Exhibit 10.35


 


AGREEMENT CONTAINING COVENANTS
AFFECTING REAL PROPERTY


 




	
  RECORDING
  REQUESTED BY

  AND WHEN RECORDED RETURN TO:

  	
   

  	
  FREE
  RECORDING REQUESTED

  (Gov’t Code Section 6103)

  






 


The
Community Redevelopment Agency of

the City of Los Angeles, California


354
South Spring Street, Suite 800


Los
Angeles, California 90013


Attn:
Director of Housing


 


WITH
A COPY TO:


 


SF
No Ho, LLC


c/o
FF Realty LLC


5510
Morehouse Drive, Suite 200


San
Diego, California 92121

Attn: Pat Gavin, Esq.


 


AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY


 


This
AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY (this “Covenant Agreement”) is made and entered into by and between
the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES (the “Agency”) and SFNOHO, LLC, a California limited Liability
company (the “Owner”) with reference to the
following:


 


A.       Owner
holds fee title to that certain real property described in the legal
description attached

hereto as Exhibit A and incorporated herein by this reference, and
shown on the Site Map attached hereto as Exhibit B and incorporated herein by
this reference (the “Property”).


 


B.        The
Property is subject to the Redevelopment Plan for the North Hollywood Redevelopment
Project (the “Redevelopment Project”) approved
and adopted on February 21, 1979 by Ordinance No. 152030 of the City
Council of the City of Los Angeles, as amended to the Date of Agreement.


 


C.        This
Covenant Agreement is made pursuant to that certain Owner Participation
Agreement by and between the Agency and SL NO HO, LLC, a California limited
liability company.


 


1

















 


(“SL
No Ho”) dated March 5, 2002 as amended by that certain First
Implementation Agreement to Owner Participation Agreement dated as of November 18,
2002, that certain Second Implementation Agreement to Owner Participation
Agreement dated as of December 12, 2003, and that certain Partial
Assignment Of Owner Participation Agreement And Consent To Assignment dated December 18,
2003 by and among the Agency, the Owner and SL No Ho (the “OPA”),
which is a public record on file at the offices of the Agency. The Property is
a portion of the real property referred to in the OPA as the “Site”. In the event of any conflict between the OPA and this
Covenant Agreement, the terms of the OPA shall prevail.


 


D.       All
capitalized terms in this Covenant Agreement shall have the meaning ascribed to
them in the OPA, unless provided otherwise herein.


 


Agency
and Owner agree as follows:


 


I.              Owner hereby covenants and agrees on behalf of
itself and any successors and assigns in the Property or any portion thereof or
any improvements thereon or any interest therein that Owner, such successors
and assigns shall comply with and be bound by the following covenants
(hereinafter referred to as the “Construction Covenants”):


 


A.       Develop
and construct improvements on the Property solely in accordance with the Redevelopment
Plan, all applicable Grant Deeds, this Covenant Agreement, the OPA (including
but not limited to the Scope of Development and the Concept Plan), and plans
approved by the City of Los Angeles.


 


II.             Owner hereby covenants and agrees on behalf of
itself and any successors and assigns in the Property or any portion thereof or
any improvements thereon or any interest therein that Owner, such successors
and assigns shall comply with and be bound by the following covenants
(hereinafter referred to as  the “Surviving
Covenants”):


 


A.       Devote
the Property, or cause the Property to be devoted, to uses solely in accordance
with the Redevelopment Plan, all applicable Grant Deeds, this Covenant
Agreement, the OPA (including but not limited to the Scope of Development and
the Concept Plan), and plans approved by the City of Los Angeles.


 


B.        Pay when
due all real estate taxes, and the special taxes or assessments of any bond
financing issued by the Agency or City in connection with the redevelopment of
the Property, assessed and levied on the Property or any portion thereof or any
improvements thereon or any interest therein and refrain from appealing, challenging
or contesting in any manner the validity or


 


2

















 


amount
of any ad valorem property tax assessment, encumbrance or lien, or the special
tax or lien of such bonds; provided, however, that Owner may appeal, challenge
or contest (i) the initial assessment of the assessed value of the
Property following the issuance of the Release of Construction Covenants by
Agency to the extent that such initial assessment is more than ten percent
(10%) higher than the Project Cost approved by the Agency pursuant to the OPA;
and (ii) any increase in assessment of the Property improperly assessed
because of a purported change of ownership where no such change took place; and
(iii) any assessment occurring by reason of a bona fide arms-length sale
of the Property or any portion thereof to the extent such assessment results in
an assessment in excess of the purchase price of such bona fide arms-length
sale, provided, however, that no such appeal, challenge or contest results in
an assessment which is lower than that existing prior to such sale.


 


C.        Not
discriminate upon the basis of race, color, creed, religion, sex, sexual
preference/orientation, age, disability, medical condition, Acquired Immune
Deficiency Syndrome (AIDS) acquired or perceived, retaliation for having filed
a discrimination complaint, marital status, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property, or any improvements erected or to be erected thereon, or any part
thereof.


 


D.       Pay when due the Agency
Participation Payment in accordance with the provisions of the OPA.


 


E.        Comply
with the Living Wage Ordinance of the City of Los Angeles to the fullest extent
applicable.


 


F.        Solely
at Owner’s expense, maintain and repair or cause to be maintained and repaired
the Property and all improvements thereon (including but not limited to landscaping,
public art, lighting and signage), in a first quality condition, free of
debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan, this Covenant Agreement, the City of Los Angeles Municipal
Code, and the following:


 


1.     All improvements on the Property shall be
maintained in good condition in accordance with the custom and practice
generally applicable to comparable first quality office, residential, restaurant, retail and parking improvements, as applicable, in Los Angeles County, and in
conformance and compliance with all plans, drawings and related documents
approved by the Agency, all conditions of approval of land use entitlements
adopted by the City or the Planning Commission of the City of Los Angeles,
including painting and cleaning of all exterior surfaces of all private improvements and public improvements
to the curb line.


 


2.     Owner shall assume responsibility for the
operation and maintenance (including repair, 


 


3

















 


restoration
and reconstruction) of all of the improvements constructed on the Property and
the costs thereof, and Agency and the City shall have no liability for costs of
such operation and maintenance by Owner or for any claims arising from the
operation and maintenance (including repair, restoration and reconstruction) of
such improvements. Without limiting the generality of the foregoing, Owner, in
the maintenance of the improvements, shall observe the following standards:


 


a.     Maintain
the surface of all automobile and pedestrian areas level, smooth and evenly
covered with the type of surfacing materials originally installed thereon or
such substitute thereof as shall be in all respects equal thereto or better in
quality, appearance and durability;


 


b.     Maintain
such appropriate entrance, exit and directional signs, markers and lights as
shall be reasonably required and in accordance with the practices prevailing in
the operation of similar developments;


 


c.     Clean
lighting fixtures and relamp and/or reballast as needed;


 


c.     Repaint striping, markers, directional signs,
etc., as necessary to maintain in first-class condition;


 


e.     Provide appropriate security personnel and
security measures. Owner shall seek the advice of the police department in
planning appropriate security measures;


 


f.      Maintain public right-of-way items between the
Property and the street in accordance with City law and policy;


 


g.     Maintain all surface and storm lateral drainage systems on the Property; and


 


h.     Maintain all sanitary sewer lateral connections
on or to the Property.


 


3.     Landscape maintenance shall include, without
limitation, watering/irrigation; fertilization; mowing; edging;
trimming of grass; pruning, trimming and shaping of trees and shrubs to
maintain a natural and healthy appearance, road visibility, and irrigation
coverage; replacement, as needed, of all plant materials; control of weeds in
all planters, shrubs, lawns, ground covers, or other planted areas; and staking
for support of trees.


 


4.     All maintenance and clean-up procedures shall
incorporate water and energy conservation measures, use of non-or low- VOC
products, natural fertilizers, no- or low-toxic pest 


 


4

















 


 


control, recycling of green waste and other recyclable waste consistent
with the Waste Reduction and Recycling Program Plan.


 


5.     Prepare and
implement a Waste Reduction and Recycling Program Plan in substantial
accordance with the terms of the OPA for the design, demolition and
construction of the improvements on the Property and for the management and
operation of all occupancies of the improvements on the Property. Facilities
shall be provided and maintained to accommodate the physical requirements for
these outreach programs for all project occupants and employees to reduce the
output of solid waste, including yard waste, through recycling and reduction of
waste at the source.


 


6.     Provide for
the commissioning of all buildings and building systems during appropriate
design stages and upon completion of construction of the improvements on the
Property and arrange for periodic monitoring of the operations of all buildings
and systems by the U.S. Green Building Council or similar organization
acceptable to the Agency, in substantial accordance with the terms of the OPA.
The Developer agrees to report the rating certification, commissioning and
monitoring results to the Agency and the City.


 


7.     Prepare and
implement a coordinated Signage Plan, in accordance with the terms of the OPA
and the Design for Development establishing sign design standards for all
exterior identification, commercial, information and directional signage.


 


8.     Require
that all mechanical and telecommunications equipment be enclosed within
buildings, concealed from view or incorporated and treated as architectural
features. All equipment shall serve the improvements on the Property only and
shall be removed when no longer required for service.


 


9.     Clean-up
maintenance shall include, without limitation, maintenance of all sidewalks,
paths and other paved areas in a clean and weed-free condition; maintenance of
all such areas clear of dirt, mud, trash, debris or other matter which is
unsafe or unsightly; removal of all trash, litter and other debris from
improvements and landscaping; clearance and cleaning of all areas so maintained
prior to the end of each day on which maintenance operations are performed to
ensure that all cuttings, weeds, leaves and other debris are properly disposed
of by maintenance workers.


 


10.   If the Agency gives written notice to Owner that the maintenance or
condition of the Property or any portion thereof or any improvements thereon
does not comply with this Covenant Agreement and such notice describes the
deficiencies, Owner shall correct, remedy or cure the deficiency within thirty
(30) days following the submission of such


 


5

















 


notice,
unless the notice accurately states that the deficiency is an urgent matter
relating to public health and safety in which case Owner shall cure the
deficiency with all due diligence and shall complete the cure at the earliest
possible time. In the event Owner fails to maintain the Property or any portion
thereof or any improvements thereon in accordance with this Covenant Agreement
and fails to cure any deficiencies within the applicable period described
above, the Agency shall have, in addition to any other rights and remedies
hereunder, the right to maintain the Property and the improvements thereon, or
portion thereof, or to contract for the correction of any deficiencies, and Owner shall be
responsible for payment of all such reasonable costs incurred by the Agency.


 


11.   Curate the public art on the Site according to guidelines provided in,
and to further the goals of, the Agency’s “Public Art Policy”.


 


G.            There
shall be no discrimination against or segregation of any person, or group of
persons, on account of race, color, creed, religion, sex, sexual
preference/orientation, age, disability, medical condition, Acquired Immune
Deficiency Syndrome (AIDS) acquired or perceived, retaliation for having filed
a discrimination complaint, marital status, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property nor shall Owner itself or any person claiming under or through it
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessee, or vendees of the Property.


 


H.            Owner
shall refrain from restricting the rental, sale or lease of the
Property or improvements thereon, or any portion thereof, on the basis of race,
color, creed, religion, sex, sexual preference/orientation, age, disability,
medical condition, Acquired Immune Deficiency Syndrome (AIDS) acquired or
perceived, retaliation for having filed a discrimination complaint, marital status,
national origin or ancestry of any person. All deeds, leases or contracts for
the sale, lease, sublease, Transfer, use, occupancy, tenure or enjoyment of the
Property or improvements thereon, or any portion thereof shall contain or be
subject to substantially the following nondiscrimination or nonsegregation
clauses:


 


1.     In deeds:
“The grantee herein covenants by and for itself, its heirs, executors,
administrators, successors and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, religion, sex,
sexual preference/orientation, age, disability, medical
condition, Acquired Immune Deficiency Syndrome (AIDS) acquired or perceived,
retaliation for having filed a discrimination complaint, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee
itself or any person claiming under or through


 


6

















 


it,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessee, or vendees in the land herein
conveyed. The foregoing covenants shall run with the land.”


 


2.     In leases:
“The lessee herein covenants by and for itself, its heirs, executors,
administers, successors and assigns, and all persons claiming under or through
them, and this lease is made and accepted upon and subject to the following
conditions: That there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, religion, sex,
sexual preference/orientation, age, disability, medical condition, Acquired
Immune Deficiency Syndrome (AIDS) acquired or perceived, retaliation for having
filed a discrimination complaint, marital status, national origin or ancestry
in the leasing. subleasing, renting, transferring, use, occupancy, tenure or
enjoyment of the land herein leased, nor shall lessee itself, or any person
claiming under or through it, establish or permit such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, sublessee, subtenants, or vendees
in the land herein leased.”


 


3.     In
contracts: “There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex,
sexual preference/orientation, age, disability, medical condition, Acquired
Immune Deficiency Syndrome (AIDS) acquired or perceived, retaliation for having
filed a discrimination complaint, marital status, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the land or premises, nor shall the transferee itself or any person claiming
under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees
of the land or premises.”


 


I.              Provide the Hazardous Substance indemnity,
waiver and release required by the OPA.


 


J.             Provide
the general indemnity and insurance required by the OPA.


 


K.            Prior
to the date that the Agency issues a Release of Construction Covenants for the
Property, the Owner shall not sell, convey, assign, lease or otherwise transfer
in any way any interest in said Property or any portion thereof or any
improvements thereon, or permit any change to occur in the ownership of the
Owner or its successors or assigns (collectively “Transfers”), except as
expressly permitted by terms of the OPA.


 


7

















 


III.           All obligations of the Owner under this Covenant Agreement (and all of
the terms, covenants and conditions of this Covenant Agreement) shall be
binding upon the Owner, its successors and assigns and every successor in
interest of the Property or any portion thereof or any interest therein,
jointly and severally, for the benefit and in favor of the Agency, its successors
and assigns, and the City of Los Angeles. All rights of the Owner under this
Covenant Agreement shall inure to the benefit of the Owner and its permitted
successors and assigns.


 


IV.           This Covenant Agreement shall not merge into any other agreement
between Agency and Owner.


 


V.            Breach
of any of the covenants, conditions, restrictions, or reservations contained in
this Covenant Agreement shall not defeat or render invalid the lien of any
mortgage or deed of trust made in good faith and for value as to the Property,
whether or not said mortgage or deed of trust is subordinated to this Covenant
Agreement, but unless otherwise herein provided, the terms, conditions,
covenants, restrictions and reservations of this Covenant Agreement shall be binding and effective against the holder of
such mortgage or deed of trust and any owner of the Property, or any part
thereof whose title thereto is acquired by foreclosure, trustee’s sale, or
otherwise.


 


VI.           The Construction Covenants shall remain in effect until the recording of
the Release of Construction Covenants to be issued by the Agency with respect
to all improvements to be constructed pursuant to the OPA. The covenants
against discrimination set forth in Sections II.C., II.G., and II.H.
hereof shall remain in effect in perpetuity. All other covenants (“Surviving
Covenants”) shall remain in effect until a date which is forty (40) years after
the date this Covenant Agreement is recorded, unless and until they expire
earlier in accordance with the express terms thereof, except for the covenant
set forth in Section II.D hereinabove to pay the Agency Participation
Payment, which shall remain in effect for forty (40) years from the Operating
Commencement Date unless and until terminated in accordance with the Buyout
provisions set forth in Section 605.4 of the OPA. Upon the issuance and
recordation of the Release of Construction Covenants by the Agency pursuant to
the OPA, Owner shall have the right to have this Covenant Agreement restated
and re-recorded with the deletion of the Construction Covenants, and the Agency
agrees to enter into documents as may be reasonably required, subject to the
approval of Agency legal counsel as to form, so as to effectuate the provisions
of this paragraph.


 


VII.          Upon written request, Agency shall execute, acknowledge and deliver an
estoppel certificate upon which Owner and any Transferee or mortgagee of all or
a portion of Owner’s interest in the Property can rely, stating whether Agency
has knowledge of any default by Owner or any successor or assign under the
terms of the OPA.


 


VIII.        If any provision of this Covenant Agreement is determined by a court of
competent jurisdiction to be illegal, invalid or enforceable, such provision
will be deemed to be severed and deleted from the


 


8

















 


Covenant
Agreement as a whole and neither such provision, nor its severance and deletion
shall in any way affect the validity of the remaining provisions of this
Covenant Agreement.


 


9
















 


IN WITNESS WHEREOF, the
Agency and Owner have caused this instrument to be executed on their behalf by
their respective officers thereunto duly authorized.


 


	
   

  	
  COMMUNITY REDEVELOPMENT
  AGENCY

  
	
   

  	
  OF THE CITY OF LOS
  ANGELES (“Agency”)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
  12-19-03

  	
   

  	
  By:

  	
  /s/
  Robert R. Ovrom

  
	
   

  	
   

  	
  Robert
  R. Ovrom

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Executive Officer

  
					



 


APPROVED AS TO FORM


Rockard J. Delgadillo,


City Attorney


 


 


	
  By:

  	
  /s/ Authorized
  Signatory

  	
   

  
	
   

  	
  Agency General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Goldfarb &
  Lipman

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Authorized
  Signatory

  	
   

  
	
   

  	
  Agency Special Counsel

  	
   

  



 


10

















 


	
   

  	
  SF NO HO LLC,

  
	
  Dated: 

  	
  12/19/03

  	
   

  	
  a California limited
  liability company (“Owner”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  California Housing Fund
  LLC,

  
	
   

  	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
  Its:

  	
  authorized member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  FF California Housing
  Fund LLC,

  
	
   

  	
   

  	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  	
  Its:

  	
  manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Patrick J. Gavin

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Patrick J. Gavin

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
							



 


11
















 


THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA


 


ALL PURPOSE
ACKNOWLEDGEMENT


 


	
  State of California

  	
  }

  	
   

  
	
  County of Los Angeles

  	
   

  



 


	
  On

  	
  DECEMBER 19, 2003

  	
   

  	
  before me,

  	
  AMELIA
  RODRIGUEZ, NOTARY PUBLIC

  
	
  DATE

  	
  NAME, TITLE OF
  OFFICER

  



 


	
  personally appeared

  	
  ROBERT
  R. OVROM

  
	
   

  	
  NAME(S) OF
  SIGNER(S)

  



 


x personally known to me - OR -


 


o proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he executed the same in
his authorized capacity (ies), and that by his signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.


 


WITNESS my hand and official seal.


 


AMELIA RODRIGUEZ


Commission # 1446602


Notary Public - California

Los Angeles County


My Comm. Expires Oct 21, 2007


 


	
  /s/ Authorized
  Signatory

  	
   

  
	
  SIGNATURE OF NOTARY

  	
   

  



 


 


	
  Title of Type of Document

  	
  AGREEMENT CONTAINING COVENANTS AFFECTING REAL
  PROPERTY

  
	
  Number of Pages

  	
  11+ATTACHMENTS

  	
   Date of Document

  	
   

  
	
  Signer(s) Other Than Named Above

  	
   

  
					



 


	
  RM-7

  	
  Remember to
  attach form to actual document

  	
  11/92

  



 
















 


CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT


 


	
  STATE OF CALIFORNIA

  	
  )

  
	
   

  	
  )      ss.

  
	
  COUNTY OF LOS ANGELES

  	
  )

  



 


	
  On

  	
  December 19,
  2003

  	
  ,

  	
  before me, 

  	
  Renee Lindsey, Notary Public

  
	
  Date

  	
   

  	
   

  	
  Name And Title
  Of Officer [ILLEGIBLE]

  



 


	
  personally appeared

  	
  Patrick
  J. Gavin

  
	
   

  	
  Name of
  Signer(s)

  



 


o personally known to me – OR – 


 


x proved to me on the basis of
satisfactory evidence to be the person whose
name is subscribed to the within
instrument and acknowledged to me that he
executed the same in his authorized capacity, and that
by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.


 


 


	
  WITNESS my hand and official seal.

  	
   

  
	
   

  	
   

  
	
  /s/ Renee
  Lindsey

  	
   

  
	
  Signature of Notary Public

  	
   

  



 


OPTIONAL


 


Though the data below is not required by law, it may
prove valuable to persons relying on the document and could prevent fraudulent
reattachment of this form.


 


	
  CAPACITY CLAIMED BY SIGNER

  	
  DESCRIPTION OF ATTACHED DOCUMENT

  
	
   

  	
   

  
	
  o

  	
  Individual

  	
   

  
	
  o

  	
  Corporate Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title(s)

  	
  Title or Type of
  Document

  
	
   

  	
   

  
	
  o

  	
  Partner(s)

  	
  o

  	
  Limited

  	
   

  
	
   

  	
   

  	
  o

  	
  General

  	
   

  
	
  o

  	
  Attorney-In-Fact

  	
  Number Of Pages

  
	
  o

  	
  Trustee(s)

  	
   

  
	
  o

  	
  Guardian/Conservator

  	
   

  
	
  o

  	
  Other:

  	
   

  	
   

  	
   

  
	
   

  	
  Date Of Document

  
								



 


	
  Signer is representing:

  	
   

  
	
  Name Of
  Person(s) Or Entity(ies)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signer(s) Other
  Than Named Above