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2008-28139113127 V RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: John DeWald & Associates. LLC Attn: John DeWald 1855 Freda Lane Cardiff, CA 92007 DOC # •2008 70281.391 1111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIN MAY 23, 2008 4:59 PM OFFICIAL RECORDS SAN DIE00 COUNTY REC09DER5 OFFICE I GREGOAYJ. SMITH. COUNTY RECORDER FEES: 85.00 WAYS: 3 OC: NA' PAGES: 21) I II�IIIU��II�I�BgI�VBIQ�IIeIa��I�IQ�IIIO�I�nl��l�l EASEMENTS, UTILITIES AND COST SHARING AGREEMENT This EASEMENTS, UTILITIES AND COST SHARING AGREEMENT ("Agreement") is made and executed as of May 8, 2008, by and between TOY FACTORY 101 ENCINITAS, L.P., a California limited partnership ( "Pacific Station "), and GEORGE YEE an individual and ANNA WONG YEE, an individual (collectively "Yee'), with reference to the facts set forth below. Pacific Station and Yee are sometimes referred to individually as a "Eg 'or collectively as the "Parties'. RECITALS A, Pacific Station is the owner of certain real property situated in the City of Encinitas (the "C "), County of San Diego, State of California; more particularly described in Exhibit A attached hereto and incorporated herein (the "Pacific Station Property "). Yee is the owner of certain real property situated in the City of Encinitas, County of San Diego, State of California, more particularly described in Exhibit B attached hereto and incorporated herein (the "Yee Prooerty "). The Pacific Station Property and the Yee Property are adjacent to each other. B. Pacific Station intends to develop a mixed -use project on the Pacific Station Property consisting of retail, office, and residential units (the "Project "). C. The Parties have determined that the development of the Project presents various opportunities to enhance and improve the use, appearance, functionality, desirability and value of both the Pacific Station Property and the Yee Property. Among other things, the Parties desire to integrate adjoining portions of their properties into a Plaza (defined below) for the joint use and enjoyment of the Permitted Users (defined below) of their respective properties. NOW, THEREFORE, in consideration of the recitals and for other good and valuable . .> 13128 consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as set forth below. ARTICLE I DEFINITIONS Except as the context otherwise requires, the defined terms set forth below shall have the meaning set forth below. 13 Agreement. The term "Agreement" means this Easements. Utilities and Cost Sharing Agreement. 1.2 Allocable Share. The term "Allocable Share" means the percentage (or the amount, if stated as a specific amount) of the Plaza Shared Expenses and the Trash Shared Expenses that the Owner of the Yee Property shall pay to the Owner of the Pacific Station Property. 13 Association. The term "Association' means the Pacific Station Commercial Association, a California nonprofit mutual benefit corporation, its successors and assigns, or such other California nonprofit mutual benefit corporation which has the duty to maintain the Plaza. IA Budget. The term "Budget" refers to the budget for the Owner of the Pacific Station Property prepared by the Owner of the Pacific Station Property. 1.5 Declaration. The term "Declaration' refers to the certain "Declaration of Covenants, Conditions and Restrictions for the Retail and Office Condominiums at Pacific Station' recorded as to the Pacific Station Property, or to be recorded as to the Pacific Station Property, in the Official Records of the County Recorder of San Diego County, and any additional recorded documents referenced in such Declaration. 1.6 Default Interest Rate. The term "Default Interest Rate" means the lesser of (i) four percent (4 %) per annum in excess of the "Prime Rate," or (ii) the highest lawful rate. The "Prime Rate" shall be the rate announced as such from time to time by Bank of America or its successor. If there shall be no such announced rate of such bank or its successor, then the "Prime Rate" shall be such equivalent rate as is charged from time to time by major money - center banks. 1.7 Installment. The term "Installment" means each installment of Shared Expenses payable by the Owner of the Yee Property under this Agreement, and any reimbursement amounts due from one Owner to another. 1.8 Owner. The term "Owner" means the record owner, whether one or more persons or entities, of any real property subject to this Agreement. In the case of the Pacific Station Property, the Association will be deemed to be the Owner (and take the place of the any other person or entity who may have had, or has, an interest in the Pacific Station Property) at such time the Association is formed and has assumed responsibility for the maintenance of the Plaza 13129 pursuant to the Declaration. In such case, the Association, and not the individual members of the Association, notwithstanding the fact that such members may own undivided interest in the Pacific Station Property, shall be the "Owner" of the Pacific Station Property and the individual members of the Association, and any prior Owner of the Pacific Station Property, shall no longer be Parties to this Agreement and shall have no rights, duties, or liabilities under this Agreement, except as may be expressly provided in this Agreement. 119 Pacific Station Phma Contribution Area. The term "Pacific Station Plaza Contribution Area' means that portion of the Pacific Station Property designated on Exhibit D as being part of the Plaza. 1.10 Pacific Station Property. The term "Pacific Station Property" means that real property described in Exhibit A. 1.11 Pavment Commencement Date. The term "Payment Commencement Date" means the first (lst) day of the first (1st) calendar month after the completion of the Plaza Improvements. The completion of the Plaza Improvements will be conclusively established by the Owner of the Pacific Station Property giving written notice to the Owner of the Yee Property stating the Plaza Improvements completion date, with such date to be no less than 30 days after the date of the notice. . 1.12 Permitted Users. The term "Permitted Users" means an Owners employees, patrons, guests, invitees, agents, contractors, members, representatives and, if applicable, residents. 1.13 Yee Plaza Contribution Area. The tern "Yee Plaza Contribution Area' means that portion of the Yee Property designated on Exhibit D as being part of the Plaza. 1.14 Yee Propertv. The term "Yee Property' means that real property described in Exhibit B. 1.15 Plaza. The term "Plaza" refers to the physical area covered by the Pacific Station Plaza Contribution Area and the Yee Plaza Contribution Area as shown on Exhibit D. Both such areas shall together constitute the Plaza as used in this Agreement. 1.16 Plaza Reciprocal Easements. The term "Plaza Reciprocal Easements" refers to the easements granted to the Owner of the Pacific Station Property over the Yee Plaza Contribution Area, and the casement granted to the Owner of the Yee Property over the Pacific Station Plaza Contribution Area as more fully described in Section 2.1 below. 1.17 Plaza Improvements. The term "Plaza Improvements" refers to the improvements constructed in, over, under and through the Plaza, including without limitation, hardscape, landscaping, irrigation equipment, lighting, planters, signage, monuments, water features, utilities servicing the Plaza, Storm Drain Improvements located within the Plaza, and furniture, as more fully depicted and described on Exhibit D. The Plaza Improvements depicted 13130 on Exhibit D are preliminary and are subject to change in the sole discretion of the Owner of the Pacific Station Property. 1.18 Plaza Shared Expenses. The term "Plaza Shared Expenses" means all costs of maintaining, repairing, insuring, and providing for replacement reserves for the Plaza and Plaza Improvements as provided herein. "Shared Expenses" does not include the costs for the original construction of the Plaza Improvements. 1.19 Statement. The term "Statement" means the statement of the Owner of the Yee Property's Allocable Share of the Shared Expenses to be delivered to the Owner of the Yee Property by the Owner of the Pacific Station Property in accordance with Section 4.2.1 hereof. 1.20 Storm Water Improvements. The term "Storm Water Improvements" means surface collection and underground conveyance structures to drain storm water from the Yee Property. 1.21 Tiebacks. The term "Tiebacks" means metal ground anchors consisting of steel strands or rods that are used to secure temporary shoring and concrete forms. Tiebacks are installed horizontally under the soil surface and extend approximately 20 horizontal feet. 1.22 Trash. The term "Trash" means typical and customary refuse from retail, office and restaurant operations. Trash does not include any hazardous materials as defined by local, state or federal laws and regulations, such as, without limitation, paints, solvents, electronic waste, mercury, and other materials that are properly disposed of using other means (such as cooking oils and grease), or refuse from uses other than retail, office or restaurant uses. 1.23 Trash Collection Enclosure. The term "Trash Collection Enclosure" means the location and improvements specified on Exhibit D for the collection of Trash constructed by the Owner of the Pacific Station Property as part of the Project and to be used by the Pacific Station Property and the Yee Property pursuant to this Agreement. The Owner of the Pacific Station Property shall have sole discretion and responsibility for designing, installing and maintaining the Trash Collection Enclosure, may change the location of the Trash Collection Enclosure notwithstanding the location identified on Exhibit D, and at any time during the term of this Agreement, may designate a temporary Trash Collection Enclosure location. 1.24 Trash Shared Expenses. The term "Trash Shared Expenses" means all costs for the collection and disposal of Trash deposited at the Trash Collection Enclosure or any temporary location designated by the Owner of the Pacific Station Property. 1.25 Wet Utilities. The term "Wet Utilities" means underground gas transmission piping and structures, underground potable water service, and underground sewer services. ARTICLE 2 EASEMENTS 4 13131. 23 Plaza. The Owners of the properties grant to each other the easements more fully described in Section 2.1.1 and 2.1.2 below (the "Plaza Reciprocal Easements"): . 2.1.1 Easement Over Yee Plaza Contribution Area. The Owner of the Yee Pro perty hereby grants to the Owner of the Pacific Station Property a perpetual easement on, over, across, and underneath the Yee Plaza Contribution Area for the construction of the Plaza Improvements, maintenance of the Plaza Improvements; physical integration of the Yee Plaza Contribution Area into the Plaza, use of the Yee Plaza Contribution Area for pedestrian ingress and egress by the Owner of the Pacific Station Property and its Permitted Users. This easement does not permit the Owner of the Pacific Station Property or its Permitted Users use the Yee Plaza Contribution Area for dining or retail uses, nor permit the placement of tables, chairs, or other furniture or items thereon. This easement shall be exclusive as to the Owner of the Pacific Station Property to the extent required to allow the Owner of the Pacific Station Property to construct and maintain the Plaza Improvements and to use the Yee Plaza Contribution Area as part of the Plaza. No other person or entity shall be allowed or granted the right to construct or maintain any improvements within the Yee Plaza Contribution Area without the express written consent of the Yee Owner and the Owner of the Pacific Station Property. The easement herein granted is appurtenant to the Pacific Station Property. 2.1.2 Easementw•Over the Pacific Station Plaza Contribution Area. The Owner of the Pacific Station Property hereby grants to the Owner of the Yee Property a perpetual, non - exclusive easement on, over, and across the Pacific Station Plaza Contribution Area for the ingress and egress of the Owner of the Yee Property and its Permitted Users, as a pedestrian commercial plaza area. This easement does not permit the Owner of the Yee Property or its Permitted Users use the Pacific Station Plaza Contribution Area for dining or retail uses, nor permit the placement of tables, chairs, or other furniture or items thereon. This easement does not extend to the construction or modification of any of the Plaza Improvements. The easement herein granted is appurtenant to the Yee Property. This easement is subject to any and all rules set forth in the Declarations and/or any rules promulgated by the Owner of the Pacific Station Property. 2.1.3 Refurbishment of Structures on Yee Property. The Owner of the Yee Property grants to the Owner of the Pacific Station Property the right, and all rights of access incidental to such right, to determine, plan, design, carry out and pay for, the refurbishment of the portions of the Yee Property improvements facing the Plaza that the Owner of the Pacific Station in order to create an attractive, harmonious Plaza area (the "Yee Property Refurbishment License'). If the Owner of the Pacific Station property determines to exercise the Yee Property Refurbishment License, it will provide reasonably adequate documentation (the "Refurbishment Plan") to the Owner of the Yee Property for review and approval. The Owner of the Yee Property shall have 30 days after receipt in which to approve or disapprove. Failure to communicate an approval or disapproval within this time period will be deemed approval. If the Owner of the Yee Property disapproves, the Parties agree to work in good faith to agree to a modified Refurbishment Plan. Failing agreement, the Parties agree to submit the disagreement to binding arbitration before one arbitrator selected in accordance with the American Arbitration Association rules. If the Owner of the Pacific Station Property exercises the Yee Property W 13132 Refurbishment License, the Owner of the Yee Property will have the obligation to maintain (and pay for such maintenance) the refurbished improvements on the Yee Property in good condition, and shall not alter the colors, materials, or other noticeable aspects of the refurbished improvements without the Owner of the Pacific Station Property's written permission. 2.2 Wet Utilities Easement. The Owner of the Pacific Station Property hereby grants to the Owner of the Yee Property a non - exclusive easement under and across the portion of the Pacific Station Property labeled "Wet Utilities Easement' in Exhibit C. to provide the Yee Property with access to Wet Utilities services (the "Wet Utilities Easement') located in the Wet Utilities Easement and in the public right of way adjoining the Wet Utilities Easement. The Wet Utilities Easement is subject to all existing easements, rights, encumbrances, licenses or other such interests of record. The Owner of the Yee Property agrees that the Owner of the Pacific Station Property may pave over and otherwise construct improvements in and over the Wet Utilities Easement, but that the Owner of the Yee Property will be allowed reasonable access to maintain any of its Wet Utilities connections. The Owner of the Yee Property agrees that its use of the Wet Utilities Easement will not interfere with the use of, or block access to, the Plaza except as reasonably required in an emergency. The Owner of the Yee Property shall have the responsibility to install (except as provided in Section 2.2.1 below), maintain, repair and replace (and pay all costs associated therewith) any Wet Utility connections installed for the benefit of the Yee Property. 2.2.1 Wet Utilities Re- Connection. As part of the construction of the Plaza Improvements and the Project, the Owner of the Pacific Station Property agrees, at its sole cost, to re -rout and re- connect the Yee Property's existing Wet Utilities connections to the location identified in Exhibit C, and the Owner of the Yee Property agrees to allow the Owner of the Pacific Station Property to conduct such work. The Owner of the Yee Property grants to the Owner of the Pacific Station Property the necessary access to the Yee Property in order to disconnect, re-rout, and re- connect the existing Wet Utilities connections. After such work is completed, the Owner of the Yee Property shall have the responsibility maintain, repair and replace its Wet Utilities connections and structures. 23 Tiebacks. The Owner of the Yee Property grants to the Owner of the Pacific Station Property a non - exclusive easement over and under that portion of the Yee Property identified in Exhibit C as the "Tieback Easement" for the installation of Tiebacks necessary for the construction of the Project. The Owner of the Pacific Station Property agrees to take all reasonable steps to ensure that the installation of the Tiebacks will not interfere with or compromise any of the structures or utilities located on the Yee Property. After completion of the Project, the Owner of the Pacific Station Property will notify the Owner of the Yee Property in writing that Tiebacks are no longer operational, thereby allowing the Owner of the Yee Property to sever and/or remove the Tiebacks in the event of any future excavation of the Yee Property. 2A Storm Drain Improvements. The Owner of the Pacific Station Property hereby grants to the Owner of the Yee Property a non - exclusive license to connect Storm Water Improvements servicing the Yee Property to Storm Water Improvements located within the Plaza (the "Storm Drain License "). The Storm Drain License is subject to all existing easements, M33 rights, encumbrances, licenses or other such interests of record. The Owner of the Pacific Station Property.will design, install and maintain, at it sole cost, all Storm Water Improvements located within the Plaza including the Yee Plaza Contribution Area. The Owner of the Yee Property will be required to design, install and maintain all Storm Water Improvements located on the portion of the Yee Property not included in the Plaza that are connected to Storm Drain Improvements within the Plaza. The costs incurred at the point of connection shall be the responsibility of the Owner of the Pacific Station Property if such connection takes place as part of the original construction of the Project; otherwise, such costs shall be paid by the Owner of the Yee Property. The Owner of the Pacific Station Property shall have the right to impose reasonable specification requirements for the Storm Drain Improvements servicing the Yee Property that the Owner of the Yee Property intends to connect to the Storm Drain Improvements located in the Plaza. 2.5 Trash. The Owner of the Pacific Station Property hereby grants to the Owner of the Yee Property a license to enter onto the Pacific Station Property for the purpose of depositing Trash into the Trash receptacles located within the Trash Collection Enclosure identified in Exhibit D (the "Trash License ") or any temporary or interim location designated by the Owner of the Pacific Station Property. The Trash License shall commence upon the grading of the Pacific Station Property. The Owner of the Yee Property shall comply with all rules promulgated by the Owner of the Pacific Station Property pursuant to the Declaration from time to time pertaining to the use of the Trash Collection Enclosure. The Owner of the Pacific Station Property may temporarily re- locate the Trash Collection Enclosure or designate a temporary location for depositing of Trash from the Yee Property from time to time to accommodate the construction of the Project. The parties agree that this Trash License will supersede and take the place of that certain License Agreement recorded November 9, 1995 as Document No. 1995-0511030 in the Official Records of the County of San Diego (the "License Agreement "), which currently encumbers both the Pacific Station Property and the Yee Property, and that with the recording of this Agreement, the License Agreement will be fully terminated and released. 2.6 Additional Provisions Applicable to Sections 2.1 through 2,5. The following provisions apply to the construction of the Plaza Improvements, the re- connection of the Yee Property's Wet Utilities connections, the installation of the Tiebacks, the use of the Wet Utilities Easement, the Storm Drain License and the Trash License, as provided below. 2.6.1 Cost and Construction of Plaza Improvements. The Owner of the Pacific Station Property shall be solely responsible for the design, selection, and construction of the Plaza Improvements. The construction of the Plaza Improvements shall take place at the time and according to the schedule determined by the Owner of the Pacific Station Property. The construction shall be performed by contractors licensed by the State of California in a workmanlike mamter. The Owner of the Yee Property agrees to cooperate in good faith in the construction of the Plaza Improvements. 2.61 Association Rules. All easements, rights and licenses granted in this Agreement associated with the Pacific Station Contribution Area are subject to the rules promulgated by the Owner of the Pacific Station Property from time to time and any rules, restrictions and provisions set forth in the Declaration. The parties agree to faithfully abide by such rules and restrictions. 13134 2.6.3 Permits and Consents. The Owner of the Pacific Station Property shall obtain all necessary permits and consents necessary to perform the work contemplated by this Agreement. The Owner of the Yee Property shall obtain all permits and consents necessary for any work it performs or causes to be performed in the Wet Utilities Easement as it relates to any additional work at any future date, unrelated to the development of this agreement. 2.6.4 Pre - Construction Notice. The Owner of the Pacific Station Property agrees to give the Owner of the Yee Property no less than 30 days prior notice of the commencement of the construction of any work contemplated by this Agreement. The Owner of the Yee Property will give Owner of the Pacific Station Property no less than 20 days prior notice of the commencement of any non - invasive maintenance of its Wet Utilities located in the Wet Utility Easement, 60 days notice of any invasive maintenance; and 90 days notice for any new installations. 2.65 Non - Disturbance, Repairs. The Yee Property's tenants, its Owner's and its Permitted Users' use of the Plaza, Wet Utilities Easement, Storm Drain License and Trash License shall not prevent access over or interfere in any way with the use of the Plaza or the Project. The Owner of the Yee Property shall have the obligation to repair and replace any damage caused to the Project, Plaza or Plaza Improvements that is determined to have resulted from its use of the Plaza Wet Utilities Easement, Storm Drain License, and Trash License, which repair shall be made at the Owner of the Yee Property's sole cost and expense. In the event that the Owner of the Yee Property fails to make reasonable repairs within a reasonable time period, the Owner of the Pacific Station Property may undertake such repairs and seek reimbursement from the Owner of the Yee Property. The Owner of the Pacific Station Property shall have the right to place a lien on the Yee Property for any amounts not reimbursed within 60 days of written notice of the reimbursement amount. The Pacific Station Property's tenants, its Owner's and its Permitted Users' use of the Plaza; shall not prevent access over or interfere in any way with the use of the Yee Plaza Contribution Area or the Yee Property. The Owner of the Pacific Station Property shall have the obligation to repair and replace any damage caused to the Yee Plaza Contribution Area or the Yee Property that is determined to have resulted from its use of said area, which repair shall be made at the Owner of the Pacific Station Property's sole cost and expense. In the event that the Owner of the Pacific Station Property fails to make reasonable repairs within a reasonable time period, the Owner of the Yee Property may undertake such repairs and seek reimbursement from the Owner of the Pacific Station Property. The Owner of the Yee Property shall have the right to place a lien on the Pacific Station Property for any amounts not reimbursed within 60 days of written notice of the reimbursement amount. 2.6.6 Notice of Non - Responsibility. The Owners shall be entitled to post notices of non - responsibility with regard to work performed on such Owner's property by another. 2.6.7 Insurance. The Owner of the Pacific Station Property shall ensure that at F1 13135 all times during construction the work contemplated by this Agreement, the contractors performing such work will maintain at no cost to the Owner of the Yee Property, general liability insurance with liability limits not less than One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage liability, with respect to claims arising out of such construction activities. The Owner of the Yee Property shall ensure that at all times during any maintenance activities it conducts or directs in the Wet Utilities Easement or with regard to the Storm Drain License, the contractors performing such work will maintain at no cost to the Owner of the Pacific Station Property, general liability insurance with liability limits not less than One Million Dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage liability, with respect to claims arising out of such maintenance activities. 2.6.8 Certificates of Insurance. Any Owner performing work on the property of another Owner shall deliver to the other Owner a certificate of insurance evidencing the insurance required to be maintained pursuant to Section 2.6.7 hereof which certificate of insurance shall be delivered at least ten (10) days prior to commencement of such work or maintenance. 2.6.9 Mutual Indemnification. The Owner of the Pacific Station Property shall indemnify, protect, defend and hold harmless the Owner of the Yee Property and all of its employees, managers, directors, representatives, agents, contractors, successors and assigns free and harmless from any damages, liabilities, costs, expenses (including without limitation, attorneys* fees and costs and costs of enforcing this indemnity) arising from or relating to the Owner of the Pacific Station Property's construction of the work and improvements contemplated by this Agreement. The Owner of the Yee Property shall indemnify, protect, defend and hold harmless the Owner of the Pacific Station Property, the Association, any association of which the Association is a member, the members of the Association, and all of their employees, managers, directors, representatives, agents, contractors; successors and assigns free and harmless from any damages, liabilities, costs, expenses (including without limitation, attorneys* fees and costs and costs of enforcing this indemnity) arising from or relating to the Owner of the Yee Property's use of the Plana. the Wet Utilities Easement, the Storm Drain License, and the Trash License. Neither Party, however, shall be obligated to indemnity a Parry for liabilities arising out of such Party's own negligence. 2.6.10 Liens. The Owners shall promptly pay for any work done or material furnished by or on their behalf. If any lien shall at any time be filed against the any of the property of another Owner herein by reason of work, labor, services or materials alleged to have been performed or furnished by, for or to an Owner, or to anyone acting through or under such Owner, then such party will cause the lien to be discharged or bonded or post adequate security over such lien within thirty (30) days of the filing of such lien. 2.6.11 No Encumbrances. No Party to this Agreement shall do anything to cause or allow any encumbrance, lien or other adverse interest ( "Encumbrance ") to be created against real property not owned by such party. Any such Encumbrance shall be promptly removed. Except as provided in Section 6.9 below, any Encumbrance affecting a portion of any of the real 13136 property described herein over which an easement has been granted shall be subject to such easement. 2.6.12 Cooperation. The Owner of the Yee Property acknowledges and understands that the City and /or other governmental agencies and utility companies may require evidence of permission from the Owner of the Yee Property for the Owner of the Pacific Station Property to conduct the work contemplated by this Agreement. The Owner of the Yee Propemk therefore agrees to execute any letters, consents, fortns, or applications reasonably requested by the Owner of the Pacific Station Property evidencing the terms of this Agreement. ARTICLE 3 MAINTENANCE 3.1 Maintenance of Plaza and Plaza Improvements. The maintenance of the Plaza and the Plaza Improvements shall be the sole responsibility of the Owner of the Pacific Station Property pursuant to the terms of the Declaration and this Agreement. 3.2 Maintenance Costs. All of the costs associated with the maintenance, repair and replacement of the Plaza, the Plaza Improvements, and Trash collection, including, without limitation, common expenses and replacement reserve costs for the Plaza and Plaza Improvements, shall be paid by the Owner of the Pacific Station Property pursuant to the terms of the Declaration and this Agreement, subject to allocation and contribution by the Owner of the Yee Property as provided herein, unless the need for any such repair or replacement arises out of directly or indirectly, or is occasioned by any present or future Owner of all or a portion of the Yee Property or their Permitted Users in connection with their use of Plaza or Plaza Improvements, in such case, the cost of any repair or replacement shall be paid by the party or parties causing such damage. The owner of Pacific Station shall be reqired to maintina the plaza in reasonable good condition. ARTICLE 4 EXPENSES 4.1 Contribution. The Owner of the Yee Property shall pay its Allocable Share calculated in accordance with the provisions set forth herein. The Allocable Shares of the Owner of the Yee Property are as follows: Plaza Shared Expenses - $250 per year for the first year with a maximum increase of 3% per year. Trash Shared Expenses - A monthly cost equivalent to 32.5% the cost of one — three yard dumpster, picked up twice weekly by the local collection service. 4.2 Pavment of Allocable Share. 10 13137. 4.2.1 Statement. The Owner of the Pacific Station Property shall deliver either monthly or quarterly, via United States mail; or such other method as the Owners deem appropriate, a statement setting forth the Shared Expenses, the Allocable Share of such Plaza and Trash Shared Expenses to be paid by the Owner of the Yee Property and the due date therefore. A copy of this statement shall also be delivered to the tenants) of the Yee Property. 4.2.2 Pavment Commencement Date. The obligation of the Owner of the Yee Property to pay its Allocable Share described in Section 4.1 above shall commence on the Payment Commencement Date. 4.2.3 Late Pavments. If the Owner of the Yee Property fails to pay the Allocable Share within thirty (30) days after the due date therefor, then a late charge in the amount of ten percent (10 %) of the amount of the delinquent amount due, interest charged at the Default Interest Rate commencing from the date of delinquency, and reasonable costs of collection, including attorneys* fees and costs, shall be levied by the Owner of the Pacific Station Property. 41.4 Nonpayment of Shared Expenses. An Installment is delinquent if not paid within thirty (30) days of the due date as established by this Agreement. If an Installment is not paid within thirty (30) days after the due date, such Installment plus all reasonable costs of collection (including attorneys* fees) and late charges as provided herein shall bear interest at the maximum rate permitted by law, commencing thirty (30) days from the due date until p aid. ARTICLE 5 TERMINATION /SUSPENSION 5.1 Termination. This Agreement shall terminate, and the easements, restrictions and other provisions shall be of no further force and effect in the event an Owner of all or any portion of the Pacific Station Property has not obtained a building permit for the construction of the Project on the Pacific Station Property within fifteen (15) years from the date of execution of this Agreement. 5.2 Suspension of Plaza Use for Non - Pavment or Non - Compliance. In the event that the Owner of the Yee Property fails to pay its Installments pertaining.to the Plaza Shared Expenses when due, and fails to cure such default within 30 -days of written notice of such default, the rights of the Owner of the Yee Property and its Permitted Users to use the Plaza and Plaza Improvements located within the Pacific Station Plaza Contribution Area shall be suspended until such time that the Owner of the Yee Property brings currents such Installments, including all late fees and interest charges. In the event that the Owner of the Yee Property or its Permitted Users materially fails to comply with the rules established by the Declaration, the Owner of the Pacific Station Property, or this Agreement, pertaining to the use of the Plaza and the Plaza Improvements, and fails to cure such noncompliance within 30 -days of written notice of such non - compliance, the rights of the Owner of the Yee Property and its Permitted Users to 11 13138 use the Plaza and Plaza Improvements located within the Pacific Station Plaza Contribution Area shall be suspended until such time that the Owner of the Yee Property cures such non- compliance. 53 Suspension of Trash License for Non- Pavment or Non - Compliance. In the event that the Owner of the Yee Property fails to pay its Installments pertaining to the Trash Shared Expenses when due, and fails to cure such default within 30 -days of written notice of such default, the Trash License shall be suspended until such time that the Owner of the Yee Property brings currents such Installments, including all late fees and interest charges. In the event that the Owner of the Yee Property or its Permitted Users materially fails comply with the rules established by the Declaration, the Owner of the Pacific Station Property, or this Agreement pertaining to the use Trash Collection Enclosure and the Trash License, and fails to cure such non - compliance within 30 -days of written notice of such non - compliance, the rights of the Owner of the Yee Property under the Trash License shall be suspended until such time that the Owner of the Yee Property cures such non - compliance. 5.4 No Limitation of Remedies. Nothing in this Article 5 shall be interpreted to limit the remedies available to any Party with regard to the breach of this Agreement by another Parry. ARTICLE 6 GENERAL PROVISIONS 6.1 Condemnation or Destruction. In the event a portion of the Plaza or Plaza Improvements are either condemned or destroyed or damaged the Owner of the Pacific Station Property may, in its sole and absolute discretion and in accordance with the provisions of the Declaration, restore or repair the Plaza and/or Plaza Improvements. In no event shall the Owner of the Yee Property be entitled to any insurance or other proceeds collected by the Owner of the Pacific Station Property and/or the Owner of the Pacific Station Property as a result of the destruction or condemnation of the Plaza and/or Plaza Improvements. If the owner of the Pacific Station Property chooses to restore or repair the plaza improvements in this event it will include the portion of the plaza in the Yee contribution area. 6.2 Maintenance Obligations. Nothing contained herein shall be deemed to impose maintenance or cost sharing obligations on the Owner of the Yee Property except those that may be expressly set forth this Agreement. 63 Enforcement. Violation or breach of any covenant, agreement or provision contained herein shall give to the Party in whose favor such covenant, agreement or provision was trade, the right to prosecute a proceeding at law or in equity against the person or persons who violated or are attempting to violate any such covenant, agreement or provision, to enjoin or prevent them from doing so, to cause such violation to be remedied and/or to recover damages for such violation. The Owner of the Pacific Station Property shall have the right to record a lien against the Yee Property for any amounts that are delinquent under this Agreement. The Owner of the Yee property shall also retain lein rights for any amounts delinquent under this agreement. 12 13139 6A Binding on Successors. This Agreement and all of the covenants and conditions herein contained shall be binding upon and shall inure to the benefit of the executors, administrators, heirs, assigns and successors of each of the Parties hereto. 6.5 Severability. If any term, provision, covenant or condition of this Agreement is held to be invalid, void or otherwise unenforceable, to any extent, by any court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby, and each term, provision and covenant shall be valid and enforceable to the fullest extent permitted by law. 6.6 Attorneys* Fees. In the event legal proceedings are commenced regarding the enforcement of this Agreement, the prevailing party in any such action shall recover, in addition to any relief granted therein. reasonable attorneys* fees from the other parry or parties, which fees shall be included in any judgment rendered in such proceedings. 6.7 To Waiver. The waiver or failure to enforce any breach or violation of any covenant herein contained shall not be deemed to be a waiver or abandonment of such covenant, or any waiver of the right to enforce any subsequent breach or violation of such covenant. 6.8.. Notice. Any and all notices, demands or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another parry if served either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand or other communication is served personally, service shall be conclusively deemed made at the time of such personal service. If such notice, demand or other communication be given by mail, service shall be conclusively deemed given upon receipt thereof•(or refusal to accept delivery) as shown on the return receipt therefor, following the deposit thereof in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth: Owner of the Pacific Station Property: Owner of the Yee Property: John DeWald & Associates, LLC Attn: John DeWald 1855 Freda Lane Cardiff, CA 92007 George Yee PO Box 230176 Encinitas, CA 92023 -0176 Any party hereto may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other party or parties hereto. 6.9 Mortgagee Protection. No portion of this Agreement or any amendment or violation thereof shall operate to defeat or render invalid, in whole or in part, the rights of the 13 13140 beneficiary, insurer, guarantor, or holder of any mortgage or deed of trust encumbering any portion of the real property described herein; provided that, after foreclosure of any such mortgage or deed of trust, the property foreclosed shall remain subject to this Agreement. 6.10 Enure Agreement. With the exception of any easement agreements of record as of the date this Agreement is recorded, this Agreement sets forth the entire understanding and agreement of the parties with respect to all matters discussed herein and supersedes any and all prior agreements, written or oral regarding such matters. The provisions hereof may not be changed or modified except by an instrument in writing signed by the parties hereto. 6.11 California Law. This Agreement is being executed and delivered, is intended to be performed, in the State of California, and to the extent permitted by law, the execution, validity, construction and performance of this Agreement shall be construed and enforced in accordance with the laws of the State of California. This Agreement shall be deemed made and entered into in San Diego County. 6.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. 6.13 Mutualitv; Reciprocity; Runs with Land; Assignment. All conditions, covenants and agreements contained herein are made for the direct, mutual and reciprocal benefit of each and every part of the real property described herein; shall create mutual, equitable servitude and burdens upon each portion of the real property described herein in favor of the other real property described herein; shall create reciprocal rights and obligations between the real property described herein and privity of contract and estate between all Owners of such real property, their heirs, successors and assigns; and shall, as to the Owners of the real property described herein bind any such Owner and such Owner's heirs, successors and assigns, operate as covenants running with the land, for the benefit of the other real property. Except as set forth in Section 1.8 above, this Agreement may not be assigned by a Party unless such party is transferring its entire interest in the real property it owns. 6.14 Authority. Each Party signing this Agreement represents and warrants that such Party has full authority to do so, that performance of all of the obligations contained herein have been duly authorized by all requisite actions on behalf of such Party, and that this Agreement binds such party. Each party further represents and warrants that it owns the its respective real property in fee simple (except as provided in Section 1.8 above) and that it has the power and authority to grant the easements and rights herein granted. [CONTINUES ONTO NEXT PAGE] 14 13141 6.15 Cooperation. The Parties agree and acknowledge that the successful implementation this Agreement will require a high degree of cooperation between the Parties. Therefore, each Party agrees and covenants that it will at all times promptly cooperate in good faith with the other Party in order to carry out the intent of this Agreement. NOW WHEREFORE, THE PARTIES ENTER INTO THIS EASEMENTS, UTILITIES AND COST SHARING AGREEMENT AS OF THE DATE FIRST WRITTEN ABOVE. "Pacific Station" Toy Factory 101 Encinitas, L.P. A California Limited Partnership Bv: John DeWald &� tares, LLC A Caliform'a�imit lity Cc Its: General Pafter i By: Acknowledgment State of California County Z,Hnl2 ) On n /Z 2008, before me, �)OYe, /)o9wW 0/9.ro notary public, personally appeared ?onN E WA_D , who proved to me on the basis of satisfactory evidence to be the person(g) whose name(s) istare subscribed to the within instrument and acknowledged to me that heliha4hey- executed the same in his/itedHtev authorized capacity(ies), and that by hisA+eWOteir signature(#) on the instrument the person(), or the entity upon behalf of which the person(A) acted, executed the instrument 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS mv hand and official sea]. lo' ► com 0,1789146 SAN DIEGO COuNry • a • • Signat (Seal) CONTINUE ONTO NEXT PAGE] 15 13142 "Yee" Ci orgg�e -Yee Anna Wong Yee Acknowledgment State of California ) Counry5�14 ( )re) On M4 , 2008. before me,JOYE J ),qWW (f) T d , ootar;• public, personally appeared ' a _ who proved to me on the basis of satisfactory evidence to be the person(p) whose name,(e) ist a subscribed to the within instrument and acknowledged to me that he/sk*Aky executed the same in hiv%edeheir authorized capaciry(i•a), and that by his/kerAheir signaturc(e) on the instrument the person(d), or the entity upon behalf of which the person(o) 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 v AVW (Seal) Acknowledgment State of California SEEF21THIMM A 1 • 11•, On AtA4 1?. 2008, before me, uNDA M. P n notary public, personally appeared AMNA W Ot4Q let , who proved to me on the basis of satisfactory evidence to be the person(f) whose -nameft is/a•• subscribed to the within instrument and acknowledged to me that )t/she/tAW executed the same in bWbcrA*ir authorized capacity(Q•O, and that by Aifterhlre® signature(S3 on the instrument the person(a), or the entity upon behalf of which the person(r) acted, executed the instnu cia. 1 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 oofffiicciial�seal. Signatur44ry. (Seal) 16 -1• T+ EXHIBIT A Legal Description of the Pacific Station ProperV PARCEL A: 13143 A PORTION OF PARCEL 9 OF PARCEL MAP 12092 RECORDED MAY 6, 1982 IN BOOK OF PARCEL MAPS AT PAGE 12092 RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY AND LOTS 4 AND 5 IN BLOCK 60, ENCINITAS, IN THE CITY OF ENCINITAS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 148, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 12,..1883 FURTHER DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEASTERLY CORNER OF SAID PARCEL 9 OF PARCEL MAP 12092; THENCE SOUTH 5 021' 55" EAST ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 9 A DISTANCE OF 480.00 FEET; THENCE SOUTH 84 °38' 05" WEST ALONG THE SOUTHERLY BOUNDARY OF SAID PARCEL 9 A DISTANCE OF 174.86 FEET; THENCE NORTH 5 °22' 18" WEST ALONG THE WESTERLY BOUNDARY OF SAID PARCEL 9 AND THE NORTHERLY PROLONGATION THEREOF A DISTANCE OF 214.66 FEET; THENCE NORTH 86 011' 27" EAST A DISTANCE OF 26.25 FEET; THENCE NORTH 20 036' 07" EAST, A DISTANCE OF 66.17 FEET; THENCE NORTH 5 040' 13" WEST A DISTANCE OF 16.49 FEET TO THE EASTERLY PROLONGATION.OF THE NORTHERLY BOUNDARY OF THE LAND 'CONVEYED IN DEED TO GEORGE YEE AND ANNA WONG YEE RECORDED NOVEM6ER 15, 1991 AS FILE /PAGE NO. 1991- 0591301 IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY; THENCE SOUTH 84 °36' 4" WEST ALONG SAID NORTHERLY BOUNDARY A DISTANCE OF 1.29 FEET TO A POINT ON THE WESTERLY BOUNDARY OF SAID PARCEL 9 OF PARCEL MAP 12092; THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 9 NORTH 21 010' 44" EAST A DISTANCE OF 103.05 FEET; THENCE CONTINUING ALONG SAID WESTERLY BOUNDARY NORTH 5 021' 55" WEST A DISTANCE OF 97.84 FEET; THENCE NORTH 84 036' 4" EAST ALONG THE NORTHERLY BOUNDARY OF SAID PARCEL 9 A DISTANCE OF 75.00 FEET TO THE POINT OF BEGINNING. PARCEL B: A ROAD EASEMENT FOR INGRESS AND EGRESS ACROSS THE NORTHERLY 12.5 FEET OF PARCEL 8 OF PARCEL MAP N0, 12092, IN THE CITY OF ENCINITAS, COUNTY OF SAN DIEGO, STATE O CALIFORNIA, ACCORDING TO MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 61 1982, BEING A DIVISION OF A PORTION OF THE ATCHINSON, TOPEKA AND SANTA FE RAILWAY COMPANY STATION GROUNDS IN SECTION 16, TOWNSHIP 13 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, ACCORDING TO OFFICIAL PLAT THEREOF. EXHIBIT B Legal Description of the Yee Property A PORTION OF PARCEL 9 OF PARC OF PARCEL MAPS AT PAGE 12092 RECORDER OF SAN DIEGO COUNTY ACCORDING TO MAP THEREOF NO. RECORDER OF SAN DIEGO COUNTY, FOLLOWS: 13144 EL MAP 12092 RECORDED MAY 61 1982 IN BOOK RECORDED IN THE OFFICE OF THE COUNTY AND LOTS 4 AND 5 IN BLOCK 60, ENCINITAS, 148 FILED IN THE OFFICE OF THE COUNTY JUNE 12, 1883 FURTHER DESCRIBED AS COMMENCING AT THE NORTHEASTERLY CORNER OF SAID PARCEL 9 OF PARCEL MAP 12092; THENCE SOUTH 50 021155" EAST ALONG THE EASTERLY BOUNDARY OF SAID PARCEL 9 A DISTANCE OF 480.00 FEET; THENCE SOUTH 84 °38'05" WEST ALONG THE SOUTHERLY BOUNDARY OF SAID PARCEL 9 A DISTANCE OF 174.86 FEET; THENCE NORTH 5 022118" WEST ALONG THE WESTERLY BOUNDARY OF SAID PARCEL 9 AND THE NORTHERLY PROLONGATION THEREOF A DISTANCE OF 214.66 FEET AND THE TRUE POINT OF BEGINNING; THENCE NORTH 86 011127" EAST A DISTANCE OF 26.25 FEET; THENCE NORTH 20 036'07" EAST A DISTANCE OF 66.17 FEET; THENCE NORTH 5 040'13" WEST A DISTANCE OF 16.49 FEET TO THE EASTERLY PROLONGATION OF THE NORTHERLY BOUNDARY OF THE LAND CONVEYED IN DEED TO GEORGE YEE AND ANNA WONG YEE RECORDED NOVEMBER 15, 1991 AS DOCUMENT NO, 1991- 0591301 IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY; THENCE SOUTH 84 036'4" WEST ALONG SAID NORTHERLY BOUNDARY A DISTANCE OF 55.19 FEET TO THE NORTHWESTERLY CORNER OF SAID YEE'S LAND; THENCE SOUTH 5 °22'18" EAST ALONG THE WESTERLY BOUNDARY OF SAID YEE'S LAND A DISTANCE OF 75.23 FEET AND THE POINT OF BEGINNING. 13145 An BLOCK 59 MAP N0. 148 j "E" STREET AW W'42'E 75.00' _ v $ �� �l�3'59'42'f 75.00• $ .v m j g Cb '; P m r a P : i y -B Lo g v, 3 25' ru cn 1{:�\ I a t [dam N Imp a 9ea. c Zo Go La { o v is ICI J T "N 0 13146 "E" STREET M� M83.59.42•E 75.00' _ • c `11 036S9'42•E 75.00' m n I m rn m at lz to ^ f2.00' IQ 0 2 RE - M S89.59'420M 50.360 2 1 d w o° o IN = M9339'42'E 55.43' 'm =m Isis is — / ® _ Cj tea Xr a i I $ g NM 052942 E ® ®� Sy `•1 oa n LA = ski I M od CO g I m;62 .[. Z JOg• r1 n n cn c" of g °a m 01�•, •-. {a� rn n'1 ti CA oo$o �t°ii / ME S m� b I la M84'038440E 133.09• : I 0 m y �I L N