HomeMy WebLinkAbout10 TUSTIN LEGACY (34) 09-15-03AGENDA REPORT
10
Agenda Item
Reviewed:
City Manager . ..
Finance Director ~
MEETING DATE:
SEPTEMBER 15, 2003
TO:
FROM:
SUBJECT:
WILLIAM HUSTON, CITY MANAGER
REDEVELOPMENT AGENCY
TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT
(DDA 03-03) FOR PARCEL 34
SUMMARY
Approval is requested of a Disposition and Development Agreement (DDA 03-03)
between the City of Tustin and WL Homes LLC (Developer) for the sale and
development of Parcel 34 at Tustin Legacy (Project).
RECOMMENDATION
That the City Council:
Adopt Resolution No. 03-103 finding that (a) an Initial Study evaluated the
Project (DDA 03-03) and all pending development entitlement applications in
light of the MCAS Tustin Final Joint Program EIS/EIR (MCAS Tustin FEIS/EIR)
certified by the City on January 16, 2001 and the adopted Mitigation
Monitoring Report Program for the MCAS Tustin FEIS/EIR to determine
whether, in accordance with CEQA requirements, any additional
environmental documentation is required in connection with approval of the
DDA 01-03 and other pending entitlement applications; (b) based on findings
in the Initial Study (i) the environmental effects of the Project are within the
scope of the MCAS Tustin FEIS/EIR and were fully examined in the MCAS
Tustin FEIS/EIR, (ii) no substantial changes are proposed in the Project or
have occurred with respect to circumstances under which the Project is being
undertaken since certification of the MCAS Tustin FEIS/EIR, (iii) no new
information has become available since the certification of the FEIS/EIR, and
(iv) pursuant to Public Resources Code Section 21116 and the requirements
of CEQA regulations promulgated with respect thereto including Title 14
California Code of Regulations Section 15168 (c) no additional environmental
analysis, action or document is required by the CEQA and (c) all applicable
mitigation measures described in the adopted Mitigation Monitoring Report for
the MCAS Tustin FEIS/EIR are incorporated into this Project or will be
conditions of approval of pending entitlements for the Project.
Subject to non-substantial modifications as may be determined necessary by
the City's Special Counsel or the City Manager prior to execution, approve and
authorize the City Manager, or designee, to execute DDA 03-03 between the
City of Tustin and WL Homes LLC for Parcel 34 and to carry out all actions
necessary to implement the DDA including execution of all related documents
including any necessary lender subordination agreement and, upon
satisfaction of all conditions and obligations of Developer thereto, to transfer
Parcel 34 to the Developer.
Authorize the waiver of parkland dedication fees for the 40 affordable housing
units in the Project; and the provision of a minimum of one acre of privately
owned parkland on Parcel 34 accessible to the public and maintained by
future residents of the Project with the fair market value of the one acre (to be
based on the City's recent appraisal of the site) to be a credit against the
balance of required parkland dedication fees for the Project, and the
requirement that a balance of $425, 225 in parkland dedication fees be paid to
the City of Tustin pursuant to Sections 9331d(1)(c) and d(2)(b) of the Tustin
City Code and in compliance with all provisions of DDA 03-03 and conditions
of all discretionary entitlements for the Project (concept plan, design review
and tentative tract map).
FISCAL IMPACT
Developer will pay the City $30,600,000 for Parcel 34 (the Base Purchase Price), plus a
future subsequent participation in gross revenues when units in the Development are
sold in the amount of 1% of the total sale price of each unit.
As the Council is aware, payment to the SAUSD of $60 million dollars was secured by a
$38 million Revenue Anticipation Note and a $22 million dollar revenue anticipation note
issued by the Tustin Public Financing Authority (Authority). In addition to interest
payments, the City's and Authority's obligation for repayment of the notes is timed to
correspond to receipt of land sale proceeds from initial Tustin Legacy property sales.
Since there may be a short delay in the Developer's original estimated escrow closing
on Parcel 34 (September 30, 2003) the Developer shall reimburse the City its required
interest payments on the remaining revenue anticipation note at escrow closing in the
amount of $4,000 per day after September 30 to the actual escrow closing date to
include the minimum 30 day notice that the City must provide to our lender in paying off
any revenue note obligation.
Page 3
BACKGROUND AND DISCUSSION
In accordance with the Defense Base Closure and Realignment Act of 1990, as
amended, the Federal Government after its decision to close MCAS Tustin designated
the City of Tustin in 1992 as the Lead Agency or Local Redevelopment Authority for
preparation of a reuse plan for MCAS Tustin. The MCAS Tustin Reuse Plan was
adopted by the City Council on October 17, 1996 and amended in September, 1998.
On July 2, 2002, MCAS Tustin was closed.
In May 2002 the Navy approved an Economic Development Conveyance of property at
MCAS Tustin and agreed to convey a large portion of the former MCAS Tustin to the
City (Navy Conveyance Agreement). A total of 977 acres was conveyed to the City by
Federal Quitclaim Deed on May 13, 2002 with approximately 176 acres of property
leased to the City to be subsequently conveyed once it is determined suitable for
transfer. Since the original conveyance, approximately 23.5 acres of previously leased
land has been now conveyed to the City. The City has also conveyed 25.3 acres of land
for private development (Parcel 33) and 15 acres for public use (Rancho Santiago
Community College District).
On February 3, 2003 the City adopted the MCAS Tustin Specific Plan (the "Specific
Plan") by Ordinance No. 1257 setting forth the zoning and entitlement framework for
future development of Tustin Legacy. The Specific Plan conforms to and implements
the Reuse Plan and the General Plan.
In order to effectuate development of Tustin Legacy through the sale and development
of property in accordance with applicable federal and local requirements, the City
Council selected of WL Homes, LLC, a Delaware limited liability company, also known
as John Laing Homes as the developer of Parcel 34, also authorizing staff to negotiate
a Disposition and Development Agreement with the Developer for development of the
parcel.
DISCUSSION
The purpose of the DDA is to effectuate the Reuse Plan and Specific Plan in
accordance with the terms and conditions of the Navy Conveyance Agreement and
Federal Quitclaim Deeds, through the disposition and development of parcel 34. The
Agreement provides for the Developer's purchase from the City, on an as-is basis,
Page 4
March 3, 2003 Agenda Report
Tustin Legacy DDA 01-03
of an approximate 36.84 acre parcel described in the Specific Plan as disposition
Parcel 34.
The DDA further provides for the development of the site by the Developer to consist of
demolition of the existing 278 units of military housing on the Project site and removal of
existing utilities and construction of both Vertical and Horizontal Improvements as
shown on the Preliminary Plan, as well as a certain portion of the Tustin Legacy
Backbone Infrastructure. Vertical Improvements consist of 189 residential units to be
offered for ownership tenure only in two product to include traditional single family
detached homes (138 homes or 73% of the units) and single family detached patio
homes (51 or 27% of the units). Improvements will also include an accompanying set
of amenities, all further identified in the DDA's Scope of Development. Horizontal
Improvements will be constructed to include public and private infrastructure
improvements such as roadways and utilities.
The DDA will require the Developer to secure all required land use entitlements from the
Tustin Planning Commission and City Council within the times established in the DDA.
Vertical and Horizontal Improvements as well as certain Tustin Legacy Backbone
Infrastructure Program Improvements will be constructed in compliance with all
provisions of the DDA and with all "Conditions of Approval" stipulated by the Planning
Commission, City Council and other applicable governmental agencies with jurisdiction.
A concept plan, design review and tentative tract map approvals will be scheduled for
Planning Commission and City Council action as applicable in the future, and these
entitlements will be a condition of any escrow closing. The DDA requires the Developer
to fund all Project development costs including but not limited to, the acquisition of the
site, construction of on-site and off-site improvements and all public utility improvements
related to developing the site, as well as a portion of Tustin Legacy Backbone
Infrastructure. The DDA also provides for review of design plans at later stages of
design development to assure conformity with DDA requirements.
The following discussion describes in greater detail a number of key features of the
DDA.
Preliminary Design Concept and Housing Products
The site is designed with a main entrance from Edinger Avenue and a secondary
entrance from Moffet Avenue which terminates at a park site at the center of the site.
Two clusters of the single family patio homes would occur to the north and south of the
park site with the traditional single family homes on the remainder of the site. Single
family patio homes would be two stories, with three to four bedrooms and range in size
from 1,556 square feet to 2,327 square feet. The patio homes would be designed in
three different architectural styles (Craftsman, Victorian and Spanish). The traditional
single family homes include six different plans ranging in size from 2,549 to 3,387
square feet designed in Craftsman, Monterey, Cottage, Spanish and Farmhouse
architectural styles. Both the traditional single family homes and the single family patio
homes will have two car garages and accommodate all required guest parking.
In initial design stages of the project, Councilman Bone raised concerns and requested
that the Developer explore the provisions of single story single family product on the site
largely to respond to those senior households downsizing that would be interested in
purchase of units at Tustin Legacy. The developer's response was to provide all Plan 1
and 4 units (a total of 46 units or 24% of the total unit count in the project) with ground
level master bedrooms) Given the constraints associated with the City's need to retire
the remaining revenue anticipation notes, the proposed purchase price for the property
that has been agreed to by the Developer is based on the project as proposed. The
purchase price of $30.6 million dollars will permit payment of the remaining $22 million
bonds as well as the repayment of the general fund of all interest to date that the City
has incurred on the revenue anticipation notes, a $6 million dollar loan from the general
fund used to pay off the $38 Million dollar revenue anticipation bonds in June 2003, as
well as total general fund cash borrowed and expended on the Tustin Legacy project
since May 2002 for administrative and operational expenses. Modification of the design
at this stage in the process, will not only result in significant expenses to the developer
but would require that they significantly reduce their agreed upon purchase price for the
property by over $1,020,985 since the square footage of units that could be located on
proposed lots would be significantly smaller than those proposed and significantly
impact land value.
Affordable Housing
To comply with affordability requirements of the Specific Plan, the developer proposes
to accommodate 40 affordable units in the Project, including 11 very Iow-income units,
10 Iow-income units and 19 moderate-income units. Each of the affordable housing
units will have Deeds of Trust and Affordable Housing Covenants to be recorded
against the units requiring the units to remain affordable at the specific qualifying
affordability category they are initially sold at for a period of 45 years as required by
California Redevelopment law. If the original purchaser of an affordable unit decides to
sell before the 45 years has elapsed, the unit must be sold to a household which meets
the appropriate income level, respectively. In addition, the DDA requires the developer
to meet the obligations of the Specific Plan and Homeless Assistance Agreement with
the Salvation Army. Approximately $1.8 million dollars has been earmarked in the
developer's pro forma for an off-site accommodation of the needs of the Salvation Army
and there are alternatives in the DDA available to the developer to meet these
obligations. The Developer would post into escrow either a cash contribution or letter of
credit to meet their obligation and will be restricted from demolishing certain units on the
existing Developer Parcel until an agreement is subsequently reached between the
Salvation Army, the City and Developer.
Parks, Open Space and Community Amenities
The Preliminary Plan includes an approximate 1.74 acre recreational area. The private
park would include a community swim center and a community clubhouse accessible
only to residents with a minimum one acre portion of the park to be accessible to the
general public and to include tot lots and a smaller multi-purpose park play area.
Pursuant to the MCAS Tustin Specific Plan, all developments are required to pay a
parkland dedication in-lieu of fee subject to provisions of the City's parkland dedication
ordinance which permits a credit for private recreational open space provided in a
development and any City Council approved waiver of fees for provision of affordable
housing units or modification of parkland requirements as may be approved by the City
Council with approval of a specific DDA. Accordingly, provisions of the DDA propose a
reduction in the developer's fee obligation for the Project based on the 40 restricted
affordable housing units as well as a credit for the 1 acre portion of the private park site
which will be accessible to the public. This will necessitate the Developer's recordation
of a perpetual access and parkland easement to ensure continued access for the public.
After deducting the affordable housing and parkland credit, The developer will be
required to provide a parkland fee in the amount of $425, 225.
Developer will also design and construct pedestrian paseos to adjacent roadways
abutting the project as well as and connections to a future proposed regional trail within
the future Peters Canyon Channel right-of-way. A perpetual easement will provide for
pedestrian and bicycle access to the public across the paseos and also require
maintenance and repair of the paseos by the development.
Infrastructure
The DDA requires the developer to complete all off-site and on-site infrastructure
improvements necessary for development of the site as well as funding of the Project's
Fair Share of the Tustin Legacy backbone infrastructure payment. The Project
contribution to the Tustin Legacy Backbone Infrastructure Program is currently
estimated at $4,773,438. In addition, the developer will be responsible for design and
construction of certain infrastructure constituting a portion of the Tustin Legacy
Backbone Infrastructure. To the extent that developer's infrastructure expenses for
Tustin Legacy Backbone Infrastructure exceed their determined project fair share
contribution as required by the DDA, the City would reimburse the developer in the
future pursuant to a subsequent reimbursement agreement. It is the intention that the
reimbursement of any costs in excess of the developer's fair share contribution would
be from either future land sale proceeds from the City's sale of Reuse Plan Disposal
Parcels 10 and 11 or from bond proceeds from a future Community Facilities District or
assessment district that might include Tustin Legacy, to the extent such expenses are
legally eligible. The DDA, however, makes it clear that the developer's Fair Share
Contribution towards the Tustin Legacy Backbone Infrastructure and any credit for
design and construction of portions of this infrastructure cannot be impacted or affected
by the failure of the City to confirm a future Community Facilities District or other
assessment district or to issue or sell bonds.
Purchase Price
The DDA provides that the City receive $30,600,00 for parcel 34 and future subsequent
profit participation when each unit is sold equal to 1% of the total sale price of each unit.
The sales price of Parcel 34 is less per acre than the sale on parcel 33 as result of the
lower density proposed on the site and the on-site demolition activities and homeless
accommodation necessary for the project.
General Provisions
The DDA includes other provisions which are typical to such agreements. These
include, but are not limited to, a schedule of performance, restrictions on the ability of
the Developer to transfer the DDA, a right of reversion in favor of the City in the event of
an uncured default by Developer, use restrictions and non-discrimination provisions,
maintenance covenants, requirements for insurance including environmental insurance,
and indemnification, including environmental indemnification in favor of the City and
default provisions and remedies.
Given the desire to move this project forward, there may be minor corrections to the
DDA necessary prior to execution as determined by the City's special counsel based on
any issues that may arise with any lender for the Developer, including any necessary
subordination agreement.
Environmental Determination
Pursuant to the National Environmental Policy Act (NEPA) as implemented by the
Council on Environmental Quality Regulations (40 CFR parts 1600-1608) and the
California Environmental Quality Act (CEQA) (Calif. Public Resources Code Sec. et.
Seq. 21000) and the State CEQA Guidelines (Title 14 Cal. Code of Regulations, Section
16000 et. Seq.), the City of Tustin and Department of Navy completed a Final Joint
Program Environmental Impact Statement/Environmental Impact Report for the
Disposal and Reuse of the Marine Corps Air Station (MCAS) Tustin (the MCAS Tustin
FEIS/EIR). The MCAS Tustin FEIS/EIR was certified as adequate under CEQA by the
Tustin City Council on January 16, 2001. Based on the FEIS/EIR, the City Council
adopted a General Plan Amendment and the MCAS Tustin Specific Plan.
An Initial Study has been prepared for DDA 03-03 and pending entitlement applications
for the Project. Based upon review of the project and the FEIS/EIR, it has been
determined that environmental issues related to the Project have previously been
addressed and evaluated in the MCAS Tustin FEIS/EIR. No additional environmental
analysis or action is required. Mitigation measures identified in the MCAS Tustin
FEIS/EIR, as applicable, are included in the DDA or will be conditions of approval of
pending entitlements for the Project; therefore, staff recommends that the City Council
find that: (i) the environmental effects of the Project are within the scope of the MCAS
Tustin FEIS/EIR and were fully examined in the MCAS Tustin FIES/EIR, (ii) no
substantial changes are proposed in the Project or have occurred with respect to
circumstances under which the Project is being undertaken since certification of the
MCAS Tustin FEIS/EIR, (iii) no new information has become available since that the
certification of the MCAS Tustin FEIS/EIR, and (iv) pursuant to Public Resources Code
Section 21116 and the requirements of CEQA regulations promulgated with respect
thereto including Title 14 California Code of Regulations Section 15168(c), no additional
environmental analysis, action or document is required and no new mitigation
measures would be required. All applicable mitigation measures described in the
adopted Mitigation Monitoring Report for the MCAS Tustin FEIS/EIR are incorporated
into this Project or will be conditions of approval of pending entitlements for the Project.
~,hristine Sh]'ngl~ton //~-
Assistant City Manager
Attachments:
Resolution No. 03-103
DDA 03-03
Note: Due to the size of the DDA attachment, only a limited distribution was made.
Copies are available for review in the Office of the City Clerk.
RESOLUTION NO.03-103
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, FINDING THAT PURSUANT TO PUBLIC RESOURCES
CODE SECTION 2116 AND SECTION 15168(c) OF STATE CEQA
GUIDELINES THE PROJECT IS WITHN THE SCOPE OF THE FINAL
JOINT PROGRAM MCAS ENVIRONMENTAL IMPACT
STATEMENT/ENVIRONMENTAL IMPACT REPORT (MCAS TUSTIN
FEIS/EIR) AND NO NEW ENVIRONMENTAL DOCUMENT IS
REQUIRED; APPLICABLE MITIGATION MEASURES HAVE BEEN
INCORPORATED INTO THE PROJECT OR WILL BE CONDITIONS OF
APPROVAL ON PENDING ENTITLEMENT APPLICATIONS
The City Council of the City of 'Dustin hereby finds, determines and orders:
A. That Disposition and Development Agreement (DDA) 03-03 and the respective
development entitlement applications and plans (Concept Plan 03-002, Design Review
03-018, Conditional Use Permit 03-016, and Tentative Tract Map No. 16507) are
considered collectively a "Project" pursuant to the terms of the California Environmental
Quality Act; and
B. That The MCAS Tustin Final Program EIS/EIR previously certified on January 16,
2001 was considered through an Initial Study for this Project. The City Council hereby
finds: that this project is within the scope of the previously approved MCAS Tustin
FEIS/EIR based on an Initial Study as well as the MCAS Tustin Specific Plan previously
approved by the City Council on February 3, 2003 with adoption of Ordinance No. 1257;
the effects of the project relating to all environmental impact issues were examined in
the MCAS FEIS/EIR. 'Dhe applicable mitigation measures developed in the MCAS
Tustin FEIS/EIR are incorporated into DDA 03-03 or will be conditions of entitlement
approvals (Concept Plan 03-002, Design Review 03-018, Conditional Use Permit 03-
016 and Tentative Tract Map 16507).
C. That the environmental effects of the Project are within the scope of the MCAS
Tustin FEIS/EIR and were fully examined in the MCAS Tustin FEIS/EIR; no substantial
changes are proposed in the Project or have occurred with respect to circumstances
under which the Project is being undertaken since certification of the MCAS Tustin
FEIS/EIR; no new information has become available since that the certification of the
MCAS Tustin FEIS/EIR, and pursuant to Public Resources Code Section 2116, and
the requirements of CEQA regulations promulgated with respect thereto including Title
Resolution No. 03-103
Page 2
14 California Code of Regulations Sections 15162 and 15168(c), no additional
environmental analysis, action or document is required by the CEQA.
PASSED AND ADOPTED by the City Council of the City of Tustin, at a regular meeting
on the 18th day of August, 2003.
Tracy Wills Worley, Mayor
Pamela Stoker
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
SS
I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is fine; that the above and foregoing Resolution No.03-103 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 18th
day of August 2003, by the following vote:
Pamela Stoker
City Clerk
DISPOSITION AND DEVELOPMENT AGREEMENT
PROVIDED UNDER SEPARATE COVER
(AVAILABLE FOR PUBLIC REVIEW AT THE TUSTIN BRANCH LIBRARY AND THE
TUSTIN CITY HALL, CITY CLERK'S OFFICE, 300 CENTENNIAL WAY, TUSTIN, CA,
AND AVAILABLE FOR PURCHASE AT THE CITY CLERK'S OFFICE.)
TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR PARCEL 34
by and between
CITY OF TUSTIN
and
WL HOMES LLC, A DELAWARE LIMITED LIABILITY COMPANY
DATED: September ., 2003
[AEF:ablDOCS2_90960_7/091003/4182.004]
TABLE OF CONTENTS
Page
ATTACHMENT NO. 1
ATTACHMENT NO. 2
ATTACHMENT NO. 3
ATTACHMENT NO. 4
ATTACHMENT NO. 5
ATTACHMENT NO. 6A
ATTACHMENT NO. 6B
ATTACHMENT NO. 7
ATTACHMENT NO. 8
ATTACHMENT NO. 9
ATTACHMENT NO. 10
ATTACHMENT NO. 11
ATTACHMENT NO. 12
ATTACHMENT NO. 13
ATTACHMENT NO. 14
ATTACHMENT NO. 15
ATTACHMENT NO. 16
ATTACHMENT NO. 17
ATTACHMENT NO. 18
ATTACHMENT NO. 19
ATTACHMENT NO. 20
LIST OF ATTACHMENTS
LEGAL DESCRIPTION OF PARCEL I-B-1
GLOSSARY OF DEFINED TERMS
QUITCLAIM DEED
SURVEY
CITY TITLE POLICY
SUBSEQUENT PARTICIPATION TERMS
SUBSEQUENT PARTICIPATION DEED OF
TRUST
SCHEDULE OF PERFORMANCE
SCOPE OF DEVELOPMENT
PRELIMINARY PLANS (INCLUDING
AFFORDABLE HOUSING UNITS)
INDEX OF HAZARDOUS MATERIALS
REPORTS
MEMORANDUM OF DDA
BILL OF SALE
AFFORDABLE HOUSING NOTE
AFFORDABLE HOUSING COVENANTS
AFFORDABLE HOUSING TRUST DEED
LEASES AND CONTRACTS
AFFORDABLE HOUSING UNIT PHASING
PLAN
FORM OF CERTIFICATE OF
COMPLIANCE
FORM OF ASSIGNMENT AND
ASSUMPTION AGREEMENT
SUBORDINATION
[AEF:ab/IDOCS2_90960_7/090903/4182.004] -ii-
TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT
FOR PARCEL 34
This TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT FOR
PARCEL 34 (the "Agreement") is entered into as of September ,2003 (the "Effective
Date") by and between the CITY OF TUSTIN (as more fully defined in Section 1.4.1, "City")
and WL HOMES LLC, a Delaware limited liability company (as more fully defined in
Section 1.4.2, the "Developer"). The City and the Developer are sometimes referred to in this
Agreement individually as a "Party" and collectively as the "Parties."
The Parties agree as follows:
1. Subject and Puroose of A~reement~ Parties~ Applicable Requiremeota,
1.1 Backeround Regarding MCAS Tustin.
1.1.1 Pursuant to the Defense Base Closure and Realignment Act of 1990,
(Part A of Title XXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note), as amended (the
"Base Closure Law") the Federal Government determined to close the Marine Corps Air
Station-Tustin ("MCAS Tustin") located substantially in the City of Tustin, California. In 1992,
the City was designated as the Lead Agency or Local Redevelopment Authority for preparation
of a reuse plan for MCAS Tustin in order to facilitate the closure ofMCAS Tustin and its reuse
in furtherance of the economic development of the City and surrounding region. The MCAS
Tustin Reuse Plan developed in accordance with this procedure was adopted by the City Council
of the City of Tustin (the "City Council") on October 17, 1996 and amended in September, 1998
(the "Reuse Plan").
1.1.2 A Final Joint Environmental Impact Statement/Environmental Impact
Report for the Disposal and Reuse ofMCAS Tustin (the "Final EIS/EIR") and Mitigation
Monitoring and Reporting Program for the Final EIS/EIR were adopted by the City on January
16, 2001. In March 2001, a Record of Decision was issued by the Department of the Navy
("Navy") approving the Final EIS/EIR and the Reuse Plan.
1.1.3 In May 2002, the Navy approved an Economic Development Conveyance
of Property at MCAS Tustin and agreed to convey 1153 acres ofMCAS Tustin to the City. On
May 14, 2002, a total of 977 acres, including Parcel I-B-1 which is the subject of this
Agreement, was conveyed by the Navy to the City by Federal Deed, in accordance with the
provisions of the Conveyance Agreement. Additional acreage is currently under ground lease by
the City from the Navy.
1.1.4 The portion of MCAS Tustin located within the City of Tustin is referred
to in this Agreement as "Tustin Legacy." "Parcel I-B-l", fomdng a portion of Tustin Legacy,
consists of that certain property of 36.84 acres, more or less, located in the City, County of
Orange, California, described in the Reuse Plan and Specific Plan as "disposition parcel 34" or
"Parcel I-B-l", which property is legally described on Attachment No. 1 land depicted on the
survey attached as Attachment No. 41.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] - 1 -
1.1.5 On February 3, 2003 the City approved and adopted the MCAS Tustin
Specific Plan (the "Specific Plan") by Ordinance No. 1257 setting forth the zoning and
entitlement framework for future development of Tusfin Legacy. The Specific Plan conforms to
and implements the Reuse Plan and the General Plan.
1.1.6 The City desires to effectuate development of Tustin Legacy, including
Parcel I-B-1 through the sale and development of such property in accordance with applicable
federal and local requirements. Tustin Legacy shall be developed in accordance with
implementing redevelopment plans, the Reuse Plan, the General Plan, and the Specific Plan and
shall include the Project.
1.1.7 Developer was the selected respondent with respect to that certain Request
for Proposals, Medium-High Density Residential, Planning Area 20 issued by the City in
November, 2001 with respect to the adjacent Parcel 33, resulting in the sale of Parcel 33 to the
Developer. The City Council has determined that public necessity required an expedient
selection process with respect to sale and development of Parcel 34 and required a sole sourcing
of sale of Parcel 34 to the Developer based upon the Developer's knowledge of the adjoining
property and of the City's process for disposition and development ofMCAS Tustin.
1.2 Description of Parcels. As of the Effective Date, Parcel I-B-1 is owned by the City
in fee. Parcel I-B-1 shall be transferred by the City to the Developer upon satisfaction of the
requirements set forth in this Agreement for such transfer. Following Close of Escrow, the
Developer shall, in connection with Entitlements required to develop the Project, offer to
dedicate certain portions of Parcel I-B-1 to the City (the "City Dedication Parcels"). The City
Dedication Parcels shall, following dedication and acceptance by the City, be owned in fee by
the City and shall be utilized, among other things, for construction of public roadway and right of
way improvements and related utilities, all of which shall be constructed by the Developer as
further set forth in this Agreement. The "Developer Parcel" shall mean, as of the Close of
Escrow, Parcel I-B-l, provided, however, that upon the dedication to and acceptance by the City
of the City Dedication Parcels, the term "Developer Parcel" shall exclude the City Dedication
Parcels.
1.3 Purpose of Agreement.
1.3.1 The purpose of this Agreement is (a) to effectuate the Reuse Plan and the
Specific Plan, in accordance with the terms and conditions set forth therein and in the
Conveyance Agreement and the Federal Deed, through disposition and development of portions
of Tustin Legacy as further described in this Agreement and (b) to provide for disposition by the
City to the Developer of the Developer Parcel and improvements located on and adjacent to the
Developer Parcel, for the maintenance of such land and improvements by the Developer and the
construction by the Developer on the Developer Parcel of the Project, including certain
infrastructure and other improvements as more particularly described in this Agreement.
1.3.2 This Agreement further provides for development by the Developer on the
Developer Parcel and adjacent to the Developer Parcel, including on the City Dedication Parcels
and other right-of-way parcels owned by the City, of the "Project" to consist of construction and
installation of the following Improvements: (a) the Horizontal Improvements to include public
[AEF:ab/IDOCS2_90960_7/090903/4182.004] -2-
and private infrastructure improvements such as roadways and utilities, (b) the Vertical
Improvements consisting of a residential ownership project and containing on the Developer
Parcel up to 189 Owner-Occupied residential dwelling Units for sale to Owner-Occupiers in two
product types, single family detached and patio homes; and (c) certain Tustin Legacy Backbone
Infrastructure Program Improvements. The Improvements shall include a complete
accompanying set of amenities, all as further depicted on the Scope of Development attached
hereto as Attachment No. 8.
1.3.3 The disposition of the Developer Parcel to the Developer, the development
and Completion of construction of the Project pursuant to this Agreement, and the fulfillment
generally of this Agreement, are in the vital and best interests of the citizens of the City and the
health, safety, morals, and welfare of its residents, and are in accord with the public purposes and
provisions of applicable federal, state, and local laws and requirements.
1.4 Parties to the Agreement.
1.4.1 City.
The City is a municipal corporation of the State of California. The City
has been recognized as the Local Redevelopment Authority by the Office of the Secretary of
Defense for the former Marine Corps Air Station, Tustin, for purposes of the Base Closure Law.
The term "City" as used in this Agreement shall mean the City of Tusfin and each assignee or
successor to the City's fights, powers and responsibilities. The City Council shall have the right,
in its sole and absolute discretion, to assign its rights and obligations to any agency or
instrumentality of the City, including the Tustin Community Redevelopment Agency or the
Tustin Public Financing Authority.
1.4.2 Developer.
The temt "Developer" as used in this Agreement shall solely mean WL
Homes LLC which is the Developer as of the Effective Date, or, following a Permitted Transfer,
shall mean any assignee of or successor to the Developer's rights, powers and responsibilities
permitted by this Agreement.
1.4.3 Relationship of City to Developer.
(a) It is hereby acknowledged that the relationship of the City to the Developer is
neither that of a partnership nor that of a joint venture and that the City shall not be deemed or
construed for any purpose to be the agent of the Developer, nor shall the Developer be deemed or
constmed to be the agent of the City.
(b) Notwithstanding any provision of this Agreement, the Developer is not, and
shall not be deemed to be, the agent of the City for any purpose, and shall not have the power or
the authority to speak on behalf of the City or to bind the City to any contractual or other
obligation. Until Close of Escrow has occurred, the Developer may characterize itself to third
parties as the prospective purchaser and developer of the Property. The Developer shall not at
any time hold itself out to the City or to any other third party as an agent of the City, and shall
not, by any act or omission, mislead any third party into believing, or allow any third party to
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continue in the mistaken belief, that the Developer is an agent of the City or has the power or
authority to bind the City to any contractual or other obligation.
1.5 Federal Requirements Applicable to Tustin Legacy.
1.5.1 The Parties acknowledge and agree that this Agreement is entered into as
part of an Economic Development Conveyance of Tustin Legacy to the City pursuant to the Base
Closure Law, the Conveyance Agreement and the terms and conditions of the Federal Deed,
including the Environmental Restriction pursuant to Califomia Civil Code Section 1471
contained therein. Notwithstanding any provision of this Agreement to the contrary, this
Agreement is and shall be subject to the terms and conditions of the Conveyance Agreement and
the Federal Deed and the rights, obligations and remedies of the Federal Government thereunder,
and nothing contained in this Agreement shall be construed in a manner that is inconsistent with
the rights, obligations and remedies of the Federal Government thereunder.
1.5.2 Notwithstanding anything in this Agreement to the contrary, no provision
of this Agreement shall modify or in any way change the terms of the Conveyance Agreement or
the Federal Deed, and in the event of conflict between this Agreement and the terms of the
Conveyance Agreement and Federal Deed, the terms of the Conveyance Agreement and the
Federal Deed shall prevail. If any provision of this Agreement in any way limits the Federal
Government in its administration of the Base Closure Law, this Agreement shall be deemed
amended so as to comply with the Conveyance Agreement, the Federal Deed and the Base
Closure Law.
1.6 Local Requirements Applicable to Tustin Legacy.
1.6.1 This Agreement is subject to all Governmental Regulations, including the
General Plan, the Specific Plan, the Reuse Plan and any redevelopment plan hereinafter enacted
with respect to the Project, each of which is incorporated in this Agreement by reference and
made a part hereof as though fully set forth in this Agreement.
1.6.2 The Developer acknowledges that the City: (a) concurrently with the
disposition of the Property, shall be negotiating disposition to various developers of other ~
portions of Tustin Legacy, and (b) through approval of the Specific Plan and through preparation
of additional design and development guidelines, is seeking to coordinate design and
development of the entirety of Tustin Legacy. The Developer agrees to comply with the design
and development guidelines set forth in the Specific Plan and to use reasonable efforts to
coordinate the development of the Project, within the parameters of this Agreement, including
the Schedule of Performance, with the additional design and development guidelines prepared by
the City in connection with development of the remainder of Tustin Legacy, provided such
design and development guidelines are developed within a time frame that permits coordination
with the design and development of the Improvements on the Developer Parcel.
1.7 Not a Development Agreement. This Agreement is not a Development Agreement
as provided in Government Code Section 65864 and, as further set forth in Section 8.3.2, is not a
grant of any Entitlement, land use approval or vested right in favor of the Developer. The City
shall cooperate in good faith, within applicable legal constraints and consistent with applicable
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City policies, and take such actions as may be necessary or appropriate to effectuate and carry
out this Agreement in a timely and commercially reasonable manner.
1.8 Definitions; Attachments. Capitalized terms used herein, including in the
Attachments attached hereto, unless otherwise defined herein, shall have the respective meanings
specified in the Glossary of Defined Terms attached hereto as Attachment No. 2. Unless
otherwise indicated, references in this Agreement to sections, paragraphs, clauses, exhibits,
attachments and schedules are to the same contained in or attached to this Agreement and all
attachments and schedules referenced herein are incorporated herein by this reference as through
fully set forth in this Section.
2. Prohibition A~ainst Chance in Ownership~ Management and Control of Developer.
2.1 Importance of Developer Qualifications. The Developer represents and agrees that
its undertakings pursuant to this Agreement are for the purpose of development of the Project
and not for speculation in land holding. The Developer further recognizes that the qualifications
and identity of the Developer are of particular concern to the City and community in light of the
following:
(a) The importance of the development of the Project and Tustin Legacy to the
general welfare of the community;
(b) The fact that a change in ownership or control of the Developer or of its
members, or any other act or transaction involving or resulting a significant change in ownership
control of the Developer or the degree of control thereof as described in Sections 2.2 and 2.3, is
for practical purposes a transfer or disposition of the property then owned by the Developer.
(c) That it is because of the qualifications and identity of the Developer and its
key personnel that the City is entering into the Agreement with the Developer.
2.2 Transfer or Assignment.
2.2.1 Restrictions on Rights and Powers under Agreement For the reasons set
forth in Section 2.1, the Developer acknowledges and agrees that no voluntary or involuntary
successor in interest of the Developer shall acquire any rights or powers under this Agreement
except as set forth in this Section 2.2.
2.2.2 Restrictions on Transfer. The Developer represents and agrees for itself,
its members and all voluntary and involuntary successors-in-interest of itself and each member
of Developer, that the Developer shall not effect any total or partial Ownership Transfer of the
Developer Parcel or the Developer's interest in this Agreement, or any interest therein, whether
voluntary or inyoluntary, unless such Ownership Transfer (including, without limitation, any
Transfer of Control) is a Permitted Transfer. In order for an Ownership Transfer to be a
Permitted Transfer, the following conditions shall be met by Developer:
(a) where required, the prior written consent of the City is obtained, subject to the
standards for such consent set forth in Sections 2.2.4 and 2.2.5;
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(b) the Developer shall have provided to the City at least twenty (20) Business
Days prior to the date of any proposed Ownership Transfer other than the sale of an individual
Unit to an Owner-Occupier: (i) the name of the proposed Ownership Transferee, (ii) all of the
material proposed terms of the transfer, (iii) current audited financial statements of the proposed
Ownership Transferee, (iv) the names of all Persons who own, directly or indirectly, a five
percent (5%) or more interest in the proposed Ownership Transferee, (v) a statement describing
other real estate projects developed by, or sold by the proposed Ownership Transferee in
California over the preceding five (5) year period, and the dates of involvement by the proposed
Ownership Transferee with such projects and the success of the projects, which statement shall
by made under penalty of perjury by the manager, president or other person with appropriate
authority from the proposed Ownership Transferee to do so, (vi) all relevant instruments and
other legal documents proposed to effect any such transfer, and (vii) such other relevant
information that the City may reasonably request; and
(c) Ownership Transferee shall provide a written assumption of this Agreement in
accordance with Section 2.2.8, approved by the City.
2.2.3 Condition to Release of Developer from Obligations Under this
Agreement. In the absence of(a) an express written assumption by an Ownership Transferee of
the obligations of the Developer in accordance with Section 2.2.8, (b) specific prior written
agreement by the City to an Ownership Transfer requiring City consent, pursuant to which the
City expressly releases the Developer, or (c) execution by the City and recordation in the Official
Records of a Final Certificate of Compliance, no Ownership Transfer, including any Ownership
Transfer of any Unit to an Owner-Occupier, shall constitute a release of the Developer from any
of its obligations trader this Agreement. Notwithstanding the foregoing, in no event shall the
Developer be released from any obligation of Developer under this Agreement, including
pursuant to any indemnity or release, accruing during the period in which Developer was a Party
to this Agreement.
2.2.4 Prior to Recordation of Final Certificate of Compliance. Prior to
recordation ora Final Certificate of Compliance, except as set forth in Sections 2.2.2, 2.2.4(a),
2.2.4(b), 2.5 and 2.7.4, an Ownership Transfer shall require the approval of the City in its sole
discretion and the City may withhold its consent to any proposed Ownership Transfer for any
reason whatsoever; provided, however, that notwithstanding the foregoing or any other provision
of this Agreement:
(a) an Ownership Transfer to a Permitted Mortgagee or its wholly-owned
designee which acquires title by reason of a Foreclosure shall not require the consent of the City
or Developer or constitute a Potential Default or Material Default under this Agreement; and
(b) an Ownership Transfer to any Ownership Transferee other than a Permitted
Mortgagee or its wholly-owned designee which acquires title at a Foreclosure sale or from a
Permitted Mortgagee or wholly-owned designee following a Foreclosure, shall not require the
consent of the City or Developer or constitute a Potential Default or Material Default under this
Agreement, provided that the transferee: (i) has a reputation as a quality residential builder
licensed to do business in the State of Califomia; (b) has a reputation for fair and honest business
dealings with persons or entities generally; (c) has a sufficient net worth to undertake the
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obligations to be performed by Developer; (d) has successfully marketed and sold homes in the
State of California; and (e) assumes the obligations of Developer under this Agreement in
accordance with Section 2.2.8. As a condition precedent to such transfer attaining "Permitted
Transfer" status, Permitted Mortgagee or its wholly-owned designee or the proposed Ownership
Transferee shall provide to the City written notice of the intent to transfer and such information
as the City shall reasonably require to ascertain that the proposed Ownership Transferee meets
the aforesaid requirements. Such information shall be provided prior to the proposed Ownership
Transfer unless the Ownership Transfer occurs at a foreclosure sale, in which event it shall be
provided within ten calendar days following the Ownership Transfer.
2.2.5 Following Recordation of a Final Certificate of Compliance. Subsequent
to the recordation of a Final Certificate of Compliance, a proposed Ownership Transfer shall not
require the approval of the City.
2.2.6 Restriction on Permitted Transfers. Any purported Ownership Transfer
that does not comply with the provisions of this Section 2.2 shall not be a Permitted Transfer
under this Agreement.
2.2.7 Assignment of Rights to Permitted Mortgagee. Subject to the provisions
of this Section 2.2 and Section 2.7, nothing contained in this Agreement shall restrict the right of
Developer to conditionally or unconditionally assign its rights and obligations under this
Agreement to the holder of a Permitted Mortgage as required to obtain financing for
development of the Project on the Developer Parcel.
2.2.8 Written Assumption Agreement Required. Notwithstanding any other
provision of this Agreement, any Ownership Transfer, other than any Ownership Transfer of all
or any portion of the Developer Parcel pursuant to Foreclosure to a Permitted Mortgagee or its
wholly-owned designee, or a sale of an individual Unit to an Owner-Occupier, shall be null and
void unless the Ownership Transferee shall, at the time of transfer, expressly assume for itself
and its successors and assigns by instrument in writing satisfactory to the City in its sole
discretion and recorded in the Official Records, for the benefit of the City, all the obligations of
the Developer under this Agreement and agree to be subject to all the conditions and restrictions
to which the Developer is subject by reason of this Agreement. The obligation of an Ownership
Transferee to enter into an assumption agreement pursuant to this Section shall cease upon
recordation in the Official Records of the Final Certificate of Compliance for the Project.
2.2.9 Assignment to a Single Member Entity. Notwithstanding any other
provision of this Article 2, the Developer may freely assign its interests in the Developer Parcel
and in this Agreement to a single member entity, provided that the Developer is the sole member
of the entity and the single member entity complies with the provisions of Section 2.2.8. Such an
assignment shall not relieve the Developer of any of its obligations under this Agreement, and
the City shall look to the Developer to fully comply with this Agreement, and to cause the single
member entity to comply with this Agreement, as though there had not been an assignment.
2.3 Change in Management or Control.
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2.3.1 The Developer represents and warrants to the City that the Developer is a
Delaware limited liability company, that the Developer is manager-managed, and that the
Developer has fourteen (14) managers (the "Managers").
2.3.2 Transfer of Control.
(a) Notwithstanding any other provision of this Agreement, until execution by the
City of a Final Certificate of Compliance and recordation of such instrument in the Official
Records, there shall be no Transfer of Control of the Developer, without the prior written
approved of the City in its sole discretion, which approval may be withheld for any reason
whatsoever.
(b) A "Transfer of Control" shall include any one or more of the following
whether made directly or through an intermediary, and whether made in one transaction or
effected in more than one transaction and whether occurring as a single event or a series of
events which result, on a cumulative basis, in (1) if thc Developer is a limited liability company,
a change in forty-nine percent (49%) or more of thc managing members or the interests of the
members thereof in Developer or which reduces or adverse impacts the managerial powers of
such percentage of managing members or members; (2) if thc Developer is a corporation, a
change in forty-nine pcrecnt (49%) or more of the directors of the Developer or of control of the
voting shares of the Developer which reduces or adverse impacts thc managerial powers of such
percentage of directors; (3) if thc Developer is a partnership, a change in forty-nine percent
(49%) or more of thc general partners of the Developer or a change in control of thc general
partnership interests of the Developer which reduces or adverse impacts the managerial powers
of such percentage of general partners; (4) if the Developer is other than a limited liability
company, a corporation or a parmership, any direct or indirect change in actual control or
ownership of the beneficial interests of thc Developer; (5) a Change in Ownership, directly or
indirectly, of forty-nine percent (49%) or more in the management of any entity or entities that
have a controlling interest in Developer (the "Controlling Parties"), whether such entity or
entities consist of limited liability companies, partnerships, corporations, individuals or other
structure; (6) a reduction or adverse effect upon thc managerial powers of forty-nine percent
(49%) or more of the manager, general partners, directors, individuals or other controlling entity
of the Controlling Parties, as applicable, or (7) if any Controlling Party is a human, the person
ceases to be a Controlling Party.
(c) Notwithstanding the provisions of Section 2.3.2(a) and (b), the City
acknowledges that it has been informed that Laing Homes Holdings, Inc. intends to transfer its
ownership interest in the Developer to other members of Developer, and that upon such transfer
the three managers of Developer heretofore designated by Laing Holdings Inc. shall instead be.
designated by another current member of Developer. The City agrees that such change in the
managers of Developer is not a Transfer of Control.
2.3.3 The Developer shall make prompt and full disclosure to the City of any
changes to the Developer and/or its managing members or members or any changes to
Developer's organizational jurisdiction or structure, and all other material information
concerning the Developer and its members related to the Project.
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2.3.4 A "Change in Ownership" shall include any direct or indirect sale, any
execution of a contract or other agreement to sell or option to purchase such membership
interest, stock, partnership interest or other beneficial interest, or any assignment or pledge of
such membership interest, stock, partnership interest or other beneficial interest, including any
assignment or pledge for security purposes.
2.3.5 The Developer shall promptly notify the City of any and all changes
whatsoever in the identity of (a) the Developer's key employees or representatives who will be
directly involved in the development of the Project, and (b) parties in control of the Developer or
the degree thereof, of which it or any of its managers have been notified or otherwise have
knowledge or information. The Developer represents and warrants that the Developer's key
employees or representatives ("Key Employees") who will be directly involved in the
development are as follows:
Mitchell Bradford, Vice President Land Acquisition
Marianne Browne, Vice President Sales & Marketing
Ken Nishikawa, Vice President Planning and Development
Jeff Herrmann, Vice President Finance
David Prolo, Vice President Operations
Dan Flynn, Director of Infill Land Acquisitions
T~rry Crowther, Director of Community Development
In the event the Developer replaces any of the above-named persons, and the City objects to the
replacement, the Developer shall replace the rejected person as soon as reasonably possible.
2.3.6 The Developer shall make full disclosure to the City of any changes to the
Developer's managers, members and Key Employees and all other material information
concerning the Developer and its associates related to the Project. The Developer agrees to
substitute any of its consultants and professionals working on the Project as reasonably requested
by the City.
2.4 Assignment by Operation of Law. Neither this Agreement nor any interest therein
shall be assignable by the Developer by operation of law (including the transfer of this
Agreement by testacy or intestacy). Any involuntary assignment shall constitute a Material
Default by the Developer. In such event, this Agreement shall not be treated as an asset of the
Developer. The following is a nonexclusive list of acts which shall be considered an involuntary
assigmnent:
(a) If the Developer is or becomes bankrupt or insolvent or if any involuntary
proceeding is brought against the Developer (nnless, in the case ora petition filed against the
Developer, the same is dismissed within ninety (90) days), or the Developer makes an
assignment for the benefit of creditors, or institutes a proceeding under or otherwise seeks the
protection of federal or State bankruptcy or insolvency laws, including the filing of a petition for
voluntary bankruptcy or instituting a proceeding for reorganization or arrangement;
(b) If a writ of attachment or execution is levied on this Agreement or on any
Parcel, or on any portion thereof, where such writ is not discharged within ninety (90) days; or
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(c) If, in any proceeding or action in which the Developer is a party, a receiver is
appointed with authority to take possession of a Parcel, or any portion thereof, where possession
is not restored to the Developer within ninety (90) days.
2.5 NonapplicabiliW of Prohibition to Sale of Lots or Units. Recognizing that the
Developer Parcel will be subdivided and developed with the intent to sell individual residential
Lots and/or Units to Owner-Occupiers, the general prohibition against Ownership Transfer
outlined in this Agreement shall not be applicable to (a) the sale of individual residential Lots
and/or Units to Owner-Occupiers, (b) to the sale and leaseback for financing proposes of model
Units, other than Affordable Housing Units, (c) to the transfer of Common Area or Common
Area Improvements to the homeowner's association to be established pursuant to the laws and
regulations of the State of California for the management of a common interest subdivision
("Homeowners' Association") or (d) the grant or dedication of easements over the Developer
Parcel to Governmental Authorities, utilities or adjacent landowners, as reasonably required in
connection with the development of the Project by the Developer; provided, however, that sale or
transfer of any Lot or Unit shall not be permitted unless and until (i) such Lot or Unit is
authorized for sale pursuant to State law, including regulations promulgated by the State
Department of Real Estate and (ii) with respect to Affordable Housing Units, the Developer shall
have recorded against the Unit an appropriate Affordable Housing Covenant in accordance with
Section 13.2.2..
2.6 Remedies For Improper Transfers. Any Ownership Transfer that is not a
Permitted Transfer shall, at the election of the City, be null and void. If there is any Ownership
Transfer that is not a Permitted Transfer such Ownership Transfer shall be a Material Default
under this Agreement as of the date of the transfer, which date shall not be extended by Force
Majeure Delay. In the event of(a) a failure by Developer to comply with the requirements of
this Article 2 with respect to any Ownership Transfer or (b) a failure of any Ownership
Transferee to execute the assumption agreement required by Section 2.2.8, the City shall have all
remedies available to it at law and in equity, including the right to exercise the Right of
Reversion contained in Article 16.
2.7 Memorandum of DDA; Mortga~,es and Mortgagee Protection.
2.7.1 Recordation of Memorandum of this Agreement. The Parties shall record
against the Developer Parcel, in accordance with Section 12.6, a memorandum of this Agreement
in substantially the form and substance of the Memorandum attached hereto as Attachment
No. 11 (the "Memorandum of DDA").
2.7.2 Right To Encumber. Notwithstanding any other provision of this
Agreement to the contrary, upon conveyance of the Property by the City to the Developer, the
Developer shall have the right to encumber the fee title to portions of the Developer Parcel
owned by it with a Pemdtted Mortgage subject to compliance with the terms, conditions and
limitations set forth in this Section 2.7 (each Mortgage complying with the following terms and
entered into by Developer with a Permitted Mortgagee is termed a "Permitted Mortgage");
provided, however that all Mortgages shall be subject and subordinate to this Agreement,
including the City's Right of Reversion (unless such Mortgage is a Senior Obligation as provided
in Section 16.2.3, in which case such Mortgage shall be senior to the City's Right of Reversion).
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2.7.3 Encumbrance Prior to Final Certificate of Compliance. Until recordation
of the Final Certificate of Compliance in the Official Records, the following shall apply to every
Mortgage with respect to the Developer Parcel or any portion thereofi
(a) The Developer shall not encumber the Developer Parcel with any Mortgage
without the prior written consent of the City in its sole discretion.
(b) The Developer's right to execute and deliver Mortgage(s) shall be limited to a
first trust deed Mortgage executed and delivered to obtain financing necessary to pay
Development Costs for the Project.
(c) This Agreement and the Developer Parcel shall not be cross-collateralized to
serve as additional security for any other loan by a Mortgagee or any other debt of Developer,
which is also secured by real property other than the Developer Parcel, the Improvements
thereon, any portion thereof or any interest therein, without the City's consent in its sole
discretion; provided, however, that a Permitted Mortgagee which has made more than one loan
to Developer secured by all or any portion of the Developer Parcel and by no other property may
cross-collateralize those loans.
(d) Except for the sale-leaseback (for financing purposes) of model Units, the
Developer shall not assign the Developer Parcel or any portion thereof to a third party for
purposes of a sale-leaseback transaction.
(e) At least thirty (30) days prior to entering into any Mortgage with any
Mortgagee, the Developer shall deliver to the City a proposed Mortgagee's loan documents and
such other information, including the name and current audited financial statements of the
proposed Mortgagee, as may be reasonably necessary for the City to confirm the matters
described in this Section 2.7.3, and the City shall have the right to review the loan documents to
ascertain that they comply with the following provisions:
(i) For all such Mortgages, that the Mortgagee is or is not an
Institutional Lender and, if the proposed Mortgagee is not an Institutional Lender, the Developer
shall provide the City with the following additional information: (i) the names of all Persons
who own, directly or indirectly, a five percent (5%) or more interest in the proposed Mortgagee,
(ii) a statement describing other real estate projects for which financing has been provided by the
proposed Mortgagee in California over the preceding five (5) year period, the dates of
involvement by the proposed Mortgagee with such projects and the success of the projects,
which statement shall by made under penalty of perjury by the manager, president or other
person with appropriate authority from the proposed Mortgagee to do so, (iii) a final draft of the
proposed Mortgage and (iv) such other relevant infonnation that the City may reasonably
request.
(ii) The loan documents shall include a subordination in the
form attached as Attachment No. 19 ("Subordination") executed by the Permitted Mortgagee
with acknowledgement and consent of the City acknowledging (A) subordination of the
Permitted Mortgage to this Agreement, (B) that its Mortgage is subject to this Agreement,
including to the New Agreement provisions set forth in Sections 2.7.24 and 2.7.25, and (C) the
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applicability of the Right of Reversion and Right of Purchase, in accordance with Sections 16.2
and 14.2.2 respectively to the Permitted Mortgage and following expiration of any relevant
Permitted Mortgagee's cure rights provided in this Agreement; provided, however, that any
Subordination executed by a Permitted Mortgagee with respect to a Senior Obligation shall
clearly indicate the priority of such Pemiitted Mortgage with respect to the Right of Reversion.
(iii) The loan documents shall include a provision requiring
(A) the Mortgagee to provide notice to the City concurrently with the provision of any notice to
the Developer of any event which has occurred which is (or which becomes upon such notice) a
default under the loan documents or which would trigger the commencement of any cure periods
under the loan documents, and (B) providing the City with a right to cure any default under such
loan documents up to one week before the completion of any Foreclosure;
(iv) For construction Mortgages for the original construction of
the Improvements, the City shall have determined that the amount of the construction loans
provided for in the loan documents, together with the equity to be committed by the Developer
for the construction of the Project, shall be sufficient to pay for the costs of constructing the
Project in accordance with the construction budget, including appropriate construction
contingencies reflected in such loan documents.
(f) The Subordination, executed and acknowledged by the Mortgagee and the
City, shall be recorded in the Official Records at the time of closing of the Mortgage;
(g) Mortgages meeting the above requirements and (i) made with Mortgagees
determined by the City, in its reasonable discretion, to be Institutional Lenders shall be Permitted
Mortgages (and the Mortgagees thereof Permitted Mortgagees) without further consent of the
City, and (ii) made with Mortgagees determined by the City, in its reasonable discretion, to be
Non-Institutional Lenders, shall be Permitted Mortgages (and the Mortgagees thereof Permitted
Mortgagees) only after Developer obtains the prior written consent of the City in its sole
discretion.
(h) No Mortgage shall be a Permitted Mortgage and no Mortgagee shall be a
Pemdtted Mortgagee or be entitled to the protections provided to Permitted Mortgagees under
this Agreement unless such proposed Mortgagee and its Mortgage has been reviewed and, if
required, consented to, by the City pursuant to this .Section 2.7.3.
2.7.4 Right to Encumber Following Final Certificate of Compliance. Following
recordation of the Final Certificate of Compliance in the Official Records, there shall be no
restriction on the right of the Developer to encumber fee title to the portions of the Developer
Parcel owned by it with any Mortgage, and City consent to such Mortgage shall not be required.
Notwithstanding the foregoing, each Affordable Housing Unit shall remain subject to all
provisions of this Agreement until it has been sold to an Owner-Occupier, and the applicable
Affordable Housing Covenant, Affordable Housing Trust Deed and Affordable Housing Option
Agreement have been recorded against the Unit.
2.7.5 The City's Acknowledgment of Permitted Mortgagee. Within thirty (30)
days following the Developer's delivery of the loan documents and information required under
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Section 2.7.3, the City shall acknowledge receipt of the name and address of any Mortgagee (or
proposed Mortgagee), and either (a) confirm in writing to the Developer and such Mortgagee
that such Mortgagee is (or would be, upon closing of its loan) a Permitted Mortgagee and has (or
would have) all the rights of a Permitted Mortgagee under this Agreement and is (or would be)
an Institutional Lender, if applicable, or (b) if the City determines that any proposed Mortgagee
does not or would not qualify as such or as an Institutional Lender or meet the other criteria set
forth in Section 2.7.3, give notice of such detemfination to the Developer and the proposed
Mortgagee, which notice shall specify the basis for such determination.
2.7.6 Change in Loan Documents. Once thc City has approved loan documents
and the Subordination as satisfying the requirements of Section 2.7.3, the Developer shall not
modify or agree to modify those loan documents in a manner affecting the requirements of
Section 2.7.3 without the prior written approval of the City in its sole discretion.
2.7.7 Initial Notice. If the Developer enters into any Mortgage(s) reviewed and,
if required, consented to, by the City pursuant to Section 2.7.3, then the Mortgagee(s) thereunder,
if confirmed by the City as Permitted Mortgagee(s) pursuant to Section 2.7.5, shall be entitled to
the Pemfitted Mortgagee protections provided for under this Agreement from and after such time
as the Developer or such Permitted Mortgagee has provided the City notice, in accordance with
the provisions of Section 17.7, of the name and address of such Mortgagee, accompanied by a
copy of the executed Mortgage.
2.7.8 Effect of a Mortgage. The Developer's recordation ora Mortgage shall
not constitute an assignment or transfer of the Developer Parcel, nor shall any Mortgagee, as
such, or in the exercise of its rights under its Mortgage or this Agreement, be deemed to be an
assignee or transferee or mortgagee in possession of the Developer Parcel so as to require such
Mortgagee to assume or otherwise be obligated to perform any of the Developer's obligations
under this Agreement.
2.7.9 Foreclosure Without the City's Consent. Ifa Pemfitted Mortgagee or its
wholly-owned designee does acquire all or any portion of the Developer Parcel being foreclosed
upon, the provisions of Section 2.7.10 shall govern such acquisition and the fights and
obligations of the Permitted Mortgagee or its wholly-owned designee. If a Pemdtted Mortgagee
or its wholly-owned designee does not acquire the portion of the Developer Parcel which is the
subject of a Foreclosure action, or if it does acquire such portion of the Developer Parcel but then
subsequently sells or conveys all or any portion of the Developer Parcel acquired by such
Permitted Mortgagee or its wholly-owned designee by Foreclosure, then upon such Foreclosure,
(a) all of the provisions contained in this Agreement shall be binding upon and benefit the Person
who acquires title to all or any portion of the Developer Parcel and (b) the City shall recognize
the purchaser or other transferee in connection therewith as the Developer under this Agreement;
provided that such Person shall, as a condition of such recognition, assume the obligations of the
Developer under this Agreement in accordance with Section 2.2.8.
2.7.10 Rights and Obligations of Permitted Mortgagee Acquiring Title.
Notwithstanding any other provision of this Agreement to contrary:
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(a) except as set forth in Section 2.7.10(d), a Permitted Mortgagee or its wholly-
owned designee obtaining title to all or any portion of the Developer Parcel as a result of
Foreclosure shall not be obligated to perform any of the Developer's obligations under this
Agreement, including without limitation to construct or Complete any Improvements or to
guarantee such construction or Completion thereof; provided, however, that except as set forth in
Section 2.7.10(b) with respect to protective advances or preservation or protection of existing
improvements, (i) nothing in this Agreement shall be deemed or construed to permit or authorize
any Permitted Mortgagee or its wholly-owned designee to devote the Developer Parcel or any
part thereof to any uses, or to construct any improvements thereon, other than those uses and or
Improvements provided for or authorized by this Agreement and (ii) any and all construction of
improvements on the Developer Parcel by the Permitted Mortgagee or its wholly-owned
designee shall be carried out in accordance with all the terms and conditions of this Agreement,
including, without limitation, Section 2.7.10(b).
(b) no Permitted Mortgagee or wholly-owned designee of such Permitted
Mortgagee shall be permitted or authorized to undertake the construction of the Improvements
unless it shall have first assumed all obligations of Developer under this Agreement, for the
portion of the Developer Parcel in which the Permitted Mortgagee or its wholly-owned designee
has an interest, by written assignment agreement in form meeting the requirements of Section
2.2.8; provided, however, that Permitted Mortgagee shall be entitled at all times to take such
actions as are reasonably necessary to conserve or protect Improvements or construction already
made, including, without limitation, the ability to continue construction to or Completion of
Improvements already begun. Upon such assumption, the Permitted Mortgagee or its wholly-
owned designee, in that event, must agree to complete, in the manner provided in this
Agreement, the Improvements upon the property to which the lien or title of such Pemfitted
Mortgage relates. Any such Permitted Mortgagee or its wholly-owned designee properly
Completing such Improvements and satisfying all other Conditions Precedent thereto, shall be
entitled, upon written request made to the City, to a Certificate of Compliance from the City for
such Improvements.
(c) in the event that a Pemdtted Mortgagee or its wholly-owned designee does
assume the obligations of Developer under this Agreement, a Permitted Mortgagee or its wholly-
owned designee shall only be liable or bound by Developer's obligations hereunder for such
period as the Permitted Mortgagee or its wholly-owned designee is in possession of the portion
of the Developer Parcel in which the Permitted Mortgagee or its wholly-owned designee has an
interest and, furthermore, notwithstanding anything to the contrary contained in this Agreement,
shall only be liable to the extent of its interest in the portion of the Developer Parcel and the
Improvements owned by it thereon.
(d) Upon obtaining title to the Developer Parcel or any portion thereof, and
notwithstanding any other provision of this Agreement to the contrary, each Permitted
Mortgagee or its wholly-owned designee, as the case may be, shall, even if it does not assume
the obligations of Developer under this Agreement, be obligated to perform the following with
respect to the portion of the Developer Parcel owned by it:
(i) keep the real property taxes current;
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(ii) abate weeds and other hazards and nuisances on the
Developer Parcel, in a commercially reasonable manner, including, solely to the extent that such
Permitted Mortgagee or its wholly-owned designee, as the case may be, is required by
Environmental Laws to do so, Investigations and Remediation of Hazardous Materials as and to
the extent required by Environmental Laws;
(iii) maintain liability insurance in commercially reasonable
amounts;
(iv) erect and maintain barricades and fencing as reasonably
necessary to protect the public and the Improvements already constructed; and
(v) maintain in a commercially reasonable manner (but subject
to all Environmental Laws) erosion control.
2.7.11 No Impact on Permitted Mortgage. Except with respect to the Right of
Reversion provisions contained in Article 16 and the Right of Purchase provisions contained in
Section 14.2.~, breach of any of the covenants, conditions, restrictions, or reservations contained
in this Agreement shall not defeat or render invalid the lien of any Permitted Mortgage made in
good faith and for value as to the Developer Parcel or any portion of the Developer Parcel or
interest therein. Except as otherwise provided in this Agreement, the terms, conditions,
covenants, restrictions and reservations of this Agreement shall be binding and effective against
the Permitted Mortgagee and any owner of the Developer Parcel, or any portion of the Developer
Parcel, whose title thereto is acquired by Foreclosure or otherwise.
2.7.12 Right of The City to Cure Mortgage; Other Conveyance for Financing
Default. In the event of an uncured default by the Developer under a Permitted Mortgage for
financing of the Developer Parcel or the Project prior to the issuance ora Certificate of
Compliance therefor and so long as the Pemfitted Mortgagee has not exercised its option to
assume the obligations hereunder and complete the Improvements, the City may at its option, but
shall not be obligated to, cure the default at any time up to one week prior to completion of any
Foreclosure. In such event, the Developer shall reimburse the City for all direct and actual costs
and expenses incurred by the City in curing the default. Such reimbursement amount shall be
secured by the Subsequent Participation Deed of Trust.
2.7.13 Notice to Mortgagees. A Pemfitted Mortgagee under any Permitted
Mortgage affecting a portion of the Developer Parcel shall be entitled to receive concurrent
notice of any default by any Party hereunder, provided that such Permitted Mortgagee shall have
delivered written request for such notice of default to the Party from whom the Permitted
Mortgagee wishes to receive such notice of default, specifying both the Permitted Mortgagee's
name and address and the name of the Party as to whose default the Permitted Mortgagee wishes
to receive such notice. Failure of a Party to deliver a concurrent copy of such notice of default to
the Permitted Mortgagee shall not affect in any way the validity of the notice of default as it
relates to the defaulting Party, but in any subsequent proceedings arising from the notice of
default without the requested concurrent notice to the Permitted Mortgagee, the interest of the
Permitted Mortgagee and its lien upon the affected Parcel shall not be affected in any way until
such time as it has received proper notice and all cure periods with respect thereto have expired.
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Any such notice to a Permitted Mortgagee shall be given in the same manner as provided in
Section 17.7. The giving of any notice of default or the failure to deliver a copy to any Permitted
Mortgagee shall in no event create any liability on the part of the Person so declaring a default.
2.7.14 Right of Permitted Mortgagee to Cure. Notwithstanding anything to the
contrary contained in this Agreement, if the Developer Parcel is encumbered by a Permitted
Mortgage(s) and if the Permitted Mortgagee(s) of such Permitted Mortgage(s) shall send to the
City a true copy thereof, together with written notice specifying the name and address of the
Mortgagee(s) and the pertinent recording data with respect to such Mortgage(s), the City agrees
that, subject to its Right of Reversion and Right of Purchase contained in this Agreement, so long
as any such Permitted Mortgage(s) shall remain unsatisfied of record or until written notice of
satisfaction is given by the Permitted Mortgagee(s) to the City each Permitted Mortgagee the
following provisions shall apply:
(a) Each Permitted Mortgagee shall have the tight, but not the obligation, at any
time prior to tetssdnation of this Agreement and without payment of any penalty or assumption of
the obligations of Developer under this Agreement, to cure or remedy such Potential Default or
Material Default, to effect any insurance, to pay any amounts due to the City, to make any
repairs or improvements, to do any other act or thing required of Developer under this
Agreement, and to do any act or thing which may be necessary and proper to be done in the
performance and observance of this Agreement to prevent termination of this Agreement. To
carry out the foregoing, the Developer hereby agrees that each Permitted Mortgagee and its
agents and contractors shall have full access to the Developer Parcel for purposes of
accomplishing any of the foregoing. Any of the foregoing done by any Permitted Mortgagee
shall be as effective to prevent a termination of this Agreement as the same would have been if
done by Developer.
(b) Notwithstanding any other provision of this Agreement to the contrary, if any
Potential Default or Material Default shall occur which, pursuant to any provision of this
Agreement, entitles the City to terminate this Agreement or to exercise its Right of Reversion,
the City shall not be entitled to terminate this Agreement or to revest any portion of the
Developer Parcel as to any Permitted Mortgagee, unless (i) the City, following the expiration of
any periods of time given Developer in this Agreement to cure such Potential Default or Material
Default, shall have given written notice to such Permitted Mortgagee stating the City's intent to
terminate this Agreement, and (ii) within ninety (90) days after delivery of such notice, such
Pemdtted Mortgagee shall fail to either:
(A) cure the Potential Default or Material Default if the same
consists of the nonperformance by Developer of any covenant or condition of this Agreement
requiting the payment of money by Developer to the City other than payments required under
Sections 4.2.3, 8.1.5, 8.2 or 8.13 of the Agreement (provided, however, that nothing set forth in
this Agreement shall restrict or limit the tight of City to exercise its remedies with respect to
performance bonds provided by Developer in accordance with this Agreement or any
Entitlements or Development Peru,its) OR
(B) if the Potential Default or Material Default is not required
to be cured pursuant to clause (A) above, either, in Pemdtted Mortgagee's sole discretion
[AEF:ab/IDOCS2_90960_7/090903/4182.004] - 16-
(x) cure such Potential Default or Material Default, or (y)(i) commence, or cause any trustee
under the Permitted Mortgage to commence, within ninety (90) days after the provision of
written notice by the City to the Permitted Mortgagee as provided above, and thereafter to
diligently pursue to completion steps and proceedings to Foreclosure. Any Potential Default or
Material Default which does not involve a covenant or condition of this Agreement requiting the
payment of money by the Developer to the City shall be deemed cured if any Permitted
Mortgagee shall diligently pursue to completion Foreclosure and shall, upon acquiring title to all
or any portion of the Developer Parcel, thereafter undertake its obligations (if any) with respect
to the portion of the Developer Parcel owned by it pursuant to Section 2.7.10.
(c) If any Permitted Mortgagee is prohibited from commencing or prosecuting
Foreclosure by any process or injunction issued by any court or by reason of any action by any
court having jurisdiction of any bankruptcy or insolvency proceeding involving Developer, the
times specified in clause (b)(B) above, for commencing or prosecuting a Foreclosure or other
proceedings shall be extended for the period of the prohibition; provided that the Permitted
Mortgagee shall have fully cured any Potential Default or Material Default required by
clause (b)(A) above and shall continue to perform and/or cure all such obligations as and when
the same fall due.
(d) No Pemdtted Mortgagee shall have the right to use the failure of the City to
provide notice to any other Permitted Mortgagee as a claim, defense or estoppel to application of
these provisions with respect to its Mortgage.
2.7.15 Failure of Permitted Mortgagee to Complete Improvements. If, after all
cure periods of Developer have expired following Material Default by Developer in Completion
of construction of the Improvements on the Developer Parcel under this Agreement, and the
notice required by Section 2.7.14 to a Pem,itted Mortgagee was properly given, and such
Permitted Mortgagee has not cured or commenced to cure as required by Section 2.7.14, the City
may, at its option, upon thirty (30) days' written notice to the Developer and such Permitted
Mortgagee either: (a) purchase the Permitted Mortgage by payment to the Permitted Mortgagee
of all amounts thereunder, including without limitation, all unpaid principal, interest, late fees
and all other advances and amounts secured by the Permitted Mortgage; (b) exercise its Right to
Purchase the Developer Parcel pursuant to Section 14.2.2, or (c) if the applicable Reversion
Conditions have occurred with respect to the Developer Parcel or any portion thereof, exercise
its Right of Reversion with respect to the applicable portions of the Developer Parcel pursuant to
Article 16.
2.7.16 Amendment; Te, mination. No amendment or modification to this
Agreement made without the consent of any outstanding Permitted Mortgagee of any Parcel
shall be binding upon such Permitted Mortgagee or its successors in interest. Developer shall not
tem,inate this Agreement as to any portion of the Developer Parcel which is subject to any
Permitted Mortgage without first obtaining the prior written consent of all Permitted Mortgagees
whose Permitted Mortgages encumber that portion of the Developer Parcel.
2.7.17 Condemnation or Insurance Proceeds. Except as otherwise expressly set
forth in this Agreement, the rights of any Permitted Mortgagee, pursuant to its Permitted
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Mortgage, to receive condemnation or insurance proceeds which are otherwise payable to such
Pemdtted Mortgagee or to a Party which is its mortgagor shall not be impaired.
2.7.18 Loss Payable Endorsement to Insurance Policy. The City agrees that the
name of the senior most Permitted Mortgagee may be added as the primary loss payee to the
"Loss Payable Endorsement" attached to any and all insurance policies required to be carried by
Developer under this Agreement.
2.7.19 Modification of Article; Conflicts. Following the Close of Escrow, no
Party shall unreasonably withhold its consent to such modifications of this Agreement as are
reasonably requested by a Permitted Mortgagee, provided that the rights of any such Party will
not be materially impaired, diminished, limited or delayed, nor the obligations of such Party
increased in any material respect as a result of such modifications. Notwithstanding the
foregoing, the Developer and the City hereby agree that the City shall have no obligation to
make any modifications to this Agreement pursuant to this Section prior or as a condition to
Close of Escrow.
2.7.20 No Subordination. This Agreement shall not be subordinated to any
Mortgage, ground lease or other instrument without the express written consent of the Parties
hereto and all Mortgagees of the Parties, each in its sole discretion.
2.7.21 Constructive Notice and Acceptance. Until such time as a Final
Certificate of Compliance is recorded in the Official Records with respect to the Developer
Parcel and subject to the provisions of this Article 2, all of the provisions contained in this
Agreement shall be binding upon and benefit any Person who acquires title to a portion of the
Developer Parcel by voluntary or involuntary transfer, Foreclosure or otherwise under a
Mortgage and each successor and assign of such Person acquiring an interest in any portion of
the Developer Parcel. Upon acquisition of title to the Property or any portion thereof by a
Person, other than a Pemdtted Mortgagee or its wholly-owned designee acquiring title through
Foreclosure which is not assuming the obligations of Developer under this Agreement, the
acquiring Person and the City shall meet and confer in good faith to revise the Schedule of
Performance as reasonably necessary to provide adequate time for such Person to satisfy the
obligations of the Developer hereunder.
2.7.22 Senior Obligations. In the event any portion of the Developer Parcel
becomes encumbered by a Senior Obligation as described in Section 16.3.2, the Developer
agrees to fully comply with each and all obligations of the Developer with respect to such Senior
Obligation.
2.7.23 Bankruptcy Affecting the Developer. Developer and City hereby agree
that this Agreement (including without limitation the Right of Repurchase and Right of
Reversion contained herein) and the Quitclaim Deed each contain and consist of covenants
rmming with the land and that neither this DDA nor the Quitclaim Deed shall be subject to
rejection in bankruptcy and Developer hereby waives its rights to reject this Agreement and the
Quitclaim Deed in bankruptcy. Notwithstanding the foregoing, and without waiver of any right
of the City to challenge the same, if the Developer, as debtor in possession, or a trustee in
bankruptcy for the Developer seeks to and does reject this Agreement in connection with any
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proceeding involving the Developer under the United States Bankruptcy Code or any similar
state or federal statute for the relief of debtors (a "Bankruptcy Proceeding"), then the City
agrees for the benefit of each and every Permitted Mortgagee that such rejection shall, subject to
such Permitted Mortgagee's acceptance, be deemed the Developer's assignment of the
Agreement and the Developer Parcel to the Developer's Permitted Mortgagee(s) in the nature of
an assignment in lieu of foreclosure. Upon such deemed assignment, this Agreement shall not
terminate and each P¢..itted Mortgagee shall, subject to compliance with Section 2.2.8, become
the Developer hereunder as if the Bankruptcy Proceeding had not occurred, unless such
Permitted Mortgagee(s) shall reject such deemed assignment by written notice to the City within
thirty (30) calendar days after receiving notice of the Developer's rejection of this Agreement in
Bankruptcy Proceedings.
2.7.24 New Agreement with Permitted Mortgagee.
(a) In the event of termination of this Agreement for any reason (including by
reason of any Material Default by Developer or by reason of the disaffirmance thereof by
Developer, as a debtor-in-possession, or by a receiver, liquidator or trustee for Developer or its
property), the City, if requested by the most senior Permitted Mortgagee (or by the next most
senior Permitted Mortgagee if Permitted Mortgagees with more senior priority do not so request)
will enter into a new Agreement with the Pemdtted Mortgagee or other party requesting a new
Agreement, provided that such party is the then-owner of the Property, upon the same tern,s,
provisions, covenants and agreements set forth in this Agreement and commencing as of the date
of termination of this Agreement ("New Agreement"), subject to the following:
(i) such Pemfitted Mortgagee or requesting party shall have
provided written notice to the City requesting the New Agreement within thirty (30) days after
the date of termination of this Agreement;
(ii) such Permitted Mortgagee or requesting party shall pay to
the City at the time of the execution and delivery of the New Agreement those sums specified in
Section 2.7.14(b)(A) which would, at the time of the execution and delivery thereof be due and
unpaid pursuant to this Agreement but for its termination, and in addition thereto any expenses
and reasonable attorneys' fees to which the City shall have been subjected by reason of
Developer's Material Default; and
(iii) such Permitted Mortgagee or requesting party shall, subject
to the provisions of Section 2.7.9, 2.7.10 and 2.7.14, perform and observe all covenants in this
Agreement to be performed and observed by a Permitted Mortgagee, and failure to do so shall,
after notice and opportunity to cure as provided by this Agreement, be a Material Default under
this Agreement.
(b) In the event of termination of this Agreement for any reason (including by
reason of any Material Default by Developer or by reason of the disaffirmance thereof by
Developer, as a debtor-in-possession, or by a receiver, liquidator or trustee for Developer or its
property) the most senior Permitted Mortgagee, if requested by the City, and provided that such
party is the then-owner of the Property, will enter into a new Agreement with the City requesting
a new Agreement upon the same terms, provisions, covenants and agreements set forth in this
[AEF:ab/IDOCS2_90960_7/09090314182.004] - 19-
Agreement and commencing as of the date of termination of this Agreement ("New
Agreement"), subject to the following:
(i) the City shall have provided written notice to such
Permitted Mortgagee requesting the New Agreement within thirty (30) days after the date of
termination of this Agreement, with a copy to each other Permitted Mortgagee; and
(ii) the Permitted Mortgagee shall be subject to the provisions
of Section 2.7.9, 2.7.10 and 2.7.14 of this Agreement and shall perform and observe all
covenants in this Agreement to be performed and observed by a Permitted Mortgagee and failure
to do so shall, after notice and opportunity to cure, shall be a Material Default under this
Agreement.
2.7.25 Priority of New Agreement. Any New Agreement shall be prior to any
Mortgage or other lien, charge, or encumbrance on the Developer Parcel and each Mortgagee
shall execute such additional consents and/or subordination agreements as may reasonably
requested by the City or the new Developer to evidence the priority of the New Agreement to all
Mortgages, whether recorded prior or subsequent to execution of the New Agreement.
3. Representations and Warranties.
3.1 Developer's Representations and Warranties. As an inducement to the City to
enter into this Agreement and to perform its obligations hereunder, thc Developer represents and
warrants to the City as follows:
(a) The Developer has the necessary expertise, experience, qualifications and
legal status necessary to perfom, as the Developer pursuant to this Agreement and to construct
and Complete the Project;
(b) The Developer's acquisition of the Developer Parcel, development of the
Project and its other undertakings pursuant to this Agreement are for the purpose of timely
redevelopment of the Developer Parcel in accordance with the Schedule of Performance attached
to this Agreement and not for speculation or land holding;
(c) The Developer is a limited liability company, duly organized, qualified, and
validly existing and in good standing under the laws of the State of Delaware, is duly qualified to
do business and in good standing under the laws of each other jurisdiction where the operation of
its business or its ownership of property or the performance of Developer's obligations under this
Agreement make such qualification necessary;
(d) The Developer has all requisite power and authority required to enter into this
Agreement and the instruments referenced in this Agreement, to consummate the transactions
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations hereunder and thereunder. No consent of any additional member, partner, individual,
corporation, shareholder, creditor, investor, judicial or administrative body, authority or other
party is required in connection with any of the foregoing.
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(e) All required action has been taken by the Developer and the Developer has
obtained all required consents in connection with entering into this Agreement and the
instruments and documents referenced in this Agreement to which the Developer is a party and
the consummation of the transactions contemplated hereby.
(0 The individuals executing this Agreement and the instruments referenced in
this Agreement on behalf of the Developer have the legal power, right and actual authority to
bind the Developer to the terms and conditions hereof and thereof.
(g) This Agreement has been duly authorized, executed and delivered by the
Developer and all documents required in this Agreement to be executed by the Developer
pursuant to this Agreement shall be, at such time as they are required to be executed by the
Developer, duly authorized, executed and delivered by the Developer and are or shall be, at such
time as the same are required to be executed hereunder, valid, legally binding obligations of and
enforceable against the Developer in accordance with their terms. The Developer has duly
authorized, executed and delivered any and all other agreements and documents required to be
executed and delivered in order to carry out, give effect to, and consummate the transactions
contemplated by this Agreement.
(h) Neither the execution or delivery of this Agreement and the documents
referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement, nor
the consummation of the transactions in this Agreement contemplated, nor compliance with the
terms of this Agreement and the documents referenced in this Agreement, will violate any
provision of law, any order of any court or other government entity or conflict with or result in
the breach of any terms, conditions, or provisions of, or constitute a default under any bond,
note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan
partnership agreement, lease or other agreements or instruments to which the Developer or any
of its members are a party or which affect Parcel I-B-1 or the Project.
(i) No attachments, execution proceedings, assignments of benefit to creditors,
bankruptcy, reorganization or other proceedings are pending or, to the best of Developer's
knowledge, threatened against the Developer or its members.
(j) The Developer is relying solely upon its own inspections and investigations in
proceeding with this Agreement, and is not relying on the accuracy or reliability of any
information provided to it by the City, on any oral or written representation or on the non-
disclosure of any facts or conclusions of law made by the City, or any of its elected and
appointed officials, officials, employees, agents, attorneys or representatives made in connection
with this Agreement. In making such investigation and assessment, the Developer has been
provided access to any persons, records or other sources of information which it has deemed
appropriate to review and it has thereafter completed such investigation and assessment.
0c) Without limiting the generality of the foregoing provisions, the Developer
acknowledges that the City has not made and will not make any representations or warranties
concerning compliance or non-compliance of Parcel I-B-l, the existing improvements, the
Project or any portion thereof with Environmental Laws or the existence or non-existence of
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Hazardous Materials in relation to Parcel I-B-l, the existing improvements, the Project or any
portion thereof or otherwise.
(1) There are no adverse conditions or cimumstances, no pending or, to the best
of the Developer's knowledge, threatened litigation, no governmental action, nor any other
condition which could prevent or materially impair the Developer's ability to develop the
Developer Parcel and the Project as contemplated by the terms of this Agreement, assuming that
the Closing Conditions described in Article 7 are satisfied.
(m)The Developer has not paid or given, and will not pay or give, any third
person any money or other consideration for obtaining this Agreement, other than the normal
cost of conducting business and cost of professional services such as architects, engineers and
attorneys.
(n) All reports, documents, instruments, information and forms of evidence
delivered by the Developer to the City concerning or related to this Agreement are, to the best of
the Developer's knowledge, accurate, correct and sufficiently complete to give the City tree and
accurate knowledge of the subject matter, and do not contain any misrepresentation or omission.
(o) The Developer has sufficient equity, capital and firm binding financing
commitments to (i) pay through Completion, all costs of development, construction, marketing
and sale of all the Improvements as defined in the Scope of Development; and (ii) enable the
Developer to perform and satisfy all the covenants of the Developer contained in this Agreement.
The Developer has not and shall not undertake such additional projects as could reasonably be
expected to jeopardize the sufficiency of such equity, capital and finn and binding commitments
for the purposes expressed in the preceding sentence.
(p) The Developer does not have any contingent obligations or any other
contracts the performance or nonperformance of which could affect the ability of the Developer
to carry out its obligations hereunder.
(q) There are no legal proceedings either pending or, to the best of the
Developer's knowledge, threatened, to which the Developer is or may be made a party, or to
which any of the Developer's property, including the Developer Parcel, is or may become
subject, which has not been fully disclosed in the documents submitted to the City and which
could materially affect the ability of the Developer to carry out its obligations hereunder.
As used in this Section 3.1, "to the best of the Developer's knowledge" means the best
knowledge of the key employees of the Developer set forth in Section 2.3.3 after conducting
commercially reasonable inquiry.
3.2 City Representations and Warranties.
As an inducement to the Developer to enter into this Agreement and perform its
obligations hereunder, the City represents and warrants to the Developer as follows:
(a) The City is a municipal corporation incorporated within and existing pursuant
to the laws of the State of California.
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(b) The City has all requisite power and authority required to enter into this
Agreement and the instruments referenced in this Agreement, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations hereunder and thereunder. No consent of any additional individual, official, board,
division, judicial or administrative body, authority or other party is required in connection with
any of the foregoing.
(c) All required action has been taken by the City and the City has obtained all
required consents in connection with entering into this Agreement and the instruments and
documents referenced in this Agreement to which the City is a party and the consummation of
the transactions contemplated hereby.
(d) The individual executing this Agreement and the instruments referenced in
this Agreement on behalf of the City has the legal power, right and actual authority to bind the
City to the terms and conditions hereof and thereof.
(e) This Agreement is duly authorized, executed and delivered by the City and all
documents required in this Agreement to be executed by the City pursuant to this Agreement
shall be, at such time as they are required to be executed by the City, duly authorized, executed
and delivered by the City and are or shall'be, at such time as the same are required to be executed
hereunder, valid, legally binding obligations of and enforceable against the City in accordance
with their terms.
(f) There are no legal proceedings either pending or, to the actual knowledge of
the Assistant City Manager or the City Attorney, threatened, to which the City is or may be made
a party, or to which any of the City's property, including the Developer Parcel, is or may become
subject, which has not been fully disclosed in the documents submitted to the Developer and
which could reasonably affect the ability of the City to carry out its obligations hereunder.
3.3 Survival. Each of the items in Section 3.1 is deemed to be an ongoing representation
and warranty and shall survive the Closing and the termination of this Agreement and shall not
be merged into the Quitclaim Deed. The Developer shall promptly advise the City in writing if
there is any change pertaining to any matters set forth or referenced in Section 3.1.
4. Conveyance of Property, from Cit~ to Developer.
4.1 The Property To Be Conveyed.
Subject to the terms and conditions set forth in this Agreement, including the
satisfaction of the Closing Conditions set forth in Article 7, the City agrees to sell to the
Developer and the Developer agrees to purchase from the City (a) the Developer Parcel, together
with (b) all existing improvements presently located on the Developer Parcel, and (c) all
Personal Property (clauses (a), (b) and (c) above collectively referred to in this Agreement as the
"Property"), subject to all Permitted Exceptions and such other title exceptions as may be
applicable to the Developer Parcel, but provided that the term "Property" shall exclude the
following rights and interest which shall be explicitly reserved to the City:
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(a) Any and all oil, oil rights, minerals, mineral rights, natural gas, natural gas
rights and other hydrocarbon by whatsoever name known, geothermal steam and rights thereto
and all products derived from any of the foregoing, that may be within or under the Developer
Parcel together with the perpetual right of drilling, mining, exploring for and storing in and
removing the same from the Developer Parcel or any other land, including the right to whipstock
or directionally drill and mine from lands other than the Developer Parcel, oil or gas wells,
tunnels and shafts into, through or across the subsurface of the Developer Parcel and to bottom
such whipstocked or directionally drilled wells, runnels and shafts under and beneath or beyond
the exterior limits thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate
any such well or mines; but without, however, the right to drill, mine, store, explore or operate
through the surface of the Developer Parcel.
(b) Any and all water, water rights or interests therein appurtenant or relating to
the Developer Parcel or owned or used by the City in connection with or with respect to the
Developer Parcel no matter how acquired by the City, whether such water rights shall be
riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated, statutory or
contractual, together with the perpetual right and power to explore, drill, re-drill and remove the
same from or in the Developer Parcel, to store the same beneath the surface of the Developer
Parcel and to divert or otherwise utilize such water, rights or interests on any other property
owned or leased by the City; but without, however, any right to enter upon or use the surface of
the Developer Parcel in the exercise of such rights.
(c) Those excess development rights remaining after deducting from the total
Tustin Legacy Specific Plan planning area authorization for Planning Area 21 the number of
Units allocated to the Developer Parcel by the Vesting Tentative Tract Map, estimated as of the
Effective Date to be 189 Units. All development rights entitled for the Developer Parcel in
excess of such allocation shall remain the property of the City and, unless attributable to property
within Planning Area 21 other than the Developer Parcel, shall be freely transferable by the City
in its sole discretion throughout the remainder of Planning Area 21. The Parties hereby agree
that if the exact number of Units to be developed on the Developer Parcel is not detemdned as of
the Close of Escrow, the Parties will cooperate in making a final determination as to the number
of Units to be developed on the Developer Parcel and shall execute and record all additional
documents deemed reasonably necessary in the determination of either Party, to specify the
development rights retained by the City and those transferred to Developer with the Property.
4.2 Purchase Price.
4.2.1 Purchase Price. As consideration for the sale of the Property by the City
to the Developer, the Developer shall pay to the City the sum of Thirty Million Six Hundred
Thousand Dollars ($30,600,000.00) (the "Base Purchase Price") plus the "Subsequent
Participation" (defined in Section 4.2.3.), which Subsequent Participation will be paid
subsequent to the Closing. The Base Purchase Price and the Subsequent Purchase Price
collectively are referred to herein as the "Purchase Price".
4.2.2 Base Purchase Price. The Base Purchase Price for the Property shall be
payable by the Developer to the City at the Close of Escrow, as follows:
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(a) Initial Deposit. An earnest money deposit ("Initial Deposit") of five percent
(5%) of the Base Purchase Price shall be delivered by the Developer to Escrow Holder within
five (5) Business Days of the City's execution of this Agreement.
(b) EAN Deposit. The Developer has paid to the City a $50,000 deposit (the
"EAN Deposit") in connection with the execution of the Exclusive Agreement to Negotiate
dated August 5, 2002, by and between the City and the Developer, as the same may be amended
from time to time. The City agrees that the EAN Deposit shall be applied toward the Initial
Deposit and that the amount funded by the Developer in respect of the Initial Deposit payable by
the Developer under Section 4.2.2(a) shall be reduced accordingly. The City agrees to transfer
the EAN Deposit to Escrow Holder promptly after the "Opening of Escrow" (as defined in
Section 4.3). Upon receipt by Escrow Holder, the EAN Deposit shall for all purposes be
considered to be part of the Initial Deposit.
(c) Supplemental Deposit. Within two (2) Business Days after the expiration of
the "Due Diligence Period" (as defined in Section 5.1) (or within two (2) Business Days of such
earlier date as the Developer has waived in writing all remaining due diligence items and notified
the City of its election to proceed to closing), unless the Developer has provided a Termination
Notice in accordance with Section 5.8, the Developer shall deposit into Escrow an additional
amount equal to five percent (5%) of the Base Purchase Price (the "Supplemental Deposit"),
increasing the total amount deposited to ten percent (10%) of the Base Purchase Price.
(d) Purchase Price Deposit. The Initial Deposit (including the EAN Deposit) and
the Supplemental Deposit (if made), and all interest earned thereon, if any, are referred to
collectively as the "Purchase Price Deposit." Unless the Developer has provided a Termination
Notice in accordance with Section 5.8, after expiration of the Due Diligence Period the Purchase
Price Deposit shall be nonrefundable except as otherwise expressly provided in this Agreement.
The Purchase Price Deposit shall be deposited by Escrow Holder into an interest bearing
account, and such deposit, plus interest earned thereon, shall be released by the Escrow Holder or
refunded to the Developer in accordance with the terms of this Agreement.
(e) Payment of the Balance of the Base Purchase Price. The Developer shall pay
the balance of the Base Purchase Price, subject to prorations and adjustments described below,
on the Closing Date in immediately available funds in the following manner: no later than one
(1) Business Day prior to the Close of Escrow, the Developer shall deposit with Escrow Holder
an amount ("Developer's Closing Payment") which, when added to the Purchase Price Deposit
held by Escrow Holder on the Closing Date, shall be sufficient to (i) cover all closing costs to be
paid by the Developer pursuant to Section 7.5.1 (b), (ii) pay the Interest Amount due to the date
of Close of Escrow, (iii) fund the Homeless Assistance Escrow with the Transitional Housing
Amount as and to the extent required by Sections 7.3.7 and 13.4.2 (a) and (iv) allow Escrow
Holder to disburse to the City an amount equal to the Base Purchase Price, as adjusted for any
net credits or debits to the City for closing costs and/or prorations in accordance with
Sections 7.5.4 and 7.5.5.
(f) Payments in Immediately Available Ftmda. Funds delivered to Escrow
Holder under this Agreement shall be in the form of cash, wire transfer (to such account as
Escrow Holder notifies the Developer in writing) or by cashier's check drawn on good and
[AEF:ab/IDOCS290960_7/090903/4182.004] -25 -
sufficient funds on a federally insured bank in the State of Califomia and made payable to the
order of Escrow Holder.
4.2.3 Subsequent Participation. As additional consideration for the sale of the
Property by the City to the Developer, in addition to the Base Purchase Price, the Developer shall
pay to the City the "Subsequent Participation" which shall be an amount equal to (a) one
percent (1%) of the gross sales price of each Unit, to include all revenues from consumer options
and premiums of each Unit; provided, however, that with respect to the Subsequent Participation
for Affordable Housing Units, the gross sales price of each such Affordable Housing Unit shall
equal the portion of the gross sales price of each Affordable Housing Unit in excess of the
principal amount of any Affordable Housing Note related to the sale of such Unit. The
Subsequent Participation shall be junior to all Permitted Mortgages and shall be secured,
computed and paid as and when provided in the document attached as Attachment No. 6A and
shall be secured by the Subsequent Participation Deed of Trust attached as Attachment No. 6B
which shall be subordinate to all Permitted Mortgages. As a condition to the issuance ora
Certificate of Compliance for any Phase, all Subsequent Participation Amounts for Units in such
Phase which have been conveyed to Owner-Occupiers shall be paid in full or to the extent that
the Developer has not sold or closed escrow on the sale of any portion of the Units, as to such
Units which have not been sold or for which escrow has not closed only, secured by Performance
Bond or other equivalent security satisfactory to the City in its sole discretion.
4.2.4 Affordable Housing Notes. As additional consideration for the sale of the
Property by the City to the Developer, the Developer shall assign to the City, without
representation or warranty and at no cost to the City, the Developer's interest in and to all
Affordable Housing Notes. The Developer shall comply with all Federal, State and local rules
and regulations (including, but not limited to, Regulation Z) that may be applicable to the sale of
Units that are paid for in part by the execution and delivery of Affordable Housing Notes.
4.3 Escrow. Not later than one (1) business day after the execution of this Agreement by
the Developer and the City, the Developer and the City shall each deliver an executed original
counterpart of this Agreement to Escrow Holder. For purposes of this Agreement, the "Opening
of Escrow" shall be the date that Escrow Holder receives an executed original counterpart to this
Agreement signed by the Developer and the City. Upon the written acceptance of this
Agreement by Escrow Holder, this Agreement shall constitute the joint escrow instructions of the
Developer and the City to Escrow Holder to open an escrow (the "Escrow"). Upon Escrow
Holder's receipt of the Initial Deposit and Escrow Holder's written acceptance of this
Agreement, Escrow Holder is authorized to act in accordance with the terms of this Agreement.
The Developer and the City shall execute Escrow Holder's general escrow instructions upon
request, with such modifications thereto as the Developer and the City may reasonably require;
provided, however, that, if there is any conflict or inconsistency between such general escrow
instructions and this Agreement, this Agreement shall control. Escrow Holder shall not prepare
any further escrow instruction restating or amending this Agreement unless specifically so
instructed by the City and the Developer in writing. Any supplemental escrow instructions must
be in writing and signed by the City and the Developer and accepted by the Escrow Holder to be
effective.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] -26-
4.4 Investigation~ Property, Sold "As-Is".
4.4.1 Investigation.
(a) The Developer has conducted, or will have conducted prior to execution of
this Agreement, the Developer's own investigation of the Property and all matters related to the
Property and the Project including the state of title, including easements, covenants, conditions
and/or restrictions affecting the Property, if any, the physical condition thereofi the physical
condition of all structures located upon Parcel I-B-1 and/or upon any other land upon which the
Project, including off-site improvements and Developer's Backbone Infrastructure Work or any
portion thereof will be constructed (collectively with Parcel I-B-l, the "Project Site"), as
applicable, the accessibility and location of utilities, and all mechanical, plumbing, sewage, and
electrical systems located therein, suitability of soils, environmental and other investigations
regarding the Property and the Project Site. The Developer has reviewed, or will have reviewed
prior to execution of this Agreement, all items that in the Developer's sole judgment affect or
influence the Developer's purchase and use of the Property and the Project Site and the
Developer's willingness to consummate this Agreement.
(b) The Developer acknowledges and agrees that having been given the
opportunity to inspect the Property and the Project Site and review the information and
documentation affecting the Property and the Project Site, the Developer is relying solely on its
own investigation of the Property and the Project Site and review of such information and
documentation in detemdning the physical, economic and legal condition of the Property and the
Project Site, and not on any information provided or to be provided by the City or the agents of
the City. The Developer further acknowledges and agrees that any information provided to the
Developer by or on behalf of the City with respect to the Property and the Project Site was
obtained from a variety of sources and that the City has not made any independent investigation
or verification of such information and makes no representations as to the accuracy or
completeness of such information. Without limiting the generality of the foregoing, the
Developer acknowledges and agrees that (a) it has been provided with access to (i) all
environmental reports and statements listed on Attachment No. 10 attached hereto and all reports
either attached to or referenced in the Conveyance Agreement, (ii) the FOST and (iii) the
Environmental Baseline Survey which is incorporated into the FOST by reference; (b) it shall
perfo.n its own assessment of the environmental condition of the Property, the presence of
Hazardous Materials on the Property and the Project Site, the suitability of the soil for
improvements to be constructed, the implications of land use restrictions on the development
plan for the Project and the Project Site and the consequences of any subsequently discovered
contamination on or adjacent to the Property and the Project Site; and (c) it shall review the
Navy produced or identified documentation reflecting the Navy's knowledge of the
environmental condition of the Property and the Project Site.
4.4.2 AS-IS; WHERE-IS.
(a) No Representations or Warranties.
The Developer recognizes that the City would not sell the Property except on an "AS, IS,
WHERE IS, WITH ALL FAULTS" basis, and the Developer acknowledges that the City has
[AEF:ab/IDOCS2_90960_7/090903/4182.004] -27-
made no representations or warranties of any kind whatsoever, either express or implied in
connection with any matters with respect to the Property or any portion thereof. The Developer
acknowledges that the Developer has examined the Property and is buying the Property in an
"AS IS, WHERE IS, WITH ALL FAULTS" condition, in its present state and condition and with
all faults, if any. The Developer further acknowledges and agrees that, except as otherwise
specifically provided in this Agreement, the City has not made and does not make and
specifically negates and disclaims any representations, warranties, promises, agreements or
guaranties of any kind or character, whether express or implied, oral or written, past, present or
future, whether by the City or any of its agents, elected or appointed officials, representatives or
employees, of concerning or with respect to:
(i)
the value of the Property or the income to be derived from
the Property;
(ii) the existence or nonexistence of any liens, easements,
covenants, conditions, restrictions, claims or encumbrances affecting the Property;
(iii) the suitability of the Property and/or the Project Site for any
and all future development, uses and activities which the Developer may conduct thereon,
including the development of the Project described in this Agreement;
(iv) the habitability, merchantability or fitness for a particular
purpose of the Property and/or the Project Site;
(v)
Property and/or the Project Site;
the manner, quality, state of repair or lack of repair of the
(vi) the nature, quality or condition of the Property and/or the
Project Site including water, soil and geology;
(vii) the compliance of or by the Property and/or the Project Site
or its operation with any Governmental Requirement, including the National Environmental
Policy Act, CEQA and the Americans with Disabilities Act of 1990;
(viii) the manner or quality of the construction or materials, if
any, incorporated into the Property and/or the Project Site;
(ix) the presence or absence of Hazardous Materials, at, on,
under, or adjacent to the Property and/or the Project Site;
(x) the content, completeness or accuracy of the information,
documentation, studies, reports, surveys and other materials, delivered to the Developer in
connection with the review of the Property and/or the Project Site and the transactions
contemplated in this Agreement;
(xi) the conformity of the existing improvements on the
Property, if any, to any plans or specifications for the Property and/or the Project Site;
[AEF:ab/IDOC S2_90960_7/090903/4182.004] -28-
(xii) compliance of the Property with past, current or future
statutes, laws, codes, ordinances, regulations or Governmental Requirements relating to zoning,
subdivision, planning, building, fire, safety, health or environmental matters and/or covenants,
conditions, restrictions or deed restrictions;
(xiii) the deficiency of any undershoring or of any drainage;
(xiv) the fact that all or a portion of the Property may be located
on or near an earthquake fault line or falls within an earthquake fault zone established under the
Alquist-Priolo Earthquake Zone Act, California Public Resources Code Sections 262 1-2630 or
within a seismic hazard zone established trader the Seismic Hazards Mapping Act, California
Public Resources Code, Sections 2690-2699.6 and Sections 3720-3725;
(xv) the existence or lack of vested land use, zoning or building
entitlement affecting the Property;
(xvi) the construction or lack of construction of Tustin Legacy or
if constructed, the construction of Tustin Legacy in accordance with design guidelines, plans and
specifications previously or to be prepared therefore;
(xvii) the contents of the Conveyance Agreement, the Federal
Deed, the Base Closure Law and the FOST; and
(xviii) with respect to any other matters.
(b) Environmental Condition of the Developer Parcel; Restrictions. The
Developer acknowledges and agrees that: (a) the City has acquired Parcel I-B-1 from the Navy,
which has conducted an EBS; (b) in accordance with the City of Tustin's recent acquisition of
Parcel I-B-1 from the Navy by Federal Deed, the Navy found and detemdned that Parcel I-B-1
was suitable for transfer and issued the FOST; (c) the City makes no representation or warranty
as to the environmental condition of Parcel I-B-l, the Property, the Navy's obligations with
respect to the environmental condition of Parcel I-B-1 or the Property or the adequacy or
accuracy of any environmental report that has been rendered; (d) there may be some residual
contamination on Parcel I-B-1 and/or the Property as a result of Navy historic activities; (e) the
Navy has agreed to accept certain limited responsibility for any contamination it caused,
including any contamination discovered after transfer from the Navy, in accordance with existing
Governmental Requirements including the National Defense Authorization Act For Fiscal Year
1993 as amended (Public Law No. 102-434) Section 330; and (f) based on an agreement
between the Navy and DTSC, the deed restrictions contained in the Federal Deed are binding
upon successors and assigns of the City and are enforceable by DTSC pursuant to a conveyed
property right from the Navy to DTSC.
(c) Federal Deed and Conveyance Agreement. The Developer acknowledges and
agrees that the purchase of the Property is subject to the terms and conditions set forth in the
Conveyance Agreement and the Federal Deed and all matters, issues, contingencies, deed
restrictions, environmental restrictions, leases, and obligations as stated therein. Upon
conveyance of the Property to the Developer, the Developer agrees to assume and faithfully
[AEF:ab/IDOC S2_90960_7/090903/4182.004] -29-
perform any covenants running with the land and obligations set forth in the Federal Deed as
obligations to be perforated by "Grantee or its successors or assigns".
(d) No Unauthorized Representations. No person acting on behalf of the City is
authorized to make, and by execution hereof, the Developer acknowledges that no person has
made, any representation, agreement, statement, warranty, guarantee or promise regarding the
Property or the transaction contemplated in this Agreement or the past, present or future zoning,
land use entitlements, construction, physical condition or other status of the Property except as
may be expressly set forth in this Agreement. No representation, warranty, agreement,
statement, guarantee or promise, if any, made by any person acting on behalf of the City that is
not contained in this Agreement will be valid or binding on the City.
(e) Release. Save and except for the covenants, representations and warranties of
the City and any other "Released Party" (as defined below in this Section) under this Agreement,
the Developer and any Person claiming by, through or under the Developer, including all
voluntary and involuntary successors of the Developer owning all or any portion of the
Developer Parcel ("Releasing Party"), hereby waives, as of the date of execution of this
Agreement and as of the Closing Date, its right to recover from, and fully and irrevocably
releases, the City and its elected and appointed officials, employees, agents, attorneys, affiliates,
representatives, contractors, successors and assigns (individually, a "Released Party",
collectively, the "Released Parties") from any and all Claims that the Developer may now have
or hereafter suffer or acquire for any costs, losses, liabilities, damages, expenses, demands,
actions or causes of action: (a) arising from any information or documentation supplied by any of
the Released Parties ("Due I~iligenee Information"); (b) arising from any condition of the
Property, known or unknown by any Releasing Party or any Released Party; (c) arising from any
construction defects, errors, omissions or other conditions, latent or otherwise, including
environmental matters, as well as economic and legal conditions on or affecting the Property, or
any portion thereof; (d) arising from the existence, Release, threatened Release, presence,
storage, treatment, transportation or disposal of any Hazardous Materials at any time on, in,
under, from, about or adjacent to the Property or any portion thereof; (e) by any Governmental
Authority or any other third party arising from or related to any actual, threatened, or suspected
Release of a Hazardous Material on, in, under, from, about, or adjacent to the Property, or any
portion thereof, including any Investigation or Remediation at or about the Property; (f) arising
from the Tustin Legacy Backbone Infrastructure Program, the cost or extent thereof, or the
amount of the Project Fair Share Contribution; and/or (g) arising from the formation of any
community facilities district in connection with the recoupment or payment of the Project Fair
Share Contribution or any school related development fees; provided, however, that the
foregoing release by the Releasing Parties shall not apply to the extent that any Claim is the
result of the willful misconduct or fraud of the City or its elected and appointed officials,
employees, representatives, agents or consultants arising after the Close of Escrow. This release
includes Claims of which the Developer is presently unaware or which the Developer does not
presently suspect to exist which, if known by the Developer, would materially affect the
Developer's release to the Released Parties. The Developer specifically waives the provision of
Califomia Civil Code Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
[AEF:ab/IDOCS2_90960_7/090903/4182.004] -30-
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
In this connection and to the extent permitted by law, the Developer hereby agrees, represents
and warrants, which representation and warranty shall survive the Close of Escrow and the
termination of this Agreement and not be merged with the Quitclaim Deed, that the Developer
realizes and acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to Claims or controversies which are presently unknown, unanticipated and
unsuspected, and the Developer further agrees, represents and warrants, which representation and
warranty shall survive the Close of Escrow and the termination of this Agreement and not be
merged with the Quitclaim Deed, that the waivers and releases in this Agreement have been
negotiated and agreed upon in light of that realization and that the Developer, on behalf of itself
and the other Releasing Parties, nevertheless hereby intends to release, discharge and acquit the
Released Parties from any such unknown Claims and controversies which might in any way be
included as a material portion of the consideration given to the City by the Developer in
exchange for the City's performance hereunder.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS
SECTION, (B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS
COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS
SECTION.
CITY'S INITIALS
DEVELOPER'S INITIALS
This release shall nm with the land for the benefit of the City Benefited Property and the City
and all owners and successor owners owning all or any portion of the City Benefited Property
and burdening the Developer Parcel and the owners and successor owners thereof and, to further
evidence its effectiveness with respect to successor owners of the Developer Parcel, shall be
included in its entirety in the Quitclaim Deed.
5. Developer's Due Diligence Investil~ation.
5.1 Due Diligence Period. The Developer's obligation to consummate this transaction
shall be contingent upon the Developer's approval, in the Developer's sole discretion, of the
results of such inspection, examination and other due diligence with regard to the Property and
its suitability for construction of the Project as the Developer may elect to conduct during the
period commencing on the Effective Date and ending at 4:00 P.M. Pacific Time on the date
which is fifteen (15) days following the Effective Date (the "Due Diligence Period"), but
excluding those items known by the Developer, expressly accepted by the Developer or waived
by the Developer as set forth in Section 4.4.2. The Developer acknowledges and agrees that the
Due Diligence Period is adequate time to complete such investigation.
[AEF:abfIDOCS2_90960 7/090903/4182.004] -3 1-
~ 5.2 Limited License. The City hereby grants to the Developer and the Developer's
representatives and agents a license during the Due Diligence Period to enter upon the Property
for purposes of conducting the Developer's due diligence inspection for the sole purpose of
obtaining data and making surveys and tests necessary to carry out this Agreement, provided
that, prior to the effectiveness of such license, the Developer shall: (a) deliver to the City written
evidence that the Developer has procured the insurance required under Section 5.3; (b) give the
City forty-eight (48) hours notice of any intended access which involves work on the Property or
may result in any impairment of the use of the Property; (c) access the Property in a safe manner;
(d) conduct no invasive testing or boring without the written consent of the City, which consent
shall not be unreasonably withheld or delayed; (e) allow no dangerous or hazardous condition
created by the Developer or the Developer's agents to continue beyond the completion of such
access; (f) comply with all Governmental Requirements and obtain all permits required in
connection with such access; and (g) conduct inspections and testing during normal business
hours. The limited license granted in this Agreement is revocable by the City upon any breach of
this Agreement by the Developer or upon the termination of this Agreement. Notwithstanding
the foregoing, the Developer shall not conduct any environmental testing, sampling or boring on
the Property without the prior written consent of the City in its reasonable discretion.
5.3 Insurance. From and after the Effective Date, the Developer shall obtain or cause its
consultants to obtain, at the Developer's sole cost and expense prior to commencement of any
investigative activities on the Property, a policy of commercial general liability insurance
covering the liability of the Developer and the City arising out of any investigative activities, in
an amount and provided by a carrier reasonably approved by the City. Such policy shall meet
the requirements of Sections 11.1 and 11.2 and shall name the City as an additional insured.
Prior to commencement of any work on the Developer Parcel or any other portion of the Project
Site, the Developer shall provide the City with a certificate of such insurance meeting the
requirements of Section 11.1 evidencing the effectiveness of the foregoing coverage. Such
policy of insurance shall be kept and maintained in force until the Close of Escrow and so long
thereafter as necessary to cover any claims of damages suffered by persons or property resulting
from any acts or omissions of the Developer, the Developer's employees, agents, contractors,
suppliers, consultants or other related parties.
5.4 Indemni .ty. The Developer hereby agrees to protect, indenmify, defend and hold the
City and its elected and appointed officials, employees, agents, attorneys, representatives,
contractors, successors and assigns free and hamdess from and against any and all Claims arising
from or related to entry onto the Property by the Developer or the activities or work on or use by
the Developer or the Developer's officers, directors, employees, agents, representatives and/or
contractors of the Property, including with respect to any inspections, surveys, tests,
Investigations and studies (collectively "Inspections") carried out by the Developer on or
adjacent to the Property; provided, however, that the foregoing indemnity shall not apply to any
diminution in the value of the Property resulting solely from Developer's discovery of any pre-
existing condition, pre-existing circumstance or pre-existing Hazardous Material on the Property.
The Developer shall keep the Property free and clear of any mechanics' liens or materialmen's
liens related to the Developer's Inspection of the Property. The indemnification by the
Developer set forth in this Section 5.4 shall survive the Close of Escrow and the termination of
this Agreement and shall not be merged with the Quitclaim Deed.
[AEF:ab/IDOCS2_90960~7/090903/4182.004] -32-
5.5 Review of Certain Records and Materials. The Developer shall also have the right
to enter thc City's offices to review files and materials, including the right to examine those
books, records and files of the City relating to the environmental and other condition of the
Property which the City determines in its sole discretion are not confidential, proprietary or
subject to attorney-client privilege or other privilege rules. The City agrees to make all such
books, records and files available to the Developer and the Developer's attorneys, accountants
and other representatives at City Hall any time during business hours on Business Days upon
reasonable notice from the Developer.
5.6 Communications with City and Third Parties. From and after the Effective Date,
the Developer and the Developer's representatives shall have the right to communicate directly
with (a) Ms. Christine Shingleton, the Assistant City Manager, who shall be the administrator of
this Agreement on behalf of thc City and such other employees, consultants and attorneys of the
City as may be designated by the Assistant City Manager from time to time; (b) with the City
staff, the City Council and planning commission members; staff and members of other public
agencies and/or the general public or other interested parties; and (c) with third parties to all
agreements affecting the Property in connection with the Developer's proposed purchase of the
Property and development of the Project. The City staff shall have the right, but not thc
obligation, to attend and participate in any and all meetings with other public agencies, the
general public, and other interested parties with regards to the Project and upon request therefor
by any City Councilmember, with such City Councilmember. Upon request of the City, the
Developer shall promptly provide the City with a copy of each item of correspondence
(including any enclosures and attachments) sent or received by the Developer in connection with
entitlement, community or governmental approval of thc Project.
5.7 No Financing Contineency. Thc Developer acknowledges that it has examined its
ability to purchase the Property and to develop the Project, including the Developer's ability to
obtain financing therefor. As a condition precedent to entering into this Agreement, the
Developer has provided evidence, satisfactory to the City, of the Developer's ability to obtain
such financing. The Developer acknowledges and agrees that the Developer's purchase of the
Property is subject to no financing contingency whatsoever with respect to either private or
public financing.
5.8 Termination Notice. On or before the expiration of the Due Diligence Period, the
Developer may notify the City in writing of the Developer's election not to purchase the
Property (the "Termination Notice"). If the City has not received the Termination Notice on or
before the end of the Due Diligence Period, the Developer will be deemed to have waived all
remaining due diligence contingencies and elected to purchase the Property on the Closing Date,
subject only to the satisfaction of the Closing Conditions set forth in Article 7. This Agreement
shall automatically terminate upon the City's receipt of the Termination Notice.
6. Title; Survey.
6.1 Survey by Developer. Prior to expiration of thc Due Diligence Period, the
Developer shall, at the Developer's sole expense, obtain a survey for the Developer Parcel
("Survey") prepared by Hunsakcr & Associates ("Surveyor"), which Survey shall be certified
by the Surveyor to the City, the Developer and the Title Company. The Survey shall show, at
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minimum, (a) the botmdaries of the Developer Parcel and all City Dedication Parcels, (b) the
location of all improvements, perimeter improvements, easements, roads, rights-of-way and
encroachments located within twenty (20) feet of the boundary of the Developer Parcel and
(c) all City Dedication Parcels and all other Permitted Exceptions susceptible to depiction on a
map or survey. The Survey will identify all Permitted Exceptions by reference to the recording
information applicable to the documents creating them and also state whether any portion of the
Developer Parcel lies within a flood hazard area. The Developer hereby agrees to indemnify and
hold the City and its elected and appointed officials, employees, agents, attomeys, affiliates,
representatives, contractors and successors and assigns free and harmless from any and all
Claims which the Developer shall incur or sustain as a result of inaccuracy in the legal
description for the Developer Parcel and all City Dedication Parcels. The indemnification by the
Developer set forth in this Section 6.1 shall survive the Close of Escrow and the termination of
this Agreement and shall not be merged with the Quitclaim Deed.
6.2 Permitted Exceptions. Attached hereto as Attachment No. 5 is Schedule A and
Schedule B of the title policy issued to the City by the Title Company with respect to Parcel I-B-
1, including the Developer Parcel, dated May 14, 2002 ("City Title Policy"). Within ten (10)
days following the Effective Date, the Developer may, at the Developer's sole expense, cause
Title Company to prepare and deliver to the Developer a preliminary title commitment from Title
Company ("Title Commitment") committing to issue to the Developer a California Land Title
Association Owner's Policy for the Developer Parcel (the "CLTA Policy") together with true
and complete copies of all instruments referred to therein. The Developer acknowledges and
agrees that it has reviewed the City Title Policy and the other relevant documents referenced
below and that it shall take title to the Developer Parcel subject to the following (collectively
referred to as the "Permitted Exceptions"): (a) all covenants, restrictions and encumbrances,
liens, exceptions, leases, restrictions, deed restrictions and qualifications set forth in or permitted
or contemplated by this Agreement, the Conveyance Agreement and the Federal Deed; (b) all
exceptions indicated in the City Title Policy, and (c) unless removed from title in accordance
with Section 6.3, any and all further title exceptions as may be found in any subsequent update of
title.
6.3 Supplemental Title Reports. Following the Effective Date, within five (5) calendar
days after the Developer's receipt of any supplemental title report issued by the Title Company
concerning the Property (a "Supplemental Title Report"), Developer shall provide the City
with written notice specifying the Developer's disapproval of any item or exception shown on
such Supplemental Title Report not previously included in the City Title Policy ("Disapproved
Exception"), together with the Developer's suggested cure thereof; provided, however that the
Developer shall not have the right to disapprove any such item or exception (a) to which it has
specifically consented pursuant to this Agreement, including all matters appearing on the City
Title Policy, (b) which arose prior to the Effective Date, even if inadvertently or negligently
excluded by the Title Company from the City Title Policy or (c) which did not arise as a result of
the act of or negligent omission to act of the City. Failure of the Developer to disapprove any
item or exception shown on any such Supplement Report on or before the expiration of such five
(5) day period shall be deemed to be an approval of the matters set forth in such Supplemental
Title Report. If the Developer designates a Disapproved Exception, the Developer shall specify
in writing its reason for such disapproval and the City shall have the right, but not the obligation,
to (x) remove or cure the Disapproved Exception to the reasonable satisfaction of the Developer,
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or (y) elect not to cure such Disapproved Exception. If the City fails to notify the Developer of
the City's election to remove or cure such Disapproved Exception or exception within five (5)
calendar days after the City's receipt of the Developer's notice of disapproval, the City shall be
deemed to have elected not to cure such Disapproved Exception. If the City elects or is deemed
to have elected not to cure any such Disapproved Exception then the Developer's exclusive
remedy shall be: (i) to accept such Disapproved Exception and proceed to take title to the
Property without either deduction or offset to the Purchase Price and waive such Disapproved
Exception without cause of action hereunder against the City, or (ii) to provide written notice to
the City within five (5) calendar days after the City's election or deemed election, of the
Developer's election to terminate this Agreement and the Escrow, in which case the Purchase
Price Deposit, to the extent previously paid by the Developer, shall be refunded to the Developer
in accordance with Section 15.1.3. The Developer's failure to provide the City within said five
(5) day period with written notice of either the Developer's acceptance of such Disapproved
Exception or the Developer's election to terminate this Agreement shall constitute the
Developer's acceptance of such Disapproved Exception and its election not to terminate this
Agreement under the foregoing clause (ii). In the event the Developer shall not have terminated
this Agreement under clause (ii) of the preceding sentence, then all matters and exclusions or
exceptions from title insurance coverage shown in such supplement which the Developer shall
have accepted pursuant to this Section 6.3 (other than those which the City has agreed to cure as
provided in this Section 6.3.), together with all Permitted Exceptions described in Section 6.2
shall be deemed Permitted Exceptions.
6.4 ALTA Polic¥~ Endorsements. It shall be a condition precedent to the Developer's
obligation to close that the Title Company issue the CLTA Policy with policy amount as
requested by the Developer, not to exceed the Base Purchase Price. It shall not be a condition
precedent to the Developer's obligation to close that the CLTA Policy show only exceptions to
fee title that are Permitted Exceptions; the Property is being sold by the City "as is." The
Developer shall have the right, at its sole expense, to request and obtain an ALTA extended
coverage owner's policy of insurance (the "ALTA Policy") and any additional title
endorsements ("Developer's Title Endorsements") as the Developer deems necessary; provided
that the issuance of the ALTA Policy and the Developer's Title Endorsements shall not delay the
Close of Escrow and shall not be a condition precedent to the Close of Eserow. The Developer
shall pay for the cost of the CLTA Policy or the ALTA Policy, as the case may be, and the cost
of the Developer's Title Endorsements, and the cost of a lender's policy of title insurance, if
any. The title policy obtained by the Developer is referred to as "Developer's Title Policy."
Developer's failure or inability to obtain the ALTA Policy or any or all of Developer's Title
Endorsements by Close of Escrow shall not be a condition precedent to or result in any delay in
the Close of Escrow.
7. Closing.
7.1 Time and Place of Closing. For purposes of this Agreement, the term "Closing
Date" shall mean October 2, 2003. Closing shall take place on the Closing Date at City Hall,
300 Centennial Way, Tustin, California, or at such other place that the City selects. The Closing
Date may be extended upon mutual written agreement of the Parties. Notwithstanding the
foregoing, Developer acknowledges that the City and Salomon Smith Barney, Inc ("Salomon")
entered into a finan.cing agreement (the "Financing Agreement") secured by a deed of trust on
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certain property in Tustin Legacy made by the Tustin Public Financing Authority in favor of
First American Title as trustee (the "Financing Agreement Trustee"). Pursuant to the
Financing Agreement, the City shall incur interest at an amount estimated by the City to be Four
Thousand Dollars ($4,000.00) per day ("Interest Payment") commencing on September 30,
2003 which obligation shall continue in effect until the date (the "Interest Termination Date")
which is thirty (30) days after written confirmation is issued by the Financing Agreement Trustee
indicating that it has been officially notified that funds are available to repay all sums due under
the Financing Agreement. Accordingly, regardless of whether or not the Close of Escrow
occurs, Developer shall be responsible for all Interest Payments due from the City under the
Financing Agreement following September 30, 2003 and Developer shall pay to the City an
amount equal to the Interest Payment for each day within the period commencing on September
30, 2003 and concluding on the earlier of(a) the Interest Termination Date or (b) the date of
ternfination of this Agreement; provided, however, that such payment shall not be due and
payable for any day on which the City is in Material Default of its obligations under this
Agreement. The aforesaid sums shall be due and payable by the Developer regardless of
whether or not the Close of Escrow occurs and shall be paid from the Escrow either as a separate
line disbursement to the City concurrently with Close of Escrow or as a deduction from the
Deposit if the Close of Escrow does not occur (and if such funds are not sufficient, shall be due
from Developer to City outside of Escrow). The obligations described in this Section shall
survive the te~,,dnation of this Agreement and the Close of Escrow to the extent unpaid.
7.2 Developer's Conditions Precedent to Closing. The Developer's obligation to
purchase the Property and to close Escrow is subject to and conditioned upon the Developer's
satisfaction or the Developer's written waiver, in its sole discretion, as to each of the following
conditions to Close of Escrow ("Developer's Closing Conditions") on or before thc Closing
Date:
7.2.1 The City's Document Deliveries. The City's execution and delivery to
Escrow Holder of the following documents, which documents the City shall deliver to Escrow
not later than one (1) day prior to the Close of Escrow:
(a) the Quitclaim Deed, executed by the City, acknowledged and in recordable
(b) the Memorandum of DDA executed by the City, acknowledged and in
recordable form;
(c) the Bill of Sale executed by the City;
(d) a federal "FIRPTA" Affidavit executed by the City;
(e) California's Real Estate Withholding Exemption Certificate Fores 593-W;
(f) a Subordination, in the form attached hereto as Attachment No. 19, executed
by the City to evidence acknowledgement and consent in favor of each Permitted Mortgagee
intending to make a loan with respect to the Developer Parcel upon or following the Effective
Date, acknowledged and in recordable form.
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(g) such proof of the City's authority and authorization to enter into this
Agreement and consummate the transactions contemplated hereby, and such proof of the power
and authority of the individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of the City to act for and/or bind the City as may be reasonably required by
Title Company and/or the Developer; and
(h) such other documents or instruments as Escrow Holder may reasonably
request to consummate the transaction contemplated in this Agreement.
7.2.2 Title Policy. The Title Company shall be in a position to convert the Title
Commitment to the CLTA Policy and issue same to the Developer.
7.2.3 Leases and Contracts. Except as approved by the Developer in writing or
constituting a Permitted Exception, there shall exist no leases, contracts or fights of occupancy
with respect to the Developer Parcel that shall survive the Close of Escrow.
7.2.4 Vesting Tentative Tract Map. The City shall have approved the Vesting
Tentative Tract Map for the Developer Parcel, which shall permit the construction of 189 Units
thereon.
7.2.5 Concept Plan and Design Review. The City shall have approved the
Concept Plan and Design Review for the Project, which shall be substantially in conformance
with the Preliminary Plan and the Scope of Development.
7.3 The CiW's Conditions Precedent. The City's obligation to sell the Property and to
close the Escrow is subject to and conditioned upon the satisfaction of, or the City's written
waiver, in its sole discretion, of each of the following conditions to Close of Eserow ("City
Closing Conditions") on or before the Closing Date:
7.3.1 Documents to be Delivered Upon Execution of this Agreement. Prior to
or concurrently with the execution of this Agreement by the Developer, the following shall have
occurred:
(a) The Developer shall have obtained and delivered to the City a binder or
certificate evidencing the Environmental Insurance, effective upon the mutual execution of this
Agreement by the Developer and the City;
(b) The Developer shall have delivered to the City (i) a declaration certified by
the President of Developer, Southern California Region that the following documentation
submitted by the Developer to the City prior to the Effective Date is true and correct as of Close
of Escrow: (aa) documentation relating to the corporate, partnership, limited liability or other
similar status, as the case may be, of the Developer's limited liability company and its members
(and, if any member is a limited partnership, its general partners, and if any member is a limited
liability company, its members), including, as applicable: articles or incorporation; State of
California Limited Liability Company Articles of Incorporation and (as to the Developer and its
managing member only) Statement of Information and Operating Agreement (including any
amendments thereto); (bb) copies of all resolutions or other necessary actions taken by such
entity to authorize the execution of this Agreement and any other documents or instruments
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required by this Agreement; (cc) a certificate of status issued by the California Secretary of
State; and (dd) a copy of any Fictitious Business Name Statement if any, as published and filed
with the Clerk of Orange County; (ii) a certification by the Developer that the final Project
budget for the Horizontal Improvements and the Vertical Improvements approved by the City
prior to the Effective Date remains a reasonable budget; and (iii) certificates of good standing
and tax good standing of the Developer and its members or managing member as the case may
be, issued by the California Secretary of State within thirty (30) days of the Close of Escrow.
7.3.2 Developer's Delivery of Purchase Price; Other Costs. Not later than one
(1) day prior to the Close of Escrow, the Developer shall deliver to Escrow the Developer's
Closing Payment, which shall, when added to the Purchase Price Deposit, be equal to the Base
Purchase Price plus all other sums required to pay the Developer's closing costs, the Interest
Payment and other sums required to be paid by the Developer as a condition to Close of Escrow.
Such sums shall include payment into an escrow or provision of a letter of credit with respect to
the Transitional Housing Amount in accordance with Section 13.4.2 of this Agreement.
7.3.3 Developer's Document Deliveries. The Developer's execution and
delivery to Escrow Holder of the following, which documents the Developer shall deliver to the
Escrow not later than one (1) Business Day prior to the Close of Escrow:
(a) the Quitclaim Deed executed by the Developer, acknowledged and in
recordable form;
(b) the Memorandum of DDA executed by the Developer, acknowledged and in
recordable form;
(c) the Bill of Sale executed by the Developer;
(d) the Subsequent Participation Deed of Trust executed by the Developer,
acknowledged and in recordable form;
(e) a Subordination Agreement, in form attached to this Agreement as
Attachment No. 20, executed by each Permitted Mortgagee, acknowledged and in recordable
form.
(0 a reaffirmation of the Developer'.s representations and warranties set forth in
Section 3.1 in from and substance acceptable to the City;
(g) a reaffirmation of the Release described in Section 4.4.2(e) in form and
substance acceptable to the City;
(h) such proof of the Developer's authority and authorization to enter into this
Agreement and consummate the transactions contemplated hereby, and such proof of the power
and authority of the individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of the Developer to act for and/or bind the Developer as may be reasonably
required by Title Company and/or the City; and
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(i) such other documents or instruments as Escrow Holder may reasonably
request to consummate the transaction contemplated in this Agreement.
7.3.4 Evidence of Financing. The Developer shall have submitted to the City
the following evidence of financing:
(a) Demonstration to the satisfaction of the Assistant City Manager or designee
(i) the availability of funds sufficient to pay all costs relating to acquisition of the Developer
Parcel and development of the Project including sufficient equity capital, bonding capacity and
commitment for fimding of the Improvements in writing from a Permitted Mortgagee(s) and
(ii) no material adverse change in the financial capacity or condition of Developer from that
presented to the City in Developer's response to RFP.
(b) A letter from a federally~insured financial institution to the effect that the
Developer has established a commercial account with such financial institution and a good and
established relationship with such financial institution.
(c) Such other documents, as the City, in its sole discretion, determines will assist
in the evaluation of whether the Developer is able to acquire the Developer Parcel, construct the
Improvements and perform in a timely manner all of its other obligations and commitments set
forth in this Agreement.
7.3.5 Vesting Tentative Tract Map. The City shall have approved the Vesting
Tentative Tract Map for the Developer Parcel, which shall permit the construction of 189 Units
thereon.
7.3.6 Concept Plan and Design Review. The City shall have approved the
Concept Plan and Design Review for the Project, which shall be substantially in conformance
with the Preliminary Plan and the Scope of Development.
7.3.7 Transitional Housing Amount. Developer shall have provided the
Transitional Housing Amount either by: (a) provision to the City of an irrevocable stand-by
letter of credit in form and substance and issued by Institutional Lender approved by the City in
its sole discretion or (b) deposit into an escrow account with Escrow Holder of the Transitional
Housing Amount and approval by the City in its sole discretion of the escrow agreement, which
letter of credit and/or escrow agreement, as the case may be, shall permit the City to draw
thereon without prior approval of Developer upon provision by the City to the issuer or Escrow
Holder, as the case may be, of written certification that Developer has failed to pay amounts due
thereunder when due.
7.3.8 Developer's Representations and Warranties. The Developer's
representations and warranties set forth in this Agreement shall be true and correct as of the
Closing Date.
7.3.9 Developer's Covenants. The Developer shall not be in default of any
covenant or agreement to be performed by the Developer under this Agreement.
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7.3.10 Insurance Policies. The Developer shall have submitted to the City
evidence of insurance policies required to be obtained by the Developer pursuant to Article 11.
7.4 Additional Closing Conditions. In addition to the provisions of Sections 7.2.
and 7.3, the Close of Escrow of the Property shall be conditioned upon the following Closing
Conditions, which shall be for the benefit of each of the City and the Developer:
(a) Closing Cost Statement. Escrow Holder shall have delivered at least two (2)
Business Days prior to the Closing Date a statement of costs to each of the City and the
Developer.
(b) Supplementary Escrow Instructions. The City and the Developer shall have
prepared and approved any supplemental Escrow instructions as may be needed.
(c) Closing Certificate. The City and the Developer shall each submit to Escrow
Holder a certificate stating that all Closing Conditions for its benefit have been satisfied or
waived.
7.5 Procedures for Conveyance of Property. From City. to Developer.
7.5.1 Costs and Expenses. The costs and expenses of the Closing shall be
allocated as follows:
(a) City's Costs. The City shall pay (a) the premium for the City Title Policy, if
any; (b) all documentary transfer taxes; (c) one-half (1/2) of all Escrow fees and costs; and
(d) the City's share of prorations, if any. Except as provided in this Agreement, the City shall
pay the fees of all consultants (including lawyers, environmental, engineering and land use
consultants) engaged by it.
(b) Developer's Costs. The Developer shall pay for (a) the premium for the
Developer's Title Policy, including the cost of Developer's Title Endorsements, if any; (b) the
cost, if any, of any title insurance policy required by any Mortgagee; (c) document recording
charges for the Quitclaim Deed, the Memorandum of DDA and other documents recorded at
Closing; (d) one-half (1/2) of all Escrow fees and costs; and (e) the Developer's share of
prorations. The Developer shall pay the fees of all consultants and employees (including
lawyers, environmental, engineering and land use consultants) engaged by it.
(c) Other Costs. All costs and expenses related to the Closing and the transfer of
the Property to the Developer not otherwise allocated in this Agreement shall be allocated
between the Developer and the City in accordance with the customary practice in Orange
County, California.
7.5.2 Possession. The City shall deliver possession of the Property at the Close
of Escrow.
7.5.3 Deliveries to Developer Upon Closing. The City agrees to deliver to the
Developer, on or prior to the Closing Date, outside of Escrow, the following items:
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(a) Leases and Contracts. Originals of all Leases and Contracts which the
Developer has agreed in writing, in its sole discretion, prior to the Close of Escrow, to assume, if
any; to the extent an original Contract is unavailable, a duplicate thereof.
(b) Records and Plans. To the extent in the City's possession, originals or copies
of records and plans that will affect the Property after the Closing.
(c) Licenses and Permits. To the extent in the City's possession, originals or
copies of all licenses and permits affecting the Property.
7.5.4 Prorations.
(a) General. Rentals, revenues and other income, if any, from the Property shall
be prorated on a cash basis as of 11:59 P.M. Pacific Time on the day preceding the Close of
Escrow. Tax payments shall be prorated in accordance with Section 7.5.4(b).
(b) Taxes. The Developer shall be responsible for all taxes, fees and charges
imposed by any Governmental Authority from and after the Close of Escrow. If, after the
Closing, any real estate taxes are assessed against the Property pertaining to the period prior to
the Closing, the City agrees to contact the applicable taxing authority and seek recognition and
enforcement of its tax exemption. The provisions of this Section 7.5.4 shall survive the
termination of this Agreement and the Closing and shall not merge into the Quitclaim Deed.
(c) Contracts and Leases. The Developer has agreed to maintain the Property
from the Effective Date to and through the Closing Date. Accordingly, amounts payable under
Contracts and Leases and any other expenses relating to the Property (excluding real property
taxes or other taxes) shall be prorated on an accrual basis as of the Effective Date (and not the
Closing Date). The City shall pay all amounts due thereunder which accrue prior to the Effective
Date, and, unless previously paid by the Developer, the Developer shall pay all amounts accruing
on the Effective Date and thereafter.
(d) Method of Proration. All prorations shall be made in accordance with
customary practice in Orange County, except as otherwise expressly provided in this Agreement.
The Developer and the City agree to cause a schedule of prorations to be prepared prior to the
Closing Date. Such prorations, if and to the extent known and agreed upon as of the Closing
Date, shall he paid by the Developer to the City (if the prorations result in a net credit to the
City) or by the City to the Developer (if the prorations result in a net credit to the Developer) by
increasing or reducing the cash to be paid by the Developer at the Closing. Any such prorations
not determined or not agreed upon as of the Closing shall be paid by the Developer to the City,
or by the City to the Developer, as the case may be, in cash as soon as practicable following the
Closing. A copy of the schedule of prorations as agreed upon by the Developer and the City
shall be delivered to Escrow Holder at least three (3) Business Days prior to the Closing Date.
All prorations provided for in this Section shall be on an "actual day" basis and a three hundred
sixty-five (365) day year. If the Developer Parcel is part of a larger tax parcel, which as of the
Close of Escrow remains unsegregated on the County Tax Assessor's Roll for the coming fiscal
year, Escrow Holder shall charge the Developer and credit the City for taxes and assessments
allocated to the Developer Parcel on an acreage basis compared to the acreage for the entire
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larger unsegregated parcel, which acreage figures for allocation purposes shall be fairly and
equitably determined and supplied to Escrow Holder by the Parties. The Parties shall cooperate
in good faith to cause the Developer Parcel to be separately assessed and segregated in
Developer's name on the current tax roll at the earliest possible time.
7.5.5 Disbursements and Other Actions by Escrow Holder.
At the Close of Escrow and subject to the satisfaction or waiver by the
benefited party of the Closing Conditions described in Sections 7.2, 7.3 and 7.4, Escrow Holder
shall promptly undertake all of the following in the manner indicated below:
7.5.6 Funds.. Debit or credit all matters addressed in Section 7.5.1 and prorate
all matters addressed in Section 7.5.4 and disburse to the City the Base Purchase Price (as
adjusted by the foregoing debits, credits and prorations) deposited with Escrow Holder by the
Developer.
7.5.7 Recording. Cause the Quitclaim Deed; the Memorandum of DDA and any
other documents which the Developer and the City may mutually direct, or which may be
required to be recorded by the terms of this Agreement to be recorded in the Official Records,
obtain conformed copies thereof and distribute same to the Developer and the City.
7.5.8 Title Policy. Direct the Title Company to issue Developer's Title Policy
to the Developer. Concurrent with the issuance of the Developer's Title Insurance Policy and the
City's Title Policy, if any, the Title Company shall provide such endorsements as may be
requested by the respective insured parties.
7.5.9 Delivery of Documents to Developer and City. Deliver to the Developer
and the City original counterparts (and conformed copies, if applicable) of the Quitclaim Deed,
the Memorandum of DDA, the FIRPTA Affidavit, the California Fol-m 593-W and any other
documents (or copies thereof) deposited into Escrow by the Developer or the City pursuant
hereto, and deliver to the Developer and the City a certified copy of their respective Escrow
closing statements.
7.5.10 Other Actions. Take such other actions as the Developer and the City
direct pursuant to mutually executed supplemental Escrow instructions.
7.5.11 Notice. All communications from the Escrow Holder shall be directed to
the addresses and in the manner established in Section 17.7 of this Agreement for notices,
demands and communications between the Parties.
8. Development of the Developer Parcel.
8.1 Scope of Development.
8.1.1 Requirement to Develop the Project. The Scope of Development attached
to this Agreement as Attachment No. 8 sets forth the overall plan for the Project and
development of the Project Site, including: (a) design, development and construction of the Units
and the Common Areas on the Developer Parcel, (b) design and construction of improvements
[AEF:ab/IDOC S2_90960_7/090903/4182.004] -42-
upon the City Dedication Parcels and (c) design and construction of Developer's Backbone
Infrastructure Work. The Developer shall develop the Project Site in the manner described in the
Scope of Development and in accordance with the Schedule of Performance and the Approved
Project Plans, all as further described below.
8.1.2 Control of Development. The Developer shall have control over the
design and layout of the Horizontal Improvements and the Vertical Improvements (including
height, shape and location of the Vertical Improvements, size of floorplates, and special
landscaping and art features) and over the special uses to be incorporated therein, subject to the
approval of the City thereto pursuant to its governmental authority as entitling agency and
subject to the provisions of this Agreement, including the design review and approval provisions
for the benefit of the City set forth in this Agreement which are undertaken by the City in its
proprietary capacity. Developer shall design and construct (a) the Improvements upon the City
Dedication Parcels and (b) those portions of the Tustin Legacy Backbone Infrastructure Program
described in Section 8.13.2 as Developer's Backbone Infrastructure Work; provided, however,
that such design and construction shall be subject to City review and approval in its sole
discretion and subject to City bid contract requirements, payment of prevailing wages, City
design and construction standards and other requirements established for design and construction
of public improvements by Governmental Requirements.
8.1.3 Project Development Costs. Within the time set forth in the Schedule of
Performance, the Developer shall design and construct the Project at the Developer's sole cost
and expense and without public subsidy of any kind, unless otherwise identified in this
Agreement or as may be agreed to in writing by the City in its sole discretion. Without limiting
the generality of the foregoing, the Developer hereby agrees that all costs associated with
planning, designing, constructing and financing the Project, preparing the Developer Parcel and
constructing all Improvements thereon including all hard costs, soft costs, interest and lender
fees, the cost of services, fees, exactions, dedications, cost overruns, profit, overhead,
consultants' fees, legal fees, wages required to be paid to any person employed by the Developer,
any Assignee, contractor or subcontractor, Quimby Act Fees and the costs of the Project Fair
Share Contribution (collectively, the "Development Costs"), shall be the responsibility of the
Developer without any cost or liability to the City. Construction of Developer's Backbone
Infrastructure Work shall be a credit against the Project's Fair Share Contribution as and to the
extent set forth in Section 8.13.
8.1.4 Compliance with Governmental Requirements and Other Requirements.
The Project shall be consistent with the development concept set forth in the Scope of
Development and shall be developed and maintained in accordance with this Agreement and all
Governmental Requirements, including the Specific Plan, the Reuse Plan, the Entitlements, the
Approved Project Plans, the Development Permits, the Conveyance Agreement and the Federal
Deed.
8.1.5 Construction of Specific Project Components.
(a) Required Horizontal Improvement.q. The Developer shall promptly begin and
thereafter diligently prosecute to Completion in accordance with Schedule of Performance, all
Required Horizontal Improvements when and as required by the City pursuant to the approved
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Vesting Tentative Tract Map, any Entitlement condition, Development Permit, the Specific Plan,
this Agreement or any other Governmental Requirement. The Required Horizontal
Improvements shall include Horizontal Improvements and the Common Area Improvements as
described in this Agreement and the Scope of Development and also as depicted on the
Preliminary Plan attached to this Agreement as Attachment No. 9. If the Project is to be
constructed in Phases, the Park Facilities and all Common Area Improvements other than
roadways, sidewalks and landscaping relating solely to later Phases of the Project shall be
constructed as part of the first Phase of development of the Project. Other than the Common
Area Improvements, the Required Horizontal Improvements may be developed in Phases, at the
reasonable discretion of the Developer subject to: (i) approval by the City in its reasonable
discretion, and (ii) compliance by the Developer with all Governmental Requirements and all
requirements of private utility purveyors such that all Required Horizontal Improvements
required to serve such Phase (including all utility, roadway, storm drain/flood control and other
infrastructure normally required to service a new, first class residential community in Orange
County) have been Completed in accordance with the foregoing conditions and all Governmental
Requirements.
(b) Quimby Fees.
(1) Generally. The Developer shall be responsible at its
sole cost and expense for compliance with the Quimby Act, California Government Code
Section 66477 and shall, as a condition precedent to issuance of building permits, pay for or
provide a Performance Bond complying with City Code Section 9931 (d), in favor of the City,
with surety and in form and substance acceptable to the City in its sole discretion, covering the
Developer's Quimby Fee obligations, in the amount ora cash payment of Four Hundred Twenty
Five Thousand Two Hundred Twenty Five Dollars ($425,225.00) and a Performance Bond in the
amount of One Million Two Hundred Eighty Seven Thousand Six Hundred Dollars ($1,287,600)
, which Performance Bond amount shall be decreased upon compliance by Developer with the
provisions of clauses (2) and (3) below.
(2) Credit for Open Space. If the Project is to be
constructed in Phases, as part of the initial Phase of the Project or otherwise, concurrently with
construction of the Required Horizontal Improvements, as part of the Common Area
Improvements, the Developer shall construct within the Common Areas certain contiguous,
landscaped open-space facilities of not less than one (1) acre in area in the location and as
depicted on the Preliminary Plan and the Approved Project Plans and including improvements as
required by the Tustin Code to qualify for Quimby Fee waiver ("Park Facilities") that shall be
open and accessible to the public. Upon completion of the Park Facilities and as a Condition
Precedent to issuance of any Partial or Final Certificate of Compliance, the Developer shall
execute and record a perpetual easement or other dedication agreement in favor of the City and
its successors and assigns, in form and substance acceptable to the City in its sole discretion, for
the benefit of the public providing in perpetuity and at no cost to the City: (i) the right of the
public, subject to Section 8.1.5(e), to use the Park Facilities, (ii) subject to Section 8.1.5(e),
public access to and from said Park Facilities along and across public and private streets within
the Site, and (iii) maintenance of the Park Facilities by the Developer and its successors and
assigns, in each case subject only to reasonable and non-discriminatory rules and regulations.
Upon (x) completion of such construction to the satisfaction of the City and in compliance with
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all Governmental Regulations applicable thereto, and (y) recordation of an easement or
dedication agreement approved by the City, the City shall provide a credit to the Developer
against its obligation to pay Quimby Act fees in the amount of Nine Hundred Twenty Five
Thousand Dollars ($925,000).
(3) Waiver for Affordable Housing. The Developer
shall receive a credit against Quimby Act fees otherwise due and payable by it to the extent
permitted by the City Code Section 9931 in connection with construction of Affordable Housing
Units in an amount not to exceed Three Hundred Sixty Two Thousand Six Hundred Dollars
($362,600); provided, however, that the benefit of such waiver shall apply with respect to each
Affordable Housing Unit only upon Completion of all Affordable Housing Units in the Phase in
which such Unit is located to Owner-Occupiers.
(c) Vertical Improvements. Upon Completion of the Required Horizontal
Improvements for each Phase and completion of the Common Area Improvements and approval
thereof by the City in accordance with Section 8.1.5(a) and (b), the Developer shall develop the
Project for residential purposes in accordance with this Agreement, regulations and/or conditions
contained in the Specific Plan and any Entitlements, and in accordance with the Approved Final
Plans, the Approved Vesting Tentative Tract Map and any and all Development Permits. In
developing the Project, the Developer shall comply with the Affordable Housing Unit
requirements and the Homeless Assistance Obligations described in Article 13. The City
acknowledges and agrees that the Units to be developed on the Developer Parcel may be
developed in multiple Phases as set forth in the Approved Vesting Tentative Tract Map, and
agrees to cooperate in good faith with the Developer to implement this Agreement so as to
permit such phased development.
(d) Bike Trail and Public Access Easement. As part of the Project, the Developer
shall accommodate, at various locations on the Developer Parcel, pedestrian and bicycle
connections to the regional bike trail to be constructed in the future along the Peters Canyon
Flood Control Channel, as well as to Edinger Avenue, Harvard Avenue and Moffett Avenue
Class 1I bicycle trails as depicted on the Preliminary Plan. The final Vesting Tentative Tract
Map shall include a perpetual easement in favor of the City, its successors and assigns, in form
and substance acceptable to the City in its sole discretion and at no cost to the City, providing
pedestrian and bicycle access to the public upon and across the full length of the foregoing
pedestrian and bicycle connections on the Developer Parcel as they connect to adjoining bike
paths. Notwithstanding the foregoing, the Developer and its successors and assigns shall retain
responsibility for maintenance and repair of the foregoing pedestrian and bicycle connections
constructed on the Developer Parcel.
(e) Not a Gated Development. Unless otherwise agreed by the City in its sole
discretion, neither the Developer Parcel, nor the Project nor any part thereof nor any street or
sidewalk or alleyway thereon shall be privately gated; provided however, that any swimming
pool and/or spa facility within the Common Area and any indoor Common Area Improvement,
including any clubhouse and bathrooms, may be gated or locked and made available solely to
residents of the Project and their guests.
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8.2 Timing and Conditions of Proiect Development.
8.2.1 Schedule of Performance. Attached hereto as Attachment No. 7 is a
Schedule of Performance which sets forth the schedule for submissions, approvals and actions,
including the design and construction of the Improvements. The Parties acknowledge and agree
that the City is entering into this Agreement with the expectation that the projections in the
Schedule of Performance will be met. Following conveyance of the Property to the Developer,
the Developer shall promptly begin and thereafter diligently prosecute to completion all steps
required by the Schedule of Perfomiance including design, construction and development of the
Improvements within the time specified in the Schedule of Performance. The City may, in its
sole discretion and upon written request from the Developer, extend the time specified in the
Schedule of Performance; provided, however, that the City shall not withhold its consent to
reasonable extensions to deadlines in the Schedule of Performance requested by the Developer
so long as the Developer is proceeding in good faith and in a commercially reasonable matter, as
detcmfined by the City in its sole discretion, to comply with the requirements of the Schedule of
Performance and there are no circumstances applicable to or causing the delay suffered by the
Developer that would not apply to other developers attempting to complete similar residential
projects in Orange County. Any such agreed upon changes shall be within the limitations of the
Specific Plan, the Reuse Plan, the Entitlements and applicable Development Permits. Any such
extensions shall not be deemed as amendments to this Agreement. Any such extensions shall be
evidenced by written notice from the Assistant City Manager or designee.
8.2.2 Conditions Relating to Timing and Sequencing of the Development of the
Project. The following are express conditions precedent to the right of the Developer to proceed
with development of the Project.
(a) Prior to the earlier of issuance of the first grading permit (other than
stockpiling permit) or the issuance of the first demolition permit for the Project, the Developer
shall provide a Performance Bond meeting the requirements of this Agreement securing its
obligations to construct the Horizontal Improvements and to pay Quimby Fees and the Project
Fair Share Contribution.
(b) Prior to issuance of the first building permit for the Vertical Improvements,
the Developer shall provide a Performance Bond meeting the requirements of this Agreement
securing its obligations to construct the Vertical Improvements and Developer's Backbone
Infrastructure Work.
(c) In the closing with respect to all Units in the Project, the Developer shall
comply with the following restrictions:
(i) The Developer shall not close escrow for any Unit in Phase
2 or in any subsequent Phase, regardless of product type, unless and until the Developer has
Completed all of the Affordable Housing Units in Phase 1.
(ii) For Units in Phase 2 and for Units in all subsequent Phases,
the Developer shall not close escrow for any Unit other than an Affordable Housing Unit unless
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the Developer has Completed one Affordable Housing Unit for every six closings of non-
Affordable Housing Units.
(iii) Notwithstanding the foregoing, the Developer shall be
prohibited from closing escrow on the final nine (9) non-Affordable Housing Units in the
Project, regardless of Phase, until Completion of all of the Affordable Housing Units in the
Project.
8.3 Land Use Matters.
8.3.1 Entitlements and Development Permits. It is the responsibility of the
Developer, without cost to the City: (a) to obtain all land use approvals and entitlements legally
required by the City or any other Governmental Authority as a condition to development of the
Developer Parcel and construction of the Improvements shown in the Scope of Development and
the Preliminary Plan as the same may be modified f~om time to time with the approval of the
City, including without limitation, the Vesting Tentative Tract Map and the Final Tract Map(s),
the Concept Plan approval, the Design Review approval, and a Conditional Use Permit
(collectively, "Entitlements"); (b) to obtain all Development Permits; and (c) to assure that the
design, construction, use, operation, maintenance, repair and replacement of the Improvements is
carried out in accordance with the provisions of this Agreement, and is permitted by zoning and
all applicable City land use requirements. Nothing contained in this Agreement shall be deemed
to entitle the Developer to any Entitlement or Development Permit or other City approval
necessary for the development of the Project, or to the waiver of any applicable City
requirements relating thereto and the failure of the City to issue or approve any Entitlement
described in this Agreement, including to approve any Vesting Tentative Tract Map, Final Tract
Map(s), Concept Plan or Design Review, or Conditional Use Permit, or to issue any
Development Permit shall not be a default of the City under this Agreement.
8.3.2 Agreement Does Not Grant Entitlements. This Agreement does not
(a) grant any land use entitlement to the Developer, (b) supersede, nullify or amend any
condition which may be imposed by the City in connection with approval of the Project,
(c) guarantee to the Developer or any other party any profits from the development of the
Developer Parcel, or (d) amend any City laws, codes or rules.
8.3.3 Required Entitlements. This Agreement and the development of the
Project shall be subject to the following Entitlement review processes of the City certain of
which are Closing Conditions: (a) Vesting Tentative Tract Map and Final Tract Map approval;
(b) Concept Plan and Design Review approval; (d) Conditional Use Permit or other permit
approval to the extent required by the City Code to permit the uses contemplated in the
Preliminary Plan or Approved Project Plan. Without limiting the foregoing, in developing and
constructing the Project, the Developer shall ensure that the Project complies with all applicable
development standards in the Specific Plan, the City Code and with all building codes,
landscaping, signage and parking requirements, except as may be permitted through variances
and modifications.
8.3.4 Development Permits and Dedications. The Developer shall process,
secure, or cause to be secured any and all permits, certificates and approvals which may be
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required by the City or any other Governmental Authority to subdivide the Developer Parcel for
residential development and to construct the Improvements (collectively, "Development
Permits"). The Vesting Tentative Tract Map and the Final Tract Map(s) shall incorporate all
required dedications described in this Agreement or otherwise required or approved by the City.
8.3.5 City Review of Land Use Applications. Consistent with this Agreement,
the City agrees, without cost or other liability to the City, to support the Developer's efforts to
obtain the Entitlements and Development Permits required for the full implementation of this
Agreement. The City will seek to expedite review of entitlement applications where reasonably
required in order to meet the deadlines set forth in the Schedule of Performance. Without
limiting any other provision of this Agreement, the Developer shall pay all permit fees and other
fees and costs normally charged by the City in connection with application for and review and
approval of Entitlements and Development Permits.
8.3.6 CEQA Requirements. The Parties acknowledge and agree that CEQA is
applicable to the development of the Project. The Developer acknowledges that the Final
EIS/EIR prepared for MCAS Tustin is a program EIR and may not fully satisfy the requirements
of CEQA with respect to development of the Project. The Developer shall be responsible, at its
own cost and expense, for obtaining CEQA approvals and certifications, if any, required by the
City and any other Governmental Authority for development of the Project. The Developer
agrees to cooperate with the City in obtaining information to determine the environmental impact
of the Project, if any. The Developer shall be responsible to pay all costs incurred by the City to
prepare or cause to prepare such environmental documents, if any, as may need to be completed
in order to effect compliance with CEQA, as determined by the City in its sole discretion.
8.3.7 Tract Map Conditions. The Developer acknowledges and agrees that the
City shall require certain satisfaction of conditions and dedication of certain property, as
determined by the City in its sole discretion, in connection with its approval of the Vesting
Tentative Tract Map and the Final Tract Map(s).
8.3.8 Disapproval or Conditions to Other Entitlements. In the event, after
approval of the Specific Plan, the City disapproves any other Entitlements necessary to carry out
this Agreement, or approves such Entitlements subject to conditions that are not consistent with
this Agreement and have a material adverse effect on the Developer's ability to carry out this
Agreement and/or to develop the Project, the City and the Developer agree to cooperate in good
faith and meet and confer regarding the impact resulting from such City action. In that event, the
City and the Developer agree to negotiate and shall cooperate in good faith to modify this
Agreement to respond to any issues that have occurred in the Entitlement process, and if the
Parties cannot agree within thirty (30) days following the commencement of such negotiations
upon the terms of such modifications, either Party may terminate this Agreement in accordance
with Section 15.1.
8.4 Financial Status.
8.4.1 Financial Capability. Until issuance of the Final Certificate of
Compliance, the Developer shall continue to be responsible for demonstrating to the City the
financial capacity and capability to perform its obligations under this Agreement. The Developer
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shall submit any additional financial information of Developer and its members or managing
member as requested by the City within th'arty (30) days of a request by the City pursuant to this
Agreement. The Developer shall identify with specificity the documents which the Developer
wants the City to maintain as confidential documents and a statement as to why the request is
consistent and complies with the provisions of the Public Records Act of the State of Califomia.
If confidentiality is requested and if nondisclosure under the Public Records Act is allowed, the
documents shall be delivered to and maintained by the City and copies shall not be disseminated.
To the extent permitted by law, the City shall not make public disclosure of the documents. The
City's agents, negotiators and consultants may review the statements as necessary as long as
such parties agree to maintain the confidentiality of such statements.
8.4.2 Additional Information. The Developer understands and agrees that the
City reserves the right at any time to reasonably request from the Developer additional
infmmation, including information, data and commitments to ascertain the depth of the
Developer's capability and desire to develop the Project expeditiously.
8.5 School Impact Fees. The Developer also acknowledges and agrees that the
Developer Parcel is subject to imposition of developer school impact fees by the Irvine Unified
School District and may be subject to a future community facilities district for financing of
school facilities to benefit the Irvine Unified School District pursuant to an agreement between
the City and the Irvine Unified School District. The Developer hereby agrees that it will not
oppose a determination by the City or the Irvine Unified School District to form any such district
and to include all or any portion of the Developer Parcel therein.
8.6 Design Approval.
8.6.1 Design Review. It is understood and agreed to by the Developer that the
quality, character and uses proposed for the Project are of particular importance to the City and
that the City, acting in its governmental capacity, shall require Concept Plan and Design Review
approval as part of the Entitlements. In addition, in its proprietary capacity as seller of the real
property that is the subject of this Agreement, the City will require plan review and approval for
the Project as further set forth in this Section 8.6.
8.6.2 Plan Development and Cost. All plans and specifications for the Project
shall be prepared by the Developer at the Developer's sole cost and expense and subject to the
requirements set forth in this Article 8.
8.6.3 Preliminary Plans and Development of Further Design Stages. The
Developer has previously submitted to the City a preliminary site plan for the Project (the
"Preliminary Plan"), a copy of which is attached as Attachment No. 9, graphically depicting the
overall plan for development of the Improvements on the Project Site, and including the required
contents listed in Chapter 4 of the Specific Plan. Within the timeframe shown in the Schedule of
Performance, Developer shall submit for approval by the City, final design drawings and related
documents conforming to the requirements of the City Code and including the required contents
listed in Chapter 4 of the Specific Plan.
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8.6.4 Coordination. The Developer and the Project Architect shall meet with
representatives of the City to review and come to a clear understanding of the planning and
design criteria required by the City. During the preparation of all Design Documents, staff of the
City and the Developer shall hold regular progress meetings to coordinate the preparation of,
submission to, and review of the Design Documents. The staff of the City and the Developer
shall communicate and consult as frequently as necessary to facilitate prompt and speedy
consideration of the Developer's submittals.
8.6.5 Proprietary Review. The City shall have the right of reasonable
architectural review of all plans and submissions, including any proposed changes thereto,
regarding exterior elevations, exterior materials (including selections and colors) and the size,
bulk and scale for all buildings. The Developer acknowledges and agrees that the City's
Community Development Department is responsible for reviewing the working drawings and
issuing the appropriate Development Permits. The exercise of the Assistant City Manager's
office of its right to inspect or review the plans, drawings and related documents for development
of the Project: (a) shall be an exercise of the City's proprietary function and not its governmental
function; (b) shall not constitute an approval by the City of any Entitlements or Development
Permits; (c) shall not constitute a determination by the City of the engineering or structural
design, sufficiency or integrity of the improvements contemplated by such plans, drawings and
related documents, and (d) shall not constitute a determination by the City of the compliance of
such plans, drawings and related documents with any applicable building codes, safety features
and standards. Any inspection or approval of plans, specifications and drawings made or granted
pursuant to this Agreement shall not constitute an inspection or approval of the quality, adequacy
or suitability of such plans, specifications or drawings, nor of the labor, materials, services or
equipment to be fumished or supplied in connection therewith.
8.6.6 Process for Proprietary Review. In order to comply with the provisions of
Sections 8.6.5, at each of the schematic design, design development and construction document
stages, the Developer shall submit two sets of Design Documents for the Improvements to the
City. All plans to be submitted to the City shall be submitted in writing over the signature of the
Developer or a representative duly authorized by the Developer in writing. If the City approves
such Design Documents, the City shall endorse its approval on one set of submitted documents
and return the same to the Person from whom the documents were received. The City shall
conclusively be deemed to have given its approval to such Design Documents unless, within ten
(10) Business Days after the City's receipt of such Design Documents, the City gives written
notice of disapproval to the Developer specifying in reasonable detail each item that the City
disapproves and the reasons for such disapproval. In the event of disapproval by the City of such
Design Documents for any Improvements, the Developer shall make changes in response to the
City's notice of disapproval and resubmit such Design Documents to the City for review and
approval in accordance with the provisions of this Section 8.6.6 (except that in such case the
City's review period shall be five (5) Business Days rather than ten (10) Business Days).
Submissions of plans by the Developer with respect to partial portions of the Project or the
Developer Parcel shall be permitted provided that the same shall be sufficient to permit review
by the City for the purposes set forth above. The Developer's final submittal to the City, when
approved by the City in its proprietary capacity, shall constitute the "Final Plans."
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8.6.7 Later Stage Design and Construction. The Developer shall not commence
or permit commencement of any work of construction in connection with any subsequent
development or any redevelopment of the Project, other than Vertical Improvements constructed
in accordance with the Approved Project Plans, interior construction work, building facade
replacements or building repair or restoration on the same footprint following a casualty, without
the written consent of the City. If the Developer contemplates any action not permitted by the
foregoing, the Developer shall submit the applicable Design Documents to the City for approval
in accordance with Sections 8.6.5 and 8.6.6 prior to commencing any construction work. The
City shall have the right to approve or disapprove any such Design Documents in accordance
with the standards and procedures for the City's review and approval set forth in such sections.
8.6.8 City's Governmental Review. The Parties acknowledge that the City shall
have the right to review all plans and submissions, including any changes therein, through its
normal plan review and Entitlement process and that the City may exercise its governmental
discretion in review of any of the plans and submissions. The Community Development
Department is authorized to mutually approve minor changes to building plans after approval by
the City provided such changes do not significantly reduce the quality of the development
concept or the design and materials to be used in enhancing the architecture and aesthetics of the
Improvements.
8.6.9 Exculpation. The City shall not be liable in damages to the Developer or
to any owner, lessee, any licensee or other Person, on account of (a) any approvals by the City,
including by the Assistant City Manager or designee whether made in the governmental or
proprietary capacity of the City, or any disapproval of any Design Document submittal, whether
or not defective or whether or not in compliance with applicable laws or ordinances; (b) any
construction, performance or nonperformance by the Developer or any owner, lessee, licensee or
other Person of any work on the Burdened Property, whether or not pursuant to approved Design
Document submittals or whether or not in compliance with applicable laws or ordinances;
(c) any mistake in judgment, negligence, action or omission in exercising its rights, powers and
responsibilities hereunder; and/or (d) the enforcement or failure to enforce any of these
Restrictions. Every Person who makes Design Document submittals for approval agrees by
reason of such submittal, and the Developer and every subsequent owner of the Developer Parcel
or any portion thereof agrees by acquiring title thereto or an interest therein, not to bring any suit
or action against the City seeking to recover any such damages and expressly waives any such
claim or cause of action which it would otherwise be entitled to assert. The review of any
Design Document submittal shall not constitute the assumption of any responsibility by, or
impose any liability upon, the City as to the accuracy, efficacy, sufficiency or legality thereof nor
decrease or diminish any liability, duties, responsibilities, or obligations of the Developer under
this Agreement.
8.6.10 No Supervision or Control. The City (whether acting in its governmental
or proprietary capacity) does not have any right and hereby expressly disclaims any right, of
supervision or control over the architects, designers, engineers or persons responsible for drafting
or fommlating of the plans, drawings and related documents of the Developer.
8.6.11 Approved Project Plans. Upon approval by the City of the Entitlements
and subsequent approval by the City of the Final Plans in accordance with Section 8.6, the plans
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so approved (the "Approved Project Plans"), shall govern development of the Improvements
on the Developer Parcel. To thc extent of any inconsistencies between the plans identified in the
Scope of Development or the Preliminary Plans and the Approved Project Plans, the Approved
Project Plans shall govern and control as to the development of the Developer Parcel.
8.7 Construction Covenants.
With respect to construction of the Project, the Developer hereby covenants and
agrees as follows:
(a) The Developer shall maintain throughout the tem~ of this Agreement,
sufficient equity, capital and firm binding commitments for financing necessary to (i) pay
through Completion, all costs of development, construction, marketing and sale of all the
Improvements as defined in the Scope of Development; and (ii) enable the Developer to perform
and satisfy all the covenants of the Developer contained in this Agreement. The Developer shall
not tmdertake such additional projects as could reasonably be expected to jeopardize the
sufficiency of such equity, capital and firm and binding commitments for the purposed expressed
in the preceding sentence.
(b) The development of the Project shall be done in a professional and competent
manner. The Developer shall perform all work required to complete the Project and related work
in accordance with all Governmental Requirements.
(c) The Developer shall be responsible for the timeliness and quality of all work
performed and materials and equipment furnished in connection with the Project, whether the
work, materials and equipment are performed and furnished by the Developer or through
subcontractors, sub-subcontractors (of all tiers) and suppliers.
(d) The Developer shall promptly cause to be removed (by way of release bonds,
if necessary) any and all mechanic's liens, stop notices and/or bonded stop notices that are
recorded and/or served by subcontractors, sub-subcontractors (of all tiers) and suppliers in
connection with the Project.
(e) The Developer shall commence the development of the Project promptly and
shall assure the completion of the development of the Project in accordance with the projections
set forth in the Schedule of Performance.
8.8 Ci~. Rights of Access.
In addition to any rights it may have in its governmental capacity, representatives
of the City shall have the reasonable right of access to all portions of the Developer Parcel,
without charges or fees, at normal construction hours during the period of construction for the
purposes of this Agreement, including the inspection of the work being performed in
constructing the Improvements. The City agrees to indemnify, defend and hold the Developer
harmless for any and all claims, liability and damages arising out of any such nongovernmental
inspection or other activity on the Developer Parcel by the City, or their respective agents,
employees or contractors permitted pursuant to this Section 8.8, except to the extent caused by
the negligence or willful misconduct of the Developer.
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8.9 Disclaimer of Responsibili~, by Ci .ry.
The City neither undertakes nor assumes nor will have any responsibility or duty
to the Developer or to any Assignee or to any other third party to review, inspect, supervise, pass
judgment upon or infomt the Developer, Assignee or any third party of any matter in connection
with the development or construction of Improvements, whether regarding the quality, adequacy
or suitability of the plans, any labor, service, equipment or material furnished for development of
the Project, any person furnishing same, or otherwise. The Developer, any Assignee and all third
parties shall rely upon its or their own judgment regarding such matters, and any review,
inspection, supervision, exercise of judgment or information supplied to the Developer, Assignee
or to any third party by the City in connection with such matter is for the public purpose of
developing the Project, and neither the Developer nor any Assignee nor any third party is entitled
to rely thereon. The City shall not be responsible for any of the work of construction,
improvement or development of the Project.
8.10 CC&Rs.
The common area subdivision conditions, covenants and restrictions ("CC&Rs")
prepared by Developer for recordation against the Developer Parcel shall be subject to review
and approval by the City. The CC&Rs shall include, at a minimum, the following provisions:
(a) creation of only one Homeowner's Association for the Project; (b) a maintenance covenant
for the benefit of the City as set forth in Section 12.2 or as otherwise agreed by the City in its
sole discretion, (c) the release provisions set forth in Section 4.4.2(e) and (d) all other
requirements included in the conditions of approval for the Vesting Tentative Tract Map and
Final Tract Map(s) for the Project.
8.11 Loeal~ State and Federal Laws.
The Developer shall carry out the construction of the Project, including all
Improvements, in confmmity with all Governmental Requirements, including all applicable
federal and State labor laws and requirements and shall investigate the applicability of and, if and
to the extent applicable, pay prevailing wages meeting the requirements of State law or Davis-
Bacon act wages required by federal law, or if both are applicable, meeting the higher of the
foregoing requirements. The Developer hereby agrees that it shall be fully responsible for
determining whether the foregoing wage requirements are applicable and agrees to indemnify,
defend and hold the City and its elected and appointed officials, employees, agents, attorneys,
affiliates representatives, contractors, successors and assigns free and harmless from and against
any and all Claims arising from or related to compliance by the Developer or the Developer's
officers, directors, employees, agents, representatives and/or contractors in construction of the
Project with the prevailing wage requirements imposed by State law and/or the Davis-Bacon Act
requirements imposed by federal law.
8.12 Taxes~ Assessments~ Encumbrances and Liens.
The Developer shall pay when due and prior to delinquency all real estate taxes
and assessments assessed and levied on or against all portions of the Developer Parcel
subsequent to the conveyance of fee thereto by the City to the Developer. The Developer shall
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not place, or allow to be placed, on its interests in the Developer Parcel, Parcel, Lot or Unit, or
any portion thereof, any Mortgage or encumbrance of lien not authorized by this Agreement.
The Developer shall remove, or shall have removed, any levy or attachment made on its interests
in the Property (or any portion thereof), or shall assure the satisfaction thereof within a
reasonable time but in any event prior to Foreclosure. Nothing contained in this Agreement shall
be deemed to prohibit the Developer from contesting the validity or amount of any tax,
assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect
thereto.
8.13 Tustin Legacy Backbone Infrastructure Program.
8.13.1 Developer's Agreements Regarding Tustin Legacy Backbone
Infrastructure Contribution. The Developer acknowledges and agrees that: (a) the development
of the Project, together with the development of the remainder of Tustin Legacy, will contribute
to the need for Tustin Legacy backbone infrastructure located off of the Developer Parcel,
including Tustin Legacy roadway improvements; traffic and circulation mitigation to support the
Tustin Legacy project; domestic and reclaimed water; sewer; telemetry; storm drains and flood
control channels; and utilities backbone (electricity, gas, telephone, cable, telecommunications,
etc.) (collectively "Tustin Legacy Backbone Infrastructure Program"); (b) the Developer
shall make a fair share contribution on behalf of the Project to design, construction and
development by the City, or third parties on behalf of the City, of the Tustin Legacy Backbone
Infrastructure Program, which Project Fair Share Contribution is described and subject to further
refinement and increase or decrease as further described below; (c) the Developer has had an
opportunity to review the budgets, plans and projections developed by the City in connection
with the Tustin Legacy Backbone Infrastructure Program and the studies prepared by the City in
connection therewith; (d) there is an essential nexus between the imposition on the Project of the
Project Fair Share Contribution (defined below) and a legitimate govermnental interest; and
(e) the Project Fair Share Contribution is roughly proportional to and reasonably and rationally
related to the impacts that will be caused by development of the Project.
8.13.2 Funding of Project's Fair Share of Backbone Infi:astructure.
(a) As a condition precedent to issuance of the first grading or building pemfit
(other than stockpiling or demolition permit), whichever is earlier, for any portion of the
Developer Parcel, the Developer hereby agrees (a) to provide to the City a Performance Bond,
with surety and in fomt and substance each acceptable to the City in its sole discretion and
meeting the requirements of the City Code, for the Project's fair share allocation of the Tustin
Legacy Backbone Infrastructure Program ("Project Fair Share Contribution"), which is
initially estimated by the City to be Four Million Seven Hundred Seventy-Three Thousand Four
Hundred Thirty-Eight Dollars ($4,773,438.00) and such additional sums as are required to
complete Developer's Backbone Infrastructure Work and (b) to enter into an Infrastructure
Agreement with the City governing the repayment by the City of excess contributions of
Developer to the Tustin Legacy Backbone Infrastructure Program, if any.
(b) Following Close of Escrow and prior to issuance of a building pemdt by the
City, and as part of its refinement of the Tustin Legacy Backbone Infrastructure Program, the
City shall detemfine the final Project Fair Share Contribution, which shall be determined by
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adjusting the estimated amount set forth above to reflect (a) design modifications if any, to the
Tustin Legacy Backbone Infrastructure Program to such date and (b) increases in cost to
construct the Tustin Legacy Backbone Infrastructure Program determined as of the month in
which the first grading permit (other than stockpiling or demolition permit) is issued, which
increase shall be determined by applying any increase in general construction cost from the date
of determination of the initial Tustin Legacy Backbone Infrastructure Program construction costs
to the date of such permit issuance, using the Construction Cost Index for Los
Angeles/Anaheim/Riverside County areas.
8.13.3 Developer's Backbone Infrastructure Work. In addition to Developer's
obligations to pay the Project Fair Share Contribution, Developer shall be responsible for design
and construction of the following infrastructure constituting a portion of the Tustin Legacy
Backbone Infrastructure Program ("Developer's Backbone Infrastructure Work") and shall
provide the City with a Perfomiance Bond meeting the criteria established in Section 8.13.2(a)
for such work:
(i) the full widening and improvement to Moffett Avenue from
Harvard Avenue to Peters Canyon Channel including right-of-way and intersection
enhancements to the intersection of Moffett Avenue and Harvard Avenue as described in the
Scope of Development, to include all master planned systems including the street, bikeways
(Class II), street lighting, domestic water line, gas, storm drainage, telephone, electricity, sewage
and reclaimed water, telemetry and any necessary telecommunication systems as shown in the
Specific Plan and/or Irvine Ranch Water District Sub Area Master Plan for Tustin Legacy,
and/or as approved by the City and all responsible private utility purveyors from existing
backbone systems adjacent to the Developer Parcel. Developer's obligation shall include design
and construction of all transitional components of the Tustin Legacy Backbone Infrastructure
Program that are determined by the City, in its sole discretion, to be necessary to construct and
operate the Project, protect the public health and safety and/or create an opportunity for a logical
and orderly future phasing of Tustin Legacy Backbone Infrastructure Work which are to be
connected to Developer's Backbone Infrastructure Work. Developer acknowledges that the new
backbone systems shall be replacing existing systems owned by the City or utility purveyors
located in or adjacent to Moffett Avenue and that although Developer may utilize such existing
systems on a temporary basis, subject only to approval of the City or the applicable private utility
purveyor, Developer shall show all existing systems (even if subject to temporary reuse) for
demolition or abandonment on the public improvement plans if they are determined by the City
or any private utility purveyor owning such system to be ultimately unnecessary and Developer
shall, at its sole cost and expense, demolish such existing systems upon cessation of use thereof
by Developer;
(ii)
Class II (on-road) bikeways on both sides of Moffett
Avenue;
(iii) Install new 12-inch domestic water line, new 16-inch
reclaimed water line and new 1 O-inch sanitary sewer line in Moffett Avenue in the location
shown on the IRWD master plan unless the Director of Public Works for the City (the "Public
Works Director") and the IRWD agree in writing that one or more of such lines are not required
as backbone infrastructure in Moffett Avenue and each of IRWD and the Public Works Director
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approve plans submitted by the Developer for alternate domestic and reclaimed water and
sanitary sewer lines to be installed by Developer in locations approved by the Public Works
Director and IRWD, which directly serve the Developer Parcel and Parcel 35 to the south from
the adjoining Harvard Avenue right of way;
(iv) Install new 18-inch brine line in Moffett Avenue;
(v) Install new storm drain line in a location approved by the
City and by the County's Flood Control District, unless the Public Works Director and the
County's Flood Control District each determine that the existing line adequately services the
Project;
(vi) Install new "backbone" dry utilities (electric, gas, cable,
telephone) as determined necessary by private utility purveyors and approved by the Public
Works Director.
(b) Design and construction of Developer's Backbone Infrastructure Work shall
be carded out in accordance with (i) the Scope of Development and the Schedule of
Performance; (ii) plans and specifications prepared by the Developer and approved by the City;
(iii) all federal, state, regional and local laws, statutes, ordinances, rules and regulations and all
requirements and regulations of the City including applicable zoning and (iv) the provisions of
Section 8.1.2.
8.13.4 Reconciliation. Upon final detemdnation by the City of the Project Fair
Share Contribution and completion by Developer of Developer's Backbone Infrastructure Work,
Developer shall submit to the City a statement setting forth all amounts expended by Developer
in design and construction of Developer's Backbone Infrastructure Work. Such amount, upon
approval thereof by the City, together with additional sums, if any, bonded by the Developer on
account of the Tustin Legacy Backbone Infrastructure Program and actually collected by the City
is referred to herein as "Developer's Infrastructure Payment".
(a) To the extent that Developer's Infrastructure Payment exceeds the finally
determined Project Fair Share Contribution, the amount of the excess ( the" Positive
Difference"), shall be reimbursed to Developer in accordance with the provisions of an
infrastructure reimbursement agreement to be entered into by the City and Developer (the
"Infrastructure Reimbursement Agreement") prior to and as a condition precedent to issuance
of the first grading permit or building permit for the Project (other than stockpiling or demolition
permits), whichever is earlier. The Infrastructure Reimbursement Agreement shall provide as
follows:
(i) any Positive Difference shall be reimbursed to Developer
following the date of the Developer's written notice to the City, by release of the portion of the
Performance Bonds posted by Developer, if any, in an amount equal to the Positive Difference
and Developer's Infrastructure Payment amount shall be reduced by the amount of the bonds so
released. If, following release of all of the Performance Bond posted by the Developer,
Developer's Infrastructure Payment (as reduced by the amount of the Perfmmance Bond
reduction) continues to exceed the final Project Fair Share Contribution, the City shall pay to
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Developer the Positive Difference upon the first to occur of City's receipt of(x) land sale
proceeds on those parcels denominated on the Reuse Plan as Disposal Parcels 10 and 11 in the
vicinity of Jamboree and Barranca or (y) bond proceeds from a Community Facilities District or
assessment district covering Tustin Legacy to the extent the City determines to issue such bonds;
provided that until the occurrence of one of the foregoing events has occurred, the City shall
have no obligation to reimburse Developer for any remaining Positive Difference.
(b) To the extent that the City determines, at any time (including prior to
completion by Developer of Developer's Backbone Infrastructure Work) that Developer's
Infrastructure Payment is or shall be less than the finally determined Project Fair Share
Contribution (the "Negative Difference"), the Developer, within ten (10) Business Days
following the date of the City's written notice thereof, shall provide to the City an additional
Performance Bond, with surety and in form and substance each acceptable to the City in its sole
discretion, in the amotmt of the Negative Difference as necessary to fully bond the Project Fair
Share Contribution in accordance with the City Code.
8.13.5 District Formation. The Developer hereby acknowledges and agrees that
the City shall have the right to determine, in its sole discretion, to fund the Tustin Legacy
Backbone Infrastructure Program and/or the Project Fair Share Contribution through imposition
of an assessment district or community facilities district established to finance the Tustin Legacy
Backbone Infrastructure Program. The Developer hereby agrees that it will not oppose a
detemfination by the City to form any such district and to include all or any portion of the
Developer Parcel therein, so long as the overall tax rate, with the exception of any special
assessments not controlled by the City, for all Units in the Project does not exceed 1.75 percent
of the assessed value of each Unit and the rate and method of allocation of special taxes is
according to law. The obligations of the Developer pursuant to this Agreement shall not be
modified or affected in any way in the event the City determines not to form an assessment
district or community facilities district or not to sell bonds to represent such assessments. In the
event the City does determine, in its sole discretion, to form an assessment district or community
facilities district and to cause the issuance of bonds by such district, the City shall reimburse the
Developer for the Project Fair Share Contribution advanced by the Developer, if any, which are
(i) approved by the City in its sole discretion as reimbursable through said financing mechanism
and (ii) legally eligible for reimbursement from bond proceeds (including engineering design
costs and plan check fees), subject to all applicable Governmental Regulations.
8.13.6 Effect on Existing Utilities. Notwithstanding any other provision of this
Agreement, Developer shall not alter, modify, repair, replace, or relocate (each an "Alteration")
any part of the City-owned utility systems or Utility Systems on the Developer Parcel to be
conveyed to Developer by the City pursuant to the Bill of Sale without the prior written consent
of the City, which the City shall not unreasonably withhold, provided that it shall be deemed
reasonable for the City to withhold its consent to such Alteration if the City determines that such
Alteration may interfere with the construction and operation of the Project, may negatively
impact public health and safety, may negatively impact the logical and orderly future phasing of
Tustin Legacy Backbone Infrastructure Work, or may interfere with the development or reuse of
any portion of MCAS Tustin or reduce or negatively affect utility services in the surrounding
community.
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9. Certificate of Compliance.
9.1 Completion; Schedule of Performance. Following the mutual execution and
delivery of this Agreement, the Developer shall proceed diligently and in good faith to complete
the Entitlement process, design and construct the Project and satisfy all Conditions Precedent
relating to issuance of a Certificate of Compliance for each Phase of the Project (if issued for a
Phase, or any portion less than the entire Project, a "Partial Certificate of Compliance"),or for
the Project as a whole (in which case, a "Final Certificate of Compliance"), as the case may be,
when and as required by this Agreement in accordance with the Schedule of Performance. Each
Certificate of Compliance shall be in the form set forth on Attachment No. 18.
9.2 Conditions Precedent to Issuance of Certificate of Compliance. After Completion
of all construction and development required to be undertaken by the Developer in conformity
with this Agreement and satisfaction of the Conditions Precedent set forth below, to the
satisfaction of the City in its sole discretion, the City shall deliver to the Developer or Assignee,
as the case may be, a Final Certificate of Compliance, upon written request therefor by thc
Developer. To the extent that portions of the Project arc constructed and completed in distinct
Phases approved by the City, upon request by the Developer, the City may issue Partial
Certificates of Compliance as each Phase of the Project is Completed and ready for sale. Partial
Certificates of Compliance shall be granted provided that the relevant Conditions Precedent set
forth below with respect to such Phase of the Project are met to the satisfaction of the City in its
sole discretion. The Conditions Precedent to issuance of a Partial Certificate of Compliance for
any Phase or to issuance ora Final Certificate of Compliance for the Project are set forth in
Section 9.6.2.
9.3 Conclusive Presumption. The Final Certificate of Compliance shall be, and shall so
state, conclusive determination of satisfactory completion of the obligations of the Developer
pursuant to this Agreement with respect to thc Project and any Partial Certificate of Compliance
shall be, and shall so state, conclusive determination of satisfactory completion of the obligations
of the Developer pursuant to this Agreement with respect to such Phase(s) or Parcel(s).
9.4 Release of Bonds. Upon issuance of the applicable Certificate of Compliance, the
City shall release the portion of any Performance Bonds for the Improvements covered in their
entirety by such Certificate of Compliance. Each Certificate of Compliance shall bc in such
form as to p¢lmit it to be recorded in the Official Records.
9.5 Not Evidence. Issuance by the City of a Certificate of Compliance shall not
constitute evidence of compliance with or satisfaction of any obligation of the Developer to any
insurer ora Mortgage securing money loaned to finance the Improvements, nor any part thereof.
Such Certificate of Compliance is not notice of completion as referred to in Section 3093 of the
California Civil Code.
9.6 Conditions to Issuance of Certificate of Compliance
9.6.1 Generally. After Completion of all Improvements to be completed by the
Developer upon the Developer Parcel or any Phase thereof in compliance with the reims of this
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Agreement and compliance by the Developer with all other provisions of this Agreement, and
upon satisfaction of the conditions set forth in Section 9.6.2, the City shall furnish the Developer
with a Certificate of Compliance upon written request therefor by the Developer. Such
Certificate of Compliance shall be, and shall so state, conclusive determination of satisfactory
Completion of the Improvements required by this Agreement, and of full compliance with the
terms hereof with respect to such Improvements. After the recordation of the Certificate of
Compliance, any Person then owning or thereafter purchasing, leasing, or otherwise acquiring
any interest therein shall not (because of such ownership, purchase, lease or acquisition) incur
any obligation or liability under this Agreement with respect to such Improvements, except that
such Party shall continue be bound by any covenants contained in Articles 10 and 12 of this
Agreement. Issuance of the Certificate of Compliance shall not waive any rights or claim that
the City may have against any party for latent or patent defects in design, construction or similar
matters under any applicable law, nor shall it be evidence of satisfaction of any of the
Developer's obligations to others, not a party to this Agreement. The Certificate of Compliance
shall be in such form as to pemdt it to be recorded in the Official Records.
9.6.2 Conditions Precedent. The City shall not be obligated to issue the Final
Certificate of Compliance for the Project as a whole, or a Partial Certificate of Compliance with
respect to any Phase, unless and until each of the following has occurred (the "Conditions
Precedent"):
(a) final inspection of the Project or Phase, as applicable, by or on behalf of the
City and deteJmination by the City that the Improvements thereon and all Improvements required
in connection with the Project or Phase as applicable have been Completed in conformance with
this Agreement and all Governmental Requirements;
(b) issuance of a certificate of substantial completion for the Project or the Phase,
as applicable, by the Project Architect;
(c) issuance of the final certificate of occupancy by the City for all Units
(including Affordable Housing Units) within the Project or the Phase for which a Certificate of
Compliance is sought;
(d) releases or waivers of all liens or rights to record liens having been obtained
from the general contractor and all subcontractors having served valid preliminary 20-day
notices, or the endorsements to their respective Mortgagee's title insurance policies, and the
statutory period for filing liens having expired;
(e) payment by the Developer to the City of all funds owing to the City, including
payment in full or provision of Performance Bond or other security for the Subsequent Purchase
Price in a manner acceptable to the City in its sole discretion, and as further set forth in
Section 4.2.2 and Attachment No. 6A;
(f) review and approval by the City of the form and substance of the CC&Rs to
be recorded against the Developer Parcel to govern use, maintenance and operation of the
Developer Parcel by the Homeowners' Association and the owners of the Lots and Units on the
Developer Parcel and recordation of the CC&Rs against the Developer Parcel in the Official
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Records with subordination thereto by all Mortgagees of record as of the date of such
recordation;
(g) closing with respect to all Affordable Housing Units within the Project or the
Phase, as applicable;
(h) completion by the Developer of Developer's Backbone Infrastructure Work;
and
(i) execution by the Developer and delivery in recordable form of the easement
agreements described in Sections 8.1.5(b) and (d).
9.6.3 City Oblieations. The City shall not unreasonably withhold or delay
issuance of any Certificate of Compliance. If the City refuses or fails to issue a Certificate of
Compliance after written request from the Developer, provided each of the conditions
established in Section 9.6.2 have been satisfied, the City shall within ten (10) Business Days of
the written request, provide a written statement which details the reasons the City refused or
failed to issue the Certificate of Compliance. The statement shall also contain a statement of the
actions that the Developer must take to obtain a Certificate of Compliance.
9.6.4 Effect of Final Certificate of Compliance.
Upon recordation of the Final Certificate of Compliance, this Agreement shall
terminate and shall be of no further force and effect, except that:
(a) the provisions of Section 4.4.2, including the release set forth therein, shall
survive in perpetuity;
(b) the covenants set forth in Sections 12.3, 12.4, 12.5 and 12.6 shall survive in
perpetuity;
(c) the Affordable Housing Covenant, Affordable Housing Trust Deeds,
Affordable Housing Note and Affordable Housing Option Agreements shall remain in effect for
each Affordable Housing Unit for a period of 45 years from the date of close of escrow of said
Unit to its first Owner-Occupier.
(d) the environmental indemnity set forth in Section 10.1 shall remain in effect
and shall bind Developer and its personal successors and assigns but shall not be binding upon
Owner-Occupiers of Units.
(e) any and all obligations contained in the Federal Deed shall survive in
perpetuity, unless such obligations are released by the Federal Government.
10. Indemnification and Environmental Provisions.
10.1 Developer's Indemnification. As a material part of the consideration for this
Agreement, and to the maximum extent permitted by law, the Developer shall indemnify,
protect, defend, assume all responsibility for and hold harmless the City and its appointed and
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elected officials, agents, attorneys, affiliates, employees, contractors and representatives
(collectively referred to as the "Indenmified Parties"), with counsel reasonably acceptable to
the City, from and against any and all Claims resulting or arising fi'om or in any way connected
with the following, provided the Developer shall not be responsible for (and such indemnity shall
not apply to) the gross negligence or willful misconduct of the Indemnified Parties:
(a) The Developer's marketing, sale or use of the Developer Parcel in any way;
(b) Any other activities of the Developer;
(c) Any plans or designs for Improvements prepared by or on behalf of the
Developer, including any errors or omissions with respect to such plans or designs;
(d) Any loss or damage to the City resulting from any inaccuracy in or breach of
any representation or warranty of the Developer, or resulting from any breach or default by the
Developer, under this Agreement; and
(e) Any development or construction of any Horizontal Improvements by the
Developer, whether regarding the quality, adequacy or suitability of the plans, any labor, service,
equipment or material furnished to the Developer Parcel, any person furnishing the same, or
otherwise.
10.2 Environmental Indemni~,. As a material part of the consideration for this
Agreement, and effective as to each of Parcel I-B-I, the Property and the Project Site, upon the
Developer's acquisition of fee title to all or any portion thereof, the Developer shall, to the
maximum extent permitted by law, indemnify, protect, defend, assume all responsibility for and
hold harmless the Indemnified Parties from and against any and all Claims resulting or arising
from or in any way connected with the existence, Release, threatened Release, presence, storage,
treatment, transportation and/or disposal of any Hazardous Materials at any time on, in, under,
from, about or adjacent to any portion or portions of said lands, regardless of whether any such
condition is known or unknown now or upon acquisition and regardless of whether any such
condition pre-dates acquisition or is subsequently caused, created or occurring, provided,
however, that the Developer shall not be responsible for (and such indemnity shall not apply to)
the gross negligence or willful misconduct of the Indemnified Parties. This environmental
indemnity shall be included in any recorded memorandum of this Agreement against said lands
and shall be binding upon successors and assigns of the Developer owning all or any part thereof
(except Owner-Occupiers) in accordance with Section 10.3.
10.3 Duration of Indemnities. The indemnities set forth in this Article 10 shall
survive the Close of Escrow and the termination of this Agreement and shall not merge into the
Quitclaim Deed; provided, however that such indemnities shall cease to run with respect to any
Parcel upon recordation of a Certificate of Compliance with respect to such Parcel.
Notwithstanding that such indemnities shall cease to run with any Parcel, they shall continue to
be personally binding and in full force and effect in perpetuity with respect to Developer and its
successors in interest.
10.4 Claim Response. In the event that any Environmental Agency or other third
party brings, makes, alleges, or asserts a Claim against the Developer, arising from or related to
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any actual, threatened, or suspected Release of Hazardous Materials on or about the Project Site,
including any Claim for Investigation or Remediation on the Project Site, or such Environmental
Agency or other third party orders, demands, or otherwise requires that any Investigation or
Remediation be conducted on the Project Site, the Developer shall promptly notify the City in
writing and shall promptly and responsibly respond to such Claim. Further, upon receipt of such
Claim, order, demand or requirement, the Developer shall (a) take such reasonable measures, as
necessary or appropriate, to reasonably dissuade such Environmental Agency or other third party
from bringing, making, alleging, or asserting any Claim against the City arising from or related
to any actual, threatened, or suspected Release of Hazardous Material on or about the Project
Site, including any Claim for Investigation or Remediation on the Project Site, and (b) request
that the Environmental Agency not issue any order, demand, or requirement to the City under
any of the Environmental Laws, or any other local, regional, State or federal law, or seek
penalties or take other punitive action against the City, in connection with, arising from, or
related to any actual, threatened, or suspected Release of Hazardous Material on or about the
Project Site, including any Investigation or Remediation on or about the Project Site.
l 0.5 Release Notification and Remedial Actions. If any Release of a Hazardous
Material is discovered on the Project Site and regardless of the cause, the Developer shall
promptly (a) provide written notice (or in the event of emergency, telephonic notice, followed by
written notice) of any such Release to the City and the Navy and (b) at Developer's sole risk and
expense and solely under the name of the Developer (but without prejudice to the Developer's or
the City's rights against any responsible party or against the Federal Government pursuant to
Section 330, Fiscal Year 1993, National Defense Authorization Act Public Law 102-484):
(i) remove, treat, and dispose of the released Hazardous Material on the Project Site in
compliance with all applicable Environmental Laws, or if such removal is prohibited by any
Environmental Laws, take whatever action is required by any Environmental Law; (ii) take such
other action as is necessary to have the full use and benefit of the Developer Parcel as
contemplated by this Agreement; and (iii) provide the City and the Navy with satisfactory
evidence of the actions taken as required in this Section. The Developer shall provide to the
City, within thirty (30) days of the City's request therefor, a bond, letter of eredit or other
financial assurance evidencing to the City's satisfaction that all necessary funds are readily
available to pay the costs and expenses of the actions required by this Section and to discharge
any assessments or liens established against the Project Site as a result of the presence of the
Hazardous Material release on the Project Site.
11. Insurance.
11.1 Required Insurance. Without limiting the City's rights to indemnification, the
Developer shall procure and maintain, at its own cost and expense, and furnish or cause to be
furnished to the City, evidence of the following policies of insurance naming the Developer as
insured and, except for automobile insurance and Workers' Compensation insurance, the City as
additional insureds. All such insurance shall be kept in force with respect to a Parcel until the
Completion with respect to such Parcel.
11.1.1 Liability Insurance. Commencing upon Close of Escrow, the Developer
shall maintain or cause to be maintained commercial general liability insurance, to protect
against loss from liability imposed by law for damages on account of personal injury, including
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death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or
about the Developer Parcel or the Project Site and the business of the Developer on the Project
Site, or in connection with the operation thereof, resulting directly or indirectly from any acts or
activities of the Developer or anyone directly or indirectly employed or contracted with or acting
for the Developer, or under its respective control or direction, and also to protect against loss
fi'om liability imposed by law for damages to any property of any person occurring on or about
the Developer Parcel or related to the Project Site and the business of the Developer on the
Project Site, or in connection with the operation thereof, caused directly or indirectly by or from
acts or activities of the Developer or any person acting for the Developer, or under its control or
direction. Such insurance shall also provide for and protect the City against incurring any legal
cost in defending claims for alleged loss. Such insurance shall be maintained in full force and
effect until issuance of a Final Certificate of Compliance for the Project (or Partial Certificate of
Compliance for a Phase of the Project) and so long thereafter as necessary to cover any claims of
damages suffered by persons or property prior to issuance of a Final Certificate of Compliance
for the Project, resulting from any acts or omissions of the Developer, the Developer's
employees, agents, contractors, suppliers, consultants or other related parties in the following
amounts: commercial general liability in the amount of not less than Five Million Dollars
($5,000,000) per occurrence and in the aggregate. The Developer shall deliver to the "City of
Tustin, California" as the certificate holder and shall name the City on a certificate of insurance
countersigned by an authorized agent of the insurance carder on the City's form evidencing such
insurance coverage prior to commencement of the Improvements. The insurance certificate shall
name the City and its elected and appointed officials, agents, representatives and employees as
additional insureds under the policy. The certificate shall contain a statement of obligation on
the part of the carder to notify the City of any cancellation or termination of the coverage at least
thirty (30) days in advance of the effective date of any such cancellation or termination.
Coverage provided hereunder by the Developer shall be primary to, and not contribute with any
insurance or self-insurance maintained by the City, and the policy shall contain such an
endorsement. The insurance policy, by endorsement, shall contain a waiver of subrogation for
the benefit of the City, and this fact shall be set forth also on the certificate.
11.1.2 Workers' Compensation Insurance. Commencing upon the Close of
Escrow, the Developer shall obtain, and thereafter maintain or cause to be maintained, workers'
compensation insurance issued by a responsible carder authorized under the laws of the State of
California to insure employers against liability for compensation under the workers'
compensation laws now in force in California, or any laws hereafter enacted as an amendment or
supplement thereto or in lieu thereof. Such workers' compensation insurance shall cover all
persons employed by the Developer in connection with the Project and shall cover liability
within statutory limits for compensation under any such act aforesaid, based upon death or
bodily injury claims made by, for or on behalf of any person incurring or suffering injury or
death in connection with the Project or the operation thereof by the Developer. Notwithstanding
the foregoing, the Developer may, in compliance with the laws of the State of California and in
lieu of maintaining such insurance, self-insure for workers' compensation in which event the
Developer shall deliver to the City evidence that such self-insurance has been approved by the
appropriate State authorities. The Developer shall also furnished (or cause to be furnished) to the
City evidence satisfactory to the City that any contractor with whom it has contracted for
performance of work on the Developer Parcel or otherwise pursuant to this Agreement carries
workers' compensation insurance required by law.
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11.1.3 Property Insurance. Prior to issuance of grading permits, the Developer
shall obtain, and thereafter maintain or cause to be maintained, for all buildings and
improvements being constructed for the Project, a policy or policies of insurance against loss or
damage to the Developer Parcel and the Improvements thereon and all property of an insurable
nature located upon the Developer Parcel, resulting from fire, lightning, vandalism, malicious
mischief, riot and civil commotion, and such other perils ordinarily included in special clauses of
property loss coverage form policies for the full replacement value of the Improvements,
including builder's risk coverage meeting the foregoing requirements during the pendency of any
construction on the Developer Parcel. Such insurance shall be maintained in an amount not less
than one hundred percent (100%) of the full insurable value of the Improvements on the
Developer Parcel. As to each Unit, such insurance shall be maintained until the close of escrow
for the Developer's sale of the Unit, at which time such insurance coverage may be terminated.
11.1.4 Environmental Insurance. Commencing upon the Close of Escrow, the
Developer shall either:
(a) become additional insured on the pollution legal liability policy issued to the
City by Indian Harbor Insurance Company (Policy Number PEC0010756) with respect to Parcel
I-B-1 (the "City's Environmental Insurance Policy"), a copy of which has been delivered to the
Developer, subject to the following: (i) limitation on liability for loss, remediation expense and
legal defense with respect to Parcel I-B-1 to an amount not to exceed Five Million Dollars
($5,000,000); (ii) Developer's agreement to pay all deductibles/self insured retention amounts
for any claim or Developer first party loss for which the insurance applies associated with Parcel
I-B-1 and due or payable under the City's Environmental Insurance Policy unless the claimed
loss, remediation expense or legal defense expense is due solely to the willful misconduct of the
City; (iii) payment of Twenty Five Thousand Eight Hundred and Ten Dollars ($25,810.00) to
the City as pro rata reimbursement to the City of its expenditures in purchasing the City's
Environmental Insurance Policy; or
(b) at the time of acquisition by the Developer of the Developer Parcel, obtain
pollution legal liability insurance coverage, including coverage for loss, remediation expense and
defense expenses, naming the City as a additional insured to address pollution risks at the
Developer Parcel. Such policy shall comply with the following:
(i) The policy shall be written by the insurance company
selected by the Developer and approved by the City, which approval shall not be unreasonably
withheld.
(ii) The policy shall provide Five Million Dollars ($5,000,000)
in coverage, subject to a maximum $200,000 deductible per claim, to protect against claims and
loss from liability relating to known and unknown conditions on the Adjacent Parcel for a 10-
year term with an extended 5-year reporting period and containing coverage substantially
equivalent to that provided by the City's Environmental Insurance Policy, in form and content
acceptable to the City.
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(iii) The policy shall be paid for in full at the time of issuance
and shall be endorsed as non-cancelable by the Developer without the written consent of the City
in its sole discretion to such cancellation.
11.2 General Insurance Requirements.
11.2.1 All policies or certificates of insurance shall provide that such policies
shall not be canceled, reduced in coverage or limited in any manner without at least thirty (30)
days prior written notice to the City. Any liability insurance policy (other than automobile or
workers' compensation policies) shall name the City as an additional insured.
11.2.2 The temx "full insurable value" as used in this Article 11 shall mean the
cost detemdned by mutual agreement of the City and the Developer (excluding the cost of
excavation, foundation and footings below the lowest floor and without deduction for
depreciation) of providing similar Improvements of equal size and providing thc same
habitability as the Improvements immediately before such casualty or other loss, but using
readily-available contemporary components, including the cost of construction, architectural and
engineering fees, and inspection and supervision.
11.2.3 All insurance provided under this Article 11 shall be for the benefit of the
Developer and the City. The Developer agrees to timely pay all premiums for such insurance
and, at its sole cost and expense, to comply and secure compliance with all insurance
requirements necessary for the maintenance of such insurance. The Developer agrees to submit
binders or certificates evidencing such insurance to the City on the City's standard form prior to
the Closing. Within thirty (30) days, if practicable, but in any event prior to expiration of any
such policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be
submitted to the City. All insurance provided for under this Article 11 shall be provided by
insurers licensed to do business in the State of California and with a Best's rating of A-VII or
better, with the exception of the pollution legal liability policy, which rating and licensing
location shall be as approved by the City.
11.2.4 If the Developer fails or refuses to procure and maintain insurance as
required by this Agreement, the City shall have the right, at the City's election, and upon ten (10)
days prior notice to the Developer, to procure and maintain such insurance. The premiums paid
by the City shall be treated as a loan, due from the Developer, to be paid on the first day of the
month following the date on which the premiums were paid. The City shall give prompt notice
of the payment of such premiums, stating the amounts paid and the name of the insured(s).
12. Covenants and Restrictions.
12.1 Use Covenant.
The Developer covenants and agrees for itselfi its successors, its assigns and
every successor in interest to the Property or any part thereof, that the Developer, its successors
and assigns shall use the Property only for those uses specified in the following documents: this
Agreement, the Specific Plan, the Reuse Plan, the Scope of Development, the Entitlements, the
Development Permits, the Quitclaim Deed, and all other applicable agreements affecting the
Property.
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12.2 Maintenance Covenant.
12.2.1 Prior to Close of Escrow. Commencing upon the Effective Date and until
Close of Escrow, the Developer, its successors and assigns, shall maintain Parcel I-B-1 in a clean
and weed free condition at the Developer's sole cost and expense.
12.2.2 Following Close of Escrow. Subject to clauses (a) through (d) below,
from and after the date of acquisition by the Developer of any portion of the Property, the
Developer and its successors and assigns shall maintain the portions of the Property owned by it
in the same aesthetic and sound condition (or better) as the condition of the Property at the time
of the transfer of the Property to the Developer.
(a) From the date of commencement of construction until issuance of a Certificate
of Compliance for any Phase of the Project, the Developer and its successors and assigns shall
maintain the Improvements under construction consistent with best construction industry
practice.
(b) Upon Completion of all or any portion of the Improvements, the Developer,
its successors and assigns shall maintain the Improvements in the same aesthetic and same
condition or better as the condition of such Improvements at the time the City issues a Certificate
of Compliance, reasonable wear and tear excepted. The standard for the quality of maintenance
of the Improvements required by this Section 12.2.2 shall be met whether or not a specific item
of maintenance is listed below. However, representative items of maintenance shall include:
(i) maintenance, repair and replacement on a regular schedule, consistent with like developments
in Orange County, of private streets, roads, drives, bike paths, alleyways, sidewalks, utilities
(except to the extent owned or controlled by a utility franchisee), common areas, landscaping,
hardscaping and fountains; (ii) frequent and regular inspection for graffiti or damage or
deterioration or failure, and immediate repainting or repair or replacement of all surfaces,
fencing, walls, equipment, etc., as necessary; (iii) emptying of trash receptacles and removal of
litter; (iv) regular sweeping of roadways and sidewalks throughout the Developer Parcel;
(v) fertilizing and replacing vegetation as necessary; (vi) cleaning windows on a regular basis;
(vi) painting the buildings on a regular program and prior to the deterioration of the painted
surfaces; (vii) conducting roof inspections on a regular basis and maintaining roofs in a leak-free
and weather-tight condition.
(c) In the event the Developer or its successors or assigns fails to maintain the
Improvements in accordance with the standard for the quality of maintenance, the City or its
designee shall have the right but not the obligation to enter the Developer Parcel upon reasonable
notice to the Developer or its successor or assigns, correct any violation, and hold the Developer,
or such successors or assigns, responsible for the cost thereof, and such cost, until paid, shall
constitute a lien on the applicable Parcel.
(d) The Developer shall have the right to assign its maintenance responsibilities
under this Agreement to the subsequent purchasers of a Parcel, or individual buildings thereon,
or to any Homeowners' Association to be created, through appropriate covenants, conditions and
restrictions to be recorded against one or more Parcels, upon which assignment the Developer
shall have no further liability under this Section.
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12.3 Nondiscrimination and Equal Opportuni~,.
12.3.1 The Developer covenants and agrees, for itself, its successors, assignees
and any successors in interest in the Developer Parcel, that (a) it shall not discriminate against
any employee or applicant for employment on any basis prohibited by law and (b) it has
received, read, understands and agrees to be bound with respect to the entirety of the Project and
by the Nondiscrimination Covenant contained in the Federal Deed which states as follows:
"Non-Discrimination. GRANTEE ("City of Tustin") covenants
for itself, its successors and assigns, that it will comply with all
applicable provisions of the Civil Rights Act of 1964, section 504
of the Rehabilitation Act of 1973, and the Age Discrimination in
Employment Act of 1975 in the use, occupancy, sale or lease of the
Property. The foregoing shall not be construed to prohibit the
operation of federal or state approved programs focusing on the
special needs of the homeless, veterans, victims of domestic
violence and other classes of persons at risk; nor shall it be
construed to prohibit employment practices not otherwise
prohibited by law. The GRANTOR ("Government") shall be
deemed a beneficiary of this covenant without regard to whether it
remains the owner of any land or interest therein in the locality of
the Property hereby conveyed and shall have the sole right to
enforce this covenant in any court of competent jurisdiction".
practices.
12.3.2 The Developer shall provide equal opportunity in all employment
12.4 Obligation to Refrain from Discrimination.
The Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest to the Developer Parcel or any part thereof or in development of the
Project, there shall be no discrimination against or segregation of any person, or group of
persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the Developer Parcel or in development of the Project, nor shall the Developer itself 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, subtenants, sublessees or vendees of the Developer Parcel or in development
of the Project.
12.5 Redevelopment Law~ Form of Nondiscrimination and Nonsegregation
Clauses.
The Developer shall refrain from restricting the sale of the property on the basis
of the race, color, creed, religion, sex, sexual orientation, marital status, national origin or
ancestry of any person. All deeds, leases or contracts shall contain or be subject to substantially
the following non-discrimination or non-segregation clauses:
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(a) In deeds: "The grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the
grantee itself 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, subtenants, sublessees or vendees in the land herein conveyed.
The foregoing covenants shall nm with the land."
(b) In leases: "The lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this lease is made and accepted
upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of persons, on
account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or
ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of
the land herein leased, nor shall lessee itself, or any person claiming under or through it,
establish or permit 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 land herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land, nor shall the transferee itself 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,
subtenants, sublessees or vendees of the land.
12.6 Deed Restrictions/Covenants Running with the Land.
12.6.1 The obligations of the Developer set forth in this Agreement shall be
covenants running with the land, shall be set forth in the Quitclaim Deed and are hereby declared
to be and shall be binding upon the Developer Parcel and the Developer and all subsequent
Assignees and Ownership Transferees owning all or any portion of the Developer Parcel, for the
benefit of the City Benefited Property and the City and the successors and assigns of the City
owning all or any portion of the City Benefited Property. The Quitclaim Deed shall provide that
any future transfer or conveyance of the Developer Parcel or any portion thereof shall, unless and
until released by the City in accordance with the provisions of Section 9.2, shall include notice of
the covenants, conditions and restrictions contained in this Agreement and in addition shall
include those disclosures and environmental covenants contained in the Federal Deed. The
Quitclaim Deed shall convey the Developer Parcel subject to reservations, covenants and
restrictions as set forth in the Federal Deed, the Conveyance Agreement and this Agreement, the
Permitted Exceptions, and any other matters specifically agreed to by the Developer in writing or
which the Developer is deemed to have accepted.
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12.6.2 To effectuate this Section 12.6 and the provisions of Article 13 with
respect to the Developer Parcel, concurrently with and as a condition of the Closing, the
Developer and the City shall execute and cause the recordation of the Memorandum of DDA,
which shall make specific reference to the non-discrimination provisions set forth in this
Article 12, City's Right of Reversion, the release set forth in Section 4.4.2, the indemnities set
forth in Article 10 and such other restrictions or covenants running with the land set forth in this
Agreement as the City may deem necessary or appropriate to carry out this Agreement. This
Agreement, the Memorandum of DDA and the Right of Reversion shall be a lien of first priority
with respect to the Property and shall be superior in priority to all Mortgages.
13. Affordable Housing Unit Obligations~ Homeless Assistance Agreement.
13.1 Affordable Housing Unit Obligations.
13.1.1 In the event that the Entitlements permit 189 Units to be constructed upon
the Developer Parcel, no fewer than forty (40) of the Units are to be available for sale to and
occupancy by persons of moderate, lower and very low income households (the "Affordable
Housing Units"). Of these forty (40) Affordable Housing Units, a minimum of eleven (11)
Units shall be sold to "Very Low Income Households," a minimum often (10) Units shall be
sold to "Lower Income Households" and a minimum of nineteen (19) Units shall be sold to
"Moderate Income Households." The Developer shall identify and set aside, and the City shall
approve in its reasonable discretion the location and other features of the Affordable Housing
Units identified on the Preliminary Plan as incorporated in the Approved Project Plans. Each
such identified Affordable Housing Unit shall be designated for sale to a Very Low Income
Household, a Lower Income Household or a Moderate Income Household, as the case may be.
In the event that the Entitlements permit fewer than 189 Units to be constructed upon the
Developer Parcel, the foregoing numbers shall be adjusted in proportion to the number of
permitted Units.
13.1.2 The Developer shall only sell Affordable Housing Units to Owner-
Occupiers. At the time of the closing of each sale of an Affordable Housing Unit to an Owner-
Occupier, the Developer shall cause to be recorded against such Affordable Housing Unit an
appropriate Affordable Housing Covenant and Affordable Housing Trust Deed as provided in
Section 13.2.2. In order to enable Developer to meet the obligations described in Section 13.1.1,
the City, provided that the Affordable Housing Covenant and Affordable Housing Trust Deed are
recorded concurrently with the closing of the sale of the Affordable Housing Unit, agrees to
accept a promissory note executed by the purchasing Owner-Occupier (the "Affordable
Housing Note"), which Affordable Housing Note shall be in an amount not in excess of the
difference between the market sales price of the Unit and the Affordable Housing Cost of such
Unit. Each Affordable Housing Note shall be assigned by the Developer to the City at the time
of the closing of the sale of each Affordable Housing Unit, and shall be secured by a deed of
trust executed by the purchasing Owner-Occupier and recorded against the Unit at the time of the
closing of such sale (the "Affordable Housing Trust Deed"), which Affordable Housing Trust
Deed shall be in the form attached hereto as Attachment No. 15, shall secure the obligations of
the owner set forth in the Affordable Housing Covenant, the Reimbursement Agreement and the
Affordable Housing Note and shall be subordinate in priority only to the monetary lien of a
purchase money deed of trust also recorded at the time of closing of the sale securing an amount
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not in excess of the Affordable Housing Cost of the Unit. The Affordable Housing Note shall be
in the form attached hereto as Attachment No.13.
13.2 Covenant Re: Affordable Housing Units.
13.2.1 The Developer covenants and agrees for itself, its successors, its assigns
and every successor in interest to an Affordable Housing Unit that, for a period temdnating
forty-five (45) years from the date of the closing of the initial sale of the Unit to a member of the
home buying public: (a) Affordable Housing Units designated in Attachment No. 9 as being for
sale to Very Low Income Households shall only be sold to Very Low Income Households, (b)
Affordable Housing Units designated in Attachment No. 9 as being for sale to Lower Income
Households shall only be sold to Lower Income Households, and (c) Affordable Housing Units
designated in Attachment No. 9 as being for sale to Moderate Income Households shall only be
sold to Moderate Income Households. The Developer also covenants and agrees for itself, its
successors, its assigns and every successor in interest to an Affordable Housing Unit, that, for a
period terminating forty-five (45) years from the date of the closing of the sale of the Unit to an
Owner-Occupier, as follows: (a) the Affordable Housing Units designated in Attachment No. 9
as being for sale to Very Low Income Households shall be sold only at a price not in excess of
an Affordable Housing Cost for Very Low Income Households, the Affordable Housing Units
designated in Attachment No. 9 as being for sale to Lower Income Households shall only be sold
at a price not in excess of an Affordable Housing Cost for Lower Income Households, and the
Affordable Housing Units designated in Attachment No. 9 as being for sale to Moderate Income
Households shall only be sold at a price not in excess of an Affordable Housing Cost for
Moderate Income Households and (b) the Affordable Housing Units will only be sold to and by
an eligible Household at an Affordable Housing Cost, and will only be occupied by the
purchasing Owner-Occupiers as their principal place of residence, and (c) shall not be rented.
13.2.2 In order to impose upon purchasers of Affordable Housing Units the
obligations set forth above in Section 13.2.1, concurrently with the recordation of the grant deed
for the Developer's conveyance of each Affordable Housing Unit, there shall be recorded against
each Affordable Housing Unit an "Affordable Housing Covenant," substantially in the form of
the applicable covenant attached hereto as Attachment No. 14, and an Affordable Housing Trust
Deed.
13.2.3 The Developer shall cause to be included in the grant deed for each
Affordable Housing Unit (a) references to the Affordable Housing Covenant and the obligation
of a Transferee of a Unit (as defined in the Affordable Housing Covenant) to be bound by all the
obligations of Homeowner set forth in the Affordable Housing Covenant, (b) a reference to the
Affordable Housing Trust Deed, (c) a reference to the Affordable Housing Option Agreement,
(d) a reference to the Reimbursement Agreement, (e) a reference to the due on sale provisions of
the Affordable Housing Note, and (f) a covenant that will require the Transferee, and any
successor or assign of the Transferee, to include in any document Transferring (as defined in the
Affordable Housing Covenant) the Unit a reference to the Affordable Housing Covenant, the
Affordable Housing Trust Deed, the Affordable Housing Option Agreement, the Reimbursement
Agreement, the due on sale provisions of the Affordable Housing Note, and the obligation of the
Transferee to be bound by the obligations set forth in the Affordable Housing Covenant, the
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Affordable Housing Trust Deed, the Affordable Housing Option Agreement, the Reimbursement
Agreement and the due on sale provisions of the Affordable Housing Note.
13.2.4 In order to enable an owner of an Affordable Housing Unit to comply with
the obligations described in the Affordable Housing Covenant, the City shall waive the fight of
the City to cause the Affordable Housing Note secured by the Unit to be due and payable and the
right of the City to exercise its option to purchase set forth in the Affordable Housing Option
Agreement, provided that all of the following occur: (a) the Unit is sold to an Owner-Occupier
and not for rent; (b) the Unit is sold at a price not in excess of the then appropriate Affordable
Housing Cost for the Unit; (c) the owner who intends to sell the Unit and all of that owner's
predecessors in interest have fully complied with the Affordable Housing Covenant; (d) the
purchaser agrees to be bound by the Affordable Housing Covenant, the Affordable Housing
Option Agreement and the Reimbursement Agreement; (e) the purchaser agrees to increase the
amount of the Affordable Housing Note as provided in this Section, (f) the City receives a title
policy, in an amount equal to the amount then due on the Affordable Housing Note as increased
as provided in this Section, insuring the Affordable Housing Note Trust Deed as a monetary lien
of second priority subordinate in priority among monetary liens only to the monetary lien of any
purchase money deed of trust recorded at the time of closing of the sale which deed of trust shall
secure an amount not in excess of the then fair market value of the Unit less the amount of the
Affordable Housing Note increased as provided in this Section, and (g) the City is reimbursed for
its costs related to the transaction. The amount due on the Affordable Housing Note secured by
the Affordable Housing Unit being sold shall be increased by the amount by which the fair
market value of the Unit at the time of the closing of the sale is in excess of the sum of(x) the
amount of principal and interest then payable on the Affordable Housing Note secured by the
Unit and (y) the Affordable Housing Cost of such Unit as of the time of the closing of the sale.
Except for such increase in the amount of the Affordable Housing Note, the Affordable Housing
Note, the Affordable Housing Trust Deed the Reimbursement Agreement and the Affordable
Housing Option Agreement shall remain in full fome and effect.
13.2.5 The City and the Developer hereby agree that the provisions of this
Agreement relating to the Affordable Housing Covenant are entered into in order to achieve a
stabilized community of Owner-Occupied Affordable Housing Units and to enable the City and
its successors and assigns to enforce the Affordable Housing Covenant, that it is the intention of
the City and the Developer that the City and its successors and assigns be empowered to enforce
the covenants contained in the Affordable Housing Covenant, that the Affordable Housing
Covenant does empower the City and its successors and assigns to enforce the covenants
contained in the Affordable Housing Covenant, and that the Affordable Housing Covenant
should be so construed and interpreted. Notwithstanding any other provision of this Agreement,
WL Homes shall not have liability for any breach or default under the provisions of this Section
13.2 or any of the documents referred to therein resulting from a breach or default thereunder by
a successor or assign of Developer which is an Owner-Occupier.
13.3 Compliance with Government Health and Safe~, Code. The City and the
Developer hereby agree that the provisions of this Agreement relating to Affordable Housing
Units are entered into in order to comply with Government Code Section 65915 and Health and
Safety Code Section 34413 and that such provisions fully satisfy the requirements of such code
sections.
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13.4 Homeless Assistance Agreement.
13.4.1 Homeless Accommodation. Pursuant to Section 3.9.4 I. of the Specific
Plan, Developer is not only responsible for minimal affordable housing production as identified
in this Agreement, but also is responsible for compliance with the Homeless Accommodation
Plan described in Sections 2.3.6 and 2.4 of the Specific Plan and with the Homeless Assistance
Plan, Homeless Assistance Agreement and the First Amendment to the Homeless Assistance
Agreement (herein collectively referred to as the "Homeless Accommodation Documents")
entered into by and between the City and the Orange County Rescue Mission, the Salvation
Army, Human Options, Irvine Housing and Orange Coast Interfaith Shelter. Pursuant to said
Homeless Accommodation Documents, the Salvation Army requested 24 units of existing family
housing (the 24 Units are referred to herein as the "Existing Housing Units") as transitional
housing on Parcel 34. The Community Redevelopment Act of 1994 and provisions of the
Homeless Accommodation Documents provide the flexibility for the following:
(a) Provision of 24 Existing Housing Units on Parcel 34 to the Salvation Army
with exact location to be detemdned subsequently under a no-cost lease with all development
and operational expenses to be the responsibility of the Salvation Army;
(b) Provision to the Salvation Army under a no-cost lease of existing housing
units elsewhere at Tustin Legacy or off of the Tustin Legacy property ("Alternate Housing
Units") if development plans require removal or use of the Parcel 34 Existing Housing Units;
(c) A cash payment to the Salvation Army "substantially equivalent" to the
replacement value of the 24 Existing Housing Units that would otherwise have been leased to the
Salvation Army on Parcel 34; or
(d) A combination of cash and units, either on or offParce134.
13.4.2 Developer's Obligations Regarding Homeless Accommodation.
(a) Developer has identified in its development proforma a One Million Eight
Hundred Thirty Seven Thousand Five Hundred and Fifty Three Dollar ($1,837,553)
development cost ("Transitional Honsing Amount") associated with accommodating the
Salvation Army homeless assistance obligations on Parcel 34. As a condition to Close of
Escrow, Developer shall provide the Transitional Housing Amount either by providing a stand-
by letter of credit for such amount in favor of the City or by paying such amount in cash into an
escrow account established for the benefit of the City ("Homeless Assistance Escrow") to be
held in the names of Developer and City, in each case in accordance with the provisions of
Section 7.3.7. The letter of credit and/or escrow shall remain in place until (a) execution of a
written agreement among the City, the Salvation Army and Developer which identifies the
procedures for satisfying the City's and the Developer's obligations to the Salvation Army
("Salvation Army Agreement") and (b) the obligations of Developer under this Section 13.4.2
and under the Salvation Army Agreement are satisfied in full. Execution of the Salvation Patay
Agreement is a pre-condition to demolition of 24 Existing Housing Units on Parcel 34 in
locations to be identified by the City and Developer hereby agrees that it shall not demolish
(x) any Units upon the Developer Parcel until such time as the City has identified such Existing
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Housing Units and (b) the Existing Housing Units unless and until a Salvation Army Agreement
is executed by and among the City, the Salvation Army and Developer.
(b) As part of the Salvation Army Agreement, Developer hereby agrees that if the
City or the Salvation Pumy so requests, Developer shall be required to sell to the City six very
low income affordable housing units at Tustin Legacy on Parcel 33 ("Parcel 33 Affordable
Itonsing Units") at a sale price not to exceed $150,000 per unit for a total not to exceed
$900,000, unless the Salvation Army agrees to accept conveyance directly from the Developer of
Alternate Units that Developer may purchase (which may be more than 6 units) at a cost not to
exceed $900,000. If the Salvation Army determines to accept the Parcel 33 Affordable Housing
Units, the City will enter into a no-cost lease with the Salvation Army for the Parcel 33
Affordable Housing Units under the lease terms and conditions originally identified in the
Homeless Assistance Documents which would also require that the Parcel 33 Affordable
Housing Units be occupied only by Very Low Income Households. The actual City purchase
price for each of the Parcel 33 Affordable Housing Units would be released from the funds in the
Homeless Assistance Escrow upon the sale of each such unit to the City and upon execution of a
lease agreement for such units with the Salvation Army (or ifa letter of credit is provided, shall
either be paid by the Developer with the amount of the letter of credit reduced accordingly or
drawn by the City from the letter of credit if such sums are not paid by Developer when due).
Developer agrees that it shall modify the Disposition and Development Agreement for Parcel 33
(DDA 03-01) as necessary to effectuate the foregoing.
(c) In the case of Alternate Units, funds not to exceed $900,000 would be
released from the Homeless Assistance Escrow to the appropriate party or, if a letter of credit is
utilized, paid by Developer to the appropriate party (with the amount of the letter of credit
reduced accordingly) or drawn by the City from the letter of credit and paid to the appropriate
party if such sums are not paid by Developer when due, as part of the conveyance of such units
to the Salvation Army. The additional $900,000 dollars would be released from Escrow to the
Salvation Army within 5 days of execution of the Salvation Axmy Agreement; this additional
$900,000 may be used by the Salvation Army for any lawful purpose consistent with the goals
and programs of the Salvation Army. Alternatively, the Salvation Army may request pursuant to
the Salvation Army Agreement that a portion of such $900,000 be applied as in-kind
construction rehabilitation to any Units that they agree to accept that might be transferred to
them by the Developer in lieu of the Parcel 33 Affordable Housing Units to be purchased by the
City.
13.4.3 No Third Party Beneficiary. Notwithstanding any other provision of this
Agreement, the Salvation Amiy shall not be a third party beneficiary to the terms of this
Agreement, including to this Section 13.4.
14. Potential and Material Defaults.
14.1 Potential Defaults. Except as otherwise provided in this Agreement, in the event
either Party (the "Defaulting Party") fails to perform, or delays in the performance of, any
obligation, in whole or in part, required to be performed by the Defaulting Party as provided in
this Agreement (a "Potential Default"), the other Party (the "Injured Party") may give written
notice of such Potential Default to the Defaulting Party, which notice shall state the particulars of
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the Potential Default. The City and the Developer agree to cooperate in good faith and meet and
confer regarding such default.
14.2 Material Defaults.
14.2.1 A Potential Default (other than a Potential Default regarding the payment
of money, which is addressed by Section 14.3) shall become a "Material Default" in the event
the Potential Default is not cured, at the Defaulting Party's expense, (a) within twenty (20)
Business Days after receipt of the written notice of such Potential Default from the Injured Party,
or (b) if such cure cannot be reasonably accomplished within such twenty (20) Business Day
period, within ninety (90) calendar days after receiving written notice of such Potential Default,
but only if the Defaulting Party has commenced such cure within such twenty (20) Business Day
period and diligently pursues such cure to completion, or (c) within such longer period of time as
may be expressly provided in this Agreement with respect to the Potential Default. The time
periods set forth above to cure a Potential Default may be extended by Force Majeure Delays.
Following written notice and failure to cure within the time periods set forth above, each
Potential Default shall become a Material Default that shall be deemed to have occurred upon the
expiration of the applicable cure period.
14.2.2 In the event the Developer is in Material Default, in addition to whatever
other rights the City may have in law or at equity, or as otherwise provided in this Agreement,
the City may do any or all of the following:
(a) The City shall have the right (the "Right of Purchase"), from time to time, at
any time within three (3) years after the date that the Developer became in Material Default
(provided that upon Developer's cure of such Material Default, such right shall cease with
respect to such Material Default only), to purchase any, or all, Parcel(s), Lot(s) or Unit(s) not
sold by the Developer to an Owner-Occupier as of the date of the election by the City to
purchase said Parcel(s), Lot(s) or Unit(s) (for the purposes hereof, "sold by the Developer" shall
mean either to enter into a binding contract for the sale of the Unit to an Owner-Occupier or to
close escrow for the sale of such Unit to an Owner-Occupier). The purchase price for such
Parcel(s), Lot(s) or Unit(s) shall be the greater of(i) seventy-five percent (75%) of the Fair
Market Value of said Parcel(s), Lot(s) or Unit(s), as the case may be, determined in accordance
with Section 14.2.4 which Fair Market Value shall be that of each of the Parcel(s), Lot(s) or
Unit(s) in the condition it or they may be in (including the obligation, if applicable, to sell the
Units as Affordable Housing Units) as of the date of election to purchase, and (ii) an amount
which provides sufficient net sales proceeds to pay a Permitted Mortgagee with a lien upon the
Parcel(s), Lot(s) or Unit(s) being purchased the following amounts secured by such Parcel(s),
Lot(s) or Unit(s): principal, accrued and unpaid interest (including default interest), late charges,
foreclosure costs, attorneys' fees and out-of-pocket costs and expenses directly incurred by the
Permitted Mortgagee in acquiring the Parcel(s), Lot(s) or Unit(s), and out-of-pocket costs and
expenses directly incurred by the Permitted Mortgagee in performing the obligations specified in
Section 2.7.10(d) with respect to the Parcel(s), Lot(s) or Unit(s), which amount shall be paid to
Developer upon the closing for the transfer of said Parcel(s), Lot(s) or Unit(s). The Parties agree
that the amount of reduction in the Fair Market Value of the Parcel(s), Lot(s) or Unit(s), as the
case may be, beam a reasonable relationship to the damages which the Parties estimate may be
suffered by the City as the result of the Developer's default in the performance of its obligations
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under this Agreement, which damages would be impractical or extremely difficult to quantify,
that the deposit constitutes a reasonable estimate of the City's damages in such event, and that
the remedy provided for in this Agreement is not a penalty or forfeiture, is necessitated by reason
of the obligations of the City to maintain Affordable Housing Units on the Developer Parcel, and
is a reasonable limitation on the Developer's potential liability as a result of such default. In the
event the City exercises its right to purchase any Parcel(s), Lot(s) or Unit(s), as provided in
subsection, this Agreement shall temlinate with respect to such Parcel(s), Lot(s) or Unit(s) as
may be purchased.
(b) The City may sue for damages it may have incurred related to any Parcel(s),
Lot(s) or Unit(s) which the City has not elected to purchase as provided in clause (a) above. In
the event the City institutes legal action to recover damages, the City's right to purchase the
Parcel(s), Lot(s) or Unit(s), as provided in clause (a) above, for which suit is brought shall
terminate and be of no further force or effect.
(c) The City may seek to specifically enforce the obligations of the Developer.
(d) The City may terminate this Agreement with respect to all, or any portion of
the Developer Parcel.
(e) The City may exercise its Right of Reversion pursuant to Section 16.2.
14.2.3 If the City elects to repurchase any, or all, Parcel(s), Lot(s) or Unit(s)
pursuant to Section 14.2.2(a), the Parties shall: (a) within five (5) Business Days after the date of
either the City's election to purchase, or the Developer's notice to exercise its right to cause the
purchase (but in either event no earlier than the first date on which the City either has the right to
purchase), open an escrow with an escrow agent designated by the City for the purchase and sale,
and shall execute an escrow agreement that shall provide that the Developer shall pay all costs of
the escrow and shall include such usual and ordinary terms as are reasonably required by the
escrow agent and by the transaction; (b) no later than five (5) Business Days after the opening of
escrow (i) the Developer shall deposit into the escrow appropriate grant deeds conveying fee title
to the Parcel(s), Lot(s) or Unit(s) to the City free and clear of any and all liens, claims and
encumbrances other than: monetary liens which total less that the purchase price to be paid by
the City, encumbrances and claims other than monetary liens that were of title as of the date of
the Closing, and any liens, claims or encumbrances approved in writing by the City and (ii) the
Developer and the City shall commence the procedure specified in Section 14.2.4 to determine
the Fair Market Value of the affected Parcel(s), Lot(s) or Unit(s); and (c) no later than twenty
(20) Business Days after the "Fair Market Value" of such Parcel(s), Lot(s) or Unit(s) has been
determined as provided in Section 14.2.4, the City shall deposit into the escrow the purchase
price, less the amount of any monetary liens against the Parcel(s), Lot(s) or Unit(s). The escrow
shall close, and title shall be conveyed to the City, no later than five (5) Business Days after the
City has deposited into escrow the appropriate portion of the purchase price. The Developer
shall comply with its obligations under Section 14.2.7 and shall, directly from escrow, pay to
Permitted Mortgagee all sums due to it. In no event shall the City have any liability for the
failure of Developer to pay to Permitted Mortgagee any sums due to it under its loan documents
with Developer.
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14.2.4 Determination of Fair Market Value. The fair market value
("Fair Market Value") of the Parcel(s), Lot(s) and/or Unit(s) that the City has elected to
repurchase ("Repurchase Property") shall be determined by one or more real estate appraisers
selected as hereafter provided, all of whom shall be members of The Appraisal Institute and
Certified General Appraisers in the State of Califomia with not less than ten (10) years
experience in appraisal of residential master planned communities in Orange County, California.
Within five (5) Business Days after Developer's receipt of written notice of the City's election to
repurchase ("Selection Period") each Party shall select one (1) appraiser ("Appraiser") and
shall notify the other Party in writing of the Appraiser so selected. Each Appraiser shall deliver
to both Parties their written determinations of the fair market value of the Repurchase Property
on the date that is twenty (20) calendar days after expiration of the Selection Period (the
"Determination Date"). If the difference between the fair market values determined by the
Appraisers does not exceed ten percent (10%) of the lesser of such appraised values, then the
Fair Market Value shall be the average of the appraisals. If, however, the difference between the
appraisals shall exceed ten percent (10%) o f the lesser of such amounts, then the Appraisers
shall, within five (5) Business Days following the Determination Date select a third appraiser
meeting the qualifications stated above ("Third Appraiser") who shall provide his or her
written determination of the fair market value of the Repurchase Property within twenty (20)
calendar days after his or her selection. If there is a third appraisal, the Fair Market Value for the
Repurchase Property shall be the average of the two (2) appraisals nearest in value. The Parties
shall each bear the cost of the Appraiser they select and shall share equally the cost of the Third
Appraiser. All such determinations of Fair Market Value shall be final and binding upon the
Parties.
14.2.5 In the event the City is to purchase any Parcel(s), Lot(s) or Unit(s) by
reason of the exercise by the City of its election to do so upon a Material Default by the
Developer, such purchase shall not terminate or release any liability or obligations of the
Developer with respect to said Parcel(s), Lot(s) or Unit(s): to return any written Due Diligence
Information to the City as provided in Section 14.2.7 and to indemnify the City as provided in
Section 5.5.4 and Article 10. In the event the City purchases any Parcel(s), Lot(s) or Unit(s),
under no circumstances shall the Developer have any right or claim to, or against, the purchased
Parcel(s), Lot(s) or Unit(s) or any portion thereof. In addition the City's right to retain and
enfome any Perfo;mance Bonds delivered pursuant to this Agreement shall survive such
purchase, and the City shall have no obligation to reimburse the Developer for any Reimbursable
Costs or to release any Performance Bonds. In addition, the Developer shall represent and
warrant that all construction of all Improvements on the purchased Parcel(s), Lot(s) or Unit(s) as
of the date of purchase are in confomdty with all applicable laws and Governmental
Requirements. Notwithstanding the purchase of any Parcel(s), Lot(s) or Unit(s) by the City as
provided in this Section, this Agreement shall remain in full force and effect with respect to the
portions of the Developer Parcel not purchased by the City.
14.2.6 Failure or delay in giving notice of a Potential Default shall not constitute
a waiver of any default, nor shall it change the time of default. Except as otherwise expressly
provided in this Agreement, any failures or delays by either Party in asserting any of its fights
and remedies as to any default shall not operate as a waiver of any default or of any such rights
or remedies. Delays by either Party in asserting any of its rights and remedies shall not deprive
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either Party of its right to institute and maintain any actions or proceedings which it may deem
necessary to protect, assert or enforce any such rights or remedies.
14.2.7 The Developer shall return and provide copies of all Due Diligence
Information and Reports (as defined below) in accordance with the following terms:
(a) Within five (5) Business Days following any termination of this Agreement
for any reason whatsoever, the Developer shall use good faith commercially reasonable efforts to
return to the City all written Due Diligence Information in the Developer's possession. The
Developer's obligation to return Due Diligence Infomiation to the City is subject to any
covenants to the contrary in any contracts or agreements with the Developer's consultant(s) and
is without representation or warranty of any kind by the Developer.
(b) Upon full performance of this Agreement or the temdnation thereof due to a
Material Default by the Developer, the Developer shall provide the City, without cost or expense
to the City, copies of all plans, specifications, reports, studies or investigations, including soil
and geotechnical reports and Hazardous Materials investigations (collectively, "Reports")
prepared by or on behalf of the Developer with respect to the Developer Parcel and/or
development of the Project, which shall in each case be made for the use and benefit of the
Developer and the City. If this Agreement is terminated for any reason other than a Material
Default hereunder by the City, the City may request that the Developer, for consideration to be
mutually agreed, transfer the Developer's rights to any or all Reports identified by the City, but
under no event shall the cost to the City exceed Five Hundred Dollars ($500.00). Upon such
request, the Developer shall deliver to the City copies of all Reports requested by the City,
provided that the Developer makes no representations, warrantee or guarantee regarding the
completeness or accuracy of the Reports, the Developer shall have no liability in connection with
the use of the Reports by the City or any other person or entity and the Developer does not
covenant to convey the copyright or other ownership rights of third parties thereto. Such Reports
shall thereupon be free of all claims or interests of the Developer or any liens or encumbrances.
Upon the City's acquiring the Developer's rights to any or all of the Reports, the City shall be
pemdtted to use, grant, license or otherwise dispose of such Reports to any person or entity for
development of the Developer Parcel or any other purpose; provided, however, that the
Developer shall have no liability whatsoever to the City or any transferee or title to the Reports
in connection with the use of the Reports. The City shall, within ten (10) Business Days of the
Effective Date and at no cost to the Developer, provide the Developer with copies of all plans,
reports, studies, investigations and other materials the City may have that are pertinent to the
Developer Parcel and/or development of the Project provided, however, that the City makes no
representations, warrantee or guarantee regarding the completeness or accuracy of such plans,
reports, studies, investigations and other materials.
14.3 Failure to Timely Pay Amounts Due. Notwithstanding any other provision of
this Agreement, ifa Party fails to pay timely any sum required to be paid pursuant to this
Agreement, and the Injured Party gives the Defaulting Party written notice of such nonpayment,
such nonpayment shall be a Potential Default. The Defaulting Party shall have a period of
fifteen (15) days after such notice is received, or deemed to have been received, within which to
cure the Potential Default by making the required payment; the period to cure such Potential
Default shall not be extended by Force Majeure Delays. In the event a Potential Default for
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nonpayment is not cured within such fifteen (15) day period, the Potential Default shall become a
Material Default that shall be deemed to have occurred upon the expiration of the cure period. In
addition to the foregoing, if any payment (other than the payment of any portion of the Purchase
Price) is not received by the Injured Party with fifteen (15) days following the notice of Potential
Default, then in addition to any other remedies conferred upon the Injured Party pursuant to this
Agreement, a late charge often percent (10%) of the mount due and unpaid will be added to the
delinquent amount to compensate the Injured Party for the expense of handling and responding
to the delinquency.
15. Nonoccurrence of a Closing Condition.
15.1 Failure of a Closing Condition to Occur Absent a Material Default.
15.1.1 In the event the Closing Date is extended for any of the reasons set forth in
this Section 15.1 not caused by a Material Default by either Party, either Party shall have the
right to terminate this Agreement as hereinafter provided:
(a) In the event a final decision in any litigation brought by a third party results in
the inability of the City to convey the Property to the Developer, or of the Developer to perform
its material obligations hereunder, either Party shall have the right, upon ninety (90) days prior
written notice to the other Party, to terminate this Agreement.
(b) In the event litigation brought by a third party is pending for more than one
year after the date of this Agreement, and (i) such litigation has resulted in the inability of the
City to convey the Property to the Developer, or (ii) in the event the Assistant City Manager or
designee reasonably detemdnes that such litigation is the cause of the Developer or its
Assignee's inability to perform its material obligations hereunder despite the best efforts of such
Party to do so, either Party shall have the right, upon ninety (90) days prior written notice to the
other Party, to terminate this Agreement.
(c) In the event of the passage of a referendum or initiative that results in the
inability of the City to convey the Property to the Developer or the inability of the Developer or
any Assignee to perform its material obligations hereunder, either Party shall have right, upon
ninety (90) days prior written notice to the other Party, to temdnate this Agreement.
15.1.2 If this transaction does not close on or before 5:00 p.m., California Time,
on the Closing Date, because of (a) the inability of the Parties to agree on modifications to this
Agreement following good faith negotiations pursuant to Section 8.3.8 or (b) the failure to occur
of a Closing Condition for reasons other than (i) a Material Default solely by the Developer
(which is governed by Section 15.2); (ii) a Material Default solely by the City (which is
governed by Section 15.3), or (iii) a Material Default by both Parties (which is governed by
Section 15.4) either Party may, by delivery of written notice to the other and to the Escrow
Holder, terminate this Agreement. In the event either the Developer or the City are in Potential
Default as of the Closing Date, the Party in Potential Default shall not have the right to exercise
the right to terminate the Agreement pursuant to this Section 15.1 until and unless the Potential
Default is cured prior to the time the Potential Default becomes a Material Default.
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15.1.3 Upon any termination under this Section 15.1, each Party shall pay one-
half(I/2) of Escrow Holder's normal cancellation charges and any Closing Costs. Thc
Developer shall be entitled to a full refund of the Purchase Price Deposit and all interest accrued
thereon, after deducting therefrom an amount, not to exceed One Hundred Thousand Dollars
($100,000), equal to the actual costs incurred by the City (including legal fees, consultant fees
and actual costs) in connection with negotiation and undertaking to comply with the terms of this
Agreement and the Exclusive Agreement to Negotiate. In the event ora termination as provided
in this Section, the Developer shall return Due Diligence Infommtion to the City as provided in
Section 14.2.7 and shall indemnify the City as provided in Section 5.4 and Article 10. The
termination of this Agreement pursuant to this Section 15.1 shall constitute a waiver of any
rights, claims, causes of action, or demands either Party may have against the other or the
Property, or any portion thereof, but shall not terminate or release any liability or obligations of
the Developer to return Due Diligence Information to the City as provided in Section 14.2.7 and
to indenmify the City as provided in Section 5.4 and Article 10. In the event ora termination as
provided in this Section, under no circumstances shall the Developer have any right or claim to,
or against, the Property or any portion thereof.
15.1.4 If notice of termination of this Agreement is received by either Party
pursuant to this Section, the Developer shall be entitled to the prompt return of the Purchase
Price Deposit, with any accrued interest thereon, subject only to payment to the City as described
in Section 15.1.3. Notwithstanding any other provision in this Agreement, the Developer shall
comply with its obligations under Section 14.2.7 before any amount of the Purchase Price
Deposit is returned to the Developer.
15.2 Failure to Close~ Material Default of Developer.
IF THIS TRANSACTION DOES NOT CLOSE ON OR BEFORE 5:00 P.M.,
CALIFORNIA TIME, ON THE CLOSING DATE, SOLELY AS A RESULT OF
DEVELOPER'S MATERIAL DEFAULT (INCLUDING FAILURE TO DELIVER
SUFFICIENT FUNDS TO CAUSE THE CLOSING TO OCCUR IN A TIMELY MANNER, IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.2.2), THE PARTIES
ACKNOWLEDGE AND AGREE BY INITIALING THIS AGREEMENT 1N THE SPACE
PROVIDED BELOW THAT:
(a) THE PURCHASE PRICE DEPOSIT BEARS A REASONABLE
RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE MAY BE
SUFFERED BY THE CITY AS THE RESULT OF DEVELOPER'S DEFAULT IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, WHICH
DAMAGES WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO QUANTIFY,
THAT THE PURCHASE PRICE DEPOSIT CONSTITUTES A REASONABLE ESTIMATE
OF THE CITY'S DAMAGES IN SUCH EVENT, AND THAT THE REMEDY PROVIDED
FOR IN THIS AGREEMENT IS NOT A PENALTY OR FORFEITURE AND IS A
REASONABLE LIMITATION ON DEVELOPER'S POTENTIAL LIABILITY AS A RESULT
OF SUCH DEFAULT.
(b) DEVELOPER SHALL PAY THE FULL AMOUNT OF ESCROW
AGENT'S REASONABLE CHARGES AS A RESULT OF SUCH DEFAULT AND
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TERMINATION AND ALL CLOSING COSTS, WHETHER OR NOT DEVELOPER
CONTESTS SUCH TERMINATION.
(c) WITHIN FIVE (5) DAYS FOLLOWING THE CITY'S NOTICE OF
TERMINATION, DEVELOPER SHALL RETURN TO THE CITY ALL WRITTEN DUE
DILIGENCE INFORMATION.
(d) AS A RESULT OF DEVELOPER'S DEFAULT IN THE PERFORMANCE
OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND FAILURE OF THE CLOSING
TO OCCUR ON OR BEFORE THE CLOSING DATE, THE CITY SHALL HAVE THE
RIGHT TO TERMINATE THIS AGREEMENT AND THE ESCROW BY WRITTEN NOTICE
TO ESCROW AGENT, WHEREUPON THE CITY SHALL BE RELEASED FROM ITS
OBLIGATION HEREUNDER TO SELL THE PROPERTY TO DEVELOPER OR
DEVELOPER'S PERMITTED ASSIGNEE, AND THE CITY SHALL RETAIN THE
PURCHASE PRICE DEPOSIT AND ALL ACCRUED INTEREST THEREON AND/OR
ESCROW AGENT SHALL RELEASE THE PURCHASE PRICE DEPOSIT AND ALL
ACCRUED INTEREST THEREON TO THE CITY, TO THE EXTENT NOT ALREADY SO
RELEASED, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE CITY'S
SOLE AND EXCLUSIVE REMEDY HEREUNDER IN THE EVENT OF SUCH BREACH,
EXCEPT FOR THE CITY'S RIGHTS AND REMEDIES FOR A SEPARATE BREACH, IF
ANY, OF THE CONFIDENTIALITY AND/OR INDEMNIFICATION PROVISIONS OF THIS
AGREEMENT AND/OR THE PROVISIONS GOVERNING THE RETURN OF DUE
DILIGENCE INFORMATION TO THE CITY.
Initials of City
Initials of Developer
15.3 Failure to Close~ Material Default of City.
15.3.1 If this transaction does not close on or before 5:00 p.m., California time,
on the Closing Date, solely as a result of the City's Material Default in the performance of its
obligations under this agreement, then, so long as the Developer is not in Potential Default or
Material Default, the Developer shall have the right, by providing notice to the City of its
election to do so, either: (a) to purchase the Property pursuant to the Agreement notwithstanding
such default, whereupon such default shall be deemed waived as against the City and all third
parties; or (b) to terminate this Agreement and to cancel Escrow.
15.3.2 In the event City receives timely notice of the Developer's election to
purchase the Property notwithstanding the City's Material Default, the Developer shall deliver
Developer's Closing Payment into Escrow no later than ten (10) Business Days after the City's
receipt of said notice. Upon delivery of Developer's Closing Payment into Escrow and payment
by Escrow Holder of the Base Purchase Price to the City, the City shall convey title to the
Property as provided in this Agreement, and the Developer shall be deemed to have waived all
Closing Conditions other than the delivery of the Quitclaim Deed into Escrow. In the event the
City fails to deliver the Quitclaim Deed into Escrow within five (5) Business Days after the
Developer has delivered the appropriate portion of the Purchase Price into Escrow, the
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Developer shall have the right to bring an action in equity or otherwise against the City or
subsequent owners of the Property for specific performance of this Agreement. In such event the
City shall pay the full amount of Escrow Holder's reasonable charges and Closing Costs.
15.3.3 In the event the City receives timely notice of the Developer's election to
ternfinate this Agreement:
(a) The Developer shall be entitled to a full refund of the Purchase Price Deposit
and all interest accrued thereon. The City shall pay the full amount of Escrow Holder's
reasonable charges. The Developer shall comply with its obligations under Section 14.2.7. The
Developer shall not be entitled to pursue an action against the City for damages as a result of the
City's default.
(b) The termination of this Agreement pursuant to this Section 15.3.3 shall not
terminate or release any liability or obligations of the Developer: to return Due Diligence
Information to the City as provided in Section 14.2.7 and to indemnify the City as provided in
Section 5.4 and Article 10. In the event of a termination as provided in this Section 15.3, under
no cimumstances shall the Developer shall have any right or claim to, or against, the Property or
any portion thereof.
(c) The termination of this Agreement pursuant to this Section 15.3.3 shall
constitute a waiver of any rights, claims, causes of action, or demands either Party may have
against the other, except as expressly provided above.
(d) In the event either (i) the City does not receive, within twenty (20) Business
Days after the Closing Date, notice of the Developer's election either to purchase the Property
pursuant to the Agreement notwithstanding such default or to terminate this Agreement, or
(b) the Developer has elected to purchase the Property but fails to deliver Developer's Closing
Payment into Escrow no later than ten (10) Business Days after the City's receipt of said notice,
then the City shall have the right to temiinate this Agreement by providing written notice of its
election to do so to the Developer. In the event ora termination as provided in this Section 15.3,
the Developer shall return Due Diligence Information to the City as provided in Section 14.2.7
and shall indemnify the City as provided in Section 5.4 and Article 10. The termination of this
Agreement pursuant to this Section 15.3.3 shall constitute a waiver of any rights, claims, causes
of action, or demands either Party may have against the other, but shall not terminate or release
any liability or obligations of the Developer: to return Due Diligence Information to the City as
provided in Section 14.2.7 and to indemnify the City as provided in Section 5.4 and Article 10.
In the event of a termination as provided in this Section 15.3.3, under no circumstances shall the
Developer shall have any right or claim to, or against, the Property or any portion thereof, and
the City shall have no obligation to reimburse the Developer for any Reimbursable Costs or to
release any Performance Bonds.
15.4 Material Default by Both Parties.
15.4.1 If this transaction does not close on or before 5:00 p.m., California time,
on the Closing Date as a result of the Material Default by both Parties in the perfoi-mance of their
respective obligations under this Agreement, the provisions of this Section 15.4 shall apply.
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15.4.2 If the Developer is in Material Default of its obligation to deliver
Developer's Closing Payment as provided in Section 7.3.2, or to provide the evidence of
financing as provided in Section 7.3.4., and the City has deposited into Escrow the Quitclaim
Deed as provided in Section 7.2. l(a), the City shall have the fight, notwithstanding any other
defaults of the City, to terminate this Agreement as provided in Sections 15.1.2, 15.1.3 and
15.1.4.
15.4.3 If the City is in Material Default of its obligation to deposit into Escrow
the Quitclaim Deed as provided in Section 7.2. l(a), and the Developer has delivered
Developer's Closing Payment as provided in Section 7.3.2, and has provided the evidence of
financing as provided in Section 7.3.4, the Developer shall have the fight, notwithstanding any
other defaults of the Developer, to terminate this Agreement as provided in Sections 15.1.2,
15.1.3 and 15.1.4.
15.4.4 Except as provided above in Sections 15.4.2 and 15.4.3, in the event both
parties are in Material Default, each Party may exercise any and all rights it may have to seek
monetary damages from the other Party. Notwithstanding the foregoing, in no event may either
Party be entitled to specific performance or other equitable relief, and in no event shall the
Developer file a lis pendens against the Property.
16. Right of Reversion.
The following remedies shall be available to the City under the circumstances set
forth below and shall be in addition to all other rights and remedies available to the City under
this Agreement, or at law or in equity. The Parties agree that time is of the essence with respect
to the dates and deadlines set forth in this Article 16 and that such dates and deadlines shall not
be subject to extension for Force Majeure.
16.1 Intentionally Deleted.
16.2 Rieht of Reversion. On the terms and subject to the conditions set forth in this
Section 16.2, the City shall have the right (the "Right of Reversion") (a) to terminate this
Agreement as to (i) the Developer Parcel or any Parcel(s), Lot(s) or Unit(s), or any portions
thereof, directly impacted by the Material Default, and/or (ii) any other portion of the Developer
Parcel with respect to which the Developer has not commenced construction of Vertical
Improvements (as applicable, the "Reversion Area") and (b) thereafter to re-enter the Reversion
Area and revest in the City the title in the Reversion Area or any portions thereof.
16.2.1 Conditions to Exercise. The provisions of this Section 16.2 shall apply in
the event that after the Closing any of the events or omissions set forth in this Section 16.2.1
occur, which such events and omissions shall each be a Potential Default:
(a) The development of the Project is delayed such that the occurrence of any
event described in the Schedule of Performance does not occur on or before the date projected
for its occurrence, as such date may be extended by Force Majeure Delay.
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(b) The Developer abandons or substantially suspends construction of any
Improvements for a period of ninety (90) days, which 90-day period shall be subject to Fome
Majeure Delay.
(c) The Developer, in violation of this Agreement, assigns this Agreement, or any
rights in this Agreement, or transfers, or suffers any involuntary transfer of the Developer Parcel
or the Developer's interest in the Developer Parcel, or any part thereof.
(d) Any voluntary or involuntary Ownership Transfer or Transfer of Control,
including any Foreclosure affecting all or any portion of the Developer Parcel, by any
Mortgagee, takes place without express assumption by the Ownership Transferee of the
Developer's obligations under this Agreement in accordance with Section 2.2.8.
16.2.2 Reversion Conditions. Notwithstanding that such portion of the
Developer Parcel may be encumbered by one or more Mortgages or Permitted Mortgages, the
City shall be entitled to exercise its Right of Reversion with respect to all or any portion of the
Developer Parcel in the event of the following (the "Reversion Conditions"):
(a) the occurrence of any of the events or omissions described in Section 16.2.1
becoming a Material Default of the Developer and the provision of written notice to the
Developer and each Pemdtted Mortgagee as required by Section 2.7.13,
(b) provision by the City of notice in accordance with Sections 2.7.14 and 17.7 to
each Permitted Mortgagee having a Permitted Mortgage on the affected portion of the Site, of a
Material Default by the Developer remaining uncured after passage of the time periods set forth
in this Agreement for cure thereof by Developer, and
(c) failure of any Permitted Mortgagee to cure such Material Default in
accordance with Section 2.7.14(b).
Notwithstanding the foregoing, if any Permitted Mortgagee has commenced and
diligently prosecuted to completion Foreclosure proceedings in accordance with Section 2.7.14,
then (i) the City's right to exercise the Right of Reversion triggered by such Material Default
shall be stayed for a period of three (3) years from the date upon which the Permitted Mortgagee
or wholly-owned designee obtains title to such portion of the Developer Parcel (which period
shall not be extended for Force Majeure Delay), and (ii) thereafter may only be exercised with
respect to that particular Material Default if such Permitted Mortgagee or wholly-owned
designee has not within such three (3) year period (which period shall not be extended for Force
Majeure Delay) either (X)(A) assumed all obligations of the Developer under this Agreement,
including the obligation to construct the Improvements in accordance with a revised Schedule of
Performance agreed to by the Permitted Mortgagee or wholly-owned designee and the City and,
thus, to step into the role of Developer hereunder and (B) commenced and diligently prosecuted
to Completion the construction of the Improvements or (y) sold the affected portion of the
Developer Parcel.
The satisfaction of the Reversion Conditions with respect to each independent
Material Default serves to trigger (or re-trigger) the City's Right of Reversion, subject in each
case to the potential stay set forth in the preceding paragraph.
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16.2.3 Exercise of Right of Reversion. So long as the Material Default triggering
the Right of Reversion has not been cured as of the date of exercise of the Right of Reversion,
the City may exercise its Right of Reversion at anytime within one (1) year after such Right of
Reversion could first be exercised with respect to such Material Default. The City may exercise
such right by delivery of notice to (a) the Developer if no Foreclosure has occurred, and (b) all
Permitted Mortgagees holding Permitted Mortgages with respect to the Reversion Area or any
portion thereof, provided that the Assistant City Manager shall not exercise the City's Right of
Reversion without first providing the Developer, if applicable, and all Permitted Mortgagees
holding Permitted Mortgages with respect to the Reversion Area or any portion thereof a
reasonable opportunity to address the City Council at a public meeting. In the event of such
termination of this Agreement, this Agreement shall remain in full force and effect with respect
to portions of the Developer Parcel not so revested in the City, but the termination of this
Agreement shall only be effective as of the date title to the Reversion Area is revested in the
City.
16.3 Priority of the City's Right of Reversion.
16.3.1 Right of Reversion Subordinate only to Senior Obligations. Prior to the
later to occur of (a) the initial funding of a loan for the construction of Vertical Improvements for
a Phase or (b) the Completion of all Required Horizontal Improvements for such the Phase, the
City's Right of Reversion with respect to Parcels upon which construction of such Phase shall
take place shall be senior in priority to any lien, including Permitted Mortgages, except for
Senior Obligations as set forth in Section 16.3.2, encumbering such Parcel or portion thereof,
such that if the City exercises its Right of Reversion, in accordance with the provisions of this
Article 16, all such liens and mortgages other than such Senior Obligations will be extinguished
and the City will be revested of title to the Reversion Parcel free and clear of all such liens and
mortgages, other than such Senior Obligations as provided below.
16.3.2 Right of Reversion Subordinate to Permitted Mortgages for Vertical
Improvements. Concurrently with the later to occur of (a) the initial funding of a loan for the
construction of Vertical Improvements on a Phase, or (b) the Completion of all Required
Horizontal Improvements for such Phase, the City's Right of Reversion with respect to Parcels
upon which construction of such Phase shall take place shall become subordinate to, and the City
shall execute such written instruments for the subordination of its Right of Reversion as may
reasonably be requested by the holder of, the lien of any Community Facilities District or other
financing bonds issued with respect to such Parcel and the lien of any Permitted Mortgagee
providing funding for Vertical Improvements (collectively, a "Senior Obligation"). The
subordination of the Right of Reversion and the City's agreement to so subordinate its Right of
Reversion is subject to agreement by the holder of any Senior Obligation to which the City's
Right of Reversion is to be subordinated, in writing, providing the City the following rights:
(a) Upon the occurrence of a default under any of the Senior Obligation
documents, the holder of the Senior Obligation shall promptly notify the City of the occurrence
of such event of default, which notification shall be provided to the City contemporaneously with
the delivery to the Developer or its Assignee of any notice of default under any of the Senior
Obligation documents;
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(b) The City shall have the right, during the cure periods which apply to the
Developer or its Assignee pursuant to the Senior Obligation documents and any cure period
which may apply to the City under applicable law, to cure the Developer's or its Assignee's
default relative to the Senior Obligation; and
(c) After a default on any of the Senior Obligation documents but prior to a
Foreclosure, the City shall have the right to take title to the Reversion Area or any portion
thereof and cure the default relative to the Senior Obligation documents, without the holder of
the Senior Obligation exercising any right it might otherwise have to accelerate the Senior
Obligation by reason of such title transfer, so long as the City promptly cures any such default
upon taking title. In the event that additional uncured events of default under the Senior
Obligation documents occur after the City has taken title to the Reversion Area, all Permitted
Mortgagees will be able to foreclose under the Permitted Mortgages.
(d)' Upon the reversion to the City of title to the Reversion Area, the City shall use
reasonable commercial efforts to resell the Reversion Area acquired by the City, as soon and in
such manner as the City shall find feasible and consistent with the objectives of the Specific Plan
and the approved Entitlements to a qualified and responsible party or parties (as determined in
the sole discretion of the City), who will assume the obligation of making or completing the
Improvements, or such other improvements with the uses specified for the Parcel, or any part
thereof, in the Specific Plan and Reuse Plan. Upon such resale of such Reversion Area or any
portion thereof, the proceeds thereof, if any, shall be applied:
(i) First, but subject to the provisions of clause (ii) below if
there exists any Senior Obligation, to reimburse the City for all costs and expenses incurred by
the City, including salaries of personnel engaged in such action, in connection with the recapture,
management and resale of the Reversion Area or any part thereof; all taxes, assessments and
water and sewer charges with respect to the Reversion Area or any part thereof; any payments
made or necessary to be made to discharge or prevent from attaching or being made any
subsequent encumbrances or liens due to obligations incurred with respect to the making or
completion of the agreed Improvements or any part thereof on the Reversion Area, or any part
thereof; and any amounts otherwise owing to the City by the Developer and its successor or
transferee;
(ii) Second, unless such reversion occurs at a time when any
Permitted Mortgage is a Senior Obligation, in which event such payment of such Senior
Obligation shall take priority over the reimbursement to the City described in clause (i) above,
repayment in full of the outstanding balance of any Permitted Mortgage Loan;
(iii) Third, to reimburse the Developer, its successor or
transferee, up to the amount equal to: the portion of the Base Purchase Price allocated to the
reversion property on a square footage basis and the Reimbursable Costs incurred by the
Developer for the development of the Reversion Area, or any part thereof, less the amounts paid
on any Permitted Mortgage pursuant to clause (ii).
(iv) Any balance remaining after such reimbursements shall be
retained by the City as its property.
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16.3.3 Termination of Ri~.J~t of Reversion.
(a) The Right of Reversion shall not apply to any Phase after the recordation by
the City ora Certificate of Compliance with respect to such Phase.
(b) In connection with every grant deed of a Unit to an Owner-Occupier, the City
shall direct the escrow company to extinguish and release the City's Right of Reversion as to
such Unit, upon the occurrence of all of the following:
(i)
Issuance by the City of a permanent certificate of
occupancy for the Unit;
(ii) Recordation of a Notice of Completion relating to the Unit
by the Developer, its Assignee or such Party's contractor, and;
(iii) Any mechanic's liens that have been recorded or stop
notices that have been delivered have been paid, settled or otherwise extinguished, discharged,
released, waived, bonded around or insured against.
17. General Provisions.
17.1 Consent to Jurisdiction.
The Parties hereto agree that all actions or proceedings arising in connection with
this Agreement shall be tried and litigated exclusively in the Municipal or Superior Court of the
County of Orange, State of California, in any other appropriate court of that county, or in the
United States District Court for the Central District of California. This choice of venue is
intended by the Parties to be mandatory and not permissive in nature, thereby precluding the
possibility of litigation between or among the Parties with respect to or arising out of this
Agreement in any jurisdiction other than that specified in this Section. Each Party hereby waives
any right that it may have to assert the doctrine forum non conveniens or similar doctrine or to
object to venue with respect to any proceeding brought in accordance with this Section, and
stipulates that the state and federal courts located in the County of Orange, State of California,
shall have in personam jurisdiction and venue over each of them for the purpose of litigating any
dispute, controversy or proceeding arising out of this Agreement. Each Party hereby authorizes
and accepts service of process sufficient for personal jurisdiction in any action against it as
contemplated by this Section 17.1 by means of registered or certified mail, return receipt
requested, postage prepaid, to its address for the giving of notices as set forth in this Agreement,
or in the manner set forth in Section 17.7 of this Agreement pertaining to notice. Any final
judgment rendered against a Party in any action or proceeding shall be conclusive as to the
subject of such final judgment and may be enforced in other jurisdictions in any manner
provided by law.
17.2 Leeal Fees and Costs.
If any Party to this Agreement institutes any action, suit, counterclaim, appeal,
arbitration or mediation for any relief against another Party, declaratory or otherwise
(collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with
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respect to any inaccuracies or material omissions in connection with any of the covenants,
representations or warranties on the part of the other Party to this Agreement, then the Prevailing
Party in such Action, whether by arbitration or final judgment, shall be entitled to have and
recover of and from the other Party all costs and expenses of the Action, including reasonable
attorneys' fees and costs (at the Prevailing Party's attorneys' then-prevailing rates as increased
from time to time by the giving of advanced written notice by such counsel to such Party)
incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or
award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued
on the commencement of such Action and shall be paid whether or not such Action is prosecuted
to a Decision. Any Decision entered in such Action shall contain a specific provision providing
for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or
arbitrator shall fix the amount of reasonable attomeys' fees and costs upon the request of either
Party. Any judgment or order entered in any final judgment shall contain a specific provision
providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees
and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing
such judgment. For the purposes of this paragraph, Costs shall include in addition to Costs
incurred in prosecution or defense of the tmderlying action, reasonable attorneys' fees, costs,
expenses and expert fees and costs incurred in the following: (a) post judgment motions and
collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party
examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment.
"Prevailing Party" within the meaning of this Section 17.2 includes a Party who agrees to
dismiss an Action in consideration for the other Party's payment of the amotmts allegedly due or
performance of the covenants allegedly breached, or obtains substantially the relief sought by
such Party.
17.3 Modifications or Amendments.
No amendment, change, modification or supplement to this Agreement shall be
valid and binding on any of the Parties unless it is represented in writing and signed by each of
the Parties hereto.
17.4 Applicable Law.
This Agreement shall be governed by, interpreted under, construed and enforced
in accordance with the laws of the State of California, irrespective of California's choice-of-law
principles.
17.5 Further Assurances.
Each of the Parties hereto shall execute and deliver at their own cost and expense,
any and all additional papers, documents, or instruments, and shall do any and all acts and things
reasonably necessary or appropriate in connection with the performance of their respective
obligations hereunder in order to carry out the intent and proposes of this Agreement.
17.6 Riuhts and Remedies are Cumulative.
Except with respect to rights and remedies expressly declared to be exclusive in
this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either
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Party of one or more 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 any other default by the
other Party.
17.7 Notices~ Demands and Communications between the Parties.
All notices, demands, consents, requests and other communications required or
permitted to be given under this Agreement shall be in writing and shall be deemed conclusively
to have been duly given (a) when hand delivered to the other Party; (b) three (3) Business Days
after such notice has been sent by United States mail via certified mail, retum receipt requested,
postage prepaid, and addressed to the other Party as set forth below; (c) the next Business Day
after such notice has been deposited with a national overnight delivery service reasonably
approved by the Parties (Federal Express, United Parcel Service and U.S. Postal Service are
deemed approved by the Parties), postage prepaid, addressed to the Party to whom notice is
being sent as set forth below with next-business-day delivery guaranteed, provided that the
sending Party receives a confirmation of delivery from the delivery service provider; or (d) when
received by the recipient Party when sent by facsimile transmission or email at the number or
email address set forth below (provided, however, that notices given by facsimile or email shall
not be effective unless either (i) a duplicate copy of such notice is promptly sent by any method
pemfitted under this Section 17.7 other than by facsimile or email; or (ii) the receiving Party
delivers a written confirmation of receipt for such notice either by facsimile, email or any other
method permitted under this Section. Any notice given by facsimile or email shall be deemed
received on the next Business Day if such notice is received after 5:00 p.m. (recipient's time) or
on a non-Business Day. Unless otherwise provided in writing, all notices hereunder shall be
addressed as follows:
If to the City:
Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
and Attention: Assistant City Manager
With a copy to:
City Attorney
City of Tustin
Woodruff Spradlin & Smart
701 S. Parker Street, Suite 8000
Orange, CA 92868-4760
Attention: Lois E. Jeffrey, Esq.
With a copy to:
Gilchrist & Rutter
Professional Corporation
1299 Ocean Avenue, Suite 900
Santa Monica, CA 90401
Attention: James R. Andrews, Esq.
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If to the Developer:
With a copy to:
WL Homes LLC
3121 Michelson, Suite 200
Newport Beach, CA 92616
Attention: Mitchell Bradford,
Vice President
Dzida, Carey & Steinman
2 Park Plaza, Suite 1140
Irvine, CA 92614
Attention: Jay R. Steinman, Esq.
Any Party may by written notice to the other Party in the manner specified in this
Agreement change the address to which notices to such Party shall be delivered.
17.8 Force Maieure Delay.
17.8.1 The tern, "Force Majeure Delay" shall mean the occurrence of any one
or more of the following events (provided such event is beyond the control of a Party and beyond
the control of such Party's contractors and consultants and are not due to an act or omission of
the Party claiming Force Majeure Delay or any consultant, contractor or other Person for whom
such Party may be contractually or legally responsible) which directly, materially and adversely
affect (a) the ability of the claiming Party to meet its obligations under this Agreement, including
the deadlines imposed by the Schedule of Performance or (b) the ability of the Developer to
Complete the Project, and which events (or the effect of which events) could not have been
avoided by due diligence and use of reasonable efforts by the Party claiming Force Majeure
Delay:
(a) An epidemic, blockade, rebellion, war, insurrection, strike or lock-ont, riot,
act of sabotage, civil commotion, act of a public enemy, freight embargo, or lack of
transportation;
(b) Unusually severe weather;
(c) Reasonably unforeseeable Developer Parcel conditions including the presence
of Hazardous Materials;
(d) Fire, an earthquake equal to or greater than 4.5 on the Richter scale or other
casualty causing physical destruction or damage on the Property;
(e) Potential Default or Material Default by the other Party;
(O AnY lawsuit seeking to restrain, enjoin, challenge or delay construction of the
Project, which is vigorously defended by the Party and which is finally determined in a manner
which restricts the ability of a Party to perform its material obligations hereunder or which is
pending for more than one (1) year after the Effective Date, and which the Assistant City
Manager or designee reasonably determines is the cause of any Party's inability to perform its
material obligations hereunder despite the best efforts of such Party to do so;
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(g) The passage of a referendum or initiative that results in the inability of any
Party to perform its material obligations hereunder
(h) Any change in Governmental Regulation or adoption of any new
Governmental Regulation which is materially inconsistent with Governmental Regulations in
effect as of the Effective Date (subject to the exclusion set forth in clause (ii) below.
17.8.2 The term "Force Majeure Delay" shall be limited to the matters listed
above and specifically excludes from its definition the following matters which might otherwise
be considered Force Majeure Delay:
(a) The suspension, termination, interruption, denial or failure to obtain or
nonrenewal of any Entitlement, permit, license, consent, authorization or approval which is
necessary for the development of the Project, except for any such matter resulting from a lawsuit
or referendum as described in Section 17.8. l(f) or (e);
(b) Any change in a Government Regulation which was proposed or was
otherwise reasonably foreseeable at the Effective Date;
(c) Failure of the Developer to perform any obligation to be performed by the
Developer hereunder as the result of adverse changes in the financial condition of Developer;
(d) Failure of the Developer to provide any Performance Bond required by this
Agreement when due or to submit evidence of financing of the Project or to perform any
obligation to be performed by the Developer hereunder as the result of adverse changes in the
market conditions affecting the development, sale or lease of any part of the Developer Parcel
unless the Developer demonstrates to the satisfaction of the Assistant City Manager or designee
in its sole discretion that (x) the Developer was unable to obtain such Performance Bonds and/or
financing despite making best efforts to do so, and (y) such Performance Bonds and financing
are unavailable on temps which are commercially feasible because of generally applicable
economic conditions affecting the credit market which then exist and which are materially worse
than the conditions which prevail as of the Effective Date.
(e) Failure to submit documentation as and when required by Sections 2.2, 2.3 or
2.7, as applicable;
(f) Failure to submit Design Documents for Improvements when required
pursuant to the Schedule of Performance;
(g) Failure to acquire, maintain and submit evidence of insurance policies as
required by Article 11;
(h) Failure to execute documents; and
(i) All other matters not caused by the other Party and not listed in Section
17.8.2 (a) through (h) above.
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(j) 17.8.3 If any Party (the "First Party") believes that an extension of time
is due to it due to Force Majeure Delay, it may apply to the other Party (the "Second Party") in
writing within thirty (30) calendar days from the date upon which the First Party becomes aware
of Force Majeure Delay, describing the event, its cause, when and how the First Party obtained
knowledge, the date the event commenced and the estimated delay resulting therefrom. The
extension for Force Majeure Delay shall be granted or denied in the Second Party's reasonable
discretion. If the Second Party's decision with respect to such request is disputed by the First
Party, the matter shall be resolved in accordance with Section 17.1. An extension of time for
Force Majeure Delay shall be on a day for day basis for the period of the delay and shall
commence to nm from the time of the commencement of the cause, if notice by the First Party is
sent to the Second Party in accordance with the provisions of this Section. If the First Party fails
to notify the Second Party in writing of its request for Force Majeure Delay within the thirty (30)
calendar days specified above, there shall be no extension for Force Majeure Delay.
17.9 Conflict oflnterest~
No appointed or elected official or employee of the City shall have any personal
interest, direct or indirect, in this Agreement nor shall any official or employee participate in any
decision relating to the Agreement which affects his interests or the interests of any corporation,
partnership, or association in which he is directly or indirectly interested. The Developer
warrants that it has not paid or given and will not pay or give any third person any money or
other consideration for obtaining this Agreement.
17.10 Nonliability of City Officials and Employees.
No elected or appointed official, representative, employee, agent, consultant, legal
counsel or employee of the City shall be personally liable to the Developer, or any successor in
interest in the event of any default or breach by the City for any amount which may become due
to the Developer or successor or on any obligation under the terms of this Agreement.
17.11 ~nspection of Books and Records.
The City shall have the right at all reasonable times, upon ten (10) days written
notice, to inspect the books and records of the Developer pertaining to the Developer Parcel as
pertinent to the purposes of this Agreement. The Developer shall also have the right at all
reasonable times to inspect the books and records of the City, upon ten (10) days written notice,
pertaining to the Developer Parcel as pertinent to the purposes of this Agreement.
17.12 Approvals.
(a) Except as otherwise expressly provided in this Agreement, approvals required
of the City or the Developer in this Agreement, including the Attachments hereto, shall not be
unreasonably withheld, conditioned or delayed.
Co) Any matter required by this Agreement to be submitted to the City shall be
deemed submitted upon the submittal to the Assistant City Manager or designee.
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(c) Except where the terms of this Agreement expressly require the approval of a
matter or the taking of any action by the City Council, any matter to be approved by the City
shall be deemed approved, and any matter to be taken by the City shall be deemed taken, upon
the written approval by the Assistant City Manager or designee.
17.13 Real Estate Commissions.
17.13.1 The City shall not be liable for any real estate commissions, brokerage
fees or finders fees which may arise from this Agreement. The Developer represents that it has
engaged no broker, agent or finder in connection with this Agreement or the transactions
identified in this Agreement. The Developer hereby agrees to indemnify and hold the City and
its elected and appointed officials, employees and representatives harmless from any losses and
liabilities arising from or in any way related to any claim by any broker, agent, or finder retained
by the Developer regarding this Agreement or development of the Project or the transactions
identified in this Agreement or the purchase or sale of other property at the Developer Parcel.
17.13.2 The City represents that it has engaged no broker, agent, or finder in
connection with this Agreement or the transactions identified in this Agreement.
17.14 Date and Delivery of Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the Parties
intend that this Agreement shall be deemed effective, executed and delivered for all purposes
under this Agreement and for the calculation of any statutory time periods based on the date an
agreement between the Parties is effective, executed and/or delivered, as of the Effective Date.
17.15 Survival of Covenants~ Representation and Warranties.
The covenants, representations and warranties specified in this Agreement shall
survive any investigation made by any Party hereto and the closing of the of the transactions
contemplated hereby.
17.16 Construction and Interpretation of Agreement,
(a) The language in all parts of this Agreement shall in all cases be construed
simply, as a whole and in accordance with its fair meaning and not strictly for or against any
Party. The Parties hereto acknowledge and agree that this Agreement has been prepared jointly
by the Parties and has been the subject of arm's length and careful negotiation over a
con. siderable period of time, that each Party has been given the opportunity to independently
rewew this Agreement with legal counsel, and that each Party has the requisite experience and
sophistication to understand, interpret, and agree to the particular language of the provisions
hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of
this Agreement, this Agreement shall not be interpreted or construed against the Party preparing
it; instead other rules of interpretation and construction shall be utilized. The provisions of
California Civil Code Section 1654 are specifically waived by each Party hereto.
(b) If any temi or provision of this Agreement, the deletion of which would not
adversely affect the receipt of any material benefit by any Party hereunder, shall be held by a
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court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement
shall not be affected thereby and each other term and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law. It is the intention of the Parties hereto that
in lieu of each clause or provision of this Agreement that is illegal, invalid, or unenforceable,
there be added as a part of this Agreement an enforceable clause or provision as similar in terms
to such illegal, invalid, or unenforceable clause or provision as may be possible.
(c) Any matters or facts included in Article 1 of this Agreement shall be
conclusively deemed true.
(d) The captions of the sections and subsections in this Agreement are inserted
solely for convenience and under no circumstances are they or any of them to be treated or
construed as part of this instrument.
(e) References in this instrument and in the Attachments hereto to "this
Agreement" mean, refer to and include this instrument as well as any riders, schedules, exhibits,
addenda and attachments hereto (which are hereby incorporated in this Agreement by this
reference) and all other documents expressly incorporated by reference in this instrument. Any
references to any covenant, conditions, obligation and/or undertaking "herein," "hereunder," or
"pursuant hereto") (or language of like import) shall mean, refer to and include the covenants,
obligations and undertakings existing pursuant to this Agreement and any riders, schedules,
exhibits, addenda, attachments or other documents affixed to or expressly incorporated by
reference in this instrument.
(f) As used in this Agreement and as the context may require, the singular
includes the plural and vice versa and the masculine gender includes the feminine and vice versa.
(g) As used in this Agreement the words "include" and "including" mean
respectively "include, without limitation" and "including, without limitati°n''.
(h) Unless otherwise indicated, references in this Agreement to sections,
paragraphs, clauses, exhibits, attachments and schedules are to the same contained in or attached
to this Agreement and all attachments and schedules referenced in this Agreement are
incorporated in this Agreement by this reference as through fully set forth in this Section.
17.17 Time of Essence.
Time is of the essence with respect to all provisions of this Agreement in which a
definite time for performance is specified; provided, however, that the foregoing shall not be
construed to limit or deprive a Party of the benefits of any grace period provided for in this
Agreement.
17.18 Fees and Other Expenses.
Except as otherwise provided in this Agreement, each of the Parties hereto shall
pay its own fees and expenses, including attorneys' fees and costs, in connection with
negotiation and preparation of this Agreement.
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17.19 No Partnership.
Nothing contained in this Agreement shall be deemed or construed to create a
partnership, joint venture or any other relationship between the Parties hereto other than
purchaser and seller and landlord and tenant according to the provisions contained in this
Agreement, or cause the City to be responsible in any way for the debts or obligations of the
Developer.
17.20 Compliance with Law.
The Developer agrees to comply with all the requirements now in fome, or which
may thereafter be in force, of all municipal, county, state and federal authorities, pertaining to the
Developer Parcel and the Improvements as well as operations conducted thereon. The judgment
of any court of competent jurisdiction or the admission of the Developer in any action or
proceeding against it, whether the City is a party thereto or not, that the Developer has violated
any such ordinance or statute in the use of the Developer Parcel and/or the Improvements shall
be conclusive of that fact as between the City and the Developer.
17.21 Bindin~ Effect.
This Agreement and the terms, provisions, promises, covenants and conditions
hereof shall be binding upon and shall inure to the benefit of the Parties hereto and their
respective heirs, legal representatives, successors and assigns.
17.22 No Third Party Beneficiaries.
This Agreement has been made and entered into solely for the benefit of the
Parties to this Agreement and their respective successors and permitted assigns. Nothing in this
Agreement is confers any rights or remedies on any persons other Person. Nothing in this
Agreement relieves or discharges the obligation or liability of any third Persons to any Parties to
this Agreement.
17.23 Counterparts.
This Agreement may be executed in two or more separate counterparts, each of
which, when so executed, shall be deemed to be an original. Such cotmterparts shall, together,
constitute and shall be one and the same instrument. This Agreement shall not be effective until
the execution and delivery by the Parties of at least one set of counterparts. The Parties agree to
recognize execution of this Agreement by facsimile signatures; provided, however, that such
execution by facsimile shall not be effective unless a manually executed copy of the signature
page is promptly sent by United States, postage prepaid, and such manually signed page is
actually received by the other Party within ten (10) days of its execution. The Parties hereby
authorize each other to detach and combine original signature pages and consolidate thm-n into a
single identical original. Any one of such completely executed counterparts shall be sufficient
proof of this Agreement.
[AEF:ab/1DOCS2_90960_7/090903/4182.004] -94-
17.24 Authori ,ty of Signatories to A~reement.
Each person executing this Agreement represents and warrants that he or she is
duly authorized and has legal capacity to execute and deliver this Agreement on behalf of the
Parties for which execution is made. Each Party represents and warrants to the other that the
execution of this Agreement and the performance of such Party's obligations hereunder have
been duly authorized and that the agreement is a valid and legal agreement binding on such Party
and enforceable in accordance with its terms.
17.25 Entire Agreemen~ Waivers and Amendments.
(a) This Agreement is executed in five (5) duplicate originals, each of which is
deemed to be an original.
(b) This Agreement, including the Attachments hereto, together with any related
documents referred to in this Agreement constitute the entire agreement between or among the
Parties with respect to the subject matter hereof. This Agreement supersedes and replaces any
and all prior agreements, proposed agreements, negotiations and communications, oral or
written, and contains the entire agreement between the Parties as to the subject matter hereof
and any and all prior agreements, understandings or representations are hereby temfinated and
canceled in their entirety. Each Party hereby acknowledges that no other Party hereto, nor its
agents or attorneys, have made any promises, representations or warranties whatsoever,
expressed or implied, not contained in this Agreement, to induce such Party to execute this
Agreement, and each Party acknowledges that it has not executed this Agreement in reliance on
any such promise, representation or warranty not contained in this Agreement.
(c) No waiver of any provision or consent to any action under this Agreement
shall constitute a waiver of any other provision or consent to any other action, whether or not
similar. No waiver or consent shall constitute a continuing waiver or consent or commit a Party
to provide a waiver in the future except to the extent specifically set forth in writing. Any waiver
given by a Party shall be null and void if the Party requesting such waiver has not provided a full
and complete disclosure of all material facts relevant to the waiver requested. All waivers of the
provisions of this Agreement must be in writing and signed by the appropriate authorities of the
City or the Developer and all amendments hereto must be in writing and signed by the
appropriate authorities of the City and the Developer. Any amendment to the Agreement shall
require the approval of the City Council of the City.
17.26 Approval Procedures.
This Agreement, when executed by the Developer and delivered to the City, will
then be scheduled for a public hearing before the City Council. This Agreement must be
authorized, executed and delivered by the City within sixty (60) days after date of signature by
the Developer or the Developer shall have the authority to withdraw its offer to enter into this
Agreement upon written notice to the City. The Effective Date of this Agreement shall be the
date when this Agreement has been executed by the City and delivered to the Developer, which
shall be the date first set forth above.
[AEF:ab/IDOC S2_90960_7/090903/4182.004] -95-
IN WITNESS WHEREOF, the City and the Developer have signed this
Agreement as of the date first set forth above.
City of Tustin
Dated: By:
William Huston, City Manager
ATTEST:
By:
Pamela Stoker
City Clerk
Dated:
APPROVED AS TO FORM
Special Counsel for the City
GILCHRIST & RUTTER
PROFESSIONAL CORPORATION
By:
WL HOMES LLC, a Delaware limited liability
company
By:
Steve Kabel
President, Southern Califomia Region
By:
Mitchell Bradford
Vice President, Southern California Region
[AEF:ab/IDOCS2_90960_7/090903/4182.004] -96-
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF PARCEL I-B-1
IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING
THAT PORTION OF BLOCKS 61 AND 62 OF IRVINE'S SUBDIVISION AS SHOWN ON A
MAP FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS RECORD MAPS, AND AS
SHOWN ON A MAP FILED IN BOOK 165, PAGES 31 THROUGH 39, INCLUSIVE, OF
RECORDS OF SURVEY, BOTH OF THE RECORDS OF SAID COUNTY, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY LINE OF HARVARD
AVENUE (HAVING A NORTHWESTERLY HALF-WIDTH OF 36 FEET) AND THE
SOUTHWESTERLY LINE OF EDINGER AVENUE (HAVING A SOUTHWESTERLY
HALF-WIDTH OF 60 FEET) AS SHOWN ON SAID RECORD OF SURVEY; THENCE
ALONG SAID NORTHWESTERLY LINE OF HARVARD AVENUE THE FOLLOWING
FOUR (4) COURSES:
1)
2)
3)
4)
SOUTH 40037'53'' WEST 1259.59 FEET TO AN ANGLE POINT THEREIN;
SOUTH 40037'37'' WEST 1319.25 FEET
SOUTH 85°39'11" WEST 38.17 FEET TO A LINE THAT IS PARALLEL WITH AND
63.00 FEET NORTHWESTERLY FROM THE CENTERLINE OF HARVARD
AVENUE;
SOUTH 40037'37'' WEST 258.51 FEET ALONG SAID PARALLEL LINE TO A
POINT ON THE NORTHWESTERLY LINE OF THE LAND DESCRIBED IN THE
DOCUMENT RECORDED IN BOOK 10657, PAGE 412 OF OFFICIAL RECORDS OF
SAID COUNTY AND AS SHOWN ON SAID RECORD OF SURVEY, SAID POINT
BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 1894.00 FEET, A RADIAL LINE TO
SAID BEGINNING BEARS SOUTH 27051'20" EAST;
THENCE SOUTHWESTERLY ALONG SAID NORTHWESTERLY LINE AND SAID
CURVE 156.44 FEET THROUGH A CENTRAL ANGLE OF 4043'57"; THENCE
CONTINUING ALONG SID NORTHWESTERLY LINE SOUTH 66052'37'' WEST 1087.44
FEET TO A POINT ON A CURVE THAT IS CONCENTRIC WITH AND 118.75 FEET
NORTHEASTERLY FROM THE CENTERLINE OF WARNER AVENUE AS SHOWN ON
SAID RECORD OF SURVEY, SAID CURVE BEING CONCAVE SOUTHWESTERLY
HAVING A RADIUS OF 1718.75 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH
68045'45'' EAST; THENCE CONCENTRIC AND PARALLEL WITH SAID CENTERLINE
OF WARNER AVENUE THE FOLLOWING TWO (2) COURSES:
1)
2)
NORTHERLY AND NORTHWESTERLY ALONG SAID CURVE 843.12 FEET
THROUGH A CENTRAL ANGLE OF 28o06'22''
NORTH 49o20'37'' WEST 468.05 FEET TO THE BEGINNING OF A CURVE
CONCAVE EASTERLY HAVING A RADIUS OF 35.00 FEET;
[AEF:ab/1DOCS2_90960_7/090903/4182.0041 Attachment No. lB - Page 1 Legal Description of Adjacent Parcel
THENCE NORTHWESTERLY, NORTHERLY AND NORTHEASTERLY ALONG SAID
CURVE 62.22 FEET THROUGH A CENTRAL ANGLE OF 101°51'19" TO THE
SOUTHEASTERLY LINE OF PETERS CANYON CHANNEL (HAVING A
SOUTHEASTERLY HALF-WIDTH OF 90 FEET) AS DESCRIBED IN THE DOCUMENT
RECORDED IN BOOK 6681, PAGE 721 OF OFFICIAL RECORDS OF SAID COUNTY AND
AS SHOWN ON SAID RECORD OF SURVEY; THENCE ALONG SAID
SOUTHEASTERLY LINE OF SAID PETERS CANYON CHANNEL NORTH 52030'42''
EAST 417.91 FEET TO THE CITY BOUNDARY LINE BETWEEN THE CITY OF TUSTIN
AND THE CITY OF IRVINE AS SHOWN ON SAID RECORD OF SURVEY; THENCE
LEAVING SAID SOUTHEASTERLY LINE AND ALONG SAID CITY BOUNDARY LINE
SOUTH 49°21'01" EAST 45.99 FEET TO A LINE THAT IS PARALLEL WITH AND 135.00
FEET SOUTHEASTERLY FROM THE CENTERLINE OF SAID PETERS CANYON
CHANNEL; THENCE ALONG SAID PARALLEL LINE NORTH 52032'09" EAST 289.49
FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 37027'51" WEST 5.00 FEET
TO A LINE THAT IS PARALLEL WITH AND 130.00 FEET SOUTHEASTERLY FROM
THE CENTERLINE OF SAID PETERS CANYON CHANNEL; THENCE PARALLEL AND
CONCENTRIC WITH SAID CENTERLINE THE FOLLOWING (3) COURSES:
1)
2)
3)
NORTH 52°32'09'' EAST 1277.26 FEET TO THE BEGINNING OF A CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 2130.00 FEET;
NORTHEASTERLY ALONG SAID CURVE 238.53 FEET THROUGH A CENTRAL
ANGLE OF 6°24'58";
NORTH 46°07'11" EAST 210.47 FEET TO A POINT ON SAID SOUTHEASTERLY
LINE OF PETERS CANYON CHANNEL
THENCE ALONG SAID SOUTHEASTERLY LINE THE FOLLOWING SEVEN (7)
COURSES:
1)
2)
3)
4)
5)
6)
7)
SOUTH 49° 19'04" EAST 20.10 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49° 19'04" WEST 60.28 FEET;
NORTH 46°07'10'' EAST 32.14 FEET;
SOUTH 49o19'04'' EAST 60.28 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49019'04'' WEST 20.10 FEET TO A LINE THAT IS PARALLEL WITH AND
130 FEET SOUTHEASTERLY FROM SAID CENTERLINE OF PETERS CHANNEL;
THENCE LEAVING SAID SOUTHEASTERLY LINE AND ALONG SAID PARALLEL
LINE NORTH 46°07'11" EAST 1209.46 FEET; THENCE LEAVING SAID PARALLEL LINE
NORTH 43052'49'' WEST 5.00 FEET TO A LINE THAT IS PARALLEL WITH AND 125.00
FEET SOUTHEASTERLY FROM SAID CENTERLINE OF PETERS CANYON CHANNEL;
THENCE ALONG SAID PARALLEL LlNE NORTH 46°07'11" EAST 58.01 FEET TO A
POINT ON SAID SOUTHWESTERLY LINE OF SAID EDINGER AVENUE, SAID POINT
ALSO BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
NORTHEASTERLY HAVING A RADIUS OF 1860.00 FEET, A RADIAL LINE TO SAID
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. lB - Page 2 Legal Description of Adjacent Parcel
BEGINNING BEARS SOUTH 54°40'20" WEST; THENCE ALONG SAID
SOUTHWESTERLY LINE THE FOLLOWING THREE (3) COURSES:
1)
2)
3)
SOUTHEASTERLY ALONG SAID CURVE 455.07 FEET THROUGH A CENTRAL
ANGLE OF 14001'5;''
SOUTH 49020'45'' EAST 428.16 FEET TO THE BEGINNING OF A CURVE
CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1740.00 FEET;
SOUTHEASTERLY ALONG CURVE 366.87 FEET THROUGH A CENTRAL
ANGLE OF 12004'50'' TO THE POINT OF BEGINNING.
EXCEPT THE FOLLOWING:
ALL THAT PORTION OF THE ABOVE DESCRIBED LAND LYING SOUTHEASTERLY
OF LINE THAT IS PARALLEL WITH AND 69.00 FEET NORTHWESTERLY FROM THE
CENTERLINE OF SAID HARVARD AVENUE AS SHOWN ON SAID RECORD OF
SURVEY.
ALSO EXCEPT THE FOLLOWING:
BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY LINE OF HARVARD
AVENUE (HAVING A NORTHWESTERLY HALF-WIDTH OF 36 FEET) AND THE
SOUTHWESTERLY LINE OF EDINGER AVENUE (HAVING A SOUTHWESTERLY
HALF-WIDTH OF 60 FEET) AS SHOWN ON SAID RECORD OF SURVEY, SAID
SOUTHWESTERLY LINE OF EDINGER AVENUE BEING A CURVE CONCAVE
SOUTHWESTERLY HAVING A RADiUS OF 1740.00 FEET, A RADIAL LINE TO SAID
INTERSECTION BEARS NORTH 52°44'05'' EAST; THENCE NORTHWESTERLY ALONG
SAID SOUTHWESTERLY LINE OF SAID CURVE 33.68 FEET THROUGH A CENTRAL
ANGLE OF 1°06'33'' TO A LINE THAT IS PARALLEL WITH AND 69 FEET
NORTHWESTERLY FROM THE CENTERLINE OF SAID HARVARD AVENUE AS
SHOWN ON SAID RECORD OF SURVEY; THENCE ALONG SAID PARALLEL LINE
SOUTH 40°37'53'' WEST 1228.30 FEET TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID PARALLEL LINE SOUTH 40°37'53'' WEST 38.00 FEET TO
AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG SAID PARALLEL LINE
SOUTH 40°37'37'' WEST 1619.79 FEET TO A POINT ON THE NORTHWESTERLY LINE
OF THE LAND DESCRIBED IN THE DOCUMENT RECORDED IN BOOK 10657, PAGE
412 OF OFFICIAL RECORDS OF SAID COUNTY AND AS SHOWN ON SAID RECORD
OF SURVEY, SAID POINT BEING THE BEGINNING OF A NON-TANGENT CURVE
CONCAVE NORTHWESTERLY HAVING A RADiUS OF 1894.00 FEET, A RADIAL LINE
TO SAID BEGINNING BEARS SOUTH 27°21'58'' EAST; THENCE SOUTHWESTERLY
ALONG SAID NORTHWESTERLY LINE AND SAID CURVE 140.26 FEET THROUGH A
CENTRAL ANGLE OF 4°14'35"; THENCE CONTINUING ALONG SAID
NORTHWESTERLY LINE SOUTH 66°52'37'' WEST 1087.44 FEET TO A PO1NT ON A
CURVE THAT IS CONCENTRIC WITH AND 118.75 FEET NORTHEASTERLY FROM
THE CENTERLINE OF WARNER AVENUE AS SHOWN ON SAID RECORD OF SURVEY,
SAID CURVE BEING CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1718.75
FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68°45'45'' EAST; THENCE
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. lB - Page 3 Legal Description of Adjacent Parcel
CONCENTRIC AND PARALLEL WITH SAID CENTERLINE OF WARNER AVENUE THE
FOLLOWING TWO (2) COURSES:
1)
2)
NORTHERLY AND NORTHWESTERLY ALONG SAID CURVE 843.12 FEET
THROUGH A CENTRAL ANGLE OF 28006'22''
NORTH 49o20'37'' WEST 468.05 FEET TO THE BEGINNING OF A CURVE
CONCAVE EASTERLY HAVING A RADIUS OF 35.00 FEET;
THENCE NORTHWESTERLY, NORTHERLY AND NORTHEASTERLY ALONG SAID
CURVE 62.22 FEET THROUGH A CENTRAL ANGLE OF 101°51'19'' TO THE
SOUTHEASTERLY LINE OF PETERS CANYON CHANNEL (HAVING A
SOUTHEASTERLY HALF-WIDTH OF 90 FEET) AS DESCRIBED IN THE DOCUMENT
RECORDED IN BOOK 6681, PAGE 721 OF OFFICIAL RECORDS OF SAID COUNTY AND
AS SHOWN ON SAID RECORD OF SURVEY; THENCE ALONG SAID
SOUTHEASTERLY LINE OF SAlD PETERS CANYON CHANNEL NORTH 52030'42''
EAST 417.91 FEET TO THE CITY BOUNDARY LINE BETWEEN THE CITY OF TUSTIN
AND THE CITY OF 1RVINE AS SHOWN ON SAID RECORD OF SURVEY; THENCE
LEAVING SAID SOUTHEASTERLY LINE AND ALONG SAID CITY BOUNDARY LiNE
SOUTH 49°21'01'' EAST 45.99 FEET TO A LINE THAT IS PARALLEL WITH AND 135.00
FEET SOUTHEASTERLY FROM THE CENTERLINE OF SAID PETERS CANYON
CHANNEL; THENCE ALONG SAID PARALLEL LINE NORTH 52032'09'' EAST 289.49
FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 37°27'51" WEST 5.00 FEET
TO A LINE THAT IS PARALLEL WITH AND 130.00 FEET SOUTHEASTERLY FROM
THE CENTERLINE OF SAID PETERS CANYON CHANNEL; THENCE PARALLEL AND
CONCENTRIC WITH SAlD CENTERLINE THE FOLLOWING THREE (3) COURSES:
1)
2)
3)
NORTH 52o32'09" EAST 1277.26 FEET TO THE BEGINNING OF A CURVE
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 2130.00 FEET;
NORTHEASTERLY ALONG SAID CURVE 238.53 FEET THROUGH A CENTRAL
ANGLE OF 6024'58";
NORTH 46°07'11" EAST 210.47 FEET TO A POINT ON SAID SOUTHEASTERLY
LINE OF PETERS CANYON CHANNEL;
THENCE ALONG SAID SOUTHEASTERLY LINE THE FOLLOWING SIX (6) COURSES:
1)
2)
3)
4)
5)
6)
SOUTH 49019'04" EAST 20.10 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49019'04" WEST 60.28 FEET;
NORTH 46°07'10" EAST 32.14 FEET;
SOUTH 49019'04" EAST 60.28 FEET;
NORTH 46°07'11" EAST 22.10 FEET;
THENCE LEAVING SAID SOUTHEASTERLY LINE SOUTH 49°19'04" EAST 1311.03
FEET TO THE TRUE POINT OF BEGINNING.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. lB - Page 4 Legal Description of Adjacent Parcel
ATTACHMENT NO. 2
GLOSSARY OF DEFINED TERMS
For purposes of this Agreement, the following initially capitalized terms shall have the
following meanings:
"Action" shall have the meaning set forth in Section 17.2.
"Affiliate" shall mean (1) any Person directly or indirectly Controlling, Controlled by or
under common Control with another Person; (2) any Person owning or Controlling fifty-one
percent (51%) or more of the outstanding voting securities of such other Person; and (3) if that
other Person is an officer, director, member or palmer, any company for which such Person acts
in any such capacity.
"Affordable Housing Cost" for an Affordable Housing Unit designated to be sold to,
and occupied by, a Very Low Income Household shall mean a price that does not exceed the
Affordable Housing Cost for Very Low Income Households; "Affordable Housing Cost" for an
Affordable Housing Unit designated to be sold to a Lower Income Household shall mean a price
that does not exceed the Affordable Housing Cost for Lower Income Households; and
"Affordable Housing Cost" for an Affordable Housing Unit designated to be sold to a Moderate
Income Household shall mean a price that does not exceed the Affordable Housing Cost for
Moderate Income Households. Affordable Housing Cost for an Affordable Housing Unit shall
be calculated as of the date of sale or resale of the Unit.
"Affordable Housing Cost for Lower Income Households" shall mean a cost per Unit
for lower income Households as more particularly defined in Health and Safety Code
Section 50052.5(b)(3) and as generally described in this Agrecn~nent as a price per Unit calculated
as follows: For Lower Income Households whose income exceeds the maximum income for
Very Low Income Households and does not exceed seventy percent (70%) of the annual Orange
County Median Income, adjusted for family size appropriate for the Unit, annual "Affordable
Housing Cost for Lower Income Households" shall be an amount not in excess of the product
of thirty percent (30%) times seventy percent (70%) of the annual Orange County Median
Income, adjusted for family size appropriate for the Unit. For Lower Income Households whose
income equals or exceeds seventy percent (70%) of the annual Orange County Median Income,
adjusted for family size appropriate for the Unit, in accordance with Health and Safety Code
Section 50052.5(b)(3), the City has determined and hereby agrees that "Affordable Housing Cost
for Lower Income Households" shall be an amount not in excess of thirty-five percent (35%) of
the gross income of the household. Affordable Housing Cost for Lower Income Households
shall take into account principal and interest, loan insurance, property taxes, fire and casualty
insurance, utilities and Homeowners' Association fees.
"Affordable Housing Cost for Moderate Income Households" shall mean a cost per
Unit for moderate income Households as more particularly defined in Health and Safety Code
Section 50052.5(b)(3) and as generally described in this Agreement as a price per Unit calculated
as follows: Annual Affordable Housing Cost for Moderate Income Households" shall not be less
than twenty-eight percent (28%) of the gross annual income of the household, nor exceed the
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 1 Glossary of Defined Terms
product of thirty-five percent (35%) times one hundred ten percent (110%) of the annual Orange
County Median Income, adjusted for family size appropriate for the Unit. Notwithstanding the
foregoing, in accordance with Health and Safety Code Section 50052.5(b)(4), the City has
detemdned and hereby agrees that, for a Moderate Income Household with annual gross income
that exceeds one hundred ten percent (110%) of the annual Orange County Median Income,
adjusted for family size appropriate for the Unit, no maximum cap shall be placed upon the
annual payments. Affordable Housing Cost for Moderate Income Households shall take into
account principal and interest, loan insurance, property taxes, fire and casualty insurance, utilities
and Homeowners' Association fees.
"Affordable Housing Cost for Very Low Income Households" shall mean the cost per
Unit for Very Low Income Households as more particularly defined in Health and Safety Code
Section 50052.5(b)(1) and as generally described in this Agreement as a price per Unit which
results in annual housing payments for the purchaser which shall not cxcccd thirty percent (30%)
times fifty percent (50%) of the annual Orange County Median Income, adjusted for family size
appropriate for the Unit, and shall take into account principal and interest, loan insurance,
property taxes, fire and casualty insurance, utilities and Homeowners' Association fees.
"Affordable Housing Covenant" shall mean the covenant in the form attached hereto as
Attachment No. 14 to be recorded against thc title to each Affordable Housing Unit.
"Affordable Housing Note" shall have the meaning set forth in Section 13.1.2.
"Affordable Housing Option Agreement" shall mean the agreement that gives the City
an option to purchase a Unit which shall bc exercisable in thc event that (a) an owner of a Unit
conveys all, or substantially all of the Owner's interest in thc Unit, or (b) thc owner of a Unit is
in breach of thc owner's obligations in thc Affordable Housing Covenant.
"Affordable Housing Trust Deed" shall have the meaning set forth in Section 13.1.2.
"Affordable Housing Units" shall have the meaning set forth in Section 13.1.1.
"Agreement" shall mean this Tustin Legacy Disposition and Development Agreement
for Parcel 34, together with all Attachments (No. 1 through 19) attached hereto.
"Alteration" shall have the meaning set forth in Section 8.13.6.
"Alternate Housing Units" shall have the meaning set forth in Section 13.4.1(b).
"ALTA Policy" shall have the meaning set forth in Section 6.4.
"Approved Project Plans" shall have the meaning set forth in Section 8.6.11.
"Assignee" shall mean any Person to whom or to which the Developer assigns its
interests in this Agreement, thc Property, the Improvements thereon or any portion thereof.
"Assistant City Manager" shall mean Ms. Christine Shingleton, or her successor in such
capacity.
[AEF:ab/IDOCS290960 7/090903/4182.004] Attachment No. 2 - Page 2 Glossary of Defined Terms
"Bankruptcy Proceeding" shall have the meaning set forth in Section 2.7.23.
"Base Closure Law" shall mean the Defense Base Closure and Realignment Act of
1990, Part A of Title XXIX of Public Law 101-510; 10 U.S.C. Section 2687.
"Base Purchase Price" shall have the meaning set forth in Section 4.2.1.
"Bill of Sale" shall mean the bill of sale to be executed and delivered by the City at the
Closing, and executed by Developer to acknowledge acceptance, which bill of sale shall convey
to the Developer title to the Personal Property. The Bill of Sale shall be in substantially the form
attached hereto as Attachment No. 12.
"Business Day(s)" shall mean any day on which City Hall is open for business and shall
specifically exclude Fridays when City Hall is officially closed, Saturday, Sunday or a legal
holiday.
"CC&Rs" shall have the meaning set forth in Section 8.10.
"CEQA" shall mean the California Environmental Quality Act and implementing
regulations and guidelines, contained in Cal. Public Resources Code Section 21000 et seq., and
Cal. Code of Regulations, title 14, Section 15000 et seq.
"Certificate of Compliance" shall mean a certificate to be issued by the City acting in its
proprietary capacity, upon Completion of all or any Phase of the Improvements and satisfaction
of all additional Conditions Precedent thereto, as described in Article 9 of this Agreement.
"Change in Ownership" shall have the meaning set forth in Section 2.3.4.
"City" shall have the meaning set forth in Section 1.4.1.
"City Benefited Property" shall mean the properties owned by the City as of the
Effective Date which are benefited by the covenants, agreements and restrictions set forth in this
Agreement and which are described in the Federal Deed as follows: Deed Group H, Parcel I-H-6,
Parcel I-H-14, Parcel I-H-17 and Parcel I-H-18.
"City Closing Conditions" shall have the meaning set forth in Section 7.3.
"City Code" shall mean the Tustin City Code for the City of Tustin, California, as the
same may be amended from time to time.
"City Council" shall have the meaning set forth in Section 1.1.1.
"City Dedication Parcels" shall have the meaning set forth in Section 1.2.
"City Hall" shall mean the seat of government for the City of Tustin, presently located at
300 Centennial Way, Tustin, California.
"City Title Policy" shall have the meaning set forth in Section 6.2.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 Page 3 Glossary of Defined Terms
"Claim" or "Claims" shall mean any and all claims, actions, causes of action, demands,
orders, or other means of seeking or recovering losses, damages, liabilities, costs, expenses
(including attomeys' fees, fees of expert witnesses, and consultants' and court and litigation
costs), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen.
"Closing" or "Close of Escrow" shall mean the point in time when thc City conveys fee
title in the Property to the Developer.
"Closing Conditions" shall mean the Developer Closing Conditions and the City Closing
Conditions.
"Closing Date" shall mean the meaning set forth in Section 7.1.
- "CLTA Policy" shall have the meaning set forth in Section 6.2.
"Common Area Improvements" shall mean all Park Facilities, swimming pools,
clubhouses, child yards, roadways, infrastructure and other amenities of the Project to be
available for and used in common by the owners of all Units on the Developer Parcel.
"Common Areas" shall mean the Common Area Improvements and the land upon which
such improvements are located.
"Community Development Department" shall mean the Community Development
Department of the City of Tustin, California.
"Complete" and "Completion" shall mean, with respect to a Phase, the point in time
when all of the following shall have occurred with respect to the Phase: (1) to the extent a
certificate of occupancy is required with respect to construction of the Improvements required
under this Agreement, issuance of a permanent certificate of occupancy by the City; and to the
extent a certificate of occupancy is not required by the City, the issuance of a Certificate of
Compliance by the City in accordance with this Agreement, (2) recordation of a Notice of
Completion by the Developer, its Assignee or such Party's contractor; (3) certification by the
Project Architect that such improvements (with the exception of minor "punch list" items) have
been completed in a good and workmanlike manner and substantially in accordance with the
approved plans and specifications (which shall not be required for single family houses); and
(4) any mechanic's liens that have been recorded or stop notices that have been delivered have
been paid, settled or otherwise extinguished, discharged, released, waived, bonded around or
insured against.
"Concept Plan and Design Review" shall mean the City's concept plan and design
review approvals as required by the City Code, which shall be part of the Entitlements.
"Condition Precedent" or "Conditions Precedent" shall mean all conditions precedent
to the City's issuance of a Partial Certificate of Compliance or a Final Certificate of Compliance,
as the case may be, which conditions are set forth in Section 9.6.2.
[AEF:ab/IDOCS290960_7/090903/4182.004] Attachment No. 2 - Page 4 Glossary of Defined Terms
"Conditional Use Permit" shall mean that certain conditional use permit required for
development of the Project on the Developer Parcel in accordance with Scope of Development.
"Contracts" shall mean those third-party contracts, if any, listed on Attachment No. 16.
"Control" "Controlled" or "Controlling", shall mean the power to direct the
management. It shall be a presumption that control with respect to a corporation or limited
liability company is the right to exercise, directly or indirectly, more than fifty percent (50%) of
the voting rights attributable to the controlled corporation or limited liability company, and, with
respect to any individual, partnership, trust, other entity or association, control is the possession,
indirectly or directly, of the power to direct or cause the direction of the management or policies
of the controlled entity.
"Controlling Parties shall have the meaning set forth in Section 2.3.2(b).
"Conveyance Agreement" shall mean that certain Agreement Between The United
States of America and the City of Tustin, California for the Conveyance of a portion of the
Former Marine Corps Air Station Tustin dated May 13, 2002.
"Costs" shall have the meaning set forth in Section 17.2.
"Decision" shall have the meaning set forth in Section 17.2.
"Defaulting Party" shall mean a Party to this Agreement who is either in Potential
Default or in Material Default.
"Design Documents" shall mean documents, plans and specifications at each stage of
development (schematics, design development and construction documents, or if design/build,
schematic and construction documents) for the Improvements which: (a) shall describe the
proposed use and include plans and renderings showing in reasonable detail the proposed size,
land coverage, floor area, gross square footage, shape, height, bulk, massing, location, exterior
material, exterior color scheme and elevation of such Improvements; (b) shall include (i) a
pedestrian and vehicular circulation and traffic plan showing all ingress and egress to public
streets or roads and including a statement of impact; (ii) utilities and service connections plan;
(iii) a landscape plan; (iv) a signage plan; (v) engineering, mechanical and electrical plans and
documents; and (vi) a grading, drainage and utility plan; and (c) shall be prepared and stamped
approved by an architect and/or engineer licensed to practice in the State of California.
"Determination Date" shall have the meaning set forth in Section 14.2.4.
"Developer" shall have the meaning set forth in Section 1.4.2.
"Developer Parcel" shall mean, as of the Close of Escrow, Parcel I-B-1, but shall
exclude, upon dedication to and acceptance thereof by the City, the City Dedication Parcels.
"Developer's Backbone Infrastructure Work" shall have thc meaning set forth in
Section 8.13.3.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 5 Glossary of Defined Terms
"Developer's Closing Conditions" shall have the meaning set forth in Section 7.2.
"Developer's Closing Payment" shall have the meaning set forth in Section 4.2.2(e).
"Developer's Infrastructure Payment" shall have thc meaning set forth in Section
8.13.4.
"Developer's Title Endorsements" shall have thc meaning set forth in Section 6.4.
"Developer's Title Policy" shall have the meaning set forth in Section 6.4.
"Development Costs" shall have the meaning set forth in Section 8.1.3.
"Development Permits" shall mcan and include any conditional usc permit, site plan,
grading permit, foundation permit, construction permit, building permit or other permit,
certificate or approval as may be necessary to subdivide thc Developer Parcel and construct thc
Improvements.
"Disapproved Exception" shall have thc meaning set forth in Section 6.3.
"DTSC" shall mcan the California Department of Toxic and Substance Control.
"Due Diligence Information" shall have the meaning set forth in Section 4.4.2(c).
"Due Diligence Period" shall have the meaning set forth in Section 5.1.
"EAN Deposit" shall have the meaning set forth in Section 4.2.2(b).
"EBS" shall mcan thc Environmental Baseline Survey incorporated into thc FOST by
reference.
"Effective Date" shall have the meaning set forth in the introduction to this Agremcnt.
"Entitlements" shall have the meaning set forth in Section 8.3.1.
"Environmental Agency" shall mean the United States Environmental Protection
Agency; the California Environmental Protection Agency and all of its sub-entities, including
any Regional Water Quality Control Board, thc State Water Resources Control Board, thc
Depatt~ent of Toxic Substances Control, the South Coast Air Quality Management District, and
the California Air Resources Board; the City; any fire department or health department with
jurisdiction over the Developer Property; and/or any other federal, state, regional or local
governmental agency or entity that has or asserts jurisdiction over Hazardous Substance Releases
or thc presence, use, storage, transfer, manufacture, licensing, reporting, permitting, analysis,
disposal or treatment of Hazardous Materials in, on, under, about, or affecting the Project.
"Environmental Insurance" shall have thc meaning set forth in Section 11.1.4.
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances,
rules, regulations, requirements, orders, directives, guidelines, or pc,~uit conditions, in existence
[AEF:ab/IDOCS290960_7/090903/4182.004] Attachment No. 2 Page 6 Glossary of Defined Terms
as of the Effective Date or as later enacted, promulgated, issued, modified or adopted, regulating
or relating to Hazardous Materials, and all applicable judicial, administrative and regulatory
decrees, judgments and orders and common law, including those relating to industrial hygiene,
public safety, human health, or protection of the environment, or the reporting, licensing,
pemdtting, use, presence, transfer, treatment, analysis, generation, manufacture, storage,
discharge, Release, disposal, transportation, Investigation or Rernediation of Hazardous
Materials. Environmental Laws shall include the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.)
("CERCLA"); the Resource Conservation and Recovery Act, as amended, (42 U.S.C.
Section 6901 et seq.) ("RCRA"); the federal Water Pollution Control Act, as amended,
(33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended, (15 U.S.C.
Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the California
Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section 25100
(Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground
Storage of Hazardous Substances) of the California Health and Safety Code; and the California
Water Code, Sections 13000 et seq.
"Escrow" shall have the meaning set forth in Section 4.3.
"Escrow Holder" shall mean First American Title Insurance Company.
"Existing Housing Units" shall have the meaning set forth in Section 13.4.1.
"Fair Market Value" shall have the meaning set forth in Section 14.2.4.
"Federal Government" shall mean the United States of America, by and through the
Secretary of the Navy, or designee.
"Federal Deed" shall mean that certain "Quitclaim Deed and Environmental Restriction
Pursuant to California Civil Code Section 1471" made by the Federal Government in favor of the
City dated May 13, 2002.
"Final EIS/EIR" shall have the meaning set forth in Section 1.1.2.
"Final Certificate of Compliance" shall have the meaning set forth in Section 9.1.
"Final Tract Map" or "Final Tract Maps" shall mean a final tract map or final tract
maps approved by the City for the Developer Parcel or any Phase thereof in accordance with the
Subdivision Map Act and the City Municipal Code and provided in the Official Records.
"Final Plans" shall have the meaning set forth in Section 8.6.6.
"Financing Agreement" shall have the meaning set forth in Section 7.1.
"FIRPTA Affidavit" shall mean an affidavit in form reasonably satisfactory to the
Developer certifying that the City is not a "foreign person" under the federal Foreign Investment
in Real Property Act.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 7 Glossary of Defined Terms
"First Party" is defined in Section 17.8.3.
"Force Majeure Delay" shall have the meaning set forth in Section 17.8 as modified for
certain purposes in Section 16.2.2.
"Foreclosure" shall mean the foreclosure of any Pemdtted Mortgage whether by judicial
proceedings or by virtue of any power of sale or any conveyance of all or any portion of the
Developer Property and/or Improvements from Developer to any Permitted Mortgagee or its
wholly-owned designee through acceptance of a deed in lieu of foreclosure or other appropriate
proceedings in the nature thereof.
"FOST" shall mean the Department of Navy finding and determination that Parcel I-B-1
was suitable for transfer to the City, pursuant to document entitled "Finding of Suitability to
Transfer" dated September 28, 2001.
"General Plan" shall mean the most current general plan for the City of Tustin.
"Governmental Authority" shall mean any and all federal, state, county, municipal and
local governmental and quasi-governmental bodies and authorities (including the United States
of America, the State of Califomia and any political subdivision, public corporation, district,
joint powers authority or other political or public entity) or departments thereof having or
exercising jurisdiction over the Parties, the Project, the Developer Parcel, the City Dedication
Parcels or such portions thereof as the context indicates.
"Governmental Requirements" shall mean all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines and other requirements, including the City Code, issued by any
Governmental Authority having jurisdiction over the Parties, the Project, the Developer Parcel
and/or the Project Site or any component thereof.
"Hazardous Materials" shall mean and include the following:
(a) "Hazardous Substance", "Hazardous Material", "Hazardous Waste",
or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and
Recovery Act, 42 U.S.C. subsection 6901, et seq.;
(b) An "Extremely Hazardous Waste", a "Hazardous Waste", or a
"Restricted Hazardous Waste", under subsections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the
California Health and Safety Code;
(c) "Hazardous Material", "Hazardous Substance", "Hazardous Waste",
"Toxic Air Contaminant", or "Medical Waste" under subsections 25281,25316, 25501,
25501.1, 117690 or 39655 of the California Health and Safety Code;
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 8 Glossary of Defined Terms
(d) "Oil" or a "Hazardous Substance" listed or identified pursuant to
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any
other hydro carbonic substance or by-product;
(e) Listed or defined as a "Hazardous Waste", "Extremely Hazardous
Waste", or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California
Code of Regulations;
(f) Listed by the State of California as a chemical known by the State to cause
cancer or reproductive toxicity pursuant to Section 25249.9(a) of the California Health and
Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public age'ney to be remediated,
including remediation which such law or public agency requires in order for the property to be
put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual,
whether or not the presence of such material resulted from a leaking underground fuel tank;
(i) Pesticides regulated under the Feral Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. subsection 136 et seq.;
(j) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. subsection 2601 et seq.;
(k) Any radioactive material including any "source material", "special nuclear
material", "by-product material", "low-level wastes", "high-level radioactive waste", "spent
nuclear fuel" or "transuranic waste", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq.,
the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California
Radiation Control Law, Califomia Health and Safety Code subsection 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor
Code subsection 6300 et seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code.
"Homeless Accommodation Documents" shall have the meaning set forth in Section
13.4.
"Homeless Assistance Escrow" shall have the meaning set forth in Section 13.4.2(a).
"Homeowners' Association" shall have the meaning set forth in Section 2.5.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 9 Glossary of Defined Terms
"Horizontal Improvements" shall mean, whether on or off the Developer Parcel, all
infrastructure improvements and utilities required to be constructed or installed on or in
connection with the development of the Developer Parcel as further described on
Attachment No. 9 to this Agreement including (a) all public and private streets, roadways, drives,
alleyways, sidewalks; (b) all utilities required for the Project to the boundary of each building
containing Units; (c) the Common Areas; and (d) the Park Facilities, but shall in no event be less
than the Required Horizontal Improvements. Horizontal Improvements shall not include the
Project Fair Share Contribution or the Tustin Legacy Backbone Infrastructure Program
Improvements.
"Household" shall mean all persons residing in a Unit.
"Improvements" shall mean Vertical Improvements and Horizontal Improvements,
collectively.
"Indemnified Parties" shall have the meaning set forth in Section 10.1.
"Infrastructure Reimbursement Agreement" shall have the meaning set forth in
Section 8.13.4(a).
"Initial Deposit" shall have the meaning set forth in Section 4.2.2(a).
"Injured Party" shall have the meaning set forth in Section 14.1.
"Inspections" shall have the meaning set forth in Section 5.4.
"Institutional Lender" shall mean a nationally chartered bank, national association,
federal association bank, savings and loan association, investment bank, state chartered bank,
lending institution or other institutional lender which has a net worth of Five Billion Dollars
($5,000,000,000) or more. The participation, securitization or assignment of a loan (or any
portion thereof) by an Institutional Lender (acting in an individual capacity or as agent for other
lenders) shall not give rise to any requirement that each lender participating in such participation,
securitization or assignment itself be an Institutional Lender (acting in an individual capacity or
as agent for other lenders), so long as (a) at the inception of the loan, the originating and agent
lender is an Institutional Lender, and (b) at thc time of any subsequent assignment of the loan,
the assignee and agent lender is an Institutional Lender.
"Interest Payment" shall have the meaning set forth in Section 7.1.
"Interest Termination Date" shall have the meaning set forth in Section 7.1.
"Investigation(s)" shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Property or any adjacent or affected properties, including the air, soil,
surface water, and groundwater, and the surrounding population or properties, or any of them, to
characterize or evaluate the nature, extent or impact of Hazardous Materials.
"IRWD" shall mean the Irvine Ranch Water District.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 10 Glossary of Defined Terms
"Key Employees" shall have the meaning set forth in Section 2.3.5.
"Leases" shall mean those leases, if any, listed on the list attached hereto as
Attachment No. 16.
"Lot(s)" shall mean the subdivided portions of a Parcel or Phase that are conveyed with a
Unit or Units as reflected in an approved and recorded Final Tract Map, that are conveyed and
intended for sale to individual Owners-Occupiers.
"Lower Income Households" shall mean a Household or Households occupied by
persons and families whose gross income does not exceed the qualifying limits for lower income
families set forth in Health and Safety Code Section 50079.5.
"Managers" shall have the meaning set forth in Section 2.3.1.
"Material Default" shall mean the state a Party to this Agreement is in after proper
notice is provided of a Potential Default and the appropriate cure period, if any, has lapsed, all as
provided in Section 14.2.
"MCAS Tustin" shall mean the Marine Corps Air Station-Tustin.
"Memorandum of DDA" shall have the meaning set forth in Section 2.7. I.
"Moderate Income Household" shall mean a Household or Households occupied by
persons and families whose gross income does not exceed the qualifying limits for moderate
income families set forth in Health and Safety Code Section 50093.
"Mortgage" shall mean any indenture of mortgage or deed of trust, bond, grant of
taxable or tax exempt funds f~om a governmental agency or other security interest and the
documents governing a sale-leaseback transaction, together with all loan documents related
thereto.
"Mortgagee" shall means any mortgagee, beneficiary (or any agent for one or more
lenders acting in such capacity) under any deed of trust, trustee of bonds, governmental agency
which is a grantor of funds, and, with respect to any Parcel which is the subject of a sale-
leaseback transaction, the Person acquiring fee title.
"Mortgagor" shall mean the mortgagor or trustor under a Mortgage (or lessee, in the
case of a sale-leaseback transaction).
"Navy" shall mean the United States Department of Navy.
"Negative Difference" shall have the meaning set forth in Section 8.13.4(b).
"New Agreement" shall have the meaning set forth in Section 2.7.24(a) and/or (b), as
applicable.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 11 Glossary of Defined Terms
"Non-Institutional Lender" shall mean a lender that does not meet the minimum
standards to quality as an Institutional Lender.
"Notice of Completion" shall mean the notice of completion filed by the Developer after
the Completion of each Unit, pursuant to California Civil Code Section 3093.
"Official Records" shall mean the records of the office of the County Recorder for
Orange County, California.
"Opening of Escrow" shall have the meaning set forth in Section 4.3.
"Orange County Median Income" shall mean the median income of all households in
Orange County, California, as established by official annual publication of thc Federal
Department of Housing and Urban Development as released by thc State Department of Housing
and Community Development.
"Owner-Occupied" shall mean a Unit that is owned and occupied by the fee owner of
such Unit.
"Owner-Occupier" shall mean a person or persons who will own in fee and occupy, for
residential purposes, an individual Unit.
"Ownership Transfer" shall mean the transfer, sale, assigmnent, ground lease, girl,
hypothecation, mortgage, pledge or encumbrance, or other similar conveyance of the
Developer's interests in this Agreement, the Developer Parcel or the Improvements thereon, or
any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or
otherwise, or any agreement to do so; the granting of any Mortgage and/or the execution of any
installment land sale contract or similar instrument affecting all or a portion of the Developer
Parcel or the Improvements thereon; and shall also include a Transfer of Control of the
Developer, or any conversion of the Developer to an entity form other than that of the Developer
at the time of execution of this Agreement.
"Ownership Transferee" shall mean any Person to which an Ownership Transfer is
made, including any Mortgagee or Permitted Mortgagee.
"Parcel" shall mean the Developer Parcel or any parcel framed by subdivision thereof
approved by the City pursuant to the Subdivision Map Act and the City Municipal Code.
"Parcel I-B-I" shall have the meaning set forth in Section 1.1.4.
"Parcel 33 Affordable Units" shall have the meaning set forth in Section 13.4.2(b).
"Park Facilities" shall have the meaning set forth in Section 8.1.6(b)(2).
"Partial Certificate of Compliance" shall have the meaning set forth in Section 9.1.
"Parties" shall mean the City and the Developer, collectively.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 12 Glossary of Defined Terms
"Party" shall mean either of the City or the Developer, individually.
"Performance Bonds" shall mean bonds issued by a surety company admitted in the
State of California and regulated by the State of California Department of Insurance, Best's
Rated "A" and otherwise acceptable to the Assistant City Manager and City Attorney in their
sole discretion, in which the City is a named obligee. The Performance Bonds shall guarantee
payment for and faithful performance and completion (within the respective times provided in
this Agreement) of the Vertical Improvements, the Horizontal Improvements, the Quimby Fees
and the Project Fair Share Contribution and/or the Subsequent Participation, as the case may be,
in accordance with drawings or plans, as appropriate, that specifically describe the work to be
performed in sufficient detail for the issuance of such Performance Bonds.
"Permitted Exceptions" shall have the meaning set forth in Section 6.2 as may be
modified by Section 6.3.
"Permitted Mortgage" shall mean any indenture of mortgage or deed of trust, bonds,
grant of taxable or tax-exempt funds from a governmental agency or other conveyance of a
security interest in a Parcel(s), to a Permitted Mortgagee or the conveyance of such Parcel to the
Permitted Mortgagee or its assignee or purchaser in connection with a Foreclosure which
satisfies all of the criteria set forth in Section 2.7.2 and 2.7.3 of this Agreement.
"Permitted Mortgage Loan" shall mean the obligations secured by a Permitted
Mortgage.
"Permitted Mortgagee" shall mean a Mortgagee meeting the criteria set forth in
Sections 2.7.2 and accordingly entitled to the Permitted Mortgagee protections provided by this
Agreement.
"Permitted Transfer" shall mean any Ownership Transfer that is pemdtted or
authorized by Sections 2.2, 2.3 or 2.5.
"Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
"Personal Property" shall mean (a)all tangible personal property appurtenant to the
Developer Parcel and (b) all Utility Systems, collectively.
"Phase" shall mean all or part of one or more Parcels, which are to be developed at one
time, as set forth on Attachment No. 17.
"Phasing Plan" shall mean that certain plan for phasing of the development of the
Project prepared by Developer and approved by the City, which plan shall be consistent with the
phasing described on Attachment No. 17 and shall specifically describe the Parcels to be
developed within each Phase of the Project.
"Positive Difference" shall have the meaning set forth in Section 8.13.4(a).
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 13 Glossary of Defined Terms
"Potential Default" shall mean any event that with the passage of time or the giving of
notice or both could result in the occurrence ora Material Default, as further defined in
Section 14.1 and 14.2.
"Preliminary Plan" shall have the meaning set forth in Section 8.6.3.
"Prevailing Party" shall have the meaning set forth in Section 17.2.
"Project" shall have the meaning set forth in Section 1.3.2.
"Project Architect" shall mean the architect or engineer, as applicable, designated in
writing by the Developer for a particular product type or improvement.
"Project Fair Share Contribution" shall have the meaning set forth in
Section 8.13.2(a).
"Project Site" shall have the meaning set forth in Section 4.4.1(a).
"Property" shall have the meaning set forth in Section 4.1.
"Public Works Director" shall have thc meaning set forth in Section 8.13.3
"Purchase Price" shall have the meaning set forth in Section 4.2.1.
"Purchase Price Deposit" shall have the meaning set forth in Section 4.2.2(d).
"Quimby Fees" shall mean the fees payable by Developer to City in order to achieve
compliance with the Quimby Act, as further described in California Government Code § 66477.
"Quitclaim Deed" shall mean the quitclaim deed to be executed and delivered by the
City at the Closing to convey title to the Property to the Developer. The Quitclaim Deed shall be
in substantially the form attached hereto as Attachment No. 3, acknowledged and in recordable
form.
"Reimbursable Costs" shall mean all out-of pocket hard costs, governmental fees, costs
of services (other than legal fees), consultants' fees, and wages required to be paid to any person
employed by the Developer, which costs and fees are reasonably incurred and actually paid by
the Developer in connection with the design and construction of the Project. Reimbursable Costs
shall specifically not include soft costs, the cost of services for legal fees, exactions, dedications,
cost related to overruns, profit, overhead, wages paid by any contractor or subcontractor or any
costs of any kind or nature incurred prior to the Effective Date. Reimbursable Costs shall not
include any costs or fee incurred by Developer as a result of the Developer's: breach of any
provision of this Agreement, violation of or noncompliance with any Governmental
Requirement, negligence, fraud or willful misconduct.
"Reimbursement Agreement" shall mcan that certain agreement whereby an owner of
an Affordable Housing Unit agrees to reimburse the City for certain amounts the City may
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 14 Glossary of Defined Terms
advance on behalf of the owner. The Reimbursement Agreement is referred to in the Affordable
Housing Covenant, and is attached as Exhibit "E" of the Affordable Housing Covenant.
"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
"Released Party" and "Released Parties" shall have the meanings set forth in
Section 4.4.2(e).
"Releasing Party" shall have the meaning set forth in Section 4.4.2(e).
"Remediate" or "Remediation" shall mean any response or remedial action as defined
under Section 101 (25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removal, containment,
abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or
other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
"Reports" shall have the meaning set forth in Section 14.2.7(b).
"Repurchase Property" shall have the meaning set forth in Section 14.2.4.
"Required Horizontal Improvements" shall mean the Horizontal Improvements that
are required to be constructed by the terms of a subdivision improvement agreement or deferred
improvement agreement between the Developer and the City as a condition of obtaining a Final
Tract Map or Final Tract Maps for a particular portion of the Developer Parcel or Phase of the
Project.
"Reuse Plan" shall have the meaning set forth in Section 1.1.1.
"Reversion Area" shall have the meaning set forth in Section 16.2.
"Reversion Conditions" shall have the meaning set forth in Section 16.2.2.
"Right of Purchase" shall have the meaning set forth in Section 14.2.2(a).
"Right of Reversion" shall have the meaning set forth in Section 16.2.2.
"Salomon" shall have the meaning set forth in Section 7.1.
"Salvation Army Agreement" shall have the meaning set forth in Section 13.4.2.
"Schedule of Performance" shall mean the document attached as Attachment No. 7 to
this Agreement, setting forth the dates and time periods for submissions, approvals and actions,
including the construction of the Improvements.
[AEF:ab/1DOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 15 Glossary of Del'reed Terms
"Scope of Development" shall mean the description of the Project attached as
Attachment No. 8.
"Second Party" shall have the meaning set forth in Section 17.8.3.
"Selection Period" shall have the meaning set forth in Section 14.2.4.
"Senior Obligation" shall have the meaning set forth in Section 16.3.2.
"Specific Plan" shall have the meaning set forth in Section 1.1.5.
"State" shall mean the State of California.
"Subdivision Map Act" shall mean the California Subdivision Map Act as codified in
Cal. Government Code Section 66410 et seq.
"Subordination" shall have the meaning set forth in Section 2.7.3.
"Subsequent Participation" shall have the meaning set forth in Section 4.2.3.
"Supplemental Deposit" shall have the meaning set forth in Section 4.2.2(c).
"Supplemental Title Report" shall have the meaning set forth in Section 6.3.
"Survey" shall have the meaning set forth in Section 6.1.
"Survey" and "Surveyor" shall have the meanings set forth in Section 6.1.
"Termination Notice" shall have the meaning set forth in Section 5.8.
"Third Appraiser" shall have the meaning set forth in Section 14.2.4.
"Title Commitment" shall have the meaning set forth in Section 6.2.
"Title Company" shall mean First American Title Insurance Company.
"Transfer of Control" shall have the meaning set forth in Section 2.3.2.
"Tustin Legacy" shall have the meaning set forth in Section 1.1.4.
"Transitional Housing Amount" shall have the meaning set forth in Section 13.4.2.
"Tustin Legacy Backbone Infrastructure Program" shall have the meaning set forth in
Section 8.13.1.
"Unit" or "Units" shall mean the residential units which are required to be developed on
the Parcel by the Developer.
[AEF:ab/IDOCS2_90960_7/09090~/4182.004] Attachment No. 2 - Page 16 Glossary of Defined Terms
"Utility Systems" shall mean all utility distribution systems located on the Developer
Parcel and shall include the following: (a) all current City-owned electrical, gas, telephone and
cable television systems, including distribution lines, pad motmted and overhead distribution
poles and/or transformers, on the Developer Parcel, (b) all conduits and duct banks from outlet or
master meters or connection points currently owned by the City on the Developer Parcel to end
usage points on the Developer Parcel; and (c) all City-owned water, sewer, and storm drain
systems (does not include culvert ditches), including distribution lines and pipelines from outlet
or master meters or connection points currently owned by the City on the Developer Parcel to
end usage points on the Developer Parcel.
"Vertical Improvements" shall mean all of the buildings, structures, landscaping and
other improvements, other than the Horizontal Improvements, to be constructed or installed on
the Developer Parcel, consistent with the Specific Plan, the Reuse Plan, the Approved Project
Plan, the Entitlements, and the Development Permits.
"Very Low Income Households" shall mean a Household or Households occupied by
persons and families whose gross income does not exceed the qualifying limits for very low
income families set forth in Health and Safety Code Section 50105.
"Vesting Tentative Tract Map" shall mean vesting tentative tract map No. 16507 to be
considered and approved or disapproved by the City in accordance with the Subdivision Map Act
and the City Municipal Code.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 2 - Page 17 Glossary of Defined Terms
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE RECORDED
AND TO BE EXEMPT FORM RECORDING
FEES PER GOVERNMENT CODE 6103 AND
27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Mail Tax Statements to:
WL HOMES LLC
895 Dove Street, Suite 110
Newport Beach, CA 92660
Attention: Mitch Bradford
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Space Above This Line Reserved for Recorder's Use
CITY QUITCLAIM DEED FOR PARCEL I-B-1 AND RESTRICTIONS,
INCLUDING ENVIRONMENTAL RESTRICTION
PURSUANT TO CIVIL CODE SECTION 1471
This CITY QUITCLAIM DEED FOR PARCEL I-B-1 AND ENVIRONMENTAL
RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471 ("Quitclaim Deed") is
made this __day of October, 2003, by the CITY OF TUSTIN, CALIFORNIA, a municipal
corporation duly organized and existing under and by virtue of the laws of the State of California
(the "GRANTOR"), in favor of WL HOMES LLC, a Delaware limited liability company (the
"GRANTEE").
RECITALS:
WHEREAS:
A. The United States of America ("Government") and the GRANTOR entered into
the Agreement between the United States of America and the City of Tustin, California, for the
Conveyance of a Portion of the Former Marine Corps Air Station Tustin (the "Agreement"),
dated May 13, 2002; and
[AEF :gnj/Parcel 34 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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B. Pursuant to the Agreement, the Government conveyed property at the Marine
Corps Air Station, Tustin ("Grantor Property") to the GRANTOR on May 13, 2002; and
C. Pursuant to California Civil Code §1471, the Government determined that it is
reasonably necessary to impose certain restrictions on the use of the Grantor Property to protect
present and future human health or safety or the environment as a result of the presence of
hazardous materials on portions of the Grantor Property described hereinafter with particularity.
D. The GRANTOR and the GRANTEE entered into the Tustin Legacy Disposition
and Development Agreement for Parcel 34, dated as of September __, 2003 ("DDA"), for the
sale and development of a portion of the Grantor Property, a memorandum of which, entitled the
"Memorandum of Disposition and Development Agreement For Parcel 34," has been
executed by the GRANTOR and the GRANTEE and will be recorded in the Official Records of
the County of Orange, California of even date with the recordation of this Quitclaim Deed (the
"Memorandum of DDA").
E. The GRANTOR desires to convey and the GRANTEE desires to acquire a portion
of the Grantor Property to facilitate economic redevelopment in accordance with the Reuse Plan
for Marine Corp Air Station, Tustin.
NOW THEREFORE, the GRANTOR, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, does hereby remise, release and forever
quitclaim to the GRANTEE, all of GRANTOR's right, title and interest in and to that certain real
property, comprising approximately 36.84 acres, more or less, more particularly described as
Parcel I-B-1 in Exhibit "A" attached hereto and incorporated herein by this reference (the
"Developer Parcel").
1. TOGETHER WITH (a) all existing improvements, if any, presently located on
the Developer Parcel and (b) all utility distribution systems located on the Developer Property
and conveyed by the Government to GRANTOR (the Developer Parcel and the matters
described in clauses (a) and (b) of this paragraph 1, collectively referred to herein as the
"Developer Property"),
2. EXCEPTING THEREOUT AND THEREFROM, however, and reserving to
the GRANTOR, its successors and assigns, together with the right to grant and transfer all or a
portion of the same, the following:
2.1 Any and all oil, oil rights, minerals, mineral rights, natural gas, natural gas
rights and other hydrocarbon by whatsoever name known, geothermal steam and all products
derived from any of the foregoing, that may be within or under the Developer Parcel together
with the perpetual right of drilling, mining, exploring for and storing in and removing the same
from the Developer Parcel or any other land, including the right to whipstock or directionally
[AEF:gnj/Parce134 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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drill and mine from lands other than the Developer Parcel, oil or gas wells, tunnels and shafts
into, through or across the subsurface of the Developer Parcel and to bottom such whipstocked or
directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits
thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate any such well or
mines; but without, however, the right to drill, mine, store, explore or operate through the surface
of the Developer Parcel.
2.2 Any and all water, water rights or interests therein appurtenant or relating
to the Developer Parcel or owned or used by the GRANTOR in connection with or with respect
to the Developer Parcel no matter how acquired by the GRANTOR, whether such water rights
shall be riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated,
statutory or contractual, together with the perpetual right and power to explore, drill, re-drill and
remove the same from or in the Developer Parcel, to store the same beneath the surface of the
Developer Parcel and to divert or otherwise utilize such water, rights or interests on any other
property owned or leased by the GRANTOR; but without, however, any right to enter upon or
use the surface of the Developer Parcel in the exercise of such rights.
2.3 Those excess development rights remaining after deducting from the total
Tustin Legacy Specific Plan planning area authorization for Planning Area 21 a total of [189]
dwelling units ("Units"). All development rights entitled for the Developer Parcel in excess of
such [189] dwelling unit allocation shall remain the property of the GRANTOR and, unless
attributable to property within Planning Area 21 other than the Developer Parcel, shall be freely
transferable by the GRANTOR in its sole discretion throughout the remainder of Planning Area
21.
3. SUBJECT TO THE FOLLOWING NOTICES, COVENANTS,
RESTRICTIONS, AND CONDITIONS, which shall be binding upon and enforceable against
the Developer Property and the GRANTEE, and its successors and assigns, in perpetuity:
3.1 The GRANTEE agrees to accept conveyance of the Developer Property
subject to all covenants, conditions, restrictions, easements, rights-of-way, reservations, rights,
agreements and encumbrances of record, including, without limitation, the DDA and the
Memorandum of DDA.
3.2 The quitclaim deed from the Government conveying the Developer
Property to the GRANTOR was recorded prior to recordation of this Quitclaim Deed. The
GRANTOR has no knowledge regarding the accuracy of information provided by the
Government regarding the environmental condition of the Developer Property and makes no
warranties regarding the environmental conditions of the Developer Property. The GRANTOR
has no knowledge regarding the accuracy or adequacy of the Government's remediation of the
Developer Property as provided in the deed conveying the Developer Property to the
GRANTOR, and the GRANTOR has taken no steps to abate any such conditions. The
[AEF:gnj/Parce134 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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GRANTOR has no actual knowledge of any false, misleading or materially incomplete or
inaccurate statements with regard to the Government information or the accuracy or adequacy of
the Government's remediation of the Developer Property, or of any omission of a material fact
pertaining to same, and the GRANTOR has not received notice from any person that the
Government information is false, misleading or omits to state a material fact.
3.3 The italicized information below is copied verbatim (except as discussed
below) from the Government deed conveying the Grantor Property to the GRANTOR. To the
extent applicable to the Developer Property conveyed hereunder, by acceptance of this Deed the
GRANTEE hereby acknowledges and assumes all responsibilities placed upon the GRANTOR
(the "City of Tustin") under the terms of the aforesaid Govermnent deed to. the GRANTOR.
Within the italicized information only, the term "GRANTOR" shall mean the Government, the
term "GRANTEE" shall mean the City of Tustin and the term "Property" shall mean the Grantor
Property, including, without limitation, the Developer Property; to avoid confusion, the words
"Government" have been added in parenthesis after the word "GRANTOR", and "City of
Tustin" has been added in parenthesis after the word "GRANTEE".
2.2 A FOST has been completed and an Environmental Baseline
Survey ("EBS") report is referenced in the FOST. The FOST and EBS reference
environmental conditions on the Property and on other property not subject to
this Deed GRANTEE ("City of Tustin '') acknowledges that it has received copies
of the EBS and the FOST and that all documents referenced therein have been
made available to GRANTEE ("City of Tustin '')for inspection and copying.
2.3 Except as otherwise provided herein, or as otherwise provided by
law, the GRANTEE ("City of Tustin'') acknowledges that it has inspected is
aware of, and accepts the condition and state of repair of the Property, and that
the Property is conveyed "as is" and "where is" without any representation,
promise, agreement, or warranty on the part of the GRANTOR ("Government")
regarding such condition and state of repair, or regarding the making of any
alterations, improvements, repairs or additions. Except for the environmental
remediation which may be required to be undertaken by GRANTOR
("Government") pursuant to paragraph 2.6 below, the GRANTEE ("City of
Tustin '')further acknowledges that the GRANTOR ("Government") shall not be
liable for any latent or patent defects in the Property except to the extent required
by applicable law.
2.4. Notices And Covenants:
2.4.1. Notices: Hazardous Substance Notification. Pursuant to
42 U.S.C. 3~ 9620(h)(3)(A), and the provisions of 40 C.F.R. part 373, the
GRANTOR ("Government") has made a complete search of its files and records
[AEF:gnj/Parce134 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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concerning the Property and hereby gives notice that based on that research no
hazardous substances were stored, released, or disposed of on the Property.
2.4.2. Grant of Covenant [CERCLA 42 U.S.C. Section 9620
(h)(3)(A)(ii)(I)]. The GRANTOR ("Government") covenants and warrants that
all remedial action necessary to protect human health and the environment with
respect to any hazardous substance remaining on the Property has been taken
before the date of transfer.
2.4.3. Additional Remediation Obligation [CERCLA 42 U.S.C.
Section 9620 (h)(3)(A)(ii)(II)]. The GRANTOR ("Government") covenants and
warrants that GRANTOR ("Government") shall conduct any additional remedial
action found to be necessary after the date of transfer for any hazardous
substance existing on the Property prior to the date of this Deed. This covenant
shall not apply to the extent that the GRANTEE ("City of Tustin") caused or
contributed to any release or threatened release of any hazardous substance,
pollutant, or contaminant.
2.4.4. Access [CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(iii)].
In connection with GRANTOR's ("Government") covenant in 2.4.3 above and in
connection with ongoing remediation on GRANTOR's ("Government") property
adjacent to the Property, GRANTEE ("City of Tustin '') agrees on behalf of itself,
its successors and assigns, as a covenant running with the land, that GRANTOR
("Government"), or its officers, agents, employees, contractors and
subcontractors, shall have the right, upon reasonable notice to GRANTEE ("City
of Tustin''), to enter upon the Property in any case in which a response or
corrective action is found to be necessary at such property after the date of this
deed or such access is necessary to carry out a response action or corrective
action on adjoining property. Neither GRANTEE ("City of Tustin''), nor its
successors and assigns, shall have any claim on account of such entries against
the United States or any of its officers, agents, employees, contractors or
subcontractors. The right to enter shall include the right to conduct tests,
investigations and surveys, including, where necessary, drilling, test-pitting,
boring and other similar activities. Such right shall also include the right to
construct, operate, maintain or undertake any other response or corrective action
as required or necessary, including, but not limited to monitoring wells, pumping
wells and treatment facilities, and the installation of associated utilities. In
exercising these rights of access, except in case of imminent and substantial
endangerment to human health or the environment, the GRANTOR
("Government") (I) shall give the GRANTEE ("City of Tustin'') reasonable
notice of any action to be taken related to such remedial or corrective actions on
the Property, and (2) make reasonable efforts to minimize interference with the
[AEF:gnj/P~rcel 34 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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on-going use of the Property. Furthermore, the GRANTOR ("Government')) and
GRANTEE ("City of Tustin')) agree to cooperate in good faith to minimize any
conflict between the necessary environmental investigation and remediation
activities and the GRANTEE's ("City of Tustin')) use of the Property. Any
inspection, survey, investigation or other response, corrective or remedial action
undertaken by GRANTOR ("Government')) will, to the maximum extent practical,
be coordinated with representatives designated by the GRANTEE ("City of
Tustin ").
In connection with GRANTOR's ("Government')) remedial actions
described above, GRANTEE ("City of Tustin')) agrees on behalf of itself, its
successors and assigns, as a covenant running with the land to comply with the
provisions of any health or safety plan in effect during the course of any such
action.
2.5. Indemnification Regarding Transferees. The GRANTOR
("Government") hereby recognizes its' obligations under Section 330 of the
National Defense Authorization Act of 1993 (Pub. L. 102-484), as amended
regarding indemnification of transferees of closing Department of Defense
property.
2.6. Non-Discrimination. GRANTEE ("City of Tustin'))
covenants for itself, its successors and assigns, that it will comply with all
applicable provisions of the Civil Rights Act of 1964, section 504 of the
Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of
1975 in the use, occupancy, sale or lease of the Property. The foregoing shall not
be construed to prohibit the operation of federal or state approved programs
focusing on the special needs' of the homeless, veterans, victims of domestic
violence and other classes of persons at risk; nor shall it be construed to prohibit
employment practices not otherwise prohibited by law. The GRANTOR
("Government") shall be deemed a beneficiary of this covenant without regard to
whether it remains the owner of any land or interest therein in the locality of the
Property hereby conveyed and shall have the sole right to enforce this covenant in
any court of competent jurisdiction.
3. FLOOD PLAIN NOTIFICATION: To the extent that any portion of the
Property lies within a floodplain as defined in Section 6(c) of Executive Order No. 11988,
Floodplain Management, dated May 24, 1977, construction, development and other uses of that
portion of the Property couM be restricted by the standards and criteria of the National Flood
Insurance Program of the Federal Emergency Management Agency, or other applicable
regulations.
[AEF:gnj/Parce134 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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4. NO HAZARD TO AIR NAVIGATION: GRANTEE ("City of Tustin")
covenants for itself, its successors and assigns, that in connection with any construction or
alteration on the Property, it will obtain a determination of no hazard to air navigation from the
Federal Aviation Administration in accordance with Title 14, Code of Federal Regulations, part
77, entitled "Objects Affecting Navigable Airspace," or under the authority of the Federal
Aviation Act of 1958, as amended.
3.4. The responsibilities and obligations placed upon the GRANTOR by the
Government shall run with the land and be binding on the GRANTEE and all subsequent owners
of the Developer Property unless or until such responsibilities and obligations are released
pursuant to the provisions set forth in the Government deed.
3.5. As further set forth in the DDA, the GRANTEE acknowledges that it has
examined the Developer Property and is buying the Developer Property from the GRANTOR in
an "AS IS, WHERE IS, WITH ALL FAULTS" condition, in its present state and condition and
with all faults, which provisions shall survive the close of escrow related to this transaction and
do not merge with this Quitclaim Deed.
3.6. The DDA imposes certain covenants, conditions and restrictions on the Developer
Property, including, without limitation, the Release contained in Section 4.4.2(e) of the DDA,
and certain non-discrimination and non-segregation covenants, each of which is set forth
verbatim below in italics and each of which is hereby declared to be a covenant running with the
land in perpetuity. Within the italicized language which follows, certain terms shall have the
following meanings: the term "Developer" shall mean the "GRANTEE" hereunder; the term
"City" shall mean the "GRANTOR" hereunder; the term "Agreement" shall mean the "DDA";
the term "Closing Date" shall mean the date first set forth above on this Quitclaim Deed; the
term "Property" shall mean the "Developer Property" conveyed pursuant to this Quitclaim
Deed; the term "Project" shall mean the residential and common area development described in
the DDA to be carried out by Developer on the Developer Parcel; the term "Quitclaim Deed"
shall mean this Quitclaim Deed; and the term "City Benefited Property" shall mean the parcels
legally described on Exhibit "B" to this Quitclaim Deed;
3.6.1 Release. Section 4.4.2(e) of the DDA provides as follows:
" (e) Release. Save and except for the covenants,
representations and warranties of the City and any other "Released Party" (as
defined below in this Section) under this Agreement, the Developer and any
Person claiming by, through or under the Developer, including all voluntary and
involuntary successors of the Developer owning all or any portion of the
Developer Parcel ("Releasing Party"), hereby waives, as of the date of execution
of this Agreement and as of the Closing Date, its right to recover from, and fully
and irrevocably releases, the City and its elected and appointed officials,
[AEF:gnj/Parcel 34 Quitclaim Deed-910-11/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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employees, agents, attorneys, affiliates, representatives, contractors, successors
and assigns (individually, a "Released Party'; collectively, the "Released
Parties") from any and all Claims that the Developer may now have or hereafter
suffer or acquire for any costs, losses, liabilities, damages, expenses, demands,
actions or causes of action: (a) arising from any information or documentation
supplied by any of the Released Parties ("Due Diligence Information"); (b)
arising from any condition of the Property, known or unknown by any Releasing
Party or any Released Party; (c) arising from any construction defects, errors,
omissions or other conditions, latent or otherwise, including environmental
matters, as well as economic and legal conditions on or affecting the Property, or
any portion thereof; (d) arising from the existence, Release, threatened Release,
presence, storage, treatment, transportation or disposal of any Hazardous
Materials at any time on, in, under, from, about or adjacent to the Property or
any portion thereof; (e) by any Governmental Authority or any other third party
arising from or related to any actual, threatened, or suspected Release of a
Hazardous Material on, in, under, from, about, or adjacent to the Property, or
any portion thereof, including any Investigation or Remediation at or about the
Property; 09 arising from the Tustin Legacy Backbone Infrastructure Program,
the cost or extent thereof, or the amount of the Project Fair Share Contribution;
and/or (g) arising from the formation of any community facilities district in
connection with the recoupment or payment of the Project Fair Share
Contribution or any school related development fees; provided, however, that the
foregoing release by the Releasing Parties shall not apply to the extent that any
Claim is the result of the willful misconduct or fraud of the City or its elected and
appointed officials, employees, representatives, agents or consultants arising
after the Close of Escrow. This release includes Claims of which the Developer is
presently unaware or which the Developer does not presently suspect to exist
which, if known by the Developer, would materially affect the Developer's release
to the Released Parties. The Developer specifically waives the provision of
California Civil Code Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
In this connection and to the extent permitted by law, the Developer hereby
agrees, represents and warrants, which representation and warranty shah survive
the Close of Escrow and the termination of this Agreement and not be merged
with the Quitclaim Deed, that the Developer realizes and acknowledges that
factual matters now unknown to it may have given or may hereafter give rise to
[AEF:gnj/Parcel 34 Quitclaim Deed-910-11/090803/4182.004]
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Claims or controversies which are presently unknown, unanticipated and
unsuspected, and the Developer further agrees, represents and warrants, which
representation and warranty shall survive the Close of Escrow and the
termination of this Agreement and not be merged with the Quitclaim Deed, that
the waivers and releases herein have been negotiated and agreed upon in light of
that realization and that the Developer, on behalf of itself and the other Releasing
Parties, nevertheless hereby intends to release, discharge and acquit the Released
Parties from any such unknown Claims and controversies which might in any way
be included as a material portion of the consideration given to the City by the
Developer in exchange for the City's performance hereunder.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT HAS
READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS SECTION,
(B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL
ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS ACCEPTED
AND AGREED TO THE TERMS SET FORTH IN THIS SECTION.
CITY'S INITIALS
DEVELOPER'S INITIALS
This release shall run with the land for the benefit of the City Benefited Property and the
City and all owners and successor owners owning all or any portion of the City Benefited
Property and burdening the Developer Parcel and the owners and successor owners
thereof and, to further evidence its effectiveness with respect to successor owners of the
Developer Parcel, shall be included in its entirety in the Quitclaim Deed"
3.6.2 Definitions of Initially Capitalized Terms in Release Provisions. The DDA,
including Attachment No. 2 thereto, sets forth the following definitions for the defined
terms contained in the above Release:
"Claim" or "Claims" shall mean any and all claims, actions, causes of action, demands,
orders, or other means of seeking or recovering losses, damages, liabilities, costs,
expenses (including attorneys 'fees, fees of expert witnesses, and consultants' and court
and litigation costs), costs and expenses attributable to compliance with judicial and
regulatory orders and requirements, fines, penalties, liens, taxes, or any type of
compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen.
"Closing" or "Close of Escrow" shall mean the point in time when the City conveys fee
title in the Property to the Developer.
"Environmental Agency" shall mean the United States Environmental Protection
Agency; the California Environmental Protection Agency and all of its sub-entities,
[AEF:gnj/Parcel 34 Quitclaim Deed-910-11/090803/4182.004]
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including any Regional Water Quality Control Board, the State Water Resources Control
Board, the Department of Toxic Substances Control, the South Coast Air Quality
Management District, and the California Air Resources Board; the City; any fire
department or health department with jurisdiction over the Developer Property; and/or
any other federal, state, regional or local governmental agency or entity that has or
asserts jurisdiction over Hazardous Substance Releases or the presence, use, storage,
transfer, manufacture, licensing, reporting, permitting, analysis, disposal or treatment of
Hazardous Materials in, on, under, about, or affecting the Project.
"Governmental Authority" shall mean any and all federal, state, county, municipal and
local governmental and quasi-governmental bodies and authorities (including the United
States of America, the State of California and any political subdivision, public
corporation, district, joint powers authority or other political or public entity) or
departments thereof having or exercising jurisdiction over the Parties, the Project, the
Site, the City Dedication Parcels or such portions thereof as the context indicates.
"Hazardous Substance", "Hazardous Material", "Hazardous Waste", or "Toxic
Substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation
and Recovery Act, 42 U.S.C. subsection 6901, et seq.; an "Extremely Hazardous
Waste", a "Hazardous Waste", or a "Restricted Hazardous Waste ", under
subsections 25115, 25117, or 25122. 7 of the California Health and Safety Code, or is
listed or identified pursuant to subsection 25140 or 44321 of the California Health and
Safety Code; "Hazardous Material", "Hazardous Substance ", "Hazardous Waste",
"Toxic Air Contaminant", or "Medical Waste" under subsections 25281, 25316,
25501, 25501.1, 117690 or 39655 of the California Health and Safety Code; "Oil" or a
"Hazardous Substance" listed or identified pursuant to Section 311 of the Federal
Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any other hydro
carbonic substance or by-product; listed or defined as a "Hazardous Waste",
"Extremely Hazardous Waste ", or an "Acutely Hazardous Waste" pursuant to Chapter
11 of Title 22 of the California Code of Regulations; listed by the State of California as a
chemical known by the State to cause cancer or reproductive toxicity pursuant to
Section 25249.9(a) of the California Health and Safety Code; a material which due to its
characteristics or interaction with one or more other substances, chemical compounds,
or mixtures damages or threatens to damage, health, safety, or the environment, or is
required by any law or public agency to be remediated, including remediation which
such law or public agency requires in order for the property to be put to any lawful
purpose; any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field
Manual, whether or not the presence of such material resulted from a leaking
underground fuel tank; pesticides regulated under the Feral Insecticide, Fungicide and
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Rodenticide Act, 7 U.S.C. subsection 136 et seq.; asbestos, PCBs and other substances
regulated under the Toxic Substances Control Act, 15 U.S.C. subsection 2601 et seq.; any
radioactive material including any "source material", "special nuclear material", "by-
product material", "Iow-level wastes ", "high-level radioactive waste ", "spent nuclear
fuel" or "transuranic waste ", and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S. C. subsection 2011 et
seq., the Nuclear Waste Policy Act, 42 U. S. C. subsection 1 O1 O1 et seq., or pursuant to the
California Radiation Control Law, California Health and Safety Code subsection 114960
et seq.; regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act, California
Labor Code subsection 6300 et seq.; and/or regulated under the Clean Air Act, 42 U. S. C.
subsection 7401 et seq. or pursuant to Division 26 of the California Health and Safety
Code.
"Investigation(s)" shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or
surveying of or concerning the Property or any adjacent or affected properties, including
the air, soil, surface water, and groundwater, and the surrounding population or
properties, or any of them, to characterize or evaluate the nature, extent or impact of
Hazardous Materials.
"Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock
company, unincorporated association, Governmental Authority, governmental agency or
other entity, domestic or foreign.
"Project Fair Share Contribution" shall mean the fair share allocation of the Tustin
Legacy Backbone Infrastructure Program attributable to development on the Site.
"Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
"Remediate" or "Remediation" shall mean any response or remedial action as defined
under Section 1 O1 (25) of CERCLA, and similar actions with respect to Hazardous
Materials as defined under comparable state and local laws, and any other cleanup,
removal, containment, abatement, recycling, transfer, monitoring, storage, treatment,
disposal, closure, restoration or other mitigation or remediation of Hazardous Materials
or Releases required by any Environmental Agency or within the purview of any
Environmental Laws.
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"Tustin Legacy Backbone Infrastructure Program" shall mean the program for funding
Tustin Legacy backbone infrastructure located off of the Site, including Tustin Legacy
roadway improvements; traffic and circulation mitigation to support the Tustin Legacy
project; domestic and reclaimed water, sewer, telemetry, storm drains and flood control
channels, utilities backbone (electricity, gas, telephone, cable, telecommunications, etc.).
3.6.3 Non-Discrimination and Non-Segregation Requirements. In addition to
the Non-Discrimination covenant contained in Section 3.3 of this Quitclaim which is repeated in
Section 12.3 of the DDA, Sections 12.4 and 12.5 of the DDA provide as follows:
"12.4 Obligation to Refrain from Discrimination.
The Developer covenants and agrees for itself, its successors, its assigns
and every successor in interest to the Developer Parcel or any part thereof or in
the development of the Project, there shall be no discrimination against or
segregation of any person, or group of persons, on account of race, color, creed,
religion, sex, sexual orientation, marital status, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Developer Parcel or in the development of the Project, nor shall the Developer
itself 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, subtenants,
sublessees or vendees of the Developer Parcel or in the development of the
Project.
12.5 Redevelopment Law; Form of Nondiscrimination and
Nonsegregation Clauses.
The Developer shall refrain from restricting the sale of the property on the
basis of the race, color, creed, religion, sex, sexual orientation, marital status,
national origin or ancestry of any person. All deeds, leases or contracts shall
contain or be subject to substantially the following non-discrimination or non-
segregation clauses:
(a) In deeds: "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that
there shall be no discrimination against or segregation of, any person or group of
persons on account of race, color, creed, religion, sex, sexual orientation, marital
status, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee
itself or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the
[AEF:gnj/Parce134 Quitclaim Deed-910- ! 1/090803/4182.004]
CITY QUITCLAIM DEED FOR A PORTION OF PARCEL I-B-1
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selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the land herein conveyed. The foregoing covenants shall
run with the land."
(b) In leases: "The lessee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and this
lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person
or group of persons, on account of race, color, creed religion, sex, sexual
orientation, marital status, national origin or ancestry in the leasing, subleasing,
renting, transferring, use, occupancy, tenure or enjoyment of the land herein
leased nor shall lessee itself, or any person claiming under or through it,
establish or permit 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 land herein leased."
(c) In contracts: "There shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed
religion, sex, sexual orientation, marital status, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land
nor shall the transferee itself 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, subtenants, sublessees or vendees of the land."
4 The terms of this Quitclaim Deed, including without limitation the provisions of
Sections 3.6.1 and 3.6.2 of this Quitclaim Deed, are hereby agreed and declared by the
GRANTEE and the GRANTOR and declared to be covenants running with the land and
enforceable as restrictions and equitable servitudes against the Developer Parcel, and are hereby
declared to be and shall be binding upon the Developer Parcel and the GRANTEE and all
successors and assigns of the GRANTEE owning all or any portion of the Developer Parcel for
the benefit of the City Benefited Property (legally described on Exhibit "B" attached to this
Quitclaim Deed and incorporated herein by this reference) and the GRANTOR and the
successors and assigns of the GRANTOR owning all or any portion the City Benefited Property.
[AEF:gnj/Parccl 34 Quitclaim Deed-910-11/090803/4182.004]
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IN WITNESS WHEREOF, the GRANTOR, the CITY OF TUSTIN, has caused this
Quitclaim Deed to be executed on the day first above written.
CITY OF TUSTIN, CALIFORNIA
By:.
ATTEST: Dated:
William A. Huston
City Manager
APPROVED AS TO FORM
Special Counsel for the City
GILCHRIST & RUTTER
PROFESSIONAL CORPORATION
By:
ACKNOWLEDGEMENT OF GRANTEE'S COVENANTS
TO INDICATE ACKNOWLEDGEMENT AND ACCEPTANCE of this Quitclaim
Deed and the covenants and agreements contained in this Quitclaim Deed, the GRANTEE has
executed this document on the date written below.
WL HOMES LLC, a Delaware
limited liability company
By:
Steve Kabel
President, Southem California Region
By:
Mitchell Bradford
Vice President, Southern California Region
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STATE OF CALIFORNIA )
) SS.
COUNTY OF ORANGE )
On , before me, , a Notary Public
in and for said state, personally appeared
., personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
[AEF:gnj/Parce134 Quitclaim Deed-910-11/090803/4182.004]
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EXHIBIT "A"
DEVELOPER PARCEL
(Parcel I-B-I)
[AEF:gnj/Parcel 34 Quitclaim Deed-910-11/090803/4182.004]
EXHIBIT "B"
CITY BENEFITED PROPERTY
[AEF:gnj/Parcel 34 Quitclaim Deed-910-11/090803/4182.004]
ATTACHMENT NO. 3
QUITCLAIM DEED
[AEF:ab/IDOCS2 90960_7/090903/4182.004] Attachment No. 3 - Page 1 Quitclaim Deed
ATTACHMENT NO. 4
SURVEY
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 4 - Page 1 Survey
ATTACHMENT NO. 5
CITY TITLE POLICY
SCHEDULE A
TOTAL FEE FOR TITLE EXAMINATION
AND TITLE INSURANCE $1,950.00
AMOUNT OF INSURANCE: $1,000,000.00
DATE OF POLICY:
MAY 14, 2002 AT 8:00 A.M.
L NAME OF INSURED:
THE CITY OF TUSTIN, CALIFORNIA.
2. THE ESTATE OR INTEREST IN THE LAND WHICH 1S COVEKED BY THIS POLICY IS:
A FEE.
3. TITLE TO THE ESTATE OR INTEREST IN THE LAND IS VESTED IN:
THE CITY OF TUSTIN, CALIFORNIA.
THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS:
(SEE EXHIBIT "A" ATTACHED HERETO.)
[AEF:ab/IDOCS2_90960_7/090903/4182.004]
Attachment No. 5 - Page 2
SCHEDULE B
EXCEPTIONS FROM COVERAGE
THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS, AITORNEYS' FEES OR EXPENSES) WHICH
ARISE BY REASON OF:
PART ONE:
1. TAXES OR ASSESSMENTS WHICH ARE NOT SHOWN AS EXISTING LIENS BY THE
RECORDS OF ANY TAXING AUTHORITY THAT LEVIES TAXES OR ASSESSMENTS ON
REAL PROPERTY OR BY THE PUBLIC RECORDS.
2. ANY FACTS, RIGHTS, INTEREST, OR CLAIMS WHICH ARE NOT SHOWN BY THE
PUBLIC RECORDS BUT WHICH COULD BE ASCERTAINED BY AN INSPECTION OF SAID
LAND OR BY MAKING INQUIRY OF PERSONS IN POSSESSION THEREOF.
3. EASEMENTS, CLAIMS OF EASEMENT OR ENCUMBRANCES WHICH ARE NOT
SHOWN BY THE PUBLIC RECORDS.
4. DISCREPANCIES, CONFLICTS IN BOUNDARY LINES, SHORTAGE IN AREA,
ENCROACHMENTS, OR ANY OTHER FACTS WHICH A CORRECT SURVEY WOULD
DISCLOSE, AND WHICH ARE NOT SHOWN BY PUBLIC RECORDS.
5. UNPATENTED MINING CLAIMS; RESERVATIONS OR EXCEPTIONS IN PATENTS
OR IN ACTS AUTHORIZING THE ISSUANCE THEREOF; WATER RIGHTS, CLAIMS OR
TITLE TO WATER.
6. ANY LIEN, OR RIGHT TO A LIEN, FOR SERVICES, LABOR OR MATERIAL
THERETOFORE OR HEREAFTER FURNISHED, IMPOSED BY LAW AND NOT SHOWN BY
THE PUBLIC RECORDS.
PART TWO:
1. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED JULY 16, 1964 IN BOOK 7137,
PAGE 813 OF OFFICIAL RECORDS,
IN FAVOR OF: PACIFIC TELEPHONE AND TELEGRAPH.
FOR: UNDERGROUND LINES AND INCIDENTAL PURPOSES.
OVER: A PORTION OF THE LAND.
2. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED JULY 9, 1971 IN BOOK 9713,
PAGE 646 OF OFFICIAL RECORDS,
IN FAVOR OF: ORANGE COUNTY FLOOD CONTROL DISTRICT.
FOR: FLOOD CONTROL CHANNEL AND INCIDENTAL PURPOSES.
OVER: A PORTION OF PARCEL I-B-2.
[AEF :ab/IDOCS2_90960_7/090903/4182.004]
Attachment No. 5 - Page 3
3. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED SEPTEMBER 1, 1971 IN BOOK
9788, PAGE 771 OF OFFICIAL RECORDS,
IN FAVOR OF: IRVINE RANCH WATER DISTRICT.
FOR: PIPELINES AND INCIDENTAL PURPOSES.
OVER: A PORTION OF PARCEL I-B-2.
4. THE EFFECT OF MAPS PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND
RECORDED IN BOOK 12, PAGE 43; IN BOOK 78, PAGE 21; IN BOOK 88, PAGE 27; IN BOOK 94, PAGE 8; IN
BOOK 97, PAGES 8 TO 10; IN BOOK 109, PAGE 50; IN BOOK 111, PAGE 5; IN BOOK 117, PAGE 48; IN BOOK
123, PAGE 44; IN BOOK 135, PAGE 10; IN BOOK 137, PAGE 20; IN BOOK 139, PAGE 1; AND IN BOOK 147,
PAGE 41, ALL OF RECORD OF SURVEYS.
5. THE EFFECT OF A MAP PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND
RECORDED IN BOOK 114, PAGES 1 TO 3 OF RECORD OF SURVEYS.
NOTE: AN INSTRUMENT ENTITLED "RECORD OF SURVEY CERTIFICATE OF
CORRECTION" RECORDED SEPTEMBER 8, 1989 AS INSTRUMENT NO. 89-481820 OF
OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL
PARTICULARS.
6. THE EFFECT OF A MAP PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND
RECORDED IN BOOK 165, PAGES 31 THROUGH 39 OF RECORD OF SURVEYS.
7. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "SHORT
FORM NOTICE OF AGREEMENT", EXECUTED BY AND BETWEEN THE UNITED STATES OF AMERICA
AND THE CITY OF TUST1N, CALIFORNIA, RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404589 OF
OFFICIAL RECORDS.
8. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM THE UNITED
STATES OF AMERICA, AS GRANTOR, TO THE CITY OF TUSTIN, CALIFORNIA, AS GRANTEE, RECORDED
MAY 14, 2002 AS INSTRUMENT NO. 20020404592 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO
SAID DOCUMENT FOR FULL PARTICULARS.
[AEF:ab/IDOC S2_90960_7/090903/4182.004]
Attachment No. 5 Page 4
EXHIBIT "A"
ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
ORANGE, CITY OF TUSTIN, AND IS DESCRIBED AS FOLLOWS:
PARCEL I-B-1
IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THAT
PORTION OF BLOCKS 61 AND 62 OF IRVINE'S SUBDIVISION AS SHOWN ON A MAP
FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS RECORD MAPS, AND AS SHOWN ON
A MAP FILED IN BOOK 165, PAGES 31 THROUGH 39, INCLUSIVE, OF RECORDS OF
SURVEY, BOTH OF THE RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY L1NE OF HARVARD
AVENUE (HAVING A NORTHWESTERLY HALF-WIDTH OF 36 FEET) AND THE
SOUTHWESTERLY LINE OF EDINGER AVENUE (HAVING A SOUTHWESTERLY HALF-
WIDTH OF 60 FEET) AS SHOWN ON SAID RECORD OF SURVEY; THENCE ALONG SAID
NORTHWESTERLY LINE OF HARVARD AVENUE THE FOLLOWING FOUR (4) COURSES:
1)
2)
3)
4)
SOUTH 40037'53'' WEST 1259.59 FEET TO AN ANGLE POINT THEREIN;
SOUTH 40037'37'' WEST 1319.25 FEET
SOUTH 85°39'11" WEST 38.17 FEET TO A LINE THAT IS PARALLEL WITH AND
63.00 FEET NORTHWESTERLY FROM THE CENTERLINE OF HARVARD AVENUE;
SOUTH 40037'37'' WEST 258.51 FEET ALONG SAID PARALLEL LINE TO A POINT
ON THE NORTHWESTERLY LINE OF THE LAND DESCRIBED IN THE DOCUMENT
RECORDED IN BOOK 10657, PAGE 412 OF OFFICIAL RECORDS OF SAID COUNTY
AND AS SHOWN ON SAID RECORD OF SURVEY, SAID POINT BEING THE
BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHWESTERLY HAVING
A RADIUS OF 1894.00 FEET, A RADIAL LINE TO SAID BEGINNING BEARS SOUTH
27051'20'' EAST;
THENCE SOUTHWESTERLY ALONG SAID NORTHWESTERLY LINE AND SAID CURVE
156.44 FEET THROUGH A CENTRAL ANGLE OF 4°43'57"; THENCE CONTINUING ALONG
SID NORTHWESTERLY LINE SOUTH 66°52'37" WEST 1087.44 FEET TO A POINT ON A
CURVE THAT IS CONCENTRIC WITH AND 118.75 FEET NORTHEASTERLY FROM THE
CENTERLINE OF WARNER AVENUE AS SHOWN ON SAID RECORD OF SURVEY, SAID
CURVE BEING CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1718.75 FEET, A
RADIAL L1NE TO SAID POINT BEARS NORTH 68045'45.. EAST; THENCE CONCENTRIC
AND PARALLEL WITH SAID CENTERLINE OF WARNER AVENUE THE FOLLOWING
TWO (2) COURSES:
1) NORTHERLY AND NORTHWESTERLY ALONG SAID CURVE 843.12 FEET
THROUGH A CENTRAL ANGLE OF 28°06'22"
2) NORTH 49020'37.. WEST 468.05 FEET TO THE BEGINNING OF A CURVE CONCAVE
EASTERLY HAVING A RADIUS OF 35.00 FEET;
[AEF:ab/IDOCS2_90960_7/090903/4182.004]
Attachment No. 5 - Page 5
THENCE NORTHWESTERLY, NORTHERLY AND NORTHEASTERLY ALONG SAID
CURVE 62.22 FEET THROUGH A CENTRAL ANGLE OF 101°51'19'' TO THE
SOUTHEASTERLY LINE OF PETERS CANYON CHANNEL (HAVING A SOUTHEASTERLY
HALF-WDTH OF 90 FEET) AS DESCRIBED IN THE DOCUMENT RECORDED IN BOOK
6681, PAGE 721 OF OFFICIAL RECORDS OF SAID COUNTY AND AS SHOWN ON SAID
RECORD OF SURVEY; THENCE ALONG SAID SOUTHEASTERLY LINE OF SAD PETERS
CANYON CHANNEL NORTH 52030'42'' EAST 417.91 FEET TO THE CITY BOUNDARY LINE
BETWEEN THE CITY OF TUSTIN AND THE CITY OF IRVINE AS SHOWN ON SAID
RECORD OF SURVEY; THENCE LEAVING SAID SOUTHEASTERLY LiNE AND ALONG
SAID CITY BOUNDARY LINE SOUTH 49°21'01" EAST 45.99 FEET TO A LINE THAT IS
PARALLEL WITH AND 135.00 FEET SOUTHEASTERLY FROM THE CENTERLINE OF
SAID PETERS CANYON CHANNEL; THENCE ALONG SAID PARALLEL LINE NORTH
52032'09'' EAST 289.49 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 37°27'51''
WEST 5.00 FEET TO A LINE THAT IS PARALLEL WITH AND 130.00 FEET
SOUTHEASTERLY FROM THE CENTERLINE OF SAID PETERS CANYON CHANNEL;
THENCE PARALLEL AND CONCENTRIC WITH SAD CENTERLINE THE FOLLOWING (3)
COURSES:
1)
2)
3)
NORTH 52032'09'' EAST 1277.26 FEET TO THE BEGINNING OF A CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 2130.00 FEET;
NORTHEASTERLY ALONG SAD CURVE 238.53 FEET THROUGH A CENTRAL
ANGLE OF 6°24'58";
NORTH 46°07'11" EAST 210.47 FEET TO A POINT ON SAD SOUTHEASTERLY LINE
OF PETERS CANYON CHANNEL
THENCE ALONG SAID SOUTHEASTERLY LINE THE FOLLOWING SEVEN (7) COURSES:
1)
2)
3)
4)
5)
6)
7)
SOUTH 49° 19'04" EAST 20.10 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49019'04'' WEST 60.28 FEET;
NORTH 46°07'10" EAST 32.14 FEET;
SOUTH 49°19'04" EAST 60.28 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49o19'04'' WEST 20.10 FEET TO A LINE THAT IS PARALLEL WITH AND 130
FEET SOUTHEASTERLY FROM SAID CENTERLINE OF PETERS CHANNEL;
THENCE LEAVING SAD SOUTHEASTERLY LINE AND ALONG SAD PARALLEL LINE
NORTH 46°07'11" EAST 1209.46 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH
43052'49'' WEST 5.00 FEET TO A LINE THAT IS PARALLEL WITH AND 125.00 FEET
SOUTHEASTERLY FROM SAID CENTERLINE OF PETERS CANYON CHANNEL; THENCE
ALONG SAID PARALLEL LINE NORTH 46°07'11" EAST 58.01 FEET TO A POINT ON SAID
SOUTHWESTERLY LINE OF SAID EDINGER AVENUE, SAID POINT ALSO BEING THE
BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A
RADIUS OF 1860.00 FEET, A RADIAL LINE TO SAID BEGINNING BEARS SOUTH 54040'20''
WEST; THENCE ALONG SAID SOUTHWESTERLY LINE THE FOLLOWING THREE (3)
COURSES:
[AEF:ab/IDOC S2_90960_7/090903/4182.004]
Attachment No. 5 Page 6
l)
2)
3)
SOUTHEASTERLY ALONG SAID CURVE 455.07 FEET THROUGH A CENTRAL
ANGLE OF 14°01'5;''
SOUTH 49°20'45'' EAST 428.16 FEET TO THE BEGINNING OF A CURVE CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 1740.00 FEET;
SOUTHEASTERLY ALONG CURVE 366.87 FEET THROUGH A CENTRAL ANGLE
OF 12°04'50'' TO THE POINT OF BEGINNING.
EXCEPT THE FOLLOWING:
ALL THAT PORTION OF THE ABOVE DESCRIBED LAND LYING SOUTHEASTERLY OF
LINE THAT IS PARALLEL WITH AND 69.00 FEET NORTHWESTERLY FROM THE
CENTERLINE OF SAID HARVARD AVENUE AS SHOWN ON SAID RECORD OF SURVEY.
ALSO EXCEPT THE FOLLOWING:
BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY LINE OF HARVARD
AVENUE (HAVING A NORTHWESTERLY HALF-WIDTH OF 36 FEET) AND THE
SOUTHWESTERLY LINE OF EDINGER AVENUE (HAVING A SOUTHWESTERLY HALF-
WIDTH OF 60 FEET) AS SHOWN ON SAID RECORD OF SURVEY, SAID
SOUTHWESTERLY LINE OF EDINGER AVENUE BEING A CURVE CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 1740.00 FEET, A RADIAL LINE TO SAID
INTERSECTION BEARS NORTH 52o44'05'' EAST; THENCE NORTHWESTERLY ALONG
SAID SOUTHWESTERLY LINE OF SAID CURVE 33.68 FEET THROUGH A CENTRAL
ANGLE OF 1°06'33'' TO A LINE THAT IS PARALLEL WITH AND 69 FEET
NORTHWESTERLY FROM THE CENTERLINE OF SAID HARVARD AVENUE AS SHOWN
ON SAID RECORD OF SURVEY; THENCE ALONG SAID PARALLEL LINE SOUTH
40037'53'' WEST 1228.30 FEET TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID PARALLEL LINE SOUTH 40037'53'' WEST 38.00 FEET TO AN
ANGLE POINT THEREIN; THENCE CONTINUING ALONG SAID PARALLEL LINE SOUTH
40037'37'' WEST 1619.79 FEET TO A POINT ON THE NORTHWESTERLY LINE OF THE
LAND DESCRIBED IN THE DOCUMENT RECORDED IN BOOK 10657, PAGE 412 OF
OFFICIAL RECORDS OF SAID COUNTY AND AS SHOWN ON SAID RECORD OF SURVEY,
SAID POINT BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 1894.00 FEET, A RADIAL LINE TO SAID
BEGINNING BEARS SOUTH 27021'58'' EAST; THENCE SOUTHWESTERLY ALONG SAID
NORTHWESTERLY LINE AND SAID CURVE 140.26 FEET THROUGH A CENTRAL ANGLE
OF 4°14'35"; THENCE CONTINUING ALONG SAID NORTHWESTERLY LINE SOUTH
66052'37" WEST 1087.44 FEET TO A POINT ON A CURVE THAT IS CONCENTRIC WITH
AND 118.75 FEET NORTHEASTERLY FROM THE CENTERL1NE OF WARNER AVENUE AS
SHOWN ON SAID RECORD OF SURVEY, SAID CURVE BEING CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 1718.75 FEET, A RADIAL LINE TO SAID
POINT BEARS NORTH 68045'45'' EAST; THENCE CONCENTRIC AND PARALLEL WITH
SAID CENTERLINE OF WARNER AVENUE THE FOLLOWING TWO (2) COURSES:
1) NORTHERLY AND NORTHWESTERLY ALONG SAID CURVE 843.12 FEET
THROUGH A CENTRAL ANGLE OF 28006'22''
[AEF:ab/IDOCS2_90960_7/090903/4182.004]
Attachment No. 5 - Page 7
2)
NORTH 49020'37'' WEST 468.05 FEET TO THE BEGINNING OF A CURVE CONCAVE
EASTERLY HAVING A RADIUS OF 35.00 FEET;
THENCE NORTHWESTERLY, NORTHERLY AND NORTHEASTERLY ALONG SAID
CURVE 62.22 FEET THROUGH A CENTRAL ANGLE OF 101°51'19" TO THE
SOUTHEASTERLY LINE OF PETERS CANYON CHANNEL (HAVING A SOUTHEASTERLY
HALF-WIDTH OF 90 FEET) AS DESCRIBED IN THE DOCUMENT RECORDED 1N BOOK
6681, PAGE 721 OF OFFICIAL RECORDS OF SAID COUNTY AND AS SHOWN ON SAID
RECORD OF SURVEY; THENCE ALONG SAID SOUTHEASTERLY LINE OF SAID PETERS
CANYON CHANNEL NORTH 52o30'42" EAST 417.91 FEET TO THE CITY BOUNDARY LINE
BETWEEN THE CITY OF TUSTIN AND THE CITY OF IRVINE AS SHOWN ON SAID
RECORD OF SURVEY; THENCE LEAVING SAID SOUTHEASTERLY LINE AND ALONG
SAID CITY BOUNDARY LINE SOUTH 49°21'01" EAST 45.99 FEET TO A LINE THAT IS
PARALLEL WITH AND 135.00 FEET SOUTHEASTERLY FROM THE CENTERLINE OF
SAID PETERS CANYON CHANNEL; THENCE ALONG SAID PARALLEL LINE NORTH
52o32'09" EAST 289.49 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 37027'51"
WEST 5.00 FEET TO A LINE THAT IS PARALLEL WITH AND 130.00 FEET
SOUTHEASTERLY FROM THE CENTERLINE OF SAID PETERS CANYON CHANNEL;
THENCE PARALLEL AND CONCENTRIC WITH SAID CENTERLINE THE FOLLOWING
THREE (3) COURSES:
1)
2)
3)
NORTH 52032'09'' EAST 1277.26 FEET TO THE BEGINNING OF A CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 2130.00 FEET;
NORTHEASTERLY ALONG SAID CURVE 238.53 FEET THROUGH A CENTRAL
ANGLE OF 6°24'58";
NORTH 46°07'11" EAST 210.47 FEET TO A POINT ON SAID SOUTHEASTERLY LINE
OF PETERS CANYON CHANNEL;
THENCE ALONG SAID SOUTHEASTERLY LINE THE FOLLOWING SIX (6) COURSES:
1)
2)
3)
4)
5)
6)
SOUTH 49° 19'04" EAST 20.10 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49o19'04'' WEST 60.28 FEET;
NORTH 46°07'10" EAST 32.14 FEET;
SOUTH 49°19'04" EAST 60.28 FEET;
NORTH 46°07'11" EAST 22.10 FEET;
THENCE LEAVING SAID SOUTHEASTERLY LINE SOUTH 49019'04'' EAST 1311.03 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL I-B-2
IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THAT
PORTION OF BLOCKS 61 AND 62 OF IRVINE'S SUBDIVISION AS SHOWN ON THE MAP
FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS RECORD MAPS, AND AS SHOWN ON
A MAP FILED IN BOOK 165, PAGES 31 THROUGH 39, INCLUSIVE, OF RECORDS OF
SURVEY, BOTH OF THE RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS:
[AEF:ab/IDOCS2_90960 7/090903/4182.004]
Attachment No. 5 - Page 8
THE NORTHEASTERLY 76.00 FEET OF THE FOLLOWING DESCRIBED LAND:
BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY LINE OF HARVARD
AVENUE (HAVING A NORTHWESTERLY HALF-WIDTH OF 36 FEET) AND THE
SOUTHWESTERLY LINE OF EDINGER AVENUE (HAVING A SOUTHWESTERLY HALF-
WIDTH OF 60 FEET) AS SHOWN ON SAID RECORD OF SURVEY, SAID
SOUTHWESTERLY LiNE OF EDINGER AVENUE BEING A CURVE CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 1740.00 FEET, A RADIAL LINE TO SAID
INTERSECTION BEARS NORTH 52044'05'' EAST; THENCE NORTHWESTERLY ALONG
SAID SOUTHWESTERLY LINE AND SAID CURVE 33.68 FEET THROUGH A CENTRAL
ANGLE OF 1°06'33'' TO A L1NE THAT IS PARALLEL WITH AND DISTANT 69.00 FEET
NORTHWESTERLY FROM THE CENTERLINE OF SAID HARVARD AVENUE AS SHOWN
ON SAID RECORD OF SURVEY; THENCE ALONG SAID PARALLEL LINE SOUTH
40037'53'' WEST 1228.30 FEET TO THE TRUE POINT OF BEGINNING; THENCE
CONTINUING ALONG SAID PARALLEL LINE SOUTH 40037'53'' WEST 38.00 FEET TO AN
ANGLE POINT THEREIN; THENCE CONTINUING ALONG SAID PARALLEL LINE SOUTH
40037'37'' WEST 1619.79 FEET TO A POINT ON THE NORTHWESTERLY LINE OF THE
LAND DESCRIBED IN THE DOCUMENT RECORDED IN BOOK 10657, PAGE 412 OF
OFFICIAL RECORDS OF SAID COUNTY AND AS SHOWN ON SAID RECORD OF SURVEY,
SAID POINT BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 1894.00 FEET, A RADIAL LINE TO SAID
BEGINNING BEARS SOUTH 27021'58'' EAST; THENCE SOUTHWESTERLY ALONG SAID
NORTHWESTERLY LINE AND SAID CURVE 140.26 FEET THROUGH A CENTRAL ANGLE
OF 4°14'35"; THENCE CONTINUING ALONG SAID NORTHWESTERLY LINE SOUTH
66052'7'' WEST 1087.44 FEET TO A POINT ON A CURVE THAT IS CONCENTRIC WITH
AND DISTANT 118.75 FEET NORTHEASTERLY FROM THE CENTERLINE OF WARNER
AVENUE AS SHOWN ON SAID RECORD OF SURVEY, SAID CURVE BEING CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 1718.75 FEET, A RADIAL LINE TO SAID
POINT BEARS NORTH 68045'45'' EAST; THENCE CONCENTRIC AND PARALLEL WITH
SAID CENTERLINE OF WARNER AVENUE THE FOLLOWING TWO (2) COURSES:
1)
2)
NORTHERLY AND NORTHWESTERLY ALONG SAD CURVE 843.12 FEET
THROUGH A CENTRAL ANGLE OF 28006'22''
NORTH 49020'37'' WEST 468.05 FEET TO THE BEGINNING OF A CURVE CONCAVE
EASTERLY HAVING A RADIUS OF 35.00 FEET;
THENCE LEAVING SAID CONCENTRIC AND PARALLEL LINE NORTHWESTERLY,
NORTHERLY AND NORTHEASTERLY ALONG SAID CURVE 62.22 FEET THROUGH A
CENTRAL ANGLE OF 101051'19" TO THE SOUTHEASTERLY LINE OF PETERS CANYON
CHANNEL (HAVING A SOUTHEASTERLY HALF-WIDTH OF 90 FEET) AS DESCRIBED IN
THE DOCUMENT RECORDED IN BOOK 6681, PAGE 721 OF OFFICIAL RECORDS OF SAID
COUNTY AND AS SHOWN ON SAID RECORD OF SURVEY; THENCE ALONG SAID
SOUTHEASTERLY LINE OF SAID PETERS CANYON CHANNEL NORTH 52o30'42'' EAST
417.91 FEET TO THE CITY BOUNDARY LINE BETWEEN THE CITY OF TUST1N AND THE
CITY OF IRVINE AS SHOWN ON SAID RECORD OF SURVEY; THENCE LEAVING SAID
SOUTHEASTERLY LINE AND ALONG SAID CITY BOUNDARY LINE SOUTH 49021'01"
[AEF:ab/IDOCS2_90960_7/090903/4182.004]
Attachment No. 5 - Page 9
EAST 45.99 FEET TO A L1NE THAT IS PARALLEL WITH AND 135.00 FEET
SOUTHEASTERLY FROM THE CENTERLINE OF SAID PETERS CANYON CHANNEL;
THENCE ALONG SAID PARALLEL LINE NORTH 52032'09'' EAST 289.49 FEET; THENCE
LEAVING SAID PARALLEL LINE NORTH 37°27'51'' WEST 5.00 FEET TO A LINE THAT IS
PARALLEL WITH AND 130.00 FEET SOUTHEASTERLY FROM THE CENTERLINE OF
SAID PETERS CANYON CHANNEL; THENCE PARALLEL AND CONCENTRIC WITH SAID
CENTERLINE THE FOLLOWING THREE (3) COURSES:
1)
2)
3)
NORTH 52032'09'' EAST 1277.26 FEET TO THE BEGINNING OF A CURVE CONCAVE
NORTHWESTERLY HAVING A RADIUS OF 2130.00 FEET;
NORTHEASTERLY ALONG SAID CURVE 238.53 FEET THROUGH A CENTRAL
ANGLE OF 6024'58";
NORTH 46°07'11" EAST 210.47 FEET TO A POINT ON SAID SOUTHEASTERLY LINE
OF PETERS CANYON CHANNEL;
THENCE ALONG SAID SOUTHEASTERLY LINE THE FOLLOWING SIX (6) COURSES:
1)
2)
3)
4)
5)
6)
SOUTH 49° 19'04" EAST 20.10 FEET;
NORTH 46°07'11" EAST 75.00 FEET;
NORTH 49019'04" WEST 60.28 FEET;
NORTH 46°07'10" EAST 32.14 FEET;
SOUTH 49019'04'' EAST 60.28 FEET;
NORTH 46°07'11" EAST 22.10 FEET;
THENCE LEAVING SAID SOUTHEASTERLY LINE SOUTH 49°19'04" EAST 1311.03 FEET
TO THE TRUE POINT OF BEGINNING.
EXCEPT THE FOLLOWING:
ALL THAT PORTION OF THE ABOVE DESCRIBED LAND LYING SOUTHEASTERLY OF A
LINE THAT IS PARALLEL WITH AND 69.00 FEET NORTHWESTERLY FROM THE
CENTERLINE OF SAID HARVARD AVENUE AS SHOWN ON SAID RECORD OF SURVEY.
PARCEL I-B-3
IN THE CITY OF TUSTIN AND CITY OF IRVINE, COUNTY OF ORANGE, STATE OF
CALIFORNIA, BEING THAT PORTION OF BLOCK 62 OF IRVINE'S SUBDIVISION AS
SHOWN ON THE MAP FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS RECORD MAPS,
AND AS SHOWN ON A MAP FILED IN BOOK 165, PAGES 31 THROUGH 39, INCLUSIVE,
OF RECORDS OF SURVEY, BOTH OF THE RECORDS OF SAID COUNTY, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY LINE OF HARVARD
AVENUE (HAVING A NORTHWESTERLY HALF-WIDTH OF 36 FEET) AND THE
SOUTHWESTERLY RIGHT-OF-WAY LINE OF EDINGER AVENUE (HAVING A
SOUTHWESTERLY HALF-WIDTH OF 60 FEET) AS SHOWN ON SAID RECORD OF
[AEF:ab/IDOC S2_90960_7/090903/4182.004]
Attachment No. 5 - Page 10
SURVEY; THENCE ALONG SAID NORTHWESTERLY LINE OF HARVARD AVENUE THE
FOLLOWING FOUR (4) COURSES:
1)
2)
3)
4)
SOUTH 40o37'53.' WEST 1259.59 FEET TO AN ANGLE POINT THEREIN;
SOUTH 40o37'37'' WEST 1319.25 FEET;
SOUTH 85°39'11" WEST 38.17 FEET TO A LINE THAT IS PARALLEL WITH AND
63.00 FEET NORTHWESTERLY FROM THE CENTERLINE OF SAID HARVARD
AVENUE;
SOUTH 40o37'37'. WEST 258.51 FEET ALONG SAID PARALLEL LINE TO A POINT
ON THE NORTHWESTERLY LINE OF THE LAND DESCRIBED IN THE DOCUMENT
RECORDED IN BOOK 10657, PAGE 412 OF OFFICIAL RECORDS OF SAID COUNTY
AND AS SHOWN ON SAID RECORD OF SURVEY, SAID POINT BEING THE
BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHWESTERLY HAVING
A RADIUS OF 1894.00 FEET, A RADIAL LINE TO SAID BEGINNING BEARS SOUTH
27o51'20" EAST;
THENCE LEAVING SAID PARALLEL LINE SOUTHWESTERLY ALONG SAID
NORTHWESTERLY LINE AND SAID CURVE 16.18 FEET THROUGH A CENTRAL ANGLE
OF 0029'22" TO A POINT ON A LINE LYING 69.00 FEET NORTHWESTERLY FROM THE
CENTERL1NE OF HARVARD AVENUE AS SHOWN ON SAID RECORD OF SURVEY;
THENCE NORTH 40°37'37" EAST 1619.79 FEET ALONG SAID PARALLEL LINE TO AN
ANGLE POINT THEREIN; THENCE NORTH 40037'53'' EAST 1266.30 FEET ALONG SA1D
PARALLEL LINE TO A POINT ON SAID SOUTHWESTERLY RIGHT-OF-WAY LINE OF
EDINGER AVENUE, BEING A CURVE CONCAVE SOUTHWESTERLY WITH A RADIUS OF
1740.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 51037'32" EAST; THENCE
33.68 FEET SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF
01°06'3Y' TO THE POINT OF BEGINNING.
WARNING
"THE MAP ATYACHED HERETO MAY OR MAY NOT BE A SURVEY OF THE
LAND DEPIL'I'ED THEREON. YOU SHOULD NOT RELY UPON 1T FOR ANY
PURPOSE OTHER THAN ORIENTATION TO THE GENERAL LOCATION OF
THE PARCEL OR PARCELS DEPICTED. FlRST AMERICAN EXPRESSLY
DISCLAIMS ANY LIABILITY FOR ALLEGED LOSS OR DAMAGE WHICH MAY
RESULT FROM RELIANCE UPON THIS MAP*'.
PP
[AEF:ab/IDOC S2_90960_7/090903/4182.004]
Attachment No. 5 - Page 11
PRIVACY POLICY
V~E ARE COMMITTED TO SAFEGUARDING CUSTOMER INFORMATION
IN ORDER TO BETfER SERVE YOUR NEEDS NOW AND IN THE FUTURE, WE MAY ASK YOU TO PROVIDE US WITH CERTAIN
INFORMATION. WE UNDERSTAND THAT YOU MAY BE CONCERNED ABOUT V~tAT WE WILL DO WITH SUCH INFORMATION-
PARTICULARLY ANY PERSONAL OR FINANCIAL INFORMATION. WE AGREE THAT YOU HAVE A RIGHT TO KNOW HOW WE WILL
UTILIZE THE PERSONAL INFORMATION YOU PROVIDE TO US. THEREFORE, TOGETHER WITH OUR PARENT COMPANY, THE
FIRST AMERICAN CORPORATION, WE HAVE ADOPTED THIS PRIVACY POLICY TO GOVERN THE USE AND HANDLING OF YOUR
PERSONAL INFORMATION.
APPLICABILITY
THIS PRIVACY POLICY GOVERNS OUR USE TO THE INFORMATION WHICH YOU PROVIDE TO US. IT DOES NOT GOVERN THE
MANNER IN WHICH WE MAY USE INFORMATION WE HAVE OBTAINED FROM ANY OTHER SOURCE, SUCH AS INFORMATION
OBTAINED FROM A PUBLIC RECORD OR FROM ANOTHER PERSON OR ENTITY. FIRST AMERICAN HAS ALSO ADOPTED BROADER
GUIDELINES THAT GOVERN OUR USE OF PERSONAL INFORMATION REGARDLESS OF ITS SOURCE. FIRST AMERICAN CALLS
THESE GUIDELINES ITS FAIR INFORMATION VALUES, A COPY OF WHICH CAN BE FOUND ON OUR WEBSITE AT
WWW.FIRSTAM.COM.
TYPES OF INFORMATION
DEPENDING UPON WHICH OF OUR SERVICES YOU ARE UTILIZING, THE TYPES OF NONPUBLIC PERSONAL INFORMATION THAT
WE MAY COLLECT INCLUDE:
· INFORMATION WE RECEIVED FROM YOU ON APPLICATIONS, FORMS AND IN OTHER COMMUNICATIONS TO US, WHETHER
IN WRITING, IN PERSON, BY TELEPHONE OR ANY OTHER MEANS;
INFORMATION ABOUT YOUR TRANSACTIONS WITH US, OUR AFFILIATED COMPANIES, OR OTHERS; AND
· INFORMATION WE RECEIVE FROM A CONSUMER REPORTING AGENCY.
USE OF INFORMATION
WE REQUEST INFORMATION FROM YOU FOR OUR OWN LEGITIMATE BUSINESS PURPOSES AND NOT FOR THE BENEFIT OF ANY
NONAFFILIATED PARTY. THEREFORE, WE WILL NOT RELEASE YOUR INFORMATION TO NONAFFILIATED PARTIES EXCEPT: (1)
AS NECESSARY FOR US TO PROVIDE THE PRODUCT OR SERVICE YOU HAVE REQUESTED OF US; OR (2) AS PERMITTED BY LAW.
WE MAY, HOWEVER, STORE SUCH INFOILMATION INDEFINITELY, INCLUDING THE PERIOD AFTER WHICH ANY CUSTOMER
RELATIONSHIP HAS CEASED. SUCH INFORMATION MAY BE USED FOR ANY INTERNAL PURPOSE, SUCH AS QUALITY CONTROL
EFFORTS OR CUSTOMER ANALYSIS. WE MAY ALSO PROVIDE ALL OF THE TYPES OF NONPUBLIC PERSONAL INFOILMATION
LISTED ABOVE TO ONE OR MORE OF OUR AFFILIATED COMPANIES. SUCH AFFILIATED COMPANIES INCLUDE FINANCIAL
SERVICE PROVIDERS, SUCH AS TITLE INSURERS, PROPERTY AND CASUALTY INSURERS, AND TRUST AND INVESTMENT
ADVISORY COMPANIES, OR COMPANIES INVOLVED IN REAL ESTATE SERVICES, SUCH AS APPRAISAL COMPANIES, HOME
WARRANTY COMPANIES, AND ESCROW COMPANIES. FURTHERMORE, WE MAY ALSO PROVIDE ALL THE INFORMATION WE
COLLECT, AS DESCRIBED ABOVE, TO COMPANIES THAT PERFORM MARKETING SERVICES ON OUR BEHALF, ON BEHALF OF
OUR AFFILIATED COMPANIES, OR TO OTHER FINANCIAL INSTITUTIONS WITH WHOM WE OR OUR AFFILIATED COMPANIES
HAVE JOINT MARKETING AGREEMENTS.
FORMER CUSTOMERS
EVEN IF YOU ARE NO LONGER OUR CUSTOMER, OUR PRIVACY POLICY WILL CONTINUE TO APPLY TO YOU.
CONFIDENTIALITY AND SECURITY
WE WILL USE OUR BEST EFFORTS TO ENSURE THAT NO LqqAUTHORIZED PARTIES HAVE ACCESS TO ANY OF YOUR
INFORMATION. WE RESTRICT ACCESS TO NONPUBLIC PERSONAL INFORMATION ABOUT YOU TO THOSE INDIVIDUALS AND
ENTITIES WHO NEED TO KNOW THAT INFORMATION TO PROVIDE PRODUCTS OR SERVICES TO YOU. WE WILL USE OUR BEST
EFFORTS TO TRAIN AND OVERSEE OUR EMPLOYEES AND AGENTS TO ENSURE THAT YOUR INFORMATION WILL BE HANDLED
RESPONSIBLY AND IN ACCORDANCE WITH THIS PRIVACY POLICY AND FIRST AMERICAN'S FAIR INFORMATION V,4LUES. WE
CURRENTLY MAINTAIN PHYSICAL, ELECTRONIC, AND PROCEDURAL SAFEGUARDS THAT COMPLY WITH FEDERAL
REGULATIONS TO GUARD YOUR NONPUBLIC PERSONAL INFORMATION.
[AEF:ab/IDOCS2_90960_7/090903/4182.004]
Attachment No. 5 - Page 12
ATTACHMENT NO. 6A
SUBSEQUENT PARTICIPATION TERMS
NOTE: References herein to "the Agreement" and "DDA" mcan thc
Disposition and Development Agreement of which this Attachment is a part;
references to "Attachments" mean the Attachments to the DDA unless
otherwise specified. Except as otherwise noted, all capitalized terms defined
within the DDA and the Attachments shall retain the meanings as defined in
the Disposition and Development Agreement.
The Developer shall pay to the City as part of the "Purchase Price" under the Agreement
to which this Attachment No. 6A is attached the "Subsequent Participation" as further
described below.
1. Definitions. The following terms shall have the following meanings for purposes
of this Attachment No. 6 only:
(a) "Actual Purchase Price" shall mean the total amount actually charged by
the Developer for a Unit as reflected on the final escrow closing statement for any Unit Escrow.
(b) "Escrow Holder" shall mean the escrow company or title company
selected by the Developer to handle Unit Escrows.
(c) "Subsequent Participation" shall mean an amount equal to (a) one
percent (1%) of the gross sales price of each Unit, to include all revenues from consumer options
and premiums of each Unit; provided, however that (i) with respect to Affordable Housing Units,
the gross sales price of each Unit shall equal the portion of the gross sales price of each
Affordable Housing Unit in excess of the principal amount of any Affordable Housing Note
related to thc sale of such Unit.
(d) "Unit Escrow" shall mean an escrow opened with the Escrow Holder in
connection with the sale ora Unit to an Owner-Occupier.
(e) "Unit Closing" shall mean, with respect to a Unit, the recordation of a
deed conveying such Unit to an Owner-Occupier.
2. Payments of Subsequent Participation. At each Unit Closing, through the
applicable Unit Escrow, Developer shall pay the Subsequent Participation to the City.
3. Subsequent Participation Deed of Trust. To secure the Developer's obligation
to pay the Subsequent Participation, the Developer shall record against the Property at the Close
of Escrow (as defined in the Agreement) a deed of trust in the form attached as Attachment
No. 6B to the Agreement ("Deed of Trust"). The Deed of Trust shall be recorded concurrently
with the Developer's acquisition of the Property; however the Deed of Trust shall be subordinate
to all Permitted Mortgages [Discuss, is it subordinate to ALL, or only 1st lien?l. To effect
such subordination, the City shall, in a time frame that does not interfere with or delay the
[AEF:ab/IDOCS2_90960 7/090903/4182.004] Attachment No. 6A - Page 1 Subsequent Participation
Developer in funding and closing any Permitted Mortgage, execute a commercially reasonable
subordination agreement in the form prepared by the applicable Permitted Mortgagee.
4. Audit Rights; Adjustments. The Developer shall keep accurate financial books
and records with respect to all items which are taken into consideration in calculating the
Subsequent Participation (collectively, the "Developer Information"). Developer Info,mation
shall, except as provided in this Agreement or in any other agreement between the Parties, be
kept in conformance with generally accepted accounting principles. The City and its
representatives (including any independent certified public accounting firm retained by the City)
shall have the right to audit, review and copy all Developer Information at the Developer's
offices during normal hours on reasonable prior notice to the Developer but no more frequently
than once each calendar year. If any audit by City or its representatives uncovers a deficiency in
any payment made by the Developer to the City of Subsequent Participation, the amount shall be
paid by the Developer to the City upon demand. If the mount of such deficiency exceeds five
percent (5%) of the gross amount of which such deficiency is a part, then the Developer shall
also reimburse the City for the cost of any such audit upon demand. The making or acceptance of
any payment or the taking of any other action by the City shall not waive any right of the City to
later audit, review, verify, object to or challenge any Developer Information. In the event of an
objection or challenge by the City to any such item, the Parties shall promptly meet and
reasonably cooperate in an attempt to resolve such objection or challenge. In the event any
adjusting payment is due as a result of the resolution of any objection or challenge by the City,
the same shall be made within thirty (30) days of such resolution.
5. Prior to the issuance of a Certificate of Compliance for any Phase of the Project,
all Subsequent Participation Amounts for such Phase shall be paid in full or to the extent that the
Developer has not sold or closed Escrow on the sale of any portion of the Units, as to such Units
which have not been sold or for which Units Escrow has not closed only, secured by
Performance Bond or other equivalent security satisfactory to the City in its sole discretion.
[AEF:ab/IDOCS2_90960 7/090903/4182.004] Attachment No. 6A - Page 2 Subsequent Participation
ATTACHMENT NO. 6B
SUBSEQUENT PARTICIPATION DEED OF TRUST
[AEF:ab/lDOCS2_90960_7/090903/4182.004] Attachment No. 6B - Page 1 Deed of Trust for Subsequent
Participation
Attachment To be Inserted Prior to
Execution
ATTACHMENT NO. 7
SCHEDULE OF PERFORMANCE
NOTE: References herein to "the Agreement" and "DDA" mean the
Disposition and Development Agreement of which this Attachment is a part;
references to "Attachments" mean the Attachments to the DDA unless
otherwise specified. Except as otherwise noted, all capitalized terms defined
within the DDA and the Attachments shall retain the meanings as defined in
the Disposition and Development Agreement.
Action Timing
1. Execution of Agreement
A. Developer delivers evidence of
Developer's ability to obtain
financing
Condition precedent to execution by City
of DDA
B. "Effective Date" of DDA
Date of execution by City of DDA
C. City executes DDA
Within 3 Business Days following
Developer's submission of executed DDA
D. City delivers executed DDA and Within 3 Business Days following
Attachments to Escrow execution of DDA by City
E. Developer delivers executed
DDA and Attachments to Escrow
Within 7 Calendar days following action by
City on DDA, and resolution of any
remaining issues
2. Acquisition of Developer Property
A. Developer delivers Initial Deposit Within 7 calendar days following execution
to Escrow of DDA by City
B. Acquisition by Developer of
Preliminary Title Commitment
Within 10 calendar days following
execution of DDA by City
C. Due Diligence Period ends
15 calendar days following execution of
DDA by City
D. Developer delivers Supplemental Within 2 Business Days after the expiration
Deposit to Escrow of the Due Diligence Period
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 7 - Page 1 Schedule of Performance
o
Action
E. Closing Date
Entitlement Approvals; City
Proprietary Design Approval
A°
Developer submits complete
Tentative Vesting Tract Map,
Concept Plan and Design Review
application with related drawings
and documents to City
B°
City considers and approves
Tentative Vesting Tract Map,
Concept Plan & Design Review
Developer submits complete
Final Tract Map with related
drawings and documents to City
D. City approves Final Tract Map(s)
E. Developer causes the recordation
of the Final Tract Map(s)
Demolition, Grading and Building
Permits; Performance Bonds
A. Developer submits application
for Demolition Permit
Timing
October 2, 2003, or later as may be
mutually agreed
Complete
Prior to Close of Escrow
Within 60 calendar days following Close of
Escrow
Within 30 calendar days following the later
of (a) Developer's complete submission
and completion of all City and County
requested corrections and (b) satisfaction
by Developer of all conditions to approval
of the Final Tract Map(s) to the satisfaction
of City in its sole discretion
Within 15 calendar days following
approval of each of the Final Tract Maps
by City
Within 45 calendar days following Close of
Escrow
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 7 - Page 2 Schedule of Performance
Bo
Co
Fo
Action
City issues Demolition Permit
Developer submits application
and Design Documents for rough
grading
Developer submits Final Design
Documents for rough grading to
City for proprietary approval
required by Section 8.6.6 of DDA
City in its proprietary role
approves rough grading
City issues permits for rough
grading
Timing
Within 30 days following (a) Close of
Escrow and (b) identification by City of 24
Existing Housing Units to be subject to
Salvation Army Agreement; provided that a
demolition permit for 24 Existing Housing
Units to be issued within 10 days following
satisfaction of foregoing conditions and
execution by all parties of Salvation Army
Agreement.
Within 30 calendar days following the
execution of DDA by City
Prior to issuance of rough grading permits
by Commtmity Development Department
Later of(i) 45 calendar days following
City's receipt of Design Documents for
rough grading or (ii) if disapproved by
City, 10 Calendar days after resubmittal by
Developer of revised Design Documents
for rough grading meeting requirements of
City
After Close of Escrow and following (a)
City's proprietary approval and
Community Development Department
approval of Final Design Documents for
rough grading, and (b) Developer's
payment of all applicable pemdt fees and
satisfaction of all conditions of approval,
including provision to City of Performance
Bonds for Horizontal Improvements,
Quimby Fees, Project Fair Share
Contribution and Developer's Backbone
Infrastructure Work, and (c) execution by
Developer and City of the Infrastructure
Reimbursement Agreement
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 7 - Page 3 Schedule of Performance
Go
Action
Developer submits Design
Documents for final grading and
fmal construction and related
documents to City for issuance of
final grading building permits
Developer submits Design
Documents to City for
proprietary approval required by
Section 8.6.6 of DDA
Timing
Within 150 calendar days following the
execution of DDA by City
Prior to issuance of final grading permits or
building permits for construction of
Improvements
City in its proprietary role
approves final grading plans and
each phase of Design Document
submittals
City issues final grading and
building permits consistent with
any approved phasing
5. Construction of the Site
Improvements
A. Developer commences rough
grading of the Site
B. Developer completes rough
grading of the Site
C. Developer commences final
grading
Developer commences
construction of model homes and
sales office
Later of (i) 15 calendar days following
City's receipt of Design Documents or (ii)
if disapproved by City, 5 calendar days
after resubmittal by Developer of revised
Design Documents meeting requirements
of City
Within 15 calendar days following City's
proprietary approval and Community
Development Department approval of Final
Design Documents and Developer's
payment of all permit fees and satisfaction
of all conditions of approval, including
provision of all required Performance
Bonds for Vertical Improvements in all
Phases for which final grading permits or
building pemfits are requested
Within 10 calendar days following issuance
of rough grading pemfits by City
Within 120 calendar days following
issuance of rough grading permits by City
Within 10 calendar days following issuance
of final grading permit for Site
Within 5 Business Days following issuance
of first building permit for model home and
sales office Vertical Improvements
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 7 - Page 4 Schedule of Performance
Bo
Action
Developer completes
construction of model homes and
sales offices
Timing
Within 180 calendar days following
issuance of first building permit for model
home and sales office Vertical
Improvements
Fo
Developer commences
construction of the Phase 1
Improvements
Developer commences
construction of the Common
Area Improvements
Developer Completes
construction of the Phase 1
Improvements
Developer completes
construction of the Common
Area Improvements shown for
construction in Phase I, including
Park Facilities
Jo
Developer commences
construction of the Phase 2
Improvements and subsequent
Phase Improvements including
remaining Common Area
Improvements by Phase
K. Developer Completes
construction of all Improvements
6. Affordable Housing Requirements
Within 30 calendar days following issuance
of all pemdts for Phase I improvements
Concurrently with commencement of Phase
1 Improvements
Prior to December 31, 2004
Prior to close of escrow on Units in Phase 1
Prior to close of escrow on Units in Phase 2
and each subsequent Phase, as applicable.
Conunon Areas in each Phase shall be
completed prior to close of escrow on Units
in that Phase
Within 28 months following issuance of
pemfits for rough grading for the Site
A. Developer identifies Units to be Completed
sold to Households not to exceed
very low, low and moderate-
income household level
("Affordable Itousing") set forth
in Section 13 of DDA
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 7 -Page 5 Schedule of Performance
Action
B. Developer submits to City
Affordable Housing Purchaser
Selection and Criteria Plan
C. City approves or disapproves
Affordable Housing Purchaser
Selection and Criteria Plan
Timing
30 calendar days prior to issuance of
Building Permits for Phase I Improvements
Within 20 calendar days following
submission of Selection and Criteria Plan
by Developer
D. Developer initiates marketing and
sales of the Affordable Housing
Units
Eo
Developer submits to City
individual escrow instructions for
buyers of Affordable Housing
Units and all other documents
and information described in
Section 13 of DDA and related
Attachments
Fo
City approves or disapproves
individual escrow instructions
and related items for buyers of
Affordable Housing Units
7. Sale and Close of Escrow on Units
A. Developer commences sales of
Units
Close of escrow for Units in
Phase 2 or in any subsequent
Phase
Marketing efforts can begin after approval
by City of Developer's Affordable Housing
Purchaser Selection and Criteria Plan. Sale
of Affordable Housing Units can begin
after Final Tract Map recordation and all
necessary California Department of Real
Estate approvals
At least 20 calendar days prior to close of
escrow of individual Affordable Housing
Units and with submission of individual
escrow instructions and related items by
Developer to City
Within 10 calendar days following
submission of individual escrow
instructions and related items by Developer
Within 180 calendar days following
issuance of first building permit for model
homes and sales office Vertical
Improvements
Only following Completion of all
Affordable Housing Units in Phase 1 and
upon Completion of one Affordable
Housing Unit for every six closings of
Non-Affordable Housing Units
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 7 - Page 6 Schedule of Performance
Action
C. Close of escrow for final nine (9)
non-Affordable Housing Units in
Project
8. Certificate of Compliance
A. Developer submits request for
issuance of a Certificate of
Compliance by City
Timing
Only following Completion of all
Affordable Housing Units in Project
Upon completion of Improvements and
satisfaction of all Conditions Precedent set
forth in Section 9.6.2 of DDA
B. The City approves or disapproves
the request for issuance of a
Certificate of Compliance
C. The City shall cause the
recordation of the Certificate of
Compliance in the Office of the
County Recorder of Orange
County
Within 30 calendar days following
submission of request for Certificate of
Compliance and satisfaction of all
conditions precedent set forth in
Section 9.6.2 of DDA
Within 10 calendar days following issuance
of Certificate of Compliance by City
[AEF:ab/1DOC S2_90960_7/090903/4182.004] Attachment No. 7 - Page 7 Schedule of Performance
ATTACHMENT NO. 8
SCOPE OF DEVELOPMENT
Note: References herein to the Agreement and the DDA shall mean the Disposition and
Development Agreement of which this Attachment is a part; references to Attachments mean the
Attachments to the DDA unless otherwise specified.
1.0 General Information
Parcel I-B-1 is delineated on Attachment No. 1.
2.0 Developer Improvements
2.1 Definition of Improvements
The Developer shall construct or cause to be constructed on the Developer Parcel all of the
Horizontal Improvements and the Vertical Improvements and shall construct or cause to be
constructed in the Project Site certain off-site infrastructure and Developer's Backbone
Infrastructure Work, including any necessary public improvements set for in this Scope of
Development or as required and approved by the City, including without limitation, the City
Planning Commission and City Council.
The Improvements shall generally consist of the following:
2.1.1 Vertical Improvements. Developer shall complete the development of the Vertical
Improvements to consist of a 189 unit Owner-Occupied, residential subdivision that shall include
a product mix of 138 Traditional Homes (single family detached) and 51 Patio Homes (single
family detached). Vertical Improvements means all buildings, structures, landscaping and other
improvements including without limitation Common Area Improvements, Park Facilities, and
privately owned park improvements as shown on the Preliminary Plan.
As more particularly described and provided in Section 8.6 of the Agreement, all final working
drawings, specifications, grading plans, soil reports, landscaping plans, color and finish
schedules shall be approved prior to start of the construction.
2.1.2 Horizontal Improvements. Developer shall be responsible for all Horizontal
Improvements which include any necessary infrastructure and utilities including, without
limitation: 1) all public streets, private streets, roadways drives, alleyways, sidewalks; 2) all
utilities including connection of all utilities, including but not limited to sewer, water, electrical,
gas, telephone, cable and telecommunication service connections from their origin or Tustin
Legacy Backbone Infrastructure Program locations as shown in the Specific Plan to the property
line and from the property line to the homes; 3) any Common Area landscape or hardscape
improvements including the landscape of lots, common areas, and privately owned park facilities
on the Developer Parcel and other improvements within the public right-of-way as may be
required and approved by the Planning Commission and City Council, as applicable, with
[AEF:ab/IDOCS2_90960 7/090903/4182.004] Attachment No. 8- Page 1 Scope of Development
approval of Vesting Tentative and Final Tract Maps, Concept Plan approval, Design Review and
Conditional Use Permit. In addition to on-site Horizontal Improvements, Developer shall be
responsible for the following: required full improvements along Edinger Avenue (the existing
curb is in the correct location and meandering sidewalks are still needed) and new intersection
and median modifications and signaling at the project entrance at Edinger Avenue; additional
right-of-way dedication along Harvard Avenue and construction of new curbing at its existing
location, new meandering sidewalks and any street repairs needed, and the reservation of
pedestrian connections to Harvard Avenue and Edinger Avenue and the future Peters Canyon
Trail.
2.1.3 Developer's Backbone Infrastructure Work. In addition to Developer's
obligations to pay the Project Fair Share Contribution, Developer shall be responsible for design
and construction of the following infrastructure constituting a portion of the Tustin Legacy
Backbone Infrastructure Program ("Developer's Backbone Infrastructure Work") and shall
provide the City with a Performance Bond meeting the criteria established in clause (a) above for
such work:
(i) the full widening and improvement to Moffett Avenue from
Harvard Avenue to Peters Canyon Channel including right-of-way and intersection
enhancements to the intersection of Moffett Avenue and Harvard Avenue as described in the
Scope of Development, to include all master planned systems including the street, bikeways
(Class II), street lighting, domestic water line, gas, storm drainage, telephone, electricity, sewage
and reclaimed water, telemetry and any necessary telecommunication systems as shown in the
Specific Plan and/or Irvine Ranch Water District Sub Area Master Plan for Tustin Legacy,
and/or as approved by the City and all responsible private utility purveyors from existing
backbone systems adjacent to the Developer Parcel. Developer's obligation shall include design
and construction of all transitional components of the Tustin Legacy Backbone Infrastructure
Program that are determined by the City, in its sole discretion, to be necessary to construct and
operate the Project, protect the public health and safety and/or create an opportunity for a logical
and orderly future phasing of Tustin Legacy Backbone Infrastructure Work which are to be
connected to Developer's Backbone Infrastructure Work. Developer acknowledges that the new
backbone systems shall be replacing existing systems owned by the City or utility purveyors
located in or adjacent to Moffett Avenue and that although Developer may utilize such existing
systems on a temporary basis, subject only to approval of the City or the applicable private utility
purveyor, Developer shall show all existing systems (even if subject to temporary reuse) for
demolition or abandonment on the public improvement plans if they are detem;ined by the City
or any private utility purveyor owning such system to be ultimately unnecessary and Developer
shall, at its sole cost and expense, demolish such existing systems upon cessation of use thereof
by Developer;
(ii) Class II (on-road) bikeways on both sides of Moffett
Avenue;
(iii) Install new 12-inch domestic water line, new 16-inch
reclaimed water line and new 10-inch sanitary sewer line in Moffett Avenue in the location
shown on the IRWD master plan unless the Director of Public Works for the City (the "Public
Works Director") and the IRWD agree in writing that one or more of such lines are not required
as backbone infi:astmcture in Moffett Avenue and each of IRWD and the Public Works Director
[AEF:ab/IDOCS2_90960 7/090903/4182.004] Attachment No. 8 - Page 2 Scope of Development
approve plans submitted by the Developer for alternate domestic and reclaimed water and
sanitary sewer lines to be installed by Developer in locations approved by the Public Works
Director and IRWD, which directly serve the Developer Parcel and Parcel 35 to the south from
the adjoining Harvard Avenue right of way;
(iv) Install new 18-inch brine line in Moffett Avenue;
(v) Install new storm drain line in a location approved by the
City and by the County's Flood Control District, unless the Public Works Director and the
County's Flood Control District each determine that the existing line adequately services the
Project;
(vi) Install new "backbone" dry utilities (electric, gas, cable,
telephone) as determined necessary by private utility purveyors and approved by the Public
Works Director.
Design and construction of Developer's Backbone Infrastructure Work shall be carded out in
accordance with (i) the Scope of Development and the Schedule of Performance; (ii) plans and
specifications prepared by the Developer and approved by the City; (iii) all federal, state,
regional and local laws, statutes, ordinances, rules and regulations and all requirements and
regulations of the City including applicable zoning and (iv) the provisions of Section 8.1.2.
(vii)
2.1.4 Compliance with Codes and Conditions. The construction of Improvements must
be in compliance with all City of Tustin planning, building, electrical, plumbing, mechanical, fire
codes, public and private street standards as well as compliance with all "Conditions of
Approval" stipulated by the City of Tustin and any applicable governmental agency having
jurisdiction including but not limited to, the Planning Commission and City Council approvals.
2.1.5 Compliance with DDA. The Developer shall comply with all provisions of the
Disposition and Development Agreement related to the planning, design, construction, and
operation of the Improvements.
2.2 Schedule of Performance
The Developer shall commence and complete the Improvements by the respective times
established in the Schedule of Performance (Attachment No. 7).
3.0 Development Standards
The Improvements shall be designed and developed as a planned development in which
residential dwellings will have a high quality architectural quality and character, both
individually and in the context of the surrounding area. All public spaces, open space, and
individual yard areas shall be designed, landscaped and developed with the same quality.
Particular attention shall be paid to enhancing pedestrian activities, minimizing mass, scale, and
bulk and to the selection of color and materials. The City and Developer will cooperate and
[AEF:ab/1DOCS2_90960_7/090903/4182.004] Attachment No. 8 - Page 3 Scope of Development
direct their consultants, architects and/or engineers to cooperate so as to ensure the continuity and
coordination necessary for the proper and timely completion of development of Improvements.
All of the Improvements shall conform to all applicable federal, state, county and city
regulations, the regulations of the MCAS Tustin Specific Plan and the Tustin City Code and the
conditions of City resolutions.
The Developer acknowledges the responsibility to obtain any approvals required by any
governmental agency, utility or other agency, including the City, which has jurisdiction over all
of any portion of the Improvements. All "Conditions of Approval" stipulated by an applicable
jurisdiction shall be incorporated into the final design and noted in the construction documents
by the architects, engineers and other consultants. The Developer shall make all necessary
applications by such time(s) as will be consistent with the timely commencement and completion
of various portions of the Improvements as identified in the Schedule for Performance.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 8 - Page 4 Scope of Development
ATTACHMENT NO. 9
PRELIMINARY PLAN (INCLUDING AFFORDABLE HOUSING UNITS)
[AEF:ab/IDOCS2_90960 7/090903/4182.004] Attachment No. 9 - Page 1 Preliminary Plans (Including
Affordable Homing Units)
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ATTACHMENT NO. 10
INDEX OF HAZARDOUS MATERIALS REPORTS
Those documents referenced in the FOST and the Environmental Baseline Study as
applicable to Parcel I-B-l, if any.
Those documents referenced in the Administrative Record File Index for MCAS Tustin
and applicable to Parcel I-B-l, if any. The Administrative Record File Index for MCAS
Tustin is available for public review at the University of California, Irvine, Government
Information Department, Main Library, contact Yvonne Wilson (949) 824-7362
[AEF:ab/1DOCS2_90960_7/090903/4182.004] Attachment No. 10 - Page I Index of Hazardous Materials Reports
ATTACHMENT NO. 11
MEMORANDUM OF DDA
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 11 - Page 1 Memorandum of DDA
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FORM RECORDING
FEES PER GOVERNMENT
CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
Thc City of Tustin
300 Centennial Way
Tustin, CA 92780
MEMORANDUM OF TUSTIN LEGACY DISPOSITION AND DEVELOPMENT
AGREEMENT FOR PARCEL 34
THIS MEMORANDUM OF TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT FOR PARCEL 34 ("Memorandum of DDA") is
made as of September __, 2003 by and between the CITY OF TUSTIN, a municipal
corporation of the State of Califomia (the "City"), and WL HOMES LLC, a Delaware
limited liability company (the "Developer") to confirm that the City and the Developer
have entered into that certain Tustin Legacy Disposition and Development Agreement
For Parcel 34 dated as of September ,2003 (the "DDA") affecting the real property
described below. The City and the Developer are sometimes referred to herein
individually as a "Party" and collectively as the "Parties." Initially capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to such terms in
the DDA.
1. Property Affected by the DDA.
1.1 The "Property", consisting of (a) the "Developer Parcel," defined as that
certain 36.84 acre property, more or less, located in the City of Tustin, County of Orange,
California (described as "disposition Parcel 34" or "Parcel I-B-I" in the MCAS Tustin
Reuse Plan adopted by the City Council of the City of Tustin on October 17, 1996, as
amended, and in the MCAS Tustin Specific Plan) which land is legally described on
Attachment No. 1 attached hereto and incorporated herein by this reference and (b) all
existing improvements located on the Developer Parcel and (c) all Personal Property,
subject to all Permitted Exceptions and such other title exceptions as may be applicable to
the Developer Parcel, but provided that the term "Property" shall exclude the following
rights and interests which shall be explicitly reserved to the City:
(a) Any and all oil, oil rights, minerals, mineral rights, natural gas,
natural gas rights and other hydrocarbon by whatsoever name known, geothermal steam
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 1
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FORM RECORDING
FEES PER GOVERNMENT
CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
MEMORANDUM OF TUST1N LEGACY DISPOSITION AND DEVELOPMENT
AGREEMENT FOR PARCEL 34
THIS MEMORANDUM OF TUST1N LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT FOR PARCEL 34 ("Memorandum of DDA") is
made as of [September] ,2003 by and between the CITY OF TUSTIN, a municipal
corporation of the State of California (the "City"), and WL HOMES LLC, a Delaware
limited liability company (the "Developer") to confirm that the City and the Developer
have entered into that certain Tustin Legacy Disposition and Development Agreement
For Parcel 34 dated as of [September ,] 2003 (the "DDA") affecting the real property
described below. The City and the Developer are sometimes referred to herein
individually as a "Party" and collectively as the "Parties." Initially capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to such terms in
the DDA.
1. Property Affected by the DDA.
1.1 The "Property", consisting of (a) the "Developer Parcel," defined as that
certain 36.84 acre property, more or less, located in the City of Tustin, County of Orange,
California (described as "disposition Parcel 34" or "Parcel I-B-1" in the MCAS Tustin
Reuse Plan adopted by the City Council of the City of Tustin on October 17, 1996, as
amended, and in the MCAS Tustin Specific Plan) which land is legally described on
Attachment No. 1 attached hereto and incorporated herein by this reference and (b) all
existing improvements located on the Developer Parcel and (c) all Personal Property,
subject to all Permitted Exceptions and such other title exceptions as may be applicable to
the Developer Parcel, but provided that the term "Property" shall exclude the following
rights and interests which shall be explicitly reserved to the City:
(a) Any and all oil, oil rights, minerals, mineral rights, natural gas,
natural gas rights and other hydrocarbon by whatsoever name known, geothermal steam
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182.004] 1
and rights thereto and all products derived from any of the foregoing, that may be within
or under the Developer Parcel together with the perpetual right of drilling, mining,
exploring for and storing in and removing the same from the Developer Parcel or any
other land, including the right to whipstock or directionally drill and mine from lands
other than the Developer Parcel, oil or gas wells, tunnels and shafts into, through or
across the subsurface of the Developer Parcel and to bottom such whipstocked or
directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior
limits thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate any
such well or mines; but without, however, the right to drill, mine, store, explore or
operate through the surface of the Developer Parcel.
(b) Any and all water, water rights or interests therein appurtenant or
relating to the Developer Parcel or owned or used by the City in connection with or with
respect to the Developer Parcel no matter how acquired by the City, whether such water
rights shall be riparian, overlying, appropriative, littoral, percolating, prescriptive,
adjudicated, statutory or contractual, together with the perpetual right and power to
explore, drill, re-drill and remove the same from or in the Developer Parcel, to store the
same beneath the surface of the Developer Parcel and to divert or otherwise utilize such
water, rights or interests on any other property owned or leased by the City; but without,
however, any right to enter upon or use the surface of the Developer Parcel in the
exercise of such rights.
(c) Those excess development rights remaining after deducting from
the total Tustin Legacy Specific Plan planning area authorization for Planning Area 21
the number of Units allocated to the Developer Parcel by the Vesting Tentative Tract
Map, estimated as of the Effective Date to be 189 Units. All development rights entitled
for the Developer Parcel in excess of such allocation shall remain the property of the City
and, unless attributable to property within Planning Area 21 other than the Developer
Parcel, shall be freely transferable by the City in its sole discretion throughout the
remainder of Planning Area 21. The Parties hereby agree that if the exact number of
Units to be developed on the Developer Parcel is not determined as of the Close of
Escrow, the Parties will cooperate in making a final determination as to the number of
Units to be developed on the Developer Parcel and shall execute and record all additional
documents deemed reasonably necessary in the determination of either Party, to specify
the development rights retained by the City and those transferred to Developer with the
Property.
1.2 The Developer Parcel and the existing Improvements have been conveyed
by the City to the Developer pursuant to that certain "City Quitclaim Deed for
Parcel I-B-1 and Restrictions, Including Environmental Restriction Pursuant to Civil
Code Section 1471" of even date herewith ("Quitclaim Deed"); provided, however, that
upon the dedication to and acceptance by the City of certain City Dedication Parcels
pursuant to the approved Final Tract Maps for the Developer Parcel, the term "Developer
Parcel" shall exclude the City Dedication Parcels.
1.3 The Personal Property has been conveyed by the City to the Developer
pursuant to a Bill of Sale of even date herewith (the "Bill of Sale").
[AEF:djw/Parce134 MemorandumofDDA-91003/090903/4182.004] 2
1.4 This Memorandum of DDA has been executed and shall be recorded
immediately following the execution and recordation by the City and the Developer of
the Quitclaim Deed with respect to the Property. The DDA and this Memorandum of
DDA, and all covenants, conditions, restrictions and obligations set forth therein, in the
Quitclaim Deed and in the Bill of Sale shall be binding upon the Property and shall
govern the use and development of the Property by the Developer and its successors and
assigns owning all or any portion thereof.
2. Effect of DDA.
2.1 The DDA imposes certain obligations, agreements, covenants, conditions
and restrictions with respect to the Property and Developer's acquisition, development,
use, operation and ultimate disposition thereof, that run with the Developer Parcel as
further set forth below. Among these obligations are the following:
(a) certain restrictions on transfer, conveyance and/or assignment of
the DDA and/or the Property, whether voluntary or involuntary, contained in Section 2.2
of the DDA, that terminate upon execution and recordation by the City of the Final
Certificate of Compliance;
(b) certain restrictions on Transfer of Control of the Developer,
contained in Section 2.3 of the DDA, that terminate upon execution and recordation by
the City of the Final Certificate of Compliance;
(c) certain restrictions on Mortgages, contained in Sections 2.2 and 2.7
of the DDA, that terminate upon execution and recordation by the City of the Final
Certificate of Compliance;
(d) the Release contained in Section 4.4.2(e) of the DDA (copied
verbatim in the Quitclaim Deed) that remains in effect in perpetuity;
(e) the environmental indemnity contained in Sections 10.2 and 10.3
of the DDA (copied verbatim below from the DDA) that ceases to run with the land upon
execution and recordation by the City of the Final Certificate of Compliance or at such
earlier time as is specified in the DDA;
(f) the use covenants contained in Sections 12.1 of the DDA (copied
verbatim below from the DDA) that remain in effect in perpetuity and the maintenance
covenants contained in Section 12.2 of the DDA (copied verbatim below from the DDA)
that terminate upon execution and recordation by the City of the Final Certificate of
Compliance;
(g) the non-discrimination covenants contained in Sections 12.3
through 12.6 of the DDA (copied verbatim in the Quitclaim Deed) that remain in effect in
perpetuity;
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 3
(h) the affordable housing covenants contained in Sections 13.1
through 13.3 of the DDA (copied verbatim below from the DDA), that remain in effect
for the period specified below;
(i) the Right of Purchase in favor of the City, contained in
Section 14.2.2 of the DDA (copied verbatim below from the DDA), that terminates upon
execution and recordation by the City of the Final Certificate of Compliance or at such
earlier time as is specified in the DDA; and
(j) the City's Right of Reversion contained in Section 16.2 of the
DDA (copied verbatim below from the DDA), that terminates upon execution and
recordation by the City of the Final Certificate of Compliance or at such earlier time as is
specified in the DDA.
For ease of reference only, the following italicized Sections are copied verbatim from the
DDA:
2.2 Indemnification and Environmental Provisions.
Sections 10.2 and 10.3 of the DDA provide as follows:
"10.2 Environmental lndemnit~. As a material part of the
consideration for this Agreement, and effective as to each of Parcel I-B-I,
the Property and the Project Site, upon the Developer's acquisition of fee
title to all or any portion thereof, the Developer shall, to the maximum
extent permitted by law, indemnify, protect, defend assume all
responsibility for and hoM harmless the Indemnified Parties from and
against any and all Claims resulting or arising from or in any way
connected with the existence, Release, threatened Release, presence,
storage, treatment, transportation and/or disposal of any Hazardous
Materials at any time on, in, under, from, about or adjacent to any portion
or portions of said lands, regardless of whether any such condition is
known or unknown now or upon acquisition and regardless of whether
any such condition pre-dates acquisition or is subsequently caused
created or occurring, provided however, that the Developer shall not be
responsible for (and such indemnity shall not apply to) the gross
negligence or willful misconduct of the Indemnified Parties. This
environmental indemnity shall be included in any recorded memorandum
of this Agreement against said lands and shall be binding upon successors
and assigns of the Developer owning all or any part thereof(except
Owner-Occupiers) in accordance with Section 10. 3.
10.3 Duration o[Indemnities. The indemnities set forth in this
Article 10 shall survive the Close of Escrow and the termination of this
Agreement and shall not merge into the Quitclaim Dee& provided,
however that such indemnities shall cease to run with respect to any
Parcel upon recordation of a Certificate of Compliance with respect to
[AEF:djw/Parce134 MemorandumofDDA-91003/090903/4182.004] 4
such Parcel Notwithstanding that such indemnities shall cease to run
with any Parcel, they shall continue to be personally binding and in full
force and effect in perpetuity with respect to Developer and its successors
in interest."
2.3 Use and Maintenance Covenants.
Sections 12.1 through 12.2 of the DDA provides as follows:
12. I Use Covenant.
The Developer covenants and agrees for itself, its successors, its
assigns and every successor in interest to the Property or any part thereof,
that the Developer, its successors and assigns shall use the Property only
for those uses specified in the following documents: this Agreement, the
Specific Plan, the Reuse Plan, the Scope of Development, the Entitlements,
the Development Permits, the Quitclaim Deed, and all other applicable
agreements affecting the Property.
12.2 Maintenance Covenant.
12.2.1 Prior to Close of Escrow. Commencing upon the Effective
Date and until Close of Escrow, the Developer, its successors and assigns,
shall maintain Parcel I-B-1 in a clean and weed free condition at the
Developer's sole cost and expense.
12.2.2 Following Close of Escrow. Subject to clauses (a) through
(d) below, from and after the date of acquisition by the Developer of any
portion of the Property, the Developer and its successors and assigns shall
maintain the portions of the Property owned by it in the same aesthetic
and sound condition (or better) as the condition of the Property at the time
of the transfer of the Property to the Developer.
(a) From the date of commencement of construction until
issuance of a Certificate of Compliance for any Phase of the Project, the
Developer and its successors and assigns shall maintain the Improvements
under construction consistent with best construction industry practice.
(b) Upon Completion of all or any portion of the
Improvements, the Developer, its successors and assigns shall maintain
the Improvements in the same aesthetic and same condition or better as
the condition of such Improvements at the time the City issues a
Certificate of Compliance, reasonable wear and tear excepted The
standard for the quality of maintenance of the Improvements required by
this Section 12.2.2 shall be met whether or not a specific item of
maintenance is listed below. However, representative items of
maintenance shall include: (i) maintenance, repair and replacement on a
regular schedule, consistent with like developments in Orange County, of
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182.004] 5
private streets, roads, drives, bike paths, alleyways, sidewalks, utilities
(except to the extent owned or controlled by a utility franchisee), common
areas, landscaping, hardscaping and fountains; (ii)frequent and regular
inspection for graffiti or damage or deterioration or failure, and
immediate repainting or repair or replacement of all surfaces, fencing,
walls, equipment, etc., as necessary; (iii) emptying of trash receptacles
and removal of litter; (iv) regular sweeping of roadways and sidewalks
throughout the Developer Parcel; (v) fertilizing and replacing vegetation
as necessary; (vi) cleaning windows on a regular basis; (vi) painting the
buildings on a regular program and prior to the deterioration of the
painted surfaces; (vii) conducting roof inspections on a regular basis and
maintaining roofs in a leak-free and weather-tight condition.
(c) In the event the Developer or its successors or assigns fails
to maintain the Improvements in accordance with the standard for the
quality of maintenance, the City or its designee shall have the right but not
the obligation to enter the Developer Parcel upon reasonable notice to the
Developer or its successor or assigns, correct any violation, and hold the
Developer, or such successors or assigns, responsible for the cost thereof,
and such cost, until paid, shall constitute a lien on the applicable Parcel.
(d) The Developer shall have the right to assign the
maintenance responsibilities under this Agreement to the subsequent
purchasers of a Parcel, or individual buildings thereon, or to any
Homeowners'Association to be created, through appropriate covenants,
conditions and restrictions to be recorded against one or more Parcels,
upon which assignment the Developer shall have no further liability under
this Section.
2.4 Affordable Housing Covenants.
Sections 13.1 through 13.3 of the DDA provides as follows:
13. I A[fordable Unit Obligations.
13.1.1 In the event that the Entitlements permit one hundred and
eighty-nine (189) Units to be constructed upon the Developer Parcel, no
fewer than forty (40) of the Units are to be available for sale to and
occupancy by persons of moderate, lower and very low income households
(the "Affordable Housing Units "). Of these forty (40) Affordable
Housing Units, a minimum of eleven (11) Units shall be sold to "Very
Low Income Households," a minimum often (10) Units shall be sold to
"Lower Income Households" and a minimum of nineteen (19) Units shall
be sold to "Moderate Income Households." The Developer shall identify
and set aside, and the City shah approve in its reasonable discretion the
location and other features of the Affordable Housing Units identified on
the Preliminary Plan as incorporated in the Approved Project Plans.
[AEF:djw/Parce134 MemorandumofDDA-91003/090903/4182.004] 6
Each such identified Affordable Housing Unit shall be designated for sale
to a Very Low Income Household, a Lower Income Household or a
Moderate Income Household, as the case may be. In the event that the
Entitlements permit fewer than one hundred eighty-nine (189) Units to be
constructed upon the Developer Parcel, the foregoing numbers shall be
adjusted in proportion to the number of permitted Units.
13.1.2 The Developer shall only sell Affordable Housing Units to
Owner-Occupiers. At the time of the closing of each sale of an Affordable
Housing Unit to an Owner-Occupier, the Developer shall cause to be
recorded against such Affordable Housing Unit an appropriate Affordable
Housing Covenant, Affordable Housing Trust Deed and Affordable
Housing Option Agreement as provided Section 13.2.2. In order to
enable Developer to meet the obligations described in Sectionl 3.1.1, the
City, provided that the Affordable Housing Covenant and Affordable
Housing Trust Deed are recorded concurrently with the closing of the sale
of the Affordable Housing Unit, agrees to accept a promissory note
executed by the purchasing Owner-Occupier (the "Affordable Housing
Note"), which Affordable Housing Note shall be in an amount not in
excess of the difference between the market sales price of the Unit and the
Affordable Housing Cost of such Unit. Each Affordable Housing Note
shall be assigned by the Developer to the City at the time of the closing of
the sale of each Affordable Housing Unit, and shall be secured by a deed
of trust executed by the purchasing Owner-Occupier and recorded against
the Unit at the time of the closing of such sale (the "Affordable Housing
Trust Deed"), which Affordable Housing Trust Deed shall be in the form
attached hereto as Attachment No. 15, shall secure the obligations of the
Owner set forth in the Affordable Housing Covenant, the Reimbursement
Agreement and the Affordable Housing Note, and shall be subordinate in'
priority only to the monetary lien of a purchase money deed of trust also
recorded at the time of closing of the sale securing an amount not in
excess of the Affordable Housing Cost of the Unit. The Affordable
Housing Note shall be in the form attached hereto as Attachment No. 13.
13.2 Covenant Re: Affordable Housing Units.
13.2.1 The Developer covenants and agrees for itself, its
successors, its assigns and every successor in interest to an Affordable
Housing Unit that, for a period terminating forty-five (45) years from the
date of the closing of the initial sale of the Unit to a member of the home
buying public: (a) Affordable Housing Units designated in Attachment
No. 9 as being for sale to Very Low Income Households shall only be sold
to Very Low Income Households, (b) Affordable Housing Units designated
in Attachment No. 9 as being for sale to Lower Income Households shall
only be sold to Lower Income Households, and (c) Affordable Housing
Units designated in Attachment No. 9 as being for sale to Moderate
Income Households shall only be soM to Moderate Income Households.
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 7
The Developer also covenants and agrees for itself, its successors, its
assigns and every successor in interest to an Affordable Housing Unit,
that, for a period terminating forty-five (45) years from the date of the
closing of the sale of the Unit to an Owner-Occupier, as follows: (a) the
Affordable Housing Units designated in Attachment No. 9 as being for
sale to Very Low Income Households shall be sold only at a price not in
excess of an Affordable Housing Cost for Very Low Income Households,
the Affordable Housing Units designated in Attachment No. 9 as being for
sale to Lower Income Households shall only be sold at a price not in
excess of an Affordable Housing Cost for Lower Income Households, and
the Affordable Housing Units designated in Attachment No. 9 as being for
sale to Moderate Income Households shall only be sold at a price not in
excess of an Affordable Housing Cost for Moderate Income Households
and (b) the Affordable Housing Units will only be sold to and by an
eligible Household at an Affordable Housing Cost, and will only be
occupied by the purchasing Owner-Occupiers as their principal place of
residence, and (c) shall not be rented
13.2. 2 In order to impose upon purchasers of Affordable Housing
Units the obligations set forth above in Section O, concurrently with the
recordation of the grant deed for the Developer's conveyance of each
Affordable Unit, there shall be recorded against each Affordable Housing
Unit an "Affordable Housing Covenant, "substantially in the form of the
applicable covenant attached hereto as Attachment No. 14, and an
Affordable Housing Trust Deed
13.2.3 The Developer shall cause to be included in the grant deed
for each Affordable Housing Unit (a) references to the Affordable Housing
Covenant and the obligation of a Transferee of a Unit (as defined in the
Affordable Housing CovenanO to be bound by all the obligations of
Homeowner set forth in the Affordable Housing Covenant, (b) a reference
to the Affordable Housing Trust Deed (c) a reference to the Affordable
Housing Option Agreement, (d) a reference to the Reimbursement
Agreement, (e) a reference to the due on sale provisions of the Affordable
Housing Note, and 60 a covenant that will require the Transferee, and any
successor or assign of the Transferee, to include in any document
Transferring (as defined in the Affordable Housing CovenanO the Unit a
reference to the Affordable Housing Covenant, the Affordable Housing
Trust Deed the Affordable Housing Option Agreement, the
Reimbursement Agreement, the due on sale provisions of the Affordable
Housing Note, and the obligation of the Transferee to be bound by the
obligations set forth in the Affordable Housing Covenant, the Affordable
Housing Trust Deed, the Affordable Housing Option Agreement, the
Reimbursement Agreement and the due on sale provisions of the
Affordable Housing Note.
[AEF:dj~v/Parce134 MemorandumofDDA-91003/090903/4182.004] 8
13.2.4 In order to enable an owner of an Affordable Housing Unit
to comply with the obligations described in the Affordable Housing
Covenant, the City shall waive the right of the City to cause the Affordable
Housing Note secured by the Unit to be due and payable and the right of
the City to exercise its option to purchase set forth in the Affordable
Housing Option Agreement, provided that all of the following occur:
(a) the Unit is sold to an Owner-Occupier and not for rent; (b) the Unit is
sold at a price not in excess of the then appropriate Affordable Housing
Cost for the Unit; (c) the owner who intends to sell the Unit and all of that
owner's predecessors in interest have fully complied with the Affordable
Housing Covenant; (d) the purchaser agrees to be bound by the
Affordable Housing Covenant, the Affordable Housing Option Agreement
and the Reimbursement Agreement; (e) the purchaser agrees to increase
the amount of the Affordable Housing Note as provided in this Section, 09
the City receives a title policy, in an amount equal to the amount then due
on the Affordable Housing Note as increased as provided in this Section,
insuring the Affordable Housing Note Trust Deed as a monetary lien of
second priority subordinate in priority among monetary liens only to the
monetary lien of any purchase money deed of trust recorded at the time of
closing of the sale which deed of trust shall secure an amount not in
excess of the then fair market value of the Unit less the amount of the
Affordable Housing Note increased as provided in this Section, and (g) the
City is reimbursed for its costs related to the transaction. The amount due
on the Affordable Housing Note secured by the Affordable Housing Unit
being sold shall be increased by the amount by which the fair market
value of the Unit at the time of the closing of the sale is in excess of the
sum of(x) the amount of principaI and interest then payable on the
Affordable Housing Note secured by the Unit and (y) the Affordable
Housing Cost of such Unit as of the time of the closing of the sale. Except
for such increase in the amount of the Affordable Housing Note, the
Affordable Housing Note, the Affordable Housing Trust Deed the
Reimbursement Agreement and the Affordable Housing Option Agreement
shall remain in full force and effect.
13.2.5 The City and the Developer hereby agree that the
provisions of this Agreement relating to the Affordable Housing Covenant
are entered into in order to achieve a stabilized community of Owner-
Occupied Affordable Units and to enable the City and its successors and
assigns to enforce the Affordable Housing Covenant, that it is the intention
of the City and the Developer that the City and its successors and assigns
be empowered to enforce the covenants contained in the Affordable
Housing Covenant, that the Affordable Housing Covenant does empower
the City and its successors and assigns to enforce the covenants contained
in the Affordable Housing Covenant, and that the Affordable Housing
Covenant should be so construed and interpreted Notwithstanding any
other provision of this Agreement, W£ Homes shall not have liability for
any breach or default under the provisions of this Section 13.2 or any of
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 9
the documents referred to therein resulting from a breach or default
thereunder by a successor or assign of Developer which is an Owner-
Occupier.
13.3 Compliance with Government Health and Safety Code.
The City and the Developer hereby agree that the provisions of this
Agreement relating to Affordable Housing Units are entered into in order
to comply with Government Code Section 65915 and Health and Safety
Code Section 33413 and that such provisions fully satisfy the requirements
of such code section.
2.5 Right of Purchase.
Section 14.2.2(a) of the DDA provides as follows:
14.2.2 In the event the Developer is in Material Default, in
addition to whatever other rights the City may have in law or at equity, or
as otherwise provided in this Agreement, the City may do any or all of the
following:
(a) The City shall have the right (the "Right of Purchase'9, from
time to time, at any time within three (3) years after the date that the
Developer became in Material Default (provided that upon Developer's
cure of such Material Default, such right shall cease with respect to such
Material Default only), to purchase any, or all, Parcel(s), Lot(s) or Unit(s)
not sold by the Developer to an Owner-Occupier as of the date of the
election by the City to purchase said Parcel(s), Lot(s) or Unit(s) (for the
purposes hereof, "sold by the Developer" shall mean either to enter into a
binding contract for the sale of the Unit to an Owner-Occupier or to close
escrow for the sale of such Unit to an Owner-Occupier). The purchase
price for such Parcel(s), Lot(s) or Unit(s) shall be the greater of(i)
seventy-five percent (75%) of the Fair Market Value of said Parcel(s),
Lot(s) or Unit(s), as the case may be, determined in accordance with
Section 14.2.4 which Fair Market Value shall be that of each of the
Parcel(s), Lot(s) or Unit(s) in the condition it or they may be in (including
the obligation, if applicable, to sell the Units as Affordable Housing Units)
as of the date of election to purchase, and (ii) an amount which provides
sufficient net sales proceeds to pay a Permitted Mortgagee with a lien
upon the Parcel(s), Lot(s) or Unit(s) being purchased the following
amounts secured by such Parcel(s), Lot(s) or Unit(s): principal, accrued
and unpaid interest (including default interesO, late charges, foreclosure
costs, attorneys 'fees and out-of-pocket costs and expenses directly
incurred by the Permitted Mortgagee in acquiring the Parcel(s), Lot(s) or
Unit(s), and out-of-pocket costs and expenses directly incurred by the
Permitted Mortgagee in performing the obligations specified in
Section 2. 7. lO(d) with respect to the Parcel(s), Lot(s) or Unit(s), which
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 10
amount shall be paid to Developer upon the closing for the transfer of said
Parcel(s), Lot(s) or Unit(s). The Parties agree that the amount of
reduction in the Fair Market Value of the Parcel(s), Lot(s) or Unit(s), as
the case may be, bears a reasonable relationship to the damages which
the Parties estimate may be suffered by the City as the result of the
Developer's default in the performance of its obligations under this
Agreement, which damages wouM be impractical or extremely difficult to
quantify, that the deposit constitutes a reasonable estimate of the City's
damages in such event, and that the remedy provided for in this
Agreement is not a penalty or forfeiture, is necessitated by reason of the
obligations of the City to maintain Affordable Housing Units on the
Developer Parcel, and is a reasonable limitation on the Developer's
potential liability as a result of such default. In the event the City
exercises its right to purchase any Parcel(s), Lot(s) or Unit(s), as provided
in subsection, this Agreement shall terminate with respect to such
Parcel(s), Lot(s) or Unit(a) as may be purchased
(b) The City may sue for damages it may have incurred related to
any Parcel(s), Lot(s) or Unit(s) which the City has not elected to purchase
as provided in clause (a) above. In the event the City institutes legal
action to recover damages, the City's right to purchase the Parcel(s),
Lot(s) or Unit(s), as provided in clause (a) above, for which suit is
brought shall terminate and be of no further force or effect.
(c) The City may seek to specifically enforce the obligations of the
Developer.
(d) The City may terminate this Agreement with respect to all, or
any portion of the Developer Parcel.
(e) The City may exercise its Right of Reversion pursuant to
Section 16. 2.
2.6 The City's Right of Reversion.
Section 16.2 of the DDA provides as follows:
16.2 Right of Reversion. On the terms and subject to the conditions set forth in
this Section 16.2, the City shall have the right (the "Right of Reversion ") (a) to
terminate this Agreement as to (i) the Developer Parcel or any Parcel(s), Lot(s)
or Unit(s), or any portions thereof, directly impacted by the Material Default,
and/or (ii) any other portion of the Developer Parcel with respect to which the
Developer has not commenced construction of Vertical Improvements (as
applicable, the "Reversion Area") and (b) thereafter to re-enter the Reversion
Area and revest in the City the title in the Reversion Area or any portions thereof.
16.2.1 Conditions to Exercise. The provisions of this Section 16.2 shall
apply in the event that after the Closing any of the events or omissions set forth in
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 11
this Section 16.2.1 occur, which such events and omissions shall each be a
Potential Default:
(a) The development of the Project is delayed such that the
occurrence of any event described in the Schedule of Performance does
not occur on or before the date projected for its occurrence, as such date
may be extended by Force Majeure Delay.
(b) The Developer abandons or substantially suspends
construction of any Improvements for a period of ninety (90) days, which
90-day period shall be subject to Force Majeure Delay.
(c) The Developer, in violation of this Agreement, assigns this
Agreement, or any rights in this Agreement, or transfers, or suffers any
involuntary transfer of the Developer Parcel or the Developer's interest in
the Developer Parcel, or any part thereof
(d) Any voluntary or involuntary Ownership Transfer or
Transfer of Control, including any Foreclosure affecting all or any
portion of the Developer Parcel, by any Mortgagee, takes place without
express assumption by the Ownership Transferee of the Developer's
obligations under this Agreement in accordance with Section 2. 2. 8.
16.2.2 Reversion Conditions. Notwithstanding that such portion of the
Developer Parcel may be encumbered by one or more Mortgages or Permitted
Mortgages, the City shall be entitled to exercise its Right of Reversion with
respect to all or any portion of the Developer Parcel in the event of the following
(the "Reversion Conditions"):
(a) the occurrence of any of the events or omissions described in
Section 16.2.1 becoming a Material Default of the Developer and the provision of
written notice to the Developer and each Permitted Mortgagee as required by
Section 2. 7.13,
(b) provision by the City of notice in accordance with Sections 2. 7.14
and 1 7. 7 to each Permitted Mortgagee having a Permitted Mortgage on the
affected portion of the Site, of a Material Default by the Developer remaining
uncured after passage of the time periods set forth in this Agreement for cure
thereof by Developer, and
(c) failure of any Permitted Mortgagee to cure such Material Default
in accordance with Section 2. 7.14(b).
Notwithstanding the foregoing, if any Permitted Mortgagee has
commenced and diligently prosecuted to completion Foreclosure proceedings in
accordance with Section 2. 7.9, then (i) the City's right to exercise the Right of
Reversion triggered by such Material Default shall be stayed for a period of three
(3) years from the date upon which the Permitted Mortgagee or wholly-owned
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 12
designee obtains title to such portion of the Developer Parcel, and (ii) thereafter
may only be exercised with respect to that particular Material Default if such
Permitted Mortgagee or wholly-owned designee has not within such three (3)
year period either (x)(1) assumed all obligations of the Developer under this
Agreement, including the obligation to construct the Improvements in accordance
with a revised Schedule of Performance agreed to by the Permitted Mortgagee or
wholly-owned designee and the City and thus, to step into the role of Developer
hereunder and (2) commenced and diligently prosecuted to Completion the
construction of the Improvements or (y) soM the affected portion of the Developer
Parcel.
The satisfaction of the Reversion Conditions with respect to each
independent Material Default serves to trigger (or re-trigger) the City's Right of
Reversion, subject in each case to the potential stay set forth in the preceding
paragraph.
16.2.3 Exercise of Right of Rev ersion. So long as the Material Default
triggering the Right of Reversion has not been cured as of the date of exercise of
the Right of Reversion, the City may exercise its Right of Reversion at anytime
within one (1) year after such Right of Reversion could first be exercised with
respect to such Material Default. The City may exercise such right by delivery of
notice to (a) the Developer if no Foreclosure has occurred and (b) all Permitted
Mortgagees holding Permitted Mortgages with respect to the Reversion Area or
any portion thereof, provided that the Assistant City Manager shall not exercise
the City's Right of Reversion without first providing the Developer, if applicable,
and all Permitted Mortgagees holding Permitted Mortgages with respect to the
Reversion Area or any portion thereof a reasonable opportunity to address the
City Council at a public meeting. In the event of such termination of this
Agreement, this Agreement shall remain in full force and effect with respect to
portions of the Developer Parcel not so revested in the City, but the termination
of this Agreement shall only be effective as of the date title to the Reversion Area
is revested in the City.
3. Effect on Mortgaees: Ri~,ht To Encumber. Notwithstanding any other
provision of the DDA, the Developer shall have the right to encumber the fee title to
portiot)s of the Developer Parcel owned by it with a Permitted Mortgage made by a
Permitted Mortgagee subject to compliance with the terms, conditions and limitations set
forth in Section 2.7 of the DDA. Mortgages complying with the terms of said section and
entered into by Developer with Permitted Mortgagees shall be deemed to be "Permitted
Mortgages"; provided, however that all Mortgages shall be subject and subordinate to
the DDA, including, without limitation, unless such Mortgage is a Senior Obligation as
provided in Section 16.3.2, the City's Right of Reversion and Right of Purchase.
4. Subsequent Participation. The sale and conveyance of the Property by the City
to the Developer is subject to the Developer's payment to the City, in addition to the Base
Purchase Price, of the "Subsequent Participation" as set forth in Section 4.2.3 o£the
DDA, which is due and payable subsequent to the conveyance of Parcel I-B-1 by the City
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182,004] 13
to the Developer and which is secured by "Subsequent Participation Deed of Trust"
executed and recorded by the Developer of even date with the execution and recordation
of this Memorandum of DDA by the City and the Developer.
5. Certificate of Compliance. Upon the Developer's satisfaction of the Conditions
Precedent set forth in Section 9.6.2 of the DDA with respect to either a Partial or Final
Certificate of Compliance, the City shall furnish the Developer with the appropriate
Certificate of Compliance in recordable form upon written request therefor by the
Developer. Such Certificate of Compliance shall be binding upon the parties to this
Memorandum of DDA, their successors and assigns, and shall be deemed the City's
conclusive determination of satisfactory Completion of the Improvements covered by
such Certificate of Compliance and compliance with all other conditions required by the
DDA, subject only to such continuing terms of the DDA and/or obligations of the
Developer as are set forth therein.
6. DDA and Memorandum of DDA Run With the Land. The DDA and this
Memorandum of DDA, including, without limitation, the provisions recited and set forth
above, and all other obligations, agreements, covenants, conditions and restrictions set
forth in the DDA and this Memorandum of DDA, are hereby agreed by the Developer
and the City to be covenants running with the land and enforceable as equitable
servitudes against the Developer Parcel, and are hereby declared to be and shall be
binding upon the Developer Parcel and the Developer and the successors and assigns of
the Developer owning all or any portion of the Developer Parcel for the benefit of the
City Benefited Property (legally described on Attachment No. 2 attached hereto) and the
City and the successors and assigns of the City owning all or any portion the City
Benefited Property.
7. Acknowledgment and Assumption by Developer. By acceptance of the
Quitclaim Deed the Developer hereby acknowledges and assumes all responsibilities
placed upon the Developer under the terms of the Quitclaim Deed and DDA.
8. Public Documents. The documents constituting the DDA are public documents
and may be reviewed at the official offices of the City.
9. Interpretation; Notice. This Memorandum of DDA is prepared for recordation
and notice purposes only and in no way modifies the terms, conditions, provisions and
covenants of the DDA. In the event of any inconsistency between terms, conditions,
provisions and covenants of this Memorandum of DDA and the DDA, the terms,
conditions, provisions and covenants of the DDA shall prevail.
10. Attachments. The Attachments attached to this Memorandum of DDA are
hereby incorporated by this reference into this Memorandum of DDA as though fully set
forth in this Section.
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 14
IN WITNESS WHEREOF, the City and the Developer have signed this Memorandum of
DDA as of the date first set forth above.
City of Tustin
Dated: By:
ATTEST:
By:
Pamela Stoker
City Clerk
Dated:
APPROVED AS TO FORM
Special Counsel for the City
GILCHRIST & RUTTER
PROFESSIONAL CORPORATION
William Huston, City Manager
By:
WL HOMES LLC, a Delaware limited
liability company
By:
Steve Kabel
President,
Southern California Region
By:
Mitchell Bradford
Vice President,
Southern California Region
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182.004] 15
STATE OF CALIFORNIA )
) SS.
COUNTY OF ORANGE )
On ., before me,
Public in and for said state, personally appeared
., a Notary
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
Notary Public in and for said
State
[AEF:djw/Parce134 Memorandum of DDA-91003/090903/4182.004] 16
STATE OF CALIFORNIA )
) SS.
COUNTY OF ORANGE )
On , before me,
Public in and for said state, personally appeared
., a Notary
_, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182.004] 17
ATTACHMENT 1
LEGAL DESCRIPTION OF DEVELOPER PARCEL
(PARCEL I-B-l)
[To Be Attached]
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182.004]
ATTACHMENT 2
CITY BENEFITED PROPERTY
[To Be Attached]
[AEF:djw/Parcel 34 Memorandum of DDA-91003/090903/4182.004]
ATTACHMENT NO. 12
BILL OF SALE
[AEF:ab/1DOCS2_9096~7/090903/4182.004] Attachment No. 12 - Page 1 Bill of Sale
ATTACHMENT NO. 12
BILL OF SALE
FOR FORMER MILITARY PERSONAL PROPERTY
LOCATED AT
THE FORMER MARINE CORPS AIR STATION, TUSTIN
This Bill of Sale ("Bill of Sale") dated as of October , 2003 is made by and
between the CITY OF TUSTIN, a municipal corporation organized under the laws of the State of
California ("City"), acting in its capacity as the Local Redevelopment Authority for the
disposition and conveyance of portions of the former Marine Corps Air Station, Tustin,
Califomia, and the WL HOMES LLC, a Delaware limited liability Company ("Developer").
RECITALS
A. Pursuant to the Agreement Between the United States of America and the City of
Tustin, California For the Conveyance of a Portion of the Former Marine Corps Air Station
Tustin, dated May 13, 2002 ("Conveyance Agreement") dated May 13, 2002, the Federal
Government through the Secretary of the Navy ("Navy") conveyed or leased to the City portions
of the former Marine Corps Air Station Tustin ("City Property"), which includes, without
limitation, Parcel I-B-1.
B. The City and Developer entered into that certain Tustin Legacy Disposition and
Development Agreement for Parcel 34, dated September __, 2003 (the "DDA") for, among other
things, the conveyance of a portion of Parcel I-B-1 (the parcel to be conveyed is defined in the
DDA as the "Developer Parcel") from the City to Developer by quitclaim deed. Initially
capitalized terms used and not otherwise defined in this Bill of Sale shall have the meanings set
forth in the DDA.
C. Pursuant to this Bill of Sale, the City will transfer to the Developer (1) all tangible
personal property appurtenant to the Developer Parcel ("Miscellaneous Personal Property"),
and (2) all utility distribution systems owned by the City and located on the Developer Parcel (as
more fully described in Exhibit "A", the "Utility Systems" and, collectively with Miscellaneous
Personal Property, "Personal Property").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other consideration
set forth herein, it is mutually agreed as follows:
1. Transfer. For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the City hereby grants, releases, quitclaims and transfers title and
ownership of (a) the Miscellaneous Personal Property and (b) the Utility Systems described in
Exhibit "A," attached hereto and made a part hereof.
[JW:ab/Bill of Sale Parcel 34-91003/090903/4182.004]
BILL OF SALE FOR PERSONAL PROPERTY
WL HOMES
2. Utility Systems Alteration. Developer agrees not to alter, modify, repair, replace, or
relocate (each an "Alteration") any part of the Utility Systems without the prior written consent
of the City, which the City shall not unreasonably withhold, provided that it shall be deemed
reasonable for the City to withhold its consent to such Alteration if the City determines that such
Alteration may interfere with the construction and operation of the Project, may negatively
impact public health and safety, may negatively impact the logical and orderly future phasing of
Tustin Legacy Backbone Infrastructure Work, or may interfere with the development or reuse of
any portion of MCAS Tustin.
3. Reversion. In the event of a breach of any of the terms or conditions of this Bill of Sale,
or upon the exercise of the City's "Right of Reversion" pursuant to Section 16.2 of the DDA or
the provisions of any quitclaim deed conveying any portion of the Developer Parcel from the
City to the Developer, whether caused by the legal or other inability of Developer, its successors
and assigns, to perform any of the terms and conditions of this Bill of Sale, the DDA or such
quitclaim deeds, at the option of the City, all right, title and interest in and to the Personal
Property shall, upon written notice from the City to Developer, pass to and become the property
of the City, which shall have an immediate right to the Personal Property, and Developer, its
successors and assigns, shall forfeit all right, title, and interest in and to such Personal Property.
The Developer hereby agrees for itself and its successors and assigns to execute any
assigmnents, transfers of title, bills of sale or other documents to effectuate the foregoing.
4. Former Military Property; No Warranty. The Personal Property sold under this Bill
of Sale was acquired by the City from the Navy by reason of the closure of the former Marine
Corps Air Station, Tustin. Buyer hereby understands and acknowledges that the City has no
knowledge and makes no representations as to the accuracy of the description of the Utility
Systems in Exhibit "A" or the Personal Property's fitness, adequacy or safety for any particular
purpose. The Personal Property is delivered to Buyer "as is," "where is," and City makes no
warranty of any kind, and particularly no warranty as to its usability generally or as to its fitness
or safety for any particular purpose.
5. Indemnification. The City shall not be responsible for, and the Developer agrees that it
shall be responsible for and at all times relieve, indemnify, protect, defend and hold harmless the
City and all of its officers, agents and employees from any and all claims and demands, actions,
proceedings, losses, liens, costs and judgments of any kind and nature whatsoever, including
expenses incurred in defending against legal actions, for death or injury to persons or damage to
property and for civil fines and penalties arising or growing out of, or in any manner connected
with, any Alteration of the Utility Systems (whether or not consented to by the City) or
Developer's failure to obtain consent prior to any such Alteration, or the ownership, use,
operation, maintenance, storage, sale or lease of any Personal Property transferred under this Bill
of Sale.
[remainder of page intentionally blank]
[JW:ab/Bill of Sale Parcel 34-91003/090903/4182.~4]
BILL OF SALE FOR PERSONAL PROPERTY
WL HOMES
IN WITNESS WHEREOF, the parties hereto have, on the respective dates set forth
below, duly executed this contract.
CITY OF TUSTIN
By:
William Huston, City Manager
ATTEST:
By:
Pamela Stoker
City Clerk
APPROVED AS TO FORM
Special Counsel for the City
GILCHRIST & RUTTER
PROFESSIONAL CORPORATION
By:
WL HOMES LLC, a Delaware limited liability
company
By:
Steve Kabel
President, Southern California Region
By:
Mitchell Bradford
Vice President, Southern Califomia Region
[JW:ab/Bill of Sale Parcel 34-91003/090903/4182.904]
BILL OF SALE FOR PERSONAL PROPERTY
WL HOMES
EXHIBIT "A"
Utility Distribution Systems Located on the Developer Parcel ("Utility Systems") as
follows:
All current City-owned electrical, gas, telephone and cable television systems, including
distribution lines, pad mounted and overhead distribution poles and/or transformers, on the
Developer Parcel, and all conduits and duct banks from outlet or master meters or connection
points currently owned by the City on the Developer Parcel to end usage points on the Developer
Parcel; all City-owned water, sewer, and storm drain systems (does not include culvert ditches),
including distribution lines and pipelines from outlet or master meters or connection points
currently owned by the City on the Developer Parcel to end usage points on the Developer
Parcel.
[JW:ab/Bill of Sale Parcel 34-91003/090903/4182.~04]
ATTACHMENT NO. 13
AFFORDABLE HOUSING NOTE
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 13 Page I Housing Note
Attachment To be Inserted Prior to
Execution
ATTACHMENT NO. 14
AFFORDABLE HOUSING COVENANTS
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 14 - Page 1 Affordable Housing Covenants
Attachment To be Inserted Prior to
Execution
ATTACHMENT NO. 15
AFFORDABLE HOUSING TRUST DEED
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 15 - Page 1 Affordable Housing Trust Deed
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:
[SPACE ABOVE LINE FOR RECORDER'S USE ONLY]
AFFORDABLE HOUSING DEED OF TRUST WITH ASSIGNMENT OF RENTS
This AFFORDABLE HOUSING DEED OF TRUST WITH ASSIGNMENT OF RENTS (this "Deed of
Trust"), made between ., herein called "Trustor", whose address is
., and , herein called
"Trustee", whose address is ., for the benefit of the CITY OF
TUSTIN, a municipal corporation, herein called "Beneficiary".
W1TNESSETH:Trustor hereby grants, transfers and assigns to Trustee in trust, with power of sale, that
certain property in the City of Tustin, County of Orange, State of California, described as:
See Exhibit "A" attached hereto,
together with the rents, issues and profits thereof, subject, however, to the right, power and authority
hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for
the purpose of securing (1) the payment of the sum of $ , with interest
thereon according to the terms of a promissory note of even date herewith ("Note") made by Trustor
payable to the order of Beneficiary, and extensions or renewals thereof, (2) payment of any sums
advanced on behalf of Trustor according to the terms of a reimbursement agreement of even date herewith
("Reimbursement Agreement") made by Trustor and Beneficiary, and extensions and renewals thereof,
(3) the performance of each agreement and obligation of Trustor according to the terms of an affordable
housing covenant of even date herewith ("Affordable Housing Covenant") made by Trustor in favor of
Beneficiary, and extensions and renewals thereof, (4) the performance of each agreement of Trustor
incorporated by reference or contained herein, and (5) payment of additional sums and interest thereon
which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory
note or notes reciting that they are secured by this Deed of Trust.
A. To protect the security of this Deed of Trust, Trustor agrees:
1) To keep such property in good condition and repair, not to remove or demolish any
building thereon; to complete or restore promptly and in good and workmanlike manner any building
which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefore, to comply with all laws affecting such property or requiring
any alterations or improvements to be made thereon, not to commit or permit waste thereof; not to
commit, suffer or permit any act upon such property in violation of law; to cultivate, irrigate, fertilize,
[AEF:djw/IDOCS2_93986_I 1/090903/4182.004] 1
fumigate, prune and do all other acts which from the character or use of such property may be reasonable
necessary, the specific enumerations herein not excluding the general.
2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with
loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be
applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may
determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released
to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder
or invalidate any act done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of
evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which
Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
4) To pay, at least ten (10) days before delinquency all taxes and assessments affecting
such property, including assessments on appurtenant water stock; when due, all encumbrances, charges
and liens, with interest, on such property or any part thereof, which appear to be prior or superior hereto;
all costs, fees and expenses of this Deed of Trust.
In the event that Trustor fails to make any payment or to do any act as herein provided, then Beneficiary
or Trustee may (but without obligation so to do, and without notice to or demand upon Trustor and
without releasing Trustor from any obligation hereof) make or do the same in such manner or to such
extent as either may deem necessary to protect the security thereof, Beneficiary or Trustee being
authorized to enter upon such property for such purposes; appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase,
contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be
prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and
pay his or her reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof;
and to pay for any statement provided for by law in effect at the date hereof regarding the obligation
secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at
the time when such statement is demanded.
B. It is mutually agreed:
1) That any award of damages in connection with any condemnation for public use of or
injury to such property or any part thereof is hereby assigned and shall be paid to Beneficiary who may
apply or release such moneys received by it in the same manner and with the same effect as above
provided for disposition of proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date, Beneficiary
does not waive its right either to require prompt payment when due of all other sums so secured or to
declare default for failure so to pay.
3) That at any time or from thne to time, without liability therefor and without notice, upon
written request of Beneficiary and presentation of this Deed of Trust, or a copy thereof; and without
affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee
[AEF:djw/IDOCS2_93986_l 1/090903/4182.004] 2
may: reconvey any part of such property; consent to the making of any map or plat thereof; join in
granting any easement thereon, or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured hereby have been
paid, and upon surrender of this Deed of Trust, or a copy thereof; and upon payment of its fees, Trustee
shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of
any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled thereto."
5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the
right, power and authority, during the continuance of this Deed of Trust, to collect the rents, issues and
profits of such property, reserving unto Trustor the right, prior to any default by Trustor in payment of
any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such
rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any
time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without
regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take
possession of such property or any part thereof; in his own name sue for or otherwise collect such rents,
issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and
in such order as Beneficiary may determine. The entering upon and taking possession of such property,
the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or
waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of any indebtedness secured hereby or in
performance of any agreement hereunder (including, without limitation, any default under the Note,
Reimbursement Agreement or Affordable Housing Covenant), Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration of default and demand
for sale and of written notice of default and of election to cause to be sold such property, which notice
Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust
and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of
such notice of default, and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell such property at the time and place affixed by it in such notice of sale, either
as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest
bidder for cash, in lawful money of the United States, payable at time of sale. Trustee may postpone sale
of all or any portion of such property by public announcement at such time and place of sale, and from
time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding
postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or
Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Deed of Trust,
including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to
payment of: all sums expended under the terms hereof and not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder,
if any, to the person or persons legally entitled thereto.
[AEF:djw/IDOCS2_9398611/090903/4 t 82.004] 3
7) That Beneficiary, or any successor in interest to any obligation secured hereby, may
from time to time, by instrument in writing, substitute a successor or successors to any Trustee named
herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and
recorded in the office of the recorder of the county or counties where such property is situated shall be
conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without
conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Such
instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book
and page where this Deed of Trust is recorded and the name and address of the new Trustee.
8) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors and assigns. In this Deed of Trust,
whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.
9) That Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party
hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
10) That Trustor agrees for itself and its successors and assigns, and every successor to
Trustor's interest in such property, or any part thereof, to abide by the terms of the Affordable Housing
Covenant during the Affordability Period, including, without limitation, each of the following conditions.
All capitalized terms used in this Section 10 and which are not defined shall have the meaning ascribed to
such terms under the Affordable Housing Covenant.
(a) Such property shall not be Transferred except to Permitted Transferees in
accordance with the requirements of Section 4 of the Affordable Housing Covenant; and
(b) Such property shall be subject to (i) the Further Encumbrance limitations set
forth under Section 5(c) of the Affordable Housing Covenant, and (ii) the terms and conditions of the
Reimbursement Agreement and the Option Agreement.
The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder
be mailed to him at his address hereinbefore set forth.
Signature of Trustor
Signature of Trustor
Name:
Name:
Dated
manle~
[AEF:djw/IDOCS2_93986_l 1/090903/4182.004] 4
EXHIBIT "A"
LEGAL DESCRIPTION OF UNIT
(to be attached)
[AEF:djw/IDOCS2_93986_l 1/090903/4182.004] Exhibit "A"
STATE OF CALIFORNIA
COUNTY OF
On before me,
a Notary Public in and for said County and State, personally appeared
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(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(les), 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.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
STATE OF CALIFORNIA
COUNTY OF
On before me,
a Notary Public in and for said County and State, personally appeared
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(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.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
[AEF :dj w/IDOCS2_93986_l 1/090903/4182.004]
DO NOT RECORD
REQUEST FOR FULL RECONVEYANCE
TO .............. .,TRUSTEE:
The undersigned is entitled to the indebtedness secured by the foregoing Deed of Trust. Such indebtedness
secured by such Deed of Trust, has been fully paid and satisfied and you are hereby requested and directed, on
payment to you of any sums owing to you under the terms of such Deed of Trust, to cancel any evidences of
indebtedness secured by such Deed of Trust delivered to you herewith, together with such Deed of Trust, and to
reconvey, without warranty, to the parties designated by the terms of such Deed of Trust, all the estate now held by
you under the same.
Dated
Please mail Deed of Trust
and Reconveyance to:
Do not lose or destroy this Deed of Trust or the evidences of indebtedness it secures. They must be
delivered to the Trustee for cancellation before reconveyance will be made.
[AEF :dj w/IDOCS2_93986_l 1/090903/4182.004]
Leases
None
ATTACHMENT NO. 16
LEASES AND CONTRACTS
Contracts
Maintenance Contract between the City and JHTM which will be modified prior to Close of
Escrow to delete the Developer Parcel.
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 16 - Page 1 Leases and Contxacts
ATTACHMENT NO. 17
AFFORDABLE HOUSING UNIT PHASING PLAN
i 22 14 11 36
2 18 12 10 30
3 23 12 10 35
4 24 13 9 37
5 23 23
6 28 28
TOTAL /38 51 40 189
Rules governing close of escrow for non-Affordable Housing Units.**
1. The Developer shall not close escrow for any Unit in Phase 2 or in any subsequent Phase,
regardless of product type, unless and until the Developer has Completed all of the Affordable
Housing Units in Phase 1.
2. For Units in Phase 2 and for Units in all subsequem Phases, the Developer shall not close
escrow for any Unit other than an Affordable Housing Unit unless the Developer has Completed
one Affordable Housing Unit for every six closings of non-Affordable Housing Units.
3. Notwithstanding the foregoing, the Developer shall be prohibited from closing escrow on
the final 20 non-Affordable Housing Units in the Project, regardless of Phase, until Completion
of all of the Affordable Housing Units in the Project.
All Affordable Housing Units are located in Patio Townhouses.
All initially capitalized terms used in this Attachment have the meaning set forth therefor in the Agreement.
[AEF:ab/IDOCS2_90960_7109090314182.004] Attachment No. 17 - Page 1 Affordable Housing Unit Phasing Plan
ATTACHMENT NO. 18
FORM OF CERTIFICATE OF COMPLIANCE
[AEF:ab/IDOCS2_90960_7/090903/4182.004] Attachment No. 18 - Page 1 Form of
Certificate of Compliance
CITY OF TUSTIN
OFFICIAL BUSINESS
REQUEST DOCUMENT
TO BE RECORDED AND
TO BE EXEMPT FORM
RECORDING FEES PER
GOVERNMENT CODE
6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER'S USE
[PARTIAL/FINAL] CERTIFICATE OF COMPLIANCE
FOR [PHASE __ OF] PARCEL 34
THIS [PARTIAL/FINAL] CERTIFICATE OF COMPLIANCE ("Certificate of
Compliance") is made as of ,20__ by the CITY OF TUSTIN, a
municipal corporation of the State of California ("City"), in favor of WL HOMES LLC,
a Delaware limited liability company (the "Developer"), with reference to the following
matters:
A. The City and the Developer have entered into that certain Tustin Legacy
Disposition and Development Agreement for Parcel 34, dated as of September __,
2003 (the "DDA"), which is incorporated herein by reference, as evidenced by that
certain Memorandum of Tustin Legacy Disposition and Development Agreement for
Parcel 34 ("Memorandum of DDA"), dated for reference as of September _, 2003,
and recorded in the official records of Orange County, California. All initially
capitalized terms not otherwise defined herein shall have the meanings assigned to them
in the DDA.
B. Pursuant to the DDA, the Developer agreed to develop and construct
certain Improvements comprising the Project on the Project Site which consists of(i)
that certain real property (the "Developer Parcel") described on Exhibit "A" attached
hereto and incorporated herein by this reference and (ii) the City Dedication Parcels and
(iii) certain additional property owned by the City upon which off-site infrastructure and
Tustin Legacy Backbone Infrastructure Improvements are to be constructed by
Developer.
C. Pursuant to Article 9 of the DDA, the City agreed to furnish to the
Developer, upon request therefor by the Developer, (a) a Partial Certificate of
Compliance in recordable form upon satisfaction of the Conditions Precedent to issuance
of a Certificate of Compliance set forth in Section 9.6.2 of the DDA relating to each
Phase (including, without limitation, Completion of all Improvements for each such
Phase in accordance with the terms and conditions of the DDA), and (b) a Final
[AEF:yb/Parcel 34 Certificate of Compliance91003/091003/4182.0Q4]
Certificate of Completion in recordable form upon satisfaction of the Conditions
Precedent to issuance of a Certificate of Compliance set forth in Section 9.6.2 of the
DDA relating to all of the Improvements for the Project (including, without limitation,
Completion of all Improvements for the Project on the Project Site in accordance with the
terms and conditions of the DDA).
D. The City has determined that the Developer has satisfied the Conditions
Precedent set forth in Section 9.6.2 of the DDA for the City's issuance of a
[Partial/Final] Certificate of Compliance. Jif partial: with respect to Phase __ of the
Project, as depicted on the map attached to this Certificate as Exhibit "B"I.
NOW, THEREFORE, the City certifies as follows:
1. This Certificate of Compliance covers and applies to [that portion of the
Improvements and Project referred to by Developer as Phase , as more
particularly depicted or described on Exhibit "B" attached hereto and incorporated
herein by this reference] [the entirety of the Improvements and Project on the
Project Site as defined above], (the "Certified Improvements").
2. This Certificate of Compliance shall be deemed conclusive evidence of the
City's determination that the Developer has satisfactorily Completed all construction and
development with respect to [the Project/Phase __ of the Project] and performed all of
the Developer's obligations set forth in Section 9.6.2 of the DDA for issuance of this
Certificate.
3. Upon recordation of this Certificate, the DDA shall terminate and shall be
of no further force and effect as to, and only as to, the Certified Improvements (including
that portion of the Developer Parcel upon which the Certified Improvements are
constructed), except that the following matters which, except as listed in Section 3(c)
below, are set forth in detail in the Quitclaim Deed and/or the Memorandum of DDA,
shall survive the termination thereof and shall not merge with any deed on any transfer of
any portion of the Developer Parcel, and shall survive the issuance of this Certificate of
Compliance and all future Certificates of Compliance in perpetuity:
(a) the provisions of Section 4.4.2 of the DDA, including the Release
set forth in Section 4.4.2(e) of the DDA;
(b) the covenants set forth in Sections 12.3 through 12.5 of the DDA;
(c) the Affordable Housing Covenant, Affordable Housing Trust
Deed, Affordable Housing Note, Affordable Housing Option Agreement and the
Reimbursement Agreement or any successor instruments thereto, each of which shall
remain in effect for each Affordable Unit for a period of 45 years from the date of close
of escrow of said Unit to a member of the home-buying public;
(d) the environmental indemnity set forth in Section 10.2 of the DDA
which shall remain in effect and shall bind the Developer and its personal successors and
assigns but shall not be binding upon Owner-Occupiers of Units; and
(e) any and all obligations contained in the Federal Deed, unless such
obligations are released by the Federal Government.
[AEF:yb/Parcel 34 Certificate of Compliance91003/091003/4182.~4]
4. This Certificate of Compliance shall not constitute evidence of compliance
with or satisfaction of any obligation of the Developer to any holder of a mortgage, or
deed of trust or any insurer of a mortgage, or deed of trust securing money loaned to
finance the Improvements or any part thereof.
5. This Certificate of Compliance is not a Notice of Completion as referred
to in California Civil Code Section 3093.
6. Except as stated herein, nothing contained in this instrument shall modify
in any way any other provisions of the DDA or any other provisions of the documents
incorporated herein.
IN WITNESS WHEREOF, the City has caused this [Partial/Final] Certificate of
Compliance to be duly executed by its officer duly authorized as of the date first above
written.
CITY OF TUSTIN
Dated:
ATTEST:
By:
Name:
Title:
By:.
Name:
Title:
APPROVED AS TO FORM:
By:
Its:
[AEF:yb/Parcel 34 Certificate of Compliance91003/091003/4182.~4]
STATE OF CALIFORNIA
COUNTY OF ORANGE
On , before me, ., a Notary
Public in and for said state, personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instnnnent, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
Notary Public in and for said
State
[AEF:yb/Parcel 34 Certificate of Compliance91003/091003/4182. ~4]
EXHIBIT "A"
Description of Developer Parcel
[To Be A~tached]
[AEF:yb/Parcel 34 Certificate of Compliance91003/091003/4182.004]
EXHIBIT "B"
Certified Improvements Description and Map
[To Be Attached to Partial Certificate of Compliance]
[AEF:yb/Parcel 34 Certificate of Compliance91003/091003/4182.004]
ATTACHMENT NO. 19
SUBORDINATION (WITH CITY ACKNOWLEDGEMENT AND CONSENT)
[AEF:ab/IDOCS2 90960_7/090903/4182.004] Attachment No. 18 - Page 1 Form of
Certificate of Compliance
Attachment To be Inserted Prior to
Execution