DEPARTMENT OF

CITY PLANNING 200 N. SPRING STREET, ROOM 525 Los ANGELES, CA 90012-4801

AND 6262 VAN NUYS BLVD., SUITE 351

VAN NUYS, CA 91401

CITY PLANNING COMMISSION

DAVID H. J. AMBROZ PRESIDENT

RENEE DAKE WILSON VICE-PRESIDENT

ROBERT L. AHN MARIA CABILDO CAROUNE CHOE RICHARD KATZ JOHNW. MACK

DANA M. PERLMAN MARTA SEGURA

JAMES K. WILUAMS COMMISSION EXECUTIVE ASSISTANT II

(213) 978-1300

Date: January 30, 2015

CITY OF LOS ANGELES CALIFORNIA

ERIC GARCETII MAYOR

EXECUTIVE OFFICES

MICHAEL!. LOGRANDE DIRECTOR

(213) 978-1271

USA M. WEBBER, AICP DEPUTY DIRECTOR

(213) 978-1274

JAN ZATORSKI DEPUTY DIRECTOR

(213) 978-1273

(VACANT) DEPUTY DIRECTOR

FAX: (213) 978-1275

INFORMATION www.planning.lacity.org

City Planning Case Nos.: CPC-2009-3416-DA-TDR-CUB-CU­CUW-ZV-SN-ZAD-SPR-GB

and VTT 71141 and ENV-2009-1577-EIR-GB

Related Council File: 11-0106

Council District No. 14

Honorable City Council City of Los Angeles City Hall, Room 395 Los Angeles, CA 90012

Dear Councilmembers:

PROPOSED ESOPPEL CERTIFICATE AND ACKNOWLEDGEMENT FOR PROPERTY LOCATED AT 900 AND 930 WILSHIRE BOULEVARD, WITHIN THE CENTRAL CITY COMMUNITY PLAN

The Wilshire Grand Hotel Project was approved by the City Council in 2011. The requested entitlements were for: a Development Agreement (Ordinance 181 ,636), a Vesting Tentative Tract Map, a Transfer of Floor Area Rights, Site Plan Review, Conditional Use for a Major Development, a Sign Supplemental Use District for the Figueroa and Seventh Street Sign District (Ordinance 181,637), a Master Conditional Use Permit for the sale of alcoholic beverages, conditional use Permits for a Heliport and Wireless Telecommunication Facilities, a Variance to permit Outdoor Dining, and various Zoning Administrator Determinations, and certification of an Environmental Impact Report.

The project was modified, as was permitted in the Conditions of Approval, to be constructed as a single tower with an approximately 900 room hotel including 380,000 square feet of office space, and 200,000 square feet of hotel ballrooms, conference facilities, restaurants, and retail space. The landmark project is currently under construction.

CPC-2009-542-GPA-ZC-HD-SPR-ZAA and ENV-2009-339-EIR Page 2

Presently, the Developer requests approval of the attached Estoppel Certificate and Acknowledgment.

Pursuant to section 7.20 (Estoppel Certificate) of the Development Agreement, the Director of Planning is authorized to execute an Estoppel Certificate as requested by the Developer. Pursuant to section 6.1.1 (Mortgagee Rights) of the Development Agreement, the City agreed to reasonable consent to "Agreement interpretations and modifications" as may be required by a Lender. This section did not define a process for such clarifications. The attached document reflects a document that combines the Estoppel and mortgagee protections. As such, it requires approval by City Council for this administrative matter.

Subsequent to Council's Action, and not dependent on the matter at hand, the Department of City Planning will issue an Annual Review of the Wilshire Grand Development Agreement wherein status updates and compliance will be enumerated in the form of a Determination of Compliance.

RECOMMENDATION.

That the City Council:

1 . Approve the attached Estoppel Certificate and Acknowledgement 2. Direct the Department of City Planning to Execute the Estoppel Certificate and

Acknowledgement

Very truly yours,

MICHAEL J. LOGRANDE Director of Planning

ana Bonstin Senior City Planner

Attachment: Estoppel Certificate and Acknowledgement

ESTOPPEL CERTIFICATE AND ACKNOWLEDGEMENT (DEVELOPMENT AGREEMENT)

THIS ESTOPPEL AND ACKNOWLEDGEMENT ("Estoppef'), is made for reference purposes on , 2015 (the "Effective Date"), and is given by the CITY OF LOS ANGELES, a municipal corporation (the "City") for the benefit of HANJIN INTERNATIONAL CORP., a California corporation (together with its direct and indirect owners, the "Developer), and Industrial Bank ofKorea, New York Branch, as administrative agent and collateral agent under the Loan Agreement described below (together with its successors and assigns, the "Administrative Agent").

RECITALS

A. Developer is constructing in downtown Los Angeles, California, a mixed-use hotel and office project, with ancillary restaurants, retail space, parking and other facilities, on certain real property more particularly described in Exhibit A attached hereto (the "Property"). The Property consists of the entire block bounded by Wilshire Boulevard on the north, Figueroa Street on the east, 7th Street on the south and Francisco street on the west. The project being constructed on the Property is commonly known as the "Wilshire Grand Center" (the "Project').

B. Developer has obtained various municipal land use approvals from the City in connection with the development of the Project including a Development Agreement dated June 22, 2011 (the "Development Agreement'), four Conditional Use entitlements (Major Development Project, Alcoholic Beverage sales, Heliport, and Wireless Telecommunications Facilities), Transfer of Floor Area Rights, a Variance, a Sign District, a Shared Parking approval, an approval for Reduced On-Site Parking, Site Plan Review under Case No. CPC-2009,..3416-DA-TDR-CUB-CU-CUW-ZV-SN-ZAD-SPR-GB and Vesting Tentative Tract Map No. 71141 ("VTTM No. 71141"). Collectively, these City land use approvals are referred to as the Property's entitlements (the "Entitlements"). The City has responsibility for administering the Entitlements and Development Agreement and for regulating use of the Property, including the processing of amendments to the Entitlements, the issuance of additional building and other municipal permits for the development, use and occupancy of the Property.

C. Developer intends to obtain a loan secured by, among other things, the Property to finance the construction of the Project (the "Loan"), which Loan is, or will be, in the aggregate principal amount of$300,000,000 and will be evidenced by a Loan Agreement (the "Loan Agreement', together with other documents evidencing, guarantying, or securing the Loan, the "Loan Documents") by and among Developer, Administrative Agent, and certain lenders from time to time party thereto ("Lenders").

D. Pursuant to the terms of an Assignment of Contracts, Licenses, Permits, Agreements, Warranties and Approvals, a Construction Deed ofTrust, Assignment of Rents and Leases, Security Agreement and Fixture Filing to be recorded against the Property, and various other Loan Documents (collectively, the "Security Agreement'), the Loan will be secured by, among other things, an assignment to Administrative Agent (for the benefit of itself and the Lenders), as collateral security for Developer's obligations under the Loan Documents, all of its right, title and interest in and to the Entitlements, including, without limitation, the Development Agreement.

E. Administrative Agent and Developer advise the City that they have agreed (i) that Developer may not voluntarily terminate nor consent to the termination of the Development Agreement without the written consent of the Administrative Agent, and no such voluntary termination shall be effective without such consent; (ii) no material modification, amendment or supplement of the Development Agreement by Developer shall be binding upon Administrative Agent or any Lender without the written consent of the Administrative Agent.

F. Pursuant to Section 6.1.1 of the Development Agreement, the City agreed that it will not unreasonably withhold its consent to a request by a mortgage lender for the interpretation or modification of the Development Agreement, provided such interpretation or modification is consistent with the intent and purposes of the Development Agreement.

G. As a condition precedent to obtaining the Loan, Developer, Administrative Agent and Lenders have required that Developer obtain this Estoppel from the City, and Administrative Agent and Lenders will be relying on this Estoppel in agreeing to close and fund the Loan.

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of are hereby acknowledged, the City certifies, acknowledges, and agrees as follows:

ESTOPPEL

1. The Recitals form a part of this Estoppel and are fully incorporated herein by this reference.

2. The City acknowledges and agrees that the granting of a security interest in the Developer's right, title, and interest in the Property, the Development Agreement, and the Entitlements pursuant to the Security Agreement is a permitted encumbrance pursuant to the Development Agreement, and that no further consent or approval of the City is required with respect thereto. The City hereby agrees that this Estoppel satisfies any notice requirements with respect to the creation of such security interests and encumbrances and a request for notice of default under the Development Agreement, including pursuant to Section 6.1.4 thereof.

3. The City represents and warrants to the Administrative Agent and Lenders that:

3.1 The Development Agreement has not been modified, amended or supplemented, nor have any of its terms or provisions been waived or released.

3.2 To the City's knowledge, there is no default by Developer in the performance of its obligations under the Development Agreement and no event has occurred that with the passing of time or the giving of notice would constitute such a default by Developer (collectively, a "Developer Default'). The City has not delivered to Developer any notice of default pursuant to the Development Agreement, including any notice pursuant to Section 5.1.2 thereof.

3.3 The City has no right to terminate the Development Agreement except in accordance with the express terms thereof. To the City's knowledge, no

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event has occurred that with the passing of time or the giving the notice would give the City the right to terminate the Development Agreement.

3.4 The Development Agreement is in full force and effect, and has been duly executed and delivered on behalf of the City.

4. The City agrees that the following procedures shall apply upon the occurrence of any Developer Default:

4.1 Whenever the City, pursuant to its rights set forth in the Development Agreement, delivers any notice to the Developer of the occurrence of a Developer Default (a "Cure Notice"), the City shall not modify or terminate the Development Agreement unless and until each of the following have occurred: (a) written notice of the Developer Default is provided to Administrative Agent as provided for in Section 6.1.5 of the Development Agreement; and (b) if Administrative Agent elects to cure such Developer Default, such Developer Default remains uncured after the expiration of the applicable cure period set forth in Section 4.3, below.

4.2 Administrative Agent shall have the right and the power to cure any Developer Default specified in a Cure Notice within the cure periods set forth in Section 4.3 below, and, if such Developer Default is so cured, the Development Agreement shall no longer be deemed in default and shall remain in full force and effect.

4.3 Developer Defaults may be cured by Administrative Agent in the following manner within the following time frames:

4.3.1 For all Developer Defaults that are reasonably susceptible to cure within one hundred twenty (120) days after Administrative Agent's receipt of the applicable Cure Notice setting forth such Developer Default (the "120 Day Cure Period''), Administrative Agent shall have such 120 Day Cure Period to cure such Developer Defaults. If a Developer Default is not reasonably susceptible to cure within such 120 Day Cure Period, and Administrative Agent has commenced to cure such Developer Default within such period and has been diligently prosecuting the same, then Administrative Agent shall be provided with such additional time as is reasonably necessary to complete the cure, provided Administrative Agent continues to diligently pursue such cure to completion. If Administrative Agent is prevented from commencing or continuing foreclosure proceedings or the cure by any bankruptcy stay, or any order, judgment or decree of any court or regulatory body of competent jurisdiction, it shall be considered to be diligently pursuing the cure if Administrative Agent diligently seeks release from or reversal of such stay, order, judgment or decree.

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5. In the event the Development Agreement is terminated as a result of a bankruptcy or similar proceeding ("Termination Event'), the City shall provide written notice to Administrative Agent of the Termination Event. Upon receipt of such notice, Administrative Agent shall have the right, exercisable by written notice to the City within thirty (30) business days following written notice from the City of the occurrence of the Termination Event, to request that the City negotiate a new Development Agreement with Administrative Agent, as agent for the Lenders, as the developer thereunder on the same terms and conditions that were in effect under the Development Agreement immediately prior to the termination thereof (the "New Development Agreement') and the City shall negotiate in good faith for a New Development Agreement; provided, however, that as a condition to the City's to entering into a New Development Agreement with Administrative Agent, Administrative Agent shall be required to cure (or commence to cure and prosecute such cure to completion, as applicable) all Developer Defaults that can be cured by the payment of money and that existed under the Development Agreement immediately prior to the termination thereof in accordance with the terms of Section 4.3 above.

6. Neither Administrative Agent nor any Lender shall have any obligations under the Development Agreement except during the period that Administrative Agent holds title to the Property on behalf of Lenders. Without limiting the foregoing, in the event Administrative Agent on behalf of Lenders acquires title to the Property through Foreclosure Transfer or otherwise, Administrative Agent shall have the right to transfer and convey all or a portion of the Property to one or more third party transferees, provided that the conditions set forth in Section 6.2.1 ofthe Development Agreement are satisfied. Upon such transfer and conveyance, neither Administrative Agent nor any Lender shall have any further obligation under the Development Agreement or to the City for acts occurring with respect to such portion of the Property conveyed following the date of the conveyance, provided such obligations are assumed by one or more such third party transferees.

7. The rights of Administrative Agent under this Estoppel are intended solely for the benefit of Administrative Agent (and any successor or assignee of Administrative Agent) and the Lenders and shall not inure to the benefit of or be enforceable by Developer. The terms and provisions of this Estoppel shall not limit or otherwise affect the obligations of Developer under the Loan Documents. This Agreement and the Development Agreement shall be binding on and shall inure to the benefit of the successors and assigns of the parties hereto. The terms and provisions of this Estoppel shall remain in effect only so long as the Loan Documents remain in effect and shall terminate upon any termination of the Loan Documents and the full reconveyance of the lien of the applicable deed of trust, except for any rights or obligations that accrue prior to the date of such termination.

8. Any notice required or desired to be given to Administrative Agent pursuant this Estoppel shall be given in accordance with the Development Agreement and addressed as follows:

Administrative Agent:

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Industrial Bank of Korea 1250 Broadway New York, NY 10001 Attention: Mr. Hyung-jun KIM Facsimile No.(212) 268-6696

with a copy to:

with a copy to:

Latham & Watkins LLP 355 South Grand Ave. Los Angeles, CA 90071-1560 Attn: Kim Boras Facsimile No.: (213) 891-8763

Paul Hastings LLP 515 South Flower Street Los Angeles, CA 90071 Attn: Mitchell B. Menzer Facsimile: (213) 996-3111

Administrative Agent may change its addresses set forth above by giving written notice to the City in accordance with the provisions of the Development Agreement.

9. This Estoppel shall be governed by and construed in accordance with the laws of the State of California. This Agreement constitutes the sole understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral, with respect to the subject matter hereof. This Estoppel cannot be terminated and none of its terms can be modified or waived except by an instrument in writing signed by the Party against whom enforcement of such modification, waiver, or termination is sought.

10. This Estoppel may be executed in any number of counterparts, each of which shall constitute an original and all ofwhich, when taken together, shall constitute one and the same instrument.

[Signatures Follow on the Next Page]

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IN WITNESS WHEREOF, this Estoppel has been duly executed and delivered by as of the date first above written.

ACKNOWLEDGED:

HANJIN INTERNATIONAL CORP., a California corporation

By: ________________ __ Name: -------------Its: ----------------

CITY OF LOS ANGELES, a municipal corporation

By: Name: -----------------------------Its:

EXHffiiTA

LEGAL DESCRIPTION

PARCELS "A" AND "B" OF PARCEL MAP L.A. NO. 5728., IN THE CITY OF LOS ANGELES COUNTY OF LOS ANGELES STATE OF CALIFORNIA, AS PER MAP RECORDE'D IN BOOK 20-t_ PAGES 14 AND 15, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDEK OF SAID COUNTY.

APN: 5144-008-020 (Affects: Parcel A) and 5144-008-021 (Affects: Parcel B)

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