOUNDARY OF SAID RANCHO, THE SAME BEING MARKED BY A 4" X 4" POST 3 FEET HIGH MARKED "S.J.C. DE S.A." ON THE SOUTIi FACE, WITH A 2" GAS PIPE DRIVEN ON THE NORTH SIDE OF SAID POST; RUNNING THENCE NORTH 85'48' WEST 107.16 CHAINS TO A 6 INCH IRON CASING MARKED "U.O.C." "G.L.O.C." "COMP. COR. NO. I" "DEC. 1904"; THENCE NORTH 57058' WEST 32.117 CHAINS TO A 6 INCH IRON CASING MARKED "U.O.C." "G.L.O.C," "COMP. COR. NO. 2" "DEC. 1904", AS PER COMPROMISE DEED BETWEEN UNION OIL COMPANY OF CALIFORNIA AND GRAHAM-LOFTUS OIL COMPANY, DATED MARCH 20, 1905 AND RECORDED JUNE 10, 1905 IN BOOK 120, PAGE 223 OF DEEDS; THENCE NORTH 28°36' EAST 27.385 CHAINS TO A POINT IN A ROAD; THENCE NORTH 69000" EAST 14.88 CHAINS TO A POINT IN THE CENTER OF THE ARROYA DEL RODEO, SAID POINT BEING 0.50 CHAINS WEST OF A 4" X 4" REDWOOD WITNESS POST MARKED "M.B." ON THE SOUTHEAST FACE, "Z" ON THE NORTHEAST FACE, AND "W" ON THE WEST FACE; THENCE SOUTH 88°49' EAST 106.811 CHAINS TO A 2" X 4" POST IN ROCK MOUND MARKED "Z" ON THE NORTHEAST FACE AND "M.B." ON THE SOUTHWEST FACE; THENCE SOUTH 00°21' EAST 52.034 CHAINS TO THE POINT OF COMMENCEMENT, CONTAINING 606.93 ACRES OF LAND, MORE OR LESS, AND BEING THAT CERTAIN SO-CALLED 593.669 ACRE TRACT OF LAND AS THE SAME IS DESCRIBED IN A DEED FROM HERBERT NOBLE AND OTHERS TO DELAWARE UNION OIL COMPANY, DATED APRIL 14, 1911 AND RECORDED APRIL 27 1911 IN BOOK 196, PAGE 339 OF DEEDS. EXCEPT THE FOLLOWING: A PORTION OF PROJECTED SECTION 5, TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO BASE AND MERIDIAN, AS ESTABLISHED BY THE COUNTY OF ORANGE, SURVEYOR, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER Or SAID SECTION 5; RUNNING THENCE SOUTH 00°54'54" WEST 1152.93 FEET; THENCE SOUTH 89°05'06" EAST 1025.64 FEET TO THE NORTHEASTERLY CORNER OF THE GENERAL PETROLEUM CORPORATION PROPERTY WHICH IS MARKED BY MONUMENT NUMBERED "16"; THENCE SOUTH 00°37'37" EAST, ALONG THE EASTERLY LINE OF SAID GENERAL PETROLEUM CORPORATION PROPERTY, 1175.00 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE SOUTH 89022'23" WEST 450 FEET; THENCE SOUTH 00037'37" EAST 400.00 FEET; THENCE NORTH 89022'23" EAST 450.00 FEET TO THE EASTERLY LINE 14 OF SAID GENERAL PETROLEUM CORPORATION PROPERTY; THENCE NORTH 00°37'37" WEST 400.00 FEET TO THE TRUE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM THE FOLLOWING: BEGINNING AT THE NORTHWEST CORNER OF SAID SECTION 5; RUNNING THENCE SOUTH 00°54'54" WEST, 1152.93 FEET; THENCE SOUTH 89°05'06" EAST, 1025.64 FEET TO THE NORTHEASTERLY CORNER OF THE PROPERTY DESCRIBED IN DEED DATED SEPTEMBER 18, 1912 TO GENERAL PETROLEUM COMPANY, RECORDED MARCH 18 1913 IN BOOK 231, PAGE 106 OF DEEDS, SAID NORTHEASTERLY CORNER BEING MARKED BY MONUMENT NUMBERED "16" AND THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE SOUTH 00°37'37" EAST ALONG THE EASTERLY LINE OF SAID PROPERTY, 1175.00 FEET TO THE NORTHEAST CORNER OF THE PROPERTY, AS DESCRIBED IN GRANT DEED DATED APRIL 02, 1952 FROM SAID GENERAL PETROLEUM CORPORATION TO SOUTHERN CALIFORNIA EDISON COMPANY, A CORPORATION. RECORDED MAY 28 1952 AS INSTRUMENT NO 27061 IN BOOK 2336 PAGE 91 OF OFFICIAL RECORDS; THENCE SOUTH 89022'23" WEST ALONG THE NORTHERLY LINE OF THE ABOVE DESCRIBED PROPERTY CONVEYED TO SOUTHERN CALIFORNIA EDISON COMPANY AND THE WESTERLY PROLONGATION THEREOF, 741.00 FEET; THENCE NORTH 00°37'37" WEST, PARALLEL WITH THE EASTERLY LINE OF SAID GENERAL PETROLEUM CORPORATION PROPERTY, 1194.95 FEET TO A POINT IN THE NORTHERLY LINE OF SAID GENERAL PETROLEUM CORPORATION PROPERTY; THENCE SOUTH 89005'06" EAST, 741.39 FEET ALONG SAID NORTHERLY LINE TO THE TRUE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED AS PARCEL IA IN THAT CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT CASE NO, 172819, A CERTIFIED COPY OF WI41CH WAS RECORDED SEPTEMBER 24 1971 AS INSTRUMENT NO. 21102 IN BOOK 9818 PAGE 251 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY. ALSO EXCEPTING THEREFROM ALL OIL, NATURAL GAS AND OTHER HYDROCARBONS AS RESERVED IN DEED RECORDED JULY 22 2004 AS INSTRUMENT NO 2004000664230 OF OFFICIAL RECORDS. PARCEL 26: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS AND EGRESS, AND INCIDENTAL PURPOSES, AS SET OUT IN DOCUMENTS RECORDED JULY 03 2001 AS INSTRUMENT NO 01-1146673, AND JULY 03 2001 AS INSTRUMENT NO. 01-1146674, BOTH OF OFFICIAL RECORDS OF LOS ANGELES COUNTY, JULY 03 2001 AS INSTRUMENT NO 20010260857, AND JULY 03 2001 AS INSTRUMENT NO. 20010260858, BOTH OF OFFICIAL RECORDS OF SAN BERNARDINO COUNTY, AND JULY 03, 2001 AS INSTRUMENT NO 20010446524, AND JULY 03 2001 AS INSTRUMENT NO, 20010446525, BOTH OF OFFICIAL RECORDS OF ORANGE COUNTY. PARCEL 27: EASEMENTS AND LICENSES AS SET OUT IN DOCUMENT RECORDED JULY 03, 2001 AS INSTRUMENT NO, 01-1146675 OF OFFICIAL RECORDS OF LOS ANGELES COUNTY, AND JULY 03, 2001 AS INSTRUMENT NO 20010446526 OF OFFICIAL RECORDS OF ORANGE COUNTY, AS DESCRIBED THEREIN, FOR THE FOLLOWING PURPOSES: TONNER CANYON ROAD EASEMENT, ROADWAY 15 EASEMENT, UTILITY EASEMENTS, SIGN EASEMENT, WATER EASEMENT, COMMUNICATIONS TOWER EASEMENT, PARKING LICENSE, HIKING LICENSE, AND LARGE EVENT LICENSE. IT EXHIBIT `B" THE 2,500 ACRES REFERRED TO HEREIN BELOW IS SITUATED IN LOS ANGELES COUNTY, ORANGE COUNTY, AND SAN BERNARDINO COUNTY, STATE OF CALIFORNIA. SCOUT PROPERTY: PARCEL 3 (APN: 308-031-21; 308-031.26; 308-031-28; 308-031-29): PORTIONS OF LAND IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, PURSUANT TO CERTIFICATE OF COMPLIANCE NO. CC 2000-03 RECORDED FEBRUARY 09 2001 AS INSTRUMENT NO. 20010076391 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: LOTS 1 AND 2 IN SECTION 4, TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT FILED IN THE DISTRICT LAND OFFICE, FEBRUARY 17, 1868, TOGETHER WITH THE NORTH 200.00 FEET OF THAT PORTION OF THE NORTHEAST QUARTER OF SAID SECTION 4 BOUNDED NORTHERLY BY THE SOUTHERLY LINE OF SAID LOT I AND BOUNDED EASTERLY AND WESTERLY BY THE SOUTHERLY PROLONGATION OF THE EASTERLY AND WESTERLY LINES RESPECTIVELY, OF SAID LOT I AND TOGETHER WITH THE NORTH 200 FEET OF THE EAST HALF OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID SECTION 4. EXCEPTING THEREFROM THAT PORTION LYING WESTERLY OF THE EASTERLY LINE OF PARCEL NO. 7.04 OF THE DEED TO THE COUNTY OF ORANGE RECORDED JANUARY 11 1985 AS INSTRUMENT NO 85-009660 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. ALSO EXCEPTING THEREFROM THAT PORTION LYING WITHIN THAT CERTAIN PARCEL OF LAND DESCRIBED IN A QUITCLAIM DEED TO SHELL OIL COMPANY, A DELAWARE CORPORATION, RECORDED JANUARY 31 1964 AS INSTRUMENT NO 26476 IN BOOK 6906, PAGE 58 OF SAID OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION THEREOF ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LANDS, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFORE AND REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN SAID LANDS, WITH OIL WELLS, GAS WELLS, TUNNELS OR SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF Im �J GFS�bt:3fe111�bYlel�Y•Y SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL OR MINE FROM THE SURFACE OF SAID LANDS INTO OTHER LANDS AND THE RIGHT TO REDRILL, RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINES OR WELLS, AS RESERVED IN THE DEED FROM SHELL OIL COMPANY, A CORPORATION, RECORDED DECEMBER 05 1962 AS INSTRUMENT NO 2240 IN BOOK 6347, PAGE 273 OF OFFICIAL RECORDS, REFERENCE TO SAID DEED BEING HEREBY MADE FOR FURTHER PARTICULARS THEREIN RELATIVE TO THE USE OF THE SUBSURFACE OF THE LAND WITH RESPECT TO SAID RIGHTS AND INTEREST. ALSO EXCEPTING FROM A PORTION THEREOF ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LANDS AND ALL WATER OR WATERS LYING BELOW SAID LANDS TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFROM AND REMOVING THE SAME FROM SAID LANDS OR ANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN SAID LANDS WITH OIL WELLS, GAS WELLS, TUNNELS OR SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND TIE EXTERIOR LIMITS TI IEREOF AND THE RIGHT TO REDRILL, RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINE OR WELLS PROVIDED, HOWEVER, THAT IN EXERCISING THE FOREGOING RIGHTS OR ANY OF THEM SO RESERVED BY SHELL, ITS SUCCESSORS OR ASSIGNS, SHALL CONFINE THEIR RESPECTIVE USE OF THE SURFACE TO THE FIVE -ACRE PARCELS REFERRED TO IN THAT CERTAIN DEED DATED MAY 04, 1962 AND RECORDED DECEMBER 05. 1962 AS INSTRUMENT NO 2240 IN BOOK 6347, PAGE 273 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, AS RESERVED BY SHELL OIL COMPANY, A CORPORATION, IN THE DEED RECORDED JANUARY 31 1964 AS INSTRUMENT NO 26477 IN BOOK 6906, PAGE 59 OF OFFICIAL RECORDS. PARCEL 24 (APN: 8714-028-04; A PORTION OF 8714-027-06): THOSE PORTIONS OF LAND DESCRIBED AS FOLLOWS: THE SOUTHEAST QUARTER OF SECTION 33, THE SOUTH HALF OF SECTION 34, THE SOUTHWEST QUARTER OF SECTION 35, ALL IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE SEPTEMBER 28, 1868. EXCEPT THAT PORTION THEREOF CONVEYED BY DEED FROM CHINO LAND AND WATER COMPANY TO JOHN C. MILES AND LOUIS B, JORALMON RECORDED IN BOOK 3859, PAGE 275 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTH QUARTER CORNER OF SAID SECTION 35 ON THE COUNTY BOUNDARY LINE OF LOS ANGELES AND ORANGE COUNTIES, MARKED BY A 2 INCH IRON PIPE WITH A BRASS CAP; TFIENCE NORTH 10°49'20" WEST 2673.34 FEET TO THE COUNTY LINE MONUMENT AT THE CENTER OF SAID SECTION 35; THENCE WESTERLY ALONG THE SOUTH LINE OF THE NORTHWEST QUARTER OF SECTION 35, A DISTANCE OF 520 FEET TO THE WEST SIDE OF FIRE BREAK; THENCE SOUTH 10°07'00" EAST 726 FEET, MORE OR LESS, TO A POINT FROM WHICH A MARKED OAK TREE BEARS SOUTH 52048'00" EAST 60.00 FEET; THENCE SOUTH 18°49'00" EAST 1566 FEET TO A POINT FROM WHICH A SMALL MARKED OAK TREE BEARS NORTH 85056'00" EAST 21.6 FEET; THENCE SOUTH 42°11'30" EAST 578.7 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THOSE PORTIONS LYING NORTHERLY AND WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT A 2 INCH IRON PIPE WITH BRASS CAP IN CONCRETE AT THE CENTER OF SAID SECTION 26, AS SHOWN ON THE LOS ANGELES COUNTY SURVEYOR'S MAP C. S. 8580 FILED IN THE OFFICE OF THE DIRECTOR OF PUBLIC WORKS OF SAID COUNTY; THENCE ALONG THE EAST LINE OF SOUTHWEST QUARTER OF LAST SAID SECTION SOUTH 00°18'50" EAST 1170.79 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID EAST LINE SOUTH 25°36'25" WEST 79.99 FEET; THENCE SOUTH 88004'14" WEST 81.81 FEET; THENCE SOUTH 65°51'07" WEST 117.69 FEET; THENCE SOUTH 64°01'22" WEST 100.66 FEET; THENCE SOUTH 72°12'58" WEST 65.15 FEET; THENCE NORTH 82022'19" WEST 318.40 FEET; THENCE SOUTH 66°08'44" WEST 291.45 FEET; THENCE NORTH 60°57'06" WEST 138.16 FEET; THENCE SOUTH 74002'49" WEST 283.15 FEET; THENCE SOUTH 67°05'03" WEST 694.43 FEET; THENCE SOUTH 67°23'18" WEST 141.24 FEET; THENCE SOUTH 28°43'35" WEST 228.33 FEET; THENCE SOUTH 58°10'01" WEST 41.27 FEET; THENCE NORTH 87°24'40" WEST 190.48 FEET; THENCE SOUTH 72057'39" WEST 411.84 FEET; THENCE SOUTH 54058'27" WEST 292.37 FEET; THENCE SOUTH 83053'26" WEST 129.97 FEET; THENCE NORTH 79°19'13" WEST 167.52 FEET; THENCE SOUTH 76056'58" WEST 191.09 FEET; THENCE SOUTH 56°41'58" WEST 213.70 FEET; THENCE SOUTH 69°48'31" WEST 205.88 FEET; THENCE SOUTH 38011'23" WEST 204.69 FEET; THENCE 43°36'59" WEST 217.43 FEET; THENCE SOUTH 52°12'56" WEST 624.84 FEET; THENCE SOUTH 29°56'10" WEST 340.97 FEET; THENCE SOUTH 54046'50" WEST 1113.97 FEET; THENCE SOUTH 60°41'00" WEST 240.86 FEET; THENCE NORTH 85050'49" WEST 434.07 FEET; THENCE SOUTH 68°34'49" WEST 228.98 FEET; THENCE SOUTH 45'13'16" WEST 111.28 FEET; THENCE SOUTH 79°06'17" WEST 190.89 FEET; THENCE SOUTH 43016'15" WEST 155.35 FEET; THENCE SOUTH 89°36'28" WEST 107.30 FEET; THENCE SOUTH 52036'47" WEST 295.83 FEET; THENCE SOUTH 39°51'34" WEST 253.31 FEET; THENCE SOUTH 08°49'28" WEST 288.86 FEET; THENCE SOUTH 43°22'04" WEST 211.30 FEET; THENCE SOUTH 28°22'04" WEST 72.87 FEET; THENCE SOUTH 08029'53" WEST 718.80 FEET; THENCE SOUTH 13054'37" WEST 265.68 FEET; THENCE SOUTH 37023'04" WEST 124.46 FEET; THENCE NORTH 21°52' 15" WEST 164.75 FEET; THENCE SOUTH 41018'08" WEST 233.05 FEET; THENCE SOUTH 15'45'12" WEST 111.80 FEET; THENCE SOUTH 31°33' 19" WEST 371.37 FEET; THENCE SOUTH 22°47'05" WEST 198.75 FEET; THENCE SOUTH 45'55'46" WEST 271.16 FEET; THENCE NORTH 88°32'46" WEST 264.11 FEET; THENCE SOUTH 00°07'50" WEST 178.08 FEET; TO THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN. ALSO EXCEPT ALL KINDS OF PETROLEUM, OIL, ASPHALTUM, MALTHA, TAR, GAS AND OTHER BITUMINOUS AND OTHER HYDROCARBON SUBSTANCES, WATER, STONE, ROCK, GYPSUM, CLAY, SAND, AND ALL MINERALS AND MINERAL SUBSTANCES, IN, UNDER, OR UPON SAID LAND, AND ANY AND ALL THEREOF; ALSO THE RIGHT AT ANY AND ALL TIMES, AND BY ANY AND ALL MEANS TO ENTER UPON ANY AND ALL PORTIONS OF SAID LANDS, AND USE AND ENJOY THE SAME IN ANY AND ALL WAYS IT MAY DEEM NECESSARY, CONVENIENT OR EXPEDIENT IN, OR IN CONNECTION WIT THE TRANSACTION OF ITS BUSINESS, AS EXCEPTED AND RESERVED IN THE DEED FROM PUENTE OIL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 05, 1903 IN BOOK 1917, PAGE 137 OF DEEDS. THE INTEREST OF THE PUENTE OIL COMPANY, A CORPORATION, HAS PASSED TO AND IS NOW VESTED IN SHELL OIL COMPANY, A DELAWARE CORPORATION, BY DEED RECORDED JULY 12, 1922 IN BOOK 1196, PAGE 278 OF OFFICIAL RECORDS AND MESNE CONVEYANCES OF RECORD. ALSO EXCEPTING ALL THE MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES IN, ON OR UNDER SAID PARCELS, TOGETHER WITH BUT NOT CONFINED TO THE FOLLOWING RIGHTS, NAMELY, ALL NECESSARY AND CONVENIENT RIGHTS FOR THE PURPOSE OF DRILLING FOR, PRODUCING, EXTRACTING AND TAKING ANY OF SAID MINERALS, GAS, OIL, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND, TOGETHER WITH THE RIGHT TO USE OR DEVELOP AND USE ALL WATER NECESSARY AND CONVENIENT FOR SAID DRILLING, EXTRACTING OR TAILING OF SAID MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND, AND TO STORE THE SAME UPON SAID LAND, TOGETHER WITH THE RIGHT TO ENTER UPON SAID LAND AT ANY AND ALL TIMES FOR SAID PURPOSES, EITHER PERSONALLY OR THROUGH ANY AGENTS, SERVANTS, EMPLOYEES, OR LESSEES OF THE GRANTOR, AND FROM TIME TO TIME TO CONSTRUCT, LAY, USE, MAINTAIN, ERECT, REPAIR, REPLACE AND REMOVE THEREON AND THEREFROM ALL DERRICKS, ROADS, TANKS, RESERVOIRS, MACHINERY, TELEPHONE, TELEGRAPH AND POWER LINES, PIPE LINES AND OTHER STRUCTURES, WITH THE RIGHT OF WAY FOR PASSAGE OVER, UPON AND ACROSS AND INGRESS AND EGRESS TO AND FROM SAID PREMISES AND EVERY PART THEREOF AS RESERVED IN DEED RECORDED APRIL 22, 1958 AS INSTRUMENT NO 941 IN BOOK D-78, PAGE 299 OF OFFICIAL RECORDS. ALSO EXCEPTING ALL MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES IN, ON OR UNDER SAID LAND TOGETHER WITH, BUT NOT CONFINED TO THE FOLLOWING RIGHTS, NAMELY ALL NECESSARY AND CONVENIENT RIGHTS FOR THE PURPOSE OF DRILLING FOR, PRODUCING, EXTRACTING AND TAKING ANY OF SAID MINERALS, GAS, OIL, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND, TOGETHER WITH RIGHT TO USE OR DEVELOP AND USE ALL WATER NECESSARY AND CONVENIENT FOR SAID DRILLING, EXTRACTING OR TAILING OF SAID MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND AND TO STORE THE SAME UPON SAID LAND, TOGETHER WITH THE RIGHT TO ENTER UPON SAID LAND AT ANY AND ALL TIMES FOR SAID PURPOSES, EITHER PERSONALLY OR THROUGH ANY AGENTS, SERVANTS, EMPLOYEES OR LESSEES OF THE GRANTOR AND FROM TIME TO TIME TO CONSTRUCT, LAY, USE, MAINTAIN, ERECT, REPAIR, REPLACE AND REMOVE THEREON AND THEREFROM ALL DERRICILS, ROADS, TANKS, RESERVOIRS, MACHINERY, TELEPHONE, TELEGRAPH AND POWER LINES, PIPE LINES AND OTHER STRUCTURES, WITH THE RIGHT OF WAY FOR PASSAGE OVER, UPON AND ACROSS AND INGRESS AND EGRESS TO AND FROM SAID PREMISES AND EVERY PART THEREOF, AS RESERVED BY ERNEST A. BRYANT, JR., SOLE SURVIVING TRUSTEE UNDER THE WILL OF SUSANNA BIXBY BRYANT, ALSO KNOWN AS SUSANNA P. BRYANT, DECEASED, IN DEED RECORDED APRIL 22 1958 AS INSTRUMENT NO 941 IN BOOK D-78 PAGE 299 OF OFFICIAL RECORDS. SAID PARCEL SHOWN AS PARCEL 3 ON CERTIFICATE OF COMPLIANCE RECORDED JUNE 09, 2000 AS INSTRUMENT NO. 00-0893206, AND AMENDED JANUARY 05 2001 AS INSTRUMENT NO. 01-0031377, BOTH OF OFFICIAL RECORDS. IC AI PARCEL 25 (APN: 8714-026-07; 8714-026-08; A PORTION OF 8714-027.06): THOSE PORTIONS OF LAND, DESCRIBED AS FOLLOWS: THE SOUTHWEST QUARTER OF SECTION 26, THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER AND THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 27, THE NORTHEAST QUARTER AND THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER AND THE SOUTHWEST OF THE NORTHWEST QUARTER AND THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 34, THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 35, ALL IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN. EXCEPT THEREFROM THOSE PORTIONS LYING NORTHERLY AND WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT A 2 INCH IRON PIPE WITH BRASS CAP IN CONCRETE AT THE CENTER OF SAID SECTION 26 AS SHOWN ON TIE LOS ANGELES COUNTY SURVEYOR'S MAP C. S. 8580 FILED IN THE OFFICE OF THE DIRECTOR OF PUBLIC WORKS OF SAID COUNTY; THENCE ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF LAST SAID SECTION SOUTH 00°18'50" EAST 1170.79 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID EAST LINE, SOUTH 25°36'25" WEST 79.99 FEET; THENCE SOUTH 88004'14" WEST 81.81 FEET; THENCE SOUTH 65°51'07" WEST 117.69 FEET; THENCE SOUTH 64001'22" WEST 100.66 FEET; THENCE SOUTH 72°12'58" WEST 65.15 FEET; THENCE NORTH 82022'19" WEST 318.40 FEET; THENCE SOUTH 66°08'44" WEST 291.45 FEET; THENCE NORTH 60057'06" WEST 138.16 FEET; THENCE SOUTH 74°02'49" WEST 283.15 FEET; THENCE SOUTH 67°05'03" WEST 694.43 FEET; THENCE SOUTH 67023'18" WEST 141.24 FEET; THENCE SOUTH 28043'35" WEST 228.33 FEET; THENCE SOUTH 58°10'01" WEST 41.27 FEET; THENCE NORTH 87°24'40" WEST 190.48 FEET; THENCE SOUTH 72°57'39" WEST 411.84 FEET; THENCE SOUTH 54058'27" WEST 292.37 FEET; THENCE SOUTH 83053'26" WEST 129.97 FEET; THENCE NORTH 79'19'13" WEST 167.52 FEET; THENCE SOUTH 76056'58" WEST 191.09 FEET; THENCE SOUTH 56°41'58" WEST 213.70 FEET; THENCE SOUTH 69°48'31" WEST 205.88 FEET; THENCE SOUTH 38°11'23" WEST 204.69 FEET; THENCE SOUTH 43°36'59" WEST 217.43 FEET; THENCE SOUTH 52°12'56" WEST 624.84 FEET; THENCE SOUTH 29°56'10" WEST 340.97 FEET; THENCE SOUTH 54°46'50" WEST 1113.97 FEET; THENCE SOUTH 60°41'00" WEST 240.86 FEET; THENCE NORTH 85050'49" WEST 434.07 FEET; THENCE SOUTH 68°34'49" WEST 228.98 FEET; THENCE SOUTH 45013'16" WEST 111.28 FEET; THENCE SOUTH 79'06'17" WEST 190.89 FEET; THENCE SOUTH 43016'15" WEST 155.35 FEET; THENCE SOUTH 89°36'28" WEST 107.30 FEET; THENCE SOUTH 52036'47" WEST 295.83 FEET; THENCE SOUTH 39°51'34" WEST 253.31 FEET; THENCE SOUTH 08049'28" WEST 288.86 FEET; THENCE SOUTH 43°22'04" WEST 211.30 FEET; THENCE SOUTH 28022'04" WEST 72.87 FEET; THENCE SOUTH 08°29'53" WEST 718.80 FEET; THENCE SOUTH 13°54'37" WEST 265.68 FEET; THENCE SOUTH 37023'04" WEST 124.48 FEET; THENCE NORTH 21°52'15" WEST 164.75 FEET; THENCE SOUTH 41018'08" WEST 233.05 FEET; THENCE SOUTH 15'45'12" WEST 111.80 FEET; THENCE SOUTH 31033'19" WEST 371.37 FEET; THENCE SOUTH 22°47'05" WEST 198.75 FEET; THENCE SOUTH 45055'46" WEST 271.16 FEET; THENCE SOUTH 88°32'46" WEST 264.11 FEET; THENCE SOUTH 00°07'50" WEST 178.08 FEET TO THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN. EXCEPT ALL RIGHTS TO SUB -SURFACE HYDROCARBON (OIL), AND OTHER MINERAL SUBSTANCES, TOGETHER WITH THE RIGHT TO ENTER UPON SAID PROPERTY TO DRILL FOR AND PRODUCE SAID HYDROCARBON OR MINERAL SUBSTANCES, AS RESERVED BY SUSAN HUNTER FERRY HAAS, WILLIAM EDWARD FERRY, GEORGE S, ST. CLAIR, CLARITA ODETTE, HELEN M. SMITH, FRANCES SWAN BEGETS, AND LOUIS BOTTI, ACTING AS GUARDIAN OF THE PERSON AND ESTATE OF VIVIAN MORRIS BOTTI; AND VIVIAN MORRIS BOTTI, AN INCOMPETENT PERSON WHO ACQUIRED TITLE AS VIVIAN MORRIS, IN DEED RECORDED MARCH 08 1960 AS INSTRUMENT NO 1048, IN BOOK D-774, PAGE 312 OF OFFICIAL RECORDS. THE RIGHTS TO ENTER UPON THE SURFACE OF SAID LAND WERE RELINQUISHED BY A DEED RECORDED NOVEMBER 09 1961 AS INSTRUMENT NO 1506, IN BOOK D-1415, PAGE 139 OF OFFICIAL RECORDS. EXCEPT THE RIGHT TO SUBSURFACE HYDROCARBON (OIL) AND OTHER MINERAL SUBSTANCES CONTAINED IN SAID REAL PROPERTY, TOGETHER WITH THE RIGHT TO ENTER UPON SAID PROPERTY TO DRILL FOR AND PRODUCE SAID HYDROCARBON OR MINERAL SUBSTANCES, AND TO ASSIGN SAID RIGHT TO OTHER PERSONS, PARTNERSHIPS OR CORPORATIONS AS RESERVED IN DEED RECORDED SEPTEMBER 12, 1961 AS INSTRUMENT NO. 4247 OF OFFICIAL RECORDS, ALSO EXCEPT ANY AND ALL KINDS OF PETROLEUM, OIL, ASPHALTUM, MALTHA, TAR, GAS AND OTHER BITUMINOUS AND OTHER HYDROCARBON SUBSTANCES, WATER, STONE, ROCK, GYPSUM, CLAY, SAND AND ALL MINERALS AND MINERAL SUBSTANCES, IN, UNDER OR UPON SAID LAND, AND ANY AND ALL THEREOF; ALSO THE RIGHT AT ANY AND ALL TIMES, AND BY ANY AND ALL MEANS TO ENTER UPON ANY AND ALL PORTIONS OF SAID LANDS, AND USE AND ENJOY THE SAME IN ANY AND ALL WAYS IT MAY SEEM NECESSARY, CONVENIENT OR EXPEDIENT IN, OR IN CONNECTION WITH THE TRANSACTION OF ITS BUSINESS, AS EXCEPTED AND RESERVED IN THE DEED FROM PUENTE OIL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 05. 1903 IN BOOK 1917, PAGE 137 OF DEEDS. SAID PARCEL SHOWN AS PARCEL 4 ON CERTIFICATE OF COMPLIANCE RECORDED JUNE 09, 2000 AS INSTRUMENT NO. 00-0893206, AND AMENDED JANUARY 05 2001 AS INSTRUMENT NO 01-0031377, BOTH OF OFFICIAL RECORDS. AGENCY PROPERTY: PARCEL 1(APN: 1000-011-21-0-000; 1000-011-22-0-000; 1000-021-14-0-000): THOSE PORTIONS OF SECTIONS 14 AND 23, IN GOVERNMENT LOT 38, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO BASE AND MERIDIAN, IN THE RANCHO SANTA ANA DEL CHINO, IN THE CITY OF CHINO HILLS, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP FILED IN RECORD OF SURVEY RECORDED IN BOOK 3 PAGE 72 OF RECORDS OF SURVEY, IN THE OFFICE :a OF THE COUNTY RECORDER OF SAID COUNTY, LYING SOUTHEASTERLY OF THE SAID RANCHO LINE BETWEEN STATIONS 13 AND 14, AS SHOWN ON SAID MAP. EXCEPT THEREFROM THAT PORTION CONVEYED TO THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, BY DEED RECORDED MARCH 07 1975 AS INSTRUMENT NO 58, IN BOOK 8630 PAGE 104 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE COUNTY OF SAN BERNARDINO, BY FINAL ORDER OF CONDEMNATION, RECORDED JUNE 07 1988 AS INSTRUMENT NO, 88-180373 OF OFFICIAL RECORDS. PARCEL 2 (APN: 1000 -011 -19 -0-000;1000-011-20-0-000;1000-021-13-0-000;1000-031-14-0-000; 1000-031-15- 0-000): THE WEST % OF SECTION 13, T1IE WEST %z OF SECTION 24, THE NORTHWEST %4 OF SECTION 25, AND THE NORTH % OF SECTION 26, ALL IN GOVERNMENT LOT 38, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO BASE AND MERIDIAN, IN THE RANCHO SANTA ANA DEL CHINO, IN THE CITY OF CHINO HILLS, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP FILED IN RECORD OF SURVEY RECORDED IN BOOK 3 PAGE 72 OF RECORDS OF SURVEY, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY, EXCEPT THEREFROM THAT PORTION CONVEYED TO THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, BY DEED RECORDED MARCH 07 1975 AS INSTRUMENT NO 56, IN BOOK 8630 PAGE 83 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, BY DEED RECORDED MARCH 07 1975 AS INSTRUMENT NO. 57 IN BOOK 8630 PAGE 92 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, BY DEED RECORDED MARCH 07 1975 AS INSTRUMENT NO 58 IN BOOK 8630, PAGE 104 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE COUNTY OF SAN BERNARDINO, BY FINAL ORDER OF CONDEMNATION, RECORDED JUNE 07. 1988 AS INSTRUMENT NO 88-180373 OF OFFICIAL RECORDS, PARCEL 22 (APN: 8701-021-271; 8701-022-270; 8701-022-273): mw A PORTION OF SECTION I AND ALL OF SECTION 12, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SECTION 12; THENCE EAST 80 CHAINS TO THE SOUTHEAST CORNER OF SECTION 12; THENCE NORTH 80 CHAINS TO THE NORTHEAST CORNER OF SAID SECTION 12; THENCE ON A COURSE OF ABOVE NORTH 91°28' WEST 90.83 CHAINS, MORE OR LESS, TO A POINT IN THE WEST LINE OF SAID SECTION 1, DISTANT 43.02 CHAINS NORTH OF THE SOUTHWEST CORNER THEREOF; THENCE SOUTH ALONG THE WEST LINES OF SAID SECTIONS 1 AND 12 TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND, DESCRIBED IN THE DEED TO THE STATE OF CALIFORNIA, RECORDED ON JULY 05 1968 AS INSTRUMENT NO. 399, IN BOOK D-4405, PAGE 993 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. ALSO EXCEPT THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND, DESCRIBED IN THE DEEDS TO THE STATE OF CALIFORNIA, RECORDED ON NOVEMBER 17, 1971 AS INSTRUMENT NO 253, IN BOOK D-5259, PAGE 626, AND NOVEMBER 17. 1971 AS INSTRUMENT NO. 254, IN BOOK D-5259, PAGE 630, BOTH OF OFFICIAL RECORDS OF SAID COUNTY. ALSO EXCEPT THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND, DESCRIBED IN THE DEEDS TO THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, RECORDED ON MARCH 07 1975 AS INSTRUMENT NO 281, IN BOOK D-6579, PAGE 1, AND MARCH 07 1975 AS INSTRUMENT NO 282 IN BOOK D-6579 PAGE I 1 BOTH OF OFFICIAL RECORDS OF SAID COUNTY, ALSO EXCEPT THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND DESCRIBED AS PARCEL A, IN THE GRANT DEED TO POMONA UNIFIED SCHOOL DISTRICT, RECORDED APRIL 07 1993 AS INSTRUMENT NO. 93-653577 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. ALSO EXCEPT THEREFROM THAT PORTION THEREOF, INCLUDED WITHIN THE LAND DESCRIBED IN THE FINAL ORDER AND JUDGMENT IN CONDEMNATION CASE NO. EAC 72461 RECORDED AUGUST 25 1995 AS INSTRUMENT NO 95-1398248 OF OFFICIAL RECORDS OF SAID COUNTY. Im EXHIBIT "C" FORM OF MEMORANDUM OF LEASE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REAL ESTATE LENDER Attn: Annie Pyke Dechert LLP One Bush Street, Suite 1600 San Francisco, CA 94104 MEMORANDUM OF LEASE This Memorandum Of Lease (this "Memorandum") is made and entered into as of May _, 2016 by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant"), with reference to the following facts: A. Landlord and Tenant are the landlord and tenant, respectively, under that certain Lease dated as of May _, 2016 (the "Lease"), relating to certain real property located in the Counties of Los Angeles, San Bernardino and Orange, State of California, more particularly described in Exhibit "A" attached hereto (the "Property"). B. Pursuant to Article 18 of the Lease, Landlord has granted to Tenant a limited right of first refusal to purchase (the "Right of First Refusal'), with respect to all or any portion of the Property and the improvements and certain other property located thereon. C. Landlord and Tenant desire to have this Memorandum recorded in the Official Records of [Orange/Los Angeles/San Bernardino] County, California, in order to put interested parties on notice of the estate of the Tenant in the Property and the Right of First Refusal. NOW, THEREFORE, in consideration of the rents and covenants provided for in the Lease to be performed by the Tenant, the Landlord hereby demises and leases the Premises to Tenant, subject to the terms and conditions of the Lease. 1. Term. The term of the Lease is Twenty -Five (25) years commencing on May , 2016, and terminating Twenty -Five (25) years thereafter, all subject to and on terms and conditions more fully set forth in the Lease. 22195068.14.BUSBdESS 2. Right of First Refusal. Landlord has granted, and hereby grants, to Tenant the Right of First Refusal described in Recital B above during the time, for the price, and on the terms and conditions contained in the Lease, the terms and conditions of which are incorporated herein by this reference in their entirety. The Right of First Refusal must be exercised on or before the dates specified in the Lease. Incorporation of Lease. All of the terms, conditions, provisions and covenants of the Lease are incorporated in this Memorandum by reference, as though written out in length herein. In the event of any conflict between the terms and provisions of this Memorandum and the Lease, the terms of the Lease shall govern. :j IN WITNESS WHEREOF, the parties hereto have executed this Memorandum on the day and year first above written. "LANDLORD" "TENANT" THE CITY OF INDUSTRY, a municipality organized under SAN GABRIEL VALLEY WATER AND the laws of California POWER, LLC, a California limited liability company By: By: Ambient SEH LP LLC, a California Name: limited liability company Its: Its: Non-member manager By: Ambient Communities LLC, a Delaware limited liability company Its: Sole Member 6 Name: Its: Name: Its: [ALL SIGNATURES MUST BE NOTARIZED] bm EXHIBIT "A" TOTAL SITE [LEGAL DESCRIPTION TO BE INSERTED BY LANDLORD] R 22195068.14.BUSINESS EXHIBIT "D" (See attached.) IM 22195068,14,BUSINGSS FIRST AMENDMENT TO MASTER GROUND LEASE THIS FIRST AMENDMENT TO MASTER GROUND LEASE (this "First Amendment") is made and entered into as of 15th day of November 2016 ("Effective Date"), by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant"). RECITALS: A. Landlord and Tenant are parties that certain Master Ground Lease dated as of May 17, 2016 (the "Original Lease"), B. Landlord and Tenant agree that the Landlord has acquired the Scout, Property (as defined in the Original Lease). C. Landlord and Tenant wish to amend certain terms and conditions of the Original Lease to recognize that Landlord has acquired the Scout Property and also to amend certain other terms and conditions of the Original Lease as set out herein (the Original Lease, as amended by the terms and conditions of this First Amendment, the "Lease"). D. In furtherance of the foregoing, Landlord and Tenant wish to enter into this First Amendment. AGREEMENT NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the foregoing recitals and of the mutual covenants, conditions and agreements herein contained to be done, kept and performed, Landlord and Tenant hereby agree as follows: I. All capitalized terms used but not defined herein shall have the meaning given thereto in the Original Lease. 2. The recital set forth in paragraph D of Original Lease is hereby deleted in its entirety and replaced with the following: D. To facilitate Tenant's development of such projects on the Total Site, Landlord shall allow Tenant or an Affiliate or Permitted Assignee, as each are defined below (as applicable, the `Project Tenant') to enter into ground leases of portions of the Total Site in the form to be agreed upon between Landlord and Tenantfrom time to time pursuant to Section 24.1 hereof and attached to this Lease as an exhibit by supplement hereto, with such revisions as the parties shall approve for each Project, as defined below (each, a "Project Lease"), whereupon the premises thereunder shall be excludedfrom the Total Site, 3. Section 2.3(a) of the Original Lease is hereby deleted in its entirety and replaced with the following: (a) prepared and submitted a request for an initial study and a notice of preparation under the California Environmental Quality Act ("CEQ,A) for photovoltaic solar project totaling, in the aggregate, at least four hundred fifty (450) megawatts of rated annual output ("Minimum Project) with the applicable governmental agency with jurisdiction over the relevant portion of the Total Site as defined under CEQA by June 30, 2017; 4. Section 23(c) of the Original Lease is hereby deleted in its entirety and replaced with the following: (c) completed and submitted to the Lead Agency a draft Environmental Impact Report ("EIR ") for the Minimum Project (f an BIR is required) (t) by November. 30, 2018 if the Lead Agency allows Tenant to prepare the draft EIR, or (ii) by November 30, 2019 tf the Lead Agency does not allow Tenant to prepare the draft EIR; 5. Section 25.1 of the Original Lease is hereby deleted in its entirety and replaced with the following: 25.1 Landlord Funding of Certain. Costs. Provided that no event of default has occurred and is continuing, from the Due Diligence Date until the fifth (51') anniversary thereof, Landlord shall make advancements (whether for retainers, deposits or other pre -payments) and/or reimbursements to Tenant for reasonable third -party fees and costs previously incurred by Tenant or to be incurred by Tenant in the future in connection with exploring the feasibility of, and seeking approvals for, the planning and development of Solar Projects in advance of the execution of one or more Project Leases, in an aggregate amount of not more than Five Million Dollars ($5,000,000), which sums shall be paid or reimbursed not more often than monthly, within. fourteen (14) days after, and, in each case, subject to, complying with the following conditions: 25.1.1 Tenant has completed and delivered a written request for payment setting forth the dates, amounts, and payees with respect to all sums being requested by Tenant, and a description of the work performed or to be performed by each payee, plus, at Landlord's request, evidence of any such work performed (to the extent applicable). 25.12 Tenant has furnished, in satisfactory form and substance, (a) every six (6) months, commencing January 1, 2017, conditional mechanics' lien releases and waivers for the amounts being requested and valid full and final mechanics' lien releases and waivers for all other work performed (which shall only be provided from consultants with respect to aspects of such work that could result in a lien under applicable law), (b) to the extent available, copies of bills or and invoices covering work for which a payment or reimbursement is made, and (c) a certification confirmation from Tenant that the foregoing and that the work for which payment is requested is authorized for reimbursement under this Lease. 6. The Part of Exhibit B to the Original Lease entitled, "Scout Property" is hereby deleted in its entirety and replaced with Exhibit A to this First Amendment. In furtherance of the Original Lease and the demise of the Total Site therein and following the preparation of a more detailed legal description of the Scout Property as set forth on Exhibit A to this First Amendment, the parties hereto agree to re -demise the Scout Property as follows: Landlord, for and in consideration of the rents, covenants and agreements to be paid, kept and performed by Tenant under the Lease, hereby demises and leases unto Tenant, and Tenant hereby leases from 2 Landlord, the Scout Property upon and subject to the terms, covenants and conditions set forth in the Lease. 7. Except as expressly amended by this First Amendment, the provisions of the Original Lease remain unchanged and in full force and effect. In the event of any conflict or inconsistency between the terms of the Original Lease and the terms of this First Amendment, the terms of this First Amendment shalt control. This First Amendment shall be effective on and after the Effective Date and any reference to the Original Lease in any other document shall be deemed to refer to the Original Lease as amended by this First Amendment. 8. This First Amendment shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law provisions. 9. All Exhibits attached to this First Amendment are hereby incorporated herein by this reference. [Balance of page intentionally left blank. Signatures appear on next page.] IN WITNESS'WIMREOF, the parties hereto have executed this First Amendment as of the date and year fust set forth above. 4%ANALOTtl) "TENANT" THE CITY OT INDUSTRY, a municipality organized under the laws of the State of California By: iti=(ya Name: l7AOA� er. M 1611 Its: —ah, M SAN GABRIEL VALLEY WATER AND POWER, LLC, -a California limited liability company By; Sustainable Water and rower LLC, a CaiS WIP, limited liability company Its; Non-member manager 0 Its-, EXHIBIT "A" THE PROPERTY REFERRED TO BELOW IS SI'TUATED IN LOS ANGELES COUNTY, ORANGE COUNTY, AND SAN BERNARDINO COUNTY, STATE OF CALIFORNIA. SCOUT PROPERTY: PARCEL 3 (APN: 308-031-21; 308-031-26; 308-031-28; 308-031-29): PORTIONS OF LAND IN THE UNINCORPORATED TERRITORY OF THE COUNTY OF ORANGE, STATE OF CALIFORNIA, PURSUANT TO CERTIFICATE OF COMPLIANCE NO. CC 2000-03 RECORDED FEBRUARY 09 2001 AS INSTRUMENT NO 20010076391 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: LOTS I AND 2 IN SECTION 4, TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO THE OFFICIAL PLAT FILED IN THE DISTRICT LAND OFFICE, FEBRUARY 17, 1868, TOGETHER WITH THE NORTH 200.00 FEET OF THAT PORTION OF THE NORTHEAST QUARTER OF SAID SECTION 4 BOUNDED NORTHERLY BY THE SOUTHERLY LINE OF SAID LOT I AND BOUNDED EASTERLY AND WESTERLY BY THE SOUTHERLY PROLONGATION OF THE EASTERLY AND WESTERLY LINES RESPECTIVELY, OF SAID LOT I AND TOGETHER WITH THE NORTH 200 FEET OF THE EAST HALF OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID SECTION 4. EXCEPTING THEREFROM THAT PORTION LYING WESTERLY OF THE EASTERLY LINE OF PARCELNO, 7.04 OF THE DEED TO THE COUNTY OF ORANGE RECORDED JANUARY 11, 1985 AS INSTRUMENTNO. 85-009660 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, ALSO EXCEPTING THEREFROM THAT PORTION LYING WITHIN THAT CERTAIN PARCEL OF LAND DESCRIBED IN A QUITCLAIM DEED TO SHELL OIL COMPANY, A DELAWARE CORPORATION, RECORDED JANUARY 31 1964 AS INSTRUMENT NO. 26476, IN BOOK 6906, PAGE 58 OF SAID OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION THEREOF ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LANDS, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFORE AND REMOVING THE SAME FROM SAID LAND ORANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN SAID LANDS, WITH OIL WELLS, GAS WELLS, TUNNELS OR SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE RIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS OR BEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL OR MINE FROM THE SURFACE OF SAID LANDS INTO OTHER LANDS AND THE RIGHT TO REDRILL, RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINES OR WELLS, AS RESERVED IN THE DEED FROM SHELL OIL COMPANY, A CORPORATION, RECORDED DECEMBER 05. 1962 AS INSTRUMENT NO 2240 IN BOOK 6347 PAGE 273 OF OFFICIAL RECORDS, REFERENCE TO SAID DEED BEING HEREBY MADE FOR FURTHER PARTICULARS THEREIN RELATIVE TO THE USE OF THE SUBSURFACE OF THE LAND WITH RESPECT TO SAID RIGHTS AND INTEREST. ALSO EXCEPTING FROM A PORTION THEREOF ALL MINERALS, MINERAL RIGHTS, OIL, OIL RIGHTS, GAS, GAS RIGHTS, AND ALL OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN IN, UPON OR UNDERLYING SAID LANDS AND ALL WATER OR WATERS LYING BELOW SAID LANDS TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING AND OPERATING THEREFROM AND REMOVING THE SAME FROM SAID LANDS OR ANY OTHER LAND BY METHODS PRESENTLY EXISTING OR HEREAFTER DEVELOPED, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN SAID LANDS WITH OIL WELLS, GAS WELLS, TUNNELS OR SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF SAID LANDS AND THE EIGHT TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS OR SHAFTS UNDER AND BENEATH SAID LANDS ORBEYOND THE EXTERIOR LIMITS THEREOF AND THE RIGHT TO RBDRILL, RECOMPLETE, DEEPEN, RETUNNEL, EQUIP, MAINTAIN, REPAIR AND OPERATE ANY SUCH MINE OR WELLS PROVIDED, HOWEVER, THAT IN EXERCISING THE FOREGOING RIGHTS OR ANY OF THEM SO RESERVED BY SHELL, ITS SUCCESSORS OR ASSIGNS, SHALL CONFINE THEIR RESPECTIVE USE OF THE SURFACE TO THE FIVE -ACRE PARCELS REFERRED TO IN THAT CERTAIN DEED DATED MAY 04, 1962 AND RECORDED DECEMBER 05 1962 AS INSTRUMENT NO 2240 IN BOOK 6347, PAGE 273 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, AS RESERVED BY SHELL OIL COMPANY, A CORPORATION, IN THE DEED RECORDED JANUARY 31 1964 AS INSTRUMENT NO. 26477 IN BOOK 6906, PAGE 59 OF OFFICIAL RECORDS. PARCEL 24 (APN: 8714.028-04; A PORTION OF 8714-027-06): THOSE PORTIONS OF LAND DESCRIBED AS FOLLOWS: THE SOUTHEAST QUARTER OF SECTION 33, THE SOUTH HALF OF SECTION 34, THE SOUTHWEST QUARTER OF SECTION 35, ALL IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE SEPTEMBER 28,1868, EXCEPT THAT PORTION THEREOF CONVEYED BY DEED FROM CHINO LAND AND WATER COMPANY TO JOHN C. MILES AND LOUIS B. JORALIVION RECORDED IN BOOK 3859, PAGE 275 OF OFFICIAL RECORDS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTH QUARTER CORNER OF SAID SECTION 35 ON THE COUNTY BOUNDARYLINE OF LOS ANGELES AND ORANGE COUNTIES, MARKED BY A 2INCH IRON PIPE WITH A BRASS CAP; THENCE NORTH 10°49'20" WEST 2673.34 PEET TO THE COUNTY LINE MONUMENT AT THE CENTER OF SAID SECTION 35: THENCE WESTERLY ALONG THE SOUTH LINE OF THE NORTHWEST QUARTER OF SECTION 35, A DISTANCE OF 520 FEET TO THE WEST SIDE OF FIRE BREAK; THENCE SOUTH 10007100" EAST 726 FEET, MORE OR LESS, TO A POINT FROM WHICH A MARKED OAIC TREE BEARS SOUTH 52048'00" EAST 60.00 FEET; THENCE SOUTH 18°49'00" EAST 1566 FEET TO A POINT FROM WHICH A SMALL MARKED OAK TREE BEARS NORTH 85056'00" EAST 21.6 FEET; THENCE SOUTH 4201110" EAST 578.7 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THOSE PORTIONS LYING NORTHERLY AND WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT A 2 INCI4 IRON PIPE WITH BRASS CAP IN CONCRETE AT THE CENTER OF SAID SECTION 26, AS SHOWN ON THE LOS ANGELES COUNTY SURVEYOR'S MAP C. S. 8580 FILED IN THE OFFICE OF THE DIRECTOR OF PUBLIC WORKS OF SAID COUNTY; THENCE ALONG THE EAST LINE OF SOUTHWEST QUARTER OF LAST SAID SECTION SOUTH 00°18'50" EAST 1170.79 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID EAST LINE SOUTH 25°36'25" WEST 79.99 FEET; THENCE SOUTH 88004'14" WEST 81.81 FEET; THENCE SOUTH 65°51'07" WEST 117.69 FEET, THENCE SOUTH 64°01'22" WEST 100.66 FEET; THENCE SOUTH 72012'58" WEST 65.15 FEET; THENCE NORTH 82022'19" WEST 318.40 FEET; THENCE SOUTH 66°08'44" WEST 291.45 FEET; THENCE NORTH 60°57'06" WEST 138.16 FEET; THENCE SOUTH 74°02'49" WEST 283.15 FEET; THENCE SOUTH 67°05'03" WEST 694.43 FEET; THENCE SOUTH 67023'18" WEST 141,24 FEET; THENCE SOUTH 28043'35" WEST 228.33 FEET; THENCE SOUTH 58010'01" WEST 41.27 FEET; THENCE NORTH 87°24'40" WEST 190.48 FEET; THENCE SOUTH 72057'39" WEST 411 .84FEET; THENCE SOUTH 54°58'27" WEST 292.37 FEET; THENCE SOUTH 83053'26" WEST 129.97 FEET, THENCE NORTH 79°79'13" WEST 167.52 FEET; THENCE SOUTH 76°56'58" WEST 191.09 FEET; THENCE SOUTH 56041'58" WEST 213.70 FEET; THENCE SOUTH 69°48'31" WEST205.88FEET, THENCE SOUTH38°l 1'23" WEST204.69FEET,THENCE 43°36'59" WEST217.43 FEET; THENCE SOUTH 52012'56" WEST 624.84 FEET; THENCE SOUTH 29056'10" WEST 340.97 FEET; THENCE SOUTH 54046'50" WEST 1113,97 FEET; THENCE SOUTH 60°41'00" WEST 240.86 FEET; THENCE NORTH 85050'49" WEST 434.07 FEET; THENCE SOUTH 6803449" WEST 228.98 FEET; THENCE SOUTH 45'13'16' WEST 111.28 FEET; THENCE SOUTH 79006'17" WEST 190.89 FEET; THENCE SOUTH 43°16'15" WEST 155.35 FEET; THENCE SOUTH 89036'28" WEST 107.30 FEET; THENCE SOUTH 52°36'47" WEST 295.83 FEET; THENCE SOUTH 39051134" WEST 253.31 FEET; THENCE SOUTH 08049'28" WEST 288.86 FEET; THENCE SOUTH 43°22'04" WEST 211.30 FEET; THENCE SOUTH 28°22'04" WEST 72.87 FEET; THENCE SOUTH 08°29'53" WEST 718.80 FEET; THENCE SOUTH 13°54'37" WEST 265.68 FEET; THENCE SOUTH 37°23'04" WEST 124.46 FEET; THENCENORTH 21°52'15" WEST 164.75 FEET; THENCE SOUTH41°18'08" WEST 233.05 FEET; THENCE SOUTH 15°45'I2" WEST 111,80 FEET; THENCE SOUTH 31°33'19" WEST 371.37 FEET; THENCE SOUTH 22047'05" WEST 198.75 FEET; THENCE SOUTH 45'55'46" WEST 271.16 FEET; THENCE NORTH 88032'46" WEST 264.11 FEET; THENCE SOUTH 00007750" WEST 178.08 FEET; TO THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN. ALSO EXCEPT ALL KINDS OF PETROLEUM, OIL, ASPHALTUM, MALTHA, TAR, GAS AND OTHER BITUMINOUS AND OTHER HYDROCARBON SUBSTANCES, WATER, STONE, ROCK, GYPSUM, CLAY, SAND, AND ALL MINERALS ANDMINERAL SUBSTANCES, IN, UNDER, OR UPON SAID LAND, AND ANY AND ALL THEREOF; ALSO THE RIGHT AT ANY AND ALL TIMES, AND BY ANY AND ALL MEANS TO ENTER UPON ANY AND ALL PORTIONS OF SAID LANDS, AND USE AND ENJOY THE SAME IN ANY AND ALL WAYS IT MAY DEEM NECESSARY, CONVENIENT OR EXPEDIENT IN, OR IN CONNECTION WITH THE TRANSACTION OF ITS BUSINESS, AS EXCEPTED AND RESERVED IN THE DEED FROM PUENTE OIL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 05 1903 IN BOOK 1917 PAGE 137 OF DEEDS. THE INTEREST OF THE PUENTE OIL COMPANY, A CORPORATION, HAS PASSED TO AND IS NOW VESTED IN SHELL OIL COMPANY, A DELAWARE CORPORATION, BY DEED RECORDED JULY 12,1922 IN BOOK 1196, PAGE 278 OF OFFICIAL RECORDS AND MESNE CONVEYANCES OF RECORD, ALSO EXCEPTING ALL THE MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES IN, ON OR UNDER SAID PARCELS, TOGETHER WITH BUT NOT CONFINED TO THE FOLLOWING RIGHTS, NAMELY, ALL NECESSARY AND CONVENIENT RIGHTS FOR THE PURPOSE OF DRILLING FOR, PRODUCING, EXTRACTING AND TAKING ANY OF SAID MINERALS, OAS, OIL, PETROLEUM, NAPHTHA. AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND, TOGETHER WITH THE RIGHT TO USE OR DEVELOP AND USE ALL WATER NECESSARY AND CONVENIENT FOR SAID DRILLING, EXTRACTING OR TAKING OF SAID MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND, AND TO STORE THE SAME UPON SAID LAND, TOGETHER WITH THE RIGHT TO ENTER UPON SAID LAND AT ANY AND ALL TIMES FOR SAID PURPOSES, EITHER PERSONALLY OR THROUGH ANY AGENTS, SERVANTS, EMPLOYEES, ORLESSEES OF THE ORANTOR AND FROM TIME TO TIME TO CONSTRUCT, LAY, USE, MAINTAIN, ERECT, REPAIR, REPLACE AND REMOVE THEREON AND THEREFROM ALL DERRICKS, ROADS, TANKS, RESERVOIRS, MACHINERY, TELEPHONE, TELEGRAPH AND POWER LINES, PIPE LINES AND OTHER STRUCTURES, WITH THE RIGHT OF WAY FOR PASSAGE OVER, UPON AND ACROSS AND INGRESS AND EGRESS TO AND FROM SAID PREMISES AND EVERY PART THEREOF AS RESERVED IN DEED RECORDED APRIL 22 1958 AS INSTRUMENT NO 941 IN BOOK D- 78, PAGE 299 OF OFFICIAL RECORDS. ALSO EXCEPTING ALL MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES IN, ON OR UNDER SAID LAND TOGETHER WITH, BUT NOT CONFINED TO THE FOLLOWING RIGHTS, NAMELY ALL NECESSARY AND CONVENIENT RIGHTS FOR THE PURPOSE OF DRILLING FOR, PRODUCING, EXTRACTING AND TAKING ANY OF SAID MINERALS, GAS, OIL, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND, TOGETHER WITH RIGHT TO USE OR DEVELOP AND USE ALL WATER NECESSARY AND CONVENIENT FOR SAID DRILLING, EXTRACTING OR TAKING OF SAID MINERALS, GAS, OILS, PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES FROM SAID LAND AND TO STORE THE SAME UPON SAID LAND, TOGETHER WITH THE RIGHT TO ENTER UPON SAID LAND AT ANY AND ALL TIMES FOR SAID PURPOSES, EITHER PERSONALLY OR THROUGH ANY AGENTS, SERVANTS, EMPLOYEES OR LESSEES OF THE GRANTORAND FROM TIME TO TIME TO CONSTRUCT, LAY, USE, MAINTAIN, ERECT, REPAIR, REPLACE AND REMOVE THEREON AND THEREFROM ALL DERRICKS, ROADS, TANKS, RESERVOIRS, MACHINERY, TELEPHONE, TELEGRAPH AND POWER LINES, PIPE LINES AND OTHER STRUCTURES, WITH THE RIGHT OF WAY FORPASSAGE OVER, UPON AND ACROSS AND INGRESS AND EGRESS TO AND FROM SAID PREMISES AND EVERY PART THEREOF, AS RESERVED BY ERNEST A. BRYANT, JR., SOLE SURVIVING TRUSTEE UNDER THE WILL OF SUSANNA BIXBY BRYANT, ALSO KNOWN AS SUSANNA P. BRYANT, DECEASED, IN DEED RECORDED APRIL 22, 1958 AS INSTRUMENT NO. 941, IN BOOK D-78, PAGE 299 OF OFFICIAL RECORDS. SAID PARCEL SHOWN AS PARCEL 3 ON CERTIFICATE OF COMPLIANCE RECORDED JUNE 09, 2000 AS INSTRUMENT NO, 00-0893206 AND AMENDED JANUARY 05 2001 AS INSTRUMENT NO 01-0031377, BOTH OF OFFICIAL RECORDS. PARCEL 25 (APN: 8714-026-07; 8714-026-08; A PORTION OF 8714027.06): THOSE PORTIONS OF LAND, DESCRIBED AS FOLLOWS: THE SOUTHWEST QUARTER OF SECTION 26, THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER AND THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 27, THE NORTHEAST QUARTER AND THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER AND THE SOUTHWEST OF THENORTHWEST QUARTER AND THE NORTH HALF OF THENORTHWEST QUARTER OF SECTION 34, THENORTH HALF OF THENORTHWEST QUARTER OF SECTION 35, ALL IN TOWNSHIP 2 SOUTH, RANGE 9 WEST, SAN BERNARDINO MERIDIAN. EXCEPT THEREFROM THOSE PORTIONS LYING NORTHERLY AND WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT A 2 INCH IRON PIPE WITH BRASS CAP IN CONCRETE AT THE CENTER OF SAID SECTION 26 AS SHOWN ON THE LOS ANGELES COUNTY SURVEYOR'S MAP C. S. 8580 FILED IN THE OFFICE OF THE DIRECTOR OF PUBLIC WORKS OF SAID COUNTY; THENCE ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF LAST SAID SECTION SOUTH 00°18'50" EAST 1170.79 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID EAST LINE SOUTH 25036'25" WEST 79.99 FEET; THENCE SOUTH 88°04'14" WEST 81.81 FEET; THENCE SOUTH 65°5l'OT' WEST 117.69 FEET; THENCE SOUTH 64001'22" WEST 100.66 FEET; THENCE SOUTH 72°12'58" WEST 65.15 FEET; THENCE NORTH 82022'19" WEST 318.40 FEET; THENCE SOUTH 66°08'44" WEST 291.45 FEET; THENCE NORTH 60°57'06" WEST 138.16 FEET; THENCE SOUTH 74'02'49" WEST 283.15 FEET; THENCE SOUTH 67°05'03" WEST 694.43 FEET; THENCE SOUTH 67°23'I8" WEST 14124 FEET; THENCE SOUTH 28043'35" WEST 228.33 FEET; THENCE SOUTH 58010'01" WEST 41.27 FEET; THENCE NORTH 87024'40" WEST 190.48 FEET; THENCE SOUTH 72057'39" WEST 411.84 FEET; THENCE SOUTH 54°58'27" WEST 29237 FEET; THENCE SOUTH 83053'26" WEST 129.97 FEET; THENCE NORTH 79°19'13" WEST 167.52 FEET; THENCE SOUTH 76056'58" WEST 191.09 FEET; THENCE SOUTH 56°41'58" WEST 213.70 FEET; THENCE SOUTH 69°48'31" WEST 205.88 FEET; THENCE SOUTH 38011'23" WEST 204.69 FEET; THENCE SOUTH 43036159" WEST 217.43 FEET; THENCE SOUTH 52012'56" WEST 624.84 FEET; THENCE SOUTH 29056'10" WEST 340.97 FEET; THENCE SOUTH 54°46'50" WEST 1113.97 FEET; THENCE SOUTH 60041'00" WEST 240.86 FEET; THENCE NORTH 85050'49" WEST 434.07 FEET; THENCE SOUTH 68034'49" WEST 228.98 FEET; THENCE SOUTH 45013'16" WEST 111.28 FEET; THENCE SOUTH 79°06'1T' WEST 190.89 FEET; THENCE SOUTH 43016'15" WEST 15535 FEET; THENCE SOUTH 89°36'28" WEST 107.30 FEET; THENCE SOUTH 52036'4T' WEST 295.83 FEET, THENCE SOUTH 39°51'34" WEST 253.31 FEET; THENCE SOUTH 08°49'28" WEST 288.86 FEET; THENCE SOUTH 43°22'04" WEST 211.30 FEET; THENCE SOUTH 28°22'04" WEST 72.87 FEET, THENCE SOUTH 08°29'53" WEST 718.80 FEET; THENCE SOUTH 13°54'3T' WEST 265.68 FEET; THENCE SOUTH 37023'04" WEST 124AS FEET, THENCE NORTH 21°52'15" WEST 164.75 FEET; THENCE SOUTH 41018'08" WEST 233.05 FEET; THENCE SOUTH 15045'12" WEST 111.80 FEET; THENCE SOUTH 31°33'19" WEST 371.37 FEET; THENCE SOUTH 22047'05" WEST 198.75 FEET; THENCE SOUTH 45055'46" WEST 271.16 FEET; THENCE SOUTH 88032146" WEST264.11 FEET; THENCE SOUTH 00007150" WEST 178.08 FEET TO THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 2 SOUTH RANGE 9 WEST, SAN BERNARDINO MERIDIAN. EXCEPT ALL RIGHTS TO SUB -SURFACE HYDROCARBON (OIL), AND OTHER MINERAL SUBSTANCES, TOGETHER WITH THE RIGHT TO ENTER UPON SAID PROPERTY TO DRILL FOR AND PRODUCE SAID HYDROCARBON OR MINERAL SUBSTANCES, AS RESERVED BY SUSAN HUNTER FERRY HAAS, WILLIAM EDWARD PERRY, GEORGE S. ST. CLAI R, CLARITA ODETTB, HELEN M. SMITH, FRANCES SWAN REGETS, AND LOUIS BOTTI, ACTING AS GUARDIAN OF THE PERSON AND ESTATE OF VIVIAN MORRIS BOTTI; AND VIVIAN MORRIS BOTTI, AN INCOMPETENT PERSON WHO ACQUIRED TITLE AS VIVIAN MORRIS, IN DEED RECORDED MARCH 08 1960 AS INSTRUMENT NO. 1048, IN BOOK D-774, PAGE 312 OF OFFICIAL RECORDS. THE RIGHTS TO ENTER UPON THE SURFACE OF SAID LAND WERE RELINQUISHED BY A DEED RECORDED NOVEMBER 09 1961 AS INSTRUMENT NO 1506 IN BOOK D-1415 PAGE 139 OF OFFICIAL RECORDS. EXCEPT THE RIGHT TO SUBSURFACE HYDROCARBON (OIL) AND OTHER MINERAL SUBSTANCES CONTAINED IN SAID REAL PROPERTY, TOGETHER WITH THE RIGHT TO ENTER UPON SAID PROPERTY TO DRILL FOR AND PRODUCE SAID HYDROCARBON OR MINERAL SUBSTANCES, AND TO ASSIGN SAB) RIGHT TO OTHER PERSONS, PARTNERSHIPS OR CORPORATIONS AS RESERVED IN DEED RECORDED SEPTEMBER 12 1961 AS INSTRUMENT NO 4247 OF OFFICIAL RECORDS. ALSO EXCEPT ANY AND ALL KINDS OF PETROLEUM, OIL, ASPHALTUM, MALTHA, TAR, GAS AND OTHER BITUMINOUS AND OTHER HYDROCARBON SUBSTANCES, WATER, STONE, ROCK, GYPSUM, CLAY, SAND AND ALL MINERALS AND MINERAL SUBSTANCES, IN, UNDER OR UPON SAID LAND, AND ANY AND ALL THEREOF; ALSO THE RIGHT AT ANY AND ALL TIMES, AND BY ANY AND ALL MEANS TO ENTER UPON ANY AND ALL PORTIONS OF SAID LANDS, AND USE AND ENJOY THE SAME IN ANY AND ALL WAYS IT MAY SEEM NECESSARY, CONVENIENT OR EXPEDIENT IN, OR IN CONNECTION WITH THE TRANSACTION OF ITS BUSINESS, AS EXCEPTED AND RESERVED IN THE DEED FROM PUENTE OIL COMPANY, A CORPORATION, IN DEED RECORDED NOVEMBER 05. 1903 IN BOOK 1917. PAGE 137 OF DEEDS. SAID PARCEL SHOWN AS PARCEL 4 ON CERTIFICATE OF COMPLIANCE RECORDED NNE 09.2000 AS INSTRUMENT NO. 00-0893206. AND AMENDED JANUARY 05. 2001 AS INSTRUMENT NO, 01-0031377, BOTH OF OFFICIAL RECORDS. SECOND AMENDMENT TO MASTER GROUND LEASE THIS SECOND AMENDMENT TO MASTER GROUND LEASE (this "Second Amendment") is made and entered into as of April 13, 2017 ("Effective Date"), by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant"). RECITALS: A. Landlord and Tenant are parties to (collectively, the "Original Lease") (a) that certain Master Ground Lease, dated as of May 17, 2016, and (b) that certain First Amendment to Master Ground Lease, dated as of November 15, 2016. B. Landlord and Tenant wish to amend certain terms and conditions of the Original Lease as set forth herein (the Original Lease, as amended by the terms and conditions of this Second Amendment, shall be referred to herein as the "Lease'), C. In furtherance of the foregoing, Landlord and Tenant wish to enter into this Second Amendment. AGREEMENT NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the foregoing recitals and of the mutual covenants, conditions and agreements herein contained to be done, kept and performed, Landlord and Tenant hereby agree as follows; 1. All capitalized terms used but not defined herein shall have the meaning given thereto in the Original Lease, 2. The following provision is added to the Lease as Section 2,4; 2.4. Proiects on Total Site. 2.4.1 The approval of this Lease is not intended to be a "project" under CEQA because it does not authorize any physical change in the environment. This Lease does not constitute an entitlement to develop any particular project on all or any portion of the Total Site, nor does it constitute an authorization of any particular use by Tenant of all or any portion of the Total Site other than activities associated with Site Diligence as provided in Section 1,3 and activities authorized in Section 4.1 for determining the suitability of the Total Site for projects. 2.4,2 Landlord will not issue any approval or entitlement to Tenant to proceed with any project on all or any portion of the Total Site unless and until compliance with CEQA is completed and all necessary entitlements obtained, including any entitlements from Landlord. Notwithstanding the foregoing, Landlord is not committing to issue any entitlements to Tenant, and Landlord retains full discretion to consider specific project proposals submitted by Tenant, to review and evaluate environmental review documents prepared for such projects, and to approve, deny, or condition any project proposed by Tenant, including adoption of any mitigation measures or project alternatives under CEQA. 2.4.3 To the extent required by law, Landlord and Tenant agree to amend the Lease to comply CEQA. 4. Section 25.1 of the Original Lease Is hereby deleted in its entirety and replaced with the following: 25.1 Landlord Funding of Certain Costs. Provided that no event of default has occurred and is continuing, fi-om the Due Diligence Date until the fifth (5'a) anniversary thereof, Landlord shall make advancements (whether for retainers, deposits or other pre -payments), subject to the provisions of Section 25.1,2, and/or reimbursements to Tenant for reasonable third - party fees and costs previously incurred by Tenant or to be incurred by Tenant in the future in connection with exploring the feasibility of, and seeking approvals for, the planning and development of Solar Projects, the transmission and/or storage of the power generated thereby, and/or a reservoir project in advance of the execution of one or more Project Leases, in an aggregate amount of not more than Eleven Million Five Hundred Thousand Dollars ($11,500,000), which sums shall be paid or reimbursed not more often than monthly, within fourteen (14) days after, and, in each case, subject to, complying with the following conditions: 25. 1,1 Tenant has completed and delivered a written request for payment setting forth the dates, amounts, and payees with respect to all sums being requested by Tenant, and a description of the work performed or to be performed by each payee, plus, at Landlord's request, evidence and/or a copy of any such work performed (to the extent applicable). 25,1.2 Tenant has furnished, in satisfactory form and substance, (a) every six (6) months, commencing July 1, 2017, conditional mechanics' lien releases and waivers for the amounts being requested and valid full and final mechanics' lien releases and waivers for all other work performed (which shall only be provided from consultants with respect to aspects of such work that could result in a lien under applicable law), (b) copies of bills or any invoices covering work for which a payment or reimbursement is made, and (c) a certification confirmation from Tenant that the foregoing and that the work for which payment is requested is authorized for reimbursement or payment under this Lease, Under no circumstances shall the aggregate outstanding balance of all retainers, advances, or deposits for work not yet performed exceed One Million Dollars ($1,000,000) at any time, 5. Other Changes, Except as expressly amended by this Second Amendment, the provisions of the Original Lease remain unchanged and in full force and effect, In the event of any conflict or inconsistency between the terms of the Original Lease and the terms of this Second Amendment, the terms of this Second Amendment shall control. This Second Amendment shall be effective on and after the Effective Date and any reference to the Original Lease in any other document shall be deemed to refer to the Original Lease as amended by this Second Amendment. This Second Amendment shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law provisions. [Balance of page intentionally left blank. Signatures appear on next page,] IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the date and year first above written, "LANDLORD" THE CITY OF INDUSTRY, a municipality organized under the layvs of the State of California Name: Its• <; 4,. ��.,pd,z__ "TENANT" SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company By: Sustainable Water and Power LLC, a California limited liability company Its: Non-member manager By: Ambient Communities LLC, a Delaware limited liability company its: Sole Member By: Name: Its: By: Name: Its: IN 11 (NESS N 10111101% the partite herout Ewe Met lod MS Wild Amendment as of the dale and Yedr first above Mail "LANDLORD" THE Gil YOINDUS H '. a municipality otpalilredundul lite Iafvsordicstate orcaminnia By ,_ __ Name its 3 "TENANT'' SAN 0ABRIF1 VALUY V1 A CER AND POWFR, I Lr, n C';rUm nia Ilmmhad INWIlty compally 13y' Sustainable Walel and hotrerl.LC, a Calirortna limilel liability Company Ite Non�n�cmbcr ntzut<i�:cr By. Ambient a Wlawi company 10 Sole,1 BY Nance It. Nome Its ties LI C. liability THIRD AMENDMENT TO MASTER GROUND LEASE THIS THIRD AMENDMENT TO MASTER GROUND LEASE (this "Third Amendment") is made and entered into as of May 23, 2017 ("Effective Date"), by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant"), RECITALS: A. Landlord and Tenant are parties to (collectively, the "Original Lease") (a) that certain Master Ground Lease, dated as of May 17, 2016, (b) that certain First Amendment to Master Ground Lease, dated as of November 15, 2016, and (c) that certain Second Amendment to Master Ground Lease, dated as of April 13, 2017. B. Landlord and Tenant wish to amend certain terms and conditions of the Original Lease as set forth herein (the Original Lease, as amended by the terms and conditions of this Third Amendment, shall be referred to herein as the "Lease"). Amendment. C. In furtherance of the foregoing, Landlord and Tenant enter into this Third AGREEMENT NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the foregoing recitals and of the mutual covenants, conditions and agreements herein contained to be done, kept and performed, Landlord and Tenant hereby agree as follows: 1. All capitalized terms used but not defined herein shall have the meaning given thereto in the Original Lease. 2. The following provision is added to the Lease as Section 25.3: 25.3 Reimbursement of Sums Funded by Landlord. Upon commencement of construction of the first Project pursuant to this Lease, (a) Landlord shall be reimbursed, in full, but without any interest thereon, in the amount of all sums advanced by Landlord pursuant to the foregoing provisions of this Section 25, which, with Landlord's consent, may be effected by a credit to any contribution owed by Landlord with respect to such Project, and (b) Landlord's obligation to fund any sums pursuant to the foregoing provisions of this Section 25 shall automatically and irrevocably terminate. 3. Development Fee. The parties acknowledge that each Project will include a mutually agreeable development fee that will be paid as directed by Tenant. 4. Other Changes. Except as expressly amended by this Third Amendment, the provisions of the Original Lease remain unchanged and in full force and effect. In the event of any conflict or inconsistency between the terms of the Original Lease and the terms of this Third Amendment, the terms of this Third Amendment shall control. This Third Amendment shall be effective on and after the Effective Date and any reference to the Original Lease in any other document shall be deemed to refer to the Original Lease as amended by this Third Amendment. This Third Amendment shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law provisions. [Balance of page intentionally left blank. Signatures appear on next page.] IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the date and year first above written. "LANDLORD" "TENANT" THE CITY OF INDUSTRY, SAN GABRIEL VALLEY WATER AND a municipality organized under the POWER, LLC, a California limited liability laws of the State of C lifor is company By� • By: Sustainable Water and Power LLC, Name: Paul J. Philips aCalifornia limited liability company Its: City Manager Its: Non-member manager By: Ambient Communities LLC, a Delaware limited liability company Its: Sole Member By: _ Name: Its: By: _ Name: Its: IN wri-i ''ss WHHU01', IBa pfoties hemp I1mv uxecuted this Third AmellTlmenl 9s (it, the dote iwd yeas iirnl:Ibovc writtmt. "r_nNui;ORWz THE CITY OF INDUSTRY. si municiprdity oppnized under tlm him Mile State orC':rliforiiia Wo �.._ Its: ' TTi VA:N'1'.. SAN GABRIkiL Vi\{ LEV WAM AND I'MOR, LIX, a 01111 rnia limited lisibilily coupm)y By; Sustnlmible Wader and Powe' LLC, 11 ('slifolidu limited liobility compony 1ts1 Non-liiember unout,uer By: Atlbi!nt a F)elanvs c<,mpnnl lis: Sole MCI By: Niuiiri Its: _ 13y; N IM. Its: >T FOURTH AMENDMENT TO MASTER GROUND LEASE THIS FOURTH AMENDMENT TO MASTER GROUND LEASE (this "Fourth Amendment") is made and entered into as June 30, 2017 ("Effective Date"), by and between THE CITY OF INDUSTRY, a municipality organized under the laws of the State of California ("Landlord"), and SAN GABRIEL VALLEY WATER AND POWER, LLC, a California limited liability company ("Tenant'). RECITALS: A. Landlord and Tenant are parties to (collectively, the "Original Lease"): (a) that certain Master Ground Lease, dated as of May 17, 2016, (b) that certain First Amendment to Master Ground.Lease, dated as of November 15, 2016, (c) that certain Second Amendment to Master Ground Lease, dated as of April 13, 2017, and (d) that certain Third Amendment to Master Ground Lease, dated as of May 23, 2017, B. Landlord and Tenant wish to amend certain terns and conditions of the Original Lease as set forth herein (the Original Lease, as amended by the teams and conditions of this Fourth Amendment, shall be referred to herein as the "Lease"). C. In furtherance of the foregoing, Landlord and Tenant wish to enter into this Fourth Amendment. AGREEMENT NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the foregoing recitals and of the mutual covenants, conditions and agreements herein contained to be done, kept and performed, Landlord and Tenant hereby agree as follows: 1. All capitalized terms used but not defined herein shall have the meaning given thereto in the Original Lease. 2. Section 2.3(a) of the Original Lease is hereby deleted in its entirety and replaced with the following: (a) prepared and submitted a request for an initial study and a notice of preparation under the California Environmental Qualio) Act ("CEQA") for photovoltaic solar project totaling, in the aggregate, at least four hundred and fifty (450) inegawatis of rated antral output ("Minimam Project') with the applicable governing agency with jurisdiction over the relevant portion of the Total Site as defined under CEQA by June 30, 2018, 3. Section 23(c) of the Original Lease is hereby deleted in its entirety and replaced with the following: (c) completed and submitted to the Lead Agency a draft Environmental Impact Report ("EIR') for the Mininnnn Project (if an EIR is required) (i) by November 30, 2019, if the Lead Agency allows Tenant to prepare the draft EIR, or (ii) by November 30, 2020, if the Lead Agency does not allow Tenant to prepare the draft EIR. 4. Section 25.1 of the Original Lease is hereby deleted in its entirety and replaced with the following: 25,1 Landlord Funding ofCertain Costs. Provided that no event of default has occurred and is continuing, from the Due Diligence Date until the fifth (5`9 anniversrny thereof, Landlord shall make advancements (whether for retainers, deposits or other pre payments), subject to the provisions of Section 25.1.2, and/or reimbunsenents to Tenantfor reasonable third-partyfees and costs previously incurred by Tenant or to be incurred by Tenant in the future in connection with exploring the feasibility of, and seeking approvals for, the planning and development of Solar Projects, the transmission and/or storage of the power generated thereby, and/or a reservoir project in advance of the execution of one or more Project Leases, in an aggregate amount of not more than Twenty Million Dollars ($20,000,000), which sums shall be paid or reimbursed not more often than monthly, within fourteen (14) days after, and, in each case, subject to, complying with the following conditions: 5. All the provisions of Section 25.3 of the Original Lease that require Tenant to reimburse (or, with Landlord's consent, provide a credit to any contribution owed by Landlord with respect to such Project) Landlord for all sums provided by Landlord pursuant to Section 25 of the Original Lease upon commencement of construction of the first Project shall also apply to, and include, the increased sum (i.e., Twenty Million Dollars ($20,000,000)) authorized by the revised version of Section 25.1 of the Original Lease set forth above in Section 4 of this Fourth Amendment. 6. Except as expressly amended by this Fourth Amendment, the provisions of the Original Lease remain unchanged and in full force and effect. In the event of any conflict or inconsistency between the terns of the Original Lease and the terms of this Fourth Amendment, the terns of this Fourth Amendment shall control. This Fourth Amendment shall be effective on and after the Effective Date and any reference to the Original Lease in any other document shall be deemed to refer to the Original Lease as amended by this Fourth Amendment. 7. This Fourth Amendment shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law provisions. This Fourth Amendment may be executed in one or more counterparts, which, taken together, shall constitute a single instrument. [Balance of page intentionally left blank. Signatures appear on next page,] IN WITNESS WHEREOF, the parties hereto•have executed this Fourth Amendment as of the date and year fust set forth above. "LANDLORD" "TENANT" THE CITY OF INDUSTRY, SAN GABRIEL VALLEY WATER AND a municipality organized under the POWER, LLC, a California limited liability laws of the State of California company Blt By: Sustainable Water and Power LLC, Name: a California limited liability company --r— Its: Non-member manager Its: CA l)� raN-,m By: Ambient Communities LLC, a Delaware limited liability company Its: Sole Member By: Name: Its: By: Name: Its: 3 IN WITNESS WHEREOF, the pat -ties hereto have executed this Fourth Aramd rew as of the date'attd year first set forth above. 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I am employed by the City of Diamond Bar. On October 6, 2017, a copy of the Planning Commission Agenda was posted at the following locations: South Coast Quality Management District Auditorium 21865 East Copley Drive Diamond Bar, CA 91765 Diamond Bar Library 21800 Copley Drive Diamond Bar, CA 91765 Heritage Park 2900 Brea Canyon Road Diamond Bar, CA 91765 I declare under penalty of perjury that the foregoing is true and correct. Executed on October 6, 2017, at Diamond Bar, California. Stella Marquez Community Development Dept. CDAnte[Waffidavitposting.doc VOLUNTARY REQUEST TO ADDRESS THE PLANNING COMMISSION SAX 1-f i1L- P,�®r� .1 AGENDA ITEM:_ SUBJECT: r�tJt F' tti� i� %" ��`� r A�� 4l !,)N 'R TO: . Planning Commission SPEAKER NAME: (Please print clearly) ADDRESS: f S UC C I would like to address the -Planning Commission on the above stated item. Please have the Commission Minutes reflect my name and address as printed a� Si6q4ture Note: This form is intended to assist the Chairman in ensuring that all persons wishing to address the Commission will have the opportunity to do so, and to ensure correct spelling of names in the Minutes. After completion, please submit your form to the Planning Commission Secretary. Thank you. VOLUNTARY REQUEST TO ADDRESS THE PLANNING COMMISSION AGENDA ITEM: SUBJECT: cZvt jr U TO: Planning Commission DATE: SPEAKER NAME: (Please (Please print I would like to address the -Planning Commission on the above stated item. Please have the Commission Minutes reflect my name and address as printed above i Signat e Note: This form is intended to assist the Chairman in ensuring that all persons wishing to address the Commission will have the opportunity to do so, and to ensure correct spelling of names in the Minutes. After completion, please submit your form to the Planning Commission Secretary. Thank you. . VOLUNTARY REQUEST TO ADDRESS AGENDA ITEM: SUBJECT: TO: Planning Commission SPEAKER NAME: _'1 L).IN 2'10 i (Please print clea ADDRESS: Lft 11 1, 1 (Please print ciea THE PLANNING COMMISS 0"m Lm -�Q-t r)N', l0r`tnti o�llw i Qc�It710 I would like to address the -Planning Commission on the above stated item. Please have the Commission Minutes reflect my name and address as printed above v(lA ' nature Note: This form is intended to assist the Chairman in ensuring that all person fishing to address the Commission will have the opportunity to do so, and to ensure correct spelling of names in the Minutes. After completion, please submit your form to the Planning Commission Secretary. Thank you. Tj VOLUNTARY REQUEST TO ADDRESS THE PLANNING COMMIS ySIONW ( 1i ON / AGENDAITEM: SUBJECT i�*tr�`��s " �iene,V-tr� �1,- �•I,. AC'v� �'_r Swl TO: Planning Commission SPEAKER NAME: (Please �print cl rly) }0/10 lD Y. i? (Please print clearly) 1 would like to address the -Planning Commission on the above stated item. Please have the Commission Minutes reflect my name and address as printed above Signature Note: This form is intended to assist the Chairman in ensuring that all persons wishing to address the Commission will have the opportunity to do so, and to ensure correct spelling of names in the Minutes. After completion, please submit your.form to the Planning Commission Secretary. Thank you. . Oct.. 10, 2017 DB Planning Commission Meeting RE: City of Diamond Bar City - to - Public Communications RE: Planning Projects Honorable Community Development Director, Plauung Commission & Staff, The many, variousmodes. of communicating and delivering;hnformaton from the city to.die public regarding this topic, arc still inefficient and inconsistent. Yes, there is lots of information posted on the city website, but important information, like the srlhedvie ofp9 nhixhg7ss pechs,.are�no2po led prom r endy a ad •easy toaeeess. Pmr example, tale planing projects schedule is buiied,at the veiy end of over 1'23 pages of toiiiglifs Agenda packet. Ws posted online in die same way with no explanation ori how to find it. Flow does a new `user" even discover WHERE this document is online? Again, there are no directions indicating how to find it. Also, the document has no tide,to teach citizens of its. informational value in the planning process. You call it an "Item Meeting Schedule". (see attached) On Janua:y 19, 2017 GPAC meeting, complaints of ob-iaseated meetungmitutes information, was posed to the Director. He was asked, if at least an audio file of the meeting could be posted within: a couple weeks after die nneeti ng, so Public engagement would/could grow rather mann wane. The Director said "maybe". To date„ no audio of the meetings are posted. Draft minutes are posted sooner now. Thank you. But, final minutes are notpostedsooner than.a couple days before the next meeting. The minutes are scores of pages long. How can a common resident read and understand tie minutes, especially if they didn't attend the meeting? Myyquestons<and comments here represent many residents and interested stakeholders in the Diamond Bar general plan update process. i repeat their questions: "Can the GPAC meeting audio' file be posted on the Diamond Bar General Plan website a week after the event? Answer Yes or No please. "Can die city's regular planning project schedule be posted online, on the front page of the website, with a description of what it is? Please answer Yes or No."' I understand die Director's position manages the public communications department, so I assume my request isgiven to the correct person. Please aiswer my questions; in writing,,, by October 17`'. 1' hope ,this communication lack may be remedied by the next GPAC mecting on October 19'". Thank you. Yuwen Wang Diamond Isar Resident, Email: 5 uhrentird)1 «sur ul.com Attachment: Diamond Bar Commmuty Development Dept. Item Meeting Schedule Z� -`w °moo ln� zw Do Dm m ;0 b O.' o° ov ro A b m� cnw P. , -«, e w mtn ea aN a ca °. -. �-. �n Z o ;; mm 3 mrn a w mw £ w a w �-iI y �. :p ;u °i' 5 (7 j S 0 N ..w�. ,' p o 1 0 El tL CMD m nE3 3• yro �, F w. N m a ,o.. _ a z O a O a =� (baa C"i (fly: N ReEri ry m a (n 0 my o o o C) U) o d 0 "r r Z z z z m m z z Z 2 O o •. m m w 'T7 S m rn O m D is m o o v a � 3 o v (D x c� z -3a a �i S S S O m m m o m w w m m m u m C) n J d m ZI F w .7: o E :C) ? 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(D (D y, y y y f0 y y •,. o m 0 ao A o� O oA � n A � o 0 7J 1 c7 v v 'o icD m rn o Ul rn J V z ZZ � ZZm -I -Zi � � Z m rn Z m m -I m -Z•i m Z m m z rn m 'n D [n T G S m A w 0 m m v m v o o w m m ' m j 1w' y m v GN a v o ° . 7 D w a rn p a -i v �..�M m m = m ,n.: ca c, (U N � (Q i ro 3 3 3 3 3 3 3 3 m a m m m m m m ro m m m m ro m x x x x x x x x x x x x ,ro •m •ro ' :m Z y M :ro 0 !y 10 •y �m .Pl Rf Rli y _ 0) m i V i V r W J I V V e0 f0 t0 5 5 7 5 � l0 � - ❑: a a o. a o. a g •EF a a. RL w m o > > o d v v v v O O N p 0 0 0 0 0 n 0 C Z -{ f7 < O O Y K z C) M A m m v m i Comment on Diamond Bar Planning Commission Agenda Item 6.1. Moving the Diamond Bar Golf Course, which is a Los Angeles Country property, to the northern section of Tres Hermanos benefits Chino Hills and Phillips Ranch more than it benefits Diamond Bar. The current Diamond Bar Golf Course should remain as a golf course in its entirety and should not be changed to any other type of development. Homes along the southeast border of Diamond Bar where it bisects Grand Avenue abut the north northeast/south southwest border between Los Angeles County and San Bernardino County. All of Tres Hermanos south of Nan Court in Diamond Bar is in San Bernardino County. The area to the north of Nan Court is approximately 730 acres and is within the Diamond Bar General Plan, which leaves 1720 acres within San Bernardino County and Chino Hills. The map of Tres Hermanos in Exhibit "A" on page 19 of the meeting packet shows the boundaries of Tres Hermanos Ranch. The map that I created from Google Earth and Photoshop and included herein shows the border between Los Angeles County and San Bernardino County in Red in the area of Tres Hermanos Ranch. The City of Industry is planning to build a 440 megawatt or larger solar facility on the Tres Hermanos Property to essentially provide about 10 percent of the power utilized by the city of Los Angeles to the grid daily and to provide an unknown dollar amount of tax credits and reimbursement to Industry. Per UCLA engineering professor Raj it Gadh, 1 megawatt of solar power requires 100,000 square feet, which is about 2.3 acres, and 440 megawatts would require about 1100 acres. However, it is closer to 3.85 acres per megawatt on the low end or about 1700 acres per the Kamuthi Power Plant in India, and closer to 6 acres per megawatt per a survey by the National Renewable Energy Laboratory of the US DOE. Sun tracking solar panels require more space than stationary panels. Other estimates claim 10 acres per megawatt. A solar plant in Rosamond by Sun Power is producing 579 megawatts from 3200 acres, or 0.18 megawatts per acre for SCE. Based on the density here, 440 megawatts would require 2,444 acres. The City of Industry solar energy proposal could require nearly all of the 2,450 acres of Tres Hermanos property, and Diamond Bar cannot assess this without exact, accurate engineering specifications from the City of Industry and accurate calculations of the heat island effect generated by the solar panels day and night and its effect on homes, residents, and wildlife in Diamond Bar. Based on current standards of $3-$3.50 per watt, it would cost about $1.32 billion for this proposed facility or $880 million at $2 per megawatt. Alternatively, Industry could fill Tres Hermanos with warehouses covered by rooftop solar panels and get a double use out of the property, or it could flood it with water from an unknown source to create a hydroelectric generating reservoir. What about Grand Avenue? Enough of the smoke and mirrors by the City of Industry and developers intent on creating urban sprawl for maximum profit. Additional Info: eA C-OY. The September 1", 2017 Exhibit "C" letter to Greg Gubman and the Planning Commission states that the City of Industry is acquiring Tres Hermanos Ranch for open space, preservation, public facility or other public purposes. Further it states that the City does not have more definitive plans at this time, which is in conflict with a master ground " lease Attachment 7 between Industry and San Gabriel Water and Power, LLC for a solar farm and a reservoir. In the September 21s`, 2017 Exhibit "E" letter to Greg Gubman and the Planning Commission, it is clear that the City of Industry is trying to subvert the authority of the Diamond Bar Planning Commission per Government Code Sections 65402(b) and 37351. Diamond Bar should ask for the assistance of the California Legislature through Assemblymember Phillip Chen per Government Code Section 65402(a). However, Industry itself is in violation of 65402(b). Submitted to Diamond Bar Planning Commission October 10, 2017 Douglas Barcon v d f3 "' g4 � C0. �a, Sleepy tioHOW