2016-35 RESOLUTION 2016-35
RESOLUTION OF THE CITY COUNCIL OF THE CITY' OF
GRAND TERRACE, COUNTY OF SAN BERNARDINO STATE
OF CALIFORNIA APPROVING AND AUTHORIZING THE
MAYOR TO EXECUTE THE DISPOSITION AND
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF
GRAND TERRACE AND DR. TERRY MCDUFFEE FOR THE
PURCHASE OF CITY OWNED PROPERTY LOCATED AT
THE SOUTHWEST CORNER OF COMMERCE WAY AND
MICHIGAN STREET (1167-141-08) AND FINDING THAT
THIS PROJECT IS EXEMPT FROM CEQA REVIEW
PURSUANT TO SECTION 15332 OF THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT GUIDELINES
WHEREAS, pursuant to Health and Safety Code Section 34191.5 the Grand Terrace
Successor Agency ("Successor Agency") prepared 'and submitted a Grand Terrace Successor
Agency Long-Range Property Management Plan (''LRPMP") that addresses the disposition and
use of the real properties of the former redevelopment agency;
WHEREAS, on April 24, 2015, the California Department of Finance approved the
LRPMP, which identified disposition of the certain property to be transferred to the City of
Grand Terrace ("City") for future development;
WHEREAS, the City is the owner of certain real property and_improvements thereon,
which is more specifically described in Exhibit A of this Agreement (City Property), which
was transferred to the City from the Successor Agency;
WHEREAS, City Property is one of seven parcels that comprise Property 4 of the
LRPMP;
WHEREAS, the California Health & Safety Code requires that for real property .
transferred from the Successor Agency to the City for future development the City must enter into
compensation agreements with certain affected taxing entities.
WHEREAS, the City is currently in negotiation regarding and anticipates successful
execution of the required compensation agreement by the appropriate taxing entities.
WHEREAS, Developer desires to acquire the City Property for development of an
animal emergency hospital and other retail,professional or commercial uses.
WHEREAS, the City has a vested interest .in ensuring the City Property is properly
developed.
WHEREAS, Developer owns certain real property, and improvements thereon
which is more specifically described in Exhibit B of this Agreement ("Developer
Property").
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RESOLUTION NO. 2016-35 PAGE 1 OF 91 SEPTEMBER 27, 2016
WHEREAS, in partial consideration of Developer's acquisition of the City Property, City
desires an option to purchase the Developer's Property. -
WHEREAS, City and Developer entered into an Exclusive Negotiation Agreement dated
July 12, 2016 ("Negotiation Agreement");
WHEREAS, Developer understands and acknowledges that City's obligation to convey
the City Property is subject to successful execution of the compensation agreement by all
appropriate taxing entities.
WHEREAS, a Report Regarding Economic Development of Real Property.Pursuant to
the 2016 Disposition and Development Agreement Between City of Grand Terrace and Dr.
McDuffee and Health and Safety.Code Section 52201 was prepared pursuant to Health and
Safety Code 52201 and made available for public inspection on August 31, 2016 to September
13, 2016;
WHEREAS, on September 15, 2016, the Planning Commission adopted a Resolution
finding, in accordance with Government Code Section 65402, the disposition of City Parcel to be
in conformance with the General Plan;
WHEREAS, on September 27, 2016, the City Council conducted a duly noticed public
hearing at the City Hall Council Chambers located at 22795 Barton Road Grand Terrace,
California, considered the Agreement attached hereto as Exhibit 1, and concluded the hearing on
that date.
NOW THEREFORE, BE IT RESOLVED THAT CITY COUNCIL OF THE CITY OF GRAND
TERRACE DOES RESOLVE, DETERMINE,FIND AND ORDER AS FOLLOWS:
Section 1. The City Council finds that all of the above recitals are true and correct and are
incorporated herein by reference.
Section 2. the Project qualifies for an environmental exemption pursuant to Section
15332 of the California Environmental Quality Act (CEQA) Guidelines, which exempts infill
projects when the project is compatible with the General Plan and Zoning Code, is on less than
five acres substantially surrounded by urban uses, it is devoid of habitat for biological resources
and the Project site has no value as habitat for endangered, rare, or threatened species, the site is_
served by public utilities and services, and there are no impacts to traffic noise, air quality or
water quality.
Section 3. The City Council finds that the sale or lease of the property will assist in the
creation of economic opportunity. The proposed Agreement is consistent with City economic
goals and objectives and is in the best interest of the general public. The loss of redevelopment
throughout the state has significantly impacted the city's major economic development program.
The sale of the City Parcel incentives a local business to stay in the City and construct a modern
facility in the City commercial district, creating synergy in the furtherance of new development.
Economic opportunities to the City include (1) creation of local jobs throughout construction. _
RESOLUTION.NO. 2016-35 PAGE 2 OF 91 SEPTEMBER 27, 2016
1
i Those w orkers will in turn ,patronize City restaurant and food- uses. -(2), Generation .of
approximately$24,000.00 in property taxes by placing a property that has not generated sales tax
for over 10 years,.back.on the County Assessor's tax rolls. (3) Sales.tax_for a 3,000:square foot_.
tenant space occupied with.commercial retail uses. -
Section 4. The City Council finds that the consideration is not less:than the fair-market
Value at its highest: and best use. The site is zoned CM-Commercial:Manufacturing and
designated as General Commercial on the Grand.Terrace General Plan'Land Use Map.:The
purpose o f the CM district-is to provide for the development of combined:commercial and light
manufacturing::uses.: The regulations of: this district: are:intended to allow various light_
manufacturing uses which-operate free of objectionable noise;:dust, odor or other nuisances to
locate in amixed use development area along with commercial uses: The list of permitted and
conditionally permitted uses allowed in the CM district includes 'those permitted and.
conditionally permitted uses allowed within the C2-General: Commercial- zone district. The
purpose of the'C2 district is to.:promote and provide.for the orderly:development of general
commercial .uses desirous to the community as a whole as well as freeway generated
consumers. Therefore,.the highest and best use of the property is commercial uses, including the:
proposed emergency animal hospital and commercial spacer
The estimated value of the .City Parcel after-improvement determined in relation to the.
purchase and development costs is estimated at Two Million Four Hundred Thousand Dollars
($2,400,000.00). The adopted LRPMP estimated the unimproved value of the City Parcel at Two
Hundred: Eighty Three Thousand and Five Hundred Dollars ($283,500.00), And. based
comparable sales in the market area; the,unit value of the property is approximately $9.00 per.
- square foot, which is approximately Three ;Hundred and Twenty Thousand Dollars:($320,000).
Therefore,:the negotiated purchase price of the City:Parcel is Four Hundred Thousand Dollars
($400,000.00); and.not less than the.estimated fair market value.
Section 5. The :city .Council hereby approves the Disposition and-Development
Agreement;and authorizes the Mayor to sign said Agreement, included in Exhibit"1".
PASSED, APPROVED.AND ADOPTED by the City Council of the City of Grand Terrace at a
regular meeting held on the 27th day of September,2016.
AYES: Council .Members Hussey, Wilson, _-Mitchell, Mayor :Pro :Tem Robles,
Mayor McNaboe
NOES: None .
ABSENT: None
ABSTAIN: None
RESOLUTION NO. 2016-35 PAGE 3 OF 91 SEPTEMBER 27,.2016
ATTEST:
Pa He - es - rcy cNa
City Clef Ma
I, PAT JACQUEZ-NARES, City Clerk of the City of Grand Terrace, do hereby certify that the
foregoing Resolution was introduced and adopted at a regular meeting of the City Council of the
City of Grand Terrace held on the 271h day of September, 2016 by the following vote:
AYES: Council Members Hussey, Wilson, Mitchell, Mayor Pro Tem Robles,
Mayor McNaboe
NOES: None
ABSENT: None
ABSTAIN: None
Pat Jacq -
City Clerk
RESOLUTION NO. 2016-35 PAGE 4 OF 91 SEPTEMBER 27, 2016
EXHIBIT 1
O
2016 DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
THE CITY OF GRAND TERRACE,
a municipal corporation,
and
DR. TERRY MCDUFFEE, an individual
September 27, 2016
RESOLUTION NO. 2016-35 PAGE 5 OF 91 SEPTEMBER 27, 2016
2016 DISPOSITION AND DEVELOPMENT AGREEMENT
THIS 2016 DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement")
is dated as of September 27, 2016 for reference purposes only, and is entered into by and
between the CITY OF GRAND TERRACE, a municipal corporation ("City"), and DR. TERRY
MCDUFFEE, an individual ("Developer"). City and Developer enter into this Agreement with
reference to the following recited facts (each a "Recital"):
RECITALS
A. WHEREAS, the City of Grand Terrace ("City") is the owner of certain real
property and improvements thereon, which is more specifically described in Exhibit A of this
Agreement (the "City Property"), which was transferred to the City from the Successor Agency
for the Grand Terrace Community Redevelopment Agency("Successor Agency").
B. WHEREAS, the California Health & Safety Code requires that for real property
transferred from the Successor Agency to the City for future development the City must enter into
compensation agreements with certain affected taxing entities.
C. WHEREAS, the City is currently in negotiation regarding and anticipates
successful execution of the required compensation agreement by the appropriate taxing entities.
D. WHEREAS, Developer desires to acquire the City Property for development of
an animal emergency hospital and other retail,professional or commercial uses.
E. WHEREAS, the City has a vested interest in ensuring the City Property is
properly developed.
F. WHEREAS, Developer owns certain real property, and improvements
thereon which is more specifically described in .Exhibit B of this Agreement
("Developer Property").
G. WHEREAS, in partial consideration of Developer's acquisition of the City
Property, City desires an option to purchase the Developer's Property.
H. WHEREAS, City and Developer entered into an Exclusive Negotiation
Agreement dated July 12, 2016 ("Negotiation Agreement") to provide time to work out details
of conveyance of the City Property and Developer Property.
I. WHEREAS, this Agreement is intended by City and Developer to be the
culmination of their negotiations.pursuant to the Negotiation Agreement for Developer to acquire
the City Property from City and develop the City Property with the Project (as hereafter defined)
and for City to have an option to acquire the Developer's Property.
J. WHEREAS, Developer understands and acknowledges that City's obligation to
convey the City Property is subject to successful execution of the compensation agreement by all
appropriate taxing entities.
1 —September 27, 2016 .
RESOLUTION NO. 2016-35 PAGE 6 OF 91 SEPTEMBER 27, 2016
K. WHEREAS, Developer understands and acknowledges that conveyance of
the City Property is subject to the City's Power of Termination of Developer's Fee Title
as set forth in Section 8.3 of this Agreement.
L. WHEREAS, In.the event Developer fails to complete the Project pursuant
to the deadlines set forth in the Schedule of Performance, City will exercise its right of
termination of-Developer's fee title and Developer shall transfer the City Property back
to the City as set forth herein.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE .
PROMISES AND COVENANTS OF CITY AND DEVELOPER SET FORTH IN THIS
AGREEMENT, CITY AND DEVELOPER AGREE, AS FOLLOWS:
1. DEFINITIONS
1.1 Defined Terms. The following words, terms and phrases are used in this
Agreement with the following meanings, unless the particular context of usage of a word, term
or phrase requires another interpretation:
1.1.1 Affiliate. Any other Person, directly or indirectly, Controlling or
Controlled by or under common Control with such specified Person.
1.1.2. [Intentionally reserved]
1.1.3 Agreement. This 2016 Disposition and Development Agreement, dated
as of September 27, 2016.
1.1.4 Application. Any' 'agreement, application, certificate, document, or
submission (or amendment of any of the foregoing): (a) necessary or appropriate for the Project,
including any application for any building permit, Certificate.of Occupancy, utility service or
hookup, easement, covenant, condition, restriction, subdivision, or such other instrument as
Developer may reasonably request for the Project; or (b) to enable Developer to seek any
Approval or to use and operate the Project in accordance with this Agreement.
1.1.5 Approval. Any license, permit, approval, consent, certificate, ruling,
variance, authorization, conditional use permit, or amendment to any of the foregoing, as shall be
necessary or appropriate under any Law to commence, perform, or complete the Construction of
the.Proj ect.
1.1.6 Automobile Liability Insurance. Insurance coverage against claims of
personal injury (including bodily injury and death) and property damage at least as broad as
Insurance Services Office Form No. CA0001 covering Automobile Liability, Code No. 1 (any
auto), covering .all owned, leased, hired and non-owned vehicles used by the Developer
regarding the Project, with minimum limits for bodily injury and property damage of TWO
MILLION DOLLARS ($2,000,000). Such .insurance shall be provided by a business or
commercial vehicle policy.
t
2—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 7 OF 91 SEPTEMBER 27, 2016
1.1.7 Bankruptcy Law. Title 11, United States Code, and any other or
successor State or Federal statute relating to assignment for the benefit of creditors, appointment
of a receiver or trustee, bankruptcy, composition, insolvency, moratorium, reorganization, or
similar matters.
1.1.8 Bankruptcy Proceeding. Any proceeding, whether voluntary or
involuntary, under any Bankruptcy Law.
1.1.9 Builder. A State licensed general contractor selected by Developer to
Construct the Project.
1.1.10 Builder's Risk Insurance. Builder's risk or course of construction
insurance covering all risks of loss, less policy exclusions, on a completed value (non-reporting)
basis, in an amount sufficient to prevent coinsurance, but in any event not less than one hundred
percent (100%) of the completed value of the subject Construction, including cost of debris
removal (subject to a policy sublimit), but excluding foundation and excavations. Such insurance
shall also: (a) grant permission to occupy; and (b) cover, for replacement cost, all materials on or
about any offsite storage location intended for use in, or in connection with, the Property(subject
to a policy sublimit).
1.1.11 Business Day. Any weekday. on which the City is open to conduct
regular municipal functions with City personnel.
1.1.12 CEQA: The California Environmental Quality Act, Public Resources
Code Sections 21000, et seq., and the associated regulations at. Title 14 California Code of
Regulations Sections 15000, et seq.
1.1.13 CEQA Document. Any exemption determination, any Negative
Declaration (mitigated or otherwise) or any Environmental Impact Report (including any
addendum or amendment to, or subsequent or supplemental Environmental Impact Report)
required or permitted by any Government, pursuant to CEQA, to issue any discretionary
Approval required to approve this Agreement.
1.1.14 Certificate of Completion. The written certification of City in
substantially the form of "Exhibit J" attached to this Agreement that the Construction of the
Project has been completed in compliance with the terms and conditions of this Agreement.
1.1.15 Certificate of Occupancy. A Certificate of Occupancy as defined in
the Uniform Building Code, 2007 Edition, published by the International Conference of Building
Officials, as may be amended from time to time.
1.L 16 City. The City of Grand Terrace, California, a municipal corporation
1.1.17 City.Manager. The City Manager of City or his or her designee or
successor in function.
1.1.18 City Property. That certain real property located within the City of
Grand Terrace, County of San Bernardino, State of California, specifically described in the legal
3 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 8 OF 91 SEPTEMBER 27, 2016
description attached as Exhibit "A" attached to this Agreement, which is incorporated into this
Agreement by this reference.
1.1.19 Claim. Any claim, loss, cost, damage, expense, liability, lien, action,
cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge,
award, assessment, fine or penalty of any kind (including consultant and expert fees and
expenses and investigation costs of whatever kind or nature, and if an Indemnitor improperly
fails to provide a defense for an Indemnitee, then Legal Costs of counsel retained by the
Indemnitee) and any judgment.
1.1.20 Close of Escrow. Completion of each of the actions set forth in Section
4 by the Escrow Agent for the sale of the Property from City to Developer.
1.1.21 Compensation Agreement. Agreement between the City, Successor
Agency to the Grand Terrace Redevelopment Agency, and certain affected taxing entities
required by Health & Safety Code 34180(f) before City can convey the City Property for future
development.
1.1.22 Construction. Any alteration, construction, excavation, demolition,
grading, development, expansion, reconstruction, redevelopment, repair, restoration, or other
work affecting the Property, including new construction.
1.1.23 Construction Contract. A current, executory agreement between
Developer and Builder for Construction of the entirety of the Project for a fixed or guaranteed
r maximum price expressly set forth in such contract and in accordance with all of the terms and.
conditions of this Agreement, conditioned only upon: (a) the Close of Escrow; (b) Developer's
receipt of all Approvals; and (c) other commercially reasonable conditions.
1.1.24 Construction Financing. Any loan obtained by Developer for the
purpose of paying for any portion of the expenses of Construction of the Project and secured or
to be secured by a Security Instrument recorded against the City Property.
1.1.25 Construction Financing Documents. The various documents and
instruments made by and between Developer and one or more lenders that evidence or perfect
the Construction Financing and/or the security for repayment of the Construction Financing,
including any associated Security Instrument.
1.1.26 Control. Possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether by ownership of Equity
Interests,by contract or otherwise.
1.1.27 Controlling and Controlled. Exercising or having Control.
1.1.28 County. The County of San Bernardino, California.
1.1.29 Deed. A deed transferring title to the Property from City to Developer
in substantially the form of Exhibit"F" attached to this Agreement.
4—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 9 OF 91 SEPTEMBER 27, 2016
1.1.30 Default. Any Monetary Default, any Non-Monetary Default, any
Insurance Maintenance Default or any Escrow Default. -
1.1.31 Default Interest. Interest at an annual rate equal to the lesser of: (a)
eight percent (8%)per annum; or(b) the Usury Limit.
1.1.32 Deposit. Ten Thousand Dollars ($10,000).
1.1.33 Developer. Dr. Terry McDuffee, an individual, or his assignee
provided that assignment can only be made to an Affiliate of Dr. Terry McDuffee.
1.1.34 Developer Entity Documents. The organizational documents of the
entity, if any, that is Developer, including all amendments, all of which Developer shall certify
as accurate and updated on the date of the Close of Escrow, and, if appropriate, a Certificate.of
Good Standing from the Secretary of State of the State certifying that Developer is authorized to
conduct business in the State.
1.1.35 Developer Official Action. If prior to Close of Escrow, Dr. Terry
McDuffee assigns his interest in this Agreement to an Affiliate, then the assignee shall within
two (2) business days of such assignment deliver to the Escrow Holder, with a copy to City, the
original of such assignment together with a certified document evidencing the consent of the
directors, managers or other Persons in Control of such assignee to the transactions provided for
in this Agreement and authorizing and instructing the official actions reasonably necessary or
convenient to enter into and perform this Agreement.
1.1.36 Developer Parties. Collectively, Developer and the directors, officers,
employees, agents, shareholders, members, managers and partners of Developer.
1.1.37 Developer Party. Individually, Developer or the directors, officers,
employees or agents, shareholders, members, managers or partners of Developer.
1.1.38 Developer Property. That certain real property located within the City
of Grand Terrace, County of San Bernardino, State of California, specifically described in the
legal description attached as Exhibit "B" attached to this Agreement, which is incorporated into
this Agreement by this reference.
1.1.39 Developer Specific Default. Any Default that: (a) is not reasonably
susceptible of cure by the holder of a Permitted Security Instrument, such as (to the extent, if
any, that it actually constitutes a Default under this Agreement) any Default resulting from a
Bankruptcy Proceeding affecting Developer; any prohibited change of management of
Developer; failure to deliver required financial information within Developer's control; (b) by its
nature relates only to, or can reasonably be performed only by, Developer or its Affiliates; or (c)
consists of Developer's failure to satisfy or discharge any lien, charge, or encumbrance that
satisfies all of the following: (i) attaches to the Property; (ii) is junior to the specific Permitted
Security Instrument; and(iii) this Agreement prohibits.
1.1.40 Due Diligence Completion Notice. A written notice from Developer
delivered to both the City and the Escrow Agent, prior to the end.of the Due Diligence Period,
5—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 10 OF 91 SEPTEMBER 27, 2016
indicating Developer's acceptance of the condition of the Property or indicating Developer's
rejection of the condition of the Property and refusal to accept a conveyance of fee title to the
Property, describing in reasonable detail the actions that Developer reasonably believes are
indicated to allow the Developer to accept.the condition of the Property(if any).
1.1.41 Due Diligence Investigations. Developer's due diligence
investigations of the Property to determine the.suitability of the Property for development of the
Project, including, without limitation, investigations of the environmental and geotechnical
suitability of the Property, as deemed appropriate in the reasonable discretion of Developer, all at
the sole cost and expense of Developer. "
1.1.42 Due Diligence Period. The period of time commencing on the date that
Developer receives from City Notice of the Effective Date, and ending at 5:00 p.m. one-hundred
and twenty(120) days thereafter.
1.1.43 Effective Date. The first Business Day on which all of the following
have occurred: (a) City has received three (3) counterpart originals of this Agreement executed
by the authorized representative(s) of Developer; (b) City has received a certified copy of the
'Developer Official Action executed by the authorized representative(s) of Developer, if Dr.
Terry McDuffy has assigned his position under this Agreement .to an Affiliate; (c) this
Agreement is approved by City governing body; (d) this Agreement is executed by the
autlorized representative(s) of City; and (e) one (1) original of this Agreement executed by the
authorized representative(s) of City has been delivered by City to Developer. City shall send
i Notice of the Effective Date to Developer within seven (7) days following the Effective Date.
.Developer shall sign and return a copy of such Notice to City within seven (7) days after receipt
of such Notice.
1.1.44 Environmental Claim. Any and all claims, demands, damages, losses,
liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings,
costs, disbursements and expenses, including Legal Costs and fees .and costs of.environmental
consultants and other experts, and all foreseeable and unforeseeable damages or costs of any
kind or of any nature whatsoever, directly or indirectly, relating to or arising from any actual or
alleged violation of any Environmental Law or Hazardous Substance Discharge.
1.1.45 Environmental Law. Any Law regarding any of the following at, in,
under, above, or upon the Property: (a) air, environmental, ground water, or soil conditions; or
(b) clean-up, remediation, control, disposal, generation, storage, release, discharge,
transportation,use of, or liability or standards of conduct concerning, Hazardous Substances.
1.1.46 Equity Interest. All or any part of any direct or indirect equity or
ownership interest(s) (whether stock, partnership interest, beneficial interest in a trust,
membership interest in a limited liability company, or other interest of an ownership or equity
nature) in any entity, at any tier of ownership, that directly or indirectly owns or holds any'
ownership or equity interest in a Person.
1
6—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 11 OF 91 SEPTEMBER 27, 2016
1.1.47 Escrow. An escrow, as defined in Civil Code Section 1057 and
Financial Code Section 17003(a), that is conducted by the Escrow Agent with respect to the sale
of the Property from City to Developer,pursuant to this Agreement.
1.1.48 Escrow Agent. Catherine Von Moos, Orange Coast Title Company.of
Southern California, 1845 Business Center Drive, Suite 218, San Bernardino, CA 92408, Phone:
909-825-8800 ext. 6123, Fax: 714-864-3106, E-mail: catherinev@octitle.com, or such other
Person mutually agreed upon in writing by City and Developer in writing.
1.1.49 Escrow Agent Consent. The Escrow Agent's consent to acting as
Escrow Agent under this Agreement, in substantially the form of Exhibit "C" attached to this
Agreement.
1.1.50 Escrow Closing Date. The fifth (5th) Business Day following the
Escrow Agent's receipt of written confirmation from both City and Developer of the satisfaction
or waiver of all conditions precedent to the Close of Escrow, subject to extension due to
Unavoidable Delay pursuant to Section 9.14.
1.1.51 Escrow Default. The unexcused failure to submit any document or
funds to the Escrow Agent as reasonably necessary to close the Escrow, after all other conditions
precedent to the Close of Escrow for the benefit of such Party are satisfied or waived by such
Party.
1.1.52 Escrow Opening Date. The first date,on which a fully,executed copy
of this Agreement and the Deposit are deposited with the Escrow Agent pursuant to Section 4.1.
1.1.53 , Event of Default. The occurrence of any one or more of the following:
(a) Monetary Default. A Monetary Default that continues for fifteen
(15) calendar days after Notice from the non-defaulting Party, specifying in reasonable detail the
amount of money not paid and the nature and calculation of each such payment;
(b) Escrow Closing Default. An Escrow Default that continues for
seven (7) calendar days after Notice from the non-defaulting Party, specifying in reasonable
detail the document or funds not submitted;
(c) Insurance Maintenance Default. An Insurance Maintenance
Default that continues for ten (10) calendar days after Notice of such Insurance Maintenance
Default.
(d) Bankruptcy or Insolvency. Developer admits in writing that it is
unable to pay its debts as they become due or becomes subject to any Bankruptcy Proceeding
(except an involuntary Bankruptcy Proceeding dismissed within one hundred twenty (120) days
after commencement), or a custodian or trustee is appointed to take possession of, or an
attachment, execution or other judicial seizure is made with respect to, substantially all of
Developer's assets or Developer's interest in this Agreement (unless such appointment,
attachment, execution, or other seizure was involuntary, and is contested with diligence and
continuity and vacated and discharged within one hundred twenty(120) days);
7—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 12 OF 91 SEPTEMBER 27, 2016
j"
(e) Transfer. The occurrence of a Transfer, whether voluntarily or
involuntarily or by operation of Law, in violation of the terms and conditions of this Agreement;
or
(f) Non-Monetary Default. Any Non-Monetary Default, other than
those specifically addressed in Subsection (d) and in Subsection(e), that is not cured within sixty
(60) days after Notice to the Party alleged to be in Default describing the Non-Monetary Default
in reasonable detail, or, in the case of a Non-Monetary Default that cannot with reasonable
diligence be cured within sixty (60) days after the effective date of such Notice, if the Party
alleged to be in Default does not do all of the following: (a) within sixty(60) days after Notice of
such Non-Monetary Default, advise the other Party of the intention of the.Party alleged to be in
Default to take all reasonable steps to cure such Non-Monetary Default; (b) duly commence such
cure within such period, and then diligently prosecute such cure to completion; and.(c) complete
such cure within a reasonable time under the circumstances.
1.1.54 Federal. The government of the United States of America.
1.1.55 Final. Relative to any Approval or any CEQA Document, when all
administrative appeal periods regarding such matter have expired, all administrative appeals or
challenges regarding such matter (if any) have been resolved to both City's and Developer's
reasonable satisfaction, all statutory periods for. challenging such matter have expired, all
litigation or other proceedings (if any) challenging any such matter have been resolved to the
reasonable satisfaction of both City and Developer, all appeal periods relating to any such
litigation or other proceedings have expired, all referendum periods regarding such matter have
expired and all referenda regarding such matter (if any) have been resolved to both City's and
Developer's reasonable satisfaction.
1.1.56 Foreclosure Event. Any transfer of title to the Property through any:
(a)judicial or non judicial foreclosure; (b) trustee's sale; (c) deed, transfer, assignment, or other
conveyance in lieu of foreclosure; (d) other similar exercise of rights or remedies under any
Security. Instrument; or (e) transfer by operation of or through any Bankruptcy Proceeding
(including an auction or plan of reorganization in any Bankruptcy Proceeding and any
Bankruptcy Sale), in each case ("(a)" through "(e)") whether the transferee is a Lender, a Person
claiming through a Lender, or a Third Person.
1.1.57 Form 593. A California Franchise Tax Board Form 5937C.
1.1.58 General Escrow Instructions. The Escrow Agent's general escrow
instructions.
1.1.59 Government. Each and every governmental City, authority, bureau,
department, quasi-governmental body, or other entity or instrumentality having or claiming
jurisdiction over the Property (or any activity this Agreement allows), including the government
of the.United States of America, the State and County governments and their subdivisions and
municipalities, including the City, the City and all other applicable governmental agencies,
authorities, and subdivisions thereof. "Government" shall also include any planning commission,
board of standards and appeals, department of buildings, city council, zoning board of appeals,
8 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 13 OF 91 SEPTEMBER27, 2016
design review board or committee or similar body having or claiming jurisdiction over the
Property or any activities on or at the Property.
1.1.60 Hazardous Substance. Any flammable substances, explosives,
radioactive materials, asbestos, asbestos-containing materials, - polychlorinated biphenyls,
chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous
wastes, medical wastes, toxic substances or related materials, explosives, petroleum, petroleum
products and any "hazardous" or "toxic" material, substance or waste that is defined by those or
similar terms or is regulated as such under any Law,.including any material, substance or waste
that is: (a) defined as a "hazardous substance" under Section 311 of the Water Pollution Control
Act (33 U.S.C. § 1317), as amended; (b) substances designated as "hazardous substances"
pursuant to 33 U.S.C. § 1321; (c) defined as a "hazardous waste" under.Section 1004 of the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq.,'as amended; (d)
defined as a "hazardous substance" or "hazardous waste" under Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
by the Superfund Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-called
"superfund" or `.`superlien" law; (e) defined as a "pollutant" or "contaminant" under 42 U.S.C. §
9601(33); (f) defined as "hazardous waste"under 40 C.F.R. Part 260; (g) defined as a"hazardous
chemical" under 29 C.F.R. Part 1910; (h) any matter within the. definition of "hazardous
substance" set forth in 15 U.S.C. § 1262; (i) any matter, waste or substance regulated under the
Toxic Substances Control Act("TSCA") [15 U.S.C. Sections 2601, et seq.]; 0) any matter, waste
or substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq.; (k) those substances listed in the United States Department of Transportation
(DOT)Table [49 C.F.R. 172.101]; (1) any matter, waste or substances designated by the EPA, or
any successor authority, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste or
substances defined as "hazardous waste" in Section 25117 of the California Health and Safety
Code; (n) any substance defined as a "hazardous substance" in Section 25316 of the California
Health and Safety Code; (o) any matter, waste, or substance that is subject to any other Law
regulating, relating to or imposing obligations, liability or standards of conduct concerning
protection of human health, plant life, animal life, natural resources, property or the enjoyment of
life or property free from the presence in the environment of any solid, liquid, gas, odor or any
form of energy from whatever source; or (p) other substances, materials, and wastes that are, or
become, regulated or classified as hazardous or toxic under Law or in the regulations adopted
pursuant to said Law, including manure, asbestos, polychlorinated biphenyl, flammable
explosives and radioactive material.
1.1.61 Hazardous Substance Discharge. Any deposit, discharge, generation,
release, or spill of a Hazardous Substance that occurs at on, under, into or from either Property,
or during transportation of any Hazardous Substance to or from either Property, or that arises at
any time from the Construction, installation, use or operation of the Project or any activities
conducted at on, under or from either Property, whether or not caused by a Party.
1.1.62 Indemnify. Where this Agreement states that any Indemnitor shall
"indemnify" any Indemnitee from, against, or for a particular Claim, that the'Indemniter shall
indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against such
Claim(alleged or otherwise). "Indemnified" shall have the correlative meaning.
9—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 14 OF 91 SEPTEMBER 27, 2016
1.1.63 Indemnitee. Any Person entitled to be Indemnified under the terms of
this Agreement.
1.1.64 Indemnitor. A Party that agrees to Indemnify any other Person under
the.terms of this Agreement.
1.1.65 Insurance Documents. Copies of.insurance policies and endorsements
evidencing all insurance coverage required to be obtained by Developer pursuant to Section 6.
1.1.66 Insurance Maintenance Default. Any failure to maintain the
insurance policies required by this Agreement.
1.1.67 Law. Every law, ordinance, requirement, order, proclamation,
directive, rule, and regulation of any Government applicable to the Properties, or the Project, in
any way, including any development, use, maintenance, taxation, operation, or occupancy of, or
environmental conditions affecting the Properties or the Project, or relating to any taxes, or
otherwise relating to this Agreement or any Party's rights, obligations or remedies under this
Agreement, or any Transfer of any of the foregoing, whether in force on the Effective Date or
passed, enacted, modified, amended or imposed at some later time, subject in all cases, however,
to any applicable waiver, variance, or exemption.
1.1.68 - Legal Costs. In reference to any Person, all reasonable costs and
expenses such Person incurs in any legal proceeding (or other matter for which such Person is
entitled to be reimbursed for its Legal Costs), including reasonable attorneys' fees, court costs
and expenses and consultant and expert witness fees and expenses.
1.1.69 Lender. The holder of any Security Instrument and its successors and
assigns.
1.1.70 Liability Insurance: Commercial general liability insurance against
claims for bodily injury, personal injury,.death,,or property damage occurring upon, in, or about
the Property, the Project or adjoining streets or passageways, at least as broad as Insurance
Services Office Occurrence Form CG0001, with a minimum liability limit of Four Million
Dollars ($4,000,000) for any one occurrence. If commercial general liability insurance or other
form with a general aggregate limit is used, either the general aggregate limit shall apply
separately to the Property or the general aggregate limit shall be twice the required minimum
liability limit for any one occurrence.
1.1.71 Monetary Default: Any failure by either Party to pay or deposit, when
and as this Agreement requires, any amount of money, any bond or surety or evidence of any
insurance coverage required to be provided under this Agreement, whether to or with a Party or a
Third Person.
1.1.72 Negotiation Agreement. Defined in Recital H to this Agreement.
1.1.73 . Non-Monetary Default. The occurrence of any of the following,
except to the extent constituting a Monetary Default or an Escrow Default: (a) any failure of a
Party to perform any of its obligations under this Agreement; (b) any failure of Party to comply
10—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 15 OF 91 SEPTEMBER 27, 2016
with any material restriction or prohibition in this Agreement; or (c) any other event or
circumstance that, with passage of time or giving of Notice, or both, or neither, would constitute
a breach of this Agreement.
1.1.74 Notice. Any consent, demand, designation, election, notice, or request
relating to this Agreement, including any Notice of Default. All Notices must be in writing. A
notice in substantially the form of Exhibit "I" attached to this Agreement to be recorded against
the Property at the Close of Escrow.
1.1.75 Notice of Agreement. A notice of the applicability of this Agreement
to the Property in substantially the form of Exhibit"I" attached to this Agreement.
1.1.76 Notice of Completion. The Notice described in and ascribed the same
name in California Civil Code Section 3093.
1.1.77 Notice of Default. Any Notice claiming or giving Notice of a Default
or alleged Default.
1.1.78. Notice of Option to Purchase Real Property. A notice of the option to
purchase real property granted to City by Developer in substantially the form of Exhibit "E"
attached to this Agreement.
1.1.79 Notify. To give a Notice.
1.1.80 Parties. Collectively, City and Developer.
1.1.81 Party. Individually, either City or Developer, as applicable.
1.1.82 Permitted Encumbrance. Any Permitted Security Instrument, the
Notice of Agreement, utility easements directly. related to the Project, a bona fide Permanent
Loan, a bona fide Refinancing and any other document required or expressly allowed to be
recorded against the Property by the express terms of this Agreement.
1.1.83 Permitted Exceptions. All of the following: (a) items shown in
Schedule B of the Title Commitment as exceptions to coverage under the proposed Title Policy
that are expressly approved by Developer or as to which no Supplement Notice has been given
by Developer or as to which a Supplement Notice Waiver has been given by Developer; (b) any
exceptions from coverage under' the proposed Title Policy; (c) any lien for non-delinquent
property taxes or assessments; (d) any Laws applicable to the Property; (e) this Agreement; (f)
the Notice of Agreement; (g) any Permitted Security Instrument; (li) any encumbrance recorded
against the Property with Developer's consent or as a result of the activities of Developer; and (i)
any other document or encumbrance expressly required or allowed to be recorded against the
Property or the Project under the terms of this Agreement.
1.1.84 Permitted Lender. The holder of any Permitted Security Instrument.
1.1.85 Permitted Security Instrument. Any Security Interest: (a) that
encumbers only the Property or any interest in the Property; (b) a copy of which (recorded or
11 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 16 OF 91 SEPTEMBER 27, 2016
unrecorded) is promptly after execution delivered to City, with a certification by the Lender that
the copy is accurate and stating the Lender's name and notice address; (c) that is held by a
Lender subject to the jurisdiction of the courts of the State, not immune from suit and.cannot
elect to be immune from suit; and (d) only secures: (i) the repayment of money used to pay or
reimburse the Total Project Costs; (ii) a bona fide Permanent Loan; or (iii) a delivery assurance
fee regarding a Permanent Loan that is refundable to Developer at the close of the Permanent
Loan.
1.1.86 Permitted Transfer. Any Transfer to a Lender that is not a Prohibited
Transferee: (1) 'pursuant to a Permitted Security Instrument as collateral for bona fide
Construction Financing to pay all or any part of the Total Project Costs; or (2) pursuant to a
Permitted Security Instrument as collateral for a bona fide Permanent Loan.
1.1.87 Person. Any association, corporation, governmental entity or City,
individual, joint venture, joint-stock company, limited liability company, partnership, trust,
unincorporated organization, or other entity of any kind.
1.1.88 Preliminary Report. A preliminary report issued by the Title
Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of
all documents.listed in Schedule B of the report as exceptions to coverage under.the proposed
Title Policy.
1.1.89 Prevailing Wage Action. Any of the following: (a) any determination
by the.State Department of Industrial Relations that prevailing wage rates should have been paid,
but were not, (b) any determination by the State Department of Industrial Relations that higher
prevailing wage rates than those paid should have been paid, (c) any administrative or legal
action or proceeding arising from any failure to comply with any of California Labor Code
Sections 1720 through 1781, as amended from time to time, regarding prevailing wages,
including maintaining certified payroll records pursuant to California Labor Code Section 1776,
or (d) any administrative or legal action or proceeding to recover wage amounts at law. or in
equity, including pursuant to California Labor Code Section 1781.
111.90 Prohibited Encumbrance. Any mortgage, lien, deed of trust, security
instrument, mechanic's lien, easement or other encumbrance recorded or asserted against. the
Property or the Project that is not a Permitted Encumbrance.
1.1.91 Prohibited Transferee. Any Person with whom City is in litigation,
any Person that City reasonably determines has any connection with any terrorist organization,
any Person entitled to claim diplomatic immunity, any domestic or foreign governmental entity,
except as reasonably approved by City, any Person that is immune or may elect to be immune
from suit under State or Federal law, or any other Person that City reasonably disapproves.
1.1.92 Project. The development to be constructed on the Property by
Developer and specifically described in the Project Scope of Development, the Project Plans and
Specifications and the Approvals for the Project.
1.1.93 Project Completion Date. April 1, 2018
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RESOLUTION NO. 2016-35 PAGE 17 OF 91 SEPTEMBER 27, 2016
. 1.1.94 Project Plans and Specifications. Plans and specifications for the
Project, prepared by Developer's architect, that have received all necessary Approvals regarding
Construction of the Project, submitted in both hard copy and such machine-readable format as is
then customary in the architectural profession in the State, using naming conventions and other
criteria reasonably approved or required by City, consisting of architectural plans; elevations and
section indicating principal areas, core design and location; location, number, and capacity of
elevators; basic structural system; minimum estimated electrical capacity and distribution
system; general type of plumbing system; facade, placement, and orientation; gross and rentable
square foot analysis; and principal types of HVAC systems.
1.1.95 Project Schedule of Performance. The Construction schedule
described in Exhibit"H" attached to this Agreement.
L1.96 Project Scope of Development. The development project generally
described in Exhibit"G" attached to this Agreement.
1.1.97 Properties. Collectively City Property and Developer Property.
1.1.98 Property. Individually, either the City Property or Developer Property
as applicable.
1.1.99 Property Information. Any and all studies and reports prepared by or
on behalf of Developer regarding the physical condition of or title to the Property, including,
without limitation, soils reports, geotechnical reports and surveys (not to include architectural
plans and specifications, proprietary information, internal communications, feasibility studies,
financial analyses, proformas, tax returns or any attorney-client privileged communications and
documents).
1.1.100 Property Insurance. Insurance providing coverage for the Property
and all improvements against loss, damage, or destruction by fire and other hazards encompassed
under the broadest form of property insurance coverage then customarily used for like properties
in the County, in an amount equal to one hundred percent (100%) of the replacement value
(without deduction for depreciation) of all improvements comprising the Project (excluding
excavations and foundations) and in any event sufficient to avoid co-insurance and with no co-
insurance penalty provision, with "ordinance or law" coverage. To the extent customary for like
properties in the County at the time, such insurance,shall include coverage for explosion of steam
and pressure boilers and similar apparatus located on the Property; an "increased cost of
construction" endorsement; and an endorsement,covering demolition and cost of debris removal,
all subject to policy sublimits. Property Insurance shall also include rental or business
interruption insurance in an amount, at least, equal to the average annual Gross Income from the
Project for the preceding three (3) calendar years and providing for a 12-month extended period
of indemnity.
1.1.101 Punchlist Work. Construction, of an insubstantial nature, that if not
completed, will not delay issuance of a final Certificate of Occupancy (or equivalent approval) .
for.the Project by the City or the applicable portion thereof or materially interfere with use of the
Project.
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RESOLUTION NO. 2016-35 PAGE 18 OF 91 SEPTEMBER 27, 2016
1.1.102 Purchase Price. Four Hundred Thousand Dollars ($400,000.00).
1.1.103 Record, recorded, recording or recordation. Recordation of the
referenced document in the official records of the County.
1.1.104 Refinancing. Any loan secured by a Permitted Security Instrument that
the Developer obtains from a Lender subsequent to recordation of the Permanent Loan for any of
the following purposes: (1) to pay off all or a portion of an existing loan secured by a Permitted
Security Instrument where the Lender providing the new loan will disburse loan proceeds to or
on behalf of Developer exceeding the amount of principal and interest under the existing loan
being paid plus the amount of any reasonable and customary fees.and costs associated with
obtaining such new loan that are actually paid by Developer and not rebated or refunded to
Developer, the aggregate amount of such fees and costs not to exceed three percent (3%) of the
original principal amount of the new loan; (2) disbursing funds to or on behalf of Developer-
without paying off any existing loan secured by a Permitted Security Instrument; or(3) any loan
extension, modification or equivalent regarding an existing loan to Developer secured by a
Permitted Security Instrument that results in the Lender of the existing loan disbursing additional
loan proceeds to or on behalf of Developer in excess of the original principal amount of the loan.
1.1.105 Security Instrument. Any security instrument, deed of trust, security
deed, contract for deed, deed to secure debt, or other voluntary real property (including
leasehold) security instrument(s) or agreement(s) intended to grant real property (including
leasehold) security for any obligation (including a purchase-money or other promissory note)
encumbering the Property, as entered into, renewed, modified, consolidated, increased,
— decreased, amended, extended, restated, assigned (wholly or partially), collaterally assigned, or
supplemented from time to time, unless and until paid, satisfied, and discharged of record. If two
or more such security instruments are consolidated or restated as a single lien or held by the
same Lender (as applicable), then all such security instruments so consolidated or restated shall
constitute a single Security Instrument. A participation interest in a security instrument(or partial
assignment of the secured loan) does not itself constitute a Security Instrument.
1.1.106 Senior. Referring to multiple Security Instruments, the Security
Instrument that is most senior in lien of the same type. Where Senior is used as a comparative
term as against any specified Security Instrument, such term refers to any Security Instrument of
the same type that is senior in lien to such specified Security Instrument. If only one Security
Instrument of a particular type exists, then it shall be deemed the Senior Security Instrument of
such type.
1.1.107 State. The State of California.
1.1.108 Supplement Notice. A Notice from Developer to both City and the
Escrow Agent indicating Developer's objection to any exception to the title of the Property set
forth in the supplement, describing in suitable detail the actions that Developer reasonably
believes are necessary to obtain Developer's approval of the state of the title of the Property.
1.1.109 Supplement Notice Response. A Notice from City in response to a.
— Supplement Notice, in which City elects to either: (a) cause the removal from the Title
14—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 19 OF 91 SEPTEMBER 27, 2016
Commitment of any matter disapproved in such Supplement Notice in a manner reasonably
satisfactory to Developer; (b) obtain title or other insurance in a form reasonably satisfactory to
Developer insuring against the effects of any matters disapproved or conditionally approved in
such Supplement Notice (City shall not enter into any indemnity arrangement with the Title
Company regarding any matter disapproved or conditionally approved by Developer, without
Developer's prior written consent); (c) otherwise satisfy Developer regarding any matter
disapproved or conditionally approved in such.Supplement Notice; or (d) not take any action
described in either"(a)," "(b)" or"(c)" of this Section.
1.1.110 Supplement Notice Waiver. A Notice from Developer to both City
and the Escrow Agent waiving Developer's previous disapproval or conditional approval of any
matter in a Supplement Notice that City has not agreed to address to Developer's reasonable
satisfaction in a Supplement Notice Response.
1.1.111 Third Person. Any Person that is not a Party, an Affiliate of a Party or
an elected official, officer, director, manager, shareholder, member, principal, partner, employee
or agent of a Party.
1.1.112 Title Commitment. A title commitment issued by the Title Company
committing to issue the Title Policy to Developer at the Close of Escrow on receipt of payment
of the Title Company's stated premium for the-Title Policy to be obtained, accompanied by the
best available copies of all documents listed in Schedule B of the title commitment, as exceptions
to coverage under the proposed Title Policy.
1.1.113 Title Company. Orange Coast Title Company of Southern California,
1845 Business Center Drive, Suite 218, San Bernardino, CA 92408, Phone: 909-825-8800, Fax:
714-864-3106, Title Officer Cynthia Kack, E-mail: ckack@octitle.com or such other title
insurance company mutually agreed upon in writing between City and Developer.
1.1.114 Title Notice. A Notice from Developer to both City and the Escrow
Agent indicating Developer's objection to any exception to the title of the Property set forth in
the Preliminary Report and describing in suitable detail the actions that Developer reasonably
believes are necessary to obtain Developer's approval of the state of the title of the Property.
1.1.115 ' Title Notice Response. A Notice from City in response to the Title
Notice, in which City elects to either: (a) cause the removal from the Preliminary Report of any
matter disapproved in such Title Notice in a manner reasonably satisfactory to Developer; (b)
obtain title or other insurance in a form reasonably satisfactory to Developer insuring against the
effects of any matters disapproved or conditionally approved in such Title Notice (City shall not
enter into any indemnity arrangement with the Title Company regarding any matter disapproved
or .conditionally approved by Developer, without Developer's prior written consent); (c)
otherwise satisfy Developer regarding any matter disapproved or conditionally approved in such
Title Notice; or(d) not take any action described in either"(a)," "(b)" or"(c)"'of this Section.
1.1.116 Title Notice Waiver. A Notice from Developer to both City and the
Escrow Agent waiving Developer's previous disapproval or conditional approval of any matter
15—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 20 OF 91 SEPTEMBER 27, 2016
in the Title Notice that City has not agreed to address to Developer's reasonable satisfaction in
the Title Notice Response.
1.1.117 Title Policy. A standard owner's policy of title insurance issued by the
Title Company, with coverage in the amount of Four Hundred Thousand Dollars ($400,000.00).
or as otherwise agreed between the Parties in writing prior to the Close of Escrow and insuring
fee title to the Property vested in Developer, subject to the Permitted Exceptions.
1.1.118 , Total Project.Costs. All of the costs set forth in Section 4.9 and
Exhibit"D" attached to this Agreement.
1.1.119 Transfer. Regarding any property, right or obligation means any of the
following, whether by operation of law or otherwise, whether voluntary or involuntary, and
whether direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage,
pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right
or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or
obligation or any part of it (including the grant of any easement, lien, or other encumbrance); (b)
any conversion, exchange, issuance, modification, reallocation, sale, or other transfer of any
direct or indirect Equity Interest(s) in the owner of such property, right or obligation by the
holders of.such Equity Interest(s); (c) any transaction described in "b" affecting any Equity
Interest(s) or any other interest in such property, right or obligation or in any such owner (or in
any other direct or indirect owner at any higher tier of ownership) through any manner or means
whatsoever; or (d) any transaction that is in substance equivalent to any of the foregoing. A
transaction affecting Equity Interests, as referred to in clauses "b'.'through"d," shall be deemed a
Transfer by the Developer even though the Developer is not. technically the transferor. A
"Transfer" shall not, however, include any of the foregoing (provided that the other Party has
received Notice of such occurrence) relating to the Property and/or any Equity Interest: (i) a
mere change in form of ownership with no material change in beneficial ownership and
constitutes a tax-free transaction under federal income tax law and the State real estate transfer
tax; (ii) to member(s) of the immediate.family(ies) of the.transferor(s) or trusts for their benefit;
(iii) to any Person that, as of the Effective Date, holds an Equity Interest in the entity whose
Equity Interest is being transferred; (iv) the original sale of Equity Interests in Developer; or (v)
to an Affiliate of Developer.
1.1.120 Unavoidable Delay. A delay in either Parry performing any obligation
under this Agreement, except •payment of money, arising from or on account of any cause
whatsoever beyond the Party's reasonable control, including strikes, labor troubles or other union
activities, casualty, war, acts of terrorism, riots, litigation, governmental action or .inaction,
regional natural disasters, or inability to obtain materials. Unavoidable Delay shall not include
delay caused by a Party's financial condition, illiquidity, or insolvency.
1.1.121 Usury Limit. The highest rate of interest, if any, that Law allows under
the circumstances.
1.1.122 Waiver of Subrogation. A provision in, or endorsement to, any
insurance policy, by which the carrier agrees to waive rights of recovery by way of subrogation
against either Parry to this Agreement for any loss such policy covers.
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RESOLUTION NO. 2016-35 PAGE 21 OF 91 SEPTEMBER 27, 2016
1.1.123 Workers Compensation Insurance. Workers compensation insurance
complying with the provisions of State law and an employer's liability insurance policy or
endorsement to a liability insurance policy, with a minimum liability limit of One Million
Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of
Developer.
2. TERMINATION OF NEGOTIATION AGREEMENT. Upon the occurrence of the
Effective Date, the Parties intend and agree that the Negotiation Agreement shall expire,
terminate and be of no further force or effect.
3. CONVEYANCE OF PROPERTY INTERESTS
3.1 Escrow. City shall sell the City Property to Developer and Developer shall
purchase the City Property from City, pursuant to the terms and conditions of this Agreement.
For the purposes of exchanging funds and documents for City to sell the City Property to
Developer and Developer to purchase the City Property from City, City and Developer agree to
open the Escrow with the Escrow Agent. The provisions of Section 4 of this Agreement are the
joint escrow instructions of the Parties to the Escrow Agent for conducting the Escrow. If
requested by the Escrow Agent, Developer and City shall execute the General Escrow
Instructions. In the event of any conflict between.the provisions of this Agreement and the
General Escrow Instructions, the provisions of this Agreement shall be controlling.
3.2 Payment of Purchase Price. The Developer shall pay the Purchase Price by
depositing it into the Escrow at least one (1) Business Day preceding the Escrow Closing Date.
3.2.1 Deposit. Within .seven (7) days following the Effective Date, the
Developer shall deliver the Deposit to the Escrow Agent in immediately available funds. The
Deposit shall be non-refundable to Developer and shall be applied to the Purchase Price, ekcept
that the Deposit shall be refunded in the event that City is unable to complete the transfer of the
Property due to not acquiring an executed compensation agreement from all of the taxing entities
a signatory thereto or City breaches this Agreement.
3.2.2 At Close of Escrow. At least one (1) Business Day preceding the
Escrow Closing Date, the Developer shall deposit the balance of the Purchase Price and any
other funds necessary to close escrow into Escrow.
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RESOLUTION NO. 2016-35 PAGE 22 OF 91 SEPTEMBER 27, 2016
3.3 Eminent Domain. If any portion of the Property or any interest in any portion of
'the Property, becomes the subject of any eminent domain proceeding prior to Close of Escrow,
other than such a proceeding by the City, including the.filing of any notice of intended
condemnation or proceedings in the nature of eminent domain commenced by any Government,
the City shall immediately give the Developer Notice of such occurrence, and the Developer
shall have the option, exercisable within ten (10) Business Days after receipt of such Notice from
the City, to either: (1) cancel the Escrow and terminate this Agreement and the Escrow, in which
case the Parties and the Escrow Agent shall proceed in accordance with Section 4.11; or (2)
continue with this Agreement in accordance with its terms, in which event the City shall assign
to the Developer any right of the City to receive any condemnation award attributable to the
Property.
3.4 Developer's Approval of Title to Property.
3.4.1 Title Notice. Within fifteen (15) days after the Escrow Opening Date,
City shall obtain the Preliminary Report from the Title Company, and deliver a copy of the
Preliminary Report to the Developer. Within thirty (30) days following the Developer's receipt
of the Preliminary Report, the Developer shall send the Title Notice to both City and the Escrow
Agent.
3.4.2 Failure to-Deliver Title Notice. If the Developer fails to send the Title
Notice to City and the Escrow Agent, within the time period provided in Section 3.4.1 the
_ Developer will be deemed to approve the status of title to the Property and accept conveyance of
' the Property.
3.4.3 Title Notice Response. Within fifteen (15) days following the City's
receipt of the Title Notice (if any), City shall send the Title Notice Response to both the.
Developer and the Escrow Agent. If the Title Notice does not disapprove or conditionally
approve any matter in the Preliminary Report or the Developer fails to deliver the Title Notice,
City shall not be required to send the Title Notice Response. If City.does not send the Title
Notice Response, if necessary, within the time period provided in this Section, City shall be
deemed to elect not to take any action in reference to the Title Notice. If City elects in the Title
Notice Response to take any action in reference to the Title Notice, City shall complete such
action,prior to the Escrow Closing Date or as otherwise specified in the Title Notice Response.
3.4.4 Title Notice Waiver. If City elects or is deemed to have elected not to
address one or more matters set forth in the Title Notice to the Developer's reasonable .
satisfaction,then within ten (10) days after the earlier of: (i) the Developer's receipt of the City's
Title Notice Response or (ii) the last date for the City to deliver its Title Notice Response, the
Developer shall either: (a) refuse to accept the title to and conveyance of the Property, or (b)
waive its disapproval or conditional approval of all such matters set forth in the Title Notice by
sending the Title Notice Waiver to both City and the Escrow Agent. Failure by the Developer to
timely send the Title Notice Waiver, where the Title Notice Response or City's failure to deliver
the Title Notice Response results in City's election not to address one or more matters set.forth
in the Title Notice to the Developer's reasonable satisfaction, will.be deemed the Developer's
continued refusal to accept the title to and conveyance of the Property, in which case both the
18 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 23 OF 91 SEPTEMBER 27, 2016
Developer and City shall have the right to cancel the Escrow and terminate this Agreement upon
seven(7) days' Notice, in their respective sole and absolute discretion.
3.4.5 Disapproval of Encumbrances Securing City Obligations.
Notwithstanding any other provision of this Agreement, the Developer disapproves any and all
encumbrances against the Property securing monetary(other than non-delinquent property taxes)
or performance obligations of City. All such encumbrances shall be removed from the Property
by City,prior to the Close of Escrow, at its sole cost and expense.
3.4.6 No Termination Liability. Any termination of this Agreement and
cancellation of the Escrow pursuant to this Section 3.4 shall be without liability to the other Party
or any other Person, and shall be accomplished by delivery of a Notice of termination to both the
other Party and the Escrow Agent at least seven (7) days prior to the termination date, in which
case the Parties and the Escrow Agent shall proceed pursuant to Section 4.11. Once a Notice of
termination is given pursuant to this Section 3.4, delivery of a Title Notice or Title Notice
Waiver shall have no force or effect and this Agreement shall terminate in accordance with the
Notice of termination.
3.5 Due Diligence Investigations.
3.5.1 License to Enter. City grants license to the Developer and its
contractors, inspectors, engineers, surveyors, consultants, architects, and other agents to enter the
Property for the purpose of undertaking the Due Diligence Investigations as the Developer
deems necessary and appropriate. The license given in this Section 3.5 shall be effective until the
earlier of. (a) the termination of this Agreement; or(b) the Close of Escrow: The Developer shall
conduct all Due Diligence Investigations during the Due Diligence Period and at its sole cost and
expense. Any Due Diligence Investigations by the Developer shall not unreasonably disrupt any
use or occupancy of the Property then existing.
3.5.2 Limitations. The Developer shall not conduct any intrusive or
destructive testing of any portion of the Property, other than low volume soil samples, without
City's prior written consent. The Developer shall pay all of its third-party vendors, inspectors,
surveyors, consultants or agents engaged in any inspection or testing of the Property, such that
no mechanics liens or similar liens for work performed are imposed upon the Property by any
such Persons. Following the conduct of any Due Diligence Investigations on the Property, the
Developer shall restore the Property to substantially its condition prior to the conduct of such
Due Diligence Investigations. Under no circumstances shall the Developer be required to
remediate or otherwise respond to the existence of any Hazardous Substances on the Property..
City may condition the Developer's or its agents entry onto the,Property on delivery to City of
proof of liability insurance reasonably acceptable to City and naming City as an additional
insured under such policy of insurance by endorsement.
3.5.3 Indemnity/Insurance. The activities of the Developer directly or
indirectly related to the Due Diligence Investigations shall be subject to the Developer's
indemnity obligations under this Agreement. Developer shall provide evidence of Liability
Insurance in compliance with Section 6 prior to the commencement of Due Diligence
Investigations.
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RESOLUTION NO. 2016-35 PAGE 24 OF 91 SEPTEMBER 27, 2016
3.5.4 Due Diligence Completion Notice. The Developer shall deliver a Due
Diligence Completion Notice to both City and the Escrow Agent, prior to the end of the Due
Diligence Period. If the Developer does not unconditionally accept the condition of the Property
by delivery of its Due Diligence Completion Notice stating such acceptance, prior to the end of
the Due Diligence Period, the Developer shall be deemed to have rejected the condition of the
Property and refused to accept conveyance of the Property. If the condition of the Property is
rejected or deemed rejected by the Developer, then either the Developer or City.shall have the
right to cancel the Escrow and terminate this Agreement, in their respective sole and absolute
discretion, until such time (if ever) as the Developer delivers the Due Diligence Completion
Notice stating the Developer's unconditional acceptance of the condition of the Property. Any
termination of this Agreement and cancellation of the Escrow, pursuant to this Section 3.5, shall
be without liability to the other Party or any other Person, and shall be accomplished by delivery
of a written Notice of termination to the other Party and the Escrow Agent, in which case the
Parties and the Escrow Agent shall proceed pursuant to Section 4.11. Notwithstanding any other
provision of this Agreement, the Developer may reject the condition of the Property at any time
during the Due Diligence Period for any reason or no reason, in the Developer's sole and
absolute discretion, and terminate this Agreement and cancel the Escrow by Notice to both City
and the Escrow Agent, in which case the Parties and the Escrow Agent shall proceed pursuant to
Section 4.11.
3.6 Delivery of Property Free of Tenants. At the Close of Escrow, City will deliver
possession of the Property to Developer free and clear of any contractual rights created by or
with the consent of City for any Person(other than Developer) to use or occupy the Property.
3.7 Acceptance of Property "AS-IS." Except to the extent of any express
representations and warranties of City specifically set forth in this Agreement (if any) the Close
of Escrow shall evidence.Developer's unconditional and irrevocable acceptance of the Property
in the Property's AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION, WITHOUT
WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION,
including any warranty as to title, physical condition, soil conditions, the presence or absence of
fill, ocean or tidal impacts, shoring or bluff stability or support, subsurface support, zoning, land
use restrictions, the availability or location of utilities or services, the location of any public
infrastructure on or off of the Property (active, inactive or abandoned), the suitability of the
Property for the Project or other use or the existence or absence of Hazardous Substances
(excepting any Hazardous Substance Discharge by City) and with full knowledge of the physical
condition of the Property, the nature of City's interest in and use of the Property, all Laws
applicable to the Property, the Permitted Exceptions and any and all conditions, covenants,
restrictions, encumbrances and all matters of record relating to the Property. Developer
represents and warrants to City that: (a) Developer has had ample opportunity to inspect and
evaluate the Property and the feasibility of the uses and activities Developer is entitled to
conduct on the Property in accordance with this Agreement; (b) Developer is experienced in real
estate development; (c) Developer is relying entirely on Developer's experience, expertise and
its own inspection of the Property in their current state in proceeding with acquisition of the
Property; (d) that Developer accepts the Property in its present condition; and (e) to the extent
that Developer's own expertise with respect to any matter regarding the Property is insufficient
to enable Developer to reach an informed conclusion regarding such matter, Developer has
engaged the services of Persons qualified to advise Developer with respect to such matters. The
20—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 25 OF 91 SEPTEMBER 27, 2016
Close of Escrow shall constitute Developer's representation and warranty to City that Developer
has received.assurances acceptable to Developer by means independent of City Parties of the
truth of all facts material to Developer's acquisition of the Property pursuant to this Agreement
and that the Property is being acquired by Developer as a result of its own knowledge,.inspection
and investigation of the Property and not as a result of any representation made by any City Party
relating to the condition of the Property, unless such statement or representation is expressly and
specifically set forth in this Agreement. Except to the extent of any express representations and
warranties of City specifically set forth in this Agreement (if any), City hereby expressly and
specifically disclaims any express or implied warranties regarding the Property.
3.8 Assignment of Property Information and Approvals. If for any reason this
Agreement is terminated, except as a direct result of a City Event of Default, without Developer
acquiring the Property, Developer shall deliver or cause to be delivered to City, within twenty
(20) days after City's written request and at no cost to City, all Property Information and
documentation of all Approvals, subject to any unwaived restrictions set forth in any agreement
between Developer and any Third Person regarding preparation of such Property Information or
documentation by such Third Person, notwithstanding Developer's reasonable efforts to obtain a
waiver of such restrictions. On such a request, the Property Information and all Approvals shall
be deemed assigned to City, without the execution of any additional documents, upon a
termination of this Agreement without Developer acquiring the Property. Developer shall, if
requested by City, execute such other documents as City reasonably requests, to further
document the assignment of the Property Information and all Approvals to City. Developer
represents and warrants to City that it has the right, power and authority to make the assignments
set forth in this Section. Developer shall deliver the Property Information to City,pursuant to this
Section, without representation or warranty of any kind. Developer shall take such actions and -
make such payments as may be necessary to preclude any Claim against City or the.Property for
any amounts owing by Developer regarding the Property Information. Developer shall Indemnify
the City Parties against all Claims arising from any actual or alleged failure of Developer to pay
any amount regarding any Property Information.
3.9 Developer to Obtain all Approvals for the Project.
3.9.1 Submission of Development Application. Developer shall exercise
reasonable efforts to prepare and submit all required Applications, documents, fees, charges or
other items (including, without limitation, deposits, funds or sureties in the ordinary course) .
required for the Construction of the Project, pursuant to all applicable Laws and Approvals, to
each necessary Government for review and approval. Further, Developer shall exercise
reasonable efforts to obtain all Approvals for the Construction of the Project on the Property
from each Government, prior to the Escrow Closing Date. Prior to commencement of any part of
the Construction of the Project, Developer shall obtain all Approvals from each Government
required for the Construction of the.Project. The City's zoning, building and land use regulations
(whether contained in ordinances, the City's municipal code, conditions of approval or
elsewhere), shall be applicable to the Construction of the Project on the Property by Developer.
Developer acknowledges that the Project Plans and Specifications and any changes to the Project
Plans or Specifications shall be subject to all applicable Laws and Approvals.
21 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 26 OF 91 SEPTEMBER 27, 2016
3.9.2 Reservations. The approval of this Agreement by the City or City shall
not be binding on the City Council, City, Design Review Committee, or any other commission,
committee, board or body of the City or City regarding any Approvals of the Project required by
such bodies. No action by the City or City with reference to this Agreement or any related
documents shall be deemed to constitute issuance or waiver of any required City or City
Approval regarding the Property, the Project or Developer. The Parties acknowledge and agree
that this Agreement is not a statutory development agreement pursuant to Government Code
Sections 65864, et seq.
3.10 .City Not to Encumber. City agrees not to place any matters of record against the
Property (other than Permitted Exceptions and any matters arising from City's issuance or
exercise of any remedy related to any Approval for the Project), prior to the Close of Escrow,
without the prior written consent of Developer.
3.11 Title Commitment Supplements. If at any time following the Effective Date, the
Title Company issues a supplement to the Title Commitment, then any exceptions to the title to
the Property set forth in the supplement and not previously shown as an exception to the
coverage under the Title Policy shall be Permitted Exceptions, unless Developer delivers a
Supplement Notice to City within twenty (20) calendar days following the date of the
supplement. City shall have twenty (20) calendar days following receipt of a Supplement Notice
to elect to deliver a Supplement Notice Response. If City elects in a Supplement Notice
Response to cause the removal of any matter objected to in a Supplement Notice from the Title
Commitment or its effect to be insured against, City shall cause the removal of each such
objectionable matter from the Title Commitment or a commitment to issue such insurance to be
issued by an appropriate insurance carrier, prior to the Close of Escrow, all to the reasonable
satisfaction of Developer. If City is unwilling or unable to cause the removal of any one or more
matters objected to in a Supplement Notice from the Title Commitment or its effect to be insured
against, all to the reasonable satisfaction of Developer, then, within ten (10) days following the
earlier of. (a) Developer's receipt of the Supplement Notice Response or (b) passage of the time
for City to deliver a Supplement Notice Response, Developer may either: (1) refuse to accept the
title to and conveyance of the Property, in which case either Developer or City shall have the
right to cancel the Escrow and terminate this Agreement, in their respective sole and absolute
discretion, without liability to the other Party or any other Person, by delivery of a Notice of
termination to both the other Party and the Escrow Agent, or (2) Developer may waive its
objection to any items set forth in a Supplement Notice by delivering a Supplement Notice
Waiver to both City and the Escrow Agent. Failure by Developer to deliver a Supplement Notice
Waiver, where a Supplement Notice Response or City's failure to deliver a Supplement Notice
Response indicates City's election not to cause the removal of any matter objected to in a
Supplement Notice from the Title Commitment or to insure against its effect, within ten (10)
days following Developer's receipt of such Supplement Notice Response or expiration of the
time period for City to deliver such Supplement Notice Response under this Agreement, will be
deemed Developer's disapproval of the title to and refusal to accept conveyance of the Property
and both the Developer and City shall have the right to cancel Escrow and terminate this
Agreement upon seven(7) days Notice, in their respective sole and absolute discretion.
3.12 Option to Purchase and Right of First Refusal for Purchase of Developer
Property. In consideration of the City's execution of this DDA and the sale of the City Property
22—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 27 OF 91 SEPTEMBER 27, 2016
contemplated herein, Developer grants to City an option to purchase certain real property, as
more specifically set forth in Section 10 of this Agreement, and a right of first refusal, as more
specifically set forth in Section 11 of this Agreement.
4. JOINT ESCROW INSTRUCTIONS
4.1 - Opening of Escrow. City and Developer shall cause the Escrow to be opened
within thirty (30) days following Notice that City has received fully executed copies of the
compensation agreement by delivering a copy of this Agreement signed by both of the Parties to
the Escrow Agent. The Escrow Agent shall promptly confirm the Escrow Opening Date in
writing to each of the Parties, with a copy of the Escrow Agent Consent signed by the authorized
representative(s) of the Escrow Agent. The provisions of this Section 4 are the joint escrow
instructions of City and Developer to the Escrow Agent for conducting the Escrow.
4.2 Escrow Agent Authority. City and Developer authorize the Escrow Agent to:
4.2.1 Charges. Pay and charge City and Developer for their respective shares
of the applicable fees, taxes, charges and costs payable by either City or Developer regarding the
Escrow;
4.2.2 Settlement/Closing Statements. Release each Party's Escrow
settlement/closing statement to the other Party;
4.2.3 Document Recording. File any documents delivered for recording
through the Escrow with the office of the Recorder of the County for recordation in the official
records of the County,pursuant to the joint instructions of the Parties; and.
4.2.4 Counterpart Documents. Utilize documents that have been signed by
City and Developer-in counterparts, including attaching separate signature pages to one version
of the same document.
4.3 Developer's Conditions to Close of Escrow. Provided that the failure of any such
condition to be satisfied is not due to a Default under this Agreement by Developer, Developer's
obligation to purchase the Property from City on the Escrow Closing Date shall be subject to the
satisfaction or waiver of each of the following conditions precedent, each of which can only be
waived in writing by Developer:
4.3.1 Title Policy. The Title Company is, upon payment of the Title
Company's premium for the Title Policy, irrevocably and unconditionally committed to issue the
Title Policy to Developer, at the Close of Escrow;
4.3.2 Approvals. Final issuance of all discretionary Approvals required from
any Government for the Construction of the Project on the Property, on terms and conditions
reasonably acceptable to Developer;
4.3.3 CEQA Documents. Final adoption, approval or certification of the
CEQA Documents;
23 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 28 OF 91 SEPTEMBER 27, 2016
4.3.4 City Escrow Deposits. City deposits all of the items into the Escrow
required by Section 4.6;
4.3.5 Settlement/Closing Statement. Developer approves the Escrow
Agent's estimated Escrow closing/settlement statement;
4.3.6 City Pre-Closing Obligations. City performs all of its material
obligations required to be performed by City under this Agreement prior to the Close of Escrow.
4.4 City's Conditions to Close of Escrow. Provided that the failure of any such
condition to be satisfied is not due to a Default under this Agreement by City, City's obligation
to sell the Property to Developer on or before the Escrow Closing.Date shall be subject to the
satisfaction or waiver of each of the following conditions precedent, each of which can only be
waived in writing by City:
4.4.1 Document Approval. City has received from Developer and approved
all of the following described items in City's reasonable discretion. Developer shall have all of
the following described documents completed and signed by all of the Persons required to make
such documents operative and shall have delivered true, accurate and legible copies or originals
of all such documents (as specified in this Agreement) to City,prior to the Close of Escrow:
(a) Developer Entity Documents; and
(b) A copy of the Construction Contract; and
(c) All Insurance Documents; and
(d) A copy of the Construction Financing Documents, if any;
4.4.2 Title. The Developer accepts the state of the title of the Property,
pursuant to Section 3.4;
4.4.3 Due Diligence. The Developer delivers its Due.Diligence Completion
Notice to both City and the Escrow Agent stating the Developer's unconditional acceptance of
the condition of the Property;
4.4.4 Title Policy. The Title Company is, upon payment of the Title
Company's standard premium for an insurance policy such as the Title Policy, irrevocably and
unconditionally committed to issue the Title Policy to Developer, at the Close of Escrow; .
4.4.5 Approvals. Final issuance of all discretionary Approvals required from
any Government for the Construction of the Project on the Property, on terms and conditions
reasonably acceptable to City;
4.4.6 CEQA Documents. Final adoption, approval or certification of the
CEQA Documents;
24—September 27, 2016
RESOLUTION NO. 2.016-35 PAGE 29 OF 91 SEPTEMBER 27, 2016
4.4.7 Construction Financing. A Permitted Security Instrument securing
repayment of any Construction Financing and approved by City has been deposited into the
Escrow and is in a condition to be recorded against the Property at the Close of Escrow and the
Construction Financing, if any, is in a condition to fund promptly following the Close of Escrow;
4.4.8 Permanent Loan Commitment. If Developer obtains Construction
Financing for more than Forty Percent (40%) of the Total Project Costs then Developer shall
provide City with evidence reasonably satisfactory to City that Developer has received a
commitment from a Lender to provide a Permanent Loan;
4.4.9 Developer Escrow Deposits. Developer deposits all of the items into
the Escrow required by Section 4.5;
4.4.10 Settlement/Closing Statement. City approves the Escrow Agent's
estimated Escrow closing/settlement statement;
4.4.11 .Developer Pre-Closing Obligations. Developer performs all of its
material obligations required to be performed by Developer under this Agreement prior to the
Close of Escrow; and
4.4.12 Compensation Agreement. City receives compensation agreements
fully executed by all.appropriate taxing entities.
4.5 Developer's Escrow Deposits. At least one (1) Business Day prior to the Escrow .
Closing Date scheduled by the Escrow Agent in a writing delivered to both of the Parties,
Developer shall deposit the following described funds and documents into the Escrow and,
concurrently, provide a copy of each such document to City:
4.5.1 Notice .of Agreement.. The Notice of Agreement signed by the
authorized representative(s) of Developer in recordable form.
4.5.2 Insurance Documents. All Insurance Documents, as approved by
City;
4.5.3 Construction Financing Security Instrument. A Permitted Security
Instrument securing repayment of the Construction Financing, if any, executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the Property at the
Close of Escrow;
4.5.4 Notice of Option to Purchase Developer's Property. The Notice of
Option to Purchase Real Estate granted to City allowing City's purchase of the Developer
Property in accordance with Section 10 of this Agreement and in recordable form substantially
similar to Exhibit"E".
4.5.5 Other Funds and Documents. Such other funds or documents
required from Developer under the terms of this Agreement to close the Escrow or by the Escrow
Agent in the performance of the Escrow Agent's contractual or statutory obligations relating to
the Escrow.
25—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 30 OF 91 SEPTEMBER 27, 2016
4.6 City's Escrow Deposits. At least one (1) Business Day prior to the Escrow
Closing Date scheduled by the Escrow Agent in a writing delivered to both of the Parties, City
shall deposit the following described funds and documents into the Escrow and, concurrently,
provide a copy of each such document to Developer:
4.6.1 Deed. The Deed signed by the authorized representative(s) of City;
4.6.2 Notice of Agreement. The Notice of Agreement signed by the
authorized representative(s) of City in recordable form.
.4.6.3 Attorney Fees. Itemized invoice of attorney fees incurred by City in
negotiating and preparing this Agreement.
4.6.4 Other Funds and Documents. Such other funds or documents
required from City under the terms of this Agreement to close the Escrow or by the Escrow
Agent in the performance of the Escrow Agent's contractual or statutory obligations regarding
the Escrow.
4.7 . Closing Procedure. When each of Developer's .Escrow deposits, as set forth in
Section 4.5, and each of City's Escrow deposits, as set forth in Section 4.6, are deposited into the
Escrow, the Escrow Agent shall request Notice from both Developer and City that each of their
respective conditions to the Close of Escrow, as set forth in Sections 4.3 and Section 4.4,
respectively, are satisfied or waived. Upon the Escrow Agent's receipt of written confirmation
i from both City and Developer that each of their respective conditions to the Close of Escrow are
either satisfied or waived, the Escrow Agent shall schedule the Escrow Closing Date by Notice
to both Parties and, thereafter, shall close the Escrow on or before the Escrow Closing Date by
doing all of the following:
4.7.1 Recordation and Distribution of Recorded Documents. The Escrow
Agent shall file the following documents with the office of the Recorder of the County for
recording in the official records of the County, in the following order, at the Close of Escrow: (a)
the Deed; (b) the Notice of Agreement; (c) Permitted Security Instrument securing the
Construction Financing, if any; (d) Notice of Option securing City's right to purchase the
Developer Property; and (e) any other documents to be recorded through the Escrow upon the
joint instructions of the Parties. The Escrow Agent shall deliver conformed copies of all
documents filed for recording in the official records of the County through the Escrow to City,
Developer and any other Person designated in the written joint escrow instructions of the Parties
to receive an original or conformed copy of each such document. Each copy of a document filed
for recording shall show all recording information. The Parties intend and agree that this Section
4.7.1 shall establish the relative priorities of the documents to be recorded in the official records
of the County through the Escrow, by providing for recordation of Senior interests prior in time
to junior interests, as provided in this Section 4.7.1;
4.7.2 Distribution of Other Documents. The Escrow Agent shall deliver .
copies of all documents to be delivered through the Escrow that are not to be recorded to City,
Developer and any other Person designated in the written joint escrow instructions of the Parties
- to receive an original or copy of each such document;
26—.September 27, 2016
RESOLUTION NO. 2016-35 PAGE 31 OF 91 SEPTEMBER 27, 2016
4.7.3 Title Policy. Obtain and deliver the Title Policy to Developer;
4.7.4 Funds. Deliver all funds held by the Escrow Agent for the account of
City to the appropriate taxing entities identified by the City and as set out in the compensation
agreement, less any other charges to the account of City pursuant to the terms of this Agreement
and as authorized by the compensation agreement, including but not limited to the City's
attorney fees in negotiating and preparing this Agreement, and return all remaining funds held by
the Escrow Agent for the account of Developer to Developer, less Developer's share of the
Escrow closing costs, and less any other charges to the account.of Developer pursuant to the
terms of this Agreement;
4.7.5 Report to IRS. Following the Close of Escrow and prior to the last
date on which such report is required to be filed with the United States Internal Revenue Service,
if such report is required pursuant to Section 6045(e) of the United States Internal Revenue
Code, the Escrow Agent shall report the gross proceeds of the sale of the Property pursuant to
this Agreement to the United States Internal Revenue Service on Form 1099-13, Form W-9 or
such other form(s) as may be specified by the United States Internal Revenue Service pursuant to
Section 6045(e) or its associated Federal regulations. Upon the filing of such reporting form with
the United States Internal Revenue Service, the Escrow Agent shall deliver a copy of the filed
form to both City and Developer.
4.8 Close of Escrow. The Close of Escrow shall occur on or before the Escrow
Closing Date. The Parties may mutually agree to change the Escrow Closing Date by joint
written instruction to the Escrow Agent. The City Manager is authorized to agree to one or more
extensions of the Escrow Closing Date on behalf of City up to a maximum time period extension
of six (6) months in the aggregate, in the City Manager's sole and absolute discretion. If for any
reason (other than a Default or Event of Default by such Party) the Close of Escrow has not
occurred on or before the Escrow Closing Date, then any Party not then in Default under this
Agreement may cancel the Escrow and terminate this Agreement, without liability to the other
Party or any other Person for such cancellation and termination, by delivering written Notice of
termination to both the other Party and the Escrow Agent. Following any such Notice of
termination of this Agreement and cancellation of the Escrow, the Parties and the Escrow Agent
shall proceed pursuant to Section 4.11. Without limiting the right of either Party to cancel the
Escrow and terminate this Agreement, pursuant to the first sentence of this Section 4.8, if the
Escrow does not close on or before the Escrow Closing Date and neither Party has exercised its
contractual right to cancel the Escrow and terminate this Agreement under this Section 4.8
before the first date on which the Escrow Agent Notifies both Parties that the Escrow is in a
position to close, then the Escrow shall close as soon as.reasonably possible following the first
date on which the Escrow Agent Notifies both Parties that the Escrow is in a position to close,
pursuant to the terms and conditions of this Agreement.
4.9 Escrow Closing Costs, Taxes and Title Policy Premium. Developer shall pay all.
Escrow fees and such other costs as the Escrow Agent may charge for conducting the Escrow.
City shall pay the premium charged by the Title Company for the Title Policy, exclusive of any
endorsements or other supplements to the coverage of the Title Policy that may be requested by
Developer. City shall pay any County documentary transfer tax arising from the transfer of the
Property from City to Developer at the Close of Escrow. Developer shall pay any and all
27—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 32 OF 91 SEPTEMBER 27, 2016
recording fees, any and all other charges or fees due at the Close of Escrow, taxes (other than
County documentary transfer tax) levied by any Government arising from or relating to.the sale
of the Property pursuant to this Agreement through the Escrow and the cost of any endorsements
or supplements to the coverage of the Title Policy requested by Developer. The Escrow Agent
shall notify Developer and City of the costs to be borne by each of them at the Close of Escrow
by delivering the Escrow Agent's estimated Escrow closing/settlement statement to both City
and Developer, at least two (2) Business Days prior to the Escrow Closing Date.
4.10 . Escrow Cancellation Charges. If the Escrow fails to close due to an Event of
Default attributable to City, City shall pay all customary and reasonable cancellation charges
regarding cancellation of the Escrow and the Title Policy order, if any. If the Escrow fails to
close due to an Event of Default attributable to Developer, Developer shall pay all customary and
reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order,
if any..If the Escrow fails to close for any reason other than an Event of Default attributable to
either Developer or City, Developer and City shall each pay one-half(1/2) of all customary and
reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order,
if any.
4.11 Escrow Cancellation. If the Escrow is cancelled and this Agreement is
terminated pursuant to a contractual right granted to a Party in this Agreement to cancel'the
Escrow and terminate this Agreement, the Parties shall pay any associated cancellation charges
in accordance with Section 4..10 and do each of the following:
4.11.1 Cancellation Instructions. The Parties shall, within three (3) Business
Days following receipt of the Escrow Agent's written request, execute any reasonable Escrow
cancellation instructions requested by the Escrow Agent; and
4.11.2 Return of Funds and Documents. Within seven (7) days following
receipt by the Parties of a settlement statement from the Escrow Agent of cancellation charges
regarding cancellation of the Escrow and.the Title Policy order, if any: (a) Developer or the
Escrow Agent, respectively, shall return to City any documents previously delivered by City to
Developer or the Escrow Agent regarding this Agreement, the Property or the Escrow; (b) City
or the Escrow Agent,.respectively, shall return to Developer all documents previously delivered
by Developer to City or the Escrow Agent regarding this Agreement, the Property or the Escrow,
except any Property Information; (c) the Escrow Agent shall return to Developer any funds
deposited into the Escrow by Developer, including the Deposit, except as otherwise provided in
Section .3.2.1 or Section 8.2, less Developer's share of any customary and reasonable
cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any, in
accordance with Section 4:10; and (d) the Escrow Agent shall return to City any funds deposited
into the Escrow by City, less City's share of any customary and reasonable cancellation charges
regarding cancellation of the Escrow and the Title Policy order, if any, in accordance with
Section 4.10.
4.12 Escrow Notices.All Notices from the Escrow Agent to the Parties shall be given
in the manner provided in Section 9.6 of this Agreement.
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RESOLUTION NO. 2016-35 PAGE 33 OF 91 SEPTEMBER 27, 2016
5. PROJECT DEVELOPMENT.
5.1 Developer's Covenant to Develop the Project. Developer covenants to and for
the express benefit of the City that Developer shall commence, pursue and complete the
development of the Project, within the time period for each such action set forth in the Project
Schedule of Performance. Developer covenants and agrees for itself, its successors.and assigns
that the Property shall be improved and developed with the Project, in conformity with the terms
and conditions of this Agreement and all applicable Laws and conditions of each Government.
The covenants of this Section 5.1 shall run with the Property until the date of issuance of a
Certificate of Completion for the Project.
5.2 Changes to Project Plans and Specifications During Course of Construction.
Developer shall have the right, during the course of Construction of the Project, to make "minor
field changes," without seeking the approval of the City, if such changes do not affect the type of
use to be conducted within all or any portion of a structure. "Minor field changes" shall be
defined as those changes from the Approvals for the Project that have no substantial effect on the
Project and are made in order to expedite the work of Construction in response to field
conditions. Nothing contained in this Section 5.2 shall be deemed to constitute a waiver of or
change in any Approvals governing any such "minor field changes" or any Approvals by any
Government otherwise required for any such "minor field changes."
5.3 Construction Start and Completion of Project.
5.3.1 Commencement. Developer shall commence Construction of the
Project in accordance with the Project Schedule of Performance. Thereafter, Developer shall
diligently proceed to pursue and complete the Construction of the Project, in a good and
workmanlike manner, in accordance with the Project Schedule of Performance and all applicable
Laws and all Approvals for the Project issued by each Government.
5.3.2 Completion. On or before the Project Completion Date, Developer
shall do all of the following:
(a) Record a Notice of Completion, in accordance with California
Civil Code Section 3093, for the entirety of the Project;
(b) Cause the Project to be inspected by each Government, as required
by the applicable Approvals or Laws, and correct any defects and deficiencies that may be
disclosed by any such inspection;
(c) Cause all final Certificates of Occupancy(or equivalent approvals)
and other Approvals necessary for the occupancy and operation of the completed Project to be
duly issued;
5.3.3 Time Extensions. The City Manager, in his or her sole and absolute
discretion, may extend the Project Completion Date for up to an additional one hundred eighty
(180) days, in the aggregate.
29—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 34:OF 91 SEPTEMBER 27, 2016
5.4 Compliance with Laws. All work performed in connection with the Construction
of the Project shall comply with all applicable Laws and Approvals.
5.5 Project Schedule of Performance. All planning construction, installation and other
development obligations and responsibilities of Developer related to the Project shall be initiated
and completed within the times specified in the Project Schedule of Performance, or within such
reasonable extensions of such times granted by the City manager or as otherwise provided for in
this Agreement.
5.6 Reserved.
5.7 City.Right to Inspect Project and Property. The City Parties shall have the right of
reasonable access to the Property, without the payment of charges or fees, during normal
construction hours, during the period of Construction of the Project. Any and all City
representatives who enter the Property shall identify themselves at the Construction management
office or, if none, to the apparent on-site Construction supervisor on the Property, upon their
entrance onto the Property, and shall at all times be accompanied by a representative of
Developer, while on the Property. Developer shall make a representative of Developer available
for this purpose at all times during normal construction hours, upon reasonable advance Notice
from the City. The City shall Indemnify Developer from injury, property damage or liability to
the extent arising out of the exercise by the City of the right of access to the Property provided in
this Section, except to the extent that any such injury, property damage or liability arises from
_ the negligence or willful misconduct of any of Developer Parties. If in the City's reasonable
' judgment it is necessary, the City shall have the further right, from time to time, at its own cost,
-- to retain a consultant or consultants to inspect the Project and verify compliance by Developer
with the provisions of this Agreement. Developer acknowledges and agrees that any such City
inspections are for the sole purpose of protecting the City's rights under this Agreement, are
made solely for the City's benefit, that the City's inspections may be superficial and general in
nature, and are.for the purposes of informing the City of the progress of the Project and the
conformity of the Project with the terms and conditions of this Agreement; and that Developer
shall not be entitled to rely on any such inspection(s) as constituting the City's approval,
satisfaction or acceptance of any materials, workmanship, conformity of the Project with this
Agreement or otherwise. Developer agrees to make its own regular inspections,of the work of
Construction of the Project to determine that the progress and quality of the Project and all other
requirements of the work of Construction of the Project are being performed in a manner
satisfactory to Developer.
5.8 PREVAILING WAGES.
5.8.1 RESPONSIBILITY. DEVELOPER AGREES WITH CITY THAT
DEVELOPER SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY
RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS EMPLOYED
RELATIVE TO THE CONSTRUCTION OF THE PROJECT MUST BE PAID THE
PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR CLASSIFICATION, AS
DETERMINED BY THE STATE, PURSUANT TO LABOR CODE SECTIONS 1720, ET
SEQ.
30—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 35 OF 91 SEPTEMBER 27, 2016
5.8.2 WAIVERS AND RELEASES. DEVELOPER, ON BEHALF OF
ITSELF AND ITS' SUCCESSORS AND ASSIGNS, WAIVES AND RELEASES CITY FROM
ANY RIGHT OF ACTION THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT
TO LABOR CODE SECTION 1781. RELATIVE TO THE WAIVER AND RELEASE
CONTAINED IN THIS SECTION 5.8, DEVELOPER ACKNOWLEDGES THE
PROTECTIONS OF CIVIL CODE SECTION 1542, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
5.8.3 INITIALS. BY INITIALING BELOW, DEVELOPER KNOWINGLY
AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION .1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 5.8:
Initials of Authorized
Developer-Representative
5.8.4 INDEMNITY. ADDITIONALLY, _ DEVELOPER SHALL
INDEMNIFY CITY, PURSUANT TO SECTION 8.56, AGAINST ANY CLAIMS PURSUANT
TO LABOR CODE SECTION 1781 ARISING FROM THIS AGREEMENT OR THE
CONSTRUCTION OF ALL OR ANY PORTION OF THE PROJECT.
5.9 Project Certificate of Completion.
5.9.1 Issuance. Following the issuance of a final Certificate of Occupancy.
for the Project by the City excluding any Punchlist Work to be completed by the Developer,
Developer may request that the City inspect the completed Project and issue a Certificate of
Completion for the Project. Following the City's receipt of such a written request from
Developer, the City shall promptly inspect the Project to determine whether or not the Project
has been completed in compliance with this Agreement. If the City determines that the Project is
complete (excluding any outstanding Punchlist Work) and in compliance with this Agreement,
the City shall issue a Certificate of Completion for the Project to Developer. If the City
determines that the Project is not complete or not in compliance with this Agreement, the City
shall send written Notice of each non-conformity to Developer, within fifteen (15) calendar days
following the City's receipt of Developer's written request for a Certificate of Completion or
within three (3) calendar days after the next regular meeting of the City governing body,
whichever date occurs later, provide Developer with a written statement setting forth the reasons
for the City's failure or refusal to issue a Certificate of Completion. The statement shall also
contain the City's opinion of the action(s) Developer must take to obtain a Certificate of
Completion from the City. If the reason for Developer's failure to complete the Project is
confined to the immediate unavailability of specific items or materials for construction or
landscaping at a price reasonably acceptable to Developer or other minor Punchlist Work, the
31 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 36 OF 91 SEPTEMBER 27, 2016
City may, in its sole and absolute discretion, issue a Certificate of Completion upon the posting
of a bond or irrevocable standby letter of credit by Developer, in form and substance reasonably
acceptable to the City, in an amount representing the fair value of the work on the Project
remaining to be completed, as reasonably determined by the City. If the City fails to provide .
such written statement, within the specified time period, Developer shall be deemed,
conclusively and without further action of the City, to have satisfied the requirements of this
Agreement with respect to the Construction of the Project, as if a Certificate of Completion had
been issued by the City pursuant to this Agreement, and the same shall irrevocably be deemed to
have been issued as of such date for all purposes of this Agreement; provided,however, that City
shall subsequently issue a Certificate of Completion, if requested to do so by Developer.
5.9.2 Effect. A Certificate of Completion shall only be evidence of the City's
conclusive determination of satisfactory completion of the Construction of the Project in
accordance with the terms of this Agreement. A Certificate of Completion shall not constitute a
Notice of Completion under California Civil Code Section 3093, nor shall it act to terminate the
continuing reservations, covenants, restrictions or conditions contained in the Deed or any other
instruments recorded against the Property or set forth in this Agreement or otherwise. A
Certificate of Completion is not evidence of the compliance of-the Project with any Laws or
Approvals. A Certificate of Completion shall not evidence the satisfaction of any obligation of
Developer to the City under this Agreement or. otherwise, other than Developer's obligation to
construct and install the Project on the Property. After the recordation of a Certificate of
Completion for the Project, any Person then owning or thereafter purchasing, leasing or
otherwise acquiring any interest in the Property or the Project shall not (because of such
ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement
regarding Construction of the Project, but such Person shall be bound by any other reservations,
covenants, conditions, restrictions and interests affecting the Property pursuant to this
Agreement.
6. INSURANCE
6.1 Developer. Developer shall maintain, to protect the City Parties against all
insurable Claims resulting from the actions of Developer in connection with this Agreement, the
Property and the Project, at the sole cost and expense of Developer,until issuance of a Certificate
of Completion for the Project, the following insurance (or its then reasonably available
equivalent): (a) Liability Insurance; (b) Property Insurance; (c) Builder's Risk Insurance; and (d)
Workers Compensation Insurance.
6.2 . Nature of Insurance. All Liability Insurance, Property Insurance and Automobile
Liability Insurance policies this Agreement requires shall be issued by carriers that: (a) are listed
in the then current "Best's Key Rating Guide—Property/Casualty—United States & Canada"
publication (or its equivalent, if such publication ceases to be published) with a minimum
financial strength rating of"A-" and a minimum financial size category of"VII" (exception may
be made for the State Compensation Insurance Fund when not specifically rated); and (b) are
authorized to do business in the State Developer may provide any insurance under a "blanket" or
"umbrella" insurance policy, provided that: (i) such policy or a certificate of such policy shall
specify the amount(s) of the total insurance allocated to the Property and the Project, which
amount(s) shall equal. or exceed the amount(s) required by this Agreement and shall not be
32—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 37 OF 91 SEPTEMBER 27, 2016
reduced for claims made for other properties or projects; and (ii) such policy otherwise complies
with this Agreement.
6.3 Policy Requirements and Endorsements. All insurance policies as required by this
Agreement shall contain.(by endorsement or otherwise) the following provisions:
6.3.1 Insured. Liability Insurance and Automobile Liability Insurance
policies shall name the City Parties as "additional insured." Property Insurance and Builder's
Risk Insurance policies shall name the City as a "loss payee." The coverage afforded to the City
Parties shall be at least as broad as that afforded.to Developer and may not contain any terms,
conditions, exclusions, or limitations applicable to the- City Parties that do not apply to
Developer.
6.3.2 Primary Coverage. All policies shall, be written as primary policies,
respecting the City Parties. Any insurance or self-insurance maintained.by the City Parties shall
be excess of all insurance required under this Agreement and shall not contribute with it.
6.3.3 Contractual Liability. Liability Insurance policies shall contain
contractual liability coverage, for the Party's indemnity obligations under this Agreement. A
Party's obtaining or failure to obtain such contractual liability coverage shall not relieve the
Party from nor satisfy any indemnity obligation of the Party under this Agreement.
6.3.4 Deliveries to the City. Developer shall deliver to the City evidence of
Liability Insurance prior to the commencement of any Due Diligence Investigations. Evidence of
Developer's maintenance of all insurance policies required by this Agreement shall be delivered
to the City prior to the Close of Escrow. No later than three (3) days before any insurance
required by this Agreement expires, is cancelled or its liability limits are reduced or exhausted,
Developer shall deliver to the City evidence of such Party's maintenance of all insurance this
Agreement requires: Each insurance policy required by this Agreement shall be endorsed to state
that coverage shall not be cancelled, except after thirty (30) calendar days' advance written
notice of cancellation or non-renewal has been given to City by certified mail, return receipt
requested. Phrases such as "endeavor to" and "but failure to mail such Notice shall impose no
obligation or liability of any kind upon the company" shall not be included in the cancellation
wording of any certificates or policies of insurance applicable to the City Parties pursuant to this
Agreement.
6.3.5 Waiver of Certain Claims. Developer shall cause each insurance
carrier providing any Liability Insurance, Builder's Risk Insurance, Worker's Compensation
Insurance, Automobile Liability Insurance or Property Insurance coverage under this Agreement
to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to the City
Parties, if not already.in the policy. To the extent that the Parties obtain insurance with a Waiver
of Subrogation, the Parties release each other; and their respective authorized representatives,
from any Claims for damage to any Person or property to the extent such Claims are paid by
such insurance policies .obtained pursuant to and in satisfaction of the provisions of this
Agreement.
33 —September 27, 2016.
RESOLUTION NO. 2016-35 PAGE 38 OF 91 SEPTEMBER 27, 2016
6.3.6 No Representation. No Party makes any representation that the limits,
scope, or forms of insurance coverage this Agreement requires are adequate or sufficient.
6.3.7 No Claims Made Coverage. None of the insurance coverage required
under.this Agreement maybe written on a claims-made.basis.
6.3.8 Fully Paid and Non-Assessable. All insurance obtained and
maintained by Developer in satisfaction of the requirements of this Agreement shall be fully paid
for and non-assessable. However, Developer's policies may be subject to insurer audits.
6.3.9 City Option to Obtain Coverage. During the continuance of an Event
of Default arising from the failure of Developer to carry any insurance required by this
Agreement, the City may, at its sole option, purchase any such required insurance coverage and
the City shall be entitled to immediate payment from the Defaulting Party of any premiums and
associated reasonable costs paid by the City for such insurance coverage. Any amount becoming
due and payable to the City under this Section that is not paid within fifteen (15) calendar days
after written demand from the City for payment of such amount, within.an explanation of the
amounts demanded, will bear interest from the date of the demand at the rate of eight percent
(8%) per annum or the Usury Limit, whichever is less. Any election by the City to purchase or
not to purchase insurance otherwise,required by the terms of this Agreement to be carried by
Developer shall not relieve the Defaulting Party of its obligation to obtain and maintain any
insurance coverage required by this Agreement.
'- 6:3.10 Separation of Insureds. All Liability Insurance and Contractor's
Insurance shall provide for separation of insureds for Developer and the City Parties.
6.3.11 Deductibles and Self-Insured Retentions. Any deductibles or self-
insured retentions under insurance policies required by this Agreement shall be declared to and
approved by City. The insurer under each such insurance policy shall eliminate such deductibles
or self-insured retentions as respects the City Parties.
6.3.12 No Separate. Insurance. Developer shall. not carry separate or
additional insurance concurrent in form or contributing in the event of doss with that required
under this Agreement, unless the City is made an additional insured thereon, as required by this
Agreement.
6.3.13 Insurance Independent of Indemnification. The insurance
requirements of this Agreement are independent of the Parties' indemnification and other
obligations under this Agreement and shall not be construed or interpreted in any way to satisfy,
restrict, limit, or modify. the Parties' indemnification or other obligations or to limit.the Parties'
liability under this Agreement, whether within, outside, or in excess of such coverage, and
regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the
provision of such insurance preclude the City from taking such other actions as are available to it
under any other provision of this Agreement or otherwise at law or in equity.
1
34—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 39 OF 91 SEPTEMBER 27, 2016
7. FINANCING
7.1 Proiect Financing. The Developer shall be responsible for the funding of all costs
of development. It is anticipated that Developer shall acquire a conditional forward loan
commitment for a Permanent Loan if the aggregate of any Construction Financing exceed forty
percent (40%) of the Total Project Costs.
7.2 Only Permitted Encumbrances. Developer shall not record and shall not allow to
be recorded against the Property any Security Instrument, lien or other encumbrance that is not a
Permitted Encumbrance. Developer shall remove or cause to be removed any Prohibited
Encumbrance made or recorded against the Property or shall assure the complete satisfaction of
any such Prohibited Encumbrance to the satisfaction of the City, in the City's sole and absolute
discretion. The covenants of Developer set forth in this Section 7.2 regarding the placement of
encumbrances on the Property shall run with the land of the Property and bind successive owners
of the Property, until recordation (or deemed issuance) of the Certificate of Completion for the
Project.
7.3 City Right to Discharge Prohibited Encumbrances. After sixty (60) calendar days
Notice to Developer of a Prohibited Encumbrance and provided that Developer has not caused
such Encumbrance to be removed (including by providing title insurance in form and substance
reasonably acceptable to City and issued by a title insurance company reasonably acceptable to
City, insuring the priority of this Agreement with such title insurance being in the minimum
amount of 125% of the amount of the lien claim or providing a statutory bond resulting in
removal of such lien). during such time period, the City shall have the right, but not the
obligation, to satisfy or remove any Prohibited Encumbrance against the Property or the Project
and receive reimbursement from Developer for any amounts paid or incurred in satisfying or
removing any such Prohibited Encumbrance, upon demand. Any amount expended by the City to
discharge a Prohibited Encumbrance that is not reimbursed to the City by Developer within thirty_
(30) calendar days following written demand for payment from the City shall accrue Default
Interest, until paid in full. Nothing in this Section, though, shall require Developer to pay or
make provisions for the payment of any tax, assessment, lien or charge that Developer is in the
process of contesting the validity or amount thereof, in good faith, and so long as such contest
shall not subject all or any portion of the Property to forfeiture or sale.
7.4 Rights of Lender and City Regarding Permitted Security Instruments.
7.4.1 - Notice of Liens. The Developer shall promptly Notify the City of any
Security Instrument or lien asserted against or attached to all or any portion of the Project or the
Property, prior to the date of issuance of a Certificate of Completion for the Project, whether by
voluntary act of Developer or otherwise; provided, however, that no Notice of filing of
preliminary notices or mechanic's liens need be given by Developer to the City, prior to suit
being filed to foreclose any such mechanic's lien.
7.4.2 Notice of Default to Lenders. Whenever the City delivers any Notice
of Default to Developer under this Agreement, the City shall send a copy of such Notice of
Default to each Lender holding a Permitted Security Instrument of which the City has received
Notice and a contact address for transmittal of such Notices. Each Lender receiving a copy of
35 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 40 OF 91 SEPTEMBER 27, 2016
any such Notice of Default shall have the right, at its option, to commence the cure or remedy of
any Default of Developer set forth in such Notice and to diligently and continuously proceed
with such cure or remedy such Default, within the cure period allowed to Developer under this
Agreement. The City shall accept such performance by a Lender with the same force and effect
as if furnished by Developer. If such Default can only be remedied or cured by the Lender upon
obtaining possession of the Property, the City shall allow the Lender an opportunity to obtain
possession with diligence and continuity through exercise of remedies under such Lender's
Permitted Security Instrument and to remedy or cure such Default within ninety (90) days after
obtaining possession of the Property. If the Default reasonably requires more than ninety (90)
days to cure, however, then the time available to a Lender to cure pursuant to this Section 7.4
shall be the reasonable time required to complete such cure, as long as the Lender has
commenced the cure of the Default within such ninety (90) day period and diligently pursues the
cure to completion. During such extension of time,the City shall not terminate this Agreement or
exercise.other remedies under this Agreement by reason of such Default. All Developer Specific
Defaults shall be deemed cured upon transfer of Developer's interest in the entire Property to the
Lender, its assignee or nominee, pursuant to exercise of remedies under a Permitted Security
Instrument. In addition, any Lender properly completing the Project with the consent of City
shall be entitled, upon written request made to City, to a Certificate of Completion from City.
Nothing contained in this Agreement shall be.deemed to permit, authorize or require any Lender
to undertake or continue the Construction or installation of any portion of the Project (beyond the
extent necessary to conserve or protect improvements or.Construction.already made) prior to or
after acquiring title to or possession of the entire Property, without expressly assuming
Developer's obligations under this Agreement by written agreement reasonably satisfactory to
the City, in which the Lender agrees to complete, in the manner provided in this Agreement, the
Project. Any Lender desiring to complete the Project must provide the City with evidence
reasonably satisfactory to the City that the Lender has the qualifications (or will engage one or
more licensed contractor(s) or consultant(s) with such qualifications) and financial capability
necessary to perform such obligations.
7.4.3 No Termination of Permitted Security Instruments by Default. An
Event of Default by Developer under this Agreement shall not defeat or render invalid the lien of
any Permitted Security Instrument made in good faith and for value as to all or any part of the
Property, whether or not the Lender is subordinated to this Agreement; but unless otherwise
provided in this Agreement, this Agreement shall be binding and effective against any owner of
the Property, whose title thereto is acquired pursuant to exercise of remedies under a Permitted
Security Instrument or from a Person exercising any such remedies.
7.4.4 Lender Rights on Termination or Modification. No termination of.
this Agreement shall be binding upon a Lender unless the termination occurs after Notice to such
Lender and such Lender's failure to cure all then existing Defaults under this Agreement (except
any Defaults), pursuant to this Section 7.4, or with such Lender's prior written consent. No
modification of this Agreement that materially affects the rights of a Lender shall be binding
upon the Lender without its prior written consent.
7.4.5 City Right to Purchase Obligation. In any case where, after delivery
of Notice of Default of Developer under this Agreement, an affected Lender has not exercised
the option provided in Section 7.4.2 to construct and install the applicable portions of the Project,
36—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 41 OF 91 SEPTEMBER 27, 2016
or has exercised the option, but has not proceeded diligently with such Construction or .
installation, the City shall have the option, in the City's sole and absolute discretion, to purchase
the rights of such Lender against or in the reference to Developer regarding the Property or
Project secured by any Permitted Security Instrument held by such Lender and by payment to the
Lender of the amount of the unpaid obligations secured by such Permitted Security Instrument
and, if the ownership of the Property has vested in such Lender, the City, at its option, but not its
obligation, shall be entitled to a conveyance from such Lender of any title or interest in the.
Property vested in such Lender to the City or the City's designee.
(a) After forty-five (45) days following expiration of the time period.
for an affected Lender to cure a Default of Developer under this Agreement, an affected Lender
may demand by Notice, that the City act to exercise or forego the right granted in Section 7.4.5
by Notice to the Lender. If the City fails to exercise the right granted in Section 7.4.5 by Notice
to the Lender within forty-five (45) calendar days following the date of the City's receipt of such
written demand from the Lender, the City shall be conclusively deemed to have waived its rights
under Section 7.4.5. If the City timely exercises its rights under Section 7.4.5, the purchase
transaction shall close within sixty (60) days after the date of such Lender's receipt of the City's
Notice exercising such rights.
7.4.6 No Construction Obligation of Lender. A Lender shall in no way be
obligated by the provisions of this Agreement to construct or complete the development of the
Project or to guarantee such construction or completion, but may do so pursuant to and in
accordance with this Section 7.4. Nothing in this Agreement shall be deemed to construe,permit,
or authorize any Lender to devote all or any portion of the Property to any uses, or to construct
any improvements thereon, other than those uses or the Project provided for or authorized by this
Agreement.
7.4.7 City Right to Cure Obligations. In the event of a Default by
Developer under any Permitted Security Instrument, prior to the date of issuance of a Certificate
of Completion for the Project, where the Lender has not exercised its option to complete the
Project under Section 7.4.2, the City may cure the Default of Developer under the. applicable
Permitted Security Instrument, but is under no obligation to do so, prior to completion of any
sale or foreclosure of all or any portion of the Property under the applicable Permitted Security
Instrument. The City shall be entitled to reimbursement from Developer of all costs and
reasonable expenses incurred by the City in curing any Default of Developer under any
Permitted Security Instrument, under demand. Any amount expended by the City to cure a
Default of Developer under any Permitted Security Instrument that is not reimbursed to the City
by Developer within thirty (30) calendar days after Notice of such amount to Developer, shall
accrue Default Interest,until paid in full.
7.4.8 Foreclosure of Permitted Security Instrument. Foreclosure of any
Permitted .Security Instrument, whether by judicial proceedings or by power of sale, or any
conveyance by deed in lieu of foreclosure, shall not require the consent of the City or constitute a
Default under this Agreement. Following any Foreclosure Event, the City shall recognize as,
"Developer" tinder this Agreement any purchaser or other transferee of the entire Property that
assumes each and all the obligations of Developer under this Agreement pursuant to an
assumption agreement reasonably satisfactory to the City. If any Lender or its nominee or
37—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 42 OF 91 SEPTEMBER 27, 2016
assignee acquires Developer's title to the entire Property as a result of a Foreclosure Event, such
Lender shall thereafter have the right to assign or transfer Developer's interest under this
Agreement to an assignee upon obtaining the City's consent with respect to such assignee, which
consent shall not be unreasonably withheld or delayed. Upon such acquisition of title by a
Lender, or the assignee or nominee of a Lender, or the purchaser from a Lender or such assignee
or nominee, the City shall execute and deliver an amendment to this Agreement with such
Person, upon the written request of such Person given not later than one hundred twenty (120)
days after such Person's acquisition of title to the entire Property. Such amended Agreement
shall be substantially the same in form and content as the provisions of this Agreement, except as
to the parties thereto, and the acknowledgment or elimination of any requirements that have been
fulfilled prior to the date of such amendment and shall have priority equal to the priority of this
Agreement.
8. REMEDIES AND INDEMNITY
8.1 DEVELOPER'S RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW.
8.1.1 ELECTION OF REMEDIES. DURING THE CONTINUANCE
OF AN EVENT OF DEFAULT BY CITY UNDER THIS AGREEMENT, DEVELOPER
SHALL BE LIMITED TO EITHER OF THE FOLLOWING REMEDIES: (1) AN
ACTION AGAINST CITY FOR SPECIFIC PERFORMANCE OF THIS AGREEMENT;
OR (2) REFUND OF THE DEPOSIT AND TERMINATION OF THIS AGREEMENT.
UNDER NO CIRCUMSTANCES SHALL CITY BE LIABLE TO DEVELOPER UNDER
-- THIS AGREEMENT FOR ANY SPECULATIVE, CONSEQUENTIAL, COLLATERAL,
SPECIAL, PUNITIVE OR INDIRECT DAMAGES OR FOR ANY LOSS OF PROFITS
SUFFERED OR CLAIMED TO HAVE BEEN SUFFERED BY DEVELOPER.
8.1.2 WAIVER OF RIGHTS. CITY AND DEVELOPER EACH
ACKNOWLEDGE AND AGREE THAT CITY WOULD NOT HAVE ENTERED INTO
THIS AGREEMENT, IF IT WERE TO BE LIABLE TO DEVELOPER FOR ANY
MONETARY DAMAGES, MONETARY RECOVERY OR ANY REMEDY DURING
THE CONTINUANCE OF AN EVENT OF DEFAULT UNDER THIS AGREEMENT BY
CITY PRIOR TO THE CLOSE OF ESCROW, OTHER THAN SPECIFIC
PERFORMANCE OF THIS AGREEMENT OR REFUND OF THE DEPOSIT AND
TERMINATION. OF THIS AGREEMENT AND PAYMENT OF THE AMOUNTS
SPECIFIED IN SECTION 8.1.1. ACCORDINGLY, CITY AND DEVELOPER AGREE
THAT THE REMEDIES SPECIFICALLY PROVIDED FOR IN SECTION 8.1.1 ARE
REASONABLE UNDER THE CIRCUMSTANCES AND SHALL BE DEVELOPER'S
SOLE AND EXCLUSIVE RIGHTS AND REMEDIES DURING THE CONTINUANCE
OF AN EVENT. OF DEFAULT UNDER THIS AGREEMENT BY CITY. DEVELOPER
WAIVES ANY RIGHT TO PURSUE ANY REMEDY OR DAMAGES OTHER THAN
THOSE SPECIFICALLY PROVIDED IN SECTION 8.1.1.
8.1.3 CIVIL CODE SECTION 1542 WAIVER. DEVELOPER
ACKNOWLEDGES .THE PROTECTIONS OF CIVIL CODE SECTION 1542
38 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 43 OF 91 SEPTEMBER 27, 2016
RELATIVE TO THE WAIVERS AND RELEASES CONTAINED IN THIS
SECTION 8.1,WHICH CIVIL CODE SECTION READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
8.1.4 ACKNOWLEDGMENT.. BY INITIALING BELOW,
DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF
SECTION 1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS
(WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT SOLELY IN
CONNECTION' WITH THE WAIVERS AND RELEASES CONTAINED IN THIS
SECTION 8.1.
INITIALS OF AUTHORIZED
DEVELOPER REPRESENTATIVE
8.1.5 STATEMENT OF INTENT. CALIFORNIA CIVIL CODE
SECTION 1542 NOTWITHSTANDING, IT IS THE INTENTION OF DEVELOPER TO
BE BOUND BY THE LIMITATION ON DAMAGES AND REMEDIES.SET FORTH IN
THIS SECTION 8.1, AND DEVELOPER HEREBY RELEASES ANY AND ALL
CLAIMS AGAINST CITY FOR MONETARY DAMAGES, MONETARY RECOVERY
OR OTHER LEGAL OR EQUITABLE RELIEF RELATED TO ANY EVENT OF
DEFAULT UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW,
EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 8.1, WHETHER OR
NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO
DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT.
8.2 City Liquidated Damages. DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT AFTER THE END OF THE
DUE DILIGENCE PERIOD AND•PRIOR TO CLOSE OF ESCROW, CITY.MAY CANCEL
THE ESCROW AND TERMINATE THIS AGREEMENT. UPON CANCELLATION OF THE
ESCROW AND TERMINATION OF THIS AGREEMENT, CITY SHALL BE RELIEVED OF
ANY OBLIGATION UNDER THIS AGREEMENT TO SELL AND CONVEY THE
PROPERTY TO THE DEVELOPER. ANY SUCH ESCROW CANCELLATION AND
TERMINATION OF THIS AGREEMENT SHALL BE WITHOUT ANY LIABILITY OF CITY
TO THE DEVELOPER OR ANY OTHER PERSON. CITY AND THE DEVELOPER
ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO
ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD-BE SUFFERED BY CITY, IN
THE EVENT OF A CANCELLATION OF THE ESCROW AND TERMINATION OF THIS
AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE
DEVELOPER UNDER THIS AGREEMENT. HAVING MADE . DILIGENT BUT
39-September 27, 2016
RESOLUTION NO. 2016-35 PAGE 44 OF 91 SEPTEMBER 27, 2016
UNSUCCESSFUL ATTEMPTS. TO ASCERTAIN THE ACTUAL DAMAGES THAT CITY
WOULD SUFFER, IN THE EVENT OF A CANCELLATION OF THE ESCROW AND
TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF
DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT, CITY AND THE
DEVELOPER AGREE THAT A REASONABLE ESTIMATE OF CITY'S DAMAGES IN
SUCH EVENT IS THE DEPOSIT. THEREFORE, UPON THE CANCELLATION OF THE
ESCROW AND TERMINATION OF THIS AGREEMENT BY CITY DUE TO THE
OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS
AGREEMENT, AFTER THE END OF THE DUE DILIGENCE PERIOD AND PRIOR TO
THE CLOSE OF ESCROW, THE PARTIES AND THE ESCROW AGENT SHALL PROCEED
PURSUANT TO SECTION 4.1.1 TO CANCEL THE ESCROW. THE ESCROW HOLDER
SHALL IMMEDIATELY CANCEL THE ESCROW AND PAY THE DEPOSIT TO CITY (IF
NOT ALREADY PAID TO CITY), UPON CANCELLATION OF THE ESCROW. RECEIPT
OF THE DEPOSIT SHALL BE CITY'S SOLE AND EXCLUSIVE REMEDY ARISING FROM
THE CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT
DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER
UNDER THIS AGREEMENT..
Initials of Authorized Initials of Authorized
Developer Representative City Representative.
8.3 City Power.of Termination Regarding Property.
8.3.1 Reservation. The City hereby reserves a power of termination pursuant
to Civil Code Sections 885.010, et se�C., exercisable by the City, in its sole and absolute
discretion, upon thirty (30) calendar days written notice to Developer referencing this Section
8.3, to terminate the fee interest of Developer in the Property and/or any improvements to the
Property and revest such fee title in the City and take possession of all or any portion of such real
property and improvements, without compensation to Developer, upon the occurrence of an
Event of Default by Developer following the Close of Escrow and prior to the issuance of a
Certificate of Completion for the Project. The City shall not exercise such power of termination
if Developer cures the Event of Default within the thirty(30) day period set forth in this Section
8.3.1.
8.3.2 Process. The rights of the City under this Section 8.3 shall not defeat,
render invalid or limit:
(a) Any Permitted Security Instrument; or
(b) Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents or interests applicable to the Property and
specifically authorized by this Agreement or consented to in writing by the City; or
(c) Upon the City's exercise of its power of termination pursuant to
this Section 8.3, Developer shall convey fee title to the Property and all improvements on or to
the Property to the City by grant deed, in accordance with Civil Code Section 1109, as such code
40—September 27, 2016
RESOLUTION NO. 2016-35 PAGE.45 OF 91 SEPTEMBER 27, 2016
section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall
be duly acknowledged by Developer and a notary public in a manner suitable for recordation.
The City may enforce its rights pursuant to this Section 8.3 by means of an injunctive relief or
forfeiture of title action filed in any court of competent jurisdiction.
(d) Upon the revesting in the City of title to the Property, whether by
grant deed or court decree, the City shall exercise its reasonable good faith efforts to resell the
Property at the Property's then.fair reuse value, as soon and in such manner as the City shall, in
its sole discretion, find feasible and consistent with the objectives of the compensation
agreements, to a qualified and responsible Person or Persons (as reasonably determined by the
City) who will assume Developer's obligations to begin and/or complete and/or operate the
Project, or such other replacement development acceptable to the City, in its sole and absolute
discretion, consistent with the Redevelopment Plan. Upon any such resale of all or a portion of
the Property, the proceeds received by the City from such sale shall be applied, as follows:
(i) First, to pay any and all amounts required to
release/reconvey any Permitted Security Instrument recorded against the Property; and
(ii) Second, to reimburse the City on its own behalf or on
behalf of the City for all actual internal and Third Person costs and expenses incurred by the City
or the City related to the Property, the Project or this Agreement, including customary and
reasonable fees or salaries to Third Person consultants (including Legal Costs) in connection
with the recapture, management or resale of all or any portion of the Property; all taxes,
assessments and utility charges paid by the City and/or the City with respect to all or any portion
of the Property; any payment made or necessary to be made to discharge or prevent from _
attaching or being made any subsequent encumbrances or liens due to obligations incurred by
Developer with respect to the Property Acquisition Costs or the construction or installation of the
Project; and amounts otherwise owing to the City by Developer pursuant to the terms of this
Agreement; and
(iii) Third, to the extent that any proceeds from such resale are,
thereafter, available, to reimburse Developer, the amount of. (1) the pro-rata portion of the
Purchase Price paid to the City; and (2) the pro-rata portion of the Third Person costs actually
incurred and paid by Developer regarding the development of the Project, including costs of
carry;-taxes, and other items as set forth in a cost certification to be made by Developer to the
City, prior.to any such reimbursement and, which certification shall be subject to the City's
reasonable approval; provided, however, that Developer shall not be entitled to reimbursement
for any expenses to the extent that such expenses relate to any loans, liens or other encumbrances
that are paid by the City pursuant to the provisions of sub-sections (1) or(2), above; and
(iv) Fourth, any portion of the proceeds from the resale of the
Property remaining after the foregoing applications shall be retained by the City, as its sole and
exclusive property and distributed immediately thereafter in compliance with the compensation
agreements.
41 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 46 OF 91 SEPTEMBER 27, 2016
8.4 Legal Actions. Either Party may institute legal action, at law or in equity, to
enforce or interpret the rights or obligations of the Parties under this Agreement or recover
damages, subject to the provisions of Section 8.1. .
8.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the Parties set forth in this Agreement are cumulative and
the exercise by either Party of one or more of such rights or remedies shall not preclude the
exercise by it, at the same or different times, of any other rights or remedies for the same Default
or the same rights or remedies for any other Default by the other Party.
8.6 Indemnification.
8.6.1 City Indemnity Obligations. City shall Indemnify the Developer
Parties against any Claim to the extent such Claim arises from any wrongful intentional act or
negligence of the City Parties, but only to the extent that City may be held liable under
applicable law for such wrongful intentional act or negligence and exclusive of any violation of
law (including the State Constitution) relating to City's approval, entry into or performance of
this Agreement. Nothing in this Agreement is intended nor shall be interpreted to waive any
limitation on City's liability, any exemption from liability in favor of City, any claim
presentment requirement for bringing an action regarding any liability of City or any limitations
period applicable to liability of City, as set forth in Government Code Sections 800, et seq.,
Sections 900, et seq., or in any other law or require City to Indemnify any Person beyond such
limitations on City's liability.
8.6.2 Developer Indemnity Obligations. Developer shall Indemnify the
City Parties against any Claim to the extent such Claim arises from any wrongful intentional act
or negligence of the Developer Parties. Developer shall also Indemnify the City Parties against
any and all of the following: (a) any Application made by or at Developer's request; (b) any
agreements that Developer (or anyone claiming by or.through Developer) makes with a Third
Person regarding the Property or the Project; (c) any workers compensation claim or
determination relating to any employee of the Developer Parties or their contractors; (d) any
Prevailing Wage Action relating to this Agreement or the Project;.and (e) any Environmental
Claim attributable to any action or failure to act by the Developer Parties.
8.6.3 Independent of Insurance Obligations. Developer's indemnification
obligations under this Agreement shall not be construed or interpreted as in any way restricting,
limiting, or modifying Developer's insurance or other obligations under this Agreement.
Developer's obligation to Indemnify City Parties under this Agreement is independent of
Developer's insurance and other obligations under this Agreement. Developer's compliance with
its insurance obligations and other obligations under this Agreement.shall not in any way restrict,
limit, or modify Developer's indemnification obligations under this Agreement and. are
independent of Developer's indemnification and other obligations under this Agreement.
8.6.4 Survival of Indemnification.and Defense Obligations.The indemnity
and defense obligations of the Parties under this Agreement.shall survive the expiration or earlier
termination of this Agreement, until any and all actual or prospective claims regarding any
42—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 47 OF 91 SEPTEMBER 27, 2016
matter.subject to an indemnity obligation under this Agreement are fully, finally, absolutely and
completely barred by applicable statutes of limitations.
8.7 Indemnification Procedures. Wherever this Agreement requires any Indemnitor to
Indemnify any Indemnitee:
8.7.1 Prompt Notice. The Indemnitee shall promptly.Notify the Indemnitor
of any Claim.
8.7.2 Selection of Counsel. The Indemnitor shall select counsel reasonably
acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier that is providing
coverage for a Claim shall be deemed reasonably satisfactory, except in the event of a potential
or actual conflict of interest for such counsel regarding such representation or such counsel,
proves to be incompetent regarding such .representation. Even though the Indemnitor shall
defend the Claim, Indemnitee may, at its option and its own expense, engage separate counsel to
advise it regarding the Claim and its defense. The Indemnitee's separate counsel may attend all
proceedings and meetings. The Indemnitor's counsel shall actively consult with the Indemnitee's
separate counsel. The Indemnitor and its counsel shall, however, control the defense, except to
the extent that the Indemnitee waives its rights to indemnity and defense for such Claim.
8.7.3 Cooperation. The Indemnitee shall reasonably cooperate with the
Irdemnitor's defense of the Indemnitee.
8.7.4 Settlement. The Indemnitor may only settle a Claim with the
Indemnitee's consent, not to be unreasonably withheld.
9. GENERAL PROVISIONS
9.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement
are true and correct and are incorporated into this Agreement in their entirety by this reference.
9.2 Successor Agency Not a Party. The Successor Agency is not a Party to this
Agreement.
9.3 Restrictions on Change in Management or Control of Developer, Assignment and
Transfer.
9.3.1 Restrictions. Developer acknowledges and agrees that the
qualifications and identity of Developer are of particular importance and concern to City.
Developer further acknowledges and agrees that City has relied and is relying on the specific
qualifications and identity of Developer in entering into this Agreement with Developer and that
City would not have entered into this Agreement, but for the specific qualifications and identity
of Developer. As a consequence, Transfers are permitted only as expressly provided in this
Agreement. Developer represents to City that it has not made and agrees that it will not create or
permit to be made or created, any Transfer, other than a Permitted Transfer, either voluntarily,
involuntarily or by operation of Law, without the prior written approval of City, which.may be
given, withheld or conditioned in the sole and absolute discretion of City. Any Transfer made in
contravention of this Section 9.3 shall be voidable at the election of City. Developer hereby
43 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 48 OF 91 SEPTEMBER 27, 2016
acknowledges and agrees that the restrictions on Transfers set forth in this Section 9.3 are
reasonable.
9.3.2 Delivery of Transfer Documents. All instruments and other legal
documents proposed to effect any proposed Transfer shall be submitted to City for review, at .
least thirty-five (35) calendar days prior to the proposed date of the Transfer, and the written
approval, disapproval or conditions of City regarding the proposed Transfer shall be provided to
Developer, within thirty (30) calendar days following City's receipt of all proposed Transfer
documents. Developer agrees to reimburse City for all costs and expenses incurred by City in
connection with its review of each proposed Transfer,including all Legal Costs and other Third
Person consultant fees and expenses.
9.4 Developer Assumption of Risks of Legal Challenges. Developer assumes the risk
of delays and damages that may result to Developer from any Third Person legal actions related
to City's approval of this Agreement or any associated Approvals, even in the event that an error,
omission or abuse of discretion by City is determined to have occurred..If a Third Person files a
legal action regarding City's approval of this Agreement or any associated Approval (exclusive
of legal actions alleging violation of Government Code Section 1090 by elected officials of
City), Developer shall have the option to either: (1) cancel Escrow and terminate this Agreement,
in which case the Parties and the Escrow Agent shall proceed in accordance with Section 4.11; or
(2) Indemnify City against such Third Person legal action, including all Legal Costs, monetary
awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of
any and all financial or performance obligations resulting from the disposition of the legal action.
Should Developer.fail to Notify City of Developer's election pursuant to this Section 9.4 at least
fifteen (15) days before response to the legal action is required by City, Developer shall be
deemed to have elected to .terminate this Agreement pursuant to this Section 9.4. City shall
reasonably cooperate in its defense in any legal action subject to this Section 9.4, subject to.
Developer's indemnity obligations for such legal action. Nothing contained in this Section 9.4 is
intended to be nor shall be deemed or construed to be an express or implied admission that City
may be liable to Developer or any other Person for damages or other relief regarding any alleged
or established failure of City to comply with any Law. Any legal action that is subject to this
Section 9..4 (including any appeal periods and the pendency of any appeals) shall constitute an
Unavoidable Delay and the time periods for performance by either Party under this Agreement
may be extended pursuant to the provisions of this Agreement regarding Unavoidable Delay.
9.5 Cit 'Manager Implementation. City shall implement this Agreement through its.
City Manager. The City Manager is hereby authorized by City to issue approvals, interpretations
or waivers and enter into certain amendments to this Agreement on behalf of City, to the extent
that any such action(s) does/do not materially or substantially change the Project or increase the
monetary obligations of City by more than Five Thousand Dollars ($5,000) in the aggregate. All
other actions shall require the consideration and approval of City governing body, unless
expressly provided otherwise by action of the City governing body. Nothing in this Section 9.5
shall restrict the submission to the City governing body of any matter within the City manager's
authority under this Section 9.5, in the City Manager's sole and absolute discretion, to obtain the
City governing body's express and specific,authorization on such matter. The specific intent of
this Section 9.5 is to'authorize certain actions on behalf of City by the City Manager, but not to
44—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 49 OF 91 SEPTEMBER 27, 2016
require that such actions be taken by the City Manager, without consideration by the City
governing body.
9.6 Notices, Demands and Communications Between the Parties.
9.6.1 Notices. Any and all Notices submitted by either Party to the other
Party or the Escrow Agent pursuant to or as required by this Agreement shall be proper, if in
writing and transmitted to the address of City or Developer, as applicable, set forth in Section
9.6.2, or to the Escrow Agent at the address set forth on the Escrow Agent's Consent, by one or
more of the following methods: (a) messenger for immediate personal delivery; (b) a nationally
recognized overnight (one-night) delivery service (i.e., Federal Express, United Parcel Service,
etc.); or (c) registered or certified United States mail, postage prepaid, return receipt requested.
Such Notices may be sent in the same manner to such other addresses as either Party may
designate, from time to time, by Notice. Any Notice shall be deemed to be received by the
addressee, regardless of whether or when any return receipt is received by the sender or the date
set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of
delivery by a nationally recognized overnight courier service (or when delivery has been
attempted twice, as evidenced by the written report of the courier.service) or four (4) calendar
days after it is deposited with the United States Postal Service for delivery, as provided in this
Section 9.6. Rejection, other refusal to accept or the inability to deliver a Notice because of a
changed address of which no Notice was given or other action by a Person to whom Notice is
sent, shall be deemed receipt of the Notice.
9.6.2 Addresses. The following are the authorized addresses for the
submission of Notices to the Parties, as of the Effective Date:
To Developer: Dr. Terry McDuffee
925 Carob Street
Redlands, CA 92373
With a courtesy copy to: Julie Peccorini
Peccorini &Peccorini
1845 Business Center Drive, Suite 103
San Bernardino, California 92408-3447
To City: City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
Attn: City manager
With a courtesy copy to:. Baron J. Bettenhausen, Esq..
Jones &Mayer
3777 N. Harbor Blvd.
Fullerton, CA 92835
9.7 Warranty Against Payment of Consideration for Agreement. Developer represents
and warrants to the City that: (a) it has not employed or retained any Person to solicit or secure
45—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 50 OF 91 SEPTEMBER 27, 2016
this Agreement upon an agreement or understanding for a commission, percentage, brokerage, or
contingent fee, excepting bona fide employees of Developer and Third Persons to whom fees are
paid for professional services related to planning, design or Construction of the Project or
documentation of this Agreement;.and (b) no gratuities, in the form of entertainment, gifts or
otherwise have been or will be given by Developer or any of.its agents, employees or
representatives to any elected or appointed official or employee of either the City or the City in
an attempt to secure this Agreement or favorable terms or conditions for this Agreement. Breach
of the representations or warranties of this Section shall entitle the City to terminate this
Agreement upon seven (7) days' Notice to the other Parties and Escrow Agent. Upon any such
termination of this Agreement, Developer shall immediately refund any payments made to or on
behalf of Developer by the City or the City pursuant to.this Agreement or otherwise related to
the Property, any Approval, any CEQA Document, or the Project, prior to the date of any such
termination.
9.8 Relationship of Parties. The Parties each intend and agree that City and Developer
are independent contracting entities and do not intend by this Agreement to create any
partnership, joint venture, or similar business arrangement, relationship or.association between
them.
9.9 Survival of Agreement. All of the provisions of this Agreement shall be
applicable to any dispute between the Parties arising from this Agreement, whether prior to or
following expiration or termination of this Agreement, until any such dispute is finally and
completely resolved between the Parties, either by written settlement, entry of a non-appealable
( judgment or expiration of all applicable statutory limitations periods and all terms and conditions
of this Agreement relating to dispute resolution and limitations on damages or remedies shall
survive any expiration or termination of this Agreement.
9.10 Non-liability of Officials, Employees and Agents. No City Party (other than City.
itself) shall be personally liable to Developer, or any successor in interest of Developer, in the
event of any Default or breach by City under this Agreement or for any amount that may be or
become due to Developer or any successor in interest of Developer, on any obligations under the
terms or conditions of this Agreement. No Developer Party (other than Developer itself) shall be
personally liable to City, or any successor-in-interest of City, in the event of any Default or
breach by Developer under this Agreement or for any amount that may be or may become due to
City or any successor-in-interest of City on any obligations under the terms or conditions of this
Agreement, except pursuant to a separate guaranty agreement.
9.11 Calculation of Time Periods. Unless otherwise specified, all references to time
periods in this Agreement measured in days shall be to consecutive calendar days, all references
to time periods in this Agreement measured in.months shall be to consecutive calendar months
and all references to time periods in this Agreement measured in years shall be to consecutive
calendar years. Any reference to Business Days in this Agreement shall mean consecutive
Business Days.
9.12 Principles of Interpretation. No inference in favor of or against any Party shall be
drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both
participated substantially in the negotiation, drafting, and revision of this Agreement, with advice
46—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 51 OF 91 SEPTEMBER 27, 2016
from legal and other counsel and advisers of their own selection. A word, term or phrase defined
in the singular in this Agreement may be used in the plural,and vice versa, all in accordance with
ordinary principles of English grammar, which shall govern all language in this Agreement. The
words "include" and "including" in this Agreement shall be construed to be followed by the
words: "without limitation." Each collective noun in this Agreement shall be interpreted as if
followed by the words "(or any part of it)," except where the context clearly requires otherwise.
Every reference to any document, including this Agreement, refers to such document, as
modified from time to time (excepting any modification that violates this Agreement), and
includes all exhibits, schedules, addenda and riders to such document. The word "or" in this
Agreement includes the word "and." Every reference to a law, statute, regulation, order, form.or
similar governmental requirement refers to each such requirement as amended, modified,
renumbered, superseded or succeeded, from time to time.
9.13 Governing Law. The procedural and substantive laws of the State shall govern the
interpretation and enforcement of this Agreement, without application of conflicts of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully
performed in and relates to real property located in the City of Grand Terrace, County of San
Bernardino, State of California. All legal actions arising from this Agreement shall be filed in the
Superior Court of the State in and for the County or in the United States District Court with
jurisdiction in the County.
9.14 Unavoidable Delay; Extension of Time of Performance.
9.14.1 Notice. Subject to any specific provisions of this Agreement stating
that they are not subject to Unavoidable Delay or otherwise limiting or restricting the effects of
an Unavoidable Delay,performance by either Party under this Agreement shall not be deemed or
considered to be in Default, where any such Default is due to the occurrence of an Unavoidable
Delay. Any Party claiming an Unavoidable Delay shall Notify the other Party: (a) within ten (10)
days after such Party knows of any such Unavoidable Delay; and (b) within five (5) days after
such Unavoidable Delay ceases to exist. To be effective, any Notice of an Unavoidable Delay
must describe the Unavoidable Delay in reasonable detail. The Party claiming an extension of
time to perform due to an Unavoidable Delay shall exercise its commercially reasonable best
efforts to cure the condition causing the Unavoidable Delay, within a reasonable time.
9.14.2 Assumption of Economic Risks. EACH PARTY EXPRESSLY
AGREES THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF EITHER PARTY
SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET
CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC.ASSUMPTIONS OF
EITHER PARTY THAT MAY HAVE PROVIDED A BASIS FOR ENTERING INTO THIS
AGREEMENT SHALL NOT OPERATE TO EXCUSE OR DELAY THE PERFORMANCE
OF EACH AND EVERY ONE OF EACH PARTY'S OBLIGATIONS AND COVENANTS
ARISING UNDER THIS AGREEMENT. ANYTHING IN THIS AGREEMENT. TO THE
CONTRARY NOTWITHSTANDING, THE PARTIES EXPRESSLY ASSUME THE RISK OF
UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES AND/OR MARKET
DEMAND/CONDITIONS AND WAIVE, TO THE GREATEST EXTENT ALLOWED BY
LAW, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART
ON ECONOMIC NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC
47—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 52 OF 91 SEPTEMBER 27;2016
CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES. THE
PARTIES AGREE THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, EITHER
OF THE PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN
MARKET CONDITIONS OR DEMANDS, SHALL NOT OPERATE TO EXCUSE OR
DELAY THE , STRICT OBSERVANCE OF EACH AND EVERY ONE OF .THE
OBLIGATIONS, COVENANTS, CONDITIONS AND REQUIREMENTS OF THIS
AGREEMENT. THE PARTIES EXPRESSLY ASSUME THE RISK OF SUCH ADVERSE
ECONOMIC OR MARKET CHANGES, WHETHER OR NOT FORESEEABLE AS OF THE
EFFECTIVE DATE.
Initials of Authorized Initials of Authorized
Representative(s) of City Representative(s) of Developer
9.15 Inspection of Books and Records. City shall have the right at all reasonable times
and upon three (3) days written notice, at City's sole cost and expense, to inspect the books and
records of Developer relating to this Agreement, the Property, any Approvals or the Project, to
the extent relevant to City's rights or obligations under this Agreement. Developer shall also
have the right at all reasonable times and upon three (3) days written notice, at Developer's sole '
cost and expense, to inspect the books and records of City relating to this Agreement, the
Property, any Approvals or the Project, to the extent relevant to Developer's rights or obligations
under this Agreement. Each Party's inspection rights under this Section 9.15 shall not apply to
_ any proprietary information or attorney-client privileged communications.
9.16 Real Estate Commissions. Each Party: (a) represents and warrants that it did not
engage or deal with any broker or finder in connection with this Agreement and no Person is
entitled to any commission or finder's fee regarding this Agreement on account of any agreement
or arrangement made by such Party; and (b) shall Indemnify the other Party against any breach
of such representation and warranty.
9.17 Binding on Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective legal representatives, successors and
assigns.
9.18 No Discrimination or Segregation. Developer covenants by and for itself and all
Persons claiming under or through it that this Agreement is made and accepted upon and subject
to the following conditions:
9.18.1 Standards. That there shall be no discrimination against or segregation
of any Person or group of Persons, on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the Property nor shall Developer or any Person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees in the Property.
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RESOLUTION NO. 2016-35 PAGE 53 OF 91 SEPTEMBER 27, 2016
9.18.2 Interpretation. Notwithstanding Section 9.18.1, with respect to
familial status, Section 9.18.1 shall not be construed to apply to housing for older persons, as
defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in
Section 9.18.1 shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of
the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section
1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government
Code shall apply to Section 9.18.1.
.9.19 No Other Representations or Warranties. Except as expressly set forth in this
Agreement, no Party makes any representation or warranty material to this Agreement to any
other Party.
9.20 Tax Consequences. Developer acknowledges and agrees that it shall,bear any and
all responsibility, liability, costs, and expenses connected in any way with any tax consequences
experienced by Developer related to this Agreement.
9.21 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement on any Person
other than the Parties and their respective permitted successors and assigns, nor is anything in
this Agreement intended to relieve or,discharge any obligation of any Third Person to any Party
or give any Third Person any right of subrogation or action over or against any Party.
9.22 Execution in Counterparts. This Agreement may be executed in multiple
counterpart originals, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same document.
9.23 Entire Agreement.
9.23.1 Integrated Agreement. This Agreement includes 56 pages, 11
exhibits, that constitute the entire understanding and Agreement of the Parties regarding the
Property and the other subjects addressed in this Agreement. This Agreement integrates all of the
terms and conditions mentioned in this Agreement or incidental to this Agreement, and
supersedes all negotiations or previous agreements between the Parties with respect to the
Property and the other subjects addressed in this Agreement.
9.23.2 Waivers Must be in Writing. All waivers of the provisions of this
Agreement (except conditions precedent to Close of Escrow expressly for the benefit of only one
Party, which may be waived unilaterally by such Party) and all amendments to this Agreement
must be in writing and signed by the authorized representative(s) of both City and Developer.
9.24 Exhibits. All of the Exhibits attached to this Agreement are described as follows:
9.24.1 Exhibit"A." City Property Legal Description (Exhibit"A"); and
9.24.2 Exhibit"B." Developer Property Legal Description (Exhibit"B"); and
9.24.3 Exhibit"C."Form of Escrow Agent Consent (Exhibit"C"); and
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RESOLUTION NO. 2016-35 PAGE 54 OF 91 SEPTEMBER 27, 2016
9.24.4 Exhibit"D." Total Project Costs (Exhibit "D"); and
9.24.5 Exhibit"E."Notice of Option to Purchase Real Estate (Exhibit"E");
9.24.6 Exhibit."F." Form of Deed (Exhibit"G"); and
9.24.7 Exhibit"G." Project Scope of Development(Exhibit"G); and
9.24.8 Exhibit"H." Project Schedule of Performance (Exhibit"H"); and
9.24.9 Exhibit"I."Notice of Agreement(Exhibit"I"); and
9.24.10 Exhibit"J." Certificate of Completion (Exhibit"J"); and
9.25 Execution of this Agreement. Following execution of three (3) counterpart
originals of this Agreement and, if Dr. Terry McDuffee has assigned his position under this
Agreement to an Affiliate the Developer Official Action, by the authorized representative(s) of
Developer and prompt delivery of all such executed documents to City, this Agreement shall be
subject to review and approval by City governing body, in its sole and absolute discretion, within
forty-five (45) calendar days after the date of such delivery to City. If City-governing body has
not approved this Agreement within such forty-five (45) calendar day period, then no provision
of this Agreement shall be of any force or effect for any purpose and any prior execution or
approval of this Agreement by Developer shall be null and void, unless otherwise agreed in
writing by Developer.
l
9.26 Time.Declared to-be of the Essence. As to the performance of any obligation
under this Agreement of which time is a component, the performance of such obligation within
the time specified is of the essence.
9.27 No Waiver. Failure to insist on any one occasion upon strict compliance with any
term, covenant, condition, restriction or agreement contained in this Agreement shall not be
deemed a waiver of such term, covenant, condition, restriction or agreement, nor shall any
waiver or relinquishment of any rights or powers under this Agreement, at any one time or more
times, be deemed a waiver or relinquishment of such right or power at any other time or times.
9.28 Facsimile Signatures. Signatures delivered by facsimile shall be binding as
originals upon the Parties so signing and delivering; provided, however, that original signature(s)
of each Party shall be required for each document to be recorded.
10. OPTION TO PURCHASE DEVELOPER PROPERTY
10.1 Grant of Option. In consideration of City's execution of the DDA and the
conveyance of the City Property and as a condition precedent to the transfer of the City Property,
Developer hereby grants to City, and City hereby accepts, an exclusive option to purchase the
Developer Property ("Option") commencing on either (i) August 15,2019, or (ii) completion
of the 1-215 Interchange Project, whichever occurs last, and continuing on thereafter for a
period of twelve (12) months ("Option Termination Date"). The purchase price for the
- Developer's Property shall be the actual fair market value as defined below. If (i) the
50—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 55 OF 91 SEPTEMBER 27, 2016
Option is not exercised within the time set forth in this section, (ii). this Agreement is /
terminated, (iii) the parties fail.to execute a DDA or other similar agreement, (iv) the
Developer does not acquire permits necessary for the. Project, or (v) the City does not
exercise its right, of first refusal or exercises such right but then does not purchase the
Developer Property and such property is sold to a third party, then the Option shall
terminate and be null and void. The parties agree that the bargained for consideration for
this Option Agreement is the mutual execution of the DDA and no further consideration
for this Option Agreement is expected. The option granted herein shall be a covenant.
running with the land.
10.2 Following the City's exercise of its Option, City and Developer shall select a
mutually acceptable appraiser to perform the appraisal. If City and Developer cannot agree upon
an appraiser, then City and Developer shall each select an appraiser, the two of whom shall
mutually agree upon a third appraiser to perform the appraisal. The appraiser shall establish the
valuation for the Developer's Property by considering the highest and best use of the
Developer's Property based upon its condition at the time of exercise of the Option and subject
to any and all encumbrances including Developer's right to access and existing or likely future
environmental conditions.
10.3 During the term of the Option, prior to City's exercise of said Option and
continuing through City's actual acquisition of the Developer Property, Developer shall remain
responsible to keep and maintain the Developer's Property in good repair, except Developer shall
have no obligations as to the condition of Developer Property during the temporary construction
easement granted relative to the construction of the freeway project.
10.4 In the event of close of escrow on the Developer's Property, each side will bear its
own costs for any attorney, staff, or consultant time involved in the transaction, except that,
Developer shall be responsible to pay for any commercial broker. The City shall owe no
commission on the sale of the Developer's Property. All other closing costs shall be shared
equally between City and Developer.
10.5 In the event City exercises its option, then within 30 business days after such
exercise, the parties shall negotiate, execute and deliver a purchase and sale agreement for the
purchase and sale of the Developer Property. To the extent terms and conditions included in
such purchase and sale agreement appear in this DDA, such terms and conditions shall be
substantially similar to those set forth in this DDA, to the extent the terms and conditions of the
DDA are appropriate and applicable for the sale of the Developer Property. The DDA terms and
obligations related to the City's interest in the development of the City Property are not relevant
to the purchase and sale of the Developer Property and such provisions shall not be included in
the purchase and sale agreement for the Developer Property. The parties shall negotiate in good
faith to resolve any dispute as to which terms and conditions of the DDA are applicable to the
purchase and sale of the Developer Property.
10.6 Conditions for Exercise of Option. If City is not in default under this Option
Agreement and all conditions to the exercise of the option are satisfied or are waived in writing
51 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 56 OF 91 SEPTEMBER 27, 2016
by Developer, City.may exercise the option in accordance with this section and in no other
manner. The option shall be exercised by delivering written notice from City to Developer before
the expiration of this option and in accordance with the notice provisions of this Option
Agreement ("Exercise Notice"). The Exercise Notice shall affirmatively state that the City
exercises the option without condition or qualification. Within 30 business days after exercise of
the option, the parties shall negotiate and execute and deliver a purchase agreement, in .
substantially similar form as the DDA, to the extent the terms and obligations of the DDA are
appropriate and applicable for the sale of the Developer Property.
10.7 Option may be assigned. City may assign this option and the rights under it. An
assignment shall only be effective if the assignee assumes all the duties and obligations of City
under this Option Agreement in a writing duly executed and delivered to Developer.
11. RIGHT OF FIRST REFUSAL
11.1 Right of First Refusal. Developer, on behalf of itself and all its successors in
interest (together, referred to herein collective, as "Developer"), hereby grants to City a right of
first refusal ("Right of First Refusal") to purchase the Developer Property from Developer
pursuant to the terms and conditions set forth in this Section 11. This Right of First Refusal shall
survive termination of this Agreement and shall be a covenant running with the land.
11.2 Right of First Refusal Period. City's Right of First Refusal shall begin upon
execution of this Agreement and thereafter expire on the Option Termination Date ("Right of
First Refusal Period").
11.3 Exercise of Right of First Refusal. Throughout the entire Right of First Refusal
Period, City shall have the right, but not the obligation, to purchase the Developer Property on
terms consistent with the terms under which the Developer Property (or any portion thereof) are
offered for sale. The Right of First Refusal shall be exercisable as follows: (i) Developer shall
not, at any time during the Right of First Refusal Period, make any transfer of the Developer
Property without first giving written notice thereof to City, which notice is hereinafter referred to
as "Notice of Transfer"; (ii) the Notice of Transfer shall include the exact and complete terms of
the proposed transfer and shall have attached thereto a photocopy of bona fide offer and
counteroffer, if any, duly executed by both Developer and the prospective transferee; (iii) for a
period of forty-five (45) days after receipt by City of the Notice of Transfer, City shall have the
right to give written notice of City's exercise of City's right to purchase the interest proposed to
be sold or otherwise transferred on the same terms, price and conditions as set forth in the Notice
of Transfer. In the event Developer does not receive written notice of City's exercise of the Right
of First Refusal herein granted within said forty-five (45) day period, there shall be a conclusive
presumption that City has elected not to exercise the Right of First Refusal hereunder, and
Developer may transfer the interest proposed to be transferred on the same terms set forth in the
Notice of Transfer (subject to Minor Modifications, as defined below); (iv) in the event City
declines to exercise its Right of First Refusal after receipt of the Notice of Transfer and
thereafter, (A) Developer and the prospective transferee purchaser (1) modify by more than five
C' percent (5%): (a) the sales price, (b) the amount of down payment, (c) the interest charged, or(2)
52—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 57 OF 91 SEPTEMBER 27, 2016
otherwise materially modify the terms of the prospective transfer; or (B) in the event the sale is
not consummated within sixty (60) days after the.time period set forth in the Notice of Transfer,
then City's Right of First Refusal shall reapply to said transaction as of the occurrence of any of
the aforementioned events (any modifications that do not satisfy the criteria of the events
described in this subdivision (iv) may be referred to herein as "Minor Modifications"); and (v)
the failure by City to exercise its Right of First Refusal as to one transfer shall not eliminate,
modify, or reduce City's Right of First Refusal in the event of future transfers that may be
proposed during the Right of First Refusal Period. If City exercises its Right of First Refusal.but
then fails to purchase the Developer Property in accordance with the terms set forth in.the Notice
of Transfer, Developer may enter into an agreement to transfer the interest on substantially the
same terms set forth in the original Notice of Transfer(subject to Minor Modifications), and City
shall not have a Right of First Refusal with respect to such agreement. If the Right of First
Refusal has not been exercised during the Right of First Refusal Period, it shall automatically
expire at the end of said term.
11.4 Title Report. Within five (5) Business Days after delivery of the Notice of
Transfer to City, Developer shall provide City with a current preliminary title report covering the
property that is subject to the proposed transfer.
11.5 Escrow and Completion of Sale. Within five (5) days after City has exercised
the Right of First Refusal, or as soon thereafter as reasonably practicable, Developer and City
shall enter into a purchase agreement upon the terms and conditions set forth in the Notice of
Transfer and an escrow shall be opened with an escrow company mutually acceptable to City
and Developer for the conveyance of the Developer Property to City. City shall deliver funds
sufficient for payment of the purchase price into such escrow not later than one (1) Business Day
prior to the anticipated close of escrow date. The obligation of City to close escrow shall be
subject to City's approval during the applicable due diligence period of a then-current
preliminary title report and, at the option of City, inspections, studies, tests, and investigations of
the physical and environmental condition of the Property and other site testing. Any exceptions
shown on such preliminary title report created on or after Developer's acquisition of the Property
and timely objected to by City and approved by Developer to be removed shall be removed by
Developer at its sole expense prior to the close of escrow unless such exception(s) is (are)
accepted by City in its reasonable discretion; provided, however, that City shall accept the
following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title
existing on the date of Developer's acquisition of the Property, and (iii) liens and encumbrances
in favor of City or previously approved by City. City shall pay all of the escrow fees,
documentary transfer taxes, recording fees, the cost of any owner's policy of title insurance
desired by City, and any other costs and expenses of the escrow. City shall have the amount of
time set forth in the Notice of Transfer after exercise of the Right of First Refusal to enter upon
the Property to conduct any tests, inspections, investigations,. or studies of the condition of the
Property. Developer shall permit City to access the Property for such purposes. Escrow shall
close promptly after the earlier of the expiration of such due diligence period or acceptance by
City of the condition of title and the physical and environmental condition of the Property.
53 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 58 OF 91 SEPTEMBER 27, 2016
[Signatures on following page]
i- �
54—September 27, 2016
RESOLUTION NO. 2016-35 PAGE 59 OF 91 SEPTEMBER 27, 2016
SIGNATURE PAGE
TO
2016 disposition and development agreement
City and Developer have signed this 2016 disposition and development agreement by and
through the signatures of their authorized representative(s) set forth below:
CITY: DEVELOPER:
CITY OF GRAND TERRACE, a DR. TERRY MCDUFFEE, an individual
municipal corporation
By:
Darcy McNaboe
Mayor
Attest:
By:
City Secretary.
APPROVED AS TO FORM: APPROVED AS TO FORM:
JONES &MAYER PECCORINI &PECCORINI
By: By:
Richard L. Adams, II Julie Peccorini
City Attorney
55 —September 27, 2016
RESOLUTION NO. 2016-35 PAGE 60 OF 91 SEPTEMBER 27, 2016
EXHIBIT "A"
TO
2016 disposition and development agreement
CITY PROPERTY LEGAL DESCRIPTION
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF GRAND
TERRACE, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS FOLLOWS:
PARCEL NO. 7 OF PARCEL MAP NO. 3803, AS PER PLAT RECORDED 1N BOOK 49 OF
PARCEL MAPS, PAGE(S) 16 AND 17, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY
APN: 1167-141-08-0000
Exhibit"A"
City Property Legal Description
RESOLUTION NO. 2016=35 PAGE 61 OF 91 SEPTEMBER 27, 2016
EXHIBIT "B"
TO
2016 disposition and development agreement
DEVELOPER PROPERTY LEGAL DESCRIPTION
All that certain real property situated in the County of San Bernardino, State of California,
described as follows:
The East% of the following described property described as a whole as follows:
East '/ of Lot 7 in Section 5, Township 2 South, Range 4 West, San Bernardino Base and .
Meridian; also that portion of Lot 6 in Section 5, more particularly described as follows:
Commencing at a point 384.78 feet West of the Northeast corner of said Lot 6: thence
running West 256.52 feet to the Northwest corner of said Lot 6; thence at right angles
South to the Southwest corner of said Lot; thence at right angles East 256.52 feet; thence at
right angles North to the place of beginning. All as delineated upon a certain map of the
lands of East Riverside Land Company and recorded in the office of the County Recorder
of the County of San Bernardino, State of California, in Book 6 of Maps,Page 44, thereof;
the said-portion of Lot 6 is also described as the Westerly rectangular 256.52.feet of said
lot.
Excepting therefrom that portion conveyed to the State of California by Deed recorded
December 18, 19569 in Book 4112, page 186, Official Records.
Assessor Parcel Number: 1167-121-01.
Exhibit`B"
Developer.Property Legal Description
RESOLUTION NO. 2016-35 PAGE 62 OF 91 SEPTEMBER 27, 2016
EXHIBIT "C"
TO
2016 disposition and development agreement
FORM OF ESCROW AGENT CONSENT
ORANGE COAST TITLE COMPANY OF SOUTHERN CALIFORNIA accepts
that certain 2016 disposition and development agreement, dated as of September 13, 2016, by
and between the City of Grand Terrace, a municipal corporation, and Dr. Terry McDuffee, an
individual, agrees to act as "Escrow Agent" pursuant to such agreement and agrees to be bound
by all provisions of such agreement applicable to it as the Escrow Agent.
ESCROW AGENT:
ORANGE COAST TITLE COMPANY
OF SOUTHERN CALIFORNIA
By:
Name:
Its:
Dated:
Notice Address:
Exhibit"C"
Form Of Escrow Agent Consent
RESOLUTION NO. 2016-35 PAGE 64 OF 91 SEPTEMBER 27, 2016
EXHIBIT "D"
TO
2016 disposition and development agreement
TOTAL PROJECT COSTS
Estimated at Two Million Dollars ($2,000,000) based on intended construction of a Ten
Thousand (10,000) square foot building at Two Hundred Dollars ($200) per square foot
Exhibit"D"
Total Project Costs
RESOLUTION NO. 2016-35 PAGE 65 OF 91 SEPTEMBER 27, 2016
EXHIBIT "E"
TO
2016 DISPOSITION AND DEVELOPMENT AGREEMENT
NOTICE OF OPTION TO PURCHASE REAL PROPERTY
Exhibit"E"
Notice of Option to Purchase Real Property
RESOLUTION NO. 2016-35 PAGE 66 OF 91 SEPTEMBER 27, 2016
f
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
Attn: City Manager
THIS SPACE FOR RECORDER'S-USE ONLY
APN 1167_121_01 EXEMPT FROM FILING FEES PURSUANT TO GOVERNMENT
CODE SECTION 27383
CITY OF GRAND TERRACE
Notice of Option to Purchase Real Property
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of September
27, 2016, the CITY OF GRAND TERRACE, a municipal corporation ("City"), and DR. TERRY
MCDUFFEE, an individual ("Developer"), entered into an agreement entitled "Disposition and
Development Agreement" (the "Agreement"). A copy of the Agreement is on file with the City
Clerk of the City and is available for inspection and copying by interested persons as'a public
record of the City at the City's offices located at 22795 Barton Road, Grand Terrace, California
92313., during the regular business hours of the City.
The Agreement affects the real property described in Attachment"A" attached to this
Notice of Option to Purchase Real Property (the "Property"). The meaning of defined terms,
indicated by initial capitalization,used in this Notice of Option to Purchase Real Property and
not defined in this Notice of Option to Purchase Real Property shall be the same as the meaning
ascribed to such terms in the Agreement.
PLEASE TAKE FURTHER NOTICE that the Agreement contains certain covenants
running with the land of the Property and other agreements between Developer and the City
affecting the Property, including, without limitation(all section references are to the Agreement):
10.1 Grant of Option. In consideration of City's execution of the DDA and the
conveyance of the City Property and as a condition precedent to the transfer of the City Property,
Developer hereby grants to City, and City hereby accepts, an exclusive option to purchase the
Developer Property ("Option") commencing on either(i) August 15'2019, or (ii) completion
of the 1-215 Interchange Project, whichever occurs last, and continuing on thereafter for a
period of twelve (12) months ("Option Termination Date"). The purchase price for the
Developer's Property shall be the actual fair market value as defined below. If (i) the
Option is not exercised within the time set forth in this section, (ii) this Agreement is
Exhibit"E"
Notice of Option to Purchase Real Property
RESOLUTION NO. 2016-35 PAGE 67 OF 91 SEPTEMBER 27, 2016
terminated, (iii) the parties fail to execute a DDA or other similar agreement, (iv) the
Developer does not acquire permits necessary for the Project, or (v) the City does not
exercise its right of first refusal or exercises such right but then does not purchase the
Developer.Property and such property is sold to a third party, then the Option shall
terminate and be null and void. The parties agree that the bargained for consideration for
this Option Agreement is the mutual execution of the DDA and no further consideration
for this Option Agreement is expected. The option granted herein shall be a covenant
running with the land.
11.1 Right of First Refusal. Developer, on behalf of itself and all its successors in interest
(together, referred to herein collective, as "Developer"), hereby grants to City a right of first
refusal ("Right of First Refusal") to purchase the Developer Property from Developer pursuant to
the terms and conditions set forth in this Section 11. This Right of First Refusal shall survive
termination of this Agreement and shall be a covenant running with the land.
11.2 Right of First Refusal Period. City's Right of First Refusal shall begin upon execution of
this Agreement and thereafter expire on the Option Termination Date ("Right of First Refusal
Period").
11.3 Exercise of Right of First Refusal. Throughout the entire Right of First Refusal Period, City
shall have the right, but not the obligation, to purchase the Developer Property on terms
consistent with the terms under which the Developer Property (or any portion thereof) are
offered for sale..The Right of First Refusal shall be exercisable as follows: (i) Developer shall
not, at any time during the Right of First Refusal Period, make any transfer of the Developer
Property without first giving written notice thereof to City, which notice is hereinafter referred to
as "Notice of Transfer"; (ii) the Notice of Transfer shall include the exact and complete terms of
the proposed transfer and shall have attached thereto a photocopy of bona fide offer and
counteroffer, if any, duly executed by both Developer and the prospective transferee; (iii) for a
period of forty-five (45) days after receipt by City of the Notice of Transfer, City shall have the
right to.give written notice of City's exercise of City's right to purchase the interest proposed to
be sold or otherwise transferred on the same terms, price and conditions as set forth in the Notice
of Transfer. In the event Developer does not receive written notice of City's exercise of the Right
of First Refusal herein granted within said forty-five (45) day period, there shall be a conclusive
presumption that City has elected not to exercise the Right of First Refusal hereunder, and
Developer may transfer the interest proposed to be transferred on the same terms set forth in the
Notice of Transfer (subject to Minor Modifications, as defined below); (iv) in the event City
declines to exercise its Right of First Refusal after receipt of the Notice of Transfer and
thereafter, (A) Developer and the prospective transferee purchaser (1) modify by more than five
percent (5%):.(a) the sales price, (b) the amount of down payment, (c) the interest charged, or(2)
otherwise materially modify the terms of the prospective transfer; or (B) in the event the sale is
not consummated within sixty (60) days after the time period set forth in the Notice of Transfer,
then City's Right of First Refusal shall reapply to said transaction as of the occurrence of any of
the aforementioned events (any modifications that do not satisfy the criteria of the events
described in this subdivision (iv) may be referred to herein as "Minor Modifications"); and (v)
the failure by City to exercise its Right of First Refusal as to one transfer shall not eliminate,
modify, or reduce City's Right of First Refusal in the event of future transfers that may be
proposed during the Right of First Refusal Period. If City exercises its Right of First Refusal but
Exhibit"E"
Notice of Option to Purchase Real Property
RESOLUTION NO. 2016-35 PAGE 68 OF 91 SEPTEMBER 27, 2016
then fails to purchase the Developer Property in accordance with the terms set forth in the Notice
of Transfer, Developer may enter into an agreement to transfer the interest on substantially the
same terms set forth in the original Notice of Transfer(subject to Minor Modifications), and City
shall not have a Right of First Refusal with respect to such agreement. If the Right of First
Refusal has not been exercised during the Right of First Refusal Period, it shall automatically
expire at the end of said term.
: THIS NOTICE OF AGREEMENT is dated as of September 27, 2016, and has been
signed on behalf of Developer and the City by and through the signatures of their authorized
representative(s) set forth below. This Notice of Agreement may be executed in counterparts and
when fully executed each counterpart shall be deemed to be one original.instrument.
[Signatures on following navel
j
Exhibit"E"
Notice of Option to Purchase Real Property.
RESOLUTION NO. 2016-35 PAGE 69 OF 91 SEPTEMBER 27, 2016
SIGNATURE PAGE
TO
NOTICE OF AGREEMENT
DISPOSITION AND DEVELOPMENT AGREEMENT
CITY: DEVELOPER:
CITY OF GRAND TERRACE, DR. TERRY MCDUFFEE, an individual
a municipal corporation
By:
Mayor By: DR. TERRY MCDUFFEE, an
individual
Attest:
By:
City Clerk
APPROVED AS TO FORM: APPROVED AS TO FORM:
JONES &MAYER
PECCORINI &PECCORINI
By:
City Attorney . By:
Julie Peccorini
[SIGNATURES OF PRINCIPALS MUST BE NOTARY ACKNOWLEDGED]
Exhibit"E"
Notice of Option to Purchase Real Property
RESOLUTION NO. 2016-35 PAGE 70 OF 91 SEPTEMBER 27, 2016
ATTACHMENT "A"
TO
NOTICE OF OPTION TO PURCHASE REAL PROPERTY
Developer Property Legal Description
All that certain real property situated in the County of San Bernardino, State of California,
described as follows:
The East 1/z of the following described property described as a whole as follows:
East 1/ of Lot 7 in Section 5, Township 2 South,Range 4 West, San Bernardino Base and
Meridian; also that portion of Lot 6 in Section 5, more particularly described as follows:
Commencing at a point 384.78 feet West of the Northeast corner of said Lot 6: thence
running West 256.52 feet to the Northwest corner of said Lot 6; thence at right angles
South to the Southwest corner of said Lot; thence at right angles East 256.52 feet; thence at
right angles North to the place of beginning.All as delineated upon a certain map of the
lands of East Riverside.Land Company and recorded in the office of the County Recorder
of the County of San Bernardino, State of California, in Book 6 of Maps,Page 44, thereof,
the said portion of Lot 6 is also described as the Westerly rectangular 256.52 feet of said
lot.
Excepting therefrom that portion conveyed to the State of California by Deed recorded
December 18, 1956, in Book 4112,page 186, Official Records.
Assessor Parcel Number: 1167-121-01.
Exhibit"E"
Notice of Option to Purchase Real Estate
RESOLUTION NO. 2016-35 PAGE 71 OF 91 SEPTEMBER 27, 2016
EXHIBIT "F"
TO
2016 disposition and development agreement
FORM OF DEED
[To be attached behind this cover page]
Exhibit"F"
Form Of Deed
RESOLUTION NO. 2016-35 PAGE 72 OF 91 SEPTEMBER 27, 2016
RECORDING REQUESTED BY:
City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
Attn: City Manager
Escrow and Order No.
WHEN RECORDED MAIL TO
AND MAIL TAX STATEMENTS TO:
City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
Attn: City Manager
APN SPACE ABOVE FOR RECORDER'S USE ONLY
CITY OF GRAND TERRACE
r
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
the CITY OF GRAND TERRACE, a municipal corporation (the "City"), hereby grants and
conveys to DR TERRY MCDUFFEE, an individual (the "Grantee"), all of that certain real
property legally described in ATTACHMENT A attached to and by this reference incorporated
into this.Grant Deed (the "Property"), subject to the following terms, conditions, covenants and
restrictions running with the land of the Property for the benefit of the City:
1. Conveyance Subject to Terms of a Disposition and Development Agreement.
The Property is conveyed subject to that certain Disposition and Development Agreement dated
as of September 27, 2016, by and between the City and the Grantee (the "Agreement"). Any
terms indicated to be defined terms in this Grant Deed by initial capitalization and not defined in
this Grant Deed shall have the meaning ascribed to the same term in the Agreement.
2. Condition of Property. The Grantee acknowledges and agrees that the Property
is conveyed by the City to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT TO ALL
FAULTS CONDITION," as of the date of recordation of this Grant Deed, with no warranties,
expressed or implied, as to the environmental or other physical condition of the Property, the
presence or absence of any patent or latent environmental or other physical condition on or in the
Property, or any other matters affecting the Property.
Exhibit'IF',
Form Of Deed
RESOLUTION NO. 2016-35 PAGE 73 OF 91 SEPTEMBER 27, 2016
3. Grantee's Covenant to Develop the Project. Grantee covenants and agrees for
itself, its successors and assigns that the Property shall be improved and developed with the
Project, in conformity with the terms and conditions of the Agreement and all applicable laws.
The covenants of this Section 3 shall run with the Property, until the date of issuance of a
Certificate of Completion for the Project.
4. City Power of Termination Regarding Property.
4.1 Reservation. The City hereby reserves a power of termination pursuant to
Civil Code Sections 885.010, et seq., exercisable by the City, in its sole and absolute discretion,
upon thirty(30) calendar days written notice to Grantee referencing this Section 4.1, to terminate
the fee interest of Grantee in the Property and/or any improvements to the Property and revest
such fee title in the City and take possession of all or any portion of such real property and
improvements, without compensation to Grantee, upon the occurrence of an Event of Default, as
set forth in the Agreement, by Grantee following the Close of Escrow and prior to the issuance of
a Certificate of Completion for the Project. The City shall not exercise such power. of
termination, if Grantee cures the Event of Default within the thirty (30) calendar day period set
forth in this Section 4.1.
4.2 Process. The rights of the City under this Section 4 shall not defeat,
tender invalid or limit:
(a) Any Permitted Security Instrument; or
(b) Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents or interests applicable to the Property and
specifically authorized by the Agreement, or consented to in writing by the City.
(c) Upon the City's exercise of its power of termination pursuant to
this Section 4, Grantee shall convey fee title-to the Property and all improvements on or to the
Property to the City by grant deed, in accordance with Civil Code Section 1109, as such code
section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall
be duly acknowledged by Grantee and a notary public in a manner suitable for recordation. The
City may enforce its rights pursuant to this Section 4 by means of an injunctive relief or
forfeiture of title action filed in any court of competent jurisdiction.
(d) Upon the revesting in the City of title to.the Property, whether by
grant deed or court decree, the City shall exercise its reasonable good faith efforts to resell the
Property at the Property's then fair reuse value, as soon and in such manner as the City shall, in
its sole discretion, find feasible and consistent with its objectives, to a qualified and responsible
Person or Persons (as reasonably determined by the City) who will assume Grantee's obligations
to begin and/or complete and/or operate the Project, or such other replacement development
acceptable to the City, in its sole and absolute discretion, consistent with the City's objectives.
Upon any such resale of all or a portion of the Property, the proceeds received by the City from
such sale shall be applied, as follows:
(i) First, to pay any and all amounts required to
release/reconvey any Permitted Security Instrument recorded against the Property; and
Exhibit'F"
Form Of Deed
RESOLUTION NO. 2016-35 PAGE 74 OF 91 SEPTEMBER 27, 2016
( (ii) Second, to reimburse the City on its own behalf or on
behalf of the City for all actual internal and Third Person costs and expenses incurred by the City
or the City related to the Property, the Project, the Agreement, including customary and
reasonable fees or salaries to Third Person consultants (including Legal Costs) in connection
with the recapture, management or resale of,all or any portion of the Property; all taxes,
assessments and utility charges paid by the City and/or the City with respect to all or any portion
of the Property; any payment made or necessary to be made to discharge or prevent from
attaching or being made any subsequent encumbrances or liens due to obligations incurred by
Grantee with respect to costs associated with the acquisition of the Property or the construction
or installation of the Project; and amounts otherwise owing to the City by Grantee pursuant to the
terms of the Agreement; and
(iii) Third, to the extent that any proceeds from such resale are,
thereafter, available, to reimburse Grantee, the amount of: (1) the pro-rats portion of the
Purchase Price paid to the City; and (2) the pro-rata portion.of the Third Person costs actually
incurred and paid by Grantee regarding the development of the Project, including costs of carry,
taxes, and other items as set forth in a cost certification to be made by Grantee to the City, prior
to any such reimbursement and, which certification shall be subject to the City's reasonable
approval; provided, however, that Grantee shall not be entitled to reimbursement for any
expenses to the extent that such expenses relate to any loans, liens or other encumbrances that
are paid by the City pursuant to the provisions of sub-sections (1) or(2), above;.and
(iv) Fourth, any portion of the proceeds from the resale of the
Property remaining after the foregoing applications shall be retained by the City, as its sole and
exclusive property.
5. No Discrimination or Segregation. Grantee covenants by and for itself and all
Persons claiming under or through it that this Grant Deed is made and accepted upon and subject
to the following conditions:
5.1 Standards. That there shall be no discrimination against or segregation of
any Person or group of Persons, on account of any basis listed in subdivision(a) or(d) of Section.
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the Property nor shall Grantee or any Person claiming under or through it establish
or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants; or
vendees in the Property.
5.2 Interpretation. Notwithstanding Section 5.1, with respect to familial
status, Section 5.1 shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing in Section 5.1
shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the
Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
—�� apply to Section 5.1.
Exhibit"F"
Form Of Deed
RESOLUTION NO. 2016-35 PAGE 75 OF 91 SEPTEMBER 27, 2016
6. Covenants, Conditions and Restrictions Run with the Land of the Property.
Regardless of classification or characterization, each of the covenants, conditions, restrictions
and agreements contained in this Grant Deed touch and concern the Property and each of them is
expressly declared to be,for the benefit and in favor of the City for the entire period that such
covenants, conditions, restrictions arid/or agreements are in full force and effect, regardless of
whether the City is or remains an owner of any land or interest.in land to which such covenants
relate. The City, in the event of any breach of any such covenants, conditions, restrictions and
agreements, has the right to exercise all of the rights and remedies, and to maintain any actions at
law or suits in equity or other proper proceedings, to enforce the curing of such breach, as
provided in the Agreement, or by law. All such covenants, conditions, restrictions and
agreements shall survive the issuance and recordation of each and every certificate of occupancy
by the City, for the time period set forth in each covenant.
7. No Impairment of Liens. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid
or in any way impair the lien or charge of any mortgage, deed of trust or other financing or
security instrument permitted by the Agreement;'provided, however, that any successor of
Grantee to all or any portion of the Property shall be bound by such continuing covenants,
conditions, restrictions, limitations and provisions, whether such successor's title was acquired
by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.
8. Interpretation. It is the intent of the City in giving this Grant Deed that all of the
covenants, conditions, restrictions and agreements set forth in this Grant Deed be given full force
and effect in.favor of the City, as the City would not.have given this Grant Deed without such
covenants, conditions, restrictions and agreements, and that each such covenant, condition,
restriction and agreement should be classified or characterized in the manner necessary to its
enforcement in favor of the City, regardless of any specific classification or characterization in
this Grant Deed.
9. No Affect on Agreement. Nothing contained in this Grant Deed is intended to
nor shall be deemed or construed to modify or terminate any condition, covenant, restriction or
agreement set forth in the Agreement; provided, however, that certain provisions of the
Agreement cease to be effective on the recordation of a Certificate of Completion for the Project
pursuant to the Agreement.
10. Costs and Attorneys' Fees for Enforcement Proceeding. If legal proceedings
are initiated to enforce the rights, duties or obligations of any of the covenants set forth in this
Grant Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable
attorney fees and costs from the other party in addition to any other damages or relief obtained in
such proceedings.
[Signatures on following-page]
Exhibit"F"
Form Of Deed
RESOLUTION NO. 2016-35 PAGE 76 OF 91 SEPTEMBER 27, 2016
� IN WITNESS WHEREOF, the City has caused this Grant Deed to be executed by its
authorized representative(s) on this day of
CITY:
CITY OF GRAND TERRACE, a public body,
corporate and politic
By:
Mayor
ATTEST:
By:
City Clerk
Exhibit"F"
Form Of Deed
RESOLUTION NO. 2016-35 PAGE 77 OF 91 SEPTEMBER 27, 2016
ATTACHM ENT A
TO
GRANT DEED
City Property Legal Description
The land referred to in this report is situated in the County of SAN BERNARDINO, State
of California, and is described as follows:
Parcel No. Tof Parcel Map No. 3803, in the City of Grand Terrace, County-of San Bernardino,
State of California, as per Plat recorded in Book 49, of Parcel Maps, Page(s) 16 and 17, in the
Office of the County Recorder of said County.
Excepting therefrom, that portion of Parcel 7 of Parcel Map No. 3803,'in the City of Grand
Terrace, County of San Bernardino, State of California, as shown on Plat filed in Book 49, Pages
16 and 17 of Parcel Maps, records of said County lying Northeasterly of the following described
line:
Commencing at the Northwest corner of said Parcel;thence along the North line of said Parcel
also being the South right of way line of Commerce Way(36.00 feet-half width), as shown on
said plat,North 46'04' 36" East, 54.82 feet to West right of way line of Michigan Street(44.00
feet- half width) as shown on said plat, and the Terminus of this description.
APN: 1167-141-08-0000
Exhibit"F"
Form of Deed
RESOLUTION NO. 2016-35 PAGE 78 OF 91 SEPTEMBER 27, 2016
!r EXHIBIT "G"
TO
2016 disposition and development agreement
PROJECT SCOPE OF DEVELOPMENT
Construction of a commercial building of approximately Ten Thousand (10,000) square feet with
an estimated Seven Thousand (7,000) square feet to be used as an animal emergency hospital and
the remaining Three Thousand(3,000) square feet to be used as rental space for professional,
retail or other commercial tenants; construction of related improvements necessary for use and
occupancy of such building including parking lot, driveways, curbs, etc.
i
Exhibit"G"
Project Scope Development
RESOLUTION NO. 2016-35 PAGE 79 OF 91 SEPTEMBER 27, 2016
EXHIBIT "H"
TO
2016 disposition and development agreement
PROJECT SCHEDULE OF PERFORMANCE
Secure Entitlements within one hundred fifty(150) days of Effective Date
Commence Construction within thirty(30) days of close of escrow
Obtain_a Certificate of Occupancy by April 1,2018
Obtain Certificate of Project Completion by April 30, 2018
Exhibit"H"
Project Schedule
RESOLUTION NO. 2016735 PAGE 80.OF 91 SEPTEMBER 27, 2016
EXHIBIT
TO
2016 disposition and development agreement
NOTICE OF AGREEMENT
[To be attached behind this cover page]
Exhibit"I"
Notice of Agreement
RESOLUTION NO. 2016-35 PAGE 81 OF 91 SEPTEMBER 27, 2016
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
Attn: City Manager
THIS SPACE FOR RECORDER'S USE ONLY
APN 1167-141-08-0000 EXEMPT FROM FILING FEES PURSUANT TO GOVERNMENT
CODE SECTION 27383
CITY OF GRAND TERRACE
Notice of Agreement
Disposition and Development Agreement
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of September
27, 2016, the CITY OF GRAND TERRACE, a municipal corporation ("City"), and DR. TERRY
MCDUFFEE, an individual ("Developer"), entered into an agreement entitled "Disposition and
Development Agreement" (the "Agreement"). A copy of the Agreement is on file with the City
Clerk of the City and is available for inspection and copying by interested persons as a public
record of the City at the City's offices located at 22795 Barton Road, Grand Terrace, California
92313, during the regular business hours of the City.
The Agreement affects the real property described in Attachment"A" attached to this
Notice of Agreement(the "Property"). The meaning of defined terms, indicated by initial
capitalization, used in this Notice of Agreement and not defined in this Notice of Agreement
shall be the same as the meaning ascribed to such terms in the Agreement.
PLEASE TAKE FURTHER NOTICE that the Agreement contains certain covenants
running with the land of the Property and other agreements between Developer and the City
affecting the Property, including, without limitation (all section references are to the Agreement):
5.1. Developer's Covenant to Develop the Project.
Developer covenants to and for the express benefit of the City that Developer
shall commence,pursue and complete the development of the Project, within the time period for
each such action set forth in the Project Schedule of Performance. Developer covenants and
agrees for itself, its successors and assigns that the Property shall be improved and developed
with the Project, in conformity with the terms and conditions of this Agreement and all
Exhibit"I"
Notice of Agreement
RESOLUTION NO. 2016-35 PAGE 82 OF 91 SEPTEMBER 27, 2016
applicable Laws and conditions of each Government. The covenants of this Section 5.1 shall run
- with the Property until the date of issuance of a Certificate of Completion for the Project.
9.3 Restrictions on Change in Management or Control of Developer,Assignment
and Transfer.
9.3.1 Restrictions. Developer acknowledges and agrees that the qualifications
and identity of Developer are of particular importance and concern to City. Developer further
acknowledges and agrees that City has relied and is relying on the specific qualifications and
identity of Developer in entering into this Agreement with Developer and that City would not
have entered into this Agreement, but for the specific qualifications and identity of Developer.
As a consequence,.Transfers are permitted only as expressly provided in this Agreement.
Developer represents to City that it has not made and agrees that it will not create or permit to be
made or created, any Transfer, other than a Permitted Transfer, either voluntarily, involuntarily
or by operation of Law, without the prior written approval of City, which may be given, withheld
or conditioned in the sole and absolute discretion of City. Any Transfer made in contravention of
this Section 9.3 shall be voidable at the election of City. Developer hereby acknowledges and
agrees that the restrictions on Transfers set forth in this Section 9.3 are reasonable.
9.3.2 Delivery of Transfer Documents. All instruments and other legal
documents proposed to effect any proposed Transfer shall be submitted to City for review, at
least thirty-five (35) calendar days prior to the proposed date of the Transfer, and the written
approval, disapproval or conditions of City regarding the proposed Transfer shall be provided to
` Developer, within thirty (30) calendar days following City's receipt of all proposed Transfer
documents. Developer agrees to reimburse City for all costs and.expenses incurred by City in
connection with its review of each proposed Transfer, including all Legal Costs and other Third
Person consultant fees and expenses.
9.18 No Discrimination or Segregation. Developer covenants by and for itself and
all Persons claiming under or through it that this Agreement is made and accepted upon and
subject to the following conditions:
9.18.1 Standards. That there shall be no discrimination against or segregation of
any Person or group of Persons, on account of any basis listed in subdivision(a) or(d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision(m) and paragraph(1) of subdivision(p) of Section 12955, and Section 12955.2 of
the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the Property nor shall Developer or any Person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees in the Property.
9.18.2 Interpretation. Notwithstanding Section 9.18.1, with respect to familial
status, Section 9.18.1 shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing in Section
9.18.1 shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil
y Code, relating to housing for senior citizens. Subdivision(d) of Section 51 and Section 1360 of
Exhibit"I"
Notice of Agreement
RESOLUTION NO. 2016-35 PAGE 83 OF 91 SEPTEMBER 27, 2016
the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to Section 9.18.1.
THIS NOTICE OF AGREEMENT is dated as of September 27, 2016, and has been
signed on behalf of Developer and the City by and through the signatures of their authorized
representative(s) set forth below. This Notice of Agreement may be executed in counterparts and
when fully executed each counterpart shall be deemed to be one original instrument.
[Signatures on following page]
Exhibit"I"
Notice of Agreement
RESOLUTION NO. 2016-35 PAGE 84 OF 91 SEPTEMBER 27, 2016
SIGNATURE PAGE
TO
NOTICE OF AGREEMENT.
DISPOSITION AND DEVELOPMENT AGREEMENT
CITY: DEVELOPER:
CITY OF GRAND TERRACE, DR. TERRY MCDUFFEE, an individual
a municipal corporation
By:
Darcy McNaboe, Mayor By: DR. TERRY MCDUFFEE, an
individual
Attest:
By:
City Clerk
APPROVED AS TO FORM: APPROVED AS TO FORM:
JONES &MAYER
PECCORINI &PECCORINI
By:
City Attorney By:
Julie Peccorini
[SIGNATURES OF PRINCIPALS MUST BE NOTARY ACKNOWLEDGED]
Exhibit"I"
Notice of Agreement
RESOLUTION NO. 2016-35 PAGE 85 OF 91 SEPTEMBER 27, 2016
ATTACHMENT "A"
TO -.
NOTICE OF AGREEMENT
DISPOSITION AND DEVELOPMENT AGREEMENT '
City Property Legal Description
The land referred to in this report is situated in the County of SAN BERNARDINO, State
of California, and is described as follows:
Parcel No. 7 of Parcel Map No. 3803, in the City of Grand Terrace, County of San Bernardino,
State of California, as per Plat recorded in Book 49, of Parcel Maps, Page(s) 16 and 17, in the
Office of the County Recorder of said County.
Excepting therefrom, that portion of Parcel 7 of Parcel Map No. 3803, in the City of Grand
Terrace, County of San Bernardino, State of California, as shown on Plat filed in Book 49, Pages
16 and 17 of Parcel Maps, records of said County lying Northeasterly of the following described
line:
Commencing at the Northwest corner of said Parcel; thence along the North line of said Parcel
also being the South right of way line of Commerce Way(36.00 feet-half width), as shown on
said plat,North 46'04' 36" East, 54.82 feet to West right of way line of Michigan Street(44.00
feet-half width) as shown on said plat, and the Terminus of this description.
APN: 1167-141-08-0000
Exhibit"N"
Notice of Agreement
RESOLUTION NO. 2016-35 PAGE 86 OF 91 SEPTEMBER 27, 2016
EXHIBIT "J"
TO
2016 disposition and development agreement
CERTIFICATE OF COMPLETION
[To be attached behind this cover page]
Exhibit"J"
Certificate of Completion
RESOLUTION NO. 2016-35 PAGE 87 OF 91 SEPTEMBER 27, 2016
TABLE OF CONTENTS
Page
1. DEFINITIONS................................................................................................................... I
1.1 Defined Terms ....................................................................................................... 1
2. TERMINATION OF NEGOTIATION AGREEMENT.................................................. 17
3. CONVEYANCE OF PROPERTY.................................................................................. 17
3.1 Escrow.................................................................................................................. 17
3.2 Payment of Purchase Price................................................................................... 18
3.3 Eminent Domain..................................................................................:............... 18
3.4 Developer's Approval of Title to Property.......................................................... 18
3.5 Due Diligence Investigations...............................................................................20
3.6 Delivery of Property Free of Tenants ..................................................................21
3.7 Acceptance of Property"AS-IS ..........................................................................21
3.8 Assignment of Property Information and Approvals...........................................21
3.9 Developer to Obtain all Approvals for the Project..............................................22
3.10 City Not to Encumber..........................................................................................22
3.11 Title Commitment Supplements..........................................................................23
4. JOINT ESCROW INSTRUCTIONS...............................................................................23
4.1 Opening of Escrow ..............................................................................................23
4.2 Escrow Agent Authority......................................................................................23
4.3 Developer's Conditions to Close of Escrow......................................................:.24
4.4 City's Conditions to Close of Escrow............:.....................................................24
4.5 Developer's Escrow Deposits..............................................................................26
4.6 City's Escrow Deposits........................................................................................27
4.7 Closing Procedure...................:............................................................................27
4.8 Close of Escrow........................................................................:..........................28
4.9 Escrow Closing Costs, Taxes and Title Policy Premium....................................29
4.10 Escrow Cancellation Charges..............................................................................29
4.11 Escrow Cancellation........................:...................................................................29
4.12 Escrow Notices ....................................................................................................30
Exhibit"K"
Developer Official Action
RESOLUTION NO. 2016-35 PAGE.88 OF 91 SEPTEMBER 27, 2016
TABLE OF CONTENTS
(continued)
-- Page
5. PROJECT DEVELOPMENT..........................................................................................30
5.1 Developer's Covenant to Develop the Project................................:....................30
5.2 Changes to Project Plans and Specifications During Course of
Construction.........................................................................................................30
5.3 Construction Start and Completion of Project.....................................................30
5.4 Compliance with Laws ........................................................................................31
5.5 Project Schedule of Performance.......................................:.................................31
5.6 Developer Attendance at City Meetings..............................................................31
5.7 City Right to Inspect Project and Property..........................................................31
5.8 PREVAILING WAGES ......................................................................................32
5.9 Project Certificate of Completion........................................................................33
6. INSURANCE...................................................................................................................34
6.1 Developer.............................................................................................................34
6.2 Nature of Insurance..............................................................................................34
6.3 Policy Requirements and Endorsements..............................................................34
7. FINANCING.....................................................................................................................36
7.1 Project Financing.................................................................................................36
7.2 Only Permitted Encumbrances ....................................................................:.......37
7.3 City Right to Discharge Prohibited Encumbrances.............................................37
7.4 Rights of Lender and City Regarding Permitted Security Instruments ...............38
8. REMEDIES AND INDEMNITY.....................................................................................40
8.1 DEVELOPER'S RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF
ESCROW.............................................................................................................40
8.2 City Liquidated Damages ....................................................................................42
8.3 City Power of Termination Regarding Property 43
8.4 Legal Actions.......................................................................................................44
8.5 Rights and Remedies are Cumulative..................................................................44
8.6 Indemnification....................................................................................................44
( 8.7 Indemnification Procedures.................................................................................45
` -iii-
RESOLUTION NO. 2016-35 PAGE 89 OF'91 SEPTEMBER 27, 2016
TABLE OF CONTENTS
(continued)
Page
9. GENERAL PROVISIONS ...............................................................................:..............46
9.1 Incorporation of Recitals......................................................................................46
9.2 City Not a Party...................................................................................................46
9.3 Restrictions on Change in Management or Control of Developer,
Assignmentand Transfer.....................................................................................46
9.4 Developer Assumption of Risks of Legal Challenges.........................................46
9.5 City manager Implementation..............................................................................47
9.6 Notices, Demands and Communications Between the Parties............................47
9.7 Warranty Against Payment of Consideration for Agreement..............................48
9.8 Relationship of Parties.........................................................................................49
9.9 Survival of Agreement.........................................................................................49
9.10 Non-liability of Officials, Employees and Agents................:..............................49
9.11 Calculation of Time Periods................................................................................49
9.12 Principles of Interpretation..................................................................................49
9.13 Governing Law ....................................................................................................50
9.14 Unavoidable Delay; Extension of Time of Performance.....................................50
9.15 Inspection of Books and Records .........................................................................51
9.16 Real Estate Commissions......................................................................................51
9.17 Binding on Successors and Assigns.....................................................................51
9.18 No Discrimination or Segregation.......................................................................51
9.19 No Other Representations or Warranties............................................................. 52
9.20 Tax Consequences ...............................................................................................52
9.21 No Third-Party Beneficiaries...............................................................................52
9.22 - Execution in Counterparts.................................................................................... 52
9.23 Entire Agreement......................................................:..........................................52
9.24 Exhibits................................................................................................................52
9.25 Execution of this Agreement...............................................................................53
9.26 Time Declared to be of the Essence.....................................................................53
9.27 No Waiver..........................................................................................................:.53
-iii-
RESOLUTION NO. 2016-35 PAGE 90 OF 91 SEPTEMBER 27, 2016
TABLE OF CONTENTS
(continued)
Page
9.28 Facsimile Signatures............................................................................................53
EXHIBIT"A"—CITY PROPERTY LEGAL DESCRIPTION.................................................... 1
EXHIBIT"B"—DEVELOPER PROPERTY LEGAL DESCRIPTION ...................................... 1
EXHIBIT"C"—FORM OF ESCROW AGENT CONSENT....................................................... 1
EXHIBIT"D"—TOTAL PROJECT CONSTRUCTION COSTS................................................ 1
EXHIBIT"E"NOTICE OF OPTION TO PURCHASE REAL ESTATE.................................. 1
EXHIBIT"F"—FORM OF DEED................................................................................................ 1
EXHIBIT"G"—PROJECT OF SCOPE OF DEVELOPMENT—................................................ 1
EXHIBIT"H"—PROJECT SCHEDULE OF PERFORMANCE................................................. 1
EXHIBIT"I"—NOTICE OF AGREEMENT............................................................................... 1
EXHIBIT"J"—CERTIFICATION OF COMPLETION.............................................................. I
EXHIBIT"K"—DEVELOPER OFFICIAL ACTION.................................................................. 1
-iii-
RESOLUTION NO. 2016-35 PAGE 91 OF 91 SEPTEMBER 27, 2016