# **Exhibit 10.34**

# ** **

**THIRDIMPLEMENTATION AGREEMENT**

 

**TO**

 

**OWNERPARTICIPATION AGREEMENT**

 

by and between

 

THE COMMUNITY REDEVELOPMENT AGENCY

 

OF THE CITY OF LOS ANGELES

 

and

 

SL NO HO, LLC

 

North Hollywood Redevelopment Project

 

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**THIRDIMPLEMENTATION AGREEMENT**

 

This THIRD IMPLEMENTATION AGREEMENT TO OWNER PARTICIPATION AGREEMENT(this “Third Implementation Agreement”) is entered into as of October 1,2004 by and between THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOSANGELES, a public body, corporate and politic (the “Agency”), and SL NO HO,LLC, a California limited liability company (the “Developer”). The Agency andthe Developer are sometimes referred to herein individually as a “Party” andcollectively as the “Parties.”

 

**RECITALS**

 

The following Recitals are a substantive part of this ThirdImplementation Agreement. Unless otherwise defined herein, capitalized terms inthis Third Implementation Agreement shall have the meaning given to them in theOPA, as hereinafter defined in Recital A.

 

A.       The Agency and Developerentered into that certain Owner Participation Agreement dated as of March 5,2002, as amended by that certain First Implementation Agreement to OwnerParticipation Agreement dated as of November 18, 2002 and by that certainSecond Implementation Agreement to Owner Participation Agreement dated as of December 12,2004 and that certain Partial Assignment and Consent to Assignment dated December 21,2003 by and among SL NoHo, LLC, SF No Ho, LLC, and the Agency (the “OPA”).

 

B.        Pursuant to the OPA, theDeveloper is obligated to design, finance and develop the Project on the Site.

 

C.        Through this ThirdImplementation Agreement, the Developer and the Agency intend to amend theprovisions relating to the Acquisition Funds and the Developer Advance.

 

D.        The parties are enteringinto this Third Implementation Agreement for good and valuable consideration,the receipt of which is hereby acknowledged.

 

NOW, THEREFORE, the Agency and the Developer agree that the OPA shallbe amended as follows:

 

**AGREEMENT**

 

1.         Subarea CImprovements. A second paragraph shall be added to Section 103.1 (c) SubareaC Improvements to read as follows:

 

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“The Parties recognize that the current design of the proposed SubareaC improvements may not use the available public space efficiently and may notprovide optimum pedestrian circulation throughout Subarea C. In recognition ofthe potential benefits to the Project, the Agency and the Developer shallconsider in good faith a redesign to the Subarea C improvements to allow for achange in density and uses to address issues relating to the operation of theAcademy of Arts and Science Complex and to better address pedestrian accessthrough Academy Plaza to Lankershim Boulevard. In addition, the redesign mayinclude proposed sites mutually acceptable to the Parties for the relocation ofcommunity.clinic. Nothing in this Section 103.1(c) shall obligate theDeveloper to make any redesign of Subarea C or the Agency to approve anyredesign or change in use of Subarea C.”

 

2.         Acquisition Funds.Section 402.1.2 Agency Bond Funds shall be deleted and replaced with thefollowing:

 

“Agency Funds. Subject to all the terms and conditions of thisAgreement, and within the time set forth in the Schedule of Performance, theAgency shall provide as Acquisition Funds the following amounts: Ten MillionEighty Eight Thousand Five Hundred Ninety Seven Dollars ($10,088,597) fromAgency funds; Three Million Eight Hundred Thirty Two Thousand Three HundredFifty Eight Dollars ($3,832,358) from proceeds received by the Agency from theDeveloper for the purchase of Subarea A; Four Hundred Forty Thousand FiveHundred Dollars ($440,500) in Economic Development Initiative grant funds fromthe HUD Loan; and any additional Economic Development Initiative grant fundsreleased to the Agency from the interest reserve fund held by the City as partof the HUD Loan pursuant to the terms of the HUD Loan documents.

 

3.         Original Letter ofCredit. Section 402.6.1 Original Letter of Credit, as amended by theSecond Implementation Agreement, shall be deleted and replaced with thefollowing:

 

“Section 402.6.1 Original Letter of Credit. Pursuant to Section 402.6,the Developer has agreed to advance to the Agency the necessary funds, over andabove the Acquisition Funds, to pay the Agency’s Acquisition Costs plus theAgency’s costs of complying with the Relocation Laws. To partially secure theDeveloper’s obligation to advance funds to the Agency, the Developer shallprovide the Original Letter of Credit to the Agency. Provided the Agreement hasnot theretofore been terminated pursuant to Section 1003, the Developershall deliver to the Agency cash or an irrevocable at-sight, standby letter ofcredit, first approved in writing by the Agency as to form, content and issuer,in an amount determined in the second paragraph of this Section 402.6.1and otherwise complying with the requirements of this Agreement (the “OriginalLetter of Credit”).

 

The Original Letter of Credit shall consist of an amount estimated tobe

 

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thedifference between the amount of the projected Developer Advance and theimmediately available Acquisition Funds, as established by the Agency based onbudgets prepared by the Agency and reviewed by the Developer. The amount of theOriginal Letter of Credit shall be in an amount equal Nine Million Forty ThreeThousand Four Hundred Sixty One Dollars ($9,043,461). The Purchase Price forthe parcels comprising Subarea A, Subarea B-l and B-2 and Subarea C iscalculated at Twelve Million Three Hundred Six Thousand Five Hundred ThirtyNine Dollars ($12,306,539). The Developer paid a portion of the Purchase Priceto the Agency at the close of escrow for the purchase of the Subarea A AcquisitionParcels in the amount of Three Million Eight Hundred Thirty Two Thousand ThreeHundred Fifty Eight Dollars ($3,832,358). In addition, concurrently with theclose of escrow for the Subarea A Acquisition Parcels, the Developer advancedto the Agency as part of the Original Letter of Credit the amount of OneMillion One Hundred Sixty Seven Thousand Six Hundred Forty Two Dollars($1,167,642). The Developer shall also receive a credit in the amount of FiveMillion Five Hundred Twenty Five Thousand Eight Hundred Nineteen Dollars($5,525,819) as an advance under the Original Letter of Credit upon theDeveloper’s assumption of the HUD Loan. The Five Million Five Hundred TwentyFive Thousand Eight Hundred Nineteen Dollars ($5,525,819) represents thedifference between the Fourteen Million Dollars ($14,000,000), the amount ofthe HUD Loan to be assumed by the Developer, and Eight Million Four HundredSeventy Four Thousand One Hundred Eighty One Dollars ($8,474,181) which is theremaining amount of the Purchase Price to be paid by the Developer for bothSubarea B and Subarea C ($12,306,539 minus $3,832,358 paid at the close ofescrow at Subarea A). Notwithstanding the foregoing, in the event the Agencyfails to convey Subarea C to the Developer in accordance the terms of the OPAthrough no fault of the Developer, the amount of the Purchase Price paid by theDeveloper which is attributable to purchase of Subarea C shall be consideredpart of the Original Letter of Credit and such amount shall be added to thePre-conveyance Termination Note delivered to the Developer by the Agency as ofthe close of escrow for the conveyance of Subarea B to the Developer.

 

The balance of the Original Letter of Credit in the amount of TwoMillion Three Hundred Fifty Thousand Dollars ($2,350,000) shall be provided intwo installments. The Developer shall advance funds to purchase the MTA Parcelin the estimated amount of Three Hundred Thousand Five Hundred Dollars($300,500). The Developer shall advance the funds for the purchase of the MTAParcel promptly following notice to the Developer by the Agency that the MTA isready to close escrow on the conveyance of the MTA Parcel. The balance of theOriginal Letter of Credit in the amount of Two Million Forty Five ThousandDollars ($2,045,000) shall be provided by the Developer as of the earlier of (i) theclose of escrow for the conveyance of Subarea C to the Developer and (ii) April 1,2005, subject to any events of enforced delay as specified in Section 1105of this OPA or any written extension to be granted to the Developer in theAgency’s sole discretion. Notwithstanding the amount of the Original Letter ofCredit provided

 

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tothe Agency by the Developer, the Developer shall be obligated to advance to theAgency the necessary funds, over and above the Acquisition Funds, to pay theAgency’s Acquisition Costs plus the Agency’s costs of complying with theRelocation Laws.

 

The Parties acknowledge that costs attributable to acquisition of theProject Site may exceed the sources of funds currently identified to pay forsuch costs. The Agency and the Developer shall work together to attempt toidentify and obtain reasonable alternative funding sources for any excess costsprior to requiring the Developer to provide funds in excess of the OriginalLetter of Credit Amount of Nine Million Forty Three Thousand Four Hundred SixtyOne Dollars ($9,043,461). Notwithstanding the foregoing, the Parties agree thatin the event reasonable alternative funding sources cannot be identified andobtained by the Agency, the Developer shall provide the required funds no laterthan thirty (30) days following the Agency’s written request for such funds. Inthe event the Developer provides funds in the excess of the Nine Million FortyThree Thousand Four Hundred Sixty One Dollars ($9,043,461) Original Letter ofCredit amount, the Agency agrees to negotiate in good faith with the Developera mutually agreeable arrangement by which the Developer shall be reimbursed ina commercially reasonable manner for the excess funds advanced. To the extentfunds are released to the Agency from the interest reserve account of the HUDLoan prior to the close of escrow for the conveyance of Subarea C to theDeveloper, the Developer’s obligation to pay Two Million Three Hundred FiftyThousand Dollars ($2,350,000) at the close of escrow for Subarea C shall bereduced by the amount of interest reserve funds released to the Agency.”

 

4.         Special DeveloperAdvance of Costs. A new Section 402.6.3 Special Developer Advance ofCosts shall be added to read as follows:

 

“402.6.3 Special Developer Advance of Costs. Prior to the dateof the Third Implementation Agreement the Agency closed escrow on the purchaseof the LADOT Parcel. The close of escrow occurred prior to the Agency receiptof funds from the HUD Loan. To enable the Agency to close escrow on the LADOTParcel, the Developer made a special advance of costs to the Agency in theamount of Nine Hundred Fifty Eight Thousand Two Hundred Twelve Dollars andNinety Six Cents ($958,212.96). Upon the receipt of funds under the HUD Loanand concurrently with the close of escrow for the conveyance of Subarea B-l andSubarea B-2 to the Developer, the Agency shall repay the special Developeradvance in the amount of Nine Hundred Fifty Eight Thousand Two Hundred TwelveDollars and Ninety Six Cents ($958,212.96).”

 

5. Security for Developer Advance. Section 402.8 Securityfor Developer Advance shall be amended by adding the following to the end ofthe Section:

 

“Following the conveyance by the Agency of Subarea B-l and Subarea B-2to the Developer, the Pre-Conveyance Termination Note given to the Developer

 

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bythe Agency shall be in the amount of Six Million Nine Hundred Ninety ThreeThousand Nine Hundred Sixty One Dollars ($6,993,961) and shall be secured bythe Pre-Conveyance Deed of Trust recorded against the Acquisition Parcels ownedby the Agency in Subarea C. Notwithstanding the foregoing, the Pre-Conveyance TerminationNote shall provide that in the event the Developer fails to provide the balanceof the Original Letter of Credit in the amount of Two Million Three HundredFifty Thousand Dollars ($2,350,000), when required pursuant to Section 402.6.1.and the Agency does not convey Subarea C to the Developer, the Agency shallreceive the first Two Million Three Hundred Fifty Thousand Dollars ($2,350,000)of sale proceeds (or such lesser amount if the Developer has advanced funds topurchase the MTA Parcel) prior to making any payment to the Developer under thePre-Conveyance Note in the event of sale of the Acquisition Parcels encumberedby the Pre-Conveyance Deed of Trust or in the event of a foreclosure under thePre-Conveyance Deed of Trust by the Developer, the principal amount of thePre-Conveyance Note shall automatically be reduced by Two Million Three HundredFifty Thousand Dollars ($2,350,000) (or such lesser amount if the Developer hasadvanced funds to purchase the MTA Parcel)”

 

6.         MTA Parcel. Section 406.1MTA Parcel shall be deleted and replaced with the following:

 

“The Agency shall make every reasonable effort to negotiate, inconsultation with the Developer, an agreement with the MTA pursuant to whichthe MTA will convey to the Developer the fee interest in the MTA Parcel or sucheasements or interests in the MTA Parcel as are necessary or convenient toallow the Developer to develop the Subarea B Improvements and reserving suchinterests as the MTA requires for the operation and maintenance of the blastrelief vent located on the MTA Parcel. The Agency shall cause to be conductedsuch appraisals of the MTA Parcel as are required by the MTA. The Developershall pay directly to the MTA the purchase amount for the fee interest in orthe easements on the MTA Parcel through an escrow opened by the Agency or MTAfor the purchase of such interests.”

 

7.         Conditions Precedent.The following subsections of Section 506.1 Conditions Precedent andClosing Obligations shall be amended and a new subsection 506.1 .(16) shall beadded, all relating solely to the conveyance by the Agency of Subarea B-l andB-2 to the Developer. The original provisions Section 506.1 shall governthe conditions for the conveyance of Subarea C to the Developer by the Agency.The subsections of Section 506.1 which are not amended by this ThirdImplementation Agreement shall continue to apply as preconditions to theconveyance of Subarea B-l and B-2 to the Developer.

 

“1. The Developer shall have submitted and the Agency shall haveapproved the Developer’s Evidence of Financing for the development of SubareaB-2 prior to the conveyance of Subarea B-2 and the Developer shall submit and

 

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obtainAgency approval of the Developer’s Evidence of Financing for the development ofSubarea B-l within sixty (60) days following the conveyance of Subarea B-l.

 

2. The Developer shall have obtained all required land use entitlementsand the City’s approval of construction and landscaping plans for the developmentof Subarea B-2 prior to the conveyance of Subarea B-2 and shall have obtain allrequired land use entitlements and the City’s approval of construction andlandscaping plans for the development of Subarea B-l within one hundred eighty(180) days following the conveyance of Subarea B-l.

 

4. The Developer shall have obtained all City approvals required tosecure a grading and excavation permit for the development of the applicablepermit for the development of Subarea B-2 prior to the conveyance of SubareaB-2 and shall obtain all City approvals required to secure a grading andexcavation permit for the development of the applicable permit for thedevelopment of Subarea B-l within one hundred eighty (180) days following theconveyance of Subarea B-l.

 

13. Prior to the conveyance of Subarea B-l and Subarea B-2, theDeveloper shall have delivered to the Agency the Guaranty for the HUD Loan inthe amount of the Purchase Price and in a form reasonably acceptable to theAgency and the City and shall have executed an assumption agreement in a formreasonably acceptable to the Agency and the City pursuant to which theDeveloper assumes the Agency obligations under the HUD Loan documents.

 

8.         Uses, Operation andMaintenance. A new Section 801.1.15 and Section 801.1.16 shall beadded as follows:

 

“15. Cooperate in good faith with and support the formation andoperation of a Business Improvement District (“BID”) which includes SubareasB-l, B-2, and C. The Developer’s financial obligation, if any, under the BIDshall be determined in accordance with engineer’s report and the adopted BIDplan.”

 

“16. The following job creation and reporting requirements shall apply:

 

(a)       Subjectto the assignment of the HUD Loan to the Developer by the Agency, the Developershall comply with the Job Creation requirements set forth in the EmploymentAction Plan attached as Exhibit G. to the loan agreementdocumenting the HUD Loan. The Developer shall make a good faith effort to meetthe goal of creating four hundred fifty two (452) full time equivalent jobs atthe Project. The new jobs shall be created within three (3) yearsfollowing the date that a certificate of occupancy or temporary certificate ofoccupancy (whichever is earlier) is issued for the Subarea B-l Improvements.The Developer shall report the newly created jobs to the City in accordancewith the requirements of the Employment Action Plan.

 

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(b)                     The Developer shall report the newly created jobs to the City until theearlier of (i) the time that four hundred fifty two (452) full timeequivalent jobs have been created and reported and (ii) three (3) yearsfollowing the date that a certificate of occupancy or temporary certificate ofoccupancy (whichever is earlier) is issued for the Subarea B-l Improvements(the “Job Reporting Period”). The Developer’s job creation and reportingrequirements shall continue for the Job Reporting Period notwithstanding thefull repayment of the HUD Loan.

 

(c)                      In the event that at the expiration of the Job Reporting Period, theCity determines that the Developer has failed to make a good faith effort, asdefined in Section 7.3 of the loan agreement documenting the HUD Loan, tocreate the full four hundred fifty two (452) full time equivalent jobs, theDeveloper shall pay to the City the amount of Three Thousand Five HundredDollars ($3,500) per full time equivalent job that the City reasonablydetermines the Developer has failed to make a good faith effort to create. Inthe event the City determines that the Developer has failed to make a goodfaith effort to create the full four hundred fifty two (452) full timeequivalent jobs and prior to the imposition by the City of any required paymentby the Developer, the Developer may request that the City extend the jobreporting period for an additional two (2) year period. This paymentobligation shall survive prepayment of the HUD Loan.

 

9.                          Public-Private Feasibility Agreement: Section 1.B. A new Section I.B.3. of Attachment No. 8Public-Private Feasibility Agreement is added to read as follows:

 

“3. As a special repayment provision for the funds provided to theAgency by the Developer under the Original Letter of Credit pursuant to Section 402.6.1,in the event the Agency has fully paid all Acquisition Costs and the costs ofcomplying with Relocation Laws and funds provided under the Original Letter ofCredit remain unspent, the Agency shall reimburse the unspent funds to theDeveloper promptly upon the Agency’s determination that such funds are nolonger needed for Acquisition Costs or relocation costs. In addition, followingthe assignment of the HUD loan pursuant to Section I.A. of the Attachment No. 8Public-Private Feasibility Agreement, in the event the City has determined thatEDI funds remain in the City’s interest reserve account to be disbursed whichare not required for interest payments on the HUD Loan and the Agency hasdetermined that that such funds are no longer needed for Acquisition Costs orrelocation costs, the EDI funds, with the approval of the City, shall be usedto reimburse the Developer for funds provided under the Original Letter ofCredit pursuant to Section 402.6.1.

 

10.                    Public-Private Feasibility Agreement: Section I.D. Section I.D.8 of Attachment No. 8Public-Private Feasibility Agreement is deleted and replaced with thefollowing:

 

“8. The Agency obligation pursuant to the Paragraph I.D. shall ceasefor

 

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eachSubarea in any Operation Year in which the Annual Return Shortfall for theSubarea equals zero, and in any event, shall cease as to Subarea A upon theearlier to occur of (i) the Agency has made total payments across allSubareas pursuant to the Paragraph I.D. in the amount of Five Million Dollars($5,000,000) plus the total interest that has accrued pursuant to ParagraphI.D.6, if any, and (ii) February, 2029, and shall cease as to SubareasB-l, B-2 and C as of February, 2029.”

 

11.                    Currently Available Funds. Section III of Attachment No. 8Public-Private Feasibility Agreement is deleted and replaced with thefollowing:

 

“III. Agency Resources. Subject to all the terms and conditionsof this Agreement, the Agency shall use the following amounts as AcquisitionFunds for the Agency’s acquisition of the Project Site: Ten Million EightyEight Thousand Five Hundred Ninety Seven Dollars ($10,088,597) from Agencyfunds; Three Million Eight Hundred Thirty Two Thousand Three Hundred FiftyEight Dollars ($3,832,358) from proceeds received by the Agency from theDeveloper for the purchase of Subarea A; Four Hundred Forty Thousand FiveHundred Dollars ($440,500) in Economic Development Initiative grant funds fromthe HUD Loan and any additional Economic Development Initiative grant fundsreleased to the Agency from the interest reserve fund held by the City as partof the HUD Loan pursuant to the terms of the HUD Loan documents. A sources anduses for Project Site acquisition costs, current as of the date of the ThirdImplementation Agreement, is attached as Exhibit A to the ThirdAgreement for informational purposes.”

 

12.                    No Other Changes, Consistency. Notwithstanding any changes and deletionscontained herein, all other provisions of the OPA remain the same. In the eventof any conflict between the terms of the OPA and this Third ImplementationAgreement, the terms of this Third Implementation Agreement shall govern.

 

13.                    Effectiveness of Third ImplementationAgreement. This ThirdImplementation Agreement is dated for convenience only and shall only becomeeffective on the date which is the latest of (i) the date this ThirdImplementation Agreement is executed by the Developer, (ii) the date thisThird Implementation Agreement is approved and executed by the Agency and (iii) thedate this Third Implementation Agreement is approved by the City.

 

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IN WITNESS WHEREOF, the parties hereby have executed this ThirdImplementation Agreement as of the Effective Date.

 
| ** ** | **DEVELOPER****:**                                     |
|------------|--------------------------------------------------------|
|       |                                                   |
|       | SL  No Ho, LLC  a California limited liability company |
|       |                                                   |   |
|       | By:                                                    | /s/ Michael E.  Wise |
|       |                                                   | Michael  E. Wise |
|       |                                                   |   |
|       | Its:                                                   | Authorized  Member |

 

 
| ** ** | **AGENCY****:**                                                              |
|------------|------------------------------------------------------------------------------|
|       |                                                                         |
|       | THE  COMMUNITY REDEVELOPMENT  AGENCY OF THE CITY OF LOS ANGELES,  CALIFORNIA |
|       |                                                                         |   |
|       | By:                                                                          | /s/ Authorized  Signatory |
|       |                                                                         | Robert  Ovrom |
|       |                                                                         |   |
|       | Its:                                                                         | Chief  Executive Officer |

 

 
| APPROVED  AS TO FORM:  |                            |
|------------------------|---------------------------------|
|                   |                            |
| ROCKARD  J. DELGADILLO |                            |
| CITY  ATTORNEY         |                            |
|                   |                            |
|                   |                            |   |
| By:                    | /s/ Authorized  Signatory       |   |
|                   | Assistant/Deputy  City Attorney |   |
|                   |                            |
| APPROVED  AS TO FORM:  |                            |
|                   |                            |
|                   |                            |   |
| By:                    | /s/ Authorized  Signatory       |   |
|                   | Agency  Special Counsel         |   |

 

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**EXHIBIT A**

** **

NoHo CommonsSource of Funds for Agency Land Acquisition/Relocation Activities

 

A.                      Funding from the Developer

 
| $     | 350,000        |       | Reimbursement  for Agency Costs FY03 (Fund 5273)                                |       |
|-------|----------------|------------|---------------------------------------------------------------------------------|------------|
| $     | 3,832,358      |       | Subarea  A Closing, Land Purchase (Fund 5273)                                   |       |
| $     | 1,167,642      |       | Subarea  A Closing, Developer Advance/Note (Fund 5273)                          |       |
| $     | 2,350,000      |       | Subarea  C and MTA Closing, Developer Advance/Note (Fund 5273)                  |       |
| $     | 8,474,181      |       | Portion  of 108 Loan Assumed by Developer for Land Purchase (Fund 2249)         |       |
| $     | 5,525,819      |       | Portion  of 108 Loan Assumed by Developer as Developer Advance/Note (Fund 2249) |       |
| **$** | **21,700,000** | ** ** | **Subtotal Developer**                                                          | ** ** |

 

B.                        Funding From the Agency

 
| $      | 10,088,597     |       | NH  Redevelopment Project Area Resources (Various Funds) |       |
|--------|----------------|------------|----------------------------------------------------------|------------|
| $      | 440,500        |       | EDI  Grant (Fund 3802)                                   |       |
| $      | 3,000,000      |       | CDBG  Grant/Loan (Fund 2258)                             |       |
|   | ** **     | ** ** | ** **                                               | ** ** |
| $      | **13,529,097** | ** ** | **Subtotal Agency**                                      | ** ** |

 

C.                        GrandTotal of Funds Available for Land Acquisition/Relocation

 
| $ | **35,229,097** | ** ** |   | ** ** |
|---|----------------|------------|--------|------------|

 

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