Maguire/Thomas Partners Fifth & Grand, Ltd., Maguire/Thomas Partners Grand Place Tower, Ltd., Tax Matters Partner - Page 11

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          rights in connection with Phase III and to develop the Grand                
          Place Tower building.  The Grand Place Tower parcel was assembled           
          from land that MTP owned.                                                   
               2.   The Cooperation Agreement                                         
               A general purpose of the Cooperation Agreement was to                  
          preserve and rehabilitate the Central Library.  Under the                   
          Cooperation Agreement, CRA pledged to spend up to $110,400,000              
          ($48,975,000 of which CRA would obtain from MTP pursuant to the             
          OPA) for that purpose.  CRA made the pledge to the City in                  
          consideration for land and other rights it would receive from the           
          City under the Cooperation Agreement.  CRA, in turn, would convey           
          this land and other rights to MTP pursuant to the OPA.                      
               The City conveyed the Garage Plaza parcel, part of the                 
          Library Tower parcel, and other land to CRA.  CRA conveyed that             
          land to MTP pursuant to the OPA.  Under the Cooperation                     
          Agreement, CRA agreed to reserve the same easements, rights, and            
          covenants that the City had reserved in its conveyance to CRA.              
               Under the Cooperation Agreement, the City agreed to record a           
          covenant running with the land for the benefit of the City and              
          CRA against the Central Library parcel limiting the Central                 
          Library building to 361,000 square feet and prohibiting further             
          development of the Central Library parcel.  The City executed and           
          recorded this covenant with the Los Angeles County Recorder in              
          1987.  The covenant is binding on the owner of the Central                  






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