Greens Group, Inc.-2019-25 2019-25
REIMBURSEMENT AND INDEMNIFICATION AGREEMENT
(Barton Road)
This REIMBURSEMENT AND INDEMNIFICATION AGREEMENT ("Agreement") is
executed this 13 day of&u(us-t' , 2019, by and between the CITY OF GRAND TERRACE, a
California municipal corporation ("City"), and GREENS GROUP, INC., a California corporation
("Developer"). City and Developer may be referred to, individually or collectively, as "Party" or
"Parties."
RECITALS
A. City owns that certain unimproved real property in the City of Grand Terrace, County of
San Bernardino, State of California comprised of 22317, 22293 and 22273 Barton Road,
Grand Terrace, CA 92313 (Assessor Parcel Nos. 1167-231-01, 1167-311-01 and 1167-
311-01) ("Property").
B. Developer desires to acquire the Property from City pursuant to a Purchase and Sale
Agreement and Joint Escrow Instructions ("PSA") executed concurrently herewith, and to
develop the Property as a mixed use project ("Project").
C. In connection with processing the Project prior to Developer's acquisition of the Property,
City will incur certain costs. City and Developer desire to enter into this Agreement in
order to provide for the Developer to deposit funds with City to reimburse City for its costs
of processing the Project, and to establish procedures for same.
D. City has already incurred certain costs and attorneys' fees incurred in connection with the
Project, as of the date of execution of this Agreement ( "Reimbursable Costs") which
costs and fees are intended to be included as reimbursable costs pursuant to this
Agreement.
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable
consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as
follows:
TERMS
1. Incorporation of Recitals. The foregoing Recitals are incorporated and made a
part hereof.
2. Effective Date. This Agreement shall be effective upon execution by City and the
delivery of the Initial Deposit(defined in Section 3)with City ("Effective Date").
3. Developer Responsibility for City Costs. Developer shall reimburse City for all its
costs and fees related to processing all documents related to the Project ("City Costs"). City Costs
shall include staff time, consultant fees, and attorneys' fees at the rate not to exceed $350 per hour
for(i) drafting this Agreement as well as any other agreements and documents that the City deems
necessary for the processing of the Project, including the PSA for the Property and any draft
disposition and development agreements; (ii) actual itemized costs of processing of the Project
including entitlements, traffic engineering services, and environmental review, and (iii) City costs
for maintenance of the Property (provided that the maximum City costs for maintenance that
Developer shall be obligated to reimburse shall not exceed $3,500.00). City Costs will be in
01247.0009/562826.18
addition to Developer's obligations in connection with Developer's duty to indemnify, defend, and
hold harmless City, pursuant to Section 9 and shall include any City costs and fees incurred prior
to the Effective Date of this Agreement related to this Agreement as reasonably detailed Exhibit
"A'. The City's good-faith reasonable estimate of the total future City Costs as of the Effective
Date (by line item) is attached hereto as Exhibit "A" and incorporated herein by this reference.
Notwithstanding the foregoing, Developer understands and agrees that the amounts set forth in
Exhibit A are not binding and are only provided for informational purposes only. Additional items
may be incurred by City which will be deemed City Costs and that City.cannot fully guarantee the
actual costs which may be incurred for the processing of Developer's project. However, upon
completion of the Initial Study pursuant to the California Environmental Quality Act ("CEQA") as
described in Exhibit "A" and transmittal to the Developer by City in accordance with Section 14
below, Developer shall have twenty (20) calendar days to terminate this Agreement and PSA,
provided that any such termination shall not relieve Developer of its obligation to pay for all City
Costs incurred prior to the termination date.
Within three (3) days of the Effective Date, Developer shall deposit with City Thirty
Thousand Dollars ($30,000) against which any City Costs will be drawn by the City from time to
time to reimburse City for actual, itemized City Costs ("Initial Deposit"). At no point shall the
minimum balance of the Deposit remaining with City fall below Ten Thousand Dollars ($10,000.00).
3.1 Additional Deposits by Developer. Developer shall deliver additional
amounts within twenty (20) days of City's written request to the Developer. City's written requests
for additional deposits shall state what costs have been incurred to date, additional costs
anticipated, and how City intends to apply any needed additional Developer deposits. If deposited
sums exceed the costs incurred by City, City shall refund the difference as soon as City determines
the amount of such excess. The Initial Deposit plus any additional sums deposited are hereinafter
referred to as the "Deposit."
3.2 City's Right to Cease Work. In the event that Developer does not promptly
reimburse the City Costs, by failing to timely pay either the initial Deposit or additional requested
deposits, City may immediately cease all work related to or concerning the Project and upon thirty
(30) days prior written notice to Developer, may take such further action as City deems
appropriate, including deeming any Developer application(s) abandoned.
3.3 Interest on Deposit. The Deposit shall not earn interest and may be may be
co-mingled with other City funds.
3.4 Accounting. City shall keep an accounting of the Deposit and all City Costs
which have been paid out by City. Upon written request, City shall provide a detailed account
summary of the account to Developer, which shall include descriptions of the City Costs, including
the date, amount, payee, and the type of activity for which the cost was incurred. Failure of City to
provide any accounting shall not excuse Developer's duty to perform any act, including the duty to
make full and timely deposits required under this Section 3, provided that should City fail to provide
a requested accounting to Developer within 60 days following City's receipt of Developer's written
demand, then Developer may terminate this Agreement and the PSA by written notice to City
whereupon the remainder of the Deposit, if any, along with the Deposit under the PSA, shall be
returned to Developer. Developer may question or challenge any City Costs set forth in the
accounting and may appeal same to the City Council. Termination of this Agreement and the PSA
shall not waive or excuse Developer's responsibility for any City Costs incurred prior to termination
nor shall it waive or excuse any indemnification obligations under this Agreement and the PSA,
including, but not limited to, Section 10.2 of this Agreement.
01247.0009/562826.18 2
4. Additional Taxes, Fee, and Charges. Notwithstanding any provision to the
contrary, Developer shall pay all normal and customary fees and charges applicable to.all permits
necessary for the Project, and any taxes, fees, and charges hereafter imposed by City in
connection with the Project, and any entitlements which are standard and uniformly-applied to
similar projects in the City.
5. City Release; Termination. This Agreement shall terminate concurrently with the
termination of the Covenants as defined in the PSA; however, termination of this Agreement and
the PSA shall not waive or excuse Developer's responsibility for any City Costs incurred prior to
termination nor shall it waive or excuse any indemnification obligations under this Agreement and
the PSA, including, but not limited to, Section 10.2 of this Agreement.
6. Cross-Default. A breach under the PSA by either party shall be a breach under
this Agreement by the same party.
7. Remedies. In the event of a breach by either party, in addition to any other
remedies, the non-breaching party may seek to recover reasonable attorneys'fees in enforcing this
Agreement. This provision will not be interpreted to curtail any of City's remedies at law or equity
against Developer for any violation of City's Municipal Codes, nor shall it be interpreted as a waiver
of any defense of Developer. In the event of a material breach or material default under this
Agreement by City, upon thirty (30) days prior written notice to City, Developer shall have the
unilateral right to terminate this Agreement and the PSA, where upon City shall refund any then
remaining portion of the Deposit under this Agreement after allowing reasonable reserve for
payment of outstanding but unbilled City Costs and City shall refund such amounts deposited
under the PSA pursuant to the terms of the PSA. Termination of this Agreement and the PSA for
any reason shall not waive or excuse Developer's responsibility for any City Costs incurred prior to
termination nor shall it waive or excuse any indemnification obligations under this Agreement and
the PSA, including, but not limited to, Section 10.2 of this Agreement. The rights of the parties
under the PSA are governed by the PSA.
8. Conflicts of Interest.
8.1 No Financial Relationship. Developer acknowledges the requirements of
Government Code Sections 1090 et seq. ("1090 Laws") and warrants that it has not entered into
any financial or transactional relationships or arrangements that would violate the 1090 Laws, nor
shall Developer solicit, participate in, or facilitate a violation of the 1090 Laws.
8.2 Developer's Representations and Warranties. Developer represents and
warrants that for the 12-month period preceding the Effective Date of this Agreement it has not
entered into any arrangement to pay financial consideration to, and has not made any payment to,
any City official, agent or employee that would create a legally cognizable conflict of interest as
defined in the Political Reform Act(California Government Code sections 87100 et seq.).
9. Developer Acknowledgements. Subject to the reimbursement obligations set forth
in this Agreement, Developer acknowledges and agrees that, with respect to the City's work
concerning the Project:
9.1 City has sole discretion to select which of its employees and contractors are
assigned to the work performed by or on behalf of the City.
01247.0009/562826.18 3
9.2 City has sole discretion to in good faith direct the work and evaluate the
performance of the employees and contractors assigned to the work, and City retains the right to
terminate or replace at any time any such person.
9.3 City has sole discretion to determine the amount of compensation paid to
employees or contractors assigned to the work.
9.4 City, not Developer, shall pay employees and contractors assigned to the
work performed by or on behalf of the City for the benefit of Developer from a City account.
9.5 By executing this Agreement, City is not providing any assurances to
Developer that the Project will be approved nor will Developer receive any priority treatment for
processing the Project.
10. Indemnification and Hold Harmless.
10.1 Non-liability of City. The Parties acknowledge that there may be
challenges to the legality, validity and adequacy of: the Project; entitlements concerning the
Project; compliance of the Project with the California Environmental Quality Act, state law, or
federal law; and/or, this Agreement, in the future. If such challenges are successful, such
challenges could delay or prevent the performance of this Agreement, approval of the Project,
or implementation of the Project. City shall have no liability for the inability of Developer to
obtain approval of the Project, obtain entitlements concerning the Project, or implement the
Project, as the result of a judicial determination that some or all of the Project, entitlements
concerning the Project, or implementation of the Project are invalid or inadequate or not in
compliance with law.
10.2 Indemnification. Developer agrees to indemnify, protect, defend, and hold
harmless the City and its officials, officers, employees, agents, elected boards, commissions,
departments, agencies, and instrumentalities thereof, from any and all actions, suits, claims,
demands, writs of mandamus, liabilities, losses, damages, penalties , obligations, expenses, and
any other actions or proceedings (whether legal, equitable, declaratory, administrative, or
adjudicatory in nature), and alternative dispute resolution procedures (including, but not limited to,
arbitrations, mediations, and other such procedures) asserted by third parties against the City that
challenge, or seek to void, set aside, or otherwise modify or annul, the action of, or any approval
by, the City for or concerning this Agreement or the Project, or any aspect or portion thereof
(including, but not limited to, reasonable attorneys' fees and costs) (herein the "Claims and
Liabilities") whether such Claims and Liabilities arise under planning and zoning laws, the
Subdivision Map Act, the California Environmental Quality Act, Code of Civil Procedure Sections
1085 or 1094.5, or any other federal, state, or local statute, law, ordinance, rule, regulation, or any
decision of a competent jurisdiction.
a. In the event any action for any Claims and Liabilities is brought
against the City and/or related parties, upon City's notification to Developer of the pendency of a
claim or suit, Developer shall make a minimum deposit sufficient to pay all of Developer's
indemnification obligations for the following ninety (90) days, which includes legal costs and fees
anticipated to be incurred as reasonably determined by the City. Developer shall make deposits
required under this section within twenty (20) days of Developer's receipt of the City's written
request therefor which shall include, without limitation, an estimated budget for then use of such
funds. At no point during the pendency of such claim or suit, shall the minimum balance of the
deposit fall below Thirty Thousand dollars ($30,000). If Developer fails to timely pay such funds,
the City may, upon twenty (20) days prior written notice, abandon the action without liability to
01247.0009/562826.18 4
Developer and may recover from Developer any attorneys' fees and other costs for which the City
may be liable as a result of abandonment of the action. It is expressly agreed that the City shall
have the right to utilize the City Attorney's office or use other legal counsel of its choosing.
Developer's obligation to pay the defense costs of the City shall extend until final judgment,
including any appeals. City agrees to fully cooperate with Developer in the defense of any matter in
which Developer is defending and/or holding the City harmless. The City may make all reasonable
decisions with respect to its representation in any legal proceeding, including its inherent right to
abandon or to settle any litigation brought against it in its sole and absolute discretion, and City's
reasonable decision to settle or abandon a matter, including but not limited to following an adverse
judgment or failure to appeal, shall not cause a waiver of the City's indemnification rights. Any
decision by the City to settle litigation shall not, without the written consent of Developer, bind
Developer. City shall discuss litigation strategy with Developer in good faith, but shall retain
absolute discretion to make strategy decisions.
b. Notwithstanding Section 10.2(a), upon City's notification to Developer
of the pendency of a claim or suit as provided in Section 10.2(a), Developer may instead terminate
such related litigation by providing five (5) days' advance written notice to City, provided that any
such termination shall not relieve Developer of its obligation to pay for all City Costs incurred prior
to the termination date. Further, City shall not be obligated to litigate such action and, in its sole
discretion, may settle or abandon the action.
(i) In the event that City elects to abandon the action, the City
may recover from Developer any costs for which City may be liable as a result of the abandonment
of the action, including but not limited to any City liability for plaintiffs attomeys'fees and costs.
(ii) In the event that City elects to settle the action, provided
Developer is not in breach of this Agreement or the PSA, and Developer has fully cooperated with
City in such action, such settlement shall be subject to Developer's prior written approval. Further,
the City may recover from Developer any costs for which City may be liable as a result of the
settlement of the action BUT ONLY AS APPROVED BY DEVELOPER, including but not limited to
any City liability for plaintiffs reasonable attorneys' fees and costs. Developer's approvals required
herein shall not be unreasonably withheld.
(iii) In the event that City elects to settle the action and Developer
either(1) is in breach of this Agreement or the PSA or (2) has not fully cooperated with City in such
action, any such settlement shall not be subject to any approvals of the Developer. Further, City
may recover from Developer any costs for which City may be liable as a result of settlement of the
action, including but not limited to any City liability for plaintiff's attorneys' fees and costs, and such
costs and City's recovery thereof shall not be subject to any approvals of the Developer.
10.3 Exception. The obligations of Developer under this Section shall not apply
to any claims, actions, or proceedings arising through the sole negligence or willful misconduct of
the City, its members, officers, employees, attorneys or consultants.
10.4 Period of Indemnification. The obligations for indemnity under Section 10.2
shall begin upon the Effective Date and shall survive termination of this Agreement for a period of
five (5) years. If City and Developer enter into a development agreement that is approved by the
City Council ("Development Agreement"), the indemnity obligations in this Agreement may,
pursuant to express written agreement in that Development Agreement, be superseded by
Developer's indemnity obligations under the Development Agreement. Notwithstanding the
foregoing, City is not assuring Developer that it will enter into a Development Agreement.
01247.0009/562826.18 5
11. Assignment. Developer may not assign this Agreement to any other entity unless
agreed to in writing by City and upon proof of the financial viability of the successor entity to fulfill
the Agreement's obligations in the City's discretion. The foregoing notwithstanding Developer may
assign this Agreement concurrently with and on the same terms and to the same assignee as
permitted in the PSA and any such assignment of this Agreement shall include the Deposit or any
balance thereof
12. Relationship between the Parties. The Parties agree that this Agreement does not
operate to create the relationship of partnership, joint venture, or agency between City and
Developer. Nothing herein shall be deemed to make Developer an agent of City.
13. Qualification; Authority. Each individual executing this Agreement on behalf of
Developer which is an entity or City, represents, warrants and covenants to City that(a) such entity
is duly formed and authorized to do business in the state of its formation, (b) such person is duly
authorized to execute and deliver this Agreement on behalf of such entity in accordance with
authority granted under the organizational documents of such entity, and (c) such entity is bound
under the terms of this Agreement.
14. Notices. All notices, demands, invoices, and communications shall be in writing and
delivered to the following addresses or such other addresses as the Parties may designate by
written notice:
To City: City of Grand Terrace
22795 Barton Rd.
Grand Terrace, CA 92313
Attention: City Manager
With a Copy to: Aleshire &Wynder, LLP
18881 Von Karman Avenue, Suite 1700
Irvine, CA 92612
Attention: Adrian Guerra, City Attorney
To Developer: Greens Group, Inc.
9289 Research Drive
Irvine, CA 92618.
Attn: President
With a Copy to: Buckner, Robinson & Mirkovich
3146 Red Hill Avenue, Suite 200
Costa Mesa, CA 92626
Attention: William D. Buckner, Esq.
Depending upon the method of transmittal, notice shall be deemed received as follows: by
personal delivery, as of actual receipt; by overnight delivery, as of the day following deposit with a
national overnight carrier; and by U.S. Mail first class postage prepaid, as of 72 hours after deposit
in the U.S. Mail.
15. Cooperation; Further Acts. The Parties shall fully cooperate with one another, and
shall take any additional acts or sign any additional documents as may be necessary, appropriate,
or convenient to attain the purposes of this Agreement.
01247.0009/562826.18 6
16. Construction; References; Captions. It being agreed the Parties or their agents
have participated in the preparation of this Agreement, the language of this Agreement shall be
construed simply, according to its fair meaning, and not strictly for or against either Party. Unless
otherwise specified, any term referencing time, days, or period for performance shall be deemed
calendar days and not business days, provided, however that any deadline that falls on a weekend
or holiday shall be extended to the next City business day. All references to Developer include all
personnel, employees, agents, and contractors of Developer, except as otherwise specified in this
Agreement. All references to City include its elected officials, appointed boards and commissions,
officers, employees, agents, and volunteers. The captions of the various paragraphs are for
convenience and ease of reference only, and do not define, limit, augment, or describe the scope,
content, or intent of this Agreement.
17. Amendment; Modification. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing and signed by both Parties.
18. Waiver. No waiver of any default shall constitute a waiver of any other default or
breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or
service voluntarily given or performed by a Party shall give the other Party any contractual right by
custom, estoppel, or otherwise.
19. Binding Effect. Each and all of the covenants and conditions shall be binding on
and shall inure to the benefit of the Parties, and their successors, heirs, personal representatives,
or assigns. This section shall not be construed as an authorization for any Party to assign any right
or obligation.
20. No Third Party Beneficiaries. There are no intended third party beneficiaries of
any right or obligation assumed by the Parties.
21. Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal,
or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall
continue in full force and effect.
22. Consent to Jurisdiction and Venue. This Agreement shall be construed in
accordance with and governed by the laws of the State of California. Any legal action or
proceeding brought to interpret or enforce this Agreement, or which in any way arises out of the
Parties' activities undertaken pursuant to this Agreement, shall be filed and prosecuted in the
appropriate California State Court in the County of San Bernardino, California. Each Party waives
the benefit of any provision of state or federal law providing for a change of venue to any other
court or jurisdiction including, without limitation, a change of venue based on the fact that a
governmental entity is a party to the action or proceeding, or that a federal right or question is
involved or alleged to be involved in the action or proceeding. Without limiting the generality of the
foregoing waiver, Developer expressly waives any right to have venue transferred pursuant to
California Code of Civil Procedure section 394.
23. Time is of the Essence. Time is of the essence with respect to this Agreement.
24. Counterparts. This Agreement may be signed in counterparts, each of which shall
constitute an original and which collectively shall constitute one instrument.
26. Entire Agreement. This Agreement contains the entire agreement between City
and Developer and supersedes any prior oral or written statements or agreements between City
and Developer with respect to the subject matter of this Agreement.
01247.0009/562826.18 7
26. Attorneys' Fees. In the event of any litigation or other legal proceeding including,
but not limited to, arbitration or mediation between the parties arising from this Agreement, the
prevailing party will be entitled to recover, in addition to any other relief awarded or granted, its
reasonable costs and expenses (including reasonable attorney's fees) incurred in the proceeding.
[SIGNATURES ON FOLLOWING PAGE]
01247.0009/562826.18 8
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day
and year first above written.
DEVELOPER: CITY:
GREEN GROUP, INC., a California CITY OF GRAND TERRACE, a California municipal
corpor do corporation
By:L �� By: /1''1 i
t Name. KacLakia G. Har Idouffey, CP Mandger
Chief Financial Officer ATTE
By:
De ra Tt ma*Citvy, rk
APPROVED AS TO FORM:
ALESHIRE &WYNDER, LLP
By: a/,-- Z /-/ ,
Adrian R. Guerra, City Attorney
DEVELOPER SHALL PROVIDE CITY _WITH COPIES OF APPROPRIATE DOCUMENTS
EVIDENCING AUTHORITY OF SIGNATORIES TO EXECUTE AND BIND DEVELOPER.
DEVELOPER'S SIGNATURES SHALL BE DULY NOTARIZED, AND APPROPRIATE
ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS,
ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO
DEVELOPER'S BUSINESS ENTITY.
01247.0009/562826.18 9
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached,and not the truthfulness,accuracy or validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO I
On 2019 before me, �1(1 t� VC, personally appeared `nv'1pS`_k '�-kproved to me on
the bas of satisfactory evidence to be the person(s)whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the fore oing paragraph is
true and correct.
..":�• ' ERiK JOSEPH LE
WITNESS my hand an Mal seal. Notary Public-California
Q / z - Orange County
Comm139
Signature: Xc •" My Comm.Expires sion 9 2Jan87,2022
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
❑ TITLE OR TYPE OF DOCUMENT
TITLE(S) NUMBER OF PAGES
❑ DATE OF DOCUMENT
❑ SIGNER(S)OTHER THAN NAMED ABOVE
SIGNER IS REPRESENTING:
(NAME OF PERSON(S)OR ENTITY(IES))
01247.0009/562826.18
EXHIBIT "A"
SCHEDULE OF EXISTING REIMBURSABLE COSTS
and
ESTIMATE OF FUTURE CITY COSTS AS OF THE EFFECTIVE DATE
(attached)
01247.0009/562826.18
A provided in Section 3, the amounts set forth in this Exhibit A are not binding and are only
provided for informational purposes only.
Estimate of Future Citv Consultants Costs
P�eh mina ry Review{including Enriiironmental Rev�ev✓) &Ent�ttements a
el-
Task Cost
Estimate
Task 1: CEQA Review and Strategy Proposal
Task 1.1 Trip Generation Assessment $6,200
Task 1.2 Initial Study $21,000
Task 1.3 Technical Studies
Task 1.3A Air Quality $3,500
Task 1.313 Greenhouse Gas Emissions $2,200
Task 1.3C Noise $3,800
Task 1.3D Energy $1,600
Task 2: Design Review $1,600
Task 3: Entitlements Requirements $15,000
Other Direct Costs (e.g., printing) $350
TOTAL $56,880
Estimate of Future Citv Staff Costs
City's staff costs are estimated to be 15% of the costs for City consultants.
01247.0009/562826.18 2