HomeMy WebLinkAboutRDA 1 DDA 04-02 10-18-04
AGENDA REPORT
Agenda Item RDA 1
Reviewed: ~
City Manager
Finance Director
MEETING DATE: OCTOBER 18,2004
FROM:
WILLIAM A. HUSTON, EXECUTIVE DIRECTOR
REDEVELOPMENT AGENCY STAFF
TO:
SUBJECT:
APPROVAL OF DISPOSITION AND DEVELOPMENT AGREEMENT 04-02 FOR
THE PROPOSED PROJECT LOCATED IN THE TOWN CENTER
REDEVELOPMENT AREA PROJECT
SUMMARY
The Community Redevelopment Agency (the "Agency") is being asked to adopt the
resolution approving the Disposition and Development Agreement 04-02 (DDA) with
Makena Great American Newport Company, LLC, for the development of a 7,400
square foot retail building at the southwest corner of EI Camino Real and Newport
Avenue.
RECOMMEDATION
Staff recommends that the Agency adopt Resolution No. RDA 04-07 approving the DDA
04-02 between the Agency and Makena Great American Newport Company, LLC, and
authorize the Executive Director to take such actions and execute such documents and
instruments, with such minor changes, additions, or deletions as may be approved by
the City Attorney, as deemed necessary or desirable for implementation of the DDA.
FISCAL IMPACT
A fiscal analysis of the proposed DDA is provided in the report prepared pursuant to
Health and Safety Code Section 33433 and attached as Exhibit A to Resolution No. 04-
85. There will be no fiscal impact to the Agency for the construction of private
improvements pursuant to the DDA (Attachment B - Disposition and Development
Agreement 04-02).
BACKGROUND
In April, 2004, the Agency approved an Exclusive Agreement to Negotiate a Disposition
and Development Agreement with Makena Great American Newport Company, LLC (the
"Developer") in response to the Developer's request for assistance in purchasing a
Makena Great American Newport Company DDA
October 4, 2004
Page 2
Caltrans surplus site located along the 1-5 freeway for the purpose of assembling larger
site for development of a retail center located at 14001 Newport Avenue. The Caltrans
surplus site is contiguous to the southerly boundary of the Newport Avenue property
owned by the Developer, which is formerly the site of Tustin Transmission and is currently
vacant and in need of redevelopment.
The Exclusive Agreement to Negotiate was to allow the Developer to proceed in
completing preliminary designs drawings, detailed economic and cost evaluations, and to
allow him to begin serious discussions on the necessary financing for the project. During
the Exclusive Right to Negotiate period, the Agency was to use its reasonable and best
efforts to acquire the Caltrans surplus site to be subsequently sold to the Developer. On
July 29, 2004 the Agency adopted Resolution RDA 04-06 approving the acquisition of real
property and entered a Purchase and Sale Agreement with the California State
Department of Transportation for the Caltrans surplus site.
DISCUSSION
Redevelopment Agency Staff have prepared the proposed Disposition and
Development Agreement 04-02 between the Redevelopment Agency and Makena
Great American Newport Company. The DDA provides for the payment by Developer
to Agency of a purchase price of $189,000 plus acquisition costs incurred by the
Agency for the Agency's purchase of the Caltrans surplus site. The purchase price to
be paid is greater than the appraised fair market value and the reuse value of the land
and is equal to the Agency's cost of acquiring the property, thus not requiring any public
subsidy for the construction of the private improvements on the Site.
The DDA requires the Developer to secure all required land use entitlements from the
Tustin Planning Commission and City Council, and to obtain private funds necessary for
all project costs, including but not limited to, the acquisition of the site, construction of all
on-site improvements and all related private improvements as identified in the DDA related
to developing the site. The site improvements will be constructed in compliance with all
provisions of the DDA and with all "Conditions of Approval" stipulated by the Tustin
Planning Commission, the City Council, and other applicable governmental agencies
having jurisdiction. The DDA also requires the developer to provide an irrevocable offer
to dedicate in fee to the City of Tustin at no cost the easterly ten feet along Newport
Avenue for future roadway improvements.
Makena Great American Newport Company DDA
October 4, 2004
Page 3
Following the public hearing on September 27, 2004, the Planning Commission adopted
(5-0 vote) Resolution No. 3931 finding the disposition of property by the Tustin Community
Redevelopment Agency for the proposed Project is in conformance with the Tustin
General Plan. In addition, since the site is being purchased by Tustin Community
Redevelopment Agency, Health and Safety Code Section 33433 requires the legislative
body (the Tustin City Council), after a public hearing, to approve an Agency sale of
property that was acquired in whole or in part with tax increment moneys. Resolution No.
04-85 includes findings pursuant to Section 33433 which were considered by the City
Council.
The proposed property sale and infill redevelopment may be categorically exempt from
the regulations of the Environmental Quality Act pursuant to Section 15332 (Class 32)
of the California Code of Regulations, Title 14, Chapter 3 (Guidelines for the California
Environmental Quality Act). The Community Redevelopment Agency has made such a
determination for this project. Such determination is on file with the Redevelopment
Agency.
CONCLUSION
The proposed project is consistent with the Implementation Plan's five year plan for
redevelopment activities in the Town Center Redevelopment Project Area. The proposed
project will remove a blighting influence and contribute to economic revitalization in the
Project Area by removing vacant deteriorating buildings and developing a retail project
consisting of a 7,400 square foot commercial building.
Attached are the proposed Disposition and Development Agreement, the Section 33433
Summary Report, and the proposed resolution.
Ø!:~
Redevelopment Program Manager
S:IRDAIRDA reportlDc! 4 04 Makena Great American DDA.doc
Attachments
RESOLUTION NO. RDA 04-07
A RESOLUTION OF THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY APPROVING A
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR A 0.68-ACRE PROPERTY LOCATED AT
14001, 14011 NEWPORT AVENUE AND 770 EL
CAMINO REAL
The Tustin Community Redevelopment Agency of the City of Tustin does hereby
resolve as follows:
I. The Tustin Community Redevelopment Agency (the "Agency") finds and
determines as follows:
A.
The Agency is engaged in implementation of the "Redevelopment Plan"
for the Town Center Area Redevelopment Project (the "Redevelopment
Project"); and
B.
Section 33430 of the California Community Redevelopment Law (Health &
Safety Code 33000, et seq.: "CRL") authorizes the Agency to sell or lease
real property for redevelopment purposes; and
C.
In order to implement the Redevelopment Plan, the Agency proposes to
enter into a certain Disposition and Development Agreement (the "DDA"),
with Makena Great American Newport Company, LLC, a California Limited
Partnership (the "Developer") pursuant to which (a) the Agency would sell
to Developer that certain Agency-owned real property located at the
southwest corner of EI Camino Real and Newport Avenue ("Caltrans
Parcel") to be assembled with the Developer-owned property located at
770 EI Camino Real and 14001 Newport Avenue ("Developer Parcel")
(collectively the "Property"); (b) Developer would construct a 7,400 square
feet retail project on the Site (the "Project"); and
D.
In its current condition, the Property is a blighting influence on the
Redevelopment Project area; and
E.
The Project will remove the blighting influence described above and
provide a mixed-use retail, office and live-work market rate housing
project; and
F.
Pursuant to Section 33433 of the CRL, the Agency is authorized to sell or
lease property acquired in whole or in part from tax increment moneys for
Resolution No. RDA 04-07
Page 2
development pursuant to the Redevelopment Plan with the approval of the
City Council of the City of Tustin after public hearing;
G.
Agency staff has prepared, and the City Council has reviewed and
approved a report pursuant to Section 33433 (a)(2) of the CRL in
connection with the DDA setting forth:
(a) A copy of the proposed sale documents, i.e. the DDA;
(b) A summary which describes and specifies all of the following:
(i) The cost of the DDA to the Agency, including land acquisition
costs, clearance costs, relocation costs, the cost of improvements
to be made by the Agency, plus the expected interest on any loans
or bonds to finance the agreements; and
(ii) The estimated value of the interests to be sold to Developer,
determined at the highest and best uses permitted under the plan;
and
(iii) The estimated value of the interests to be sold, determined at
the uses and with the conditions, covenants and development costs
required by the sale; and
H.
(iv) An explanation of why the sale of the property will assist in the
elimination of blight with reference to all supporting facts and
materials needed upon making this explanation.
The DDA contains all of the terms, covenants, conditions, restrictions,
obligations and provisions required by state and local law; and
I.
The Agency has duly considered all of the terms and conditions of the
DDA and believes that the Project is in the best interests of the City of
Tustin and the health, safety, morals and welfare of its residents, and is in
accord with the public purposes and provisions of applicable state and
local law and requirements; and
Pursuant to the California Community Redevelopment Law the Agency
has held a duly noticed public hearing on the proposed DDA, at which
public hearing all persons were given an opportunity to be heard.
J.
II. The Tustin Community Redevelopment Agency hereby finds and determines,
based upon substantial evidence provided in the record before it:
A.
That the foregoing recitals are true and correct.
Resolution No. RDA 04-07
Page 3
G.
B.
That the Agency has received and heard all oral and written testimony to
the proposed Agreement and to Developer's proposed development of the
Property in connection therewith and to any other matters pertaining to
this transaction.
C.
That the sale of the Property will assist in the elimination of blight in the
Redevelopment Project area and is consistent with the implementation
plan adopted by the Agency for the Town Center Area Redevelopment
Plan pursuant to Section 33490 of the CRL.
That the consideration for the Agency's disposition of property pursuant to
the DDA is not less than the fair reuse value in accordance with
conditions, covenants and development costs required by the DDA.
D.
E.
F.
That the sale of the Property is for more than its fair market price.
The foregoing findings are based upon the record of the public hearing on
the DDA, the record of the public hearing for the adoption of the
Redevelopment Plan (including amendments thereto), the report prepared
in pursuant to CRL Section 33433(a)(2).
The proposed property sale and infill redevelopment may be categorically
exempt from the regulations of the Environmental Quality Act pursuant to
Section 15332 (Class 32) of the California Code of Regulations, Title 14,
Chapter 3 (Guidelines for the California Environmental Quality Act). The
Community Redevelopment Agency has made such a determination for
this project. Such determination is on file with Redevelopment Agency.
III. The DDA, a copy of which is on file with the Office of the City Clerk, is hereby
approved with such minor changes, additions or deletions as may be subsequently
approved by the Agency's Executive Director and City Attorney.
IV. The Executive Director is hereby also authorized to take such actions and
execute such documents and instruments, as deemed necessary or desirable for
implementation of the DDA.
Resolution No. RDA 04-07
Page 4
PASSED, APPROVED AND ADOPTED at a regular meeting of the Tustin Community
Redevelopment Agency held on the 4th day of October, 2004.
TONY KAWASHIMA
Chairperson
PAMELA STOKER
City Clerk
STATE OF CALIFORNIA)
ORANGE COUNTY )
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex-officio Clerk of the Tustin Community
Redevelopment Agency of the City of Tustin, California, do hereby certify that the whole
number of the members of the Tustin Community Redevelopment Agency of the City of
Tustin is five; that the above and forgoing Resolution No. RDA 04-07 was duly passed
and adopted at a regular meeting of the Tustin Community Redevelopment Agency,
held on October 4, 2004, by the following vote:
BOARDMEMBER AYES:
BOARDMEMBER NOES:
BOARDMEMBER ABSTAINED:
BOARDMEMBER ABSENT:
PAMELA STOKER
CITY CLERK
S:IRDAIRDA resoslRDA 04-07 Makena Great American Newport Company DDA Approval Resolution.DOC
EXHIBIT A
SUMMARY REPORT PURSUANT TO
SECTION 33433
OF THE HEALTH AND SAFETY CODE
ON A
OWNER PARTICIPATION AND DISPOSITION AGREEMENT
BY AND BETWEEN
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
AND
MAKENA GREAT AMERICAN NEWPORT COMPANY, LLC
SUMMARY REPORT PURSUANT TO
SECTION 33433
OF THE
CALIFORNIA HEALTH AND SAFETY CODE
ON A
OWNER PARTICIPATION AND DISPOSITION AGREEMENT
BY AND BETWEEN THE
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
AND
MAKENA GREAT AMERICAN NEWPORT COMPANY, LLC
The following Summary Report has been prepared pursuant to Section 33433 of the California
Health and Safety Code. The report sets forth certain details of the proposed Disposition and
Development Agreement (Agreement) between the Tustin Community Redevelopment Agency
(Agency) and Makena Great American Newport Company, LLC (Developer). The purpose of
the Agreement is to effectuate the Redevelopment Plan for the Town Center Redevelopment
Project Area (Redevelopment Plan).
The Agreement requires the Agency to convey the 0.23-acre Caltrans Parcel (Caltrans Parcel)
located at 14011 Newport Avenue in the City of Tustin (City) to the Developer. The 0.58-acre
project site consists of the 0.23-acre Caltrans Parcel and approximately 0.45 acres located at
14001 Newport Avenue and 770 EI Camino Real (Site). The Developer is required to construct
a one-story, 7,400 square foot retail commercial building and a parking lot for no less than 35
cars (Project).
The following Summary Report is based upon information contained within the Agreement, and
is organized into the following seven sections:
I.
Salient Points of the Agreement: This section summarizes the major responsibilities
imposed on the Developer and the Agency by the Agreement.
II.
Cost of the Agreement to the Agency: This section details the total cost to the
Agency associated with implementing the Agreement.
III.
Estimated Value of the Interests to be Conveyed Determined at the Highest Use
Permitted under the Redevelopment Plan: This section estimates the value of the
interests to be conveyed determined at the highest use permitted under the Site's
existing zoning and the requirements imposed by the Redevelopment Plan.
IV.
Estimated Reuse Value ofthe Interests to be Conveyed: This section summarizes
the valuation estimate for the Site based on the required scope of development, and the
other conditions and covenants required by the Agreement.
0409046.TUS,JAR"mm
19830.001.008109128104
V.
VI.
VII.
Consideration Received and Comparison with the Established Value: This section
describes the compensation to be received by the Agency, and explains any difference
between the compensation to be received and the established highest and best use
value of the Site.
Blight Elimination: This section describes the existing blighting conditions on the Site,
and explains how the Agreement will assist in alleviating the blighting influence.
Conformance with the AB1290 Implementation Plan: This section describes how the
Agreement achieves goals identified in the Agency's adopted AB1290 Implementation
Plan.
This report and the Agreement are to be made available for public inspection prior to the
approval of the Agreement.
I.
SALIENT POINTS OF THE AGREEMENT
A.
Project Description
The Scope of Development defined in the Agreement includes a one-story, 7,400 square foot
retail commercial building with outdoor patio space and a parking lot for no less than 35 cars.
The Project also includes an irrevocable requirement to dedicate 2,143 square feet along
Newport Avenue for future street widening.
B.
Developer Responsibilities
The Agreement requires the Developer to accept the following responsibilities:
1.
The Developer must accept conveyance of the Caltrans Parcel from the Agency under
the terms of the Agreement for a price of $189,000, plus Agency Transaction Expenses,
less any advance paid to Caltrans from the EAN Deposit.
2.
The Developer must demolish and remove the existing improvements on the Site.
3.
The Developer must develop a one-story, 7,400 square foot retail building with an
outdoor patio and a parking lot for no less than 35 cars. Building improvements and
landscaping must be consistent with the terms of the Agreement.
4.
The Developer must irrevocably dedicate the 2,143 square feet along Newport Avenue.
2
0409046.TUS,JAR,<mm
19830.001.008109/28104
5.
The Developer shall provide escrow instructions consistent with the Agreement and pay
in escrow the following:
a.
All escrow fees;
b.
Recording fees:
c.
Any state, county, city or other documentary stamps and transfer taxes; and
d.
The premium for the title insurance policy.
6.
The Developer shall submit to the Agency evidence of financing necessary to undertake
the Project in accordance with the Agreement.
a.
A commitment in writing from a permitted mortgagee for the funding of the
improvements.
b.
Evidence satisfactory to the Agency of sources of equity capital sufficient to
cover the difference between construction cost and financing by mortgage loans.
7.
The Developer shall begin and complete all construction and development within the
times specified in the Schedule of Performance per the Agreement.
8.
The Developer shall be responsible for any and all costs directly or indirectly related to
the Development, including but not limited to, acquisition of the Site and construction of
the Private Improvements.
c.
Agency Responsibilities
Under the Agreement, the Agency must complete the following responsibilities:
1.
The Agency shall acquire the Caltrans Parcel.
2.
The Agency shall convey the Caltrans Parcel to the Developer for $189,000.
a.
The Agency agrees to open an escrow for conveyance, and provide escrow
instructions consistent with the Agreement.
3.
The Agency shall timely and properly execute, acknowledge and deliver the Quit Claim
Deed, conveying title to the Caltrans Parcel to the Developer.
4.
Agency's financial participation is limited to conveying fee ownership interest in the
Caltrans Parcel to the Developer, at a price of $189,000 as set forth in the Agreement.
3
0409046.TUSoJAR.mm
19830.001.008109128104
II.
COST OF THE AGREEMENT TO THE AGENCY
The Agency costs to implement the Agreement are limitßd to the acquisition of the Caltrans
Parcel. The Agency is scheduled to acquire the Caltrans Parcel for $189,000. As shown below,
the total cost to the Agency is $189,000.
Land Payment at Closing
Present Value of Tax Increment
Total Agency Revenues
$ 189.000
$ 189,000
$ 189,000
$ 416,327
$ 733,582
Acquisition Cost
Total Agency Cost
Net Agency Revenue
$ 544.582
The Agency costs are offset by the land payment received at closing and tax increment
revenues received by the Agency. At closing, the Agency will receive $189,000 for acquisition
of the Caltrans Parcel. The Agency receives tax increment revenues for affordable housing and
general use. Over the remaining term of the Project Area, the Agency is projected to receive
nearly $733,582 million of tax increment revenues, which has a present value, discounted at
6%,of$416,327.
The Agency revenues of $733,582 exceed the Agency costs of $189,000, so the net Agency
revenues from the Project are $544,582.
III.
ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN
Section 33433 of the California Health and Safety Code requires the Agency to identify the
value of the interests being conveyed at the highest use allowed by the Agency Site's zoning
and the requirements imposed by the Redevelopment Plan. The valuation must be based on
the assumption that near-term development is required, but the valuation does not take into
consideration any extraordinary use, quality and/or income restrictions are being imposed on
the development by the Agency. The Agency and Caitrans have entered into a purchase and
sale agreement for the Agency to purchase the Caltrans Parcel for the fair market value of
$189,000. The Developer is acquiring the Caltrans Parcel from the Agency at fair market value
in the amount of $189,000 plus Agency Transaction Expenses.
4
0409046.TUSoJAR'mm
19630.001.008109/28104
IV.
ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
Taking into account the covenants, conditions and restrictions imposed by the Agreement, It is
concluded that the fair reuse value is the same as the fair market value, namely $189,000.
V.
CONSIDERATION RECEIVED AND COMPARISON WITH THE ESTABLISHED
VALUE
The Agreement requires the Agency to convey the Caltrans Parcel to the Developer at a price of
$189,000.
As previously mentioned, the Caltrans Parcel has a fair market and fair reuse value of
$189,000. Thus, the consideration to be received by the Agency is equal to the established fair
reuse value and the fair market value.
VI.
BLIGHT ELIMINATION
The Site currently characterized by the following blighting conditions that will be alleviated by
the Project:
Unsafe/dilapidated/deteriorated buildings
Physical conditions that limit economic viability and use of lots and buildings (age and
obsolescence)
Inadequate public infrastructure/facilities
Depreciated or stagnant property values and/or impaired private investments
The development of the mixed-use project will eliminate the current physical blighting
conditions. Thus, the proposed development fulfills the blight elimination requirement.
5
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19830.001.006109/28104
VII.
CONFORMANCE WITH THE AB1290 IMPLEMENTATION PLAN
The Project conforms with several of the objectives defined in the Five Year Implementation
Plan adopted by the Agency in March 2000. Pertinent goals and objectives that are satisfied by
the Project are as follows:
To create a mixed-use Town Center area that combines commercial, office residential
and public uses, which will serve the needs of the community as well as encourage the
healthy growth of the area;
To encourage residential development by actively seeking private development in the
redevelopment area;
To increase the level of capital improvements such as the development of, parking
facilities, sidewalk and street landscaping, street improvements, and related public
improvement projects; and
To revitalize and develop amenities in the Project Area, both publicly and privately
financed, as a means of aiding the revitalization of the EI Camino Real section of the Old
Town district in particular.
6
0409046.TUS,"AR"mm
19630.001.OOBlO9l28m4
190113.10
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY
and
MAKENA GREAT AMERICAN NEWPORT COMPANY, LLC
DATED:
-i-
S'ptomb<, 27. 2004
3.
4.
5.
6.
7.
8.
1.
2.
]'!O] 13.]0
TABLE OF CONTENTS Page
SUBJECT AND PURPOSE OF AGREEMENT: PARTIES: APPLICABLE REQUIREMENTS. ......1
1.1 BACKGROUND REGARDING THE PROJECT. ..................................... ...................................................1
1.2 PURPOSE OF THE AGREEMENT. ...... ............................................. ..1
1.3 SCOPE OF AGREEMENT .......... ........ ...................... .............................. ..2
1.4 PARTIES TO THE AGREEMENT. ................................. . ........................... ...2
1.5 LOCAL GOVERNMENTAL REQUIREMENTS ApPLICABLE TO AGREEMENT. ..........................................3
1.6. NOT A DEVELOPMENT AGREEMENT...................................................................................................3
1.7 DEFINITIONS; ATTACHMENTS.. ......................... ...........................................................3
PROHIBITION AGAINST CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF
DEVELOPER................................................................................................................................................3
2.1 IMPORTANCE OF DEVELOPER QUALIFICATIONS... ... ... ...............3
2.2 OWNERSHIP TRANSFER OR ASSIGNMENT... ................................................................4
2.3 CHANGE IN MANAGEMENT OR CONTROL.. ................................. ..6
2.4 ASSIGNMENT BY OPERATION OF LAW.... .................. ............................................. ..6
2.5 NON-APPLICABILITY OF OWNERSHIP TRANSFER PROVISIONS TO LEASING. ................................... .. 7
2.6 REMEDIES FOR IMPROPER TRANSFERS............... ........................................................................... 7
2.7 MEMORANDUM OF DDA; PERMITTED MORTGAGEE PROTECTION. .................................................... 7
REPRESENTATIONS AND WARRANTIES..........................................................................................16
3.1
3.2
3.3
DEVELOPER'S REPRESENTATIONS AND WARRANTIES.. ..................... ..16
AGENCY REPRESENTATIONS AND WARRANTIES.. ...........................................................................19
SURVIVAL... ....................................................... .....................................................................20
CONVEYANCE OF PROPERTYINEWPORT AVENUE DEDICATION...........................................20
4.1
4.2
4.3
4.4
THE PROPERTY To BE CONVEYED......................
PURCHASE PRICE..
ESCROW......................... ...... .
INVESTIGATION; PROPERTY SOLD "As-Is"....
....................
..........20
.........20
................21
................21
.........................
...........................
INDEMNITY, NO FINANCING CONTINGENCY. ...............................................................................25
5.1 INDEMNITY. ....................................... ............................... ..................25
5.2 No FINANCING CONTINGENCY....... .................................. ............................................ ..26
TITLE: SURVEY........................................................................................................................................26
6.1
6.2
6.3
SURVEY. ........................................
PERMITTED EXCEPTIONS..............
AL T A POLICY: ENDORSEMENTS. .
.................................- ......................................M
.............................. .............................. ..26
......................................... ................................ ..M
CLOSING.....................................................................................................................................................27
7.1 TIME AND PLACE OF CLOSING. ........................................................................................................27
7.2 DEVELOPER'S CONDITIONS PRECEDENT TO CLOSING.. .............................................................27
7.3 THE AGENCY'S CONDITIONS PRECEDENT. ............... .............................. ...................... ............28
7.4 ADDITIONAL CLOSING CONDITIONS. ................ ...... ........................................................ ......30
7.5 PROCEDURES FOR CONVEYANCE OF PROPERTY FROM AGENCY TO DEVELOPER.. ......30
DEVELOPMENT OF THE PROJECT. """"""""""""""""""""""""'.'."""""."""""..........................32
8.1 SCOPE OF DEVELOPMENT..........................................................-....................................................32
8.2 TIMING AND CONDITIONS OF PROJECT DEVELOPMENT. ..................................................... ............33
8.3 LAND USE MATTERS.. ................... .......-................. ......................................34
8.4 FINANCIAL STATUS... .................... ............................................................................35
8.5 DESIGN ApPROVAL. ........................... .................................. ..........................................................36
8.6 CONSTRUCTION COVENANTS.... ......................... ................................... .................39
S'ptemb" 27. 2004
ii
9.
10.
11.
12.
13.
14.
15.
1"()I13.IO
8.7 AGENCY RIGHTS OF ACCESS...... .......................... .................................. ...............................39
8.8 DISCLAIMER OF RESPONSIBILITY BY AGENCY.. ............................ ....40
8.9 CC&Rs............ ... ...... ......... ....................... ....40
8.10 LOCAL, STATE AND FEDERAL LAWS. ............. .. .................................... ........................40
8.11 TAXES, ASSESSMENTS, ENCUMBRANCES AND LIENS.... ....................................... ......................40
CERTlFICA TE OF COMPLIANCE. .......................................................................................................41
9.1 COMPLETION: SCHEDULE OF PERFORMANCE. ..................................................................................41
9.2 ISSUANCE OF CERTIFICATE OF COMPLIANCE. ........................ ........................................................41
9.3 CONCLUSIVE PRESUMPTION....... ...................... ................................................41
9.4 NOT EVIDENCE. .... . ... .. ..........................................................................41
9.5 CONDITIONS PRECEDENT TO ISSUANCE OF CERTIFICATE OF COMPLIANCE. .......................... .......41
9.6 AGENCY OBLIGATIONS ............... ................................................................................. ..42
INDEMNIFICATION AND ENVIRONMENTAL PROVISIONS. .......................................................42
10.1 DEVELOPER'S INDEMNIFICATION. .................. .................................... .....................42
10.2 ENVIRONMENTAL INDEMNITY. ....... ................................ .....................43
10.3 DURATION OF INDEMNITIES. .............................. ................................................................... ........44
10.4 CLAIM RESPONSE.............................................................................................................................44
10.5 RELEASE NOTIFICATION AND REMEDIAL ACTIONS........... ..............................................................44
INSURANCE ...............................................................................................................................................45
11.1 REQUIRED INSURANCE. ........................................ .........................................................45
11.2 GENERAL INSURANCE REQUIREMENTS ......... ............................ .......................................46
COVENANTS AND RESTRICTIONS. ....................................................................................................47
12.1 USE COVENANT............................................... ............ ................................................ ..........47
12.2 MAINTENANCE COVENANT. ..................................................................................................... ...47
12.3 NONDISCRIMINATION AND EQUAL OPPORTUNITY................................................................. ...48
12.4 DEED RESTRICTIONS/COVENANTS RUNNING WITH THE LAND. .............................. ...49
POTENTIAL AND MATERIAL DEFAULTS.........................................................................................50
13.1 POTENTIAL DEFAULTS...................................... ..................................................................50
13.2 MATERIAL DEFAULTS.............. .. ..............................................................................50
13.3 FAILURE OR DELAY IN NOTICE. ........................... ..........................................................51
13.4 DEVELOPER INFORMATION AND PRODUCTS......... ..........................................................51
13.5 FAILURE TO TIMELY PAY AMOUNTS DUE.......... ................................ ......51
NONOCCURRENCE OF A CLOSING CONDITION............................................................................52
14.1
14.2
14.3
14.4
FAILURE OF A CLOSING CONDITION TO OCCUR ABSENT A MATERIAL DEFAULT.............................52
FAILURE TO CLOSE; MATERIAL DEFAULT OF DEVELOPER...............................................................53
FAILURE TO CLOSE MATERIAL DEFAULT OF AGENCY. ....................................................................54
MATERIAL DEFAULT BY BOTH PARTIES. ................ ........................................................................56
GENERAL PROVISIONS. ........................................................................................................................56
15.1 CONSENT TO JURISDICTION.................................................................. ................................. ......56
15.2 LEGAL FEES AND COSTS. .................................... ...........................................................................57
15.3 MODIFICATIONS ORAMENDMENTS..... ............................ ....57
15.4 ApPLICABLE LAW..... .. .................57
15.5 FURTHER ASSURANCES.......................................... ... .................................. ......57
15.6 RIGHTS AND REMEDIES ARE CUMULATIVE. .....................................................................................58
15.7 NOTICES, DEMANDS AND COMMUNICATIONS BETWEEN THE PARTIES. ............................................58
15.8 FORCE MAJEURE ÐELAY............................ ......................................................................59
15.9 CONFLICT OF INTEREST.............................................................................................. .....................61
15.10 NON-LIABILITY OF AGENCY OFFICIALS AND EMPLOYEES..................................... ...........61
15.11 INSPECTION OF BOOKS AND RECORDS. ....................................................... ............................. ....61
Soptomb" 27. 2004
iii
15.12
15.13
15.14
15.15
15.16
15.17
15.18
15.19
15.20
15.21
15.22
15.23
15.24
15.25
15.26
1'!( IIJ.1O
ApPROVALS. ........ ...... .......................... ....................................................... .....61
REAL ESTATE COMMISSIONS. ...... ....'" ....... .....61
DATE AND DELIVERY OF AGREEMENT............................... ............................................62
SURVIVAL OF COVENANTS...............................................................................................................62
CONSTRUCTION AND INTERPRETATION OF AGREEMENT... ................................. .................62
TIME OF ESSENCE. .... ............, .........................................63
FEES AND OTHER EXPENSES. .............. ....'" .......................63
No PARTNERSHIP............................................................ ..............................................................63
COMPLIANCE WITH LAW. ................ ................................................................................................63
BINDING EFFECT. ....................................... ...................................................... .............................64
No THIRD PARTY BENEFICIARIES.. ................................ ..............................................................64
COUNTERPARTS. ..............................................................................................................................64
AUTHORITY OF SIGNATORIES TO AGREEMENT....... ............................... ....64
ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS.... .................................................................64
ApPROVAL PROCEDURES. ................... ........................................................65
S'ptomb",. 27,2004
iv
IOUII].IO
ATTACHMENT NO. IA
ATTACHMENT NO. IB
ATTACHMENT NO. IC
ATTACHMENT NO.2
ATTACHMENT NO.3
A TT ACHMENT NO.4
ATTACHMENT NO.5
ATTACHMENT NO. 6
ATTACHMENT NO.7
ATTACHMENT NO.8
ATTACHMENT NO.9
LIST OF ATTACHMENTS
LEGAL DESCRIPTION OF THE DEVELOPER
PARCEL
LEGAL DESCRIPTION OF THE CALTRANS
PARCEL
LEGAL DESCRIPTION OF THE NEWPORT
DEDICATION AREA
GLOSSARY OF DEFINED TERMS
MEMORANDUM OF DDA
QUITCLAIM DEED TO DEVELOPER
SCHEDULE OF PERFORMANCE
SCOPE OF DEVELOPMENT
METHOD OF FINANCING
FORM OF CERTIFICATE OF COMPLIANCE
PRELIMINARY PLANS
Soptomb" 27,2004
v
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is
entered into as of , 2004 (the "Effective Date") by and between the
TUSTIN COMMUNITY REDEVELOPMENT AGENCY (as defined in Section 1.4.1.
"Agency") and MAKENA GREAT AMERICAN NEWPORT COMPANY, LLC, a California
limited liability company (as defined in Section 1.4.2 the "Developer"). The Agency and the
Developer are sometimes referred to herein individually as a "Party" and collectively as the
"Parties." The Parties agree as follows:
1.
Subject and Purpose of Al!reement; Parties; Applicable Requirements.
1.1
Backl!round Rel!:ardinl! the Project.
1.1.1 The real property that is the primary subject of this Agreement is located
at 14011 Newport Avenue ("Caltrans Parcel"), and 14001 Newport Avenue and 770 El Camino
Real ("Developer Parcel"), in Tustin, California and currently consists of approximately 0.68
acres with 29,732 square feet of improvements (collectively hereinafter the "Site"). A legal
description of the components of the Site are attached hereto as Attachment Nos. IA. lB. lC.
The Project includes the construction of Improvements ("Project Improvements") on the Site
and the dedication in fee to the City of Tustin of the 4,891 square feet for street and highway
purposes ("Newport Avenue Dedication Area" (Attachment 9). The proposed Project
Improvements are more fully described in Section 1.3.1 (b). The Site is located within the Town
Center Redevelopment Project area.
1.1.2 On May 5, 2004, the Agency entered into an Exclusive Agreement to
Negotiate ("EAN") with Developer. The ENA provided that the Agency desires to negotiate a
Disposition and Development Agreement ("DDA") to have the Developer construct a
commercial retail project on the Site and on certain adjacent parcels that the Developer might
acquire.
1.1.3 The Agency desires to encourage and effectuate the redevelopment of
certain real property located in the Town Center Redevelopment Plan area of the City of Tustin
generally bounded on the north by EI Camino Real, on the east by Newport Avenue, on the south
by the 1-5 Santa Ana Freeway ramp, and on the east by EI Camino Way, in furtherance of the
Agency's revitalization efforts and in accordance with all City requirements, including the Town
Center Redevelopment Plan, and the City's General Plan and Zoning Code.
1.1.4 Developer has requested that the Agency acquire the Caltrans Parcel, and
in turn, for consideration to Agency, to transfer the Caltrans Parcel to Developer for use in
redeveloping the Site. The DDA herein specifies the rights, obligations and method of
participation of the Parties with respect to the acquisition of the Caltrans Parcel by Developer
(provided Cal Trans approves the acquisition by Agency), and the development of the Site by the
Developer.
1.2 Purpose of the Al!:reement. The purpose of this Agreement is to provide for the
disposition of the Caltrans Parcel to the Developer, and the improvement of the Site (the
1901\3.\0
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S,pt<mb<, 27. 2004
"Project"). The fulfillment of this Agreement is in the vital and best interests of the Tustin
community and the health, safety, and welfare of its residents, and is in accord with the public
purposes and provisions of applicable federal, state, and local laws and requirements.
1.3
Scope of Agreement.
1.3.1 This Agreement provides for the disposition by the Agency to the
Developer of the Caltrans Parcel, to be included in the scope of the Project. Subject to approval
of Entitlements, Developer shall be required to develop and construct the Project as more fully
described in the Scope of Development (Attachment No.6), attached hereto and incorporated
herein by this reference. As part of the development process, Developer shall irrevocably offer
to dedicate to the City of Tustin for street and highway purposes the Newport A venue Dedication
Area. The legal description for the Newport Avenue Dedication Area is shown in Attachment
No. 1C. Until such time as the Agency accepts Developer's irrevocable offer to dedicate the
Newport Avenue Dedication Area, the term "Site" shall include the Newport Avenue Dedication
Area. This Agreement further provides for the Project to consist of construction and installation
of the following Project Improvements, which are more particularly described in Attachment No.
2, Scope of Development, and all of which collectively constitute the "Project".
1.4
Parties to the Agreement.
1.4.1 Agency. The Agency is a state agency organized for local purposes
(Health and Safety Code Sections 33000 et. seq.). It is a public body, corporate and politic,
exercising governmental functions and powers organized and existing under the Community
Redevelopment Law of the State of California (Health and Safety Code Sections 33000 et seq.).
The City Council of the City of Tustin ("City") serves as the legislative body of the Agency.
The principal office of the Agency and mailing address is: 300 Centennial Way, Tustin,
California, 92780.
1.4.2 Developer. The Developer is Makena Great American Newport
Company, LLC, a California limited liability company, located at: 1450 El Camino Real,
Second Floor, Tustin, California 92780. Developer is a Quality buitder licensed to do business in
the State of California.
1.4.3
Relationship of Agencv to Developer.
(a) It is hereby acknowledged that the relationship of the Agency to
the Developer is neither that of a partnership nor that of a joint venturer and that the Agency
shall not be deemed or construed for any purpose to be the agent of the Developer, nor shall the
Developer be deemed or construed to be the agent of the Agency.
(b) Notwithstanding any provision of this Agreement, the Developer is
not, and shall not be deemed to be, the agent of the Agency for any purpose, and shall not have
the power or the authority to bind the Agency 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 Caltrans Parcel. The Developer shall not at any time hold itself
out to the Agency or to any other third party as an agent of the Agency, and shall not, by any act
or omission, mislead any third party into believing, or allow any third party to continue in the
'9011'.10
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S'ptomb" 27. 2004
mistaken belief, that the Developer is an agent of the Agency or has the power or authority to
bind the Agency to any contractual or other obligation.
1.5 Local Governmental ReQuirements Applicable to Al!reement. This
Agreement is subject to all Governmental Regulations, including the Tustin General Plan, the
Tustin City Code and ordinances, and the Town Center Redevelopment Plan, as Amended.
1.6. Not a Development Al!reement. This Agreement is not a Development
Agreement as provided in California Government Code Section 65864 and, is not a grant of any
Entitlements, in favor of the Developer. The Agency shall cooperate in good faith, within
applicable legal constraints and consistent with applicable Agency 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.
1.7 Definitions; Attachments. Capitalized terms used herein, including in the
Attachments attached hereto, unless otherwise defined herein, shall have the respective
meanings set forth herein/or as 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 that are contained
within or attached to this Agreement and all attachments and schedules referenced herein are
incorporated herein by this reference as through fully set forth herein.
1.8 Recordation of Memorandum ofthis Al!reement. The Developer shall record a
memorandum of this Agreement in substantially the form and substance of the Memorandum
attached hereto as Attachment No.3 (the "Memorandum of DDA") against the Site (Caltrans
Parcel and Developer Parcel).
2.
Prohibition Al!ainst Chanl!e in Ownership, Manal!ement and Control of Developer.
2.1 Importance of Developer Oualifications. The Developer represents and agrees
that its undertakings pursuant to this Agreement are for the purpose of development of the
I Project and not fo.r sp.' eculation in land holding. The Developer is an Owner-Participant under the
A¡;cncv's Rulcs (í()~ emit'!! Participation bv Owncrs. The Devetoper further recognizes that the
qualifications and identity of the Developer are of particular concern to the Agency and
community in light of the following:
(a) The importance of the development of the Project to the fulfillment of the
Town Center Redevelopment Plan and the general welfare of the community;
(b) The fact that a change in ownership or control of the Developer, 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 ~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 Agency is entering into the Agreement with the Developer.
19UIIJ.IO
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S'pt<mbo, 27. 2004
2.2
Ownership Transfer or Assil!nment.
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 sha1l acquire any rights or powers under this Agreement
except as set forth in this Section 2.2.
2.2.2 Restrictions on Ownership Transfers and Assilroments. For the reasons set
forth in Section 2.1, the Developer represents and agrees for itself, its members and a1l voluntary
and involuntary successors-in-interest of itself and each member of Developer, that the
Developer sha1l not effect any total or partial Ownership Transfer of the Developer Parcel, or the
Site, except as provided in Section 2.5, or the Developer's interest in this Agreement, or any
interest therein, whether voluntary or involuntary, nor sha1l there be a Transfer of Control of the
Developer (as described below in Section 2.3) unless such Ownership Transfer or Transfer of
Control is a Permitted Transfer. In order for an Ownership Transfer to be a Permitted Transfer,
the fo1lowing conditions sha1l be met by Developer:
(a) where required, the prior written consent of the Agency is
obtained, subject to the standards for such consent set forth in Sections 2.2.4 and 2.2.5;
(b) the Developer sha1l have provided to the Agency at least twenty
(20) Business Days prior to the date of any proposed Ownership Transfer: (i) the name of the
proposed Ownership Transferee, (ii) a1l of the material terms of the transfer, (iii) current audited
financial statements of the proposed transferee, (iv) the names of a1l 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 sha1l 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) a1l relevant
instruments and other legal documents proposed to effect any such transfer, and (vii) such other
relevant information that the Agency may reasonably request; and
(c) The Ownership Transferee sha1l execute a written assumption of
this Agreement in accordance with Section 2.2.8, and sha1l be approved by the Agency.
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 in
accordance with Section 2.2.8 of the obligations of the Developer, which assumption sha1l be
approved by the Agency, (b) specific prior written agreement by the Agency to an Ownership
Transfer requiring Agency consent, pursuant to which the Agency expressly releases the
Developer, or (c) execution by the Agency and recordation in the Official Records of a
Certificate of Compliance, no Ownership Transfer sha1l constitute a release of the Developer
from any of its obligations under this Agreement.
1')(JlI.\IO
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S,ptomb<, 27. 2004
2.2.4 Prior to Recordation of Certificate of Compliance.
(a) Except as set forth in Sections 2.2.4 (b), 2.5 and 2.7, prior to the
recordation of a Certificate of Compliance, an Ownership Transfer shall require the approval of
the Agency in its sole discretion and the Agency may withhold its consent to any proposed
Ownership Transfer for any reason whatsoever.
(b) Notwithstanding the provisions of Section 2.2.4(a) or any
provision of this Agreement, foreclosure of any Pennitted Mortgage, or any sale thereunder,
shall not require the consent of the Agency or constitute a breach of any provision of or a
Material Default under this Agreement.
(c) Notwithstanding the provisions of Section 2.2.4(a) or any
provision of this Agreement, a sale or conveyance by any Pennitted Mortgagee or its
wholly-owned designee who acquired title to the Developer Parcet by an Ownership Transfer
shall not require the consent of the Agency or constitute a breach of or a Material Default under
this Agreement, provided that the transferee: (i) has a reputation as a qualitY builder of retail
developments reflecting the scope and construction of the qualitY development desires in the
Agreement, licensed to do business in the State of California; (ii) has a reputation for fair and
honest business dealings with persons or entities generally; (iii) has a sufficient net worth to
undertake the obligations to be perfonned by Developer; (iv) has successfully constructed,
marketed, leased, and managed retail complexes in the State of California; and (v) assumes the
obligations of Developer under this Agreement in accordance with Section 2.2.8; and (iv)
provided if transfer occurs at a foreclosure sale, the infonnation received under Section 2.2.2( c)
shall be provided as soon as practical, but in no event more than 30 calendar days following such
transfer.
2.2.5 Following Recordation of a Certificate of Compliance. Subsequent to the
recordation of a Certificate of Compliance, a proposed Ownership Transfer shall not require the
consent of the Agency.
2.2.6 Restriction on Pennitted Transfers. Any purported Ownership Transfer
that does not comply with the provisions of this Section 2.2 shall not be a Pennitted Transfer
under this Agreement.
2.2.7 Assignment of Rights to Pennitted Mortgagee. Subject to the provisions of
Section 2.2 and Section 2.7.2, 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 Pennitted Mortgage as required to obtain financing for
development of the Project on the Developer Parcel, or the Site.
2.2.8 Written Assumption Agreement Required. Except as provided in Section
2.5 or for an Ownership Transfer after recordation of the Certificate of Compliance, any
Ownership Transfer, other than an Ownership Transfer of all or any portion of the Developer
Parcel, or the Site, pursuant to foreclosure or deed in lieu of foreclosure to a Pennitted
Mortgagee or its wholly-owned designee, regardless of whether such Ownership Transfer is a
1')OIL1.!0
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S,pIOmb" 27. 2004
Permitted Transfer hereunder, shall be null and void unless the Ownership Transferee shall, at
the time of transfer, expressly assumes by written instrument that is satisfactory to the Agency
and in a fonn that is recordable in the Official Records, for itself and its successors and assigns,
and for the benefit of the Agency, all the obligations of the Developer under this Agreement and
agrees to be subject to all the conditions and restrictions to which the Devetoper is subject by
reason of this Agreement (the "Assumption Agreement"). The obligation of an Ownership
Transferee to enter into an Assumption Agreement pursuant to this Section 2.2.8 shall cease
upon recordation of the Certificate of Compliance for the Project.
2.2.9 Assignment to a Single Member Entitv. Notwithstanding any other
provision of this Section 2, the Developer may freely assign its interests in the Developer Parcel,
or the Site, 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 Agency 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. Developer shall provide to the Agency confinnation that adequate equity
remains secured for the duration of the Project, as detennined by the Agency.
2.3
Change in Management or Control.
2.3.1 The Developer represents and warrants to the Agency that the Developer
is a California limited liability company and is qualified to do business in the State of California.
2.3.2 Transfer of Control. Notwithstanding any other provision of this
Agreement, until execution by the Agency of a Certificate of Compliance and recordation of
such instrument in the Official Records, there shall be no Transfer of Control of the Developer,
unless otherwise approved by the Agency in its sote discretion, which approval may be withheld
for any reason whatsoever. "Transfer of Control" shall include anyone or more of the
following, whether made directly or through an intennediary, and whether made in one
transaction or in more than one transaction during the Tenn and whether occurring as a single
event or a series of events which result, on a cumulative basis, in a change in forty-nine percent
(49%) or more of the Developer.
2.3.3 The Developer shall make prompt and full disclosure to the Agency of any
changes to Developer's organizational jurisdiction or structure, and all other material infonnation
concerning the Developer as related to the Project.
2.3.4 The Developer shall make full disclosure to the Agency of all other
material infonnation concerning the Developer and its partners and consultants related to the
Project. The Developer agrees to substitute any of its consultants and professionals working on
the Project as reasonably requested by the Agency.
2.4 Assienment by Ooeration of Law. Neither this Agreement nor any interest
therein shall be assignable by operation of law (including the transfer of this Agreement by
testacy or intestacy). Any involuntary assignment shall constitute a Material Default by the
190113.10
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Seplomb" 27, 2004
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 assignment:
(a) If the Developer is or becomes bankrupt or insolvent or if any involuntary
proceeding is brought against the Developer (unless, in the case of a 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 the
Developer Parcel, or on any portion thereof, where such writ is not discharged within ninety (90)
days; or
(c) If, in any proceeding or action in which the Developer is a party, a
receiver is appointed with authority to take possession of the Devetoper Parcel, or any portion
thereof, where possession is not restored to the Developer within ninety (90) days.
2.5
N on-applicabilitv of Ownership Transfer Provisions to Leasinl!:.
2.5.1 Lease of the Commercial Building and the Space Within. The general
prohibition against Ownership Transfer described in Section 2.2.2 shall not be applicable to the
leasing of retail commercial space to tenants in the commercial building, provided that no
occupancy shall be pennitted until a Certificate of Occupancy has been issued by the City and
the City has approved the Lessee in writing. Prohibited uses of retail commercial space are
defined in Attachment 10.
2.5.2 The Leasing pennitted in this Section 2.5 shall not relieve Developer of its
obligation under this Agreement, including but not limited to, to completing the Project
Improvements.
2.6 Remedies For Improper Transfers. Any purported Ownership Transfer that is
not a Pennitted Transfer shall, at the election of the Agency, be null and void. If there is any
Ownership Transfer that is not a Pennitted 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.
2.7
Permitted Mortl!:al!:es.
2.7.1 Right To Encumber. Notwithstanding any other provision of this
Agreement to the contrary, upon conveyance of the Caltrans Parcel by the Agency to the
Developer, the Developer shall have the right to encumber the fee title to all or portions of the
Site owned by it with a Pennitted Mortgage subject to compliance with the tenus, conditions and
limitations set forth in this Section 2.7 (Mortgages complying with the following tenus and
entered into by Developer with Pennitted Mortgagees shall be deemed to be "Permitted
]')O]]'.!O
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S'ptom"', 27. 2004
Mortgages"); provided, however that all Mortgages shall be subject and subordinate to the lien
of this Agreement, and the Memorandum ofDDA.
2.7.2 Encumbrance Prior to Certificate of Compliance. Until recordation of the
Certificate of Compliance in the Official Records, the following shall apply to every Mortgage
with respect to the Site or any portion thereof:
(a) The Developer shall not encumber the Site with any Mortgage
without the prior written consent of the Agency 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
costs for Acquisition of Caltrans Parcel and Developer Parcel and developing and constructing
the Project Improvements.
(c) This Agreement and the Site shall not be cross-collateralized to
serve as additional security for any other loan by a Mortgagee, which is also secured by real
property other than the Site, the Project Improvements thereon, any portion thereof or any
interest therein, without the Agency'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 ofthe Site may cross-collateralize those loans.
(d) At least twenty (20) days prior to entering into any Mortgage with
any Mortgagee, the Developer shall deliver to the Agency 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 Agency to
confirm the matters described in this Section 2.7.3 and the Agency 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 Agency 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 and (iii) such other
relevant information that the Agency may reasonably request.
(ii) The loan documents shall include a subordination and
consent agreement in form satisfactory to the Agency in its reasonable discretion
("Subordination and Consent") executed by the Permitted Mortgagee or its designee
(hereinafter referred to collectively as "Permitted Mortgagee") in favor of the Agency
acknowledging subordination of the Permitted Mortgage to this Agreement.
(iii) The loan documents shall include a provision requiring (A)
the Mortgagee to provide notice to the Agency concurrently with the provision of any notice to
100111.10
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S,pt<mbcr27.2004
the Developer of any event which has occurred which is a default under the loan documents or
which would trigger the commencement of any cure periods under the loan documents, and (B)
providing the Agency with a right to cure any such default up to one week before the completion
of any foreclosure in accordance with Section 2.7.12;
(iv) For construction Mortgages for the original construction of
the Project Improvements, the Agency shall have determined in accordance with the Method of
Financing, Attachment No.7, 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) There shall be recorded in the Official Records at the time of
closing of the Mortgage the Subordination and Consent executed and acknowledged by the
Mortgagee;
(g) Mortgages meeting the above requirements and (i) made with
Mortgagees determined by the Agency, in its reasonable discretion, to be Institutional Lenders
shall be deemed to be Permitted Mortgages (and the Mortgagees thereof Permitted Mortgagees)
without further consent of the Agency, and (ii) made with Mortgagees determined by the
Agency, in its reasonable discretion, to be Non-Institutional Lenders, shall be deemed to be
Permitted Mortgages (and the Mortgagees thereof Permitted Mortgagees) only with the consent
of the Agency in its sole discretion.
(h) No Mortgage shall be a Permitted Mortgage and no Mortgagee
shall be a Permitted 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 Agency pursuant to this Section 2.7.2.
2.7.3 Right to Encumber Following Recordation of Certificate of ComDliance.
Following recordation of the 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 Site owned by
it with any Mortgage, and Agency consent to such Mortgage shall not be required.
2.7.4 The Agencv's Acknowledgment of Permitted Mortgagee. Within thirty
(30) days following the Developer's delivery of the loan documents and information required
under Section 2.7.2, the Agency shall acknowledge receipt of the name and address of any
Mortgagee (or proposed Mortgagee), and either (a) confirm to the Devetoper 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 Agency 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 2.7.2 give notice of such determination to the Developer and
the proposed Mortgagee, which notice shall specify the basis for such determination.
2.7.5 Change in Loan Documents. Once the Agency has approved loan
documents and the Subordination and Consent as satisfying the requirements of Section 2.7.2,
100113.10
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S,pIomb<' 27. 2004
the Developer shall not modify or agree to modify those loan documents in a manner affecting
the requirements of Section 2.7.2 without the prior written approval of the Agency in its sole
discretion.
2.7.6 Initial Notice. If the Developer enters into any Mortgage(s) reviewed and,
if required, consented to, by the Agency pursuant to Section 2.7.2, then the Mortgagee(s)
thereunder, if confirmed by the Agency as Permitted Mortgagee(s) pursuant to Section 2.7.2
shall be entitled to the Permitted Mortgagee protections provided for under this Agreement ITom
and after such time as the Developer or such Permitted Mortgagee has provided the Agency
notice, in accordance with the provisions of Section 15.7, of the name and address of such
Mortgagee, accompanied by a copy of the executed Mortgage.
2.7.7 Effect ofa Mortgage. The Developer's recordation of a Mortgage shall not
constitute an assignment or transfer of the Site, 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 Site so as to require such Mortgagee to assume or
otherwise be obligated to perform any ofthe Developer's obligations under this Agreement.
2.7.8 Foreclosure Without the Agencv's Consent. Neither the foreclosure of any
Permitted Mortgage (or any sale thereunder), whether by judicial proceedings or by virtue of any
power contained in any such Permitted Mortgage, nor any conveyance of the Site and/or Project
Improvements from Developer to any Permitted Mortgagee through, or in lieu of, foreclosure or
other appropriate proceedings in the nature thereof, shall require the consent of the Agency or
constitute a breach of any provision of, or a Potential Default or a Material Default under, this
Agreement. If a Permitted Mortgagee acquires all or any of a portion of the Site being foreclosed
upon, the provisions of Section 2.7.10 shall govern such acquisition and the rights and
obligations of such Permitted Mortgagee. If a Permitted Mortgagee does not acquire the portion
of the Site being foreclosed upon, or if it does acquire such portion of the Site but then
subsequently sells or conveys all or any portion of the Site acquired by such Permitted
Mortgagee, then upon such foreclosure, sale or conveyance, (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 Site and (b) the Agency 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 2.2.7. The Person and Agency 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.
2.7.9 Rights and Obligations of Permitted Mortgagee Acquiring Title.
(a) Limitations on Construction Obligations. Except as set forth in
Section 2.7.8, a Permitted Mortgagee obtaining title to all or any portion of the Site as a result of
a default by the Developer under a Permitted Mortgage shall not be obligated to perform any of
the Developer's obligations under this Agreement, including without limitation to construct or
complete the Project Improvements or to guarantee such construction or completion thereof.
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S'ptomb" 27. 2004
(b) No Authority to Construct. Except as set forth in Section 2.7.9(d),
with respect to protective activities or preservation or protection of existing Project
Improvements, nothing in this Agreement shall be deemed or construed to permit or authorize
any Permitted Mortgagee to devote the Site or any part thereof to any uses, or to construct any
improvements thereon, other than those uses and/or Project Improvements provided for or
authorized by this Agreement and (ii) any and all construction of improvements on the Site by
the Permitted Mortgagee shall be carried out in accordance with all the terns and conditions of
this Agreement, including without limitation, Section 2.7.9(c).
(c) Protection of Collateral. Notwithstanding the prohibition on
construction set forth in , during or after foreclosure, the Permitted Mortgage shall
be entitled at all times to take such actions necessary to preserve or protect existing Project
Improvements, but such shall not include the right to undertake new construction except as
necessary to protect exposed elements of such previously constructed Project Improvements.
Upon such assumption, the Permitted Mortgagee, in that event, must agree to complete, in the
manner provided in this Agreement, the Project Improvements to which the lien or title of such
Permitted Mortgagee relates. Any such Permitted Mortgagee properly completing such Project
Improvements and satisfying all other conditions precedent thereto, shall be entitled, upon
written request made to the Agency, to a Certificate of Compliance from the Agency for such
Project Improvements.
(d) Limitation on Liability. In the event that a Permitted Mortgagee, is
in possession and/or control of such portion of the Site in which the Permitted Mortgagee has an
interest, and the Permitted Mortgagee assumes the obligation of Developer under this
Agreement, such Permitted Mortgagee shall only be bound to perform Developer's obligations
hereunder to the extent of its interest in the portion of the Site and the Project Improvements
thereon.
(e) Obligation of Mortgagees in Possession. Upon obtaining title to
the Site or any portion thereof, and notwithstanding any other provision of this Agreement to the
contrary, each Permitted Mortgagee shall, even if it does not assume the obligation of Developer
under this Agreement, be obligated to perform the following with respect to the portion of the
Site owned by it:
(i)
keep the real property taxes current;
(ii) abate weeds and other hazards and nuisances on the Site, in
a commercially reasonable manner including, but not limited to, the investigation and
remediation of hazardous materials and to the extent required by any and all environmental laws
applicable to Lenders and pursuant to cause clean-up of Property in accordance with applicable
environmental laws under any Environmental Insurance Policy;
(iii)
maintain property and liability insurance in commercially
reasonable amounts;
19011.1.10
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S",!ember 27, 2004
(iv) erect and maintain barricades and fencing as reasonably
necessary to protect the public; and
(v)
maintain erosIOn control in a commercially reasonable
manner.
2.7.10 No ImDact on Lien. 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 Site or any portion of the
Site or interest therein. Unless otherwise herein provided, the terms, conditions, covenants,
restrictions and reservations of this Agreement shall be binding and effective against the
Permitted Mortgagee and any owner of the Site, or any portion of the Site, whose title thereto is
acquired by foreclosure, trustee's sale, or otherwise.
2.7.11 Right of The Agency to Cure Mortgage; Other Conveyance for Financing
Default. In the event of an uncured event of default by the Developer under a Permitted
Mortgage for financing of the Site or the Project prior to the issuance of a Certificate of
Compliance, and so long as the Permitted Mortgagee has not exercised its option to assume the
obligations hereunder and complete the Project Improvements, the Agency may, at it option, but
shall not be obligated to, cure the default at any time, up to one week (5 business days) prior to
completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement by
Developer of all direct and actual costs and expenses incurred by Agency in curing the default.
2.7.12 Notice to Mortgagees. A Permitted Mortgagee under any Permitted
Mortgage affecting a portion of the Site shall be entitled to receive concurrent notice of any
default by any party hereunder provided that such Permitted Mortgagee shall have delivered a
written request for such notice of default to the Party from whom the Permitted Mortgagee
wishes to receive notice of a 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 of. 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 proceeding 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 Site 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. Any such notice to
a Permitted Mortgagee shall be given in the same manner as provided in Section 15.7. 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.
2.7.13 Right of Permitted Mortgagee to Cure. Notwithstanding anything to the
contrary contained in this Agreement, if the Site is encumbered by a Permitted Mortgage(s) and
if the Permitted Mortgagee(s) of such Permitted Mortgage(s) shall send to the Agency 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 Agency agrees that, so
long as any such Permitted Mortgage(s) shall remain unsatisfied of record or until written notice
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S","mber 27. 2004
of satisfaction is given by the Permitted Mortgagee(s) to the Agency, each Permitted Mortgagee
the following provisions shall apply:
(a) Each Permitted Mortgagee shall have the right, but not the
obligation, at any time prior to termination of this Agreement and without payment of any
penalty, to cure or remedy such Potential Default or Material Default, to effect any insurance, to
pay any amounts due to the Agency, 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 Site 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 Agency to terminate this Agreement, the Agency shall
not be entitled to terminate this Agreement as to any Permitted Mortgagee, unless (i) the Agency,
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 Agency's intent to terminate this Agreement, and (ii) within ninety (90)
days after delivery of such notice, such Permitted Mortgagee shall fail to either:
(i) cure the Potential Default or Material Default if the same
consists of the nonperformance by Developer of any covenant or condition of this Agreement
requiring the payment of money by Developer to the Agency; or
(ii) ifthe Potential Default or Material Default does not involve
a covenant or condition of this Agreement requiring the payment of money by the Developer to
the Agency, either, in Permitted Mortgagee's sole discretion, (a) cure such Potential Default or
Material Default, or (b)(i) commence, or cause any trustee under the Permitted Mortgage to
commence, within ninety (90) days after the provision of written notice by the Agency to the
Permitted Mortgagee as provided above, and thereafter to diligently pursue to completion steps
and proceedings to foreclose on the interests covered by the Permitted Mortgage, and (ii)
perform or cause the performance of all of the covenants and conditions of this Agreement
requiring the payment of money by the Developer to the Agency, until such time as the Site shall
be sold upon foreclosure pursuant to the Permitted Mortgage or shall be transferred upon judicial
foreclosure or by deed or assignment in lieu of foreclosure. Any Potential Default or Material
Default which does not involve a covenant or condition of this Agreement requiring the payment
of money by the Developer to the Agency shall be deemed cured if any Permitted Mortgagee
shall diligently pursue to completion steps and proceedings to foreclose under the Permitted
Mortgage as provided above and shall, upon acquiring title to all or any portion of the Site,
thereafter undertake its obligations with respect to the portion ofthe Site owned by it pursuant to
Section 2.7.9.
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S'ptombOT",'O04
(c) If any Permitted Mortgagee is prohibited from commencing or
prosecuting foreclosure or other appropriate proceedings in the nature thereof 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 Section
2.7.13(b) above, for commencing or prosecuting 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 Section 2.7.13(b) above and shall
continue to perform and/or cure all such obligations as and when the same fall due.
(d) No Permitted Mortgagee shall have the right to use the failure of
the Agency to provide notice to any other Permitted Mortgagee as a claim, defense or estoppel to
application of these provisions with respect to its Mortgage.
2.7.14 Failure of Permitted Mortgagee to Complete Proiect Improvements. If,
after all cure periods of Developer have expired following Material Default by Developer in
Completion of construction of the Project Improvements on the Site under this Agreement, and
the notice required by Section 2.7.13 to a Permitted Mortgagee was property given, and such
Permitted Mortgagee has not cured or commenced to cure as required by Section 2.7.13, the
Agency may, at its option, upon thirty (30) days written notice to the Developer and such
Permitted Mortgagee purchase the Permitted Mortgage by payment to the Permitted Mortgagee
of the amount of the unpaid debt plus accrued but unpaid interest and other advances and
amounts secured by the security interest.
2.7.15 Amendment: Termination. No amendment or modification to this
Agreement may impair or materially alter Permitted Mortgagee's rights hereunder or increate
obligations, whether on-going or contingent, without the prior written consent of such Permitted
Mortgagees whose Permitted Mortgages encumber that portion of the Site, provided that such
consent is not unreasonably withheld by the Permitted Mortgagee(s) and provided that such
consent shall not be required for modifications to Attachments.
2.7.16 Condemnation or Insurance Proceeds. Except as otherwise expressly set
forth in this Agreement, the rights of any Permitted Mortgagee, pursuant to its Permitted
Mortgage, to receive condemnation or insurance proceeds which are otherwise payable to such
Permitted Mortgagee or to a Party which is its mortgagor shall not be impaired.
2.7.17 Loss Pavable Endorsement to Insurance Policv. The Agency agrees that
the name of the senior most Permitted Mortgagee may be added as the primary toss payee to the
"Loss Payable Endorsement" attached to any and all insurance policies required to be carried by
Developer under this Agreement.
2.7.18 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 Agency hereby agree that the Agency shall have no obligation
I')IJID.IO
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S'ptomb" 27, 2004
to make any modifications to this Agreement pursuant to this Section prior or as a condition to
Close of Escrow.
2.7.19 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.
2.7.20 Constructive Notice and Acceptance. Until such time as a Certificate of
Compliance is recorded in the Official Records with respect to the Site, all of the provisions
contained in this Agreement shall be binding upon and benefit any Person who acquires title to a
portion of the Site.
2.7.21 Bankruptcy Affecting the DeveloDer. Developer and City hereby agree
that this Agreement and the Quitclaim Deed contain covenants running with the land that neither
this Agreement, nor the Quitclaim Deed shall be subject to rejection in bankruptcy and
Developer hereby waives its rights to reject this Agreement, and/or the Quitclaim Deed. If,
notwithstanding the foregoing, the Developer, as debtor in possession, or a trustee in bankruptcy
for the Developer seeks to and does reject this Agreement or the Quitclaim Deed in connection
with any 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
without waiver of any right of the City to challenge such rejection, the Developer and the City
hereby agree 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, the Quitclaim Deed and the Site corresponding thereto 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 Permitted Mortgagee shall, subject to
compliance with Section 2.2, 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 fifteen (15) calendar days after receiving notice of the
Developer's rejection of this Agreement in Bankruptcy Proceedings.
2.7.22 New Agreement with Permitted Mortgagee.
(a) Request bv Senior Permitted Mortgagee. 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 Agency, ifrequested 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 Permitted Mortgagee or the party requesting a new Agreement upon the same terms,
provisions, covenants and agreements set forth herein and commencing as of the date of
termination of this Agreement ("New Agreement"), subject to the following:
(i) such Permitted Mortgagee or the requesting party shall
have provided written notice to the Agency requesting the New Agreement within thirty (30)
days after the date of termination of this Agreement;
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S'ptomb" 27. 2004
(ii) such Permitted Mortgagee or the requesting party shall pay
to the Agency at the time of the execution and delivery of the New Agreement the sums
specified in Section 2.7.I3(b)(i) 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 Agency shall have been subjected by
reason of Developer's Material Default; and
(iii) such Permitted Mortgagee or the requesting party shall,
subject to provisions of Sections 2.7.8, 2.7.9, and 27.12, perform and observe all covenants in
this Agreement and failure to do so shall, after notice and opportunity to cure as provided in this
Agreement, be a Material Default under this Agreement.
(b) Request bv Agencv. 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 Agency, and provide that such Permitted Mortgagee is the then owner of the
Site, will enter into a new Agreement with the Agency upon the same terms, provisions,
covenants and agreements set forth herein and commencing as of the date of termination of this
Agreement ("New Agreement"), subject t the Agency having provided written notice to the
party requesting the New Agreement within thirty (30) days after the date of termination of this
Agreement.
2.7.23 Priority of New Agreement. Any New Agreement shall be prior to any
Mortgage or other lien, charge, or encumbrance on the Site and each Mortgagee shall execute
such additional consents and/or subordination agreements as may reasonably requested by the
Agency 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 Agency to enter into this Agreement and to perform its
obligations hereunder, the Developer represents and warrants to the Agency as follows:
(a) The Developer has the necessary expertise, experience, financial
capability, qualifications and legal status necessary to perform as the Devetoper pursuant to this
Agreement and to construct and complete the Project;
(b) The Developer represents and agrees that its acquisition of the Caltrans
Parcel from Agency and its other undertakings pursuant to this Agreement are and shall be used
for the timely redevelopment of the Site in accordance with the Schedule of Performance
attached to this Agreement and not for speculation in land holding;
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Sop'""b,, 27. 2004
(c) Developer represents and agrees that prior to issuance of a certificate of
occupancy for the Project; the DDA shall include restrictions upon assignment, sale, and
encumbrance of the Project and the Site without approval of the City, which shall include
restrictions on transfer of control of Developer;
(d) The Developer is a limited liability company, duly organized, qualified,
and validly existing and in good standing under the laws of the State of California, 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 make such qualification necessary;
(e) The Developer has all requisite power and authority required to enter into
this Agreement and the instruments referenced herein, 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 partner, individual,
corporation, shareholder, creditor, investor, judicial or administrative body, authority or other
party is required in connection with any of the foregoing;
(f) All requisite action has been taken by the Developer and the Developer
has obtained all requisite consents in connection with entering into this Agreement and the
instruments and documents referenced herein to which the Developer is a party and the
consummation of the transactions contemplated hereby;
(g) The individuals executing this Agreement and the instruments referenced
herein 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;
(h) This Agreement has been duty authorized, executed and delivered by the
Developer and all documents required herein 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 obtigations 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;
(i) Neither the execution or delivery of this Agreement and the documents
referenced herein, nor the incurring of the obligations set forth herein, nor the consummation of
the transactions herein contemplated, nor compliance with the terms of this Agreement and the
documents referenced herein, 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 the Site;
19011.1.10
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(j) 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;
(k) 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 Agency, on any oral or written representation or on the
nondisclosure of any facts or conclusions of law made by the Agency, 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;
(I) The Developer assumes full and complete responsibility at its own cost for
surface and subsurface conditions on the Site (including the Caltrans Parcel). The Agency on
behalf of itself and on behalf of the City does not make any representations or warranties
concerning the Site, its suitability for the use intended by Developer, or the surface or subsurface
conditions of the Site;
(m) Without limiting the generality of the foregoing provisions, the Developer
acknowledges that the Agency has not made and will not make any representations or warranties
concerning compliance or non-compliance of the Caltrans Parcel with Environmental Laws or
the existence or non-existence of Hazardous Materials to the Caltrans Parcel or otherwise;
(n) There are no adverse conditions or circumstances, pending or, to the best
of the Developer's knowledge, threatened litigation, governmental action, or other condition
which could prevent or materially impair the Developer's ability to develop the Site and the
Project as contemplated by the terms of this Agreement, assuming that the Closing Conditions
described in Section 7 are satisfied;
(0) The Developer has not paid or given, and will not payor 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;
(p) To the best of the Developer's knowledge, all reports, documents,
instruments, information and forms of evidence delivered by the Developer to the Agency
concerning or related to this Agreement are accurate, correct and sufficiently complete to give
the Agency true and accurate knowledge of the subject matter, and do not contain any
misrepresentation or omission;
(q) The Developer has sufficient equity, capital and firm binding financing
commitments to (i) pay all costs of development, construction, marketing and sale of all the
Project Improvements as defined in the Scope of Development; (ii) to purchase the Caltrans
Parcel; and (iii) 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
1'1011J.10
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projects as could reasonably be expected to jeopardize the sufficiency of such equity, capital and
finu and binding commitments for the purposes expressed in the preceding sentence;
(r) The Developer does not have any contingent obligations or any other
contracts which could affect the ability of the Developer to carry out its obligations hereunder;
and,
(s) 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 is or may become subject, which has not been fully
disclosed in the documents submitted to the Agency and which could materially affect the ability
of the Developer to carry out its obligations hereunder.
3.2
Al!encv Renresentations and Warranties.
As an inducement to the Developer to enter into this Agreement and perfonu its
obligations hereunder, the Agency represents and warrants to the Developer as follows:
(a) The Agency is a redevelopment authority existing pursuant to the laws of
the State of California;
(b) The Agency has all requisite power and authority required to enter into
this Agreement and the instruments referenced herein, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perfonu 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 requisite action has been taken by the Agency and the Agency has
obtained all requisite consents in connection with entering into this Agreement and the
instruments and documents referenced herein to which the Agency is a party and the
consummation of the transactions contemplated hereby;
(d) The individual executing this Agreement and the instruments referenced
herein on behalf of the Agency has the legal power, right and actual authority to bind the Agency
to the tenus and conditions hereof and thereof;
(e) This Agreement is duly authorized, executed and delivered by the Agency
and all documents required herein to be executed by the Agency pursuant to this Agreement shall
be, at such time as they are required to be executed by the Agency, duly authorized, executed and
delivered by the Agency 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 Agency in
accordance with their tenus; and,
(f) There are no legal proceedings either pending or, to the actual knowledge
of the Assistant Executive Director or Agency Legal Counsel, threatened, to which the Agency is
or may be made a party, or to which any of the Agency's property is or may become subject,
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which has not been fully disclosed in the documents submitted to the Developer and which could
reasonably affect the ability of the Agency to carry out its obligations hereunder.
3.3 Survival. Each of the items in Sections 3.1 and 3.2 in its entirety 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, or Agency, shall
each promptly advise the other party in writing if there is any change pertaining to any matters
set forth or referenced in Sections 3.1 and 3.2.
4.
Convevance of Proper tv/Newport Avenue Dedication.
4.1
The Propertv To Be Conveyed.
4.1.1 ProDertv. Within the time frame described in the Schedule of
Performance, Attachment No.5, and subject to the terms and conditions set forth herein,
including the satisfaction of the Closing Conditions set forth in Section 7, the Agency agrees to
sell to the Developer and the Developer agrees to purchase from the Agency the Caltrans Parcel,
together with all existing improvements, presently located on the Caltrans Parcel, subject to all
Permitted Exceptions (defined below) and such other title exceptions as may be applicable to the
Caltrans Parcel.
4.1.2 NewPort Avenue Dedication. Developer shall irrevocably offer to
dedicate to the City of Tustin the Newport Avenue Dedication Area, which is described in
Attachment No. lC. Such dedication in fee shall be accomplished through Developer's
compliance with the City's subdivision ordinance at no cost to the City.
4.2
Purchase Price.
4.2.1 Purchase Price. As consideration for the sale of the Caltrans Parcel (the
"Property") by the Agency to the Developer, the Developer shall pay to the Agency the sum of
one hundred eight-nine thousand dollars ($189,000.00), plus Agency Transaction Expenses (the
"Purchase Price").
4.2.2 Purchase Price. The Purchase Price for the Property shall consist of the
following:
(a) EAN Deposit. The Developer has paid to the Agency a $50,000.00
deposit in connection with the execution of the Exclusive Agreement to Negotiate (the "EAN
Deposit"). The Agency agrees that to the extent the Agency has advanced funds from the EAN
Deposit to Caltrans to purchase the Caltrans Parcel, the amount of such advance shall be applied
toward the Purchase Price.
(i) The EAN Deposit has been used by the Agency to pay the
Agency's costs incurred in connection with the drafting, negotiation, execution, implementation
and/or termination of the EAN and the drafting, negotiation, execution and implementation of
this Agreement including the Agency's title and survey costs, if any, incurred with respect to the
Caltrans Parcel and all fees and costs incurred for legal counsel, financial and other consultants,
1')(1111.10
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engineering and otherwise, including the cost of acquisition of the Cattrans Parcel ("Agency
Transaction Expenses");
(ii) determination of costs, expenses and fees constituting
Agency Transaction Expenses will be made by the Agency in its sole discretion and Developer
shall be entitled to receive summary notices from the Agency setting forth the Agency
Transaction Expenses to be retained by or paid to the Agency at least four (4) Business Days
prior to Close of Escrow, and a Statement of the Purchase Price; and,
(b) SuPDlemental Deposit. Three (3) Business Days prior to close of
escrow, the Developer shall deposit into Escrow an additional amount to equal the Purchase
Price. The Purchase Price 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 to Agency
at Close of Escrow. The Purchase Price shall be nonrefundable except as otherwise expressly
provided in this Agreement.
(c) Closing Costs. The Developer shall also deposit into Escrow
sufficient funds to (a) cover all closing costs to be paid by the Developer pursuant to Section
7.5.Hb), (b) allow Escrow Holder to disburse to the Agency an amount equat to the Purchase
Price, as adjusted for any net credits or debits to the Agency for closing costs and/or prorations in
accordance with Sections 7.5.4 and 7.5.5.
(d) Pavments in Immediatelv Available Funds. 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
sufficient funds on a federally insured bank in the State of California and made payable to the
order of Escrow Holder.
4.3 Escrow. Not later than one (I) business day after the execution of this
Agreement by the Developer and the Agency, the Developer and the Agency 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 Hotder receives an executed
original counterpart to this Agreement signed by the Developer and the Agency. Upon the
written acceptance of this Agreement by Escrow Holder, this Agreement shall constitute the joint
escrow instructions of the Developer and the Agency to Escrow Holder to open an escrow (the
"Escrow"). Upon 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 Agency
shall execute Escrow Holder's general escrow instructions upon request, with such modifications
thereto as the Developer and the Agency 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 Agency
and the Developer in writing. Any supplemental escrow instructions must be in writing and
signed by the Agency and the Developer and accepted by the Escrow Holder to be effective.
4.4
Investigation: Propertv Sold" As-Is".
4.4.1
Investigation.
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(a) The Developer has conducted, or will have conducted prior to
execution of this Agreement, the Developer's own investigation of the Caltrans Parcel and all
matters related to the Caltrans Parcel including the state of title, easements, covenants, conditions
and/or restrictions affecting the Caltrans Parcel, if any, the physicat condition thereof, the
accessibility and location of utilities, the physical condition of all structures located on the
Caltrans Parcel, as applicable, and all mechanical, plumbing, sewage, and electrical systems
located therein, suitability of soils, environmental and other Caltrans Parcel investigations. 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 Developer's willingness to consummate this Agreement.
(b) The Developer acknowledges and agrees that having been given
the opportunity to inspect the Caltrans Parcel and review the infonnation and documentation
affecting the property, the Developer is relying solely on its own investigation of the Caltrans
Parcel and review of such infonnation and documentation in detennining the physical, economic
and legal condition of the property, and not on any infonnation provided or to be provided by the
Agency or the agents of the Agency. The Developer further acknowledges and agrees that any
infonnation provided to the Developer by or on behalf of the Agency with respect to the Caltrans
Parcel was obtained from a variety of sources and that the Agency has not made any independent
investigation or verification of such infonnation and makes no representations as to the accuracy
or completeness of such infonnation. The Developer acknowledges and agrees that it shall
perfonn its own assessment of the environmental condition of the Caltrans Parcet, the presence
of Hazardous Materials on the property, and the suitability of the soit for improvements to be
constructed.
4.4.2
AS-IS: WHERE-IS.
(a) No Representations or Warranties. The Developer recognizes that
the Agency would not sell the Caltrans Parcel except on an "AS, IS, WHERE IS, WITH ALL
FAULTS" basis, and the Developer acknowledges that the Agency has made no representations
or warranties of any kind whatsoever, either express or implied in connection with any matters
with respect to the Caltrans Parcel or any portion thereof. The Devetoper acknowtedges that the
Developer has examined the Caltrans Parcel and is buying the Caltrans Parcel 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 Agency 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 Agency or any of its agents, elected or appointed officials, representatives
or employees, of concerning or with respect to:
(i)
the value of the Caltrans Parcel or the income to be derived
from the Caltrans Parcel;
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S'p"mb" 27, 2004
(ii) the existence or nonexistence of any liens, easements,
covenants, conditions, restrictions, claims or encumbrances affecting the Caltrans Parcel;
(iii) the suitability of the Caltrans Parcel for any and all future
development, uses and activities which the Developer may conduct thereon, including the
development of the Project described herein;
(iv)
purpose ofthe Caltrans Parcel;
the habitability, merchantability or fitness for a particular
(v)
the manner, quality, state of repair or tack of repair of the
Caltrans Parcel;
(vi)
including water, soil and geology;
the nature, quality or condition of the Caltrans Parcel
(vii) the compliance of or by the Caltrans Parcel 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 Caltrans Parcel;
(ix) the presence or absence of Hazardous Materials, at, on,
under, or adjacent to the Caltrans Parcel;
(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 Caltrans Parcel and the transactions contemplated herein;
(xi) the conformity of the existing improvements on the
Caltrans Parcel, if any; to any plans or specifications for the Caltrans Parcet;
(xii) compliance of the Caltrans Parcel 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 Caltrans Parcel 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 under the Seismic Hazards Mapping Act,
California Public Resources Code, Sections 2690-2699.6 and Sections 3720-3725;
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S'ptomb" 27. 2004
(xv) the existence or lack of vested land use, zoning or building
entitlement affecting the Caltrans Parcel; and,
(xvi)
with respect to any other matters.
(b) No Unauthorized Representations. No person acting on behalf of
the Agency 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 Caltrans Parcel or the transaction contemplated herein or the past, present or future
zoning, land use entitlements, construction, physical condition or other status of the Caltrans
Parcel 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
Agency that is not contained in this Agreement will be valid or binding on the Agency.
(c) Release. Save and except for the covenants, representations and
warranties of the Agency 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 Caltrans 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 Agency and City of Tustin and their respective 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 Diligence Information"); (b)
arising from any condition of the Caltrans Parcel, 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 Caltrans Parcel, 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 Caltrans Parcel
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 Caltrans Parcel, or any portion thereof, including any
Investigation or Remediation at or about the Caltrans Parcel; 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 Agency or their respective 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
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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 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 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 ftom any such unknown Claims and controversies which might in any way be included
as a material portion of the consideration given to the Agency by the Developer in exchange for
the Agency's performance hereunder.
BY INITIALIZING BELOW, DEVELOPER
ACKNOWLEDGES THAT (A) IT HAS READ AND FULLY
UNDERSTANDS THE PROVISIONS THAT 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.
DEVELOPER'S INITIALS
AGENCY'S INITIALS
This release shall run with the land as an equitable servitude for the benefit of the Agency and,
shall be included in its entirety in the Quitclaim Deed.
5.
Indemnitv. No Financinl!: Continl!:encv.
5.1 Indemnitv. The Developer hereby agrees to protect, indemnify, defend and hold
the Agency and the City of Tustin and their respective officials, employees, agents, attorneys,
representatives, contractors, successors and assigns free and harmless from and against any and
all Claims arising ftom or related to entry onto the Caltrans Parcel 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 Caltrans Parcel, including carried out by the
Developer on or adjacent to the Caltrans Parcel; provided, however, that the foregoing indemnity
shall not apply to any diminution in the value of the Caltrans Parcel resulting solely from
Developer's discovery of any pre-existing condition, pre-existing circumstance or pre-existing
Hazardous Material on the Caltrans Parcel. The Developer shall keep the Caltrans Parcel free
and clear of any mechanics' liens or materialmen's liens related to the Developer's Inspection of
19011.1.10
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S'p"mb" 27, 2004
the Caltrans Parcel. The indemnification by the Developer set forth in this Section 5.1 shall
survive the Close of Escrow and the termination of this Agreement and shall not be merged with
the Quitclaim Deed.
5.2 No Financin!! Contin!!ency. The Developer acknowledges that it has examined
its ability to purchase the Caltrans Parcel and to develop the Project, including the Developer's
ability to obtain financing there for. As a condition precedent to entering into this Agreement, the
Developer has provided evidence, satisfactory to the Agency, of the Developer's ability to obtain
such financing. The Developer acknowledges and agrees that the Developer's purchase of the
Caltrans Parcel is subject to no financing contingency whatsoever with respect to either private
or public financing.
6.
Title: Survey.
6.1 Survey. A proposed survey of the Caltrans Parcel ("Survey") has been prepared
by Caltrans. Prior to Close of Escrow the Survey shall be certified by the Surveyor to the
Agency, the Developer and the Title Company and corrections made, if necessary. The Survey
identifies all Permitted Exceptions, as hereinafter defined, by reference to the recording
information applicable to the documents creating them and also states whether any portion of the
Caltrans Parcel lies within a flood hazard area. The Developer hereby agrees to indemnify and
hold the Agency and its respective officials, employees, agents, attorneys, representatives,
contractors and successors and assigns ftee and harmless ftom any and all Claims which the
Developer shall incur or sustain as a result of inaccuracy in the legal description for the Caltrans
Parcel. The indemnification by the Developer set forth in this Section 5.1 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. Within ten (10) days following the Effective Date, the
Developer may, at the Developer's sole expense, cause the Title Company to prepare and deliver
to the Developer a preliminary title cOIumitment ftom Title Company ("Title Commitment")
committing to issue to the Developer a California Land Title Association Owner's Policy for the
Caltrans Parcel (the "CL TA Policy") together with true and complete copies of all instruments
referred to therein. The Developer acknowledges and agrees that it has reviewed the Preliminary
Title Report and the other relevant documents referenced below and that it shall take title to the
Developer Parcel subject to the following (collectively referred to herein 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, (b) all exceptions indicated in the Preliminary Title Report, 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 ALTA Policv: Endorsements. It shall be a condition precedent to the
Developer's obligation to close escrow that the Title Company issue the CLTA Policy with
policy amount as requested by the Developer, not to exceed the Purchase Price. It shall not be a
condition precedent to the Developer's obligation to close that the CL T A Policy show only
exceptions to fee title that are Permitted Exceptions; the Caltrans Parcel is being sold by the
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S'ptomb<, 27. 2004
Agency "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 AL T A 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 Escrow. The
Agency shall pay for the cost of the CL T A Policy. Developer shall pay for the cost of any AL T A
Policy requested by Developer and the cost of Developer's Title Endorsements. The title policy
obtained by the Developer is referred to herein as "Developer's Title Policy." Developer's
failure or inability to obtain the AL T A 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.
Closinl!.
7.1 Time and Place of Closinl!. For purposes of this Agreement, the term "Closing
Date" shall mean three (3) business days after satisfaction of Developer's Closing Conditions
and Agency's Closing Conditions. The Close of Escrow shall take place on the Closing Date at:
First American Title Company (the "Title Company"), Robert Benavente ( the "Escrow
Officer"). The Closing Date may be extended upon mutual written agreement of the Parties.
7.2 Developer's Conditions Precedent to Closinl!. 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 the Closing
Date:
7.2.1 The Agencv's Document Deliveries. The Agency's execution and delivery
to Escrow Hotder of the following documents, which documents the Agency shall deliver to
Escrow not later than three (3) days prior to the Close of Escrow:
(a)
the Quitclaim Deed, executed by the Agency, acknowledged and in
recordable form;
(b) a federal "FlRPT A" Affidavit executed by the Agency in form
reasonably acceptable to the Developer, certifYing that the Agency is not a "foreign person"
under the Foreign Investment in Real Property Tax Act;
(c)
California's Real Estate Withholding Exemption Certificate Form
597-W;
(d) such proof of the Agency'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 Agency to act for and/or bind the Agency as may be reasonably
required by Title Company and/or the Developer; and
191111J.10
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S,ptern"", 27, 2004
(e) such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated herein.
7.2.2 Title Policv. The Title Company shall be in a position to convert the Title
Commitment to the CL T A 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 rights of occupancy
with respect to the Caltrans Parcel that shall survive the Close of Escrow.
7.2.4 Tentative Tract Map. Developer Shall have submitted a Tract Map for the
Site.
7.3 The A!!:ency's Conditions Precedent. The Agency's obligation to sell the
Caltrans Parcel and to close Escrow is subject to and conditioned upon the Agency's satisfaction
or the Agency's written waiver, in its sole discretion, as to each of the following conditions to
Close of Escrow ("Agency Closing Conditions") on or before the Closing Date:
7.3.1 Close of Escrow with Caltrans for the Caltrans Parcel. The deed from
Caltrans to Agency shall have been recorded.
7.3.2 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:
The Developer shall have delivered to the Agency (i) a declaration
certified by the Developer, that the following documentation submitted by the Developer to the
Agency prior to the Effective Date is true and correct as of Close of Escrow: (aa) 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 required by this Agreement; (bb) a
certificate of status issued by the California Secretary of State; and (cc) a copy of any Fictitious
Business Name Statement if any, as published and filed with the Clerk of Orange County; and
(ii) a certificate of good standing of the Developer issued by the California Secretary of State.
7.3.3 Developer's Deliverv of Purchase Price: Other Costs. Not later than two
(2) days prior to the Closing Date, the Developer shall deliver to Escrow (a) the Supplemental
Deposit, as described in Section 4.2.2(b) plus all other sums required to pay the Developer's
closing costs, and other sums required to be paid by the Developer as a condition to Close of
Escrow, as described in Section 4.2 of this Agreement.
7.3.4 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 thirty (30) business days following the Execution of this Agreement by Agency:
(a) the Memorandum of DDA executed by the Developer,
acknowledged and in recordable form;
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S,ptomb" 27. 2004
(b) a reaffirmation of the Developer's representations and warranties
set forth in Section 3.1 in form and substance acceptable to the Agency;
(c) a reaffirmation of the Release described in Section 4.5.2(e) in form
and substance acceptable to the Agency;
(d) 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 Agency;
(e)
evidence of satisfaction of conditions precedent; and,
(f) such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated herein.
7.3.5 Evidence of Financing. The Developer shall have submitted to the Agency
the following evidence of financing:
(a) Demonstration to the satisfaction of the Assistant Executive
Director or designee the availability of funds sufficient to pay all costs relating to acquisition of
the Caltrans Parcel and development of the Project including sufficient equity capital, bonding
capacity and commitment for funding of the Project Improvements in writing from a Permitted
Mortgagee(s).
(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 Agency, in its sole discretion,
determines will assist in the evaluation of whether the Developer is able to acquire the Caltrans
Parcel and construct the Project Improvements and perform in a timely manner all of its other
obligations and commitments of the Project set forth in this Agreement.
7.3.6 DeveloDer's ReDresentations and Warranties. The Developer's
representations and warranties set forth in this Agreement shall be true and correct as of the
Closing Date.
7.3.7 Developer's Covenants. The Developer shall not be in default of any
covenant or agreement to be performed by the Developer under this Agreement.
7.3.8 Insurance Policies. The Developer shall have submitted to the Agency
evidence of insurance policies required to be obtained by the Developer pursuant to Section 11.
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S'ptomb« 27, 2004
7.4 Additional Closinl! Conditions. In addition to the provisions of Sections 7.2 and
7.3, the Close of Escrow shall be conditioned upon the following Closing Conditions, which
shall be for the benefit of each of the Agency and the Developer:
7.4.1 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 Agency and the
Developer.
7.4.2 Supplemental Escrow Instructions. The Agency and the Developer shall
have prepared and approved any supptemental Escrow instructions as may be needed.
7.4.3 Closing Certificate. The Agency 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 Proper tv From Al!encv to Developer.
7.5.1 Costs and Expenses. The costs and expenses of the Closing shall be
allocated as follows:
(a) Developer's Costs. The Developer shall pay for (a) the premium
for the Developer's CLTA or ALTA Title Policy, it may request the costs of Developer's Title
Endorsements; (b) the cost, if any, of any title insurance policy required by any Mortgagee; (c)
all documentation transfer faxes; (d) document recording charges for the Quitclaim Deed, the
Memorandum ofDDA and other documents recorded at Closing; (e) all Escrow fees and costs;
and (t) 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.
(b) Other Costs. All costs and expenses related to the Closing and the
transfer of the Caltrans Parcel to the Developer not otherwise allocated herein shall be paid by
the Developer.
7.5.2 Possession. The Agency shall deliver the Quitclaim Deed to the Caltrans
Parcel and possession of the Caltrans Parcel at the Close of Escrow.
7.5.3 Deliveries to Developer Upon Closing. The Agency agrees to deliver to
the Developer, on or prior to the Closing Date, outside of Escrow, the following items:
(a) Records and Plans. To the extent in the Agency's possession,
originals or copies of records and plans that will affect the Caltrans Parcel after the Closing.
(b) Licenses and Permits. To the extent in the Agency's possession,
originals or copies of all licenses and permits affecting the Caltrans Parcel.
7.5.4 Prorations.
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(a) 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 Ctosing, any real property taxes are assessed against the Caltrans Parcel pertaining to the
period prior to the Closing, the Agency 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.
(b) Method of Proration. All prorations shall be made in accordance
with customary practice in Orange County, except as otherwise expressly provided herein. The
Developer and the Agency 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 be paid by the Developer to the Agency (if the prorations result in a net credit to the
Agency) or by the Agency 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 Agency, or by the Agency 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 Agency 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 Caltrans Parcel is part of a larger tax
parcel ("Assessment 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 Agency for taxes and assessments allocated to the Caltrans Parcel on an
acreage basis compared to the acreage for the entire Assessment 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 Caltrans 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 bv 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 Agency the 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 ofDDA and any
other documents which the Developer and the Agency 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 Agency.
19011J.!O
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S'P',rnb" 27. 2004
7.5.8 Title Policv. Direct the Title Company to issue the CLTA policy to'the
Developer, concurrent with the issuance of the Insurance Policy the Title Company shall provide
such endorsements as may be requested by the Developer.
7.5.9 Deliverv of Documents to Developer and Agency. Deliver to the
Developer and the Agency original counterparts (and conformed copies, if applicable) of the
Quitclaim Deed, the Memorandum ofDDA, the FIRPTA Certificate, the California Form 597-W
and any other documents (or copies thereof) deposited into Escrow by the Developer or the
Agency pursuant hereto, and deliver to the Developer and the Agency a certified copy of their
respective Escrow closing statements.
7.5.10 Other Actions. Take such other actions as the Developer and the Agency
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 15.7 of this Agreement for notices,
demands and communications between the Parties.
8.
Development ofthe Project.
8.1
Scope of Development.
8.1.1 Requirement to Develop the Project. The Scope of Development attached
to this Agreement as Attachment No.6 sets forth the overall plan for the Project and
development of the Site. The Developer shall improve the Site and construct the Project
Improvements identified in Attachment No.6, 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. The Developer shall promptly begin and thereafter
diligently prosecute to Completion in accordance with the Schedule of Performance and subject
to Force Majeure, all Project Improvements when and as required by the Agency and pursuant to
all Governmental Requirements, State and Federal Law.
8.1.2 Responsibilitv for Project Development. The Developer shall have
responsibility for the design and layout of the Project Improvements (including height, shape and
location, size of floor plans, and special landscaping and art features), and the City, 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 Agency set forth in
this Agreement which are undertaken by the Agency in its proprietary capacity.
8.1.3 Project Development Costs. Within the time set forth in the Schedule of
Performance and subject to Force Majeure, the Developer shall design and construct the Project
at the Developer's sole cost and expense and without public subsidy of any kind, except as
provided herein, unless otherwise agreed in writing by the Agency in its sole discretion. Without
limiting the generality of the foregoing, the Developer hereby agrees that all costs associated
with planning, designing and constructing the Project, preparing the Site and constructing all
Project Improvements thereon including all hard costs, soft costs, the cost of services, fees,
exactions, dedications, cost overruns, profit, overhead, consultants' fees, legal fees, wages
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required to be paid to any person employed by the Developer, any Assignee, contractor or
subcontractor, ("Development Costs"), shall be the responsibility of the Developer without any
cost or liability to the Agency.
8.1.4 Compliance with Governmental Requirements and Other Requirements.
The Project shall be consistent with the Scope of Development and shall be developed and
maintained in accordance with this Agreement and all Governmental Requirements, including
the Approved Project Plans.
8. 1.5 Products, Reports, Studies and Investigations. In connection with the
proposed Project, the Developer shall prepare or cause to be prepare architectural and other
products, surveys, plans, reports, tests, studies, and investigations with respect to the Property
and Project (collectively, "Products"). All Products shall be prepared at Developer's sole cost
and expense. If this Agreement is terminated for any reason other than a material breach or
default hereunder by the Agency, then with respect to all Products other than: architectural
products; financial or economic estimates, projections and evaluations; studies and information
related to potential tenants, lenders and investors, the Agency may request that the Developer,
for consideration to be mutually agreed, transfer Developer's rights to any or all of the
transferable products identified by the Agency, but in no event shall the cost to the Agency
exceed five hundred dollars ($500.00). Upon such request, the Developer shall deliver to the
Agency copies of all transferable products requested by the Agency together with a bill of sale
thereto, provided that the Developer makes no representation, warrantee or guarantee regarding
the completeness or accuracy of the transferable products, and the Developer does not covenant
to convey the copyright or other ownership rights of third parties thereto. Such transferable
products shall thereupon be free from all claims or interests of Developer or any liens or
encumbrances.
8.2
Timin!! and Conditions ofProiect Development.
8.2. I Schedule of Performance. Attached hereto as Attachment No.5 is a
Schedule of Performance which sets forth the schedule for submissions, approvals and actions,
including the design and construction of the Project Improvements. The Parties acknowledge and
agree that the Agency is entering into this Agreement with the expectation that subject to Force
Majeure, the projections in the Schedule of Performance will be met. Following conveyance of
the Caltrans Parcel to the Developer, the Developer shall promptly begin and thereafter diligently
prosecute to completion all steps required by the Schedule of Performance including design,
construction and development of the Project Improvements within the time specified in the
Schedule of Performance. The Agency may, in its sole discretion and upon written request from
the Devetoper, extend the time specified in the Schedule of Performance; provided, however,
that the Agency 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 determined by the Agency 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 projects in Orange County. Any such agreed
upon changes shall be within the limitations of the Entitlements. Any such extensions shall not
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be deemed as amendments to this Agreement. Any such extensions shall be evidenced by written
notice from the Assistant Executive Director or designee.
8.2.2 Conditions Relating to Timing and Sequencing of the Development of the
Proiect. The following are express conditions precedent to the right of the Developer to proceed
with development ofthe Project.
(a) School ImDact Fees. The Developer acknowledges and agrees that
the Developer Parcel is subject to imposition of developer school impact fees by the Tustin
Unified School District. Such fees shall be paid by Developer in accordance with law, prior to
issuance of Building permits for the Project Improvements, and evidence of such payment
provided to City.
8.3
Land Use Matters.
8.3.1 Entitlements and Development Permits. It is the responsibility of the
Developer, without cost to the Agency: (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 Site and construction of the Project Improvements shown in the Scope of Development
and the Preliminary Plan as the same may be modified from time to time with the approval of the
Agency ("Entitlements"); (b) to obtain all grading, demolition, and building permits; and (c) to
assure that the design, construction, use, operation, maintenance, repair and replacement of the
Project Improvements is carried out in accordance with the provisions of this Agreement, and is
permitted by zoning and all applicable City requirements. Nothing contained herein shall be
deemed to entitle the Developer to any Entitlement or grading, demolition, and building permit
or other City approval necessary for the development of the Site, or to the waiver of any
applicable Agency requirements relating thereto and the failure of the City to issue or approve
any Entitlement described in this Agreement, including any Subdivision Map, Concept Plan,
Design Review or Specific Plan, or to issue any grading, demolition, and building permit shall
not be a default of the Agency 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 Site, or (d) amend any
City laws, codes or rules.
8.3.3 Required Entitlements. The development of the Project shall be subject to
the following Entitlement review processes of the City: (a) Subdivision Map Act approval; (b)
Design Review and securing; and (c) demolition and grading permits. 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 Redevelopment Plan, the City Code,
and with all building codes, landscaping, signage and parking requirements, except as may be
permitted through variances and minor modifications.
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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
required by the Agency or any other Governmental Authority to subdivide the Site and to
construct the Project Improvements (collectively, "Development Permits"). The Subdivision
Map shall incorporate all required dedications described in this Agreement or otherwise required
by the City.
8.3.5 Agencv Review of Land Use ApDlications. Consistent with this
Agreement, the Agency agrees, without cost to the Agency, to support the Developer's efforts to
obtain the Entitlements and grading, demolition, and building permits required for the full
implementation of this Agreement. The Agency 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 grading, demolition, and building
permits.
8.3.6 CEOA Requirements. The Parties acknowledge and agree that CEQA is
applicable to the development of the Project. The Agency shall be responsible, at its own cost
and expense, for obtaining CEQA approvals and certifications, if any, required by the Agency
and any other Governmental Authority for development of the Project. The Developer shall
cooperate with the Agency and abide by the Agency's CEQA guidelines and procedures, and fee
requirements, which include but are not limited to, the following obligations: (a) to deposit funds
to pay all of the Agency's costs of preparing the required environmental studies, (b) to supply
information and otherwise assist the Agency to enable the Agency to determine the
environmental impact of the proposed Project, as described in the DDA, and (c) to prepare such
additional environmental documents, if any, as may be determined by the Agency, to be required
in connection with development of the Project.
8.4
Financial Status.
8.4.1 Financial CaDabilitv. Until issuance of the Certificate of Compliance, the
Developer shall continue to be responsible for demonstrating to the Agency the financial
capacity and capability to perform its obligations under this Agreement. The Developer shall
submit any additional financial information of Developer as requested by the City, including
Developer's recent signed financial statements for the last two years (catendar or fiscal) and the
financial statements of its key principal(s) shall be submitted to the Agency within thirty (30)
days of the Effective Date of this Agreement. To the extent Devetoper wants such financial
statements to remain confidential, Developer shall identify with specificity the documents which
the Developer wants the Agency to maintain as confidential documents and a statement of the
reasons why such documents are to be maintained 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 California. If confidentiality is requested and if nondisclosure under the Public
Records Act is allowed, the statements shall be delivered to and maintained by the Agency
Counsel and copies not disseminated. Otherwise, Developer agrees to make such information
available to Agency at its offices. To the extent permitted by law, the Agency, including Agency
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Sop'=b" 27. 2004
Counsel, shall not make public disclosure of the statements. The Agency's negotiators and
consultants may review the statements as necessary as long as such parties agree to maintain the
confidentiality of such statements.
8.5
Desi!!n Approval.
8.5.1 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 Agency
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 Agency will require plan review and
approval for the Site as further set forth in this Section 8.5.
8.5.2 Plan DeveloDment 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 Section 8.5.
8.5.3 Preliminary Plans and DeveloDment of Further Design Stages. The
Developer has previously submitted to the City and Agency a pretiminary Site plan (the
"Preliminary Plan"), which is on file with the Community Development Department,
graphically depicting the overall plan for development of the Project Improvements on the Site.
Within the timeframe shown in the Schedule of Performance, Developer shall submit for
approval by the Agency and City, entitlement applications and final design drawings and related
documents conforming to the requirements of the conditions of approval and the Tustin City
Code.
8.5.4 Coordination. It is understood and agreed to by Developer that the quality,
character, and uses proposed for the Project are of particular importance to the Agency and that
planning and design review approval by the Agency and the City will be required for the
development of the Site. Developer and the proposed architect shall meet with representatives of
the Agency and the City to review and come to a clear understanding of the planning and design
criteria required by the Agency and the City. Within ten (10) days following the Effective Date,
Developer and Agency shall agree upon a schedule for entitlement processing based upon an
initial draft to be submitted to the Developer by the City. Within the 45 days of the Effective
Date, the Developer shall submit for approval of the City preliminary design drawings and
related documents required for Entitlements containing the overall plan for development of the
Developer's Project including the following:
(a) A site plan and design review submittat including all information
as required by the Tustin City Code and Department of Community Development and showing
the building layout, dimensions, floor plans, parking, landscaping and access on or related to
each individual parcel, preliminary materials call outs and conceptual building renderings;
(b) A Tentative Parcel map to consolidate the parcels on the site, as
may be required by the Department of Community Development;
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(c)
A tentative development schedule; and,
(d) Preliminary engineering and concept design drawings for all
improvements within the public right-of-way adjacent to the Site.
8.5.5 Proprietary Review. The Agency shall have the right of reasonable
architectural review of all preliminary and Entitlement 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 Executive Directors office of its right to inspect or review the plans, drawings and
related documents for development of the Site: (a) is an exercise of the Agency's proprietary
function and not the City's governmental function; (b) shall not constitute an approval by the
Agency of any Entitlements or Development Permits; (c) shall not constitute a determination by
the Agency of the engineering or structural design, sufficiency or integrity of the Project
Improvements contemplated by such plans, drawings and related documents, and (d) shall not
constitute a determination by the Agency 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 furnished or
supplied in connection therewith.
8.5.6 Process for Proprietary Review. Developer shall submit two (2) sets of
preliminary plans & Entitlement plans for the Project Improvements to the City. All plans to be
submitted to the Agency shall be submitted in writing over the signature of the Developer or a
representative duly authorized by the Developer in writing. If the Agency approves such
preliminary plans & Entitlement plans, the Agency shall endorse its approval on one set of
submitted documents and return them to Developer. The Agency shall conclusively be deemed to
have given its approval to such concept plans & Entitlement plans unless, within ten (10)
business days after the Agency's receipt of such preliminary plans & entitlement plans, the
Agency gives written notice of disapproval to the Developer specifying in reasonable detail each
item that the Agency disapproves and the reasons for such disapproval. In the event of
disapproval by the Agency of such preliminary plans & Entitlement plans, the Developer shall
make changes in response to the Agency's notice of disapproval and resubmit such preliminary
plans & entitlement plans to the Agency's review and approval in accordance with the provisions
of this Section 8.5.6 (except that in such case the Agency'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 Site shall be permitted provided that the same
shall be sufficient to permit review by the Agency for the purposes set forth above.
8.5.7 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 on the Site, other than Project Improvements constructed in
accordance with the Approved Project Plans, interior construction work, building facade
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S'p"mb" 27, 2004
replacements or building repair or restoration on the same footprint following a casualty, without
the written consent of the Agency. If the Developer contemplates any action not permitted by the
foregoing, the Developer shall submit the applicable concept plans & entitlement plans to the
Agency for approval in accordance with Sections 8.5.5 and 8.5.6 prior to commencing any
construction work. The Agency shall have the right to approve or disapprove any such concept
plans & entitlement plans in accordance with the standards and procedures for the Agency's
review and approval set forth in such sections.
8.5.8 Agencv's Governmentat Review. The Parties acknowledge that the
Agency shall have the right to review all plans end submissions, including any changes therein,
through its normal plan review and Entitlement process and that the Agency 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 Agency 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 Project Improvements.
8.5.9 Exculpation. The Agency 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
Agency, including by the Assistant Executive Director or designee whether made in the
governmental of City or proprietary capacity of the Agency, 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 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 Site or
any portion thereof agrees by acquiring title thereto or an interest therein, not to bring any suit or
action against the Agency or 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 or Agency 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.
8.5.10 No SuDervision or Control. The Agency 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 formulating of the plans, drawings and related
documents of the Developer.
8.5.11 Status Reports. Developer agrees to make orat and written reports at such
times requested by the Agency advising the Agency and/or its staff of all matters and studies
being made, including Developer's progress in analyzing the feasibility of the Project, as may be
requested by the Agency or its staff.
1')()113.10
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S'ptomb" 27. 2004
8.5.12 Approved Proiect Plans. (i) Upon approval by the City of the Entitlements;
(ii) approval by the Agency of preliminary plans and Entitlement plans, in accordance with
Sections 8.5.5 and 8.5.6, and (iii)approval of construction level drawings by the City, then such
approved plans (the "Approved Project Plans"), shall govern development of the Project
Improvements on the Site. To the extent of any inconsistencies between the ptans identified in
the Scope of Development or the Preliminary Plans and the Approved Project Plans, the
Approved Project Plans shall govern and controt as to the development of the Site.
8.6
Construction Covenants.
With respect to construction of the Project, the Developer hereby covenants and agrees as
follows:
8.6.1 The Developer shall maintain throughout the term of this Agreement,
sufficient equity, capital and 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 Devetoper to perform and satisfy all
the covenants of the Developer contained in this Agreement. The Developer shall not undertake
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.
8.6.2 The development of the Project shall be done in a professional and
competent manner. The Developer shall perform all work required to comptete the Project and
related work in accordance with all Governmental Requirements.
8.6.3 The Developer shall be responsible for the timetiness 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 Dev'eloper or through
subcontractors, sub-subcontractors (of all tiers) and suppliers.
8.6.4 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.
8.6.5 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, subject to Force Majeure.
8.7 Al!encv Ril!hts of Access. Representatives of the Agency shall have the
reasonable right of access to all portions of the Site, 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 Project Improvements.
The Agency agrees to indemnify, defend and hold the Developer harmless for any and all claims,
19011.1.JO
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Soptemb" 27. 2004
liability and damages arising out of any inspection or other activity on the Site by the Agency, or
their respective agents, employees or contractors permitted pursuant to this Section 8.7, except to
the extent caused by the negligence or willful misconduct of the Developer.
8.8 Disclaimer of Responsibilitv bv Al!encv. The Agency 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 inform the Developer,
Assignee or any third party of any matter in connection with the development or construction of
the Project Improvements, whether regarding the quality, adequacy or suitability of the plans,
any labor, service, equipment or material furnished to the Site, 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 Agency in
connection with such matter is for the public purpose of redeveloping the Site, and neither the
Developer nor any Assignee nor any third party is entitled to rely thereon. The Agency shall not
be responsible for any of the work of construction, improvement or development of the Site.
8.9 CC&Rs. One (I) set of conditions, covenants and restrictions ("CC&Rs") shall
be prepared by Developer for recordation against Site. This set shall be subject to review and
approval by the Agency. The CC&Rs shall include, at a minimum, the following provisions as
applicable: (a) a maintenance covenant for the benefit of the Agency as set forth in Section 12.2
or as otherwise agreed by the Agency in its sole discretion, (b) the release provisions set forth in
Section 4.5.2(c); (c) all other applicable requirements included in the conditions of approval for
the Subdivision Map for the Project; and (d) covenants to maintain and/or contribute to the
maintenance of post-construction best management practices to control runoff.
8.10 Local, State and Federal Laws. The Developer shall carry out the construction
of the Project, including all Project Improvements, in conformity with all applicable laws and
Governmental Requirements, including all applicable federal and State labor laws and
requirements. The City shall not be responsible for any claims, including penalties assessed by
Governmental Authorities, arising from or related to Developer's construction of the Project,
including compliance with the prevailing wage requirements imposed by State law.
8.11 Taxes, Assessments, Encumbrances and Liens. The Developer shall pay when
due and prior to delinquency all real property taxes and assessments assessed and levied on or
against all portions of the Site subsequent to the conveyance of fee thereto by the Agency to the
Developer. The Developer shall not place, or allow to be placed, on its interests in the Site, or
any portion thereof, any Mortgage or encumbrance or lien not authorized by this Agreement. The
Developer shall remove, or shall have removed, any levy or attachment made on its interests in
the Site (or any portion thereof), or shall assure the satisfaction thereof within a reasonable time
but in any event prior to foreclosure sale. Nothing herein contained 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.
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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 when and as required by this Agreement in
accordance with the Schedule of Performance.
9.2 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 Agency in
its sole reasonable discretion, the Agency shall deliver to the Developer or Assignee, as the case
may be, a Certificate of Compliance, upon written request there for by the Developer. 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 Sections 10 and 12 of this Agreement. Issuance of the Certificate of Compliance
shall not waive any rights or claim that the Agency 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 permit it to be recorded in
the Official Records.
9.3 Conclusive Presumption. The Certificate of Compliance shall be, and shall so
state, conclusive determination of satisfactory completion of the obligations of the Developer
pursuant to this Agreement.
9.4 Not Evidence. Issuance by the Agency of a Certificate of Compliance shall not
constitute evidence of compliance with or satisfaction of any obligation of the Developer to any
insurer of a Mortgage securing money loaned to finance the Project Improvements, nor any part
thereof. Such Certificate of Compliance is not a notice of completion as referred to in Section
3093 of the California Civil Code.
9.5 Conditions Precedent to Issuance of Certificate of Compliance. The Agency
shall not be obligated to issue the Certificate of Compliance for the Project as a whole, unless
and until each of the following has occurred (the "Conditions Precedent"):
(a) final inspection of the Site and determination by the Agency that
all Project Improvements required in connection with the Project have been Completed in
conformance with this Agreement and all Governmental Requirements;
(b)
issuance of a final certificate of occupancy for the Project;
(c) releases or waivers of all liens or rights to record liens having been
obtained from the general contractor and all subcontractors or the endorsements to their
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respective Mortgagee's title insurance policies, and the statutory period for filing liens having
expired; and,
(d) recordation of a final map, and the certificate of completion, for
the Project, which shall be reviewed and approved by the Agency for the fonn and substance of
the CC&Rs to be recorded against the Property to govern the perpetual use, maintenance and
. operation of the Site and the recordation of the CC&Rs in the Official Records with
subordination thereto by all Mortgagees of record as of the date of such recordation.
9.6 Al!encv Oblil!ations. The Agency shall not unreasonably withhold or delay
issuance of any Certificate of Compliance. If the Agency 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 have been satisfied, the Agency shall within ten (10) business days of
the written request, provide a written statement which details the reasons the Agency 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.
Upon recordation of the Certificate of Compliance, this Agreement shall tenninate and shall be
of no further force and effect, except that:
(a) the provisions of Section 4.5.2, including the release set forth
therein, shall survive in perpetuity;
(b)
the covenants set forth in Section 12 shall survive in perpetuity;
(c) the environmental indemnity set forth in Section 10 shall remain in
effect and shall bind Developer and its personal successors and assigns.
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 pennitted by law, the Developer shall indemnify,
protect, defend, assume all responsibility for and hold hannless the Agency and its officials,
employees, contractors, representatives and agents (collectively referred to as the "Indemnified
Parties"), with counsel reasonably acceptable to the Agency, ftom and against any and all
Claims resulting or arising from 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 Site in any way;
(b) All acts and omissions of Developer in connection with the Project, the
Site or any portion of the foregoing;
(c) Any plans or designs for Project Improvements prepared by or on behalf
of the Developer, including any errors or omissions with respect to such plans or designs;
I<¡OII).IO
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S'ptomb" 27, 2004
(d) Any loss or damage to the Agency 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 Project Improvements by the
Developer, whether regarding the quality, adequacy or suitability of the plans, any labor, service,
equipment or material furnished to the Site, any person furnishing the same, or otherwise.
10.2 Environmental Indemnitv. As a material part of the consideration for this
Agreement, and effective as to the Caltrans Parcel upon the Developer's acquisition of fee title or
execution of this Agreement whichever shall occur later, the Developer, on behalf of itself and
each Successor Owners and each person claiming by, through or under Developer or any
Successor Owners, hereby agrees that Developer and each Successor Owner 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,
trom, about or adjacent to any portion or portions of the Site, regardless whether any such
condition is known or unknown now or upon acquisition and regardless whether any such
condition pre-exists acquisition or is subsequently caused, created or occurring, provided,
however, that neither the Developer, nor any Successor Owner, 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 run with the land and shall be included in the
Memorandum of DDA, the Quitclaim Deed and shall be binding upon the Developer and
Successor Owners.
10.2.1 Tenant Indemnitv. As a material part of the consideration for this
Agreement, and effective as to the Site, Developer, on behalf of itself and Successor Owners and
each and every Person claiming by, through or under Developer or any Successor Owner, hereby
agrees that Developer and each Successor Owner shall include the following indemnity in favor
of the Indemnified Parties in each Lease and in each deed effecting a Transfer of Ownership (and
incorporating the defined terms required to interpret the following provisions):
"[Tenant] on behalf of itself and each and every Person claiming by,
through or under [Tenant], including without limitation, successors,
assigns of such Tenant leasing all or any portion of [defined premises] to
the maximum extent permitted by law, shall indemnify, protect, defend,
assume all responsibility for and hold harmless the City and its appointed
and elect officials, agents, attorneys, affiliates, employees, contractors and
from and against any and all Claims resulting or arising trom 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 or occurring
on or about any portion or portions of the [defined premises) caused or
created by such [Tenant] or its officers, directors, members, partners,
19DII3.10
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agents, affiliates, employees, contractors, consultants or representatives, or
with respect to pre-existing conditions, exacerbated by negligent act or
omission of any of the foregoing (but with respect to such exacerbation,
only to the extent of the exacerbation)."
10.3 Duration of Indemnities. The indemnities set forth in this Section 10 shall
survive the Close of Escrow and the termination of this Agreement and shall not merge into the
Quitclaim Deed.
10.4 Claim ResDonse. 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
any actual, threatened, or suspected Release of Hazardous Materials on or about the Caltrans
Site, including any Claim for Investigation or Remediation on the Caltrans Parcel, or such
Environmental Agency or other third party orders, demands, or otherwise requires that any
Investigation or Remediation be conducted on the Site, the Developer shall promptly notify the
Agency 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
Agency arising from or related to any actual, threatened, or suspected Release of Hazardous
Material on or about the Site, including any Claim for Investigation or Remediation on the Site,
and (b) request that the Environmental Agency not issue any order, demand, or requirement to
the Agency 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 Agency, in connection with,
arising from, or related to any actual, threatened, or suspected Release of Hazardous Material on
or about the Site, including any Investigation or Remediation on or about the Site.
10.5 Release Notification and Remedial Actions. If any Release of a Hazardous
Material is discovered on the 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 Agency and (b) at Developer's sole risk and expense and
solely under the name ofthe Developer (but without prejudice to the Developer's or the Agency's
rights against any responsible party: (i) remove, treat, and dispose of the released Hazardous
Material on the 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 Site as
contemptated by this Agreement; and (iii) provide the Agency with satisfactory evidence of the
actions taken as required in this Section 10.5. The Developer shall provide to the Agency, within
thirty (30) days of the Agency's request there for, a bond, letter of credit or other financial
assurance evidencing to the Agency'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 Site as a result of the presence of the Hazardous
Material release on the Site.
1')0113.10
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II.
Insurance.
11.1 Required Insurance. Without limiting the Agency'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 Agency, evidence of the following policies of insurance naming the Developer
as insured and, except for Workers' Compensation insurance, the Agency as additional insureds.
All such insurance shall be kept in force until issuance of a Certificate of Compliance.
11.1.1 Liabilitv Insurance. Commencing on the effective date (for the Developer
Parcel), and upon recordation of the deed to the Caltrans Parcel to Developer (for that Parcel),
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 death therefrom, suffered or alleged to be suffered by any person or persons
whomsoever on or about the Site and the business of the Developer on the 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 from
liability imposed by law for damages to any property of any person occurring on or about the
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 Agency 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 Certificate of Compliance and cover claims of damages suffered by
persons or property, resulting from any acts or omissions of the Developer, the Developer's
employees, agents, contractors, suppliers, or consultants as follows: commercial general liability
in a general aggregate amount of not less than Two Million Dollars ($2,000,000) per occurrence
and in the aggregate. The Developer shall deliver to the Agency a certificate of insurance
countersigned by an authorized agent of the insurance carrier and an Insurer endorsement
evidencing such insurance coverage prior to commencement of grading or demolition. The
endorsement shall name the Agency, the City and their respective officials, agents,
representatives and employees as additional insureds under the policy. The endorsement shall
contain a statement of obligation on the part of the carrier to notifY the Agency of any
cancellation or tennination of the coverage at teast thirty (30) days in advance of the effective
date of any such cancellation or tennination. The endorsement shall provide that coverage shall
be primary to, and not contribute with any insurance or self-insurance maintained by the Agency,
and the policy shall contain such an endorsement. The Developer may substitute equivalent
liability insurance of its contractors, provided the insurance and endorsements meet the
requirements of Section II.
11.1.2 Workers' Compensation Insurance. Commencing on the effective date (for
the Developer Parcel), and upon recordation of the deed to the Caltrans Parcel to Developer (for
that Parcel), the Developer shall maintain or cause to be maintained workers' compensation
insurance issued by a responsible carrier 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
I'IUIIJ.IO
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S'p',mb" 27, 2004
Developer in connection with the Site 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 Site
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 Agency
evidence that such self-insurance has been approved by the appropriate State authorities. The
Developer shall also furnish (or cause to be furnished) to the Agency evidence satisfactory to the
Agency that any contractor with whom it has contracted for perfonnance of work on the Site or
otherwise pursuant to this Agreement carries workers' compensation insurance required by law.
The endorsement for workers compensation shall contain a waiver of subrogation for the benefit
of the Agency.
11.1.3 ProDertv Insurance. Commencing on the effective date (for the Developer
Parcel), and upon recordation of the deed to the Caltrans Parcel to Developer (for that Parcel),
the Developer shall maintain or cause to be maintained for all buildings, a policy or policies of
insurance against loss or damage to the Developer Parcel and the Caltrans Parcel and the Project
Improvements thereon and all property of an insurable nature located upon the Site, resulting
ITom fire, lightning, vandalism, malicious mischief, riot and civil commotion, and such other
perils ordinarily included in special clauses of property loss coverage fonn policies for the full
replacement value of the Project Improvements, including builder's risk coverage meeting the
foregoing requirements during the pendency of any construction on the Site. Such insurance shall
be maintained in an amount not less than one hundred percent (100%) of the Full Insurable
Value of the Project Improvements on each Parcel.
11.1.4 Pollution Legal Liability Insurance. Commencing on the effective date
(for the Developer Parcel), and upon recordation of the deed to the Caltrans Parcel to Developer
(for that Parcel), the Developer shall maintain or cause to be maintained a policy or policies of
insurance naming the Agency and the City of Tustin as additional insureds in an amount and for
such duration and with a self-insured retention amount to be detennined to address pollution
risks in the vicinity of the Site and potentially on the Site. Coverage shall be required to include
remediation and defense costs as well as bodily injury and property damage for on and off-site
preexisting or subsequently created known and unknown pollution conditions.
11.2
Generat Insurance ReQuirements.
11.2.1 The tenn "Full Insurable Value" as used in this Section II shall mean the
cost detennined by mutual agreement of the Agency and the Developer (excluding the cost of
excavation, foundation and footings below the lowest floor and without deduction for
depreciation) of providing similar Project Improvements of equal size and providing the same
habitability as the Project 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.
11.2.2 All insurance provided under this Section II shall be for the benefit of the
Developer and the Agency. The Developer agrees to timely pay all premiums for such insurance
19011J.10
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and, at its sole cost and expense, to comply and secure compliance with all insurance
requirements necessary for the maintenance of such insurance. All insurance herein provided for
under this Section II shall be provided by insurers authorized to do business in the State of
California and with a Best's rating of A-X or better, with the exception of workers
compensation, where the City will accept insurers rated B or better or coverage from the State
Compensation Fund and pollution legal liability insurance where any rating and licensing
location shall require review and approval by the City Attorney.
11.2.3 If the Developer fails or refuses to procure and maintain insurance as
required by this Agreement, the Agency shall have the right, at the Agency's election, and upon
ten (10) days prior notice to the Developer, to procure and maintain such insurance. The
premiums paid by the Agency 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 Agency
shall give prompt notice of the payment of such premiums, stating the amounts paid and the
name ofthe insured(s).
12.
Covenants and Restrictions.
12.1 Use Covenant. The Developer covenants and agrees for itself, its successors, its
assigns and every successor in interest to the Site or any part thereof, that the Developer, its
successor and assigns shall use the Site only for those uses specified in this Agreement for a
period of thirty (30) years.
12.2
Maintenance Covenant.
12.2.1 Following Close of Escrow. After the date of acquisition by the Developer
of the Caltrans Parcel, the Developer and its successors and assigns shall maintain the Caltrans
Parcel in the same aesthetic and sound condition (or better) as the condition of the Property at the
time of the transfer of the Caltrans Parcel to the Developer.
(a) From the date of commencement of construction until issuance of a
Certificate of Compliance, the Developer and its successors and assigns shall maintain the
Project Improvements on the portions of the Site under construction consistent with best
construction industry practice.
(b) Upon completion of all or any portion of the Project
Improvements, and in perpetuity, the Developer, its successors and assigns shall maintain the
Project Improvements on the Site in the same aesthetic and same condition or better as the
condition of such Project Improvements at the time the Agency issues a Certificate of
Compliance, reasonable wear and tear excepted. The standard for the quality of maintenance of
the Project 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, ofroads, drives, sidewalks, utilities (except to the extent owned or controlled
by a utility franchisee) landscaping, hardscaping and fountains; (ii) frequent and regular
inspection for graffiti or damage or deterioration or failure, and immediate repainting or repair or
"'°'11.10
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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 Site; (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 Project Improvements in accordance with the above-described standards for the
maintenance, the Agency or its designee shall have the right but not the obligation to enter the
Site 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 Site.
(d) With Agency's written consent, which shall not be unreasonably
withheld, the Developer shall have the right to assign all of the maintenance responsibilities
contained herein to subsequent purchasers and/or to a maintenance association established by the
CC&R's for the Site, upon which assignment the Developer shall have no further liability under
this Section.
12.3
Nondiscrimination and EQual ODDortunitv.
12.3.1 Obligation to Refrain from Discrimination. The Developer covenants and
agrees for itself, its successors, its assigns and every successor in interest to the Caltrans Parcel
or any part thereof, there shall be no discrimination against or segregation of any person, or
group ofpersons, 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 Caltrans Parcel nor shall the Developer itself or any person claiming under or
through it establish or penmit 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 Caltrans Parcel.
12.3.2 Fonm of Nondiscrimination Clauses. All deeds, leases or contracts shall
contain or be subject to substantially the following non-discrimination 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, nationat 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 penmit 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 run with the land."
]90]13.10
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(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 itsetf 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, sub lessees or vendees of the land.
12.4
Deed Restrictions/Covenants Runninl! with the Land.
12.4.1 The obligations of the Developer set forth in this Agreement are covenants
running with the land and equitable servitudes and shall be binding upon the Developer and all
subsequent Assignees and Ownership Transferees owning all or any portion of the Site, for the
benefit of the Agency and the successors and assigns of the Agency. The Quitclaim Deed shall
provide that any future transfer or conveyance of the Site or any portion thereof shall, unless and
until released by the Agency in accordance with the provisions of Section 9.2, shall include
notice of the covenants, conditions and restrictions contained herein. The Quitclaim Deed shall
convey the Site subject to reservations, covenants and restrictions as set forth in 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.
12.4.2 To effectuate this Section 12.4 with respect to the Site, concurrently with
and as a condition of the Closing, the Developer and the Agency 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 Section 12. the release set forth in Section 4.5.2,
the indemnities set forth in Section 10 and such other restrictions, equitable servitudes or
covenants running with the land set forth herein as the Agency may deem necessary or
appropriate to carry out this Agreement. This Agreement and the Memorandum ofDDA shall be
a lien of first priority with respect to the Property and shall be superior in priority to all
Mortgages.
190111.10
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13.
Potential and Material Defaults.
13.1 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
the Potential Default. The Agency and the Developer agree to cooperate in good faith and meet
and confer regarding such default.
13.2
Material Defaults.
13.2.1 A Potential Default (other than a Potential Detàult regarding the payment
of money, which is addressed in Section 13.3) 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 written notice of such Potential Detàult from the Injured Party, or (b) if such
cure cannot be reasonably accomplished within such twenty (20) Business Day period, within
ninety (90) days after receiving written notice of such Potential Default, but only if the
Detàulting 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 tàilure to cure within the time periods set forth above, each Potential Default
shall become a Material Default that shall he deemed to have occurred upon the expiration of the
applicable cure period.
13.2.2 [n the event the Developer is in Material Default, in addition to whatever
other rights thc Agency may have in law or at equity, or as otherwise provided in this
Agreement, the Agency may do any or all of the following:
(a) The Agency may sue for damages it may have incurred related to
its purchase of the Caltrans Parcel, as provided in this Section.
(b) The Agency may seek to specifically enforce the obligations of the
Developer under this Agreement.
(c)
any portion of the Site.
The Agency may terminate this Agreement with respect to all, or
(d) The Agcncy may record a lien against the Site. Developer, on
behalf of itself, each Successor Owner and each and every Person claiming by, through or under
Developer or any Succcssor Owner for thc bcnefit of the City and its successors and assigns
hereby agrees that the delinquent amount of any payments due hereunder, together with any late
charges or intercst due on any such delinquent amount of any payment, reasonable attorneys'
fees, experts' tèes and consultants' tèes and collection costs related to such delinquent payment,
shall to the greatcst extent pcrmitted by applicable law, be a lien and charge upon the Site owned
19011J.10
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S,ptemb" 27. 2004
by the defaulting Person and shall be a continuing lien upon such property in favor of the City,
etTective upon Recordation of a notice of delinquency, which lien and charge shall be paramount
to the lien and charge of any Mortgage upon such defaulting Person's interest in the Property,
subject only to the priority of a tìrst lien which is a Permitted Mortgage.
13.3 Failure or Delay in Notice. 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 rights 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 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.
13.4 Deyelover Information and Products. Upon full performance of this
Agreement or the termination thereof due to a Material Default by the Developer, the Developer
shall provide the Agency, without cost or expense to the Agency, 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 Site and/or development of the Project, which shall in each case be
made for the use and benefit of the Developer and the Agency. If this Agreement is terminated
for any reason other than a Material Default hereunder by the Agency, the Agency may request
that the Developer, for consideration to be mutually agreed, transfer the Developer's rights to any
or all Reports identified by the Agency, but under no event shall the cost to the Agency exceed
five hundred dollars ($500.00). Upon such request, the Developer shall deliver to the Agency
copies of all Reports requested by the Agency, provided that the Developer makes no
representations, warranty or guarantee regarding the completeness or accuracy of the Reports,
the Devetoper shall have no liability in connection with the use of the Reports by the Agency 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 Agency's acquiring the
Developer's rights to any or all of the Reports, the Agency shall be permitted to use, grant,
license or otherwise dispose of such Reports to any person or entity for development of the Site
or any other purpose; provided, however, that the Developer shall have no liability whatsoever to
the Agency or any transferee or title to the Reports in connection with the use of the Reports.
The Agency 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 Agency may have that are pertinent to the Site and/or development of the
Project provided, however, that the Agency makes no, representations, warranty or guarantee
regarding the completeness or accuracy of such plans, reports, studies, investigations and other
materials.
t3.5 Failure to Timely Pay Amounts Due. Notwithstanding any other provision of
this Agreement, if a 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
"'°113.10
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(15) calendar 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
nonpayment is not cured within said fifteen (15) calendar day period, the Potential Default shall
become a Material Default that shall be deemed to have occurred upon the expiration of the cure
period. Notwithstanding the foregoing, and provided that notice of the Potential Default is
provided the Defaulting Party, if any payment (other than the payment of any portion of the
Purchase Price) is not received by the Injured Party with fifteen (IS) calendar 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 of ten percent (10%) of the amount due and
unpaid wilt be added to the delinquent amount to compensate the Injured Party for the expense of
handling the delinquency.
14.
Nonoccurrence of a Closine: Condition.
14.1
Failure of a Closine: Condition to Occur Absent a Material Default.
14.1.1 In the event the Closing Date is extended for any of the reasons set forth in
this Section 14.1 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 Agency to convey the Caltrans Parcel 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 Agency to convey the Property to the Developer, or (ii) in the event the Assistant
Executive Director or designee reasonably determines 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 Agency to convey the Caltrans Parcel 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 terminate this
Agreement.
14.1.2 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 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 14.2); (ii) a Material Default solely by the Agency (which is governed by Section 14.3),
or (iii) a Material Default by both Parties (which is governed by Section 14.4), either Party may,
1')011).10
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by delivery of written notice to the other and to the Escrow Holder, tenninate this Agreement. In
the event either the Developer or the Agency are in Potential Default as of the Closing Date, the
Party in Potential Default shall not have the right to exercise the right to tenninate the Agreement
pursuant to this Section 14.1 until and unless the Potential Default is cured prior to the time the
Potential Default becomes a Material Default.
14.1.3 Upon any tennination under Section 14.1.1 or 14.1.2, each Party shall pay
one-half (112) of Escrow Holder's nonnal cancellation charges and any Closing Costs. The
Developer shall not be entitled to a refund of the EAN Deposit and all interest accrued thereon.
Developer shall be responsible for payment of all of Agency's actual costs incurred (including
legal fees, consultant fees and staff costs) in connection with the negotiation of this Agreement,
not to exceed $25,000.00. If Agency has made the EAN deposit into escrow and Developer has
made the Supplemental Deposit, Developer shall be entitled to a refund of $189,000.00, and
Agency shall be entitled to keep $25,000.00. In the event of a tennination as provided in this
Section, the Developer shall return Infonnation to the Agency as provided in Section 13.4 and
shall indemnify the Agency as provided in Sections 5.1 and 10. The tennination of this
Agreement pursuant to this Section 14.1 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 tenninate or release any liability or obligations of the Developer to return
Due Diligence Infonnation to the Agency as provided in Section 13.4 and to indemnify the
Agency as provided in Sections 5.1 and 10 or to pay Agency's actual costs incurred, not to
exceed $25,000. In the event of a tennination as provided in this Section, under no circumstances
shall the Developer have any right or claim to, or against, the Property or any portion thereof.
14.2
Failure to Close: Material Default of Developer.
IF THIS TRANSACTION DOES NOT CLOSE ON OR BEFORE 5:00 P.M.,
CALIFORNIA TIME, ON THE CLOSING DATE, SOLELY AS A RESULT OF
DEVELOPER'S MATERIAL DEFAULT (INCLUDING FAILURE TO DELIVER
SUFFICIENT FUNDS TO CAUSE THE CLOSING TO OCCUR IN A TIMELY MANNER, IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.2.2), THE PARTIES
ACKNOWLEDGE AND AGREE BY INITIALING THIS AGREEMENT IN THE SPACE
PROVIDED BELOW THAT:
(a) THE AGENCY'S ACTUAL COSTS, INCLUDING LEGAL
COSTS AND CONSULTANT COSTS, INCURRED IN PREPARING AND NEGOTIATING
THIS DDA AND PREPARING THE ENVIRONMENTAL DOCUMENTATION BEAR A
REASONABLE RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE
MAY BE SUFFERED BY THE AGENCY AS THE RESULT OF DEVELOPER'S DEFAULT
IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
DEVELOPER SHALL PAY ALL OF AGENCY'S ACTUAL COSTS INCURRED TO THE
CLOSING DATE, WHICH ARE ESTIMATED TO BE [$ insert costs].
(b) DEVELOPER SHALL PAY THE FULL AMOUNT OF
ESCROW AGENT'S REASONABLE CHARGES AS A RESULT OF SUCH DEFAULT AND
19011.1.10
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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 INFORMATION
DESCRIBED IN SECTION 13.4.
(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 AGENCY SHALL BE
RELEASED FROM ITS OBLIGATION HEREUNDER TO SELL THE PROPERTY TO
DEVELOPER OR DEVELOPER'S PERMITTED ASSIGNEE, AND THE CITY SHALL
RETAIN THE EAN DEPOSIT AND ALL ACCRUED INTEREST THEREON AND/OR
ESCROW AGENT SHALL RELEASE THE EAN DEPOSIT AND ALL ACCRUED
INTEREST THEREON TO THE AGENCY, TO THE EXTENT NOT ALREADY SO
RELEASED, AS A DEPOSIT ON PAYMENT BY DEVELOPER OF AGENCY'S ACTUAL
COSTS. IF DEVELOPER HAS DEPOSITED THE SUPPLEMENTAL DEPOSIT,
DEVELOPER SHALL BE ENTITLED TO A REFUND, SUBJECT TO AGENCY'S RIGHT
OF SET OFF FOR ITS ACTUAL COSTS INCURRED. NOTHING HEREIN AFFECTS THE
AGENCY'S RIGHTS AND REMEDIES FOR A SEPARATE BREACH IF ANY, OF THE
CONFIDENTIALITY AND/OR INDEMNIFICATION PROVISIONS OF THIS AGREEMENT
AND (c) ABOVE GOVERNING THE RETURN OF INFORMATION TO THE AGENCY.
Initials of Agency
Initials of Developer
14.3
Failure to Close Material Default of A!!encv.
14.3.1 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 Agency's Material Default in the performance of its
obligations under this agreement, than, so long as the Developer is not in Potential Default or
Material Default, the Developer shall have the right, by providing notice to the Agency, of its
election to do so, either: (a) to purchase the Caltrans Parcel pursuant to the Agreement
notwithstanding such default, whereupon such default shall be deemed waived as against the
Agency and all third parties; or (b) to terminate this Agreement and to cancel Escrow.
14.3.2 In the event Agency receives timely notice of the Developer's election to
purchase the Caltrans Parcel notwithstanding the Agency's Material Default, the Developer shall
deliver Developer's Supplemental Deposit into Escrow no later than ten (10) Business Days after
the Agency's receipt of said notice. Upon delivery of Developer's Supplemental Deposit and
Closing Costs into Escrow and payment by Escrow Holder of the Purchase Price to the Agency,
the Agency shall convey title to the Property as provided in this Agreement, and the Developer
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shall be deemed to have waived all Closing Conditions other than the delivery of the Quitclaim
Deed into Escrow. In the event the Agency 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 Developer shall have the right to bring an action in equity or
otherwise against the Agency or subsequent owners of the Property for specific performance of
this Agreement. In such event the Agency shall pay the full amount of Escrow Holder's
reasonable charges and Closing Costs.
14.3.3 In the event the Agency receives timely notice of the Developer's election
to terminate this Agreement:
(a) The Developer shall be entitled to a full refund of the EAN Deposit
and the Supplemental Deposit (if paid into escrow) and all interest accrued thereon. The Agency
shall pay the full amount of Escrow Holder's reasonable charges and all closing costs. The
Developer shall comply with its obligations under Section 13.4. Developer shall not be entitled
to pursue an action against the Agency for damages as a result of the Agency's default.
(b) The termination of this Agreement pursuant to this Section 14.3.3
shall not terminate or release any liability or obligations of the Devetoper: to return Due
Diligence Information to the Agency as provided in Section 13.4 and to indemnify the Agency as
provided in Sections 5.1 and 10. In the event of a termination as provided in this Section, under
no circumstances 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 14.3.3
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 Agency 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 Supplemental Deposit into Escrow no later than ten (10) Business Days after the
Agency's receipt of said notice, then the Agency shall have the right to terminate this Agreement
by providing written notice of its election to do so to the Developer. In the event of a termination
as provided in this Section, the Developer shall return Due Diligence Information to the Agency
as provided in Section 13.4 and shall indemnify the Agency as provided in Sections 5.1 and 10.
The termination of this Agreement pursuant to this Section 14.3.3 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 Agency as provided in Section 13.4 and to indemnify the Agency as provided
in Sections 5.1 and 10. In the event of a termination as provided in this Section, under no
circumstances shall the Developer shall have any right or claim to, or against, the Property or any
portion thereof, and the Agency shall have no obligation to reimburse the Developer for any
Reimbursable Costs.
]91)]13.10
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14.4
Material Default bv Both Parties.
14.4.1 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 perfonnance oftheir
respective obligations under this Agreement, the provisions of this Section 14.4 shall apply.
14.4.2 If the Developer is in Material Default of its obligation to deliver
Developer's Supplemental Deposit as described in Section 4.2.2(b), or to provide the evidence of
financing as provided in Section 7.3.4, and the Agency has deposited into Escrow the Quitclaim
Deed as provided in Section 7.2.1, the Agency shall have the right, notwithstanding any other
defaults of the Agency, to tenninate this Agreement as provided in Sections 14.1.2, 14.1.3 and
14.1.4.
14.4.3 If the Agency is in Material Default of its obligation to deposit into
Escrow the Quitclaim Deed as provided in Section 7.2.1 and the Developer has delivered
Supplemental Purchase Price Deposit and funds for other costs as provided in Section 7.3.2, and
has provided the evidence of financing as provided in Section 7.3.4, the Devetoper shall have the
right, notwithstanding any other defaults of the Developer, to tenninate this Agreement as
provided in Sections 14.1.1, 14.1.2 and 14.1.3.
14.4.4 Except as provided above in Sections 14.4.2 and 14.4.3, 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 perfonnance or other equitable relief, and in no event shall the
Developer file a lis pendens against the Property.
15.
General Provisions.
15.1 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 pennissive 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/orum 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 15.1 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 15.7 of this Agreement pertaining to notice.
Any final judgment rendered against a Party in any action or proceeding shall be conclusive as to
19011'.10
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the subject of such final judgment and may be enforced in other jurisdictions in any manner
provided by law.
15.2 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 tenus hereof or to declare rights hereunder or
with 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 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 attorneys' 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 underlying 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 15.2 includes a Party who agrees to
dismiss an Action in consideration for the other Party's payment of the amounts allegedly due or
perfonnance of the covenants allegedly breached, or obtains substantially the relief sought by
such Party.
15.3 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.
15.4 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.
15.5 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 perfonnance
of their respective obligations hereunder in order to canry out the intent and purposes of this
Agreement.
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15.6 Ri!!hts 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 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.
15.7 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, return 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 reasonabty 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 permitted under this
Section 15.7 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 Saturday, Sunday
or national holiday. Unless otherwise provided in writing, all notices hereunder shall be
addressed as follows:
If to the Agency:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, CA 92780
Attention: Executive Director
and Assistant Executive Director
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.
If to the Developer:
Makena Great American Newport
Company, LLC
1450 EI Camino Real, Second Floor,
Tustin, California 92780
Attn: Brett Blanchard
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Any Party may by written notice to the other Party in the manner specified herein change the
address to which notices to such Party shall be delivered.
15.8
Force Majeure Delav.
15.8.1 The term "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,
lock-out, riot, act of sabotage, civil commotion, act of a public enemy, freight embargo, or lack
of transportation;
(b)
Unusually severe weather;
(c) Reasonably unforeseeable Caltrans Parcel conditions including the
presence of Hazardous Materials;
(d) Fire, or earthquake, or other casualty, in each case, causing
material physical destruction or damage on the Site;
(e)
Potential Default or Material Default by the other Party;
(f) Issuance of a permanent injunction or writ of mandate in a lawsuit
seeking to restrain, enjoin, challenge or delay construction of the Project, which restricts the
ability of a Party to perform its material obligations hereunder, or a temporary restraining order
("TRO"), preliminary injunction, or alternative writ which prevents the Agency, City or
Devetoper from meeting the Schedule of Performance. In the case of a TRO, preliminary
injunction, or alternative writ, the deadlines in the Schedule of Performance shall be extended to
be coterminous with the TRO, injunction, or alternative writ, but shall in no event extend for
more than one (1) year after the Effective Date;
(g) The passage of a referendum or initiative that results in the
inability of any Party to perform its material obligations hereunder; and,
(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.
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15.8.2 The tenn "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) Due to acts or omissions of the Developer, the suspension,
tennination, interruption, denial or failure to obtain or non-renewal of any Entitlement, pennit,
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 subsections (e)
or ill above;
(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 perfonn any obligation to be perfonned
by the Developer hereunder as the result of adverse changes in the financial condition of
Developer;
(d) Failure of the Developer to submit evidence of financing of the
Project or to perfonn any obligation to be perfonned 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 Devetoper Parcel unless the Developer demonstrates to the satisfaction of the Assistant
Executive Director or designee in its sole discretion that (i) the Developer was unable to obtain
financing despite making best efforts to do so, and (ii) such financing are unavailable on tenus
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 Project Improvements
when required pursuant to the Schedule ofPerfonnance;
(g) Failure to acquire, maintain and submit evidence of insurance
policies as required by Section II;
(h)
Failure to execute documents; and,.
(i) All other matters not caused by the other Party and not listed in
subsections (a) through (h) above.
15.8.3 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 !Tom 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 there from. The
1<)0111.10
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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 15.1. 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 run 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.
15.9 Conflict ofInterest. No appointed or elected official or employee of the Agency
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 payor give any third
person àny money or other consideration for obtaining this Agreement.
15.10 Non-liabilitv of A!!encv Officials and Emulovees. No elected or appointed
official, representative, employee, agent, consultant, legal counselor employee of the Agency
shall be personally liable to the Developer, or any successor in interest in the event of any default
or breach by the Agency for any amount which may become due to the Developer or successor
or on any obligation under the terms of this Agreement.
15.1\ Insuection of Books and Records. The Agency 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 Site 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 Agency,
upon ten (10) days written notice, pertaining to the Developer Parcel as pertinent to the purposes
of this Agreement.
15.12 Auurovals.
(a) Except as otherwise expressly provided in this Agreement, approvals
required of the Agency or the Developer in this Agreement, including the Attachments hereto,
shall not be unreasonably withheld, conditioned or delayed.
(b) Any matter required by this Agreement to be submitted to the Agency
shall be deemed submitted upon the submittal to the Assistant Executive Director or designee.
(c) Except where the terms of this Agreement or State law expressly require
the approval of a matter or the taking of any action by the Agency, any matter to be approved by
the Agency shall be deemed approved, and any matter to be taken by the Agency shall be
deemed taken, upon the written approval by the Assistant Executive Director or designee.
15.13 Real Estate Commissions.
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15.13.1 The Agency 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 herein. The Developer hereby agrees to indemnif'y and hold the Agency
and its elected and appointed officials, employees and representatives hannless 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 herein or the purchase or sale of other property at the Developer Parcel,
including the Caltrans Parcel.
15.13.2 The Agency represents that it has engaged no broker, agent, or
finder in connection with this Agreement or the transactions identified herein.
15.14 Date and Delivery of Al!reement. 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.
15.15 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.
15.16 Construction and Interpretation of Al!:reement.
(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
considerable period of time, that each Party has been given the opportunity to independently
review 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 term 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
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.
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(c) The inclusion in Section 1.1 of this Agreement of any matters or facts
shall be conclusive proof of the truthfulness thereof.
(d) The captions of the sections and subsections herein 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, exhibits, addenda
and Attachments hereto (which are hereby incorporated herein 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 instrument and any riders, exhibits, addenda and
Attachments or other documents affixed to or expressly incorporated by reference in this
instrument.
(t) 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 limitation".
15.17 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.
15.18 Fees and Other ExDenses. Except as otherwise provided herein, 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.
15.19 No Partners hiD. 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 herein, or cause the Agency to be responsible in any way for the debts or obligations
ofthe Developer.
15.20 ComDliance with Law. The Developer agrees to comply with all the
requirements now in force, 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 Agency is a party
thereto or not, that the Developer has violated any such ordinance or statute in the use ofthe Site
and/or the Project Improvements shall be conclusive of that fact as between the Agency and the
Developer.
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S'ptomb" 27. 2004
15.21 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.
15.22 No Third Partv 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 intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the Parties to it and their respective
successors and permitted assigns. Nothing in this Agreement is intended to relieve or discharge
the obligation or liability of any third persons to any Parties to this Agreement.
15.23 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
counterparts 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 them into a single identical original. Anyone of such completely executed
counterparts shall be sufficient proof of this Agreement.
15.24 Authoritv of Si!!natories 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.
15.25 Entire A!!reement. 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 herein 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 terminated 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 herein, to induce such Party to execute this Agreement, and
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each Party acknowledges that it has not executed this Agreement in reliance on any such
promise, representation or warranty not contained herein.
(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
Agency or the Developer and all amendments hereto must be in writing and signed by the
appropriate authorities of the Agency and the Developer. Any amendment to the Agreement shall
require the approval of the Agency.
15.26 Approval Procedures. This Agreement, when executed by the Developer and
delivered to the Agency, will then be scheduled for a public hearing before the Agency's Board
of Directors This Agreement must be authorized, executed and delivered by the Agency 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 Agency. The
Effective Date of this Agreement shall be the date when this Agreement has been executed by
the Agency and delivered to the Developer, which shall be the date first set forth above.
IN WITNESS WHEREOF, the Agency and the Developer have signed this
Agreement as of the date first set forth above.
AGENCY:
Tustin Community Redevelopment Agency
Dated:
By:
William A. Huston, Executive Director
Dated:
APPROVED AS TO FORM:
WOODRUFF SPRADLIN & SMART
By:
Lois E. Jeffrey, Agency Counsel
DEVELOPER:
Makena Great American Newport Company, LLC,
a California Limited Liability Company
]90] 11.]0
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Dated:
Dated:
1"011.1.10
By:
Brett Blanchard, President
Makena Great American Newport Company, LLC,
a California Limited Liability Company
By:
Don Robertson, Vice President
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ATTACHMENT NO. lA
LEGAL DESCRIPTION OF THE DEVELOPER PARCEL
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ATTACHMENTNO.lB
LEGAL DESCRIPTION OF THE CALTRANS PARCEL
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ATTACHMENTNO.IC
LEGAL DESCRIPTION OF THE NEWPORT AVENUE DEDICATION AREA
190111.10
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ATTACHMENT NO.2
GLOSSARY OF DEFINED TERMS
For purposes of this Agreement, the following capitalized tenns shall have the following
meanings:
"Affiliate" shall mean (I) 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 partner, any company for which such Person acts
in any such capacity.
"Agency" shall have the meaning set forth in Section 1.4.1.
"Agency Closing Conditions" shall have the meaning set forth in Section 7.3.
"Agency Title Policy" shall mean any title insurance policy obtained by the City from
the Title Company in connection with this Agreement.
"ALTA Policy" shall have the meaning set forth in Section 6.3.
"Approved Project Plans" shall have the meaning set forth in Section 8.5.11.
"Assignee" shall mean any Person to whom or to which the Developer assigns its
interests in this Agreement the Site, the Project Improvements thereon or any portion thereof.
"Assistant Executive Director" shall mean Ms. Christine Shingleton, or other designee
of the Executive Director of the Agency.
"Business Day(s)" shall mean any day on which Tustin City Hall is open for business and shall
specifically include Fridays when City Hall is officially closed, Saturday, Sunday or a legal
holiday.
"Caltrans Parcel" shall mean a specific parcel ofland located at 14011 Newport Avenue
that the Agency has offered to purchase on Developer's behalf ITom the Department of
Transportation of the State of California ("Cal Trans").
"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 have the meaning set forth in Section 9.
"Change in Ownership" shall have the meaning set forth in Section 2.3.
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"City" shall mean the City of Tustin.
"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 Hall" shall mean the seat of government for the City of Tustin and the Tustin
Community Redevelopment Agency, located at 300 Centennial Way, Tustin, Catifornia.
"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", "Close of Escrow" or "Escrow Closing" shall mean the point in time when
the Agency conveys fee title in the Caltrans Parcel to the Developer, which shall be within three
(3) business days after Developer and Agency approval of the perfonnance of or occurrence of
the Closing Conditions.
"Closing Conditions" shall mean the Developer Closing Conditions and the Agency
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.
"Community Development Department" shall mean the Community Development
Department of the City of Tustin, California.
"Complete" and "Completion" shall mean, with respect to the Project, the point in time
when all of the following shall have occurred: (I) to the extent a certificate of occupancy is
required with respect to construction of the Project Improvements required under this
Agreement, issuance of a certificate of occupancy by the City; (2) recordation of a Notice of
Completion by the Developer, its Assignee or such Party's contractor; (3) certification by the
Project Architect that the Project 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; (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; and (5) final inspection and acceptance by
City Engineer of the Public Improvements.
"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.
]90]]3.10
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"Conditions Precedent" or "Condition Precedent" shall mean all conditions precedent
to the Agency's issuance of a Certificate of Compliance, as set forth in Section 9.6.
"Consumer Price Index" shall mean the Consumer Price Index - all Urban Consumers.
Los Angeles-Orange Countv. published by the Bureau of Labor Statistics, or such comparable
index as may be reasonably acceptable to the City.
"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
Partnership 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.
"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 Project 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 Project 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.
"Developer" shall have the meaning set forth in Section 1.4.2.
"Developer's Closing Conditions" shall have the meaning set forth in Section 7.2.
"Developer Parcel" shall mean the specific parcel of land located at 14001 Newport
Avenue and 770 El Camino Real, adjacent to the Caltrans Parcel.
"Developer's Title Endorsements" shall have the meaning set forth in Section 6.3.
"Developer's Title Policy" shall have the meaning set forth in Section 6.3.
"Development Costs" shall have the meaning set forth in Section 8.1.3.
"Effective Date" shall have the meaning set forth in the introduction.
190113.10
S'ptombo. 27. 2004
"EAN Deposit" shall have the meaning set forth in Section 4.2.2(a).
"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, 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 Hea]th Department with
jurisdiction over the 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.
"Environmental Laws" shall mean any federal, state, regional or local laws, ordinances,
rules, regutations, requirements, orders, directives, guidelines, or permit conditions, in existence
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,
permitting, use, presence, transfer, treatment, analysis, generation, manufacture, storage,
discharge, Release, disposal, transportation, Investigation or Remediation of Hazardous
Materials. Environmental Laws shall include the Comprehensive Environmental Response,
Compensation and Liability Act of ]980, as amended (42 U.S.C. Section 960], et seq.)
("CERCLA"); the Resource Conservation and Recovery Act, as amended, (42 U.S. C. Section
690] et seq.) ("RCRA"); the federal Water Pollution Control Act, as amended, 33 US.C.
Section ]25] et seq.); the Toxic Substances Control Act, as amended, (15 US.C. Section 260] 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 25]00 (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 4.4.
"Escrow Ho]der" shall mean First American Title Company.
"Exclusive Agreement to Negotiate" shall mean that certain Exclusive Agreement to
Negotiate dated May 4, 2004, by and between the Agency and Makena, LLC, a California
Limited Liabi]ity Company, as the same may be amended from time to time.
"Final Map" or "Final Maps" shall mean a final tract map or final tract maps approved
by the City for the Developer Parcel in accordance with the Subdivision Map Act and the City
Code.
"Final Plans" shall have the meaning set forth in Section 8.5.6.
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"Force Majeure Delay" shall have the meaning set forth in Section 15.8.
"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 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, or the Developer Parcel, as the context
indicates.
"Governmental Requirements" shall mean all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines and other requirements issued by any Governmental Authority
having jurisdiction over the Parties, the Project, or the 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 D.S.C. subsection 9601, et sea., the Hazardous Materials
Transportation Act, 49 U.S.C. subsection 5101, et sea., 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;
(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 TitIe 22 of the California
Code of Regulations;
(1) Listed by the State of California as a chemical known by the State to cause
cancer or reproductive toxicity pursuant to Section 25249.9(8) of the California Health and
Safety Code;
190113.10
S'p"mb<, 27, 2004
(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 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;
(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 sea.;
(j) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, IS US.C. subsection 2601 et sea.;
(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 sea.,
the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California
Radiation Control Law, California Health and Safety Code subsection 114960 et seq.;
(1) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651et 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 Leg. or
pursuant to Division 26 of the California Health and Safety Code.
"Indemnified Parties" shall have the meaning set forth in Section 10.1.
"Initial Deposit" shall have the meaning set forth in Section 4.2.2.
"Injured Party" shall mean the Party to this Agreement other than the Party which is in
Potential Default or in Material Default.
"Institutional Lender" shall mean a nationally recognized bank, savings and loan
association, investment bank, or other institutional lender which has a net worth of One Billion
Dollars ($1,000,000,000) or more. The participation or securitization of a loan by an Institutional
Lender shall not give rise to any requirement that each lender participating in such participation
or securitization itself be an Institutional Lender, so long as (a) at the inception of the loan, the
originating and agent lender is an Institutional Lender, and (b) at the time of any subsequent
assignment of the loan, the assignee and agent lender is an Institutional Lender.
100113.10
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"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 Materiats.
"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 this Agreement.
"Memorandum of DDA" shall mean a Memorandum of this Agreement substantially in
the form and substance of the memorandum attached to the Agreement as Attachment No.3.
"Mortgage" shall mean any indenture ofmortgage or deed of trust, bond, grant of taxable
or tax exempt funds from 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 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).
"Newport Avenue Dedication Area" shall mean the portion of the Developer Parcel to
be irrevocably offered by Developer to dedicate in fee to the City of Tustin, as described in
Section 4.1.2.
"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 4.2.2.
"Ownership Transfer" shall mean the transfer, sale, assignment, ground tease, gift,
hypothecation, mortgage, pledge or encumbrance, or other similar conveyance of the Developer's
interests in this Agreement, the Site or the Project 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 Site or the Project
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.
190113.10
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"Party" shall mean either of the Agency or the Developer, individually.
"Parties" shall mean the Agency and the Developer, collectively.
"Permitted Exceptions" shall have the meaning set forth in Section 6.2.
"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 or a deed in
lieu of foreclosure, which satisfies all of the criteria set forth in Section 2.7.2 and 2.7.3 of this
Agreement.
"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 permitted 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.
"Potential Default" shall mean the state of being potentially in Material Default, as
further defined in Section 13.
"Preliminary Plan(s)" shall have the meaning set forth in Section 8.5.3.
"Preliminary Title Report" shall have the meaning set forth in Section 6.2.
"Project" shall have the meaning set forth in Sections 1.1 - 1.3.
"Project Architect" shall mean the architect or engineer, as applicable, designated in
writing by the Developer for a particular product type or improvement.
"Project Improvements" shall mean all of the buildings, structures, landscaping and
other improvements, to be constructed or installed on the Site, consistent with the approved
Project Plans, the Entitlements, demolition, grading and building permits.
"Proprietor, Owner-Occupier" shall mean a person or persons who will own in fee and
occupy for commercial/professional purposes.
"Purchase Price" is defined in Section 4.2.1.
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"Quitclaim Deed" shall mean the Quitclaim Deed to be executed and delivered by the
Agency at the Closing to convey title to the Property to the Developer. The Quitclaim Deed shall
be in substantially the fonn attached hereto as Attachment No.3, acknowledged and in
recordable fonn.
"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 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removat, 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.
"Schedule of Performance" shall mean the document attached as Attachment No.5 to
this Agreement, setting forth the dates and time periods for submissions, approvals and actions,
including the construction of the Project Improvements.
"Scope of Development" shall mean the description of the Project attached as
Attachment No.6.
"Site" shall mean collectively the CaItrans Parcel and the Developer Parcel, including the
Newport Avenue Dedication Area, until such time as Agency accepts Developer's irrevocable
offer to dedicate.
"State" shall mean the State of California.
"Subdivision Map" shall mean any tentative or final map for the Site approved by the
City in accordance with the Subdivision Map Act and the City Municipal Code.
"Subdivision Map Act" shall mean the California Subdivision Map Act as codified in
Cal. Government Code Section 66410 et seq.
"Subordination and Consent" shall have the meaning set forth in Section 2.7.3.
"Title Commitment" shall have the meaning set forth in Section 6.2.
"Title Company" shall mean First American Title Company
"Transfer of Control" shall have the meaning set forth in Section 2.3.2.
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ATTACHMENT NO.3
MEMORANDUM OF DDA
190113.10
S'ptem"" 27. 2004
RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, California 92780
Attention: Christine A. Shingleton
No fee for recording requested pursuant to
Government Code Sections 6103 and 27383
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
THIS MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
("Memorandum of DDA") is made as of , 2004 by and between
the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a State agency organized for local
purposes (Health and Safety Code Section 33000 et. seq.) (the "Agency"), and MAKENA
GREAT AMERICAN NEWPORT COMPANY, LLC, a California limited liability company
(the "Developer") to confirm that the Agency and the Developer have entered into that certain
Disposition and Development Agreement dated as of , 2004 (the "DDA")
affecting the real property described below. The Agency 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. Pronertv Affected bv the DDA. The following described land is subject to the terms,
covenants, conditions and restrictions set forth in the DDA effective as to such land upon the
date of acquisition thereof by the Developer:
1.1 The "Site" consisting as of the date hereof of that certain property of
approximately 1.60 acres, as legally defined in Attachments lA through IC attached hereto and
incorporated by reference with all existing improvements, located in the City of Tustin, County
of Orange, California.
1.2 This Memorandum ofDDA has been executed and shall be recorded immediately
following the execution and recordation by the Agency and the Developer of the Quitclaim Deed
with respect to the Caltrans Parcel and the DDA and this Memorandum of DDA shall each be
binding upon the Site in accordance with its terms.
2. Effect of DDA. The DDA imposes certain obligations, agreements, covenants,
conditions and restrictions with respect to the Site and Developer's acquisition, development,
use, operation and ultimate disposition thereof, that run with the land as further set forth below,
including, without limitation:
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September 27, 2004
(a) certain restrictions on transfer, conveyance and/or assignment of the DDA and/or
the Site, whether voluntary or involuntary, contained in Section 2.2 of the DDA, that tenninate
upon execution and recordation by the Agency ofthe Certificate of Compliance;
(b) certain restrictions on Transfer of Control of the Developer, contained in Section
Qofthe DDA, that tenninate upon execution and recordation by the Agency of the Certificate
of Compliance;
(c) certain restrictions on Mortgages, contained in Section 2.7 of the DDA, that
tenninate upon execution and recordation by the Agency of the Certificate of Compliance;
(d) the Release contained in Section 4.5.2(c) of the DDA (that is repeated in its
entirety in the Quitclaim Deed) that remains in effect in perpetuity;
(e) certain requirements to maintain Project Improvements contained in Section 12.2
of the DDA that remains in effect in perpetuity;
(f) the non-discrimination covenants contained in Sections 12.3 through 12.4 of the
DDA (that are repeated in their entirety in the Quitclaim Deed) that remain in effect in
perpetuity;
For ease of reference only, the following italicized Sections are copied verbatim from the DDA:
2.1
Indemnification and Environmental Provisions.
Sections 10.2 and 10.3 of the DDA provide as follows:
10.2 Environmental Indemnitv. As a material part of the consideration for this
Agreement, and effective as to the Caltrans Parcel upon the Developer's acquisition of fee title
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
land, regardless whether any such condition is known or unknown now or upon acquisition and
regardless whether any such condition pre-exists 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 land and shall be binding upon successors and assigns of the Developer
owning all or any part thereof in accordance with Section 10.3.
10.3 Duration of Indemnities. The indemnities set forth in this Section 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 upon recordation of
190113.10
-2-
September 27, 2004
a Certificate of Compliance. Notwithstanding that such indemnities shall cease to run with the
Caltrans 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.
3.
Effect on Mort!!a!!es: Ri!!ht To Encumber.
Notwithstanding any other provision of the DDA, the Developer shall have the right to
encumber the fee title to portions 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 and 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.
4.
Certificate of Compliance.
Upon the Developer's satisfaction of the conditions set forth in Section 9.6 of the DDA
with respect to a Certificate of Compliance, the Agency shall furnish the Developer with the
appropriate Certificate of Compliance in recordable form upon written request there for 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 Agency's
conclusive determination of satisfactory Completion of the Project 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.
5.
DDA and Memorandum of DDA Run With the Land.
Except as otherwise provided herein or in the DDA, 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 Agency to be covenants
running with the land and enforceable as equitable servitudes against the Site, and are hereby
declared to be and shall be binding upon the Site and the Developer and the successors and
assigns of the Developer owning all or any portion of the Site for the benefit of the Agency and
the successors and assigns of the Agency.
6.
Acknowled!!ement and Assumption bv 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.
7.
Public Documents.
The documents constituting the DDA are public documents and may be reviewed at the
official offices of the Agency.
190113.10
-3-
September 27, 2004
8.
Interpretation; Notice.
This Memorandum of DDA is prepared for recordation and notice purposes only and in
no way modifies the tenus, conditions, provisions and covenants of the DDA, including all
Attachments. In the event of any inconsistency between the tenus, conditions, provisions and
covenants of this Memorandum of DDA and the DDA, the tenus, conditions, provisions and
covenants ofthe DDA, including all Attachments, shall prevail.
IN WITNESS WHEREOF, the Agency and the Developer have signed this Memorandum
ofDDA as ofthe date first set forth above.
Tustin Community Redevelopment Agency
Dated:
By:
William A. Huston, Executive Director
APPROVED AS TO FORM
Legal Counsel for the Agency
WOODRUFF, SPRADLIN & SMART
By:
Lois E. Jeffrey
Makena Great American Newport
Company, LLC, a California Limited
Liability Company
Dated:
By:
Brett Blanchard, President
Makena Great American Newport
Company, LLC, a California Limited
Liability Company
Dated:
By:
Don Robertson, Vice President
190113.10
-4-
September 27, 2004
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF ORANGE
On , before me,
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 action, executed the instrument.
, a
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
l'OllJ.IO
-1-
September 27. 2004
ATTACHMENT NO.4
QUITCLAIM DEED
190113.10
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Soptomb" 27. 2004
Recording requested by and
when recorded mail to:
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY
300 Centennial Way
Tustin, California 92780
Attention: Assistant Executive Director
Space Above This Line Reserved for Recorder's Use
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, TUSTIN
COMMUNITY REDEVELOPMENT AGENCY, duly organized and existing under and by
virtue of the laws of the State of California, hereby remises, releases and forever quitclaims to
MAKENA GREAT AMERICAN NEWPORT COMPANY, LLC, a California limited liability
company, all of its right, title and interest in and to the certain real property, described as
follows:
SEE EXHIBIT A ATTACHED HERETO AND INCORPORATED BY REFERENCE HEREIN
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY
Dated:
By:
William A. Huston,
Executive Director
lO01IJ.IO
-1-
S'ptemb" 27, 2004
STATE OF CALIFORNIA
COUNTY OF ORANGE
)
) ss.
)
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 hislher signature on the
instrument, the person, or the entity upon behalf of which the person action, executed the
instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
190113.10
2
S'ptomb" 27, 2004
ATTACHMENT NO.5
SCHEDULE OF PERFORMANCE
[MAKENA NEWPORT AVENUE COMMERCIAL PROJECT]
NOTE: References herein to "the Agreement" and "the DDA"
mean the Disposition and Development Agreement of which this
Attachment No.5 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
I. Execution of Al!reement
A. Developer executes three (3) counterpart
originals ofDDA and Attachments.
B. Developer delivers executed counterpart
original DDA and executed DDA Attachments to
Escrow Holder for acquisition ofthe Caltrans
Parcel.
C. Agency Executes original DDA and
Attachments, "Effective Date" ofDDA.
D. Agency delivers executed original DDA and
appropriate Attachments to Escrow. Memorandum
of Agreement recorded after Agency sale of
Caltrans Parcel to Developer
2. AcQuisition of the Caltrans Parcel
Timing
By October 4, 2004.
Within 3 business days following Approval by
Agency of the DDA.
Within 5 business days following receipt of
evidence of Developer's delivery of executed
DDA and executed DDA Attachments to Escrow
Holder.
Within 7 business days following execution by
Agency of the DDA.
A. Developer delivers to Agency evidence of Within 5 business days following execution by
Developer's equity contribution funding and abilitY Agency of the DDA or prior to the close of
to obtain financing pursuant to Section 7.3.4 ofthe Escrow.
DDA.
190113.10
S'p"mb<, 27. 2004
B. Agency approves or disapproves Developer's
equity contribution funding and financing
commitments.
C. Developer obtains Title Insurance
Commitment.
D. Cal Trans transfers Caltrans Parcel to City.
Agency transfers Caltrans Parcel to Developer.
E. Developer submits to Agency for review and
approval all required closing submittals.
F. City delivers to Escrow all required closing
submittals.
G. Closing Date ("Close of Escrow")
3. City Entitlement Approvals
A. Developer submits complete Preliminary
Plans and Design Review application with related
drawings and documents to the City of Tustin.
B. Developer submits complete Tentative Tract
Map No. - with related drawings and
documents to the City of Tustin.
C. City considers and approves Preliminary
Plans and Design Review application and Tentative
Tract Map application.
190113.10
Within 3 business days following Developer's
submission of evidence of equity contribution and
financing commitments.
Within 15 business days following Escrow
Developer deposits all funds necessary to purchase
the Caltrans Parcel in Escrow.
?
Within 30 business days following execution of
the DDA by Agency.
Within 5 business days following Developer's
submission of evidence of satisfaction of
conditions precedent pursuant to Section 7.3 of the
DDA.
Within 3 business days following Agency
approval of all documentation required to close at
Escrow.
Completed.
Prior to Close of Escrow.
Prior to Close of Escrow.
2
S'ptomb" 27, 2004
D. Developer submits complete Final Tract
Map application with related drawings and
documents to the City.
E. City approves Final Tract Map.
Within 90 business days following City approval
of Tentative Tract Map No._.
Within 30 business days following the later of (a)
Developer's complete submission and completion
of all City and County requested corrections, (b)
satisfaction by Developer of all conditions to
approval of the Final Map to the satisfaction of
City in its sole discretion.
F. Developer causes the recordation of the Final Within 10 business days following approval of the
Tract Map. Final Tract Map by City.
4. Buildinl! Permits for Project Improvements
A. Developer submits application for demolition
and clearance of the Site. City issues permits for
demolition and clearance ofthe Site.
With 3 business days following approval by the
Community Development Department, Developer
submittals but no earlier than close of Escrow.
B. Developer submits construction plans and Within 3 months following the execution of the
related documents for Private Improvements to City DDA.
for issuance of Building Permits.
C. Developer obtains building permits for
Project Improvements consistent with any approved
conditions.
190113.10
Within 10 business days following the later of
Community Development Department (a)
approval of construction plans and related
documents for Project Improvements, and
Developer's payment of all applicable fees and
required Performance Bonds, or (b) approval of
Final Tract Map by City.
S'ptomb" 27. 2004
5. Construction ofProiect Improvements
A. Developer commences demolition and
clearance of the Site.
B. Developer completes demolition and
clearance of the Site.
C. Developer commences construction of
Improvements on the Project.
D. Developer completes construction of
Improvements on the Project.
6. Certificate of Compliance.
A. Developer submits request for issuance of a
Certificate of Compliance by Agency.
B. The Agency approves or disapproves the
request for issuance of a Certificate of Compliance.
Within 5 business days following issuance of
Demolition Permits by City.
Within 30 business days following issuance of
demolition permits by City.
Within 30 business days following issuance of
Building Permits and Retated Approvals by the
City.
Within 12 months following issuance of Building
Permits and Related Approvals by the City.
Upon completion of all Project Improvements and
satisfaction of all conditions precedent set forth in
the DDA.
Within 30 business days following submission of
request for Certificate of Compliance and
satisfaction of all conditions precedent set forth in
the DDA.
C. The Agency shall cause the recordation of the Within 10 business days following issuance of
Certificate of Compliance in the Office of the Certificate of Compliance by Agency.
County Recorder of Orange County.
190113.!O
4
S'pIOmb" 27. 2004
ATTACHMENT NO.6
SCOPE OF DEVELOPMENT
[MAKENA NEWPORT A VENUE COMMERCIAL PROJECT]
NOTE: References herein to "the Agreement" and "the DDA" mean the
Disposition and Development Agreement of which this Attachment No.6
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.
1.0
GENERAL DESCRIPTION
The Project is located at 14001 and 14011 Newport Avenue and 770 EI Camino Real, and
is described in the Legal Description (Attachment No. I) of this DDA. The Project Site is
approximately 29,732 gross square feet (0.68 acres), comprised of the Developer Parcel of
approximately 19,694 square feet and the Caltrans Parcel of approximately 10,038 square feet.
Approximately 2,143 square feet of the Site shall be irrevocably offered to be dedicated in fee at
no cost to the CitY for right-of-way to the City of Tustin for the public street widening of
Newport Avenue (the "Newport Avenue Dedication Area") situated along the easterly
boundary of the Site leaving a net site area of approximately 27,589 square feet (0.63 acres) as
described on Exhibit A and shown on Exhibit B. The Caltrans Parcel shall be acquired by the
Developer from the Agency and merged with the Developer Parcel into one lot to create the
Project Site as part of a Developer application for a Tentative Tract Map and with conditions
approved by the Planning Commission and CitY Council.
2.0
DEVELOPER IMPROVEMENTS
2.1
Definition of Site Improvements
The Developer shall design and construct or cause to be constructed on the Site all of the
improvements, including the Project Improvements set forth in this Scope of Development and
as required and approved by the City, including the Planning Commission, and CitY Council.
Additional requirements may be contained in the conditions of approval of entitlements for the
Project. Project approvals shall be obtained within the times established in the Schedule of
Performance Attachment No.5.
The Improvements shall generally consist ofthe following:
2.1.1 Demolition and clearance of existing site improvements including
structures and remaining concrete and asphalt paved surfaces.
190113.10
2004
S'pIOmb" 27.
2.1.2 Construction of a 7,400 square feet, one-story retail commercial building
with outdoor patio seating and a parking lot for not less than 35 cars.
2.1.3 Compliance with Codes and Conditions. Construction of the Project
Improvements shall be in compliance with all City of Tustin ptanning, building, etectrical,
plumbing, mechanical, fire codes and standards, as well as in compliance with all "Conditions
of Approval" stipulated by the City and any applicable governmental agency having
jurisdiction, including, but not limited to, the Planning Commission and City Council approvals.
(a) The Project Improvements shall be designed in which the
commercial building will have a first-class architectural quality and character, both individually
and in the context of the surrounding Tustin Old Town District. All public spaces and parking
areas shall be designed, landscaped and developed with the same degree of quality. Particular
attention shall be paid to enhancing pedestrian activities, minimizing mass, scale and bulk, and to
the selection of color and materials. The Agency and the Developer will cooperate and 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 the rehabilitation of the Site;
(b) 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 or any portion of the Project 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 Project Improvements by the
respective times established therefore by the Schedule of Performance (Attachment No.5 of this
Agreement).
2.1.4 Compliance with DDA. The Developer shall comply with all provisions
of the Disposition and Development Agreement.
2.2
Schedule of Performance
The Developer shall commence and complete the Improvements by the respective times
established therefore in the Schedule of Performance (Attachment No.5).
3.0
DEVELOPMENT STANDARDS
3.1
Approval of Plans
3.1.1 The Project Improvements shall be designed in which the retail
commercial building will have a first-class architectural quality and character, both individually
and in the context of the surrounding Tustin Old Town area. All public spaces and parking areas
shall be designed, landscaped and developed with the same degree of quality. Particular
attention shall be paid to enhancing pedestrian activities, minimizing mass, scale and bulk, and to
the selection of color and materials. The Agency and the Developer will cooperate and direct
190113.10
2004
2
Sep"mb" 27,
their consultants, architects and/or engineers to cooperate so as to ensure the continuity and
coordination necessary for the proper and timely completion of the redevelopment of the Site.
3.1.2 Materials and finishes on the retail commercial building shall include
brick tile at the base of the building with granite tile insets around the storefront windows and
granite tile medallions at accent points on the building to separate the stucco finish on the upper
portion of the building. The building's roofline is to be articulated and capped with a stone
cornice on the front and side elevations and a copper shingle roof shall be installed on the
pitched roof tower element located at the front corner of the building. Metal or fabric awnings
are to be installed above all storefront windows to soften the building's elevations and enhance
the pedestrian feel.
3.1.3 All of the Project Improvements shall conform to all applicable federal,
state and county codes and regulations, the requirements of the Town Center Redevelopment
Plan and the Tustin City Codes and the conditions of City resolutions.
3.1.4 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 or 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 off-site and on-site improvements by
the respective times established therefore by the Schedule of Performance (Attachment No.5 of
this Agreement).
4.0
CHANGES TO FINAL CONSTRUCTION DRAWINGS AND RELATED
DOCUMENTS
If the Developer desires to make any changes in the Final Construction Drawings and
Related Documents approved by the Agency, Planning Commission and the City Council, the
Developer shall submit the proposed change(s) to the Agency and City for approval. Such
changes shall be reviewed in the context of the purpose of the DDA and applicable provisions of
the City of Tustin Municipal Code and shall be approved or disapproved by the Agency and
City.
190113.10
2004
S'pl,mb" 27.
ATTACHMENT NO. 7
METHOD OF FINANCING
[MAKENA NEWPORT A VENUE COMMERCIAL PROJECT]
NOTE: References herein to "the Agreement" and "the DDA"
mean the Disposition and Development Agreement of which this
Attachment No.7 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.
1.0
PROJECT BUDGET AND FINANCING SOURCES AND DEFINITIONS
1.1 In General. The acquisition of the Caltrans Parcel from the Tustin Community
Redevelopment Agency by the Developer, merger of the Caltrans Parcel with the Developer
Parcel to create the Project Site, and construction of the Project Improvements is intended to be
financed as provided in this Method of Financing. (The acquisition of the Caltrans Parcel,
creation of the Project Site, and the construction of the Project Improvements are collectively
referred to herein as "the Project.") The "Project Budget", which is attached hereto as Exhibit
A, estimates the Total Project Costs (as defined in Section 1.2 below), to be Three Million Two
Hundred Eleven Thousand Seven Hundred Fifty Dollars ($3,211,750), which includes: (a) One
Million Six Hundred Three Thousand Four Hundred Dollars ($1,603,400) for land acquisition,
comprised of (i) approximately One Hundred Eighty-Nine Thousand Dollars ($189,000) for the
Caltrans Parcel, and (ii) approximately One Million Four Hundred Fourteen Thousand Four
Hundred Dollars ($1,414,400) for the Developer Parcel, and (b) One Million Six Hundred Eight
Thousand Three Hundred Fifty Dollars ($1,608,350) for construction and installation of Project
Improvements as described in the Scope of Development, Attachment 6. Funding of the Total
Project Costs will generally be as follows:
1.1.1 "Conventional Construction/Permanent Loan" (as defined in Section
1.2.4 below) in an approximate amount of Two Million Seven Hundred Five Thousand Six
Hundred Twenty-Five Dollars ($2,705,625);
1.1.2 "Developer Equity" (as defined in Sections 2.1 and 2.2 herein) in an
approximate amount of Five Hundred Six Thousand One Hundred Twenty-Five Dollars
($506,125);
1.1.3 "Agency Assistance" (as defined in Section 1.2.1 below).
190113.10
S'ptomb" 27. 2004
1.2
Definitions
1.2.1 "Agency Assistance" shall mean the amount to be paid by Agency for the
actual costs of purchasing and selling the Caltrans Parcel, which reflects the total amount to be
paid by the Developer to the Agency for Acquisition Parcel pursuant to the Agency's assistance
in assembling the Developer Parcel.
1.2.2 "Conventional Construction/Permanent Loan" shall mean a
construction loan to be converted to a pennanent financing loan made by a Pennitted Mortgagee
("Pennitted Mortgage") to finance Project Costs as more particularly described in Section 2.3
below.
1.2.3 "Developer Equity" shall mean all cash equity made avaitable by the
Developer to fund Project Costs consisting of the Developer's Cash Equity Contribution, and any
costs overruns, excluding any proceeds from a Pennitted Mortgage.
1.2.4 "Total Project Costs" shall mean all reasonable and necessary cost and
expenses for Project Improvements incurred by Developer prior to issuance of a Certificate of
Compliance and solely in connection with the acquisition, planning, design, construction,
improvement, development and equipping of the Project, which costs are enumerated in Exhibit
"A" - Project Budget.
2.0
DEVELOPER FUNDING
2.1 Developer's Cash Equity Contribution. "Developer's Cash Equity
Contribution" shall be in an amount of Five Hundred Six Thousand One Hundred Twenty-Five
Dollars ($506,125). Developer's Cash Equity Contribution shall be used to fund Project Costs.
On or before the date set forth in the Schedule of Perfonnance (Attachment No.5), Developer
shall establish a separate bank account or third-party escrow account approved by Agency. The
account shall contain the Developer's Cash Equity Contribution (Developer's Equity Account).
The Developer's Equity Account shall remain under the control of the Developer, who shall earn
all interest on the Developer's Cash Equity Contribution.
2.2 Conventional Construction/Permanent Loan. Developer shall obtain a
Conventional Construction/Pennanent Loan from a Pennitted Mortgagee in an approximate
amount Two Million Seven Hundred Five Thousand Six Hundred Twenty-Five Dollars
($2,705,625). The Conventional Construction/Pennanent Loan shall be funded and disbursed as
provided in the construction loan agreement between the Developer and the Pennitted
Mortgagee.
3.0
AGENCY ASSISTANCE
3.1 Amount of Assistance. Subject to the satisfaction of conditions as described in
the DDA, the Agency shall purchase the Acquisition Parcel for the amount of One Hundred
Eighty-Nine Thousand Dollars ($189,000) plus the Agency's total Transaction Costs, which
shall be subsequently purchased by the Developer from the Agency.
1901IJ.JO
S'p"mbor27,2004
4.0
PROJECT BUDGET
4.1 The Developer estimates that the Total Project Costs may exceed the amounts set
forth in Exhibit "A" - Project Budget. Developer acknowledges that it shall bear all project costs
in excess ofthe Improvement cost shown on Exhibit "A".
190113.10
SeplOmbe, 27. 2004
190113.10
EXHIBIT-"A"
to
METHOD OF FINANCING
Land Acquisition Cost
Direct Construction Costs
Building Shell @$110
T.r. Allowance
Indirect Construction Costs
A&E
Fees & Pennits
Misc. / Other
Marketing & Leasing
Finance Costs
General Administrative
TOTAL PROJECT COSTS
Projected Loan @ 75%LTV*
Developer Cash Equity
*Estimated Market Value @ 8% Cap
PROJECT BUDGET
$ 1,603,400
$ 961,000
$ 814,000
$ 147,000
$ 370,350
$ 96,000
$ 123,000
$ 151,350
$ 40,000
$ 107,000
$ 130,000
$ 3,211,750
$ 2,705,625
$ 506,125
$ 3,607,500
4
S'ptomb" 27. 2004
ATTACHMENT NO.8
FORM OF CERTIFICATE OF COMPLIANCE
'901lJ.1O
S'ptombo, 27. 2004
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
300 CENTENNIAL WAY
TUSTIN, CA 92780-3767
ATTENTION: ASSIST ANT EXECUTIVE DIRECTOR
No fee for recording requested pursuant to
Government Code Sections 6103 and 27383
CERTIFICATE OF COMPLIANCE
[MAKENA COMMERCIAL PROJECT]
THIS CERTIFICATE OF COMPLIANCE ("Certificate of Compliance") is made as of
, 200- by the TUSTIN COMMUNITY REDEVELOPMENT
AGENCY ("Agency"), in favor of MAKENA GREAT AMERICAN NEWPORT COMPANY,
LLC, a California limited liability company (the "Developer"), with reference to the following
matters:
A. The Agency and the Developer have entered into that certain Disposition and
Development Agreement dated as of , 2004 (the "DDA"), which is
incorporated herein by reference, as evidenced by that certain Memorandum of Disposition and
Development Agreement ("Memorandum of DDA"), dated for reference as of
, 2004, and recorded in the official records of Orange County, California.
All initially capitalized tenns 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, as defined in the DDA, on that certain real property (the
"Developer Parcel") described on Exhibit "A" attached hereto and incorporated herein by this
reference.
C. Pursuant to Section 9 of the DDA, the Agency agreed to furnish to the Developer,
upon request there for by the Developer, a Certificate of Completion in recordable fonn upon
satisfaction of the Conditions Precedent to issuance of a Certificate of Compliance set forth in
Section 9.6 of the DDA relating to all of the Improvements for the Project (including, without
limitation, completion of all Improvements for the Project in accordance with the tenns and
conditions of the DDA).
D. The Agency has detennined that the Developer has satisfied the Conditions
Precedent set forth in Section 9.6 of the DDA for the Agency's issuance of a Certificate of
Compliance.
NOW, THEREFORE, the Agency certifies as follows:
I. This Certificate of Compliance covers and applies to the entirety of the
Improvements and Project as defined above, (the "Certified Improvements").
I'JilllJ.1O 1 S","mbor27,2004
2. This Certificate of Compliance shall be deemed conclusive evidence of the Agency's
detennination that the Developer has satisfactorily completed all construction and development with
respect to the Project and perfonned all of the Developer's obligations set forth in Section 9.6 of the
DDA for issuance of this Certificate.
3. Upon recordation of this Certificate, the DDA shall tenninate 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 provisions of the DDA, which, except for those documents listed in Section 3( c) below,
are set forth in detail in the Quitclaim Deed and/or the Memorandum of DDA, shall survive the
tennination 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 4.5.2, including the Release set forth in Section 4.5.2(c)
of the DDA;
(b) the covenants set forth in Sections 12.3 through 12.4 of the DDA; and,
(c) 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.
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 Agency has caused this Certificate of Compliance to be
duly executed by its officer duly authorized as of the date first above written.
TUSTIN COMMUNITY REDEVELOPMENT
AGENCY
Dated:
By:
Name:
Title:
I<¡OIl).!O
2
S'ptomber".200'
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF ORANGE
On , before me,
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 action, executed the instrument.
, a
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
¡gOIIJ.!O
S'p"mb" 27. 2004
ATTACHMENT NO.9
PRELIMINARY PLANS
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S'p"mb" 27. 2004
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EXHIBIT "A"
DESCRIPTION OF SITE
[TO BE ATTACHED]
I'IUIU.IQ
S,ptemb" 27, 2'1'14
19011'.10
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
ATTACHMENT NO. 10
PROHIBITED USES
Adult cabarets, massage parlors (but not including massage services offered by a
doctor, nurse, or chiropractor, or massage services offered by a hair salon, nail
salon, barbershop, or day spa, which have obtained authorized permits from the
City as required by the City Code), or nude or partially nude entertainment;
Adult motels, thrift or budget motels, or transient occupancy residents;
Animal boarding, but not including overnight boarding of animals in connection
with the rendering of veterinarian services by an approved End User;
Animal, grooming, veterinary offices or animal hospital, unless part of an
operation being conducted by an approved End User;
Auctions, unless pursuant to court order and as may be permitted under the City
Code;
Automotive sales, rentals, inspection or repair, or tire sales;
Bingo parlors, bingo halls, or other establishments conducting games of chance;
Boat sales or rentals;
Businesses engaged in pest control, taxidermy, tattooing, appliance repair (but not
including repair services offered by an approved End User of greater than 20,000
square feet of rentable area on the Site as a component of its business) or other
repair shops (except for jewelry repair, shoe repair, tailoring, camera repair, watch
repair or computer/electronic equipment repair or other repair incidental to
another business);
Churches, temples, or other houses of religious worship;
"Drive-through" uses;
Dumping or disposing of garbage or refuse, except in approved on-site trash
enclosure or disposal areas;
Funeral homes or funeral parlors;
Grocery stores, supermarkets, mini-markets or mini-marts, convenience stores or
similar food retail operations, except for specific specialty or gourmet markets;
S'ptomb<' 27. 2004
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
190'13.lO
15.
"Head shops" (so-called) or facilities for the sale of drug paraphernalia;
16.
Off-track betting parlors;
Recreational vehicle ("RV") sales, rentals, or repairs;
Residential dwellings of any kind;
Second hand stores, thrift stores, pawn shops, or indoor or outdoor flea markets;
Self-service laundry facilities;
Sexually oriented businesses as defined in Section 3911 of the City Code and
subject to applicable law, provided that the foregoing is not intended to generally
prohibit sale or rental of products by full line bookstores, full line video stores
showing movies in general release provided that nothing set forth herein is
intended to affect governmental rights of the City of Tustin with respect to
applicable obscenity or similar laws;
Traveling carnivals or fairs, except as may be approved for promotional events
under the City Code;
Uses involving Hazardous Materials except for the types and in the amounts as
may be customary in retail shopping centers;
Uses prohibited on the Project Site under provisions of the City Code, unless a
Zoning Code amendment or other entitlement for such use is approved by the City
(e.g. temporary use pennits, conditional use pennits, etc.);
Uses which create strong, unusual or offensive odors, fumes, dust, or vapors are a
public or private nuisance, emit noise or sounds, which are objectionable due to
the intennittence, beat, frequency, shrillness or loudness, or which create an
excessive quantity of dust or dirt, or create a hazardous condition;
Uses which materially increase fire, explosion, or radioactive hazards on the
premises, including the storage, display, or sale of explosives, fireworks or
fireanns, but not including the sale of firearms and ammunitions by sporting good
stores, which are approved End Users subject to any specific additional
requirements of the City Code.
2
S'ptomb<, 27. 2004