122705 RESO AA Mutal Release Jt Escrow Inst Vinci Invest Co.,Inc

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Resolution Approving Acquisition Agreement, Mutual Release and Joint Escrow Instructions with Vinci Investment Co., Inc. December 27, 2005 Page 2 acquisition agreement. Vinci disputed the legality of the Agency's action. Vinci has concluded its litigation with the Johers and has successfully acquired the Mr. J's property. The Agency and Vinci desire to resolve their differences and, in doing so, carry out the intent of the Purchase Agreement and the Term Sheet. Under the proposed Acquisition Agreement, the Agency will purchase the Mr. J's Assets including the lease, buildings & business goodwill for $4,247,897 and then license the property back to Vinci for two years. During that time, Vinci is willing to integrate the premises into the Honda Dealership and make substantial improvements to bring it into full compliance with the Santa Ana Auto Mall specific development standards. To assist in that, the Agency will contribute $367,000 to Vinci to partially offset those costs, plus pay to Vinci $385,103 as an advance against the rental subsidy proposed in the Term Sheet. Finally, the Agency will pay Vinci $1,025,000 as a full and complete settlement and compromise of Vinci's claim for extraordinary expenses incurred in the Joher litigation and for all other disputes and potential claims against the Agency by Vinci. At the end of the two years, if all of the improvements are made, the Agency will re- assign the lease back to Vinci. In the meantime, Vinci and the Agency will sign a new Term Sheet to guide negotiations on a DDA. FISCAL IMPACT Total payments by the Agency will be $6,025,000. Funds are available in the South Main Tax Allocation Bond Capital Project account (account no. 552 - 936- 6611). Patricia C. Whitaker Executive Director PCW /JF /mlr APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management H: \ACTIONS \2005 CRA \Honda Settlement -Short 12- 27- 05.doc Services Agency