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Exhibit 10.7  

MANAGEMENT AGREEMENT

(SANTA ANITA PROJECT)

by
and between 

Santa
Anita Associates, LLC,

a Delaware limited liability company,

as Company, 

and

Caruso
Management Company, Ltd.,

a California limited partnership,

as Manager 

	 

	 

Dated as of September 28, 2006 

 
LIMITED LIABILITY COMPANY AGREEMENT

OF

SANTA ANITA ASSOCIATES, LLC  

THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, 15 U.S.C. § 15b ET SEQ., AS AMENDED
(THE "FEDERAL ACT"), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL ACT. IN ADDITION, THE
ISSUANCE OF THIS SECURITY HAS NOT BEEN QUALIFIED UNDER THE DELAWARE SECURITIES ACT, THE CALIFORNIA CORPORATE SECURITIES LAW OF 1968 OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY, THE
"STATE ACTS"), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF THE STATE ACTS. IT IS UNLAWFUL TO CONSUMMATE A
SALE OR OTHER TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN TO, OR TO RECEIVE ANY CONSIDERATION THEREFOR FROM, ANY PERSON OR ENTITY WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED
SALE OR OTHER TRANSFER OF THIS SECURITY DOES NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH PROPOSED SALE OR OTHER TRANSFER IS IN
COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES LAWS. THE TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED UNDER THE TERMS OF THE LIMITED LIABILITY COMPANY AGREEMENT GOVERNING THE COMPANY,
A COPY OF WHICH IS ON FILE WITH THE COMPANY. 

1

   
TABLE OF CONTENTS 

	 
	 	 
	 	Page

	ARTICLE I	 	FORMATION	 	2
	 	1.01	 	Formation	 	2
	 	1.02	 	Names and Addresses	 	2
	 	1.03	 	Nature of Business	 	2
	 	1.04	 	Outside Activities	 	2
	 	 	(a)    Non-Competition Agreement	 	2
	 	 	(b)    Permitted Outside Activities	 	3
	 	1.05	 	Term of Company	 	4
	
 ARTICLE II	
 	

MANAGEMENT OF THE COMPANY	
 	

4
	 	2.01	 	Appointment of Management Committee	 	4
	 	 	(a)    Management by the Management Committee	 	4
	 	 	(b)    Composition of the Management Committee	 	4
	 	2.02	 	Management Committee Procedures	 	4
	 	 	(a)    Quorum	 	4
	 	 	(b)    Special Meetings	 	5
	 	 	(c)    Telephonic Participation	 	5
	 	 	(d)    Transaction of Business	 	5
	 	 	(e)    Actions Without Meetings	 	6
	 	 	(f)    Proxies	 	6
	 	 	(g)    Limitations on Authority	 	6
	 	 	(h)    Compensation	 	6
	 	2.03	 	Day to Day Management by the Managing Member	 	6
	 	2.04	 	Specific Duties of Managing Member	 	7
	 	2.05	 	Major Decisions	 	9
	 	 	(a)    [Arbitration] Amendments to Development Plan or Development Budget	 	9
	 	 	(b)    [Arbitration] Operating Plan and Operating Budget	 	10
	 	 	(c)    [Arbitration] Expenditures Outside of Approved Budgets	 	10
	 	 	(d)    [Arbitration] Leases	 	10
	 	 	(e)    [Arbitration] Project Consultants	 	10
	 	 	(f)    [Arbitration] Insurance	 	10
	 	 	(g)    [Arbitration] Tax and Accounting Returns and Elections	 	10
	 	 	(h)    [Arbitration] Sale or Other Transfer of Incidental Personal Property	 	10
	 	 	(i)    [Arbitration] Refinancing and Encumbrances	 	11
	 	 	(j)    [Veto] Sale or Other Transfer	 	11
	 	 	(k)    [Veto] Admission of New Member	 	11
	 	 	(l)    [Veto — Minority Member Major Decision] Acquisition of Properties	 	11
	 	 	(m)    [Veto] Entitlements	 	11
	 	 	(n)    [Veto — Minority Member Major Decision] Contracts with Affiliates	 	11

i

 

	 	 	(o)    [Veto] Legal Proceedings	 	11
	 	 	(p)    [Veto — Minority Member Major Decision] Amendment to Agreement	 	12
	 	 	(q)    [Veto — Minority Member Major Decision] Dissolution	 	12
	 	 	(r)    [Veto — Minority Member Major Decision] Confess Judgments	 	12
	 	 	(s)    [Veto — Minority Member Major Decision] Possess Company Property	 	12
	 	 	(t)    [Veto — Minority Member Major Decision] Merger, Consolidation or Bankruptcy	 	12
	 	 	(u)    [Veto — Minority Member Major Decision] Extending Credit	 	12
	 	 	(v)    [Veto — Minority Member Major Decision] Acts in Contravention	 	12
	 	 	(w)    [Veto — Minority Member Major Decision] Additional Capital Contributions For Unauthorized Expenditures	 	12
	 	 	(x)    [Veto — Minority Member Major Decision] Material Changes to the Site Plan	 	12
	 	2.06	 	Development Plan and Operating Plan	 	13
	 	 	(a)    Development Plan	 	13
	 	 	(b)    Operating Plan	 	14
	 	2.07	 	Notification to the Member of Certain Matters	 	15
	 	 	(a)    Defects and Deviations	 	15
	 	 	(b)    Litigation	 	16
	 	 	(c)    Disputes	 	16
	 	 	(d)    Governmental Order	 	16
	 	 	(e)    Environmental Matters	 	16
	 	 	(f)    Construction Delays	 	16
	 	 	(g)    Condemnation	 	16
	 	 	(h)    Lapse of Insurance	 	16
	 	 	(i)    Notice of Default	 	16
	 	 	(j)    Recordation of Lien	 	16
	 	 	(k)    Material Change in Operating Plan, Pre-Development Budget, Development Budget or Operating Budget	 	16
	 	 	(l)    Purchase Offers	 	16
	 	 	(m)    Other Material Events	 	16
	 	2.08	 	Compensation	 	17
	 	 	 	 	(a)    Development Agreement	 	17
	 	 	 	 	(b)    Construction Management Fee	 	17
	 	 	 	 	(c)    Retail Management Agreement	 	17
	 	 	 	 	(d)    MEC Retail Asset Management Fee	 	17
	 	 	 	 	(e)    Residential Management Agreement	 	17
	 	 	 	 	(f)    MEC Residential Asset Management Fee	 	17
	 	2.09	 	Treatment of Payments	 	18
	 	2.10	 	Liability and Indemnity	 	18
	 	2.11	 	Reimbursement and Fees	 	18
	 	2.12	 	Limited Liability	 	19
	 	2.13	 	Removal of the Managing Member	 	19
	 	2.14	 	Authority with Respect to Caruso Affiliate Agreements	 	19

ii

 

	
 ARTICLE III	
 	

MEMBERS' CONTRIBUTIONS TO COMPANY	
 	

20
	 	3.01	 	Initial Contributions	 	20
	 	3.02	 	Construction Financing	 	20
	 	3.03	 	Additional Contributions	 	21
	 	3.04	 	Remedy for Failure to Contribute Capital	 	21
	 	 	 	 	(a)    Loan Remedy	 	21
	 	 	 	 	(b)    Dilution	 	23
	 	 	 	 	(c)    Election of Remedy	 	25
	 	 	 	 	(d)    Adjustments to Percentage Interests	 	25
	 	 	 	 	(e)    Right to Remove Caruso as Managing Member	 	25
	 	 	 	 	(f)    Loss of Voting Rights	 	26
	 	 	 	 	(g)    Enforceability of Provisions	 	26
	 	3.05	 	Affiliate Liability and Indemnification	 	26
	 	3.06	 	Capital Contributions in General	 	27
	
 ARTICLE IV	
 	

ALLOCATION OF PROFITS AND LOSSES	
 	

27
	 	4.01	 	Allocation of Net Losses	 	27
	 	 	 	 	(a)    First Tier Losses	 	27
	 	 	 	 	(b)    Second Tier Losses	 	27
	 	4.02	 	Net Profits	 	27
	 	 	 	 	(a)    First Tier Profits	 	27
	 	 	 	 	(b)    Second Tier Profits	 	27
	 	4.03	 	Special Allocations	 	28
	 	4.04	 	Curative Allocations	 	28
	 	4.05	 	Differing Tax Basis; Tax Allocation	 	29
	
 ARTICLE V	
 	

DISTRIBUTION OF CASH FLOW	
 	

29
	 	5.01	 	Distribution of Cash Flow	 	29
	 	5.02	 	Distribution of Extraordinary Cash Flow	 	29
	 	 	 	 	(a)    Unreturned Contribution Accounts	 	29
	 	 	 	 	(b)    Percentage Interests	 	29
	 	5.03	 	Limitations on Distributions	 	29
	 	5.04	 	In-kind Distribution	 	29
	
 ARTICLE VI	
 	

RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS	
 	

30
	 	6.01	 	Limitations on Transfer	 	30
	 	6.02	 	Permitted Transfers	 	30
	 	 	 	 	(a)    Other Members	 	30
	 	 	 	 	(b)    Affiliates	 	30
	 	 	 	 	(c)    Share Transfers	 	30
	 	 	 	 	(d)    Merger, Consolidation or Sale of All or Substantially All Assets	 	30
	 	 	 	 	(e)    REIT Controlled by Caruso	 	30
	 	 	 	 	(f)    Owner of Racetrack Property	 	31
	 	 	 	 	(g)    Sale of Partial Interest	 	31
	 	 	 	 	(h)    Pledge for Loan for Sole Purpose of Funding Additional Capital Contribution	 	31
	 	 	 	 	(i)    Transfer following Default under Right of First Refusal	 	31

iii

 

	 	6.03	 	Right of First Offer/Right of First Refusal	 	32
	 	6.04	 	Lender Prohibitions	 	35
	 	6.05	 	Admission of Substituted Members	 	35
	 	6.06	 	Election; Allocations Between Transferor and Transferee	 	36
	 	6.07	 	Partition	 	36
	 	6.08	 	Waiver of Withdrawal and Purchase Rights	 	36
	 	6.09	 	No Appraisal Rights	 	36
	
 ARTICLE VII	
 	

DEFAULT BUY/SELL AGREEMENT	
 	

36
	 	7.01	 	Buy/Sell Events	 	36
	 	 	 	 	(a)    Fraud or Conviction of a Felony by Member	 	36
	 	 	 	 	(b)    Misappropriation of Funds by Member	 	37
	 	 	 	 	(c)    Fraud or Conviction of a Felony Under Development Agreement or Management Agreement	 	37
	 	 	 	 	(d)    Misappropriation of Funds Under Development Agreement or Management Agreement	 	37
	 	7.02	 	Rights Arising From a Buy/Sell Event	 	38
	 	7.03	 	Determination of Purchase Price	 	38
	 	 	 	 	(a)    Determination of Purchase Price	 	38
	 	 	 	 	(b)    Determination of Appraised Value	 	38
	 	 	 	 	(c)    Payment of Costs	 	39
	 	7.04	 	Non-Defaulting Member's Option	 	40
	 	7.05	 	Closing of Purchase and Sale	 	40
	 	7.06	 	Payment of Purchase Price	 	40
	 	7.07	 	Release and Indemnity	 	40
	
 ARTICLE VIII	
 	

DISSOLUTION AND WINDING UP OF THE COMPANY	
 	

41
	 	8.01	 	Events Causing Dissolution of the Company	 	41
	 	8.02	 	Winding Up of the Company	 	41
	 	 	 	 	(a)    Creditors	 	41
	 	 	 	 	(b)    Reserves	 	41
	 	 	 	 	(c)    Remaining Amounts	 	42
	 	8.03	 	Negative Capital Account Restoration	 	42
	 	8.04	 	Termination Rights	 	42
	
 ARTICLE IX	
 	

BOOKS AND RECORDS	
 	

43
	 	9.01	 	Books of Account and Bank Accounts	 	43
	 	9.02	 	Annual Reports and Tax Returns	 	44
	 	9.03	 	Delivery of Reports	 	44
	 	 	 	 	(a)    Monthly Balance Sheet and Income Statement	 	44
	 	 	 	 	(b)    Monthly Reports	 	44
	 	 	 	 	(c)    Supplemental Information	 	45
	 	 	 	 	(d)    Quarterly Reports	 	46
	 	 	 	 	(e)    Quarterly Forecasts	 	46
	 	 	 	 	(f)    Annual Reports	 	46
	 	 	 	 	(g)    Construction Reports	 	46
	 	 	 	 	(h)    Additional Information	 	46

iv

 

	
 ARTICLE X	
 	

INSURANCE REQUIREMENTS	
 	

46
	 	10.01	 	Insurance	 	46
	
 ARTICLE XI	
 	

MISCELLANEOUS	
 	

47
	 	11.01	 	Investment Representations	 	47
	 	 	 	 	(a)    Member Understandings	 	47
	 	 	 	 	(b)    Acquisition for Own Account	 	47
	 	 	 	 	(c)    No Public Market	 	47
	 	 	 	 	(d)    No Advertisement	 	47
	 	 	 	 	(e)    Survival of Representations and Warranties	 	47
	 	11.02	 	Notice	 	48
	 	11.03	 	Construction of Agreement	 	49
	 	11.04	 	Further Acts	 	49
	 	11.05	 	Preservation of Intent	 	49
	 	11.06	 	Waiver	 	50
	 	11.07	 	Entire Agreement	 	50
	 	11.08	 	Choice of Law	 	50
	 	11.09	 	No Third-Party Beneficiaries	 	50
	 	11.10	 	No Usury	 	51
	 	11.11	 	Venue	 	51
	 	11.12	 	Waiver of Jury Trial	 	51
	 	11.13	 	Timing	 	51
	 	11.14	 	Remedies for Breach of this Agreement	 	52
	 	11.15	 	Reasonableness of Remedies	 	52
	 	11.16	 	Partnership Intended Solely for Tax Purposes	 	52
	 	11.17	 	Arbitration of Disputes	 	52
	 	11.18	 	Scope of Representation	 	54
	 	11.19	 	CPI Adjustments	 	54
	
 ARTICLE XII	
 	

DEFINITIONS	
 	

55
	 	12.01	 	Accounting Firm	 	55
	 	12.02	 	Adjusted Capital Account	 	55
	 	12.03	 	Affiliate	 	55
	 	12.04	 	Agreement	 	55
	 	12.05	 	Approved Transferee	 	55
	 	12.06	 	Budget	 	56
	 	12.07	 	Business Plan	 	56
	 	12.08	 	Buy/Sell Price Determination Notice	 	56
	 	12.09	 	California Act	 	56
	 	12.10	 	Capital Account	 	56

v

 

	 	12.11	 	Caruso Affiliate Agreements	 	57
	 	12.12	 	Cash Flow	 	57
	 	12.13	 	City	 	57
	 	12.14	 	Code	 	57
	 	12.15	 	Commissionable Revenue	 	57
	 	12.16	 	Company	 	57
	 	12.17	 	Company Capital	 	57
	 	12.18	 	Construction Contract	 	57
	 	12.19	 	Construction Loan	 	58
	 	12.20	 	Contractor	 	58
	 	12.21	 	Contributing Member(s)	 	58
	 	12.22	 	Contribution Date	 	58
	 	12.23	 	Covered Persons	 	58
	 	12.24	 	Default Loan	 	58
	 	12.25	 	Delaware Act	 	58
	 	12.26	 	Delinquent Contribution	 	58
	 	12.27	 	Deposit	 	58
	 	12.28	 	Development Agreement	 	58
	 	12.29	 	Development Budget	 	59
	 	12.30	 	Development Plan	 	59
	 	12.31	 	Dilution Percentage	 	59
	 	12.32	 	Due Care	 	59
	 	12.33	 	Effective Date	 	59
	 	12.34	 	Event of Default	 	59
	 	12.35	 	Extraordinary Cash Flow	 	60
	 	12.36	 	Extraordinary Event	 	60
	 	12.37	 	Five Million Dollar Outstanding Delinquent Contribution	 	60
	 	12.38	 	Force Majeure	 	60
	 	12.39	 	Ground Lease	 	61
	 	12.40	 	Improvements	 	61
	 	12.41	 	Interest	 	61
	 	12.42	 	Index	 	61
	 	12.43	 	Leases	 	61
	 	12.44	 	Liquidation	 	61
	 	12.45	 	Major Decisions	 	62
	 	12.46	 	Management Committee	 	62
	 	12.47	 	Managing Member	 	62
	 	12.48	 	Member(s)	 	62
	 	12.49	 	Milestones	 	62
	 	12.50	 	Minority Member Major Decisions	 	62
	 	12.51	 	Net Profits and Net Losses	 	62
	 	12.52	 	Opening	 	63
	 	12.53	 	Operating Budget	 	63
	 	12.54	 	Ordinary Cash Flow	 	63
	 	12.55	 	Percentage Interest	 	63

vi

 

	 	12.56	 	Permitted Transferees	 	63
	 	12.57	 	Pre-Development Costs	 	63
	 	12.58	 	Prime Rate	 	63
	 	12.59	 	Prohibited Transferee	 	63
	 	12.60	 	Project(s)	 	64
	 	12.61	 	Property	 	64
	 	12.62	 	Quorum	 	64
	 	12.63	 	Racetrack Property	 	64
	 	12.64	 	REA	 	64
	 	12.65	 	Recapture Conditions	 	64
	 	12.66	 	Regulatory Allocations	 	65
	 	12.67	 	Representative(s)	 	65
	 	12.68	 	Retail Management Agreement	 	65
	 	12.69	 	Securities Acts	 	65
	 	12.70	 	Treasury Regulation	 	65
	 	12.71	 	Unreturned Contribution Account	 	65

EXHIBITS 

Exhibit "A" — DESCRIPTION
OF SANTA ANITA PROPERTY

Exhibit "B" — DESCRIPTION OF PROPERTY

Exhibit "C" — GROUND LEASE

Exhibit "D" — NAMES, ADDRESSES, AND PERCENTAGE INTERESTS OF THE MEMBERS

Exhibit "E" — PRELIMINARY PRE-DEVELOPMENT PLAN AND PRELIMINARY PRE-DEVELOPMENT BUDGET

Exhibit "F" — DEVELOPMENT AGREEMENT

Exhibit "G" — RETAIL MANAGEMENT AGREEMENT

Exhibit "H" — FORM OF LEASE DOCUMENT REQUEST

Exhibit "I" — INSURANCE REQUIREMENTS 

vii

 
        INDEX

	 
	 	Page(s)

	Accountant's Notice	 	24
	Accounting Firm	 	55
	Adjusted Capital Account	 	55
	Affiliate	 	55
	Agreement	 	55
	Appraisal Costs	 	24
	Appraisal Notice	 	24
	Appraised Value	 	38
	Approved Transferee	 	55
	Arbitration Major Decisions	 	13
	Arbitrator(s)	 	53
	Budget	 	56
	Business Plan	 	56
	Buy/Sell Events	 	36
	Buy/Sell Price Determination Notice	 	38
	Buy/Sell Purchase Price	 	38
	California Act	 	56
	Capital Account	 	56
	Caruso	 	1
	Caruso Affiliate Agreements	 	57
	Caruso Termination Election	 	42
	Caruso Termination Window	 	42
	Cash Flow	 	57
	Certificates	 	22
	City	 	1
	Code	 	57
	Commissionable Revenue	 	57
	Company	 	57
	Company Capital	 	57
	Construction Contract	 	57
	Construction Loan	 	58
	Construction Management Fee	 	17
	Construction Schedule	 	13
	Contingency	 	13
	Contractor	 	58
	Contributing Member	 	21
	Contribution Date	 	21
	Contribution Notice	 	21
	control	 	55
	controlled by	 	55
	Covered Persons	 	18
	Default Event	 	19
	Default Loan	 	21
	Default Notice	 	38

viii

 

	Defaulting Member	 	37
	Delaware Act	 	58
	Delinquent Contribution	 	21
	Demand	 	53
	Demanding Member	 	53
	Deposit	 	33
	Development Agreement	 	17
	Development Budget	 	13
	Development Fee	 	17
	Development Plan	 	13
	Dilution Notice	 	22
	Dilution Percentage	 	23
	Due Care	 	59
	Effective Date	 	1
	Entitlements	 	2
	Event of Default	 	59
	Extraordinary Cash Flow	 	60
	Extraordinary Event	 	60
	First Offering Notice	 	32
	Five Million Dollar Outstanding Delinquent Contribution	 	60
	Force Majeure	 	60
	GAAP	 	14
	Ground Lease	 	1
	Guarantor	 	26
	Guarantors	 	26
	Improvements	 	2
	Index	 	61
	Insurance Requirements	 	46
	Interest	 	61
	Lease Document Request	 	10
	Leases	 	61
	Leasing Plan	 	13
	Lender	 	20
	Liquidation	 	61
	Major Decisions	 	9
	Management Committee	 	4
	Managing Member	 	62
	Material Discrepancy	 	46
	MEC Residential Asset Management Fee	 	17
	MEC Retail Asset Management Fee	 	17
	Member	 	62
	Members	 	62
	Members' Equity	 	23
	Milestones	 	62
	Minimum Interest Percentage	 	25

ix

 

	Minority Member	 	26
	Net Losses	 	62
	Net Profits	 	62
	Non Competition Area	 	2
	Non-Competition Period	 	2
	Non-Contributing Member	 	21
	Non-Defaulting Member	 	37
	Non-Demanding Member	 	53
	Non-Transferring Member	 	32
	Offered Interest	 	32
	Opening	 	32
	Operating Budget	 	14
	Operating Plan	 	14
	Ordinary Cash Flow	 	63
	partner nonrecourse deductions	 	28
	Percentage Interest	 	63
	Permitted Transferees	 	30
	Pre-Development Costs	 	13
	Preliminary Development Plan	 	13
	Preliminary Pre-Development Budget	 	13
	Prime Rate	 	63
	Prohibited Transferee	 	63
	Project	 	2
	Property	 	1
	Purchase Notice	 	32
	Quorum	 	4
	Racetrack Property	 	1
	REA	 	1
	Recapture Conditions	 	64
	Recourse Document	 	26
	Regulatory Allocations	 	28
	Removal Notice	 	19
	Representative	 	4
	Representatives	 	4
	Residential Asset Management Agreement	 	17
	Residential Asset Management Fee	 	17
	Residential Management Agreement	 	17
	Residential Management Fee	 	17
	Retail Leasing Fee	 	17
	Retail Management Agreement	 	17
	Retail Management Fee	 	17
	SAC Owner	 	1
	Santa Anita	 	1
	Santa Anita Associates, LLC.	 	2
	Santa Anita Park	 	1

x

 

	Santa Anita Property	 	1
	Santa Anita Termination Election	 	42
	Santa Anita Termination Window	 	42
	Schematic Plans and Specifications	 	13
	Second Offering Notice	 	32
	Securities Acts	 	47
	Site Plan	 	13
	tax matters partner	 	44
	Termination Election	 	42
	Termination Notice	 	43
	Termination Window	 	42
	Third Party	 	32
	Transfer	 	30
	Transferring Member	 	32
	Treasury Regulation	 	65
	under common control with	 	55
	Unreturned Contribution Account	 	65
	Veto Major Decisions	 	13

xi

LIMITED LIABILITY COMPANY AGREEMENT

OF

SANTA ANITA ASSOCIATES, LLC  

        THIS LIMITED LIABILITY COMPANY AGREEMENT OF SANTA ANITA ASSOCIATES, LLC, is entered into effective as of
                        
            , 2006 ("Effective Date"), by and between Santa Anita Commercial
Enterprise, Inc., a Delaware corporation, ("Santa Anita"), and Santa Anita Associates
Holding Co., LLC, a California limited liability company ("Caruso"). 

W I T N
E S S E T H: 

                A.    The
Santa Anita Companies, Inc. ("SAC Owner") is the fee owner of that certain real property located in the City
of Arcadia ("City"), County of Los Angeles, in the State of California, more particularly described in  Exhibit "A" attached hereto
(the "Santa Anita Property"). The
Santa Anita Property includes an existing horse racing facility consisting of a grandstand, paddock, racetrack, stables and related improvements and facilities known as "Santa Anita Park"
(the "Racetrack Property"). The Santa Anita Property also includes not more than eighty-five (85) acres of undeveloped
non-racing land fronting on Huntington Drive, bordered on the north by racetrack facilities/operations and on the west by the Santa Anita Fashion Mall owned by Westfield Properties, more
particularly described in Exhibit "B" attached hereto
(the "Property"). 

                B.    Subject
to the terms of this Agreement, Santa Anita and Caruso intend to develop a portion of the Property as a mixed-use project consisting of stores,
restaurants and other entertainment and retail outlets and residential uses. 

                C.    The
Company will hold title to and develop the Project as a ground lessee pursuant to that certain seventy-five (75) year ground lease with two (2),
ten (10) year renewal options, in the form attached hereto as Exhibit "C"
(the "Ground Lease"), dated as of the date the Recapture Conditions have been satisfied, by and between SAC Owner as the ground lessor and the
Company as the ground lessee. 

                D.    Santa
Anita and Caruso agree that the Project will not include any part of the Racetrack Property. 

                E.    Santa
Anita will cause the SAC Owner to enter into, and the Company will enter into, a Reciprocal Easement Agreement
(the "REA"), dated as of the date the Recapture Conditions have been satisfied, which will provide reciprocal easements and other rights and
obligations appurtenant to the Property and the Racetrack Property. SAC Owner and the Company will negotiate in good faith the terms of the REA, and will agree upon the form of the REA on or before
the date which is ninety (90) days following the Effective Date. 

 

        NOW
THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and of other good and valuable consideration, Santa Anita and Caruso hereby
mutually agree as follows: 

ARTICLE I  

 FORMATION  

         1.01    Formation    

        The
Members hereby form a Delaware limited liability company pursuant to the provisions of the Delaware Act and this Agreement. In connection therewith, an authorized
representative of the Company shall execute a Certificate of Formation for the Company in accordance with the Delaware Act, which shall be duly filed with the Office of the Delaware Secretary of
State. In addition, an authorized representative of the Company shall execute a Limited Liability Company Application for Registration (Form LLC-5), which shall be duly filed with
the Office of the California Secretary of State. The Managing Member (or its designee) is also authorized to execute, acknowledge and/or verify such other documents and/or instruments as may be
necessary and/or appropriate in order to form the Company under the Delaware Act and/or to continue its existence in accordance with the provisions of the Delaware Act and/or to register, qualify to
do business and/or operate its business in California (or any other state in which the Company conducts business) as a foreign limited liability company in accordance with the provisions of the
California Act (or other applicable law). 

         1.02    Names and Addresses    

        The
name of the Company is "Santa Anita Associates, LLC." The principal office of the Company in the State of California shall be at 101 The Grove Drive, Los Angeles,
California 90036. The name and address of the agent for service of process for the Company in the State of Delaware are The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware
19801. The names and addresses of the Members are set forth on Exhibit "D" attached hereto. 

         1.03    Nature of Business    

        The
express, limited and only purposes of the Company shall be (i) to enter into the Ground Lease with respect to the Property, (ii) to obtain the entitlements, zoning and
other governmental approvals (the "Entitlements") necessary to develop and construct the Project on the Property in accordance with the Business
Plan (the "Improvements"), (iii) to operate, manage, maintain, market, lease, finance, refinance, hold for long-term
investment, sell, exchange, dispose of and otherwise realize the economic benefit from the Property pursuant to the Ground Lease and the Improvements (collectively, the
"Project"), and (iv) to conduct such other activities with respect to the Project as are necessary and/or appropriate to carry out the foregoing
purposes and to do all things incidental to or in furtherance of the above-enumerated purposes. 

         1.04    Outside Activities    

                (a)   Non-Competition
Agreement.    Notwithstanding the provisions of Section 1.04(b) below, during the period
commencing as of the Effective Date and ending upon the earlier of (i) five (5) years after the Opening, (ii) the exercise by either Member of its termination rights pursuant to
Section 8.04 due to the failure to timely satisfy the Recapture Conditions, or (iii) the dissolution of the Company (the "Non-Competition
Period"), Caruso hereby agrees that Caruso and any Affiliate of Caruso shall not, without the prior written consent of Santa Anita, which consent may be withheld in Santa
Anita's sole discretion, directly or indirectly (other than through its ownership interest in the Company), develop, manage, lease or own any shopping center or retail project within a five
(5) mile radius of the Project (the "Non Competition Area"). In addition, during the Non Competition Period, Santa Anita hereby agrees
that Santa Anita and any Affiliate of Santa Anita shall not, without the prior written consent of Caruso, which consent may be withheld in Caruso's sole discretion, directly or indirectly (other than
through its ownership interest in the Company), develop, manage, lease or own any shopping center or retail project within the Non-Competition Area. 

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                (b)   Permitted
Outside Activities.    In view of the limited purposes of the Company, but subject to Section 1.04(a) above, no
Member shall have any fiduciary obligation with respect to the Company or to the other Member insofar as making other investment opportunities available to the Company or to the other Member. Subject
to Section 1.04(a) above, each Member may, notwithstanding the existence of this Agreement, engage in whatever activities such Member may choose, whether the same are competitive with the
Company or otherwise, without having or incurring any obligation to offer any interest in such activities to the Company or to the other Member. Subject to Section 1.04(a) above, neither this
Agreement nor any activities undertaken pursuant hereto shall prevent any Member from engaging in such activities, and the fiduciary duties of the Members to each other and to the Company shall be
limited solely to those arising from the purposes of the Company described in Section 1.03 above. SUBJECT TO SECTION 1.04(a) ABOVE, IN FURTHERANCE OF THE FOREGOING PROVISIONS OF THIS
SECTION 1.04, THE MEMBERS ACKNOWLEDGE AND AGREE THAT THE MEMBERS AND THEIR RESPECTIVE AFFILIATES MAY CURRENTLY HOLD AND MAY HEREINAFTER ACQUIRE INVESTMENTS IN AND/OR ENGAGE IN A VARIETY OF
ACTIVITIES (INCLUDING, WITHOUT LIMITATION, REAL ESTATE INVESTMENTS AND ACTIVITIES) THAT MAY OR MAY NOT COMPETE WITH THE BUSINESS OF THE COMPANY. SUBJECT TO SECTION 1.04(a) ABOVE, THE MEMBERS
AGREE THAT EACH MEMBER (AND SUCH AFFILIATES) MAY ACQUIRE SUCH INVESTMENTS AND ENGAGE IN SUCH ACTIVITIES REGARDLESS OF WHETHER THEY COMPETE WITH THE COMPANY, AND SHALL NOT HAVE ANY OBLIGATION TO
OFFER ANY INTEREST IN SUCH INVESTMENTS OR ACTIVITIES TO THE COMPANY OR TO THE OTHER MEMBER NOR SHALL ANY SUCH MEMBER (OR SUCH AFFILIATES) HAVE ANY FIDUCIARY DUTIES WITH RESPECT TO SUCH
INVESTMENTS OR ACTIVITIES TO THE OTHER MEMBER OR TO THE COMPANY. EACH MEMBER AGREES THAT THE MODIFICATION AND WAIVER OF THE FIDUCIARY DUTIES OF THE MEMBERS PURSUANT TO THIS SECTION 1.04 ARE
FAIR AND REASONABLE AND HAVE BEEN UNDERTAKEN WITH THE INFORMED CONSENT OF EACH MEMBER. TO THE MAXIMUM EXTENT ALLOWED BY LAW, THE MEMBERS FURTHER AGREE AND COVENANT NOT TO CONTEST THE VALIDITY OF THE
PROVISIONS OF THIS SECTION 1.04 IN ANY COURT OF LAW (AND/OR ARBITRATION). IN ADDITION, EACH MEMBER MAY EXERCISE THE PROVISIONS OF ARTICLES III, VII AND/OR VIII WITHOUT REGARD TO ANY FIDUCIARY
DUTIES. THE PROVISIONS OF THIS SECTION 1.04 SHALL NOT LIMIT THE OBLIGATIONS OR DUTIES OF EITHER MEMBER OR ANY OF ITS AFFILIATES ARISING UNDER THE DEVELOPMENT AGREEMENT, THE MANAGEMENT
AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN THE PARTIES OR RELATING TO THE PROJECT. 

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         1.05    Term of Company    

        The
term of the Company shall commence on the date the Certificate of Formation for the Company is filed with the Delaware Secretary of State, and shall continue until expiration or
termination of the Ground Lease, unless dissolved sooner pursuant to Article VIII or unless extended by the election of both Members. The existence of the Company as a separate legal
entity shall continue until the cancellation of the Company's Certificate of Formation. 

ARTICLE II  

 MANAGEMENT OF THE COMPANY  

         2.01    Appointment of Management Committee    

                (a)   Management
by the Management Committee.    Subject to the provisions of Section 2.03, the Company shall be managed by the
Members acting through a "Management Committee" in accordance with the provisions of this Section 2.01 and Section 2.02. 

                (b)   Composition
of the Management Committee.    The Management Committee initially shall be composed of four
(4) representatives (individually, a "Representative" and collectively, the "Representatives").
The Representatives shall not be required to be Members of the Company. Each Member shall appoint two (2) Representatives. Concurrently with the Effective Date of this Agreement, each Member
shall deliver written notice to the other Member which notice shall designate the identity of the two (2) Representatives selected by such Member. Each Member may, from time to time, change
such Member's designated Representative(s) by giving written notice thereof to the other Member. If any Representative ceases to serve, then the Member that appointed such Representative shall replace
such Representative with a new Representative selected in the sole discretion of such Member by giving written notice thereof to the other Member. The other Member shall not have any right to approve
any replacement Representative. The authorized number of Representatives of the Management Committee may be increased or decreased only with the prior written approval of both Members. 

         2.02    Management Committee Procedures    

                (a)   Quorum.    A
"Quorum" shall require the attendance of (or participation by
phone) of at least one of the Representatives selected by each Member. In the absence of a Quorum, the Representatives in attendance shall, adjourn the meeting until a Quorum shall attend. Each Member
shall have one (1) vote on the Management Committee, which vote may be exercised by any of its designated Representatives who casts a vote. All decisions by the Management Committee shall
require the unanimous affirmative vote of the Representatives. In the event of disagreement among the two (2) Representatives selected by either Member, the vote shall not be unanimous until
those two (2) Representatives agree with each other. The Management Committee shall meet quarterly, unless otherwise agreed, on a business day designated by the Managing Member and shall hold
such other regularly scheduled meetings as are designated by the Managing Member. Meetings shall be held at the Company's principal office, unless otherwise agreed to by the Management Committee.
Notice of any regularly scheduled meeting of the Management Committee shall be given by the Managing Member to all of the Representatives no fewer than ten (10) days and no more than thirty
(30) days prior to the date of any such meeting. The attendance of a Representative of the Management Committee at a regularly scheduled meeting of the Management Committee (either in person or
telephonically) shall constitute a waiver of notice of such meeting, except where a Representative of the Management Committee attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting is not properly called or convened. Minutes of the Management Committee shall not be required to be maintained. Resolutions of the Management Committee, when signed
by at least one of the Representatives of each Member, shall be binding and conclusive evidence of the decisions reflected therein and any authorization granted thereby. Notice of any in person or
telephonic special meeting may be waived by each Representative of the Management Committee. 

4

 

                (b)   Special
Meetings.    Special meetings of the Management Committee may be called by or at the request of any Representative and
shall be held at the principal office of the Company, or elsewhere as mutually agreed, during normal business hours. Notice of any such special meeting of the Management Committee (other than any
telephonic meeting) shall be given to all the Representatives no fewer than ten (10) business days and no more than thirty (30) days prior to the date of such meeting. Notice of any
special telephonic meeting shall be given to all of the Representatives of the Management Committee no fewer than three (3) business days and no more than thirty (30) days prior to the
date of such meeting. The attendance of a Representative of the Management Committee at a special meeting of the Management Committee (either in person or telephonically) shall constitute a waiver of
notice of such meeting, except where a Representative of the Management Committee attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not
properly called or convened. The business to be transacted at, and the purpose of, any special meeting of the Management Committee shall be generally described in the notice or waiver of notice of
such meeting. Notice of any in person or telephonic special meeting may be waived by each Representative of the Management Committee. Minutes of special meetings of the Management Committee shall not
be required to be maintained. Resolutions of the Management Committee, when signed by at least one of the Representatives of each Member, shall be binding and conclusive evidence of the decisions
reflected therein and any authorization granted thereby. 

                (c)   Telephonic
Participation.    Representatives of the Management Committee may participate in any meetings of the Management
Committee telephonically or through other similar communications equipment provided that all of the Representatives participating in such meeting can hear one another. Participation in the meetings
pursuant to the preceding sentence shall constitute presence in person at such meeting for all purposes of this Agreement. 

                (d)   Transaction
of Business.    Provided that notice of a meeting has been given in the manner set forth herein, a Quorum shall be
entitled to transact business at any meeting of the Management Committee. 

5

 

                (e)   Actions
Without Meetings.    Any action required or permitted to be taken at a meeting of the Management Committee or any other
action which may be taken at a meeting of the Management Committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by a Quorum, which shall have
the same effect as an act of a Quorum at a properly called and constituted meeting of the Management Committee at which all of the Representatives of the Management Committee were present
and voting. 

                (f)    Proxies.    Each
Representative may authorize another person or persons to act for him or her by proxy, but no such proxy shall
be voted or acted upon after one (1) year from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long
as, it is coupled with an interest sufficient in law to support an irrevocable power. A Representative may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by
filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Managing Member. 

                (g)   Limitations
on Authority.    None of the Members, Representatives or officers, without the prior consent of the Management
Committee or the Managing Member, as the case may be, shall take any action on behalf of or in the name of the Company, or enter into any commitment or obligation binding upon the Company, except for
(i) actions expressly authorized by this Agreement; (ii) actions by any Member (or Representative or officer) within the scope of such Member's (or Representative's or
officer's) authority granted under this Agreement; (iii) actions authorized by the Management Committee or the Managing Member in the manner set forth herein, (iv) actions by Santa Anita
with respect to any Caruso Affiliate Agreement pursuant to Section 2.14 below, and (v) actions by Caruso with respect to any Santa Anita Affiliate Agreement pursuant to
Section 2.14 below. 

                (h)   Compensation.    Except
as otherwise unanimously approved by both Members, no Representative of the Management Committee shall be
entitled to receive any salary or other remuneration or expense reimbursement from the Company for his or her services as a Representative of the Management Committee. 

         2.03    Day to Day Management by the Managing Member    

                (a)   Subject
to the terms of this Agreement, the Managing Member shall have the duty and responsibility to use Due Care to manage the day to day business of the Company in
accordance with terms of the Development Plan and Development Budget, and the Operating Plan and Operating Budget, as applicable. Any and all agreements, contracts and other documents or instruments
affecting or relating to the day-to-day development and operational business and affairs of the Company may be executed on the Company's behalf by the Managing Member alone and
without execution by Santa Anita or the Management Committee provided that the amount or matters involved for any such agreement or other document does not otherwise represent a Major Decision or is
expressly authorized in the Development Plan and the Development Budget (as the same may be revised in accordance with the provisions of Section 2.06(a) below) or in the Operating Plan
and the Operating Budget (as the same may be revised in accordance with the provisions of Section 2.06(b) below), or otherwise approved by Santa Anita or the Management Committee.
The Managing Member shall carry out the business of the Company and shall devote such time to the Company as is necessary for the efficient operation of the Company's business. The Managing Member
will cause the Company to commence construction of the Project within twenty-four (24) months following the Effective Date of this Agreement, subject to extension for Force Majeure
and subject to further extension for up to an additional twelve (12) months provided that the Milestones (as such term is defined in Article XII) are achieved within
twenty-four (24) months following the Effective Date of this Agreement, subject to extension for Force Majeure. 

6

 

                (b)   The
Managing Member shall not, without the consent of the Management Committee, take any action on behalf of or in the name of the Company, or enter into any commitment
or obligation binding upon the Company, except for actions which have been expressly authorized hereunder or are within the scope of the Managing Member's authority granted hereunder or are expressly
authorized in the Development Plan and the Development Budget (as the same may be revised in accordance with the provisions of Section 2.06(a) below), in the Operating Plan and the
Operating Budget (as the same may be revised in accordance with the provisions of Section 2.06(b) below), or otherwise approved by Santa Anita or the Management Committee. 

         2.04    Specific Duties of Managing Member    

        Except
as otherwise provided in this Agreement (including, without limitation, Sections 2.01, 2.05 and 2.06), the Managing Member shall have the responsibility, authority,
and obligation to use Due Care to conduct or cause to be conducted the following activities on behalf of the Company in accordance with the last approved Development Plan and Development Budget,
and/or the last approved Operating Plan and Operating Budget, as applicable: 

                (a)   Preparing,
supervising the preparation of, and submitting to the Management Committee the Development Plan and Development Budget and/or the Operating Plan and
Operating Budget, as applicable, as provided in Section 2.06; 

                (b)   Properly
administer the day-to-day activities of the Company, and implement all actions necessary or appropriate to implement the approved
Development Plan and Development Budget and/or the Operating Plan and Operating Budget, as applicable, as provided in Section 2.06; 

                (c)   Preparing,
supervising the preparation of and submitting to the Management Committee, monthly, quarterly and annual management reporting obligations set forth in
this Agreement; 

                (d)   Recommending
for approval by the Management Committee specific policies, plans and procedures for security, maintenance, marketing/promotional, sponsorship and other
operating aspects of the Project (in each case, addressing integration and synergies with the Racetrack Property), and periodically updating such policies, plans and procedures in accordance
with Section 2.06(b); 

                (e)   Complying
with any and all applicable laws, ordinances, and regulations of any and all governmental authorities applicable to the Company or the Project or any portion
thereof; 

7

 

                (f)    Protecting
and preserving the title and interests of the Company in and to the Project; 

                (g)   Supervising
the development and construction of the Project, including, without limitation, the actions of general contractors and subcontractors; 

                (h)   Contracting
on behalf of the Company for all supplies, equipment, repairs, improvements, and services for the Project in accordance with the last approved Development
Plan and Development Budget and/or the Operating Plan and Operating Budget, as applicable, as provided in Section 2.06; 

                (i)    Selecting,
employing, supervising, coordinating, and discharging any engineers, designers, architects, general contractors, major subcontractors, other contractors,
brokers, appraisers, attorneys, accountants, bookkeepers, clerical personnel, and other consultants who are needed to render services to the Company in order to develop, construct, manage, operate,
maintain, improve, market, lease, and/or sell the Project, or any portion thereof; 

                (j)    Preparing
and supervising the preparation of such reports as may be required by the Company for the use of any public agency or the progress of the development of
the Project; 

                (k)   With
cooperation from the SAC Owner, arranging for and coordinating the issuance of all required governmental consents, approvals, entitlements and the like for the
development, construction, operation, leasing, marketing, management, maintenance, and/or sale of all or any portion of the Project, including, without limitation, preparing and submitting or filing
such applications, maps, plans, and reports as may be required of the Company by any governmental authority and the preparation for and participation in any and all governmental agency hearings; 

                (l)    Applying
for and procuring any and all permits and licenses, including, without limitation, grading and building permits, business licenses, and assuring that the
Contractor has a valid contractor's license, as may be required in connection with the development, construction, operation, management, maintenance, marketing, leasing, and/or sale of the Project or
any portion thereof; 

                (m)  Negotiating
on behalf of, assisting the Company in procuring, and proposing for the approval of the Management Committee, any and all financing for the development,
construction, and/or ownership of the Project or otherwise necessary or desirable in connection with the Company; 

                (n)   Supervising
the preparation, dissemination and execution of advertising, publicity, and community and press relations for the Project; 

                (o)   Collecting
and receiving all funds for the benefit of the Company, and making disbursements from Company funds to pay for all amounts due and payable as operating
expenses of the Project and/or the Company, including, without limitation, payments to contractors, subcontractors, and suppliers performing services for the Project, taxes, special assessments, and
similar obligations imposed against the Project or any other Company property, insurance, utility payments, and principal and interest payments on any financing for the Project; 

8

 

                (p)   Managing
the Company's cash assets, including, without limitation, investing Company funds temporarily in interest-bearing accounts, commercial paper, government
securities, certificates of deposit, or other similar investments as directed by Management Committee's cash management policy; 

                (q)   Enforcing
and complying (to the extent of available Company funds) with the terms and conditions of all contracts and other agreements to which the Company is
properly from time to time a party; 

                (r)   Arranging
for and coordinating the procurement and maintenance by the Company, from Company funds, of policies of insurance for the protection of the Company and the
Members as set forth in Article XI of this Agreement; 

                (s)   Supervising
and coordinating the operation, management, maintenance, and repair of the Project; 

                (t)    Supervising
the management and leasing activities of the Company, including services performed by third party brokers approved by the Management Committee and services
performed by an Affiliate of Caruso pursuant to the Management Agreement; 

                (u)   Performing
or causing to be performed the accounting functions of the Company set forth in Article IX, including, without limitation, maintaining, keeping,
and if so requested pursuant to Article IX, causing to be audited (no more than once per fiscal year) the books, records, and accounts of the Company, and preparing or
causing to be prepared any and all Company financial statements and tax returns; and 

                (v)   Performing
any and all other services and/or functions of a general and/or administrative nature required under the provisions of this Agreement or otherwise in
connection with the development, construction, operation, management, maintenance, marketing, leasing, and/or sale of the Project or any portion thereof, which services and/or functions are not
prohibited or restricted under this Agreement. 

         2.05    Major Decisions    

        Notwithstanding
the provisions of Sections 2.03 and 2.04 above, the Managing Member shall not have the right, power or authority to cause the Company to undertake any of
the following matters (collectively, the "Major Decisions") without the consent of the Management Committee: 

                (a)   [Arbitration] Amendments to Development Plan or Development
Budget.    (The initial Development Plan and Development Budget will be approved by the Management Committee upon satisfaction of the Recapture Conditions.) Approval of
any amendment to the Development Plan or Development Budget pursuant to Section 2.06(a); 

9

 

                (b)   [Arbitration] Operating Plan and Operating
Budget.    Approval of the initial and annual Operating Plan and Operating Budget, and any amendments thereof, pursuant to Section 2.06(b); 

                (c)   [Arbitration] Expenditures Outside of Approved
Budgets.    The making of any expenditure that is not included in any Development Budget or Operating Budget (subject to any variances expressly permitted under this
Agreement) or the use or application of the Master Contingency line item; 

                (d)   [Arbitration] Leases.    Approval of any commitments for
Leases or letters of intent, and Leases and Lease amendments for space which does not materially comply (i.e., annual rental less than seventy-five percent (75%) of Budget, or
tenant allowances greater than one hundred twenty-five (125%) of Budget) with the space-by-space leasing plan set forth in the Business Plan, or if such Lease would
cause the overall committed and projected Leases to not materially comply (i.e., annual rental less than ninety-seven percent (97%) of Budget, or tenant allowances greater than one hundred
three percent (103%) of Budget) with the space-by-space leasing plan set forth in the Business Plan. Notwithstanding the foregoing, with respect to any Lease requiring
Management Committee approval pursuant to this Section 2.05(d), the Managing Member may deliver a completed Lease Document Request in the form attached hereto as  Exhibit "H"
("Lease Document Request") for such proposed Lease, and
such proposed Lease shall be deemed approved if not disapproved by any member of the Management Committee within ten (10) business days of delivery of such Document Request or Lease to the
members of the Management Committee; 

                (e)   [Arbitration] Project Consultants.    The hiring and/or
termination of any architect, civil engineer, general contractor or any other material Project consultant for design and development, architecture, engineering and finance (the Members will
approve all initial material Project consultants prior to satisfaction of the Recapture Conditions); 

                (f)    [Arbitration] Insurance.    Modify, terminate, or settle
any claim in an amount equal to or greater than *** under or any insurance policies maintained by the Company, and modify, renew or terminate any insurance policies maintained by the Company; 

                (g)   [Arbitration] Tax and Accounting Returns and
Elections.    Any and all federal and state income tax returns and tax elections under the Code or the California Revenue and Taxation Code or any material changes to any
depreciation or accounting methods, change in Fiscal Year or Taxable Year, and any other material decisions regarding the treatment of any transaction for bookkeeping and/or tax purposes. 

                (h)   [Arbitration] Sale or Other Transfer of Incidental Personal
Property.    The sale, exchange, transfer, grant of any option or right of first offer or first refusal, or other disposition of all or any portion of the Company's incidental
personal property, unless such sale or other transfer is otherwise approved pursuant to the Operating Budget or with a sales price when combined with all other sales of incidental personal property
for such year is less than ***, which Major Decision shall be subject to the approval by the Management Committee in the sole and absolute discretion of each Representative, and any related dispute or
impasse shall be subject to arbitration pursuant to this Agreement; 

10

 

                (i)    [Arbitration] Refinancing and Encumbrances.    Any
refinancing for the Project or hypothecating or encumbering any of the Company's assets, and/or any modifications and/or amendments thereto (the Members will approve the terms of the initial
Construction Loan as part of the requirement for satisfaction of the Recapture Conditions); 

                (j)    [Veto] Sale or Other Transfer.    The sale, exchange,
transfer, grant of any option or right of first offer or first refusal, or other disposition of all or any portion of the assets of the Company, other than any sales of incidental personal property
otherwise approved pursuant to Section 2.05(h) above, which Major Decision shall be subject to the approval by the Management Committee in the sole and absolute discretion of each
Representative, and any related dispute or impasse shall not be subject to arbitration pursuant to this Agreement (it being agreed by the Members that a Member may only have the unilateral
right to Transfer its Interest pursuant to or to the extent permitted by Article VI below, and such Member shall not have the right to require the Company to sell all or any portion of
the Project without the unanimous consent of the Representatives of the Management Committee); 

                (k)   [Veto] Admission of New Member.    The admission
of any new member into the Company; 

                (l)    [Veto — Minority Member Major Decision]
Acquisition of Properties.    The acquisition of any property by the Company (including, without limitation, the terms and conditions for any such acquisition)
except for the acquisition of personal property as expressly approved pursuant to the Operating Budget or having a fair market value of *** or less with respect to any single transactions; 

                (m)  [Veto] Entitlements.    The procurement of, and any
material change in, any entitlements (including zoning or subdivision approval for any portion of the Project), permits and/or other governmental approvals for any Improvements and the submission, and
approval of any environmental impact report, application plan, building plan, tentative tract map, development agreement, or other material report, plan, agreement or response to the City of Arcadia
or any other governmental agency in connection with the procurement of any such entitlements, permits and/or other governmental approvals for such improvements; 

                (n)   [Veto — Minority Member Major Decision]
Contracts with Affiliates.    Except as otherwise provided in the Development Agreement, or the Management Agreement, enter into, or amend, any agreement with or
otherwise make any payment to any Member or any Affiliate of any Member; 

                (o)   [Veto] Legal Proceedings.    Institute any legal
proceedings (including arbitration) in the name of the Company or settle any such legal proceedings on behalf of the Company if the amount of litigation expenses incurred or projected to be incurred
by the Company is reasonably anticipated to exceed *** provided each member of the Management Committee agrees to act in good faith and for the good of the Company with respect to such
Major Decision; 

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                (p)   [Veto — Minority Member Major Decision]
Amendment to Agreement.    Any amendment to this Agreement (exclusive of any amendment to this Agreement necessary to reflect the admission of a substituted
member in accordance with the provisions of Article VI); 

                (q)   [Veto — Minority Member Major Decision]
Dissolution.    The dissolution of the Company (other than any dissolution of the Company permitted or required pursuant to Article VIII of this
Agreement); 

                (r)   [Veto — Minority Member Major Decision]
Confess Judgments.    Confessing a judgment against the Company in excess of * * *; 

                (s)   [Veto — Minority Member Major Decision]
Possess Company Property.    Possessing any Company property or assigning the rights of the Company in any specific property for other than the purposes set
forth herein; 

                (t)    [Veto — Minority Member Major Decision]
Merger, Consolidation or Bankruptcy.    The entry into by the Company of any merger, consolidation, liquidation, bankruptcy proceeding (including, without
limitation, of any composition with creditors and/or the filing of any proceeding under the United States Bankruptcy Code), dissolution, partnership, joint venture, limited liability company or
other material corporate transaction; 

                (u)   [Veto — Minority Member Major Decision]
Extending Credit.    The extension by the Company of credit or the making by the Company of any loans or becoming a surety, guarantor, endorser or accommodation
endorser for any person or entity; 

                (v)   [Veto — Minority Member Major Decision] Acts
in Contravention.    Any act in contravention of this Agreement; 

                (w)  [Veto — Minority Member Major Decision]
Additional Capital Contributions For Unauthorized Expenditures.    Any requirement to contribute additional capital, unless such capital contribution is required
to satisfy a Company loan or other approved obligation set forth in the Company's Development Budget or Operating Budget, as applicable (in which event, either Member shall have the right to
require such additional capital contribution); and 

                (x)   [Veto — Minority Member Major Decision]
Material Changes to the Site Plan.    Any of the following: (i) any material change to the Site Plan, (ii) any change to the Improvements which
result in a material adverse impact upon the view corridors to the Racetrack grandstand on the Racetrack Property as such view corridors are set forth on the approved Site Plan; (iii) except
for tenant required alterations, changes in the exterior design of all or any material portion of the Improvement provided that the Majority Member's approval with respect to the exterior design of
the Improvements shall be limited to the compatibility of the same with the exterior architecture of the Racetrack as it exists as of the Effective Date, or (iv) any change in the parking
areas, road network or access drives, or any reduction in the automobile parking ratio of 4.5 spaces per 1,000 square feet of retail floor area for the Improvements. 

12

 

        In
considering or approving/disapproving any Major Decision of the nature described in: 

                (1)   Sections 2.05(a)
through (i) inclusive (the "Arbitration Major Decisions") above, such Arbitration
Major Decisions shall be subject to approval by the Management Committee in the sole and absolute discretion of each Representative and the sole remedy to resolve any dispute or impasse related to
such Arbitration Major Decisions shall be the right of either Member to commence arbitration pursuant to Section 11.17 of this Agreement; and 

                (2)   Sections 2.05(j)
through (x) inclusive (the "Veto Major Decisions"), above, such Veto Major
Decisions shall be subject to approval by the Management Committee in the sole and absolute discretion of each Representative and any related dispute or impasse shall not be subject to arbitration
pursuant to this Agreement, with the result that either Member shall have the absolute right to prevent or veto any Veto Major Decisions. 

        Notwithstanding
the foregoing, in the event that a Member is a Minority Member or has a Five Million Dollar Outstanding Delinquent Contribution, then such Minority Member or Member with
a Five Million Dollar Outstanding Delinquent Contribution shall have no right to participate in the management or control of the Company, or otherwise vote or approve Major Decisions, other than the
Minority Member Major Decisions. 

         2.06    Development Plan and Operating Plan    

                (a)   Development
Plan.    The Members have approved the preliminary business and development plan
(the "Preliminary Development Plan") for the development and construction of the Improvements dated October 29, 2004, as supplemented by a
site plan which has been initialed by the parties on or after the Effective Date, a copy of which is attached hereto as Exhibit
"E." The Preliminary Development Plan includes, without limitation, (i) a preliminary pro forma pre-development budget
("Preliminary Pre-Development Budget") containing a current return on cost and a cost breakdown setting forth the estimated
Pre-Development Costs ("Pre-Development Costs") necessary to obtain the Entitlements and satisfy the Recapture Conditions. Prior
to the date that the Recapture Conditions are satisfied, and as a condition to such satisfaction of the Recapture Conditions, the Members shall approve a final Development Plan
("Development Plan") which shall include: (i) a pro forma development budget (the "Development
Budget") containing a cost breakdown setting forth the estimated development and construction costs that will be incurred by the Company in connection with the development and
construction of the Improvements, together with projected revenues, operating costs and cash flows for the applicable period which Development Budget shall include a contingency line item of ten
percent (10%) in excess of the hard costs identified in the Development Budget ("Contingency"); (ii) a leasing plan
("Leasing Plan") setting forth in reasonable detail the following items: (A) a description of the proposed size of, type of tenants for and
proforma rent for each tenant space and tenant improvement allowances; (B) a statement of projected operating costs, revenues and cash flows for the first two (2) years following the
Opening, and (C) a merchandising plan incorporating a description of the Project's merchandising strategy, i.e., identifying target consumer and retailer markets; (iii) the artist
drawings and drawings depicting architectural detail in a manner similar to the level of detail provided in the Preliminary Development Plan for the development and construction of the Improvements
(the "Schematic Plans and Specifications"); (iv) site plan for the Improvements (the "Site
Plan") showing the footprint of all buildings, parking, drives and points of ingress and egress and showing the integration of the Improvements with the Racetrack Property;
(v) a time schedule for the completion of the Improvements (the "Construction Schedule"); and (vi) a staffing plan identifying all
key members of the Project team along with a description of the role to be played by each such member and identification of key Project consultants. The Managing Member shall have the right and
authority to incur costs or expenditures for any of the items set forth in the approved Development Budget without the approval of the Management Committee, and to apply line item cost savings and the
Contingency line item to any other line items or to unanticipated expenditures not included in the Development Budget in accordance with policies approved by the Management Committee; provided,
however, that the Managing Member shall promptly deliver written notice to the Management Committee whenever a specific line item in the Development Budget is exceeded or a line item cost savings or
Contingency is applied, which notice shall be delivered with the normal monthly reporting date for monthly reports. In addition, the Managing Member shall have the right, power and authority without
the consent of the other Member to incur costs or expenditures in such amounts as the Managing Member deems reasonably necessary for the preservation of the assets of the Company if under the
circumstances in the good faith judgment of the Managing Member, there exists an emergency situation requiring an immediate expenditure of funds which should not reasonably be delayed until the
approval of the Management Committee is obtained; provided that the Managing Member promptly delivers written notice to Santa Anita within five (5) days of such emergency, which notice shall
describe the nature of the emergency and the amount of funds expended as a result of such emergency. 

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                (b)   Operating
Plan.    The Managing Member (or its designee) shall prepare and deliver to the Management Committee an annual
Operating Plan ("Operating Plan") and Operating Budget ("Operating Budget") for the Improvements. The
initial draft of the Operating Plan and Operating Budget shall be delivered no later than one hundred eighty (180) days prior to the Opening, and shall be updated by the Managing Member no
later than sixty (60) days prior to the Opening and the Management Committee will provide comments to the Managing Member within thirty (30) days of its receipt. Within ten
(10) days following the date of Management Committee's comments, the Managing Member shall submit the final initial Operating Budget to the Management Committee for approval. For each fiscal
year of the Company thereafter, the Managing Member shall deliver to the Management Committee an annual Operating Plan and Operating Budget no later than October 15 prior to the commencement of
such fiscal year. The Management Committee shall provide its comments to the Managing Member on the draft Operating Plan and Operating Budget on or before November 1. On or before
November 15, the Managing Member shall submit a final Operating Plan and Operating Budget for the ensuing fiscal year incorporating the comments and changes requested by the Management
Committee. The Management Committee shall provide its approval (or its disapproval) of the final Operating Plan and Operating Budget on or before December 1. Each Operating Plan shall be
required to be approved by the Management Committee and shall set forth on a detailed itemized basis for the Company: (i) all receipts projected for the period of such Operating Budget and all
expenses, by category, for the Company (including, without limitation, all operating and capital expenditures projected to be incurred during such period); (ii) the anticipated reserves
projected to be required for such period; (iii) a projection setting forth the estimated annual revenues, expenses and net operating income (or loss) expected to be incurred for the
ensuing five (5) years for the Company, which shall be updated to compare the actual results to the projected results set forth in the prior Operating Budget, provided that the five
(5) year projection shall be updated on an annual basis only; (iv) a monthly income statement prepared in accordance with generally accepted accounting principles
("GAAP"); (v) a monthly cash flow statement separately reflecting cash flow from sales activities and cash flow from operating activities;
(vi) a schedule reflecting monthly contributions by and Cash Flow distributions to the Members; (vii) the Leasing Plan for the Project which shall set forth the rent and other material
terms for the lease of each vacant space (or any space reasonably anticipated to be vacant) within the Project; (viii) a monthly capital expenditures budget for the ensuing subsequent
Fiscal Year and a quarterly schedule reflecting the estimated capital expenditures for the ensuing Fiscal Year (which shall be reasonably correct in all material respects); (ix) the Property
Manager's marketing plan for the Project; (x) the type and coverage level of all insurance for the Project to be maintained during such Fiscal Year; and (xi) a summary of all material
agreements relating to the Project. The Operating Plan (including, without limitation, the income statement, cash flow statement and projected development and construction costs) shall be updated on a
monthly basis to reflect (i) the actual results of the operations of the Company from the beginning of the Fiscal Year through the last complete calendar month ending prior to the month in
which such updated plan is provided; and (ii) updated projections of income/cash flow through the end of the Fiscal Year. If any material changes to the Operating Plan are required, then the
Managing Member shall deliver an updated Operating Plan to the other Members within forty-five (45) days after the Managing Member reasonably determines that such material changes
are required, which approval shall be a Major Decision pursuant to Section 2.05(b). The Operating Plan shall also include a detailed description of such other information, contracts, agreements
and other matters reasonably necessary to inform the Members of all matters relevant to the operation, management, and leasing of the Project or as may be reasonably requested by any Representative of
the Management Committee, including, but not limited to, the general business strategy for the operation of the Project, and its, security, maintenance, customer service, marketing/promotion and other
operating programs and integration with the Race Track Project. The Managing Member shall have the right and authority to incur costs or expenditures for any of the items set forth in an approved
Operating Budget without the approval of the Management Committee. In addition, the Managing Member shall have the right, power and authority without the consent of the other Member to incur costs or
expenditures in such amounts as the Managing Member deems reasonably necessary for the preservation of the assets of the Company if under the circumstances in the good faith judgment of the Managing
Member, there exists an emergency situation requiring an immediate expenditure of funds which should not reasonably be delayed until the approval of the Management Committee is obtained. 

14

 

         2.07    Notification to the Member of Certain Matters    

        The
Managing Member shall include with each quarterly report a reasonable description of each of the following items (in each case to the extent the Managing Member or its
Affiliates has actual knowledge): 

                (a)   Defects
and Deviations.    Any defect or deviation (other than minor defects or deviations which can be remediated or cured at a
cost not to exceed One Hundred Thousand Dollars ($100,000) and do not result in any overall delay in the construction schedule) in the construction of the Improvements from the plans and
specifications for such improvements or any material breach by any contractor, major sub-contractor, materials supplier, vendor or consultant for the Company; 

15

 

                (b)   Litigation.    Any
litigation or claims relating to the Company and/or the Project, including a summary description of the status
of such litigation, the amount of expenses incurred to-date by the Company and the company's budget for future expenses projected to be incurred with respect to such action; 

                (c)   Disputes.    Any
material dispute between the Company and any governmental agency or any third party relating to any part of the
Project including, without limitation, any material disputes with any tenants of the Project; 

                (d)   Governmental
Order.    Any governmental order, ruling or change in zoning or other governmental action that could reasonably be
expected to materially impact the successful or timely construction, if applicable, of the Improvements or any other future improvements to be constructed by the Company; 

                (e)   Environmental
Matters.    Any environmental matter or condition that could reasonably be expected to have a material adverse
effect upon the Company and/or the Project; 

                (f)    Construction
Delays.    Any significant delay in the construction of the Improvements (or any other improvements to be
constructed by the Company) caused by any Force Majeure or other event; 

                (g)   Condemnation.    Any
threat or commencement of proceedings in condemnation or eminent domain relating to all or a material
portion of the Project; 

                (h)   Lapse
of Insurance.    Any lapse or change in any insurance policies maintained by the Company that could reasonably be expected
to have a material adverse effect upon the Company and/or the Project; 

                (i)    Notice
of Default.    Any written notice of default or breach received from any lender or tenant; 

                (j)    Recordation
of Lien.    Any recorded mechanic's lien or claim made against the Project (excluding a notice of intent or other
preliminary notices); 

                (k)   Material
Change in Operating Plan, Pre-Development Budget, Development Budget or Operating Budget.    Any fact or
circumstance that may render the Operating Plan, the Pre-Development Budget, the Development Budget or Operating Budget materially inaccurate; 

                (l)    Purchase
Offers.    Any written bona fide offer to purchase all or any material portion of the assets of
the Company; 

                (m)  Other
Material Events.    Any other event or condition that the Managing Member reasonably believes could cause a material
adverse change in the financial condition of the Company or the construction, leasing, operation or sale of the Project. 

16

   
         2.08    Compensation    

                (a)   Development
Agreement.    As consideration for providing development services in connection with the Project, Caruso
(or Affiliate) shall be paid a development fee in an amount equal to *** of hard costs ("Development Fee") pursuant to the terms of a separate
development agreement ("Development Agreement") entered into between the Company and Caruso (or Affiliate) in the form attached hereto as  Exhibit "F."

                (b)   Construction
Management Fee.    As consideration for providing construction management services in connection with the Project,
Caruso (or Affiliate) shall be paid a construction management fee in an amount equal to *** of hard costs ("Construction Management Fee")
pursuant to the terms of the Development Agreement. 

                (c)   Retail
Management Agreement.    As consideration for providing property management and leasing services for the Project on and
after the Opening, Caruso (or Affiliate) shall be paid a retail management fee in the amount of *** of all Commissionable Revenue ("Retail Management
Fee") and a retail leasing fee in the amount of *** per square foot of leased space, *** per square foot of leased space renewals, and a mutually agreed upon
market rate leasing fee for carts ("Retail Leasing Fee"), payable pursuant to the terms of the management agreement ("Retail Management Agreement")
entered into between the Company and Caruso (or Affiliate) in the form attached hereto as Exhibit "G."

                (d)   MEC
Retail Asset Management Fee.    Without the obligation to perform any asset or property management services of any kind, MEC
(or Affiliate) shall be paid a retail asset management fee in the amount of *** of all Commissionable Revenue ("MEC Retail Asset Management
Fee"). The MEC Retail Management Fee shall be paid upon the same terms and conditions as the Retail Management Fee payable to Caruso. 

                (e)   Residential
Management Agreement.    In the event that there is a residential component to the Project, as consideration for
providing residential property management and leasing services for the Project on or after the opening, Caruso (or Affiliate) shall be paid a residential management and leasing fee in the
amount of *** of gross residential income collected ("Residential Management Fee") pursuant to the terms of the Residential Management Agreement
("Residential Management Agreement") to be entered into between the Company and Caruso (or Affiliate) in a mutually approved form; provided,
however, that in the event that a third party manager is used to manage the residential project, then the Residential Management Fee shall not be paid, but Caruso (or Affiliate) shall be paid a
residential asset management fee in the amount of *** of gross residential income collected ("Residential Asset Management Fee") pursuant to the terms
of the Residential Asset Management Agreement ("Residential Asset Management Agreement") to be entered into between the Company and Caruso in a mutually approved form. 

                (f)    MEC
Residential Asset Management Fee.    In the event that there is a residential component to the Project, without the
requirement of providing any asset or property residential management services of any kind, MEC (or Affiliate) shall be paid a residential asset management fee ("MEC
Residential Asset Management Fee") in the amount of *** of all gross residential income collected on the same terms and conditions as the Residential Management Fee is payable
to Caruso. 

17

 

         2.09    Treatment of Payments    

        For
financial and income tax reporting purposes, any and all fees paid by the Company to any Member and/or any Affiliate thereof pursuant to Section 2.08 shall be treated as
expenses of the Company and, if paid to any Member, as guaranteed payments within the meaning of Section 707(c) of the Code. To the extent all or any portion of any fee is not paid in full
prior to the liquidation of the Company, such unpaid portion of such fee shall constitute a debt of the Company payable upon such liquidation. The Members acknowledge and agree that any fee paid to
any Member (and/or any Affiliate thereof) in accordance with the terms of any agreement (including, without limitation, this Agreement) shall constitute the sole and exclusive property of such
recipient Member (and/or such Affiliate) and the other Members, shall not have any rights thereto or interests therein. 

         2.10    Liability and Indemnity    

        No
Member, Affiliate of a Member, Representative, officer, authorized person, or other person or entity approved by the Management Committee (collectively, the
"Covered Persons") shall be liable or accountable in damages or otherwise to the Company or to the other Member for any error of judgment or any mistake
of fact or law or for anything that such Covered Person may do or refrain from doing hereafter, except in the case of the Managing Member's gross negligence, fraud or willful misconduct except as
specifically provided in the Development Agreement, the Management Agreement or any other agreement with the Company. To the maximum extent permitted by law, the Company hereby indemnifies and agrees
to defend, protect and hold each Covered Person wholly harmless from and against any loss, expense or damage (including, without limitation, attorneys' fees and costs of litigation, investigation and
appeal) suffered by such Covered Person arising out of or relating to the Company, including, without limitation, for any mistake or error in judgment or for any act or omission reasonably believed by
such Covered Person to be within the scope of the authority under this Agreement; provided, however, the Company shall not indemnify, defend, protect or hold harmless any Covered Person from any loss,
expense or damage which such Covered Person may suffer as a result of such Covered Person's fraud, willful misconduct or gross negligence in performing or in failing to perform such Covered Person's
duties hereunder. 

         2.11    Reimbursement and Fees    

        Except
as provided in this Agreement, none of the Members (or their respective Affiliates and/or other representatives) shall be paid any compensation for rendering services to
the Company. To the extent each Member is authorized by an applicable approved Budget to be reimbursed for any ordinary and necessary third-party out-of-pocket expenses
incurred by such Member on behalf of the Company, such reimbursements shall be without reduction to such Member's Capital Account or Unreturned Contribution Account; provided, however, the foregoing
shall not be construed to authorize reimbursement of a Member for any Pre-Development Costs incurred by such Member which are treated as capital contributions to the Company pursuant to
Section 3.01. 

18

 

         2.12    Limited Liability    

        Except
as otherwise provided by the Delaware Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of
the Company. 

         2.13    Removal of the Managing Member    

        Caruso
(or any successor Managing Member) may be removed as the Managing Member as a result of the occurrence of a Default Event with respect to the Managing Member following the
delivery of ten (10) days' prior written notice ("Removal Notice") from the other Member to the Managing Member, specifying in reasonable detail
the Default Event giving rise to the removal. The term "Default Event" means (i) an Event of Default, or (ii) the occurrence of any of the
Buy/Sell Events set forth in Section 7.01. Upon the removal of the Managing Member in accordance with this Section 2.13, (i) Caruso shall be relieved of all of its duties and
obligations as Managing Member of the Company, (ii) Santa Anita shall have the right to designate a replacement Managing Member (which may be Santa Anita or an Affiliate of Santa Anita), and
(iii) such replacement Managing Member shall assume and perform all of the rights, duties and obligations for which the Managing Member was relieved. 

         2.14    Authority with Respect to Caruso Affiliate Agreements    

        Notwithstanding
the provisions of Article II, and elsewhere in this Agreement, Santa Anita, acting alone, shall have the sole right, power and authority, in its sole and absolute
discretion: (i) to make any and all decisions on behalf of the Company with respect to any amendment, modification, and, subject to the Company's rights under the terms of the Caruso Affiliate
Agreements, the right to effect rescission and/or termination of any Caruso Affiliate Agreement; provided that Caruso may grant any consent on behalf of the Company to approve leases or make
expenditures to the extent that such approval or consent does not constitute a Major Decision; (ii) to declare any default under any Caruso Affiliate Agreement; (iii) to institute,
settle and/or compromise any claim under any Caruso Affiliate Agreement; (iv) to waive any rights of the Company against any Affiliate of any Caruso Affiliate; (v) to consent to the
assignment of any rights and/or the delegation of any duties by any Affiliate of any Caruso Affiliate not permitted under any Caruso Affiliate Agreement; (vi) upon any termination under any
Caruso Affiliate Agreement, to designate a replacement development manager or property manager (which may be Santa Anita or an affiliate of Santa Anita) upon terms and conditions identical to those
provided in the applicable Caruso Affiliate Agreement, or if the replacement development manager or property manager is not Santa Anita or an Affiliate of Santa Anita as otherwise determined in good
faith by Santa Anita; and (vii) to execute and deliver, on behalf of the Company any document or agreement effectuating any of the foregoing. In addition, if and only if: (x) the Caruso
Affiliate Agreements are terminated due to voluntary termination or, in the case of the Development Agreement, the "Developer" (as such term is defined in the Development Agreement) ceases to
be owned and controlled by Rick J. Caruso and his family pursuant to Section 13.01(g) of the Development Agreement, and/or, in the case of the Management Agreement, the expiration of the term
of the Management Agreement, or the "Manager" (as such term is defined in the Management Agreement) ceases to be owned and controlled by Rick J. Caruso and his family pursuant to
Section 16.02(g) of the Management Agreement, and (y) Santa Anita or an Affiliate of Santa Anita enters into a replacement development agreement and/or management agreement as permitted
pursuant to clause (vi) above, then in such event the rights of the parties under the preceding sentence shall be reversed (with the result that references to "Santa Anita" shall be deemed to
refer to "Caruso", and vice versa). 

19

 
ARTICLE III  

 MEMBERS' CONTRIBUTIONS TO COMPANY  

         3.01    Initial Contributions    

        Each
Member has incurred certain jointly approved Pre-Development Costs on behalf of the Company prior to the Effective Date. In addition, each Member shall contribute to the
capital of the Company fifty percent (50%) of all additional capital required from time to time pursuant to the approved Pre-Development Budget. Such Pre-Development Costs
incurred and paid by each Member (to the extent approved by both Members as otherwise set forth in the Pre-Development Budget) shall be treated as contributions to the capital of
the Company and shall be credited to the Capital Account and Unreturned Contribution Account of each Member as of the Effective Date. In addition, each Member shall contribute to the capital of the
Company fifty percent (50%) of any and all equity amounts required to (i) fund expenditures approved in the current Development Budget or Operating Budget, as applicable; and (ii) to
fund the Construction Loan for the Improvements. Such amounts, if any, shall be contributed on the dates called for under the Construction Loan or otherwise required pursuant to the approved
Development Budget or Operating Budget, as applicable and shall be credited to the Capital Account and Unreturned Contribution Account of each Member as and when any such contribution is made to
the Company. 

         3.02    Construction Financing    

        The
Members intend to obtain one (1) or more loans (collectively, the "Construction Loan") from one or more third-party
institutional lender(s) (collectively, the "Lender") to finance the construction of the Improvements. It is the intent of both Members to obtain
construction/mini-permanent financing from third-party institutional sources in an amount equal to *** of the costs of the development of the Improvements. The Managing Member shall be
required to use its commercially reasonable efforts to obtain the Construction Loan on commercially reasonable terms and conditions that are approved by the Management Committee. Except as otherwise
agreed to by the Members, the Construction Loan shall be secured by an unsubordinated deed of trust encumbering the Ground Leasehold estate only (and not the fee estate) and shall be expressly
nonrecourse to the Members (and their Affiliates) provided that the Members hereby agree to provide one (1) or more completion guarantees, repayment guarantees, and/or other guarantees,
indemnitees or other agreements on terms reasonably required by the Lender(s) and approved by the Members on or before the date that the Recapture Conditions are satisfied. Any Member and/or Affiliate
that provides a Recourse Document (as defined in Section 3.05) will have indemnity and contribution rights as described in Section 3.05 below. 

20

 

         3.03    Additional Contributions    

        If
either Member in good faith determines that additional funds are necessary for the Company to meet its current or projected financial requirements pursuant to the currently approved
Development Budget or Operating Budget, or are otherwise required to pay on a current basis the Company's previously approved Loan(s) or to cause such approved Loan(s) to remain "in balance", then
either Member shall give written notice ("Contribution Notice") of such cash deficit to each Member, which notice shall summarize, with reasonable
particularity, the Company's actual and projected cash obligations, cash on hand, and projected sources and amounts of future Cash Flow and a contribution date ("Contribution
Date") (which shall not be less than ten (10) business days following the effective date of such notice (or such shorter time if required by the Company's Lender,
but in no event less than five (5) business days following the effective date of such
notice)) upon which each Member shall have the obligation, to contribute to the capital of the Company, in cash, such Member's Percentage Interest share of such cash deficit. Any and all amounts
contributed to the capital of the Company by any Member pursuant to this Section 3.03 shall be credited to the Capital Account and the Unreturned Contribution Account of such Member as and when
any such contribution is made. 

         3.04    Remedy for Failure to Contribute Capital    

        If
any Member (the "Non-Contributing Member") fails to contribute timely all or any portion of the additional capital
such Member is required to contribute pursuant to Section 3.03 (the "Delinquent Contribution"), and provided that the other Member
(the "Contributing Member") has timely contributed to the capital of the Company all of the capital required to be contributed by such
Contributing Member pursuant to Section 3.03 (with respect to that particular notice and capital call), then such Contributing Member, as its sole and exclusive remedies, shall have the right
to: (1) require that the Company return to the Contributing Member such additional capital contributed by the Contributing Member, (2) treat such Contributing Member's share of
additional capital contributed to the Company as the total amount of required capital, and select one (1) or more of the following options in accordance with the terms set forth below in
Section 3.04(a) or 3.04(b) with respect to Percentage Interest share of the Non-Contributing Member of such reduced additional capital deemed required, or
(3) contribute the full amount of the Delinquent Contribution and select one (1) or more of the following options in accordance with the terms set forth below in Section 3.04(a)
or 3.04(b): 

                (a)   Loan
Remedy.    The Contributing Member may advance to the Company, in cash, within thirty (30) days following the
Contribution Date, an amount equal to the Delinquent Contribution, and such advance shall be treated as a non-recourse loan ("Default Loan")
by the Contributing Member(s) to the Non-Contributing Member, bearing interest at a rate equal to the lesser of (i) the Prime Rate plus four (4) percentage points, adjusted
concurrently with any adjustments to such rate and compounded annually, or (ii) the maximum, nonusurious rate then permitted by law for such loans. Subject to Section 7.06, the initial
term of each Default Loan shall be due and payable in full twelve (12) months from the date advanced (or, if earlier, upon the dissolution of the Company); provided, however, that if the
Non-Contributing Member has a Five Million Dollar Outstanding Delinquent Contribution, or more, then on or after such date the maturity of all Default Loans shall thereafter be reduced to
thirty (30) days following the date that such cumulative Delinquent Contributions exceeds the Five Million Dollar Outstanding Delinquent Contribution (with the result that the Contributing
Member may elect pursuant to the following paragraph of this Section 3.04(a) the remedy provided in Section 3.04(b) with respect to such Default Loan). As of the effective date of any
such advance of a Default Loan, the Capital Account and the Unreturned Contribution Account of the Non-Contributing Member shall be credited with an amount equal to the original principal
balance of the Default Loan advanced by the Contributing Member(s) to the Non-Contributing Member. Notwithstanding the provisions of Articles V and VIII, until any and all
Default Loans advanced to the Non-Contributing Member are repaid in full, the Non-Contributing Member shall draw no further distributions from the Company, and all cash or
property otherwise distributable with respect to the Non-Contributing Member's Interest pursuant to Articles V and VIII, shall be distributed to the Contributing Member(s) as
a reduction of the outstanding balance of (together with all accrued, unpaid interest thereon) any and all such Default Loans, with such funds being applied first to reduce any and all interest
accrued on such Default Loans and then to reduce the principal amount thereof. Any amounts so applied shall be treated, for all purposes under this Agreement, as having actually been distributed to
the Non-Contributing Member pursuant to Section 5.01 and applied by the Non-Contributing Member to repay such outstanding Default Loan(s). 

21

 

        To
secure the repayment of any and all Default Loans made on behalf of a Non-Contributing Member, such Non-Contributing Member hereby grants a security interest
in favor of the Contributing Member in and to such Non-Contributing Member's Interest in the Company, and hereby irrevocably appoints the Contributing Member, and any of the Contributing
Member's respective representatives, agents, officers, partners, members or employees, as such Non-Contributing Member's attorney-in-fact, with full power to
prepare and execute a commercially reasonable pledge agreement and UCC-1 financing statement, and to the extent of any change in law such other documents as may be reasonably
required to properly perfect a security interest with respect to such Default Loan(s). The Contributing Member is also authorized to cause the Company to issue certificates (collectively, the
"Certificates") evidencing the Members' respective Interests in the Company (in such form as is determined in the sole and absolute discretion of
the Contributing Members) and is further authorized to transfer possession and control of any such Certificate of the Non-Contributing Member to the Contributing Member on behalf of such
Non-Contributing Member. The Certificates shall constitute securities for purposes of Article 8 of the Delaware version of the Uniform Commercial Code. 

        If,
upon the maturity of a Default Loan (taking into account any agreed upon extensions thereof), any principal thereof and/or accrued interest thereon remains outstanding, then the
Contributing Member may elect any one (1) of the following options: (i) to renew such Default Loan(s) (or portion thereof) pursuant to the terms and provisions of this
Section 3.04(a) or (ii) to contribute all or any portion of such outstanding principal of, and accrued interest on, such Default Loan (or portion thereof) to the capital of the
Company in the manner described in Section 3.04(b) below. The Contributing Member may elect any of the options set forth in the immediately preceding sentence by giving written notice of such
election to the Non-Contributing Member within thirty (30) days following such maturity date, which notice shall be a dilution notice ("Dilution
Notice") if such Contributing Member elects the dilution option. The Non-Contributing Member may at any time within ten (10) days of receipt of notice of the
Dilution Notice, elect to repay such Default Loan. Failure of the Contributing Member to timely give such Dilution Notice to the Non-Contributing Member shall be deemed to constitute an
election to renew such Default Loan(s) for an additional term of one (1) month on the terms set forth herein. 

22

 

                (b)   Dilution.    The
Contributing Member may contribute to the Company, in cash, within thirty (30) days following the
Contribution Date, an amount equal to the Delinquent Contribution, and the Contributing Member's Capital Account and Unreturned Contribution Account shall each be credited with the amount so
contributed by such Contributing Member. Upon the maturity of a Default Loan that is not fully repaid on or before the maturity thereof, each Contributing Member advancing such Default Loan
(or portion thereof) also may contribute to the capital of the Company, in accordance with the provisions of Section 3.04(a) above, all or any portion of the outstanding principal of
and/or accrued, unpaid interest on such Default Loan (or portion thereof) previously advanced by such Contributing Member that is not repaid prior to the maturity thereof, and (i) the
amount of such outstanding principal and/or interest so contributed shall be deemed repaid and satisfied, (ii) the Non-Contributing Member shall be deemed to have received a
distribution equal to the amount of such outstanding principal so contributed and each of the Capital Account and Unreturned Contribution Account of the Non-Contributing Member shall be
reduced by such amount, and (iii) the Capital Account and Unreturned Contribution Account of the Contributing Member shall be increased by the amount of the reduction to the
Non-Contributing Member's Capital Account and Unreturned Contribution Account pursuant to clause (ii) set forth immediately above. 

        Upon
any contribution by any Contributing Member pursuant to the foregoing provisions of this Section 3.03(b), (i) the Percentage Interest of the
Non-Contributing Member shall be decreased by the Dilution Percentage and the Percentage Interest of the Contributing Member shall be increased by the Dilution Percentage. The
"Dilution Percentage" shall equal the amount expressed in percentage points calculated based upon the following formula: 

	

Dilution Percentage=200%×	 	            Delinquent Contribution by the

            applicable Contributing Member

                                         
                                   
	 	 	Aggregate Amount of the Members' Equity

        For
purposes of determining the Dilution Percentage pursuant to this Section 3.04(b), the aggregate amount of Members' equity ("Members'
Equity") shall be determined in accordance with the following procedures: 

	(i)
	If
the Contributing Member contributes the Delinquent Contribution and makes the election to dilute prior to the Opening, then the Members' Equity shall mean the
cumulative total amount of the balances standing in all of the Members' respective Unreturned Contribution Accounts; and 

23

 

	(ii)
	If
the Contributing Member contributes the Delinquent Contribution and makes the election to dilute on or after the Opening, then the aggregate amount of the Members'
Equity shall be determined in accordance with the following appraisal procedure. Within fifteen (15) days after determination of the Appraised Value of the assets of the Company, as determined
pursuant to the procedures set forth in Sections 7.03(a) and 7.03(b) (for purposes of implementing the procedures set forth in Section 7.03(a), both the Contributing
Member(s) and the Non-Contributing Member(s) shall have the right to deliver a written notice requesting an appraisal ("Appraisal Notice")
within thirty (30) days following the Dilution Notice, the accountants regularly employed by the Company shall determine the amount of cash which would be distributed to the Members pursuant to
Section 8.02 if (i) the assets of the Company were sold for the Appraised Value thereof as of the Effective Date of the Dilution Notice, (ii) the liabilities of the Company were
liquidated pursuant to Section 8.02, (iii) the a reasonable reserve for any contingent, conditional or unmatured liabilities or obligations of the Company was established by the
Contributing Member, as applicable, and (iv) the Company made its required distributions to the Members pursuant to Section 8.02. Upon such determination, such accountants shall give
each Member written notice ("Accountant's Notice") thereof. Such determination by such accountants of such amounts (including all components thereof)
shall be deemed conclusive, absent any material computational error. One hundred percent (100%) of the aggregate amount which would be distributed to the Members pursuant to Section 8.02 shall
be deemed to be the "Members' Equity". 

        The
Non-Contributing Member shall pay for the services of the accountant and the services of all appraisers appointed pursuant to this Section 3.03(c) (whether one
(1) or three (3) appraisers are selected) (collectively, the "Appraisal Costs"). 

        If
the Non-Contributing Member fails to pay all or any portion of the Appraisal Costs associated with determining the Appraised Value, then, in order to calculate the amount
(expressed in percentage points) by which such Non-Contributing Member's Percentage Interest shall be decreased pursuant to the provisions of Section 3.03(b), the amount
representing the Delinquent Contribution (or the outstanding principal of, and accrued interest on, a Member Loan, as the case may be) to be used in the calculation set forth in
Section 3.03(b) shall be increased by the balance of such unpaid Appraisal Costs. 

24

 

        The
application of the provisions of this Section 3.04(b) are illustrated by the following example: Assume that (i) the aggregate Members' Equity of all of the Members is
equal to Eighty Million Dollars ($80,000,000), (ii) an additional contribution of Five Million Dollars ($5,000,000) is required to be contributed by the Members in proportion to their
respective Contribution Percentages pursuant to Section 3.02, (iii) the Percentage Interest of Caruso and of Santa Anita is each equal to fifty percent (50%), (iv) Caruso fails to
contribute its fifty percent (50%) share of such contribution of Two Million Five Hundred Thousand Dollars ($2,500,000) (i.e., 50% of $5,000,000), and (v) Santa Anita contributed its
entire fifty percent (50%) share of such contribution of Two Million Five Hundred Thousand Dollars ($2,500,000) (i.e., 50% of $5,000,000) and the Delinquent Contribution of Two Million Five
Hundred Thousand Dollars ($2,500,000) to the capital of the Company on behalf of Caruso pursuant to this Section 3.04(b). By operation of this Section 3.04(b), the Dilution Percentage
for Caruso would be equal to five and 88/100ths (5.88) percentage points as calculated in accordance with the following formula: 

	5.88%=200%×	 	    $2,500,000    

    $85,000,000

        The
Percentage Interest of Caruso would therefore be reduced by five and 88/100ths (5.88) percentage points from fifty percent (50%) to forty-four and 12/100ths percent
(44.12%), and the Percentage Interest of Santa Anita would be increased by a like amount of percentage points from fifty percent (50%) to fifty-five and 88/100ths percent (55.88%). 

                (c)   Election
of Remedy.    The Contributing Member shall determine which of the options set forth in Sections 3.04(a)
or 3.04(b) are to be exercised by the Contributing Member with respect to each Delinquent Contribution. Subject to the last paragraph of Section 3.04(a), the Contributing Member may not
elect to exercise more than one (1) of the remedies set forth in Sections 3.04(a) or 3.04(b). If the Contributing Member advances any amount to the Company pursuant to this
Section 3.04 but fails to specify which of the foregoing options the Contributing Member has elected within ten (10) days after the effective date that the Contributing Member makes such
advance, then such Contributing Member shall be deemed to have elected the option set forth in Section 3.04(a) above with respect to such advance. 

                (d)   Adjustments
to Percentage Interests.    Any and all adjustments to the Members' respective Percentage Interests pursuant to
Section 3.04(b) shall be rounded to the nearest one one-hundredth percentage point (.01%) and the Contributing Member shall not succeed to all or any portion of the Capital Account
or Unreturned Contribution Account of the Non-Contributing Member as the result of any such adjustment. In addition, notwithstanding any provision contained in this Article III, the
Non-Contributing Member's Percentage Interest shall in no event be reduced below one one-hundredth percent (.01%) (the "Minimum Interest
Percentage") by operation of Section 3.04(b). 

                (e)   Right
to Remove Caruso as Managing Member.    Notwithstanding any other term of this Agreement, and in the event that
Caruso is the Non-Contributing Member, so long as Caruso has failed to contribute a Five Million Dollar Outstanding Delinquent Contribution or more, Santa Anita shall have the right,
exercisable at any time following ten (10) business days notice to Caruso (and provided that Caruso has not repaid all or any portion of the outstanding Default Loan(s) within such ten
(10) day period with the result that Caruso no longer has a Five Million Dollar Outstanding Delinquent Contribution), to remove Caruso as Managing Member and substitute Santa Anita or its
nominee as Managing Member, and to terminate on behalf of the Company the Development Agreement and/or Management Agreement, without penalty to Santa Anita, the Company or any of their respective
Affiliates. 

25

 

                (f)    Loss
of Voting Rights.    Notwithstanding any other term of this Agreement, if a Non-Contributing Member's Percentage
Interest has been reduced to twenty-five percent (25%) or less (a "Minority Member"), or has a Five Million Dollar Outstanding
Delinquent Contribution, so long as such Non-Contributing Member remains a Minority Member, such Minority Member or Member with a Five Million Dollar Outstanding Delinquent Contribution
shall thereafter have no right to participate in the management or control of the Company, or otherwise vote or approve Major Decisions, other than the Minority Member Major Decisions, as
defined herein. 

                (g)   Enforceability
of Provisions.    THE MEMBERS ACKNOWLEDGE AND AGREE THAT, UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE HEREOF,
THE REMEDIES PROVIDED FOR IN THIS SECTION 3.04 ARE FAIR AND REASONABLE AND DO NOT CONSTITUTE A FORFEITURE OR PENALTY. THE MEMBERS FURTHER ACKNOWLEDGE AND AGREE THAT THEY HAVE BEEN PROVIDED WITH
THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL WITH RESPECT TO THE PROVISIONS OF THIS SECTION 3.04 AND AGREE AND COVENANT NOT TO CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH REMEDY
AS A PENALTY, FORFEITURE OR OTHERWISE IN ANY COURT OF LAW AND/OR IN ANY ARBITRATION PROCEEDING (OR OTHERWISE). 

         3.05    Affiliate Liability and Indemnification    

        The
Company hereby agrees to indemnify, defend, protect and hold each Member and/or any Affiliate and their representatives, divisions, subsidiaries, partners, employees, officers,
directors, shareholders, agents, representatives and attorneys and its and all of their respective successors and assigns thereof (collectively, the
"Guarantors" and individually, a "Guarantor") that provides any non-recourse
carve-out guaranty, indemnity and/or other guaranties, indemnities, documents or other agreements that may impose recourse liability upon one (1) or more of the Guarantors
(collectively, a "Recourse Document") wholly harmless from and against any claim, loss, cost, expense, damage or liability incurred by any such
Guarantor as a result of such Recourse Document that is not reimbursed or otherwise satisfied by the Company including, without limitation, attorneys' and expert witness fees and costs; provided,
however, the foregoing indemnification obligation shall not extend or apply to any claim, loss, cost, expense, damage or liability incurred by any such Guarantor resulting from the fraud, willful
misconduct, gross negligence, misappropriation of funds, or other intentional wrongful act or intentional wrongful omission by such Guarantor. Either Member may require the Members to make capital
contributions pursuant to Section 3.02 for the Company to satisfy the foregoing indemnification obligation. In addition, the Members shall enter into one (1) or more contribution
and/or indemnity agreements prior to the date that any Recourse Documents are executed to ensure that any liability for which the Guarantors are entitled to be indemnified under this
Section 3.05 is borne by the Members in proportion to their respective Percentage Interests. 

        The
Members acknowledge and agree that the Guarantors (but no other third parties) are third-party beneficiaries of the foregoing provisions of this Section 3.05, and, as
such, the Guarantors have the right, power and authority to enforce the provisions of this Section 3.05. 

26

 

         3.06    Capital Contributions in General    

        Except
as otherwise expressly provided in this Agreement or as otherwise agreed to in writing by all of the Members (i) no part of the contributions of any Member to the capital
of the Company may be withdrawn by such Member, (ii) no Member shall be entitled to receive interest on such Member's contributions to the capital of the Company, (iii) no Member shall
have the right to demand or receive property other than cash in return for such Member's contribution to the Company, and (iv) no Member shall be required or be entitled to contribute
additional capital to the Company other than as permitted or required by this Article III. 

ARTICLE IV  

 ALLOCATION OF PROFITS AND LOSSES  

         4.01    Allocation of Net Losses    

        Net
Losses of the Company for each fiscal year (or part thereof) shall be allocated to the Members at the end of such fiscal year (or part thereof) in the following order
of priority: 

                (a)   First
Tier Losses.    First, to those Members with positive balances in their respective Capital Accounts in amounts equal to
their respective Capital Account balances at the end of such fiscal year (or part thereof); provided, however, if the amount of Net Losses to be allocated is less than the sum of the Capital
Account balances of all of the Members having positive Capital Account balances, then such Net Losses shall be allocated to the Members in such proportions and in such amounts as would result in the
respective Capital Account balances of the Members equaling, as nearly as possible, each such Member's share of the then Company Capital determined by calculating the amount each Member would receive
if an amount equal to the Company Capital were distributed to the Members in accordance with the provisions of Section 5.01; and 

                (b)   Second
Tier Losses.    Thereafter, to the Members in proportion to their respective Distribution Percentages. 

         4.02    Net Profits    

        Net
Profits of the Company for each fiscal year (or part thereof) shall be allocated to the Members at the end of such fiscal year (or part thereof) in the following order
of priority: 

                (a)   First
Tier Profits.    First, to the Members in proportion to, and to the extent of, the negative balance, if any, standing in
each such Member's Capital Account at the end of such fiscal year (or part thereof); and 

                (b)   Second
Tier Profits.    Thereafter, to the Members in such proportions and in such amounts, as would result, as closely as
possible, in the respective Capital Account balances at the end of such fiscal year (or part thereof) of each such Member equaling, as nearly as possible, each such Member's share of the then
Company Capital determined by calculating the amount each Member would receive if an amount equal to the Company Capital were distributed to the Members in accordance with the provisions of
Section 5.01. 

27

 

         4.03    Special Allocations    

        Notwithstanding
any other provision of this Agreement, no Net Losses or items of expense, loss or deduction shall be allocated to any Member to the extent such an allocation would cause
or increase a deficit balance standing in such Member's Adjusted Capital Account and any such Net Losses and items of expense, loss and deduction shall instead be allocated to the Members in
proportion to their respective "interests" in the Company as determined in accordance with Treasury Regulation Section 1.704-1(b). In addition, items of income and gain shall be
specially allocated to the Members in accordance with and to the extent required by the qualified income offset provisions set forth in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d). Notwithstanding any other provision in this Article IV, (i) any and all "partnership nonrecourse deductions" (as defined in
Treasury Regulation Section 1.704-2(b)(1)) of the Company for any fiscal year or other period shall be allocated to the Members in proportion to their respective Distribution
Percentages; (ii) any and all "partner nonrecourse deductions" (as such term is defined in Treasury Regulation Section 1.704-2(i)(2)) attributable to any "partner
nonrecourse debt" (as such term is defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to the Member that bears the "economic risk of loss"
(as determined under Treasury Regulation Section 1.752-2) for such "partner nonrecourse debt" in accordance with Treasury Regulation
Section 1.704-2(i)(l); (iii) each Member shall be specially allocated items of Company income and gain in accordance with the partnership minimum gain chargeback requirements
set forth in Treasury Regulation Sections 1.704-2(f) and 1.704-2(g); and (iv) each Member with a share of minimum gain attributable to any "partner
nonrecourse debt" shall be specially allocated items of Company income and gain in accordance with the partner minimum gain chargeback requirements of Treasury Regulation
Sections 1.704-2(i)(4) and 1.704-2(i)(5). Any and all "excess nonrecourse liabilities" as determined under Treasury Regulation
Section 1.752-3(a)(3) shall be allocated to the Members in proportion to their respective Distribution Percentages. 

         4.04    Curative Allocations    

        The
allocations set forth in Section 4.03 (the "Regulatory Allocations") are intended to comply with certain requirements of
the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations
of other items of Company income, gain, loss or deduction pursuant to this Section 4.04. Therefore, notwithstanding any other provision of this Article IV (other than the Regulatory
Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of
this Agreement and all Company items were allocated pursuant to Sections 4.01 and 4.02. In exercising its discretion under this Section 4.04, the Managing Member shall take into
account future Regulatory Allocations under Section 4.03 but, although not yet made, are likely to offset other Regulatory Allocations previously made under the provisions of
Section 4.03. 

28

 

         4.05    Differing Tax Basis; Tax Allocation    

        Depreciation
and/or cost recovery deductions and gain or loss with respect to each item of property treated as contributed to the capital of the Company shall be allocated among the
Members for federal income tax purposes in accordance with the principles of Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, and for state income tax purposes in
accordance with comparable provisions of applicable state law, so as to take into account the variation, if any, between the adjusted tax basis of such property and its book value
(as determined for purposes of the maintenance of Capital Accounts in accordance with this Agreement and Treasury Regulation Section 1.704-1(b)(2)(iv)(g)). 

ARTICLE V  

 DISTRIBUTION OF CASH FLOW  

         5.01    Distribution of Cash Flow    

        Subject
to repayment of any Default Loans pursuant to Sections 3.04(a), Ordinary Cash Flow realized by the Company for each fiscal year (or part thereof) shall be
distributed monthly to the Members in proportion to their respective Percentage Interests. 

         5.02    Distribution of Extraordinary Cash Flow    

        Subject
to repayment of any Default Loans pursuant to Sections 3.04(a), Extraordinary Cash Flow realized by the Company for each fiscal year (or part thereof) shall be
distributed to the Members in the following order of priority: 

                (a)   Unreturned
Contribution Accounts.    First, to the Members in proportion to, and to the extent of, the positive balances standing
in each such Member's Unreturned Contribution Account, if any; and 

                (b)   Percentage
Interests.    Thereafter, to the Members in proportion to their respective Percentage Interests. 

         5.03    Limitations on Distributions    

        Notwithstanding
any other provision contained in this Agreement, the Company shall not make a distribution of Cash Flow (or other proceeds) to any Member if such distribution
would violate any applicable provision of the Delaware Act or other applicable law. 

         5.04    In-kind Distribution    

        Assets
of the Company (other than cash) shall not be distributed in-kind to the Members without the prior written approval of the Management Committee. 

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   ARTICLE VI  

 RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS  

         6.01    Limitations on Transfer    

        Except
as otherwise set forth in Section 6.02 (with respect to transfers to a Permitted Transferee) and Section 6.03 (with respect to a Transfer after five (5) years
following the Opening, subject to a Right of First Offer/Right of First Refusal), no Member shall be entitled to sell, exchange, assign, transfer, or otherwise dispose of, pledge, hypothecate,
encumber or otherwise grant a security interest in, directly or indirectly, all or any part of such Member's Interest in the Company or withdraw or retire from the Company
("Transfer"), without the prior written consent of the other Member, which consent may be withheld in such other Member's sole and absolute discretion.
Each Member shall ensure that no Transfer shall be made of any direct or indirect interest in such Member (and no issuance of additional ownership interests in such Member or any entity
directly or indirectly owning or controlling such Member, respectively, shall occur) without the written consent of the other Member, which consent may be withheld in such other Member's sole and
absolute discretion. Any attempted Transfer in violation of the restrictions set forth in this Article VI shall be null and void ab initio and of no force or effect. 

         6.02    Permitted Transfers    

        Any
Member may Transfer all or any portion of such Member's Interest in the Company to any of the following (collectively, "Permitted
Transferees") without complying with the provisions of Section 6.01: 

                (a)   Other
Members.    In the case of any Member, to any other Member; 

                (b)   Affiliates.    In
the case of any Member, to any Affiliate of such Member provided the original transferring Member (that
executed this Agreement) or its owners at all times thereafter owns more than fifty percent (50%) of the voting and beneficial interests in such Affiliate, and with respect to Caruso, provided that
Rick J. Caruso, or an Affiliate or the heirs of Rick J. Caruso or the members of the immediate family of Rick J. Caruso, owns more than fifty percent (50%) of the voting and beneficial interests in
such Affiliate; 

                (c)   Share
Transfers.    In the case of any Member or direct or indirect owner of any Member that is publicly traded, transfers of
such publicly traded shares to any person or entity; 

                (d)   Merger,
Consolidation or Sale of All or Substantially All Assets.    In the case of any Member or constituent owner of any Member
that is publicly traded, to any person or entity that acquires, directly or indirectly, all or substantially all of the assets of the Member; 

                (e)   REIT
Controlled by Caruso.    In the case of Caruso, to a private or publicly held real estate investment trust or comparable
business entity provided that Rick J. Caruso, or an Affiliate or the heirs of Rick J. Caruso or the members of the immediate family of Rick J. Caruso, controls such trust or comparable entity; 

30

 

                (f)    Owner
of Racetrack Property.    In the case of Santa Anita, to any person or entity that acquires the Racetrack Property from the
SAC Owner on or after the date which is five (5) years following the Effective Date; 

                (g)   Sale
of Partial Interest.    In the case of any Member, to any person or entity that is not a Prohibited Transferee that acquires
any portion, but not all, of such Member's Interest in the Company; provided, however, that in the event that such Member or its Affiliate fails to control more than fifty percent (50%) or more of the
voting and beneficial interests with respect to such Member's Interest, then such Member and such Permitted Transferee shall lose the right to approve Major Decisions, but shall retain the right to
approve Minority Member Major Decisions; 

                (h)   Pledge
for Loan for Sole Purpose of Funding Additional Capital Contribution.    In the case of any Member, to an institutional
lender as a pledge or security for a loan, provided that (i) the loan is made solely for the purposes of raising capital to be contributed by the Member to the Company pursuant to a
Contribution Notice, (ii) the principal amount of such loan is limited to such Member's Percentage Interest share of such required contribution pursuant to the Contribution Notice,
(iii) upon any default under such loan, the lender agrees to provide written notice to the non-pledging Member of such default, and grants the non-pledging Member the
right to cure the default, repay the loan and receive an assignment of the lender's security interest in the pledging Member's membership Interest, (iv) if the non-pledging Member
does not elect to cure the default as described in the (iii) above, the rights of the lender and its assignee upon foreclosure shall be limited to the rights of an assignee only and shall not
be admitted as a Member of the Company, and shall have no right to participate in the management of the business and affairs of the Company, and the rights of such assignee shall, to the extent
permitted by law, be limited to the rights of an assignee of an Interest who does not become a substituted member and shall have no right to vote on any of the matters as to which a Member would be
entitled to vote under this Agreement, but shall only be entitled to receive financial information concerning the Company, share in such Net Profits and Net Losses, to receive such distribution, and
to receive such allocations of income, gain, loss, deduction or credit or similar items to which the assignor was entitled, to the extent assigned; and 

                (i)    Transfer
following Default under Right of First Refusal.    In the case of any Transferring Member (as defined in
Section 6.03(a) below), any Transfer of such Transferring Member's Interest in the event that the Non-Transferring Member fails to consummate a purchase of the Offered Interest
pursuant to Section 6.03(e) below. 

        Any
such Permitted Transferee shall receive and hold such ownership interest or portion thereof subject to the terms of this Agreement and to the obligations hereunder of the transferor.
There shall be no further transfer of such ownership interest or portion thereof except to a person or entity to whom the original transferor could have transferred such ownership interest in
accordance with this Section 6.02. 

31

 

         6.03    Right of First Offer/Right of First Refusal    

                (a)   If
at any time on or after the date which is five (5) years following the date that the Project opens to the public
(the "Opening"), any Member (the "Transferring Member") desires to transfer all, but not
less than all of such Member's Interest (the "Offered Interest") to any person or entity other than a Permitted Transferee and is not a
Prohibited Transferee, then the Transferring Member shall give written notice (the "First Offering Notice") thereof to the other Member
(the "Non-Transferring Member"). The First Offering Notice shall specify the purchase price and the other terms upon which the
Transferring Member intends to so transfer. For a period of thirty (30) days following the effective date of the First Offering Notice, the Non-Transferring Member shall have the
right, but not the obligation, to elect to purchase all, but not less than all, of the Offered Interest for the purchase price (and on the other terms) specified in the First Offering Notice by
delivering written notice of such election to the Transferring Member. 

                (b)   If
the Non-Transferring Member fails to timely and validly elect to purchase the Offered Interest in accordance with the terms of the First Offering Notice
as provided in Section 6.03(a) above (or rejects the opportunity to purchase), time being of the essence, then, notwithstanding the failure of the Transferring Member to obtain the
consent required for the transfer of the Offered Interest pursuant to Section 6.01, the Transferring Member may offer the Offered Interest for sale on the open market for a period of one
hundred eighty (180) days following the effective date of the First Offering Notice. If, during such one hundred eighty (180) day period, a cash offer is received from an independent
third party that is not directly or indirectly affiliated with either Member, is an Approved Transferee and is not a Prohibited Transferee ("Third
Party") and if the cash purchase price offered by such Third Party is equal to or greater than ninety five percent (95%) of the price previously offered to the
Non-Transferring Member then the Transferring Member shall be permitted to transfer the Offered Interest to such Third Party at a purchase price equal to or greater than ninety five
percent (95%) of the price previously offered to the Non-Transferring Member without any further consent or rights of first offer and/or refusal in favor of the
Non-Transferring Member. If the purchase price offered by such Third Party is less than ninety five percent (95%) the purchase price previously offered to the Non-Transferring
Member, then the Transferring Member shall deliver written notice (the "Second Offering Notice") thereof to the Non-Transferring
Member. The Second Offering Notice shall specify the identity of the Third Party, the purchase price made in the offer by such Third Party and the other terms of purchase. For a period of thirty
(30) days following the effective date of the Second Offering Notice, the Non-Transferring Member shall have the right, but not the obligation, to elect to purchase all, but not
less than all, of the Offered Interest for the purchase price (and on the other terms) specified in the Second Offering Notice by delivering written notice ("Purchase
Notice") of such election to the Transferring Member; 

                (c)   If
the Non-Transferring Member fails to timely and validly elect to purchase the Offered Interest in accordance with the terms of the Second Offering Notice
(or rejects the opportunity to purchase), then the Transferring Member may transfer the Offered Interest to the Third Party who is not a Prohibited Transferee as identified in the Second
Offering Notice at the same price and on the same terms as are specified in the Second Offering Notice for a period of one hundred and eighty (180) days following the date of the Second
Offering Notice without any further consent or rights of first offer and/or refusal in favor of the Non-Transferring Member. 

32

 

                (d)   If
the Non-Transferring Member timely and validly elects to purchase the Offered Interest in accordance with the provisions of Section 6.03(a)
or 6.03(b) above, then: (i) within sixty (60) days after the delivery of the Purchase Notice, the Non-Transferring Member shall deposit into an escrow account
established by the Non-Transferring Member with a nationally recognized title company mutually and reasonably agreed-upon with the Transferring Member, a deposit by wire
transfer of immediately available federal funds in an amount equal to ten percent (10%) of the purchase price of the Transferring Member's interest which amount shall include any interest earned
thereon (the "Deposit"), which Deposit shall be non-refundable to the Non-Transferring Member if the closing of the sale
fails to occur by reason of the default by the Non-Transferring Member; (ii) the closing for such purchase shall be held at the principal office of the Company in California within
ninety (90) days following the effective date of the First Offering Notice or the Second Offering Notice, as the case may be and (iii) upon the closing of the sale, the Deposit shall be
a credit against the purchase price. If the sale fails to occur due to a default by the Non-Transferring Member, then the Transferring Member shall retain the Deposit of the
Non-Transferring Member as liquidated damages. The Members acknowledge that it would be impractical and extremely difficult to estimate the damages which the Transferring Member may suffer
in connection with a default by the Non-Transferring Member under this Article VI. Therefore, the Members have agreed that a reasonable estimate of the detriment that any Member
would suffer in such event is and shall be the right of the Transferring Member to retain the Deposit as liquidated damages. The Members expressly acknowledge and agree that the retention of the
Deposit is not intended as a forfeiture or penalty within the meaning of any state laws, but is intended to constitute liquidated damages to the Transferring Member. Nothing contained herein shall
limit or otherwise affect any rights the Transferring Member may have to obtain specific performance and, to the maximum extent permitted by law, any other equitable remedies; 

                (e)   If
the Non-Transferring Member timely and validly elects to acquire the Offered Interest in accordance with the foregoing provisions of this
Section 6.03, but fails to consummate such purchase within ninety (90) days following the effective date of the First Offering Notice or the Second Offering Notice, as the case may be,
then the Offered Interest shall thereafter be freely transferable by the Transferring Member to any third party who is not a Prohibited Transferee without any further consent or rights of first offer
and/or refusal in favor of the Non-Transferring Member; 

                (f)    The
Members acknowledge and agree that either Member may assign such Member's rights of first offer and/or rights of first refusal set forth above in this
Section 6.03 to any Affiliate of such Member without the consent of the other Member so as to enable any such Affiliate to acquire the Offered Interest; 

                (g)   This
Section 6.03 shall not apply to a transfer described in Article VII below; 

                (h)   If
the Transferring Member is Caruso (except if a Permitted Transferee), and irrespective of whether Santa Anita elects to purchase the Offered Interest, then Santa
Anita may elect, in its sole and absolute discretion, to remove and replace Caruso (and Caruso's transferee) as Managing Member, and cause the Company to terminate the Development Agreement and
Management Agreement, without penalty to Santa Anita, the Company or any of their respective Affiliates, pursuant to Section 2.14; 

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                (i)    Notwithstanding
any other provision of this Article VI, and as a condition to the right to exercise the purchase rights provided in this Article VI, on
or before the closing of a purchase and sale held pursuant to this Article VI, the Non-Transferring Member(s) shall obtain written releases of each Transferring Member and
each such Transferring Member's Affiliates (including, without limitation, any Affiliates, principals of any Member that have entered into any guarantee or indemnitee, or who are otherwise obligated
in any way pursuant to any loan agreement or contractual obligations of the Company), from all contractual liabilities of the Company for which such Transferring Member (and/or its Affiliates) may
have personal liability and from all guarantees of such liabilities of the Company previously executed by such Transferring Member (and/or such Transferring Member's Affiliates). To the extent such
releases cannot be obtained by the Non-Transferring Member despite the Non-Transferring Member using its best efforts to obtain such releases, the Non-Transferring
Member shall indemnify, defend and hold the Transferring Member (and such Affiliates) free and harmless from and against any and all claims, liabilities, causes of action, liens, charges, and
all other matters arising out of or in connection with the business and affairs of the Company, whether arising prior to or subsequent to the effective date of such closing, except for unknown
liabilities arising prior to the effective date of such closing and not taken into account in calculating the purchase price for the Transferring Member's Interest. 

                (j)    The
closing of a purchase and sale held pursuant to this Article VI shall be held at the principal office of the Company. The Transferring Member shall transfer
to the Non-Transferring Member (or such Non-Transferring Member's nominee) the entire Interest of the Transferring Member free and clear of all liens, security
interests, and competing claims and shall deliver to the Non-Transferring Member (or such Non-Transferring Member's nominee) such instruments of transfer and such
evidence of due authorization, execution, and delivery, and of the absence of any such liens, security interests, or competing claims, as the Non-Transferring Member (or such
Non-Transferring Member's nominee) shall reasonably request. The purchase price for the Transferring Member's Interest shall be paid by the Non-Transferring Member by
delivering, at the closing, in cash in immediately available funds, by wire transfer, or one (1) or more certified or bank cashier's checks made payable to the order of the Transferring Member
in an amount equal to the purchase price, less the amount of the Deposit paid by the Non-Transferring Member. If the Interest of any Member is purchased pursuant to this Article VI,
then, effective as of the closing for such purchase, the Transferring Member shall withdraw as a member of the Company and shall have no further rights, duties, liabilities or obligations with respect
to the Company or the remaining Member. In connection with any such withdrawal, where the Non-Transferring Member would otherwise be the sole member, the Non-Transferring
Member may cause any nominee designated in the sole and absolute discretion of such Member to be admitted as a substituted member of the Company. The Transferring Member shall be required at the
closing pursuant to this Section 6.03 to repay the outstanding balance of any Default Loan(s) (together with all accrued, unpaid interest thereon) previously made to the Transferring
Member pursuant to a previous Delinquent Contribution. The Non-Transferring Member shall have the right to apply the purchase price that would otherwise be payable to the Transferring
Member pursuant to this Article VI to the repayment of such Default Loan(s). For all purposes of this Agreement, the Transferring Member shall, to the extent any Default Loan is repaid
pursuant to this Article VI, be deemed to have received the purchase price and to have used the proceeds thereof to repay such Default Loan(s). 

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         6.04    Lender Prohibitions    

        Notwithstanding
any other provision of this Agreement, no Member may Transfer all or any portion of such Member's Interest if such Transfer would result in a breach of or violation in
any loan documentation (and/or guaranty) relative to any indebtedness governing all or any portion of the Improvements (and such restrictions are not waived by the applicable lender). 

         6.05    Admission of Substituted Members    

        If
any Member transfers such Member's Interest to a transferee in accordance with Sections 6.01, 6.02 and/or 6.03 above, then such transferee shall only be entitled to be
admitted into the Company as a substituted member (and this Agreement shall be amended in accordance with the Delaware Act to reflect such admission), if: (i) the
Non-Transferring Member shall reasonably approve the form and content of the instrument of transfer, which approval shall not be unreasonably withheld or delayed; (ii) the
Transferring Member and transferee named therein execute and acknowledge such other instruments as the Management Committee may deem reasonably necessary to effectuate such admission; (iii) the
transferee in writing accepts and adopts all of the terms and conditions of this Agreement, as the same may have been amended; provided, however, that in the case of a Transfer by Caruso, then Santa
Anita may at its sole option elect to be admitted as Managing Member and cause the Company to terminate the Development Agreement and Management Agreement without penalty to the Company,
(iv) the Transferring Member pays, as the Management Committee may reasonably determine, all reasonable expenses incurred in connection with such admission, including, without limitation, legal
fees and costs; and (v) the Transferring Member or the transferee repays in full any outstanding Default Loan(s) with respect to the Transferring Member's Membership Interest. To the extent
permitted by law, any assignee of an Interest who does not become a substituted member shall have no right to vote on any of the matters as to which a Member would be entitled to vote under this
Agreement, but, if such assignee is not a Prohibited Transferee, shall have the right to receive financial information concerning the Company and to inspect the Company's books and records. An
assignee shall only be entitled to share in such Net Profits and Net Losses, to receive such distributions, and to receive such allocations of income, gain, loss, deduction or credit or similar items
to which the Transferring Member was entitled, to the extent assigned. A Member that Transfers such Member's Interest shall not cease to be a Member of the Company until the admission of the assignee
as a substituted member. If the Transferring Member is Caruso, and irrespective of whether Santa Anita elects to purchase the Offered Interest, then Santa Anita may elect, in its sole and absolute
discretion, to remove and replace Caruso (and Caruso's transferee) as Managing Member, and cause the Company to terminate the Development Agreement and the Management Agreement, without penalty
to Santa Anita, the Company or any of their respective Affiliates, in which event Santa Anita and the new transferee of Caruso's Interest shall jointly approve a replacement property manager, and in
the event that such parties are unable to agree upon such replacement property manager, the determination of the replacement property manager shall be determined by arbitration pursuant to the terms
of this Agreement. 

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         6.06    Election; Allocations Between Transferor and Transferee    

        Upon
the Transfer of the Interest of any Member or the distribution of any property of the Company to a Member, the Company may file, in the reasonable discretion of the Management
Committee, an election in accordance with applicable Treasury Regulations, to cause the basis of the Company property to be adjusted for federal income tax purposes as provided by Sections 734
and 743 of the Code. Upon the transfer of all or any part of the Interest of a Member as hereinabove provided, Net Profits and Net Losses shall be allocated between the Transferring Member and
transferee on the basis of a computation method that is in conformity with the methods prescribed by Section 706 of the Code and Treasury Regulation
Section 1.706-1(c)(2)(ii). 

         6.07    Partition    

        No
Member shall have the right to partition any assets of the Company or any interest therein, nor shall a Member make application or proceeding for a partition thereto and, upon any
breach of the provisions of this Section 6.07 by any Member, the other Members (in addition to all rights and remedies afforded by law or equity) shall be entitled to a decree or order
restraining or enjoining such application, action or proceeding. 

         6.08    Waiver of Withdrawal and Purchase Rights    

        Except
in the case of any Transfer permitted in accordance with this Agreement, no Member may voluntarily withdraw, resign or retire from the Company without the prior written consent of
the other Member, which consent may be withheld in such other Member's sole and absolute discretion. In furtherance of the foregoing, each Member hereby waives any and all rights such Member may have
to withdraw and/or resign from the Company pursuant to Section 18-603 of the Delaware Act and hereby waives any and all rights such Member may have to receive the fair value of such
Member's Interest in the Company upon any resignation and/or withdrawal in breach of the terms of this Agreement pursuant to Section 18-604 of the Delaware Act. 

         6.09    No Appraisal Rights    

        None
of the Members shall have any appraisal rights with respect to their Interests pursuant to Section 18-210 of the Delaware Act or otherwise. 

ARTICLE VII  

 DEFAULT BUY/SELL AGREEMENT  

         7.01    Buy/Sell Events    

        For
purposes of this Article VII, the following shall constitute "Buy/Sell Events": 

                (a)   Fraud
or Conviction of a Felony by Member.    Any act of fraud by a Member, as determined by a final, non-appealable
judicial determination by a court of competent jurisdiction, or a final, non-appealable conviction of a felony with respect to a Member's performance of its obligations or duties relating
to the Company; 

36

 

                (b)   Misappropriation
of Funds by Member.    Any misappropriation of funds by a Member provided that if such misappropriation of funds
is committed by an employee of a Member, then such event may be cured if, within five (5) Business Days after being notified in writing of such event, such Member (i) makes full
restitution to Company of all damages caused by such event, (ii) terminates the employment of such employee, and (iii) promptly takes all appropriate actions necessary to remediate the
situation and protect the interests of Company; 

                (c)   Fraud
or Conviction of a Felony Under Development Agreement or Management Agreement.    Any act of fraud or conviction of a crime
involving moral turpitude by Caruso or its Affiliate (or Santa Anita, if applicable) under the Development Agreement or Management Agreement followed by the failure of Caruso or its Affiliate
(or Santa Anita, if applicable) to remedy or cure such act of fraud within any applicable cure period set forth in the applicable Agreement, which act gives the Company the right to terminate
the Development Agreement or Management Agreement, as applicable; provided, however, that in the event that Caruso or its Affiliate (or Santa Anita, if applicable) timely files suit to contest
such termination as permitted by the Development Agreement or Management Agreement, as applicable, then the Buy/Sell Event described in this Section 7.01(c) shall not be deemed to have occurred
until there is a final, non-appealable judicial determination that the Company had the right to terminate the applicable Agreement; and 

                (d)   Misappropriation
of Funds Under Development Agreement or Management Agreement.    Any misappropriation of funds by Caruso or its
Affiliate (or Santa Anita, if applicable) under the Development Agreement or Management Agreement followed by the failure of Caruso or its Affiliate (or Santa Anita, if applicable) to
remedy or cure such act of misappropriation of funds within any applicable cure period set forth in the applicable Agreement, which act gives the Company the right to terminate the Development
Agreement or Management Agreement, as applicable; provided, however, that in the event that Caruso or its Affiliate (or Santa Anita, if applicable) timely files suit to contest such termination
as permitted by the Development Agreement or Management Agreement, as applicable, then the Buy/Sell Event described in this Section 7.01(d) shall not be deemed to have occurred until there is a
final, non-appealable judicial determination that the Company had the right to terminate the applicable Agreement. 

        For
the purposes of implementing the provisions contained in this Article VII: 

                (i)    the
"Defaulting Member" shall be: (A) in the case of the event referenced in Section 7.01(a), the Member
that has committed an act of fraud or conviction of a felony, (B) in the case of the event described in Section 7.01(b), the Member that has misappropriated funds, and (C) in the
case of the events described in 7.01(c) and in Section 7.01(d), Caruso or Santa Anita, as applicable; 

                (ii)   the
"Non-Defaulting Member" shall be the Member(s) who is not the Defaulting Member; and 

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                (iii)  the
Buy/Sell Event shall be deemed to have occurred: (A) in the case of the event described in Section 7.01(a), the date that such Member is convicted
of a felony or a court of competent jurisdiction determines that an act of fraud has occurred, (B) in the case of the event described in Section 7.01(b), the date that a Member
misappropriates funds, or the date that the five (5) day cure period expires with respect to misappropriation of funds by an employee of a Member, and (C) in the case of the events
described in Section 7.01(c) and Section 7.01(d), the date that the Development Agreement or Management Agreement is terminated, and if Caruso or its Affiliate contests such
determination and has timely filed an action under the Development Agreement or Management Agreement, as applicable, the date that there is a final, non-appealable judicial determination
that the Company had the right to terminate such Development Agreement or Management Agreement, as applicable. 

         7.02    Rights Arising From a Buy/Sell Event    

        Upon
the occurrence of a Buy/Sell Event, the Non-Defaulting Member may elect to implement the buy/sell procedures set forth in this Article VII by giving written
notice ("Default Notice") thereof to the Defaulting Member within thirty (30) days following such occurrence. For a period of ten
(10) days following the Default Notice, the Members shall attempt to agree upon a purchase price for the Defaulting Member's Interest (the "Buy/Sell Purchase
Price"). If the Members are unable to agree, then the Buy/Sell Purchase Price shall be determined in accordance with the provisions of Section 7.03. 

         7.03    Determination of Purchase Price    

                (a)   Determination
of Purchase Price.    Within thirty (30) days after the determination of the Appraised Value of the assets
of the Company as determined pursuant to Section 7.03(b) below, the Members shall for a period of twenty (20) days attempt to jointly determine the amount of cash which would be
distributed to each Member pursuant to Section 5.01, if (i) the assets of the Company were sold for the Appraised Value thereof as of the date of the Default Notice; (ii) the
liabilities of the Company were liquidated in accordance with Section 9.02, (iii) reasonable reserves for any contingent, conditional or unmatured liabilities of the Company were
established by the Non-Defaulting Member; and (iv) the Company made its required distributions to the Members pursuant to Section 5.01. If the Members are unable to agree
upon such determination within the applicable twenty (20) day period, then the accountants regularly employed by the Company shall make such determination of the Appraised Value and shall give
each Member written notice (" Buy/Sell Price Determination Notice") thereof. The determination by the accountants of such amounts, including all
components thereof, shall be deemed conclusive absent any material computational error. Ninety percent (90%) of the amount that would be distributed to the Defaulting Member pursuant to
clause (iv) above shall be deemed to be the Purchase Price for purposes of this Article VII. 

                (b)   Determination
of Appraised Value.    For purposes of this Article VII, the appraised value
("Appraised Value") of the assets of the Company shall be determined by one (1) or more real estate appraiser(s) all of whom shall be independent
qualified M.A.I. appraisers. The Non-Defaulting Member shall select one (1) appraiser, who shall be identified in the Default Notice. The Defaulting Member shall either agree to the
appraiser selected by the Non-Defaulting Member or select a second appraiser within ten (10) days of the date of the Default Notice and give written notice to the
Non-Defaulting Member of the person so selected. In the event of the failure of the Defaulting Member to appoint such an appraiser within the times specified and after expiration of five
(5) days following the Effective Date of written demand that an appraiser be appointed, the appraiser duly appointed by the Non-Defaulting Member shall proceed to make the appraisal
as herein set forth and the determination thereof shall be conclusive on both Members. 

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        If
two (2) appraisers are selected, then for a period of sixty (60) days, the two (2) appraisers shall attempt to agree upon the fair market value, and if they are
unable to agree within such sixty (60) day period, then such selected appraisers shall thereafter appoint a third (3rd) appraiser. If the two (2) selected appraisers fail to appoint a
third (3rd) appraiser within ten (10) days following the date of written notice from the Defaulting Member notifying the Non-Defaulting Member of the selection of the second (2nd)
appraiser, then either Member may file a petition with the Superior Court in the County of Los Angeles, State of California for the purposes of causing the judge to select an Arbitrator to
appoint a third (3rd) appraiser. 

        The
appraiser or three appraisers, as the case may be, shall promptly fix a time for the completion of the appraisal which shall not be later than thirty (30) days from the date
of appointment of the last appraiser. 

        The
appraiser(s) shall determine the Appraised Value by determining the fair market value of the assets of the Company, such fair market value being the price estimated in terms of money
which the Company could obtain if such assets were sold in the open market, allowing a reasonable time to find a purchaser who purchases with knowledge of the uses which such assets in their then
condition are adapted for and capable of being used for as of the date of the Default Notice. 

        Upon
submission of the appraisals setting forth the opinions as to the appraised value of the assets of the Company, (A) if only one (1) appraiser is selected, then such
appraisal shall constitute the Appraised Value of the assets of the Company, or (B) if three (3) appraisers are selected, then the two (2) such appraisals which are nearest in
amount shall be retained, and the third appraisal shall be discarded, unless one (1) appraisal is the mean of the other two (2) appraisals in which case such appraisal shall constitute
the Appraised Value. The average of the two (2) retained appraisals shall constitute the Appraised Value of the assets of the Company. 

                (c)   Payment
of Costs.    Except as provided below, the Company shall pay for the services of the appraiser appointed by the
Non-Defaulting Member, and the Defaulting Member shall pay for the services of the appraiser appointed by such Member. The cost of the services of the third (3rd) appraiser, if any, shall
be paid one-half (1/2) by the Company, on the one hand, and one-half (1/2) by the Defaulting Member, on the other hand. The costs of the services
of the Accounting Firm and, in the event only one (1) appraiser is required, the cost of the services of such appraiser, shall be paid one-half (1/2) by the Company,
on the one hand, and one-half (1/2) by the Defaulting Member, on the other hand. Any costs that the Company is required to pay pursuant to this Section 7.03(c) shall
be treated as expenses of the Company in determining the Defaulting Member's Buy/Sell Purchase Price pursuant to Section 7.03. 

39

 

         7.04    Non-Defaulting Member's Option    

        For
a period of thirty (30) days after the effective date of the Buy/Sell Price Determination Notice, the Non-Defaulting Member shall have the right, but not the
obligation, to purchase the entire Interest of the Defaulting Member for the Defaulting Member's Purchase Price, and on the terms and conditions set forth in this Article VII by giving written
notice thereof to each other Member within such thirty (30)-day period. Failure by the Non-Defaulting Member to timely give written notice exercising such Member's right to
purchase set forth in this Section 7.04 shall be deemed an election by such Member to waive such right to purchase with respect to the particular Buy/Sell Event that triggered the application
of the provisions of this Article VII. 

         7.05    Closing of Purchase and Sale    

        The
closing of a purchase and sale pursuant to this Article VII shall be held at the principal office of the Company in California on the ninetieth (90th) day after the expiration
of the thirty (30)-day period set forth in Section 7.04 (or such earlier date as is unanimously agreed to by the purchasing Members). The Defaulting Member shall transfer to
the purchasing Non-Defaulting Member(s) (or such Member's(s') nominee(s)) the entire Interest of the Defaulting Member free and clear of all liens, security interests, and competing
claims and shall deliver to the purchasing Non-Defaulting Member(s) (or such Member's(s') nominee(s)) such instruments of transfer and such evidence of due authorization, execution,
and delivery, and of the absence of any such liens, security interests, or competing claims as such purchasing Non-Defaulting Member(s) (or such Member's(s') nominee(s)) shall
reasonably request. 

         7.06    Payment of Purchase Price    

        The
purchasing Non-Defaulting Member shall pay the Defaulting Member's Purchase Price, in cash, by a certified or bank cashier's check or a confirmed wire transfer of readily
available funds at the closing. The Defaulting Member shall be required at the closing pursuant to this Section 7.06 to repay the outstanding balance of any Default Loan(s) (together
with all accrued, unpaid interest thereon) previously made to the Non-Defaulting Member pursuant to a previous Delinquent Contribution. The Non-Defaulting Member(s) shall have
the right to apply the Buy/Sell Purchase Price that would otherwise be payable to the Non-Defaulting Member pursuant to this Article VII to the repayment of such Default
Loan(s). For all purposes of this Agreement, the Defaulting Member shall, to the extent any Default Loan is repaid pursuant to this Section 7.06, be deemed to have received the Buy/Sell
Purchase Price and to have used the proceeds thereof to repay such Default Loan(s). 

         7.07    Release and Indemnity    

        Notwithstanding
any other provision of this Article VII, and as a condition to the right to exercise the buy/sell rights provided in this Article VII, on or before
the closing of a purchase and sale held pursuant to this Article VII, the buying
Member(s) shall obtain written releases of each selling Member and each such selling Member's Affiliates (including, without limitation, any Affiliates of any Member that have entered into any
guarantee or indemnitee), from all contractual liabilities of the Company for which such selling Member (and/or its Affiliates) may have personal liability and from all guarantees of such liabilities
of the Company previously executed by such selling Member (and/or such selling Member's Affiliates). To the extent such releases cannot be obtained by the buying Member despite the buying Member using
its best efforts to obtain such releases, the buying Member, shall indemnify, defend and hold the selling Member (and such Affiliates) free and harmless from and against any and all claims,
liabilities, causes of action, liens, charges, whether arising prior to or subsequent to the effective date of such closing, except for unknown liabilities arising prior to the effective date of such
closing and not taken into account in calculating the Purchase Price for the selling Member's Interest. 

40

 
ARTICLE VIII  

 DISSOLUTION AND WINDING UP OF THE COMPANY  

         8.01    Events Causing Dissolution of the Company    

        Upon
any Member's bankruptcy, retirement, resignation, withdrawal, expulsion or other cessation to serve or the admission of a new Member into the Company, the Company shall not dissolve
but the business of the Company shall continue without interruption or break in continuity. However, the Company shall be dissolved and its affairs wound up upon the first to occur of: (a) the
expiration of the term of the Company as provided in Section 1.05, unless such term has been extended with the approval of both Members; (b) the sale, transfer or other disposition by
the Company of all or substantially all of its assets and the collection by the Company of any and all Cash Flow derived therefrom; (c) the affirmative election of both Members to dissolve the
Company; (d) the making of Termination Election by a Member pursuant to Section 8.04; or (e) the entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Delaware Act. Except as may be permitted in accordance with this Section 8.01, no Member shall have the right to, and each Member hereby agrees that it
shall not, seek to dissolve or cause the dissolution of the Company or seek to cause a partial or whole distribution or sale of Company assets whether by court action or otherwise, it being agreed
that any actual or attempted dissolution, distribution or sale would cause a substantial hardship to the Company and the remaining Member. 

         8.02    Winding Up of the Company    

        Upon
the Liquidation of the Company caused by other than the termination of the Company under Section 708(b)(1)(b) of the Code (in which latter case the Company shall
remain in existence in accordance with the provisions of such Section of the Code), the Managing Member shall proceed to the winding up of the affairs of the Company. During such winding up process,
the Net Profits, Net Losses and Cash Flow distributions shall continue to be shared by the Members in accordance with this Agreement. Subject to Section 8.04(d), the assets shall be liquidated
as promptly as consistent with obtaining a fair value therefor, and the proceeds therefrom, to the extent available, shall, subject to Section 8.04(d), be applied and distributed by the Company
on or before the end of the taxable year of such Liquidation or, if later, within ninety (90) days after such Liquidation, in the following order: 

                (a)   Creditors.    First,
to creditors of the Company (including Members who are creditors) in the order of priority as provided
by law; 

                (b)   Reserves.    Second,
to establishing any reserves which the Management Committee determines reasonably necessary for any
contingent, conditional or unmatured liabilities or obligations of the Company; and 

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                (c)   Remaining
Amounts.    Thereafter, any remaining proceeds shall be distributed to the Members in the order of priority set forth
in Section 5.01. 

        Any
reserves withheld pursuant to Section 8.02(b) shall be distributed as soon as practicable, as determined in the reasonable discretion of the Management Committee to the
Members in the order of priority set forth in Section 8.02(c). 

        The
Members believe and intend that the effect of making any and all liquidating distributions in accordance with the provisions of this Section 8.02 will result in such
liquidating distributions being made to the Members in proportion to the positive balances standing in their respective Capital Accounts. 

         8.03    Negative Capital Account Restoration    

        No
Member shall have any obligation whatsoever upon the Liquidation of such Member's Interest, the Liquidation of the Company or in any other event, to contribute all or any portion of
any negative balance standing in such Member's Capital Account to the Company, to any other Member or to any other person or entity. 

         8.04    Termination Rights.    

                (a)   In
the event that (1) prior to timely completion of the Recapture Conditions, Caruso presents to Santa Anita a Business Plan which adversely deviates from the
Santa Anita current return on cost set forth in the Preliminary Pre-Development Budget, or, (2) if the Recapture Conditions are not achieved by the Company (or waived by
Santa Anita) within twenty-four (24) months following the Effective Date, subject to extension for events of Force Majeure, and subject to further extension for an additional twelve
(12) months provided that the Milestones (as defined in Article XII), are achieved as will be agreed upon in the Business Plan within twenty-four (24) months
following the Effective Date, subject to extension for Force Majeure, in Santa Anita's sole discretion (the "Santa Anita Termination Window"),
Santa Anita shall have the option to elect to terminate this Agreement, the Ground Lease and all other agreements, documents and instruments related to this Agreement and the Ground Lease between
Santa Anita, SAC Owner and/or any of its Affiliates and Caruso and/or any of its Affiliates (the "Santa Anita Termination Election"). 

                (b)   In
the event that Caruso concludes at any time, within twenty-four (24) months following the Effective Date subject to extension for events of Force
Majeure, and subject to further extension for an additional 12 months provided that the Milestones are achieved in the Business Plan (the "Caruso Termination
Window"); the Santa Anita Termination Window and the Caruso Termination Window may also be separately referred to as a "Termination
Window"), that satisfaction of any of the Recapture Conditions may not be met on terms which are acceptable to Caruso, in Caruso's sole discretion, Caruso shall have the option
to elect to terminate this Agreement, the Ground Lease and all agreements, documents and instruments related to this Agreement and the Ground Lease between Santa Anita, SAC Owner and/or any of its
Affiliates and Caruso and/or any of its Affiliates (the "Caruso Termination Election"; the Santa Anita Termination Election and the Caruso
Termination Election may also be separately referred to as a "Termination Election"). 

42

 

                (c)   If
Santa Anita or Caruso desires to make a Termination Election pursuant to Sections 8.04(a) or 8.04(b), respectively, the applicable Member making such
Termination Election must deliver written notice within thirty (30) days following the expiration of the applicable Termination Window (a "Termination
Notice"). Any such election to deliver a Termination Election shall be effective on the date specified in the Termination Notice; provided, however, that such effective date
shall not be less than thirty (30) days following the delivery of the Termination Notice by the Member making the Termination Election. 

                (d)   If
a Termination Election is delivered pursuant to the foregoing provisions of this Section 8.04, (i) title to and all ownership rights in the Property
shall continue to be held by Santa Anita; (ii) all Improvements shall automatically revert to Santa Anita; (iii) the Members shall be deemed to have released each other and their
respective Affiliates, representatives, divisions, subsidiaries, partners, employees, officers, directors, shareholders, agents, representatives and attorneys and all of their respective successors
and assigns from any claims or obligations of any nature relating to the Company, the Ground Lease, the Property and the Project; (iv) all rights and interests in any drawings, intellectual
property, entitlements, and other work product relating to the Project shall automatically become the sole and exclusive property of Santa Anita; (v) all approved third-party costs and expenses
incurred by either Member following the date of the Letter of Intent through the effective date of termination pursuant to this Section 8.04 shall be paid by the Members in proportion to each
Member's Percentage Interest within thirty (30) days after the effective date of such termination, to the extent such costs and expenses had not been previously paid by the Company; and
(vi) each Member agrees to execute any and all documents, instruments, agreements and other writings, and to take such other actions, as the other Member reasonably deems necessary or
appropriate to accomplish the foregoing (i)-(vi). 

ARTICLE IX  

 BOOKS AND RECORDS  

         9.01    Books of Account and Bank Accounts    

        The
fiscal year and taxable year of the Company shall be the year ending December 31. The Managing Member shall maintain all of the books and records of the Company. During normal
business hours at the principal office of the Company, all of the following shall be made available for inspection and copying by all of the Members at their own expense: (i) a current list of
the full name and last known business or residence address of each Member set forth in alphabetical order, together with the contribution and share in Net Profits and Net Losses of each Member;
(ii) a copy of the Certificate of Formation and all amendments thereto, together with any powers of attorney pursuant to which the Certificate of Formation or any amendments thereto were
executed; (iii) copies of the Company's federal, state and local income tax or information returns and reports, if any, for the six (6) most recent taxable years; (iv) a copy of
this Agreement and any amendments thereto, together with any powers of attorney pursuant to which this Agreement or any amendments thereto were executed; (v) copies of the financial statements
of the Company, if any, for the six (6) most recent fiscal years; and (vi) all of the books and records of the Company. All receipts, funds and income of the Company shall be deposited
into a bank account selected by the Members and disbursements from such account shall be made upon the signature of any individual designated by the Managing Member, provided such disbursement does
not exceed Fifty Thousand Dollars ($50,000). Any disbursement in excess of Fifty Thousand Dollars ($50,000) shall require such signature(s) as the Management Committee may approve. 

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         9.02    Annual Reports and Tax Returns    

        Within
fifteen (15) days after the end of each calendar quarter, the Managing Member shall cause to be prepared and distributed to the other Member, at the expense of the Company,
unaudited quarterly financial statements, which shall include a balance sheet of the Company, an operating (income or loss) statement, a statement of cash flow, a statement of changes in the Capital
Accounts, and all other information customarily shown on quarterly financial statements prepared in accordance with generally accepted accounting principles, consistently applied. Within thirty
(30) days after the end of each calendar quarter, the Managing Member shall cause to be prepared and distributed to the other Member, at the expense of the Company, a report which includes the
planned and forecasted revenues, expenses, net income and net cash flow of the Company and an explanation of any variance item in excess of five percent (5%) of the Pre-Development Budget,
Development Budget and Operating Budget. In addition, the Managing Member shall cause to be prepared and distributed to the other Member within forty-five (45) days after the close
of each fiscal year, at the expense of the Company, annual unaudited financial statements, which shall include, without limitation, a balance sheet of the Company, an operating (income or loss)
statement, and all other information customarily shown on financial statements prepared in accordance with generally accepted accounting principles, consistently applied. The annual financial
statements of the Company may be audited once a year at the written request of either Member at the expense of the Company. Within one hundred twenty (120) days after the close of each fiscal
year, the Managing Member shall also cause to be prepared and timely filed and distributed to each Member, at the expense of the Company, all required federal, state and local Company tax returns.
Subject to Sections 2.05 and 6.06, the Managing Member shall act as the "tax matters partner" of the Company under Section 6231(a)(7) of the Code and the Treasury Regulations
promulgated thereunder, and the accounting and legal fees reasonably incurred by the Managing Member in its capacity as "tax matters partner" shall be a cost and expense of the Company (whether or not
provided in the Budget). 

         9.03    Delivery of Reports    

        The
Managing Member shall send or cause to be sent to the other Members the following at the expense of the Company: 

                (a)   Monthly
Balance Sheet and Income Statement.    The Managing Member shall cause a monthly balance sheet and income statement to be
e mailed or faxed to the other Member no later than the tenth (10th) business day following the end of each such calendar month. 

                (b)   Monthly
Reports.    Within thirty (30) days after the end of each month, in each case certified by the Managing Member as
being true and correct in all material respects and prepared in accordance with GAAP and generally accepted industry standards: (i) a leasing activity report, and copies of completed lease
Document Requests approved by the Managing Member during such month; (ii) monthly financial statements (including, without limitation, an accrual based balance sheet and income statement);
(iii) a statement of the cash flow for the Project and an explanation of any profit and loss variance to the Approved Plan in excess of One Hundred Thousand Dollars ($100,000); (iv) a
progress report on any construction work being undertaken by the Company during the period of such construction work; (v) a report on all capital expenditures of the Company with an explanation
of each item the exceeds the Approved Plan by the lesser of One Hundred Thousand Dollars ($100,000) or five percent (5%) of an individual line item; and (vi) a budget analysis including,
without limitation, the actual and expected total projected cost variances, by line item, to the Pre-Development Budget, Development Budget and Operating Budget most recently submitted to
the other Member; 

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                (c)   Supplemental
Information.    Each monthly report shall also include the following information: 

                        (i)    Financial Information.    All of the following: (A) a
detailed general ledger, (B) a check register, (C) a cash receipts journal (by tenant), (D) the supporting calculations for the management fee, development fee and leasing
fees and other fees paid to the Members and/or their Affiliates, (E) a security deposit ledger, (F) a rent roll and other supplemental lease information reasonably requested by any
Member, (G) delinquencies/tenant receivable aging report, broken down by 30/60/90/90+ day categories and the amount of arrearages for each tenant, (H) a job cost report including the
total costs incurred to date for the Pre-Development Budget and the Development Budget, total costs incurred to date, estimated costs to complete the improvements, total anticipated costs
and budget variances by line item, and (I) an account analysis including the composition of the ending balance/subledger report for accounts receivable, fixed assets and other balance sheet
asset and liability accounts including, without limitation, prepaid accounts and accrued liabilities, in excess of Five Hundred Thousand Dollars ($500,000); and 

                        (ii)    Executive Summary.    All of the following: (A) a
comparison of the actual and planned occupancy for the Project, (B) an overview of the strategic plan for the Company including the leasing activity, construction completion activity/timeline
for completion, major lease expiration and other information reasonably requested by either Member, (C) leasing information including a description of the spaces that are leased and occupied
and vacancies calculated by square footage and percentage, a description of any space re-leased during the month and a description of any current leasing activity, (D) a
summary of any material tenant claims or other material concerns, (E) a list of any material litigation matters with a description of any material developments with respect thereto, and
(F) a summary of any other matters affecting the Company. 

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                (d)   Quarterly
Reports.    Within fifteen (15) days after the end of each calendar quarter, (i) a quarterly statement of
changes in Company's capital, balance sheet, statements of profit and loss and cash flow and (ii) for the quarter ending June 30 and December 30 of each Fiscal Year, a
straight-line rent schedule complying with Financial Accounting Standard 13; 

                (e)   Quarterly
Forecasts.    Within thirty (30) days after the end of each calendar quarter a quarterly summary of the planned
and forecasted revenues, expenses, net income and net cash flow of the Company and an explanation of any variance item in excess of one hundred thousand dollars ($100,000) of the
Pre-Development Budget, Development Budget and Operating Budget; 

                (f)    Annual
Reports.    Within forty five (45) days after the end of each Fiscal Year financial statements for the Company
audited by the Accounting Firm, prepared in accordance with GAAP, which shall contain a balance sheet as of the end of such Fiscal Year, statements of profit and loss and cash flow, a statement of
changes in the Capital Accounts and a statement of changes in financial position for such Fiscal Year. Drafts of such financial statements shall be delivered to the Members within thirty
(30) days after the end of each Fiscal Year. The timing of the annual audit for each Fiscal Year shall be such that the Accounting Firm is in a position to render a conclusion as to the
probable fairness of presentation of the financial statements of each Project Entity for such Fiscal Year by the forty-fifth (45th) day following the close of such Fiscal Year; 

                (g)   Construction
Reports.    Upon request from the other Member, deliver to the other Member copies of all material construction,
management and other reports, all draw requests and other information delivered to any lender or any general contractor, or received by the Managing Member from any lender or any general
contractor; and 

                (h)   Additional
Information.    Deliver to the other Member copies of such other reports or other information as the other Member may
reasonably request from time to time. 

        Each
Member shall have the right, at all reasonable times during customary business hours and at such Member's expense, to inspect, review, audit and make copies of the books of account
and records of the Company; provided, however, that in the event that there is a discrepancy in excess of two and one-half percent (2.5%) between the items reported in the books of account
and records and the actual amount of said items as determined in connection with the audit of the Company's books of account and records (the "Material
Discrepancy"), then the cost of said audit shall be borne by the Managing Member. 

ARTICLE X  

 INSURANCE REQUIREMENTS  

         10.01    Insurance    

        The
Managing Member shall procure and maintain in effect during the Term of this Agreement the insurance coverages described in  Exhibit "I" attached hereto ("Insurance
Requirements"). 

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   ARTICLE XI  

 MISCELLANEOUS  

         11.01    Investment Representations    

        Each
Member agrees as follows with respect to investment representations: 

                (a)   Member
Understandings.    Each Member understands: 

          (i)  That
the Interests in the Company evidenced by this Agreement have not been registered under the Securities Act of 1933, 15 U.S.C. § 15b et
seq., the Delaware Securities Act, the California Corporate Securities Law of 1968, or any other state securities laws (the "Securities Acts")
because the Company is issuing Interests in the Company in reliance upon the exemptions from the registration requirements of the Securities Acts providing for issuance of securities not involving a
public offering; 

         (ii)  That
the Company has relied upon the representation made by each Member that such Member's Interest in the Company is to be held by such Member for
investment; and 

        (iii)  That
exemption from registration under the Securities Acts would not be available if any Interest in the Company was acquired by a Member with a view to distribution.
Each Member agrees that the Company is under no obligation to register the Interests in the Company or to assist the Members in complying with any exemption from registration under the Securities Acts
if the Member should at a later date wish to dispose of such Member's Interest in the Company. 

                (b)   Acquisition
for Own Account.    Each Member hereby represents to the Company that such Member has acquired such Member's Interest
in the Company for such Member's own account, for investment and not with a view to the resale or distribution. 

                (c)   No
Public Market.    Each Member recognizes that no public market exists with respect to the Interests and no representation has
been made that such a public market will exist at a future date. 

                (d)   No
Advertisement.    Each Member hereby represents that such Member has not received any advertisement or general solicitation
with respect to the sale of the Interests. 

                (e)   Survival
of Representations and Warranties.    Each Member understands the meaning and consequences of the representations,
warranties and covenants made by such Member set forth herein and that the Company has relied upon such representations, warranties and covenants. Each Member hereby indemnifies, defends, protects and
holds wholly free and harmless the Company and the other Members from and against any and all losses, damages, expenses or liabilities arising out of the breach and/or inaccuracy of any such
representation, warranty and/or covenant. All representations, warranties and covenants contained herein and the indemnification contained above in this Section 11.01(e) shall survive the
execution of this Agreement, the formation of the Company, and the liquidation of the Company. 

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         11.02    Notice    

        Any
notice, demand or other communication which may or is required to be given under this Agreement shall be in writing and shall be: (a) personally delivered;
(b) transmitted by United States or Canadian postage prepaid mail, registered or certified mail, return receipt requested; (c) transmitted by reputable overnight courier service,
such as Federal Express; or (d) transmitted by legible facsimile (with answer back confirmation), or transmitted by e- mail, to Caruso and Santa Anita as listed below. Except as
otherwise specified herein, all notices and other communications shall be deemed to have been duly given on (i) the date of receipt if delivered personally, (ii) seven
(7) calendar days after the date of posting if transmitted by registered or certified mail, return receipt requested, (iii) the first (1st) business day after the date of deposit, if
transmitted by reputable overnight courier service, or (iv) the date of transmission with confirmed answer back if transmitted by facsimile, whichever shall first occur, or (v) the first
(1st) business day after the date of transmission by e-mail. Any notice or other communication sent by facsimile or e-mail must be confirmed within one (1) business day
by letter or overnight courier service mailed or delivered in accordance with the foregoing in order to be effective. A notice or other communication not given as herein provided shall only be deemed
given if and when such notice or communication and any specified copies are actually received in writing by the party and all other persons to whom they are required or permitted to be given. Any
notice may be given on behalf of either party by such party's legal counsel. Caruso and Santa Anita may change their addresses for purposes hereof by notice given to the other party in accordance with
the provisions of this Section, but such notice shall not be deemed to have been duly given unless and until it is actually received by the other party. Notices hereunder shall be directed
as follows: 

	 	If to Caruso:	 	Santa Anita Associates Holdings Co., LLC

c/o Caruso Affiliated Holdings

101 The Grove Drive

Los Angeles, CA 90036

Attention: Rick J. Caruso

                   Richard A. Moses

Fax: 323-900-8101
	 	 	 
	 	with a copy to:	 	Donfeld, Kelley & Rollman

11845 West Olympic Blvd., Suite 1245

Los Angeles, CA 90064

Attention: Jeffrey E. Donfeld, Esq.

Fax: 310-312-8014

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	 	If to Santa Anita:	 	Santa Anita Commercial Enterprise, Inc.

337 Magna Drive

Aurora, Ontario 74G 7K1

Attention: Chief Executive Officer, Chief Financial

Officer and Corporate Secretary

Fax: 905-726-7172
	 	 	 
	 	with a copy to:	 	Allen Matkins Leck Gamble & Mallory LLP

12348 High Bluff Drive, Suite 100

San Diego, California 92130

Attention: Michael C. Pruter, Esq.

Fax: 858-481-5028

         11.03    Construction of Agreement    

        The
Article and Section headings of this Agreement are used herein for reference purposes only and shall not govern, limit, or be used in construing this Agreement or any provision
hereof. If any proceeding is brought by any Member against any other Member or the Company that arises out of, or in connection with, this Agreement, then the prevailing parties in such proceeding
shall be entitled to recover reasonable attorneys' fees and costs and expert witness costs and fees. Subject to the restrictions set forth in Article VI, this Agreement shall inure to the
benefit of and shall bind the parties hereto and their respective personal representatives, successors, and assigns. Each of the Exhibits attached hereto is incorporated herein by this reference and
expressly made a part of this Agreement for all purposes. References to any Exhibit made in this Agreement shall be deemed to include this reference and incorporation. Where the context so requires,
the use of the neuter gender shall include the masculine and feminine genders, the masculine gender shall include the feminine and neuter genders, the feminine gender shall include the masculine and
neuter genders, and the singular number shall include the plural and vice versa. Each Member acknowledges that (i) each Member is of equal bargaining strength; (ii) each Member has
actively participated in the drafting, preparation and negotiation of this Agreement; and (iii) any rule to the effect that ambiguities are to be resolved against the drafting party shall not
apply in the interpretation of this Agreement, any portion hereof or any amendments hereto. 

         11.04    Further Acts    

        Each
Member covenants, on behalf of such Member and such Member's successors and assigns, to execute, with acknowledgment, verification, or affidavit, if required, any and all documents
and writings, and to perform any and all other acts, that may be reasonably necessary or desirable to implement, accomplish, and/or consummate the formation of the Company, the achievement of the
Company's purposes, or any other matter contemplated under this Agreement. 

         11.05    Preservation of Intent    

        If
any provision of this Agreement is determined by any court having jurisdiction to be illegal or in conflict with any laws of any state or jurisdiction, then the Members agree that
such provision shall be modified to the extent legally possible so that the intent of this Agreement may be legally carried out. If any one (1) or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect or for any reason, then the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired or affected, it being intended that all of the Members' rights and privileges shall be enforceable to the fullest
extent permitted by law, unless the enforcement of any such provision under the circumstances would otherwise clearly frustrate the purpose and intent of this Agreement. 

49

 

         11.06    Waiver    

        No
consent or waiver, express or implied, by a Member to or of any breach or default by any other Member in the performance by such other Member of such other Member's obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Member hereunder. Failure on the part of a Member to complain of
any act or failure to act of any other Member or to declare any other Member in default, irrespective of how long such failure continues, shall not constitute a waiver by such
non-complaining or non-declaring Member of the latter's rights hereunder. 

         11.07    Entire Agreement    

        This
Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior or other contemporaneous
understanding, correspondence, negotiations or agreements between them respecting the subject matter hereof. This Agreement may be amended and/or modified only with the written approval of
both Members. 

         11.08    Choice of Law    

        Notwithstanding
the place where this Agreement may be executed by any of the parties hereto, the parties expressly acknowledge and agree that all of the terms and provisions of this
Agreement shall be construed in accordance with the laws of the State of Delaware, and pursuant to Section 17450(a) of the California Act, all rights, duties, obligations and remedies shall be
governed by the Delaware Act without giving effect to principles of conflict of laws. 

         11.09    No Third-Party Beneficiaries    

        Except
with regard to the Company's obligation to indemnify Covered Persons as set forth in Section 2.10, and as otherwise specifically provided in this Agreement, the provisions
of this Agreement are not intended to be for the benefit of, or enforceable by, any third party and shall not give rise to a right on the part of any third party (i) to enforce or demand
enforcement of a Member's obligation to contribute to capital, obligation to return distributions, or obligation to make other payments to the Company as set forth in this Agreement, or (ii) to
demand that the Company or the Managing Member issue any capital call. 

50

 

         11.10    No Usury    

        Notwithstanding
any other provision in this Agreement, the rate of interest charged by the Company or by any Member (and/or any Affiliate thereof) to the Company or to any Member in
connection with any obligation under this Agreement shall not exceed the maximum rate permitted by applicable law. To the extent that any interest otherwise paid or payable by a Member or the Company
to the Company or to any Member (and/or Affiliate) shall have been finally adjudicated to exceed the maximum amount permitted by applicable law, such interest shall be retroactively deemed to have
been a required repayment of principal (and any such amount paid in excess of the outstanding principal amount shall be promptly returned to the payor). In furtherance of the foregoing, the
Members acknowledge and agree that pursuant to the Delaware Act, no obligation of a Member to the Company shall be subject to the defense of usury, and no Member shall impose the defense of usury with
respect to any such obligation in any action. 

         11.11    Venue    

        Subject
to Section 11.17, each Member agrees that any litigation, claim or lawsuit directly or indirectly arising out of or related to this Agreement shall be instituted
exclusively in the courts, whether federal or state, located in the County of Los Angeles, State of California, and nowhere else. Each Member further agrees that, notwithstanding the foregoing, any
such litigation, claim or lawsuit as to which there is federal jurisdiction, by reason of diversity, federal question or otherwise, shall be instituted exclusively in a federal district court located
in the Central District of California. 

         11.12    Waiver of Jury Trial    

        TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH MEMBER WAIVES, AND COVENANTS THAT SUCH MEMBER WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE),
ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH THE DEALINGS
OF ANY OTHER MEMBER OR THE COMPANY IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. The Company or any Member may
file an original counterpart or a copy of this Section with any court as written evidence of the consent of the Members to the waiver of their rights to trial by jury. 

         11.13    Timing    

        All
dates and times specified in this Agreement are of the essence and shall be strictly enforced. 

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         11.14    Remedies for Breach of this Agreement    

        Except
as otherwise specifically provided in this Agreement, the remedies set forth in this Agreement are cumulative and shall not exclude any other remedies to which a person or entity
may be lawfully entitled. 

         11.15    Reasonableness of Remedies    

        THE
REMEDIES SET FORTH IN THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, SECTIONS 3.04 AND 7.04) ARE A MATERIAL INDUCEMENT FOR EACH MEMBER TO ENTER INTO THIS AGREEMENT, AND THE
MEMBERS WOULD NOT HAVE AGREED TO ENTER INTO THIS AGREEMENT BUT FOR THE AGREEMENT OF EACH MEMBER TO BE BOUND BY SUCH REMEDIES. EACH MEMBER ACKNOWLEDGES AND AGREES THAT THE FOREGOING REMEDIES ARE FAIR
AND REASONABLE AND HAVE BEEN ENTERED INTO WITH THE INFORMED CONSENT OF EACH MEMBER. EACH MEMBER FURTHER ACKNOWLEDGES AND AGREES THAT IT WOULD BE IMPRACTICABLE AND EXTREMELY DIFFICULT TO ESTIMATE THE
DAMAGES WHICH THE COMPANY AND THE NON DEFAULTING MEMBERS MAY SUFFER IN CONNECTION WITH THE OCCURRENCE OF ANY OF THE DEFAULTS DESCRIBED ABOVE. THEREFORE, EACH MEMBER AGREES THAT THE REMEDIES SET FORTH
ABOVE REASONABLY AND FAIRLY REFLECT THE DETRIMENT THAT THE COMPANY AND THE NON DEFAULTING MEMBER WOULD SUFFER IN SUCH EVENT AND, IN LIGHT OF THE DIFFICULTY IN DETERMINING ACTUAL DAMAGES, REPRESENT A
PRIOR AGREEMENT AMONG THE MEMBERS AS TO APPROPRIATE LIQUIDATED DAMAGES. EACH MEMBER ALSO AGREES THAT THE REMEDIES SET FORTH ABOVE ARE NOT INTENDED AS A FORFEITURE OR PENALTY UNDER DELAWARE OR ANY
OTHER APPLICABLE STATE LAW. EACH MEMBER FURTHER COVENANTS NOT TO CONTEST THE VALIDITY OF THE REMEDIES SET FORTH ABOVE AS A PENALTY, FORFEITURE OR OTHERWISE IN ANY COURT OF LAW (AND/OR ARBITRATION). 

         11.16    Partnership Intended Solely for Tax Purposes    

        The
Members have formed the Company as a Delaware limited liability company under the Delaware Act, and do not intend to form a corporation or a general or limited partnership
under California or any other state law. The Members intend the Company to be classified and treated as a partnership solely for federal and state income taxation purposes. Each Member agrees to act
consistently with the foregoing provisions of this Section 11.16 for all purposes, including, without limitation, for purposes of reporting the transactions contemplated herein to the
Internal Revenue Service and all state and local taxing authorities. 

         11.17    Arbitration of Disputes    

        Any
controversy or claim arising out of or relating to this Agreement, or the claimed breach or interpretation thereof, shall be resolved by binding arbitration, subject to the following
additional provisions (provided, however, that any controversy or claim relating to a dispute as to whether a Buy/Sell Event has occurred shall be resolved by a court of competent jurisdiction, with
venue as provided in Section 11.11): 

52

 

                (a)   The
Member seeking arbitration ("Demanding Member") shall deliver a written notice of demand to resolve dispute
(the "Demand") to the other Member ("Non-Demanding Member"). The demand shall include
a brief statement of the Demanding Member's claim or controversy, the amount thereof, and the name of the proposed arbitrator to decide the dispute
("Arbitrator(s)"). Within ten (10) days after receipt of the demand, the Non-Demanding Member against whom a demand is made shall
deliver a written response to the Demanding Member. Such response shall include a short and plain statement of the Non-Demanding Member's defenses to the claim and shall also state the
name of the arbitrator chosen by the Demanding Member. Thereafter, the two (2) arbitrators shall select a third independent arbitrator. An arbitrator shall not be employed by any Member or its
Affiliate, directly, indirectly or as an agent, except in connection with the arbitration proceeding. Any person appointed as an arbitrator shall be knowledgeable and experienced in the matters sought
to be arbitrated. As an example, if the arbitrable dispute deals with construction issues, the arbitrator so appointed shall be experienced and knowledgeable as to construction practice of shopping
centers. 

                (b)   The
locale of the arbitration shall be in Los Angeles County, California, unless otherwise mutually agreed upon between the parties. 

                (c)   The
arbitrator's powers shall be limited as follows: the arbitrator shall follow the laws of the State of Delaware, and pursuant to Section 17450(a) of the
California Act, all rights, duties, obligations and remedies shall be governed by the Delaware Act without regard to principles of conflict of laws, and the Rules of Evidence of California. The
arbitrator's decision may be entered as a judgment in the Superior Court located in Los Angeles County, and that judgment shall be subject to any and all appeal rights which either party would have if
the judgment had been rendered in a Superior Court action after trial before a judge sitting without a jury. 

                (d)   The
costs of the resolution (including all reporter costs) shall be split between the Members prorata in accordance with their Distribution Percentages, provided,
however, that such costs, along with all other costs and expenses, including attorneys' fees, shall be subject to award, in full or in part, by the arbitrator, in his/her discretion, to the prevailing
party. Unless the arbitrator so awards attorneys' fees, each Member shall be responsible for its own attorneys' fees. 

                (e)   To
the extent possible, the arbitration hearings shall be conducted on consecutive days, excluding Saturdays, Sundays and holidays, until the completion of
the hearings. 

                (f)    In
connection with any arbitration proceedings commenced hereunder, either Member shall have the right to join any third parties in such proceedings in order to resolve
any other disputes, the facts of which are related to the matters submitted for arbitration hereunder. 

53

 

                (g)   The
arbitrator shall render her/his decision(s) concerning the substantive issue(s) in dispute in writing. The written decision shall be sent to the parties no later
than thirty (30) days following the last hearing date. 

                (h)   All
hearings shall be concluded within ninety (90) days from the day the arbitrator is selected or appointed, unless the arbitrator determines that this deadline
is impractical. 

                (i)    If
any of the provisions relating to arbitration are not adhered to or complied with, either party may petition the Presiding Judge of the California Superior Court
located in Los Angeles County for appropriate relief. 

                (j)    All
arbitration conducted under this Section 11.17 shall be in accordance with the rules of the American Arbitration Association to the extent such rules do not
conflict with the procedures herein set forth. To the extent permitted by law, compliance with this Section 11.17 is a condition precedent to the commencement by any Member of a judicial
proceeding arising out of any dispute relating directly or indirectly to this Agreement; provided, however, that any controversy or claim relating to a dispute as to whether a Buy/Sell Event has
occurred shall be resolved by a court of competent jurisdiction, with venue as provided in Section 11.11. 

         11.18    Scope of Representation    

        EACH
MEMBER ACKNOWLEDGES AND AGREES THAT IN CONNECTION WITH THE DRAFTING, PREPARATION AND NEGOTIATION OF THIS AGREEMENT AND ANY OTHER MATTERS RELATED THERETO (I) ALLEN MATKINS
LECK GAMBLE & MALLORY LLP HAS ONLY REPRESENTED THE INTERESTS OF SANTA ANITA AND NOT ANY OTHER MEMBER OR THE COMPANY, AND (II) DONFELD, KELLEY & ROLLMAN HAS ONLY REPRESENTED
THE INTERESTS OF CARUSO, AND NOT ANY OTHER MEMBER OR THE COMPANY. THE ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS WHO PERFORM SERVICES FOR ANY OF THE MEMBERS MAY ALSO PERFORM SERVICES FOR THE COMPANY.
THE MEMBERS FURTHER ACKNOWLEDGE THAT THE ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS WHO PERFORM SERVICES FOR THE COMPANY SHALL NOT BE DEEMED BY VIRTUE OF SUCH REPRESENTATION TO HAVE ALSO REPRESENTED THE
MEMBERS IN CONNECTION WITH ANY SUCH MATTERS. 

         11.19    CPI Adjustments    

        The
dollar limitations provided in the following Sections of this Agreement shall be subject to adjustment on January 1, 2010, and thereafter shall be adjusted in five
(5) year increments (i.e., on January 1, 2015, January 1, 2020, etc.) pursuant to the Index: Section 2.05(f), Section 2.05(h), Section 2.05(l),
Section 2.05(o), Section 2.05(r), Section 2.07(a), Section 2.08(c), Section 3.04(a), Section 6.03 (i), Section 9.01 and Section 9.03. 

54

   ARTICLE XII  

 DEFINITIONS  

         12.01    Accounting Firm    

        The
term "Accounting Firm" means the accounting firm retained by the Company to prepare the Company's tax returns and financial reports
and statements or such other accounting firm as is approved by the Management Committee. 

         12.02    Adjusted Capital Account    

        The
term "Adjusted Capital Account" means, with respect to any Member as of the end of each fiscal year of the Company, such Member's
Capital Account (i) reduced by any anticipated allocations, adjustments and distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4)-(6), and
(ii) increased by the amount of any deficit in such Member's Capital Account that such Member is deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulation
Sections 1.704-2(g)(1) and 1.704-2(i)(5) or under Section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations as the end of such
fiscal year. 

         12.03    Affiliate    

        The
term "Affiliate" means any person or entity which, directly or indirectly through one(1) or more intermediaries, controls or is
controlled by or is under common control with another person or entity. The term "control" as used herein (including the terms "controlling,"
"controlled by," and "under common control with") means the possession, direct or indirect, of the power
to (i) vote more than fifty percent (50%) of the outstanding voting securities of such person or entity, or (ii) otherwise direct management policies of such person by contract or
otherwise. The term "Affiliate" as to Santa Anita, includes Magna International Inc., MI Developments Inc., Magna Entertainment Corp., and
any Affiliate of any of the foregoing corporate entities. 

         12.04    Agreement    

        The
term "Agreement" means this Limited Liability Company Agreement of Santa Anita Associates, LLC. 

         12.05    Approved Transferee    

        The
term "Approved Transferee" means any publicly-traded real estate investment trust, any financial institution or pension fund, any
mutual fund or other institutional investor, any investment bank, and any publicly-traded real estate ownership or operating company, in each case with a net worth in excess of Two Hundred Fifty
Million Dollars ($250,000,000.00), and any corporation, partnership, limited liability company, trust or private fund in which any of the foregoing has a controlling interest, provided that such
entity also has a net worth in excess of Two Hundred Fifty Million Dollars ($250,000,000.00) or is guaranteed by any one of the foregoing entities having assets in excess of Two Hundred Fifty Million
Dollars ($250,000,000.00). 

55

 

         12.06    Budget    

        The
term "Budget" means the Pre-Development Budget, Development Budget or Operating Budget, as applicable. 

         12.07    Business Plan    

        The
term "Business Plan" means the Development Plan or Operating Plan, as applicable. 

         12.08    Buy/Sell Price Determination Notice    

        The
term "Price Determination Notice" is defined in Section 7.03(a). 

         12.09    California Act    

        The
term "California Act" means the Beverly-Killea Limited Liability Company Act, as set forth in Title 2.5, Chapter, et seq. of the
California Corporations Code, as hereafter amended from time to time. 

         12.10    Capital Account    

        The
term "Capital Account" means with respect to each Member the amount of money contributed by such Member to the capital of the Company,
increased by the aggregate fair market value at the time of contribution (as determined by a the Management Committee) of all property contributed by such Member to the capital of the Company
(net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), the aggregate amount of all Net
Profits allocated to such Member, and any and all items of gross income and gain specially allocated to such Member pursuant to Sections 4.03 and 4.04, and decreased by the amount of
money distributed to such Member by the Company (exclusive of any guaranteed payment within the meaning of Section 707(c) of the Code paid to such Member), the aggregate fair market value at
the time of distribution (as determined by a the Management Committee) of all property distributed to such Member by the Company (net of liabilities secured by such distributed property
that such Member is considered to assume or take subject to under Section 752 of the Code), the amount of any Net Losses allocated to such Member, and any and all losses and deductions,
including, without limitation, any and all partnership and/or partner "nonrecourse deductions" specially allocated to such Member pursuant to Sections 4.03 and 4.04. For purposes of
applying the provisions of Sections 4.01 and 4.02, each Member's Capital Account shall be increased by such Member's allocable share of partnership minimum gain as determined under
Treasury Regulation Section 1.704-2(g)(1) and partner nonrecourse debt minimum gain as determined under Treasury Regulation Section 1.704-2(i)(5). The
foregoing Capital Account definition and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulation
Sections 1.704-1(b) and 1.704-2 and shall be interpreted and applied in a manner consistent with such Regulations. 

56

 

         12.11    Caruso Affiliate Agreements    

        The
term "Caruso Affiliate Agreements" means the Management Agreement, the Development Agreement and any other agreement entered into
between the Company and any Affiliate of Caruso. 

         12.12    Cash Flow    

        The
term "Cash Flow" means the sum of any and all Ordinary Cash Flow and Extraordinary Cash Flow. 

         12.13    City    

        The
term "City" means the City of Arcadia, California. 

         12.14    Code    

        The
term "Code" means the Internal Revenue Code of 1986, as heretofore and hereafter amended from time to time (and/or any corresponding
provision of any superseding revenue law). 

         12.15    Commissionable Revenue    

        The
term "Commissionable Revenue" means all revenues paid by sub-tenants under Leases to with the Company, less all common
area maintenance, taxes, insurance and marketing and promotional amounts charged to sub-tenants under Leases. 

         12.16    Company    

        The
term "Company" means the limited liability company created pursuant to this Agreement and the filing of a Certificate of Formation
with the Delaware Secretary of State in accordance with the provisions of the Delaware Act. 

         12.17    Company Capital    

        The
term "Company Capital" means an amount equal to the sum of all of the Members' respective Capital Account balances determined
immediately prior to the allocation to the Members pursuant to Section 4.01 or 4.02 of any Net Losses or Net Profits, decreased by the aggregate amount of any Net Losses to be allocated
to the Members pursuant to Section 4.01 or increased by the aggregate amount of any Net Profits to be allocated to the Members pursuant to Section 4.02. 

         12.18    Construction Contract    

        The
term "Construction Contract" means the construction contract(s) by and between Company and Contractor. 

57

 

         12.19    Construction Loan    

        The
term "Construction Loan" means a mortgage loan encumbering the applicable phase of the Project with minimum proceeds sufficient to
provide funding (in excess of any required equity and available public funds, if any), for the applicable Improvements which the Parties intend to construct in such phase. Any Construction Loan
shall comply with the applicable criteria, if any, set forth in the Development Plan, and shall in any event conform to commercially reasonable rates and terms of national or regionally recognized
construction lenders. 

         12.20    Contractor    

        The
term "Contractor" means the licensed general contractor selected and engaged by Company to perform the construction of the applicable
phase of the Project. 

         12.21    Contributing Member(s)    

        The
terms "Contributing Member" and "Contributing Members" are defined in Section 3.04. 

         12.22    Contribution Date    

        The
term "Contribution Date" is defined in Section 3.03. 

         12.23    Covered Persons    

        The
term "Covered Persons" is defined in Section 2.10. 

         12.24    Default Loan    

        The
term "Default Loan" is defined in Section 3.04(a). 

         12.25    Delaware Act    

        The
term "Delaware Act" means the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et
seq.), as hereafter amended from time to time. 

         12.26    Delinquent Contribution    

        The
term "Delinquent Contribution" is defined in Section 3.04. 

         12.27    Deposit    

        The
term "Deposit" is defined in Section 6.03(c). 

         12.28    Development Agreement    

        The
term "Development Agreement" is defined in Section 2.08(a). 

58

 

         12.29    Development Budget.    

        The
term "Development Budget" is defined in Section 2.06(a) 

         12.30    Development Plan    

        The
term "Development Plan" is defined in Section 2.06(a). 

         12.31    Dilution Percentage    

        The
term "Dilution Percentage" is defined in Section 3.04(b). 

         12.32    Due Care    

        "Due Care" means the care, skill, prudence and diligence under circumstances then prevailing that a skillful, prudent, diligent, careful
and experienced developer of national standing would use in the conduct of an enterprise similar to that of the Project. 

         12.33    Effective Date    

        The
term "Effective Date" is defined in the initial paragraph of this Agreement. 

         12.34    Event of Default    

        The
term "Event of Default" means, with respect to the Managing Member or Member, as applicable: 

                (a)   The
Managing Member (A) makes a general assignment for the benefit of creditors, (B) files in any court a petition in bankruptcy, or insolvency, or for a
reorganization, or for the appointment of a receiver or trustee of all or a substantial part of its property, (C) voluntarily takes advantage of any bankruptcy or insolvency law, or
(D) has filed against it an involuntary petition or any answer is filed against the Managing Member or proposing the adjudication of the Managing Member as bankrupt which is not discharged or
denied within ninety (90) days thereafter; 

                (b)   the
failure of the Managing Member to observe or perform any covenant or agreement to be observed or performed by it under this Agreement for a period of thirty
(30) days after written notice from the other Member which notice specifies the failure and requests that it be remedied, provided, however, if the failure stated in the notice cannot
reasonably be corrected within thirty (30) days, but is capable of being cured, the time period for curing such default shall be extended for an additional period of time if corrective action
is instituted by the Managing Member within such thirty (30) day period and so long as such cure is pursued with diligence until the event of default is corrected; 

                (c)   willful
misconduct, bad faith, or gross negligence of a Member in the performance of any of its tasks hereunder; 

59

 

                (d)   an
assignment by the Managing a Member of the Managing its Member's rights and duties under this Agreement in violation of Article VI hereof; or 

                (e)   the
occurrence of any circumstance identified in (a) above applicable to any Affiliate of the Managing Member that is a party to the Management Agreement,
Development Agreement, or any guarantor under any loan on behalf of the Company. 

         12.35    Extraordinary Cash Flow    

        The
term "Extraordinary Cash Flow" means the cash proceeds (including, without limitation, loan proceeds, insurance proceeds, recoveries,
damages and awards) realized by the Company, directly or indirectly, as a result of the occurrence of an Extraordinary Event, plus cash interest payments received with respect to such proceeds,
decreased by the sum of (i) the amount of such proceeds applied by the Company to pay debts and liabilities of the Company (inclusive of any guaranteed payment within the meaning of
Section 707(c) of the Code paid to any Member) and insurance proceeds used to repair or rebuild Company property; (ii) any incidental or ancillary expenses, costs or liabilities incurred
by the Company in effecting or obtaining any such Extraordinary Event, or the proceeds thereof (including, without limitation, attorneys' fees, expert witness' fees, accountants' fees, court costs,
recording fees, transfer taxes and fees, appraisal costs and the like) all of which expenses, costs and liabilities shall be paid from the gross amount of such cash proceeds to the extent thereof;
(iii) the payment of such other Company debts and liabilities as are determined in the reasonable discretion of the Management Committee; and (iv) a reserve, established in the
reasonable discretion of the Management Committee for anticipated cash disbursements that will have to be made before additional cash receipts from third parties will provide funds therefor. 

         12.36    Extraordinary Event    

        The
term "Extraordinary Event" means the sale, disposition, exchange, condemnation, damage, destruction, financing, refinancing or other
transfer of any substantial portion of the assets of the Company. 

         12.37    Five Million Dollar Outstanding Delinquent Contribution    

        The
term "Five Million Dollar Outstanding Delinquent Contribution" means that a Non-Contributing Member has failed to
contribute cumulative Delinquent Contributions of Five Million Dollars ($5,000,000) or more, less (i) the amount of any Delinquent Contributions that have been subsequently repaid by the
Non-Contributing Member whether or not pursuant to a Default Loan (including cash distributed to the Contributing Member which would otherwise be distributed to the
Non-Contributing Member as set forth in Section 3.04), and (ii) the amount of any Delinquent Contribution that a Contributing Member has elected to contribute to the Company
pursuant to a dilution election pursuant to Section 3.04(b). 

         12.38    Force Majeure    

        The
term "Force Majeure" shall have the meaning set forth in Section 6.02 of the Development Agreement. Force Majeure shall exclude
delays caused by lack of funds or financing. 

60

 

         12.39    Ground Lease    

        The
term "Ground Lease" is defined in Recital "C." 

         12.40    Improvements    

        The
term "Improvements" is defined in Section 1.03. 

         12.41    Interest    

        The
term "Interest" means with respect to any Member, all of such Member's right, title and interest in and to the Net Profits, Net
Losses, Cash Flow, distributions and capital of the Company, and any and all other interests therein in accordance with the provisions of this Agreement and the Delaware Act. 

         12.42    Index    

        The
term "Index" means with respect to any applicable calculation that is provided for herein, for each particular year or period in
question, means the "All Items" portion of the Consumer Price Index for All Urban Consumers: U.S. City Average (1982-84 = 100), issued and published by the Bureau of Labor
Statistics of the United States Department of Labor. If the Index ceases to use the 1982-84 average equaling 100 as the basis of calculation, or if a change is made in
the terms or number of items contained in the Index, or if the Index is altered, modified, converted or revised in any way, then the Index shall be determined by reference to the index designated as
the successor to the prior Index or other substitute index published by the government of the United States and new index numbers shall be substituted for the old index numbers in making the
calculations, as may be appropriate. If at any time the Bureau of Labor Statistics shall no longer publish such Index, then any successor or substitute index to the Index published by said Bureau or
other governmental agency of the United States, and similarly adjusted as aforesaid, shall be used. If such a successor or substitute index is not available or may not lawfully be used for the
purposes herein stated, a reliable governmental or other non-partisan publication selected by Manager and reasonably acceptable to Company shall be used in evaluating the information
theretofore used in determining the Index. 

         12.43    Leases    

        "Leases" means any lease, sublease, license to occupy or other right of occupancy, use or possession of the Property or any part of the
Property, including advertising agreements and sponsorship agreements, and any amendment thereof, entered into or granted by the Company, whether temporarily or for a fixed or periodic term, whether
or not recorded, and whether oral or written including, without limitation, any storage license, cart or kiosk lease or license, and any other specialty lease or license. "Leases" means each and every
Lease in effect at the applicable time, collectively. 

         12.44    Liquidation    

        The
term "Liquidation" means, (i) with respect to the Company the earlier of the date upon which the Company is terminated under
Section 708(b)(1) of the Code or the date upon which the Company ceases to be a going concern (even though it may continue in existence for the purpose of winding up its affairs, paying its
debts and distributing any remaining balance to its Members), and (ii) with respect to a Member wherein the Company is not in Liquidation, means the liquidation of a Member's interest in the
Company under Treasury Regulation Section 1.761-1(d). 

61

 

         12.45    Major Decisions    

        The
term "Major Decisions" is defined in Section 2.05. 

         12.46    Management Committee    

        The
term "Management Committee" is defined in Section 2.01(a). 

         12.47    Managing Member    

        The
term "Managing Member" initially means Caruso, unless replaced pursuant to the terms of this Agreement. 

         12.48    Member(s)    

        The
term "Members" means all of the parties listed as "Members" on Exhibit "A" attached hereto, collectively; the term
"Member" means any one (1) of the Members. 

         12.49    Milestones    

        The
term "Milestones" means satisfaction by Caruso of the following milestones prior to expiration of the Termination Window:
(i) obtaining an executed letter of intent from at least one (1) anchor store on terms and conditions consistent with the Development Plan and Development Budget and approved by Santa
Anita, (ii) completed and submitted to applicable government agencies a final environmental impact report for the Project, approved by Santa Anita, and (iii) confirmation that the
overall owner returns to Santa Anita are consistent with the preliminary proforma attached to the Preliminary Development Plan or the last updated Preliminary Development Plan, if any, approved by
the Members. 

         12.50    Minority Member Major Decisions.    

        The
term "Minority Member Major Decisions" means any of the Major Decisions provided in Section 2.05(l), Section 2.05(n), and Sections 2.05(p)
through (x), inclusive. 

         12.51    Net Profits and Net Losses    

        The
terms "Net Profits" and "Net Losses" mean, for each fiscal year or other period, an
amount equal to the Company's taxable income or loss, as the case may be, for such year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items
of income, gain, loss and deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss); provided, however, for purposes of
computing such taxable income or loss, (i) such taxable income or loss shall be adjusted by any and all adjustments required to be made in order to maintain Capital Account balances in
compliance with Treasury Regulation Sections 1.704-1(b), and (ii) any and all items of gross income, gain, losses and/or deductions, including, without limitation, any and
all partnership and/or partner "nonrecourse deductions" specially allocated to any Member pursuant to Sections 4.03 and 4.04 shall not be taken into account in calculating such taxable
income or loss. 

62

 

         12.52    Opening    

        The
term "Opening" is defined in Section 6.03(a). 

         12.53    Operating Budget    

        The
term "Operating Budget" is defined in Section 2.06(b). 

         12.54    Ordinary Cash Flow    

        The
term "Ordinary Cash Flow" means the amount, if any, of all cash receipts of the Company (exclusive of the proceeds of an Extraordinary
Event), as of any applicable determination date in excess of the sum of (i) all cash disbursements (inclusive of any guaranteed payment within the meaning of Section 707(c) of the Code
paid to any Member, but exclusive of disbursements made from the proceeds of an Extraordinary Event to the Members in their capacities as such) of the Company prior to that date; and (ii) a
reserve, established in the reasonable discretion of the Management Committee for anticipated cash disbursements that will have to be made before additional cash receipts from third parties will
provide the funds therefor. 

         12.55    Percentage Interest    

        The
term "Percentage Interest" means, with respect to such Member, the percentage set forth opposite each such Member's name on
Exhibit "D" attached hereto under the column labeled "Percentage Interest", as the same may be adjusted from time to time. 

         12.56    Permitted Transferees    

        The
term "Permitted Transferees" is defined in Section 6.02. 

         12.57    Pre-Development Costs    

        The
term "Pre-Development Costs is defined in Section 2.06. 

         12.58    Prime Rate    

        The
term "Prime Rate" means as of any applicable date the prevailing Bank of America, NA, commercial reference rate, which rate shall be
adjusted concurrently with any adjustments to such commercial reference rate. 

         12.59    Prohibited Transferee    

        The
term "Prohibited Transferee" means, with respect to any transfer by Caruso, any entity which, directly or indirectly, through an
Affiliate or otherwise, owns or operates any horse racing, pari-mutuel wagering or other gaming facility, and with respect to any transfer by either Member, any person or entity who has
been convicted of a felony, or any person or entity that owns or manages the shopping center located at 400 South Baldwin Avenue and to the West of the Project. 

63

 

         12.60    Project(s)    

        The
term "Project" is defined in Section 1.03. 

         12.61    Property    

        The
term "Property" is defined in Recital A. 

         12.62    Quorum    

        The
term "Quorum" is defined in Section 2.02(a). 

         12.63    Racetrack Property    

        The
term "Racetrack Property" shall have the meaning given to such term in Recital "A". 

         12.64    REA    

        The
term "REA" is defined in Recital "E". 

         12.65    Recapture Conditions    

        The
term "Recapture Conditions" means the following: 

                (a)   the
Company obtains the Entitlements, and the Entitlements have been fully vested and all applicable appeal periods and periods for challenge initiative or referendum
have expired without any appeal initiative or referendum, or such appeals initiatives or referendum have been resolved in favor of the Company; 

                (b)   the
minimum pre-leasing conditions required pursuant to the Company's Construction Loan have been satisfied; 

                (c)   construction
drawings have been completed and contracts have been negotiated; 

                (d)   applicable
building permits have been or are ready to be obtained and actual construction is ready to commence for the construction of the Project; and 

                (e)   the
Company has obtained a commitment letter, and the Company has paid a commitment fee, for a Construction Loan in an amount *** loan-to-cost
ratio, as determined by reference to the cumulative hard and soft costs provided in the approved Development Budget. 

64

 

                (f)    the
Members have approved the Development Budget and Development Plan; and 

                (g)   the
Members have agreed upon the form of the REA. 

         12.66    Regulatory Allocations    

        The
term "Regulatory Allocations" is defined in Section 4.04. 

         12.67    Representative(s)    

        The
terms "Representative" and "Representatives" are defined in Section 2.01(b). 

         12.68    Retail Management Agreement    

        The
term "Retail Management Agreement" shall have the meaning given to such term in Section 2.08(c). 

         12.69    Securities Acts    

        The
term "Securities Acts" is defined in Section 11.01(a)(i). 

         12.70    Treasury Regulation    

        The
term "Treasury Regulation" means any proposed, temporary, and/or final federal income tax regulation promulgated by the
United States Department of the Treasury as heretofore and hereafter amended from time to time (and/or any corresponding provisions of any superseding revenue law and/or regulation). 

         12.71    Unreturned Contribution Account    

        The
term "Unreturned Contribution Account" means with respect to each Member, the amount of money contributed by each such Member to the
capital of the Company and credited to such account pursuant to Section 3.01 and Section 3.03, and decreased by the amount of money distributed by the Company to such Member pursuant to
Section 5.02(a), and the agreed-upon fair market value (as reasonably determined by the Management Committee) of any property distributed to such Member by the Company as
permitted pursuant to Section 5.04 (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the
Code) pursuant to Section 5.02(a). 

65

 

        WITNESS
WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written. 

	"Santa Anita"	 	SANTA ANITA COMMERCIAL ENTERPRISE,

INC., a Delaware corporation
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	 	          /s/ Blake Tohana
 Blake Tohana,

Executive Vice President and Chief

Financial Officer
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	 	          /s/ Frank Stronach

	 	 	 	 	Name:	

	 	 	 	 	Title:	

	 	 	 	 	 	 
	 	 	 	 	 	 
	"Caruso"	 	SANTA ANITA ASSOCIATES HOLDING CO.,

LLC, a California limited liability company
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	 	          /s/ Rick Caruso

	 	 	 	 	Rick J. Caruso, Manager

66

EXHIBIT "A"

DESCRIPTION OF SANTA ANITA PROPERTY  

        EXHIBIT
"A" 

* * * 

EXHIBIT "B"

DESCRIPTION OF PROPERTY  

EXHIBIT
"B" 

* * *

EXHIBIT "C"  

 GROUND LEASE

        THIS
GROUND LEASE (this "Lease") is made as of the              day of
                                    ,
200     (the "Effective Date"), by and between THE SANTA
ANITA COMPANIES, INC., a California corporation ("Landlord"), and SANTA ANITA ASSOCIATES, LLC, a Delaware limited liability company
("Tenant"). 

R
E C I T A L S: 

        A.    Landlord
is the owner of a parcel of land, together with all easements, rights and appurtenances related thereto (referred to herein as the
"Premises") containing approximately eighty-five (85) [TO BE
CONFIRMED] acres located in the State of California, within Los Angeles County and within the City of Arcadia. The legal description of the Premises is attached
hereto as Exhibit A. 

        B.    Tenant
desires to obtain a long-term leasehold estate in the Premises for the purpose of enabling Tenant to develop thereon a mixed-use
retail/entertainment/residential and office (in conjunction with such retail/entertainment uses, but in any event the square footage of such office use shall not exceed twenty percent
(20%) of the square footage of such retail/entertainment uses) project consisting of approximately eight hundred thousand (800,000) square feet of retail space, the potential future
development of residential housing and approximately four thousand (4,000) parking spaces (collectively, together with all replacement thereof and additions thereto, referred to as the
"Improvements"). It is anticipated that the Improvements will be (i) physically integrated relative to access and certain common areas and
certain parking areas with each other and with Landlord's existing improvements related to Landlord's operation of a horse racing and wagering facility generally known as "Santa Anita Park"
(the "Racetrack") shown on the Site Plan (as hereinafter defined), and (ii) functionally integrated, at least in part, with the
Racetrack. Santa Anita Park and the Racetrack are located on land owned by Landlord adjacent to the Premises (referred to herein as the "Adjacent
Land"). The proposed general layout and configuration of the Improvements on the Premises and the Racetrack on the Adjacent Land are depicted in the site plan
(the "Site Plan") attached hereto as Exhibit B. The Improvements and Racetrack are sometimes hereinafter
collectively referred to as the "Complex". 

        C.    Landlord
and Tenant acknowledge that the success of the Improvements and the Racetrack will be enhanced by the physical integration of the Improvements and the Racetrack,
including easements for the common use of parking areas, driveways and walkways located on the Premises and the Adjacent Land, and upon observance and performance by Tenant and the owner and occupants
of the Adjacent Land of various reciprocal restrictions and common obligations and standards of development, operation and maintenance. 

        D.    In
order to provide for such common standards, reciprocal rights and restrictions and in order to create various reciprocal easements for access, parking and utilities,
concurrent with the execution of this Lease, Landlord and Tenant have entered into a Construction, Operation and Reciprocal Easement Agreement (as may be amended or supplemented from time to
time, the "REA"). 

        E.    Definitions
of capitalized terms not otherwise defined in the body of this Lease are set forth in Section 16.14 below. 

        NOW,
THEREFORE, the parties do hereby agree as follows: 

ARTICLE 1

LEASE OF PREMISES  

         1.1.    Lease of Premises    

        Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord the Premises for the consideration and subject to the terms and conditions hereinafter set forth. 

 

         1.2.    Reservation of Oil, Gas and Mineral and Water Rights    

        Landlord
reserves to itself and its Affiliates all water rights used in connection with or appurtenant to the Premises and the sole and exclusive right to prospect for, drill for,
produce and take any water, oil, gas, or other hydrocarbon or mineral substances and accompanying fluids, including all geothermal resources, from below the Premises
(the "Oil, Gas and Mineral Rights"), including the right to slant drill, maintain subsurface pressures and utilize subsurface storage space for
natural substances; provided, however, that this reservation does not include the right of entry from the surface or within 500 feet below the surface, nor any other right not expressly
reserved herein. Furthermore, Landlord shall not disturb, remove or impair the lateral or subjacent support of the Premises or any improvements thereon. Landlord covenants that Tenant and its
subtenants and their respective employees and customers shall not be disturbed in its quiet enjoyment and peaceful use of the Premises by any drilling and production or any energy production
activities, and Landlord agrees to indemnify Tenant and hold it harmless for any damages caused by such activities. Tenant shall not conduct any exploration or operations for the extraction
of water. 

         1.3.    Tenant's Investigation    

        Subject
to the terms of Section 18.8, Tenant accepts the Premises "as is" without representation or warranty of Landlord except as expressly set forth in this Lease. Tenant
acknowledges that it has: the advice of such independent professional consultants and experts as it deems necessary in connection with its investigation and study of the Premises; to the extent it has
deemed necessary, independently investigated the condition of the Premises, including the soils, hydrology and seismology thereof, and the laws and regulations relating to the construction and
operation of the Improvements on the Premises, including environmental, zoning and other land use entitlement requirements and procedures, height restrictions, floor area coverage limitations and
similar matters; and not relied upon any statement, representation or warranty of Landlord and/or of its Affiliates of any kind or nature in connection with its decision to execute and deliver this
Lease and its agreement to perform the obligations of Tenant hereunder, except as expressly set forth in this Lease. Without limiting the foregoing, except as otherwise provided in Section 18.8
of this Lease, Tenant acknowledges that Landlord makes no representation as to entitlement, soil or "Hazardous Substances" (as defined in Section 16.14.1.4. below) conditions. 

         1.4.    Subordination to and Conflicts with the REA    

        All
references herein to the REA shall mean and refer to the REA as it exists as of the Effective Date and as the REA may be hereinafter amended by amendments thereto which are consented
to in writing by Landlord and Tenant. This Lease shall be subordinate to the REA. Landlord and Tenant intend for the REA and this Lease to supplement and be consistent with one another. Thus, as
between Landlord and Tenant, the REA and this Lease each shall be interpreted to avoid any conflict between the two instruments. However, in the event of a conflict between any terms of this Lease and
the terms of the REA, as between Landlord and Tenant, the terms of this Lease shall control. 

         1.5.    Covenant of Quiet Enjoyment    

        Landlord
hereby covenants that Tenant, on paying the rent herein reserved and upon performing all of the terms and conditions on its part to be performed, shall at all times during the
Term quietly have, hold and enjoy the Premises without any disturbance from Landlord or any Person claiming through Landlord or any of its Affiliates which would interfere with Tenant's use of the
Premises except for the permitted exceptions identified on Exhibit "C" attached hereto (the "Permitted
Exceptions") and other matters expressly permitted in this Lease. 

ARTICLE 2  

 TERM  

         2.1.    Initial Term    

        The
initial term of this Lease (the "Term") shall be for a period of seventy-five (75) years, plus the partial
calendar year from the Effective Date until December 31st of such year if the Effective Date is other than January 1st of the subject calendar year. The date Rent under
this Lease shall commence (the "Rent Commencement Date") shall be the earlier of (i) the date Tenant opens the Improvements, or any
material portion thereof, to the general public (the "Opening Date"), (ii) twenty-four (24) months following the
Effective Date as extended for Force Majeure Delays which cause the Opening Date to be delayed or (iii) five (5) years following the Effective Date. 

2

 

         2.2.    Option Terms    

        Tenant
shall have the right to extend the Term for two (2) periods of ten (10) years each (each, an "Option Term"), which
Tenant may exercise by giving Landlord written notice thereof at least twelve (12) months prior to the expiration of the initial Term or the first Option Term, as applicable. Notwithstanding
the foregoing, Tenant may not exercise an extension option at any time an Event of Default exists. If Tenant timely exercises an extension option, then all references in this Lease to the Term shall
include the exercised Option Term. 

ARTICLE 3  

 RENTAL  

         3.1.    Annual Rental    

        Tenant
shall pay to Landlord without abatement, deduction (except as expressly permitted under this Lease), offset (except as expressly permitted under this Lease) or prior demand,
annual rental as calculated pursuant to the provisions of Exhibit 3.1 attached hereto (the "Annual Rental")
in equal, consecutive monthly installments, in advance on or before the first business day of each calendar month. On the fifth (5th) anniversary of the Rent Commencement Date, and every
five (5) years thereafter during the Term (including any exercised Option Term), Annual Rental shall increase to an amount equal to one hundred ten percent (110%) of the Annual Rental in effect
during the immediately preceding five (5) year period. 

         3.2.    Adjustment to Annual Rental    

                3.2.1    Change in Use.    If Tenant causes there to be (i) a net
change in the actual use of the Premises or (ii) an intensification of the use of the Premises for the same uses that are specified in Section 5.1.1 (individually and collectively
referred to herein as the "Changed Use"), then effective upon the date that the improvements that constitute a Changed Use first open for business, or a
material portion thereof (for purposes of this Section 3.2.1, the "Adjustment Date"), the Annual Rental shall be increased by an amount
equal to the product of (i) eight percent (8%) multiplied by (ii) fifty percent (50%) of the Changed Use Value Increase as determined in accordance with the provisions of
Section 16.4. The "Changed Use Value Increase" means the difference between the value of the entitlements for the Changed Use and the value of
the entitlements being replaced by the Changed Use; however, in no event shall the Annual Rent be reduced as a result of a Changed Use. On the fifth (5th) anniversary of the Adjustment
Date and every five (5) years thereafter during the Term (including any exercised Option Term), Annual Rental shall increase to an amount equal to one hundred ten percent (110%) of the Annual
Rental in effect during the immediately preceding five-year period. By way of example of the concept of "Changed Use Value Increase", assume that 100,000 square of retail space is
converted to 125,000 square feet of office space as a result of Tenant securing a change in entitlements, the Changed Use Value Increase would be the value of the entitlements for
125,000 square feet of office space less the value of the entitlements for 100,000 square feet of retail space. 

                3.2.2    Cessation of Racetrack Operations.    In the event the Racetrack
ceases operation for a period of at least twelve (12) consecutive months, or does not conduct at least sixty (60) days of live horse racing meets in any twelve (12) month period,
for reasons other than Force Majeure Delays or loss of license, or if the Racetrack loses its license to conduct live horse racing meets and the license is not renewed within thirty-six
(36) months (each of the foregoing being referred to as a "Cessation Event"), then effective upon the occurrence of a Cessation Event (for
purposes of this
Section 3.2.2, the "Adjustment Date"), the Annual Rental shall be adjusted to an amount equal to the product of (i) eight percent (8%)
multiplied by (ii) fifty percent (50%) of the fair market value of the Premises as determined in accordance with the provisions of Section 16.4. Notwithstanding the foregoing, in no
event shall Annual Rent increase as the result of such adjustment. On the fifth (5th) anniversary of the Adjustment Date and every five (5) years thereafter during the term
(including any exercised Option Term), Annual Rental shall increase to an amount equal to one hundred ten percent (110%) of the Annual Rental in effect during the immediately preceding
five-year period. 

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         3.3.    Place for Payment of Rent    

        Rent
shall be payable to Landlord without deduction (except as expressly permitted by this Lease) or offset (except as expressly permitted by this Lease), prior notice or demand, in
lawful money of the United States of America, at Landlord's then current address for notices as furnished pursuant to Section 16.1, by wire transfer or other method of transfer of
immediately available funds. The term "Rent" or "rent" means Annual Rental and all other sums payable by
Tenant hereunder. 

         3.4.    Net Lease    

        This
Lease shall be deemed and construed to be a "net lease" and Tenant shall pay to Landlord, absolutely net throughout the term of this Lease, the rent provided for in this Lease, free
of deductions of any kind and without abatement except as specifically provided herein, and under no circumstances or conditions, whether now or hereafter existing, or whether within or beyond the
present contemplation of the parties, shall Landlord be expected or required to make any payment of any kind whatsoever or be under any other obligation or liability hereunder except as herein
otherwise expressly set forth; and Tenant agrees that, except as herein otherwise expressly provided, Tenant shall pay all costs, charges, and expenses of every kind and nature whatsoever against or
in connection with the Improvements and/or the Premises which may arise or become due during the term of this Lease, and which, except for the execution and delivery hereof, would or could have been
payable by Landlord. Nothing in this Section is intended to relieve Landlord of any liability specifically imposed on Landlord in any other Section of this Lease. 

ARTICLE 4  

 TAXES AND UTILITIES  

         4.1.    Tenant's Obligations to Pay Taxes    

        Except
as provided in Section 4.3, all real and personal property taxes, general and special assessments, environmental levies or charges other than attributable to Hazardous
Substances present at or under the Premises on the Effective Date (including, but not limited to, levies, or charges, governmental employer parking regulations, and any other parking or vehicular
regulations, levies, or charges imposed by any municipal, state or federal agency or authority) and other charges of every description levied on or assessed against the Premises, Improvements located
on the Premises, personal property located on or in the Improvements, the leasehold estate, any subleasehold estate or the rent payable hereunder, to the full extent of installments falling due
(or otherwise applicable to periods) after the Effective Date and prior to the expiration or termination of the Term, ordinary or extraordinary, foreseen or unforeseen, general or special,
shall be paid or caused to be paid by Tenant directly to the taxing authority, except only those specifically and separately levied against the Oil, Gas and Mineral Rights reserved by Landlord and
those levied against the personal property (if any) of Landlord, all of which shall be paid by Landlord. Tenant shall make or cause to be made all such payments directly to the charging
authority prior to delinquency and before any fine, interest, or penalty shall become due or be imposed by operation of law for their nonpayment. If, however, the law expressly permits the payment of
any or all of the foregoing in installments prior to delinquency (whether or not interest accrues on the unpaid balance), Tenant may, at Tenant's election, utilize the permitted installment method of
payment, but shall pay each installment with any interest before delinquency. Notwithstanding any provision in this Lease to the contrary, in no event shall Tenant be liable for nor obligated to pay
any portion of real property taxes or assessments on the Premises that may be attributable to: (i) to any special assessment, including a "Mello Roos" bond, voted for or approved by Landlord
for which Landlord did not receive the prior written approval of Tenant, or not opposed by Landlord following Tenant's written request of Landlord that, at Tenant's expense, Landlord oppose such bond,
provided, however, even if Tenant requests that Landlord not support, not vote for or actively oppose any proposed Mello Roos that affects the Premises, Landlord may ignore such requests, but in such
event Tenant shall not be liable for the payment of any assessment attributable to bonds that encumber the Premises in connection with such Mello Roos; or (ii) federal, state or local income or
franchise taxes, inheritance taxes, transfer, or documentary transfer taxes. 

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         4.2.    Prorations    

        All
payments of taxes or assessments or both shall be prorated for the year in which Tenant's obligation to pay taxes commences (i.e., proration as of the Effective Date),
terminates or expires. Tenant shall pay, at or prior to the expiration or earlier termination of this Lease, all installments of taxes or assessments relating to any period prior to such expiration
or termination. 

         4.3.    Prorations for Other Premises of Landlord    

        Landlord
shall use its diligent efforts to obtain separate assessment of the Premises from the balance of the Adjacent Land at the earliest practicable date. For such part of the Term,
if any, as the Premises, is not separately assessed but is included in a larger parcel for computation of real property taxes and assessments (the "Larger
Parcel"), or is separately assessed but the taxes attributable thereto are billed to Landlord as though the Premises is part of the Larger Parcel, then (i) Landlord
shall provide to Tenant a copy of the tax bill along with a computation setting forth Landlord's allocation of the taxes between the Larger Parcel and the Premises; (ii) Tenant's share of taxes
on the Larger Parcel shall be an amount equal to the sum of (a) Tenant's share of taxes payable with respect to all improvements upon the Larger Parcel (which will be based upon a fraction, the
numerator of which is the floor area of the Improvements, and the denominator of which is the floor area of all Improvements on the Larger Parcel), plus (b) Tenant's share of Taxes with respect
to the land within the Larger Parcel (which will be determined by a fraction, the numerator of which is the square footage of the Premises and the denominator of which is the
square footage of the Larger Parcel), and (iii) all taxes payable by Tenant hereunder shall be paid to Landlord, as the case may be, on the later of (a) ten (10) days
before such tax becomes delinquent or (b) ten (10) days after Landlord, or the taxing authority, notifies Tenant that a payment is due. 

         4.4.    Tenant's Right to Contest    

        Tenant,
at Tenant's expense, may contest the legal validity or amount of any taxes, assessments, or charges for which Tenant is responsible under this Lease, and may institute such
proceedings as shall be reasonable under the circumstances. If Tenant contests any such tax, assessment, or charge, Tenant may withhold or defer payment or pay under protest to the extent permitted by
law and the remaining provisions of this Section 4.4, but shall protect Landlord, the Premises and the Improvements from any lien by posting a surety bond or other appropriate security
reasonably satisfactory to Landlord, which Landlord may apply against any such taxes, assessments or charges upon completion of or failure to diligently prosecute such contest. Tenant may contest
taxes, assessments, and other charges hereunder only in good faith and by appropriate proceedings which shall operate to prevent (i) the collection of or other realization upon the tax,
assessment, or charge so contested, and (ii) the sale, forfeiture or loss of the Premises and/or the Improvements, and which shall not affect the payment of any rent and provided that such
contest shall not subject Landlord to the risk of any criminal or civil liability. Tenant shall notify Landlord prior to commencement of any contest and shall keep Landlord apprised of the status
thereof. Unless Tenant elects to cease the contest and pay the taxes, Tenant will diligently prosecute such contest to completion. 

        Landlord
appoints Tenant as Landlord's attorney-in-fact for the purpose of making all payments to any taxing authorities and for the purpose of contesting any
taxes, assessments or charges to the extent Tenant is required to make such payments or permitted to conduct such contest hereunder, conditional upon Tenant's preventing any liens with respect to such
taxes, assessments or charges (other than a statutory lien for non-delinquent taxes) from being levied on the Premises or other property of Landlord. 

         4.5.    Substitute Taxes    

        Notwithstanding
anything to the contrary contained in this Lease, Tenant shall not be required to pay any municipal, county, state or federal net income taxes or corporation franchise,
or net profit taxes, if any, of Landlord, or any municipal, county, state or federal estate, succession, inheritance, or transfer taxes of Landlord. If, however, during the Term, taxes described in
the preceding sentence are imposed, assessed, or levied on the rents derived from the Improvements in lieu of all or any part of real property taxes, personal property taxes, or real and personal
property taxes that Tenant would have been obligated to pay under this Lease, and the purpose of the new taxes is more closely akin to that of an ad valorem or use tax than to an income or franchise
tax on Landlord's income, Tenant shall pay the taxes as provided above for property taxes and assessments. 

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         4.6.    Tax Receipts    

        Promptly
upon request Tenant shall furnish Landlord with copies of receipts evidencing payment of any taxes or assessments or other charges Tenant is required to pay hereunder. 

         4.7.    Utilities    

        Tenant
is solely responsible for obtaining utility services and Landlord shall have no responsibility or liability for, nor shall any Rental be abated or offset as a result of, any
interruption in utility service unless the same is caused by Landlord and is due to Landlord's gross negligence or willful misconduct. Tenant shall pay or cause to be paid all charges and connection
fees for water, gas, heat, electricity, power, garbage service, air conditioning, telephone service, cable, satellite, fiber optics, telecommunications, sewer service charges and sewer rentals charged
or attributable to the Improvements, and all other services or utilities used in, upon or about the Improvements by Tenant or any of its subtenants, licensees or concessionaires during the Term.
Tenant shall have the right to install meters in the Improvements. Landlord will not enter into any discretionary or voluntary agreement with a provider of utilities for the Premises that would
increase the costs of utilities, meters, connection fees or the like for the Premises without first obtaining Tenant's consent. 

ARTICLE 5  

 USE AND POSSESSION  

         5.1.    Uses    

                5.1.1    Permitted Uses.    Subject to Section 5.1.3, Tenant may use
the Premises only for retail/entertainment uses, and at Tenant's election, residential (rental and/or for sale housing), and office (in conjunction with such retail/entertainment uses, but in
any event the square footage of the office use shall not exceed twenty percent (20%) of the square footage of the such retail/entertainment uses)
(the "Permitted Use"). The retail/entertainment component of the Permitted Use shall be (i) during the initial five (5) year term
following the Rent Commencement Date, consistent with the retail/entertainment uses as currently exist for "The Grove", located at 101 The Grove Drive, Los Angeles, California, and
(ii) thereafter, consistent with the retail/entertainment uses as are commonly found in first-class open-air mixed-use lifestyle and entertainment centers in the
Southern California area. 

                5.1.2    Prohibited Uses.    Notwithstanding any other provision of this
Lease, no use or operation shall be made, conducted or permitted on any part of the Premises that is clearly inconsistent with the development or operation of a first-class mixed-use
retail/entertainment/ residential project. So long as there is not a Cessation Event, Tenant shall not permit any activity at the Premises that would (i) be incompatible with the operation of
the Racetrack, or (ii) violate the Horse Safety Restrictions set forth on Exhibit 5.1.2 attached hereto. 

                5.1.3    Change in Use.    At any time following the first to occur of
(i) fifteen (15) years following the Rent Commencement Date or (ii) a Cessation Event, Tenant may change the Permitted Use of the Premises to any then legally permissible use that
is not otherwise prohibited under Section 5.1.2 above, provided that such permissible use constitutes a first-class development. 

         5.2.    Permits    

        Tenant
shall obtain and/or maintain all necessary licenses, approvals and permits from all federal, state and local authorities required for the operation of the Improvements and for any
other activity of Tenant hereunder but not for the business of subtenants. 

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         5.3.    Opening and Operation Covenant    

        Subject
to Force Majeure Delays, Tenant covenants to and agrees with Landlord that Tenant shall open the constructed and leased portions of the retail/entertainment Improvements for
business, on or before                               (the "Scheduled
Opening Date") and during the Term of this Lease shall
operate or cause to be operated the retail/entertainment Improvements as follows: 

        (a)   Tenant
shall continuously operate the retail/entertainment Improvements (but not individual shop premises) as a complex of merchandise retail/ entertainment
establishments within the Premises satisfying the applicable standard set forth in Section 5.1.1 above, and shall be preserved as such by such refurbishing and/or remodeling to the
extent reasonably necessary for such standard to be continuously adhered to. 

        (b)   Tenant
shall: (i) have the occupied and leased retail/entertainment floor area open and operated daily other than for national holidays and due to Force Majeure
Events and (ii) have at all times a mixture of retail/entertainment occupants in the Improvements satisfying the applicable standard set forth in Section 5.1.1 above. 

        (c)   Tenant
shall maintain a quality of management and operation satisfying the applicable standard in Section 5.1.1 above. 

        In
the event Tenant changes the use of the Premises in accordance with the provisions of Section 5.1.3 above, (i) the operating criteria set forth in clauses (a),
(b) and (c) above shall be revised to reflect such new use and (ii) cessations in operations due to alterations to the Improvements necessary to accommodate such new use shall not
constitute a default of Tenant's obligation to operate under this Section 5.3 for so long as Tenant is diligently pursing such alterations; provided, however, in no event may such
cessation with respect to any single or related series of alterations exceed a total of three (3) years (it being the intent that a cessation in operations with respect to successive
related alterations may not exceed a total of three (3) years, but once such alterations have been completed and operations commence, subsequent cessations in operations due to alterations
shall not constitute a default of Tenant's obligation to operate under this Section 5.3 for so long as Tenant is diligently pursing such alterations; provided, however, in no event may
such cessation with respect to any subsequent single or series of alterations exceed a total of three (3) years). 

        Notwithstanding
the foregoing, Tenant's obligation to operate as provided above shall terminate in the event (i) a Cessation Event occurs, or (ii) the Improvements are
damaged by casualty and Tenant elects not to restore such damaged Improvements pursuant to Section 7.2 below. 

ARTICLE 6  

 CONSTRUCTION OF IMPROVEMENTS  

         6.1.    Plan Approval    

        This
Section 6.1 shall apply to the plans for the original construction of the Improvements, the subsequent restoration thereof and any alterations requiring Landlord's consent. 

                6.1.1    Improvement Plans.    The "Improvement
Plans" shall consist of Schematic Design Plans, Design Development Plans and Contract Documents. 

        (a)   Schematic
Design Plans.    The "Schematic Design Plans" are conceptual in nature
and shall include the following with respect to the Improvements: site plans, architectural floor plans and elevations, Exterior Design, perspectives and renderings of exterior design concepts,
layouts and descriptions of landscaping. 

        (b)   Design
Development Plans.    The "Design Development Plans" shall be developed
from and substantially conform to the approved Schematic Design Plans and shall describe the following with respect to the Improvements: 

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        (1)   Plans
relating to all truck loading areas and truck parking, turn-around and dock areas and ramps; 

        (2)   Architectural
floor plans and elevations of the Improvements; 

        (3)   Exterior
Design including facade and all exterior (non-store front) signage; 

        (4)   Layout
of all occupant space in the Improvements (but not individual occupant premises); and 

        (5)   Such
plans to include architectural floor plans and elevations and renderings, color schemes, floor coverings, lighting, decorative elements, furnishings and signage,
excluding the storefront signage of occupants; 

        (c)   Contract
Documents.    The "Contract Documents" shall be developed from and
substantially conform to the approved Design Development Plans and provide the precise plans and specifications for construction of the Improvements as well as the precise locations of the staging,
employee parking, equipment access and fenced areas Tenant shall employ during said construction. 

                6.1.2    Approval of Plans.    Landlord shall have the right to approve in
its reasonable discretion (i) all aspects of the Schematic Design Plans and (ii) only those aspects of the Design Development Plans that do not substantially conform to the approved
Schematic Design Plans, as distinguished from additional detailed information that did not appear on the approved Schematic Design Plans. Subject to the provisions of Section 16.14.11,
Landlord's approval or disapproval of the Schematic Design Plans shall be given within thirty (30) days following receipt thereof and of the Design Development Plans within fifteen
(15) days following receipt thereof. Approval by Landlord shall not imply any assumption of liability with respect to such Improvement Plans. 

                6.1.3    Changes in Plans.    Subsequent changes to the approved Design
Development Plans that constitute material changes from the approved Schematic Design Plans or that do not otherwise substantially conform to the approved Schematic Design Plans shall be subject to
Landlord's approval pursuant to the provisions of Section 6.1.2. Any changes to the Schematic Design Plans or Design Development that materially differ from the last approved set of such plans
shall contain a statement delineating the nature and extent of the changes. 

                6.1.4    Governmental Requirements.    The Improvement Plans shall be
prepared in accordance with the requirements of all governmental authorities and agencies having jurisdiction over the Premises or Improvements. 

         6.2.    Notice of Nonresponsibility and Completion    

        Tenant
shall notify Landlord of Tenant's intention, and upon securing actual knowledge, Tenant shall notify Landlord of the intention of its subtenants to commence initial construction
of any work of improvement which will exceed a cost of Five Hundred Thousand Dollars ($500,000) at least fifteen (15) days before commencement of any such work or delivery of any materials.
Additionally, the notice shall specify the approximate location and nature of the intended Improvements. Landlord shall have the right to post and maintain on the Improvements any notices of
nonresponsibility provided for under applicable law. On completion of any work of improvement during the Term, Tenant shall promptly file or cause to be filed a notice of completion. 

         6.3.    Completion Bonds    

        Subject
to the remainder of this Section, Landlord shall be named as a co-obligee (whose rights are secondary to the Leasehold Mortgagee) under such lien and completion bonds
required, if at all, by Tenant's Leasehold Mortgagee. Such bonds shall be in the form of bond acceptable to Tenant's construction lender. In the event of a default by Tenant in constructing and/or
completing the Improvements as herein provided, as between Landlord and the Leasehold Mortgagee, such Leasehold Mortgagee may, but shall not be obligated to, enforce such completion/performance bonds
and complete or cause completion of construction of the Improvements. Should such Leasehold Mortgagee refuse or fail to enforce such bonds, Landlord may, but shall not be obligated to, enforce such
bonds and/or complete construction of the Improvements. 

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         6.4.    Financing    

        Tenant
shall deliver to Landlord the written approval of the Final Plans by the lender, if any, which will advance the funds required for construction of the Improvements. Tenant shall
provide such information and evidence as Landlord may reasonably require to assure Landlord that Tenant is able to and will make all payments required to be made as and when Tenant is required to do
so. A commitment for construction financing on commercially reasonable terms from a Leasehold Mortgagee will satisfy this requirement. 

         6.5.    Land Use Matters    

        Provided
the same are normally incident to development of a project of the type and scale similar to the Improvements, no Adverse Impact will result and no Event of Default then exists,
Tenant, at its sole expense and without cost or expense to Landlord, may enter into any agreement governing the use, operation or development of the Premises and may apply for and obtain use permits
or variances with respect to the Premises. Landlord shall, upon notice of request by Tenant, join with Tenant as necessary in any application for land use entitlements, including subdivision maps,
variances, use permits, including conditional use permits or grant of easement necessary in connection with the development or operation of the Improvements, such agreement and in applications to
obtain use permits or variances, at no out-of-pocket cost or expense to Landlord. Landlord may refuse to join in such agreements and applications only if such agreement,
easement, use permit, variances, or other change or matter affecting the Premises, would at any time materially adversely affect the current use or future development of the Adjacent Land or would
materially adversely affect Landlord's use or development of the Premises upon the expiration or earlier termination of this Lease or would subject Landlord to exactions or conditions of approval to
future development that Landlord would not otherwise be subject to (an "Adverse Impact"). Notwithstanding the foregoing, a development project
for the Premises that reduces entitlement rights for the Adjacent Land shall not be deemed an Adverse Impact so long as it does not adversely affect the operation of the Racetrack as a horse racing
venue (for example, if the Premises and the Adjacent Land were collectively allocated a certain number of dwelling units, the use of all such allocated dwelling units for the Premises would not
constitute an Adverse Impact). Tenant agrees not to oppose any development by Landlord or any of its Affiliates of any of the Adjacent Land so long as the proposed development in no way violates this
Lease or impairs Tenant's rights under the REA. 

         6.6.    Time for Commencement and Completion of Construction, Leasing and
Opening    

        Subject
to Force Majeure Delays, Tenant shall (i) commence construction (meaning grading of the Premises and trenching for foundations) of the Improvements not later than one
hundred eighty (180) days after the Effective Date (which date is referred to herein as the "Construction Commencement Date") and (ii) on
or before the Scheduled Opening Date Tenant shall (a) complete the Improvements (other than sub-tenant improvements and other than Improvements to be constructed by pad subtenants)
in accordance with the approved Schematic Design Plans and (b) open the retail/entertainment Improvements and the parking areas to the general public, (c) use commercially reasonably
efforts to have at least sixty-five percent (65%) of the square feet of retail/entertainment floor area of the Improvements either opened for business to the general public or
leased under leases requiring the occupants thereunder to be first open for business to the general public by the Scheduled Opening Date. Provided that Tenant is not otherwise in material default of
its obligations hereunder following the receipt of written notice and passage of applicable cure periods, the failure of Tenant to fully and timely meet any of the foregoing shall not constitute an
Event of Default hereunder so long as Tenant is exercising diligent and commercially reasonable efforts to perform the foregoing obligations. 

         6.7.    Mechanic's Liens    

        In
the event any mechanic's lien is filed against the Premises arising from work performed at the Premises, Tenant shall discharge the lien from record within thirty (30) days
following Tenant's notice of the commencement of a foreclosure action, whether such discharge shall be by payment or by the posting of a bond in the event Tenant elects to contest such lien. 

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         6.8.    Indemnity    

        Except
to the extent caused by the negligence or willful misconduct of Landlord, its tenants or any of their respective contractors or agents, Tenant shall indemnify, defend and hold
Landlord and the Premises harmless from (i) claims of lien of laborers, materialmen and others arising from such work performed or supplies furnished pursuant to such order or contract and
(ii) all claims arising from or as a result of the death of, or any accident, bodily injury, loss or damage whatsoever caused to any natural Person, or to the property of any Person, as shall
occur by reason of the performance of any work at the Premises. 

ARTICLE 7  

 MAINTENANCE, REPAIRS, ALTERATIONS, RECONSTRUCTION  

         7.1.    Maintenance    

        Tenant
shall keep and maintain, or cause to be kept and maintained, the Premises and all Improvements in good order, first class-condition and repair (including necessary replacements),
reasonable wear and tear excepted, and in accordance with all applicable laws. Landlord shall have no obligation to make any alterations, repairs or improvements to the Improvements or
the Premises. 

         7.2.    Casualty    

        In
the event of any casualty during the Term, except as provided in Sections 7.3 and 7.4, Tenant shall be required to rebuild or restore the Improvements, or at Tenant's
option, to construct different improvements that are equal in quality and, following such construction, along with the undamaged Improvements, comprise at least fifty percent (50%) of the
square footage of Improvements that existed on the Premises immediately prior to the casualty. In the event Tenant constructs different improvements, the same shall be on the terms of
Section 6.1 above including Schematic Design Plans developed and approved by Landlord in accordance with the terms of Section 6.1 above. The provisions of this Lease constitute an
agreement between Landlord and Tenant with respect to damage or destruction to the Premises or the Improvements, and any law, including Sections 1932(2) and 1933(4) of California Civil
Code, with respect to termination rights arising from damage or destruction shall have no application to this Lease. Notwithstanding the foregoing, (i) in the event of any casualty occurring
after the date that is fifteen (15) years following the Rent Commencement Date that would require an expenditure of more than twenty-five percent (25%) of the then full insurable
value of all Improvements (as defined in the provisions of this Lease relating to fire and extended coverage) or (ii) in the event of any casualty at any time during the Term that would
require an expenditure of more than ten percent (10%) of the full insurable value of all Improvements and a Leasehold Mortgagee requires the insurance proceeds to be applied to the Leasehold Mortgage
rather than to restoration, then Tenant may elect not to rebuild or restore such damaged Improvements, in which case, (a) Tenant shall give Landlord written notice thereof within sixty
(60) days following such casualty, (b) Tenant shall raze the same and place the area of the Premises upon which such Improvements were located in a safe, clean and sightly condition and
(c) this Lease shall remain in full force and effect, subject to Tenant's termination right under Sections 7.3 and 7.4 below. 

         7.3.    Damage or Destruction During Final Years of Term: Tenant's Right
to Terminate    

        Notwithstanding
the provisions of Section 7.2 (other than Section 7.2(ii) which shall be applicable), in the event of damage or destruction from casualty (a) at any
time after the first fifteen (15) years of the Term and provided the work of repairing, restoring or reconstructing the Improvements would require an expenditure of more than
twenty-five percent (25%) of the then full insurable value of all Improvements (as defined in the provisions of this Lease relating to fire and extended coverage insurance), or
(b) during the final ten (10) years of the Term and provided the work of repairing, restoring or reconstructing the Improvements would require an expenditure of more than ten percent
(10%) of the then full insurable value of all Improvements, Tenant shall have the option of repairing and reconstructing the Improvements or of terminating this Lease. If Tenant elects to repair and
reconstruct, Tenant shall promptly do so in accordance with the terms of this Lease. To exercise its right of termination, Tenant must comply with all of the following conditions: 

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        (i)    Give
Landlord notice of termination within one (1) year after the damage or destruction, specifying the date of termination which shall be not less than sixty
(60) days nor more than one hundred twenty (120) days after the date such notice of termination is given; 

        (ii)   Prior
to the termination date, cure any Defaults on Tenant's part under this Lease; 

        (iii)  Continue
to make all payments when due as required by the provisions of this Lease until the date of termination and on or before such date pay to Landlord all sums
then accrued under this Lease; 

        (iv)  Prior
to the termination date, pay in full any outstanding indebtedness incurred by Tenant and secured by an encumbrance or encumbrances on the leasehold, or
alternatively, deliver to Landlord the written consent of the holders of all such encumbrances to the early termination of this Lease and extinguishment of their liens; 

        (v)   Subject
to subsection (vii) below, on or before the termination date, deliver possession of the Premises and the Improvements and any personal property of Tenant
useful in connection therewith to Landlord, including, but not limited to, subtenant security deposits and prepaid rent with respect to subleases which are not terminated by the subtenant and not
required to be terminated by Tenant pursuant to subsection (vii) below, convey title in the Premises and Improvements to Landlord by grant deed and by similar bill of sale convey the
above-described personal property to Landlord and cease to do business on the Premises; 

        (vi)  Prior
to the termination date, cause to be discharged all liens and encumbrances resulting from any act or omission of Tenant including, but not limited to, any
subleases not entitled to the benefits of attornment set forth in Section 13.1; and 

        (vii) Prior
to the termination date, at Landlord's option, (a) in the case of an insured casualty, to the extent not required to be paid to the Leasehold
Mortgagee by the terms of the Mortgage, effectively relinquish and transfer to Landlord the casualty insurance proceeds payable with respect to the subject damage or destruction (less the cost of
(b) below if it is also elected by Landlord and less the book value of the damaged Improvements, as carried on Tenant's records for purposes of federal income tax) and (b) terminate all
subleases, raze all surface improvements on the Premises at Tenant's sole cost and expense and return the Premises to Landlord in a clean, neat and undeveloped condition. 

         7.4.    Uninsurable Casualty: Tenant's Right to Terminate    

        In
the event of damage or destruction by a casualty not required to be insured against hereunder and not so insured by Tenant, and provided the work of repairing, restoring or
reconstructing the Improvements would require an expenditure of more than ten percent (10%) of the then full insurable value of all Improvements (as defined in the provisions of this Lease
relating to fire and extended coverage insurance), Tenant shall have the option of repairing and reconstructing the Improvements or of terminating this Lease. If Tenant elects to repair and
reconstruct, Tenant shall promptly do so in accordance with the terms of this Lease. To exercise its right of termination, Tenant must comply with all of the following conditions: 

        (i)    Give
Landlord notice of termination within one (1) year after the damage or destruction, specifying the date of termination which shall be not less than sixty
(60) days nor more than one hundred twenty (120) days after the date such notice of termination is given; 

        (ii)   Prior
to the termination date, cure any Defaults on Tenant's part under this Lease; 

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        (iii)  Continue
to make all payments when due as required by the provisions of this Lease until the date of termination and on or before such date pay to Landlord all sums
then accrued under this Lease; 

        (iv)  Prior
to the termination date, pay in full any outstanding indebtedness incurred by Tenant and secured by an encumbrance or encumbrances on the leasehold, or
alternatively, deliver to Landlord the written consent of the holders of all such encumbrances to the early termination of this Lease and extinguishment of their liens; 

        (v)   Prior
to the termination date, cause to be discharged all liens and encumbrances resulting from any act or omission of Tenant; and 

        (vi)  Prior
to the termination date, terminate all subleases, raze all surface improvements on the Premises at Tenant's sole cost and expense and return the Premises to
Landlord in a clean, neat and undeveloped condition. 

         7.5.    General    

        Except
as specifically provided above, including a permitted change of use and election not to reconstruct all or any part of the Improvements, at no cost to Landlord, Tenant shall
promptly and diligently repair, restore, and replace the Improvements as required to comply with the terms of this Article 7 to remedy all damage to or destruction of all or any part of
the Improvements. Subject to the provisions of the preceding sentence, and Article 6, the completed work shall be equal in value, aesthetic appeal and quality to the condition of the
Improvements before the event giving rise to the work and Landlord shall not be required to furnish any services or facilities or to make any repairs or alterations of any kind in, to or on the
Improvements. 

        In
determining whether Tenant has acted promptly as required under this Section, in the case of a casualty, subject to Force Majeure Delays, Tenant may delay repair commencement up to
one hundred fifty (150) days while making preparations such as processing claims, obtaining lender approvals, developing plans and soliciting bids and obtaining permits if Tenant is exercising
reasonable reconstruction efforts during said period but is unable to commence the actual work of reconstruction any sooner. Subject to Force Majeure Delays, Tenant shall complete restoration within
eighteen (18) months after commencement. 

         7.6.    No Abatement of Rent    

        No
deprivation, impairment, or limitation of use resulting from any event or work contemplated by this Article 7 shall entitle Tenant to any offset, abatement, or reduction in
rent nor to any termination except as provided in Sections 7.3 and 7.4 (termination on damage or destruction), and Article 9 (condemnation) nor to any extension of
the Term. 

         7.7.    Alterations    

                7.7.1    Interior Alterations.    Following the initial construction of the
Improvements, Tenant may alter the interior of its Improvements without Landlord's consent. 

                7.7.2    Exterior Alterations.    Following the initial construction of the
Improvements, Tenant may alter the exterior of its Improvements without Landlord's consent provided that such alteration will not in any way cause or result in any of the following (in which
event Tenant shall obtain Landlord's prior written approval and the plan approval process set forth in Section 6.1 shall apply): (i) any material change to the Site Plan; (ii) a
material adverse impact upon the view corridors to the Racetrack grandstand as such view corridors are set forth on the approved Site Plan; (iii) except for subtenant required alterations,
changes in the Exterior Design of all or any material portion of the Improvements provided that Landlord's approval with respect to the Exterior Design of the Improvements shall be limited to the
compatibility of the same with the exterior architecture of the Racetrack as it now exists, or (iv) any change in the parking areas, road network or access drives, or any reduction in the
automobile parking ratio of 4.5 spaces per 1,000 square feet of retail floor area on the Premises. Notwithstanding the foregoing, the provisions of this Section 7.7.2 shall
be null and void from and after the date that either the originally named Landlord or its Affiliate is not the fee simple owner of the Premises or is not the fee simple owner of the Racetrack
property. 

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   ARTICLE 8  

 INDEMNITY AND EXCULPATION; INSURANCE  

         8.1.    Indemnity    

                8.1.1    By Tenant.    Tenant shall indemnify, defend, protect and hold
Landlord harmless from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses, including reasonable attorneys' fees and court costs
(collectively, "Claims"), arising or resulting from any occurrence within the Premises unless caused by the negligence or willful misconduct of Landlord
or Landlord's Affiliates, tenants, contractors or subcontrators or any of their respective agents or employees. The provisions of this Section 8.1.1 shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability occurring prior to such expiration or termination. 

                8.1.2    By Landlord.    Landlord shall indemnify, defend, protect and hold
Tenant and its subtenants harmless from and against any and all Claims arising or resulting from any occurrence within the Premises caused by the negligence or willful misconduct of Landlord or
Landlord's Affiliates and which is not caused by an occurrence covered by a special causes of loss property damage insurance policy carried by Tenant, or required to be carried by Tenant hereunder;
provided, however, in any such event, Landlord shall pay all deductible amounts. The provisions of this Section 8.1.2 shall survive the expiration or sooner termination of this Lease with
respect to any claims or liability occurring prior to such expiration or termination. 

         8.2.    Exculpation of Landlord and Tenant    

        Except
as otherwise provided in Section 8.1, neither Landlord nor any Affiliates of Landlord nor Tenant nor any Affiliates of Tenant shall be liable to the other for any personal
injury or death or any loss or damage to any property or business arising at the Premises from any cause. 

         8.3.    Rent Insurance    

        Throughout
the Term, Tenant at Tenant's cost shall procure and maintain in force rent or business interruption insurance insuring that the full monthly rent
(i.e., one-twelfth (1/12) of the current Annual Rental) will be paid to Landlord for a period of not less than eighteen (18) months if the Improvements are destroyed or
rendered inaccessible by a risk insured against by a policy of "Special Form" property insurance required by this Lease. The maintenance of such insurance shall not entitle Tenant to any offset,
abatement or reduction in rent. 

         8.4.    Property Insurance.    The provisions of
Exhibit 8.4 attached hereto shall govern the insurance requirements of Landlord and Tenant hereunder. 

         8.5.    Other Insurance Matters    

        In
the event of termination of this Lease, Landlord shall, at its election, subject to the rights of any Leasehold Mortgagee in the event of a casualty, as hereinafter provided, have the
right to require Tenant to make an assignment to Landlord of any or all insurance policies maintained by Tenant with respect to the Improvements, other than blanket policies permitted hereunder, upon
Landlord's pro rata reimbursement to Tenant for prepaid premiums. The provisions of the preceding sentence shall be applicable only to the extent that Tenant's insurance carriers permit
assignment to be made to Landlord. Tenant may effect for its own account any insurance not required under this Lease provided that such insurance does not adversely affect any of Landlord's rights
under this Lease. Tenant shall procure and maintain such other types of insurance as are maintained by a majority of owners of comparable Southern California shopping centers. 

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ARTICLE 9  

 CONDEMNATION  

         9.1.    Definitions    

                9.1.1    Condemnation.    "Condemnation"
means (a) the exercise of any governmental power, whether by legal proceedings or otherwise, by a condemnor or (b) a voluntary sale or transfer by Landlord to any condemnor, either under
threat of condemnation or while legal proceedings for condemnation are pending. 

                9.1.2    Date of Taking.    "Date of
taking" means the date the condemnor has the right to possession of the property being condemned. 

                9.1.3    Award.    "Award"
means all compensation, sums, or anything of value awarded, paid, or received on a total or partial condemnation. 

                9.1.4    Condemnor.    "Condemnor"
means any public or quasi-public authority, or private corporation or individual, having the power of condemnation. 

                9.1.5    Total Taking.    "Total
Taking" means all or substantially all of the Premises or the Improvements are taken under the power of eminent domain or sold to a condemning authority under threat of the
exercise of said power. 

         9.2.    Notification    

        Promptly
upon its receipt of such notice or process, each party shall notify the other of the receipt, contents and date of any notice of intended taking of all or any portion of the
Premises, service of any legal process relating to Condemnation of the Premises, notice in connection with any proceeding or negotiations with respect to such a Condemnation or notice of intent or
willingness to make or negotiate a private purchase, sale, or transfer in lieu of Condemnation. 

        Landlord,
Tenant, and all Persons and entities holding under Tenant, including a Leasehold Mortgagee, shall each have the right to represent his or its respective interest in each
proceeding or negotiation with respect to a taking or intended taking and to make full proof of its claims. No negotiations, agreements, settlement, sale, or transfer to or with the Condemnor shall be
made without the consent of Landlord and Tenant, and, if applicable, the Leasehold Mortgagee. Landlord and Tenant each agree to execute and deliver to the other any instruments that may be required to
effectuate or facilitate the provisions of this Lease relating to Condemnation. 

        The
provisions of this Lease constitute an express agreement between Landlord and Tenant with respect to any Condemnation of all or any portion of the Premises or Improvements, and any
law, including Section 1265.130 of the California Code of Civil Procedure, with respect to termination rights arising from a condemnation shall have no application to this Lease. 

         9.3.    Total Taking    

                9.3.1    Effect on Lease.    If there is a Total Taking, or in the event
that primary access to or from the Premises is taken and not replaced in a manner that is reasonably acceptable to Tenant, at Tenant's option this Lease shall terminate on the date of taking. 

                9.3.2    Distribution of Award if no Outstanding Leasehold Mortgage.    If
at the time of the Total Taking and early termination, there is not outstanding a Leasehold Mortgage that constitutes a first deed of trust on Tenant's leasehold estate hereunder, then Landlord shall
be entitled to receive and retain the following: 

                (a)   An
amount equal to the discounted present value of the estimated future rentals that would have been received under this Lease in the absence of the Total
Taking; and 

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                (b)   An
amount equal to the discounted present value of Landlord's reversionary interest (absent the Total Taking) in the Premises, including without limitation, all
Improvements. 

In
making the foregoing calculations, the discounted present value shall be computed as provided in Section 10.3.3 for computing "worth at the time of the award". The balance of the
Award shall be payable to Tenant. 

                9.3.3    Distribution of Award if Leasehold Mortgage Outstanding.    

        If
at the time of the Total Taking and early termination of this Lease, there is outstanding a Leasehold Mortgage that constitutes a first deed of trust on Tenant's leasehold estate
hereunder, then Landlord shall be entitled to receive and retain the amount provided for in the preceding Section 9.3.2, except that to the extent that the application of the provisions of
Section 9.3.2 would result in the compensation payable to Tenant pursuant to Section 9.3.4 being less than the amount that Tenant is required to pay to the Leasehold Mortgagee under said
Leasehold Mortgage in connection with the Total Taking and early termination of this Lease, said amount otherwise so payable to Landlord pursuant to Section 9.3.2(b) for Landlord's
reversionary interest in the Improvements only shall be reduced so that the amount of compensation so payable to Tenant shall not be less than said amount that Tenant is required to pay to said
Leasehold Mortgagee. 

                9.3.4    Compensation to Tenant.    

        Subject
to the provisions of Section 9.3.3, Tenant shall be entitled to receive and retain all other compensation of any type or nature awarded other than that payable to Landlord
under Section 9.3.2. 

         9.4.    Partial Taking    

                9.4.1    Right to Terminate.    If any portion of the Premises which
contains less than all of the Improvements is taken by condemnation, this Lease shall remain in effect, except that Tenant can elect to terminate this Lease if the portion of the Improvements not so
taken cannot be restored or reconstructed, taking into consideration the amount of the award actually made available to Tenant for repair, so as to constitute a complete, rentable
mixed-use retail/entertainment/office shopping center and residential complex, if any, capable of producing a proportionately (giving regard to the extent of the partial taking) net annual
income as was realized by Tenant prior to the taking, after payment of all operating expenses and debt service, the rent (as reduced as a result of the taking), and other charges payable under
this Lease, and after performance of all covenants and conditions required of Tenant by law and under this Lease. 

        If
Tenant elects to terminate this Lease, Tenant must exercise its right to terminate by giving notice to Landlord within ninety (90) days after the nature and extent of the
taking have been finally determined. If Tenant elects to terminate this Lease, it also shall notify Landlord of the date of termination, which date shall not be earlier than thirty (30) days
nor later than the date of final taking; except that this Lease shall terminate on the date of taking if the date of taking falls on a date before the date of termination as designated by Tenant. In
connection with any such termination, Tenant shall comply with all of the following conditions: 

                        9.4.1.1    Prior to the termination date, Tenant shall cure any defaults on Tenant's part under
this Lease;    

                        9.4.1.2    Tenant shall continue to make all payments when due as required by the provisions of this Lease until
the date of termination and on or before such date pay to Landlord all sums then accrued under this Lease;    

                        9.4.1.3    Prior to the termination date, provided that the condemning authority and Landlord have made that
portion of the Award available to Tenant to retire the Leasehold Mortgage, Tenant shall pay in full any outstanding indebtedness
incurred by Tenant and secured by an encumbrance or encumbrances on the leasehold, or alternatively, deliver to Landlord the written consent of the holders of all such encumbrances to the early
termination of this Lease and extinguishment of their liens;    

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                        9.4.1.4    On or before the termination date, Tenant shall deliver possession of the Premises to Landlord,
including, but not limited to, subtenant security deposits and prepaid rents with respect to subleases which are not terminated as a result of the condemnation or required to be terminated pursuant to
subsection 9.4.1.5, convey title in the land and improvements to Landlord by quitclaim deed;    

                        9.4.1.5    Prior to the termination date, Tenant shall cause to be discharged all liens and encumbrances
resulting from any acts or omissions of Tenant and any subleases not entitled to the benefits of Section 13.1 (relating to attornment).    

        If
Tenant does not terminate this Lease within the said ninety-day period, this Lease shall continue in full force and effect, except that the Annual Rental shall be reduced
pursuant to Section 9.4.2. 

                9.4.2    Effect on Rent.    If any portion of the Premises is taken by
condemnation and this Lease remains in full force and effect, on the date of taking the Annual Rental shall be reduced by an amount that is in the same ratio to Annual Rental as the value of the
portion of the Premises taken bears to the total value of the Premises immediately before the date of taking (excluding in both instances the value of Oil, Gas and Mineral Rights). Notwithstanding the
foregoing, if the condemnation does not result in an adverse impact on Tenant's business operations at the Premises or receipt of net income, then there shall be no reduction in Annual Rental. 

                9.4.3    Restoration of Improvements.    If there is a partial taking of
the Premises and this Lease remains in full force and effect pursuant to Section 9.4.1, Landlord shall provide to Tenant any portion of the severance Award that is attributable to damage done
to any of the Improvements, and to the extent that severance Award damages are made available to Tenant by Landlord and the Leasehold Mortgagee, Tenant shall accomplish all necessary restoration in
accordance with the procedures set forth in Sections 7.2 and 7.5 for reconstruction following destruction covered by insurance. If at the time of the partial taking, there is outstanding
a Leasehold Mortgage that constitutes a first deed of trust on Tenant's leasehold estate hereunder, then Landlord shall be entitled to receive and retain the amount provided for in
Section 9.3.2, except that to the extent that the application of the provisions of Section 9.3.2 would result in the compensation payable to Tenant pursuant to Section 9.3.4 being
less than the amount that Tenant is required to pay to the Leasehold Mortgagee under said Leasehold Mortgage in connection with the partial taking, said amount otherwise so payable to Landlord
pursuant to Section 9.3.2(b) for Landlord's reversionary interest in the Improvements only shall be reduced so that the amount of compensation so payable to Tenant shall not be less than
said amount that Tenant is required to pay to said Leasehold Mortgagee. Subject to the foregoing, the Award for or on account of Landlord's reversionary interest in the Improvements, Landlord shall
apply to the cost of restoration and any remainder shall be allocated as provided in Section 9.3.2 as in the case of Total Taking; provided, however, if the condemnation does not result in an
adverse impact on Tenant's business operations at the Premises or receipt of net income then any remainder shall be allocated to Landlord. Any Award for severance or other damages with respect to
other property of Landlord shall belong solely to Landlord. 

                9.4.4    Distribution of Award.    If there is a partial taking of the
Premises and Tenant elects to terminate this Lease pursuant to Section 9.4.1, the entire Award shall be distributed in accordance with Sections 9.3.2, 9.3.3 and 9.3.4 as if such
partial taking were a Total Taking. 

         9.5.    Temporary Taking    

        On
any taking of the temporary use of all or any part or parts of the Premises for a period ending on or before the expiration date of the Term, neither the Term nor the rent shall be
reduced or affected in any way, and Tenant shall be entitled to any award for the use or estate taken. If a result of the taking is to necessitate expenditures for changes, repairs, alterations,
modifications, or reconstruction of the improvements, the award shall be paid to the Tenant or Leasehold Mortgagee, and Tenant shall accomplish all necessary changes, repairs, alterations,
modifications or reconstruction of the Improvements in accordance with the procedures set forth in Article 7. At the completion of the work and the discharge of the Improvements from all liens
and claims, Tenant shall be entitled to any surplus. 

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        If
any such taking is for a period extending beyond the expiration date of the Term, the provisions of Section 9.3 or 9.4, as applicable, shall apply to such taking. 

ARTICLE 10  

 DEFAULT  

         10.1.    Tenant's Default    

        The
occurrence of any of the following shall constitute an "Event of Default" or "Default"
by Tenant: 

                10.1.1    Failure to Pay.    Failure to pay rent or any other payment
required to be made by Tenant hereunder when due, and such failure continues for five (5) days after written notice from Landlord to Tenant; provided, however, that Tenant may cure such default
at any time prior to a termination of this Lease by Landlord or a re-entry by Landlord by paying all rents and other expenses or charges then due together with any interest due under
Section 16.9. 

                10.1.2    Abandonment: Surrender.    Abandonment or surrender of the
Premises or the leasehold estate by Tenant. If after commencement of construction Tenant leaves the Premises vacant for twelve (12) consecutive months and Tenant is otherwise in default under
any other provision of this Lease following written notice and opportunity to cure, or unless caused by Force Majeure Delays, Tenant shall be presumed to have abandoned the Premises. 

                10.1.3    Construction.    

                        10.1.3.1    Should, after commencement of construction of the Improvements, such work substantially abate (other
than appropriate reductions in the level of work based on the current phase of construction) for a period of ninety (90) days except if such abatement is caused by Force
Majeure Delays.    

                        10.1.3.2    Except as delayed by Force Majeure Delays, should Tenant not have commenced construction of the
Improvements on or before the Construction Commencement Date. Notwithstanding the foregoing, to the extent that Tenant has not secured subtenants for certain of the Improvements, Tenant shall not be
obligated to commence construction of those Improvements, provided that those Improvements that Tenant is not obligated to construct do not exceed fifty percent (50%) of the square footage set
forth on the Site Plan.    

                        10.1.3.3    Except as delayed by Force Majeure Delays, if all structural and exterior aspects of the Improvements
to be constructed by Tenant as distinguished from any of its subtenants have not been substantially completed and/or the common areas of the Improvements are not open for use by the public on or
before the Scheduled Completion Date.    

                10.1.4    Failure to Perform.    Failure to perform any other covenant or
provision of this Lease (other than Sections 10.1.1, 10.1.2 and 10.1.3), if the failure to perform is not cured within thirty (30) days after written notice from Landlord to
Tenant. If the Default cannot reasonably be cured within thirty (30) days, an Event of Default shall not exist if Tenant commences to cure the Default within the thirty (30) day period
and thereafter continues to make diligent and reasonable efforts to cure such failure as soon as practicable. 

                10.1.5    Attachment.    The subjection of any right or interest to
attachment, execution, order, levy, or to seizure under legal process, if not released within ninety (90) days, except that foreclosure by any Leasehold Mortgagee entitled to receive notice
under the provisions of Section 10.2.1 shall not be construed as an Event of Default within the meaning of this Section. Should Tenant not commence a contest of any such attachment, execution,
order, levy or seizure within thirty (30) days or should Tenant thereafter fail to diligently and in good faith prosecute such contest, such attachment, execution, order, levy or seizure shall
immediately constitute an Event of Default without regard to the ninety (90) day cure period. 

                10.1.6    Bankruptcy.    An assignment by Tenant for the benefit of
creditors or the filing of a voluntary or involuntary petition by or against Tenant under any law for the purposes of adjudicating Tenant a bankrupt; or for extending time for payment, adjustment, or
satisfaction of Tenant's liabilities; or for reorganization, dissolution, or arrangement on account of or to prevent bankruptcy or insolvency; unless, in the case of an involuntary proceeding, Tenant
commences a contest thereof within thirty (30) days, Tenant diligently and in good faith prosecutes such contest and the proceeding, and all consequent orders, adjudications, custodies, and
supervisions are dismissed, vacated, or otherwise permanently stayed or terminated within ninety (90) days after the filing or other initial event. 

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                10.1.7    Receivership.    The appointment of a receiver, unless, in the
case of an involuntary proceeding, Tenant commences a contest thereof within thirty (30) days, Tenant diligently and in good faith prosecutes such contest and such receivership is terminated
within ninety (90) days after the appointment of the receiver, to take possession of Tenant's interest in the Improvements or of Tenant's interest in the leasehold estate or of Tenant's
operations on the Improvements for any reason, including but not limited to, assignment for benefit of creditors or voluntary or involuntary bankruptcy proceedings, but not including receivership
(a) pursuant to administration of the estate of any deceased or incompetent tenant or of any deceased or incompetent individual member or partner of any Tenant, or (b) pursuant to any
Leasehold Mortgage on Tenant's estate in this Lease, or (c) instituted by Landlord, the Event of Default being not the appointment of a receiver at Landlord's instance but the event justifying
the receivership if the same is not otherwise an uncured Event of Default. 

                10.1.8    General.    None of the foregoing shall constitute an Event of
Default unless and until all elements of the Event of Default have occurred (i.e., where required, Landlord shall have given notice of Default in accordance with Sections 10.1
and 10.2.1 and Tenant and Leasehold Mortgagee shall have failed to cure the failure to perform within the applicable time period.) 

        Any
notice required to be given by Landlord to Tenant under this Section 10.1 shall specify in reasonable detail the event or act or failure to perform complained of by Landlord
and the applicable provision of this Lease which Tenant is alleged to have violated, and shall be given in accordance with the provisions of Section 16.1. No such notice shall be deemed a
forfeiture or a termination of this Lease unless Landlord so elects in the notice. All notice and cure periods provided in this Lease shall run concurrently with any notice or cure periods under
applicable law. Without limiting the foregoing and notwithstanding anything in this Lease to the contrary, Landlord shall be entitled to cause a notice to pay/perform or quit to be served if a Default
occurs and the service on Tenant and any Leasehold Mortgagee of such notice to pay/perform or quit shall constitute a notice of such Default under this Lease. 

         10.2.    Leasehold Mortgagee's Right to Cure Lease Defaults    

                10.2.1    Notice of Tenant Failure to Pay or Perform to be Given to Leasehold
Mortgagee.    Landlord agrees to give to any Leasehold Mortgagee who so requests in writing of Landlord and furnishes its current notice address to Landlord: (a) a
simultaneous copy of any notice of failure to pay or perform that Landlord gives to Tenant under Section 10.1, and (b) the right to cure any failure by Tenant to pay or perform hereunder
in accordance with the provisions of Section 10.2.2. 

                10.2.2    Leasehold Mortgagee's Right to Cure.    In the event that Tenant
shall fail to pay Rent as and when required hereunder or shall fail to perform any of Tenant's other obligations hereunder, any Leasehold Mortgagee referred to in Section 10.2.1 who then holds
a Leasehold Mortgage shall have the right to cure said failure in accordance with the following provisions and Landlord shall not have the right to terminate this Lease as a result of any Tenant
default if within the following prescribed periods Leasehold Mortgagee effectuates the cure: 

                        10.2.2.1    Monetary Defaults.    In case of Tenant's failure to pay all
or any part of any amount of Rent provided for herein, the Leasehold Mortgagee shall have the right to cure such failure by paying the required amount to Landlord if such cure is effected within
thirty (30) days after Landlord notifies the Leasehold Mortgagee of such failure by a notice separate from the notice referred to in Section 10.2.1, which separate notice may not be
given prior to the expiration without cure of Tenant's applicable cure period under Section 10.1.1, i.e., until Tenant is in Default under that Section. 

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                        10.2.2.2    Nonmonetary Defaults    

                                10.2.2.2.1    Nonmonetary Defaults That Are Curable by Tenant.    In case
of a failure by Tenant to perform any obligation under this Lease other than the obligation to pay Rent, where Tenant is entitled to notice of such failure and the right to cure it under
Section 10.1, the Leasehold Mortgagee shall have the right to cure such failure if such cure is effected within thirty (30) days after Landlord notifies the Leasehold Mortgagee of such
failure by a notice separate from the applicable notice referred to in Section 10.1, which separate notice may not be given prior to the expiration without cure of Tenant's applicable cure
period under Section 10.1; provided that if (other than by reason of the Leasehold Mortgagee's having to obtain possession of the Premises) more than thirty (30) days are reasonably
required to cure the Default, then the Leasehold Mortgagee shall have the right to cure the Default if such cure is commenced within thirty (30) days after Landlord notifies the Leasehold
Mortgagee of the Default as aforesaid and such cure is thereafter diligently prosecuted to completion; and provided further that if the nature of the failure is such that the Leasehold Mortgagee
cannot cure it without obtaining possession of the Premises, then the Leasehold Mortgagee's time to cure the failure will not start until it obtains possession of the Premises if within thirty
(30) days following receipt of Landlord's written notice of Tenant's default and failure to cure (or as soon thereafter as the Leasehold Mortgagee is legally allowed to do so, if the
Leasehold Mortgagee is not legally allowed to do so within said period of time), the Leasehold Mortgagee commences (by filing any necessary court papers) formal legal proceedings to obtain such
possession and, to extent allowed by law, thereafter prosecutes such proceedings diligently to conclusion. 

                                10.2.2.2.2    Nonmonetary Defaults That Are Not Curable by Tenant.    In
case of an act, omission or event that constitutes a Default under Section 10.1 without Tenant being entitled to notice or a right to cure under that Section, the Leasehold Mortgagee shall
nevertheless have the right to cure the resulting Default if such cure is effected within thirty (30) days after Landlord notifies the Leasehold Mortgagee in writing of the Default and the cure
results in Landlord being restored to the same position in all material respects that Landlord would have been in had the Default not occurred; provided that if (other than by reason of the Leasehold
Mortgagee's having to obtain possession of the Premises) more than thirty (30) days are reasonably required to cure the Default, then the Leasehold Mortgagee shall have the right to cure the
Default if such cure is commenced within thirty (30) days after Landlord notifies the Leasehold Mortgagee of the Default as aforesaid and such cure is thereafter diligently prosecuted to
completion; and provided further that if the nature of the Default is such that the Leasehold Mortgagee cannot cure it without obtaining possession of the Premises, then the Leasehold Mortgagee's time
to cure the Default will not start until it obtains possession of the Premises if within thirty (30) days after the aforesaid notice from Landlord (or as soon thereafter as the Leasehold
Mortgagee is legally allowed to do so, if the Leasehold Mortgagee is not legally allowed to do so within said thirty (30) days), the Leasehold Mortgagee commences (by filing any
necessary court papers) formal legal proceedings to obtain such possession and, to extent allowed by law, thereafter prosecutes such proceedings diligently to conclusion. 

                                10.2.2.2.3    Rights of Leasehold Mortgagee.    In connection with the
cure of any default of Tenant by the Leasehold Mortgagee or after a foreclosure of the Leasehold Mortgagee, the Leasehold Mortgagee shall have the following rights: 

                (a)   The
Leasehold Mortgagee shall be entitled to exercise all rights of Tenant under the Lease. 

                (b)   The
Leasehold Mortgagee shall have the right to enter the Premises in order to effectuate cures of any defaults by Tenant under the Lease, subject, however, to the
rights of any subtenant of Tenant. 

                (c)   The
Lease may not be surrendered, terminated or materially amended by mutual future agreement of Landlord and Tenant without the prior written consent of the Leasehold
Mortgagee. 

                (d)   Subject
to Section 12.9, Landlord agrees that, following foreclosure of a Leasehold Mortgage, or conveyance of the leasehold interest under this Lease in lieu of
such foreclosure, Landlord will recognize the purchaser at foreclosure or recipient of the conveyance in lieu of foreclosure as the successor Tenant under this Lease. Subject to Section 12.9,
the Leasehold Mortgagee may, following foreclosure or a conveyance in lieu thereof, assign this Lease without Landlord's consent. All subsequent assignments shall be subject to all of the requirements
of Article 12 of this Lease. 

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                (e)   If
Leasehold Mortgagee makes written request therefor within thirty (30) days after Leasehold Mortgagee's receipt from Landlord of written notice of termination
of this Lease, Landlord will enter into a new lease with Leasehold Mortgagee or its designee, commencing on the date of termination of the Lease and ending on the scheduled expiration date of this
Lease as the same may be extended pursuant to the exercise of the options to extend the Term, at the same rent and upon the same terms and conditions (subject only to adjustment of provisions unique
to the original Tenant and impossible of performance by the new Tenant) as this Lease, and with the same priority with respect to any subleases or other interests in the Premises as this Lease,
provided that Leasehold Mortgagee or such designee cures all curable defaults under this Lease through the date of termination. The new lease shall contain all of the covenants, conditions,
limitations and agreements contained in this Lease; provided, however, that Landlord shall not be deemed to have represented or covenanted that such new lease shall be superior to claims of Tenant,
its other creditors or a judicially appointed receiver or trustee for Tenant or in any other way be deemed, directly or indirectly (such as, but not limited to, a covenant of quiet enjoyment), to have
made any representation or warranty, express or implied, as to title of the Premises and the Improvements or Adjacent Land after the date hereof, or as to the condition of the Improvements. 

                (f)    If
the leasehold estate covering the Premises and the Premises fee estate become vested in the same party, there shall be no merger of estates while the Leasehold
Mortgage is outstanding. 

                (g)   A
Leasehold Mortgage does not constitute an assignment of the Lease to the Leasehold Mortgagee, nor an assumption by the Leasehold Mortgagee of any of Tenant's
obligations under the Lease until the Leasehold Mortgagee acquires the Leasehold estate upon foreclosure or transfer in lieu thereof. 

                (h)   Upon
foreclosure of the Leasehold Mortgage or transfer in lieu thereof, Leasehold Mortgagee shall succeed to (i) the interest of Tenant in any unapplied security
deposit and any other monies of Tenant then in the possession of Landlord, subject to Landlord's right to apply such security deposit or other monies in accordance with this Lease; and (ii) the
right to exercise all of Tenant's rights under the Lease, including without limitation the right to exercise any option to extend the term. 

                10.2.3    Curing of Defaults After Foreclosure.    Notwithstanding anything
in Section 10.2.2 to the contrary, any Leasehold Mortgagee or other transferee of Tenant's leasehold interest in the Premises upon foreclosure of a Leasehold Mortgagee or as a result of
a deed in lieu of foreclosure must cure all outstanding Tenant Defaults hereunder and, subject to the last sentence of this section, assume all executory obligations of Tenant under this Lease within
thirty (30) days after the transfer in question occurs; provided, however, that if more than thirty (30) days is reasonably required to cure an outstanding Default hereunder, then the
transferee shall not be deemed in Default hereunder if the transferee commences such cure within said thirty (30)-day period and thereafter diligently prosecutes the same to completion;
and provided further that the transferee shall not be required to cure any outstanding Default that is not reasonably susceptible to cure by the transferee so long as said Default shall also have
constituted a default under the Leasehold Mortgage and the Leasehold Mortgagee shall have proceeded diligently in exercising its remedies under the Leasehold Mortgage and proceeding to foreclosure
(or acceptance of a deed in lieu of foreclosure) under the Leasehold Mortgage in connection with such default; and provided further that the assumption of executory obligations referred to
above shall be in writing in a form reasonably satisfactory to Landlord's counsel and shall be delivered to Landlord within thirty (30) days from the date Landlord and the transferee reasonably
agree on the form of assumption. Upon a permitted transfer of the leasehold estate by the Leasehold Mortgagee subsequent to the foreclosure or transfer in lieu thereof, Leasehold Mortgagee shall be
relieved from all obligations accruing under the Lease after the date of such subsequent transfer. 

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         10.3.    Remedies    

                10.3.1    Cumulative Nature of Remedies.    If any Event of Default shall
occur, Landlord shall have the remedies described in this Section 10.3 (subject to the provisions of Sections 10.1 and 10.2) in addition to all other rights and remedies provided
by law or equity or elsewhere in this Lease, to which Landlord may resort cumulatively or in the alternative. 

                10.3.2    No Termination.    Landlord shall have the remedy described in
California Civil Code Section 1951.4. If Landlord does not elect to terminate this Lease on account of a Default, Landlord may, from time to 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. 

                10.3.3    Termination.    Subject to the provisions of
Sections 10.1, 10.2 and 10.6, whether before, after or concurrently with the exercise of any other remedy, Landlord may at Landlord's election terminate this Lease. In the event Landlord
terminates this Lease, Landlord may recover possession of the Premises (which Tenant shall surrender and vacate upon demand) and remove all Persons and property therefrom (subject to the
nondisturbance provisions of this Lease), and Landlord shall be entitled to recover as damages all of the following: 

                        10.3.3.1    The worth at the time of the award of any unpaid rent due to Landlord which have been earned or
accrued at the time of termination;    

                        10.3.3.2    The worth at the time of the award of the amount by which the unpaid rent which would have been
earned or accrued after termination until the time of the award exceeds the amount of the loss of such rent that Tenant proves could have been reasonably avoided;    

                        10.3.3.3    The worth at the time of the award of the amount by which the unpaid rent for the balance of the Term
after the time of the award exceeds the amount of the loss of such rent that Tenant proves could have been reasonably avoided;    

                        10.3.3.4    Any other amount necessary to compensate Landlord for 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; and    

                        10.3.3.5    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.    

        As
used in Sections 10.3.3.1 and 10.3.3.2 above, the "worth at the time of the award" shall be computed by allowing interest at the rate of the lower of the highest rate
permitted by law with respect to this transaction or one percent (1%) in excess of the Prime Rate as the same may vary from time to time. As used in Section 10.3.3.3 above, the "worth at the
time of the award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%). 

                10.3.4    Use of Tenant's Personal Property.    Following the termination
of this Lease by reason of an Event of Default, in connection with the exercise of Landlord's remedies, Landlord may at Landlord's election use Tenant's personal property and trade fixtures located
on, about or appurtenant to any of such property and fixtures that remain at the Premises without compensation and without liability for use and damage, or store them and remove for the account and at
the cost of Tenant. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time. Tenant agrees to hold
Landlord free and harmless from any liability whatsoever for the removal and/or storage of any such property, whether of Tenant or any third party whomsoever. 

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                10.3.5    Assignment of Subrents.    Tenant assigns to Landlord all
subrents and other sums falling due from subtenants, licensees, and concessionaires (herein called subtenants) during any period in which an Event of Default exists, and Tenant shall not have any
right to such sums during that period. This assignment is subject and subordinate to any and all assignments of the same subrents and other sums made to the Leasehold Mortgagee. Landlord may at
Landlord's election, without terminating this Lease, either collect these sums or bring action for the recovery of the sums directly from such obligors, or both. Landlord shall receive and collect all
subrents and proceeds from reletting, applying them when and as received: first, to the payment of reasonable expenses (including attorneys' fees) incurred by or on behalf of Landlord in recovering
such proceeds; and second, to the fulfillment of Tenant's covenants hereunder. Any excess rental received by Landlord over and above that which Tenant is obligated to pay hereunder shall be held in
trust by Landlord for application to Tenants obligations hereunder. Tenant shall nevertheless pay to Landlord on the due dates specified in this Lease the equivalent of all sums required of Tenant
under this Lease, plus Landlord's expenses, less the proceeds of the sums assigned and actually collected under this provision. 

                10.3.6    Landlord's Right to Cure Tenant's Default.    At any time after
Tenant fails to perform any covenant or provisions of this Lease, after prior reasonable notice to Tenant of Landlord's intent to cure, Landlord may, but is not obligated to, cure such failure at
Tenant's cost. 

        If
Landlord at any time, by reason of such failure by Tenant, pays any sum or does any act, the reasonable, ascertainable and verifiable sum paid by Landlord plus the reasonable,
ascertainable and verifiable cost of performing such act shall be due as additional rent immediately on demand by Landlord to Tenant along with evidence of the foregoing expenditures. No such payment
or act shall constitute a waiver of default or of any remedy for default or render Landlord liable for any loss or damage resulting from any such act. 

         10.4.    Landlord's Default    

        Landlord
shall not be deemed to be in default in the performance of any obligation required to be performed by it hereunder unless and until it has failed to perform such obligation
thirty (30) days after written notice by Tenant to Landlord specifying in reasonable detail the event or act or failure to perform complained of by Tenant and the applicable provisions of this
Lease which Landlord is alleged to have violated; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for its performance, then
Landlord shall not be deemed to be in default if it shall commence such performance within such thirty (30) day period and thereafter diligently and in good faith prosecute the same to
completion. In no event shall Tenant have any right to terminate this Lease as a result of a Landlord default. Notwithstanding anything to the contrary contained herein, the liability of Landlord
under this Lease and any recourse by Tenant against Landlord shall be limited solely and exclusively to the interest of Landlord in the Premises. 

         10.5.    Certain Waivers    

        The
parties hereto shall and they hereby do waive, to the extent permitted by law, trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against
the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of landlord and tenant, Tenant's use or occupancy of the Premises, and/or any claim of
injury or damage. 

         10.6.    Limitation on Right to Terminate Lease    

        Notwithstanding
the foregoing provisions of this Article 10, Landlord may elect the remedy of Lease termination only in the following circumstances: 

                10.6.1    On account of a failure to pay rent or any other payment required to be made by Tenant hereunder as
provided in Section 10.1.1 above;    

                10.6.2    On account of a material default under this Lease resulting from Tenant's (but not Tenant's
subtenants') failure to perform or comply with any material agreement, term covenant or condition of this Lease other than payment of rent;    

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                10.6.3    On account of any violation by a subtenant of Tenant of any material provision of this Lease; however,
if such subtenant's sublease expressly provides that it is subject to applicable terms and conditions of this Lease and Tenant promptly and diligently pursues all available legal remedies (through
trial court) against such subtenant on account of such violation, including, but not limited to the termination of such sublease if necessary to cease the violation, then Landlord shall not terminate
this Lease on account of such material violation. In its notice of default to Tenant, Landlord shall state that, in Landlord's commercially reasonable judgment, the violation is of a material
provision of this Lease. If Tenant disputes the materiality of the provision, Tenant and Landlord shall arbitrate the issue pursuant to the arbitration provisions set forth in Article 19 below
if Tenant shall serve on Landlord written notice of a demand to arbitrate within fifteen (15) business days of delivery of the notice of default from Landlord. If Tenant disputes the
materiality of the alleged violation of this Lease, Tenant shall not be obligated to initiate termination of the subject sublease unless and until a ruling is issued in the arbitration that the
alleged violation of this Lease is in fact material; or    

                10.6.4    On account of any default by Tenant specified in Sections 10.1.5
through 10.1.7.    

        In
any notice of default regarding the matters set forth in subsections 10.6.1 through 10.6.4, Landlord shall state: "SUCH DEFAULT GIVES LANDLORD THE RIGHT TO ELECT THE
REMEDY OF LEASE TERMINATION." 

        Notwithstanding
the provisions of Section 10.6, a termination of this Lease by reason of a default of Tenant shall not terminate the sublease of a subtenant of Tenant where a
Nondisturbance Agreement has been entered into by Landlord and such subtenant, and such Nondisturbance Agreement provides for the continuation of such sublease as a direct lease between Landlord and
the subtenant after termination of this Lease. 

ARTICLE 11  

 OWNERSHIP, REMOVAL OF IMPROVEMENTS

AT EXPIRATION OR TERMINATION  

         11.1.    Improvements    

        All
Improvements on the Premises shall be the property of Tenant (and Tenant shall retain all rights to depreciation deductions and tax credits arising from ownership) or (should
its sublease so provide) of any subtenant ("owner subtenant") which occupies the subject portion of such Improvements, provided that, at the expiration
or sooner termination of this Lease (or, as to any owner subtenant attorning to Landlord pursuant to Article 13, at the expiration or sooner termination of its sublease) such improvements
(exclusive of subtenants' trade fixtures and other personalty but including Tenant's trade fixtures) shall, without compensation to Tenant or such owner subtenant, be surrendered to Landlord in good
condition and repair, ordinary wear and tear excepted (subject to Sections 7.2, 7.3, 7.4, 9.3, 9.4 and 9.5 hereof), and become Landlord's property free and clear of all claims to or
against them by Tenant or any third Person other than the claims of equipment lessors and mortgagees, and Tenant shall defend, protect and indemnify and hold Landlord harmless against all liability
and loss arising from such claims or from Landlord's exercise of the rights conferred by this section with respect to Tenant's Improvements for a period of two (2) years after the expiration or
sooner termination of this Lease. Notwithstanding the foregoing, upon the expiration or sooner termination of the Term, should Landlord so direct prior to such expiration or termination, subject to
the non-disturbance rights of subtenants pursuant to Article 13, Tenant shall, at its sole cost and expense, remove all personal property and Improvements (razing and removal of all
debris) from the Premises and, within one hundred twenty (120) days following such expiration or termination, surrender the Premises in the same condition as following grading of the site of
the Premises but prior to any vertical development thereon. In the event Tenant shall fail to remove any of such property as provided herein, in addition to and in no way waiving Landlord's right to
damages arising from such default by Tenant, Landlord may, at its option, retain all or any portion thereof as abandoned by Tenant, or Landlord may, but is not obligated to, at Tenant's expense,
remove all of such property not so removed, and Landlord shall have no responsibility to Tenant for any loss or damage to said property caused by or resulting from such removal or otherwise. 

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         11.2.    Surrender of Improvements    

        If
the Improvements and Premises are not surrendered at the end of the Term, Tenant shall indemnify, defend, protect and hold Landlord harmless against loss or liability resulting from
delay by Tenant in so surrendering the Improvements and Premises including, without limitation, any claims made by any succeeding tenant founded on such delay. 

ARTICLE 12  

 ASSIGNMENT; SUBLETTING  

         12.1.    General Prohibition    

        Neither
Tenant's leasehold interest hereunder nor any part of such interest shall be assignable, transferable or subject to being sublet, mortgaged or otherwise encumbered, whether
voluntarily or by operation of law, without the prior written consent of Landlord, which consent may be granted or withheld in Landlord's reasonable discretion. 

                12.1.1    Prohibition Applies to Direct and Indirect Transfers.    For
purposes hereof, if Tenant is a corporation or limited liability company or partnership or other type of business entity, the dissolution, merger, consolidation or other reorganization of Tenant or
the sale or other transfer, in one or more related or unrelated transactions, whether simultaneously or over time, and whether voluntarily or by operation of law, of a controlling percentage of the
corporate stock of or membership or partnership interests or other ownership interests in Tenant, other than by means of transactions on a public securities exchange or through the NASDAQ
over-the-counter public securities market, shall constitute an assignment of this Lease. For purposes of the preceding sentence, the term, "controlling percentage" shall mean
stock or membership or partnership or other ownership interests possessing, in the aggregate, more than fifty percent (50%) of the total combined voting power of all classes of stock of or membership
or partnership or other ownership interests in Tenant that are issued, outstanding and entitled to vote for the election of directors or managers or general or managing partner of Tenant, whether such
ownership be (a) direct ownership, or (b) indirect ownership through the ownership of (i) stock or membership or partnership or other ownership interests possessing more than
fifty percent (50%) of the total combined voting power of all classes of stock of or membership or partnership or other ownership interests in one or more other corporations or limited liability
companies or partnerships, or (ii) beneficial interests in a trust or estate. The term "controlling percentage" shall specifically exclude any change of any of the foregoing described interests
among the then owners of corporate stock, partnership interests or limited liability company membership interests or other ownership interests, provided that any such change in ownership is not
designed as a subterfuge to avoid the limitations on transfer set forth in this Section 12.1.1. 

         12.2.    Exceptions    

        Notwithstanding
anything in Section 12.1 or 12.1.1 to the contrary, the transactions described in Sections 10.2.2.2.3 (Rights of Leasehold Mortgagee), 12.2
(Exceptions), 12.3 (Permitted Transfers), 12.8 (Subletting) and 12.9 (Encumbrance or Assignment As Security) shall be permitted and Landlord's consent to all or any of such transactions shall not
be required. 

         12.3.    Permitted Transfers    

        Subject
to the provisions of this Section 12.3 and compliance with the provisions of Section 12.6 below, Tenant shall have the right, without necessity of obtaining
Landlord's consent, to assign Tenant's leasehold interest hereunder by means of: 

                12.3.1    Transfer to Tenant Subsidiary.    A direct transfer of Tenant's
leasehold interest to, or a merger or consolidation of Tenant with, a majority-owned subsidiary of Tenant; 

                12.3.2    Other Members.    In the case of any member of Tenant
("Member"), to any Affiliate of a Member or to any other Member of Tenant, unless such Member of Tenant is first admitted as a minority Member of Tenant
as a subterfuge designed to avoid the limitations of Section 12.1.1.; 

                12.3.3    Affiliates.    To any Affiliate of Tenant; 

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                12.3.4    Publicly Traded Share Transfers.    In the case of any Member of
Tenant or constituent owner of any Member that is publicly traded, transfers of such publicly traded shares to any person or entity; 

                12.3.5    Merger, Consolidation or Sale of All or Substantially All
Assets.    In the case of any Member of Tenant or constituent owner of any Member of Tenant that is publicly traded, to any person or entity acquiring, directly or indirectly,
all or substantially all of the assets of such Member; 

                12.3.6    REIT Controlled by Caruso.    In the case of Rick J. Caruso, to a
private or publicly held real estate investment trust or comparable business entity provided that Rick J. Caruso, or an Affiliate or the heirs of Rick J. Caruso or the members of the immediate family
of Rick J. Caruso, controls such trust or comparable entity; 

                12.3.7    Owner of Racetrack.    In the case of The Santa Anita
Companies, Inc., to any person or entity that acquires the Racetrack from The Santa Anita Companies, Inc. on or after the date which is five (5) years following the
Effective Date; 

                12.3.8    Sale of Partial Interest by Santa Anita Commercial
Enterprises, Inc.    In the case of Santa Anita Commercial Enterprise, Inc., to any person or entity that acquires all or any portion of Santa Anita Commercial
Enterprise, Inc.'s Interest in Tenant; 

                12.3.9    Pledge for Loan for Sole Purpose of Funding Additional Capital
Contribution.    In the case of any Member, to an institutional lender who has foreclosed on a security interest in the Member's interest in Tenant in connection with a pledge
or security for a loan, all as permitted and provided for in the Operating Agreement of Tenant; 

                12.3.10    Trusts.    Pursuant to the successorship provisions of any trust
by reason of the death of any Person; 

                12.3.11    Assignment or Sublease of Entirety of Tenant's Interest to Unrelated
Third Party    

                (a)   Subject
to the requirements set forth in this subparagraph (a), an assignment of this Lease to any other Person, provided that such Person (or all Persons
therein who will be jointly and severally liable for the performance of all of Tenant's obligations under this Lease) would have a net worth (as defined in Section 12.3.11
(c) below) after the assignment (i.e., including the value of the assignee's right, title and interest in and to the Premises and the Improvements) at least equal to the lesser of
(i) the product of $50,000,000 times a fraction, the numerator of which is the Index last published immediately preceding the date of the proposed assignment and the denominator of which is the
Index last published prior to the third anniversary of the Opening Date and (ii) twenty-five percent (25%) of the then fair market value of the Tenant's interests under this Lease
as determined by the proposed purchase price that will be paid in consideration for the assignment of Tenant's interest in this Lease; 

                (b)   An
assignment to an entity described in Paragraph (a) above of this Section 12.3.11 shall be a permitted assignment only if such assignee or its Affiliate
has had at least one million (1,000,000) square feet of first-class real estate operations of the same type as the then existing use of the Premises as of the date of the assignment under its
management for the prior three (3) years, or the assignee contracts for management services with a manager satisfying such criteria, which contract shall be for a period of at least one
(1) year after the effective date of the assignment; 

                (c)   As
used in Section 12.3.11 (a), "net worth" refers to "tangible net worth" exclusive of (a) any cash or
other property to be paid or transferred to obtain the proposed assignment and (b) any assets outside of the United States and Canada. "Tangible net
worth" means the excess of a Person's assets over its liabilities, determined by GAAP, less the sum of: 

	(i)
	goodwill,
including any amounts, however designated, representing the excess of the purchase price paid for assets or stock acquired over the value assigned thereto on
the books of such Person;

	(ii)
	patents,
trademarks, trade names, and copyrights; 

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	(iii)
	any
amounts at which shares of capital stock or equity interests of such Person appear as an asset on such Person's balance sheet;

	(iv)
	loans
and advances to stockholders, directors, officers, partners, or employees;

	(v)
	deferred
expenses; and

	(vi)
	any
other amount in respect of an intangible that should be classified as an asset on a balance sheet of such Person in accordance with GAAP. 

         12.4.    Absolute Prohibition.    

        Any
other provision in this Lease to the contrary notwithstanding, an assignment to the then existing owner or manager of the regional shopping center adjacent to the Premises and
located at the corner of Huntington Drive, or to any Affiliate of such owner or manager, shall not be a permitted assignment. 

         12.5.    Other Assignments (Landlord's Consent Required)    

        Any
assignment other than an assignment of the type described in Sections 12.2 and 12.3 shall be subject to Landlord's prior written consent which may be withheld only in
Landlord's reasonable discretion. 

         12.6.    Procedure for Assignment    

                12.6.1    Assignments.    Except in the event of a death described in
Section 12.3.10, before Tenant can make any assignment described in Sections 12.3 or 12.5: 

	(i)
	Tenant
shall give Landlord notice of the proposed assignment and, where the net worth of the proposed assignee is required hereunder to exceed a specified level,
financial statements representing the proposed assignee's net worth (as of a date no more than six (6) months prior to the date of the proposed assignment) and a letter from the proposed
assignee's chief financial officer or equivalent that there has been no material change in its financial position since such date, and any other documentation or information which Landlord shall
reasonably request or Tenant considers supportive of the proposed assignee's qualifications to be the assignee of Tenant's interest in this Lease (including, if applicable, the proposed assignee's
history as a developer or property manager or proposed contractual arrangements for management of the property by third parties, and related information). The financial statements submitted pursuant
to Section 12.3.11(c) shall be prepared in accordance with generally accepted accounting principles ("GAAP"), accompanied by a certification of
an executive officer of the proposed assignee or its general partner with the understanding that Landlord will rely thereon, representing an aggregate net worth under GAAP of at least the required
amount.

	(ii)
	Tenant
shall cure any Defaults on Tenant's part of which Tenant has or is given notice then existing under the terms of this Lease prior to the effective date of
any assignment;

	(iii)
	If
applicable, Tenant shall pay such reasonable sums (for attorneys' fees, appraisals, unless the proposed assignee delivers financial statements that have been
audited by a nationally recognized independent certified public accounting firm, and accounting fees) as are reasonably necessary to enable Landlord adequately to investigate the proposed assignee's
qualifications and reputation as contemplated by Section 12.6.1(i) and to review or prepare documentation in connection with the proposed assignment;

	(iv)
	If
applicable, the proposed assignee shall deliver to Landlord, in recordable form, an express assumption of Tenant's obligations hereunder accruing from and after the
effective date of the assignment (for use if the proposed assignment becomes a "permitted assignment"); and 

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	(v)
	Tenant
shall furnish to Landlord and the proposed assignee Tenant's written commitment to Landlord and the proposed assignee to deliver to the proposed assignee
(if the proposed assignment becomes a permitted assignee) original books of account and records, or copies thereof, in accordance with the provisions of Section 15.1 relating to the
retention of records. 

                12.6.2    Consent.    Tenant shall give Landlord notice of the identity of
the proposed assignee, its ownership structure, and such other information as may be helpful to Landlord in determining whether the proposed assignment is not subject to Section 12.1.1, 12.2
or 12.3, and if not, whether it would be reasonable for Landlord to withhold consent. Landlord's failure to reasonably disapprove the proposed assignee in accordance with the terms of
Section 12.5 within thirty (30) days of its receipt of the foregoing notice and information shall, subject to Section 16.14.11(d), be deemed to be Landlord's approval of the
general reputation of the proposed assignee or relevant principals of the proposed assignee and Landlord's acknowledgment that the proposed assignment is not of the type described in
Section 12.5. 

         12.7.    Effective Date of Assignment    

        The
effective date of the assignment shall be thirty (30) days after Tenant's notice of the proposed assignment and any required submission unless, within that time, Landlord
gives notice of an objection that the proposed assignee is not a permitted assignee. Landlord's failure to give notice within that time shall, subject to Section 16.14.11(d), constitute a
waiver of any objection to the assignment and such assignment shall be deemed to be a permitted assignment. 

         12.8.    Subletting    

                12.8.1    Subleases in Normal Course of Business.    Tenant shall have the
right, without necessity of obtaining Landlord's consent, to sublease space at the Premises, in the normal course of operation of the Premises, for a sublease term or terms not extending beyond the
then-remaining term of this Lease, to any subtenant (i) whose principal business is the retailing of merchandise, services, food, beverages, including alcohol, and entertainment for
the purpose of operating the subleased space as a retail sales or service establishment, (ii) as office space, or (iii) as otherwise permitted hereunder. Tenant's right to sublease space
at the Premises under the preceding sentence shall include the right to ground-sublease building pads to subtenants (such as a restaurant, department store or a movie-theater operator) for
construction by the subtenant of a building to be operated by the subtenant as a retail sales or service establishment where the subtenant will be the direct retailer of merchandise, food, beverage,
entertainment or services. Except as otherwise provided in a non-disturbance agreement executed by Landlord, no sublease permitted by this Section shall contain any provision in conflict
with any provision of this Lease, and in any such sublease, the subtenant shall expressly represent and agree that the provisions of this Lease will be binding upon the subtenant as to all matters
affecting the permitted use and prohibited uses of the Premises and the subtenant's obligation to attorn as provided below, and shall specifically exclude the payment of any monetary obligations by
the Tenant to Landlord hereunder or the provisions governing insurance. In addition, Tenant shall comply with the balance of the provisions of Section 12.8 in conjunction with Tenant's
subleasing of space at the Premises. 

                12.8.2    Non-Disturbance and Attornment.    Each sublease
shall contain a provision requiring the subtenant to attorn to Landlord or its successors or assigns (subject to the provisions of Article 13 below). If such sublease is not entitled to
non-disturbance and recognition under Article 13, Landlord may, without cause upon thirty (30) days' written notice given at any time after the date of termination of this
Lease, terminate such sublease. 

                12.8.3    Prepayment.    Each sublease shall contain an express
acknowledgment and agreement by the subtenant that in the event the subtenant is required to attorn as provided in Section 12.8.2, or otherwise permitted to attorn, not more than one
(1) month's rent plus security deposit actually prepaid by the subtenant to Tenant and actually delivered by Tenant to Landlord in connection with a termination of this Lease will be recognized
or allowed as a credit against any rent or other sums which the subtenant is required to pay to Landlord under such subtenant's sublease. 

27

   
                12.8.4    Subject to Ground Lease.    The sublease with such subtenant
shall specifically recognize that it is subject to the permitted use and prohibited use provisions hereof. No sublease may extend beyond the Term as in effect when such sublease is executed. 

                12.8.5    Restrictions on Subtenants and Sublease Terms.    Tenant shall
not enter into any sublease of the Premises with an Affiliate of Tenant or any other Person not on an arm's length" basis unless the same reflects market terms for similar subleases at that time.
Without Landlord's consent, Tenant shall not sublease more than thirty-five percent (35%) of the floor area to any single user or group of users under common ownership, unless such user is
a nationally recognized tenant. 

                12.8.6    Effect of Consent.    Where Landlord consent to a sublease is
required because the sublease does not comply with the foregoing terms of this Section 12.8, such consent shall be subject to the provisions of Section 16.14.11 (except the time period
to respond shall be ten (10) business days) and any consent by Landlord to any sublease shall not constitute a consent to any specific requirement of this Lease other than the requirement of
obtaining Landlord's consent. 

                12.8.7    Notice of Execution, Modification or Termination of
Subleases.    Subject to the provisions of Section 12.8.8, Tenant shall give Landlord a copy of any sublease and any material modification thereof, and prompt notice of
(a) any agreement to terminate or waive any material rights of Tenant under, and (b) termination of any Premises sublease. In the event that pursuant to Section 12.8.8, Tenant
cannot deliver the aforementioned copies to Landlord, Tenant shall give to Landlord prompt written notice of execution of a Premises sublease that shall identify the subtenant thereunder, the space
covered thereby and the term thereof. 

                12.8.8    Copies of Subleases.    If a particular sublease contains a
confidentiality clause that prevents disclosure of that sublease to Landlord, Landlord shall execute and deliver to Tenant a confidentiality agreement that is reasonably satisfactory to such
subtenant. If the Landlord and the subtenant are not able to agree on a mutually satisfactory confidentiality agreement and Tenant, after exercising commercially reasonable efforts, is unable to
obtain from the subtenant a waiver of the confidentiality clause that would allow a copy of the sublease to be provided to Landlord, then Tenant need not furnish Landlord with a copy of that sublease.
However, Tenant shall furnish Landlord with copies of such (if any) portions of the sublease in question as Tenant is permitted to furnish under its confidentiality agreement with the subtenant
(or, if Tenant is not permitted to furnish such copies, then, to the extent permitted by the confidentiality agreement, Tenant shall furnish Landlord with a comprehensive summary of the sublease). If
requested by a subtenant of Tenant, Landlord will execute and deliver a confidentiality agreement in commercially reasonable form covering such sublease. 

         12.9    Encumbrance or Assignment as Security    

        Notwithstanding
any other provision contained in this Lease, Tenant shall have the right to encumber or assign its interest in this Lease or assign its interest in any sublease hereunder
by a Leasehold Mortgage (or by foreclosure or assignment in lieu of foreclosure under such Leasehold Mortgage) to any Institutional Lender, and if not an Institutional Lender, then a lender
reasonably acceptable to Landlord, and if such Leasehold Mortgage is a deed of trust, foreclosure may be had thereunder by the exercise of a power of sale in accordance with the provisions of
California law, provided that no successor to the beneficiary under the Leasehold Mortgage, whether by purchase, foreclosure or otherwise will be permitted in violation of Section 12.4. Except
as provided in this Section 12.9 and Section 12.4, foreclosure of a Leasehold Mortgage may be had without compliance with Section 12.1 through 12.6 inclusive. Upon
execution of a Leasehold Mortgage otherwise entitled to the benefits of a Leasehold Mortgage (or any amendment, supplement or modification thereto) and in order to be entitled to such benefits,
Tenant or the Leasehold Mortgagee must give Landlord written notice of the name and mailing address of the Leasehold Mortgagee (which shall be deemed such Leasehold Mortgagee's address hereunder until
changed by notice to Landlord and Tenant as provided in Section 16.1) and the date of recording and recorder's instrument number for the Leasehold Mortgage. Until such notification is
delivered to Landlord, any such instrument shall have no force or effect whatsoever on the enforcement by Landlord of any provisions of this Lease or any rights or remedies hereunder. So long as any
Leasehold Mortgage is in existence, unless the holder of such Leasehold Mortgage shall otherwise express its consent in writing, the fee title to the Improvements and the leasehold estate of Tenant
created by this Lease shall not merge, but shall remain separate and distinct, notwithstanding the acquisition of both fee title to the Improvements and the leasehold estate by Landlord, or by Tenant,
or by any Leasehold Mortgagee or by any other party. During the existence of a Leasehold Mortgage and following delivery thereof, there shall be no cancellation, surrender, acceptance of surrender or
modification of this Lease except as provided in this Lease or by a written instrument executed by Landlord, Tenant and the Leasehold Mortgagee. Except as expressly provided herein, nothing contained
in any Leasehold Mortgage or herein shall be deemed or construed to relieve Tenant from the full and faithful observance and performance of its covenants herein contained, or from any liability for
the nonobservance or nonperformance thereof, or to constitute a waiver of any rights of Landlord hereunder. Nothing contained in any Leasehold Mortgage or herein shall be deemed or construed to
require or provide for the subordination to the lien of the Leasehold Mortgagee of any estate, right, title or interest of Landlord in or to the Improvements or this Lease. With the exception of the
rights specifically granted to a Leasehold Mortgagee pursuant to the provisions of Article 9, Section 10.2 and this Section 12.9, the execution and delivery of a Leasehold
Mortgage shall not give nor shall be deemed to give a Leasehold Mortgagee any greater rights against Landlord than those granted to Tenant hereunder. Any Leasehold Mortgage must provide that Landlord
will be notified concurrently in writing of any default thereunder and provided an equal opportunity to cure the same, provided, however, failure to deliver any such notice shall not serve to impair
the priority nor enforceability of any such Leasehold Mortgage. Subject to Landlord's interest in the Improvements and this Lease, subtenants may assign their interest in their respective subleases to
finance leasehold improvements. 

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         12.10    Effect of Consent    

        Any
consent by Landlord to any act requiring consent pursuant to this Lease shall not constitute a waiver of the necessity for such consent to any subsequent act. 

ARTICLE 13  

 ATTORNMENT  

         13.1.    Generally    

        In
the event of a termination of this Lease after completion of construction of the Improvements for which a subtenant is requesting a non-disturbance agreement from Landlord
and prior to the expiration of its Term (other than upon a termination by reason of a condemnation described in Section 9.3 or 9.4 or a casualty described in Section 7.2, 7.3
or 7.4 and the election of Tenant to terminate and not reconstruct), Landlord shall recognize the attornment of and not disturb the tenancy of each subtenant who is not then in default
(following the expiration of applicable notice and cure periods) and attorning to Landlord and thereby allow the continuation of such subtenant' s sublease in effect on the same terms and conditions
as set forth in such sublease but as a direct lease, subject to the payment, when due, of all rentals payable for any period after termination of this Lease and compliance on the part of the subtenant
with each and every term and condition of its sublease, provided the sublease is made in accordance with the provisions of Section 12.8, is otherwise permitted hereunder and is with a subtenant
affiliated with (a) a national or regional retailer or brand name tenant which is recognized nationally or regionally and whose lease term, including options to extend, is not more than
20 years, or (b) any department store tenant whose floor area is in excess of forty thousand (40,000) square feet and whose lease term, including options to extend, is not more
than 50 years; (c) a movie theater whose lease term, including options to extend, is not more than 35 years; (d) a restaurant whose lease term, including options to extend,
is not more than 30 years; and (e) any other tenant whose lease term, including options to extend, is not more than 15 years. 

        In
connection with any automatic recognition and non-disturbance under this Article 13, Landlord shall not be: (i) liable for any act or omission of any prior
landlord (including Tenant) under the sublease or any damages or other relief attributable to any latent or patent defects in the Premises; (ii) subject to any offsets, defenses or
counterclaims which subtenant might have against any prior landlord (including Tenant) under the sublease; (iii) bound by any rent or other charges which subtenant may have paid to any prior
landlord (including Tenant) for more than one (1) month in advance; (iv) responsible or liable for security deposits except to the extent received by Landlord (e.g., turned over
by Tenant to Landlord); (v) bound by the terms of any amendment of the sublease which materially modifies the terms thereof to the extent not approved or consented to by Landlord (which such
consent or approval Landlord agrees not to unreasonably withhold or delay); (vi) responsible or liable for any obligation of any prior landlord (including Tenant) under the sublease to perform,
pay for or reimburse the cost of, the construction, alteration or removal of subtenant's improvements or leasing commissions or any other Improvements, except to the extent the funds for the same have
been received by Landlord (e.g., turned over by Tenant to Landlord); (vii) be obligated to restore the Improvements or the sublease premises following a casualty if Tenant hereunder is
not obligated to restore the Premises, and in the event Landlord is obligated to restore, such obligation shall be limited to such restoration as is funded by the insurance proceeds actually received
by Landlord, or (viii) prevented from terminating the sublease in the event of a condemnation that would permit the termination of this Lease. Within ten (10) days of any demand therefor
by Landlord, any subtenant shall execute and deliver to Landlord a recordable certificate stating that such subtenant has attorned to Landlord hereunder, that the subtenant's sublease is unmodified
and in full force and effect, such defenses or offsets as are claimed by such subtenant, if any, the date to which all rentals have been paid, and such other information concerning the sublease,
subleased premises and subtenant as Landlord may reasonably request. Landlord's recognition of any subtenant's attornment shall be conditioned upon such subtenant's compliance with all the terms,
covenants and conditions hereof. 

29

 

        Within
ten (10) business days following written demand by Tenant, Landlord agrees to enter into a specific recordable separate Recognition, Attornment and
Non-Disturbance Agreement with any subtenant satisfying the requirements set forth in the preceding paragraph substantially on the terms of Exhibit D
attached hereto (the "Non-Disturbance Agreement") and to timely negotiate in its good faith reasonable discretion (i) such
revisions to the Non-Disturbance Agreement as may be reasonably requested by such subtenant, and (ii) such subtenant's requested form of Recognition, Attornment and
Non-Disturbance Agreement reflecting the same general terms as contained in this Section 13.1. Landlord further agrees to reasonably consider reasonable recognition and
non-disturbance requests of subtenants not entitled to automatic recognition and non-disturbance rights taking into consideration Tenant's interest in achieving a desired
tenant mix, full occupancy and maximum rents from the perspective of viewing the Improvements as a whole and also considering the subtenant's business, operating history and ownership. If Tenant
requests on behalf of a subtenant recognition and non-disturbance rights in the form of the Non-Disturbance Agreement or another form of Recognition, Attornment and
Non-Disturbance Agreement and such request is accompanied by the requested form of agreement, if other than the Non-Disturbance Agreement, and information on the subtenant's
business, operating history and ownership, and Landlord fails to disapprove such request in writing by notice to Tenant received within ten (10) business days after Landlord's receipt of an
additional notice requesting Landlord's action that conforms to the requirements of Section 16.14.11(d), Landlord hereby appoints Tenant as its attorney in fact to execute, record and deliver
such Recognition, Attornment and Non-Disturbance Agreement and/or such subtenant shall be entitled to automatic recognition and non-disturbance on the terms of this
Article 13 above notwithstanding that such subtenant or such subtenant's sublease fails to satisfy the conditions for automatic recognition and non-disturbance set
forth above. 

ARTICLE 14  

 INTENTIONALLY OMITTED  

ARTICLE 15  

 EXPIRATION, TERMINATION  

         15.1.    Duty to Surrender    

        At
the expiration or earlier termination of the Term, Tenant shall surrender to Landlord the possession of the Improvements and, subject to Tenant's right to retain a copy of the same
and the rights of any Leasehold Mortgagee, shall surrender and assign to Landlord Tenant's right, title and interest, if any, in and to all books and records with respect to the Improvements,
including, but not limited to, Tenant's rights with respect to plans and specifications, soils tests, architectural plans and designs, engineering reports and similar items. Surrender or removal of
improvements, fixtures and trade fixtures shall be as directed in Article 11. Tenant shall leave the surrendered property and any other property in good and broom-clean condition except as
provided in Sections 7.3, 7.4, Article 9 and except for reasonable wear and tear. 

30

 

         15.2.    Holding Over    

        This
Lease shall terminate without further notice at expiration of the Term. Any holding over by Tenant after expiration shall not constitute a renewal or extension or give Tenant any
rights in or to the Premises. Should Tenant hold possession of the Premises or Improvements after the expiration of the stated term of this Lease, such holding over shall create a tenancy at
sufferance only, upon the same terms and conditions as herein set forth, except that Annual Rental shall be *** of the Annual Rental applicable immediately preceding the expiration of the Term. 

         15.3.    Existing Liabilities    

        Expiration
or termination of this Lease shall not relieve any party hereto of any liability accrued as of such date or arising out of or relating to facts occurring on or prior to such
date, whether for breach, indemnity or otherwise. Without limiting the generality of the foregoing, Sections 8.1, 8.2 and 15.1 shall survive such expiration or termination. 

         15.4.    Name    

        At
the expiration or earlier termination of the Term, any and all rights to any and all names used to designate the Improvements (other than the name "Caruso") shall vest in Landlord
without the requirement of any further act or instrument. Tenant shall, however, execute any and all instruments Landlord may request to effectuate the foregoing. 

ARTICLE 16  

 MISCELLANEOUS  

         16.1.    Notices; Appointment of Agent    

        As
used in this Lease, notice includes but is not limited to the communication of notice, request, demand, approval, disapproval, statement, report, acceptance, consent, objection,
waiver and appointment. 

        All
notices must be in writing; provided that no writing other than the check or other instrument for the rent payment itself need accompany the payment or rent. 

        Notice
shall be given (i) by personal delivery to the address(es) set forth below, (ii) by United States mail in a sealed envelope or container, either registered or
certified mail, return receipt requested, postage and postal charges prepaid, addressed by name and address to the party or Person intended set forth below, (iii) by delivery by a courier
service keeping records of deliveries and attempted deliveries to the address specified below or (iv) by telecopy or similar facsimile transmission to the number set forth below with a hard
copy to be mailed within twenty-four (24) hours of such transmission: 

	Notice to Landlord	 	The Santa Anita Companies, Inc.

c/o Magna Entertainment

337 Magna Drive

Aurora, Ontario 74G 7KI

Attn: President, Chief Executive Officer and

Chief Financial Officer

Telecopy No.: (905) 726-7172
	
 With a copy to:	
 	

Allen Matkins Leck Gamble & Mallory LLP

12348 Bluff Drive, Suite 100

San Diego, CA 92130

Attn: Michael C. Pruter, Esq.

Telecopy No.: (858) 481-5028

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	Notice to Tenant:	 	Santa Anita Associates, LLC

c/o Caruso Affiliated Holdings

101 The Grove Drive

Los Angeles, CA 90036

Attn: Rick J. Caruso

Richard A. Moses

Telecopy No.: (323) 900-8101
	
 With a copy to:	
 	

Donfeld, Kelley & Rollman

11845 West Olympic Blvd, Suite 1245

Los Angeles, CA 90064

Attn: Jeffrey Donfeld, Esq.

Telecopy No.: (310) 312-8014

        Any
notice, demand, request or other communication, including any copy, shall be deemed to have been given, made, received and communicated, as the case may be, on the date personal
delivery was effected if personally served, on the day one day after the date of acknowledgment of receipt if by facsimile or telex (provided a hard copy of the same is sent in another manner
permitted hereunder within twenty-four (24) hours of transmission), on the date shown as the delivery date on the overnight courier's cartage copy if by overnight courier, or on the
date of delivery as shown on the return receipt if delivered by mail; provided, however, if delivery is not completed due to the absence of the recipient or his/her refusal to accept delivery,
delivery to the Person identified above for receipt of copies shall be deemed to be delivery to the primary addressee. 

        Either
party may, by notice given at any time or from time to time, require subsequent notices to be given to another individual Person, whether a party or an officer or representative,
and/or to a different address and/or number. Notices given before actual receipt of notice of change shall not be invalidated by the change. 

        If
Landlord or Tenant is at any time comprised of more than one Person (e.g., tenants-in-common), a majority (computed on the basis of their respective
interests in Landlord's or Tenant's estate) of such Persons shall appoint one of their number as agent to receive rent, to receive services of process, to receive notices, to grant consents or
approvals and otherwise to act for that party with respect to all matters relating to this Lease. Failing such appointment, Landlord or Tenant as the case may be
(the "selecting party") may select and designate one of such Persons comprising the other party for that purpose, and the selecting party shall
be conclusively permitted to treat such selected and designated Person as the agent of the other party for all purposes related to this Lease. 

         16.2.    Estoppel Certificates    

        At
any time and from time and time, within fifteen (15) days after notice of request by either party, the other party shall execute, acknowledge, and deliver to the requesting
party, or to such other recipient as the notice shall direct, a statement indicating that this Lease is unmodified and in full force and effect, or, if there have been modifications, that this Lease
is in full force and effect as modified in the manner specified in the statement and acknowledging that there are no uncured defaults or failures to perform any covenant or provision of this Lease on
the part of the requesting party or specifying any such defaults or failures which are claimed to exist. The statement shall also state the dates to which the rent and any other charges have been paid
in advance. The statement shall be such that it can be relied on by the addressee thereof. 

        The
failure of the party requested to execute, acknowledge, and deliver, on request, the certified statement described above within the specified time shall constitute its acknowledgment
to all Persons entitled to rely on the statement that this Lease is unmodified and in full force and effect and that the rent and other charges have been duly and fully paid to and including the
respective due dates immediately preceding the date of the notice of request and shall constitute a waiver, with respect to all Persons entitled to rely on the statement, of any defaults on the
requesting party's part that may exist before the date of the notice. 

32

 

         16.3.    Attorneys' Fees    

        If
either party brings an action or proceeding (including an arbitration action) to declare, enforce, protect, or establish any right or remedy, including, but not limited to, any
proceedings to lift stay or other bankruptcy proceedings, the prevailing party shall be entitled to recover its costs and legal expenses including reasonable attorneys' fees and expert witness fees
and expenses. 

         16.4.    Arbitration of Changed Use Value Increase and Fair Market Value of
the Premises    

        If
Landlord and Tenant cannot reach an agreement as to the Changed Use Value Increase under Section 3.2.1 or the fair market value of the Premises under
Section 3.2.2 of this Lease within thirty (30) days after notice by a party to the other party, then, at any time after the end of such thirty (30) day period either party may
demand arbitration of the determination of the Changed Use Value or fair market value, as applicable, of the Premises by so notifying the other party. Within twenty (20) days after delivery of
the arbitration demand, each party shall appoint an arbitrator who shall be an independent M.A.I. appraiser with at least five (5) years prior experience in appraising real property of the same
or similar type and nature as the Premises (i.e., such experience appraising large commercial projects). The appointment of all appraisers shall be in writing and shall be served on the other
party. If a party fails to appoint an appraiser within the time required above, the single appraiser appointed shall be the sole appraiser. The appraisers shall determine, as applicable, the Changed
Use Value Increase or the fair market value of the Premises for its then permitted use under this Lease without otherwise taking into consideration this Lease or the Improvements, but taking into
consideration: (i) the actual number of square feet of Improvements constructed or to be constructed by Tenant; and (ii) that such Improvements are to be constructed in compliance
with the entitlement requirements, including the Specific Plan, architectural design review and design guidelines to which the Premises are subject, all recorded restrictions, and free and clear of
all monetary encumbrances, as if such asset was sold in the open market on an arm's length basis allowing a reasonable time to find a purchaser who purchases with knowledge of the then general market
conditions. The two appraisers appointed by Landlord and Tenant, respectively, shall be instructed by Landlord and Tenant to meet promptly and to use their best efforts to mutually agree upon the
Changed Use Value Increase or fair market value, as applicable, of the Premises as described above. If the two appraisers agree upon the Changed Use Value Increase or fair market value, as applicable,
of the Premises, then their mutual decision shall be final and binding upon Landlord and Tenant. If within
forty-five (45) days after the second appraiser has been appointed, the two appraisers are unable to agree to the Changed Use Value Increase or fair market value, as applicable, of
the Premises, then they shall attempt to select a third appraiser meeting the qualifications stated in this paragraph within ten (10) days thereafter. If the appraisers are unable to agree on
the third appraiser within such ten (10) day period, then either of the parties to this Lease can apply to the presiding judge of the Superior Court for the State of California in and for the
County of Los Angeles, for the selection of a third appraiser who meets the qualifications stated in this paragraph. Each party shall bear the entire fee of the appraiser chosen by such party and
one-half (1/2) of the cost of appointing the third appraiser and of paying the third appraiser's fee. The third appraiser, however selected, shall be a person who has not
previously acted in any capacity for either party; provided, however, such appraiser may have acted as the third appraiser in connection with a prior appraisal rendered pursuant to this
Section 16.4. Promptly after the selection of the third appraiser, the three appraisers shall meet and the first two appraisers selected shall present to the third appraiser their respective
arguments and evidence (including copies of their written appraisals) respecting the Changed Use Value Increase or fair market value, as applicable, of the Premises. Within thirty (30) days
after the selection of the third appraiser, the third appraiser shall render its written decision to Landlord and Tenant, provided, that the Changed Use Value Increase or fair market value, as
applicable, of the Premises so decided by the third appraiser must not exceed the higher of the two Changed Use Value Increases or fair market values, as applicable, of the Premises proposed by the
first two appraisers, and must not be less than the lower of the Changed Use Value Increase or fair market value, as applicable, of the Premises proposed by the first two appraisers. 

         16.5.    Joint and Several Obligations    

        If
either Landlord or Tenant consists of more than one Person, the obligation of all such Persons shall be joint and several. 

33

 

         16.6.    Authority    

        Landlord
and Tenant represent and warrant to each other that each individual executing the Lease (or any amendment hereto) on its behalf is duly authorized to execute and deliver
this Lease or such amendment on its behalf and that this Lease or such amendment is binding upon such party in accordance with its terms. 

         16.7.    Access for Landlord    

        Landlord
and its agents shall have free access to the Premises and the Improvements during all reasonable hours throughout the Term on reasonable advance notice to Tenant (except that
Landlord shall have the right of immediate entry at any time in the case of emergency), for the purpose of exhibiting the same to Persons interested in purchasing or lending upon Landlord's interest
in the Premises and the Improvements; posting or keeping posted thereon notices provided for hereunder, and such other non-obtrusive notices as Landlord may reasonably deem necessary or
appropriate for protection of Landlord, its interest or the Premises and the Improvements; inspecting the Improvements or any portion thereof; and exercising Landlord's rights under
Section 10.3.6. Nothing contained herein shall impose any duty on the part of Landlord to do any work or repair, maintenance, reconstruction or restoration, which under any provision of this
Lease is required to be done by Tenant and the performance thereof by Landlord shall not constitute a waiver of Tenant's default in failing to do the same. 

        Except
as otherwise provided in Section 8.1.2, Landlord shall not be liable for inconvenience, annoyance, disturbance, loss of business or quiet enjoyment, or other damage or loss
to Tenant by reason of exercising Landlord's rights under this Section 16.7 

         16.8.    Transfer of Landlord's Interest    

        In
the event of any transfer or transfers of Landlord's interest in the Premises, the transferor shall be automatically relieved of any and all obligations and liabilities on the part of
Landlord accruing from and after the date of such transfer provided that the transferee expressly assumes in writing all of Landlord's obligations under this Lease accruing from and after the date of
transfer. Tenant agrees to attorn to such transferee, provided a copy of such assumption is delivered to Tenant executed and acknowledged by both the transferor and transferee. Provided that Tenant is
operating the Premises for the use as specified in Section 5.1.1, Landlord shall not transfer Landlord's interest in the Premises to the then existing owner or manager of the regional shopping
center adjacent to the Premises and located at the corner of Huntington Drive, or to any Affiliate of such owner or manager. 

         16.9.    Interest on Past Due Obligations    

        Any
amount due from one party to the other party under the terms of or with respect to this Lease which is not paid within five (5) days after payment is due shall bear interest
at the lower of (i) *** or (ii) the maximum per annum interest rate permitted by law with respect to this transaction from the date five (5) days after payment is due until paid
unless otherwise specifically provided herein, but the payment of interest shall not excuse or cure any default under this Lease. 

         16.10.    Waiver    

        The
waiver by Landlord or Tenant of any breach by the other party of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or
condition or any subsequent breach of the same or any other term, covenant, or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not be deemed a waiver of any
preceding breach by Tenant of any term, covenant, or condition of this Lease (including, without limitation, the provisions of Article 12 on assignment and subletting), other than the failure
to pay the particular rents so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent herein provided shall be deemed to be other than on account of the earliest rent due and payable hereunder, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment of rent be deemed an accord and satisfaction, and Landlord may accept any such check or payment without prejudice to Landlord's rights to recover the balance of such
rent or pursue any other remedy under this Lease. 

34

 

         16.11.    Time of Essence    

        Time
is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. 

         16.12.    Brokers    

        Landlord
and Tenant each warrants to and for the benefit of the other, and shall indemnify, defend, protect and hold harmless the other for a breach hereof, that it has had no dealings
with any real estate broker or other agent (attorneys excepted) in connection with the negotiation or making of this Lease. 

         16.13.    Surrender or Cancellation    

        The
voluntary or other surrender of this Lease by Tenant, or a mutual cancellation hereof, shall not work a merger, and shall (subject to the nondisturbance provisions of this Lease)
terminate all or any existing subleases, unless Landlord elects to treat such surrender or cancellation as an assignment to Landlord of any or all of such subleases. 

         16.14.    Interpretation of Lease    

                16.14.1    Definitions    

                        16.14.1.1    Affiliate means any person or entity which, directly
or indirectly through one(1) or more intermediaries, controls or is controlled by or is under common control with another person or entity. The term
"control" as used herein (including the terms "controlling," "controlled by," and "under common control with") means the possession, direct or indirect,
of the power to (i) vote more than fifty percent (50%) of the outstanding voting securities of such person or entity, or (ii) otherwise direct management policies of such person by
contract or otherwise. As to Santa Anita Commercial Enterprises, Inc., Affiliates shall include Magna International Inc., MI Developments Inc., Magna Entertainment Corp., and any
Affiliate of any of the foregoing corporate entities. As to Rick J. Caruso, Affiliates include one or more of his heirs or the members of the immediate family of Rick J. Caruso, provided that
individually or collectively they own more than fifty percent (50%) of the voting and beneficial interests in such Affiliate.    

                        16.14.1.2    Business Day means any day other than a Saturday, a
Sunday or a day on which banking institutions in Arcadia, California, are authorized by law to close.    

                        16.14.1.3    Control (including, with correlative meanings, the
terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting securities or by agreement or otherwise.    

                        16.14.1.4    Exterior Design means the general architectural
theme of the exterior appearance of the façade of an Improvement and shall specifically encompass the color, material, finish, location, design and architectural feature of the
subject façade.    

                        16.14.1.5    Hazardous Substances means and includes the
following, including mixtures thereof; any hazardous substance, pollutant, contaminant, waste, by-product or constituent regulated under any federal, state or local laws and regulations as
amended or hereafter enacted regulating hazardous or toxic substances or wastes, petroleum pollutant or waste or similar substances, including, but not limited to, as defined in the Comprehensive
Environmental Response, Liability and Compensation Act, 42 U.S.C. 9601 et seq., as amended, the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251, et seq.,
Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq., Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq., Safe Drinking Water Act,
42 U.S.C. Sections 3000(f), et seq., Clean Air Act, 42 U.S.C. Sections 7401, et seq., United States Department of Transportation Hazardous Materials Table,
49 C.F.R. 172.101, Chapters 444, 445A, 445B, 477, 590 or 618 of NRS, pesticides regulated under the Federal Insecticides, Fungicide, and Rodenticide Act, 7 U.S.C.
Section 136 et seq., asbestos and asbestos containing materials, PCBs and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., source
material, special nuclear material, byproduct material and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act or the Nuclear Waste Police
Act; chemicals subject to the OSHA Hazard Communication Standard, 29 C.F.R. (1910.1200 et seq.; and industrial process and pollution control wastes whether or not hazardous within the
meaning of the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., all as may be amended.    

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                        16.14.1.6    Improvements means any and all improvements existing
on the Premises from time to time other than improvements belonging to subtenants pursuant to the terms of their respective subleases.    

                        16.14.1.7    Institutional Lender means any bona fide
financial institution duly authorized to lend money on the security of an interest or interests in this Lease and/or the Improvements.    

                        16.14.1.8    Landlord means the Person who is the fee owner at
the time question of the Premises, whether singular or plural in number, and whether named in this Lease as Landlord or having become the successor-in-interest of the initially
named Landlord, or the successor of a successor, whether by assignment, foreclosure, or other transfer, and whether intentional or inadvertent or by operation of law.    

                        16.14.1.9    Leasehold Mortgage means a first priority mortgage
or deed of trust, including, but not limited to, construction financing or permanent financing or any refinancing in connection therewith, complying with the provisions of Section 12.9 which
encumbers Tenant's interest in the Improvements and/or this Lease.    

                        16.14.1.10    Leasehold Mortgagee means the holder of a Leasehold
Mortgage.    

                        16.14.1.11    Mezzanine Lender means a lender whose loan is
secured by a pledge and/or security interest in the membership interests of one or more of the members of the Tenant and otherwise satisfies the requirements of an Institutional Lender.    

                        16.14.1.12    Person means a Person or Persons or entity or
entities of any combination or Persons and entities including when such Person(s) or entity(ies) are acting in the capacity of an executor, trustee or other fiduciary capacity.    

                        16.14.1.13    Tenant means the Person named as Tenant in this
Lease, whether singular or plural in number, or the Person who at the time in question is the successor-in-interest of Tenant, or the successor of a successor, whether by assignment,
foreclosure, or other transfer, and whether intentional or inadvertent or by operation of law. It does not, however, include any Person claiming under any assignment or other transfer which is not a
permitted assignment described or referred to under Article 12. This definition does not alter the provisions of this Lease relating to assignment or subletting.    

                16.14.2    Table of Contents; Headings.    The table of contents of this
Lease and the captions of the various sections of this Lease are for convenience and ease of reference only and do not define, limit, augment, or describe the scope, content, or intent of this Lease
or of any part or parts of this Lease. 

                16.14.3    Gender; Number.    The neuter gender includes the feminine and
masculine, the masculine includes the feminine and neuter, and the feminine includes the masculine and neuter, and each includes fiduciary, corporation, partnership, or other legal entities whenever
the context so requires. The singular number includes the plural whenever the context so requires. 

                16.14.4    Exhibits.    All exhibits to which reference is made in this
Lease are hereby incorporated by reference. Any reference to "this Lease" includes matters incorporated by reference. 

                16.14.5    Entire Agreement; Modification.    This Lease contains the
entire agreement between the parties with respect to the leasing of the Premises. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statements, law or custom to
the contrary notwithstanding. No promise, representation, warranty, or covenant not included in this Lease has been or is relied on by either party. Each party has relied on its own inspection of the
Premises and examination of this Lease, the counsel of its own advisors, and the provisions of this Lease. The failure or refusal of either party to inspect the Premises, to read this Lease or other
documents, or to obtain legal or other advice relevant to this transaction constitutes a waiver of any objection, contention, or claim that might have been based on such reading, inspection,
or advice. 

36

 

        No
provision of this Lease may be amended or varied except by an agreement in writing signed by the parties hereto or their respective successors-in-interest. 

                16.14.6    Severability.    The invalidity or illegality of any provision
shall not affect the remainder of this Lease and all remaining provisions shall, notwithstanding any such invalidity or illegality, continue in full force and effect. 

                16.14.7    Successors.    Subject to the provisions of this Lease on
assignment and subletting, each and all of the covenants and conditions of this Lease shall be binding on and shall inure to the benefit of the heirs, successors, executors, administrators, assigns,
and personal representatives of the respective parties. 

                16.14.8    No Partnership.    Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and
Tenant. Neither the method of computation or rent nor any other provisions contained in this Lease nor any acts of the parties hereto shall be deemed to create any relationship between Landlord and
Tenant other than the relationship of landlord and tenant. 

                16.14.9    Governing Law.    The laws of the State of California shall
govern the validity, construction, performance and effect of this Lease. 

                16.14.10    Covenants.    Whenever in this Lease any words of obligation or
duty are used in connection with either party, such words shall have the same force and effect as though framed in the form of express covenants on the part of the party obligated. 

                16.14.11    Consents and Approvals.    

                (a)   In
any instance in which any party to this Lease shall be requested to consent to or approve of any matter with respect to which such party's consent or approval is
required by any of the provisions of this Lease, such consent or approval, or disapproval, shall be given in writing, and such consent or approval shall not be unreasonably withheld, unless the
provisions of this Lease with respect to a particular consent or approval shall expressly provide that the same may be given or refused in the sole discretion of such party. 

                (b)   Wherever
in this Lease approval or consent of any party is required, and unless a different time limit is provided in this Lease, such approval or disapproval or
consent or denial of consent shall be given within thirty (30) days following the receipt of the item to be so approved or disapproved, or the same shall be conclusively deemed to have been
approved by such party, subject to the provisions of this Section 16.14.11. Any disapproval shall specify with particularity the reasons therefor; provided, however, that wherever in this Lease
any party is given the right to approve or disapprove in its sole discretion, such party may disapprove without specifying a reason therefor and its disapproval shall not be subject to contest in any
judicial, administrative, arbitration or other proceeding. 

                (c)   Wherever
a period of time less than thirty (30) days is provided in this Lease, such time limit shall not apply unless the notice to the party whose approval or
disapproval is required contains a correct statement of the period of time within which such party must act or otherwise respond. If the time specified in the notice is incorrectly set forth or
omitted, the time limit shall be thirty (30) days unless a longer time period is specified in this Lease, in which case the longer time period shall control. Failure to specify such time period
shall not invalidate such notice but shall instead require the action of such party within said thirty (30) day period or such longer period. 

37

 

                (d)   Any
request for the consent or approval of any party shall recite verbatim the applicable Lease provision involved and state that the document, or the facts contained
therein, shall be deemed approved or consented to by the recipient unless the recipient objects thereto within the required time period specified in such notice. Notwithstanding anything to the
contrary contained in this Lease, no recipient's approval of or consent to the subject matter of a notice shall be deemed to have been given by its failure to object thereto if such notice
(or the accompanying cover letter) did not fully comply with the provisions of this Section 16.14.11. 

                16.14.12    No Third Party Beneficiaries.    

        Tenant
acknowledges and agrees that it shall have no rights with respect to the Adjacent Land, express or implied, except as provided in the REA. This Lease is made solely for the
benefit of Landlord, Tenant and, with respect to Section 12.8 and Section 10.2, Tenant's Leasehold Mortgagee. 

                16.14.13    Force Majeure Delays.    

        Except
as otherwise expressly provided in this Lease to the contrary, each party shall be excused from its duty to perform any covenant or obligation under this Lease, except an
obligation to pay any sums of money not expressly conditioned on the other party's performance of a covenant or obligation that has itself been excused, in the event but only so long as the
performance of any such covenant or obligation is prevented, delayed, retarded or hindered by any of the following ("Force Majeure Delays"): shortages
of labor or materials, act of God, fire, earthquake, floods, explosion, action of the elements, war, invasion, terrorism, insurrection, riot, mob violence, sabotage, strikes, lockouts, action of labor
unions, condemnation, government moratorium, litigation relating to entitlements for the Improvements, requisition, or orders of military or naval authorities (other than the lack or inability to
procure funds to fulfill its covenants and obligations provided in this Lease). 

        Notwithstanding
any specific references in certain provisions of this Lease to extension for Force Majeure Delays, the absence of such specific reference in any other provision shall not
be deemed to diminish the general applicability of this Section 16.14.13. 

        In
the event any party claims excuse from its duty to perform any covenant or obligation set forth in this Lease due to a Force Majeure Delay, such party shall notify the other party of
the occurrence of such event of force majeure within thirty (30) days following the occurrence thereof. The provisions of this Section 16.14.13 shall not be effective to excuse any party
failing to give such notice from the performance of such covenant or obligation until such notice is given to the other party; provided, however, in no event shall the giving of such notice at any
time following such thirty (30) day period extend the period during which such party is otherwise excused beyond any maximum period of delay or excuse set forth in this Lease or failure of one
party to timely fulfill its obligations hereunder, which failure delays performance of the other party. 

                16.14.14    Index Adjustment.    

        Wherever
in this Lease other than Article 3 reference is made to a dollar denomination, such dollar denomination shall be subject to the "Index
Adjustment", which shall be the amount of the proportionate increase or decrease for each year during the term of this Lease in the Consumer Price Index for all Urban
Consumers), issued and published by the United States Department of Commerce (1982-1984) (the "Index"), or any successor index
thereto, appropriately adjusted, shall be used. In the event that the Index is converted to a different standard reference base or otherwise revised, the determination of the adjustment to be made
with reference to the Index shall be made with the use of such conversion factor, formula or table for converting the Index as may be published by the Department of Commerce or, if said Department
shall not publish the same, then with the use of such conversion factor, formula or table as may be published by Prentice Hall, Inc., or other nationally recognized publisher of similar
statistical information as may be agreed upon by the parties. If the Index ceases to be published, and there is no successor thereto, then a reasonable substitute index selected by Landlord and
approved by Tenant shall be utilized; or, if such a substitute index is not available or may not lawfully be used for the purposes stated herein, then based upon a reliable governmental or other
nonpartisan publication, selected by Landlord, and approved by Tenant, evaluating changes in the cost of living or purchasing power of the consumer dollar, if such a publication is available and may
be lawfully used for the purposes stated herein. For the purposes of calculating fluctuations in the Index, the calendar year of the date of this Lease shall be considered to be the base year
(the "Base Year"). In computing future dollar equivalencies, any amount referred to in this Lease shall, for the purpose of calculating the
equivalency, be referred to in this Section 16.14.14 as the "Base Amount" and the Base Amount, as adjusted by the application of this
Section 16.14.14, shall be referred to herein as the "Adjusted Amount." 

38

 

        The
Adjusted Amount shall be determined as follows: 

        With
respect to each time at which the equivalency is to be determined, the Adjusted Amount shall be equal to the product obtained by multiplying the Base Amount by a fraction, the
numerator of which is the average annual Index for the most recent complete calendar year, and the denominator of which is the average annual Index for the Base Year. 

        For
purposes of this Section 16.14.14, the Base Amount utilized for any initial calculation made hereunder shall continue to be utilized as the Base Amount for each subsequent
application of this provision. 

ARTICLE 17  

 EXECUTION; RECORDATION OF SHORT FORM OF LEASE; CONSENT  

         17.1.    Execution in Counterparts    

        This
Lease, or the short form of this Lease, or both, may be executed in two or more counterparts, each of which shall be in original, but all of which shall constitute one and the same
instrument. 

         17.2.    Recordation of Short Form of Lease    

        This
Lease shall not be recorded; however the parties shall execute and acknowledge a short form or memorandum of this Lease (the "Memorandum of Ground
Lease") in the form of Exhibit E attached hereto. At Tenant's expense relative to the recording costs and any taxes, the Memorandum of
Ground Lease shall be recorded in the real property records of Los Angeles County at the request of either party on or after the Conditions Removal Date. 

         17.3.    Execution Triplicate Originals    

        This
Lease shall be executed by the parties in triplicate originals, and each original executed Lease without the others shall serve as an original. 

ARTICLE 18  

 HAZARDOUS SUBSTANCES  

         18.1.    Covenant    

        Tenant
covenants to Landlord that it will not use, or allow to be used, generated, manufactured, produced, stored, transported, treated, disposed or released on, in or about the
Premises, any Hazardous Substances except as may be reasonably required in connection with the operation and maintenance of the Improvements, such as cleaning and maintenance supplies and fuel related
to emergency power generation needs, and then only in full compliance with all laws and except for the use of Hazardous Substances by Tenant's subtenants in connection with their respective permitted
uses of their respective premises, provided that such uses are in compliance with all laws. 

         18.2.    Right of Entry    

        Landlord
reserves the right to enter the Premises upon prior notice at any reasonable time, and at any time without notice in exigent circumstances, for the purpose of visually
inspecting and examining the Premises for the presence of any Hazardous Substance. If the results of such inspection or examination reveal the presence of Hazardous Substances in, on or about the
Premises, or if Landlord has reasonable cause to believe that they are present in, on or about the Premises due to Tenant's failure to be in compliance with Section 18.1, then Tenant shall
reimburse Landlord for its reasonable cost incurred in undertaking such inspection and examination. 

39

 

         18.3.    Indemnity    

                18.3.1    By Tenant.    Tenant shall hold Landlord harmless from, and
protect, defend and indemnify Landlord against, any and all claims, expenses, including reasonable attorney's fees, damages, clean-up costs or liability (including the orders of any
regulatory agency) whether foreseeable or not for any injury or damage to any Person or property caused by the presence of Hazardous Substances in, on or about the Premises except to the extent
placed, released or stored in, on or about the Premises by Landlord or its agents or contractors or employees in violation of applicable laws as of the Effective Date. The provisions of this indemnity
shall remain in full force and effect and shall not be affected or impaired by any termination of this Lease and shall survive any such termination. Neither the consent by Landlord to the use,
generation, storage, release, disposal or transportation of Hazardous Substances as set forth in Section 18.1, nor Tenant's strict compliance with all Hazardous Substances laws, shall excuse
Tenant from Tenant's indemnification obligations hereunder. Any defense of Landlord pursuant to this indemnity shall be by counsel reasonably acceptable to Landlord. 

                18.3.2    By Landlord.    Landlord shall hold Tenant harmless from, and
protect, defend and indemnify Tenant against, any and all claims, expenses, including reasonable attorneys' fees, damages, clean-up costs or liability (including the orders of any
regulatory agency) whether foreseeable or not for any injury or damage to any Person or property caused by the presence of Hazardous Substances in, on or about the Premises to the extent placed,
released or stored in, on or about the Premises by Landlord, its subtenants or its agents or contractors or their respective employees in violation of applicable laws as of the Effective Date. The
provisions of this indemnity shall remain in full force and effect and shall not be affected or impaired by any termination of this Lease and shall survive any such termination. Any defense of Tenant
pursuant to this indemnity shall be by counsel reasonably acceptable to Tenant. 

         18.4.    Permits    

        Tenant
shall at all times maintain or cause to be maintained current permits required for all of its operations on the Premises, including those required for the use, storage, or
disposal of Hazardous Substances in, on or about the Premises; provided, however, that nothing in this paragraph shall imply Landlord's consent to Tenant's storage, use or disposal of any hazardous
substance or material in, on or about the Premises except as provided pursuant to Section 18.1. 

         18.5.    Notice of Release    

        In
the event of the release of any Hazardous Substance from the Premises, after obtaining actual knowledge of such release, Tenant shall immediately give Landlord notice thereof if such
release is in a quantity or of a quality requiring notice to any public authority or agency. 

         18.6.    Termination/Expiration    

        Upon
the termination or expiration of this Lease, for whatever reason, Tenant shall promptly (a) remove any and all Hazardous Substances placed, or allowed to be placed, in, on or
about the Premises by Tenant to the extent required to return the Premises to a condition in full compliance with all laws, and (b) remove and replace any fixture, mechanical or other system,
or improvement in and to the Premises which was involved in Tenant's use, storage or disposal of Hazardous Substances and which cannot otherwise be returned to a condition in full compliance with
applicable laws. 

         18.7.    Dumping    

        Tenant
shall not deposit or allow to be deposited in, on or about, or allow to remain in, on or about the Premises, or any other property of Landlord, any waste material or debris of any
nature whatsoever except as such is generated by Tenant's normal operation of the Premises, and then only temporarily pending proper ultimate disposition thereof off of the Premises. 

40

 

         18.8.    Landlord's Obligation to Remediate    

        Landlord
shall deliver to Tenant the Premises free and clear of all Hazardous Substances that are present in, on or under the Premises, including ground water, that are in excess of
levels permitted by law as of the date hereof and to the extent of any such contamination, shall deliver to Tenant no further action letters from applicable government authorities. In the event that
the costs to remediate the Premises are reasonably projected to exceed Seven Million Dollars ($7,000,000), and Tenant does not elect to pay the excess costs, Landlord may elect to terminate this Lease
within ten (10) days following such determination provided that Landlord pays to Tenant Tenant's third party out of pocket costs and expenses incurred in accordance with the approved
"Pre-Development Budget" (as defined in that certain Development Agreement between Tenant and Caruso Management Company, Ltd., a California limited partnership, dated as of
the Effective Date. 

ARTICLE 19  

 GENERAL ARBITRATION  

         19.1.    Dispute Resolution; Arbitration.    Other than with respect to the
matters covered in Section 16.4 above, any controversy, dispute or claim among or between Landlord and Tenant arising out of or relating to this Lease that is specified to be resolved by
arbitration shall be resolved solely and exclusively as provided in this Article 19. 

         19.2.    Informal Resolution.    The party initiating the dispute
resolution procedure shall submit to, and serve upon the adverse party, a written demand that invokes this provision and identifies the nature of the dispute and all requested relief. The adverse
party shall serve upon the initiating party a written response to each of the disputes identified in the written demand within five (5) business days after service of the demand. If no written
resolution is achieved ten (10) days after the demand is submitted (or any later date agreed to by the parties in writing), then the provisions of Section 19.3 shall govern with
respect to each of the disputes identified in the written demand. 

         19.3.    Formal Resolution.    

                19.3.1    Any controversy, dispute or claim identified in the written demand served by the initiating party that
has not been resolved pursuant to Section 19.2 shall be finally resolved by binding arbitration, which the initiating party shall commence within twenty-one (21) days after
no written resolution is achieved. The arbitration shall be governed by this Lease and, to the extent that they do not conflict with this Lease, Sections 1280 through 1294.2 of the
California Code of Civil Procedure (or any amendments or successor statutes    

                19.3.2    The parties shall attempt to agree on an arbitrator. If the parties cannot agree on an arbitrator within
fifteen (15) days following the expiration of the twenty-one (21) day period referenced in Section 19.3.1 above, then the demanding party shall request that the CPR
Institute for Dispute Resolution or its successor or any comparable organization and if none, then the Presiding Judge of the Los Angeles Superior Court will appoint an arbitrator with experience
resolving disputes arising from complex real estate transactions to conduct the proceeding. Once the arbitrator has been identified, the party initiating the dispute resolution procedure shall provide
both the written demand and any response to the arbitrator.    

                19.3.3    Each party shall have the right to conduct discovery consistent with the California Code of Civil
Procedure, including expert and third-party discovery. Discovery may not be served before a written demand is provided to the arbitrator. Limitations on the quantity, type manner or timing of
discovery or responses to discovery shall be determined by the arbitrator. No party shall be entitled to "priority" in conducting discovery. Depositions may be taken by either party upon seven
(7) days' written notice. Written discovery requests shall be responded to within ten (10) days after service. Discovery disputes that cannot be resolved by the parties shall be
submitted to the arbitrator whose decision on such matters shall be final and binding. All non-expert discovery must be completed no less than fifteen (15) days before the first
hearing date for the arbitration proceeding. Expert discovery must be completed no less than five (5) days before the first hearing date of the arbitration proceeding. For good cause, however,
the arbitrator may extend the period for discovery or allow additional discovery.    

41

 

                19.3.4    The parties shall have the right to bring and the arbitrator shall rule on dispositive motions
including, but not limited to, demurrers, motions to dismiss, and motions for summary judgment or adjudication. Section 437c of the California Code of Civil Procedure shall govern summary
judgment or summary adjudication motions, except for notice periods or briefing schedules, which shall be determined by agreement or by the arbitrator. Hearings on such motions must be held no less
than ten (10) days before the first hearing date for the arbitration proceeding. If the parties are unable to agree upon a briefing schedule for such motions, the arbitrator shall set the
briefing schedule.    

                19.3.5    The arbitration shall be held within ninety (90) days after the date the written demand was first
sent but in any event not earlier than 21 days following selection of the arbitrator. Except as expressly set forth in this clause, the arbitrator shall determine the manner in which the
arbitration is conducted including the time and place (within the County of Los Angeles, California) of all hearings, the order of presentation of evidence, and all other questions that arise with
respect to the course of arbitration. The arbitrator shall determine all issues in accordance with applicable decisional law. The presentation and admission of evidence shall be governed by the rules
governing the presentation and admission of evidence in Los Angeles County Superior Court, including but not limited to the provisions of the California Evidence Code. All proceedings and hearings
conducted before the arbitrator shall be transcribed by a court reporter unless both parties agree that no reporter is necessary. The costs of the court reporter shall be borne equally by the parties,
but may be awarded as costs to the prevailing party.    

                19.3.6    The arbitrator shall be empowered to enter equitable as well as legal relief, to provide temporary
and/or provisional relief and to enter equitable orders that will be binding upon the parties; provided that, the arbitrator shall not have the authority to grant any remedy or relief that is
expressly prohibited by, or that exceeds any limitations on remedies set forth in, this Lease. If the arbitrator determines that a remedy available to a party pursuant to this Lease and sought by a
party exceeds the arbitrator's authority, then the party denied such a remedy may initiate an action in the appropriate Federal or California court in the County of Los Angeles, California seeking
exclusively such a remedy or remedies. This Section shall not be construed to provide any remedy to any party that is prohibited by this Lease.    

                19.3.7    The arbitrator shall issue a single award at the close of the arbitration consistent with California
Code of Civil Procedure § 1283.4. The arbitrator shall issue the final award within fifteen (15) days after the conclusion of the arbitration hearing.    

	 

[SIGNATURES ON FOLLOWING PAGE] 

42

 

        IN
WITNESS WHEREOF, the undersigned have executed this Ground Lease as of the date first written above. 

	 	LANDLORD:
	

 	

THE SANTA ANITA COMPANIES, INC.,

a California corporation
	

 	

By:	

 
	 	 	

	 	Name:	 
	 	 	

	 	Title:	 
	 	 	

	

 	

By:	

 
	 	 	

	 	Name:	 
	 	 	

	 	Title:	 
	 	 	

	 

	 

	 	 	TENANT:
	

 	
 	

SANTA ANITA ASSOCIATES, LLC

a Delaware limited liability company
	

 	
 	

By:	
 	

Santa Anita Associates Holding Co., LLC,

a California limited liability company,

Managing Member
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Rick J. Caruso, Manager
	

 	
 	

By:	
 	

Santa Anita Commercial Enterprise, Inc.,

a Delaware corporation, Member
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

43

   EXHIBIT 3.1

ANNUAL RENTAL  

        The Annual Rental shall be an amount equal to the product of (i) *** multiplied by *** of the fair market value of the Premises as of the Effective Date
(the "Valuation Date"). 

        If
Landlord and Tenant have been unable to reach an agreement as to the fair market value of the Premises by the Valuation Date, either party may demand arbitration of the determination
of the fair market value of the Premises by so notifying the other party. Within twenty (20) days after delivery of the arbitration demand, each party shall appoint an arbitrator who shall be
an independent M.A.I. appraiser with at least five (5) years prior experience in appraising real property of the same or similar type and nature as the Premises (i.e., such experience
appraising large commercial projects). The appointment of all appraisers shall be in writing and shall be served on the other party. If a party fails to appoint an appraiser within the time required
above, the single appraiser appointed shall be the sole appraiser. The appraisers shall determine the fair market value of the Premises for its then permitted use under this Lease, without otherwise
taking into consideration this Lease or the Improvements, but taking into consideration: (i) the actual number of square feet of Improvements constructed or to be constructed by Tenant;
and (ii) that such Improvements are to be constructed in compliance with the entitlement requirements, including the Specific Plan, architectural design review and design guidelines to which
the Premises are subject, all recorded restrictions, and free and clear of all monetary encumbrances, as if such asset was sold in the open market on an arm's length basis allowing a reasonable time
to find a purchaser who purchases with knowledge of the then general market conditions. The two appraisers appointed by Landlord and Tenant, respectively, shall be instructed by Landlord and Tenant to
meet promptly and to use their best efforts to mutually agree upon the fair market value of the Premises as described above. If the two appraisers agree upon the fair market value of the Premises,
then their mutual decision shall be final and binding upon Landlord and Tenant. If within forty-five (45) days after the second appraiser has been appointed, the two appraisers are
unable to agree to the fair market value of the Premises, then they shall attempt to select a third appraiser meeting the qualifications stated in this paragraph within ten (10) days
thereafter. If the appraisers are unable to agree on the third appraiser within such ten (10) day period, then either of the parties to this Lease can apply to the presiding judge of the
Superior Court for the State of California in and for the County of Los Angeles, for the selection of a third appraiser who meets the qualifications stated in this paragraph. Each party shall bear the
entire fee of the appraiser chosen by such party and one-half (1/2) of the cost of appointing the third appraiser and of paying the third appraiser's fee. The third
appraiser, however selected, shall be a person who has not previously acted in any capacity for either party. Promptly after the selection of the third appraiser, the three appraisers shall meet and
the first two appraisers selected shall present to the third appraiser their respective arguments and evidence (including copies of their written appraisals) respecting the fair market value of the
Premises. Within thirty (30) days after the selection of the third appraiser, the third appraiser shall render its written decision to Landlord and Tenant, provided, that the fair market value
of the Premises so decided by the third appraiser must not exceed the higher of the two fair market values of the Premises proposed by the first two appraisers, and must not be less than the lower of
the fair market value of the Premises proposed by the first two appraisers. 

1

   EXHIBIT 5.1.2

HORSE SAFETY RESTRICTIONS  

1

   EXHIBIT 8.4

INSURANCE REQUIREMENTS  

1

GROUND LEASE  

by and between  

THE SANTA ANITA COMPANIES, INC.,

a California corporation  

 as Landlord,  

and  

SANTA ANITA ASSOCIATES, LLC

a Delaware limited liability company  

 as Tenant  

 
TABLE OF CONTENTS 

SANTA
ANITA GROUND LEASE 

	 
	 	 
	 	Page(s)

	ARTICLE 1	 	LEASE OF PREMISES	 	1
	 	1.1.	 	Lease of Premises	 	1
	 	1.2.	 	Reservation of Oil, Gas and Mineral and Water Rights	 	2
	 	1.3.	 	Tenant's Investigation	 	2
	 	1.4.	 	Subordination to and Conflicts with the REA	 	2
	 	1.5.	 	Covenant of Quiet Enjoyment	 	2
	ARTICLE 2	 	TERM	 	2
	 	2.1.	 	Initial Term	 	2
	 	2.2.	 	Option Terms	 	3
	ARTICLE 3	 	RENTAL	 	3
	 	3.1.	 	Annual Rental	 	3
	 	3.2.	 	Adjustment to Annual Rental	 	3
	 	3.3.	 	Place for Payment of Rent	 	4
	 	3.4.	 	Net Lease	 	4
	ARTICLE 4	 	TAXES AND UTILITIES	 	4
	 	4.1.	 	Tenant's Obligations to Pay Taxes	 	4
	 	4.2.	 	Prorations	 	5
	 	4.3.	 	Prorations for Other Premises of Landlord	 	5
	 	4.4.	 	Tenant's Right to Contest	 	5
	 	4.5.	 	Substitute Taxes	 	5
	 	4.6.	 	Tax Receipts	 	6
	 	4.7.	 	Utilities	 	6
	ARTICLE 5	 	USE AND POSSESSION	 	6
	 	5.1.	 	Uses	 	6
	 	5.2.	 	Permits	 	6
	 	5.3.	 	Opening and Operation Covenant	 	7
	ARTICLE 6	 	CONSTRUCTION OF IMPROVEMENTS	 	7
	 	6.1.	 	Plan Approval	 	7
	 	6.2.	 	Notice of Nonresponsibility and Completion	 	8
	 	6.3.	 	Completion Bonds	 	8
	 	6.4.	 	Financing	 	9

i

 

	 
	 	 
	 	Page(s)

	 	6.5.	 	Land Use Matters	 	9
	 	6.6.	 	Time for Commencement and Completion of Construction, Leasing and Opening	 	9
	 	6.7.	 	Mechanic's Liens	 	9
	 	6.8.	 	Indemnity	 	10
	ARTICLE 7	 	MAINTENANCE, REPAIRS, ALTERATIONS, RECONSTRUCTION	 	10
	 	7.1.	 	Maintenance	 	10
	 	7.2.	 	Casualty	 	10
	 	7.3.	 	Damage or Destruction During Final Years of Term: Tenant's Right to Terminate	 	10
	 	7.4.	 	Uninsurable Casualty: Tenant's Right to Terminate	 	11
	 	7.5.	 	General	 	12
	 	7.6.	 	No Abatement of Rent	 	12
	 	7.7.	 	Alterations	 	12
	ARTICLE 8	 	INDEMNITY AND EXCULPATION; INSURANCE	 	13
	 	8.1.	 	Indemnity	 	13
	 	8.2.	 	Exculpation of Landlord and Tenant	 	13
	 	8.3.	 	Rent Insurance	 	13
	 	8.4.	 	Property Insurance	 	13
	 	8.5.	 	Other Insurance Matters	 	13
	ARTICLE 9	 	CONDEMNATION	 	14
	 	9.1.	 	Definitions	 	14
	 	9.2.	 	Notification	 	14
	 	9.3.	 	Total Taking	 	14
	 	9.4.	 	Partial Taking	 	15
	 	9.5.	 	Temporary Taking	 	16
	ARTICLE 10	 	DEFAULT	 	17
	 	10.1.	 	Tenant's Default	 	17
	 	10.2.	 	Leasehold Mortgagee's Right to Cure Lease Defaults	 	18
	 	10.3.	 	Remedies	 	21
	 	10.4.	 	Landlord's Default	 	22
	 	10.5.	 	Certain Waivers	 	22
	 	10.6.	 	Limitation on Right to Terminate Lease	 	22

ii

 

	 
	 	 
	 	Page(s)

	ARTICLE 11	 	OWNERSHIP, REMOVAL OF IMPROVEMENTS AT EXPIRATION OR TERMINATION	 	23
	 	11.1.	 	Improvements	 	23
	 	11.2.	 	Surrender of Improvements	 	24
	ARTICLE 12	 	ASSIGNMENT; SUBLETTING	 	24
	 	12.1.	 	General Prohibition	 	24
	 	12.2.	 	Exceptions	 	24
	 	12.3.	 	Permitted Transfers	 	24
	 	12.4.	 	Absolute Prohibition	 	26
	 	12.5.	 	Other Assignments (Landlord's Consent Required)	 	26
	 	12.6.	 	Procedure for Assignment	 	26
	 	12.7.	 	Effective Date of Assignment	 	27
	 	12.8.	 	Subletting	 	27
	 	12.9	 	Encumbrance or Assignment as Security	 	28
	 	12.10	 	Effect of Consent	 	29
	ARTICLE 13	 	ATTORNMENT	 	29
	 	13.1.	 	Generally	 	29
	ARTICLE 14	 	INTENTIONALLY OMITTED	 	30
	ARTICLE 15	 	EXPIRATION, TERMINATION	 	30
	 	15.1.	 	Duty to Surrender	 	30
	 	15.2.	 	Holding Over	 	31
	 	15.3.	 	Existing Liabilities	 	31
	 	15.4.	 	Name	 	31
	ARTICLE 16	 	MISCELLANEOUS	 	31
	 	16.1.	 	Notices; Appointment of Agent	 	31
	 	16.2.	 	Estoppel Certificates	 	32
	 	16.3.	 	Attorneys' Fees	 	33
	 	16.4.	 	Arbitration of Changed Use Value Increase and Fair Market Value of the Premises	 	33
	 	16.5.	 	Joint and Several Obligations	 	33
	 	16.6.	 	Authority	 	34
	 	16.7.	 	Access for Landlord	 	34
	 	16.8.	 	Transfer of Landlord's Interest	 	34
	 	16.9.	 	Interest on Past Due Obligations	 	34

iii

 

	 
	 	 
	 	Page(s)

	 	16.10.	 	Waiver	 	34
	 	16.11.	 	Time of Essence	 	35
	 	16.12.	 	Brokers	 	35
	 	16.13.	 	Surrender or Cancellation	 	35
	 	16.14.	 	Interpretation of Lease	 	35
	ARTICLE 17	 	EXECUTION; RECORDATION OF SHORT FORM OF LEASE; CONSENT	 	38
	 	17.1.	 	Execution in Counterparts	 	39
	 	17.2.	 	Recordation of Short Form of Lease	 	39
	 	17.3.	 	Execution Triplicate Originals	 	39
	ARTICLE 18	 	HAZARDOUS SUBSTANCES	 	39
	 	18.1.	 	Covenant	 	39
	 	18.2.	 	Right of Entry	 	39
	 	18.3.	 	Indemnity	 	40
	 	18.4.	 	Permits	 	40
	 	18.5.	 	Notice of Release	 	40
	 	18.6.	 	Termination/Expiration	 	40
	 	18.7.	 	Dumping	 	40
	 	18.8.	 	Landlord's Obligation to Remediate	 	41
	ARTICLE 19	 	GENERAL ARBITRATION	 	41
	 	19.1.	 	Dispute Resolution; Arbitration	 	41
	 	19.2.	 	Informal Resolution	 	41
	 	19.3.	 	Formal Resolution	 	41

iv

 

EXHIBITS  

	A	 	Legal Description of Premises
	B	 	Site Plan of Complex
	C	 	Permitted Exceptions
	D	 	Form of Non-Disturbance Agreement
	E	 	Memorandum of Ground Lease
	3.1	 	Annual Rental
	5.1.2	 	Horse Safety Restrictions
	8.4	 	Insurance Requirements

v

 
 
 

INDEX OF DEFINED TERMS    
    

	 
	 	Page(s)

	Adjacent Land	 	1
	Adjusted Amount	 	38
	Adjustment Date	 	3
	Adverse Impact	 	9
	Affiliate	 	35
	Annual Rental	 	3
	Award	 	14
	Base Amount	 	38
	Base Year	 	38
	Business Day	 	35
	Cessation Event	 	3
	Changed Use Value Increase	 	3
	Complex	 	1
	Condemnation	 	14
	Condemnor	 	14
	Construction Commencement Date	 	9
	Contract Documents	 	8
	Control	 	35
	Date of taking	 	14
	Default	 	17
	Design Development Plans	 	7
	Effective Date	 	1
	Event of Default	 	17
	Exterior Design	 	35
	Force Majeure Delays	 	38
	GAAP	 	26
	Hazardous Substances	 	35
	Improvement Plans	 	7
	Improvements	 	1
	Index	 	38
	Index Adjustment	 	38
	Institutional Lender	 	36
	Landlord	 	1
	Larger Parcel	 	5
	Lease	 	1
	Leasehold Mortgage	 	36
	Leasehold Mortgagee	 	36
	Member	 	24
	Memorandum of Ground Lease	 	39
	Mezzanine Lender	 	36
	net worth	 	25
	Non-Disturbance Agreement	 	30
	Oil, Gas and Mineral Rights	 	2
	Opening Date	 	2
	Option Term	 	3
	owner subtenant	 	23
	Permitted Exceptions	 	2
	Permitted Use	 	6
	Person	 	36
	Premises	 	1
	Racetrack	 	1
	REA	 	1
	Rent	 	4
	Rent Commencement Date	 	3
	Scheduled Opening Date	 	7
	Schematic Design Plans	 	7
	selecting party	 	32
	Site Plan	 	1
	Tangible net worth	 	25

vi

 

	 
	 	Page(s)

	Tenant	 	1
	Term	 	2
	Total Taking	 	14

vii

   EXHIBIT "D"

NAMES, ADDRESSES, AND

PERCENTAGE INTERESTS OF THE MEMBERS  

	Name and Address of the Members 
	 	Percentage

Interest

	 Santa Anita Associates Holding Co., LLC

101 The Grove Drive

Los Angeles, CA 90036	 	50%
	Attention:	 	Rick J. Caruso

Richard A. Moses	 	 
	Fax: 323-900-8101	 	 
	E-mails:	 	rcaruso@carusoaffiliated.com and

rmoses@carusoaffiliated.com	 	 
	
 Santa Anita Commercial Enterprise, Inc.

c/o Magna Entertainment Corp.

337 Magna Drive

Aurora, Ontario 74G 7K1	
 	

50%
	Attention:	 	Mr. Blake Tohana	 	 
	Fax: 905-726-7172	 	 
	E-Mail:	 	BTohana@magnaent.com	 	 
	 	 	 	 	

	 	 	 	 	100%
	 	 	 	 	

1

EXHIBIT "E"  

 PRELIMINARY PRE-DEVELOPMENT PLAN AND

PRELIMINARY PRE-DEVELOPMENT BUDGET  

	 

	 

* * * 

EXHIBIT "F"  

DEVELOPMENT AGREEMENT

(SANTA ANITA PROJECT)

by
and between 

Santa
Anita Associates, LLC,

a Delaware limited liability company,

as Owner, 

and

Caruso
Management Company, Ltd.,

a California limited partnership,

as Developer 

	 

	 

Dated as of
                                    ,
200         

 
DEVELOPMENT AGREEMENT

[SANTA ANITA PROJECT]  

        THIS
DEVELOPMENT AGREEMENT ("Agreement") is made and entered into as of the
                         day of
                                    ,
200            , by and between SANTA ANITA ASSOCIATES, LLC, a Delaware limited liability company
("Owner"), and CARUSO MANAGEMENT COMPANY, LTD., a California limited partnership ("Developer"). 

R E C I T A L S: 

        A.    Owner
is the lessee of certain lands described in Schedule I ("Property") pursuant to
that certain seventy-five (75) year ground lease with two (2), ten (10) year renewal options with The Santa Anita Companies, Inc. as lessor, and desires to construct
thereon the shopping center commonly known as "[Santa Anita Project]", as more particularly
described in the definition of ("Project"); and 

        B.    Owner
desires to carry out certain development works with respect to a portion of the Property, and for the purposes of such development, Owner desires to engage
Developer to provide development, pre-construction and construction management services and pre-opening leasing services on the terms and conditions hereinafter
set forth. 

A G R E E M E N T: 

        NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows: 

ARTICLE I  

 DEFINITIONS AND INTERPRETATION  

        Section 1.01  Definitions.    As used in this Agreement the following words and
phrases shall have the meanings respectively assigned to them: 

        "Affiliate" means, with respect to any Person (the "Subject Person"), any other Person controlling,
controlled by or under common control with the Subject Person. As used in this definition of "Affiliate," the term "control" means, with respect to any Person, the right to the exercise, directly or
indirectly, of fifty percent (50%) or more of the voting rights attributable to such Person. 

        "Approved Budget" means the budget for the Project set out in Schedule IV, as it may be amended from
time to time by Change Order or otherwise by the written agreement of Owner or Owner's Representative and Developer in accordance with the provisions of this Agreement. 

1

 

        "Authorities" means all Federal, state, county and local governments and their respective agencies and departments, and any other public
authorities having jurisdiction over the Project or any component part thereof. 

        "Bankruptcy" with respect to any Person means the occurrence of any of the following events: 

        (a)    if
such Person shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under the present or any future Federal bankruptcy act or any other present or future
applicable Federal, state or other statute or law relating to bankruptcy, insolvency, or other relief for debtors, or shall seek or consent to the appointment of any trustee, receiver, conservator or
liquidator of such Person of all, or substantially all, of its property; or 

        (b)    if
a court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against such Person seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the present or any future Federal bankruptcy act, or any other present or future Federal, state or other statute or law
relating to bankruptcy, insolvency, or other relief for debtors, and such order, judgment or decree shall remain unvacated and unstayed for a period of ninety (90) days from the date of entry
thereof, or any trustee, receiver, conservator or liquidator of such Person or of all or substantially all of its property shall be appointed without the consent of such Person and such appointment
shall remain unvacated and unstayed for a period of ninety (90) days, or if such Person shall file an answer admitting the material allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or 

        (c)    if
such Person shall admit to the others in writing its inability to pay its debts as they mature; or 

        (d)    if
such Person shall make a general assignment for the benefit of creditors or take any other similar action for the protection or benefit of creditors; or 

        (e)    if
any assets of such Person are attached, seized or subjected to a garnishment or other action by a creditor of such Person seeking to realize upon a judgment against
such Person, and such attachment, seizure, garnishment or other action is not vacated, stayed or otherwise resolved within ninety (90) days thereafter. 

        "Business Day" means a day which is not a Saturday, Sunday or legally recognized public holiday in the United States. 

        "Change Order" means any change instructed or approved by Owner and identified in writing by Owner as a change order, including: 

        (a)    increases
or decreases in, or omissions from, the scope of the Project or the execution of additional work or acceleration of the work agreed upon by Developer and Owner
in accordance with Article 3; 

2

 

        (b)    material
changes in the character or quality of any material or work, provided that for the purposes of this clause (b) and the following clause (c)
of this definition, any change or series of related changes which would be likely to result in an increased or decreased cost of one hundred thousand dollars ($100,000) or more, individually, or five
hundred thousand dollars ($500,000) or more, in the aggregate, shall be deemed material, and unless Owner and Developer otherwise agree, changes resulting in a lesser increase or decrease shall not be
deemed material; 

        (c)    material
changes requested by Owner in the levels, lines, positions or dimensions of any part of the Project; 

        (d)    changes
in any work made necessary by an unanticipated change in the requirements of any Authority, or a revised interpretation or opinion of the requirement by such
Authority from the interpretation communicated to Developer prior to the date hereof, or an unanticipated change in any Legal Requirements or Insurance Requirements; or 

        (e)    work
resulting from unanticipated environmental or extraordinary subsurface conditions. 

        "Comparable Project" means "The Grove", located at 101 The Grove Drive, Los Angeles, California. 

        "Consents" has the meaning assigned thereto in Section 2.01. 

        "Construction Management Fee" means a construction management fee equal to *** of the final Hard Costs. 

        "Construction Schedule" means the preliminary construction schedule for the Project attached hereto as
Schedule III, and any final construction schedule approved by Owner or Owner's Representative and Developer in accordance with the provisions of
Section 3.04, as such final schedule may be amended from time to time by Change Order or otherwise by the agreement of Owner's Representative and Developer. 

        "Construction Standard" means a quality of construction, materials and workmanship consistent with or better than the quality of
construction, materials and workmanship utilized for the Comparable Project. 

        "Contract" means any contract entered into by Developer with contractors, suppliers, consultants or other persons for the supply of labor,
materials or other services required for the execution of the Project. 

        "Contractor" means any contractor, supplier, consultant or other person with whom Developer (or Owner at Developer's direction)
shall enter into a Contract in connection with the Project. 

        "Date for Substantial Project Completion" shall mean the date which is specified in the Construction Schedule as the projected date upon
which the building shell construction of the Project will be substantially complete (excluding construction work to be performed by sub-ground lease tenants), as such date may be adjusted
from time to time for extensions of time under Article 6. 

3

 

        "Date of Substantial Project Completion" means the date which Owner's Representative certifies under Section 16, as the date on
which the Substantial Project Completion has been achieved. 

        "Design Documentation Schedule" means the schedule for the preparation of architectural designs, drawings and specifications for the
Project as agreed between Developer and Owner or Owner's Representative, as such schedule may be amended from time to time by the agreement of Developer and Owner or Owner's Representative or by an
extension of time pursuant to Article 6. 

        "Developer" means Caruso Management Company, Ltd., a California limited partnership, and its permitted successors and assigns
hereunder. 

        "Default Notice" has the meaning assigned thereto in Section 13.02. 

        "Developer Representative" means the representative of Developer appointed pursuant to Section 8.02. 

        "Development" means the performance either prior to or after the date of this Agreement of (i) all of the
planning and evaluation for the Project, (ii) all negotiations with relevant Authorities required to obtain all required Consents (as defined in Section 2.01
below) and entitlements for the execution of the Project from the applicable Authorities and (iii) any other services or obligations described in Section 3.02. 

        "Development Fee" means a development fee equal to *** of the final Hard Costs. 

        "Development Site" means that part of the Land and the existing buildings located thereon, if any, upon or within which the Project is to
be carried out and refers to the same in its condition during the period from the date hereof until the Date of Substantial Project Completion. 

        "Due Care" means the care, skill, prudence and diligence under circumstances then prevailing that a skillful, prudent, diligent, careful
and experienced developer of national standing would use in the conduct of the Comparable Project. 

        "Emergency" means an event which, in Developer's reasonable judgment, requires immediate action to be taken prior to Owner's
Representative's approval of a Proposed Change Order in order to comply with Legal Requirements or Insurance Requirements, to preserve any portion of the Project, to assure the safety of any
Contractor or employees of any Contractor, Occupants, customers or invitees of the Property, or to avoid the suspension of any material services necessary proceed with the Project (if such
services will only be available after material delay or material expense following the suspension thereof). 

4

 

        "Entitlements" means all land use approvals from all applicable Authorities required for (i) the development
of additional floor area or (ii) the modification of existing floor area at the Property for leasing to tenants for retail or other ancillary use. 

        "Final Completion" of the Project means the occurrence of all of the following events: (a) the completion by
Developer or its Contractors of all work required to be performed under this Agreement, including the performance of all punch list items and the correction of any defective or nonconforming work
identified to Developer prior to the later of the first anniversary of the Date of Substantial Project Completion and the expiration of the Warranty Period, but excluding any Occupant's Improvements;
(b) the receipt by Owner or Owner's Representative of all Consents required for the permanent use and occupancy of the Project for its intended purposes;
(c) the delivery by Developer to Owner or Owner's Representative of waivers or releases from liens and claims for payment from all Contractors in a form reasonably
satisfactory to Owner or Owner's Representative, or with respect to any liens or claims that have not been released, the bonding over (at no cost to Developer) of such liens or claims in a
manner reasonably acceptable to Owner or Owner's Representative; and (d) the closing of the construction books and records for the Project. 

        "Force Majeure Event" shall have the meaning specified in Section 6.02. 

        "Force Majeure Notice" shall have the meaning specified in Section 6.03. 

        "Hard Costs" means the "direct hard cost" of the Project as set forth in the Approved Budget, which Hard Costs shall exclude the
Development Fee and the Construction Management Fee payable to Developer hereunder, as the same may be adjusted from time to time pursuant to the provisions of this Agreement, including, without
limitation by any Change Order. 

        "Horse Safety Requirements" means those horse safety requirements set forth on  Exhibit "B" attached hereto. 

        "Insurance Requirements" means the requirements for insurance set forth in Exhibit "I" of the LLC Agreement. 

        "Land" means the real property on which the Property is located, together with all rights, privileges and easements appurtenant to or used
in connection therewith. 

        "Leasable Areas" means those sections of the completed Project intended to be leased or licensed to Occupants, as provided in the
construction documents. 

        "Lease" means any lease, sublease, license to occupy or other right of occupancy, use or possession of the Property or any part of the
Property, including advertising agreements and sponsorship agreements, and any amendment thereof, entered into or granted by or as agent of Company, including Temporary Leases, whether temporarily or
for a fixed or periodic term, whether or not recorded, and whether oral or written including, without limitation, any storage license, cart or kiosk lease or license, and any other specialty lease or
license. "Leases" means each and every Lease in effect at the applicable time, collectively. 

5

 

        "Leasing Fee" has the meaning set forth in Section 14.03 below. 

        "Leasing Plan" shall set forth in reasonable detail the following items: 

                (a)   a
description of the proposed size of, type of tenants for and pro forma rent for each tenant space and tenant improvement allowances; 

                (b)   a
merchandising plan for vacant space; and 

                (c)   Leasing
Guidelines shall include items (a) and (b) above for any space reasonably anticipated to be vacant within the next Fiscal Year, and such other
information provided in the form of Document Request attached hereto as Schedule VI. 

        "Legal Requirements" means all laws, statutes, codes, ordinances, orders, regulations, judgments, decrees and directions of all Federal,
state and local governments and courts and the appropriate agencies, officers, departments, boards, authorities and commissions thereof, whether now or hereafter enacted, to the extent that the same
are applicable to the Project or any portion thereof. 

        "Lender" means the holder of any Loan. 

        "LLC Agreement" means that certain Limited Liability Company Agreement between Santa Anita Commercial Enterprise, Inc. and Santa
Anita Associates Holding Co., LLC, dated of even date herewith, as the same may be amended from time to time in accordance with the terms thereof. 

        "Loan" means any loan made to Owner and secured by the Property at any time on or after the date hereof. 

        "Management Committee" has the meaning set forth in Section 2.01(a) of the LLC Agreement. 

        "Manager" means Caruso Management Company, Ltd., a California limited partnership, and its permitted successors and assigns under
the Management Agreement. 

        "Management Agreement" means the Management Agreement entered into between Owner and Manager, as the same may be amended from time
to time. 

        "Occupant" means any Person occupying or proposing to occupy any part of the Leasable Areas under any lease, license or other occupancy
agreement with Owner. 

        "Occupant's Improvements" means those works which are proposed to be constructed by or on behalf of any Occupant to complete and
fit-out any part of the Leasable Areas to such Occupant's own occupancy requirements. Occupant's Improvements are not the obligation of Developer under this Agreement. 

        "Off-Site Improvements" means those works outside the boundaries of the Land required to be carried out or paid for by Owner
in order to obtain any entitlements from, or comply with any other conditions imposed by, any Authority in respect of the Project. 

6

 

        "Owner" means Santa Anita Associates, LLC, a Delaware limited liability company, and any permitted successor or assign under the
terms of this Agreement. 

        "Owner's Representative" means the representative of Owner appointed pursuant to Section 8.01,
provided that if Owner has not appointed a representative pursuant to Section 8.01 all references to "Owner's Representative" contained in this Agreement shall be
deemed to refer to Owner. 

        "Operating Plan" has the meaning set forth in the Management Agreement. 

        "Person" means an individual, partnership, joint venture, corporation, firm, unincorporated association or any Authority, and a reference
to a Person includes a reference to that person's executors, administrators, successors, substitutes and assigns. 

        "Plans and Specifications" means the plans and specifications for the Project now or hereafter approved by Owner, as evidenced by being
initialed by Owner's Representative and Developer for identification, prepared by or on behalf of Developer, as they may be amended from time to time pursuant to Section Article XVII
or by Change Order or otherwise by the written agreement of Owner's Representative and Developer in accordance with the provisions of this Agreement. The Plans and Specifications prepared by
Developer and approved by Owner as of the date hereof are set forth in Schedule II hereof. 

        "Prime Rate" means as of the first day of each month, the "Prime Rate" most recently reported in The Wall Street Journal, which rate shall
be adjusted concurrently with any adjustments to such Prime Rate. 

        "Project" means the development of the Property and construction of the improvements (including, without limitation, the construction of
Off-Site Improvements and the installation of services and any landscaping, parking, roadways, traffic control works, or other works with respect to common areas or other improvements) to
be carried out on the Development Site, and any work required to be performed at the existing Property in connection with or as a result of such development and construction of the Property, all in
accordance with (i) the Approved Budget, (ii) the Plans and Specifications, (iii) the Construction Schedule,
(iv) Insurance Requirements and Legal Requirements and (v) all of the other terms and conditions of this Agreement. 

        "Proposed Change Order" means any Change Order which requires the approval of Owner hereunder but has not been approved by Owner. 

        "Related Person" means, with respect to any Person (the "Subject Person"), any
other Person having any of the following relationships with the Subject Person: 

        (a)    any
Affiliate of the Subject Person; 

        (b)    any
other Person owning directly or indirectly more than fifteen percent (15%) of the issued and outstanding stock of, or more than a fifteen percent (15%) beneficial or
voting interest in, the Subject Person; or 

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        (c)    any
other Person more than fifteen percent (15%) of the issued and outstanding stock of which, or more than a fifteen percent (15%) beneficial or voting interest in
which, is owned directly or indirectly by the Subject Person. 

        "Substantial Project Completion" means the stage when the Project is in all material respects complete in accordance with the Plans and
Specifications and this Agreement, and is ready for occupation and fit for use for its intended purposes, or with respect to Leasable Areas, is ready to be turned over to the Occupants for the
construction of the Occupant's Improvements (it being acknowledged that Substantial Project Completion shall be determined to have been achieved notwithstanding that any Occupants' Improvements
have not been completed), subject in any case to the completion of punch list items (it being acknowledged that Substantial Project Completion shall be determined to have been achieved
notwithstanding that any punch list items have not been completed) and a temporary certificate of occupancy has been issued by the appropriate Authorities for all applicable portions of the Project,
other than Leasable Areas, as may be required by Legal Requirements. 

        "Standard Form of Lease" means (i) the standard form leasing documents for Leases as reasonably modified from
time to time by the Manager, and (ii) for Leases, with any national tenant, either: (a) leasing documents that are materially consistent with the leasing documents
generally used by Manager and its Affiliates and such tenant at other properties managed by Manager and its Affiliates; or (b) to the extent that Manager and its Affiliates do not have a prior
relationship with the national tenant, then leasing documents (x) that are used by such national tenants at other locations, or (y) the standard form leasing documents for Leases, as the
same may be amended or restated from time to time in accordance with the provisions of this Agreement. 

        "Temporary Lease" means any Lease of a temporary or seasonal nature, having a term, including renewal options (if any) of one
(1) year or less, including without limitation, short-term concessions or license agreements and cart or kiosk leases or licenses for one (1) year or less. 

        Section 1.02  Interpretation. 

        (a)    Where
under any provision of this Agreement, except Article 13 any notice is to be given or any other act, matter or thing is to be done in a stated period of
days, only Business Days shall be counted, and where anything is to be done on a day which is a non-Business Day then that thing will be deemed to be required to be done on the next
succeeding Business Day. 

        (b)    The
word "including" where used in this Agreement shall be deemed to be followed by the words "without limitation" if not already followed by those words. 

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   ARTICLE II  

 CONSENTS AND APPROVALS  

        Section 2.01 Obtaining Consents.    Subject to this Article 2, Developer shall
(to the extent it has not already done so) obtain and maintain all necessary consents, approvals, licenses, permits, variances, zoning changes, and other authorizations necessary pursuant to
applicable Legal Requirements or otherwise required by any Authorities, utility companies and other parties entitled to approve or consent to all or any portion of the Project to enable the timely
commencement and completion of the Project, including the Final Completion and the issuance of a permanent certificate of occupancy (collectively, the
"Consents"). Owner acknowledges, however, that Developer shall have no liability to Owner if despite the exercise of its diligent, good faith efforts,
Developer is unable to obtain or maintain any of the Consents, provided that, except as may otherwise be agreed upon by Owner or Owner's Representative and Developer, Developer will not permit any
construction of the Project in the absence of any Consent required to do so. 

        Section 2.02 Owner's Cooperation.    Owner shall reasonably cooperate with and shall cause
the ground lessor to reasonably cooperate with the Developer to enable Developer to obtain the Consents. 

        Section 2.03 Copies of Consents to be Delivered to Owner.    Developer shall provide to
Owner's Representative copies of any documents issued by any Authorities or other persons evidencing any Consents or other notices or orders arising out of any Legal Requirements or Insurance
Requirements and relating to the Project, within a reasonable time after such documents are received by Developer. 

ARTICLE III  

 THE PROJECT, COMMENCEMENT AND PROGRAMMING  

        Section 3.01 Scope of Project.    Owner and Developer have agreed to undertake a Project of
the scope described in Schedule VII. 

        Section 3.02 Services of Developer.    In consideration of the payments to be made by Owner
to Developer hereunder and any other sums payable to Developer in accordance with the Approved Budget, Developer shall undertake all actions consistent with the Approved Budget, Leasing Plan, the
Plans and Specifications, the Construction Schedule and all other provisions of this Agreement necessary or appropriate to execute all aspects of leasing and the Development and construction of the
Project, including, without limitation: 

        (a)    using
its diligent, good faith efforts to obtain and maintain all of the Consents in full force and effect until Final Completion (or for such shorter period as
any such Consent may be required to be kept in effect), and executing and completing the Project in accordance with all Consents; 

9

 

        (b)    Provide
the necessary employees, engage, subject to Owner's approval, the necessary Consultants and supervise and coordinate the services of all such employees and
Consultants. Elkus/Manfredi Architects ("Architect"), has been retained by Owner as the Architect for the construction of the Project. The services,
duties and responsibilities of Consultants shall be described in agreements between Owner and each respective Consultant unless Consultants are retained by Architect; 

        (c)    Supervise
the preparation by the Architect of, and analyze and evaluate, the Plans and make recommendations to Owner when required, to achieve an economical and
efficient design and construction in consideration of the functional and aesthetic requirements of the Project as a whole; 

        (d)    Recommend
to Owner for Owner's approval the identity and method of retention of a general contractor and/or construction manager (collectively, the
"Contractor") to construct the Project and, upon Owner's retention of the Contractor, Manager shall supervise the Contractor's activities in connection
with such construction; 

        (e)    Maintain
accounting records for the construction of the Project and establish a procedure reasonably satisfactory to Owner and its mortgagee, if any, for making payments
to trade contractors, material suppliers and others and analyze, verify and make recommendations respecting construction progress payments to the Contractor in keeping with the approved procedures
therefor; 

        (f)    Prepare
and submit to Owner for approval monthly draw requests for funds pursuant to the financing arrangements of Owner for the construction of the Project; 

        (g)    Arrange
and coordinate regular observations and/or inspections by the Architect and other appropriate Consultants of all necessary and appropriate work relating to the
construction of the Project and use reasonable and diligent efforts so that all defects in work, if any, are corrected; 

        (h)    Develop
and implement a system for the preparation, review and processing of Change Orders (as such term is hereinafter defined) and recommend necessary or
desirable changes to Owner and the Consultants, review requests for changes, submit recommendations to Owner and the Consultants, and negotiate Change Orders; 

        (i)    Not
less than once every month during the Term of this Agreement, prepare and submit to Owner a "Development Status Report" describing the status of the development,
design and construction of the Project; 

        (j)    Conduct
meetings (including telephonic) with Owner (and representatives from each member of Owner) in Los Angeles every thirty (30) days or more frequently
as may be required by Owner upon no fewer than three (3) business days prior written notice, for the purpose of reviewing the progress of the development, design and construction of
the Project; 

10

 

        (k)    retaining,
supervising and arranging for the payment (subject to receipt of funds from Owner in accordance with the terms of this Agreement) of all necessary or
appropriate Contractors, including contractors, suppliers, surveyors, engineers, architects, agents and any other experts or consultants that Developer may desire to retain in connection with the
Project, and entering into Contracts with all such Contractors and, to the extent determined appropriate by Developer, enforcing such Contracts; 

        (l)    administering,
reviewing and approving or rejecting all requests for payment made by Contractors or other third parties providing labor, material or services to
the Project; 

        (m)    causing
to be prepared by appropriately qualified consultants all design and working plans, drawings, specifications and other construction documents relating to
the Project; 

        (n)    hiring,
directing, supervising and administering all required on-site personnel needed by Developer to enable Developer to perform its obligations hereunder
with respect to the Project and the design, development and construction thereof; 

        (o)    recording
and reporting the progress of the construction of the Project; 

        (p)    generally
performing such other acts and things as may be required in accordance with this Agreement for the full and complete supervision and coordination of the
planning, design, Development and construction of the Project; and 

        (q)    use
Due Care to lease the Project in accordance with the Leasing Plan. 

No
delegation by Developer of any of its obligations hereunder shall be permitted except in accordance with this Agreement and no such delegation shall relieve Developer of any responsibility or
liability with respect to such obligations hereunder. 

        Section 3.03 Commencement; Diligent Performance.    Developer shall, subject to delays
caused by a Force Majeure Event, regularly and diligently cause Contractors to proceed with the completion of the Project in accordance with this Agreement, the Plans and Specifications, the terms of
all applicable Consents and the Construction Schedule, until the Date of Substantial Project Completion. Following Substantial Project Completion through Final Completion of the Project, Developer
shall diligently perform such work as may be required in accordance with all applicable provisions of this Agreement. 

 Section 3.04 Construction Schedule.

        (a)    The
Construction Schedule submitted by Developer shall be in the form of a critical path network and shall: 

        (i)    include
a Design Documentation Schedule; 

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        (ii)    provide
for a sequence for the Project which conforms with the requirements for access to the Project for the purpose of Occupant's Improvements as set out in the
program for the performance of such Occupant's Improvements provided to Developer by Owner's Representative, which requirements shall be recorded as milestone dates in the Construction
Schedule; and 

        (iii)    provide
an estimated date for the achievement of Substantial Project Completion and Final Completion. 

        (b)    Developer
shall proceed with the Project in accordance with the Construction Schedule, as adjusted or amended from time to time by delays caused by Force
Majeure Events. 

        (c)    Developer
shall update the Construction Schedule as and when necessary to reflect any changes to the timing or sequence of the activities included therein or in the
Design Documentation Schedule resulting and shall forthwith submit the revised Construction Schedule or Design Documentation Schedule to Owner's Representative for review and approval. 

        Section 3.05 Performance Standard.    Developer shall exercise its powers and perform its
responsibilities under this Agreement in a manner consistent with the Construction Standard. In performing its duties hereunder, Developer is, and at all times shall be, acting as an independent
developer contracted by Owner under this Agreement and all personnel contracted with, paid or supervised by Developer shall be independent contractors or employees of Developer, and shall not be
employees of Owner. Developer shall be limited in its authority to the express authority herein granted and by the express restrictions on authority set forth in this Agreement. 

        Section 3.06 Adjustment of Approved Budget.    At least once every month if applicable,
Developer shall deliver to Owner's Representative an adjustment to the Approved Budget taking into account any increases or reductions in costs resulting from the implementation of each Change Order
pursuant to Article 4. 

        Section 3.07 Architectural Contract.    With Owner's approval, Developer will draft and
negotiate (i) the architectural contract for the construction of the Project with the Architect, (ii) the construction contract for the construction of the Project with
the Contractor, (iii) agreements, if any, with governmental authorities having jurisdiction and (iv) other requisite documents relating to the development and construction of the
Project. In addition to the foregoing, Developer shall assist Owner in drafting and negotiating all financing documents. 

ARTICLE IV  

 CHANGES TO PLANS AND CHANGE ORDERS  

 Section 4.01 Initiation of Change Orders, Changes or Additions.

        (a)    Owner
may from time to time instruct Developer to undertake a Change Order and Developer shall comply with that instruction. 

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        (b)    Developer
may from time to time during the progress of the Project submit to Owner's Representative for approval as a Change Order a copy of any proposed changes or
additions to the Plans and Specifications, such submission to be accompanied by a written report setting out the reasons for the proposed changes or additions. Any Change Order proposed by Developer
under this Section 4.01(b) (a "Proposed Change Order") shall constitute a Change Order hereunder if and when it is approved by Owner's
Representative in accordance with this Article 4. 

        Section 4.02 Increase in Price; Extension of Time.    Where any Change Order instructed by
Owner's Representative under Section 4.01(a) or required by Owner's Representative under Section 10.02, or any Proposed Change Order proposed by Developer under
Section 4.01(b) if it would be likely to result in an increased or decreased cost of one hundred thousand dollars ($100,000) or more, individually, or five hundred thousand dollars ($500,000)
or more, in the aggregate, and is approved by Owner, may result in an increase or decrease in the Hard Costs and/or is likely to cause any delay to the Date for Substantial Project Completion,
Developer shall promptly submit to Owner's Representative an analysis of the applicable Change Order or Proposed Change Order, and that analysis shall: 

        (a)    specify
the actual cost increase or reduction resulting from the applicable Change Order or Proposed Change Order; 

        (b)    contain
an estimate of any increase in or reduction of the time required to bring the Project to Substantial Project Completion, including the cost increase
(if any) or cost reduction (if any) associated with such extension or reduction of time, and with respect to any extension of time, the information required under Section 6.06; 

        (c)    specify
the impact, if any, on Consents already obtained and/or the need to obtain additional Consents, to the extent such information is available to, or actually known
by, Developer; and 

        (d)    contain
sufficient detail, including, where appropriate, methods of calculation to enable Owner's Representative to establish the accuracy of the information relating to
items (a) through (c), inclusive. 

        (e)    Upon
receipt of the analysis from Developer, Owner's Representative shall meet with the Developer Representative as soon as is practicable in an endeavor to agree in
good faith upon the cost and time consequences of the applicable Change Order or Proposed Change Order. 

 Section 4.03 Owner's Approval of Proposed Change Orders.

        (a)    If
the amount of the Proposed Change Order would be likely to result in an increased or decreased cost of one hundred thousand dollars ($100,000) or more, individually,
or five hundred thousand dollars ($500,000) or more, in the aggregate, Owner's Representative shall notify Developer in writing of its approval or disapproval of any Proposed Change Order within ten
(10) days following its submission of the Proposed Change Order. If Owner's Representative has not notified Developer of its approval or rejection of the Proposed Change Order within ten
(10) days following the receipt of the Proposed Change Order, then the Proposed Change Order shall be deemed to have been approved by Owner's Representative. Except in an Emergency, Developer
shall not commence work on any Proposed Change Order until such Proposed Change Order has been approved in writing or deemed approved by Owner's Representative. Promptly after an Emergency, Developer
shall deliver a notice thereof to Owner's Representative together with its recommendations with regard thereto. 

13

 

        (b)    Notwithstanding
any other provision of this Agreement, in the event that the amount of the Proposed Change Order would be likely to result in an increased or decreased
cost of one hundred thousand dollars ($100,000) or more, individually, or five hundred thousand dollars ($500,000) or more, in the aggregate, Owner's Representative may in its absolute discretion
refuse to approve any Proposed Change Order, provided, however, that if failure to institute a Proposed Change Order would expose Developer to
any possible civil or criminal liability, then Developer may process the Proposed Change Order without the need to obtain Owner's consent. 

        Section 4.04 Adjustment of Hard Costs and Date for Substantial Project Completion.    If
Developer has submitted an evaluation of a Proposed Change Order pursuant to Section 4.02 and the cost and time consequences of the change or addition have been approved by Owner's
Representative or otherwise determined pursuant to Section 4.02, the Hard Costs shall be deemed to have been correspondingly increased or decreased and/or the Date for Substantial Project
Completion shall be deemed to have been altered as the case may be as of the date at which the increase or decrease in the Hard Costs and/or the alteration to the Date for Substantial Project
Completion was approved or determined. 

        Section 4.05 Adjustment of Developer Fees.    In the event that the Hard Costs are increased
or decreased as a result of the operation of this Article 4 by any amount (the "Hard Costs Increments"), then, in addition to all other
payments to be made by Owner pursuant to this Agreement, the fees payable to Developer pursuant to Article 14 shall be adjusted accordingly; provided, however, that Developer's fees shall be
adjusted due to approved or deemed approved Change Orders but only to the extent of (i) Hard Costs Increments resulting from Owner approved changes in the scope of the work, or (ii) Hard
Costs Increments that do not exceed the final Approved Budget (upon commencement of work) including the applicable contingency. 

ARTICLE V  

 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS  

 Section 5.01 Compliance.

        (a)    In
carrying out the Project, Developer shall, on behalf of Owner, comply in all material respects with the provisions of all Legal Requirements and Insurance
Requirements set forth on Exhibit "I" of the LLC Agreement. Notwithstanding the foregoing, Developer, with the prior approval of Owner, shall be entitled to contest in good faith any
Legal Requirement or any such Insurance Requirement provided that such contest is not reasonably expected to result in the cancellation or interruption of insurance coverage for the Property or
subject Owner to any civil or criminal liability or fines and is not reasonably expected to result in a breach, violation or termination of any mortgage, Lease or other material contract or agreement
encumbering or relating to the Property. Manager's good faith noncompliance with the applicable Legal Requirement or Insurance Requirement shall not be deemed a default under this Agreement provided
that Manager prosecutes such contest in good faith and with due diligence to a final determination. 

14

 

        (b)    Upon
the written request of Owner, Developer agrees to make such commercially reasonable modifications to the terms of this Agreement as are required by any lender
providing funds to Owner with respect to the Development and the Project ("Construction Lender"). 

        (c)    In
carrying out the Project, Developer shall comply in all material respects with the provisions of the Leases with anchor stores, if any, and shall comply with the
provisions of all of Owner's Loan documents, which provisions are applicable to the Development or construction of the Project, provided that Owner makes the provisions of any such documents known to
Developer. Developer shall provide Owner and any member of the Management Committee of Owner with reasonable access from time to time to the Contracts. To the extent a Loan is outstanding, such access
shall be on the same basis and on the same terms and conditions, as has been granted to Lender. Developer agrees to provide to Owner or, to the extent a Loan is outstanding, to Lender, any documents,
instruments or certificates with respect to the Project reasonably required from time to time by Owner or, to the extent a Loan is outstanding, by such Lender, within the time periods as may be
required by the Loan. 

ARTICLE VI  

 COMPLETION AND ACCELERATION OF THE PROJECT  

        Section 6.01 Completion Dates.    Subject to the provisions of this Article VI,
Developer shall use Due Care to cause Contractors to bring the Project to Substantial Project Completion on or before the Date for Substantial Project Completion, subject to any delays caused by Force
Majeure Events. 

        Section 6.02 Force Majeure Events.    If progress of the Project is delayed by: 

        (a)    delay
by an Authority (unless such delay is caused by Developer) in giving any necessary approval in respect of any properly prepared application made by Developer and
submitted with all necessary fees in a timely manner; 

        (b)    delay
caused by unusually inclement weather for the area in which the Property is located or conditions resulting from such unusually inclement weather, earthquake, fire
or act of God; 

        (c)    the
commencement of litigation against Developer, Owner or Project, other than litigation arising from any willful misconduct or negligent or fraudulent act
of Developer; 

15

 

        (d)    the
progress of the Project being affected by any civil commotion, act of terrorism, workmen strike or labor unrest, or any combination thereof; or 

        (e)    work
resulting from unanticipated environmental or extraordinary subsurface conditions. 

and,
as a result of any such event or occurrence set forth in subparagraphs (a) through (d) above (a "Force Majeure Event") a delay
will occur in the achievement of Substantial Project Completion, then, subject to Section 6.03, Developer shall be granted such extensions of the Date for Substantial Project Completion or the
respective Dates for Substantial Stage Completion with respect to the applicable Stage(s) as shall under all of the circumstances be reasonable. 

 Section 6.03 Limitations on Extension of Time.

        (i)    Notwithstanding
anything to the contrary contained in this Agreement, Developer acknowledges that it is obligated to take all reasonable steps to avoid the occurrence of
the delay or to minimize the impact of the delay on the progress of the Project. 

        (b)    Upon
the occurrence of any Force Majeure Event set forth in Section 6.02)(a)-(d) above, Developer shall promptly submit to Owner's Representative a notice of the
occurrence of such Force Majeure Event, as well as a reasonably detailed explanation of the cause of such Force Majeure Event, the impact on the critical path of the Construction Schedule and
Developer's good faith estimate, if ascertainable, of the resulting delay (a "Force Majeure Notice"). 

        Section 6.04 Owner's Acceleration Direction.    At any time between the date of this
Agreement and the Date of Substantial Project Completion, Owner's Representative may direct Developer to cause Contractors to accelerate the performance of the Project, provided that Owner approves
any resulting Change Order pursuant to Article IV. 

        Section 6.05 Acceleration Cost and Time Consequences.    Upon receipt of a direction from
Owner's Representative to accelerate the performance of the Project (an "Acceleration Direction"), Developer must promptly provide a report
(an "Acceleration Report") to Owner's Representative for its review and approval. Each Acceleration Report shall include the following
information: 

        (a)    details
of additional labor and construction materials and equipment which Developer considers will be required to comply with the direction through Contractors; 

        (b)    Developer's
estimate of the extra costs and expenses relating to the provision of architectural design and engineering services which it may reasonably incur in
complying with the direction; 

        (c)    a
revised Construction Schedule for the period which will elapse between the date on which the acceleration of the Project or any stage of the Project commences, and the
date notified by Owner in the direction as being the date for the completion of the Project or the relevant stage of the Project (the "Acceleration
Period"); and 

16

 

        (d)    if
so requested by Owner's Representative following receipt of this information, such additional information as Owner's Representative may reasonably require to enable
it to make a properly informed assessment of the likely cost and time consequences of the acceleration. 

ARTICLE VII  

 PERFORMANCE OF OBLIGATIONS AND CONTRACTING  

        Section 7.01 Transfer by Developer.    This Agreement shall be binding on the parties
hereto. No assignment by Developer shall be effective for any purpose without the written consent and approval of Owner. Any attempted assignment or sub-contract in violation of the
provisions of this Section 7.01 shall be void ab initio. 

        Section 7.02 Transfer by Owner.    The term
"Owner" as used in this Agreement, so far as covenants or obligations on the part of Owner are concerned, shall be limited
to mean and include only Owner or the successor-in-interest of Owner under this Agreement at the time in question. In the event of any transfer, assignment or the conveyance of
Owner's leasehold estate, the Owner herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved, from and after the date of
such transfer, assignment or conveyance, of all liability for the performance of any covenants or obligations contained in this Agreement thereafter to be performed by Owner. Owner may transfer its
interest in this Agreement without the consent of Developer and such transfer or subsequent transfer shall not be deemed a violation on the part of Owner or the then grantor of any of the terms or
conditions of this Agreement. 

ARTICLE VIII  

 REPRESENTATIVES  

        Section 8.01 Owner's Representative.    Owner shall be entitled to appoint as Owner's
Representative from time to time any Person selected by Owner. Owner may by notice in writing to Developer terminate the appointment of such person and appoint some other Person as the Owner's
Representative. 

        Section 8.02 Developer Representative.    Developer shall select and appoint employees of
Developer having substantial experience in development of shopping centers to act as the Developer Representative for purposes of this Agreement. Owner shall not unreasonably delay or withhold its
consent to the selection of and appointment of any Developer's Representative. Owner hereby consents to the appointment of either Rick Moses or Michael McManus as Developer's Representative. 

        Section 8.03 Sufficient Personnel.    Developer acknowledges that in order to perform the
services required of Developer hereunder, it will be necessary for Developer to have in Developer's employ sufficient personnel (as provided in, and pursuant to, the Budget) with appropriate
skills. Accordingly, Developer agrees that the staff available to Developer in connection with Developer's performance of this Agreement shall at all times consist of personnel with the requisite
expertise to perform the responsibilities outlined in this Agreement by Developer, and that such personnel shall devote appropriate effort to permit the full performance of this Agreement
by Developer. 

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ARTICLE IX  

 ACCESS  

        Section 9.01 Owner's Access to Project.    Subject to the receipt of reasonable advance
notice, Developer shall permit Owner's Representative or any other agent or representative of Owner or any Member access at any reasonable time to the Development Site or to any other place where
works are being prepared for use on the Development Site, provided that at Developer's election, such agent or representative shall be accompanied by the Developer Representative or a designee. Owner
will take all reasonable steps to cause any person for whom Owner is responsible to avoid unreasonable interference with the construction of the Project and to comply with the reasonable directions of
Developer with respect to site safety and other conditions prevailing on the Development Site. 

 Section 9.02 Access to Property.

        (a)    Where
access to the Property is or must be through the Development Site, Developer shall make and maintain safe and reasonable access through the Development Site
available to Occupants, invitees and customers of the Property, it being acknowledged by Owner, however, that there are risks to the safety of persons inherently arising from the operation of a
construction site. Developer shall be entitled to undertake such measures as are in its reasonable opinion necessary to restrict or regulate the access route to enable it to ensure the safety of
persons in transit through the Development Site. 

        (b)    Developer
shall, while carrying out the Project, use its diligent, good faith efforts to (i) cause as little obstruction to the use and
operation of Santa Anita Park and its customers as is commercially reasonable; (ii) minimize disruption caused by the Project, or by any act or thing associated with the
Project, to Santa Anita Park's businesses, and (iii) comply with the Horse Safety Requirements, in each case to such extent as is reasonably practicable under the circumstances, it being
acknowledged that, having regard to the nature, extent and scope of the Project, some disruption to Santa Anita Park and its customers and some disruption to Santa Anita Park's businesses and a
certain level of noise and dust is inevitable in order for Developer to carry out the Project in accordance with this Agreement 

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   ARTICLE X  

 MANNER OF EXECUTION OF PROJECT  

        Section 10.01 Construction Standard.    With respect to the quality of the Project and the
execution thereof, Developer warrants, covenants and agrees with Owner that Developer shall: 

        (a)    execute
and complete the Project in accordance with the provisions of this Agreement; and 

        (b)    ensure
that the standard and quality of the workmanship and materials to be incorporated in the Project are of a standard and quality commensurate with the Construction
Standard. 

        Section 10.02 Effect of Owner's Approval.    

        (a)    Notwithstanding
anything to the contrary contained in this Agreement, the responsibility of Developer pursuant to this Agreement will not be relieved or reduced nor will
Owner be made responsible to Developer by reason of: 

                (i)    the
review or approval by Owner, Owner's Representative or any other agent or representative of Owner or any Member of any work, construction means,
methods or proposed methods of working, techniques, equipment or labor levels, sequences, procedures or other matters employed or to be employed by Developer or any of the Contractors in the execution
of the Project; 

                (ii)    the
estimating of quantities by Owner, Owner's Representative or any other agent or representative of Owner; or 

                (iii)    the
provision, review or approval by Owner, Owner's Representative or any other agent or representative of Owner or any Member of the Plans and
Specifications, Change Order or any Construction Schedule supplied by Developer pursuant to this Agreement. 

ARTICLE XI  

 LIABILITY FOR EMPLOYEES  

        Developer shall obtain insurance against any liability, loss, claim or proceeding whatsoever arising under any statute relating to Workers' Compensation or
Employers' Liability, at common law or under any other Legal Requirement in respect of any injury or death suffered by any person employed by Developer, or by any Affiliate of Developer. All such
insurance shall be for such amounts as may be reasonably specified by Owner, but in no event less than One Million Dollars ($1,000,000) per accident, and the statutory limit for Workers' Compensation.
All insurance obtained in accordance with this Article 11 shall be obtained and maintained in accordance with the requirements of Article 12, except that Owner shall not be an "insured"
and each such policy (other than workers compensation) shall contain a provision waiving the applicable insurance company's rights of subrogation against Owner. Developer shall require each Contractor
to maintain reasonably similar insurance with respect to the employees of such Contractor, and each such Contractor shall be required to furnish Developer with satisfactory evidence of
such coverage. 

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ARTICLE XII  

 INSURANCE  

        Section 12.01 Developer's Insurance.    Developer shall in the joint names of Developer and
Owner (hereinafter referred to as the "insured"), as their respective rights, interests and liabilities may appear, effect or cause to be effected
insurance coverage in accordance with the Insurance Requirements. 

        Section 12.02 Application of Casualty Proceeds.    In the event of any occurrence resulting
in loss of or damage to the Project or to materials or equipment while located on the premises in an amount exceeding One Million Dollars ($1,000,000) in respect of which Developer is required to
insure under this Agreement, in the event that Owner elects to re-construct, all moneys received by Owner or Developer in settlement of any claim under the insurance aforesaid shall be
paid, if directed by Owner, to a bank reasonably acceptable to Owner into an account in the name of Owner, and Developer shall thereupon proceed to reconstruct the Project and replace and repair the
materials or equipment destroyed or damaged, and Owner's Representative shall certify in accordance with the provisions of this Agreement against the aforesaid joint account for the cost of
reconstructing the Project and replacing and repairing the materials or equipment destroyed or damaged. The provisions of this Section 12.02 shall be subject to the requirements of any loan
documents encumbering the Property. 

        Section 12.03 Duration of Insurance.    The insurance referred to in Article 11
and in this Article 12 shall be effected before the Project is commenced. The builder's risk insurance shall be maintained effective until the Date of Substantial Project Completion of
the Project. The commercial general liability and workers' compensation insurance shall be maintained throughout the period during which Developer and/or any of its Contractors are performing work on
the Project. 

        Section 12.04 Failure to Effect Insurance.    Where Developer is required to effect any
insurance pursuant to this Agreement and fails to do so or fails to comply with its obligations pursuant to Section 12.04 hereof, upon no fewer than five (5) days' prior written notice
to Developer, Owner may effect such insurance and the premiums shall be deducted from the line item therefor in the Approved Budget. 

ARTICLE XIII  

 TERMINATION BY OWNER  

        Section 13.01 Non-Curable Terminating Events.    Owner may terminate this
Agreement immediately upon written notice to Developer upon the occurrence of any of the following events: 

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        (a)    a
Bankruptcy occurring with respect to Developer; 

        (b)    Owner
sells or transfers one hundred percent (100%) of its interest in the Property (other than to a Related Person), whether directly or indirectly; 

        (c)    Santa
Anita Associates Holding Co., LLC or its Affiliate sells, exchanges, assigns or transfers any of its interest in Owner if such transfer is not
permitted pursuant to the Limited Liability Company Agreement of Owner; 

        (d)    the
appointment of a receiver or the foreclosure by any mortgagee upon the Property or the taking of possession thereof by a deed-in-lieu of
foreclosure, except as otherwise agreed in writing by Developer and such mortgagee; 

        (e)    a
good faith determination of the Company that there has occurred an act of fraud, willful misconduct, gross negligence, habitual neglect or conviction of a crime
involving moral turpitude by Developer under this Agreement, or by Manager under the Management Agreement; 

        (f)    Any
misappropriation of funds by Developer provided that if such misappropriation of funds is committed by an employee of Developer, then such event may be cured if,
within five (5) Business Days after being notified in writing of such event, Developer (i) makes full restitution to Owner of all damages caused by such event, (ii) terminates the
employment of such employee, and (iii) promptly takes all appropriate actions necessary to remediate the situation and protect the interests of Owner; 

        (g)    if
Developer ceases to be owned and controlled by Rick J. Caruso, his immediately family, or his heirs and his Affiliates; 

        (h)    the
Property or a substantial part of the Property is damaged or destroyed where the Owner has determined not to rebuild or reconstruct; 

        (i)    Owner
terminates the Management Agreement due to (i) a default by Manager thereunder or (ii) the mutual agreement of Manager and Owner; and 

        (j)    Santa
Anita Associates Holding Co., LLC, is removed as Managing Member under the LLC Agreement. 

        (k)    An
independent audit or inspection of Developer's books of account reveals the posting of total Hard Costs that are more than five percent (5%) in excess of the amount
of total Hard Costs actually expended by the Developer, provided, however, the reclassification by outside independent auditors of an entry as a (i) "soft cost" in Developer's books of account
rather than as a Hard Cost shall not constitute a deviation that is included in such five percent (5%) or greater deviation; (ii) Hard Cost in Developer's books of account rather than as a
"soft cost" shall not constitute a deviation that is included in such five percent (5%) or greater deviation. 

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        Section 13.02 Curable Defaults.    

        (a)    Either
Owner or Developer may terminate this Agreement by written notice to the other party in the event that the other party shall default
(the "Defaulting Party") in the performance or observance of any material term, condition or covenant contained in
this Agreement in respect of the Project not falling under Section 13.01 above or shall fail to perform or observe the same in accordance with the required standard
under this Agreement and such default shall continue for a period of * * * days after written notice thereof shall have been received by the non-defaulting party
(the "Non-Defaulting Party") specifying such default and requesting that the same be remedied in such
thirty-day period, provided that a ten (10) day period shall apply with respect to any failure to make a monetary payment hereunder
(a "Default Notice"). 

        (b)    The
Defaulting Party shall be deemed to have complied with a Default Notice given under this Section 13.02 if the default (other than
a monetary default) is such that it cannot reasonably be remedied within * * * days but can reasonably be remedied within one hundred twenty (120) days and the Defaulting
Party shall, in good faith, have commenced to remedy the default specified therein as soon as is practicable after receiving such Default Notice, and, thereafter shall have diligently prosecuted the
cure to its completion within such one hundred twenty (120) day period. If at the end of such one hundred twenty (120) day period, the default (other than a monetary default) can
reasonably be remedied within an additional and reasonably foreseeable period of time, and if the Defaulting Party shall continue to diligently prosecute the cure to its completion, then the
Defaulting Party shall have such additional reasonably foreseeable period of time to cure the default; provided, however, that the Non-Defaulting Party shall have the right to initiate
binding arbitration proceedings pursuant to Article XXIV for the purpose of determining whether the Defaulting Party has promptly commenced and diligently pursued the cure to its
completion, or if such cure is reasonably capable of being completed within a reasonably foreseeable period of time. Termination of this Agreement shall be effective upon the later of
(i) delivery of a Default Notice, or (ii) expiration of the cure period provided in the preceding sentence. 

        Section 13.03 Rights and Duties after Owner's Termination.    In the event that Owner shall
terminate the engagement of Developer, the following shall be the respective rights and duties of Owner and Developer with respect to all Sections of this Agreement that relate to the execution of
the Project: 

        (a)    Owner
may employ and pay another developer or other Person or Persons to carry out and complete the Project; 

        (b)    Developer
shall remove from the Development Site as and when required and within such reasonable time as Owner's Representative may in writing specify any temporary
buildings, equipment, machinery, appliances, goods or materials belonging to Developer and if Developer fails to do so, Owner, upon at least five (5) days' written notice to Developer
(or such longer period as may be reasonably required provided Developer is diligently pursuing such removal), may remove and sell any such property of Developer (without being responsible for
any loss or damage), distributing the proceeds less all costs incurred in removing and selling such property of Developer promptly to Developer; 

22

 

        (c)    Developer
shall promptly deliver to Owner all design documentation in Developer's possession relating to the Project, all Consents and certificates from Authorities, all
job documents, all Project Documents and other records relevant to the Project in its possession or in the possession of any Affiliate, and all warranties and guaranties by any Contractor. Developer
shall assign to Owner all of its right, title and interest in the foregoing documentation to the extent such rights relate to the Property. Developer also shall provide such additional information or
documentation as Owner may reasonably require in order to cause the completion of the Project. 

        (d)    Owner
and Developer shall cooperate in a reasonable manner in order to minimize the additional costs which will be incurred by Owner in completing the Project as the
result of such termination. 

        (e)    Notwithstanding
any termination of this Agreement, the provisions of this Section 13.03 shall remain in full force and effect after any such termination and no
such termination shall prejudice any right or remedy which a party has or, but for the termination of Developer's appointment hereunder, might have had, for breach of this Agreement. 

        (f)    Owner
shall pay to Developer any accrued but unpaid Development Fee, Construction Management Fee and Leasing Fee. 

ARTICLE XIV  

 FEES AND PAYMENTS  

        Section 14.01 Development Fee.    In consideration of Developer designing and constructing
the Project and providing the other services required of Developer by this Agreement, Owner shall pay to Developer at the times and in the manner hereinafter provided (a)
the Development Fee, and (b) any other reimbursements payable to Developer in accordance with the Approved Budget or otherwise under this Agreement. 

        Section 14.02 Construction Management Fee.    In consideration of Developer performing
construction management services as required of Developer by this Agreement, Owner shall pay Developer at the times and in the manner hereinafter provided the Construction Management Fee. 

        Section 14.03 Leasing Fee.    Developer shall be entitled to receive from Owner a leasing
fee of *** per rentable square foot leased by the Occupant ("Leasing Fee"). The Leasing Fee shall be payable one-half
(1/2) upon execution of the Lease, and the remaining one-half (1/2) to be paid upon opening for business by the Occupant; provided, however, that in the event
that the Occupant fails to open for business following execution of the Lease, Developer shall refund the one half (1/2) portion of such Leasing Fee paid upon execution of the Lease. In
addition, Developer shall receive a mutually agreed upon market rate leasing fee for carts, which fee shall be agreed upon prior to the date of this Agreement. Notwithstanding the foregoing, no
Leasing Fee shall be payable with respect to any Lease entered into on or after the effective date of the Management Agreement, and Developer's leasing obligations pursuant to Article XIX of
this Agreement shall be performed by Manager under the Management Agreement (it being clear that no Leasing Fee shall be payable under this Agreement with respect to a Lease for which a Leasing
Fee is payable pursuant to the Management Agreement). 

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ARTICLE XV  

 PAYMENT OF DEVELOPMENT FEE AND

CONSTRUCTION MANAGEMENT FEE  

        Section 15.01    Developer shall be entitled to claim and Owner, subject to the other applicable provisions of this
Agreement, shall pay to Developer ninety percent (90%) of the Development Fee and Construction Management Fee in equal monthly installments over the period of the Construction Schedule, and the
remaining ten percent (10%) of the Development Fee and Construction Management Fee upon Substantial Project Completion and completion of the work relating to the punch list items set forth in
Section 16.04 below. Notwithstanding the foregoing, Developer shall continue to use Due Care to achieve Final Completion and to complete supervision and coordination of construction of
Occupant's Improvements, close-out the construction books and records and obtain a final certificate of occupancy in accordance with the Construction Schedule. 

ARTICLE XVI  

 SUBSTANTIAL PROJECT COMPLETION  

        Section 16.01 Notice of Substantial Project Completion.    When Developer believes that the
Project has reached Substantial Project Completion it shall give written notice to Owner's Representative to that effect together with a list of any punch list items requiring completion known to
Developer (without any obligation to inspect). 

        Section 16.02 Inspection; Certification of Substantial Project Completion.    Owner's
Representative shall within fifteen (15) days after receiving a notice under Section 16.01 arrange for a joint inspection of the Project with the Developer Representative and Contractor.
Within ten (10) days after the completion of such inspection, Owner's Representative shall: 

        (a)    agree
with the notice and certify to Developer that the Project has achieved Substantial Project Completion, as of the date of the delivery of Developer's notice under
Section 16.01; or 

        (b)    give
written notice to Developer and Contractor of any work which Owner's Representative reasonably considers should be undertaken by Developer in order to have the
Project reach Substantial Project Completion. 

        Section 16.03 Reinspection.    When Developer believes Contractor has rectified the defects
of which it has been notified under Section 16.02(b), it shall give written notice to Owner's Representative to that effect, and subject to the provisions of Article XXIV, the provisions
of Section 16.02 shall reapply until Owner's Representative issues a certificate of Substantial Project Completion under Section 16.02. 

24

 

        Section 16.04 Punch list.    Together with or promptly after Owner's certification of
Substantial Project Completion under Section 16.02(a), Developer shall issue to Owner for Owner's review, comment and approval a list of those defects or unfinished items in the Project
("punch list items") which do not prevent the Project from achieving Substantial Project Completion, but which Developer is required to rectify under
the provisions of this Agreement and Developer shall set and Owner shall approve a timetable for the completion of all work necessary to remedy those punch list items. Developer shall complete all
punch list items as promptly as possible. 

ARTICLE XVII  

 PROJECT DOCUMENTATION  

        Section 17.01 Design Documents.    Developer will in the development and execution of the
design for the Project cause to be prepared such plans and specifications (in addition to the Plans and Specifications referred to in Schedule II), schematic
drawings and other usual design documents (collectively, the "design documents") as are necessary or desirable to carry out the development and
execution of the Project. 

        (a)    Copies
of the design documents will be provided to Owner's Representative for Owner's review and reasonable approval as soon as reasonably practicable after their
preparation. Owner's approval, however, shall not be required to the extent that the design documents are in every material sense, including quality requirements, in conformity with the Construction
Standard (excluding from the definition thereof the exceptions for deviations shown in the Plans and Specifications or any design documents approved or deemed approved under this
Section 17.01). Owner's Representative shall determine in its reasonable judgment whether the design documents are in every material sense, including quality
requirements, in conformity with the Construction Standard. Owner's Representative's determination as to whether such component is in material conformance with the Construction Standard shall be given
in writing by Owner's Representative not later than the end of the review period reasonably specified by Developer in its submission of such design documents
(the "specified period"), which will in no event be less than ten (10) days after Owner's Representative's receipt thereof. If within the
specified period after the receipt of any design documents Owner's Representative notifies Developer that it is not practicable for Owner to respond within the specified period and fixes a reasonable
period within which Owner's review will be completed, then the review period shall be the period specified by Owner's Representative after receipt by Owner's Representative of copies of the design
documents; provided, that, such review period specified by Owner's Representative shall not be greater than thirty (30) days. If Owner's Representative has not notified Developer that the
design documents are in every material sense, including quality requirements, in conformity with the Construction Standard within the specified period or the reasonable period nominated by Owner's
Representative (as the case may be), then the applicable design documents shall be deemed to have been approved by Owner. 

        (b)    In
the event that Owner's Representative determines that any component of such design documents is inconsistent with (i) the Construction Standard,
(ii) the Construction Schedule, or (iii) the Approved Budget, as determined by Owner's Representative, then such component shall be subject to approval by Owner in its sole and absolute
discretion. Owner's approval or rejection of any such component of the design documents shall be given in writing by Owner or Owner's Representative, as applicable, not later than the end of specified
period, which will in no event be less than ten (10) days after Owner's receipt thereof. If within the specified period after the receipt of any design documents Owner's Representative notifies
Developer that it is not practicable for Owner to respond within the specified period and fixes a reasonable period within which Owner's review will be completed, then the review period shall be the
period specified by Owner's Representative after receipt by Owner of copies of the design documents; provided, that, such review period specified by Owner's Representative shall not be greater than
fifteen (15) days. If Owner has not notified Developer of its rejection or acceptance of any of the design documents within the specified period or the reasonable period nominated by Owner's
Representative (as the case may be), then the applicable design documents shall be deemed to have been approved by Owner. 

25

 

        Section 17.02 Final Plans and Specifications.    Within six (6) months after the Date
of Substantial Project Completion, Developer shall cause to be prepared and deliver to Owner copies of the final Plans and Specifications for the Project, which shall include copies of all
as-built drawings, if any, received by Developer from Contractors in the normal course of business. Promptly after the Date of Substantial Completion, Developer shall deliver to Owner
original comprehensive maintenance and operating manuals in form and content reasonably acceptable to Owner relating to the operation and maintenance of all equipment installed in the Project. 

        Section 17.03 Project Meetings.    Throughout the course of construction of the Project,
Developer shall convene project meetings to be held at the Development Site (or at such other location as may be mutually agreed) at least once each month (or more frequently if
reasonably requested by Owner or Developer) at a time mutually acceptable to all parties entitled to attend, and for this purpose shall provide advance written notice to Owner's Representative of the
time and location of such project meeting, and Owner's Representative shall be entitled to attend such project meetings. Developer shall cause the appropriate experienced representatives to attend all
such project meetings. Any Member of the Management Committee of Owner and its representatives shall be entitled to attend any project meeting which Owner is entitled to attend. 

        Section 17.04 Monthly Progress Reports.    Developer shall provide to Owner at least once a
month a progress report on the design and construction of the Project in form and content reasonably satisfactory to Owner which report shall contain the information specified in
Schedule V. 

ARTICLE XVIII  

 CERTIFICATE OF COMPLIANCE  

        Section 18.01 Preliminary and Final Certificates.    Developer shall use its diligent, good
faith efforts to obtain all relevant Consents and temporary and final certificates of occupancy, issuable by relevant Authorities in connection with the construction and right of occupation of the
Project and shall give access to the Development Site to any Authority for that purpose. Owner acknowledges that for the purpose of achieving Substantial Project Completion, Developer shall be
required to obtain only a temporary certificate of occupancy from the relevant Authority covering all applicable portions of the Project excluding any portions of Leasable Areas with respect to which
Developer is not responsible for the construction of the Occupant's Improvements. 

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ARTICLE XIX  

 LEASING THE PROJECT  

        Section 19.01 Leasing Obligations.    Developer shall use Due Care to lease the Project in
accordance with the Leasing Plan and shall exercise professional competence in leasing the Project at the prevailing national standard of industry practice for Comparable Project. In connection
therewith, Developer shall: 

        (a)    use
the Standard Form of Lease as the basis for the negotiation of all Leases; 

        (b)    subject
to and in accordance with the terms of the Leasing Plan, negotiate the terms and conditions of all Leases, including, without limitation, all extensions,
renewals, amendments and modifications thereto, in accordance with the Leasing Plan; 

        (c)    arrange
for the execution of Leases and all amendments and modifications thereto by all parties thereto, and distribute copies thereof in accordance with
this Agreement; 

        (d)    locate
and endeavor to secure, in accordance with the Leasing Plan, suitable Occupants for all areas of the Project that may be vacant from time to time or are to become
vacant in the near future and are reasonably available for occupation or use, including, to the extent applicable, the Common Areas; 

        (e)    review
the general suitability of prospective Occupants and, to the extent Developer may deem it reasonably necessary or appropriate, seek references from prospective
Occupants and conduct such other investigations as will establish whether or not the prospective Occupant is capable of performing all obligations which the prospective Occupant would be required to
perform under its Lease; and 

        (f)    coordinate
the activities of management, leasing, design and engineering personnel and/or consultants to implement the leasing program for the Project. 

        Section 19.02 Brokers.    Developer may engage and cooperate with brokers, as may be
reasonably necessary or appropriate, so as to secure prospective tenants for the Project. The Company will pay third party independent broker a commission in accordance with the Approved Budget. 

27

 

        Section 19.03 Temporary Leases.    Developer is authorized to execute Temporary Leases
(including, without limitation, all extensions, renewals, amendments and modifications thereto) as agent of Company, without seeking Management Committee's consent thereto. Developer shall deliver a
conformed copy of any such executed Temporary Lease (and all extensions, renewals, amendments and modifications thereto) to Company promptly after Company's request therefore. 

        Section 19.04 Leases.    Developer shall deliver a Document Request (which shall contain the
Lease Summary information described in Exhibit "A") to Management Committee within ten (10) Business Days after Developer's approval of the proposed lease terms for a Lease as set
forth in the Document Request. If the terms and conditions of any Lease are consistent with the Leasing Plan or have otherwise been approved in writing by the Company (or in the
Company's LLC Agreement), Developer is authorized to execute such Lease (including, without limitation, all extensions, renewals, amendments and modifications thereto) as agent of Company,
without seeking Management Committee's consent thereto. Developer shall deliver a conformed copy of each such executed Lease (and all extensions, renewals, amendments and modifications thereto)
to Management Committee within ten (10) Business Days after Developer's execution thereof. 

        Section 19.05 Leasing Fee.    Developer shall be entitled to receive fees in connection with
the negotiation and execution or administration of Leases in accordance with Section 14.03 above as its sole compensation for the leasing services contemplated by
this Article XIX. 

        Section 19.06 Occupant Improvements.    Developer shall review, approve and coordinate the
design of the Occupants' stores to the extent contemplated in the Occupants' respective Leases, including without limitation obtaining and reviewing design drawings for Occupants' store fronts and
monitoring the progress of Occupants' construction of standard tenant improvements at the Project. 

ARTICLE XX  

 NOTICES  

        Section 20.01 In Writing; Address.    All notices, demands, requests, consents, reports,
submissions, deliveries and other communications provided for in this Agreement (collectively, "Notices") shall be in writing, shall be given by a
method prescribed in Section 20.02, and shall be given to the applicable party at the address set forth below. 

If
to Owner as follows:

Santa Anita Associates, LLC

337 Magna Drive

Aurora, Ontario 74G 7K1

Attention: Chief Executive Officer, Chief Financial Officer and Corporate Secretary

Fax: 905-726-7172 

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With
a copy to: 

Allen
Matkins Leck Gamble & Mallory LLP

12348 High Bluff Drive, Suite 100

San Diego, California 92130

Attention: Michael C. Pruter, Esq.

Fax: 858-481-5028 

If
to Developer:

Caruso Management, Co., Ltd.

101 The Grove Drive

Los Angeles, California 90036

Attention: Rick J. Caruso, Richard A. Moses

and Michael McManus

Fax: 323-900-8101 

With
a copy to: 

Donfeld,
Kelley & Rollman

11845 West Olympic Blvd., Suite 1245

Los Angeles, CA 90064

Attention: Jeffrey E. Donfeld, Esq.

Fax: 310-312-8014 

Developer
or Owner may change the address to which Notices are to be delivered hereunder by giving written notice thereof to Owner or Developer, as applicable. 

        Section 20.02 Methods.    Any Notice may be delivered by United States certified
mail, return, receipt requested, postage prepaid, or by hand delivered or nationally recognized overnight courier which maintains evidence of receipt or by facsimile transmission (with confirmed
receipt). All Notices shall be deemed effective when received by all applicable parties at the addresses set forth above (as such addresses may be changed as provided in Section 20.01).
Notwithstanding the foregoing, no Notice shall be deemed ineffective because of any party's refusal to accept delivery at the address specified for the giving of such notice in accordance herewith. 

        Section 20.03 Response Period.    Any Notice which is intended to initiate a response period
provided in this Agreement must specifically reference such response period in order to effectively initiate such response period. 

ARTICLE XXI  

 GOVERNING LAW  

        This Agreement shall be constructed and take effect in accordance with and the obligations of the parties hereto shall be governed by the laws of the State
of California. 

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   ARTICLE XXII  

 CAPACITY AND AUTHORITY  

        Each party to this Agreement warrants to each other party hereto that it has the capacity, and has obtained all necessary authorizations and passed all necessary
resolutions required, to enter into this Agreement, and has validity executed and delivered this Agreement. 

ARTICLE XXIII  

 GENERAL  

        Section 23.01  Further Assurances.    In connection with this Agreement, as well
as all transactions contemplated by this Agreement, each party agrees to execute and deliver such additional documents and instruments, and to perform such additional acts as may be necessary or
reasonably appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement, and all such transactions. 

        Section 23.02  Pronouns.    All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require. Words importing the singular shall be deemed to embrace the plural and
vice versa. 

        Section 23.03  References to this Agreement.    All references to numbered or
lettered Articles, Sections, paragraphs and sub-paragraphs herein contained refer to the Articles, Sections, paragraphs and sub-paragraphs of this Agreement unless otherwise
expressly stated. 

        Section 23.04  Headings.    All headings herein are inserted only for
convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement. 

        Section 23.05  Binding Effect.    Except as herein otherwise expressly provided
to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, legal representatives, successors and permitted assigns. 

        Section 23.06  Counterparts.    This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same Agreement. 

        Section 23.07  Amendments.    This Agreement may not be amended, altered or
modified except by a written instrument signed by each of the parties hereto. 

        Section 23.08  Severability.    Every provision of this Agreement is hereby
declared to be independent of, and separable from, every other provision of this Agreement. To the extent any such provision shall be held to be invalid or unenforceable, such provision shall be
deemed not to exist in this Agreement and any such holding shall be without effect upon the validity or enforceability of any other provision of this Agreement. It is the intention of the parties
hereto that, in lieu of each provision of this Agreement which is determined to be invalid or unenforceable, there shall be added, as part of this Agreement, such an alternative clause or provision as
may be valid or enforceable but otherwise as close to the applicable original provision as possible. 

30

 

        Section 23.09  Waiver.    No waiver of any provision of this Agreement shall be
deemed to or shall constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. Failure on the part of
any party to complain of any act of any other party, or to declare any other party in default, irrespective of how long such failure continues, shall not constitute a waiver by such party of its
rights hereunder. 

        Section 23.10  No Third Party Beneficiary.    This Agreement is made for the
exclusive benefit of the parties hereto, their executors, administrators, successors and assigns herein permitted (including, without limitation, persons taking by novation or accession) and except as
otherwise expressly provided not for any third party as a third party beneficiary or otherwise. Except as otherwise specifically provided, nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties hereto, their executors, administrators, successors and assigns herein permitted, any rights or remedies by reason of this Agreement. 

        Section 23.11  Indemnities.    

        (a)    Developer
hereby agrees to indemnify, defend and protect Owner and its officers, directors, members (each such person collectively called "the
indemnified parties" for the purposes of this Section 23.11(a)) against all claims, losses, causes of action, damages, costs, expenses and liabilities (including,
without limitation, attorneys' fees and expenses incurred in good faith and court costs) incurred by the indemnified parties by reason of any claim or demand being made upon or any action taken
against the indemnified parties resulting from any willful misconduct or gross negligence or fraudulent act by Developer with respect to its duties and obligations under this Agreement. The
indemnified parties shall, in good faith, endeavor to notify Developer in writing as to every such claim, demand or action against the indemnified parties within ten (10) days after they become
aware that such claim or demand has been made or such action has been taken, provided, however, that a good faith failure to notify Developer does not limit Developer's liability under this
Section 23.11(a) to the extent such failure does not materially adversely affect Developer's rights with respect to such claim. 

        (b)    Owner
hereby agrees to indemnify, defend and protect Developer and each of its respective officers, directors, members, advisors, fiduciaries, agents, affiliates,
successors and assigns and managers (each such person collectively called "the indemnified parties" for the purposes of this Section 22.12(b)),
and hold each of the indemnified parties harmless against all claims, losses, causes of action, damages, costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses
incurred in good faith and court costs) incurred by the indemnified parties by reason of any claim or demand being made upon or any action taken against the indemnified parties resulting from any
willful misconduct or gross negligence or fraudulent act by Owner with respect to its duties and obligations under this Agreement, except to the extent an Developer or Affiliate of Caruso is
responsible for such willful misconduct or gross negligence or fraud of Owner. The indemnified parties shall, in good faith, endeavor to notify Owner in writing as to every such claim, demand or
action against the indemnified parties within ten (10) days after they become aware that such claim or demand has been made or such action has been taken, provided,
however, that a good faith failure to notify Owner does not limit Owner's liability under this Section 23.11(b) to the extent such failure does not
materially adversely affect Developer's rights with respect to such claim. 

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        (c)    No
person engaged as an independent contractor by Owner or Developer shall be considered an employee, servant, agent or other Person that Owner or Developer
(as the case may be) shall be obligated to indemnify for the purposes of this Section 23.11. Developer shall cause Owner and Developer to be listed as an
indemnified party in any indemnity contained in an agreement with an independent contractor. The indemnity contained in this Section 23.11 made by Owner and Developer shall survive the
termination of this Agreement. 

        Section 23.12  Attorneys' Fees.    

        (a)    All
parties to this Agreement must pay their respective legal costs and disbursements associated with the preparation, negotiation and execution of this Agreement, and
any modification hereof. 

        (b)    In
any judicial action between the parties to enforce any of the provisions of this Agreement or any right of any party under this Agreement, regardless of whether such
action or proceeding is prosecuted to judgment and in addition to any other remedy, the unsuccessful party shall pay to the prevailing party all reasonable costs and expenses incurred therein by the
prevailing party, including, without limitation, all reasonable attorneys' fees and expenses and court costs. 

        Section 23.13  Schedules.    All Schedules attached hereto are hereby expressly
incorporated herein to the same extent and with the same effect as if fully set out herein. 

        Section 23.14  Herein.    Wherever used in this Agreement, the words "herein",
"hereof" or words of similar import shall be deemed to refer to this Agreement in its entirety and not to a specific section unless otherwise stated. 

        Section 23.15  Cumulative Rights.    Unless otherwise provided in this
Agreement, all rights, privileges, and remedies afforded the parties by this Agreement shall be cumulative and in addition to, and not exclusive of, any other rights, remedies and benefits allowed by
law or equity to any party and the exercise of any one of such remedies shall not be deemed to be a waiver of any other right, remedy or privilege provided for herein or available at law
or equity. 

        Section 23.16  Object of Agreement.    The object of this Agreement is the
provision of services, and any transfer of tangible property under this Agreement is incidental to the services to be provided under this Agreement. 

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        Section 23.17  Estoppel Certificate.    

        (a)    Developer
shall within fifteen (15) days of written notice from Owner, execute, acknowledge and deliver a statement in writing (i)
certifying that this Agreement is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement as so modified is in full force
and effect) and the dates to which the Development Fee are paid, (ii) acknowledging that there are not, to Developer's knowledge, any uncured defaults on the part of Owner
hereunder, or specifying such defaults if any are claimed and (iii) setting forth such further information with respect to this Agreement or the Project as may be
reasonably requested thereon. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of Property or the Development Site of which the Project is a
part. Developer's failure to deliver such statement within such time shall be conclusive upon Developer that the Agreement is in full force and effect and without modification except as may be
represented by Owner in any certificate prepared by Owner and delivered to Developer for execution. 

        (b)    Owner
shall within fifteen (15) days of written notice from Developer, execute, acknowledge and deliver a statement in writing (i)
certifying that this Agreement is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement as so modified is in full force
and effect) and the dates to which the Development Fee are paid, (ii) acknowledging that there are not, to Owner's knowledge, any uncured defaults on the part of Developer
hereunder, or specifying such defaults if any are claimed and (iii) setting forth such further information with respect to this Agreement or the Project as may be
reasonably requested thereon. Any such statement may be relied upon by any prospective purchaser or encumbrancer of Developer. Owner's failure to deliver such statement within such time shall be
conclusive upon Owner that the Agreement is in full force and effect and without modification except as may be represented by Developer in any certificate prepared by Developer and delivered to Owner
for execution. 

        Section 23.18  Standard For Consent.    Where the consent of Owner, Owner's
Representative or Developer is required by any provision of this Agreement, unless expressly so provided to the contrary, such consent may be granted or withheld in Owner's sole discretion. 

        Section 23.19  Time.    Time is of the essence of this Agreement and each of
its provisions. 

        Section 23.20  Inadequacy of Damages.    Owner and Developer hereby acknowledge
and agree that in the event of a wrongful termination of this Agreement by Owner, the receipt by Developer of monetary damages at law as a result of such wrongful termination of Developer hereunder
would not be adequate or sufficient to compensate Developer for all losses it will sustain as a result thereof. Owner hereby agrees that it shall not in any event contest a claim by Developer of the
inadequacy of monetary damages as a result of the wrongful termination of this Agreement by Owner, and that it shall be bound by the terms and conditions of this Section 23.20 in any action,
suit or proceeding brought by Developer against Owner arising out of, or relating to, the Development Agreement. 

33

 

        Section 23.21  Disputes Arising Under Section 13.01(e).    Within
forty-five (45) days following the date of termination of this Agreement with respect to any matter described in Section 13.01(e), Developer shall have the right to contest
such termination by filing suit, and if Developer fails to timely file suit within such forty-five (45) day period, Developer shall have no further right to contest such
termination. 

        Section 23.22  Venue.    With respect to any litigation that might arise under
Section 23.21, Owner and Developer agree that any litigation, claim or lawsuit directly or indirectly arising out of or related to this Agreement shall be instituted exclusively in the
courts, whether federal or state, located in the County of Los Angeles, State of California, and nowhere else. Owner and Developer further agree that, notwithstanding the foregoing, any such
litigation, claim or lawsuit as to which there is federal jurisdiction, by reason of diversity, federal question or otherwise, shall be instituted exclusively in a federal district court located in
the Central District of California. 

ARTICLE XXIV  

 ARBITRATION PROVISIONS  

        Section 24.01  Dispute, Controversy or Claim.    Any dispute, controversy or
claim arising out of or relating to this Agreement (other than a dispute arising under Section 13.01(e), which dispute shall be resolved by litigation pursuant to Section 23.21),
including whether the Owner has the right to terminate this Agreement pursuant to the provisions of Sections 13.01 and 13.02 above or the breach, termination or validity thereof, shall
be finally settled by arbitration in accordance with the then-prevailing Commercial Arbitration Rules of the American Arbitration Association
("AAA"), as modified herein (the "Rules") and the Supplementary Procedures for Large, Complex
Disputes. The place of arbitration shall be Los Angeles, California. There shall be three arbitrators, of whom the claimant shall appoint one and the respondent shall appoint one within five
(5) Business Days of receipt by the respondent from the AAA of service of the notice of arbitration. The two arbitrators so appointed shall select the chairperson of the tribunal within five
(5) Business Days of the appointment of the second arbitrator. If the two party appointed arbitrators fail to appoint a chairperson within the time limits set forth herein, the chairperson will
be appointed in accordance with the following procedure. The parties will agree to a list of five (5) candidates. Each party will individually and confidentially rank the candidates and submit
such rankings to the AAA. The AAA will appoint the chairperson from these ranked lists in accordance with the Rules. If for some reason the parties are unable to agree on a list of five
(5) candidates within five (5) Business Days of the appointment of the second arbitrator, the AAA shall provide the parties with a list of ten (10) proposed candidates from the
Los Angeles Large Complex Case Panel. The parties will each strike up to three (3) names from this list, and rank the remaining seven (7) names in order of preference. This list shall be
returned to the AAA within five (5) Business Days of receipt of this list. The AAA will then appoint the chairperson from this list in accordance with the Rules. 

        Section 24.02  Arbitration Award.    The arbitral tribunal is not empowered to
award damages, and each party hereby irrevocably waives any right to recover damages pursuant to the arbitration with respect to any dispute. The sole purpose of the arbitration shall be to determine
whether a party shall be in default in the performance or observance of any material term, condition, warranty or covenant contained in this Agreement. Except to the extent contradictory with the last
sentence of this paragraph (b), any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by
the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. The award shall be final and binding on the parties
(the "Arbitration Award") and judgment upon any Arbitration Award may be entered in any court of competent jurisdiction. The arbitrators shall be
required to enter the Arbitration Award within sixty (60) days of the appointment of the chairperson arbitrator. 

34

 

        Section 24.03  Information Exchange.    Exchange of information will take place
as described herein. Each party will, upon the written request of the other party, provide the other with copies of documents on which the producing party may rely in support of or in opposition to
any claim or defense within ten (10) Business Days of actual receipt of the request, whether served by U.S. mail, telecopy, fax, hand delivery or overnight delivery. Any dispute
regarding discovery, or the relevance or scope thereof, shall be determined by the chair of the arbitration panel which determination shall be conclusive. Each party may take up to six depositions of
the opposing party or of six individuals under the control of the opposing party. 

        Section 24.04  No Disclosure/Confidentiality.    The arbitration proceedings
conducted pursuant to this Agreement shall be confidential. Neither party shall disclose or permit the disclosure of any information about the evidence adduced or the documents produced by the other
party in the arbitration proceedings or about the existence, contents or results of the arbitration award without the prior written consent of such other party except as required in the course of a
judicial, regulatory or arbitration proceeding, as may be requested or required by a governmental authority or as required for the enforcement of an arbitral award. Before making any disclosure
permitted by the preceding sentence, the party intending to make such disclosure shall give the other party reasonable written notice of the intended disclosure and afford the other party a reasonable
opportunity to protect its interests. 

        Section 24.05  Payment of Costs and Expenses.    Each party to the arbitration
shall pay the compensation, costs, fees and expenses of its own witnesses, experts and counsel. The compensation and any costs and expenses of the arbitrators shall be borne equally by
the parties. 

35

 

        IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the date first above written. 

	 	 	OWNER:
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	SANTA ANITA ASSOCIATES, LLC,

a Delaware limited liability company
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	 	Santa Anita Associates Holding Co., LLC,

a California limited liability company,

Its Member,
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	By:	

	 	 	 	 	Name:	

	 	 	 	 	Title:	

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	 	Santa Anita Commercial Enterprise, Inc.,

a Delaware corporation, Its Member
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	By:	

	 	 	 	 	Name:	

	 	 	 	 	Title:	

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	DEVELOPER:
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	CARUSO MANAGEMENT COMPANY, LTD.,

a California limited partnership
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	By:	 	Caruso Property Management, Inc.,

a California corporation, its general partner
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	By:	

	 	 	 	 	Name:	Rick J. Caruso, President

36

 
SCHEDULE I

DESCRIPTION OF PROPERTY  

37

 
SCHEDULE II

PLANS AND SPECIFICATIONS  

38

 
SCHEDULE III

CONSTRUCTION SCHEDULE  

39

 
SCHEDULE IV

PROJECT BUDGET  

40

 
SCHEDULE V

MINIMUM CONTENT OF MONTHLY REPORTS  

                (a)   a
report on design progress and Contract documentation; 

                (b)   a
report on construction progress with photographs and the awarding of Contracts; 

                (c)   a
report on labor relations issues which have arisen or are likely to arise on the Project; 

                (d)   details
of and recommendations on proposed changes in the Construction Schedule; 

                (e)   reports
on all contractual matters including claims, progress payments, and list of change orders; 

                (f)    quality
control reports; 

                (g)   an
up-to-date drawing schedule; 

                (h)   early
advice of any matter, event or thing which may affect the progress, cost or quality of the Project; 

                (i)    such
other material and information as Owner may reasonably require to keep it informed on all aspects of the Project; 

                (j)    changes
to the Approved Budget and the reasons for those changes and a monthly update showing, among other things, a comparison of the Approved Budget and the Hard
Costs paid to date; and 

                (k)   a
comparison of estimated costs to complete the Project to the amount set forth in the Approved Budget to complete the Project. 

41

 
SCHEDULE VI

DOCUMENT REQUEST  

42

 
SCHEDULE VII

CONSTRUCTION SCHEDULE  

43

   TABLE OF CONTENTS  

	 
	 	 
	 	Page

	ARTICLE I	 	DEFINITIONS AND INTERPRETATION	 	1
	 	
 Section 1.01	
 	

Definitions	
 	

1
	 	Section 1.02	 	Interpretation	 	8
	
 ARTICLE II	
 	

CONSENTS AND APPROVALS	
 	

9
	 	
 Section 2.01	
 	

Obtaining Consents	
 	

9
	 	Section 2.02	 	Owner's Cooperation	 	9
	 	Section 2.03	 	Copies of Consents to be Delivered to Owner	 	9
	
 ARTICLE III	
 	

THE PROJECT, COMMENCEMENT AND PROGRAMMING	
 	

9
	 	
 Section 3.01	
 	

Scope of Project	
 	

9
	 	Section 3.02	 	Services of Developer	 	9
	 	Section 3.03	 	Commencement; Diligent Performance	 	11
	 	Section 3.04	 	Construction Schedule	 	11
	 	Section 3.05	 	Performance Standard	 	12
	 	Section 3.06	 	Adjustment of Approved Budget	 	12
	 	Section 3.07	 	Architectural Contract	 	12
	
 ARTICLE IV	
 	

CHANGES TO PLANS AND CHANGE ORDERS	
 	

12
	 	
 Section 4.01	
 	

Initiation of Change Orders, Changes or Additions	
 	

12
	 	Section 4.02	 	Increase in Price; Extension of Time	 	13
	 	Section 4.03	 	Owner's Approval of Proposed Change Orders	 	13
	 	Section 4.04	 	Adjustment of Hard Costs and Date for Substantial Project Completion	 	14
	 	Section 4.05	 	Adjustment of Developer Fees	 	14
	
 ARTICLE V	
 	

COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS	
 	

14
	 	
 Section 5.01	
 	

Compliance	
 	

14
	
 ARTICLE VI	
 	

COMPLETION AND ACCELERATION OF THE PROJECT	
 	

15
	 	
 Section 6.01	
 	

Completion Dates	
 	

15
	 	Section 6.02	 	Force Majeure Events	 	15
	 	Section 6.03	 	Limitations on Extension of Time	 	16
	 	Section 6.04	 	Owner's Acceleration Direction	 	16
	 	Section 6.05	 	Acceleration Cost and Time Consequences	 	16

i

 

	
 ARTICLE VII	
 	

PERFORMANCE OF OBLIGATIONS AND CONTRACTING	
 	

17
	 	
 Section 7.01	
 	

Transfer by Developer	
 	

17
	 	Section 7.02	 	Transfer by Owner	 	17
	
 ARTICLE VIII	
 	

REPRESENTATIVES	
 	

17
	 	
 Section 8.01	
 	

Owner's Representative	
 	

17
	 	Section 8.02	 	Developer Representative	 	17
	 	Section 8.03	 	Sufficient Personnel	 	17
	
 ARTICLE IX	
 	

ACCESS	
 	

18
	 	
 Section 9.01	
 	

Owner's Access to Project	
 	

18
	 	Section 9.02	 	Access to Property	 	18
	
 ARTICLE X	
 	

MANNER OF EXECUTION OF PROJECT	
 	

19
	 	
 Section 10.01	
 	

Construction Standard	
 	

19
	 	Section 10.02	 	Effect of Owner's Approval	 	19
	
 ARTICLE XI	
 	

LIABILITY FOR EMPLOYEES	
 	

19
	
 ARTICLE XII	
 	

INSURANCE	
 	

20
	 	
 Section 12.01	
 	

Developer's Insurance	
 	

20
	 	Section 12.02	 	Application of Casualty Proceeds	 	20
	 	Section 12.03	 	Duration of Insurance	 	20
	 	Section 12.04	 	Failure to Effect Insurance	 	20
	
 ARTICLE XIII	
 	

TERMINATION BY OWNER	
 	

20
	 	
 Section 13.01	
 	

Non-Curable Terminating Events	
 	

20
	 	Section 13.02	 	Curable Defaults	 	22
	 	Section 13.03	 	Rights and Duties after Owner's Termination	 	22
	
 ARTICLE XIV	
 	

FEES AND PAYMENTS	
 	

23
	 	
 Section 14.01	
 	

Development Fee	
 	

23
	 	Section 14.02	 	Construction Management Fee	 	23
	 	Section 14.03	 	Leasing Fee	 	23
	
 ARTICLE XV	
 	

PAYMENT OF DEVELOPMENT FEE AND CONSTRUCTION MANAGEMENT FEE	
 	

24
	
 ARTICLE XVI	
 	

SUBSTANTIAL PROJECT COMPLETION	
 	

24
	 	
 Section 16.01	
 	

Notice of Substantial Project Completion	
 	

24
	 	Section 16.02	 	Inspection; Certification of Substantial Project Completion	 	24
	 	Section 16.03	 	Reinspection	 	24
	 	Section 16.04	 	Punch list	 	25

ii

 

	
 ARTICLE XVII	
 	

PROJECT DOCUMENTATION	
 	

25
	 	
 Section 17.01	
 	

Design Documents	
 	

25
	 	Section 17.02	 	Final Plans and Specifications	 	26
	 	Section 17.03	 	Project Meetings	 	26
	 	Section 17.04	 	Monthly Progress Reports	 	26
	
 ARTICLE XVIII	
 	

CERTIFICATE OF COMPLIANCE	
 	

26
	 	
 Section 18.01	
 	

Preliminary and Final Certificates	
 	

26
	
 ARTICLE XIX	
 	

LEASING THE PROJECT	
 	

27
	 	
 Section 19.01	
 	

Leasing Obligations	
 	

27
	 	Section 19.02	 	Brokers	 	27
	 	Section 19.03	 	Temporary Leases	 	28
	 	Section 19.04	 	Leases	 	28
	 	Section 19.05	 	Leasing Fee	 	28
	 	Section 19.06	 	Occupant Improvements	 	28
	
 ARTICLE XX	
 	

NOTICES	
 	

28
	 	
 Section 20.01	
 	

In Writing; Address	
 	

28
	 	Section 20.02	 	Methods	 	29
	 	Section 20.03	 	Response Period	 	29
	
 ARTICLE XXI	
 	

GOVERNING LAW	
 	

29
	
 ARTICLE XXII	
 	

CAPACITY AND AUTHORITY	
 	

30
	
 ARTICLE XXIII	
 	

GENERAL	
 	

30
	 	
 Section 23.01	
 	

Further Assurances	
 	

30
	 	Section 23.02	 	Pronouns	 	30
	 	Section 23.03	 	References to this Agreement	 	30
	 	Section 23.04	 	Headings	 	30
	 	Section 23.05	 	Binding Effect	 	30
	 	Section 23.06	 	Counterparts	 	30
	 	Section 23.07	 	Amendments	 	30
	 	Section 23.08	 	Severability	 	30
	 	Section 23.09	 	Waiver	 	31
	 	Section 23.10	 	No Third Party Beneficiary	 	31
	 	Section 23.11	 	Indemnities	 	31
	 	Section 23.12	 	Attorneys' Fees	 	32
	 	Section 23.13	 	Schedules	 	32
	 	Section 23.14	 	Herein	 	32
	 	Section 23.15	 	Cumulative Rights	 	32
	 	Section 23.16	 	Object of Agreement	 	32
	 	Section 23.17	 	Estoppel Certificate	 	33
	 	Section 23.18	 	Standard For Consent	 	33
	 	Section 23.19	 	Time	 	33
	 	Section 23.20	 	Inadequacy of Damages	 	33
	 	Section 23.21	 	Disputes Arising Under Section 13.01(e)	 	34
	 	Section 23.22	 	Venue	 	34

iii

 

	
 ARTICLE XXIV	
 	

ARBITRATION PROVISIONS	
 	

34
	 	
 Section 24.01	
 	

Dispute, Controversy or Claim	
 	

34
	 	Section 24.02	 	Arbitration Award	 	34
	 	Section 24.03	 	Information Exchange	 	35
	 	Section 24.04	 	No Disclosure/Confidentiality	 	35
	 	Section 24.05	 	Payment of Costs and Expenses	 	35

SCHEDULES 

SCHEDULE
I — DESCRIPTION OF PROPERTY

SCHEDULE II — PLANS AND SPECIFICATIONS

SCHEDULE III — CONSTRUCTION SCHEDULE

SCHEDULE IV — APPROVED BUDGET

SCHEDULE V — MINIMUM CONTENT OF MONTHLY REPORTS

SCHEDULE VI — DOCUMENT REQUEST

SCHEDULE VII — CONSTRUCTION SCHEDULE 

iv

 
INDEX  

	 
	 	Page(s)

	AAA	 	34
	Acceleration Direction	 	16
	Acceleration Period	 	16
	Acceleration Report	 	16
	Affiliate	 	1
	Agreement	 	1
	Approved Budget	 	1
	Arbitration Award	 	34
	Architect	 	10
	Authorities	 	2
	Bankruptcy	 	2
	Business Day	 	2
	Change Order	 	2
	Comparable Project	 	3
	Consents	 	9
	Construction Lender	 	15
	Construction Management Fee	 	3
	Construction Schedule	 	3
	Construction Standard	 	3
	Contract	 	3
	Contractor	 	3
	Date for Substantial Project Completion	 	3
	Date of Substantial Project Completion	 	4
	Default Notice	 	22
	Defaulting Party	 	22
	Design Documentation Schedule	 	4
	design documents	 	25
	Developer	 	4
	Developer Representative	 	4
	Development	 	4
	Development Fee	 	4
	Development Site	 	4
	Due Care	 	4
	Emergency	 	4
	Entitlements	 	5
	Final Completion	 	5
	Force Majeure Event	 	16
	Force Majeure Notice	 	16
	Hard Costs	 	5
	Hard Costs Increment	 	14
	Insurance Requirements	 	5
	insured	 	20
	Land	 	5
	Leasable Area	 	5
	Lease	 	5
	Leasing Fee	 	23
	Legal Requirements	 	6

v

 

	Lender	 	6
	LLC Agreement	 	6
	Loan	 	6
	Management Agreement	 	6
	Management Committee	 	6
	Manager	 	6
	Non-Defaulting Party	 	22
	Notices	 	28
	Occupant	 	6
	Occupant's Improvements	 	6
	Off-Site Improvements	 	6
	Operating Plan	 	7
	Owner	 	7
	Owner's Representative	 	7
	Person	 	7
	Plans and Specifications	 	7
	Prime Rate	 	7
	Project	 	7
	Property	 	1
	Proposed Change Order	 	7
	Related Person	 	7
	Rules	 	34
	Santa Anita Project	 	1
	Standard Form of Lease	 	8
	Subject Person	 	1
	Temporary Lease	 	8
	the indemnified parties	 	31

vi

EXHIBIT "G"  

MANAGEMENT AGREEMENT

(SANTA ANITA PROJECT)  

        THIS
MANAGEMENT AGREEMENT (this "Agreement") is made and entered into as of the
                         day of
                                    ,
200             by and between Santa Anita Associates, LLC, a
Delaware limited liability company ("Company"), and Caruso Management Company, Ltd., a California limited
partnership ("Manager"). 

R E C I T A L S: 

        A.    Company
is the lessee of certain lands pursuant to that certain seventy-five (75) year ground lease with two (2), ten (10) year renewal options
with The Santa Anita Companies, Inc. as lessor, and has constructed thereon the shopping center commonly known as "[Santa Anita
Project]", (as more particularly described in the definition of "Project"); and 

        B.    Company
and Manager desire to enter into this Agreement to appoint Manager to manage the Project, it being the understanding that the object of this Agreement is the
provision of property management and leasing services by Manager to Company, upon all of the terms and conditions set forth in this Agreement. 

A G R E E M E N T: 

        NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows: 

ARTICLE I  

 CERTAIN DEFINITIONS  

        As
used in this Agreement, the following terms shall have the meanings respectively set forth in this Article I: 

        "Accounting Firm" has the meaning set forth in the LLC Agreement. 

        "Affiliate" means, with respect to any Person (the "Subject
Person"), any other Person controlling, controlled by or under common control with the Subject Person. As used in this definition of "Affiliate," the term
"control" means, with respect to any Person, the right to (i) the exercise, directly or indirectly, of fifty percent (50%) or more of the voting rights attributable to
such Person or (ii) otherwise direct the management policies of such Person by contract or otherwise. 

 

        "Bankruptcy" of any Person means the occurrence of any of the following events: 

        (i)    if
such Person shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under the present or any future Federal bankruptcy act or any other present or future
applicable Federal, state or other statute or law relating to bankruptcy, insolvency, or other relief for debtors, or shall seek or consent to the appointment of any trustee, receiver, conservator or
liquidator of such Person of all, or substantially all, of its property; or 

        (ii)    if
a court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against such Person seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the present or any future Federal bankruptcy act, or any other present or future Federal, state or other statute or law
relating to bankruptcy, insolvency, or other relief for debtors, and such order, judgment or decree shall remain unvacated and unstayed for a period of ninety (90) days from the date of entry
thereof, or any trustee, receiver, conservator or liquidator of such Person or of all or substantially all of its property shall be appointed without the consent of such Person and such appointment
shall remain unvacated and unstayed for a period of ninety (90) days, or if such Person shall file an answer admitting the material allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or 

        (iii)    if
such Person shall admit in writing its inability to pay its debts as they mature; or 

        (iv)    if
such Person shall make a general assignment for the benefit of creditors or take any other similar action for the protection or benefit of creditors; or 

        (v)    if
any assets of such Person are attached, seized or subjected to a garnishment or other action by a creditor of such Person seeking to realize upon a judgment against
such Person, and such attachment, seizure, garnishment or other action is not vacated, stayed or otherwise resolved within ninety (90) days thereafter. 

        "Business Day" means a day which is not a Saturday, Sunday or legally recognized public holiday in the
United States. 

        "Capital Account" has the meaning set forth in the LLC Agreement. 

2

 

        "Caruso Member" means the two individuals appointed by Santa Anita Holdings, LLC, a California limited
liability company, from time to time as its representative on the Management Committee. 

        "Cash Receipts" has the meaning set forth in Section 6.02 below. 

        "Commissionable Revenue" has the meaning set forth in Section 13.01
below. 

        "Common Areas" means all those parts of the Property which are not exclusively used or intended for the
exclusive use of any particular Occupant. Common Areas shall include, without limitation, the following areas within the Property: parking areas, parking garage, pools, fountains, trolleys and
facilities, traffic control and information signs and equipment, roadways, pedestrian sidewalks, public transportation loading and unloading facilities not devoted to a single Occupant, truckways,
delivery areas, landscaped areas, community rooms, office facilities, Property Manager's office, elevators, escalators, the open air mall, including space occupied by carts or kiosks, stairs and ramps
not contained within any Occupant's floor area, public restrooms and comfort stations, service areas, service and fire exit corridors and passageways, those areas within the Property and adjacent to
the Property containing signs, pylons or structures advertising the Property, and other areas, amenities, facilities and improvements provided by Company for the convenience and use of Company, the
Occupants and their respective concessionaires, agents, employees, customers, invitees and other licensees. 

        "Company" means the limited liability company created pursuant to the LLC Agreement and the filing of
a Certificate of Formation with the Delaware Secretary of State in accordance with the provisions of the Delaware Act. 

        "Company's Account" means the separate account established by Company into which Manager is to deposit all
amounts collected by Manager under Section 6.01 below, which may be a cash management account if required by the Company or the company's Lender. 

        "Comparable Project" has the meaning set forth in Section 3.01 below. 

        "Control" means, with respect to any Person, the possession, direct or indirect, of the power to
(i) vote fifty percent (50%) or more of the outstanding voting securities of any Person, or (ii) otherwise direct management policies of any Person by contract or otherwise. 

        "Developer" means Manager and its permitted successors and assigns to the extent expressly permitted by the
Development Agreement. 

        "Development Agreement" means the agreement entered into between Developer and Company in the form attached
as an Exhibit to the LLC Agreement. 

3

 

        "Discretionary Expenses" means all Operating Expenses that are not Non-Discretionary Expenses. 

        "Document Request" means the form of Document Request and Lease Summary attached hereto as  Exhibit "A".

        "Emergency" means an event which, in Manager's reasonable judgment, requires action to be taken prior to the
time that approval could be obtained from Company (as reasonably determined by Manager) in order to comply with Legal Requirements or Insurance Requirements or to preserve the Property, or to
assure the safety of any employees, Occupants, customers or invitees of the Property, or to avoid the suspension of any services necessary to, or required by, the Occupants, customers or invitees
thereof. 

        "Fiscal Year" means the calendar year. 

        "GAAP" has the meaning set forth in Section 7.02 below. 

        "Gross Income" in respect of a particular period means all minimum, fixed and percentage rents and all other
receipts, revenues, proceeds and other monies received by Company, or by Manager as agent of Company, from or in connection with the operation of the Property in respect of such period, directly or
indirectly and from any source whatsoever including, without limitation, all payments made to Company by Occupants including, but not limited to (i) minimum, fixed and
percentage rent (including proceeds from any litigation wherein damages equivalent to or based upon rent from a defaulted tenant are recovered, exclusive of interest),
(ii) Common Area maintenance charges, (iii) contributions for personal and real property taxes and sales taxes, insurance premiums and
deductibles, utilities, heating, ventilating and air conditioning, domestic water and waste handling, sprinkler charges, Manager's administrative costs and any other expenses of the Property for the
payment of which Occupants are obligated to contribute pursuant to their respective Leases or Property Agreements, (iv) security deposits which have been applied to rent,
and (v) all proceeds from loss of rents insurance maintained by Company relating to the Property. 

        "Ground Lease" means that certain seventy-five (75) year Ground Lease with two (2), ten
(10) year renewal options as between The Santa Anita Companies, Inc., as ground lessor and the Company as ground lessee for the certain property on which the Project is located. 

        "Horse Safety Requirements" means those horse safety requirements set forth in  Exhibit "B" attached hereto. 

4

 

        "Index" with respect to any applicable calculation that is provided for herein, for each particular year or
period in question, means the "All Items" portion of the Consumer Price Index for All Urban Consumers: U.S. City Average (1982-84 = 100), issued and published by the Bureau
of Labor Statistics of the United States Department of Labor. If the Index ceases to use the 1982-84 average equaling 100 as the basis of calculation, or if a change
is made in the terms or number of items contained in the Index, or if the Index is altered, modified, converted or revised in any way, then the Index shall be determined by reference to the index
designated as the successor to the prior Index or other substitute index published by the government of the United States and new index numbers shall be substituted for the old index numbers in
making the calculations, as may be appropriate. If at any time the Bureau of Labor Statistics shall no longer publish such Index, then any successor or substitute index to the Index published by said
Bureau or other governmental agency of the United States, and similarly adjusted as aforesaid, shall be used. If such a successor or substitute index is not available or may not lawfully be
used for the purposes herein stated, a reliable governmental or other non-partisan publication selected by Manager and reasonably acceptable to Company shall be used in evaluating the
information theretofore used in determining the Index. 

        "Insurance Requirements" means the requirements of any insurer or insurance carrier, to the extent that such
requirements are applicable to the Property, or any portion thereof, or to Company in its capacity as owner of the Property. 

        "Lease" means any lease, sublease, license to occupy or other right of occupancy, use or possession of the
Property or any part of the Property, including advertising agreements and sponsorship agreements, and any amendment thereof, entered into or granted by or as agent of Company, whether temporarily or
for a fixed or periodic term, including any Temporary Lease, whether or not recorded, and whether oral or written including, without limitation, any storage license, cart or kiosk lease or license,
and any other specialty lease or license. "Leases" means each and every Lease in effect at the applicable time, collectively. 

        "Leasing Fee" has the meaning set forth in Section 13.03 below. 

        "Leasing Plan" has the meaning set forth in Section 7.02 below. 

        "Legal Requirements" means all laws, statutes, codes, ordinances, orders, regulations, judgments, decrees and
directions of all federal, state and local governments and courts and the appropriate agencies, officers, departments, boards, authorities and commissions thereof, whether now or hereafter enacted, to
the extent that the same are applicable to the use or operation of the Property or any portion thereof. 

        "Lender" means any lender under a Loan existing at any time on or after the date hereof. 

        "LLC Agreement" means that certain Limited Liability Company Agreement between Santa Anita Associates
Holding Co., LLC dated of even date herewith, as the same may be amended from time to time in accordance with the terms thereof. 

5

 

        "Loan" means any loan made to Company and secured by all or any part of the Property at any time on or after
the date hereof. 

        "Management Duties" has the meaning set forth in Section 11.05 below. 

        "Management Fee" has the meaning set forth in Section 13.01 below. 

        "Management Committee" has the meaning set forth in of the LLC Agreement. 

        "Managing Member" initially means Santa Anita Associates Holding Co., LLC, a California limited
liability company, unless replaced pursuant to the LLC Agreement. 

        "Marketing Fund" means the media fund or other like fund or organization established, operated and maintained
by Manager in accordance with the Operating Budget for the advertising, merchandising and promotion of the Property. 

        "Non-Discretionary Expenses" means the following Operating Expenses, the payment and amount of
which are not within the discretion of Company or Manager: utility charges, scheduled payments of principal and interest on Loans, real estate and personal property taxes and assessments, insurance
premiums for policies approved by Company, and amounts due and payable under service contracts and other agreements entered into in accordance with any Operating Plan. 

        "Occupants" means all Persons using or in possession or occupation of any portion of the Property from time
to time under any Lease. 

        "Operating Budget" has the meaning set forth in Section 7.02 below. 

        "Operating Expenses" means the total for each relevant period of the on-site costs and expenses
incurred or accrued in respect of the Property by Company or by Manager as agent of Company in accordance with this Agreement (to the extent not paid by individual tenants). Subject to the
foregoing, Operating Expenses shall include, without limitation: 

        (i)    all
rates, taxes, assessments and impositions whatsoever (whether assessed, charged or imposed by or under Federal, State or local Legal Requirements) assessed, charged
or imposed in respect of the Property or Company in its capacity as lessee of the Property, including, without limitation, sales taxes paid by Manager with respect to goods or services benefiting the
Property acquired or provided in accordance with the Operating Budget; 

        (ii)    charges
for supply of water, sewerage, gas, electricity and other utilities supplied to the Common Areas, and the disposal of all garbage and refuse from the
Common Areas; 

6

 

        (iii)    costs
of operating, maintaining, repairing and cleaning all areas of the Property, and costs of providing on-site security personnel for the Common Areas,
including the salary, wages, benefits and other costs of all on-site employees at the Property employed by Manager; 

        (iv)    all
charges for leasing or licensing, operating, maintaining and repairing the lighting and HVAC systems, vertical or horizontal transportation equipment, sanitary,
security and fire detection and fighting equipment and all other equipment, machinery and systems provided for or to the Property from time to time, in accordance with the Operating Budget; 

        (v)    the
costs of leasing, maintenance, registration and other expenses incurred in respect of on-site security and maintenance vehicles used by employees of
Manager in connection with the performance of services for the benefit of the Property which are properly incurred in the performance by Manager of its duties and obligations under this Agreement, in
accordance with the Operating Budget; 

        (vi)    all
fees and charges incurred in connection with the opening, maintenance and operation of any bank accounts operated for the Property by Manager; 

        (vii)    advertising,
marketing and promotional costs for the Property in accordance with the Operating Budget or which otherwise have been approved in writing by Management
Committee; 

        (viii)    the
fees of appraisers, attorneys and consultants incurred by Manager in accordance with the Operating Budget or at the written request of Management Committee in
connection with the performance by Manager of its duties and obligations under this Agreement including, without limitation, the enforcement of all Leases; 

        (ix)    all
contributions made by Company or by Manager as agent of Company from time to time to the Marketing Fund in accordance with the Operating Budget or which otherwise
have been approved in writing by Management Committee; 

        (x)    the
payment or reimbursement of the applicable portion of costs incurred by Company or by or on behalf of Manager for insurance and claims management services for the
Property in accordance with the Operating Budget, whether such payment is incurred pursuant to any master policy covering other properties under the management of Manager, or otherwise; 

7

 

        (xi)    all
third party out-of-pocket expenses incurred by Manager in accordance with the Operating Budget or as otherwise approved in writing by
Management Committee in connection with equipment and vehicles provided by or on behalf of Manager or by others for the purpose of the operation and maintenance of the
Property or the applicable portion of such costs relating solely to the Property including, without limitation, all financing, leasing and other charges incurred in respect of such equipment
and vehicles; 

        (xii)    third
party audit and accountancy fees incurred in accordance with the Operating Plan in connection with the preparation of any accounts, reports or financial
statements relating solely to the Property prepared by or on behalf of Company for the purpose of providing the financial information to Company required by this Agreement and enabling Manager to
perform its obligations under this Agreement; 

        (xiii)    the
Management Fee payable to Manager in accordance with Section 13.01 below; 

        (xiv)    general
expenses associated with the Property incurred in accordance with the Operating Budget or as otherwise approved in writing by Management Committee; and 

        (xv)    all
costs incurred in accordance with the Operating Budget or as otherwise approved in writing by Management Committee in connection with (a) complying with
Legal Requirements and Insurance Requirements binding the Project, binding Company in its capacity as owner of the Project, or binding Manager in its capacity as Company's agent; and
(b) enforcing compliance with Legal Requirements and Insurance Requirements binding Occupants, contractors or consultants, provided,
however, that if any such noncompliance was caused by Manager's fraud, willful misconduct, gross negligence, misappropriation of funds or other intentional wrongful act or
intentional wrongful omission in the performance of it tasks, any incremental increase in the cost of enforcing such compliance shall be borne by Manager and shall not be an Operating Expense; 

provided,
however, that notwithstanding the foregoing, "Operating Expenses" shall exclude: 

        (1)    all
general and administrative costs, wages, salaries and benefits of supervisory personnel employed by Manager other than at the Project site; 

        (2)    income
taxes, capital gains tax and any other taxes imposed on Company, Manager or Occupants in their capacities as individual taxpayers; 

8

 

        (3)    the
fees of consultants and other costs proven by Company to have been incurred as a direct result of Manager's fraud, willful misconduct, gross negligence,
misappropriation of funds or other intentional wrongful act or intentional wrongful omission in the performance of its tasks or breach of this Agreement; and 

        (4)    premiums
and other costs payable by Manager for fidelity insurance. 

        "Operating Plan" has the meaning set forth in Section 7.02 below. 

        "Person" means an individual, partnership, joint venture, limited liability company, corporation, trust,
unincorporated association or other entity. 

        "Prime Rate" means as of the first day of each month, the "Prime Rate" most recently reported in The Wall
Street Journal, which rate shall be adjusted concurrently with any adjustments to such Prime Rate. 

        "Project" means the property shown on Exhibit "C"
attached hereto together with, to the extent of Company's interest therein, all of the improvements now or hereafter erected thereon (including, without limitation, buildings, parking structures,
paved areas, any street and interior roads, landscaped areas, landscaping, sidewalks, bridges and tunnels), including the improvements commonly known as
"                                    "
as it may be expanded or renovated from time to time hereafter, together with all fixtures, machinery, equipment, and other property located thereon belonging to or leased or licensed by or for
Company and used in connection with the operation thereof. 

        "Project Agreements" means any and all reciprocal easement agreements, operating agreements, supplemental
agreements and other similar agreements concerning the operation of the Project, as the same may be modified, amended, restated or supplemented from time to time. 

        "Promotional Activity" means all promotional activities relating to the Project or the Company, including,
without limitation, naming rights, sponsorship rights, vending agreements, banking, credit card agreements, pay phone agreements and any other type or kind of promotional activities or exclusive
agreement applicable to or binding upon the Project or Company. 

        "Property Manager" has the meaning set forth in Section 3.05 below. 

        "REA" means those certain reciprocal easement agreements or covenants, conditions and restrictions, as same
may be modified, amended, restated or supplemented from time to time, which provide reciprocal easements and other rights and obligations appurtenant. 

9

 

        "Race Track Project" means the existing horse racing facility consisting of a grandstand, racetrack, stable
and related improvements and facilities known as "Santa Anita Park" as may be modified, reconstructed, renovated or redeveloped from time
to time. 

        "Related Person" means, with respect to any Person (the "Subject
Person"), any other Person having any of the following relationships with the Subject Person: 

        (i)    any
Affiliate of the Subject Person; 

        (ii)    any
other Person owning directly or indirectly more than fifteen percent (15%) of the issued and outstanding stock of, or more than a fifteen percent (15%) beneficial
or voting interest in, the Subject Person; or 

        (iii)    any
other Person more than fifteen percent (15%) of the issued and outstanding stock of which, or more than a fifteen percent (15%) beneficial or voting interest in
which, is owned directly or indirectly by the Subject Person; 

        "Santa Anita Member" means one of the two individuals appointed by Santa Anita Commercial
Enterprise, Inc. from time to time as its representatives on the Management Committee. 

        "Security Deposit Account" has the meaning set forth in Section 6.03
below. 

        "Standard Form of Lease" means (i) the standard form leasing documents for
Leases as reasonably modified from time to time by the Manager, and (ii) for Leases, with any national tenant, either: (a) leasing documents that are materially
consistent with the leasing documents generally used by Manager and its Affiliates and such tenant at other properties managed by Manager and its Affiliates; or (b) to the extent that Manager
and its Affiliates do not have a prior relationship with the national tenant, then leasing documents (x) that are used by such national tenants at other locations, or (y) the standard
form leasing documents for Leases, as the same may be amended or restated from time to time in accordance with the provisions of this Agreement. 

        "Taxable Year" means the taxable year of the Company, which shall be the calendar year, unless the Company
otherwise notifies Manager of a change in the taxable year of the Company. 

        "Temporary Lease" means any Lease of a temporary or seasonal nature, having a term, including renewal options
(if any) of one (1) year or less, including without limitation, short-term concessions or license agreements and cart or kiosk leases or licenses for one (1) year
or less. 

10

 
ARTICLE II  

 APPOINTMENT  

        Company
hereby appoints Manager as the exclusive manager to rent, lease, operate, manage and direct the operation of the Project subject to the terms and conditions hereinafter
set forth. 

        Company
and Manager acknowledge that Company may engage Developer as the exclusive developer for the Project pursuant to the Development Agreement with respect to the initial development
and any expansion, redevelopment or refurbishment of the Project. 

ARTICLE III  

 MANAGER'S DUTIES  

        Section 3.01    Operating Standard; Duties.    Manager shall exercise its powers
and perform its duties and obligations under this Agreement in a good faith and diligent manner, and shall (provided the Company makes funds available) exercise professional competence in managing the
Project for the initial give (5) year term following the opening of the Project at the standard currently existing as of the date of this Agreement for "The Grove", located at 101 The
Grove Drive, Los Angeles, California, and after the initial five (5) year term following the opening of the Project, at the prevailing standard of industry practice for first-class
open-air lifestyle and entertainment centers in the Southern California area (individually or collectively, as the case may be, the "Comparable
Project"). Manager shall provide to Company the full benefit of the judgment, experience and advice of the members of Manager's organization and staff. Manager
represents and warrants that it, together with its Affiliates, has the skill and experience necessary to perform its obligations in accordance with the terms of this Agreement. Without limiting the
generality of the foregoing, Manager shall perform the following duties, subject to the limitations imposed by the Operating Plan and all other provisions of this Agreement: 

                (a)   The
billing and collection of all amounts payable to Company by Occupants under the Leases, and other amounts included in Gross Income and the prompt deposit of all
such amounts received by Manager in the Company's Account; 

11

 

                (b)   To
the extent funds have been made available by Company through deposits into the Company's Account, the payment of all Operating Expenses and capital expenses of
the Project; 

                (c)   Subject
to the Operating Plan, the negotiation of Leases and service and maintenance agreements, the administration and enforcement by commercially reasonable methods
of all Leases and all other service, maintenance and other agreements or contracts made by or as agent of Company for the Project, and the performance of the obligations specified in
Article IV below relating to the leasing of the Project; 

                (d)   Fulfill
the obligations of Company subject to the approved Operating Budget, set forth in the in the REA and Project Agreements; 

                (e)   The
selection, engagement, employment, payment, supervision, direction and discharge of all Project employees reasonably necessary or appropriate for the proper, safe
and economic operation and maintenance of the Project, in number and at wages in accordance with the Operating Budget, the carrying of Worker's Compensation Insurance (and, when required by law,
compulsory Non-Occupational Disability Insurance) covering such employees, and the use of reasonable care in the selection, supervision and discharge of such employees. Manager shall use
its diligent, good faith efforts to comply with all laws and regulations and collective bargaining agreements, if any, affecting such employment. All persons employed in connection with the operation
and maintenance of the Project shall be employees of Manager or its Affiliates, not Company, or employees of contractors providing contract services to the Project; 

                (f)    The
cleaning, maintenance, servicing and repair of the Project (whether by employees of Manager or through supervision of contractors), including all machinery,
equipment and other items whether leased or provided by Manager or provided by Company for the operation of the Project, in accordance with Article XI below; 

                (g)   The
management and administration of the Marketing Fund and the advertising, merchandising and promotion of the Project and the Occupants' (if required by any
Project Agreements or Leases) respective businesses in accordance with the Operating Plan and this Agreement or as otherwise approved in writing by Management Committee; 

12

 

                (h)   The
provision to Company of the financial, accounting and reporting services relating to the Project specified in
Article XII below; 

                (i)    The
making of recommendations concerning the Project (including, without limitation, as to the tenant mix, maintenance, refurbishment of the Project and structural
alterations or improvements to the Project) as Management Committee may from time to time reasonably require; 

                (j)    Prepare,
maintain and provide (at the request of Management Committee) copies to Management Committee of all depreciation schedules for the machinery, equipment
and other property located at the Project; 

                (k)   Notify
Company in its quarterly report to Company of any material tax assessments, reassessments, or other impositions relating to the Project or to Company received by
or on behalf of Manager and the handling of any relevant appeals at the request and cost of Company; 

                (l)    Attend,
by telephone or, at the request of Management Committee, in person (in which event, Manager shall be reimbursed for reasonable travel costs), such
meetings with the representatives of Management Committee on a quarterly basis and at such other times as Management Committee may reasonably require (provided Manager receives reasonable notice
thereof) for the purposes of delivering Operating Plans, reports, financial statements and other documents, making such recommendations or discussing such aspects of the operation and management of
the Project as Manager is required to provide under this Agreement, provided that this provision will not be deemed to require Manager to deliver Operating Plans, reports,
financial statements or other documents at times earlier than the times otherwise set forth herein; 

                (m)  Pursuant
to Article XIV, formulating and, subject to the Company's approval, implementing an insurance program for the Project; 

13

 

                (n)   The
management, administration and coordination of all design and construction associated with the maintenance, repair and/or leasing of the Project including all
tenant improvements to be constructed at the Project (which services shall be supervised by Manager but may be conducted by an Affiliate of Manager at no additional cost or expense to the Company),
provided, however, that Manager shall not be required to perform any actual design or construction work, and provided
further that with respect to tenant improvements, Manager shall only be responsible for the approval, supervision and coordination of the design of any Occupant's store to the extent
contemplated in such Occupant's Lease, including without limitation the design of such Occupant's store front and the specifications of such Occupant's equipment; 

                (o)   Keep
the Management Committee reasonably informed through reports at regular quarterly meetings with Management Committee with respect to any other material matters
relating to the management, leasing and operation of the Project; 

                (p)   Cause
the Project to be operated in a manner which uses all good faith, diligent and reasonable efforts to comply with the Horse Safety Requirements, and 

                (q)   Perform
all additional duties which Management Committee may reasonably require Manager to perform from time to time which are (i)
consistent with the provisions of this Agreement, and (ii) generally performed by property managers of a Comparable Project. 

        Section 3.02    Independent Contractor; Employees.    In performing its duties
hereunder, Manager at all times shall be acting as an independent contractor contracted by Company (except where acting as agent for Company as specifically required pursuant to this Agreement) and
all contractors or consultants engaged or supervised by Manager shall be independent contractors or employees of Manager. All personnel performing services at the Project shall be independent
contractors of, or employed by Manager or its Affiliates and Manager shall oversee such Project independent contractors and employees in the discharge of their duties. 

        Section 3.03    Compliance with Requirements.    Subject to the Operating Plan or
as otherwise approved or authorized in writing by Management Committee and Manager, Manager, on behalf of Company, shall manage, maintain, lease and operate the Project in compliance with
the following: 

                (a)   all
Legal Requirements concerning the Project; 

14

 

                (b)   the
provisions of all mortgages, notes, deeds of trust and any other instruments encumbering the Project; 

                (c)   all
Insurance Requirements; 

                (d)   the
Leases; 

                (e)   all
Project Agreements; 

                (f)    the
REA; 

                (g)   all
covenants binding Manager under agreements or arrangements made with third parties including, without limitation, contractors, consultants and the lessors of any
leased equipment or machinery, and, to the extent it is in Manager's legal capacity to do so, Manager shall perform all obligations binding Company under agreements or arrangements made with third
parties; and 

                (h)   Comply
With all Horse Safety Requirements. 

        If
Manager ascertains that the Project is not in compliance with any of the foregoing items and such compliance is not contemplated by the Operating Plan, Manager shall notify Management
Committee in writing, and Management Committee shall instruct Manager in writing as to how to proceed. To the extent that Manager complies with Management Committee's instructions relating to
Company's, Manager's or the Project's compliance or non-compliance with any of the foregoing items, Manager shall in no event be deemed in breach of any provision of this Agreement, and
Manager shall be fully indemnified under the provisions of Section 18.15(b) below. 

        Notwithstanding
the foregoing, Manager, with the prior written approval of Management Committee, shall be entitled to contest in good faith any Legal Requirement or Insurance Requirement
provided that such contest is not reasonably expected to result in the cancellation or interruption of insurance coverage for the Project or subject Company to any civil
or criminal liability or fines and is not reasonably expected to result in a breach, violation or termination of any mortgage, Lease or other material contract or agreement encumbering or relating to
the Project. Manager's good faith noncompliance with the applicable Legal Requirement or Insurance Requirement shall not be deemed a default under this Agreement provided
that Manager prosecutes such contest in good faith and with due diligence to a final determination. 

        Section 3.04    Implementation of Operating Plan.    Manager shall use its
diligent and good faith efforts to implement the terms of each approved Operating Plan and shall exercise control over and shall expend or otherwise transfer rents and all other sums received as agent
of Company in accordance with the terms hereof. Manager shall not take any actions which are inconsistent with the Operating Plan and are not otherwise authorized in writing by Company,
provided that Manager may exceed the annual Operating Budget with respect to the payment of Operating Expenses as set forth in
Section 8.01 below. 

15

 

        Section 3.05    Property Manager.    Manager shall retain the services of an
experienced property manager, and such other personnel as are specifically approved by the Company pursuant to a separate line item contained in the Operating Budget (as employee(s) of Manager)
(the "Property Manager"), at Company's cost (which costs will be included in the Operating Budget for the applicable
Fiscal Year), to perform the on-site management functions specified herein. 

        Section 3.06    No Default.    Notwithstanding anything to the contrary in this
Agreement, except to the extent that the payment of additional monies is proven by Company to have been required as a direct result of Manager's fraud, willful misconduct, or gross negligence, Manager
shall not be required to expend money in excess of that contained in the Company's Account or otherwise made available by Company to be expended by Manager hereunder. Manager will not be in breach or
default of any obligation under this Agreement if, upon receipt of a timely written request from Manager, Company fails to advance funds as provided in Article IX
below, fails to make a decision, recommendation or request, fails to give a direction, approval or consent, fails to execute any notice or document required by Manager, or fails to make a demand or
other communication in any such case necessary for the performance by Manager of that obligation under this Agreement. 

        Section 3.07    Powers, Duties and Obligations.    For the purposes of carrying
out its duties referred to in this Agreement, Manager shall have the right, duty and obligation to perform the following functions and activities from time to time during the continuance of this
Agreement, in each case subject to the limitations, if any, set forth in this Agreement: 

                (a)   To
enter upon the Project for the purposes of carrying out the provisions of this Agreement; 

                (b)   Preparing,
supervising the preparation of, and submitting to the Management Committee the Operating Plan and Operating Budget as provided in Article VII; 

                (c)   Properly
administer the day-to-day activities at the Project, and implement all actions necessary or appropriate to implement the approved
Operating Plan and Operating Budget as provided in Article VII; 

16

 

                (d)   To
negotiate Leases in Company's name and implement rent escalations, the terms of such Leases and rent escalations to be in accordance with the Leasing Plan; 

                (e)   To
execute in Company's name all Temporary Leases, and all licenses or other occupancy agreements negotiated for Common Areas, provided
that Manager shall have obtained Management Committee's prior written consent with respect to those Leases and agreements requiring such consent pursuant to
Article IV below, and, for the purpose only of such execution, Company hereby appoints Manager as Company's attorney-in-fact; 

                (f)    Recommending
for approval by the Management Committee specific policies, plans and procedures for security, maintenance, marketing/promotional, sponsorship and other
operating aspects of the Project (in each case, addressing integration and synergies with the Racetrack Project and periodically updating such policies, plans and procedures no later than sixty
(60) days prior to the commencement of each fiscal year, or more frequently as reasonably requested by Management Committee; 

                (g)   Contracting
on behalf of the Company for all supplies, equipment, repairs, improvements, and services for the Project in accordance with the last approved Plan and
Operating Budget as provided in Article VII; 

                (h)   As
agent for Company but without need for consent of Company except as set forth in writing by Management Committee, to institute, prosecute, defend, settle or
otherwise deal with (a) any claim or legal proceeding against Company alleging damages related to or resulting from personal injury or personal property damage which
occurred on or about the Project which is not covered by Company's insurance or Company's self-insured retention, but is likely to be settled or otherwise resolved at a total cost to
Company (including attorneys' fees and expenses and payments made to any claimant or potential claimant) that is equal to or less than ***, subject to annual increase on each January 1
commencing on the year after the Project opens to the pubic based on the percentage increase in the Index during the preceding Fiscal Year, (b) any litigation or claims
involving any tenant defaults or delinquencies (which the Manager may undertake without the consent of Company only if the amount of litigation expenses incurred or projected to be incurred by the
Company is reasonably anticipated to be less than *** and any collection or enforcement action or eviction proceeding commenced in the ordinary course of business with respect to any Lease, and
(c) the settlement of any legal proceedings against the Company or the confession of any judgment against any Company or any property of the Company if the amount of any
such settlement or judgment is less than ***; 

17

 

                (i)    As
agent for Company, to accept and receive all Gross Income for deposit into the Company's Account; 

                (j)    To
advertise, merchandise and promote the Project in accordance with the Operating Plan or as otherwise approved in writing by Management Committee, including
supervising the preparation, dissemination and execution of advertising, publicity and community and press relations for the Project; 

                (k)   Supervising
and coordinating the operation, management, maintenance and repair of the Project; 

                (l)    To
select, retain, engage, employ, replace, supervise, dismiss, or otherwise deal with any contractors, vendors or consultants as may be reasonably necessary or
desirable for the efficient management and operation of the Project by Manager in accordance with the Operating Plan, provided that such contractor, vendor or consultant
is not a Related Person of Manager and the applicable contract or agreement shall not be for a term longer than one (1) year unless such contract may be terminated on no more than thirty
(30) days' notice without charge or penalty; and 

                (m)  Subject
to the Operating Plan or as otherwise authorized or approved in writing by Management Committee, to do and perform in respect of the Project all things
reasonably necessary or appropriate on the part of Manager in compliance with the covenants and obligations of Manager herein contained to fully and effectively manage the Project and otherwise
perform its obligations hereunder. 

        Section 3.08    Instructions to Manager.    To be effective, any notices, requests
or instructions given to the Manager by the Management Committee, pursuant to this Agreement, must be in writing and signed by one of the Santa Anita Members on behalf of Santa Anita Commercial
Enterprise, Inc. and by one of the Caruso Members on behalf of Santa Anita Associates Holding Co., LLC. 

18

   ARTICLE IV  

 LEASING THE PROJECT  

        Section 4.01    Leasing Obligations.    Manager shall use its diligent, good faith
efforts during the term of this Agreement to lease the Project in accordance with the Leasing Plan and shall exercise professional competence in leasing the Project at the prevailing national standard
of industry practice for Comparable Project. In connection therewith, Manager shall: 

                (a)   use
the Standard Form of Lease as the basis for the negotiation of all Leases; 

                (b)   subject
to and in accordance with the terms of the Leasing Plan, negotiate the terms and conditions of all Leases, including, without limitation, all extensions,
renewals, amendments and modifications thereto, in accordance with the Operating Plan; 

                (c)   arrange
for the execution of Leases and all amendments and modifications thereto by all parties thereto, and distribute copies thereof in accordance with
this Agreement; 

                (d)   locate
and endeavor to secure, in accordance with the Leasing Plan, suitable Occupants for all areas of the Project that may be vacant from time to time or are to
become vacant in the near future and are reasonably available for occupation or use, including, to the extent applicable, the Common Areas; 

                (e)   review
the general suitability of prospective Occupants and, to the extent Manager may deem it reasonably necessary or appropriate, seek references from prospective
Occupants and conduct such other investigations as will establish whether or not the prospective Occupant is capable of performing all obligations which the prospective Occupant would be required to
perform under its Lease; 

                (f)    coordinate
the activities of management, leasing, design and engineering personnel and/or consultants to implement the leasing program for the Project; and 

                (g)   perform
such other leasing activities as may be required by and consistent with the prevailing national standard for properties of a similar type and quality as
the Project. 

19

 

        Section 4.02    Brokers.    Manager may engage and cooperate with brokers, as may
be reasonably necessary or appropriate, so as to secure prospective tenants for the Project. The Company will pay a third party independent broker in accordance with the approved Operating Budget. 

        Section 4.03    Temporary Leases.    Manager is authorized to execute Temporary
Leases (including, without limitation, all extensions, renewals, amendments and modifications thereto) as agent of Company, without seeking Management Committee's consent thereto. Manager shall
deliver a conformed copy of any such executed Temporary Lease (and all extensions, renewals, amendments and modifications thereto) to Company promptly after Company's request therefore. 

        Section 4.04    Leases.    Manager shall deliver a Document Request (which shall
contain the Lease Summary information described in Exhibit "A") to Management Committee within ten (10) Business Days after
Manager's approval of the proposed lease terms for a Lease as set forth in the Document Request. If the terms and conditions of any Lease are consistent with the Operating Plan and the Leasing Plan or
have otherwise been approved in writing by the Company (or in the Company's LLC Agreement), Manager is authorized to execute such Lease (including, without limitation, all extensions,
renewals, amendments and modifications thereto) as agent of Company, without seeking Management Committee's consent thereto. Manager shall deliver a conformed copy of each such executed Lease
(and all extensions, renewals, amendments and modifications thereto) to Management Committee within ten (10) Business Days after Manager's execution thereof. 

        Section 4.05    Leasing Fee.    Manager shall be entitled to receive fees in
connection with the negotiation and execution or administration of Leases in accordance with Section 13.03 below as its sole compensation for the leasing services
contemplated by this Article IV. 

        Section 4.06    Occupant Improvements.    Manager shall review, approve and
coordinate the design of the Occupants' stores to the extent contemplated in the Occupants' respective Leases, including without limitation obtaining and reviewing design drawings for Occupants' store
fronts and specifications for Occupants' equipment, and monitoring the progress of Occupants' construction of standard tenant improvements at the Project. 

ARTICLE V  

 TENANT RELATIONS  

        Section 5.01    Tenant Relations.    Manager shall exercise its diligent and
professional good faith efforts consistent with Article IV above to maintain good tenant relations with Occupants of the Project in a reasonable manner, and shall
exercise professional competence in maintaining good tenant relations at the prevailing national standard of industry practice for Comparable Project. 

20

 

        Section 5.02    Procedures.    Manager shall establish procedures for the prompt
receipt, investigation and handling of Occupant requests and complaints, and shall request that any and all allegations by Occupants of defaults by Company or Manager under the Leases be made
in writing. 

        Section 5.03    Enforcement of Leases.    Manager shall establish procedures
consistent with this Agreement for the collection and receipt of rent and all other charges due Company under and in accordance with the Leases, including procedures for advising Occupants of overdue
rent. To the extent commercially reasonable, Manager shall, as agent of Company: 

                (a)   subject
to the limitations set forth in Section 3.07(d) above, engage attorneys experienced in the field of landlord-tenant
relations to prosecute defaults under any of the Leases without the consent of the Management Committee only if the amount of litigation expenses incurred or projected to be incurred by Company is
reasonably anticipated to be less than ***; 

                (b)   take
such other action as may be directed by Company to enforce the Leases; and 

                (c)   hire
auditors to audit Occupants in order to collect applicable sales information. 

        Section 5.04    Performance of Company's Obligations.    Manager shall use its
diligent and professional efforts to cause to be performed the duties of Company for day-to-day management of the Project under each Lease. All services to be provided by
Company, as landlord, under Leases (which may include, by way of example, common area maintenance, normal repairs and maintenance, cleaning and janitorial services) shall be arranged for and
supervised by Manager. 

ARTICLE VI  

 RECEIPTS  

        Section 6.01    Company's Account.    Company shall establish, and Manager shall
maintain, the Company's Account in the name of Company at an institution selected by Management Committee from time to time. All funds on deposit in the Company's Account or otherwise held by or in
the name of Manager as managing agent for Company, shall be held by Manager in trust for Company and shall not be commingled with Manager's others funds. Except as expressly set forth herein, no
accounts (other than the Company's Account) shall be established with respect to the Project, except to the extent (i) approved by Management Committee, which consent may
be withheld in Management Committee's sole and absolute discretion or (ii) required pursuant to the terms and conditions of any Loan. 

21

 

        Section 6.02    Cash Receipts.    Except as provided in
Section 6.03 below, all rent and other monies with respect to the Project received by Manager from whatever source
(the "Cash Receipts") shall promptly be deposited by Manager into the Company's Account. 

        Section 6.03    Security Deposit Account.    Manager shall deposit into a
segregated interest bearing deposit account (hereinafter referred to as the "Security Deposit Account"), prior to the close
of business of the third succeeding Business Day after receipt by Manager, all security deposits. If any Lease requires the security deposit or any other payment to be held in an interest bearing
account, Manager shall so comply. Manager shall hold all security deposits received in a form other than cash (e.g., letters of credit or certificates of deposit) in a safe and secure location.
Manager shall from time to time withdraw funds from any Security Deposit Account (and convert any non-cash security deposits to cash) and deposit the same in the Company's Account
in accordance with the terms of the Leases. Manager shall not commingle security deposits with any funds or other property of Manager. Manager shall from time to time withdraw funds from the Security
Deposit Account (and convert any non-cash security deposits to cash) as are necessary to return a security deposit or any portion thereof to a tenant as required pursuant to the
terms of its Lease or as may be otherwise directed by Company. 

ARTICLE VII  

 OPERATING PLAN  

        Section 7.01    Initial Operating Plan.    Manager shall prepare and submit to
Management Committee on or before one hundred eighty (180) days prior to the scheduled opening of the Project, a preliminary Operating Plan for the
200     Fiscal Year. Thereafter, Manager will submit a revised Operating Plan to the 200     Fiscal Year, as revised to
take into account any comments received by the Management Committee with respect to the preliminary Operating Plan, on or before sixty (60) days prior to the scheduled opening of the Project.
Management Committee will provide comments to the Manager on the preliminary Operating Plan within thirty (30) days of its receipt. Within ten (10) days following the date of Management
Committee's comments, Manager shall submit the final Operating Plan for the 200     Fiscal Year to Management Committee for its review and final approval. 

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        Section 7.02    Submission of Operating Plans.    On or before October 15
for each year following the initial Operating Plan, Manager shall submit a draft Operating Plan for the ensuing Fiscal Year to Management Committee for its review. Management Committee shall provide
comments to the Manager on the draft Operating Plan on or before November 1 of such year. On or before November 15 for such year, Manager shall submit a final Operating Plan for the
ensuing Fiscal Year incorporating the comments and changes requested by Management Committee. The Management Committee shall provide its approval (or its disapproval) of the final Operating
Plan for the ensuing Fiscal Year on or before December 1 of the preceding year. Each Operating Plan submitted by Manager to Management Committee shall incorporate: 

                (a)   an
operating budget (the "Operating Budget") for such Fiscal Year setting forth,
with reasonable specificity, the estimated Gross Income, operating and extraordinary expenses (including capital expenditures) of the Project on a monthly basis; 

                (b)   a
monthly income statement prepared in accordance with generally accepted accounting principles
("GAAP"); 

                (c)   a
monthly cash flow statement separately reflecting cash flow from sales activities and cash flow from operating activities; 

                (d)   a
schedule reflecting monthly contributions by and Cash Flow distributions to the Company; 

                (e)   the
leasing plan for the Project (the "Leasing Plan"), which shall set forth in
reasonable detail the following items: 

	(i)
	a
description of the proposed size of, type of tenants for and pro forma rent for each tenant space and tenant improvement allowances;

	(ii)
	a
merchandising plan for such vacant space;

	(iii)
	the
proposed material economic terms for each lease of each vacant space; and

	(iv)
	Leasing
Guidelines shall include items (i), (ii) and (iii) above for any space reasonably anticipated to be vacant within the next Fiscal Year, and
such other information provided in the form of Document Request attached hereto as Exhibit "A".

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                (f)    a
monthly capital expenditures budget for such Fiscal Year and a quarterly schedule reflecting the estimated capital expenditures for such Fiscal Year; 

                (g)   a
staffing plan identifying all key members of the Manager's team along with a description of the role to be played by each such member; 

                (h)   Manager's
marketing plan for the Project; 

                (i)    the
type and coverage level of all insurance for the Project to be maintained during such Fiscal Year; 

                (j)    a
summary of all agreements relating to the Project between Manager and/or any Affiliate thereof) and Company; 

                (k)   a
projection setting forth the estimated annual revenues, expenses and net operating income expected to be incurred for the ensuing Fiscal Year, which shall be updated
periodically to compare the actual results to the projected results set forth in the Operating Budget; and 

                (l)    such
other items as are reasonably requested by Company and/or as otherwise reasonably necessary to keep the Company informed as to the business and affairs of
the Company. 

        The
Operating Plan shall be in form and substance reasonably acceptable to Management Committee, and shall be submitted together with a report containing recommendations for the
subsequent Fiscal Year in relation to any matters deemed appropriate by Manager or reasonably requested by Company. The Operating Plan for the applicable Fiscal Year (or other period) that is
approved by Company is referred to as the "Operating Plan." 

        Section 7.03    Management Committee's Approval.    Management Committee shall
approve or disapprove Manager's proposed Operating Plan or specific items in such proposed Operating Plan on or before December 1 of the year preceding each Fiscal Year. Management Committee's
failure to respond within such period shall be deemed a disapproval of the Operating Plan as submitted. Upon Manager's receipt from Company of a request for supplemental information regarding the
proposed Operating Plan or any component thereof, Manager shall diligently undertake to modify the disapproved matters or to provide Company with such requested supplemental information. Pending the
resolution of any such dispute within the Management Committee, the submitted Operating Plan shall control with the sole exception of those specific items not approved by Management Committee, and the
Operating Plan for the preceding Fiscal Year (exclusive of any line items relating to expenditures for specified capital works which shall be established by Management Committee) shall control with
respect to those specific items not approved by Management Committee; provided, however, that unless Management Committee and Manager
otherwise agree: 

24

 

                (a)   individual
unapproved line items may be increased to such amount as may be necessary for Non-Discretionary Expenses and any Operating Expenses incurred in
connection with any Emergency; 

                (b)   any
other unapproved line item relating to Operating Expenses payable to (A) third parties who are not Related Persons to Manager pursuant to the existing terms
of existing contracts or (B) Related Persons to Manager pursuant to the existing terms of existing contracts (other than the renewal terms of contracts which automatically renew upon expiration
pursuant to the terms thereof) in each case with respect to clauses (A) and (B) which are known at that time to have increased or decreased in cost shall be increased or decreased, as
applicable pursuant to the existing terms of existing contracts, to the then current level as of the end of such prior Fiscal Year; 

                (c)   any
line items relating to expenditures for capital works or other capital expenditure in the Operating Plan for the preceding Fiscal Year shall be disregarded except
where the capital expenditure approved for the preceding Fiscal Year remains to be paid in accordance with the approval; and 

                (d)   with
respect to each other unapproved line item of the submitted Operating Budget, the amount for such line item set forth in the Operating Budget for the preceding
Fiscal Year shall be increased by the percentage increase in the Index during the preceding Fiscal Year. 

        Section 7.04    Monthly Operating Plan Updates.    The Operating Plan (including,
without limitation, the income statement, cash flow statement and projected development and construction costs) shall be updated on a monthly basis to reflect (i) the actual results of the
operations of Company from the beginning of the Fiscal Year through the last complete calendar month ending prior to the month in which such updated plan is provided; and (ii) variance reports
to show variances to the approved Operating Plan. If any material changes to the Operating Plan are required, then Manager shall deliver an updated Operating Plan to Management Committee within
forty-five (45) days after the Manager reasonably determines that such material changes are required. 

25

 

        Section 7.05    Operating and Capital Plans.    On or before December 1,
200    , and on or before December 1 for each Fiscal Year thereafter, Manager shall submit for informational purposes only, a proposed operating and
capital plan for the Fiscal Year following the ensuing Fiscal Year to the Management Committee. 

        Section 7.06    Miscellaneous Provisions.    Manager shall operate the Project in
accordance with the applicable Operating Plan and Operating Budget with such variances as may be permitted pursuant to Article VIII. Manager may from time to time recommend to Management
Committee proposed amendments to the then current Operating Plan or Operating Budget, and upon Management Committee's written approval thereof, Manager shall operate the Project in accordance with the
Operating Plan or Operating Budget as so amended. Any inconsistencies between the terms and conditions of this Agreement and the provisions of any Operating Plan shall be governed by the provisions of
the Operating Plan. Manager shall not be deemed to be in breach of its obligation to comply with the operating standards provided in this Agreement to the extent that the failure to comply with such
standards results from insufficient funds due to Management Committee's refusal to approve any element of an Operating Plan proposed by Manager, or insufficient funds being on deposit in the Company's
Account due to withdrawals by Company, provided, however, that the foregoing shall not be deemed to relieve Manager from liability for such
obligations if the need for such funds resulted from Manager's fraud, willful misconduct, dishonesty, bad faith, gross negligence, recklessness or breach of this Agreement. 

ARTICLE VIII  

 DISBURSEMENTS  

        Section 8.01    Payment of Operating Expenses.    Subject to the provisions of
Article IX below, Manager shall pay, prior to delinquency, during each month of the term hereof from funds on deposit in the Company's Account as provided in
Section 8.02 below, all Operating Expenses due and payable in accordance with the Operating Budget without further consent of Management Committee, and such further
sums as Management Committee may have directed in writing Manager to pay. In addition, Manager may pay the following Operating Expenses without obtaining Management Committee's consent whether or not
the amount thereof is in excess of the respective amounts set forth therefor in the Operating Budget: (1) all Non-Discretionary Expenses and
(2) Emergency expenditures in accordance with Section 11.04 below. 

        Section 8.02    Checks.    Manager shall designate two or more officers or
employees to sign checks, and all checks in the amount of Twenty-Five Thousand Dollars ($25,000.00) or more shall require two (2) signatures, for the payment of Operating Expenses
due and payable in accordance with the Operating Budget and such further sums as Management
Committee may have directed in writing Manager to pay, from the Company's Account. Except for the drawing of funds from the Company's Account as expressly authorized herein, Manager shall not have any
authority to withdraw funds from, or otherwise give instructions relating to, the Company's Account. Management Committee shall designate one or more representatives of Company as signatories on the
Company's Account which representatives shall have the right to sign checks, draw funds from and otherwise give instructions relating to the Company's Account. 

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ARTICLE IX  

 ADVANCES FOR OPERATING EXPENSES  

        Section 9.01    Notification.    Pursuant to
Section 12.01 below, Manager shall submit to Management Committee, on a monthly basis, an estimate of the Operating Expenses (including the fees payable to Manager
pursuant to Section 13.01 and Section 13.03 in the ensuing calendar month) and other items required to be paid by Manager hereunder which will become due
during the ensuing calendar month and the dates on which such amounts will be payable. In addition, if, during any month within the term of this Agreement, Manager determines that the balance in the
Company's Account is or will be insufficient to pay Operating Expenses and any other items required to be paid by Manager hereunder, Manager shall promptly notify Management Committee of that event
and of the amount of the deficiency, actual or anticipated. Such notice shall be accompanied by an explanation for any variance from the Operating Budget, and, unless any such variance is the result
of Company's withdrawal of funds from the Company's Account, then as promptly as practicable thereafter Manager shall deliver to Management Committee for Management Committee's reasonable approval a
revised Operating Budget for the remainder of the applicable Fiscal Year. 

        Section 9.02    Company's Advances.    Promptly after receipt of the Manager's
estimate under Section 9.01 above or upon written request by Manager, Company shall have the right but not the obligation to advance or cause to be advanced to the
Company's Account such funds as are necessary to pay Operating Expenses as they become due. Manager's obligation to pay the obligations of the Project and Company under this Agreement is conditioned
upon the availability of sufficient funds (from a Person other than Manager) to perform such obligation, and, Manager shall not be deemed in default of any provision of this Agreement for its failure
to pay or discharge any Operating Expenses or other Project expenses to the extent the balance of the Company's Account is insufficient to pay the same. 

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ARTICLE X  

 FIDELITY INSURANCE COVERAGE  

        Manager
and all officers and employees of Manager who may handle or are responsible for the handling of receipts or disbursements shall be covered by insurance maintained by Manager, at
its sole cost and expense, in an amount not less than Five Million Dollars ($5,000,000) for employee dishonesty coverage against any and all loss, theft, embezzlement or other fraudulent acts on the
part of Manager or Manager's employees, and not less than One Hundred Thousand Dollars ($100,000) for money and securities on and off the premises, transit and depositors forgery coverage,
indemnifying Company, as obligees, against any and all loss, theft, embezzlement or other fraudulent acts on the part of Manager or Manager's employees. 

ARTICLE XI  

 MAINTENANCE OF THE PROJECT  

        Section 11.01    Standard.    Manager shall cause the Project and all buildings,
improvements and systems comprising same to be maintained at a standard not less than the standard for the Comparable Project. In connection therewith, Manager shall use its professional and diligent
good faith efforts to contract in the name and at the expense of Company, for all services and utilities necessary for the efficient maintenance and operation of the Project, as contemplated by the
Operating Plan. Manager shall not enter into any contracts as agent of Company without the prior written consent of Management Committee unless (1) the payments required
to be made by Manager and/or Company under such contract, in the aggregate, are contemplated by the applicable Operating Plan, (2) such contract is for a term no longer
than one (1) year unless such contract may be terminated on no more than thirty (30) days' notice without charge or penalty, and (3) such contract is not
with a Related Person to Manager, in which event Manager shall be entitled to enter into such contract without Management Committee's consent. All work for the maintenance and repair of the Project
shall be performed by independent contractors or affiliates of Manager, or by Manager's or Project employees, except to the extent required by Manager's gross negligence, willful misconduct
or fraud. 

        Section 11.02    Supplies and Equipment.    Manager shall, at Company's expense,
purchase such supplies, equipment and services as are necessary for the maintenance and operation of the Project; provided, however, that
except as otherwise expressly permitted hereunder no disbursement for this purpose shall exceed the amount set forth in the Operating Budget (subject to variances permitted by Section 8.01
above) and no such disbursement shall be made unless the necessary funds are available to Manager from the Company's Account. 

28

 

        Section 11.03    Enforcement of Contracts.    In connection with the maintenance
and operation of the Project, Manager shall take all commercially reasonable steps, including legal action when authorized in writing by Management Committee, to enforce all maintenance, service and
supply contracts, guarantees, warranties, bonds and other third party contractual undertakings, if any. 

        Section 11.04    Emergencies.    In the event of an Emergency, Manager may make
such repairs to the Project and take such other actions as Manager may deem reasonably necessary irrespective of any cost limitations or other restrictions imposed by this Agreement,
provided, however, that Manager will use its diligent good faith efforts to notify Management Committee prior to making any such repair or
taking any such action and shall not take any such action if Management Committee has otherwise directed Manager in writing following receipt of such notification. Promptly, but not later than three
(3) Business Days, after an Emergency, or after knowledge of any conditions which require maintenance or repair work at a projected cost in excess of the annual amounts authorized in the
Operating Plan, Manager shall deliver a written notice thereof to Management Committee advising Management Committee of the nature of the Emergency, the estimated costs of any repairs or actions
required as a result of the Emergency (to the extent such costs are known by Manager), together with its recommendations with regard thereto. 

        Section 11.05    Management Duties.    Subject to the terms and conditions
provided herein, Manager shall use its good faith diligent and professional efforts to cause to be performed all duties of Company for management and operation of the Project
(the "Management Duties") as such duties are set forth in any Project Agreements and REA. Notwithstanding the
foregoing, Manager shall arrange for and supervise the performance of all material duties of Company as set forth in the Project Agreements and the REA (including any supplemental agreements) for the
operation, maintenance, service and repair of the Project, including, without limitation, the Common Areas. In addition, Manager shall be entitled to invoke Company's rights under the Project
Agreements with respect to the Management Duties. 

        Section 11.06    Promotional Activities.    Manager shall use its good faith
diligent and professional efforts to conduct or cause to be conducted an advertising and promotional program for the benefit of the Project to the extent provided in the Operating Plan, including, but
not limited to, preparing an annual promotional budget planning seasonal promotional campaigns and coordinating tenant participation in a regular ongoing advertising program. The cost of such
advertising and promotional service, including, without limitation, the actual cost for radio, newspaper, television, artwork, paper, stationery, etc. and office equipment, utilities and telephone
shall be the obligation of the Occupants and Company; provided, however, that Manager shall not exceed the amounts set forth in the approved
Operating Budget for such services unless specifically authorized in writing by Management Committee. 

29

 

        Section 11.07    Comply With Management Committee's Standards and
Instruction.    Manager agrees to abide by those reasonable standards and instructions which Management Committee may issue from time to time regarding
the operation of the Project. Notwithstanding the authority granted herein, Manager further agrees to abide by those reasonable standards and instructions which Company may issue from time to time
regarding the operation of the Project. 

ARTICLE XII  

 RECORDS AND REPORTS  

        Section 12.01    Monthly Reports.    Manager shall send to Company the following
at the expense of Company: 

                (a)   Manager
shall cause an unaudited monthly balance sheet and income statement to be transmitted electronically to Management Committee no later than 5:00 p.m.
(PST) on the tenth (10th) Business Day following the end of each such calendar month. 

                (b)   Within
thirty (30) days after the end of each month, in each case certified by Manager as being true and correct in all material respects and prepared in
accordance with GAAP and generally accepted industry standards: (i) a leasing activity report, and copies of completed Lease Document Requests approved by Manager during such month;
(ii) monthly financial statements (including, without limitation, an accrual based balance sheet and income statement); (iii) a statement of the cash flow for Company and an explanation
of any profit and loss variance to the Approved Plan in excess of One Hundred Thousand Dollars ($100,000); (iv) a progress report on any construction work being undertaken by Company during the
period of such construction work (to the extent not otherwise delivered to Company pursuant to the Development Agreement); (v) a report of all capital expenditures with an explanation of
each item that exceeds the Approved Plan by the greater of One Hundred Thousand Dollars ($100,000) or five percent (5%) of any individual line item; and (vi) a budget analysis including,
without limitation, the actual and expected total projected cost variances, by line item, to the Operating Budget most recently submitted to Management Committee; 

                (c)   Each
monthly report shall also include the following information: 

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	(i)
	(A)
a detailed general ledger, (B) a check register, (C) a cash receipts journal (by tenant), (D) the supporting calculations for the
management fee, development fee and leasing fees and other fees paid to Manager and/or its Affiliates, (E) a security deposit ledger, (F) a rent roll and other supplemental lease
information reasonably requested by Management Committee, (G) delinquencies/tenant receivable aging report, broken down by 30/60/90/90+ day categories and the amount of arrearages for each
tenant, (H) a job cost report, total costs incurred to date, estimated costs to complete the improvements, total anticipated costs and budget variances by line item, and (I) an account
analysis including the composition of the ending balance/subledger report for accounts receivable, fixed assets and other balance sheet asset and liability accounts including, without limitation,
prepaid accounts and accrued liabilities; and

	(ii)
	(A)
a comparison of the actual and planned occupancy for the Project, (B) an overview of the strategic plan for the Project including the leasing activity,
construction completion activity/timeline for completion, lease expiration and other information reasonably requested by Management Committee, (C) leasing information including a description of
the spaces that are leased and occupied and vacancies calculated by square footage and percentage, a description of any space re-leased during the month and a description of any
current leasing activity, (D) a summary of any material tenant claims or other concerns, (E) a list of any material litigation matters with a description of any material developments
with respect thereto, and (F) a summary of any other matters affecting the Company. 

        Section 12.02    Quarterly Reports.    

                (a)   Within
fifteen (15) days after the end of each calendar quarter, (i) balance sheet, statements of profit and loss and cash flow, and (ii) for the
quarter ending June 30 and December 30 of each Fiscal Year, a straight-line rent schedule complying with Financial Accounting Standard 13. 

                (b)   Manager
shall deliver to Management Committee a report, describing in reasonable detail, any litigation or material claims relating to Company and/or the Project, or
any tenant defaults or delinquencies (unless with respect to an Anchor Lease), within thirty (30) days after the end of each calendar quarter. 

31

 

        Section 12.03    Quarterly Forecasts.    Within thirty (30) days after the
end of each calendar quarter, a report showing the planned and forecasted revenues, expenses, net income and net cash flow of the Company, including any item which varies more than the greater of One
Hundred Thousand Dollars ($100,000) or five percent (5%) from the Operating Budget. 

        Section 12.04    Annual Reports.    Within forty-five (45) days
after the end of each Fiscal Year financial statements for Company audited by the Accounting Firm, prepared in accordance with GAAP, which shall contain a balance sheet as of the end of such Fiscal
Year, statements of profit and loss and cash flow, a statement of changes in the Capital Accounts and a statement of changes in financial position for such Fiscal Year. Drafts of such financial
statements shall be delivered to Management Committee within thirty (30) days after the end of each Fiscal Year. The timing of the annual audit for each Fiscal Year shall be such that the
Accounting Firm is in a position to render a conclusion as to the probable fairness of presentation of the financial statements of Company for such Fiscal Year by the forty-fifth (45th)
day following the close of such Fiscal Year. 

        Section 12.05    Financial Statements.    

                (a)   Manager
shall maintain or cause to be maintained accurate and complete financial accounts (including the appropriate ledgers and journals) and supporting documents
(including invoices and receipts) for the Project showing assets, liabilities, income, operations, transactions and the financial position of the Project to enable the financial statements referred to
in Section 12.04 above to be properly and efficiently prepared in accordance with generally accepted accounting principles, consistently applied (including, without
limitation, by maintaining proper computer programs and systems), and must keep "electronic" copies of such financial accounts and supporting documents at its principal office, or otherwise ensure
that such copies are readily available, for at least seven (7) years. Company acknowledges that (unless Company shall have contributed to the cost of acquiring or developing such software) the
computer software maintained by Manager for the purposes of this Section 12.05(a) belongs to Manager if the software is used by Manager or Affiliates in connection
with other shopping centers or assets. 

                (b)   Manager
shall use commercially reasonable efforts to timely deliver, in the manner set forth in the documents evidencing and securing any Loan, all financial statements
and reports relating to the Project and Company's ownership interest therein as are required to be delivered pursuant to the terms thereof. 

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        Section 12.06    Records.    

                (a)   Manager
shall maintain proper and sufficient management accounts and records for the Project to enable Manager to efficiently perform its obligations under this
Agreement and to enable Company (or any partner in Company) to promptly obtain any information concerning the Project reasonably required by Management Committee (or any partner in
Company), and Manager shall keep such management accounts and records at the Project or stored at another off-site location in the Southern California area reasonably approved by
Management Committee for at least seven (7) years. All records maintained by Manager pursuant to this Agreement shall be the property of Company and shall be delivered to Management Committee
upon the termination of this Agreement or, at Company's request, prior to disposal by Manager. Manager shall maintain files with the originals, or if the originals have been delivered to Company,
copies of all Leases and other material contracts and agreements relating to the Project. 

                (b)   Without
limiting Section 12.06(a) above, Manager shall keep or cause to be kept the following records with respect to
the Project: 

	(i)
	a
rent roll of Occupants containing all relevant information in relation to each such Occupant;

	(ii)
	a
record of all material contracts or other material agreements made with contractors or consultants containing details of the essential terms of such contracts or
arrangements;

	(iii)
	a
register of depreciable improvements and equipment showing the cost, date of purchase and current depreciated value of each item shown in the books of account kept
by Manager for Company;

	(iv)
	a
record of all insurance claims pending, current or contemplated in respect of any insured risk incurred as a consequence of the ownership, use, operation or
occupation of the Project made or managed by Manager as agent of Company showing the status of each claim (a loss run prepared by a third party insurance adjustor will satisfy this
requirement); 

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	(v)
	an
updated record of the total benefits and entitlements of all Project employees;

	(vi)
	a
register of all written claims received concerning the Project from all Persons including, without limitation, customers, visitors, authorities, and neighboring
residents and owners, and the responses made thereto, except those claims which, in Manager's reasonable opinion, do not require further action; and

	(vii)
	a
lease file for each Occupant, which will include copies of all written complaints covering the Project received from Occupants. 

        Section 12.07    Production of Records and Information.    Subject to all other
provisions of this Agreement, Manager shall: 

                (a)   if
requested by Management Committee (or any partner in Company) produce such financial accounts, books of account, records or information in relation to the
Project to any one or more of Company's (or any partner in Company's) appraisers, accountants, Lenders or other agents as Company (or any partner in Company) may reasonably require and
take or permit those Persons to take photocopies of the books of account and records or information at the expense of such Persons; 

                (b)   if
requested by Management Committee (or any partner in Company), no more than once per Fiscal Year, permit Company or any partner in Company or their agents to
carry out an independent audit (in addition to the annual audit required pursuant to Section 12.04 above) or inspection of Manager's books of accounts, records or information for the
Project or Company at Company's cost, unless the amount of Gross Income or total Operating Expenses for any Fiscal Year as determined by any such audit or inspection differs by more than two and
one-half percent (2.5%) from the amount of Gross Income or total Operating Expenses for such Fiscal Year recorded in Manager's books and records, in which case Manager shall be responsible
for the cost of such audit or inspection; provided, however, that the following accounting deviations ("Permitted Accounting Deviations") shall not be
taken into account in determining whether the amount of Gross Income or total Operating Expenses for any Fiscal Year as determined by such audit or inspection differs by more than two and
one-half percent (2.5%) from the amount of Gross Income or total Operating Expenses for such Fiscal Year recorded in Manager's books and records: 

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	(i)
	the
reclassification of an item otherwise reflected in Manager's books and records from an asset which has been expensed but is determined by outside independent
auditors to be required to be capitalized, or vice versa, provided that such reclassification is a direct result from input by outside independent
auditors;

	(ii)
	reasonable
timing delays relating to Manager's reasonable estimates of items not reasonably known at the time the books are closed, such as percentage rent, bad debt
reserves and write-offs, write-offs of tenant improvement allowances, lease commissions, etc., provided that such estimates provided in Manager's books and records are
otherwise reasonable and based upon the best information at the time that Manager's books and records are closed;

	(iii)
	finalization
and reconciliation of first year common area maintenance charges and tenant billings; provided, however, that such delays are not otherwise within
Manager's reasonable control and are otherwise reasonable under the circumstances, and estimates provided by Manager are otherwise reasonable and based upon the best information reasonably available
to Manager;

	(iv)
	delays
in obtaining final property tax assessments from the Los Angeles County Assessor's office; provided, however, that Manager shall make reasonable efforts to
estimate anticipated property taxes and such estimates will be based on the best information reasonably available to Manager. 

                (c)   from
time to time, as may be reasonably appropriate in order to give Management Committee time to make any necessary or appropriate decisions in response thereto,
provide information and recommendations to Management Committee as to: 

	(i)
	market
conditions and trends affecting the Project; 

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	(ii)
	changes
to Legal Requirements affecting the Project (including, without limitation, reassessments carried out by any responsible authority) to the extent known by
Manager or adopted by the majority of property owners or managers or both with respect to the management, operation and leasing of properties of a type and quality similar to the Project;

	(iii)
	any
improvements which may be made to the Project, this Agreement, the procedures employed by Manager for carrying out its obligations under this Agreement, the
Operating Budget, the capital budget or any other matter to improve the value, economical operation and efficiency or appearance of the Project;

	(iv)
	the
occupancy mix within the Project;

	(v)
	the
type of insurance maintained for the Project, the coverage level of insurance under any policy effected for the Project and alterations to the terms of any insurance
policy held by or as agent of Company for the Project; and

	(vi)
	any
other matters which may be reasonably requested by Management Committee from time to time, including, without limitation, any additional information or financial
reports and statements that Company may reasonably require to provide to its Lenders, bankers, partners, shareholders, joint venturers or any similar Person. 

        Section 12.08    Tax Returns.    Within one hundred twenty (120) days after
the end of each Taxable Year, Manager will provide the information relating to the Project necessary to complete the tax returns of Company for such Taxable Year and will cooperate with Company and
its attorneys, accountants and tax advisers with respect to the completion thereof in good faith. 

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   ARTICLE XIII  

 COSTS AND EXPENSES — COMPENSATION  

        Section 13.01 Management Fee.    Manager shall be entitled to a management fee
(the "Management Fee" ) for rendering the services herein required during the term of this Agreement equal to *** of
all revenues, less CAM, taxes, insurance, and marketing/promotional amounts paid to Company under all Leases ("Commissionable Revenue") at the Project
during each Fiscal Year (or the pro rata portion of such amounts for any partial Fiscal Year during the term of this Agreement). Subject to adjustment as hereinafter provided, such fee
shall be payable monthly by Company in arrears at the end of each month during the term of this Agreement based on the Commissionable Revenue for such month as shown in the most recent leasing status
report delivered to Management Committee. Manager is hereby authorized to pay to itself on account of the Management Fee each such monthly installment from the Company's Account. 

        The
Management Fee shall be adjusted on the following basis so that the aggregate Management Fee equals the amount set forth in this Section 13.01:
(1) monthly on an interim basis as soon as practicable after Manager has delivered to Company the financial statements specified in
Section 12.01 above for such month; (2) quarterly on an interim basis as soon as is practicable after the delivery to Management
Committee of the quarterly financial statements specified in Section 12.02 above; and (3) annually on a final basis as soon as is
practicable after the delivery to Management Committee of the annual financial statements specified in Section 12.04 above. Promptly after each such adjustment,
Company or Manager, as the case may be, shall pay to the other the amount of the applicable shortfall or overpayment of the Management Fee as determined by such adjustment. 

        In
the event that there are insufficient funds in the Company's Account to pay the Management Fee due for any month during the term of this Agreement, then if Company does not pay the
amount of such Management Fee within ten (10) Business Days after receipt of written notice of such insufficiency, such unpaid Management Fee shall bear interest at a rate equal to the lesser
of (1) the Prime Rate plus four percent (4%), compounded monthly, or (2) the highest rate allowable by law, for the period from the date such
Management Fee was due until the date that it is paid in full by Company to Manager. With respect to any partial Fiscal Year during the term of this Agreement, for the purpose of calculating the
Management Fee, the percentage rent shall be allocated to the portion of the year during which the Management Fee is payable by multiplying (a) the amount of percentage
rent received from the Project for the entire applicable Fiscal Year, by (b) a fraction, the numerator of which shall be the applicable Occupant's gross sales upon which
the percentage rent is calculated with respect to the portion of such Fiscal Year during which this Agreement was in effect, and the denominator of which shall be such gross sales of the applicable
Occupants with respect to such entire Fiscal Year. 

        Section 13.02 Expense Reimbursement.    In addition to the Management Fee specified in
Section 13.01 above, Manager shall be entitled to monthly reimbursement as an Operating Expense of the Project, for those costs and expenses directly relating to
the on-site management, accounting, operation and leasing of the Project incurred by it and specifically authorized for reimbursement under the terms of this Agreement, including the cost
of the on-site management office furniture, fixtures and equipment and office supplies, to the extent approved in the Operating Budget or by the Management Committee (which furniture,
fixtures and equipment shall remain the property of Company) except to the extent any of the foregoing are an expense of Common Area maintenance. 

37

 

        Section 13.03 Leasing Fee.    Manager shall be entitled to receive from Company a leasing
fee of *** per rentable square foot leased by the Occupant ("Leasing Fee"). The Leasing Fee shall be payable one-half
(1/2) upon execution of the Lease, and the remaining one-half (1/2) to be paid upon opening for business by the Occupant; provided, however, that in the event
that the Occupant fails to open for business following execution of the Lease, Manager shall refund the one half (1/2) portion of such Leasing Fee paid upon execution. In addition,
Manager shall be entitled to receive from the Company an additional Leasing Fee equal to *** per rentable square foot leased by the Occupant upon renewal of the term of its Lease. Finally,
Manger shall receive a mutually agreed upon market rate leasing fee for carts, which fee shall be agreed upon prior to the date of this Agreement. 

        Section 13.04 Promotional Activities.    Except to the extent contemplated by the Operating
Plan, neither Manager and any Related Person of Manager shall enter into any Promotional Activity applicable to or binding upon the Project or Company which activity would promote or include any
racetrack or gaming activity (other than for the Race Track Project) without Management Committee's prior written consent. Manager shall coordinate the Company's Promotional Activities with any
promotional activities undertaken by the Race Track Project. If Management Committee approves a Promotional Activity, such Promotional Activity is contemplated by the Operating Plan, or Manager is
otherwise permitted to enter into such Promotional Activity pursuant to the preceding sentence of this Section 13.04, Manager will credit Company any amounts earned by the Project with respect
to such Promotional Activity. If such Promotional Activity also relates to additional properties owned or managed by Manager or any of its Affiliates, Manager will credit Company its allocable share
of any amounts earned by the Project with respect to such Promotional Activity. All amounts earned by Company shall be included in the calculation of the Gross Income of the Company for the applicable
period. 

ARTICLE XIV  

 INSURANCE  

        Manager shall procure and maintain all insurance required pursuant to the applicable Operating Plan or any mortgage or deed of trust encumbering the Project, and
shall procure (or cause Occupants to procure) such insurance in such amount and from such companies as may be approved by Management Committee in the Operating Plan or otherwise authorized by
Management Committee in writing. Manager shall comply with all Insurance Requirements in the management and operation of the Project and shall use its diligent good faith efforts to cause all
Occupants to comply with any applicable Insurance Requirements. 

38

 
ARTICLE XV  

 ALTERATIONS  

        Manager shall make no changes or alterations in or additions to the Project or any part thereof of a material nature without the prior written consent of
Management Committee, except as otherwise expressly set forth in the Operating Plan. Except with respect to any expansion, redevelopment or refurbishment, or preliminary services relating thereto,
performed pursuant to a Development Agreement for the Project, Manager shall supervise the performance of all repairs, renovations and alterations performed at the Project, and shall monitor all
Occupant alterations of the Project as agent of Company in such a manner as may be reasonably required of Manager. Manager shall promptly report any liens on the Project to Management Committee. 

ARTICLE XVI  

 TERMINATION  

        Section 16.01 Term.    The term of this Agreement shall be for an initial term expiring on
one year after the execution date. Thereafter, until this Agreement is terminated in accordance with its terms, this Agreement shall be deemed renewed automatically each year for an additional one
year period unless terminated as set forth below. If this Agreement is terminated, then Company shall deliver to Manager prior written notice of the determination not to renew this Agreement based on
the terms set forth in this Section 16.01 not less than thirty (30) days prior to the expiration of the then existing term. If this Agreement is not renewed,
Company shall designate the date, not less than forty-five (45) nor more than one hundred eighty (180) days from the date of the notice, on which the Manager shall turn over
management of the Project to Company and this Agreement shall terminate as of such date. 

        Section 16.02 Non-Curable Terminating Events.    Notwithstanding anything
contained in Section 16.01 above, Company may terminate this Agreement immediately upon written notice to Manager upon the occurrence of any of the following
events: 

                (a)   the
Bankruptcy of Manager; 

39

 

                (b)   Company
sells, exchanges, assigns or transfers all of its interest in the Project (other than to an Affiliate), whether directly or indirectly; 

                (c)   Santa
Anita Associates Holding Co. (or its Affiliate), sells, exchanges, assigns or transfers any of its interest in Company if such transfer is not
permitted pursuant to the LLC Agreement; 

                (d)   the
appointment of a receiver or the foreclosure by any mortgagee upon the Project or the taking of possession thereof by deed-in-lieu of
foreclosure, except as otherwise agreed in writing by Manager and such Mortgagee; 

                (e)   a
good faith determination of the Company that there has occurred an act of fraud, willful misconduct, gross negligence, habitual neglect or conviction of a crime
involving moral turpitude by Manager under this Agreement, or the Development Agreement; 

                (f)    Any
misappropriation of funds by Manager provided that if such misappropriation of funds is committed by an employee of Manager, then such event may be cured if, within
five (5) Business Days after being notified in writing of such event, Manager (i) makes full restitution to Company of all damages caused by such event, (ii) terminates the
employment of such employee, and (iii) promptly takes all appropriate actions necessary to remediate the situation and protect the interests of Company; 

                (g)   if
Manager ceases to be owned and controlled by Rick J. Caruso or his heirs, his immediate family, or his Affiliates; 

                (h)   the
Project or a substantial part of the Project is damaged or destroyed where the Company has determined not to rebuild or reconstruct,
provided, however, that in such event Manager will continue to operate the Project for a reasonable period of time until Company winds down
the operation of the Project and for a reasonable fee to be agreed upon between Company and Manager, and provided further that (i) this
Agreement shall be automatically reinstated if, within eighteen (18) months after the date of such damage or destruction, Company determines to rebuild the Project or develop a new shopping
center as a replacement for the Project, and (ii) in the case of the destruction of only a substantial part of the Project, if Company elects to continue the operation of
the remaining portion of the Project, this Agreement shall remain in effect with respect to the portion of the Project to be operated; 

40

 

                (i)    Company
terminates any Development Agreement due to (i) a default by Manager thereunder or (ii) the mutual agreement of Manager and Company; and 

                (j)    Santa
Anita Associates Holding Co., LLC, is removed as Managing Member under the LLC Agreement. 

                (k)   An
independent audit or inspection of Manager's books of account pursuant to Section 12.07(b) above reveals a difference by more
than five percent (5%) from the amount of Gross Income or total Operating Expenses from the amount of Gross Income or total Operating Expenses recorded in Manager's books and records, excluding
Permitted Accounting Deviations (as defined in Section 12.07(b) above). 

 Section 16.03 Curable Defaults.  

                (a)   Either
Company or Manager may terminate this Agreement by written notice to the other party in the event that the other party shall default
(the "Defaulting Party") in the performance or observance of any material term, condition or covenant contained in
this Agreement in respect of the Project not falling under Section 16.02 above or shall fail to perform or observe the same in accordance with the required standard
under this Agreement and such default shall continue for a period of thirty (30) days after written notice thereof shall have been received by the non-defaulting party
(the "Non-Defaulting Party") specifying such default and requesting that the same be remedied in such
thirty-day period, provided that a ten (10) day period shall apply with respect to any failure to make a monetary payment hereunder
(a "Default Notice"). 

                (b)   The
Defaulting Party shall be deemed to have complied with a Default Notice given under this Section 16.03 if the default (other
than a monetary default) is such that it cannot reasonably be remedied within thirty (30) days but can reasonably be remedied within one hundred twenty (120) days and the Defaulting
Party shall, in good faith, have commenced to remedy the default specified therein as soon as is practicable after receiving such Default Notice, and, thereafter shall have diligently prosecuted the
cure to its completion within such one hundred twenty (120) day period. If at the end of such one hundred twenty (120) day period, the default (other than a monetary default) can
reasonably be remedied within an additional and reasonably foreseeable period of time, and if the Defaulting Party shall continue to diligently prosecute the cure to its completion, then the
Defaulting Party shall have such additional reasonably foreseeable period of time to cure the default; provided, however, that the Defaulting Party shall have the right to initiate binding arbitration
proceedings pursuant to Section 18.20 for the purpose of determining whether the Defaulting Party has promptly commenced and diligently pursued the cure to
its completion, or if such cure is reasonably capable of being completed within a reasonably foreseeable period of time. Termination of this Agreement shall be effective upon the later of
(i) delivery of a Default Notice, or (ii) expiration of the cure period provided in this Section 16.03(b). 

41

 

        Section 16.04 Manager's Rights and Obligations on Termination.    Upon the termination of
this Agreement, all rights and obligations of the parties hereunder shall expire, other than those rights and obligations which expressly survive the termination of this Agreement; provided, however,
that termination of this Agreement shall not release the Defaulting Party from liability for failure to perform any of the duties and obligations required to be performed by it prior to the date of
such termination. Upon termination of this Agreement Manager shall: 

                (a)   promptly
surrender and deliver to Company any space in the Project occupied by Manager and pay to Company or as Company shall direct all Gross Income and other monies
related to the Project on hand and all moneys due to Company under this Agreement including any moneys received after termination; 

                (b)   promptly
deliver to Company originals in the possession of or reasonably available to Manager, its Affiliates, agents or employees or, if such originals are not in the
possession or reasonably available to Manager, copies of all contracts, documents, reports, market studies, files, funds, surveys, insurance policies, papers, Leases, keys, records and other property
pertaining to this Agreement or to the Project in the possession of or reasonably available to Manager, its Affiliates, agents or employees; 

                (c)   furnish
all such information and take all such action as Company may reasonably require in order to effect an orderly and systematic termination of Manager's duties and
activities hereunder and the appointment of a substitute manager; 

                (d)   if
requested by Company, promptly give written notice to the Occupants, in a form reasonably satisfactory to Company, that Manager no longer manages or is otherwise
associated with the Project; 

42

 

                (e)   immediately
assign and transfer all accounts maintained by Manager under this Agreement for Company and assign all assignable contracts with respect to the Project to a
person designated by Company or as otherwise directed by Company and such person shall assume all of Manager's obligations under such contracts; and 

                (f)    be
paid all Management Fees, expense reimbursements as provided in Section 13.02 and Leasing Fees earned under the provisions of this Agreement prior to
such termination. Manager shall not be obligated to refund any Management Fees earned and received from any month prior to the month in which this Agreement is terminated,
provided, however, that Manager shall refund to Company any overpayments of the Management Fee previously paid to Manager. 

ARTICLE XVII  

 DELIVERY OF DOCUMENTS AND NOTICES  

        In order to be deemed effective, all documents to be delivered and all notices, approvals, authorizations and/or consents to be given or obtained by any party to
this Agreement shall be in writing and shall be given by personal delivery, or sent by express mail or nationally recognized overnight courier, or by registered or certified mail, postage prepaid,
return receipt requested, or by facsimile (with confirmed receipt) addressed as follows: 

	 	 	To Manager:	 	Caruso Management, Co., Ltd.

101 The Grove Drive

Los Angeles, California 90036

Attention: Rick J. Caruso, Richard A. Moses and Daniel J. Burgner

Facsimile: 323-900-8101
	
 	
 	

 	
 	

 
	 	 	With a Copy to:	 	Donfeld, Kelley & Rollman

11845 West Olympic Blvd., Suite 1245

Los Angeles, CA 90064

Attention: Jeffrey E. Donfeld, Esq.

Fax: 310-312-8014

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	 	 	To Company and/or Management Committee:	 	Santa Anita Commercial Enterprise, Inc.

c/o Magna Entertainment Corp.

337 Magna Drive

Aurora, Ontario 74G 7K1

Attention: Chief Executive Officer, Chief Financial Officer and Corporate Secretary

Fax: 905-726-7172
	
 	
 	

 	
 	

 
	 	 	With a Copy to:	 	Allen Matkins Leck Gamble & Mallory LLP

12348 High Bluff Drive, Suite 100

San Diego, California 92130

Attention: Michael C. Pruter, Esq.

Fax: 858-481-5028

        The
above addresses may be changed for future communications or delivery of notice hereunder by giving notice of such change to the others listed above in the manner prescribed by this
Article XVII. All notices shall be deemed effective when received by all applicable parties at the addresses set forth above either by delivery or facsimile
transmission (as such addresses may be changed by the parties in accordance herewith). Notwithstanding the foregoing, no notice shall be deemed ineffective because of any party's refusal to
accept delivery at the address specified for the giving of such notice in accordance herewith. 

ARTICLE XVIII  

 MISCELLANEOUS PROVISIONS  

        Section 18.01 Law to Apply.    This Agreement is made in and shall
be governed by and construed in accordance with the laws of the State of California. 

        Section 18.02 Incorporation by Reference.    The Recitals as attached hereto, is hereby
expressly incorporated herein to the same extent and with the same effect as if fully set out herein. 

        Section 18.03 Section Headings and References.    Headings at the beginning of Articles and
Sections of this Agreement are solely for the convenience of the parties and are not a part of this Agreement. All references herein to specific Articles or Sections are references to the applicable
Articles or Sections of this Agreement, unless otherwise indicated. 

        Section 18.04 Terms.    When required by the context, whenever the singular number is used
in this Agreement, the same shall include the plural, and the plural shall include the singular, and the masculine gender shall include the feminine and neuter genders. 

44

 

        Section 18.05 Waiver.    Any waiver, express or implied, by a party hereto, of any breach of
this Agreement by another party or parties, shall not be considered a waiver of any subsequent breach. 

        Section 18.06 Severability.    The invalidity or unenforceability of any portion of this
Agreement shall not render the remainder hereof invalid or unenforceable. 

        Section 18.07 Counterparts.    This Agreement may be executed in any number of counterparts,
each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, with the same effect as if all
parties hereto had all signed the same signature page. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures
thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one more additional signature pages. 

        Section 18.08 Time.    Time is of the essence of this Agreement and each of
its provisions. 

        Section 18.09 Incorporation of Prior Agreements.    This Agreement contains all of the
agreements of the parties hereto with respect to the matters contained herein, and no prior agreement or understanding pertaining to any such matter shall be effective for any purpose. No provision of
this Agreement may be amended or added to except by an agreement in writing signed by the parties hereto. 

        Section 18.10 Further Assurances.    Each party hereto hereby agrees to execute and deliver
any and all instruments, agreements and other documents reasonably necessary to effect the acts contemplated hereby, to the extent required by this Agreement. 

        Section 18.11 Attorneys' Fees.    If any party commences an action against another to
enforce any of the terms hereof or because of the breach by any party of any of the terms hereof, then the successful party after final judgment shall be entitled to receive from the other party its
reasonable attorneys' fees and other costs and expenses incurred in connection with the prosecution or defense of such action. 

        Section 18.12 Personal Agreement.    This Agreement shall be binding on the parties hereto.
No assignment by Manager shall be effective for any purpose without the written consent and approval of Management Committee. Any attempted assignment or sub-contract in violation of the
provisions of this Section 18.12 shall be void ab initio.

45

 

        Section 18.13 No Partnership.    Nothing contained in this Agreement shall constitute
Company and Manager as partners with one another. Subject to the terms and provisions of this Agreement, each of the parties shall have the right to engage in other businesses and business
transactions and the other party shall have no right or interest therein. 

        Section 18.14 Amendments.    No amendment to this Agreement shall be effective unless signed
by at least one constituent member of each of the owners of the Company and the Manager. 

 Section 18.15 Indemnities.  

                (a)   Manager
hereby agrees to indemnify, defend and protect Company and each of Company's constituent members and their respective officers, directors, shareholders and
partners (such persons collectively called the "Indemnified Parties" for the purposes of this
Section 18.15(a)), and hold each of the Indemnified Parties harmless against all losses, damages, costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses incurred in good faith and court costs) incurred by the Indemnified Parties by reason of any claim or demand being made upon or any action taken against any of the
Indemnified Parties arising from Manager's gross negligence, willful misconduct or fraud with respect to its duties and obligations under this Agreement. The Indemnified Parties shall, in good faith,
endeavor to notify Manager in writing as to every such claim, demand or action against (or any loss, damage, cost, expense or liability suffered by) the Indemnified Parties within ten
(10) Business Days after the Indemnified Parties become aware that such claim or demand has been made or such action has been taken (or such loss, damage, cost, expense or liability has
been suffered). A failure to notify Manager shall not limit Manager's liability under this Section 18.15(a) to the extent that such failure to notify does
not adversely affect Manager's rights with respect to such claim. 

                (b)   Company
hereby agrees to indemnify, defend and protect Manager and each of Manager's constituent partners and their respective officers, directors, shareholders and
partners (each such person collectively called the "Indemnified Parties" for the purposes of this Section 18.15(b)),
and hold each of the Indemnified Parties harmless against all losses, damages, costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses incurred in good faith and
court costs) incurred by the Indemnified Parties by reason of any claim or demand being made upon or any action taken against any of the Indemnified Parties arising from
(i) any gross negligence, willful misconduct or fraud of Company, except to the extent Manager or its Affiliate is responsible for such gross negligence, willful
misconduct or fraud, or (ii) any act taken or omission made by Manager in the performance of its obligations under this Agreement, which act or omission was not the result
of Manager's gross negligence, willful misconduct, fraud or breach of this Agreement. The Indemnified Parties shall, in good faith, endeavor to notify Management Committee in writing as to every such
claim, demand or action against the indemnified parties within ten (10) Business Days after the Indemnified Parties become aware that such claim or demand has been made or such action has been
taken. A failure to notify Management Committee shall not limit Company's liability under this Section 18.15(b) to the extent that such failure to notify
does not adversely affect Company's rights with respect to such claim. 

46

 

                (c)   No
person engaged as an independent contractor by Company or Manager shall be considered an employee, servant, agent or other Person that Company or Manager
(as the case may be) shall be obligated to indemnify for the purposes of this Section 18.15. Manager shall cause Company to be listed as an indemnified party
in any indemnity contained in an agreement with an independent contractor. The indemnity contained in this Section 18.15 made by Company and Manager shall survive
the termination of this Agreement for a period of two (2) years. 

        Section 18.16 Object of Agreement.    The object of this Agreement is the provision of
services by Manager to Company, and no tangible property will be conveyed other than tangible property incidental to the provision of such services. 

 Section 18.17 Company's Lenders and/or Purchasers.  

                (a)   Manager
shall, at the request of Company, enter into agreements with a Lender, pursuant to which agreements Manager (i) recognizes
the collateral rights, if any, of such Lender with respect to this Agreement, and (ii) acknowledges that if any such Lender forecloses upon Company's interest in
this Agreement, then such Lender or its assignee shall not be liable for any act or omission of Company under this Agreement prior to the date of such foreclosure or assignment. 

                (b)   Manager
shall, at Company's request, cooperate with and provide information to any Lender or to any potential purchaser(s) of the Project regarding actual facts and
matters within the knowledge of Manager's personnel engaged in the management of the Project. 

47

 

        Section 18.18 Confidentiality.    Manager agrees to hold in confidence and not to use or
disclose to others any confidential or proprietary information of Company heretofore or hereafter disclosed to Manager, but only to the extent that such information is marked or otherwise expressly
designated as "Confidential" by Company ("Company Confidential Information"), except where required by judicial or
administrative order, or where Company specifically gives Manager written authorization to disclose any of the foregoing to others or such disclosure hereunder. If Manager is required by a judicial or
administrative order to disclose any Company Confidential Information, Manager will promptly notify Company thereof, consult with Company on the advisability of taking steps to resist or narrow such
request and cooperate with Company in any attempt it may make to obtain an order or other assurance that confidential treatment will be accorded to the Company Confidential Information disclosed. 

        Section 18.19 Company's Consents and Approvals.    Whenever Company's consent or approval is
required pursuant to this Agreement, such consent or approval may be granted or withheld in Company's sole and absolute discretion. With respect to any matter which is a Major Decision (as such
term is defined in the LLC Agreement) or which otherwise requires the consent of the Management Committee under the LLC Agreement, Company's consent or approval shall only be deemed
given if Company affirmatively grants such consent or approval in writing (whether or not the applicable provisions of the Agreement requires that such consent or approval be obtained in writing).
With respect to any matter which is a Major Decision or which otherwise requires the consent of Management Committee, to the extent that Company's consent or approval is not affirmatively confirmed in
writing with any applicable time frame provided in this Agreement, Company shall be deemed to have withheld its consent and disapproved the applicable matter. 

        Section 18.20 Arbitration.    Any controversy or claim arising out of or relating to this
Agreement including whether the Company has the right to terminate this Agreement pursuant to the provisions of Sections 16.02 and 16.03 above, or the claimed breach or interpretation
thereof, shall except as provided in Section 18.21 be resolved by binding arbitration, subject to the following additional provisions: 

                (a)   The
Party seeking arbitration ("Demanding Party") shall deliver a written notice of demand to resolve dispute
(the "Demand") to the other Party ("Non-Demanding Party"). The demand shall include a
brief statement of the Demanding Party's claim or controversy, the amount thereof, and the name of the proposed arbitrator to decide the dispute, which proposed arbitrator shall be a retired judge, or
attorney with ten (10) years or more of experience in commercial real estate matters ("Arbitrator(s)"). Within ten (10) days after receipt
of the demand, the Non-Demanding Party against whom a demand is made shall deliver a written response to the Demanding Party. Such response shall include a short and plain statement of the
Non-Demanding Party's defenses to the claim and shall also state the name of the arbitrator chosen by the Demanding Party. Thereafter, the two (2) arbitrators shall select a third
independent arbitrator. An arbitrator shall not be employed by any Party or its Affiliate, directly, indirectly or as an agent, except in connection with the arbitration proceeding. Any person
appointed as an arbitrator shall be knowledgeable and experienced in the matters sought to be arbitrated. As examples, if the arbitrable dispute deals with construction issues, the arbitrator so
appointed shall be experienced and knowledgeable as to construction practice of shopping centers. 

48

 

                (b)   The
locale of the arbitration shall be in Los Angeles County, California, unless otherwise mutually agreed upon between the parties. 

                (c)   If
the Non-Demanding Party selects a proposed arbitrator different than the arbitrator selected by the Demanding Party, and such selection is indicated by
the Non-Demanding Party in its written response to the Demanding Party made within ten (10) days after receipt of the demand, then the parties shall, for ten (10) days after
the Demanding Party's receipt of the Non-Demanding Party's written response to the demand, attempt to agree upon an arbitrator. If the parties cannot agree upon an arbitrator within said
ten (10) day period, then a single neutral arbitrator shall be appointed by the then Presiding Judge of the California Superior Court located in Los Angeles County, acting in his individual and
nonofficial capacity on the application of the Demanding Party. 

                (d)   The
arbitrator's powers shall be limited as follows: the arbitrator shall follow the substantive laws of the State of California, and the Rules of Evidence of
California, and his/her decision shall be subject to review thereon as would the decision of the Presiding Judge of the California Superior Court located in Los Angeles County sitting without
a jury. 

                (e)   The
costs of the resolution (including all reporter costs) shall be split between the Parties prorata in accordance with their Distribution Percentages, provided,
however, that such costs, along with all other costs and expenses, including attorneys' fees, shall be subject to award, in full or in part, by the arbitrator, in his/her discretion, to the prevailing
party. Unless the arbitrator so awards attorneys' fees, each Party shall be responsible for its own attorneys' fees. 

49

 

                (f)    To
the extent possible, the arbitration hearings shall be conducted on consecutive days, excluding Saturdays, Sundays and holidays, until the completion of
the hearings. 

                (g)   In
connection with any arbitration proceedings commenced hereunder, either Party shall have the right to join any third parties in such proceedings in order to resolve
any other disputes, the facts of which are related to the matters submitted for arbitration hereunder. 

                (h)   The
arbitrator shall render her/his decision(s) concerning the substantive issue(s) in dispute in writing. The written decision shall be sent to the parties no later
than thirty (30) days following the last hearing date. 

                (i)    All
hearings shall be concluded within ninety (90) days from the day the arbitrator is selected or appointed, unless the arbitrator determines that this deadline
is impractical. 

                (j)    If
any of the provisions relating to arbitration are not adhered to or complied with either party may petition the Presiding Judge of the California Superior Court
located in Los Angeles County, for appropriate relief. 

                (k)   The
award of the arbitrator may be entered as a judgment in a court of competent jurisdiction. All arbitration conducted under this Section 18.20 shall be in
accordance with the rules of the American Arbitration Association to the extent such rules do not conflict with the procedures herein set forth. To the extent permitted by law, compliance with this
Section 18.20 is a condition precedent to the commencement by any Party of a judicial proceeding arising out of any dispute relating directly or indirectly to
this Agreement. 

        Section 18.21 Disputes Arising Under Section 16.02(e).    Within
forty-five (45) days following the date of termination of this Agreement with respect to any matter described in Section 16.02(e), Manager shall have the right to contest
such termination by filing suit, and if Manager fails to timely file suit within such forty-five (45) day period, Manager shall have no further right to contest such termination. 

50

 

        Section 18.22 Venue.    With respect to any litigation that may arise under
Section 18.21, Owner and Manager agree that any litigation, claim or lawsuit directly or indirectly arising out of or related to this Agreement shall be instituted exclusively in the
courts, whether federal or state, located in the County of Los Angeles, State of California, and nowhere else. Owner and Manager further agree that, notwithstanding the foregoing, any such litigation,
claim or lawsuit as to which there is federal jurisdiction, by reason of diversity, federal question or otherwise, shall be instituted exclusively in a federal district court located in the Central
District of California. 

Remainder of this page left intentionally blank.

51

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 

	 	COMPANY:
	
 	

 	

 	

 
	 	SANTA ANITA ASSOCIATES, LLC,
	 	a Delaware limited liability company
	
 	

 	

 	

 
	 	By:	Santa Anita Associates Holding Co., LLC,
	 	 	a California limited liability company, Its Member,
	
 	

 	

 	

 
	 	 	By:	

	 	 	Name:	

	 	 	Title:	

	
 	

 	

 	

 
	 	By:	Santa Anita Commercial Enterprise, Inc.,
	 	 	a Delaware corporation, Its Member
	
 	

 	

 	

 
	 	 	By:	

	 	 	Name:	

	 	 	Title:	

	
 	

 	

 	

 
	 	MANAGER:
	
 	

 	

 	

 
	 	CARUSO MANAGEMENT COMPANY, LTD.,
	 	a California limited partnership
	
 	

By:	

Caruso Property Management, Inc.,
	 	 	a California corporation, its general partner
	
 	

 	

 	

 
	 	 	By:	

	 	 	 	Rick J. Caruso, President

52

   TABLE OF CONTENTS  

	 
	 	 
	 	PAGE

	
 ARTICLE I	
 	

CERTAIN DEFINITIONS	
 	

1
	
 ARTICLE II	
 	

APPOINTMENT	
 	

11
	
 ARTICLE III	
 	

MANAGER'S DUTIES	
 	

11
	 	Section 3.01	 	Operating Standard; Duties	 	11
	 	Section 3.02	 	Independent Contractor; Employees	 	14
	 	Section 3.03	 	Compliance with Requirements	 	14
	 	Section 3.04	 	Implementation of Operating Plan	 	15
	 	Section 3.05	 	Property Manager	 	16
	 	Section 3.06	 	No Default	 	16
	 	Section 3.07	 	Powers, Duties and Obligations	 	16
	 	Section 3.08	 	Instructions to Manager	 	18
	
 ARTICLE IV	
 	

LEASING THE PROJECT	
 	

19
	 	Section 4.01	 	Leasing Obligations	 	19
	 	Section 4.02	 	Brokers	 	20
	 	Section 4.03	 	Temporary Leases	 	20
	 	Section 4.04	 	Leases	 	20
	 	Section 4.05	 	Leasing Fee	 	20
	 	Section 4.06	 	Occupant Improvements	 	20
	
 ARTICLE V	
 	

TENANT RELATIONS	
 	

20
	 	Section 5.01	 	Tenant Relations	 	20
	 	Section 5.02	 	Procedures	 	21
	 	Section 5.03	 	Enforcement of Leases	 	21
	 	Section 5.04	 	Performance of Company's Obligations	 	21
	
 ARTICLE VI	
 	

RECEIPTS	
 	

21
	 	Section 6.01	 	Company's Account	 	21
	 	Section 6.02	 	Cash Receipts	 	22
	 	Section 6.03	 	Security Deposit Account	 	22
	
 ARTICLE VII	
 	

OPERATING PLAN	
 	

22
	 	Section 7.01	 	Initial Plan	 	22
	 	Section 7.02	 	Submission of Operating Plans	 	23
	 	Section 7.03	 	Management Committee's Approval	 	24
	 	Section 7.04	 	Monthly Plan Updates	 	25
	 	Section 7.05	 	Operating and Capital Plans	 	26
	 	Section 7.06	 	Miscellaneous Provisions	 	26
	
 ARTICLE VIII	
 	

DISBURSEMENTS	
 	

26
	 	Section 8.01	 	Payment of Operating Expenses	 	26
	 	Section 8.02	 	Checks	 	26

i

 

	ARTICLE IX	 	ADVANCES FOR OPERATING EXPENSES	 	27
	 	Section 9.01	 	Notification	 	27
	 	Section 9.02	 	Company's Advances	 	27
	
 ARTICLE X	
 	

FIDELITY INSURANCE COVERAGE	
 	

28
	
 ARTICLE XI	
 	

MAINTENANCE OF THE PROJECT	
 	

28
	 	Section 11.01	 	Standard	 	28
	 	Section 11.02	 	Supplies and Equipment	 	28
	 	Section 11.03	 	Enforcement of Contracts	 	29
	 	Section 11.04	 	Emergencies	 	29
	 	Section 11.05	 	Management Duties	 	29
	 	Section 11.06	 	Promotional Activities	 	29
	 	Section 11.07	 	Comply With Management Committee's Standards and Instruction	 	30
	
 ARTICLE XII	
 	

RECORDS AND REPORTS	
 	

30
	 	Section 12.01	 	Monthly Reports	 	30
	 	Section 12.02	 	Quarterly Reports	 	31
	 	Section 12.03	 	Quarterly Forecasts	 	32
	 	Section 12.04	 	Annual Reports	 	32
	 	Section 12.05	 	Financial Statements	 	32
	 	Section 12.06	 	Records	 	33
	 	Section 12.07	 	Production of Records and Information	 	34
	 	Section 12.08	 	Tax Returns	 	36
	
 ARTICLE XIII	
 	

COSTS AND EXPENSES — COMPENSATION	
 	

37
	 	Section 13.01	 	Management Fee	 	37
	 	Section 13.02	 	Expense Reimbursement	 	37
	 	Section 13.03	 	Leasing Fee	 	38
	 	Section 13.04	 	Promotional Activities	 	38
	
 ARTICLE XIV	
 	

INSURANCE	
 	

38
	
 ARTICLE XV	
 	

ALTERATIONS	
 	

39
	
 ARTICLE XVI	
 	

TERMINATION	
 	

39
	 	Section 16.01	 	Term	 	39
	 	Section 16.02	 	Non-Curable Terminating Events	 	39
	 	Section 16.03	 	Curable Defaults	 	41
	 	Section 16.04	 	Manager's Rights and Obligations on Termination	 	42
	
 ARTICLE XVII	
 	

DELIVERY OF DOCUMENTS AND NOTICES	
 	

43
	
	
 	

 	
 	

 

ii

 

	 
	 	 
	 	PAGE

	
 ARTICLE XVIII	
 	

MISCELLANEOUS PROVISIONS	
 	

44
	 	Section 18.01	 	Law to Apply	 	44
	 	Section 18.02	 	Incorporation by Reference	 	44
	 	Section 18.03	 	Section Headings and References	 	44
	 	Section 18.04	 	Terms	 	44
	 	Section 18.05	 	Waiver	 	45
	 	Section 18.06	 	Severability	 	45
	 	Section 18.07	 	Counterparts	 	45
	 	Section 18.08	 	Time	 	45
	 	Section 18.09	 	Incorporation of Prior Agreements	 	45
	 	Section 18.10	 	Further Assurances	 	45
	 	Section 18.11	 	Attorneys' Fees	 	45
	 	Section 18.12	 	Personal Agreement	 	45
	 	Section 18.13	 	No Partnership	 	46
	 	Section 18.14	 	Amendments	 	46
	 	Section 18.15	 	Indemnities	 	46
	 	Section 18.16	 	Object of Agreement	 	47
	 	Section 18.17	 	Company's Lenders and/or Purchasers	 	47
	 	Section 18.18	 	Confidentiality	 	48
	 	Section 18.19	 	Company's Consents and Approvals	 	48
	 	Section 18.20	 	Arbitration	 	48
	 	Section 18.21	 	Disputes Arising Under Section 16.02(e)	 	50
	 	Section 18.22	 	Venue	 	51
	
 EXHIBITS:	
 	

 	
 	

 
	 	 Exhibit "A" — Document Request and Lease Summary
	 	 Exhibit "B" — Horse Safety Requirements
	 	 Exhibit "C" — Project Description

iii

 
INDEX  

	 
	 	Page(s)

	Accounting Firm	 	1
	Affiliate	 	1
	Agreement	 	1
	Annual Operating Plan	 	24
	Arbitrator(s)	 	48
	Bankruptcy	 	2
	Business Day	 	2
	Capital Account	 	2
	Caruso Member	 	3
	Cash Receipts	 	22
	Commissionable Revenue	 	37
	Common Areas	 	3
	Company	 	3
	Company Confidential Information	 	48
	Company's Account	 	3
	Comparable Project	 	11
	Control	 	3
	Default Notice	 	41
	Defaulting Party	 	41
	Demand	 	48
	Demanding Party	 	48
	Developer	 	3
	Development Agreement	 	3
	Discretionary Expenses	 	4
	Document Request	 	4
	Emergency	 	4
	Fiscal Year	 	4
	GAAP	 	23
	Gross Income	 	4
	Ground Lease	 	4
	Horse Safety Requirement	 	4
	Indemnified Parties	 	46
	Index	 	5
	Insurance Requirements	 	5
	Lease	 	5
	Leasing Fee	 	38
	Leasing Plan	 	23
	Legal Requirements	 	5
	Lender	 	5
	LLC Agreement	 	5
	Loan	 	6
	Management Committee	 	6
	Management Duties	 	6, 29
	Management Fee	 	6, 37
	Manager	 	1

iv

 

	 
	 	 
	 	PAGE

	
 Managing Member	
 	

 	
 	

6
	Marketing Fund	 	 	 	6
	 Non-Defaulting Party	 	 	 	41
	 Non-Demanding Party	 	 	 	48
	 Non-Discretionary Expenses	 	 	 	6
	Occupants	 	 	 	6
	Operating Budget	 	 	 	23
	Operating Expenses	 	 	 	6
	Permitted Accounting Deviations	 	 	 	34
	Person	 	 	 	9
	Prime Rate	 	 	 	9
	Project	 	 	 	9
	Project Agreements	 	 	 	9
	Promotional Activity	 	 	 	9
	Property Manager	 	 	 	16
	Race Track Project	 	 	 	10
	REA	 	 	 	9
	Related Person	 	 	 	10
	Santa Anita Member	 	 	 	10
	Santa Anita Park	 	 	 	10
	Santa Anita Project	 	 	 	1
	Security Deposit Account	 	 	 	22
	Standard Form of Lease	 	 	 	10
	Subject Person	 	 	 	1
	Taxable Year	 	 	 	10
	Temporary Lease	 	 	 	10

v

EXHIBIT "H"  

 Lease Summary  

Tenant:
                                 

	 

Guarantor/Indemnifier

Premises

Date of Lease/Amendments

Term

Expiry

Gross Leasable Area

Base Rent

Additional Rent

Percentage Rent

Free Rent Period

Tenant's Leasehold Allowance

Renewal Options

Landlord's Right to Terminate

Tenant's Right to Terminate

Go Dark Provision

Operating Covenant

Co-Tenancy Requirement

Exclusive Use Provision

Tenant's Right of Rent Abatement

Security Deposit-Advance Rent

Assignment Rights of tenant

Other Comments 

	 

Date Completed:
                                         
        

By:
                                         
                        

   EXHIBIT "I"

INSURANCE REQUIREMENTS  

        Caruso shall procure and maintain in effect during the Term of this Agreement the insurance coverages described in this Exhibit "I", which insurance shall
be placed with insurance companies reasonably approved by Santa Anita and having a general policyholders' rating of not less than "A-" and a financial rating of not less than "VIII" or
better by the latest issue of Best's Key Rating Guide. Such insurance companies shall be licensed and authorized to do business in the State of California, and shall name the Members as additional
insureds. Notwithstanding the foregoing, the Members may agree to self-insure with respect to any of the coverages required below provided that such self-insurance is permitted
by the Company's Lender and by each Member, which consent may be granted or withheld by each Member in each such Member's sole discretion. 

         (a)    Insurance Required.    

	(i)
	Worker's
Compensation Insurance with statutory benefits and limits which shall fully comply with all applicable state and federal requirements and which shall also
include Broad Form All States and Voluntary Compensation and Employer's Liability Insurance with limits of not less than $1,000,000 per accident, $1,000,000 per disease, and a $1,000,000 policy limit
on disease.

	(ii)
	Automobile
Liability Insurance in Caruso's name covering all owned, non-owned, leased and hired vehicles utilized by Caruso, with a combined single limit
per occurrence for bodily injury and property damage of not less than $1,000,000.

	(iii)
	Commercial
General Liability Insurance on an occurrence basis in Caruso's name, providing coverage of not less than $10,000,000 per occurrence, which shall include:
Bodily injury, Personal injury, Products and Completed Operations (for a minimum period of time to satisfy applicable statute of limitations for construction defects), Blanket Contractual
Liability and Broad Form Property Damage coverage, with bodily injury and property damage of combined single limits of not less than $10,000,000 per occurrence. The required policy shall not contain
any limitation of coverage and/or exclusion coverage for Explosion, Collapse and Underground Hazards (X, C, U). Caruso may provide the coverage required herein through the use of a primary liability
policy and umbrella liability policies.

	(iv)
	Valuable
Papers and Records Insurance to cover the plans, drawings, specifications, records and any other documents pertaining to the Project, including electronic
media and data of any type, if applicable. 

1

 

	(v)
	Upon
commencement of construction on or about the Project, and unless otherwise directed by the Management Committee, Caruso shall maintain at the expense of the
Company, a standard "all risk" Developer's Risk Policy for not less than the full replacement cost of improvements on or about the Project (including any improvements constructed off-site)
and shall include a replacement cost endorsement. 

         (b)    Terms and Conditions.    

	(i)
	Before
Caruso commences any on-site work pursuant to this Agreement, Caruso shall file with Santa Anita valid, original insurance certificates, including the
required amendatory riders and endorsements, evidencing that all required insurance is in force. An authorized representative of the applicable insurance company shall execute the foregoing. All
required insurance certificates should identify the Project and location. Caruso shall not make any changes in the required insurance, or allow the required insurance to lapse, without Santa Anita's
prior written approval.

	(ii)
	Caruso
shall require all Project consultants and all contractors and subcontractors (other than non-material specialty trade subcontractors, such as
artisans, mosaic tile, etc.), to comply with the Worker's Compensation, Employer's Liability and Automobile Liability Insurance provisions required of Caruso pursuant to this Agreement. Caruso shall
require its sub-contractors and sub-consultants to provide Commercial General Liability Insurance in amounts typically provided by sub-contractors and
sub-consultants of that respective trade but in no event shall: (A) any general contractor carry less than $10,000,000 in coverage; (B) any electrical, drywall, plumbing,
roofing or framing contractor carry less than $5,000,000 in coverage; and (C) as to all other sub-contractors or sub-consultants not specified in (A) or
(B) above, carry less than $1,000,000 in coverage.

	(iii)
	Caruso
shall further require all Project consultants to maintain Professional Liability Insurance covering damages by reason of any negligent act, error, or omission
committed, or alleged to have been committed, by Caruso or its sub-contractors and sub-consultants with limits as approved by the Management Committee.

	(iv)
	Caruso
agrees that it will contractually obligate all Project consultants and all contractors and sub-contractors to promptly advise Caruso of any changes
or lapses of the requisite insurance coverages and Caruso agrees to promptly advise Santa Anita of same. Caruso assumes all responsibility for monitoring the applicable insurance certificates for
compliance with the insurance provisions of this Agreement. 

2

 

	(v)
	Caruso
will give to the Company written notice within five (5) business days following the date that it receives any written notice of a proposed cancellation of
a policy required to be carried hereunder by the Company.

	(vi)
	Should
a notice of cancellation be issued for non-payment of premiums or any part thereof, or should Caruso fail to provide and maintain certificates as set
forth herein, Santa Anita shall have the right, but shall not be obligated, to pay such premium to the insurance company to obtain such coverage and to seek reimbursement for said payments from the
Company, which sums shall be due and payable immediately upon receipt by the Company of notice from Santa Anita.

	(vii)
	All
certificates of insurance and all notices required pursuant to this paragraph shall be sent to the address of Santa Anita as set forth in on
Exhibit "C" hereof.

	(viii)
	Caruso
agrees with respect to Commercial General Liability and Automobile Liability insurance provided or required to require each certificate to contain the
following wording: 

"It
is agreed that the 'Persons Insured' provision of this policy is amended to include Santa Anita, the Santa Anita Companies, Inc., Magna Entertainment Corp., and their officers, directors,
shareholders and employees as Additional Insureds, jointly and severally, with respect to any coverage afforded by this policy, but only with respect to operations by, or on behalf of, or to
facilities of, used by, or for, the Named Insured." 

	(ix)
	For
all insurance required in connection with this Agreement, such insurance is primary and is not additional to, or contributing with, any other insurance carried by,
or for the benefit of, Santa Anita or any Additional Insured. 

3

QuickLinks

INDEX OF DEFINED TERMSExhibit 10.8  

PRIVATE & CONFIDENTIAL  

WITHOUT PREJUDICE  

October 13,
2006 

Mr. Don
Amos

1742 The Loft

Mississauga, Ontario

L5L 3H5 

Dear
Don: 

Re: Employment with Magna Entertainment Corp. ("MEC")  

Further
to the October 12, 2006 letter from your counsel, this letter confirms the agreed upon terms which your employment with MEC will conclude as follows: 

	1.
	You
will retire from your employment with MEC effective October 6, 2006.

	2.
	MEC
will pay you a retiring allowance of U.S. $709,600 representing one year's base salary and annual bonus. This amount will be subject to statutory deductions and any
outstanding advances, and will be forwarded to you by November 3, 2006.

	3.
	MEC
will maintain your current benefits, except Short and Long Term Disability Benefits, until October 6, 2007. You will be eligible to participate in MEC's retiree benefit plan
after that date. Your Short and Long Term Disability Benefits will be maintained until December 5, 2006. However, you do have the right within thirty-one (31) days after the
termination of your benefits to exercise your option to convert your group life insurance to an individual policy. If you wish to exercise this option, please contact Mr. Stephen J. O'Neill of
SunLife (416-493-9560).

	4.
	You
will further be paid your MEC vested shares under the 2005 Performance Share Unit Award Agreement between yourself and MEC in accordance with the terms of this agreement. Subject
to the approval of the Compensation Committee of MEC's Board of Directors, the 2006 Performance Share Unit Award Agreement shall be cancelled and the deferred amount of your prorated 2006 Annual Bonus
(U.S. $134,615.38) shall be paid to you in a lump sum, less statutory deductions. MEC executive management will put this matter before the Compensation Committee at its next meeting, currently
scheduled for November 1, 2006, with a strong recommendation for approval. Upon approval, payment of the deferred bonus will be made by November 17, 2006. 

 

	5.
	Your
stock options will be governed by the terms of the stock option agreements you have entered into with MEC and Magna International Inc. respectively. For purposes of
clarity, the terms of these agreements provide that a retiree may exercise his options within three (3) years of his retirement date.

	6.
	MEC
will pay for your income tax return preparation for the years 2006 and 2007 utilizing the professionals which you have utilized in the past.

	7.
	MEC
will allow you to retain your company issued laptop computer, Blackberry and fax machine.

	8.
	MEC
will pay $5,000 to the firm of Grosman, Grosman & Gale LLP as contribution for your legal expenses. 

By
signing this letter and in consideration of the payments described above, you agree: 

	i)
	to
release MEC, its subsidiaries, associates and affiliates and their respective shareholders, directors, officers, employees and agents, and their respective successors
and assigns of all such persons and corporations (collectively described in this paragraph as "MEC") of and from all liabilities, damages, actions, causes of action, claims, including any claims under
the Ontario Employment Standards Act for severance pay and termination pay, and demands, costs or expenses including lawyers' fees, agreements, provisions and covenants,
of any nature or any kind now accrued or which may hereafter accrue, arising out of any employment relationship with MEC and the cessation thereof, including without limitation the termination of any
employment contract either written or oral, between you and MEC;

	ii)
	to
acknowledge that the payments described above satisfy all entitlements you may have under the Ontario Employment Standards Act, including
severance pay, termination pay and vacation pay;

	iii)
	to
acknowledge that the payments provided for in this letter shall in no way be deemed to be an admission of any liability or obligation on the part of MEC and
constitute total satisfaction of all monies that are owed or may be owing to you;

	iv)
	that
the release contained in this paragraph shall be binding on your heirs, executors, administrators, personal representatives and assigns;

	v)
	not
to make any claim or to commence or maintain any action or proceeding against any other person or corporation who might claim contribution, indemnity or relief over
from MEC; 

2

 

	vi)
	to
keep the terms and conditions of this letter confidential between you and MEC;

	vii)
	at
any time hereafter, not to disclose in any way whatsoever any information concerning the business and affairs of MEC and its customers and suppliers, including its
trade secrets and confidential or proprietary information, to which you have been exposed during the term of your employment with MEC nor to take any action at any time to discredit or damage the
goodwill or reputation of MEC;

	viii)
	to
agree to co-operate in effecting an orderly transition of all corporate governance matters regarding your retirement, including signing all necessary
documents to effect your resignation from all current offices you hold with MEC and its subsidiaries; and

	ix)
	to
return any keys, identification cards, company credit cards, business material or other items or documents, if any, belonging to MEC. 

Your
Record of Employment, as well as payment of four (4) weeks' vacation pay, as well as any outstanding wages and prorated bonus, will be forwarded to you by October 20, 2006. Please
submit a final expense report for any business expenses to which you may be entitled to reimbursement on or before November 20, 2006. I would ask that you contact Andrew Staniusz (telephone
905.726.7078) to arrange a time for you to attend the office to retrieve your personal effects. 

We
ask that you review the contents of this letter carefully. You may wish to discuss the contents of this letter with your lawyer prior to signing it. 

If
you are in agreement with the terms of your severance package as set out in this letter, please sign and date four (4) copies of this letter and courier out two (2) copies to Andrew
Staniusz by close of business day today. I would ask, as well, that a copy of this agreement signed by you be faxed to Andrew Staniusz (fax 905.726.7295) by close of business day today. Please
be advised that the terms of this letter are open for acceptance until 5:00 p.m. on October 13, 2006 following which time if not accepted by you, it will be considered to
be revoked. 

We
thank you for your contribution to MEC and wish you a happy retirement. 

Yours
very truly, 

/s/Donald
Mills 

Dennis
Mills

Vice Chairman 

3

 

        I,
Don Amos, have read over, understand and hereby agree to the terms and conditions as set out in this letter regarding the conclusion of my employment with Magna
Entertainment Corp. 

	

 	
 	

 
	
 Date	 	
 Don Amos

4

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