MEMORANDUM OF UNDERSTANDING RELATING TO SIGNAL HILL AUTO CENTER FREEWAY SIGN AND ADDITIONAL ADVERTISEMENT SIGN

Transcription

1 MEMORANDUM OF UNDERSTANDING RELATING TO SIGNAL HILL AUTO CENTER FREEWAY SIGN AND ADDITIONAL ADVERTISEMENT SIGN THIS MEMORANDUM OF UNDERSTANDING ( MOU ) is made this day of, 2014, between the CITY OF SIGNAL HILL, a municipal corporation ( Signal Hill ), and REGENCY OUTDOOR ADVERTISING, INC., a California corporation ( Regency ) and the SIGNAL HILL AUTO CENTER ASSOCIATION, a California corporation, as successor in interest to the Signal Hill Automobile Dealership Association (collectively, Association ). City, Regency and Association are each individually referenced herein as a party and collectively as the parties. This MOU pertains to the following Recitals: R E C I T A L S The parties enter into this MOU on the basis of the following facts, understandings and intentions: A. Sign Parcel and City Parcel: City is the owner of (i) certain real property encompassing approximately 11, square feet, 822 feet long and feet wide, adjacent to the I-405 freeway ( Sign Parcel ), and (ii) part of a 1.55 acre parcel designated as Assessor s Parcel No ( City Parcel ). The City Parcel is located at 3100 California Avenue in the City of Signal Hill, County of Los Angeles, State of California. B. Acquisition of Sign Parcel: City s predecessor in interest of the Sign Parcel was the Signal Hill Redevelopment Agency ( Agency ), a community redevelopment agency existing and formed pursuant to the Community Redevelopment Law (Health & Safety Code et seq.). In 2008, the Agency purchased the Sign Parcel as part of purchasing the City Parcel from Thomas L. Eyestone, Karen Kennard and Glenn M. Eyestone, Successor Co- Trustees of the Eyestone Revocable Trust dated May 29, 1996 (collectively, Eyestones ). Subsequently, on March 8, 2011, the Agency transferred much of its property, including the City Parcel and Sign Parcel, to the City pursuant to a transfer agreement. Pursuant to ABx1 26 providing for the dissolution of redevelopment, the Agency has been succeeded by the City Council as the Successor Agency/City whose activities are overseen by the Oversight Board of the Successor Agency ( Oversight Board ). Successor Agency/City requested approval of the transfer for governmental purpose from the Oversight Board, but the Department of Finance of the State of California denied this request. The Successor Agency/City revised its proposal to transfer the property for governmental purpose and submitted in with the Long Range Property Management Plan on February 6, C. Regency Lease: The Sign Parcel is encumbered by a lease, dated August 26, 1992 wherein the Eyestones leased the Sign Parcel to Regency ( Regency Lease ). With the acquisition of the Sign Parcel, the Agency/City assumed the Regency Lease. On October 5, 2011, the Agency/City provided Regency a written notice to terminate the Regency Lease at the expiration of the lease term, which is on July 21, /

2 D. Auto Association: Regency subleases the Sign Parcel to the Association for its electronic reader board sign adjacent to the 405 Freeway ( Auto Sign ). The Signal Hill Automobile Dealership Association entered an Outdoor Advertising Sublease Agreement (the Sublease ) with Regency in October The Sublease terminates in July The Signal Hill Auto Center Association was formed in 1990 in connection with the creation of the Signal Hill Auto Center ( Auto Center ), which currently consists of seven automobile dealerships selling twelve makes of automobiles including: BMW, Mercedes, Dodge, Chrysler, Buick, GMC, Cadillac, Nissan, Honda, Jeep, Mini Cooper and Fiat. The Auto Center occupies approximately forty (40) acres. E. Auto Sign: The Association constructed the Auto Sign in The Auto Sign, which is owned by the Association, consists of a display panel 24 feet high by 37.6 feet long and a length of 56 feet between the panel and the ground. The Agency/City received a permit for the Auto Sign on October 1, 1993 from the State Department of Transportation ( Caltrans ) for a period of 20 years, which expired on October 1, Pursuant to a request by Caltrans, the City has given permission to allow for the continued display of the Auto Sign until October 1, The passage of SB 684 has extended the period for continued display of the Auto Sign for an additional ten years. SB 684 allows an advertising display advertising business and activities within the Redevelopment Project Area to remain and be considered an on-premises display until January 1, F. Proposed Project: Since the Auto Sign is visible from the 405 Freeway, and the Association itself is not visible from the 405 Freeway, the Auto Sign is vital to the success of the Auto Center. After acquiring the Sign Parcel, the Agency/City intended to work with Regency to upgrade and rehabilitate the Auto Sign. The proposed project contemplated the rehabilitation of the existing Auto Sign, which is now some 19 years old and lacks electronic technology able to provide current high resolution graphics (the Rehabilitated Auto Sign ). Further, a second advertisement sign or billboard, which may be static or digital, with one or two sign faces, will be constructed on the City Parcel, at least 500 feet from the Rehabilitated Auto Sign in a manner not obstructing the visibility of the Rehabilitated Auto Sign (the Second Auto Sign and, collectively with the Rehabilitated Auto Sign, the Project ). The rehabilitation of the Auto Sign will be paid by the Association. The construction of the Second Auto Sign is to be paid for by Regency. G. Further Plans for Project Proposal; Compliance with Laws: Both the Association and Regency may each be required to submit site plans and Project descriptions prior to receiving any Project entitlements from the City for their respective portions of the Project. Regency and Association each represents that it will submit a proposal that is consistent with all laws, ordinances, regulations, and requirements of the City, including but not limited to, the City s Zoning Code and General Plan. It may be necessary to include zoning and General Plan amendments for Regency s portion of the Project, the application for which shall be Regency s sole responsibility. This MOU does not guaranty that the City will issue any Project entitlements and does not in any way limit the City s discretion in approving or disapproving the Project or any portion thereof; provided, however, that the City shall use reasonable good faith efforts to process Regency s application within one hundred twenty (120) days of submittal /

3 H. Project Contingent on Resolution of Multiple Strategic Issues: As detailed further in the terms of this MOU, the completion of this Project (i) will entail cooperative negotiations and arrangements with the Association and Regency, and (ii) will require approvals from, and cooperation with, Caltrans as well as the City. In particular, City wishes to terminate (i) the Regency Lease, set to expire in July 2014, and (ii) the Sublease to Association. In exchange, City has offered to allow the construction of the Second Auto Sign on the City Parcel and to issue permits for the display of off-site and general advertising on another sign to be built at a location that is acceptable to both Regency and the City (the Third Sign ). In addition, City is willing to directly lease the Sign Parcel to Association and the Second Auto Sign to Regency. I. Course of Negotiations. The Agency/City originally began discussions with Regency concerning the termination of Regency s leasehold interest in the Sign Parcel during City s review of the acquisition of the City Parcel from Eyestones in The Agency/City closely reviewed the effect of the lease on the visibility of the property for other Auto Center uses, and the effect of oil and gas surface easements owned by Signal Hill Petroleum ( SHP ), who had also made an offer to purchase the City Parcel. SHP backed out of acquiring the City Parcel due to the expense and because ownership of the property was ultimately unnecessary in order to use the surface rights. The Signal Hill West Unit Agreement governs the oil and gas surface easements and encumbers the City Parcel by allowing SHP to use the City Parcel for its oil operations. During the Great Recession, which began in 2008, the Association found the Regency Lease payments for the Auto Sign burdensome, and during the height of the Recession as two auto dealers in the Auto Center closed for business, the Agency/City provided assistance to the Association in paying utility and other expenses for the Auto Sign. Beginning in 2010, the City commenced a dialogue with Regency concerning eliminating Regency s leasehold interest in the Sign Parcel and giving Regency other economic incentives in 2010 through Regency s latest offer on October 17, 2012, which proposed the Project outlined above, became the basis for further negotiations. J. Negotiations with Goal of Reaching the Conveyance Instruments: Subject to the contingencies outlined herein, the City, Association and Regency desire, for the period set forth herein, to continue negotiating diligently and in good faith to enter into one or more leases, development agreements and/or equivalent agreements setting forth the terms of the development of the Project consistent with this MOU (each and collectively, a Conveyance Instrument ). NOW, THEREFORE, and in consideration of the mutual covenants contained herein, the parties mutually agree to the following: SECTION 1. NATURE OF NEGOTIATIONS. A. Good Faith. City and Regency agree that, for the period commencing in October 17, 2012, and continuing as set forth in Section 2 herein, they will negotiate diligently and in good faith to prepare and enter into a Conveyance Instrument. The development of the Project will be subject to all rules, regulations, standards, and criteria set forth in the City s General Plan and other applicable specific plans and zoning regulations (which may necessitate amendment or other modification to accommodate Regency s proposed use), and this MOU. City agrees, for the period stated below, not to negotiate with any other person or entity (other than the /

4 Association and its vendors, contractors and assignees) regarding the leasing or development of the Sign Parcel, the City Parcel or any Third Sign, nor any portions thereof, without the prior written consent of Regency, which Regency may withhold in its sole and absolute discretion. Regency agrees, for the period stated below, not to negotiate with any other person or entity regarding the subleasing of the Sign Parcel or any portion thereof without the prior written consent of City, which City may withhold in its sole and absolute discretion. Nothing in this MOU shall be deemed a covenant, promise or commitment by the City, or any subdivision of the City, with respect to the leasing of property or the approval of any development of the Sign Parcel, City Parcel or otherwise, or with respect to the issuance of permits for the Third Sign. City s acceptance of this MOU is merely an agreement to continue negotiations according to the terms hereof, reserving final discretion and approval by City as to any actions required of it. Recital Paragraphs A through J, inclusive are incorporated by reference as substantive provisions of this MOU. B. MOU Deposit. Regency acknowledges that the City shall expend substantial resources in the negotiation and performance of this MOU. Concurrently with the full execution of this MOU by the City and Regency, Regency shall submit to the City a deposit of at least Twenty Five Thousand Dollars ($25,000) (the MOU Deposit ). The purpose of the MOU Deposit is: (i) to provide security for Regency s commitment to negotiate diligently and in good faith and perform all of Regency s obligations under the MOU; and (ii) to pay for City s actual and reasonable costs and expenses in connection with the negotiation and performance of this MOU and preparing any additional agreements relating to the proposed Project. Such costs shall include, but not be limited to, staff costs, costs of Planning Staff, fees and expenses of legal counsel, environmental, soils, geotechnical, traffic, financial and economic consultants and reports, in each case engaged by City for services relating to the Project. City shall provide Regency a written report and accounting of expenditures from the MOU Deposit. To the extent City has a remaining balance in the MOU Deposit by the end of the term of this MOU, and Regency is not in breach of this MOU (after any applicable notice and cure period has elapsed), City shall return to Regency the portion of the MOU Deposit for which City has not incurred costs along with an accounting of the costs incurred by City. If this MOU is terminated by City at any time due to a breach of Regency s obligations hereunder, then the entire balance of the MOU Deposit shall be retained by City, as set forth in Section 7.H. C. Site. The proposed Project shall be located upon all or a portion of the Sign Parcel and the City Parcel ( Site ). The approximate location thereof is shown in the Map of the Site attached as Exhibit A. City represents that it owns the entirety of the Sign Parcel and portions of the City Parcel in fee, although the Site is subject to various encumbrances which may impact or interfere with development. City makes no representation concerning the developability of the Site, and Regency must exercise due diligence and, at its own expense, make all necessary Site investigations to assure itself of the suitability of the Site for development /

5 D. Nature of the Project; Caltrans Issues. Subject to the execution of a Conveyance Instrument, Association intends to rehabilitate the Auto Sign as shown in Exhibit B, and Regency intends to develop the Second Auto Sign as shown in Exhibit C. The Project provides for the Rehabilitated Auto Sign with upgraded technology, including high resolution electronics, and construction of the Second Auto Sign. The design of the Project shall be consistent with the City laws, ordinances, regulations, zoning, the General Plan and design guidelines. The Association and Regency must also obtain architectural review and approval for the Project from the City s Planning Commission. All signage for the Project must comply with the City of Signal Hill Sign Ordinance. 1. Project Background. The Agency/City over many years has supported the development of the Auto Center, which encompasses approximately 40 acres and consists of seven franchised new car auto dealers with eleven models/brands (including BMW, Dodge, Buick, GMC, Cadillac, Mercedes, Nissan, Honda, Jeep, Chrysler, Mini Cooper, and Fiat) with annual sales taxes to the City exceeding $2 million, or at least 20% of the City s general fund budget. The Agency/City has entered into six DDAs with dealerships since 1986 and has provided assistance to three dealers in 2009 through 2011 to help them survive the worst U.S. recession since the Great Depression. Further, since 1989, the Agency/City has expended approximately $15 million to perform remediation of environmental contamination caused by the oil industry and has removed blighted and dilapidated improvements, plus costs to acquire properties and grading as appropriate for development. Finally, the Auto Center paid for the original construction of and owns the Auto Sign, subject to the terms of the Sublease. 2. Negotiations, Entitlements, Commencement and Progress of Project are Strictly Contingent Upon Caltrans Approval of Each Project Component. Within thirty (30) days of executing a Conveyance Instrument, Regency and the Association shall each use reasonable good faith efforts to submit applications for acquiring the requisite permits from all governmental and/or quasi-governmental entities, including without limitation, the City and Caltrans, for their respective signs. 3. Failure to Secure Permits. If, within four (4) months after the submission of permit applications for the Rehabilitated Auto Sign, the Association is unable to secure extension of the current permit with Caltrans for the Rehabilitated Auto Sign for at least another ten (10) years, the City may, in its sole discretion, determine to continue to negotiate with the Association for the development of the Rehabilitated Auto Sign on the Sign Parcel. If, within eighteen (18) months of executing a Conveyance Instrument for the City Parcel (or a portion thereof), Regency is unable to secure permits with Caltrans as needed for the construction of the Second Auto Sign for a ten (10)-year term, the City may, in its sole discretion, determine to continue to negotiate with Regency for the development of the Second Auto Sign on the City Parcel. The designated time periods to procure the requisite permits with Caltrans may be extended by mutual agreement of the parties. If the parties do not elect to continue the negotiations as stated in the immediately preceding sentence, then either party may terminate this MOU by notice to the other party /

6 4. Association Right to Select Alternative Vendor for Rehabilitated Auto Sign. Notwithstanding anything herein to the contrary, Association has the right to select an entity other than Regency to construct the Rehabilitated Auto Sign, and is considering a bid by EMI to rehabilitate said sign, who also constructed the current sign. 5. Rehabilitated Auto Sign. The design shall be (i) consistent with Exhibit B, (ii) approved by City, (iii) and fully financed by Association with no financial assistance from City. The Rehabilitated Auto Sign shall be completed within two (2) years of the effective date of this MOU. 6. Tolling of Rent for the Auto Sign. The parties hereto agree that, as of the effective date of this MOU, all rent due from Regency to City under the Regency Lease and from Association to Regency under the Sublease shall be tolled during the term of this MOU, and shall be extinguished in accordance with the following: (a) upon Regency s receipt of all Cityrelated permits and approvals for the display of off-site and general advertising on the Third Sign, then fifty percent (50%) of the tolled rents under the Regency Lease and the Sublease will be extinguished, and (b) if the City enters into an acceptable lease with Regency for the Second Auto Sign on the City Parcel, then fifty percent (50%) of the tolled rents under the Regency Lease and the Sublease will be extinguished. Upon the occurrence of both (a) and (b), the Regency Lease will be terminated, and no further rent will be due under the Regency Lease and the Sublease. If during the term of this MOU (unless the MOU and deadlines are extended by the mutual agreement of the parties), Regency does not receive all City-related permits and approvals for the display of off-site and general advertising on the Third Sign, or if no lease for the Second Auto Sign is entered into, then Regency will be entitled to recover back rent from the Association pursuant to the Sublease, and Regency will pay back rent to City pursuant to the Regency Lease, from the date the tolling commenced until the date of termination in July 2014, except for any rent that has been extinguished pursuant to this Paragraph D.6 of Section Second Auto Sign. The lease of the Second Auto Sign will have the following elements: (i) Regency shall construct and maintain the Second Auto Sign and obtain any necessary permits therefore at its own expense; (ii) Regency shall have an exclusive use area for the physical location of the Second Auto Sign and a non-exclusive right of access over the remainder of the City Parcel, provided its access shall not infringe on SHP s surface use rights, the use of the property for Auto Center parking or other City uses; (iii) the Second Auto Sign shall be constructed within two (2) years; (iv) lease rates will be comparable within the market and a minimum of Seven Thousand Dollars ($7,000) per month for each sign face containing digital displays, and/or Four Thousand Dollars ($4,000) per month for each sign face containing static displays (percentage of revenue provisions may be included in the negotiations beyond the minimum lease rates per sign face described above); and (v) the Second Auto Sign design shall be consistent with Exhibit C or is otherwise agreed by the parties. E. Maintenance of Project. The Rehabilitated Auto Sign shall be maintained by Association. The Second Auto Sign shall be maintained by Regency. F. Environmental Review. The parties intend to negotiate the final terms of the Conveyance Instrument during the term of this MOU. There are unknowns concerning the Project at this time, and during the term of this MOU, Regency and Association will undertake /

7 the studies, reports and analysis contemplated in Section 3 to allow each to develop its portion of the Project plan, Project designs, traffic analysis, environmental impact analysis and financing plans necessary to determine whether to undertake its portion of the Project. Environmental analysis will occur when the Project s plans are developed. Regency and Association will have the sole responsibility to pursue and obtain any necessary environmental approvals for their respective portions of the Project pursuant to either CEQA or NEPA, as applicable. As Regency and Association are required to undertake environmental review of their respective portions of the Project, and the City shall serve as the lead agency for such review, Regency and the Association shall deposit with the lead agency all funds necessary to cover the cost of such environmental review and shall replenish the deposit as funds are drawn down to the extent required by the lead agency. G. Financial Provisions. The parties agree to the following, subject to the terms and provisions of the Conveyance Instrument: Sign. Auto Sign. 1. The Association shall be responsible for financing the Rehabilitated Auto 2. Regency shall be responsible for financing and constructing the Second 3. City and Regency shall negotiate a shared percentage of revenues and percent of time arrangement with respect to advertising on the Second Auto Sign. H. Schedule for Development. During the Period of Negotiations (as defined below), a specific schedule for development of the Project will be agreed upon, to be incorporated in the Conveyance Instruments and subject to the requirement that any amendment extending any specific Project timeframes by more than one year shall require City Council approval. I. Access to Properties. During the Period of Negotiations each party shall allow the other parties, and their employees, agents, representatives and contractors reasonable access to the Site during normal business hours, upon reasonable notice, for performing evaluations, engineering studies, surveys, geological work or other studies reasonably desired by such parties. Signal Hill s City Manager or his or her designee shall determine when and the extent of the access granted to Regency on the City Parcel. SECTION 2. PERIOD OF NEGOTIATIONS. A. Term. The term of this MOU shall be retroactive to October 17, Notwithstanding the foregoing, City, Regency and Association agree to continue negotiating diligently and in good faith for an additional term of two hundred seventy (270) days commencing upon the execution of this MOU by all parties hereto ( Period of Negotiations ). Notwithstanding anything herein to the contrary, Regency and/or Association may terminate this MOU, with or without cause, by forty five (45) day written notice to the City, but any performance already received by the other parties may be kept without any liability therefor, and further provided that the non-terminating parties shall be required to proceed under this MOU without the terminating party, unless both Regency and Association elect to terminate this MOU /

8 B. City Approval. Regency and Association understand and acknowledge that if negotiations culminate in a Conveyance Instrument, the Conveyance Instrument shall be effective only after, and if, the Conveyance Instrument has been considered and approved by City and Signal Hill s City Council after public hearing thereon as required by law. Any Conveyance Instrument would require environmental analysis meeting the requirements of either CEQA or NEPA. SECTION 3. REGENCY AND ASSOCIATION S RESPONSIBILITIES. A. Project Plan and Development. Regency and Association shall each provide a final Project Plan for its applicable sign specifying the framework to guide the overall development of the Project. In addition, Regency and Association shall prepare the preliminary design plan for the Project, including design themes, as reasonably required by City, sufficient, to the extent feasible and practicable, to allow City to evaluate sign configuration, architectural design and similar issues. Regency and Association will be solely responsible for obtaining all permit approvals and entitlements for the Project and developing the Project, subject to the terms and conditions of the Conveyance Instrument. B. Use and Transfer Restrictions. The Conveyance Instruments will contain City s standard provisions restricting the use and transfer of the Sign Parcel and the City Parcel, respectively. The Conveyance Instruments will restrict the use of the Sign Parcel and the City Parcel for Project purposes only, unless the City approves of a different use in writing. SECTION 4. CITY S RESPONSIBILITIES. A. City Assistance. City shall cooperate fully in providing Regency and Association with appropriate information and assistance, but such assistance shall not include financial assistance. B. Preparation of Conveyance Instruments. City shall provide Regency and Association with an initial draft of the applicable Conveyance Instruments. C. Processing Permits. City shall use reasonable good faith efforts to expeditiously process Regency s applications for permits for the Second Auto Sign and the Third Sign. If the negotiations culminate in one or more Conveyance Instruments signed by Regency and/or Association, such Conveyance Instrument shall become effective only after and if such Conveyance Instruments have been considered and approved by the Signal Hill City Council. SECTION 5. CITY S DISCRETION; NON-WAIVER OF POLICE POWERS. Regency and Association acknowledge that City is under no obligation to enter into any proposed Conveyance Instrument or other agreement, subject to City s obligations to negotiate diligently and in good faith as set forth in this MOU, and that any actions taken or investments made by Regency and Association in anticipation of a proposed agreement prior to such agreement being considered and approved by the City Council and signed and delivered, are undertaken at each party s sole risk and expense. Prior to the execution and delivery of an agreement by City, any reliance by Regency and Association on any representations or promises /

9 by City or City staff or consultants, or individual Council or Board members, is undertaken at each party s sole risk and expense. City acknowledges that Regency and Association are under no obligation to enter into any proposed Conveyance Instrument or other agreement, subject to each party s obligations to negotiate in this MOU, and that any actions taken or investments made by City in anticipation of a proposed agreement prior to such agreement being considered and approved by Regency and Association and signed and delivered, are undertaken at City s sole risk and expense. Prior to the execution and delivery of an agreement by Regency and Association, any reliance by City on any representations or promises by Regency, Association, or each party s staff or consultants, is undertaken at City s sole risk and expense. It is anticipated that Signal Hill s City Council and/or Planning Commission will be required to review and hold hearing(s) upon the Project s necessary entitlements and environmental documentation. The parties understand that City is reserving the right to exercise its discretion as to all matters which City is, by law, entitled or required to exercise, at its discretion and nothing in this MOU shall be construed as having the effect of waiving or limiting City s police powers and exercise of discretion. To this end: 1. Discretion. The parties understand that City has the complete and unfettered discretion to reject the Project and/or any Conveyance Instrument, and other documents related to the development or use of the Site or the Third Sign, without explanation or cause. The risk of loss of all processing, design and developmental costs incurred by Regency and Association, respectively, prior to Conveyance Instrument approval and execution shall be absorbed entirely by Regency and Association, unless expressly assumed by the terms of this MOU by City. 2. Conveyance Instrument. The duty of City to execute the Conveyance Instrument shall be conditioned upon the successful review and approval of all necessary findings and conclusions which Signal Hill s City Council is required to make, including all necessary findings and determinations required under CEQA or NEPA, as applicable, state and local land use provisions. As to any matter which City may be required to exercise its unfettered discretion in advancing the Project to completion, nothing herein, nor to be contained in the Conveyance Instruments, shall obligate City to exercise its discretion in any particular manner, and any exercise of discretion reserved hereunder or required by law, shall not be deemed to constitute a breach of City s duties under this MOU. 3. No Approval. By its execution of this MOU, City is not committing itself or agreeing to undertake any activity requiring the subsequent exercise of discretion by City, or any department thereof including, but not limited to, the approval and execution of a Conveyance Instrument, the approval of any development proposal or land use regulation governing the Sign Parcel, the City Parcel or the Third Sign, the provision of financial assistance for the development of any public or private interest in real property, or any other such act or approval. 4. Agreement to Negotiate. This MOU does not constitute a disposition of property and does not require a public hearing. City execution of this MOU is merely an agreement to enter into a period of negotiations according to the terms hereof, reserving final discretion and approval by City as to any proposed Conveyance Instrument and all proceedings and decisions in connection therewith /

10 SECTION 6. CONVEYANCE INSTRUMENT DEPOSIT. If the negotiations contemplated by this MOU result in the execution of a Conveyance Instrument, subject to the agreement of the parties, the Conveyance Instrument will require that Regency submit to City a deposit in the form of a cash deposit, cashier s check or other form of security reasonable acceptable to City to insure (i) that Regency will proceed diligently and in good faith to perform all of Regency s obligations under the Conveyance Instrument ( Conveyance Instrument Deposit ) and (ii) the City will recover its costs for the transaction. The amount and terms of the Conveyance Instrument Deposit shall be outlined in the Conveyance Instrument. SECTION 7. MISCELLANEOUS. A. Brokerage Commissions. City represents it has engaged no broker, agent, or finder in connection with this transaction, and Regency and Association agree to hold City harmless from any claim by any broker, agent, or finder retained by Regency and Association. Subject to the accuracy of City s representation set forth in the preceding sentence, City shall not be liable to pay any real estate commission or any broker s fees which may arise in relation to the Project or the granting of a leasehold interest in the Sign Parcel or the City Parcel. B. Ownership of Documents. If the negotiations contemplated by this MOU do not result in the execution of a Conveyance Instrument, except as a result of a breach of this MOU by the City, Regency and Association shall provide City, at no cost or expense to City, with copies of any third party consultant, contractor, or subcontractor reports, studies, analysis, site plan layouts, engineering studies, memorandums, or similar documents, excluding legally privileged or confidential items or proprietary financial information, regarding the proposed development which were prepared during the Period of Negotiations. City may not sell such plans or drawings to other parties, and may only use them conceptually for planning purposes. Regency and Association may retain copies of such documents for its own use and shall have an unrestricted right to use such documents, including without limitation all concepts embodied therein. Such delivery of copies of documents by Regency and Association to City shall be made without any representation, warranty, or liability whatsoever by Regency and Association as to the accuracy or sufficiency of the contents of such documents and shall be made subject to the rights of the preparers of such documents including, without limitation, the copyrights (if any) associated with such documents. City acknowledges that any use of such documents for other projects and/or use of uncompleted documents without specific written authorization by Regency and Association (and/or the owner of any applicable copyrights therein) will be at City s or the applicable third party s sole risk and without liability to Regency and Association, and City shall indemnify Regency and Association for all damages concerning, affecting, or relating to City resulting therefrom. C. No Personal Liabilities. Nothing in this MOU shall create any personal obligation or liability of Signal Hill s City Manager or any City member, staff member, employee, or agent of City for any obligation of City under this MOU and, conversely, nothing in this MOU shall create any personal obligation or liability of any partner, member, principal, /

11 shareholder, employee, or agent of Regency or Association for any obligation of Regency or Association under this MOU. The obligations of Regency and Association under this MOU shall be several, but not joint, and neither Regency nor Association shall have any liability for the obligations of the other under this MOU. D. No Conflicts. City represents to Regency and Association that neither the execution or delivery by the City of this MOU, the performance by the City of its obligations hereunder, nor the fulfillment by the City of the terms and conditions hereof: (i) conflict with, violates or result in a breach of Applicable Law; or (ii) conflict with, violate or result in a breach of any term or condition of any judgment, order or decree of any court, administrative agency or other governmental authority, or any agreement or instrument to which the City is a party or by which the City or any of its properties or assets are bound, or constitute a default thereunder. E. Amendment. This MOU may only be amended by a document in writing signed by the parties. F. Notices. All notices, including without limitation all approvals and consents, required or permitted under this MOU shall be delivered in person, by messenger, by overnight mail courier, or by registered or certified mail, postage prepaid, return receipt requested, to each party at its address shown below, or to any other notice address designated in writing by such party: City: Regency: Association: City of Signal Hill 2175 Cherry Avenue Signal Hill, CA Attention: City Manager Regency Outdoor Advertising, Inc Sunset Boulevard, 2nd Floor West Hollywood, CA Attn: Brian Kennedy Signal Hill Auto Center Association c/o Glenn E. Thomas Dodge, Chrysler, Jeep, Fiat 2100 E. Spring Street Signal Hill CA Attn: Bob Davis, President G. Default. Any party may terminate this MOU if another party should fail to comply with and perform in a timely manner any material obligation to be performed by such other party under this MOU, provided the party seeking to terminate this MOU shall provide at least ten (10) days written notice to the other party of such failure or nonperformance and such other party shall have a ten (10) day period within which to cure such failure or nonperformance (or such longer period as may be reasonably necessary to cure such failure or nonperformance if such failure or nonperformance cannot reasonably be cured with such 10-day period). Termination shall be the sole remedy for default. In no event shall either party be liable for monetary damages, attorney fees and costs, or any other cost or expense for the default or /

12 termination of this MOU, and any such right to recover damages is expressly waived. Notwithstanding the foregoing, in no event shall any cure period hereunder extend the term of this MOU. H. Remedies. In the event of an uncured default by the City, Regency and Association s sole remedy shall be to terminate this MOU, upon which Regency shall be entitled to the return of the remaining balance of the MOU Deposit and any interest earned thereon (but City shall have no obligation to earn interest on the MOU Deposit). Following such termination and the return of the balance of the Deposit and any interest earned thereon, neither party shall have any further right, remedy or obligation under this MOU, except that the City s indemnification, hold harmless and assumption of risk obligations pursuant to this MOU shall survive such termination. In the event of an uncured default by Regency, City s sole remedy shall be to terminate this MOU and to retain the MOU Deposit, and any interest earned thereon. Following such termination, neither Party shall have any right, remedy or obligation under this MOU, except that the defaulting party s indemnification, hold harmless and assumption of risk obligations pursuant to this MOU shall survive such termination. Except as expressly provided in this MOU, neither party shall have any liability to the other for damages or otherwise for any default, nor shall either party have any other claims with respect to performance under this MOU. Each party specifically waives and releases any such rights or claims it may otherwise have at law to in equity and expressly waives any rights to consequential damages or specific performance from the other party under this MOU. I. Indemnification by Regency and Association. Regency hereby agrees to indemnify, defend, and hold the City and its respective members, officers, staff and agents (collectively, City Indemnitees ) harmless from any and all claims, actions, suits and other liability asserted against the City resulting from or in connection with Regency s execution of this MOU and/or Regency s performance under this MOU. Association hereby agrees to indemnify, defend, and hold the City Indemnitees harmless from any and all claims, actions, suits and other liability asserted against the City resulting from or in connection with Association s execution of this MOU and/or Association s performance under this MOU. The foregoing indemnities shall survive the expiration or termination of this MOU. In the event that any claim should be filed against any of the City Indemnitees which would require indemnification by Regency and/or Association, the City shall notify Regency and/or Association, as applicable, of such claim in a timely manner to permit Regency and/or Association, as applicable, the opportunity to provide adequate representation to the City Indemnitees with respect to any such claim. Nothing in this Section shall be construed to mean that Regency and Association shall hold the City Indemnitees harmless and/or defend them to the extent of any claims arising from the negligence, willful misconduct or illegal acts of any of the City Indemnitees and/or the failure of the City Indemnitees to follow any procedure or law applicable to the City. J. General Provisions. This MOU and all terms and conditions hereof shall be governed by and construed and enforced in accordance with the laws of the State of California. Any term herein can be waived only by a written waiver signed by the party against whom such /

13 waiver is to be asserted. This MOU may be executed in counterparts, each of which when so executed shall be deemed an original, and all of which, together, shall constitute one and the same instrument. K. Authority. The persons executing this MOU on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this MOU on behalf of said party, (iii) by so executing this MOU, such party is formally bound to the provisions of this MOU, and (iv) entering into this MOU does not violate any provision of any other agreement to which said party is bound. IN WITNESS WHEREOF, the parties have executed this MOU as of the day first above written. CITY CITY OF SIGNAL HILL a municipal corporation By: Michael J. Noll, Mayor ATTEST: Kathee Pacheco, City Clerk APPROVED AS TO FORM: ALESHIRE & WYNDER, LLP David J. Aleshire, City Attorney /

14 REGENCY Regency Outdoor Advertising, Inc., a California corporation By: [Name and Title] ASSOCIATION Signal Hill Auto Center Association, a California corporation By: Robert Davis, President (ALL SIGNATURES MUST BE NOTARIZED) /

15 STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On, 2014, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On, 2014, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) / N-1 -

16 STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On, 2014, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On, 2014, before me,, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) / N-2 -

17 Exhibit A MAP OF THE SITE / A-1 -

18 Exhibit B REHABILITATED AUTO SIGN / B-1 -

19 Exhibit C SECOND AUTO SIGN / C-1 -