HomeMy WebLinkAbout08 DDA WITH CD-CW LLC (CONFLUENT DEVELOPMENT)
Agenda Item_______
Reviewed:
AGENDA REPORT
City Manager_______
Finance Director_______
MEETING DATE: OCTOBER 6, 2026
TO:ALDO E. SCHINDLER, CITY MANAGER
FROM:BRIAN MONCRIEF, DEPUTY CITY MANAGER – REAL PROPERTY
SUBJECT:DISPOSITION AND DEVELOPMENT AGREEMENT WITH CD-CW
(TUSTIN) LLC (CONFLUENT DEVELOPMENT, LLC) FOR A
PORTION OF DISPOSITION AREA 8 AT TUSTINLEGACY
SUMMARY:
Request for authorization to approve the Disposition and Development Agreement(DDA)
between CD-CW (Tustin) LLC (Confluent Development, LLC)and the City for the
development of an active adult senior livingresidential developmentconsisting of172rental
unitsand a senior congregate care facility consisting of assisted living and memory care
comprised of up 147,500 square feet inclusive of75 assisted living rooms and 28 memory
care rooms on approximately 6.14acreswith atotal of 15% of the active adult senior living
residential rental units affordable to lower income households. The DDAspecifies the terms
and conditions under which the City owned property, known as portions of Disposition Area
8, and bounded by Warner Avenue, Armstrong Avenue, John Johnson Wayand Veterans
Wayin Planning Areas 13 and 14 of Tustin Legacy, will be conveyed to and developed by
CD-CW (Tustin) LLC.
RECOMMENDATION:
1.Authorize the City Manager to execute the DDAbetween CD-CW (Tustin) LLCand the
Cityin the form attached heretosubject to any non-substantive modifications as may be
recommended by the City’s special real estate counsel or the City Attorney; and
2.Authorize the City Manager to take all actions and executeall other agreements
necessary or appropriate to implementthe DDA.
FISCAL IMPACT:
CD-CW (Tustin) LLCwill paythe City a fair market value purchase price of $15,054,243.00
for the land and pay a Project Fair Share Contribution of $3,029,764.58to fund backbone
infrastructure improvements at Tustin Legacy.
City Council AgendaReport
Confluent Development DDA
October 6, 2026
Page 2
CORRELATION TO THE STRATEGIC PLAN:
Execution of the DDA contributes to the fulfillment of the City’s Strategic Plan Goal A:
Economic and Neighborhood Development. Specifically, this item implements Strategy 1,
which is to develop critical phases of Tustin Legacy.
BACKGROUNDAND DISCUSSION:
Confluent Development, LLC is a proven developer of senior living and congregate care
facilities throughout the United States and in California under its subsidiary Confluent Senior
Living. Clearwater Senior Living (Clearwater) will serve as the operating partner as well as
an equity partner for the project. Clearwater is a local senior living operator headquartered
in Newport Beach with six existing senior living facilities under management in Southern
California and additional senior living facilities throughout the western and southern United
States.
The project will provide senior housing and care options for the City and region across various
income levels. In compliance with the Surplus Land Act, the project will provide 15% of the
active adult senior living residential units as affordable to lower income households and utilize
a density bonus under state law. The active adult units provided by the project will contribute
towards meeting the housing goals identified within the City’s Housing Element and Regional
Housing Needs Allocation requirements.
On September 19, 2023, the City Council authorized the City Manager to enter into an
Exclusive Negotiating Agreement (ENA) with CD-MS (Tustin) LLC (now CD-CW (Tustin) LLC
and referred to hereinafter as Developer) to negotiate the disposition and development of a
portion of Disposition Area 8 at Tustin Legacy for a senior congregate care facility project.
On March 4, 2025, the City Council amended the ENA and approved a 270-day extension,
as requested by the Developer, to allow time to process a new entitlement submittal for a re-
visioned project and negotiate a DDA. At the same time, the City Council formally approved
Clearwater as the new operator.
On December 2, 2025, the City Council approved another amendment and extension of the
ENA, at the request of the Developer, to allow for a 120-day extension until April 11, 2026,
in order to select an equity partner for the project and complete negotiations.
On April 21, 2026, the City Council authorized the City Manager to execute a reinstatement
and amendment of the ENA with the Developer subject to a milestone schedule of
performance and the provision of extension deposits. The Developer has met the applicable
milestones such as securing an equity partner for the project, completing entitlement
submittal, completing construction drawings, negotiating the DDA and other items.
On August 11, 2026, the Planning Commission reviewed the entitlement application for the
proposed project and recommended that the City Council approve the project. On September
1, 2026, the City Council reviewed the subject project considering the Planning Commission’s
City Council AgendaReport
Confluent Development DDA
October 6, 2026
Page 3
recommendation and approved the project. An Addendum to the Tustin Legacy Specific
Plan (TLSP) 2025 Supplemental Environmental Impact Report (SEIR) was prepared
pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15164, 15162,
and 15168.
Schedule of Performance
The Schedule of Performance establishes outside dates by which all steps required including
design, construction and development of the project must commence or have been
completed during the term of the DDA. The project schedule anticipates completing these
items prior to the outside dates allowing for any unanticipated events or issues. In the event
of non-performance, a DDA default is triggered. The project will be acquired and built in a
single phase with the active adult building anticipated to start first due to a slightly longer
construction period. The following are some of the major milestone dates contained within
the Schedule of Performance:
Close of Escrow (COE) December 23, 2026
Construction Commencement(Grading) 60 days following COE
Vertical Construction Commencement 180 days following COE
Project Completion 36 months following COE
___________________________ __________________________
Brian Moncrief Ryan Swiontek
Deputy City Manager – Real Property Deputy Director of Real Property
Attachments: 1. Location Map
2. DDA between City of Tustin and CD-CW (Tustin) LLC
NBQ
TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR PORTION OF DISPOSITION AREA 8
BY AND BETWEEN
THE CITY OF TUSTIN
AND
CD-CW (TUSTIN) LLC,
A COLORADO LIMITED LIABILITY COMPANY
DATED: October __, 2026
TABLE OF CONTENTS
1.Subject and Purpose of Agreement; Parties; Applicable Requirements. ............................ 1
1.1Background Regarding MCAS Tustin. ................................................................... 1
1.2Description of Development Parcel, and Real Property. ........................................ 3
1.3Description of the Project. ...................................................................................... 4
1.4Parties to the Agreement. ........................................................................................ 6
1.5Federal Requirements Applicable to Tustin Legacy. .............................................. 7
1.6Other Governmental Requirements Applicable to Tustin Legacy. ......................... 7
1.7Not a Development Agreement. ............................................................................. 8
1.8DDA Transaction Expenses and Independent Contract Consideration. ................. 8
1.9Definitions; Attachments. ..................................................................................... 10
2.Prohibition Against Transfers and Transfer of Control. ................................................... 11
2.1Importance of Developer Qualifications. .............................................................. 11
2.2Restrictions on Transfers and Transfers of Control and Releases Following
Transfer. ................................................................................................................ 11
2.3Effect of Transfer; Release of Transferor. ............................................................ 17
2.4City Costs. ............................................................................................................. 18
2.5City Estoppel. ........................................................................................................ 18
2.6Restrictions on Sale of Units or Condominium Development; Rental of
Residential Units and Rooms. ............................................................................... 18
2.7Effect of and Remedies for Improper Transfers or Transfers of Control. ............ 18
2.8Changes. ................................................................................................................ 19
3.Representations and Warranties. ....................................................................................... 19
3.1Developer’s Representations and Warranties. ...................................................... 19
3.2Developer Covenants Regarding Representations and Warranties. ..................... 22
3.3City Representations and Warranties. ................................................................... 22
3.4City Covenants Regarding Representations and Warranties. ............................... 24
4.Conveyance of Property from City to Developer. ............................................................ 24
4.1Conveyance of Property. ....................................................................................... 24
4.2Purchase Price and Project Fair Share Contribution. ............................................ 25
4.3Payment of Purchase Price.................................................................................... 26
4.4Escrow and Joint Escrow Instructions. ................................................................. 26
4.5Property Conveyed “As-Is”. ................................................................................. 27
4.6Developer Covenants; Preconditions to Close of Escrow. ................................... 34
5.Developer’s License, Access to Records and Communications. ...................................... 38
5.1Limited License. ................................................................................................... 38
5.2Indemnity. ............................................................................................................. 38
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5.3Communications with City and Third Parties. ...................................................... 39
6.Title; Survey...................................................................................................................... 40
6.1Survey by Developer............................................................................................. 40
6.2Permitted Exceptions. ........................................................................................... 40
6.3Supplemental Title Reports................................................................................... 40
6.4ALTA Policy; Endorsements; Close of Escrow. .................................................. 41
6.5City Title Policy. ................................................................................................... 42
7.Closing. ............................................................................................................................. 42
7.1Time and Place of Closing. ................................................................................... 42
7.2Conditions Precedent to Close of Escrow. ............................................................ 43
7.3Additional Close of Escrow Conditions. .............................................................. 49
7.4Procedures for Conveyance. ................................................................................. 49
8.Development of the Real Property and Additional Covenants of Developer and
City. ................................................................................................................................... 52
8.1Scope of Development. ......................................................................................... 52
8.2Development Costs. .............................................................................................. 53
8.3Schedule of Performance; Completion of Project. ............................................... 54
8.4Land Use Matters. ................................................................................................. 54
8.5Design Approval. .................................................................................................. 56
8.6Financial Capability and Budget Statement. ......................................................... 58
8.7Fees and Exactions. ............................................................................................... 59
8.8Grading Work; Design and Construction of Improvements. ................................ 62
8.9Guaranty and Guarantor. ....................................................................................... 62
8.10Replacement of Equity Investor ............................................................................ 64
8.11Development Covenants. ...................................................................................... 64
8.12City Rights of Access............................................................................................ 66
8.13Disclaimer of Responsibility by City and Exculpation......................................... 66
8.14Local, State and Federal Laws. ............................................................................. 67
8.15Liens, Taxes and Assessments. ............................................................................. 68
8.16Duration of Article 8 Indemnities; Post-Certificate of Compliance Affiliate
Responsibilities. .................................................................................................... 69
9.Certificate of Compliance. ................................................................................................ 69
9.1Completion; Schedule of Performance. ................................................................ 69
9.2Certificate of Compliance Defined. ...................................................................... 69
9.3Certificate of Compliance Conditions Precedent. ................................................. 70
9.4Conclusive Presumption ....................................................................................... 72
9.5Not Evidence. ........................................................................................................ 72
9.6City Obligations. ................................................................................................... 72
9.7Effect of Certificate of Compliance; Termination of Agreement. ........................ 72
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10.Indemnification and Environmental Provisions................................................................ 74
10.1Developer’s Indemnification for Non-Environmental Matters. ............................ 74
10.2Environmental Indemnity. .................................................................................... 76
10.3Effect of Recording of Special Restrictions.......................................................... 77
10.4Claim Response. ................................................................................................... 77
10.5Release Notification and Remedial Actions. ........................................................ 78
10.6Conflict with Section 330 and Other Federal Government Obligations. .............. 79
10.7Insurance and Indemnification. ............................................................................. 79
10.8Selection of Counsel and Defense Obligations. .................................................... 80
10.9Settlement Procedures. .......................................................................................... 80
11.Insurance. .......................................................................................................................... 80
11.1Required Insurance. .............................................................................................. 80
11.2General Insurance Requirements. ......................................................................... 83
12.Covenants and Restrictions. .............................................................................................. 84
12.1Covenants Run With the Land. ............................................................................. 84
12.2Obligation to Refrain from Discrimination........................................................... 85
12.3Use Covenant. ....................................................................................................... 85
12.4Access Easement Agreement and Bioswale Easement. ........................................ 85
12.5Management and Operation of Project; Operating Agreement. ........................... 85
13.Housing Requirements. ..................................................................................................... 86
14.Potential Defaults and Material Defaults. ......................................................................... 87
14.1Potential Defaults. ................................................................................................. 87
14.2Material Defaults. ................................................................................................. 87
14.3Due Diligence Information; Products. .................................................................. 88
15.Remedies Prior to Close of Escrow. ................................................................................. 89
15.1Failure of a Condition Absent a Default. .............................................................. 90
15.2Failure of Close of Escrow; Developer Default. ................................................... 91
15.3Failure to Close; Default of City. .......................................................................... 92
15.4Remedies Exclusive. ............................................................................................. 94
15.5Survival. ................................................................................................................ 94
16.Remedies for Defaults After the Close of Escrow. ........................................................... 94
16.1General Remedies. ................................................................................................ 94
16.2Lien Rights. ........................................................................................................... 95
16.3Right of Repurchase. ............................................................................................. 95
16.4The Right of Reversion. ........................................................................................ 98
16.5Access and Inspection. ........................................................................................ 102
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16.6Obligations and Release Following Repurchase or Reversion. .......................... 103
16.7Cooperation. ........................................................................................................ 103
17.Mortgages and Mortgagee Protection for Project. .......................................................... 103
17.1Restrictions on Mortgages. ................................................................................. 103
17.2Restrictions on Transfer to Mortgagee. .............................................................. 104
17.3Subordination of Permitted Mortgage. ............................................................... 105
17.4Loan Documents. ................................................................................................ 105
17.5Acknowledgment by City of Permitted Mortgagee. ........................................... 106
17.6Change in Loan Documents, Special Restrictions and/or Landscape
Installation and Maintenance Agreement. .......................................................... 106
17.7Effect of a Mortgage. .......................................................................................... 107
17.8Constructive Notice and Acceptance. ................................................................. 107
17.9Bankruptcy Affecting Developer. ....................................................................... 107
17.10Mortgagee Protections. ....................................................................................... 107
18.General Provisions. ......................................................................................................... 108
18.1Applicable Law; Consent to Jurisdiction; Service of Process. ........................... 108
18.2Counsel for Indemnified Obligations; Legal Fees and Costs. ............................ 109
18.3Memorandum of DDA; Modifications or Amendments. .................................... 109
18.4Further Assurances.............................................................................................. 110
18.5Rights and Remedies Are Cumulative; Limitation on Damages. ....................... 110
18.6Notices, Demands and Communications between the Parties. ........................... 111
18.7Delay. .................................................................................................................. 113
18.8Conflict of Interest. ............................................................................................. 115
18.9Non-liability of City Officials and City or Developer Employees. .................... 116
18.10Inspection of Books and Records. ...................................................................... 116
18.11Consents and Approvals. .................................................................................... 116
18.12Real Estate Commissions. ................................................................................... 117
18.13Date and Delivery of Agreement; Term of Agreement. ..................................... 117
18.14Constructive Notice and Acceptance. ................................................................. 118
18.15Survival of Covenants, Representation and Warranties. .................................... 118
18.16Construction and Interpretation of Agreement. .................................................. 118
18.17Time of Essence. ................................................................................................. 119
18.18Fees and Other Expenses. ................................................................................... 119
18.19No Partnership; Binding Effect. .......................................................................... 120
18.20Compliance with Law. ........................................................................................ 120
18.21No Third-Party Beneficiaries. ............................................................................. 120
18.22Counterparts. ....................................................................................................... 120
18.23Duplicate Originals, Entire Agreement and Waivers. ........................................ 120
18.24Confidentiality. ................................................................................................... 121
18.25Proprietary and Governmental Roles; Actions by Parties. ................................. 122
18.26Performance of Acts on Business Days. ............................................................. 123
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TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT
FOR PORTION OF DISPOSITION AREA 8
This TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT FOR
PORTION OF DISPOSITION AREA 8 (“Agreement”) is entered into as of October __, 2026
(“Effective Date”) by and between the CITY OF TUSTIN (as more fully defined in Section 1.4.1,
“City”) and CD-CW (TUSTIN) LLC, a Colorado limited liability company (as more fully defined
in Attachment 1, “Developer”). The City and Developer are sometimes referred to in this
Agreement individually as a “Party” and collectively as the “Parties”. The Parties agree as
follows:
1.Subject and Purpose of Agreement; Parties; Applicable Requirements.
1.1Background Regarding MCAS Tustin.
1.1.1Pursuant to the Defense Base Closure and Realignment Act of 1990 (Part A
of Title XXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note), as amended (“Base Closure
Law”), the Federal Government (see Section 1.9 and Attachment 1 for definitions of initially
capitalized terms in this Agreement) determined to close the Marine Corps Air Station-Tustin
(“MCAS Tustin”) located substantially in the City of Tustin, California. In 1992, the City was
designated as the Lead Agency or Local Redevelopment Authority for preparation of a reuse plan
for MCAS Tustin to facilitate the closure of MCAS Tustin and its reuse in furtherance of the
economic development of the City and surrounding region. The MCAS Tustin Reuse Plan
developed in accordance with this procedure was adopted by the City Council of the City of Tustin
(“City Council”) on October 17, 1996 and amended in September 1998 (“Reuse Plan”).
1.1.2A Final Joint Environmental Impact Statement/Environmental Impact
Report for the Disposal and Reuse of MCAS Tustin and Mitigation Monitoring and Reporting
Program for the Final EIS/EIR were adopted by the City on January 16, 2001. In March 2001, a
record of decision was issued by the Department of the Navy (hereinafter, “Navy”) approving the
Final EIS/EIR and the Reuse Plan with several subsequent supplements and addenda approved by
the City (the original EIS/EIR, as so amended, “Final EIS/EIR”).
1.1.3In May 2002, the Navy approved an “Economic Development
Conveyance of Property at MCAS Tustin” and agreed to convey approximately 1,153 acres of
MCAS Tustin to the City. On May 13, 2002, a total of approximately 977 acres, including the
Development Parcel which are the subject of this Agreement were conveyed by the Navy to the
City by quitclaim deed, as further described below, in accordance with the provisions of that certain
Memorandum of Agreement by and between The United States of America (through the Secretary
of the Army or designee) and the City dated May 13, 2002 (“Memorandum of Agreement”). The
additional approximately 177 acres were made subject to a ground lease by the City from the Navy
and portions thereof have subsequently been conveyed by the Navy to the City pursuant to
subsequent quitclaim deeds. The approximately 1,153 acres of MCAS Tustin located within the
City of Tustin and either conveyed by the Navy to the City or subject to ground lease between the
Navy and the City are referred to in this Agreement as “Tustin Legacy”.
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1.1.4On February 3, 2003, the City adopted an ordinance approving the MCAS
Tustin Specific Plan/Reuse Plan setting forth the zoning and entitlement framework for future
development of Tustin Legacy. Since its initial adoption, the City has approved numerous Specific
Plan amendments. All references in this Agreement to the “Specific Plan” shall be deemed to refer
to the MCAS Tustin Specific Plan/Reuse Plan, as the same may have been previously or may be
subsequently amended. The Specific Plan conforms to and implements the Reuse Plan and the
City’s General Plan.
1.1.5The City desires to effectuate development of Tustin Legacy through the
sale and development of property in accordance with applicable federal and local requirements.
Tustin Legacy shall be developed in accordance with all applicable City requirements, including
the Specific Plan.
1.1.6Consistent with the requirements of California Government Code Sections
54220-54234 (“Surplus Land Act”) and the California Department of Housing and Community
Development (“HCD”), issued Surplus Land Act Guidelines (collectively with the Surplus Land
Act, the “SLA Regulations”), on June 15, 2021, the City declared the Development Parcel and
certain other property at Tustin Legacy to be surplus and sent a notice of availability to all required
housing entities on June 17, 2021. No affordable housing entity expressed interest in the identified
properties during the required 60-day notice period following issuance of such notice. To ensure
compliance with the SLA Regulations, prior to approval of this Agreement, the City submitted to
HCD: (i) a list of the entities that were sent the Notice of Availability and (ii) Resolution 21-49
adopted by the City Council on June 15, 2021, declaring the Development Parcel to be surplus
land; and HCD, by letter dated September 15, 2022, confirmed that the City followed the notice
of availability process and is permitted to proceed with the sale or lease of the Development Parcel
so long as a covenant is recorded against the Development Parcel that requires that if ten (10) or
more residential units are developed thereon, then not less than fifteen percent (15%) of the total
number of residential units developed on the Development Parcel shall be for Lower Income
Households.
1.1.7The City initiated a competitive Request for Proposals (“RFP”) process for
development of senior congregate care comprised of assisted living and memory care facilities on
the Development Parcel. Developer submitted a proposal pursuant to the RFP for purchase and
development of the Development Parcel and was selected for further negotiations.
1.1.8Following selection of Developer, the City and Developer entered into that
certain Exclusive Negotiating Agreement (Tustin Legacy Portion of Disposition Area 8) (as
amended, “ENA”) contemplating the sale of the Property, and development thereon of age
restricted (55 years or older) active adult and independent living facilities and senior congregate
care comprised of assisted living and memory care facilities, together with required on-site
infrastructure and a complete accompanying set of high quality amenities to be constructed by
Developer, including rooftop amenities and private open space.
1.1.9Following the review of new competitive senior housing options in the
market area, Developer adopted a revised design providing (i) a residential active adult residential
development with 172 Residential Units, including one manager unit (which may, at the discretion
of Developer, be a Lower Income Unit) (comprised of 124 base units and 48 density bonus units),
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including approximately 26 Lower Income Units, with the final number of such Residential Units
to be shown on the Approved Plans, provided that in no event shall the number of Lower Income
Units be less than fifteen percent (15%) of the total Residential Units constructed on the Active
Adult Real Property, and (ii) an assisted living and memory care (“AL/MC”) facility comprised
of up to 147,500 square feet of development and including 103 Rooms, comprised of 106 assisted
living beds in 75 Rooms and 28 memory care Rooms and proposed a plan for development
consistent with that approach. The Project is designed to comply with the SLA Regulations
requiring that fifteen percent (15%) of the total number of Residential Units on the Development
Parcel shall be Lower Income Units.
1.2Description of Development Parcel, and Real Property.
1.2.1Definition of Development Parcel. The City is the owner of approximately
6.14 acres of land located in the City of Tustin, County of Orange, California, legally described on
Attachment 2A and depicted on Attachment 2B (“Development Parcel”). The Development
Parcel is within a portion of Disposition Area 8 bounded by Warner Avenue, future Veterans Way,
future John Johnson Way and Armstrong Avenue. The Development Parcel comprises a portion of
the land conveyed by the Navy to the City in Navy Quitclaim Deed D dated May 13, 2002 and
recorded in the Orange County Clerk Recorder Office on May 14, 2002 as Instrument No.
20020404594 (“Federal Deed”). The Development Parcel is located in Specific Plan
Neighborhood D, within Planning Areas 13 and 14 and is referred to in the Navy Reuse Plan as a
portion of Parcel 14 and in the Federal Deed as a portion of Parcel I-D-3 and as a portion of Parcel
I-D-4. The approximately 2.79 acre parcel identified on the Tentative Parcel Map as proposed to
be developed with the Active Adult Project is referred to herein as “Active Adult Real Property”
and the approximately 3.35 acre parcel proposed to be developed with the assisted living and
memory care Project is referred to in this Agreement as the “AL/MC Real Property”, each as
depicted on the Site Plan attached to this Agreement as Attachment 3 (“Site Plan”) and in each
case excluding the rights and interests in the City reserved in the Quitclaim Deed as further
described in Section 1.2.2.
1.2.2Definition of Real Property. The term “Real Property” as used in this
Agreement shall mean the Development Parcel (and if the Final Parcel Map is Recorded, shall
mean Parcel 1 and Parcel 2 as depicted thereon) to be conveyed to Developer pursuant to this
Agreement and is comprised of the Development Parcel excluding the following rights and
interests of the City which shall be reserved to the City in the Quitclaim Deed:
1.2.2.1Any and all oil, oil rights, minerals, mineral rights, natural gas,
natural gas rights and other hydrocarbons by whatsoever name known, geothermal steam and all
products derived from any of the foregoing, that may be within or under the Development Parcel
together with the perpetual right of drilling, mining, exploring for and storing in and removing the
same from the Development Parcel or any other land, including the right to whipstock or
directionally drill and mine from lands other than the Development Parcel, oil or gas wells, tunnels
and shafts into, through or across the subsurface of the Development Parcel and to bottom such
whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the
exterior limits thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate any
such well or mines; but without, however, the right to enter upon or use the surface of the
Development Parcel in the exercise of such rights or otherwise adversely affect the use or operation
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of the Development Parcel as anticipated by this Agreement or the structural integrity of any
improvements on the Development Parcel; and
1.2.2.2Any and all water, water rights or interests therein appurtenant or
relating to the Development Parcel or owned or used by the City in connection with or with respect
to the Development Parcel no matter how acquired by the City, whether such water rights shall be
riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated, statutory or
contractual, together with the perpetual right and power to explore, drill, re-drill and remove the
same from or in the Development Parcel, to store the same beneath the surface of the Development
Parcel and to divert or otherwise utilize such water, rights or interests on any other property owned
or leased by the City; but without, however, the right to enter upon or use the surface of the
Development Parcel in the exercise of such rights or otherwise adversely affect the use or operation
of the Development Parcel as anticipated by this Agreement or the structural integrity of any
improvements on the Development Parcel.
1.2.2.3Those excess development rights reserved to the City as set forth in
Section 4.1.2.
Reservation by the City of the rights and interests in Sections 1.2.2.1 and 1.2.2.2 shall not
be deemed to limit Developer’s right to construct foundations, utilities and other subsurface
improvements for the purpose of constructing the Project and otherwise engage in subsurface
construction activity in order to construct the Project.
1.2.3Mapping. The City has approved Tentative Parcel Map No. 2025-151 (as
approved by the City Council as part of the Pre-Closing Entitlements, “Tentative Parcel Map”)
pursuant to the Subdivision Map Act and the City Code. The City shall, when submitted by the
Developer, process in its Governmental Capacity and upon approval by it and the Orange County
Surveyor’s office cause the Recording of the final parcel map based upon the Tentative Parcel Map
(“Final Parcel Map”). The determination of whether to submit the final parcel map for approval
by the City and Orange County is at the election of the Developer. Upon Recording, the Final
Parcel Map would subdivide the Development Parcel into Parcel 1 and Parcel 2, generally as
shown on the Tentative Parcel Map. If Recorded, Parcel 1 of the Final Parcel Map shall comprise
the Active Adult Real Property and Parcel 2 shall comprise the AL/MC Real Property. Developer
shall enter into the Subdivision Improvement Agreement with the City prior and as a condition to
Recording of the Final Parcel Map. Developer shall cause the Final Parcel Map to be Recorded no
later than when required by the Schedule of Performance.
1.3Description of the Project.
1.3.1Purpose and Approach. The purpose of this Agreement is to (i) effectuate
the Specific Plan (including the Reuse Plan incorporated therein), in accordance with the terms
and conditions set forth therein and in the Memorandum of Agreement and the Federal Deed,
through disposition and development of portions of Tustin Legacy as further described in this
Agreement and (ii) to provide for the sale and conveyance of the Property, for the maintenance
and use of the Property and certain related improvements by Developer and for the construction
of the Project by Developer in accordance with the terms and conditions of this Agreement. The
Project shall be designed and constructed to Completion in a manner consistent with the Site Plan.
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Developer intends on assigning this Agreement prior to Close of Escrow to a newly formed entity
(“PropCo”) that is wholly owned by a joint venture entity (“JV Entity”), which in turn is owned
by (a) certain principals and employees of Confluent Development, LLC (“Confluent”), (b)
Clearwater, and (c) an entity owned and Controlled by the Initial Equity Investor. Developer
intends that PropCo acquire the Property and become “Developer” at Close of Escrow and develop
the Project, provided that in no event shall the Close of Escrow with respect to the Property take
place unless and until all of the Closing Conditions in this Agreement have been satisfied.
Developer acknowledges that the qualifications and identity of Manager are of particular concern
to the City and accordingly that unless otherwise agreed by the City in its sole discretion, a Person
Controlled by Marshall Burton shall be the Manager of Developer.
1.3.2Active Adult Project Improvements Definitions. This Agreement
provides for development by Developer of the Active Adult Real Property with the Active Adult
Project Horizontal Improvements, all required on-site infrastructure, the Active Adult Project
Vertical Improvements including a complete accompanying set of high-quality tenant amenities
(e.g., outdoor pool, fitness center, activity room, rooftop lounge and pickleball), on identified
common open space, and 211 parking spaces to be developed at grade and in a parking structure,
which shall be designed and constructed as further set forth in Article 8 and the Scope of
Development attached to this Agreement as Attachment 8 (“Scope of Development”). The Active
Adult Project Horizontal Improvements and the Active Adult Project Vertical Improvements,
comprised of approximately 172 Residential Units (comprised of 124 base units and 48 density
bonus units), of which not less than 15% (currently estimated as 26 Residential Units) shall be
Lower Income Units, are referred to in this Agreement as the “Active Adult Project
Improvements” and the development, construction, maintenance, leasing and use of the Active
AdultProject Improvements within the boundaries of and/or relating to the Active Adult Real
Property is referred to in this Agreement as the “Active Adult Project”. Notwithstanding any
provision in this Agreement to the contrary, (i) the final number of Residential Units on the Active
Adult Real Property shall be as set forth in the Approved Plans and the number of Residential
Units actually constructed on the Active Adult Real Property Parcel shall be established in the
Active Adult Project Certificate of Compliance if the Final Parcel Map is Recorded prior to the
Recording of the first Certificate of Compliance or in the Final Certificate of Compliance if not,
and (ii) the Residential Units may be opened and leased to tenants at any time from and after the
issuance by the City of a final certificate of occupancy or temporary certificate of occupancy (if
issued in the City’s Governmental Capacity). The Active Adult Project Improvements shall be
constructed in a manner consistent with the requirements of the Specific Plan, the Approved Plans,
the Entitlements and the Development Permits.
1.3.3AL/MC Project Improvements Definitions. This Agreement further
provides for development by Developer of the AL/MC Real Property with the AL/MC Project
Horizontal Improvements, all required on-site infrastructure, the AL/MC Project Vertical
Improvements, including a complete accompanying set of high-quality amenities (e.g., fitness
center, dining spaces, theater, salon, activity rooms, and club room), and 66 parking spaces to be
developed at grade and in a parking structure, which shall be designed and constructed as further
set forth in Article 8 and the Scope of Development. The AL/MC Project Horizontal Improvements
and the AL/MC Project Vertical Improvements are collectively referred to in this Agreement as the
“AL/MC Project Improvements” and the development, construction, maintenance, leasing and
use of the AL/MC Project Improvements on the AL/MC Real Property is referred to in this
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Agreement as the “AL/MC Project”. Notwithstanding any provision in this Agreement to the
contrary, (i) the final number of Rooms in the AL/MC Project shall be as set forth in the Approved
Plans and the number of Rooms actually constructed on the AL/MC Real Property shall be
established in the AL/MC Project Certificate of Compliance if the Final Parcel Map is Recorded
prior to the Recording of the first Certificate of Compliance or in the Final Certificate of
Compliance if not, and (ii) the Rooms may be opened and leased to occupants at any time from
and after the issuance by the City of a final certificate of occupancy or temporary certificate of
occupancy (if issued in the City’s Governmental Capacity). The AL/MC Project Improvements
shall be constructed in a manner consistent with the requirements of the Specific Plan, the
Approved Plans, the Entitlements and the Development Permits.
1.3.4Other Agreements. At the Close of Escrow, the City intends to convey the
Property to Developer, in accordance with the terms and conditions of this Agreement. As further
set forth in this Agreement, at or prior to the Close of Escrow the City intends to establish Special
Restrictions, an SLA Covenant and an Affordable Housing Declaration and to record certain
additional covenants, conditions and restrictions with respect to the Property as further described
in this Agreement and the Attachments.
1.4Parties to the Agreement.
1.4.1City. The City is a municipal corporation of the State. The City has been
recognized as the Local Redevelopment Authority by the Office of the Secretary of Defense for
the former Marine Corps Air Station, Tustin, for purposes of the Base Closure Law. The term
“City” as used in this Agreement shall mean the City of Tustin and each assignee or successor to
the City’s rights, powers and responsibilities, provided that when in this Agreement the term “City
and its Governmental Successors” is used, the term “City” shall be deemed to mean solely the City
of Tustin. The City Council shall have the right, in its sole discretion, to assign its rights and
obligations to any agency or instrumentality of the City. The principal office of the City and
mailing address is 300 Centennial Way, Tustin, California 92780.
1.4.2Developer; Initial Developer. The Developer as of the Effective Date is
CD-CW (TUSTIN) LLC, a Colorado limited liability company, and, as of the Effective Date, CD-
CW (TUSTIN) LLC is also referred to in this Agreement as the “Initial Developer”. The principal
office of Initial Developer is located at and its mailing address is c/o Confluent Development, 2215
Market Street, Denver, Colorado 80205. Developer shall have the right, solely in accordance with
the provisions of Article 2 and the other terms and conditions set forth in this Agreement, to assign
its rights and obligations under this Agreement and the Other Agreements and in such event, Initial
Developer and each Transferee that is a Successor Owner with respect to all of a Transferor’s
interest in the Transferable Interests shall thereafter (and may concurrently with the Transferor) be
“Developer” under the terms of this Agreement.
1.4.3Responsibilities of Developer. Developer shall be responsible to cause the
design, development, construction and Completion of the Project (and to cause the operation of
the same) as required by this Agreement and the Landscape Installation and Maintenance
Agreement and to comply with the requirements of the Other Agreements with respect to the
Project.
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1.4.4Relationship of City and Developer. The Parties acknowledge and agree
that the relationship of the City and Developer is neither that of a partnership nor that of a joint
venture. Notwithstanding any other provision of this Agreement, Developer is not, and shall not
be deemed to be, the agent of the City for any purpose, and shall not have the power or the authority
to bind the City to any contractual or other obligation. Prior to the Close of Escrow, Developer
may only characterize itself to third parties as the prospective purchaser and/or developer of the
Property. Developer shall not at any time hold itself out to the City or to any other third party as
an agent of the City, and shall not, by any act or omission, mislead any third party into believing,
or allow any third party to continue in the mistaken belief that Developer is an agent of the City or
has the power or authority to bind the City to any contractual or other obligation.
1.5Federal Requirements Applicable to Tustin Legacy.
1.5.1Federal Economic Development Conveyance. The Parties acknowledge
and agree that this Agreement is entered into as part of an economic development conveyance of
Tustin Legacy to the City pursuant to the Base Closure Law, the Memorandum of Agreement and
the terms and conditions of the Federal Deed, including the environmental restriction pursuant to
California Civil Code Section 1471 contained therein.
1.5.2Memorandum of Agreement and Federal Deed. This Agreement is and
shall be subject to the terms and conditions of the Memorandum of Agreement and the Federal
Deed and the rights, obligations and remedies of the Federal Government under the Federal Deed,
and nothing contained in this Agreement shall be construed in a manner that is inconsistent with
the rights, obligations and remedies of the Federal Government under the Federal Deed.
Accordingly, if any provision of this Agreement contradicts, modifies or in any way changes the
terms of the Memorandum of Agreement or the Federal Deed, the terms of the Memorandum of
Agreement and Federal Deed shall prevail and govern.
1.6Other Governmental Requirements Applicable to Tustin Legacy.
1.6.1Compliance with SLA Regulations. The City is required by law to comply
with the SLA Regulations with respect to the development of the Real Property. Developer
acknowledges that for the benefit of the City as a condition to the Close of Escrow, the City shall
Record an SLA Covenant in substantially in the form and substance of the instrument attached as
Attachment 25 to this Agreement (“SLA Covenant”) against the Development Parcel at the Close
of Escrow, that requires that if ten (10) or more residential units are developed thereon, not less
than fifteen percent (15%) of the total number of residential units developed on the property shall
be sold or rented at affordable housing cost, as defined in Section 50052.5 of the California Health
and Safety Code, or affordable rent, as defined in Section 50053 of the California Health and Safety
Code, to lower income households, as defined in Section 50079.5 of the California Health and
Safety Code. Any such rental units shall remain affordable to, and occupied by, lower income
households for a period of 55 years for rental housing and 45 years for ownership housing. The
initial occupants of all ownership units shall be lower income households, and the units shall be
subject to an equity sharing agreement consistent with the provisions of paragraph (2) of
subdivision (c) of 65915 of the California Government Code. Developer acknowledges that these
requirements shall be restrictions running with the land and shall be enforceable against any owner
who violates such restrictions and each successor-in-interest who continues the violation by any
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of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5 of the California
Government Code. Application of these provisions to the Project is described in Article 13.
1.6.2Compliance with Other Governmental Requirements. This Agreement
is subject to all Governmental Requirements (including the General Plan, the Specific Plan, the
City Code and the SLA Regulations) applicable to the Real Property and the Project or any portion
thereof, provided, however, that the City acknowledges and agrees that, substantially concurrently
with the execution of this Agreement, the City and Developer are entering into a statutory
development agreement pursuant to California Government Code Section 65864 et seq.
(“Development Agreement”) relating to the Property and the Project and that any provisions of
this Agreement with respect to the rights and obligations of Developer under any Governmental
Requirements imposed by the City relating to entitlements or development of the Real Property
shall be subject to the provisions of the Development Agreement and in the event of any
inconsistency between such provisions under this Agreement and the Development Agreement,
the Governmental Requirements required to be imposed pursuant to the Development Agreement
shall control.
1.7Not a Development Agreement.
This Agreement is not a development agreement as provided in California Government
Code Section 65864 and, as further set forth in Section 8.4.4, is not a grant of any entitlement,
permit, land use approval, or vested right in favor of Developer, the Project or the Property;
however, the Parties will separately enter into the Development Agreement as provided in
Section 1.6.2. The City shall use good faith efforts, within applicable legal constraints and
consistent with applicable City policies, to take such actions as may be necessary or appropriate
to effectuate and carry out this Agreement in a timely and commercially reasonable manner.
1.8DDA Transaction Expenses and Independent Contract Consideration.
1.8.1ENA Expenses Deposit and Transaction Expenses. Pursuant to
Section 4.3 of the ENA, Developer has paid Four Hundred Thirty Thousand Six Hundred Ninety-
2
Two Dollars ($430,692.00) to the City as ENA Deposits (“ENA Expenses Deposit”) to be used
by the City to pay “City Transaction Expenses” as defined in the ENA. Developer has also paid to
the City the ENA Extension Deposits which amounts are not ENA Expenses Deposits.
1.8.2City Costs Deposit; Independent Consideration.Upon the execution of
this Agreement by the Parties, the funds remaining in the ENA Expenses Deposit shall be the “City
Costs Deposit”, provided that, if the ENA Expenses Deposit is less than $50,000.00, Developer
shall, not later than three (3) Business Days following the Effective Date, deliver to the City
additional funds sufficient to bring the City Costs Deposit to $50,000.00 (“City Costs Deposit”).
The City Costs Deposit shall be deposited by the City in an account in a bank or trust company
selected by the City. If any interest is paid on such account, such interest shall accrue to any
balances in the account for the benefit of Developer and as additional security for Developer
obligations under this Section 1.8. One Hundred Dollars ($100.00) of the City Costs Deposit shall
be retained by the City as “Independent Contract Consideration”. The City Costs Deposit may
2
NTD: To be confirmed by City.
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be used by the City to pay the City’s DDA Transaction Expenses and the City Costs Deposit will
be depleted accordingly. Until the earlier to occur of (i) Recording by the City of the Final
Certificate of Compliance, or (ii) termination of this Agreement, if at any time the amount of funds
in the City Costs Deposit account (including interest accrued thereon) is depleted below Twenty
Five Thousand Dollars ($25,000), Developer shall be required to pay to the City each time an
additional amount, as specified by the City in writing, to replenish the City Costs Deposit to Fifty
Thousand Dollars ($50,000). Each such payment shall be deposited by the City into the City Costs
Deposit account to be applied to DDA Transaction Expenses in accordance with the provisions of
Section 1.8.3.
1.8.3Payment of DDA Transaction Expenses. Developer shall pay all DDA
Transaction Expenses incurred by the City during the Term of this Agreement, whether arising
with respect to matters or incurred by the City prior to or following the Close of Escrow until the
Recording by the City of the Final Certificate of Compliance. The City Costs Deposit has been
established to fund the DDA Transaction Expenses and may be used by the City for such purpose
and shall be depleted accordingly. Immediately upon incurring any DDA Transaction Expenses or
receipt of an invoice from third parties for same, subject to complying with the requirements of
Section 1.8.4, the City shall have the right to deduct the amounts due it on account thereof from
the City Costs Deposit. In addition, at the Close of Escrow, the City shall be entitled to deduct
from the City Costs Deposit the payment of all DDA Transaction Expenses then unpaid and if such
amounts are insufficient to cover all DDA Transaction Expenses incurred by the City to the Close
of Escrow, Developer shall, as a condition to the Close of Escrow, pay the full amount of DDA
Transaction Expenses incurred by the City to and including the Closing Date and then remaining
unpaid and such additional amount as is required to maintain a City Costs Deposit held by the City
of Fifty Thousand Dollars ($50,000.00). If following Recording by the City of Certificates of
Compliance for both the Active Adult Project and the AL/MC Project, there is any City Costs
Deposit amount held by the City after application of such funds by the City to reduce the DDA
Transaction Expenses arising or incurred by the City to such date, the City shall refund such
amount to Developer. If the amount of the City Costs Deposit is not sufficient to fund all DDA
Transaction Expenses arising or incurred prior to such date, Developer shall pay the outstanding
amounts due with respect to DDA Transaction Expenses to the City within thirty (30) calendar
days following receipt of an invoice from the City therefore, provided that the City shall first apply
the amount of the City Costs Deposit, if any, then held by it in satisfaction of such invoice, and
shall reflect the amount of such credit on the invoice.
1.8.4Standards Applicable to DDA Transaction Expense Payments. Absent
manifest error, the determination of costs, expenses, and fees constituting DDA Transaction
Expenses shall be made by the City in its sole discretion and City shall provide to Developer, on a
quarterly basis during the Term, summary written notices, including non-confidential summary
invoices of third party consultants from the City setting forth the identity of the provider or cost
and the amounts attributable and/or paid to each that constitute DDA Transaction Expenses and
related non-confidential documents evidencing such expenses. Developer shall have the right to
reasonably object to any DDA Transaction Expenses upon written notice thereof delivered to the
City within fifteen (15) calendar days following Developer’s receipt of such notice specifying the
grounds for such objection and to request in writing to the City reasonable further non-confidential
information supporting any DDA Transaction Expenses, provided that in no event shall Developer
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have the right to challenge the hourly rates of City staff nor those of the City’s third party attorneys
or consultants.
1.8.5Exclusions from DDA Transaction Expenses. The City and Developer
hereby acknowledge and agree that the DDA Transaction Expenses do not include: (i) any fees or
deposits required of Developer for processing Entitlements applications; (ii) any fees or costs for
complying with provisions of CEQA or its State CEQA implementing regulations or other matters
identified in Section 8.4; (iii) any costs to review or approve any applications or submittals by
Developer to the City in connection with the Project; (iv) the Development Costs, Project Fair
Share Contribution or any other development impact fees, exactions or other costs imposed as
conditions of approval or pursuant to the Development Agreement or mitigation measures with
respect to the Entitlements or pursuant to the Other Agreements; (v) the marketing fees set forth
in Section 8.7.4; or (vi) any other matters in this Agreement that expressly require Developer to
pay, at its sole cost, for expenses incurred in connection with this Agreement that are not otherwise
duplicative of other fees to be paid to the City in connection with the Project. The obligation of
Developer to pay for the DDA Transaction Expenses pursuant to this Section 1.8 shall not diminish
or limit Developer’s obligation to pay for any of the costs in the preceding sentence.
1.8.6The provisions of this Section 1.8 shall survive the termination of this
Agreement until all DDA Transaction Expenses due are paid.
1.9Definitions; Attachments.
1.9.1Definitions. Capitalized terms used in this Agreement, including in the
Attachments attached hereto, unless otherwise defined in this Agreement, shall have the respective
meanings specified in the Glossary of Defined Terms attached hereto as Attachment 1. Unless
otherwise indicated, references in this Agreement to articles, sections, paragraphs, subsections,
clauses, exhibits, attachments and schedules are to the same contained in or attached to this
Agreement and all attachments and schedules referenced in this Agreement are incorporated in this
Agreement by this reference as though fully set forth in this Section.
1.9.2“Substantially in the Form and Substance.” Wherever used in this
Agreement, the term “substantially in the form and substance” shall mean that the referenced
document, when compared to the applicable Attachment or previously approved form of
document, (i) is consistent in all material respects, and none of the modifications in the referenced
document materially diminish a Party’s rights or materially increase such Party’s obligations under
this Agreement, as determined by the Party for whose benefit the condition is written, in its sole
discretion or (ii) is otherwise in such form and substance mutually agreed upon by the Parties in
their sole discretion. In the event the Parties disagree whether or not a particular document is
substantially in the form and substance of the applicable Attachment or previously approved form
of document, the Parties shall promptly meet and confer in good faith to seek to resolve such
disagreement.
1.9.3“Includes”, “Included” and “Including”. As used in this Agreement the
words “include”, “includes”, “included” and “including” mean, respectively, “include, without
limitation” “includes, without limitation”, “included, without limitation” and “including, without
limitation”.
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1.9.4“Shall”; “Shall Not”; “May”. When stated in connection with performance
by a Party, the word “shall” imposes a mandatory requirement on that Party to perform the stated
act or requirement (and shall be synonymous with “must”) and the term “shall not” imposes a
mandatory requirement on that Party not to perform the stated act or requirement (and shall be
synonymous with “must not”). The word “may” is permissive and does not impose any mandatory
requirement on a Party to perform the stated act.
1.9.5“Sole”. When stated in connection with the discretion of any Party (i.e., in
the “sole discretion” of such Party, the word “sole” means “sole and absolute”.
1.9.6“Binding Upon Each and Every Person Claiming By, Through or
Under Developer or any Successor Owner”. When stated in this Agreement, the term “binding
upon each and every Person claiming by, through or under Developer or any Successor Owner”
shall mean and include each Person with a possessory or ownership interest in any portion of the
Property or the Project but shall specifically exclude End Users.
2.Prohibition Against Transfers and Transfer of Control.
2.1Importance of Developer Qualifications.
2.1.1Developer Acknowledgement of City Concerns. Developer represents
and agrees that its undertakings pursuant to this Agreement are for the purpose of development of
the Project and not for speculation in land holding. Developer recognizes and agrees that the
qualifications and identity of Initial Developer and its Key Employees and the fact that Confluent
is the managing member of Initial Developer, as well as the intended Transfer to PropCo, the
Control by the Initial Equity Investor of Propco, and restrictions on Mortgages set forth in this
Agreement, are all of particular concern to the City and community. Developer further
acknowledges the importance of the development of the Property and Tustin Legacy to the general
welfare of the community and to provide affordable housing in the City and that a Transfer of
Control is for practical purposes a transfer of rights and obligations under this Agreement or the
Property and for the foregoing reasons, agrees to the following restrictions on Transfer and
Transfer of Control during the Term. Transfers and Transfers of Control.
2.1.2Survival of Provisions. The provisions of this Article 2 shall survive the
termination of this Agreement at the Close of Escrow until the Recording by the City of the Final
Certificate of Compliance.
2.2Restrictions on Transfers and Transfers of Control and Releases Following
Transfer.
2.2.1For the reasons set forth in Section 2.1, Developer, on behalf of itself, each
Successor Owner and each and every Person claiming by, through or under Developer or any
Successor Owner (but specifically excluding any End Users), acknowledges and agrees that the
restrictions on Transfer and Transfer of Control set forth in this Article 2 and Article 17 shall apply
to Developer, the Real Property, the Project Improvements, the Property, and the Project and any
portion thereof or interest therein or in this Agreement or the Other Agreements (“Transferable
Interests”) until Recording by the City of the Final Certificate of Compliance, provided that if the
Final Parcel Map is Recorded prior to Recording by the City of the first Certificate of Compliance,
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then these provisions shall apply as to the Active Adult Project and Active Adult Real Property,
until Recording by the City of the Active Adult Project Certificate of Compliance, and as to the
AL/MC Project and AL/MC Real Property, until Recording by the City of the AL/MC Project
Certificate of Compliance. Further, during the Term of this Agreement, Developer shall not
Transfer less than the entirety of the Transferable Interests and any Transfer resulting in a division
of ownership with respect to the Transferable Interests shall be void and of no force or effect except
that the following Transfers of less than all of the Transferable Interests shall be authorized and
shall proceed only if in accordance with the requirements of this Article 2: (i) any Permitted
Transfer described in Sections 2.2.2.2 through 2.2.2.4, (ii) any Transfer to a Permitted Mortgagee
to secure a Construction Loan for the construction of the Project Improvements authorized
pursuant to Section 2.2.5 and Article 17, and (iii) the foregoing restrictions shall not apply to any
portion of the Real Property for which a Certificate of Compliance has been Recorded by the City.
No Person shall acquire any rights or powers under this Agreement or the Other Agreements or
any interest in all or any portion of the Property, the Project Improvements thereon or any portions
thereof except with the written consent of the City, as set forth in this Article 2, or with respect to
any Mortgage, Article 17, including through a Non- Foreclosure Event.
2.2.2Permitted Transfer. Notwithstanding anything to the contrary contained in
this Agreement, the following Transfers are each a “Permitted Transfer” and shall not be subject
to the City’s prior written consent or otherwise subject to the requirements of Section 2.2.3 or 2.4,
or except as set forth immediately below, Section 2.2.4, provided that Developer shall provide not
less than thirty (30) calendar days’ prior written notice to the City of such Transfer and the
Person(s) to which Transfer is made and in the event of Transfer pursuant to Section 2.2.2.1, shall
provide, prior to or concurrently with the Transfer, the Transfer Date deliverables as required in
Section 2.2.4:
2.2.2.1A Transfer by Responsible Developer to a Developer Affiliate of the
entirety of Developer’s interest in the Transferable Interests; provided that:
(i)unless and until Responsible Developer is released from
such obligations pursuant to Article 9 or Section 16.6, the City shall be entitled to look to
both the Transferee and the Responsible Developer notwithstanding such Transfer, and the
Responsible Developer shall remain fully liable under and shall not be released from this
Agreement and shall cause its Developer Affiliate to fully comply with this Agreement as
though there had not been a Transfer;
(ii)there shall be no Transfer of Control, the Controlling Person
of the Responsible Developer shall be, directly or indirectly, the Controlling Person of the
Developer Affiliate that is the Transferee shall be the Manager;
(iii)neither Transferor nor the then Responsible Developer shall
be in Potential Default or Material Default under this Agreement at the Transfer Date;
(iv)the Responsible Developer or the Responsible Developer’s
Controlling Person shall provide the City with written notice of such transaction not less
than thirty (30) Business Days prior to the proposed Transfer; and
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(v)no later than the Transfer Date, all of the applicable
conditions set forth in Sections 2.2.4, 2.4, 4.6, 8.9 and 8.10 shall have been satisfied.
2.2.2.2Any Transfer by Developer of portions of the Property to the City
and/or grants of easements affecting the Real Property to the City, to any public or quasi-public
entity or to any utility, or to any Successor Owner for the benefit of any portion of the Property, as
necessary or desirable for the development or operation thereof.
2.2.2.3Any temporary license or other temporary grant of access rights by
Developer to any portion of the Real Property to the City and/or to any other third party, as
necessary or desirable for the development of the Real Property.
2.2.2.4Any lease to an End User as described in clause (ii) of that definition
for a Residential Unit within the Active Adult Project or for a Room in the AL/MC Project.
So long as Confluent or another Person Controlled by Confluent or Marshall
Burton (or another Person approved in writing by the City in the exercise of the City’s sole
discretion after execution of this Agreement and prior to the proposed Permitted Transfer) is,
directly or indirectly, the Manager of Initial Developer, Initial Developer shall have the right to
transfer or permit the transfer of ownership interests in the Initial Developer entity and in the
members and Manager of Initial Developer in connection with the admission of new members
and/or the loss of members in Initial Developer or Initial Developer’s members, as applicable, in
the ordinary course of business.
2.2.3Provisions Applicable to Transfer and Transfer of Control Other than
Permitted Transfer. Except as set forth in Section 2.2.2 or Article 17, Developer shall comply
with the requirements of this Section 2.2.3 and Sections 2.2.1, 2.2.4, 2.2.5, 2.4, 4.6, 8.9 and 8.10
as a condition to each Transfer or Transfer of Control of the Property and shall obtain the prior
written consent of the City thereto, which consent, except as set forth in Section 2.7, shall be
granted or denied in the City’s sole discretion; provided that the foregoing restrictions shall not
apply to any portion of the Real Property for which the City has executed and Recorded a
Certificate of Compliance. The City’s right of consent shall include the right of the City to approve
the Transferee, the Controlling Person of Transferee and the proposed Manager of Transferee with
respect to a Transfer, and the Controlling Person of Developer and the Manager of Developer, in
the case of a Transfer of Control of Developer, and the right to approve the proposed Guarantor or
replacement Guarantor and proposed Equity Investor or replacement Equity Investor, if any,
described in Sections 8.9 and 8.10. In order to provide the City with information necessary to
inform its right to consent as described in this Section 2.2.3, Developer shall provide to the City at
least thirty (30) Business Days prior to the date of any proposed Transfer or Transfer of Control:
2.2.3.1the name(s) of the proposed Transferee and its Key Employees and
principals and the new Controlling Person, if applicable; the biographies of the principals and Key
Employees of the proposed Transferee and the names and biographies of any proposed equity
investor or guarantor;
2.2.3.2all of the material proposed terms of the Transfer or Transfer of
Control and draft documents in substantially the form and substance of the final forms of the
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documents described in Section 2.2.4 and, if applicable, red-lined to show changes from any prior
drafts reviewed by the City;
2.2.3.3provide evidence to the City satisfactory to it in its sole discretion
other than a previously approved Permitted Mortgage or Mortgage meeting the requirements of
this Agreement will be required with respect to the Property or the Project and (i) either (a) each
previously approved Evidence of Equity, Equity Commitment and Guaranty remains in full force
and effect (in which case the City’s rights of review shall be as set forth in Section 4.6.1.4), (1)
there are no defaults thereunder, (2) there have been no modifications thereto other than
modifications that have been consented to by the City in its sole discretion, or if modified that the
modifications have been reviewed and approved by the City in accordance with Section 4.6.1.4,
and (3) the same will remain in full force and effect following such Transfer or Transfer of Control,
or (b) if the Evidence of Equity or Equity Commitment will be replaced, if the Equity Investor is
proposed to be replaced, information required for the City to approve the Evidence of Equity,
Equity Commitment Equity Investor as set forth in Sections 4.6 and 8.10, and (ii) if the Guarantor
has not previously been approved or is proposed to be replaced, the information required for the
City to approve the proposed Guarantor as set forth in Section 8.9.1 and, if applicable,
Section 8.9.2 and in each case, together with such modifications to the form of the Equity
Commitment and/or Evidence of Equity and Guaranty as may be required by the City in its sole
discretion;
2.2.3.4a certificate of the proposed Transferee and new Controlling Person
for each Transfer and of the new Controlling Person for each Transfer of Control describing other
similar senior living real estate projects developed and leased by, or sold by the proposed
Transferee over the preceding five (5) year period, the dates of involvement by the proposed
Transferee and new Controlling Person with such projects and the success of the projects, such
certificate to be made by the manager, president or other Person with appropriate authority from
the proposed Transferee and/or Controlling Person, as applicable, to do so;
2.2.3.5with respect to each Transfer, an Updated Financing Plan, in each
case meeting the requirements of Section 4.6.1 prepared by Transferee and with respect to each
Transfer of Control, either (i) certification by Developer that the most recent Financing Plan
approved by the City remains accurate, true and complete, or (ii) an Updated Financing Plan
meeting the requirements of Section 4.6.1.12 prepared by Developer and with certification as
required by Section 4.6.1.3 (and such City approval rights shall not negate the rights of the City to
review and approve an Updated Financing Plan as a condition to Close of Escrow).
2.2.3.6In addition, with respect to each Transfer of Control, Developer shall
also provide evidence to the City that there is no change to the identity of Developer and such
other relevant information as the City may request in its sole discretion in connection with its
consent rights under this Agreement.
2.2.4Transfer Date Deliverables. No later than the Transfer Date:
2.2.4.1With respect to each Transfer, Transferor and Transferee shall
execute and deliver to each other and the City and shall have acknowledged and Recorded, an
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assignment and assumption agreement in substantially the form and substance of the instrument
attached to this Agreement as Attachment 17A (“Assignment Agreement”).
2.2.4.2Developer shall deliver to the City a certificate executed by the chief
financial officer or other appropriate authorized officer of (i) if a Transfer or Control, in
substantially the form and substance of the Developer Date Down and Reaffirmation Certificate
attached as Attachment 19B (“Developer Date Down and Reaffirmation Certificate”) or (ii) if
a Transfer, substantially in the form and substance of the certificate attached as Attachment 17B to
this Agreement (“Transferee Certificate”), in either case dated as of the Transfer Date;
2.2.4.3If the Equity Commitment will remain in effect and Transferee is
utilizing an Approved Equity Investor that has previously delivered an Equity Investor Original
Certificate, a certificate in substantially the form and substance of the Equity Investor Date Down
Certificate attached to this Agreement as Attachment 15B (“Equity Investor Date Down
Certificate”) otherwise, an Equity Investor Original Certificate by an Approved Equity Investor
(provided that the Equity Investor is approved by the City prior to the Transfer pursuant to
Section 8.10), in each case certified by the chief financial officer or other appropriate authorized
officer of such Approved Equity Investor, and, if revised, Evidence of Equity and/or Equity
Commitment, in either case dated as of the Closing Date;
2.2.4.4For a Transfer following the Close of Escrow, if the existing
Guaranty remains in effect, Developer shall cause delivery from the Guarantor of executed
originals of a Reaffirmation of Guaranty, a Guarantor Date Down Certificate in substantially the
form and substance of the Guarantor Date Down Certificate attached to this Agreement as
Attachment 14C (“Guarantor Date Down Certificate”) and a Reaffirmation Legal Opinion or, if
a new Guarantor is proposed, Developer shall cause such new Guarantor (provided that the
proposed Guarantor and form of Guaranty is approved by the City prior to the Transfer pursuant
to Section 8.9.1 and, if applicable, Section 8.9.2) to deliver to the City a Guaranty executed by
Guarantor, a declaration certified by the chief financial officer or other appropriate authorized
officer of Guarantor substantially in the form and substance of the certificate attached to this
Agreement as Attachment 14B (“Guarantor Original Certificate”); and a legal opinion
substantially in the form and substance of the Guaranty Legal Opinion attached to this Agreement
as Attachment 14D, or other form required by Guarantor’s legal counsel and approved by the City
in its sole discretion, executed by legal counsel to the Guarantor as the same may be required to
be modified to reflect the state of formation of Guarantor (“Guaranty Legal Opinion”); and
2.2.4.5all of the applicable conditions set forth in Sections 2.2.2 or 2.2.3
shall have been satisfied.
2.2.5Restrictions on Mortgages, Sale Leasebacks and Mezzanine Financing.
No Transfer to a Mortgagee shall be valid or enforceable with respect to the Property or the Project
Improvements unless the Mortgage is a Permitted Mortgage entered into with a Permitted
Mortgagee in compliance with the requirements and conditions of Article 17, including the
restrictions on Mortgages and consent of the City as required therein and the execution and
delivery by Permitted Mortgagee and the City of a Subordination Agreement in substantially the
form and substance as that attached to this Agreement as Attachment 24 or as otherwise approved
by the City in its sole discretion (“Subordination Agreement”). Except as set forth in Article 17,
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Developer shall not encumber the Property with any Mortgage, In addition, Developer shall not
enter into or convey or otherwise assign the Property or any portion thereof to a third party for
purposes of a sale-leaseback transaction or utilize Mezzanine Financing. The foregoing restrictions
shall not apply and the City shall have no right to approve or disapprove a Mortgage as to any
portion of the Real Property or Project for which the City has Recorded a Certificate of
Compliance.
2.2.6Bankruptcy. The following shall be considered Transfers or Transfers of
Control which are prohibited without consent from the City, which may be granted or withheld in
the City’s sole discretion (herein, a “Developer Insolvency Event”):
2.2.6.1If Developer is or becomes bankrupt or insolvent or if any
involuntary proceeding is brought against Developer (unless, in the case of a petition filed against
Developer, the same is dismissed within ninety (90) calendar days), or 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;
2.2.6.2If a writ of attachment or execution is levied on this Agreement or
on any portion of the Property, where such writ is not discharged within ninety (90) calendar days;
or
2.2.6.3If, in any proceeding or action in which Developer is a party, a
receiver is appointed with authority to take possession of all or any portion of the Property, where
possession is not restored to Developer within ninety (90) calendar days.
2.2.7Foreclosure Transfers.
2.2.7.1Foreclosure Transfer to Permitted Mortgage Transferee.
Notwithstanding the provisions of this Article 2, a Transfer to a Permitted Mortgage Transferee
that acquires an interest in the Property by reason of a Foreclosure shall not require the consent of
the City or Developer or constitute a Potential Default or Material Default under this Agreement.
2.2.7.2Transferee Other than to a Permitted Mortgage Transferee.
With respect to a Transfer to any Person other than a Permitted Mortgage Transferee at or following
a Foreclosure, the provisions of Section 2.2.3 shall apply and upon provision of such information,
a Guaranty and Evidence of Equity or an Equity Commitment, the City shall not withhold its
consent to such Transfer so long as the Transferee provides information that the City determines
to be sufficient that the Transferee is a Qualified Foreclosure Purchaser, and if the Transfer occurs
at a Foreclosure sale, the information required by Section 2.2.3, including evidence that the
Transferee is a Qualified Foreclosure Purchaser shall be provided as soon as practicable, and in no
event more than thirty (30) calendar days following the Transfer.
2.2.7.3Effect of Foreclosure. If a Permitted Mortgagee acquires all of the
Foreclosed Collateral in a Foreclosure, the provisions of this Section 2.2.7 and the Subordination
Agreement shall govern such acquisition and the rights and obligations of such Permitted
Mortgagee. If a Person that is not a Permitted Mortgage Transferee acquires Foreclosed Collateral,
or if a Permitted Mortgage Transferee acquires Foreclosed Collateral but then subsequently
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Transfers the Foreclosed Collateral with the effect that the Transferee acquires the Real Property
and the Project Improvements, then upon such Foreclosure or subsequent Transfer, as applicable:
(i) all of the provisions contained in this Agreement and the Other Agreements shall be binding
upon the Transferee acquiring the Foreclosed Collateral (such Transferee is referred to as
“Foreclosure Transferee”), and (ii) upon the satisfaction of the requirements of Sections 2.2.4
and 2.2.7.2, the City shall recognize such Foreclosure Transferee as the Developer under this
Agreement upon execution by the Foreclosure Transferee of an Assignment Agreement by which
it shall expressly assume for itself and its successors and assigns, and for the benefit of the City all
the rights and obligations of Developer under this Agreement and the Other Agreements arising
from and after the date of such Foreclosure or subsequent Transfer, as applicable; and (iii)
Foreclosure Transferee shall agree in a writing reasonably satisfactory to the City to be subject to
all the conditions and restrictions to which Developer is subject by reason of this Agreement and
the Other Agreements. Any failure of a Permitted Mortgagee to satisfy the requirements of
Section 2.2.4 or this Section 2.2.7 or of a Foreclosure Transferee to satisfy the requirements of
clause (iii) of the immediately preceding sentence shall constitute a Material Default by Developer
which shall not be subject to extension for Force Majeure Delay.
2.2.8Initial Transfer to Subsidiary of Joint Venture. The City acknowledges
the intention of the Developer to Transfer the entirety of the Transferable Interests to PropCo as of
the Closing Date, and Developer acknowledges that the Transfer so effected would not be a
Permitted Transfer. Upon compliance by Developer and PropCo with all of the requirements of
Sections 2.2.3 and 2.2.4, the City Manager, acting alone, shall have authority to approve a Transfer
of all of the Transferrable Interests to PropCo as of the Closing Date.
2.3Effect of Transfer; Release of Transferor.
2.3.1Notwithstanding any Transfer or Transfer of Control, unless specifically
released by the City in writing as set forth in Section 2.3.2 or otherwise released by the City (in its
sole discretion) in writing, Initial Developer and each subsequent Developer shall remain fully
liable for the obligations of Developer under this Agreement and the Other Agreements following
a Transfer, subject to the effects of Recording by the City of a Certificate of Compliance as to any
portion of the Project against which the same is Recorded, as provided in Article 9.
2.3.2Upon a Transfer (other than a Permitted Transfer) of all of the Transferable
Interests to a Transferee approved by the City pursuant to Section 2.2.3 and with the satisfaction
of all of the conditions to such Transfer set forth in Sections 2.2.3 and 2.2.4 and the assumption in
writing by Transferee of all obligations under this Agreement and the Other Agreements pursuant
to an Assignment Agreement executed and acknowledged by Transferor and Transferee, the City
shall execute a consent to assignment and release of Transferor substantially in the form and
substance of the consent attached to the Assignment Agreement and, thereupon, Transferor shall
be released from the obligations of Developer under this Agreement and the Other Agreements
arising after the date of such Transfer; provided, however, that Transferor shall not be released
with respect to (i) matters or circumstances (including any payment obligations) which relate to or
Accrued during the period that such Transferor was the Developer hereunder (or during such
longer period for which such Transferor is liable hereunder), (ii) the releases set forth in
Section 4.5.3 or in the Other Agreements, and (iii) Developer’s indemnity obligations under this
Agreement or the Other Agreements as and to the extent set forth in this Agreement. Upon a
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Foreclosure or when otherwise agreed by the City in its sole discretion, Developer shall be released
from its obligations under this Agreement and the Other Agreements arising from and after the
date of such Transfer or Foreclosure if and only if the Transfer is of all of the Transferable Interests
to a Transferee approved by the City in its sole discretion or to Qualified Foreclosure Purchaser
approved by the City in its reasonable discretion.
2.3.3Following Transfer, the Property and Improvements thereon, if any, shall
continue to be subject to this Agreement and, if then in effect, the Other Agreements, and each
Transferee, Successor Owner, and all Persons claiming by, through or under Developer or any
Successor Owner, shall be deemed to have assumed and shall be obligated to comply with all
covenants, conditions, restrictions, and obligations of Developer under the terms of this Agreement
and the Other Agreements then in effect unless otherwise set forth herein or in the Assignment
Agreement consented to by the City.
2.4City Costs.
Developer shall promptly pay to the City all of the City’s actual out of pocket third party
expenses, including legal fees, and staff costs incurred with respect to the review, consideration,
analysis and response to any of the matters required to be reviewed or consented to by the City
pursuant to Articles 2 and 17 and Sections 4.6, 8.9 and 8.10 including with respect to (i) any request
for consent or approval of a Guarantor, Equity Investor, Permitted Mortgagee or Permitted
Mortgage, Transferee, Transfer or Transfer of Control, and (ii) review, consideration, preparation
and delivery of each City Estoppel.
2.5City Estoppel.
From time to time (but in no event more often than four times annually) within twenty (20)
calendar days of the City’s receipt of a written request therefor, the City shall execute and deliver
to Developer and any Transferee, a City Estoppel, substantially in the form and substance of the
City Estoppel attached hereto as Attachment 5 (“City Estoppel”) but with such modifications as
are necessary in the City’s sole discretion to ensure the accuracy of the statements made therein.
2.6Restrictions on Sale of Units or Condominium Development; Rental of
Residential Units and Rooms.
The Real Property shall not be made subject to condominium laws (whether residential or
commercial) and shall be developed solely for rental of Residential Units and Rooms and not with
the intent to sell individual Residential Units or Rooms, and the general prohibition against
Transfer outlined in this Agreement shall be applicable to the sale of individual Residential Units
in the Active Adult Project and Rooms in the AL/MC Project.
2.7Effect of and Remedies for Improper Transfers or Transfers of Control.
Without limiting the generality of the foregoing, a failure (i) by Developer to comply with
the requirements of this Article 2 or Article 17 with respect to any Transfer or Transfer of Control
or (ii) by any Transferee to execute the Assignment Agreement required by Section 2.2.4.1 or to
execute and deliver, or cause a Transferee, its Approved Equity Investors, if applicable, and its
Guarantor to execute and deliver each of the certificates and other documents required in
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connection with such Transfer, shall in each case be a Material Default under this Agreement,
subject to the provisions of Section 14.2.3, but with no extension on account of Force Majeure
Delay and, in such event, the City shall have all remedies available to it at law and in equity,
including those specified in this Agreement and specifically including the right to terminate this
Agreement or following Close of Escrow, to exercise the Right of Repurchase and/or the Right of
Reversion, as applicable, in accordance with Article 16.
2.8Changes.
Developer shall promptly notify the City in the event that any of the following Persons
cease to be involved with the development of the Project: (i) any of the Key Employees, (ii) HPI,
formerly The Hill Partnership, Inc., (iii) Urban Arena, Inc. or (iv) David Evans and Associates,
Inc., the engineer for the Project. Following any Transfer or Transfer of Control, Transferee shall
provide the City with a list of its Key Employees. For Transfers or Transfer of Control, other than
a Permitted Transfer, and the City shall have the right to notify Developer if it considers any of
such individuals unsatisfactory, in which event such individual(s) shall be removed as Key
Employees. In addition, Developer shall provide a then-current organizational chart for Developer
on a quarterly basis in the event of any Permitted Transfer(s) under the final paragraph of
Section 2.2.2 above occur during the preceding calendar quarter.
3.Representations and Warranties.
3.1Developer’s Representations and Warranties.
As an inducement to the City to enter into and perform its obligations under this
Agreement, Developer represents and warrants to the City as follows as of the Effective Date:
3.1.1Developer has the necessary expertise, experience, financial experience,
financial capacity, qualifications and legal status necessary to perform as Developer pursuant to
this Agreement and to construct and Complete the Project, and, without limiting the foregoing,
Developer is experienced in the development, management, and leasing of projects of the size and
type described in this Agreement and understands the process and requirements associated with
projects such as the Project described in this Agreement.
3.1.2The acquisition of the Property and other undertakings of Developer
pursuant to this Agreement are for the purpose of timely development of the Project upon the Real
Property in accordance with the Schedule of Performance attached to this Agreement and not for
speculation or land holding.
3.1.3Developer is a limited liability company duly organized, and validly
existing and in good standing under the laws of the State of Colorado, is duly qualified to do
business and in good standing in California and in each other jurisdiction where the operation of
its business or its ownership of property or the performance of Developer’s obligations under this
Agreement make such qualification necessary. The Manager of Developer is Confluent and
Marshall Burton is the Chief Executive Officer of Confluent.
3.1.4Subject to all of the conditions set forth in this Agreement for the benefit of
Developer, Developer has (or will have prior to the date by which a particular step is required to
be taken or performance of a particular obligation is required to be commenced pursuant to this
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Agreement or any Other Agreements) all requisite power and authority required to enter into this
Agreement and the instruments referenced in this Agreement, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations under this Agreement or the other instruments referenced in this Agreement. to which
Developer is or shall be a party and the consummation of the transactions contemplated in this
Agreement.
3.1.5Developer has obtained (or will have obtained prior to the date by which a
particular step is required to be taken or performance of a particular obligation is required to be
commenced pursuant to this Agreement or any Other Agreements) all required consents in
connection with entering into this Agreement and the instruments and documents referenced in
this Agreement to which Developer is or shall be a party and the consummation of the transactions
contemplated hereby.
3.1.6The individuals executing this Agreement and the individuals that will
execute the instruments referenced in this Agreement on behalf of Developer have, or will have
upon execution thereof, the legal power, right and actual authority to bind Developer to the terms
and conditions hereof and thereof.
3.1.7This Agreement has been duly authorized, executed and delivered by
Developer and all documents required in this Agreement to be executed by Developer pursuant to
this Agreement shall be, at such time as they are required to be executed by Developer, duly
authorized, executed and delivered by Developer and are or shall be, at such time as the same are
required to be executed pursuant to this Agreement, valid, legally binding obligations of and
enforceable against Developer in accordance with their terms, except as enforceability may be
limited by bankruptcy laws or other similar laws affecting creditors’ rights.
3.1.8Neither the execution nor delivery of this Agreement or the documents
referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement and
the certificates, declarations and other documents referenced in this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor compliance with the terms
of this Agreement and the documents referenced in this Agreement, will violate any provision of
law or any order of any court or Governmental Authority to which Developer is subject 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 Developer,
one of its owners, members or partners are a party and which affect the Property or the transactions
contemplated by this Agreement.
3.1.9No attachments, execution proceedings, assignments of benefit to creditors,
Bankruptcy Proceedings are pending or, to the best of Developer’s Knowledge, threatened against
Developer, any Developer Affiliate or any of their respective owners, members or partner or their
Controlling Person.
3.1.10Except for those representations and warranties of the City expressly set
forth in Sections 3.3 and 18.12.2, Developer is relying solely upon its own inspections and
investigations in proceeding with this Agreement and the transactions contemplated in this
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Agreement, and is not relying on the accuracy or reliability of any information provided to it by
the City, on any oral or written representation or on any facts or conclusions of law made by the
City, or any of its elected and appointed officials, officials, employees, agents, attorneys or
representatives made in connection with this Agreement. In making such investigation and
assessment, Developer has been provided access to any persons, records or other sources of
information which it has deemed appropriate to review and it has thereafter completed such
investigation and assessment. Without limiting the generality of the foregoing, Developer
acknowledges that the City has not made and will not make any representations or warranties
concerning the condition of the Development Parcel, the compliance or non-compliance of the
Development Parcel or any portion thereof with Environmental Laws or the existence or
nonexistence of Hazardous Materials in relation to the Development Parcel or any portion thereof
or otherwise, except for those representations and warranties of the City set forth in Sections 3.3
and 18.12.2.
3.1.11Except as described on Attachment 4, there are no adverse conditions or
circumstances existing and no litigation or governmental action either pending or, to the
knowledge of any of the Developer Representatives, threatened, to which Developer or any
Controlling Person of Developer is or may be a party or to which the Development Parcel is or
may become subject, which would reasonably be expected to prevent or materially impair
Developer’s ability to carry out its obligations under this Agreement or to develop the Real
Property and the Project or carry out its other obligations under this Agreement, and upon Close
of Escrow, the Other Agreements as contemplated by the terms of this Agreement.
3.1.12Except as set forth in this Agreement, the Development Agreement and the
ENA, Developer has not paid or given, and will not pay or give, any third Person any money or
other consideration for obtaining this Agreement, other than the normal cost of conducting
business and cost of professional services such as architects, engineers and attorneys.
3.1.13All reports, documents, instruments, information and forms of evidence
delivered by Developer to the City concerning or related to this Agreement and the transactions
contemplated hereby are, to Developer’s Knowledge, accurate and correct and sufficiently
complete at the time of submission to give the City true and accurate knowledge of the subject
matter, and do not contain any material misrepresentation or omission.
3.1.14As of the Close of Escrow, Developer will have the equity capital and
bonding capacity required for Completion of the Project and, as of the Close of Escrow, Developer
shall have delivered to the City evidence of financing as required by Section 4.6.1 and
Section 4.6.2, including evidence of a Construction Loan made by a Permitted Mortgagee meeting
the requirements of Article 17 approved by the City sufficient, together with evidence of equity as
required by Sections 4.6.2.3 and 8.10, (i) to pay through Completion, all costs of development of
the Project and the construction, marketing and sale of the Project Improvements as further
described in the Scope of Development; and (ii) to enable Developer to perform and satisfy all the
covenants of Developer contained in this Agreement.
3.1.15Developer does not have any contingent obligations or any other contracts
the performance or nonperformance of which could adversely affect the ability of Developer to
fund the Project or to carry out its obligations under this Agreement. Developer has not and shall
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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 purposes expressed
in the preceding sentence.
3.1.16There are no legal proceedings either pending or, to the best of Developer’s
knowledge, threatened, to which Developer is or may be made a party, or to which any of
Developer’s property, or the Development Parcel, is or may become subject, which has not been
fully disclosed in the documents submitted to the City and which could materially affect the ability
of Developer to carry out its obligations hereunder (if the same were determined to be the case).
Developer’s representations and warranties set forth in this Section 3.1 as the same may be
updated in any Assignment Agreement, shall be deemed to be restated at the Close of Escrow and
shall survive the Close of Escrow until the termination of this Agreement and shall not be merged
with the Quitclaim Deed; provided that the foregoing shall not apply as to any portion of the Real
Property for which a Certificate of Compliance has been executed and Recorded by the City. As
used in Sections 3.1 and 3.2, “Developer’s Knowledge” and similar phrases means the actual
present knowledge of the Developer Knowledge Parties as of the Effective Date, in each case
without any duty of inquiry; provided, however, that in the event any of the Developer Knowledge
Parties are unavailable at the time these representations and warranties set forth in this Section 3.1
are restated at the Close of Escrow, Developer shall specifically identify different Developer’s
Knowledge Parties, subject to the City’s reasonable approval. Notwithstanding anything to the
contrary contained in this Agreement, (i) none of the Developer Knowledge Parties shall be
personally liable for any inaccuracy or breach by Developer of the representations and warranties
contained in this Section 3.1 or elsewhere in this Agreement and/or any of the Other Agreements,
and (ii) the City shall not be entitled to make a claim for a breach of Developer’s representations
and warranties if Developer had provided written notice to the City indicating that the applicable
representation and warranty was incorrect prior to the Close of Escrow and the City proceeded to
Closing in spite of such inaccuracy.
3.2Developer Covenants Regarding Representations and Warranties.
Developer shall promptly advise the City in writing if any of the Developer Knowledge
Parties becomes aware (without any duty of inquiry) that any representation or warranty made by
Developer in Section 3.1 or in any Assignment Agreement is or becomes untrue in any material
respect prior to the Close of Escrow.
3.3City Representations and Warranties.
As an inducement to Developer to enter into and perform its obligations under this
Agreement, the City represents and warrants to Developer as follows:
3.3.1The City is a municipal corporation incorporated within and existing
pursuant to the laws of the State.
3.3.2Subject to all of the conditions set forth in this Agreement for the benefit of
the City, the City has (or will have prior to the date by which a particular step is required to be
taken or performance of a particular obligation is required to be commenced pursuant to this
Agreement or any Other Agreements) all requisite power and authority required to enter into this
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Agreement and the instruments referenced in this Agreement, to consummate the transaction
contemplated hereby and to take any steps contemplated thereby or hereby, and to perform its
obligations under this Agreement and the instruments referenced in this Agreement.
3.3.3The City has obtained (or will have obtained prior to the date by which a
particular step is required to be taken or performance of a particular obligation is required to be
commenced pursuant to this Agreement or any Other Agreements) all required consents in
connection with entering into this Agreement and the instruments and documents referenced in
this Agreement to which the City is or shall be a party and the consummation of the transactions
contemplated in this Agreement.
3.3.4The individuals executing this Agreement and the individuals that will
execute the instruments referenced in this Agreement on behalf of the City have, or will have upon
execution thereof, the legal power, right and actual authority to bind the City to the terms and
conditions hereof and thereof.
3.3.5This Agreement has been duly authorized, executed and delivered by the
City and all documents required in this Agreement to be executed by the City pursuant to this
Agreement shall be, at such time as they are required to be executed by the City, duly authorized,
executed and delivered by the City and are or shall be, at such time as the same are required to be
executed under this Agreement, valid, legally binding obligations of and enforceable against the
City in accordance with their terms, except as enforceability may be limited by bankruptcy laws
or other similar laws affecting creditors’ rights.
3.3.6Neither the execution or delivery of this Agreement or the documents
referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement, and
the certificates, declarations and other documents referenced in this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor compliance with the terms
of this Agreement and the documents referenced in this Agreement, will violate any provision of
law, any order of any court or Governmental Authority to which the City is subject 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 City is a party
and which affect the Property, the ability of Developer to develop the Real Property, the Project or
to carry out the transactions contemplated by this Agreement. Notwithstanding the foregoing,
development of the Property is subject to and may be limited based upon the encumbrances listed
on Attachment 4.
3.3.7Except as described in Attachment 4, there is no litigation or governmental
action either pending or, to the knowledge of the City Representatives, threatened, to which the
City is or may be made a party, or to which the Development Parcel is or may become subject,
which has not been disclosed in the documents submitted to Developer and which would
reasonably be expected to prevent or materially impair Developer’s ability to develop the Real
Property, the Project, or to carry out its obligations under this Agreement or, and upon the Close
of Escrow, the Other Agreements, as contemplated by the terms of this Agreement.
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The City’s representations and warranties set forth in this Section 3.3 shall be deemed to
be restated at the Close of Escrow and shall survive the Close of Escrow until the termination of
this Agreement and shall not be merged with the Quitclaim Deed; provided that the foregoing shall
not apply as to any portion of the Real Property for which a Certificate of Compliance has been
Recorded by the City. As used in Sections 3.3 and 3.4, “City’s Knowledge” and similar phrases
means the actual present knowledge of Aldo E. Schindler (or, if he is not then City Manager, the
then-current City Manager), David Kendig (or, if he is not then City Attorney, the then-current
City Attorney) and Brian Moncrief, (or if he is not then Deputy City Manager – Real Property the
Person then in that role), and if then working on the Project for the City, Ryan Swiontek (the “City
Representatives”) without any duty of inquiry. Notwithstanding anything to the contrary
contained in this Agreement, (i) none of the City Representatives shall be personally liable for any
inaccuracy or breach by the City of the representations and warranties contained in Section 3.3 or
elsewhere in this Agreement or in any of the Other Agreements, and (ii) neither Developer nor any
other Person shall be entitled to make a claim for a breach of the City’s representations and
warranties if the City had disclosed in writing facts to Developer indicating that the applicable
representation and warranty was incorrect prior to the Close of Escrow and Developer proceeded
with the Close of Escrow, in either case in spite of such inaccuracy.
3.4City Covenants Regarding Representations and Warranties.
City shall promptly advise Developer in writing if any of the City Representatives becomes
aware (without any duty of inquiry) that any representation or warranty made by the City in
Section 3.3 is or becomes untrue in any material respect prior to the Close of Escrow.
4.Conveyance of Property from City to Developer.
4.1Conveyance of Property.
4.1.1Definition of Property. Subject to the terms and conditions set forth in this
Agreement, including the satisfaction of the Closing Conditions set forth in Article 7 in this
Agreement, the City agrees to sell to Developer and Developer agrees to purchase the Real
Property from the City, together with (i) all existing improvements, if any, located on the Real
Property as of the Effective Date; (ii) all appurtenances pertaining to the Real Property or such
improvements; (iii) all permits, licenses, approvals and authorizations issued prior to the Close of
Escrow by any Governmental Authority for development of the Project; (iv) the right to construct
for the Active Adult Project a maximum of 172 Residential Units (comprised of 124 base units and
48 density bonus units), including approximately 26 Lower Income Units) on the Real Property
and for AL/MC Project 103 Rooms in up to 147,500 square feet of building on the Real Property
(of which 75 shall be assisted living Rooms and 28 shall be memory care Rooms and (v) all of
City’s right, title and interest in, to and arising out of the Intangible Property (excluding the matters
described in Section 4.1.2, collectively, “Property”), subject to all Permitted Exceptions and the
reservations identified in Sections 1.2.2 and 4.1.2; provided, however that City’s assignment of its
rights to enforce the Navy Responsibilities against the Navy shall be made to Developer on a non-
exclusive basis and the City and Developer may each enforce the Navy Responsibilities as their
interests may appear. Notwithstanding the foregoing, nothing set forth in this Agreement shall
preclude the City or any insurer, on a non-exclusive basis, from enforcing the Navy
Responsibilities against the Navy with respect to Tustin Legacy other than the Property or, with
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respect to the Property for matters Accruing prior to Close of Escrow. At the Close of Escrow, the
City shall convey to Developer by Quitclaim Deed, in substantially the form and substance of the
instrument attached to this Agreement as Attachment 11 (“Quitclaim Deed”) all of its right, title
and interest in and to the Property.
4.1.2Reservation of Development Rights by City. The City hereby reserves
from the definition of Property and shall reserve from the conveyance of the Property in the
Quitclaim Deed all those excess development rights remaining within Specific Plan Neighborhood
D, Planning Areas 13 and 14 after deducting (i) from the number of Residential Units authorized
by the Specific Plan the lesser of (a) 172 Residential Units (comprised of 124 base units and 48
density bonus units) or (b) the number of Residential Units authorized by the Approved Plans and
actually constructed by Developer on the Active Adult Real Property prior to Recording by the
City of the Final Certificate of Compliance, provided that the total number of Lower Income Units
constructed on the Active Adult Real Property shall not be less than fifteen percent (15%) of the
total number of Residential Units constructed on the Active Adult Real Property so long as the
Affordable Housing Declaration remains in effect and (ii) from the number of Rooms and gross
square footage authorized by the Specific Plan for commercial purposes, the lesser of (a) 75
assisted living/memory care Rooms in up to 147,500 gross square feet (excluding parking) or (b)
the number of Rooms and gross square footage of the building authorized by the Approved Plans
and actually constructed by Developer on the AL/MC Real Property prior to Recording by the City
of the Final Certificate of Compliance, provided that if the Final Parcel Map is Recorded prior to
the Recording of the first such Certificate of Compliance, then these provisions shall apply as to
the Active Adult Project and Active Adult Real Property, with respect to the Active Adult Project
Certificate of Compliance, and as to the AL/MC Project and AL/MC Real Property, with respect
to the AL/MC Project Certificate of Compliance. For avoidance of doubt, except to the extent any
of such rights were conveyed by the City to third parties prior to the Quitclaim Deed Effective
Date, the City shall retain all development rights in Specific Plan Neighborhood D, Planning Areas
13 and 14 in excess of the Residential Units, commercial square footage and other development
rights specified above. All Residential Units, Rooms, commercial square footage and other
development rights retained by the City shall be freely transferable by the City throughout Tustin
Legacy.
4.2Purchase Price and Project Fair Share Contribution.
4.2.1Purchase Price and Project Fair Share Contribution. As consideration
for the sale of the Property by the City to Developer, Developer shall pay to the City a total
purchase price in the sum of Fifteen Million Fifty-Four Thousand Two Hundred Forty-Three
Dollars ($15,054,243.00) (“Purchase Price”). The City and Developer acknowledge that the
Purchase Price is equal to or greater than the fair market value of the Property taking into account
the various factors affecting the same, including the Project Fair Share Contribution, and those
items described in Sections 6.2, 8.7.3 and 8.7.5.
4.2.2Project Fair Share Contribution. In addition to and separate from the
Purchase Price, at the Close of Escrow Developer shall pay to the City the Project’s fair share of
the costs of the Tustin Legacy Backbone Infrastructure Program in effect at the Closing Date
(“Project Fair Share Contribution”) The Project Fair Share Contribution to be paid by Developer
shall be in the total amount of Three Million Twenty Nine Thousand Seven Hundred Sixty Four
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and 58/100 Dollars ($3,029,764.58) which is equal to a rate of Four Hundred Ninety Three
Thousand Four Hundred Forty Seven Dollars ($493,447.00) per acre of the Real Property.
4.3Payment of Purchase Price.
4.3.1Intentionally Omitted.
4.3.2Treatment of ENA Extension Deposits. The ENA Extension Deposits
have vested in the City prior the Effective Date and shall be retained by the City in all events. The
ENA Extension Deposits shall be applied to the Purchase Price as set forth in Section 4.3.3.
4.3.3Payment of the Balance of the Purchase Price and Other Amounts Due
at the Close of Escrow. No later than one (1) Business Day prior to the Close of Escrow,
Developer shall deposit with Escrow Holder an amount (“Developer Closing Payment”) which
shall, be equal to: (i) the Purchase Price for the Property less the ENA Extension Deposits, plus
(ii) such additional amount as is necessary to cover all outstanding DDA Transaction Expenses
incurred by the City through the Close of Escrow, and all closing costs and/or prorations to be paid
by Developer pursuant to Sections 7.4.1 and 7.4.4 as adjusted for any net credits or debits to the
City for closing costs and/or prorations in accordance with Sections 7.4.1 and 7.4.4.
4.3.4Payments in Immediately Available Funds. Funds delivered to the City
or Escrow Holder under this Agreement shall be in the form of cash or wire transfer (to such
account of the City or Escrow Holder as Escrow Holder notifies Developer in writing).
4.4Escrow and Joint Escrow Instructions.
Developer shall have delivered to the City, prior to the City Council hearing at which this
Agreement is considered for adoption, three (3) fully executed counterparts of this Agreement. If
not previously delivered, within five (5) Business Days following City Council approval of this
Agreement, Developer shall: deliver to the City (i) the declarations and information from
Developer and Equity Investor(s) required by Section 4.6.2 and such other information as City
may reasonably request as further described in Section 4.6, (ii) the City Costs Deposit and (iii) the
insurance binder(s) required by Section 11.2.3 with respect to coverage required by
Sections 11.1.1 and 11.1.2. Upon delivery by Developer of the items described in clauses (i)
through (iii) of this Section 4.4, the City shall deliver to Escrow Holder three (3) originals of this
Agreement which have been executed in counterparts by the City and Developer and the “Opening
of Escrow” shall be the date that Escrow Holder receives such executed originals from the City.
Escrow Holder shall promptly sign the joinders and transmit one (1) original of this Agreement to
City and one (1) original to Developer. Upon the written acceptance of the executed Agreement
by Escrow Holder, this Agreement shall constitute the joint escrow instructions of Developer and
the City to Escrow Holder to open an escrow (“Escrow”) and Escrow Holder is thereafter
authorized to act in accordance with the terms of this Agreement. Developer and the City shall
execute Escrow Holder’s general escrow instructions upon request, with such modifications
thereto as Developer and the City may reasonably require; provided, however, if there is any
conflict or inconsistency between such general escrow instructions and this Agreement, this
Agreement shall control. Escrow Holder shall not prepare any further escrow instruction restating
or amending this Agreement unless specifically so instructed by the City and Developer in writing.
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Any supplemental escrow instructions must be in writing and signed by the City and Developer
and accepted by the Escrow Holder to be effective.
4.5Property Conveyed “As-Is”.
4.5.1Investigation.
4.5.1.1Prior Due Diligence Review. Developer acknowledges that it had
the right during the term of the ENA to conduct its own investigation of the Development Parcel
and that Developer has satisfied itself prior to entering into this Agreement that all matters related
to the Development Parcel, the Property, the Project and construction of the Project Improvements,
are acceptable to Developer, including the state of title (subject only to the Permitted Exceptions),
the physical condition thereof, the physical condition of structures, if any, located upon the
Development Parcel and, as applicable, the accessibility and location of utilities, and all
mechanical, plumbing, sewage, and electrical systems located therein, suitability of soils,
environmental and other investigations regarding the Development Parcel and Developer that it is
willing to consummate the transactions described by this Agreement.
4.5.1.2Opportunity to Evaluate. Developer acknowledges and agrees that,
as of the Close of Escrow:
(i)its determination to enter into this Agreement constitutes
Developer’s agreement that Developer, in consummating the transactions described in this
Agreement: (i) has been given the opportunity to inspect the Development Parcel and to
review the information and documentation provided by the City to Developer and affecting
the Development Parcel, including the environmental condition of the Development Parcel,
or otherwise obtained by Developer in connection with its due diligence of the
Development Parcel and the Property, and is relying solely on its own investigation of the
Development Parcel, including such investigation prior to execution of this Agreement,
and review of such information and documentation in determining the physical,
environmental, economic and legal condition of the Development Parcel and except as
provided in Sections 3.3 and 18.12.2, not on any information, representation or warranty
provided by the City or any agents or representatives of the City;
(ii)It has performed its own assessment of the Development
Parcel, including the physical and environmental condition of the Development Parcel, the
presence of Hazardous Materials on the Development Parcel, the suitability of the soil for
improvements to be constructed, the implications of land use restrictions on the
development plan for the Project and the Development Parcel and the consequences of any
subsequently discovered contamination on or adjacent to the Development Parcel, and (iii)
has been provided with access to all information in the possession of the City which it has
requested. Information provided to Developer by or on behalf of the City with respect to
the Development Parcel was obtained from a variety of sources and that the City has not
made any independent investigation or verification of such information and makes no
representations as to the accuracy or completeness of such information; and Developer is
satisfied with the nature and extent of its permissible investigation of the physical and
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environmental condition and other matters relating to the Development Parcel and is
willing to consummate the transactions described by this Agreement; and
(iii)without limiting the generality of the foregoing, Developer
acknowledges and agrees that:
(a)in addition to use, Investigation and Remediation of
the Development Parcel by the Navy, there has been grading, other uses,
Investigation and Remediation of the Development Parcel subsequent to the
date of the Federal Deed, and that the AS-IS conveyance of the Property
and the waivers, releases, and indemnities provided by Developer in this
Agreement with respect to the Development Parcel apply to the current
condition of the Property, the Development Parcel taking into account the
grading, other uses, Investigation and Remediation at Tustin Legacy,
including at the Development Parcel, whether occurring before or following
conveyance to the City pursuant to the Federal Deed;
(b)Developer has been provided with access to all
environmental reports and statements listed on Attachment 10 and all
reports either attached to or referenced in the Memorandum of Agreement
and Federal Deed;
(c)it shall perform its own assessment of the
environmental condition of the Development Parcel, the presence of
Hazardous Materials on the Development Parcel, the suitability of the soil
for improvements to be constructed, the implications of the land use
restrictions on the development plan for the Project and the Development
Parcel and the consequences of any subsequently discovered contamination
on the Development Parcel; and
(d)it shall review the City and Navy produced or
identified documentation, including that listed on Attachment 10, reflecting
the Navy’s and the City’s knowledge of the environmental condition of the
Development Parcel.
4.5.2AS-IS; WHERE-IS.
4.5.2.1No Representations or Warranties. Developer recognizes that the
City would not sell the Property except on an “AS, IS, WHERE IS, WITH ALL FAULTS” basis,
and Developer acknowledges that the City has made no representations or warranties of any kind
whatsoever (excepting only those representations and warranties of the City expressly set forth in
Sections 3.3 and 18.12.2), either express or implied in connection with any matters with respect to
the Development Parcel or any portion thereof.
4.5.2.2Acknowledgement. Developer’s determination to enter into this
Agreement constitutes Developer’s agreement that Developer, in consummating the transactions
described in this Agreement is buying the Property in an “AS IS, WHERE IS, WITH ALL
FAULTS” condition, in its present state and condition and with all faults, if any. Without limiting
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the generality of the foregoing, Developer further acknowledges and agrees that, except as
otherwise specifically provided in Sections 3.3 and 18.12.2, the City makes no representations,
warranties, assurances or guaranties of any kind or character in connection with the transaction
contemplated by this Agreement, or the Development Parcel or the Property, whether express or
implied, oral or written, past, present or future, whether by the City or any of its agents, elected or
appointed officials, representatives or employees, of, concerning or with respect to:
(i)the value of the Property or the income to be derived from
the Property;
(ii)the existence or non-existence of any liens, easements,
covenants, conditions, restrictions, claims or encumbrances affecting the Development
Parcel or the Property (including any of the foregoing arising from or related to the
Entitlements or any of the Other Agreements);
(iii)the suitability of the Development Parcel for any and all
future development of the Project Improvements and the other uses and activities which
Developer may conduct upon the Real Property, including the development of the Project
and use of the Property as described in this Agreement and the Other Agreements;
(iv)the ability of the City or any third party to complete, or
likelihood of the completion of, any of the improvements and infrastructure described by
the General Plan, the Specific Plan, the Tustin Legacy Backbone Infrastructure Program or
any other plan or policy of the City or any other Governmental Authority;
(v)the compliance with or enforcement by the City or any third
party of the General Plan, the Specific Plan, the Special Restrictions applicable to the
Development Parcel or the special restrictions or other covenants and agreements
applicable to other property at Tustin Legacy, any covenants, conditions and restrictions,
the Tustin Legacy Backbone Infrastructure Program or any other agreement or
governmental restriction or plan affecting Tustin Legacy;
(vi)the habitability, merchantability or fitness for a particular
purpose of the Development Parcel;
(vii)the manner, quality, state of repair or lack of repair of the
Development Parcel and of the improvements thereon, if any;
(viii)the nature, quality or condition of the Development Parcel
including water, soil and geology;
(ix)the compliance of or by the Development Parcel and/or its
operation in accordance with any of the Entitlements or any Governmental Requirements,
including the National Environmental Policy Act, CEQA and the Americans with
Disabilities Act of 1990;
(x)the manner or quality of the construction or materials, if any,
incorporated into the Development Parcel;
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(xi)the presence or absence of Hazardous Materials, including
asbestos or lead paint at, on, under, or adjacent to the Development Parcel or in other
locations at Tustin Legacy;
(xii)the content, completeness or accuracy of the information,
documentation, studies, reports, surveys and other materials delivered to Developer in
connection with the review of the Development Parcel and the transactions contemplated
in this Agreement and the Other Agreements;
(xiii)the conformity of the existing improvements on the
Development Parcel and/or at Tustin Legacy, if any, to any plans or specifications therefor;
(xiv)compliance of the Development Parcel with past, current or
future Governmental Requirements relating to zoning, subdivision, planning, building, fire,
safety, health or Environmental Matters and/or covenants, conditions, restrictions or deed
restrictions;
(xv)the deficiency of any undershoring or of any drainage to on
or from the Development Parcel or any other portion of Tustin Legacy;
(xvi)the condition of any adjoining land owned by the City,
including any property and improvements covered by the Landscape Installation and
Maintenance Agreement;
(xvii)the fact that all or a portion of the Development 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 2621-2630 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 of Title 14 of the California Code of Regulations;
(xviii)the existence or lack of vested land use, zoning or building
entitlements, permits or approvals affecting the Development Parcel;
(xix)the construction or lack of construction of Tustin Legacy or
if constructed, the construction of Tustin Legacy in accordance with design guidelines,
plans and specifications previously or to be prepared therefor;
(xx)the conditions, covenants and restrictions imposed or to be
imposed upon the Development Parcel or any portion thereof under this Agreement, the
Other Agreements or the Entitlements;
(xxi)the contents of the Memorandum of Agreement, the Federal
Deed, the Base Closure Law and the FOST; and
(xxii)any other matters.
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4.5.2.3Environmental Condition of the Development Parcel;
Restrictions. Without limiting the generality of the foregoing, the City makes no representation
or warranty as to the environmental condition of the Development Parcel or any portion thereof,
the Navy’s obligations with respect to the environmental condition of the Development Parcel or
the adequacy or accuracy of any environmental report that has been rendered. Developer
acknowledges and agrees that (i) there may be some residual contamination on the Development
Parcel as a result of Navy historic activities; (ii) the Navy has agreed to accept certain limited
responsibility for any contamination it caused, including any contamination discovered after
transfer from the Navy, in accordance with existing Governmental Requirements including the
National Defense Authorization Act For Fiscal Year 1993 as amended (Public Law No. 102-434)
Section 330 and Section 120(h) of the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. § 9620(h) (“Navy Responsibilities”); and (iii) the deed restrictions
contained in the Federal Deed are binding upon the City and its successor and assigns (and
therefore, shall be binding upon Developer with respect to the Property upon its acquisition of the
Property).
4.5.2.4Federal Deed and Memorandum of Agreement. Developer
acknowledges and agrees that the purchase of the Property is subject to the terms and conditions
expressly set forth in the Memorandum of Agreement, the Federal Deed and the Permitted
Exceptions. From and after the Close of Escrow, Developer agrees to assume and faithfully
perform any covenants running with the land acquired and all obligations set forth in the Federal
Deed as obligations to be performed by “Grantee or its successors or assigns” with respect to the
Property acquired by Developer.
4.5.2.5No Unauthorized Representations. No Person acting on behalf of
the City is authorized to make, and by execution hereof, Developer acknowledges that no Person
has made, any representation, agreement, statement, warranty, guarantee or promise regarding the
Development Parcel, the Project or the transactions contemplated in this Agreement or the past,
present or future zoning, land use entitlements or approvals, including the Entitlements or the
Development Permits, construction, physical condition, presence or extent of Hazardous Materials
or other status of the Development Parcel except as may be expressly set forth in this Agreement
or in any of the Other Agreements. No representation, warranty, agreement, statement, guarantee
or promise, if any, made by any Person acting on behalf of the City that is not contained in this
Agreement or in any of the Other Agreements will be valid or binding on the City. Nothing in this
Section 4.5.2 is intended to limit or affect in any manner (i) the validity or provisions of the
Entitlements and Development Permits obtained by Developer with respect to the Development
Parcel or (ii) any provisions of this Agreement or the Other Agreements when this Agreement and
the Other Agreements are approved by the City Council and executed by the City.
The provisions of this Section 4.5.2 shall be included in the Special Restrictions, shall run
with the land, shall remain in effect in perpetuity and shall survive termination of this Agreement,
the Close of Escrow, and shall not merge with any deed and shall be binding upon Developer, its
successors and assigns, each Successor Owner and each and every Person claiming by, through or
under Developer or any Successor Owner including all End Users, for the benefit of the City and
its Governmental Successors, and from and after the Close of Escrow, shall be binding upon and
burden the Real Property.
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4.5.3Release. Developer, on behalf of itself, and its successors and assigns, each
Successor Owner and each and every Person claiming by, through or under Developer or any
Successor Owner and including each End User (each, including Developer, a “Developer
Releasing Party”), hereby waives, as of the Effective Date, and agrees to waive, as of the Close
of Escrow, the right of each Developer Releasing Party to recover from, and fully and irrevocably
releases, the City Released Parties from any and all Claims that any Developer Releasing Party
may now have or hereafter have, suffer, acquire or incur arising from or related to: (i) any Due
Diligence Information, (ii) any condition of the Development Parcel or any current or future
improvement thereon or of the Property, known or unknown by any Developer Releasing Party or
any City Released Party, including the extent or effect of any grading of the Development Parcel
whether or not there is or has been any restriction on access to the Real Property for pre-acquisition
inspection; (iii) the extent or effect of any of the matters identified in Section 4.5.2; (iv) any
construction defects, errors, omissions or other conditions, latent or otherwise; (v) economic and
legal conditions on or affecting the Development Parcel or any improvements thereon or the
Property; (vi) Environmental Matters, including the existence, Release, threatened Release,
presence, storage, treatment, transportation or disposal of any Hazardous Materials at any time on,
in, under, or from, the Development Parcel or any current or future improvement thereon or any
portion thereof; (vii) Claims of or acts or omissions to act of 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, or from about, or adjacent to the Development Parcel or any
current or future improvement thereon, including any Investigation or Remediation at or about the
Development Parcel or any current or future improvement thereon; and/or (viii) arising from the
Tustin Legacy Backbone Infrastructure Program, any community facilities district, service district
or assessment district the cost or extent thereof, or the amount of the Project Fair Share
Contribution or any community facilities district, service district or assessment district assessment
against the Development Parcel described in this Agreement or the Development Agreement; (ix)
the actions or inaction of the Navy with respect to any agreements between the City and the Navy;
(x) the ability of the City or any third party to complete, or the likelihood of the completion or
actual completion of, any of the improvements and infrastructure related to the Project described
by the General Plan, the Specific Plan, the Tustin Legacy Backbone Infrastructure Program, the
agreements, environmental reports and statements listed on Attachment 10 or any other plan or
policy of the City or any other governmental entity; (xi) the compliance or non-compliance by the
City or any third party, including the Navy, with the City’s General Plan, the Specific Plan, the
Federal Deed and the Environmental Documents, or any special restrictions or other covenants
and agreements applicable to other property at Tustin Legacy, or any other agreement or
governmental restriction or plan affecting Tustin Legacy; (xii) any disputes, claims, actions, causes
of action, demands or orders arising between Initial Developer, Clearwater, any future Developer
or Manager or between them or any other third party; (xiii) a potential or declared violation of or
other requirements or proceedings under the SLA Regulations affecting or prohibiting the
disposition of the Development Parcel or a determination by the City not to proceed with the
transaction based on the foregoing; and/or (xiv) any action or inaction of the City or the City Parties
in connection with any of the foregoing (including the exercise by the City of its discretion,
decision or judgment with respect to the foregoing); provided that the foregoing release by the
Developer Releasing Parties shall not extend to the extent of (a) any uncured Material Default by
the City provided that the Material Default is directly related to the Claim or (b) any Claim that is
the result of the gross negligence or willful misconduct or fraud of the City Released Parties
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(collectively, “Excluded Claims”). This release includes Claims of which Developer is presently
unaware or which Developer does not presently suspect to exist which, if known by Developer,
would materially affect Developer’s release of the City Released Parties. Developer specifically
waives the provision of California Civil Code Section 1542, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.”
In this connection and to the extent permitted by law, Developer on behalf of itself, and the other
Developer Releasing Parties hereby agrees that (1) it 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; (2) the waivers and releases in this
Section 4.5.3 have been negotiated and agreed upon in light of that realization and (3) Developer,
on behalf of itself and the other Developer Releasing Parties, nevertheless hereby intends to
release, discharge and acquit the City Released Parties from any such unknown Claims and
controversies (other than Excluded Claims) to the extent set forth above.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES
THAT (A) IT HAS READ AND FULLY UNDERSTANDS THE
PROVISIONS OF THIS SECTION, (B) IT HAS HAD THE
CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS
MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN
THIS SECTION.
DEVELOPER’S INITIALS
From and after the acquisition of the Property by Developer, the provisions of this
Section 4.5.3 and the release set forth herein shall be an equitable servitude and a covenant running
with the land for the benefit of the City and its Governmental Successors and burdening the Real
Property and Developer, its successors and assigns, each Successor Owner and each and every
Person claiming by, through or under Developer or any Successor Owner including all End Users,
shall remain in effect in perpetuity and shall survive termination of this Agreement, the Close of
Escrow, and Recording by the City of each Certificate of Compliance and shall not merge with
any deed. To further evidence its effectiveness with respect to each such Person, this release shall
be included in its entirety in the Special Restrictions; provided that nothing in this Agreement
limits or releases Claims by Developer against the Federal Government, including the Department
of the Navy, regarding the environmental condition of the Real Property.
4.5.4No Additional Due Diligence Period. Developer acknowledges that, while
the City has been negotiating this Agreement with Developer, Developer has had extensive access
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to the Development Parcel within which to undertake such physical inspections and other
investigations of, and inquiries concerning, the Development Parcel as may be necessary to allow
Developer to evaluate the environmental and physical characteristics of the Development Parcel,
as well as such other matters as may be deemed by Developer to be reasonably necessary to
generally evaluate the Development Parcel and determine the feasibility and advisability of
Developer’s purchase of the Property and development of Real Property with the Project, including
performance of the Grading Work and construction of the Project Improvements and acknowledges
that, Developer shall have the right to conduct additional due diligence prior to Close of Escrow
pursuant to Section 5.1. Nothing in this Section 4.5.4 shall or shall be deemed to limit or modify
Developer’s Closing Conditions pursuant to Section 7.2.1 or Developer’s termination rights and
other rights and remedies under Section 15.3.
4.6Developer Covenants; Preconditions to Close of Escrow.
The provisions of this Section 4.6 are covenants of Developer for the benefit of the City,
are conditions precedent to Transfers, Transfers of Control and to the Close of Escrow as further
described in this Section 4.6 and Sections 2.2 and 7.2.2 and shall, for the benefit of the City, be
satisfied by Developer not later than the times specified for such conditions below.
4.6.1Financing Plans.
4.6.1.1Financing Plan. As of the Effective Date, Developer has provided
the City with, and City has approved, the pro forma financing plan and Budget Statement for
development of the Project (“Financing Plan”), demonstrating the financial feasibility of the
Project.
4.6.1.2Developer Closing, Transfer and Transfer of Control
Requirements; Updates to Financing Plan. At least thirty (30) calendar days prior to the Close
of Escrow, and as a condition precedent for the benefit of the City to the Close of Escrow and any
Transfer and Transfer of Control, Developer shall provide (i) an update to the previously approved
Project Financing Plan for the Project including the same categories of information contained
therein and identifying revisions to the information previously provided (“Updated Financing
Plan”) for the purposes of confirming that Developer has the financial capacity and capability to
perform its obligations under this Agreement and (ii) certification in writing for the benefit of the
City as to the matters set forth in Section 4.6.1.3. If Developer determines at any of the dates upon
which an updated Financing Plan is due to the City that there is no required change to the Financing
Plan then in effect, Developer shall provide written notice to the City of the same and shall certify
as to the accuracy, truth and completeness of the previously delivered Financing Plan and the
matters set forth in Section 4.6.1.3 and shall submit to the City such documents as may be
reasonably requested by the City to allow the City to confirm, in its sole discretion, that the
previously delivered Financing Plan or Updated Financing Plan and the documents delivered in
connection therewith remain sufficient to satisfy all applicable requirements hereunder.
4.6.1.3Certificate Requirements. The certificate to be provided by
Developer or Transferee with respect to each Updated Financing Plan shall include Developer or
Transferee’s certification as to: (i) the accuracy, truth and completeness of the Updated Financing
Plan and (ii) the truth and completeness of each of the following (and shall deliver to the City
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reasonable evidence demonstrating that): (a) either the most recent Financing Plan approved by
the City remains in full force and effect and, or as modified by the most recent Updated Financing
Plan, demonstrates funding is sufficient to pay through Recording by the City of the later of the
Active Adult Project Certificate of Compliance and the AL/MC Project Certificate of Compliance,
all Development Costs for the Project and provides sufficient capital to design, construct and
Complete the Project Improvements and to bring the Project to stabilization, (b) there has been no
material adverse change in the financial capacity or condition of Developer or its financial or
organizational relationships from that described in the most recent Financing Plan approved by the
City; (c) the Budget Statement for the Project Improvements set forth in the Project Budget
Statement for the Project is a reasonable budget for such Project and the funding of all
Development Costs through the Final Certificate of Compliance, (d) that the proposed Guarantor
(which shall be named) for the Project satisfies the Minimum Asset Standards; (e) that the
Evidence of Equity and Equity Commitment, as applicable, previously provided to the City remain
in full force and effect and sufficient, when combined with the other sources and uses set forth in
the Financing Plan (including the Evidence of Equity), to fund the Development Costs specified
in the Financing Plan and (f) Developer has available funds, with third-party financing or Mortgage
only as authorized by this Agreement, sufficient to pay all Development Costs, including sufficient
equity capital to design and construct the Project to stabilization consistent with the terms of this
Agreement. If revisions are required to permit Developer to make the certifications required by
this Section 4.6.1 which shall be subject to review by the City in accordance with Section 4.6.1.4.
Developer shall deliver to the City such other documents as the City reasonably determines will
assist in the evaluation of whether Developer is able to acquire the Real Property, construct the
Project Improvements and perform in a timely manner all of its other obligations and commitments
set forth in this Agreement, including the documentation described in Section 8.5.
4.6.1.4City Review of Updated Financing Plan. The City shall have the
right to reasonably approve or disapprove any immaterial modifications between a Financing Plan
previously approved by the City and a proposed updated Financing Plan and to approve in its sole
discretion any material modifications between a Financing Plan previously approved by the City
and a proposed updated Financing Plan. In addition, the City shall have the right to review and
approve the Guarantor and Guaranty in accordance with Sections 8.9.1 and 8.9.2 and to review
and approve the Approved Equity Investor(s) and each instrument evidencing Evidence of Equity
and Equity Commitment as further described in Sections 4.6.2 and 8.10. The City’s review of
modifications set forth in each updated Financing Plan and of each instrument evidencing
Evidence of Equity and Equity Commitment (and the documentation for any Construction Loan)
shall be for the purposes of determining (i) the availability of the contemplated financing pursuant
to the Construction Loan and whether the contemplated financing will be reasonably available,
without any condition precedent the satisfaction of which is unlikely or speculative, (ii) if the funds
available to Developer including equity capital and a Construction Loan from sources approved
by the City in accordance with this Agreement are consistent with the Financing Plan and will
provide sufficient funds to timely pay all Development Costs and to satisfy all requirements of
Developer set forth in this Agreement, (iii) that the contemplated funding meets the budget
requirements for the Project as set forth in the Budget Statement; (iv) that the contemplated funding
is being provided on commercially reasonable terms and consistent with the terms and conditions
of this Agreement and (v) that there has been no material adverse change in the financial capacity
or condition of Developer or its financial or organizational relationships from that presented to the
City as of the Effective Date or in any subsequently approved Updated Financing Plan. Except to
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the extent already approved in the last sentence of Section 4.6.1.2, if there are modifications to any
previously approved Financing Plan, the City shall have the right, in its sole discretion, to approve
or disapprove such modifications including any modifications to the Evidence of Equity, Equity
Commitment, and/or Construction Loan documentation and evidence that the Equity Investor has
the Net Worth and Liquid Assets, as determined by the City in its sole discretion, required to fund
the Development Costs for the Project as described in the Updated Financing Plan and Guarantor
meets the Minimum Asset Standards. If the City is not satisfied with the financial status of
Developer, the Equity Investor, the Guarantor, the financial feasibility of the Project or any portion
thereof or any of the other contents of the Financing Plan or the Updated Financing Plan following
review of the certification and the above materials, the City shall be entitled to obtain such other
information and assurances from Developer and such other financial information as the City may
request of Developer, the JV Entity, PropCo and any proposed Transferee and their respective
members, owners and/or partners, if any. Such information shall be subject to the confidentiality
provisions of Section 18.24.
4.6.2Additional Assurances.
4.6.2.1Declaration of Ownership; Documentation at Effective Date.
Prior to or concurrently with the Effective Date, Developer shall deliver to the City a declaration,
dated as of or prior to the Effective Date, certified by the chief financial officer or other appropriate
authorized officer of Initial Developer, substantially in the form and substance of the Developer
Original Certificate attached to this Agreement as Attachment 19A (“Developer Original
Certificate”).
4.6.2.2Evidence of Equity. If Developer or any Transferee intends to fund
the Development Costs in whole or in part without an Equity Investor, Developer or Transferee,
as applicable, shall, prior to or concurrently with the Effective Date and when required by
Sections 2.2.2 through 2.2.4, Section 7.2 or Section 8.10, provide evidence and written assurances
satisfactory to the City in its sole discretion that Developer or such Transferee has the financial
capacity, Liquid Assets and Net Worth, to provide sufficient equity, when combined with the other
sources and uses set forth in the Financing Plans to fund the Development Costs, including by
provision to the City of resolutions or other documentation to evidence the availability and
authorizing the expenditure of such funds (“Evidence of Equity”). The Evidence of Equity shall
be subject to the approval of the City in its sole discretion.
4.6.2.3Equity Commitments. Prior to mutual execution and delivery of
this Agreement, Developer has caused to be executed and delivered to City a contractual
commitment in substantially the form and substance of the agreement attached to this Agreement
as Attachment 15C (“Initial Equity Commitment”) of PRISA II LP, a Delaware limited
partnership (the “Initial Equity Investor”), under the terms of which, if the Close of Escrow
occurs and if the other conditions specified in the Initial Equity Commitment as requirements to
its effectiveness as of the Close of Escrow shall have been satisfied, the Initial Equity Investor has
agreed to fund (under the other terms and conditions specified in the Initial Equity Commitment),
as capital contributions to Developer, such amounts as may be necessary for Developer to satisfy
the “DDA Obligations” (as that term is defined in the Initial Equity Commitment). If as of the
Closing Date, the amounts committed to be funded by the Initial Equity Investor are insufficient
to provide the equity funds required by the then Updated Financing Plan, the Developer will cause
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to be executed and delivered to City as of the Closing Date additional contractual commitments
(each an “Additional Equity Commitment”) from one or more entities Controlling Developer
and one or more entities Controlling Clearwater (with the financial capacity of each such entity
being subject to the approval of the City Manager in his or her sole discretion and, when so
approved, being referred to as an “Additional Equity Investor”), in substantially the form and
substance of the agreement attached to this Agreement as Attachment 15E. The Initial Equity
Commitment, any Additional Equity Commitments, and any other similar contractual commitment
approved by City in accordance with this Section 4.6.2.3 are each referred to as an “Equity
Commitment”. In connection with any Transfer, if Developer or Transferee has identified an
Equity Investor approved by the City which has the financial capacity, Liquid Assets and Net
Worth, as determined by the City in its sole discretion, sufficient when combined with the other
sources and uses set forth in the Financing Plan to fund the Development Costs as described in the
Financing Plan (the Initial Equity Investor, each Additional Equity Investor, and each other Equity
Investor approved by the City in connection with any Transfer being referred to in this Agreement
as an “Approved Equity Investor”), Developer or Transferee, as applicable, shall deliver to the
City when required by Sections 2.2.2 through 2.2.4 or Section 8.10:
(i)evidence of an executed, binding and effective contractual
commitment made by Approved Equity Investor in favor of Developer or Transferee, as
applicable, dated on or before each Transfer Date to fund the required equity for the Project
substantially in the form and substance of the Equity Commitment; and
(ii)a declaration in favor of the City at each of the Effective Date
and each Transfer Date, certified by the chief financial officer or other appropriate
authorized officer of the Approved Equity Investor in substantially the form and substance
of the Equity Investor Original Certificate attached to this Agreement as Attachment 15A
(“Equity Investor Original Certificate”) and dated as of the Effective Date and each
Transfer Date. Developer shall from time to time demand from the Equity Investor under
the Equity Commitment, as capital contributions to Developer, such amounts as may be
necessary for Developer to satisfy the “DDA Obligations” (as that term is defined in the
Equity Commitment). Developer’s obligations under this Agreement are not conditioned
on the Equity Investor’s performance of its obligations under the Equity Commitment.
4.6.2.4Survival. Each document providing Evidence of Equity or an Equity
Commitment shall be and remain in full force and effect through the Recording by the City of the
later of the Active Adult Project Certificate of Compliance and the AL/MC Project Certificate of
Compliance unless replaced by a Transferee with Evidence of Equity and/or Equity
Commitment(s) made by an Approved Equity Investor and approved by the City in its sole
discretion as part of a Transfer; provided that the foregoing restrictions shall not apply to any
portion of the Real Property for which a Certificate of Compliance has been Recorded by the City.
The Construction Loan commitment or term sheet shall be subject to the approval of the City in
its sole discretion and shall remain in full force and effect unless replaced by a Transferee with a
loan commitment or term sheet approved by the City in its sole discretion or a Construction Loan
with loan documents meeting the requirements of Article 17.
4.6.2.5No Distributions to Equity Investor Prior to Certificate of
Occupancy. Until satisfaction of the requirements in all of Sections 9.3.1.3, 9.3.1.5, 9.3.2.3 and
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9.3.2.5 below, Developer shall not, directly or indirectly, make any distributions of cash or property
to the holders of equity interests in Developer or other Developer Affiliates, whether by dividend,
loan, investment or any other means.
5.Developer’s License, Access to Records and Communications.
5.1Limited License.
The City grants to Developer for use by Developer and its officers, directors, employees,
agents, representatives, consultants, contractors, and other Persons accessing the Development
Parcel by, through or with the permission or under the direction or auspices of Developer
(“Developer Representatives”) a limited and revocable license to enter upon the Development
Parcel at any time prior to Close of Escrow for purposes of obtaining data and making surveys and
tests necessary to carry out this Agreement, provided that, prior to the effectiveness of such license,
Developer shall: (i) prior to entry on the Development Parcel, deliver to the City written evidence
that Developer has procured and then maintains the insurance required under Sections 11.1 and
11.2; (ii) give the City twenty-four (24) hours telephonic, electronic mail or written notice of any
intended access which involves work on the Development Parcel or may result in any impairment
of the use of the Development Parcel or any portion thereof, or any adjacent property by any then-
current owners, occupants, or contractors; (iii) access the Development Parcel in a safe manner;
(iv) conduct no environmental testing, sampling, invasive testing, or boring without the written
consent of the City (and, in all cases, Developer shall not carry out any environmental testing,
sampling, invasive testing, or boring on the Development Parcel prior to the effective date of the
environmental insurance policy required by Section 1.1.3 of Exhibit B to the ENA) as required by
Section 11.1.4; (v) allow no dangerous or hazardous condition to be created or caused on the
Development Parcel to continue beyond the completion) of such access, (vi) comply with all
Governmental Requirements and obtain all permits required in connection with such access; (vii)
conduct inspections and testing, subject to the rights of any existing tenants or contractors doing
work on the Development Parcel, if any (which inspections and testing, if conducted at times other
than normal business hours, shall be conducted only after obtaining the City’s consent, which shall
not be unreasonably withheld); (viii) keep the Development Parcel free and clear of any and all
liens of any kind caused by Developer or the Developer Parties, including mechanics’ liens or
materialmen’s liens related to Developer’s or any Developer Parties’ access to or inspection of the
Development Parcel; (ix) cause the portion of the Development Parcel subject to such inspection
to be restored to the condition existing immediately prior to such inspection promptly upon
completion of each inspection; and (x) provide City, at no additional charge, with copies of the
results of each inspection made by or for Developer after Developer’s receipt of such results. The
City shall have the right to have a City representative present on the Development Parcel during
any testing under clause (iv) of this Section 5.1. This limited license shall commence on the
Effective Date, may be revoked by the City during the continuation of any Default by Developer,
or upon termination of this Agreement by any Party, and shall be automatically revoked and
terminated upon occurrence of the Close of Escrow.
5.2Indemnity.
Prior to the Close of Escrow, Developer, on behalf of itself and its successors and assigns,
each Successor Owner and each and every Person claiming by, through or under Developer or any
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Successor Owner but excluding End Users, hereby agrees to protect, indemnify, defend and hold
harmless the City Indemnified Parties from and against any and all Claims arising in connection
with or resulting from or related to Developer’s or the Developer Representatives’: (i) exercise of
the license provided in Section 5.1, including entry onto or access to the Development Parcel, or
breach by Developer or any Developer Parties of the terms and conditions of the grant of license;
(ii) exercise of any rights under such license, including, any inspections, surveys, tests or studies
performed by Developer or the Developer Representatives with respect to the Development Parcel,
the Property or the Project; (iii) presence, activities or work on or related to use of the Development
Parcel by Developer or the Developer Representatives and any Construction Liens or mechanics’
or materialmen’s liens arising with respect thereto; (iv) bodily injury to or death of any person
(including any of the City Indemnified Parties or any employee or contractor of the City
Indemnified Parties) or damage to or loss of use of property resulting from any of the foregoing,
(v) a Release of Hazardous Materials on the Development Parcel caused by the acts of Developer
or any Developer Representatives and (vi) Recording of any Construction Liens related to
Developer’s inspection and/or Investigation of the Development Parcel, in each case whether
occurring prior to or following the Effective Date; save and except to the extent such Claims result
from (i) the gross negligence, willful misconduct or fraud of City or any City Indemnified Party
or any other Excluded Claims, or (ii) Hazardous Materials existing on the Development Parcel
prior to Close of Escrow unless such Hazardous Materials condition is exacerbated by, or any
Release caused by, acts of Developer or any of the Developer Representatives. Developer shall
keep the Development Parcel free and clear of any and all Construction Liens related to
Developer’s inspection and/or Investigation of the Development Parcel. The indemnification by
Developer set forth in this Section 5.2 shall survive termination of this Agreement, Close of
Escrow, shall not merge with any deed and shall be binding upon Developer, its successors and
assigns, each Successor Owner and each and every Person claiming by, through or under
Developer or any Successor Owner of the Property or portion thereof including all End Users, for
the benefit of the City and its Governmental Successors, but only with respect to Claims Accrued
prior to the earlier of Close of Escrow or the earlier termination of this Agreement.
5.3Communications with City and Third Parties.
From and after the Effective Date, communications with the City by Developer and the
Developer Representatives shall be directly with the City Manager or designee, that shall be the
administrator of this Agreement on behalf of the City (and, subject to Section 18.11, shall have the
authority, power and right to grant all approvals and consents on behalf of the City as required
hereunder), and such other employees, consultants, and attorneys of the City from time to time as
the City Manager may designate. In addition, Developer shall have the right to communicate with
staff of other public agencies; and with third parties to all agreements affecting the Real Property
and its development in connection with Developer’s proposed purchase of the Property and
development of the Project. The City staff shall have the right, but not the obligation, to attend and
participate in any and all meetings with other public agencies, with regard to the Project and/or the
Property. Upon request of the City, Developer shall promptly provide the City with a copy of each
material item of correspondence (including emails, letters, facsimiles, and any enclosures and
attachments) sent to or received by Developer from third parties in connection with entitlements
or approval required for the Project, or with respect to community or governmental approval of
the Project, provided, however, that Developer shall not be obligated to deliver any such materials
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that based upon advice of counsel are determined to be subject to attorney-client or other privilege
or exception from disclosure.
6.Title; Survey.
6.1Survey by Developer.
During the term of the ENA, Developer obtained and provided to the City at Developer’s
sole cost and expense the ALTA/NSPS Land Title Survey for the Real Property prepared by CL
Surveying & Mapping (such surveyor or other licensed surveyor subsequently designated by
Developer during the Term being referred to in this Agreement as “Surveyor”), dated October 3,
2023, certified by the Surveyor to the City and the Title Company and acceptable to each
(“Survey”). Developer shall provide an updated certification of the Survey at closing.
6.2Permitted Exceptions.
Developer, at Developer’s sole cost and expense, has caused the Title Company to prepare
and deliver to Developer and the City with respect to the Property the Title Commitment attached
as Attachment 4 (the “Title Commitment”) based upon which the Title Company may issue an
extended American Land Title Association Owner’s Policy for the Property (collectively “ALTA
Policy”). An ALTA Policy shall be issued at the Close of Escrow to Developer with respect to the
Real Property in the amount of the Purchase Price, and such additional amounts as Developer may
request of Title Company. Prior to the Effective Date, Developer has reviewed the Title
Commitment and the other relevant documents referenced below and has approved the matters set
forth in the Title Commitment with respect to the Real Property. “Permitted Exceptions” to title
shall mean the following: (i) all matters set forth on the Title Commitment attached as Attachment
4, or set forth on the Survey (provided that if the Real Property is annexed to the District as CFD
18-01 Zone 5 is required hereunder, CFD 13-01 shall not be a Permitted Exception); (ii) the lien
of special taxes related to CFD 18-01 Zone 5 and other governmental assessments and taxes; (ii)
the Other Agreements that are to be executed, and if applicable, Recorded pursuant to Article 7;
(iii) the Federal Deed; (v) the Memorandum of Agreement; and (vi) all covenants, restrictions and
encumbrances, liens, exceptions, leases, restrictions, deed restrictions and qualifications expressly
set forth in or permitted or contemplated by this Agreement or the Other Agreements.
Notwithstanding anything to the contrary in this Agreement, the City shall deliver the Property to
Developer free and clear of all monetary liens other than (a) liens for real property taxes that are
not yet delinquent, and (b) Construction Liens and/or other liens or costs caused by or arising from
or in connection with (1) the limited license granted pursuant to Section 5.1; and/or (2) the acts or
omissions to act of Developer or the Developer Representatives with respect to work on or use of
the Real Property or adjoining property owned by the City pursuant to the license granted pursuant
to Section 5.1.
6.3Supplemental Title Reports.
If prior to the Close of Escrow the Title Company discloses additional matters that affect
title to the Property not disclosed on the Title Commitment, then within ten (10) Business Days
after Developer’s receipt of any report issued by the Title Company concerning the RealProperty
that discloses any such additional matters (a “Supplemental Title Report”), Developer shall cause
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to be provided to the City a copy of such Supplemental Title Report and shall specify in writing
Developer’s disapproval of any item or exception shown on such Supplemental Title Report not
previously included in the Title Commitment and that is not acceptable to Developer (each a
“Disapproved Exception”) together with Developer’s suggested cure thereof (to the extent
capable of being cured); provided, however, that Developer shall not have the right to disapprove
any item or exception specifically consented to by Developer, including all exceptions arising
pursuant to this Agreement and all Permitted Exceptions approved or deemed approved pursuant
to Section 6.2. Failure of Developer to disapprove any item or exception shown on any such
Supplemental Title Report on or before the expiration of such ten (10) calendar day period shall
be deemed to be an approval of the matters set forth in such Supplemental Title Report. If
Developer designates a Disapproved Exception, Developer shall specify in writing its reason for
such disapproval, and the City shall have the right, but not the obligation, to (i) remove or cure the
Disapproved Exception to the reasonable satisfaction of Developer, or (ii) subject to the last
sentence of Section 6.2, elect not to cure such Disapproved Exception. If the City fails to notify
Developer of the City’s election to remove or cure such Disapproved Exception within ten (10)
Business Days after the City’s receipt of Developer’s notice of disapproval, the City shall be
deemed to have elected not to cure such Disapproved Exception. If the City elects or is deemed to
have elected not to cure any such Disapproved Exception then Developer’s exclusive remedy shall
be: (a) to accept such Disapproved Exception and proceed to take title to the Real Property in the
manner set forth in this Agreement and without either deduction or offset to the Purchase Price,
and waive such Disapproved Exception without cause of action under this Agreement against the
City, or (b) to provide written notice to the City of Developer’s election to terminate the Escrow,
within five (5) Business Days after the City’s election or deemed election, provided that
Developer’s failure to provide the City within said five (5) Business Days period with written
notice of either Developer’s acceptance of such Disapproved Exception or Developer’s election to
terminate shall constitute Developer’s election to terminate Escrow. If Developer elects (or is
deemed to have elected) to terminate Escrow prior to the Close of Escrow as set forth in this
Section 6.3, then the provisions of the third sentence of Section 15.1.3 shall apply. In the event
Developer shall not have terminated or been deemed to have terminated this Agreement as set
forth in this Section 6.3, then all matters and exclusions or exceptions from title insurance coverage
shown in such Supplemental Title Report which Developer shall have accepted pursuant to this
Section 6.3 (other than those which the City has agreed to cure as provided in this Section 6.3),
together with all Permitted Exceptions described in Section 6.2 shall be deemed “Permitted
Exceptions”.
6.4ALTA Policy; Endorsements; Close of Escrow.
It shall be a condition precedent to Developer’s obligation to close Escrow that the Title
Company issue the ALTA Policy with a policy amount equal to the Purchase Price (plus the Project
Fair Share Contribution, at Developer’s election) and subject only to the Permitted Exceptions
(“Original ALTA Coverage”). The City shall only be obligated to deliver to the Title Company
an owner’s affidavit regarding title in a form acceptable to the City in its reasonable discretion.
Developer shall have the right, at its sole expense, to request and obtain additional ALTA coverage
for the value of the development cost for the Project (“Additional ALTA Coverage”) and any
title endorsements as Developer deems necessary (“Developer Title Endorsements”); provided
that the issuance of such Additional ALTA Coverage and the Developer Title Endorsements shall
not delay the Close of Escrow and shall not be a condition precedent to the Close of Escrow. At
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the Close of Escrow, the City shall pay the City Premium and Developer shall pay all other costs
associated with issuance of the ALTA Policy, including costs of the ALTA Policy and Developer
Title Endorsements.
6.5City Title Policy.
The City shall have the right to request that the Title Company agree to issue at Close of
Escrow an ALTA owner’s extended coverage policy in the amount of One Million Dollars
($1,000,000.00) insuring the City’s ownership interest in the easements made and insurance
interests contained in the Landscape Installation and Maintenance Agreement, the Access
Easement Agreement and the Bioswale Easement (i) subject only to the Permitted Exceptions and
(ii) including the following endorsements in favor of the City:ALTA 17-06 (Access and Entry),
ALTA 17.1-06 (Indirect Access and Entry), ALTA 22.1-06 (Location and Map), and ALTA 25.1-
06 (Same as Portion of Survey) (collectively, “City Title Policy”). Provided that the Title
Company consents, then at the Close of Escrow, Developer shall be obligated to deliver to the
Title Company an owner’s affidavit regarding title in a form acceptable to Developer in its
reasonable discretion and sufficient to allow issuance of the City Title Policy and shall pay the
premium for the City Title Policy including the stated endorsements.
7.Closing.
7.1Time and Place of Closing.
7.1.1Close of Escrow. The Close of Escrow shall take place on that date which
is twenty (20) Business Days (or such shorter period as the Parties may agree) following the last
to occur of the satisfaction, or the waiver thereof by the Party for whose benefit the condition
applies, of the Developer Closing Conditions and the City Closing Conditions provided that (i) in
no event shall either City or Developer be obligated to close Escrow unless each has received at
least five (5) Business Days’ (or such shorter period as the Parties may agree) advance written
notice from the other party of the anticipated date for satisfaction of their respective City Closing
Conditions and Developer Closing Conditions, and (ii) the Close of Escrow shall in no event be
later than the Outside Closing Date set forth in the Schedule of Performance, which date shall be
not be subject to or extended by extension for Force Majeure Delay but shall be subject to and
extended by the extensions contemplated by Sections 7.1.2 and 7.1.3 (“Outside Closing Date”).
The Close of Escrow shall be subject to the satisfaction (or waiver by the Party benefited by such
condition) of all of the conditions set forth in Sections 7.2 through 7.4. and shall take place at the
offices of Escrow Holder in Orange County or Riverside County, California or such other location
as the City and Developer may mutually select. In the event that the Close of Escrow does not
occur on or prior to the Outside Closing Date, then, subject to the provisions of Article 15 or any
agreement by the Parties (each in its sole and absolute discretion) to extend the Outside Closing
Date, this Agreement shall terminate at 5 p.m. Pacific Time on the Outside Closing Date. In no
event shall the Closing Date be extended beyond the Outside Closing Date without approval of the
City Council in its sole discretion.
7.1.2Extension of Outside Closing Date. The City shall have the right to extend
the Outside Closing Date to January 26, 2027 at no cost to the City upon provision of written notice
to Developer on or before October 30, 2026 if on or before October 23, 2026 the City has not
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formed a new improvement area of the District (to be denominated CFD 18-01 Zone 5 and referred
to as “CFD 18-01 Zone 5”) with respect to the Real Property, adopted a rate and method of
apportionment for CFD 18-01 Zone 5 (“RMA”) and/or de-annexed the Real Property from City
of Tustin Community Facilities District No. 13-01.
7.1.3Other Closing Date Extensions By Mutual Agreement. In addition to the
extension periods provided in Section 7.1.2 and additional extensions, if any, contemplated by
Article 15, each Closing Date and each Outside Closing Date may be extended upon mutual written
agreement of the Parties.
7.2Conditions Precedent to Close of Escrow.
7.2.1Developer Closing Conditions. Developer’s obligation to purchase the
Property and to complete all requirements for the Close of Escrow is subject to and conditioned
upon the satisfaction of, or Developer’s express written waiver of, each of the following conditions
to the Close of Escrow (“Developer Closing Conditions”):
7.2.1.1Document Deliveries. Not later than two (2) Business Days prior to
the Close of Escrow, the City shall have executed and delivered to Escrow Holder the following
documents, in each case substantially in the form and substance of the instruments attached as
Attachments to this Agreement:
(i)if not previously executed and Recorded, the Memorandum
of DDA, acknowledged and in Recordable form;
(ii)if not previously executed and Recorded, the Development
Agreement (and provided it is then effective as a matter of law), acknowledged and in
Recordable form;
(iii)the SLA Covenant acknowledged and in Recordable form;
(iv)the Affordable Housing Declaration, substantially in the
form and substance of the instrument attached to this Agreement as Attachment 26
(“Affordable Housing Declaration”), executed by the City and the Tustin Housing
Authority, acknowledged and in Recordable form;
(v)the Special Restrictions, acknowledged and in Recordable
form;
(vi)the Quitclaim Deed, acknowledged and in Recordable form;
(vii)the Access Easement Agreement, acknowledged and in
Recordable form;
(viii)the Bioswale Easement, acknowledged and in Recordable
form;
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(ix)the Landscape Installation and Maintenance Agreement in
substantially the form and substance of the Landscape Installation and Maintenance
Agreement attached as Attachment 21 to this Agreement (“Landscape Installation and
Maintenance Agreement”), acknowledged and in Recordable form;
(x)federal FIRPTA Affidavit;
(xi)California’s Real Estate Withholding Exemption Certificate
Form 593-C;
(xii)a bill of sale and assignment by the City to Developer of
Intangible Property substantially in the form and substance of the instrument attached to
this Agreement as Attachment 22 (“Bill of Sale”), acknowledged and in Recordable form;
(xiii)if a Construction Loan is proposed, City consent, as
evidenced by execution by the City of a Subordination Agreement, to the proposed
Mortgage being a Permitted Mortgage with the proposed Mortgagee being a Permitted
Mortgagee for such Construction Loan;
(xiv)Intentionally Omitted;
(xv)a reaffirmation of the City’s representations and warranties
set forth in Sections 3.3 and 18.12.2 (as the same may be modified pursuant to Section 3.4)
in substantially the form and substance of the certificate attached to this Agreement as
Attachment 18;
(xvi)such proof of the City’s authority and authorization to enter
into this Agreement and consummate the transactions contemplated hereby, and such proof
of the power and authority of the individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of the City to act for and/or bind the City as may be
reasonably required by Title Company and/or Developer (usually in the form of City
Council meeting minutes); and
(xvii)such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated in this Agreement
(provided that no such other documents or instruments shall (a) require the City to make
any payments or incur any liabilities not otherwise required by this Agreement in favor of
any Person or (b) modify any provision of this Agreement);
7.2.1.2Title Policy. The Title Company shall be in a position to issue the
ALTA Policy to Developer for the Property in the amount of the Purchase Price plus the Project
Fair Share Contribution (at Developer’s election) and subject only to the Permitted Exceptions.
7.2.1.3Pre-Existing Obligations; CFD 18-01 Zone 5. Except as approved
by Developer in writing or constituting a Permitted Exception, there shall exist no leases, contracts
or rights of occupancy or other agreements or contracts with respect to the Property that shall
survive the Close of Escrow. The City shall have annexed the Real Property to the District a new
CFD 18-01 Zone 5, approved the RMA and de-annexed the Real Property from City of Tustin
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Community Facilities District No. 13-01 as required by and in accordance with Sections 7.1.2,
7.2.2.9 and 8.7.3.
7.2.1.4Pre-Closing Entitlements. Developer shall have timely applied for
all Pre-Closing Entitlements required for development of the Project and all such Pre-Closing
Entitlements shall have been Finally Approved.
7.2.1.5Basic Concept Plan. If Developer seeks any modification to the
previously approved Basic Concept Plan for the Project prior to the Close of Escrow, Developer
shall have timely applied for and the City shall have approved any modifications to the same in
accordance with Sections 8.5.5 and 8.5.6.
7.2.1.6No Casualty or Condemnation. There shall not have occurred any
material casualty or condemnation with respect to the Property and no material condemnation shall
be threatened with respect to the Property.
7.2.1.7No Litigation. No litigation shall be threatened or pending which
seeks to prevent the development or operation of the Project or any part thereof according to the
terms of this Agreement and the Other Agreements.
7.2.1.8Construction Loan. Developer shall have obtained a Construction
Loan for the Project in accordance with the Updated Financing Plan on terms and conditions
acceptable to Developer in its sole discretion.
7.2.1.9Default. The City shall not be in Default of any covenant or
agreement to be performed by the City under this Agreement.
7.2.1.10Representations and Warranties. The City’s representations
and warranties set forth in in Sections 3.3 and 18.12.2 shall be true and correct as of the Close of
Escrow, provided, in no event shall the City be liable to Developer for, or be deemed to be in
Default under this Agreement by reason of, breach of any such representation or warranty which
results from a change that (i) occurs between the Effective Date and the date of the Close of
Escrow, and (ii) is expressly permitted under the terms of this Agreement or is beyond the
reasonable control of the City to prevent. The occurrence of a change in a representation and
warranty shall, if materially adverse to Developer or the Property, as determined by Developer in
Developer’s reasonable business judgment, constitute the non-fulfillment of the condition set forth
in this Section 7.2.1.10, unless such matter is cured at least one (1) Business Day prior to the Close
of Escrow. If, despite changes or other matters described in the City’s reaffirmation certificate, the
Close of Escrow occurs, the City’s representations and warranties set forth in Sections 3.3 and
18.12.2 shall be deemed to have been modified by all statements made in such certificate.
7.2.2City Closing Conditions. The City’s obligation to deliver the Quitclaim
Deed(s) and to complete all requirements for the Close of Escrow is subject to and conditioned
upon the satisfaction of, or the City’s express written waiver of, each of the following conditions
to the Close of Escrow (“City Closing Conditions”) on or before the Closing Date:
7.2.2.1Developer Closing Payment. Not later than one (1) Business Day
prior to the Close of Escrow, Developer shall deliver to Escrow (i) the Developer Closing Payment
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and (ii) any other costs explicitly set forth in this Agreement as costs to be paid by Developer at
the Close of Escrow, including the City Costs Deposit amounts described in Section 1.8.3 and the
master marketing program fee described in Section 8.7.4.
7.2.2.2Document Deliveries. Not later than two (2) Business Days prior to
the Close of Escrow, Developer shall have executed and delivered to Escrow Holder, in each case
(including consents where applicable) substantially in the form and substance of the instruments
attached as Attachments to this Agreement, the following documents:
(i)if not previously executed and Recorded, the Memorandum
of DDA, executed by Developer, acknowledged and in Recordable form;
(ii)if not previously executed and Recorded, the Development
Agreement (and provided it is then effective as a matter of law) executed by Developer,
acknowledged and in Recordable form;
(iii)a consent and agreement to the terms of the SLA Covenant
executed by Developer acknowledged and in Recordable form;
(iv)a consent and agreement to the terms of the Affordable
Housing Declaration executed by Developer, acknowledged and in Recordable form;
(v)a consent and agreement to the terms of the Special
Restrictions, executed by Developer, acknowledged and in Recordable form;
(vi)a consent and agreement to the terms of the Quitclaim Deed
executed by Developer for the deed affecting the Property to be acquired by Developer,
acknowledged and in Recordable form;
(vii)the Access Easement Agreement, acknowledged and in
Recordable form;
(viii)the Bioswale Easement, acknowledged and in Recordable
form;
(ix)the Landscape Installation and Maintenance Agreement,
executed by Developer, acknowledged and in Recordable form;
(x)a Bill of Sale executed by Developer as to the Property to be
acquired by Developer, acknowledged and in Recordable form;
(xi)with respect to a Construction Loan in favor of Developer
secured by a Permitted Mortgage with a Permitted Mortgagee and approved by the City
pursuant to Article 17, the following documentation approved by the City:
(a)Permitted Mortgagee shall have delivered to Escrow
(1) the Subordination Agreement executed by Permitted Mortgagee
acknowledged and in Recordable form;
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(b)as to the Construction Loan, Developer and
Permitted Mortgagee (as determined by City) of such Permitted Mortgage
shall each have confirmed in writing to Escrow Holder for the benefit of the
City that all conditions to close of such Construction Loan have been met
or waived and each is prepared to close the Construction Loan concurrently
with the Close of Escrow, and Developer shall have provided to the City
written verification from Escrow confirming that the deed of trust to be
recorded in conjunction with the closing of the Construction Loan has been
fully executed and acknowledged and in Recordable form and deposited
into Escrow by the Construction Loan Permitted Mortgagee; and
(c)written consent to the Subordination Agreement
executed by Developer for the agreement affecting the Property to be
acquired by Developer, acknowledged and in Recordable form;
(xii)Agreement with Conditions of Approval in form and
substance of the agreement approved by the City in its Governmental Capacity executed
by Developer, acknowledged and in Recordable form;
(xiii)O&M Agreement for the Property in form and substance of
the agreement approved by the City in its Governmental Capacity executed by Developer,
acknowledged and in Recordable form;
(xiv)a Guaranty executed by the chief financial officer or other
appropriate authorized officer of Guarantor;
(xv)a Guarantor Original Certificate executed by the chief
financial officer or other appropriate authorized officer of Guarantor; and
(xvi)a Guaranty Legal Opinion executed by legal counsel to
Guarantor;
(xvii)a Developer Date Down and Reaffirmation Certificate with
such certificate certified for the benefit of the City by the chief financial officer or other
appropriate authorized officer of Developer dated as of the Closing Date;
(xviii)If Developer is utilizing an Approved Equity Investor that
has previously delivered an Equity Investor Original Certificate, an Equity Investor Date
Down Certificate executed by each Approved Equity Investor, otherwise, an Equity
Investor Original Certificate by each Approved Equity Investor, in each case certified by
the chief financial officer or other appropriate authorized officer of the Approved Equity
Investor, and, if not previously delivered by each Approved Equity Investor, Evidence of
Equity and/or Equity Commitment, in each case dated as of the Closing Date and stating,
without limitation, that the “Pre-Closing Conditions” (as that term is defined in the Equity
Commitment) have been satisfied as of the Closing Date;
(xix)the “Satisfaction Notice” as such term is defined in
Attachment 15C, Section 1, executed by Initial Equity Investor;
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(xx)if required under the provisions of Section 4.6.2.3,
Additional Equity Commitments from the Additional Equity Investors in the amounts
required by Section 4.6.2.3 and in the form of Attachment 15E;
(xxi)such proof of 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 Developer to act for and/or bind each
as may be reasonably required by Title Company and/or the City; and
(xxii)such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated in this Agreement
(provided that no such other documents or instruments shall (a) require the City to make
any payments or incur any liabilities not otherwise required by this Agreement in favor of
any Person or (b) modify any provision of this Agreement).
7.2.2.3Pre-Closing Entitlements. Developer shall have timely applied for
all Pre-Closing Entitlements required for development of the Project and all such Pre-Closing
Entitlements shall have been Finally Approved.
7.2.2.4Basic Concept Plan. If Developer seeks any modification to the
previously approved Basic Concept Plan, Developer shall have timely applied for and the City
shall have approved any modifications to the same in accordance with Sections 8.5.5 and 8.5.6.
7.2.2.5Horizontal Improvements. The City shall be prepared to issue the
grading permit for the Grading Work and Horizontal Improvements on the Real Property and plans
for the Vertical Improvements shall have been submitted to the City for building permit review.
7.2.2.6Bonds to Secure Certain Construction Work. Developer shall have
provided to the City those labor and material bonds and payment bonds in favor of the City as
obligee securing Developer’s obligations to perform and construct the Grading Work and for
necessary encroachments into City-owned property, if any.
7.2.2.7Insurance. Developer shall have provided to the City evidence of
insurance as and to the extent required by Article 11.
7.2.2.8Financial Capability; Guaranty. Developer shall have satisfied the
conditions precedent to the Close of Escrow set forth in Sections 4.6.1, 4.6.2, 8.9.1 and, if
applicable, Sections 8.9.2 and 8.10.
7.2.2.9Formation of Improvement Area, Adoption of RMA and Annexation
of Property into District. The City shall have formed the new CFD 18-01 Zone 5, approved the
RMA and caused the Property to be annexed into the District and de-annexed the Real Property
from City of Tustin Community Facilities District No. 13-01 in accordance with Section 8.7.3, and
such formation, annexation, adoption and de-annexation shall each be Finally Approved.
7.2.2.10Developer’s Affidavit. When required by Section 6.5,
Developer shall have provided the Title Company with the affidavit described in Section 6.5.
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7.2.2.11Default. Developer shall not be in Default of any covenant
or agreement to be performed by Developer under this Agreement.
7.2.2.12Representations and Warranties. Developer’s
representations and warranties set forth in Sections 3.1 and 18.12.1 shall be true and correct as of
the Close of Escrow (or in the case where any Transfer occurs prior to the Close of Escrow, the
representations and warranties made by the Transferee in an Assignment Agreement, as
applicable), shall be true and correct as of the Close of Escrow, provided, in no event shall
Developer be liable to the City for, or be deemed to be in Default under this Agreement by reason
of, breach of any such representation or warranty which results from a change that (i) occurs
between the Effective Date and the date of the Close of Escrow, and (ii) is expressly permitted
under the terms of this Agreement or is beyond the reasonable control of Developer to prevent.
The occurrence of a change in a representation and warranty shall, if materially adverse to City, as
determined by the City in City’s reasonable business judgment, constitute the non-fulfillment of
the condition set forth in this Section 7.2.2.12, unless such matter is cured at least one (1) Business
Day prior to the Close of Escrow. If, despite changes or other matters described in Developer’s
reaffirmation certificate, the Close of Escrow occurs, Developer’s representations and warranties
set forth in Sections 3.1 and 18.12.1 (or in the case where a Transfer occurs prior to the Close of
Escrow, the representations and warranties made by the Transferee in the Assignment Agreement)
shall be deemed to have been modified by all statements made in such certificate.
7.3Additional Close of Escrow Conditions.
7.3.1Closing Statements. In addition to the provisions of Section 7.2, the Close
of Escrow shall be conditioned upon the following Closing Conditions, which shall be for the
benefit of each Party: (i) Escrow Holder shall have delivered at least seven (7) Business Days prior
to the Close of Escrow a statement of costs to each Party and at least two (2) Business Days prior
to the Close of Escrow each of the Parties shall have approved such statement as being consistent
with the provisions of Section 7.4 and (ii) each Party shall confirm in writing to Escrow Holder
that all Closing Conditions for its benefit have been satisfied or waived.
7.3.2Supplementary Escrow Instructions Related to Construction Loan. The
Parties shall have prepared and approved any supplemental Escrow instructions which Escrow
instructions shall state that the Quitclaim Deed may be recorded only if it is recorded concurrently
with the closing of the Construction Loan, which closing shall be evidenced by the Recording of
the deed of trust securing the Construction Loan and such additional supplemental Escrow
instructions as may be needed.
7.4Procedures for Conveyance.
7.4.1Costs and Expenses. The costs and expenses of the Close of Escrow shall
be allocated as follows:
7.4.1.1City’s Costs. The City shall pay (i) the City Premium; (ii) one-half
(1/2) of all Escrow fees and costs; (iii) all documentary transfer taxes, if any; and (iv) the City’s
share of prorations, if any, and such costs, fees and taxes shall not be DDA Transaction Expenses.
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7.4.1.2Developer’s Costs. Developer shall pay (i) the entire cost of the
ALTA Policy, along with the cost of any other title insurance coverage, in excess of the City
Premium and shall be responsible for obtaining, any lender’s or other title policy or endorsements
in excess of the City Premium and all other costs associated with issuance of such title policy and
any associated Developer Title Endorsements or other endorsements requested by lenders, (ii) the
cost of the City Title Policy; (iii) the entire cost of the Survey and any additional land surveys
obtained by Developer in connection with the foregoing; (iv) document recording charges for the
documents to be Recorded per Section 7.4.6(ii); (v) one-half (1/2) of all Escrow fees and costs;
(vi) Developer’s share of prorations and (vii) the cost of any outstanding DDA Transaction
Expenses as described in Section 1.8.3. Developer shall pay the fees of all consultants and
employees (including legal fees and fees of environmental, engineering and land use consultants)
engaged by it.
7.4.1.3Other Costs. All costs and expenses related to the Close of Escrow
and the transfer of the Property to Developer not otherwise allocated in this Agreement shall be
allocated between the Parties in accordance with the customary practice in Orange County,
California.
7.4.2Possession. The City shall deliver exclusive possession of the Property at
the Close of Escrow subject to any Permitted Exceptions and to any other matters disclosed on the
ALTA Policy.
7.4.3Deliveries to Developer Upon Close of Escrow. The City agrees to deliver
to Developer, on or prior to the Close of Escrow, outside of Escrow, the following items with
respect to the Property:
7.4.3.1Records and Plans. To the extent in the City’s possession, originals
or copies of records and plans that will affect the Property after the Close of Escrow.
7.4.3.2Licenses and Permits. To the extent in the City’s possession,
originals or copies of all licenses and permits affecting the Property (other than Development
Permits).
7.4.4Prorations.
7.4.4.1General. Rentals, revenues and other income, if any, from the
Property conveyed shall be prorated on a cash basis as of 11:59 P.M. Pacific Time on the day
preceding the Close of Escrow. Tax payments shall be prorated in accordance with Section 7.4.4.2.
7.4.4.2Taxes. Developer shall be responsible for all taxes, assessments, fees
and charges imposed by any Governmental Authority with respect to the Property and all existing
and future improvements thereon accruing from and after the Close of Escrow. If, after the Close
of Escrow, any real estate taxes or possessory interest taxes are assessed against any portion of the
Real Property pertaining to the period prior to the Close of Escrow, the City agrees to contact the
applicable taxing authority and seek recognition and enforcement of its tax exemption. The
provisions of this Section 7.4.4.2 shall survive the termination of this Agreement and the Close of
Escrow and shall not be merged with the Quitclaim Deed.
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7.4.5Method of Proration. All prorations shall be made in accordance with
customary practice in Orange County, except as otherwise expressly provided in this Agreement.
Developer and the City agree to cause a schedule of prorations to be prepared prior to the Close of
Escrow. Such prorations, if and to the extent known and agreed upon as of the Close of Escrow,
shall be paid by Developer to the City (if the prorations result in a net credit to the City) or by the
City to Developer (if the prorations result in a net credit to Developer) by increasing or reducing
the cash to be paid by Developer at the Close of Escrow. Any such prorations not determined or
not agreed upon as of the Close of Escrow shall be paid by Developer to the City, or by the City
to Developer, as the case may be, in cash as soon as practicable following the Close of Escrow, but
in no event later than sixty (60) calendar days after the Close of Escrow. A copy of the schedule of
prorations as agreed upon by Developer and the City shall be delivered to Escrow Holder at least
three (3) Business Days prior to the Close of Escrow. All prorations provided for in Section 7.4.4
and this Section 7.4.5 shall be on an “actual day” basis and a three hundred sixty-five (365) day
year.
7.4.6Disbursements and Other Actions by Escrow Holder. At the Close of
Escrow, and subject to the satisfaction or waiver by the benefited party of the conditions to the
Close of Escrow described in Section 7.2, Escrow Holder shall promptly undertake all of the
following in the manner indicated below:
(i)Funds. Debit or credit all matters addressed in Section 7.4.1
and prorate all matters addressed in Section 7.4.4 and disburse to the City the Purchase
Price (as adjusted by the foregoing debits, credits and prorations) and the Project Fair Share
Contribution.
(ii)Recording. At the Close of Escrow, cause the following
instruments to be Recorded against the Real Property in the following order: (1) if not
previously Recorded, the Memorandum of DDA and the Development Agreement, (2) the
SLA Covenant, (3) the Affordable Housing Declaration, (4) the Special Restrictions, (5)
the Quitclaim Deed; (6) the Access Easement Agreement; (7) the Bioswale Easement; (8)
the Landscape Installation and Maintenance Agreement and (9) the Subordination
Agreement, and thereafter, such other documents that Developer and the City may mutually
direct, or that may be required by the terms of this Agreement to be Recorded, obtain
conformed copies thereof and distribute same to Developer and the City.
(iii)Title Policies. At the Close of Escrow direct the Title
Company to issue (a) the ALTA Policy to Developer for the Real Property in the amounts
described in Section 6.4 and (b) if issuance is previously agreed to by the Title Company,
the City Title Policy; provided, however issuance of the City Title Policy shall, if available,
be provided by the Title Company to the City concurrently with, but shall not be a condition
precedent to the City’s obligations for Closing. Concurrently with the issuance of the ALTA
Policy, the Title Company shall provide the Developer Title Endorsements, provided that
the issuance of such Developer Title Endorsements shall not be a condition to the Close of
Escrow, except for those endorsements that the City agreed to obtain in order to cure any
disapproved title exceptions or survey matters. Concurrently with the issuance of the City
Title Policy, the Title Company shall provide to the City the endorsements listed in
Section 6.5.
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(iv)Delivery of Documents to the City and Developer. Deliver
to the City and to Developer executing each of the following original counterparts (and
conformed copies if applicable) of the Development Agreement (if not previously
Recorded), the Memorandum of DDA (if not previously Recorded), the SLA Covenant, the
Affordable Housing Declaration, the Special Restrictions, the Quitclaim Deed, the
Bioswale Easement, the Landscape Installation and Maintenance Agreement, the Bill of
Sale, the FIRPTA Affidavit, the California Form 593-W, and any other documents (or
copies thereof) deposited into Escrow by Developer or the City at the Close of Escrow
pursuant hereto, including conformed copies of the Recorded instruments and deliver to
the Parties a certified copy of their respective Escrow closing statements. Deliver to the
City original fully executed (a) Equity Commitment(s) for the Project, (b) Guaranty with
Guaranty Legal Opinion, (c) certificates delivered by Developer, and Guarantor and each
Equity Investor, and (d) Subordination Agreement, and evidence that the Construction
Loan conditions have been satisfied and the Construction Loan has issued for the Project.
(v)Other Actions. Take such other actions as the Parties direct
pursuant to mutually executed supplemental Escrow instructions.
7.4.7Notice. All communications from the Escrow Holder shall be directed to
the addresses and in the manner established in Section 18.6 for notices, demands and
communications between the Parties.
8.Development of the Real Property and Additional Covenants of Developer and City.
8.1Scope of Development.
8.1.1Requirement to Develop the Project. The Scope of Development sets
forth the overall conceptual plan for the Project and development of the Real Property, including
design, development, and construction of the Project Improvements as may be required by the
Entitlements and Development Permits. The Project shall be designed and constructed to
Completion in a manner consistent with the Site Plan and in compliance with the Scope of
Development, the Approved Plans, the Design Guidelines, the Entitlements and Entitlements
conditions, Development Permits and any other Governmental Requirements as well as all
requirements of private utility purveyors.
8.1.2Control of Site Development. Developer shall have control over the design
and layout of the Project Improvements (including height, shape and location of the Vertical
Improvements and special landscaping and art features) and over the special uses to be
incorporated therein, subject to (i) the Approved Plans, the Design Guidelines, Development
Permits, Entitlements and Governmental Requirements including any conditional use permit
necessitated by particular proposed uses or design features and (ii) the design approval provisions
set forth in Sections 8.5.3, 8.5.5 and 8.5.6 for the benefit of the City, which are undertaken by the
City in its Proprietary Capacity. Except as excepted by Article 17, no Person (including any
Permitted Mortgagee) shall be permitted or authorized to undertake the construction of any
improvements on the Real Property unless such Person: (x) is the Initial Developer, (y) is a
Transferee pursuant to a Permitted Transfer and has met the requirements of Section 2.2.2, or (z)
(A) has been approved by the City as a Transferee pursuant to Section 2.2.3 and has met the
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requirements of Section 2.2.3 or (B) is a Foreclosure Transferee recognized as the Developer by
the City pursuant to Section 2.2.7.3 and in the case of clauses (x) and (z) of this Section 8.12, such
Person has first assumed in writing all obligations of Developer under this Agreement by written
assignment and assumption agreement in substantially the form and substance of the Assignment
Agreement; provided that the foregoing restrictions shall not apply to any portion of the Real
Property for which a Certificate of Compliance has been Recorded by the City.
8.1.3Compliance with Governmental Requirements and Other
Requirements. Developer shall develop the Real Property with the Project in the manner
described in and consistent with the Scope of Development, the Site Plan, and in accordance with
the Schedule of Performance, the Approved Plans and all Governmental Requirements, including
the Specific Plan, the Entitlements, the Development Permits, the Memorandum of Agreement and
the Federal Deed.
8.2Development Costs.
Within the time set forth in the Schedule of Performance, Developer shall design and
construct the Project at Developer’s sole cost and expense and without public subsidy of any kind,
unless otherwise agreed in writing by the City in its sole discretion. Nothing in this Agreement or
in any Other Agreement shall in any way limit the ability of Developer from applying for and/or
obtaining a property tax abatement for the Active Adult Project. Without limiting the generality of
the foregoing, Developer hereby agrees that the following costs and expenses (collectively
“Development Costs”) incurred by Developer during the Term and until (i) termination of this
Agreement or (ii) Recording by the City of the later of the Active Adult Project Certificate of
Compliance and the AL/MC Project Certificate of Compliance, shall be the responsibility of
Developer without any cost or liability to the City:
(i)all costs and expenses to perform and satisfy all the
covenants of Developer with respect to the Real Property contained in this Agreement and
the Other Agreements;
(ii)all costs and expenses associated with planning, designing,
developing and constructing the Project, preparing the Real Property and constructing all
Project Improvements (whether on-site or off-site) required in connection with the Project,
including all hard costs, soft costs, the cost of services, fees, exactions, dedications, cost
overruns, profit, overhead, Entitlements costs (including costs to perform conditions of
approval and mitigation measures thereunder), warranties, consultants’ fees, legal fees;
(iii)all costs and expenses of marketing and rental of Residential
Units as further described in the Scope of Development, including marketing fees, sales
incentives, insurance, overhead, and brokerage fees incurred in the rental of Residential
Units;
(iv)all costs and expenses costs and expenses necessary to obtain
the Entitlements and Development Permits and to comply with the other obligations of
Developer under this Agreement required to be satisfied prior to the Close of Escrow;
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(v)subject to Sections 7.4.1, 7.4.4 and 18.12.1, all costs and
expenses associated with acquisition of the Property, payment of the Purchase Price and
brokerage fees incurred in the acquisition of the Property and, if applicable, sale of the
Property, the Project, and/or the Project Improvements by Developer;
(vi)all costs and expenses comprising DDA Transaction
Expenses of the City;
(vii)all wages and benefits required to be paid to any person
employed by Developer, and by persons employed by the Developer Representatives;
(viii)the costs of the Project Fair Share Contribution; and
(ix)the CFD 18-01 Zone 5 Special Tax (it being acknowledged
and agreed by Developer that the CFD 18-01 Zone 5 Special Tax shall be perpetual and
shall continue to be the obligation of the Owner of the Real Property notwithstanding
Recording of a Certificate of Compliance thereto).
8.3Schedule of Performance; Completion of Project.
The Schedule of Performance sets forth the schedule for closings under this Agreement
and for submissions, approvals and actions related to design and development of each of the Project
and construction and Completion of the Project Improvements during the Term. Following the
Closing, Developer shall promptly begin and thereafter diligently prosecute to Completion the
construction of the Project Improvements within the time period provided by the Schedule of
Performance. Where time periods for performance are specified in the Schedule of Performance
or in this Agreement, Developer shall perform such matters no later than the time specified in the
Schedule of Performance or in this Agreement, as applicable, provided that the dates set forth in
the Schedule of Performance and this Agreement may be extended by Force Majeure Delay in
accordance with Section 18.7, subject to the limitations set forth in Section 18.7.5 and 18.7.6 or
may be otherwise extended by the City in accordance with Section 18.3. To be effective, any
extensions pursuant to this Section or Section 18.3 shall be requested in writing by Developer and
approved by and evidenced by written notice from the City Manager or designee and any requested
Force Majeure Delay extension shall be requested pursuant to Section 18.7.
8.4Land Use Matters.
8.4.1CEQA Requirements. The Parties acknowledge and agree that CEQA is
applicable to discretionary actions associated with the development of the Project. Developer
acknowledges that the City shall prepare any supplemental environmental information, if any, as
may need to be completed in order to effect compliance with CEQA, as determined by the City in
its sole discretion, and Developer shall be responsible to pay all costs incurred by the City to
prepare or to cause to its consultants to prepare such environmental documents and shall enter into
such agreements to pay such costs as the City shall require. Developer agrees to cooperate with
the City in obtaining information to determine the environmental impact of the Project, if any.
8.4.2Required Entitlements. Developer shall, at its sole cost and expense,
process, obtain, and maintain all Entitlements to assure that the design, construction, use,
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operation, maintenance, repair and replacement of the Project Improvements is carried out in
accordance with the provisions of this Agreement, and is permitted by the Entitlements and all
other Governmental Requirements. Development of the Project shall be subject to the following
Entitlements and review processes of the City: (i) Design Review approval (Design Review
application 2025-0008); (ii) Tentative Parcel Map approval (Subdivision Application 2025-0003);
(iii) Conditional Use Permit approval (CUP 2025-0012); (iv) Development Agreement approval
(DA 2025-0001) and (v) the density bonus application, density bonus exception and related
concessions and incentives authorized under Tustin City Code Section 9123 related to the
provision of affordable housing units in compliance with California Government Code Sections
54220-54234 and 65915, and any other approvals to the extent required by the City Code to permit
the uses contemplated in the Site Plan or Approved Plans. Without limiting the foregoing, in
developing and constructing the Project, Developer shall ensure that the Project complies with all
applicable development standards in the Specific Plan, the City Code and with all building codes,
landscaping, signage and parking requirements, except as may be permitted through variances and
modifications or the Development Agreement.
8.4.3Development Permits. Developer, at its sole cost and expense shall
process, obtain, and maintain all Development Permits required for the construction, use,
operation, maintenance, repair and replacement of the Project Improvements.
8.4.4Agreement Does Not Grant Entitlements. Nothing in this Agreement
shall be construed or interpreted as committing the City to approve or undertake any action or
review process or activities that require the independent exercise of discretion by the City in its
Governmental Capacity, including any approval of any of the Entitlements or Development
Permits for which Developer applies whether prior to or following the Effective Date. This
Agreement does not (i) grant any land use entitlement or approval to Developer, (ii) supersede,
nullify or amend any condition which may be imposed by the City in its Governmental Capacity
in connection with approval of the Project, (iii) guarantee to Developer or any other party any
profits from the development of the Property, or (iv) amend any Governmental Requirements of
the City. The issuance or approval of any of the Entitlements or any Development Permit described
in this Agreement shall be done by the City in its Governmental Capacity and the failure of the
City to issue or approve any such matters shall not be a Default. Nothing contained in this
Agreement shall be deemed to waive the right of the City to act in its Governmental Capacity with
respect to the consideration and approval of the Entitlements, Development Permits and all other
permits, licenses and approvals requested by Developer from time to time in connection with the
Project nor shall it entitle Developer to any of the Entitlements, Development Permits or other City
approvals necessary for the development of the Project, or to the waiver of any applicable City
requirements relating thereto, and the failure of the City to issue or approve any of the Entitlements
described in this Agreement, including to certify or approve any CEQA document, to approve any
tentative (or vesting tentative) tract map, design review, conditional use permit or other
entitlements or approvals, including the Entitlements or Development Permits, shall not be a
Default of the City under this Agreement.
8.4.5Cooperation of City. Consistent with this Agreement, the City agrees,
without cost or other liability to the City or any commitment of the City to approve or conditionally
approve any Entitlements required for the full implementation of the Project or this Agreement, to
assist and cooperate with Developer in its efforts to process the Entitlements and Development
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Permits. The City will use good faith efforts to expedite review of applications for the Entitlements
and the Development Permits that are to be issued by the City and other submissions made by
Developer where reasonably appropriate in order that Developer is able to meet the deadlines set
forth in the Schedule of Performance and will assist and cooperate with Developer in its efforts to
process such Development Permits, Entitlements and other submissions. At no cost to the City, the
City shall also assist and cooperate with Developer to obtain from other Persons (including IRWD,
Environmental Agencies and the City of Irvine) any licenses or entry permits necessary or
reasonably desirable in connection with development of the Project Improvements.
8.4.6Entitlements Conditions. Developer acknowledges and agrees that the
City in its Governmental Capacity may require satisfaction of certain conditions and dedication of
certain property in connection with approval of any Entitlements.
8.4.7Payment of Processing Fees. The Development Agreement provides for
payment by Developer of City Processing Fees and Plan Check and Inspection Fees (as each is
defined in the Development Agreement). If the Development Agreement shall terminate during the
Term of this Agreement, then Developer shall, commencing upon termination of the Development
Agreement, pay to the City pursuant to this Agreement all charges imposed by the City under the
then-current regulations for processing applications and requests for permits and entitlement
approvals, including (i) all fees, costs and deposits normally charged by the City or other
Governmental Authority in connection with application for and review and approval of
Entitlements and Development Permits, (ii) any fees or costs incurred by the City or any other
Governmental Authority in complying with CEQA or the CEQA implementing regulations; (iii)
any costs to review or approve any of the Entitlements or Development Permits applications or
submittals by Developer to the City or any other Governmental Authority in connection with the
Project, provided that in no event shall Developer be obligated to pay again any fee previously
paid pursuant to the Development Agreement.
8.5Design Approval.
8.5.1Design Review. It is understood and agreed to by Developer that the quality,
character and uses proposed for the Project are of particular importance to the City. In furtherance
of the development of the Project and the foregoing, Design Review approval is required as part
of the Entitlements. In addition, the City will require review and approval of any modifications to
the Basic Concept Plan for the Project and the Project Improvements and Landscape Improvements
upon the Boundary Landscape Area as further set forth in this Section 8.5.
8.5.2Plan Development and Cost. All plans and specifications for the Project
shall be prepared by Developer at Developer’s sole cost and expense and subject to the
requirements set forth in this Article 8.
8.5.3Process for Governmental Review. The Parties acknowledge that the City
shall have the right to review all plans, specifications and submissions, including any changes
therein, through its normal plan review and Entitlements process and that the City may exercise
its governmental discretion in review of any of the plans, specifications and submissions.
Developer has previously submitted to the City, and the City has previously reviewed and approved
the Entitlements in its Governmental Capacity. Within the timeframe shown in the Schedule of
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Performance, Developer shall submit for approval by the City in its Governmental Capacity, final
construction design drawings and related documents conforming to the requirements of the City
Code, the Specific Plan and all other Entitlements and conditions of approval and mitigation
measures within the time period set forth in the Schedule of Performance. The Community
Development Department is authorized pursuant to City Code to approve minor changes to
building plans after approval by the City provided such changes do not significantly reduce the
character or quality of the development concept or the design and materials to be used in enhancing
the architecture and aesthetics of the Project Improvements. Nothing in this Agreement shall
relieve Developer from the obligation to submit modified final design drawings and related
documents conforming to the requirements of the City Code, the Specific Plan and all other
Entitlements for further review and approval by the City, if any modification to the previously
approved plan or Entitlements is required.
8.5.4Coordination. Developer and the architect for the Project, shall meet with
representatives of the City to review and come to a clear understanding of the applicable planning
and design criteria required by the City. During the preparation of all plans and specifications for
the Project, staff of the City and Developer shall hold regular progress meetings to coordinate the
preparation, submission and review of such plans. The staff of the City and Developer shall
communicate and consult as frequently as necessary to facilitate prompt and speedy consideration
of Developer’s submittals.
8.5.5Real Property Division Review. Review of any modifications to the
previously approved Basic Concept Plan for the Project shall also be carried out by the City’s Real
Property Division as further described in this Section and Section 8.5.6. Prior to the Effective Date,
Developer has caused the Basic Concept Plan to be prepared and submitted to the City for approval
and the City has previously reviewed and approved the Basic Concept Plan. Developer
acknowledges and agrees that the City’s Community Development Department is responsible for
reviewing the working drawings and issuing recommendations with respect to the appropriate
Entitlements. In addition to its submittal of same to the Community Development Department,
Developer shall submit any modifications to the previously approved Basic Concept Plan to the
Deputy City Manager – Real Property for its approval in accordance with this Section and
Section 8.5.6. The exercise by the Deputy City Manager – Real Property of the right to inspect or
review the concept plans, drawings and related documents for development of the Project are
actions in the Proprietary Capacity of the City and: (i) shall not constitute an approval by the City
of any Entitlements; (ii) shall not constitute a determination by the City of the engineering or
structural design, sufficiency or integrity of the improvements contemplated by such plans,
drawings and related documents, and (iii) shall not constitute a determination by the City of the
compliance of such plans, drawings and related documents with any applicable building codes,
safety features and standards. Any inspection or approval of plans 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. The Parties acknowledge and agree
that the City’s approval in its Proprietary Capacity of modifications to the Basic Concept Plan shall
be carried out only in accordance with the provisions of this Section 8.5. Developer shall not be
entitled to damages or compensation as a result of the City’s disapproval, conditional approval, or
failure to approve or disapprove any modification to the Basic Concept Plan in accordance with
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the provisions of this Section 8.5.1. Field modifications are not subject to review by the Deputy
City Manager – Real Property.
8.5.6Process for Real Property Division Review. If Developer desires to
modify the previously approved Basic Concept Plan, Developer shall submit to the City two sets
of the modifications to the Basic Concept Plan for the proposed revised Improvements with
proposed revisions marked for review and approval by the City (and in such case the City’s review
period shall be fifteen (15) Business Days after City’s receipt of the requested modification). Sets
of the Basic Concept Plan shall be submitted in writing over the signature of Developer or a
representative duly authorized by Developer in writing. Approval by the Deputy City Manager –
Real Property shall not be unreasonably withheld, conditioned or delayed if such modifications
are Minor Modifications but shall be in the sole discretion of the Deputy City Manager – Real
Property if he or she determines they are Major Modifications. If approved, the Deputy City
Manager –Real Property or designee shall endorse its approval on one set of such modified Basic
Concept Plan and return it to Developer. Subject to the preceding provisions of this Section 8.5.6,
Developer shall make changes in response to the City’s notice of disapproval and resubmit such
Basic Concept Plan to the City for review and approval in accordance with the provisions of this
Section 8.5.6 (and in such case the City’s review period shall be ten (10) Business Days). Provided
the documents are submitted substantially concurrently to the Real Property Department and the
Community Development Department, such reviews shall take place substantially concurrently.
8.5.7Approved Plans. Upon approval by the City of each of the matters
described in the definition of Approved Plans, the Approved Plans shall govern development of
the Project Improvements. In addition to any other rights to approve or disapprove the construction
level drawings in its Governmental Capacity, the City may, in its Proprietary Capacity and without
limiting the rights of the City in its Governmental Capacity, disapprove any construction level
drawings that represent Major Modifications to the Entitlements or previously approved Basic
Concept Plan. Developer shall not construct any Project Improvements on the Real Property unless
the same are shown in the Approved Plans or unless the prior written consent of the City is obtained
to any modification thereof. To the extent of any inconsistencies between the plans identified in
the Scope of Development or the Site Plan and the Approved Plans, the Approved Plans shall
govern and control as to the development of the Real Property.
8.6Financial Capability and Budget Statement.
8.6.1Financial Capability. Developer understands and agrees that following the
Close of Escrow, the City reserves the right to request in writing from Developer reasonable
additional financial information which shall be comprised of current audited financial statements
to the extent then available without any additional cost to Developer, including information, data
and commitments, to ascertain the depth of the financial capability of Developer or other equity
participants, to meet the financial obligations required by this Agreement. After the Close of
Escrow, and thereafter until the later of Recording by the City of the Active Adult Project
Certificate of Compliance and the AL/MC Project Certificate of Compliance, Developer shall
maintain adequate financial capacity to perform its obligations under this Agreement and the Other
Agreements with respect to the Property and the Project and shall assure that each Equity Investor
has the Liquid Assets to fund the required equity for the Project, as determined by the City in its
sole discretion, and each Guarantor, for the term of the Guaranty, continues to satisfy the Minimum
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Asset Standards as the same may be modified by the City pursuant to Section 8.9.5. In addition, if
the City is not reasonably satisfied with any written financial information provided by Developer
or any Equity Investor, the City shall be entitled to obtain further information from Developer with
respect thereto (excluding audited financial statements except to the extent then available without
any additional cost to Developer) as may be necessary to establish that the financial resource
available to Developer are sufficient, as determined by the City in its sole discretion, when
combined with the other sources and uses set forth in the Financing Plans to fund the Development
Costs.
8.6.2Budget Statement. From the Close of Escrow until the later of Recording
by the City of the Active Adult Project Certificate of Compliance and the AL/MC Project
Certificate of Compliance, if requested by the City, Developer shall provide a Budget Statement
for the Project in the format required by the applicable Financing Plan. The Budget Statement shall
be delivered to the City by Developer within thirty (30) calendar days following the later of receipt
by Developer of the City’s written request therefor and the expiration of the applicable quarter;
provided that the City shall make such request no more than once annually. Notwithstanding the
foregoing, the delivery of such Budget Statement shall be for informational purposes only and in
no event shall the City be entitled to declare a Potential Default or Material Default, or exercise
any of its remedies pursuant to this Agreement, based on the contents of such Budget Statement
absent an actual Potential Default or Material Default under one of the other covenants or
obligations of Developer set forth in this Agreement. All Budget Statements submitted in response
to request by the City shall be subject to the confidentiality provisions set forth in Sections 4.6.1
and 18.24.
8.7Fees and Exactions.
8.7.1Developer Acknowledgements. Developer acknowledges and agrees that:
(i) the development of the Project, together with the development of the remainder of Tustin
Legacy, will contribute to the need for Tustin Legacy backbone infrastructure located off of the
Development Parcel, including Tustin Legacy roadway improvements; traffic and circulation
mitigation to support the Tustin Legacy project; domestic and reclaimed water; sewer; telemetry;
storm drains and flood control channels; utilities backbone (electricity, gas, telephone, cable,
telecommunications, etc.) based on the allocations to the Development Parcel in the City’s Tustin
Legacy Backbone Infrastructure Financing Program-2024 Update adopted January 21, 2025 as the
same may be amended from time to time (“Tustin Legacy Backbone Infrastructure Program”);
(ii) Developer has had an opportunity to review the budgets, plans and projections developed by
the City in connection with the Tustin Legacy Backbone Infrastructure Program and the studies
prepared by the City in connection therewith; (iii) there is an essential nexus between the
imposition on the Project of the Project Fair Share Contribution and a legitimate governmental
interest; and (iv) the Project Fair Share Contribution is roughly proportional to and reasonably and
rationally related to the impacts that will be caused by development of the Project.
8.7.2Project Fair Share Contribution. Developer is responsible to pay the
Project Fair Share Contribution which shall be in addition to the Purchase Price and paid by
Developer at Close of Escrow pursuant to Section 4.2.2. Developer waives its right to fund all or
any portion of such contribution pursuant to a community facilities district, including pursuant to
any special tax for the development of facilities within the Tustin Legacy Backbone Infrastructure
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Program or pursuant to other community facilities district. For avoidance of doubt, the City
acknowledges and agrees that, notwithstanding the provisions of Section 8.7.1, the preceding
provisions of this Section 8.7.2 or any provision elsewhere in this Agreement to the contrary, the
amount of the Project Fair Share Contribution payable by Developer at the Close of Escrow
represents and constitutes the full amount of costs of the Tustin Legacy backbone infrastructure
allocated to the Real Property as described in Section 8.7.1 pursuant to the Tustin Legacy
Backbone Infrastructure Program and such payment of the Project Fair Share Contribution by
Developer constitutes full, complete and final satisfaction of the Project Fair Share Contribution
under the Tustin Legacy Backbone Infrastructure Program with respect to the Property and the
Project and no further payment shall be owed or payable thereunder with respect thereto.
8.7.3Community Facilities District.
8.7.3.1The City has previously established Community Facilities District
No. 18-01 (“District”). The City, by action of the City Council, intends to annex the Real Property
into the District as CFD 18-01 Zone 5 prior and as a condition to the Close of Escrow and to adopt
an RMA for CFD 18-01 Zone 5 imposing assessments upon each Room located on the AL/MC
Real Property and upon the Residential Units in the Active Adult Real Property, provided that for
the period in which any Units are designated as Lower Income Units, such Units shall be excluded
from any obligation under the RMA. When CFD 18-01 Zone 5 is created, the District shall impose
a special tax and lien upon the Real Property in accordance with the terms of the instruments
governing CFD 18-01 Zone 5, the RMA and the requirements of this Agreement. At the time of
annexation into the District, the Real Property will be de-annexed from City of Tustin Community
Facilities District No. 13-01.
8.7.3.2Subject to the annexation documents and RMA for CFD 1801 Zone
5 being consistent with the Maximum Tax Burden Schedule attached to this Agreement as
Attachment 23 and the other terms of this Agreement related to CFD 18-01 Zone 5, including all
of the terms in this Section 8.7.3, Developer, on behalf of itself and its Successor Owners, agrees
to the imposition of the special tax lien of CFD 18-01 Zone 5, as described in Section 8.7.3.1, the
RMA and the new CFD 18-01 Zone 5 Special Tax, the proceeds of which shall be used by the City
to fund a portion of City essential services, including but not limited to police protection services,
fire protection services, ambulance and paramedic services, recreation program services,
maintenance of City-owned parks, parkways and open space, flood and storm protection and street
and sidewalk maintenance at Tustin Legacy. Unless otherwise agreed by the City and Developer,
each in its sole discretion, the following shall apply to CFD 18-01 Zone 5 formed by the City:
8.7.3.3The term of the CFD 18-01 Zone 5 Special Tax component imposed
upon the Real Property shall not be time limited in any manner unless determined by the City in
its sole discretion.
8.7.3.4At the Closing Date, the RMA shall establish the annual tax on the
Real Property that shall not exceed the amount shown on Attachment 23. Thereafter, the special
taxes in the RMA for CFD 18-01 Zone 5 may escalate annually at a rate equal to the greater of (i)
the change in the Consumer Price Index during the twelve (12) months prior to December of the
previous Fiscal Year and (ii) two percent (2.00%), subject to and as further described in the RMA.
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8.7.3.5The CFD 18-01 Zone 5 Special Tax shall be levied only against
Developed Property (i.e., property that has received a building permit for new construction, as
defined in the RMA).
8.7.3.6The City has provided Developer with the opportunity to review and
provide input on all documents and budgets relating to the formation of CFD 18-01 Zone 5,
annexation of the Real Property into CFD 18-01 Zone 5 and adoption of the RMA and the RMA
documents expected to be submitted for the agenda package related to the annexation of the Real
Property to CFD 18-01 Zone 5 and adoption of the RMA by the City Council and Developer has
approved the same prior to the Effective Date.
8.7.3.7Developer acknowledges and agrees that its development plan for
the Project will not require the formation of any community facilities district for the financing of
public facilities and that neither assessment district nor community facilities district proceeds will
be used to reimburse Developer for its Development Costs, including the Project Fair Share
Contribution or specific infrastructure costs for the Project. Developer, on behalf of itself, each
Successor Owner and each Successor Ground Lessee, waives its right to fund all or any portion of
the development of the Project pursuant to a community facilities district. Developer will not
oppose a determination by the City to annex the Real Property into CFD 18-01 Zone 5, provided
that the City, the District and the special taxes levied by CFD 18-01 Zone 5 comply with this
Agreement. If due to a Default by the City, the Close of Escrow takes place pursuant to
Section 15.3.2 prior to annexation of the Real Property into CFD 18-01 Zone 5 by the City or prior
to Final District Approval, then the City shall nonetheless have the right to annex the Real Property
into the CFD 18-01 Zone 5 (or, if challenged to form a new district) and Developer hereby agrees
that it shall support the annexation of the Real Property into such CFD 18-01 Zone 5 or new district
provided the same comports with the terms of this Section 8.7.3.
8.7.3.8The City shall not be prohibited by the terms of this Agreement from
subjecting the Real Property and/or the Project Improvements thereon, to any increase in ad
valorem real property tax pursuant to a City of Tustin-wide election, provided that nothing in this
Agreement shall be construed to constitute a waiver by Developer of its right or ability to dispute
or oppose passage of a City of Tustin-wide bond, the proposed formation of any special district or
taxing authority in connection therewith, or the imposition of any such tax, or its right to dispute
any portion of the Real Property’s assessed value.
8.7.3.9With respect to the Real Property, the CFD 18-01 Zone 5 Special
Tax shall be levied only against Developed Property (as referenced in Attachment 23), i.e., the
Real Property that has received a building permit for new construction.
8.7.4Master Marketing Program Fees. Developer acknowledges that the City
(in its Proprietary Capacity) requires that all builders within Tustin Legacy contribute a master
marketing program fee towards the marketing of Tustin Legacy by the City. In complete
satisfaction of such obligation by Developer, Developer shall pay to the City through Escrow
Holder at the Close of Escrow a one-time master marketing program fee of Fifty Thousand Dollars
($50,000.00). The City acknowledges and agrees that this payment shall satisfy all obligations of
Developer to contribute to the master marketing program or any future master marketing program
for the Project and that Developer shall have no additional obligations on account thereof after the
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payment of such fee at the Close of Escrow. The provisions of this Section shall survive the Close
of Escrow.
8.7.5Other Fees and Assessments. Developer acknowledges and agrees that in
addition to City fees, fees may be imposed by other Governmental Authorities with jurisdiction
over the Project and/or the Property and payment of any such fees and assessments shall be at
Developer’s sole cost, including (a) the Foothill/Eastern Corridor Fee, (b) state-mandated school
impact fees and assessments by the Santa Ana Unified School District, (c) Orange County School
Facility Bonds, if any, and (d) utility meter and connection fees from the Irvine Ranch Water
District and other utilities and districts as applicable.
8.7.6No Quimby Act Fees or Park Fees. Except as set forth in the Development
Agreement, all fees and/or dedications required in connection with the Project pursuant to the
Quimby Act, California Government Code Section 66477, are included within the Project Fair
Share Contribution and Developer shall not have any additional liability on account thereof.
8.8Grading Work; Design and Construction of Improvements.
8.8.1Grading Work. Following the Close of Escrow, Developer shall cause the
Grading Work to be performed. Grading Work shall be performed in accordance with the Approved
Plans and the requirements of this Agreement within the time period set forth in the Schedule of
Performance.
8.8.2Horizontal Improvements. Developer shall (i) submit plans for Horizontal
Improvements (other than Landscape Improvements) for approval by the City within the time
periods set forth in the Schedule of Performance, (ii) promptly obtain permits for the Horizontal
Improvements following City approval of the Approved Plans and (iii) when authorized by this
Agreement or the Other Agreements, to commence construction of and diligently prosecute
construction of the Horizontal Improvements in accordance with and subject to this Agreement
promptly after the Close of Escrow.
8.8.3Vertical Improvements. Developer shall promptly obtain permits for the
Vertical Improvements following City approval of the Approved Plans and shall commence
construction of and diligently prosecute construction of the Vertical Improvements to Completion
in accordance with the Schedule of Performance. Upon satisfaction of the requirements to achieve
the Vertical Improvements Commencement Date, Developer shall notify the City in writing by
submitting an executed original of the Vertical Improvements Commencement Date Certificate in
substantially the form and substance of the certificate attached to this Agreement as Attachment
13. Upon confirmation by the City that the Vertical Improvements Commencement Date has
occurred and provided that there is then no Default under this Agreement or the Other Agreements,
the City shall countersign and cause Recording of the Vertical Improvements Commencement Date
Certificate.
8.9Guaranty and Guarantor.
8.9.1Approval of Guarantor. The City shall have the right to review and
approve, in its sole discretion, the proposed Guarantor and each and every replacement Guarantor
for the Project. Guarantor shall throughout the Term of this Agreement, meet the Minimum Asset
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Standards. Developer shall cause the proposed Guarantor to deliver evidence of the financial
capacity of the proposed Guarantor, authority of the proposed Guarantor to provide the Guaranty,
and copies of all documents evidencing formation, good standing and authority requested by the
City, including providing information to assure that the proposed Guarantor meets the Minimum
Asset Standards (provided that if any Transfer is proposed to take place following the Close of
Escrow, Developer or Transferee shall provide information regarding the Liquid Assets and Net
Worth of the proposed guarantor anticipated at the time at which the Guaranty would be given,
and the City’s review of such information shall not be deemed to be City’s approval of Guarantor,
which shall be provided if at all, as a condition for the benefit of the City at the Close of Escrow
and Transfer). Following Close of Escrow, Developer shall cause Guarantor to deliver, in
accordance with the terms of the Guaranty, periodic current financial statements of Guarantor to
assure that Guarantor continues to meet the Minimum Asset Standards. Following Close of
Escrow, if Developer or any Transferee desires to replace its existing Guaranty or the approved
Guarantor, then in addition to satisfaction of the above requirements, the replacement Guarantor
shall provide a guaranty in the form and substance of the Guaranty with such modifications from
the form of Attachment 14A as the City may require or agree to in its sole discretion.
8.9.2Deliverables at Close of Escrow. At the Close of Escrow, Developer shall
deliver a Guaranty from a Guarantor approved by the City in its sole discretion (subject to the
following sentence). As of the Effective Date, the City has reviewed and confirmed that as of the
date of review the Rebecca P. Samberg 2018 Revocable Trust, created under a trust instrument
dated March 26, 2018,satisfies the financial requirements to serve as the Guarantorfor the Project.
Developer shall cause Guarantor to provide to the City (i) evidence and written assurances that
Guarantor has financial capacity that meets the Minimum Asset Standards, (ii) a Guarantor
Original Certificate and (iii) a Guaranty Legal Opinion. If Developer or any Transferee desires to
replace its existing Guaranty or the approved Guarantor, then in addition to satisfaction of the
above requirements, replacement Guarantor shall provide a guaranty in the form and substance of
the Guaranty with such modifications from the form of Attachment 14A as the City may require
or agree to in its sole discretion.
8.9.3Guarantor Illiquidity Event; Developer Default.The Guaranty requires
Guarantor to maintain the Minimum Asset Standards and to comply with certain related covenants,
and the failure of Guarantor to do so is referred to in the Guaranty as a Guarantor Illiquidity Event.
Until termination of the obligations of Guarantor under the Guaranty, Developer shall cause
Guarantor to meet the Minimum Asset Standards and to provide replacement financial assurances
in the event Guarantor fails to meet the Minimum Asset Standards. Prior to the Close of Escrow
and, if applicable, provision by Developer of any replacement Guaranty, Guarantor and the City
shall enter into a written agreement upon terms approved by City, in its reasonable discretion,
establishing the procedures by which Guarantor shall furnish specified financial reports to the City
on a regular basis, but not more often than quarterly, to assure that the Minimum Asset Standards
are met and that no Insolvency Event has occurred with respect to the Guarantor (the failure of any
such standard being, a “Guarantor Illiquidity Event”). The failure of Developer to deliver or
cause others to deliver when due the financial reporting information to the City as required by this
Section 8.9.3 and any subsequently adopted procedures shall be a Material Default of Developer
under this Agreement subject to the cure period provisions set forth in Sections 14.2.1 and 8.9.4
for a Guarantor Illiquidity Event.
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8.9.4Developer Cure of Guarantor Illiquidity Event. If a Guarantor Illiquidity
Event occurs, the City’s notice to Developer of the existence of the Guarantor Illiquidity Event
shall constitute a declaration by the City of a Material Default by Developer pursuant to
Section 14.2.1. To cure such Material Default, Developer shall be required to provide the City with
additional security satisfactory to the City by, at Developer’s election (i) providing the City with a
Guaranty from a replacement or supplemental guarantor or guarantors acceptable to the City in its
sole discretion (and with such modifications from the form of Attachment 14A as the City may
require or agree to in its sole discretion), or (ii) furnishing the City with another form of security
such as a pledge of specified assets or completion bond, in each case in a manner meeting the
requirements of the City in its sole discretion.
8.9.5Intentionally Omitted.
8.9.6Guaranty Effectiveness. Developer, on behalf of itself and each Successor
Owner, and the City on behalf of itself and its successors and assigns, hereby agree that
notwithstanding any other term of this Agreement, Guaranty provided at the Close of Escrow (or,
if applicable, any replacement Guaranty provided to and approved by the City pursuant to this
Agreement) as the same may be reaffirmed by any Reaffirmation of Guaranty provided to the City,
shall remain in effect as to the Project and the Property until the later of the Recording by the City
of the Active Adult Project Certificate of Compliance and the AL/MC Project Certificate of
Compliance, or for such longer period specified in the applicable Guaranty or any reaffirmation
thereof, and the Guarantor shall not be released therefrom, except as otherwise expressly provided
in the Guaranty unless the Guaranty is replaced by an executed new Guaranty from a Guarantor
approved by the City in accordance with Section 8.9.1 and, if applicable, Section 8.9.2.
8.10Replacement of Equity Investor.
If as a result of a Transfer or for any other reason Developer has identified a new Equity
Investor that has not previously delivered an Equity Investor Original Certificate or entered into
an Equity Commitment, Developer shall identify a new Equity Investor that, in the determination
of the City in its sole discretion (i) is a Qualified Equity Investor and (ii) has sufficient Liquid
Assets and Net Worth to fund all Development Costs for the Project as described in the Financing
Plan or Updated Financing Plan for the Project, and in connection with such approval Developer
shall cause the Equity Investor to deliver to the City those items set forth in Section 4.6.2.3 and
the form of Equity Commitment, each of which shall be subject to approval of the City in its sole
discretion (and only upon City approval in its sole discretion of each of the foregoing shall the
proposed Equity Investor be deemed an Approved Equity Investor). Notwithstanding the
foregoing, the City hereby approves the Initial Equity Investoras an Approved Equity Investor.
8.11Development Covenants.
With respect to construction of the Project and the Project Improvements, Developer, on
behalf of itself and each Successor Owner, hereby covenants and agrees as follows:
8.11.1Developer shall maintain throughout the Term sufficient equity, capital and
firm binding commitments for financing necessary to (i) pay through Completion, all costs of
development, construction, marketing, sale and/or leasing, operation and management of all the
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Project and the Project Improvements as defined in the Scope of Development and the Approved
Plans; and (ii) enable Developer to perform and satisfy all the covenants of Developer contained
in this Agreement and the Other Agreements. Developer shall not undertake any additional project
if it could reasonably be expected to jeopardize the sufficiency of any equity, capital and firm and
binding commitments for the purposes expressed in the preceding sentence.
8.11.2The development of the Project shall be done in a professional and
competent manner. Developer shall, and shall cause all other Persons carrying out work on the
Real Property to perform all work required to construct and Complete the Project, the Project
Improvements and related work as a High Quality Project in accordance with the Approved Plans,
the Entitlements, the Development Permits, the Design Guidelines and all Governmental
Requirements and at the level of quality set forth in the Scope of Development.
8.11.3Developer shall be responsible for the timeliness and quality of all work
performed and materials and equipment furnished in connection with the Project, whether the
work, materials and equipment are performed and furnished by Developer or through contractors,
subcontractors (of all tiers) and suppliers.
8.11.4Developer shall not place, or allow to be placed, on its interests in the
Property, the Project Improvements or the Project, or any portion thereof, any Mortgage, except as
provided in this Agreement with respect to the Project.
8.11.5Developer shall not place, or allow to be placed, on its interests in the
Property or the Project Improvements or any portion thereof any encumbrance or lien, including
any Construction Lien.
8.11.6Developer shall, within thirty (30) Business Days following receipt of
notice thereof, cause to be removed or bonded against (such bonding to be by the provision of
bonds satisfying California statutory requirements) any and all mechanic’s liens, stop notices
and/or bonded stop notices that are Recorded and/or served by contractors, subcontractors (of all
tiers) and suppliers in connection with the Project, including construction of the Project
Improvements on the Development Parcel or performance of other work by Developer or any of
the Developer Representatives in connection therewith, including conducting investigations or
causing the foregoing to be carried out (“Construction Liens”). Notwithstanding the foregoing,
Developer may contest the amount, validity or application, in whole or in part, of any Construction
Liens; subject, however, to the further requirement that neither the Property nor any Project
Improvements nor any part or interest in either thereof would be in any danger of being sold,
forfeited, attached or lost pending the outcome of such proceedings.If any such contest is finally
resolved against Developer, then Developer shall promptly pay the amount required to be paid,
together with all interest and penalties accrued thereon. Developer on behalf of itself, and each
Successor Owner, hereby agrees to indemnify, defend and hold the City Indemnified Parties free
and harmless from and against any and all Claims arising from or related to failure to pay for
construction of the Project Improvements or other work related thereto, including costs to remove
or bond any Construction Liens, including costs to remove or bond any Construction Liens for
work performed on the Real Property to the extent (i) Accrued during its respective period of
ownership thereof, and (ii) with respect to Developer only, Accrued during such longer period
between the Effective Date and the date of Recording by the City of a Certificate of Compliance
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as to the Real Property if Developer is not released pursuant to Article 2; provided, however, that
neither Developer nor any Successor Owner shall have liability or responsibility for such Claims
for work performed by the City or any contractor of the City that is claiming a right to a
Construction Lien on any portion of the Real Property and provided further that the foregoing shall
not apply as to any portion of the Real Property for which a Certificate of Compliance has been
Recorded by the City. For the avoidance of doubt, “any contractor of the City” does not mean
Developer, each Successor Owner or any Person claiming by, through or under Developer or any
Successor Owner.
8.12City Rights of Access.
In addition to any rights it may have in its Governmental Capacity, representatives of the
City shall have the reasonable right of access to all portions of the Development Parcel and the
Project Improvements, upon not less than two (2) Business Days prior written notice to Developer
(except in the event of an emergency, in which case no such prior notice shall be required), 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.
8.13Disclaimer of Responsibility by City and Exculpation.
8.13.1Disclaimer of Responsibility. The City neither undertakes nor assumes nor
will have any responsibility or duty to Developer or any Successor Owner, nor any Developer
Representatives, any End User or any other Person to review, inspect, supervise, pass judgment
upon or inform Developer, any Successor Owner, any End User or any other Person of any matter
in connection with the development or construction of the Project Improvements or the approval
of any maps, including the Horizontal Improvements, the Vertical Improvements or the Approved
Plans, any Basic Concept Plan or component thereof and grading plans with respect to the
foregoing, whether regarding the quality, adequacy or suitability of the plans, any labor, service,
equipment or material furnished for development of the Project or other work related to the Project
Improvements, any Person furnishing same, or otherwise. Developer, any Successor Owner, any
End User and all other Persons shall each rely upon its or their own judgment regarding such
matters, and any review, inspection, supervision, exercise of judgment or information supplied to
it by the City in connection with such matter is for the public purpose of developing the Project,
and none of the foregoing is entitled to rely upon information supplied by the City.
8.13.2Exculpation. The City shall not be liable in damages to Developer or to any
Successor Owner, any Developer Representatives, any End User or any other Person, on account
of (i) any approval or disapproval by the City, including by the City Manager or designee, made
in the Governmental Capacity and/or Proprietary Capacity of the City of any Entitlements,
Development Permits, design documents or maps, in connection with the Project, the Horizontal
Improvements, the Vertical Improvements, the Approved Plans, any Basic Concept Plan or
component thereof and grading plans with respect to the foregoing, whether or not defective or
whether or not in compliance with applicable laws or ordinances; (ii) any construction,
performance or nonperformance by Developer, or any Successor Owner, lessee, licensee or other
Person of any work on the Real Property, the Project Improvements, whether or not pursuant to
Approved Plans or whether or not in compliance with applicable laws or ordinances; (iii) any
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mistake in judgment, negligence, action or omission in exercising its rights, powers and
responsibilities under this Agreement or any other agreement between City and Developer in
connection with Sections 8.13.1 and 8.13.2(i) and (ii); and/or (iv) the enforcement or failure to
enforce any of the provisions of this Agreement. Each and every Person who makes design
submittals for approval agrees by reason of such submittal, and Developer, on behalf of itself, each
Successor Owner and all Persons claiming by, through or under Developer or each Successor
Owner agrees by acquiring an interest in the Property, the Project the Project Improvements or any
portion thereof or interest therein, not to bring any suit or action against the City seeking to recover
any such damages and expressly waives any such claim or cause of action for such damages which
it would otherwise be entitled to assert. The review of any design submittals shall not constitute
the assumption of any responsibility by, or impose any liability upon, the City as to the accuracy,
efficacy, sufficiency or legality thereof nor decrease or diminish any liability, duties,
responsibilities, or obligations of Developer or any Successor Owner under this Agreement or
otherwise.
8.13.3City Responsibility. Nothing in this Section 8.13 shall limit or be deemed
to limit the City’s express representations, warranties, covenants and obligations set forth in this
Agreement and the Other Agreements.
8.13.4No Supervision or Control. The City (whether acting in the Governmental
Capacity and/or Proprietary Capacity of the City) 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 Developer.
8.13.5Graded Condition of the Development Parcel. The City has previously
caused its contractor to rough grade the Development Parcel and such Development Parcel have
been certified by David Hoopfer, civil engineer for Michael Baker International, as to bridge
mounds on October 21, 2024 and January 27, 2026 and Jeremy Beck for Landmark Surveying on
January 16, 2026. Developer acknowledges that the City is delivering the Property as-is and does
not certify in any manner the grading or condition of the Development Parcel or any portion
thereof. Developer and each Successor Owner shall look solely to the engineers, consultants and
contractors and their respective certifications and not to the City for all purposes related to the
Grading Work performed, including the adequacy of the work and the certification(s).
8.13.6Survival. The provisions of this Section 8.13 shall be included in the
Special Restrictions, shall run with the land, shall remain in effect in perpetuity and shall survive
termination of this Agreement, the Close of Escrow, and the Recording by the City of both
Certificates of Compliance (or, if only one Certificate of Compliance, the Final Certificate of
Compliance) and shall not merge with any deed and shall be binding upon Developer, its
successors and assigns, each Successor Owner and each and every Person claiming by, through or
under Developer, including all End Users, for the benefit of the City and its Governmental
Successors, and from and after the Close of Escrow, and shall be binding upon and burden the Real
Property.
8.14Local, State and Federal Laws.
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Developer shall carry out the construction of the Project including all Project
Improvements subject to Section 8.1.3 and in conformity with all Governmental Requirements
including all applicable federal and State labor laws and regulations and shall, if and to the extent
required by applicable federal or State labor laws or regulations, pay prevailing wages meeting the
requirements of such laws and regulations; provided that Developer on behalf of itself, and each
Successor Owner reserves the right to reasonably contest such laws and regulations. Developer
and each Successor Owner shall carry out construction of the Project Improvements in compliance
with the requirements of this Section and each shall be fully responsible for determining whether
the foregoing wage requirements are applicable to the Project. Developer hereby agrees on behalf
of itself, each Successor Owner and each and every Person claiming by, through or under
Developer or any Successor Owner, but excluding End Users, to indemnify, defend and hold the
City and the City Indemnified Parties free and harmless from and against any and all Claims arising
from or related to applicability of the prevailing wage requirements imposed by any federal and
State labor laws and/or the compliance by Developer or Developer’s officers, directors, employees,
agents, representatives, consultants and/or contractors (at every tier) in construction of the Project
Improvements with the prevailing wage requirements imposed by any applicable federal and State
labor laws. For avoidance of doubt, Developer and each Successor Owner shall be liable pursuant
to this Section only with respect to work performed on a portion of the Real Property, (i) during
its respective period of ownership of such portion of the Real Property, and (ii) with respect to
Developer only, during such longer period between the Effective Date and the date of Recording
by the City of a Certificate of Compliance as to such portion of the Real Property until it is released
pursuant to Article 2 provided, however, that neither Developer nor any Successor Owner shall
have liability or responsibility for prevailing wage requirements for public improvements
performed by the City or any contractor of the City on any portion of the Property, and provided
further that the foregoing shall not relieve Developer or any Successor Owner of liability should
the City work trigger a determination that the Project or any Project Improvement is subject to
prevailing wage requirements. The City makes no representations nor warranties regarding the
applicability of prevailing wage laws. For the avoidance of doubt, “any contractor of the City”
does not mean Developer, each Successor Owner or any Person claiming by, through or under
Developer or any Successor Owner.
8.15Liens, Taxes and Assessments.
Developer and each Successor Owner shall pay prior to delinquency all real estate taxes
and assessments assessed and levied on or against all portions of the Property and/or the Project
Improvements, during the period of ownership thereof by such Developer or Successor Owner
provided that the foregoing shall not prohibit application by Developer or any Successor Owner
for a property tax welfare exemption with respect to the Active Adult Project. Developer shall not
place, or allow to be placed, on its interests in the Property, or any Parcel, Improvement or any
portion thereof, any Mortgage or encumbrance or lien not authorized by this Agreement.
Developer shall remove, or shall have removed, any levy or attachment made on its interests in the
Property, the Project Improvements (or any portion thereof) or shall assure the satisfaction thereof
within thirty (30) Business Days following receipt of notice thereof. Subject to Section 8.11.6 and
except as set forth in Sections 8.7.2 and 8.7.3, nothing contained in this Agreement shall be deemed
to prohibit Developer or any Successor Owner from contesting the validity or amount of any tax
or assessment or to limit the remedies available to Developer or such Successor Owner in respect
thereto. Developer on behalf of itself and each Successor Owner hereby agrees to indemnify,
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defend and hold the City Indemnified Parties free and harmless from and against any and all Claims
arising from or related to failure to pay liens, taxes and assessments assessed, levied to the extent
(i) Accrued during its respective period of ownership of the Real Property or any portion thereof,
and (ii) with respect to Developer only, Accrued during such longer period between the Effective
Date and the date of Recording by the City of the later of the Active Adult Project Certificate of
Compliance and the AL/MC Project Certificate of Compliance until it is released pursuant to
Article 2; provided that the foregoing shall not apply as to any portion of the Real Property for
which a Certificate of Compliance has been Recorded by the City.
8.16Duration of Article 8 Indemnities; Post-Certificate of Compliance Affiliate
Responsibilities.
The provisions, including the indemnities, set forth in Sections 8.11.6, 8.14 and 8.15 shall
survive the termination of this Agreement, the Close of Escrow and Recording by the City of both
Certificates of Compliance (or, if only one Certificate of Compliance, the Final Certificate of
Compliance), shall not merge with any deed and shall remain in effect for the Term of this
Agreement and, upon Recording of the Special Restrictions each shall run with the land for the
term of the Special Restrictions in accordance with the specific terms of Sections 8.11.6, 8.14 and
8.15, provided that following Recording by the City of a Certificate of Compliance for any portion
of the Real Property and notwithstanding the limitations set forth in Sections 8.11.6, 8.14 and 8.15
on the liability of each Owner during its respective period of ownership of a portion of the Real
Property, if any Owner (Transferor) Transfers all or any portion of its interest in the Real Property
to an Owner Affiliate (Transferee), the Transferee shall be deemed to have assumed and be liable
for the obligations of the Transferor and each consecutive prior Owner Affiliate Transferee as
though such Transferee had held joint ownership with Transferor and each consecutive prior
Owner Affiliate Transferee during their respective prior consecutive periods of ownership of the
Real Property or any portion thereof.
9.Certificate of Compliance.
9.1Completion; Schedule of Performance.
Subject to Section 18.7, following the Close of Escrow, Developer shall construct or cause
to be constructed the Project Improvements upon the Real Property and shall satisfy all Conditions
Precedent when and as required by this Agreement in accordance with the Schedule of
Performance.
9.2Certificate of Compliance Defined.
After Completion of all construction and development required to be undertaken by
Developer in conformity with this Agreement and in accordance with the Schedule of Performance
and the satisfaction by Developer of the Conditions Precedent set forth Sections 9.3.1 and 9.3.2,
the City shall execute and Record a Final Certificate of Compliance for the Real Property and the
Project; provided that if the Final Parcel Map is Recorded by the City prior to the Recording by
the City of the Final Certificate of Compliance, then upon Completion of the Active Adult Project
Improvements and satisfaction by Developer of the Conditions Precedent set forth in Section 9.3.1,
the City shall execute and Record a Certificate of Compliance as to the Active Adult Project
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(“Active Adult Project Certificate of Compliance”) and upon Completion of the AL/MC Project
Improvements and satisfaction by Developer of the Conditions Precedent set forth in Section 9.3.2,
the City shall execute and Record a Certificate of Compliance for the AL/MC Project (“AL/MC
Project Certificate of Compliance”) as the case may be and the later Recorded of the two
Certificates of Compliance shall be referred to as the Final Certificate of Compliance. The City
shall have no obligation to execute and Record any Certificate of Compliance unless and until all
Conditions Precedent thereto are satisfied. Each Certificate of Compliance shall be substantially
in the form and substance of the Certificate of Compliance attached to this Agreement as
Attachment 16 (each, a “Certificate of Compliance” and collectively, “Certificates of
Compliance”). Developer, on behalf of itself, each Successor Owner, and each and every Person
claiming by, through or under Developer or any Successor Owner, including each End User,
hereby consents to Recording by the City of each Certificate of Compliance as to the portion of
the Project and Real Property to which it applies, and to have the Final Certificate of Compliance
Recorded against the entirety of the Development Parcel if requested by the City, and confirms
that no further acknowledgement or consent by the then-Owners of the Real Property shall be
required in connection with such Recording(s). The Final Certificate of Compliance (or the Active
Adult Project Certificate of Compliance, if applicable) shall state the actual number of Residential
Units constructed on the Active Adult Real Property and the number of that total that are Lower
Income Units as of the date of execution thereof by the City, and the Final Certificate of
Compliance (or the AL/MC Project Certificate of Compliance, if applicable) shall state the total
number of Rooms constructed on the AL/MC Real Property as of the date of execution thereof by
the City and each shall establish the actual number of Residential Units or Rooms, as applicable,
allocated to Developer by the City pursuant to Section 4.1.2 and the Quitclaim Deed. The
provisions of this Section with respect to Recording by the City of the Certificates of Compliance
shall terminate if this Agreement terminates prior to Close of Escrow but shall survive any
subsequent termination of this Agreement, to preserve the right of the City and each subsequent
Developer to cause Recording by the City of the Certificates of Compliance as stated in this
Section. Except as specifically set forth in the Affordable Housing Declaration, the Recording by
the City of a Certificate of Compliance as to a portion of the Real Property and Project shall not
relieve Developer of its obligations under this Agreement and the Other Agreements as to portions
of the Property for which no Certificate of Compliance has been issued.
9.3Certificate of Compliance Conditions Precedent.
9.3.1Active Adult Project Conditions Precedent. If the Final Parcel Map is
Recorded prior to execution and Recording by the City of the first Certificate of Compliance, then
the following shall comprise the Conditions Precedent to the execution and Recording of the
Active Adult Certificate of Compliance, provided that if the Final Parcel Map is not Recorded
prior to Recording of the first Certificate of Compliance then as an additional Condition Precedent
for the Active Adult Project, all of the Conditions Precedent to execution and Recording by the
City of the AL/MC Project Certificate of Compliance shall also be satisfied and the certificate to
be issued shall be the Final Certificate of Compliance:
9.3.1.1Completion of (i) the Active Adult Project Improvements with the
number of Residential Units and the minimum number of Lower Income Units to be constructed
as depicted on the Approved Plans and all accompanying amenities, (ii) all Public Benefits
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Improvements (as defined in the Development Agreement) and (iii) all Landscape Improvements
shall have occurred;
9.3.1.2Final inspection by or on behalf of the City of the Active Adult Real
Property and the Active Adult Project Improvements constructed thereon and determination by the
City that all Active Adult Project Improvements have been Completed in conformance with this
Agreement, the Approved Plans and all Governmental Requirements;
9.3.1.3Issuance of a final certificate of occupancy by the City for the Active
Adult Project containing the number of Residential Units and Lower Income Units constructed
thereon as depicted on the Approved Plans;
9.3.1.4Written release or bonding for the Real Property in accordance with
California law of all Construction Liens or rights to record liens from the general contractor and
all subcontractors (at all tiers) having served valid preliminary 20-day notices, or, if none are filed,
the statutory period for filing liens having expired without any Construction Liens being filed
against or with respect to the Real Property;
9.3.1.5Payment by Developer to the City of all funds then owing to the City
under this Agreement and the Other Agreements with respect to the Project; and
9.3.1.6No Potential Default or Material Default by Developer under this
Agreement or default under the Other Agreements or default by Guarantor under the Guaranty
shall have occurred and be continuing.
9.3.2AL/MC Project Conditions Precedent. If the Final Parcel Map is
Recorded prior to execution and Recording by the City of the first Certificate of Compliance, then
the following shall comprise the Conditions Precedent to the execution and Recording of the
AL/MC Project Certificate of Compliance, provided that if the Final Parcel Map is not Recorded
prior to Recording of the first Certificate of Compliance then as an additional Condition Precedent
for the AL/MC Project, all of the Conditions Precedent to execution and Recording by the City of
the Active Adult Certificate of Compliance shall also be satisfied:
9.3.2.1Completion of (i) the AL/MC Project Improvements with the
number of Rooms to be constructed as depicted on the Approved Plans, and all accompanying
amenities, (ii) all Public Benefits Improvements (as defined in the Development Agreement) and
(iii) all Landscape Improvements shall have occurred;
9.3.2.2Final inspection by or on behalf of the City of the AL/MC Real
Property and the AL/MC Project Improvements constructed thereon and determination by the City
that all AL/MC Project Improvements have been Completed in conformance with this Agreement,
the Approved Plans and all Governmental Requirements;
9.3.2.3Issuance of a final certificate of occupancy by the City for the
AL/MC Project containing the square footage of buildings within the AL/MC Project and the
number of Rooms constructed as depicted on the Approved Plans;
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9.3.2.4Written release or bonding in accordance with California law of all
Construction Liens or rights to record liens from the general contractor and all subcontractors (at
all tiers) having served valid preliminary 20-day notices, or if none are filed, the statutory period
for filing liens having expired without any Construction Liens being filed against or with respect
to the Real Property;
9.3.2.5Payment to the City of all funds then owing to the City under this
Agreement and the Other Agreements with respect to the Project; and
9.3.2.6No Potential Default or Material Default by Developer under this
Agreement or default under the Other Agreements or default by Guarantor under the Guaranty
shall have occurred and be continuing.
9.4Conclusive Presumption.
Each Certificate of Compliance shall be, and shall so state, conclusive determination of
satisfactory completion of the obligations of Developer pursuant to this Agreement with respect to
the portion of the Project and Real Property to which it is applicable and shall be evidence of
termination of this Agreement, subject only to the provisions referenced in Section 9.7 and the
Other Agreements affecting the applicable Property, each of which shall survive in accordance
with its respective terms.
9.5Not Evidence.
Neither execution nor Recording by the City of any Certificate of Compliance is a notice
of completion as referred to in Section 8182 of the California Civil Code.
9.6City Obligations.
The City shall not unreasonably withhold, condition, or delay execution or Recording of a
Certificate of Compliance when all the Conditions Precedent thereto are satisfied. Developer shall
provide evidence of satisfaction of the foregoing conditions. If the City refuses or fails to execute
and Record a Certificate of Compliance after written certification from Developer which shall
include evidence of satisfaction of each of the applicable Conditions Precedent to such execution
and Recording set forth in this Article 9, and provided each of the applicable conditions established
in Section 9.3 have been satisfied, the City shall, within fifteen (15) Business Days of the written
request, provide a written statement which details the reasons the City refused or failed to execute
and Record such Certificate of Compliance. The statement shall also contain a statement of the
actions that Developer must take to obtain the Certificate of Compliance. The City shall cause each
Certificate of Compliance to be Recorded within five (5) Business Days after execution thereof.
9.7Effect of Certificate of Compliance; Termination of Agreement.
9.7.1Termination of Portions of Agreement Upon Recording. Each Certificate
of Compliance shall be in such form as to permit it to be Recorded. After Recording by the City
of a Certificate of Compliance this Agreement shall terminate as to the portion of the Real Property
against which it is Recorded; provided, however, such termination of this Agreement with respect
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to such portion of the Property shall not affect the continued applicability of any provisions in this
Agreement or in the Other Agreements that survive Recording of such Certificate of Compliance.
9.7.2Survival of Certain Provisions. In addition to the matters set forth in the
Special Restrictions, the following shall as to each portion of the Real Property and Project to
which the Recorded Certificate of Compliance applies survive the Recording of the Certificate of
Compliance and remain in full force and effect for the period set forth in each, and shall be binding
upon Developer, its successors and assigns, each Successor Owner and each and every Person
claiming by, through or under Developer or any Successor Owner of the Property or portion thereof
including all End Users, for the benefit of the City and its Governmental Successors, and from and
after the Close of Escrow, and shall be binding upon and burden the Real Property, provided that
upon sale or transfer to an End User, the obligations set forth in Sections 9.7.2.1 and 9.7.2.3 shall
not survive with respect to or bind any End User or any of their respective successors and assigns:
9.7.2.1The provisions of Section 11.1.4 of this Agreement shall survive
until the expiration of the time period for provision of the environmental insurance policy
described thereby; and the obligation to provide such insurance policy shall remain in effect as to
the Real Property for the applicable period specified in Section 11.1.4 and no Developer, nor any
successor or assign, nor any Successor Owner shall modify or terminate any prepaid environmental
insurance policy in effect as of the execution and Recording by the City of any Certificate of
Compliance;
9.7.2.2Any and all obligations contained in the Federal Deed shall survive
in perpetuity or for such lesser time period as may be expressly set forth therein, unless such
obligations are released by the Federal Government; and
9.7.2.3The provisions of Section 11.1.1 requiring liability insurance shall
be maintained in full force and effect until the Recording by the City of a Certificate of Compliance
to the portion of the Real Property against which it is Recorded; and, subject to the provisions of
Section 11.1.1, so long thereafter as necessary to cover any Claims of damages suffered by persons
or property prior to Recording by the City of a Certificate of Compliance, resulting from any acts
or omissions of Developer, Developer’s employees, agents, contractors, suppliers, consultants or
other related parties.
9.7.3Effect of Recording. Upon Recording by the City of a Certificate of
Compliance, any Person then owning or thereafter purchasing, leasing, or otherwise acquiring any
interest in the Real Property released by the applicable Certificate of Compliance shall not (because
of such ownership, purchase, lease or acquisition) incur any obligation or liability under this
Agreement with respect to such interests, except as set forth in the Quitclaim Deed, Special
Restrictions, the Affordable Housing Declaration, the SLA Covenant, the Access Easement
Agreement, the Bioswale Easement, the Landscape Installation and Maintenance Agreement and
the Development Agreement which shall each remain in effect for the term specified therein.
Neither execution or Recording by the City of a Certificate of Compliance shall waive any rights
or claims that the City may have against any Person 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 Developer’s obligations to others not a party to this Agreement.
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9.7.4Effect on Guaranty. The Guaranty, as the same may be reaffirmed at each
Transfer by a Reaffirmation of Guaranty, or, if applicable, any alternative security provided by
Developer and approved by the City in its sole discretion, shall remain in full force and effect for
the period specified in Section 8.9.6.
9.7.5Survival. Notwithstanding anything to the contrary set forth in this
Agreement, the provisions of this Section 9.7 shall survive as to each portion of the Property and
the Project the termination of this Agreement until the Recording by the City of a Certificate of
Compliance as to such portion of the Real Property and Project and for such longer period as set
forth in the Certificate of Compliance.
10.Indemnification and Environmental Provisions.
10.1Developer’s Indemnification for Non-Environmental Matters.
As a material part of the consideration for this Agreement and to the maximum extent
permitted by law, Developer on behalf of itself and its successors and assigns, each Successor
Owner and each and every Person claiming by, through or under Developer or any Successor
Owner, but excluding any End Users, hereby agrees to indemnify, protect, defend, assume all
responsibility for and hold harmless the City Indemnified Parties from and against any and all
Non-Environmental Claims, to the extent (a) caused by the following, or (b) resulting or arising
from the following during the period set forth below, provided, however, that this Section 10.1
shall not during the period prior to Close of Escrow apply to the matters addressed by Section 5.2:
(i)Developer’s marketing, sale or use of the Property or
construction on the Real Property;
(ii)all acts and omissions of Developer in connection with the
Property, the Project, the Project Improvements, and/or any portion of any of the foregoing;
(iii)any plans or designs for the Project Improvements s,
prepared by or on behalf of Developer, including any errors or omissions with respect to
such plans or designs;
(iv)any loss or damage to the City resulting from any inaccuracy
in or breach of any representation or warranty of Developer, or resulting from any Potential
Default or Material Default by Developer, under this Agreement, including any such loss
or damage resulting from the exercise or breach of the license provided in Section 5.1 or
the breach of the obligations of Developer under Section 8.11;
(v)the non-performance or breach by Developer or the
Developer Representatives, of any term or condition of this Agreement or the Other
Agreements;
(vi)any development or construction of the Project
Improvements and/or other structures or facilities by Developer, any Developer Affiliate
or the Developer Representatives, whether regarding the quality, adequacy or suitability of
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any labor, service, equipment or material furnished to the Real Property, any Person
furnishing the same, or otherwise; or
(vii)Any Claims in any lawsuits and writ proceedings seeking to
make records public that Developer requests the City to protect as confidential pursuant to
Section 18.24.3.
(viii)Any Claim for penalties or other remedies for violation of
the SLA Regulations.
Notwithstanding the foregoing, Developer shall not be obligated to indemnify any of the
City Indemnified Parties to the extent caused by or arising or resulting directly or indirectly from
(a) the gross negligence or willful misconduct or fraud of the City Indemnified Parties, (b) any
uncured Material Default by the City with respect to any of the representations or warranties of
the City set forth in Sections 3.3 or 18.12.2 or any of the covenants or obligations set forth in this
Agreement, in either case provided that the Material Default is directly related to the Claim, or (c)
any uncured material default by the City with respect to any of the covenants or obligations set
forth in any Other Agreement that is directly related to the Claim. Nothing in this Section shall
limit or negate the terms of the indemnity provided in Section 5.2.The indemnification provisions
in this Section 10.1 shall not apply to Environmental Claims. Developer’s indemnification
obligations to the City regarding any Environmental Claims are exclusively addressed in Section
10.2.
Developer’s obligations under clauses (i), (iii), (iv), (v) and (viii) of this Section 10.1 shall
apply from and after the Effective Date, and Developer’s obligations under clauses (ii), (vi) and
(vii) of this Section 10.1, shall apply from and after the Close of Escrow. The indemnity obligations
in this Section 10.1 shall remain in effect and shall be binding upon the Real Property and each
Developer and each Successor Owner during the period of each such Person’s ownership of any
portion of the Real Property to the extent of such Person’s ownership therein and for Claims
Accruing during such period, provided that upon any Transfer, if the Transferor is not released
pursuant to Section 2.3, it shall be jointly and severally liable with the Transferee and each
Successor Owner thereafter until it is released by the City. Notwithstanding the foregoing, (1) upon
Recording by the City of a Certificate of Compliance as to a portion of the Real Property, the
indemnity obligations set forth in this Section 10.1 shall terminate as to any prior unreleased Person
that has Transferred the Property other than for matters Accruing during the period in which it was
jointly and severally liable pursuant to the preceding sentence and (2) any Person acquiring an
interest in the Real Property after such Recording of a Certificate of Compliance shall be liable
under this Section 10.1 for Non-Environmental Claims Accruing during its period of ownership
of the Real Property or portion thereof. Notwithstanding the foregoing or any other provision of
this Agreement, such Recording of the City of the Certificate of Compliance (a) the indemnity,
defense and hold harmless provisions of Section 10.1(viii) shall remain in full force and effect
until termination of the Special Restrictions as to the Real Property, but shall not run with the land
and shall instead continue as a personal and ongoing obligation of the Person that is the Developer
under this Agreement at the time of Recording of the Certificate of Compliance and (b) shall be
Guaranteed by the Guarantor under the Guaranty until termination of the Special Restrictions as
to the whole of the Real Property.
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The provisions of this Section 10.1 and Sections 10.3 through 10.9 as they pertain to non-
Environmental Claims shall be included in the Special Restrictions, shall run with the land as set
forth in this Agreement and the Special Restrictions in accordance with their terms, and shall
survive termination of this Agreement, the Close of Escrow, and the execution and Recording by
the City of each Certificate of Compliance shall not merge with any deed and shall be binding
upon Developer, each Successor Owner of the Property or portion thereof, for the benefit of the
City and its Governmental Successors, and from and after the Close of Escrow, and shall be
binding upon and burden the Real Property provided, however, that upon sale or transfer of the fee
interest in the Real Property or any portion thereof to an End User, the provisions of such Section
terminate automatically as to such End User and shall cease to run with the land acquired in fee by
such End User or any of its respective successors and assigns.
10.2Environmental Indemnity.
As a material part of the consideration for this Agreement, and effective upon the Close of
Escrow, Developer on behalf of itself and its successors and assigns and its Successor Owners and
each and every Person claiming by, through or under Developer or any Successor Owner, but
excluding any End Users, hereby agrees that Developer and each Successor Owner shall, to the
maximum extent permitted by law, indemnify, protect, defend, and hold harmless the City
Indemnified Parties from and against any and all Claims resulting or arising directly or indirectly
from or in any way connected with the existence, Release, threatened Release, presence, storage,
treatment, transportation and/or disposal of any Hazardous Materials on, in, under, from, or
migrating from, any portion or portions of the Development Parcel or migrating from the Real
Property or the Development Parcel to adjacent properties regardless of whether any such
condition is known or unknown now or upon acquisition and regardless of whether any such
condition pre-exists acquisition or is subsequently caused, created or occurring (“Environmental
Claims”); provided, however, that neither Developer nor any Successor Owner shall be
responsible for and such indemnity shall not apply to the extent caused by or arising or resulting
directly or indirectly from (a) any uncured Material Default by the City with respect to any of the
representations or warranties of the City set forth in Sections 3.3 or 18.12.2 or any of the covenants
or obligations set forth in this Agreement, in either case provided that the Material Default is
directly related to the Claim, or (b) the Active Negligence, gross negligence, willful misconduct
or fraud of the City Indemnified Parties with respect to Hazardous Materials Releases occurring
prior to the Close of Escrow with respect to work performed by such Persons on the Development
Parcel. This indemnity shall not be deemed to limit in any manner the rights and/or remedies that
City, Developer or Successor Owners may have against the Federal Government, including as
described in Section 4.1 or against other non-City Indemnified Parties, provided that under no
circumstances may such Claims be pursued (and all such Claims are waived and released) against
any City Indemnified Parties, and each of them.
Subject to the limitations set forth below in this Section, the indemnity set forth in this
Section 10.2 and the requirements of Sections 10.4 through 10.9 as they pertain to Environmental
Claims shall be included in the Special Restrictions in accordance with its terms and shall run with
the land as set forth in this Agreement and in the Special Restrictions and shall survive termination
of this Agreement, the Close of Escrow, and the execution and Recording by the City of a
Certificate of Compliance, shall not merge with any deed and shall, for the benefit of the City and
its Governmental Successors, be binding upon the Real Property and each Developer and each
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Successor Owner unless such Person is released by the City in writing pursuant to Section 2.3 or
is released pursuant to the terms set forth below in this Section 10.2. Developer and each of its
Successor Owners shall be jointly and severally liable with respect to Environmental Claims
affecting the Development Parcel notwithstanding any Transfer thereof or Recording of a
Certificate of Compliance with respect thereto, except that each shall be released for
Environmental Matters related to a portion of the Property arising subsequent to its ownership of
such portion of the Property under the following circumstances:
(x) if prior to Recording by the City of a Certificate of
Compliance as to such portion of the Real Property, Developer or Successor Owner
is released pursuant to Section 2.3.2 (and for avoidance of doubt, if not so released,
remains jointly and severally liable with each Successor Owner of such portion of
the Real Property; or
(y) following Recording by the City of a Certificate of
Compliance as to such portion of the Real Property, other than for Environmental
Claims related to Releases caused by its own acts or omissions for which each shall
remain liable.
Notwithstanding the foregoing, upon Transfer of the fee interest in the Real Property or
any portion thereof to an End User, such indemnities shall terminate automatically as to such End
User and shall cease to run with the land acquired in fee by such End User or any of its respective
successors and assigns.
10.3Effect of Recording of Special Restrictions.
The provisions of Sections 10.1 through 10.9 shall be included in the Special Restrictions
and shall remain in effect in accordance with their terms; provided, however, that following
Recording of the Special Restrictions, the provisions in each such Section of this Agreement shall
not be interpreted more broadly than, nor be applied in addition to, nor be deemed to increase the
obligations of Developer in the counterpart provisions in the Special Restrictions. Without limiting
the foregoing, in the event any conflict arises during the Term of this Agreement between the
provisions in each such Section of this Agreement and the counterpart provisions in the Special
Restrictions, the provisions in each such Section of this Agreement shall control.
10.4Claim Response.
In the event that following the Close of Escrow, any Environmental Agency or other third
party brings, makes, alleges, or asserts a Claim, arising from or resulting directly or indirectly from
or related to any actual, threatened, or suspected presence or Release of Hazardous Materials on
or about the Development Parcel, including any Claim for Investigation or Remediation on the
Development Parcel, or such Environmental Agency or other third party orders, demands, or
otherwise requires that any Investigation or Remediation be conducted on the Development Parcel,
Developer (or Successor Owner at the time such Claim is asserted) shall promptly upon its receipt
of notice thereof, notify the City in writing and thereafter shall promptly and responsibly evaluate
and respond to such Claim as provided in Section 10.5. Further, upon receipt of such Claim, order,
demand or requirement, Developer (or Successor Owner at the time such Claim is asserted) shall
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take such reasonable measures, as necessary or appropriate, to reasonably attempt to dissuade such
Environmental Agency or other third party from bringing, making, alleging, or asserting any Claim
against the City arising from or resulting directly or indirectly from or related to the presence or
any actual, threatened, or suspected Release of Hazardous Material on or about the Development
Parcel, including any Claim for Investigation or Remediation on or with respect to the
Development Parcel, the Active Adult Project Improvements or the AL/MC Project
Improvements, provided, however, that Developer (or Successor Owner at the time such Claim is
asserted) shall have no obligation pursuant to this sentence with respect to any Claim, order,
demand or requirement arising from or resulting directly or indirectly from or related to any actual,
threatened or suspected Release of Hazardous Material to the extent caused by the Active
Negligence, willful misconduct or fraud of the City Indemnified Parties. For avoidance of doubt,
the obligations under this Section 10.4 apply only to the extent an obligation arises under either
Section 10.1 or Section 10.2.
10.5Release Notification and Remedial Actions.
If, after Close of Escrow, any Release of a Hazardous Material is discovered on the
Development Parcel, Developer (or Successor Owner at the time of discovery of such Release)
shall promptly provide written notice (or in the event of emergency, telephonic notice, followed
by written notice) of any such Release to the City. To the extent that any Environmental Agency
(other than the City) is requiring that the City Remediate such Release and Developer or Successor
Owner (as applicable) acknowledges that it is obligated to assume responsibility or indemnify the
City with respect to such Release pursuant to Section 10.2 or there is a good faith dispute between
the City and Developer or Successor Owner (as applicable) as to whether Developer or Successor
Owner (as applicable) is obligated to assume responsibility or indemnify the City with respect to
such Release pursuant to Section 10.2, then Developer or Successor Owner (as applicable) shall
(i) Remediate the Release in compliance with and to the extent required by Environmental Laws
and such Environmental Agency, or if such removal is prohibited by any Environmental Laws,
take whatever action is required by any Environmental Law and such Environmental Agency;
provided, however, that any environmental response action approved by the applicable
Environmental Agency or Environmental Agencies with jurisdiction shall be deemed acceptable
and binding upon Developer (or Successor Owner at the time such Claim is asserted) and the City
without modification or amendment, and such Environmental Agency or Environmental Agencies
shall be the sole and exclusive Government Authority with jurisdiction over the Investigation and
Remediation of any such Release and any Hazardous Material involved therewith; (ii) take such
other reasonable action as is necessary to have the full use and benefit of the Development Parcel
as contemplated by this Agreement; and (iii) provide the City with satisfactory evidence of the
actions taken as required in this Section 10.5. To the extent that any Environmental Agency (other
than the City) is requiring that the City Remediate such Release and the City acknowledges that
Developer or any Successor Owner is not obligated to assume responsibility or indemnify the City
with respect to such Release pursuant to Section 10.2 or no Environmental Agency (other than the
City) is requiring that the City Remediate such Release, then (as between Developer or such
Successor Owner (as applicable), and the City under this Agreement) Developer or Successor
Owner (as applicable) may elect in its sole discretion whether to Remediate such Release and/or
pursue any rights that it has against any Person with respect to such Release. The foregoing shall
be without prejudice to Developer’s (or any Successor Owner’s, as applicable) or the City’s rights
against any responsible party or against the Federal Government pursuant to the Navy
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Responsibilities and without compromising the applicability of any insurance coverage in regard
to such Release. The City and Developer (or any Successor Owner, as applicable) will coordinate
any action required under this Section 10.5 with appropriate environmental insurance carriers so
as not to compromise coverage for the costs of such actions. Nothing set forth in this Agreement
requires Developer or any Successor Owner to perform any obligation of the Federal Government
or shall be deemed to limit or impair (or require any action that might limit or impair) in any
manner the rights and/or remedies that Developer (or any Successor Owner, as applicable) or the
City may have against the Federal Government or any other third party. The provisions of Sections
10.4 and 10.5 shall not apply to any Repurchase Property after the close of escrow pursuant to
Section 16.3 or to any Reversion Property following a Reversion Event. For avoidance of doubt,
the obligations under this Section 10.5 apply to the Person (i.e., Developer or Successor Owner)
that is the Owner of the Real Property when the Release occurs and only to the extent an obligation
arises under either Section 10.1 or Section 10.2.
10.6Conflict with Section 330 and Other Federal Government Obligations.
Notwithstanding anything to the contrary contained in this Article 10, in the event that any
actions required to be taken by Developer pursuant to this Article 10 could potentially result in
Developer losing rights, or are contrary to any rights, which it otherwise would have pursuant to
the Navy Responsibilities or otherwise against the Federal Government, then the City and
Developer shall meet in order to determine the proper course of action to be taken by Developer.
The course of action to be agreed upon shall protect the City’s interest in the Project and Tustin
Legacy, while retaining for Developer its rights pursuant to the Navy Responsibilities or otherwise
against the Federal Government to the extent reasonable under the circumstances. Notwithstanding
the foregoing, nothing set forth in this Section 10.6 relieves Developer or any Successor Owner
with respect to the environmental responsibilities and obligations to, and/or environmental
indemnification of the City in this Agreement.
10.7Insurance and Indemnification.
Notwithstanding anything contained in and without limiting or relieving Developer or any
Successor Owner of its obligations under this Agreement, the City agrees that with respect to any
Claims tendered by any one or more of the City Indemnified Parties under this Agreement for
which Developer or any Successor Owner has the obligation to indemnify the City pursuant to the
terms of this Agreement, the City Indemnified Parties shall seek recourse for such Claims under
Developer’s or such Successor Owner’s, if applicable, insurance coverage required by Article 11,
in each case only to the extent such insurance could reasonably be determined to be applicable to
the type, extent, value and location of the Claim being made. The City shall thereafter use
reasonable commercial efforts to prosecute its Claim for coverage with such insurer(s) and shall
notify Developer of the City’s tender of its Claim to such insurer(s). Developer or Successor
Owner, if applicable, shall reimburse the City for its reasonable costs incurred in complying with
this Section 10.7, including reasonable out-of-pocket consultant costs and reasonable attorney fees.
To the extent that insurance is determined by the City not to be applicable to the Claim or, if after
six (6) months from tender of the Claim to the insurer, despite such efforts, insurance proceeds are
not available to cover all or a portion of the Claim or if such Claim is earlier denied by the insurance
carrier, then Developer or Successor Owner, if applicable, shall defend and indemnify the City
Indemnified Parties for the full amount of the Claim not covered by the insurance, including but
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not limited to sums theretofore expended by the City Indemnified Parties defending such Claim,
but only to the extent Developer has such obligations in this Agreement. If an insurer(s) to which
a Claim is tendered declines to defend, or fails to timely defend, the Claim within the six (6) month
period described above, then Developer shall defend and indemnify the City Indemnified Parties
for the full amount of the Claim not covered by the insurance, including but not limited to sums
theretofore expended by the City Indemnified Parties defending such Claim, but only to the extent
Developer has such obligations in this Agreement. At any time after six (6) months have passed
since the original tender of a Claim to an insurer by the City as described in this Article 10, if the
insurer has not paid out on all or part of the insurance claim, Developer in its sole discretion may
decide to pay for the legal fees and expenses associated with filing and prosecuting litigation
against such insurance carrier. If Developer decides to pay such legal fees and expenses, the City
shall proceed with such litigation at Developer’s expense as further set forth below. Developer
may recommend counsel to represent the City in connection with the prosecution of such Claim in
litigation but the determination of counsel shall be made by the City in accordance with Section
10.8. Any fees and expenses of such litigation will be borne by Developer. For avoidance of doubt,
the obligations under this Section 10.7 apply only to the extent an obligation arises under either
Section 10.1 or Section 10.2.
10.8Selection of Counsel and Defense Obligations.
A Person being defended pursuant to this Article 10 (“Defended Party”) shall select legal
counsel of its choice and reasonably acceptable to the Person with the obligation to defend
(“Defending Party”) and shall cooperate in the defense of any such action. Failure of the Defended
Party to notify the Defending Party promptly of the filing of any Claim or Action shall offset the
indemnification obligations of the Defending Party only to the extent of any prejudice to the
Defended Party caused by such failure to notify.
10.9Settlement Procedures.
No Defending Party or Defended Party shall settle any Claim or Action that is the subject
of an indemnity or obligation to defend under this Agreement without the prior written consent of
the other, which consent shall not be unreasonably withheld, conditioned or delayed.
11.Insurance.
11.1Required Insurance.
Without limiting the City’s rights to indemnification, Developer shall procure and
maintain, at its own cost and expense, and furnish or cause to be furnished to the City, evidence of
the following policies of insurance (complying with the requirements set forth below) naming
Developer as insured and, with respect to the general liability and environmental liability insurance
required pursuant to Sections 11.1.1 and 11.1.4 only, including as additional insureds the City and
the City’s additional insureds specified below. Unless otherwise specified below, all insurance
required below shall be in place or obtained by Developer upon the date specified below and shall
be kept in force with respect to each portion of the Development Parcel, the Project, the Project
Improvements, until the Recording by the City of a Certificate of Compliance with respect to
thereto or for such longer period to the extent described below. Subject to the provisions of this
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Article 11, the insurance obligations under this Agreement shall be: (i) all the insurance coverage
and/or limits carried by or available to Developer; or (ii) the minimum insurance coverage
requirements and/or limits shown in this Agreement; whichever is greater. Any insurance proceeds
in excess of or broader than the minimum required coverage and/or minimum required limits,
which are applicable to a given loss, shall be available to the City. No representation is made that
the minimum insurance requirements of this Agreement are sufficient to cover the obligations of
Developer under this Agreement. Prior to or concurrently with the execution of this Agreement by
Developer, Developer shall have obtained and delivered to the City a binder or certificate
evidencing the insurance required below to be effective upon the Effective Date.
11.1.1Liability Insurance. Commencing upon the Effective Date, Developer
shall maintain or cause to be maintained commercial general liability insurance and automobile
liability insurance, to protect against insurable 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 Real Property, the Active Adult Project, the AL/MC
Project, Active Adult Project Improvements and/or the AL/MC Project Improvements and the
business of Developer on the Real Property, or in connection with the operation thereof, resulting
directly or indirectly from any acts or activities of Developer or anyone directly or indirectly
employed or contracted with or acting for 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 Real Property, Project, and/or the Project Improvements, or
related to the Project and/or the business of Developer on the Real Property, or in connection with
the operation thereof, caused directly or indirectly by or from acts or activities of Developer or any
Person acting for Developer, or under its control or direction. Such insurance shall also provide
for and protect the City against incurring any legal costs in defending Claims for alleged loss. Such
insurance shall be maintained in full force and effect with respect to each portion of the Project
and the Project Improvements until Recording by the City of a Certificate of Compliance therefor,
and for so long thereafter as necessary to cover any claims of damages suffered by persons or
property prior to Recording by the City of such Certificate of Compliance, resulting from any acts
or omissions of Developer, Developer’s employees, agents, contractors, suppliers, consultants or
other related parties, as further set forth in Section 9.7 and Article 10. The amount of insurance
required shall include comprehensive general liability and personal injury with limits of at least
Ten Million Dollars ($10,000,000.00) each occurrence and annual policy aggregate and
automobile liability with limits of at least Five Million Dollars ($5,000,000.00) combined single
limit per occurrence. The insurance shall be issued by a company authorized by the Insurance
Department of the state of California to do business in California and rated A-/VII or better (if an
admitted carrier) or A-/X (if offered by a surplus line broker), by the latest edition of Best’s Key
Rating Guide (“Best’s”). Such insurance may be provided in part by an umbrella or excess
insurance policy meeting the requirements of this Article 11, including the endorsements set forth
in the following paragraph.
ACORD certificates and endorsements signed by authorized representative(s) of the
underwriter (or copies of the applicable pages from the policy if the applicable endorsement
coverage is part of the policy rather than provided by separate endorsement) and reasonably
approved by the City shall be delivered as soon as reasonably possible but in no event later than
within thirty (30) calendar days following the Effective Date and in all events prior to access by
Developer or Developer Representatives upon the Real Property pursuant to Section 5.1 and
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annually thereafter evidencing renewals of each policy until the Recording by the City of the Final
Certificate of Compliance. The endorsements shall provide as follows: (i) designate “the City of
Tustin and the Successor Agency to the Tustin Community Redevelopment Agency and their
respective elected and appointed officials, agents, representatives and employees”, as additional
insureds on the commercial general liability policies and automobile liability policies; (ii) the
commercial general liability and automobile liability insurance coverages shall be primary, and
not contribute with any insurance maintained by the City; and (iii) a waiver of subrogation for the
benefit of “the City of Tustin and the Successor Agency to the Tustin Community Redevelopment
Agency and their respective elected and appointed officials, agents, representatives and
employees”. “Blanket” endorsements (or coverage within the policy itself) providing the same
protection as required by written contract shall be acceptable to the City. The procuring of such
insurance and the delivery of policies, certificates or endorsements evidencing the same shall not
be construed as a limitation of Developer’s obligation to indemnify the City Indemnified Parties
as set forth in this Agreement.
11.1.2Workers’ Compensation Insurance. Commencing upon the Effective
Date, in the event the Developer entity has employees, Developer shall obtain, and thereafter
maintain or cause to be maintained, workers’ compensation insurance issued by a responsible
carrier authorized under the laws 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 Developer in connection with the
Project and shall cover liability within statutory limits for compensation under any such act
aforesaid, based upon death or bodily injury claims made by, for or on behalf of any employee of
Developer incurring or suffering injury or death in connection with the Project or the construction
and operation thereof by Developer. Notwithstanding the foregoing, Developer may, in compliance
with the laws of California and in lieu of maintaining such insurance, self-insure for workers’
compensation in which event Developer shall deliver to the City evidence that such self-insurance
has been approved by the appropriate State authorities. Developer shall also furnish (or cause to
be furnished) to the City evidence satisfactory to the City that any contractor with whom it has
contracted for performance of work on the Real Property or otherwise pursuant to this Agreement
carries workers’ compensation insurance required by law. Policies or an ACORD certificate of
insurance may be provided as evidence of the existence of insurance policies and their limits, but
actual endorsements (or copies of the applicable pages from the policy if the coverage is part of
the policy) are required to be provided to the City to evidence that each endorsement requirement
has been satisfied. The insurance policy(ies), by endorsement signed by an authorized
representative of the underwriter(s), shall contain a waiver of subrogation for the benefit of the
following additional insureds: “the City of Tustin and the Successor Agency to the Tustin
Community Redevelopment Agency, and their respective elected and appointed officials, agents,
representatives and employees”. A “blanket” endorsement providing the same protection as
required by written contract shall be acceptable to the City. The insurance provided for under this
Section 11.1.2 shall be issued by a company rated B-/VIII or better by Best’s or from the state of
California Compensation Fund.
11.1.3Builder’s Risk Insurance. Commencing upon the commencement of
construction of Vertical Improvements by Developer and continuing until the issuance by the City
of a final certificate of occupancy for and for such longer period as work on the Project
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Improvements is continuing on the Real Property, Developer shall obtain, or shall cause its
contractor to obtain, and thereafter maintain a builder’s risk policy with respect to Vertical
Improvements constructed or to be constructed on the Real Property, or maintain comparable
coverage through a property policy. Such insurance shall be maintained in an amount not less than
one hundred percent (100%) of the full insurable value of the Project Improvements to be
constructed on the Real Property. The insurance provided for under this Section 11.1.3 shall be
provided by insurer(s) authorized to do business in California and with a Best’s rating of A-/VII
or better.
11.1.4Contractors Pollution Liability Insurance. Developer shall require each
Contractor and subcontractor performing grading, excavation, demolition, remediation or other
construction activities that could reasonably result in a pollution condition to maintain Contractors
Pollution Liability (“CPL”) insurance covering on-site and off-site operations and completed
operations. Coverage shall include bodily injury, property damage, cleanup and remediation costs,
defense costs, transportation pollution, including loading and unloading, and non-owned disposal
site liability. The CPL insurance shall cover sudden and accidental and gradual pollution
conditions, including pollution conditions arising from the disturbance, exacerbation, migration,
release or discovery of pre-existing Hazardous Materials or other pollution conditions at, on, in,
under or migrating to and from the Development Parcel, whether known or unknown when the
CPL policy is issued. Each CPL policy shall not exclude any Hazardous Materials or pollution
conditions reasonably anticipated to be encountered in connection with the Project. The
combination of CPL coverage carried by the Contractor and each subcontractor shall, at all times
during the performance of Contractor’s operations be not less than Ten Million Dollars
($10,000,000) for each pollution incident and Ten Million Dollars ($10,000,000) in the aggregate.
For purposes of clarity, and by way of example only, if Contractor maintains $6 million in CPL
coverage, then each subcontractor shall maintain not less than $4 million in CPL coverage at all
times during the performance of such subcontractor’s operations. If written on a claims-made
basis, the retroactive date for each policy shall be no later than commencement of the Contractor’s
operations and coverage shall be maintained, through renewal or an extended reporting period, for
not less than ten (10) years following Completion of the Contractor’s work. The City of Tustin and
the Successor Agency to the Tustin Community Redevelopment Agency, and their respective
elected and appointed officials, officers, employees, agents and representatives, shall be additional
insureds, and the policy shall include a waiver of subrogation in their favor and otherwise comply
with Section 11.2.
11.2General Insurance Requirements.
11.2.1For all policies or certificates, the insurer endorsements (or a copy of the
policy binder, if applicable) shall specifically identify the Project address and shall provide
evidence that Developer has paid its premium in full for each required policy that is currently in
place. Each insurance company shall endorse its policy to provide that the City will receive thirty
(30) calendar days’ written notice from the insurance company in the event of termination or
expiration of the policy, or 7 days written notice in the event of termination for failure to pay
premiums; provided that if Developer is unable to procure that endorsement from its insurance
company, then Developer shall provide evidence that each policy has been fully prepaid for the
period of time required to be covered thereby. In addition, Developer’s insurance broker shall
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confirm in writing that premium payments are in compliance with the insurance policy(ies)
payment terms.
11.2.2The term “full insurable value” as used in this Article 11 shall mean the
cost determined by Developer (excluding the cost of excavation, foundation, underground utilities,
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, but in no event less than the value set forth in the Updated
Financing Plan for the Project.
11.2.3All insurance provided under this Article 11 shall be for the benefit of the
Parties. Developer shall, and shall cause each Insured Party, (a) to timely pay all premiums for
such insurance and, at its sole cost and expense, to comply and secure compliance with all
insurance requirements necessary for the maintenance of such insurance, and (B) with respect to
coverage required by Sections 11.1.1 and 11.1.2, to submit certificates evidencing such insurance
to the City on an ACORD form following City Council approval of this Agreement or, with respect
to coverage required by Section 11.1.4, upon the Close of Escrow and with respect to coverage
required by Section 11.1.3, upon commencement of construction. Within seven (7) Business Days,
if practicable, after expiration of any such policy, certificates evidencing renewal policies (and all
required endorsements) shall be submitted to the City, together with evidence of compliance with
insurance policy(ies) premium payment terms.
11.2.4Subject to Section 11.2.5, if Developer fails to procure or to cause any
Insured Party to procure and maintain insurance as required by this Agreement, the City shall have
the right, at the City’s election, and upon ten (10) calendar days’ prior written notice to Developer,
to procure and maintain such insurance. The premiums paid by the City shall be treated as a loan,
due from Developer, to be paid on the first calendar day of the month following the date on which
the premiums were paid and such cost, until paid, shall constitute a City Lien on the Real Property
and improvements thereon. The City shall give prompt notice of the payment of such premiums,
stating the amounts paid and the name of the insured(s).
11.2.5In the event the CPL Policy or any other policy of insurance required
hereunder is not then commercially available, the Parties shall promptly meet and confer in good
faith to seek to resolve such issue and to facilitate the securing by Developer of a mutually
acceptable policy.
12.Covenants and Restrictions.
12.1Covenants Run With the Land.
This Agreement and all other obligations, agreements, covenants, representations,
warranties, and indemnities set forth in this Agreement shall run with the land and shall be binding
upon each Developer, its successors and assigns, each Successor Owner and each Person claiming
by, through or under Developer or such Successor Owner, but excluding any End Users, to which
such obligations, agreements, covenants, representations, warranties, and indemnities apply to the
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extent set forth in this Agreement and shall be enforceable as equitable servitudes against each
portion of the Real Property and the Project for the benefit of the City and its successors and
assigns until Recording by the City of a Certificate of Compliance as to such portion of the Real
Property and the Project, subject to the effects of the execution and Recording by the City of a
Certificate of Compliance as provided in Article 9 and subject to any other limitations set forth in
this Agreement or in any of the Other Agreements.
12.2Obligation to Refrain from Discrimination.
Developer covenants and agrees on behalf of itself, each Successor Owner and each and
every Person claiming by, through or under Developer or any Successor Owner, including each
End User, that there shall be no discrimination against or segregation of any person, or group of
persons, on account of sex, race, color, creed, religion, ancestry, national origin, disability, medical
condition, marital status, or sexual orientation in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Property, the Project Improvements or in development of the Project,
nor shall Developer or any Person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property or
the Project Improvements or in development of the Project or any part thereof.
12.3Use Covenant.
Developer shall cause the Real Property and the Project to be developed only as a High
Quality Project containing as to the Active Adult Project, the number of Residential Units,
including Lower Income Units, described on the Approved Plans for such portion of the Project
and for the AL/MC Project, the number of Rooms described on the Approved Plans for such
portion of the Project and ancillary uses for each set forth on the Approved Plans and neither
Developer nor any Successor Owner, nor any Person claiming by, through or under Developer or
any Successor Owner, including any Manager shall use the Property or any portion thereof for any
unlawful use and shall not permit any activity on the Property that would violate this Agreement,
the Special Restrictions, the Approved Plans, the SLA Covenant, the Affordable Housing
Declaration or any applicable Governmental Restrictions.
12.4Access Easement Agreement and Bioswale Easement.
At the Close of Escrow there shall be Recorded against the Property (i) a non-exclusive
perpetual easement in gross for common access and emergency vehicular access in substantially
the form and substance of the Access Easement Agreement attached to the Development
Agreement as Exhibit F and (ii) a non-exclusive perpetual easement in favor of the City for access
to and installation, maintenance and repair of a bioswale in substantially the form and substance
of the Bioswale Easement Agreement attached to the Development Agreement as Exhibit G.
12.5Management and Operation of Project; Operating Agreement.
12.5.1Appointment of Class “A” Operator. Developer shall be responsible for
securing a Class “A” Operator for the Project. Developer has identified and the City has approved
Clearwater Senior Living, or its affiliates Controlled by or under common Control with Clearwater
Senior Living, including Clearwater Living, LLC (any of such entities referred to as
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“Clearwater”) as the Class “A” Operator and operator of the Project. Developer acknowledges
that the design of the Project, the identity, stability and financial capacity of Developer and any
proposed operator of the Project and the ability of Developer to deliver the Project, including by
causing Clearwater or another Class “A” Operator to operate the Project, will be of material
concern to the City. Developer shall have the right to contract with or delegate to Clearwater or
other Class “A” Operator approved by the City for the management and operation of the Project
(but retaining the right and duty to enforce such assigned or delegated duties). The right of the City
to approve any operator for the Project shall terminate as to each portion of the Real Property and
Project upon Recording of the Certificate of Compliance as to such portion, but the requirement
that Developer retain a Class “A” Operator shall remain in effect for the term of the Special
Restrictions.
12.5.2At least fifteen (15) Business Days prior to execution of any operating
agreement or property management agreement with an entity other than Clearwater for any portion
of the Real Property and/or Project for which a Certificate of Compliance has not then been
Recorded by the City, Developer shall provide the City with written notice of the identity of each
operator, evidence that such operator is a Class “A” Operator, the intended operational location of
such operator and allow the City to view a copy of the final form of the proposed operating
agreement, property management agreement, lease or other agreement for operation and
management of the Project or any portion thereof in order to permit the City to confirm that the
proposed operator is a Class “A” Operator and that the agreement is in conformance with the
requirements of this Agreement and the Other Agreements and the use covenants set forth in this
Agreement, including this Section 12.5, and the Other Agreements have not been breached. The
City shall have the right in its sole discretion to determine whether any proposed operator or
manager is a Class “A” Operator. If the City determines that the proposed operator is not a Class
“A” Operator or would violate the use covenants and the City provides Developer with written
notice of its determination on or before the date which is ten (10) Business Days following its
receipt of such notice, Developer shall be prohibited from entering into an operating agreement,
lease or other agreement with such proposed operator unless such operator and the terms of such
agreement are approved by the City in its sole discretion.
12.5.3Nothing in this Agreement shall (i) prohibit the City, in its sole discretion
from approving an operator which is not a Class “A” Operator or (ii) obligate the City to exercise
its approval or enforcement rights with respect to the use covenants set forth in this Agreement,
for the benefit of the City or any third parties.
13.Housing Requirements.
The Project shall be constructed consistent with the Affordable Housing Declaration and
upon Completion of the Project Improvements, not less than fifteen percent (15%) of the
Residential Units constructed as part of the Project Improvements shall be Lower Income Units
and shall be made available for rental only to Lower Income Households, for the term set forth in,
and otherwise in accordance with, the Affordable Housing Declaration. Development of the
Project as described in this Agreement is and shall be structured to comply with the Affordable
Housing Declaration. The Affordable Housing Declaration shall be enforceable in accordance with
its terms by the City against Developer and as those terms are defined therein any “Owner”, which
includes a “Successor Owner” as defined therein. The SLA Covenant shall remain in effect with
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respect to the Real Property in accordance with its terms. Nothing in this Agreement or in the
Affordable Housing Declaration shall relieve the Parties from third party liability under the SLA
Regulations or the SLA Covenant.
14.Potential Defaults and Material Defaults.
14.1Potential Defaults.
Except as otherwise provided in this Agreement, in the event either Party (“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 (“Injured Party”) may give written notice of such Potential Default to
the Defaulting Party (“Default Notice”), which Default Notice shall state the particulars of the
Potential Default. For avoidance of doubt, and notwithstanding any provision in this Agreement
to the contrary, no Potential Default shall be deemed to exist hereunder unless and until the Injured
Party shall have provided to the Defaulting Party a Default Notice. In the event the Defaulting
Party contests in writing to the Injured Party the Potential Default subject of a Default Notice, or
in the event of any other disagreement between the Parties regarding this Agreement or the
implementation thereof, the Parties shall promptly meet and confer in good faith to seek to resolve
such Potential Default or other disagreement, provided that in no event shall the obligation to meet
and confer or the discussions of the Parties pursuant to this Section 14.1 modify the time periods
for cure set forth in Section 14.2, Article 15 or Article 16.
14.2Material Defaults.
14.2.1Monetary Defaults; Guarantor Illiquidity Event Defaults.
Notwithstanding any other provision of this Agreement, if a Party fails to pay the other Party any
sum as and when required to be paid pursuant to this Agreement or to make any deposit as and
when required pursuant to this Agreement, the Defaulting Party shall have a period of fifteen (15)
Business Days after the date a Default Notice is received, or deemed to have been received, within
which to cure the Potential Default by making the required payment. Potential Defaults described
in Section 8.9.3 or 8.9.4, shall also be covered by this Section provided that the period for cure of
any such Potential Default shall be thirty (30) calendar days. The period to cure any Potential
Default described in Sections 8.9.3, 8.9.4, 11.2.4, 14.2.3, 14.2.4 or this Section 14.2.1 shall not be
extended by Force Majeure Delay. In the event a Potential Default for nonpayment or failure to
make a deposit is not cured within the applicable time period, the Potential Default shall become
a “Material Default” that shall be deemed to have occurred upon the expiration of the cure period.
14.2.2Non-Monetary Defaults. With respect to non-monetary defaults under this
Agreement, a Potential Default shall become a “Material Default” in the event the Potential
Default is not cured, at the Defaulting Party’s expense, (i) within thirty (30) Business Days after
the date the Default Notice is received, or deemed to have been received by the Defaulting Party;
(ii) if such cure cannot be reasonably accomplished within such thirty (30) Business Day period,
within ninety (90) Business Days after the date the Default Notice is received, or deemed to have
been received by the Defaulting Party, but only if the Defaulting Party has commenced such cure
within such thirty (30) Business Day period and diligently pursues such cure to completion; or (iii)
within such longer period of time as may be expressly provided in this Agreement or as mutually
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agreed to in writing between the Parties with respect to the Potential Default. Following written
notice and failure to cure within the time periods set forth above, each Potential Default shall
become a Material Default that shall be deemed to have occurred upon the expiration of the
applicable cure period. A Defaulting Party may cure a Material Default at any time prior to the
date the Injured Party exercises its remedy for the Material Default. Notwithstanding anything in
the foregoing to the contrary, the default cure periods in this Section 14.2.2 shall not apply with
respect to matters governed by Sections 6.3, 8.9.3, 8.9.4, 11.2.4, 14.2.1, 14.2.3 or 14.2.4.
14.2.3Transfer Defaults. Any Transfer or any Transfer of Control in violation of
the provisions of Article 2 shall be null and void and shall be a Material Default under this
Agreement as of the date of the Transfer or Transfer of Control without notice or cure period, and
shall not be subject to extension for Force Majeure Delay, except that (a) with respect to
involuntary Construction Liens the notice and cure periods set forth in Section 14.2.2 shall apply,
in order to enable Developer to comply with the provisions of Section 8.11.5.6 and (b) with respect
to any Transfer of which City has received prior written notice from Developer as required by
Article 2 and for which the requirements in Article 2 are not fully met but are satisfied in all
material respects, or which constitutes an easement in favor of a utility or a conveyance of an
immaterial portion of the property to any governmental entity, such violation shall not constitute a
Material Default unless the violation has not been cured within five (5) Business Days following
City’s written demand to Developer for cure.
14.2.4Right to Cure Closing Default. Notwithstanding the foregoing, if either
Party is in Potential Default on the expected Closing Date or the Outside Closing Date or shall
have failed to deliver the documents required to be delivered to Escrow, and the Non-Defaulting
Party has provided written notice to the Defaulting Party, the Defaulting Party shall be provided
ten (10) Business Days from the expected Closing Date or Outside Closing Date, as applicable,
and, for one such extension only, the Closing Date and the Outside Closing Date shall be extended
to allow such cure within such ten (10) Business Day period. Failure to cure such Potential Default
within the foregoing ten (10) Business Day period shall be deemed a Material Default.
14.2.5Interest. If a monetary Material Default occurs under this Agreement, then
in addition to any other remedies conferred upon the Injured Party pursuant to this Agreement, the
Defaulting Party shall pay to the Injured Party, in addition to all principal amounts due, interest on
such principal amounts at the Default Rate, for the period from the date such payment or part
thereof was due until the date the same is paid.
14.2.6No Waiver. Failure or delay by an Injured Party to deliver a Default Notice
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 failure or delay 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.
14.3Due Diligence Information; Products.
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14.3.1Return of Due Diligence Information. Within five (5) Business Days
following a termination of this Agreement occurring prior to the Close of Escrow, Developer shall
use commercially reasonable efforts to return to the City all written Due Diligence Information in
Developer’s possession. Developer’s obligation to return Due Diligence Information to the City is
without representation or warranty of any kind by Developer.
14.3.2Surrender of Transferable Products. In connection with the proposed
Project, Developer has prepared during the term of the ENA and shall during the term of this
Agreement, be preparing or causing to be prepared the Survey, a Phase I environmental site
assessment, a geotechnical report and architectural and other products with respect to Horizontal
Improvements with respect to the Property and the proposed Project (collectively, “Transferable
Products”). For the avoidance of doubt, the Transferable Products shall not include any plans or
specifications with respect to the Vertical Improvements. Developer shall cause each of the
Transferable Products to be certified in favor of the City by the engineering and architecture firms
preparing them in the form and substance of the instrument attached to this Agreement as
Attachment 27. All Transferable Products shall be prepared at Developer’s sole cost and expense.
If this Agreement is terminated for any reason other than a Material Default by the City prior to or
following the Close of Escrow or if the Right of Repurchase or Right of Reversion is exercised,
then, with respect to all Transferable Products, the City may request that Developer transfer
Developer’s rights to any or all of the Transferable Products identified by the City but in no event
shall the cost to the City for all of the Transferable Products transferred to the City exceed the
lesser of the actual cost of the Transferable Products requested by the City or One Hundred
Thousand Dollars ($100,000). If any of the Transferable Products requested by the City to be
transferred to it are not certified in favor of the City by the applicable engineering or architecture
firm, then the total cost to the City of such uncertified Transferable Products shall not exceed Five
Thousand Dollars ($5,000). Upon such request and payment of such consideration, Developer shall
deliver to the City copies of all Transferable Products together with a bill of sale therefor, provided
that such transfer is made AS-IS and Developer makes no representation, warranty or guaranty
regarding the completeness or accuracy or any other aspect of the Transferable Products, and
Developer does not covenant to convey the copyright or other ownership rights of third parties
thereto. Such Transferable Products shall thereupon be free of all claims or interests of Developer
or any liens or encumbrances. Upon the City’s acquiring Developer’s rights to any or all of the
Transferable Products, the City shall be permitted to use, grant, license or otherwise dispose of
such Transferable Products to any Person for development of the Project or any other purpose;
provided, however, that Developer shall have no liability whatsoever to the City or any transferee
of title to the Transferable Products in connection with the use of the Transferable Products.
Notwithstanding anything to the contrary in this Section 14.3.2, Developer shall only be obligated
to transfer any Transferable Products to the extent that Developer owns the rights to the same
pursuant to its contract with the preparer thereof.
14.3.3Survival. The provisions of this Section 14.3 shall survive the termination
of this Agreement except that the same shall terminate with respect to the applicable portions of
the Real Property and Project upon Recording by the City of a Certificate of Compliance applicable
thereto.
15.Remedies Prior to Close of Escrow.
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15.1Failure of a Condition Absent a Default.
15.1.1If the Close of Escrow does not occur by reason of the failure of any of the
Closing Conditions (other than by reason of a Default by either Party) or any of the following
conditions, each of which shall be an additional Closing Condition for the benefit of each Party,
either Party shall have the right to terminate this Agreement as provided below:
15.1.1.1If a final non-appealable decision in any litigation brought
by a third party or approval of a referendum or initiative results in the inability of the City to
convey all or any portion of the Property to Developer, or prohibits Developer from performing
any of its material obligations under this Agreement that are not waived by the City, either Party
shall have the right, upon ten (10) Business Days’ prior written notice to the other Party and the
Escrow Holder, to terminate this Agreement.
15.1.1.2If any litigation, referendum, or initiative brought by a third
party remains pending on the Outside Closing Date and (i) such ongoing challenge prevents the
City from conveying all or any portion of the Property to Developer, or (ii) such ongoing challenge
prohibits Developer from performing any of its material obligations under this Agreement that are
not waived by the City, either Party shall have the right, upon ten (10) Business Days’ written
notice to the other Party and the Escrow Holder, to terminate this Agreement.
15.1.1.3If, prior to the Close of Escrow, HCD notifies the City that
the disposition of all or any portion of the Property violates the SLA Regulations or any of them
or HCD issues a notice of potential violation, enforcement or non-compliance with respect to the
Project or the sale of the Real Property and the same remains pending on the Outside Closing Date,
then upon written notice to the other Party and the Escrow Holder delivered not later than ten (10)
Business Days’ prior to the Outside Closing Date (as the same may be extended by this Section or
Section 7.1) either Party shall have the right to terminate this Agreement on or after the Outside
Closing Date.
If any of the matters described in Sections 15.1.1.2 or 15.1.1.3 has occurred and is continuing as
of the Outside Closing Date, the Parties may agree on or before the Outside Closing Date, each in
its sole discretion, to extend the Outside Closing Date for a period not to exceed sixty (60) calendar
days (and the City Manager shall have the right to approve such extension on behalf of the City).
15.1.2If the circumstances creating the right of termination in Sections 15.1.1.1 or
15.1.1.2 have been cured during the thirty (30) Business Day period described in each such section,
the right to terminate with respect to such circumstances shall likewise be extinguished.
15.1.3If the Close of Escrow does not occur on or before 5:00 p.m., Pacific Time,
on or before the Outside Closing Date because of the failure to occur of a Closing Condition for
reasons other than a Default by either Party, then the Party for whose benefit the applicable Closing
Condition was intended may, by delivery of written notice to the other Party and to the Escrow
Holder, terminate this Agreement. In the event either Developer or the City is in Default as of the
Closing Date, the Party in Default shall not have the right to terminate this Agreement pursuant to
this Section 15.1.3 until and unless the Default is cured. Upon termination of this Agreement prior
to the Close of Escrow in accordance with Section 15.1.1 or this Section 15.1.3, each Party shall
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pay one-half (1/2) of Escrow Holder’s normal cancellation charges, the ENA Extension Deposits
then held by the City shall retained in full by the City and Developer shall pay to the City the
amounts due pursuant to Section 1.8. The termination of this Agreement pursuant to Section 15.1.1
or this Section 15.1.3 prior to the Close of Escrow shall constitute a waiver of any rights or Claims
either Party may have against the other or against the Property or with respect to the Project and
the Project Improvements or any portion thereof, but shall not terminate or release any liability or
obligations of either Party to comply with any obligations under this Article 15 or any provisions
of this Agreement which are expressly stated to survive a termination of this Agreement. In the
event of a termination as provided in Section 15.1.1 or this Section 15.1.3, under no circumstances
shall Developer have any right or claim to, or against, the Project, the Development Parcel or the
Property or any portion thereof.
15.1.4For purposes of clarity, the failure of a Closing Condition for the benefit of
either Party to be satisfied at or prior to the Close of Escrow shall not, on its own, constitute a
Default by either Party hereunto absent a Default under a separate covenant, obligation,
representation or warranty set forth in this Agreement or any Other Agreement.
15.2Failure of Close of Escrow; Developer Default.
15.2.1CLOSE OF ESCROW. IF THE CLOSE OF ESCROW DOES NOT TAKE
PLACE ON OR BEFORE 5:00 P.M., PACIFIC TIME, ON THE OUTSIDE CLOSING DATE AS
A RESULT OF A DEFAULT BY DEVELOPER IN THE PERFORMANCE OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND DEVELOPER THEREAFTER FAILS TO
CURE THE SAME WITHIN THE APPLICABLE NOTICE AND CURE PERIOD SET FORTH
IN ARTICLE 14, THEN THE PARTIES ACKNOWLEDGE AND AGREE BY INITIALING
THIS AGREEMENT IN THE SPACE PROVIDED BELOW THAT:
15.2.1.1THE CITY SHALL HAVE THE RIGHT TO TERMINATE
THIS AGREEMENT AND THE ESCROW BY DELIVERING WRITTEN NOTICE TO
DEVELOPER AND TO ESCROW HOLDER, WHEREUPON THIS AGREEMENT SHALL
TERMINATE AND DEVELOPER AND CITY SHALL BE RELEASED FROM THEIR
OBLIGATIONS UNDER THIS AGREEMENT, INCLUDING THE CITY’S OBLIGATION TO
SELL THE PROPERTY TO DEVELOPER, BUT EXCLUDING THEREFROM ANY
OBLIGATIONS WHICH EXPRESSLY SURVIVE THE TERMINATION OF THIS
AGREEMENT. IN SUCH EVENT, DEVELOPER SHALL PAY TO THE CITY THE AMOUNT
OF TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) AND THE CITY SHALL RETAIN
THE ENA EXTENSION DEPOSITS (“Liquidated Damages”) AS LIQUIDATED DAMAGES,
WHICH DAMAGES SHALL BE THE CITY’S SOLE AND EXCLUSIVE REMEDY FOR
DEVELOPER’S FAILURE TO CLOSE ESCROW, EXCEPT FOR THE CITY’S OTHER
RIGHTS AND REMEDIES WITH RESPECT TO ANY OBLIGATIONS OF DEVELOPER
THAT EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE
RIGHT OF THE CITY TO RETAIN THE ENA EXTENSION DEPOSITS AND TO BE PAID IN
FULL FOR THE DDA TRANSACTION EXPENSES. THE CITY’S RIGHTS AND REMEDIES
DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.
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15.2.1.2THE LIQUIDATED DAMAGES BEAR A REASONABLE
RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE MAY BE
SUFFERED BY THE CITY AS THE RESULT OF DEVELOPER’S FAILURE TO CLOSE
ESCROW UNDER THIS AGREEMENT, WHICH DAMAGES WOULD BE IMPRACTICAL
OR EXTREMELY DIFFICULT TO QUANTIFY. THE LIQUIDATED DAMAGES
CONSTITUTE A REASONABLE ESTIMATE OF THE CITY’S DAMAGES IN SUCH EVENT.
THE REMEDY PROVIDED FOR IN THIS SECTION 15.2.1 IS NOT A PENALTY OR
FORFEITURE AND IS A REASONABLE LIMITATION ON DEVELOPER’S POTENTIAL
LIABILITY AS A RESULT OF THE FAILURE TO CLOSE ESCROW. NOTHING IN THIS
AGREEMENT SHALL PRECLUDE THE CITY FROM (A) RETAINING THE ENA
EXTENSION DEPOSITS, ALL REIMBURSEMENTS IT HAS PREVIOUSLY RECEIVED
FROM DEVELOPER PURSUANT TO THE ENA (FROM ENA EXPENSES DEPOSITS) OR
FOR THE DDA TRANSACTION EXPENSES AND RETAINING AND COLLECTING FROM
DEVELOPER ANY ADDITIONAL AMOUNTS THEN DUE TO THE CITY ON ACCOUNT OF
DDA TRANSACTION EXPENSES INCURRED BY THE CITY TO THE DATE OF
TERMINATION OF THIS AGREEMENT OR (B) PURSUING ITS RIGHTS AND REMEDIES
FOR A SEPARATE BREACH, IF ANY, OF THE RELEASE PROVISIONS SET FORTH IN
SECTION 4.5.3, THE CONFIDENTIALITY PROVISIONS SET FORTH IN SECTION 18.24
AND/OR INDEMNIFICATION PROVISIONS SET FORTH IN SECTION 5.2 AND/OR THE
PROVISIONS OF SECTION 14.3.
15.2.1.3DEVELOPER SHALL PAY THE FULL AMOUNT OF
ESCROW HOLDER’S CHARGES AS A RESULT OF SUCH DEFAULT AND TERMINATION.
15.2.1.4DEVELOPER SHALL COMPLY WITH THE
REQUIREMENTS OF SECTION 14.3 AND SHALL INDEMNIFY THE CITY AS PROVIDED
IN SECTION 5.2 AND COMPLY WITH ALL OTHER PROVISIONS OF THIS AGREEMENT
THAT EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT.
Initials of City Initials of Developer
15.3Failure to Close; Default of City.
15.3.1Developer Remedies. If the Close of Escrow does not occur on or before
5:00 p.m., Pacific Time, on or before the Outside Closing Date, solely as a result of a Default by
the City in the performance of its obligations under this Agreement with respect to the Close of
Escrow, and the City thereafter fails to cure the same within the applicable notice and cure period
set forth in Section 14.2 (the “City Cure Period”), then, as the sole remedy of Developer with
respect to such Default by the City, and provided that Developer is not then in Default under this
Agreement, Developer shall have the right, by providing written notice to the City, within twenty
(20) Business Days after the last day of the City Cure Period, to elect one of the following
remedies, it being agreed by the Parties that in the event Developer fails to deliver such notice
within such twenty (20) Business Day period, Developer shall be deemed to have elected to
terminate this Agreement in accordance with clause (iii) below:
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(i)to purchase the Property pursuant to this Agreement
notwithstanding such Default by the City and subject to its agreement to waive all of
Developer’s rights with respect to any such City Default, whereupon such Default (other
than Defaults with respect to City’s failure to deliver the documents and instruments
required under Section 7.2.1.1) shall be deemed waived as against the City;
(ii)to elect to extend the Closing Date for a period of up to
ninety (90) Business Days in order to provide the City with additional time to cure such
Default (and in such event the City shall use commercially reasonable efforts to cure the
same during such extension period) and, if despite such efforts the City is not able to cure
the same by such extended Closing Date, Developer shall have the right by providing
written notice to the City within twenty (20) Business Days after the extended Closing Date
to elect the remedies set forth in clauses (i), (iii) or (iv) of this Section 15.3.1, in each case
only if then applicable;
(iii)to terminate this Agreement and cancel the Escrow as more
particularly set forth in Section 15.3.3; or
(iv)if all City Closing Conditions have been waived by the City
in writing or satisfied (except with respect to any City Closing Condition which is not
satisfied as a result of a Default by the City), and the City fails to deliver any of the
materials described in Section 7.2.1.1 or otherwise fails to proceed with the Close of
Escrow in breach of this Agreement after Developer has delivered into Escrow all of its
required deliveries pursuant to Section 7.2.2 other than the Developer Closing Payment,
and Developer has provided the notice and City has failed to cure pursuant to Section 14.2
or Section 15.3.1(ii), Developer shall have the right to (a) bring an action in mandamus or
at equity or otherwise against the City or subsequent owners, lessors or sublessors of the
Property for specific performance of the City’s obligation to close Escrow in accordance
with Article 7, but Developer shall not be entitled to a refund of the ENA Extension
Deposits nor shall it be entitled to any other monetary award or damages.
15.3.2Closing Pursuant to Section 15.3.1. In the event the City receives timely
notice of Developer’s election to purchase the Property pursuant to Section 15.3.1 notwithstanding
the Default by the City, Developer shall deliver the Developer Closing Payment and all other
deliverables required by Section 7.2.2.2 and otherwise required to satisfy the City Closing
Conditions into Escrow no later than ten (10) Business Days after the City’s receipt of said notice,
and, provided that the City Closing Conditions have been satisfied, (i) the Close of Escrow shall
occur on that date which is eleven (11) Business Days after the City’s receipt of such notice and
(ii) Developer shall be deemed to have waived the Default as of the Close of Escrow.
15.3.3Developer Termination of Agreement Pursuant to Section 15.3.1.
15.3.3.1In the event that the Developer elects or is deemed to have
elected to terminate this Agreement pursuant to Section 15.3.1, then Developer’s election (or
deemed election) shall terminate the entirety of this Agreement, the City shall pay the full amount
of Escrow Holder’s charges and Developer shall be entitled, as its exclusive remedy, to a refund
of amounts paid by it then held by Escrow Holder, which refund and payment shall be Developer’s
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sole and exclusive remedy under this Agreement for the failure of the Close of Escrow due to the
City’s Default.
15.3.3.2City Right to Terminate Agreement. In the event
Developer has elected to purchase the Property pursuant to Section 15.3.1 but fails to deliver the
Developer Closing Payment into Escrow and to satisfy the other City Closing Conditions no later
than ten (10) Business Days after the City’s receipt of said notice in accordance with Section
15.3.2, then the City shall have the right to terminate this Agreement by providing written notice
of its election to terminate to Developer, such termination to be in accordance with the provisions
of Section 15.3.3.1.
15.3.4In the event that Developer does not elect a remedy within the time period
set forth in Section 15.3, Developer shall have no further right or claim to or against such Property
or any portion thereof following the termination of this Agreement. The termination of this
Agreement pursuant to this Section 15.3 shall constitute a waiver of any and all rights and Claims
either Party may have against the other, except as expressly provided in this Section 15.3.
15.4Remedies Exclusive.
The remedies provided in Sections 15.1 through 15.3 (and Section 18.2 as applicable) for
the failure of a Closing to occur are the exclusive remedies of the Parties for such failure. Without
limiting the generality of the immediately preceding sentence, (i) neither Party shall have any
remedy in monetary damages against the other (other than the liquidated damages specifically
provided for in Section 15.2) for the failure of the Close of Escrow to occur, whether or not the
failure of the Closing to occur is due to the Default or other fault of the other Party, and (ii)
following the Close of Escrow, no Default on the part of the City shall entitle Developer to a claim
for the recovery of any portion of the Purchase Price or the Project Fair Share Contribution.
15.5Survival.
The provisions of this Article 15 shall survive the termination of this Agreement pursuant
to this Article 15 but shall terminate and be of no force and effect following the Close of Escrow.
16.Remedies for Defaults After the Close of Escrow.
16.1General Remedies.
In the event Developer is in Material Default following the Close of Escrow, in addition to
whatever other rights the City may have in law or at equity, or as otherwise provided in this
Agreement, the City may do any one or more of the following (in such order, at such time or times,
and in such combinations as the City may determine in its discretion):
(i)Record a lien against the Property, in accordance with
Section 16.2;
(ii)subject to Section 18.5.1, sue for damages it may have
incurred;
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(iii)seek to enjoin actions by or specifically enforce the
obligations of Developer.
(iv)exercise its Right of Repurchase with respect to the Property
pursuant to Section 16.3;
(v)in the event of a Reversion Action Trigger only, exercise its
Right of Reversion with respect to the Property pursuant to Section 16.4.
(vi)terminate this Agreement and/or the Other Agreements, or
any of them, with respect to all or any portion of the Property.
16.2Lien Rights.
Developer, on behalf of itself, its successors and assigns and each Successor Owner and
each and every Person claiming by, through or under Developer or any Successor Owner (but
specifically excluding any End Users) for the benefit of the City and its successors and assigns
hereby agrees that the delinquent amount of any payments due under this Agreement, including
any liquidated damages under this Agreement, together with any late charges or interest due on
any such delinquent payment, reasonable attorneys’ fees, experts’ fees and consultants’ fees and
collection costs and the cost of in-house staff time (including City overhead and administrative
costs) related to such delinquent payment shall, to the greatest extent permitted by applicable law,
be a continuing lien upon the Property in favor of the City (“City Lien”) relating back to the
Recording of the Memorandum of DDA, which City Lien shall be paramount to the lien and charge
of each and every Mortgage, Construction Lien and/or other lien upon or affecting the Real
Property or any Improvements thereon, and, subject to the terms of any then effective
Subordination Agreement, the City shall have the right to foreclose the City Lien with respect to
any property so encumbered by the City Lien. Upon conveyance of any portion of the Real
Property to an End User unless otherwise provided in the Landscape Installation and Maintenance
Agreement, the City Lien shall automatically terminate as to such conveyed portions, provided
however, that the termination of such City Lien shall not terminate the obligations of Developer
and its successors and assigns to City with respect to amounts due and secured by such lien, which
shall remain an ongoing obligation of Developer. Following Recording by the City of a Certificate
of Compliance for a portion of the Real Property, the City Lien shall apply to the portion of the
Real Property for which such Certificate of Compliance has been Recorded only if the default
arises from or is related to such portion of the Property or if the City Lien is imposed in connection
with default by the Owner thereof.
16.3Right of Repurchase.
16.3.1Property Subject to Repurchase. Following the Close of Escrow and until
the Vertical Improvements Commencement Date, the City shall have the right (“Right of
Repurchase”) on the terms and subject to the conditions set forth in this Section 16.3 to purchase
the applicable portion of the Real Property as set forth in Section 16.3.10, and all applicable
Entitlements, Development Permits and other development rights, consents, authorizations,
variances, waivers, licenses, permits, certificates and approvals from any Governmental Authority,
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the Transferable Products, the Intangible Property and all other appurtenant rights applicable
thereto (“Repurchase Property”).
16.3.2Repurchase Default. In the event of a Default by Developer, the City shall
have the right from time to time at any time prior to the Vertical Improvements Commencement
Date to give notice to Developer of its intent to acquire the Repurchase Property in accordance
with this Section 16.3. provided that the City shall not have the right to repurchase the Property if,
as to such Default(s), the Developer proceeds to cure the Default(s) within the time periods for
cure provided in this Agreement.
16.3.3Exercise of Right of Repurchase. The City may exercise its Right of
Repurchase by delivering written notice to Developer stating that the City is exercising its Right
of Repurchase and specifying the Repurchase Property; provided that such notice is delivered at
least ninety (90) Business Days prior to the date on which the City requires Developer to convey
the Repurchase Property to the City pursuant to the Right of Repurchase and otherwise in
accordance with this Section 16.3. Prior to the Vertical Improvements Commencement Date, the
City’s Right of Repurchase shall constitute a lien and encumbrance on the portions of the Real
Property and the Project Improvements then subject to the Right of Repurchase which lien shall
have priority over the lien and charge of any Mortgage, Construction Lien and/or other lien upon
or affecting Real Property or any Project Improvements thereon; provided, however, such lien shall
be deemed to be automatically released and discharged for portions of the Property and Project for
which it has not been exercised upon the Vertical Improvements Commencement Date. The Parties
agree that the discount reflected in the definition of Repurchase Price as compared with the
Purchase Price is justified in that it bears a reasonable relationship to the damages which the Parties
estimate may be suffered by the City as the result of Developer’s Material Default in the
performance of its obligations under this Agreement, which damages would be impractical or
extremely difficult to quantify, and that the computation of the Repurchase Price reflecting that
discount is not a penalty or forfeiture, and is a reasonable limitation on Developer’s potential
liability as a result of Developer’s default.
16.3.4Access, Inspection, Further Obligations. The provisions of Section 16.5
shall apply with respect to access to and inspection of the Repurchase Property. The provisions of
Section 16.6 shall apply in accordance with their terms upon close of escrow with respect to any
Repurchase Property.
16.3.5Process. If the City is entitled to and elects to repurchase the Repurchase
Property: (i) the Parties shall, within five (5) Business Days after the date of the City’s notice of
election to exercise the Right of Repurchase, open an escrow with an escrow agent designated by
the City for the purchase and sale, and shall execute an escrow agreement that shall provide that
Developer shall pay all costs of the escrow and shall include such usual and ordinary terms as are
reasonably required by the escrow agent and by the transaction; (ii) Developer shall, no later than
fifteen (15) Business Days after the opening of escrow, place into the escrow the appropriate
quitclaim deed and bill of sale conveying fee title to the Repurchase Property; and (iii) the City
shall, no later than eighty-five (85) calendar days after the opening of the escrow, deposit into the
escrow an amount equal to (a) the Repurchase Price minus (b) the Lien Release Amounts, if any,
minus (c) any other amounts then owed to the City by Developer and/or any Successor Owner
arising or resulting directly or indirectly from or related to this Agreement with respect to the
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Repurchase Property, and minus (d) the actual costs incurred by the City to acquire environmental
and pollution legal liability insurance coverage for the Repurchase Property, including coverage
for loss, remediation expense and legal defense expenses. The escrow shall close, and title to the
Repurchase Property shall be conveyed to the City, and the Repurchase Price paid to Developer
no later than five (5) Business Days after the City has deposited into escrow the Repurchase Price.
Concurrently with the close of escrow for the Repurchase Property, Developer shall comply with
its obligations under Section 14.3 with respect to the Repurchase Property. Nothing in this Section
16.3 shall restrict the right of the City to terminate its exercise of the Right of Repurchase at any
time prior to the close of escrow and such termination shall not be a Default by the City. At the
close of escrow, real property taxes and assessments with respect to the Repurchase Property shall
be prorated between Developer and the City as of the date of the close of escrow. All prorations
shall be based upon a 365-day year and actual days elapsed. All closing costs, including the cost
of an ALTA policy of title insurance in favor of the City with respect to the Repurchase Property
shall be borne by Developer and deducted from the Repurchase Price.
16.3.6Cooperation and Grant of Easements. The Parties shall cooperate with
respect to and concurrently with the close of escrow for the Repurchase Property, shall each reserve
and/or grant to the other such roadway, utility, access and other easement rights as may be required
by the other Party and its successors in interest to develop the Real Property as contemplated by
Entitlements, this Agreement and the Other Agreements.
16.3.7Termination of Right of Repurchase. In the event that prior to delivery by
the City of written notice to Developer of its exercise of the Right of Repurchase pursuant to
Section 16.3.2, Developer or any Person on behalf of Developer cures the Default which is the
basis for the City’s exercise of its Right of Repurchase, such Right of Repurchase shall cease and
terminate with respect to such Repurchase Property only; provided that the provisions of this
sentence shall not be applicable to any subsequent notice by the City of its election to exercise the
Right of Repurchase with respect to a subsequent Default or to Transfer or Transfer of Control
defaults. In the event the City has declared a Default, Developer shall not have the right to apply
for permits for Horizontal Improvements or Vertical Improvements or to commence construction
thereof in a manner that affects or thwarts the ability of the City to exercise its Right of Repurchase.
16.3.8Effect of Repurchase. The provisions of Section 16.6 shall apply with
respect to the Repurchase Property following close of escrow for the repurchase. Following close
of escrow for the conveyance of the Repurchase Property to the City, under no circumstances shall
Developer or any lienholder have any right or claim to, or against, the Repurchase Property.
Notwithstanding the acquisition of the Repurchase Property by the City as provided in this Section
16.3, this Agreement shall remain in full force and effect with respect to the portions of the
Property and Project Improvements not acquired by the City.
16.3.9Rights of Third Parties. The Right of Repurchase shall not defeat or render
invalid or limit any rights or interests provided in easements, covenants, conditions or restrictions
in favor of third parties (i.e., Persons other than Developer or its Developer Affiliates) granted
pursuant to Transfers approved by the City (or constituting a Permitted Transfer) and Recorded on
the portion of the Real Property for which the City exercises its rights under this Section 16.3. The
Repurchase Property acquired by the City shall be delivered to the City at close of escrow free and
clear of all liens, including Construction Liens (other than Lien Release Amounts that are actually
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deducted from the Repurchase Price paid by the City) and Mortgages and (v) the Permitted
Exceptions in effect at the time of the original Close of Escrow for such Property, (w) the Final
Parcel Map, if then Recorded, (x) utility easements and/or roadway easements, (y) other matters
affecting title consented to or requested by any Governmental Authority with respect to the
Repurchase Property in connection with development or operation of the Repurchase Property, or
consented to or requested by the City, and any covenants to comply with the Entitlements, and (z)
the Other Agreements then in effect.
16.3.10 Additional Terms Applicable To Right of Repurchase. From the Close
of Escrow until the Vertical Improvements Commencement Date, the City shall have the right, but
not the obligation, upon the terms and conditions provided herein, to exercise the Right of
Repurchase with respect to all or any portion of the Real Property. Following the Vertical
Improvements Commencement Date, the City shall not have the right to exercise the Right of
Repurchase.
16.3.11 No Release of Liability. Conveyance of the Repurchase Property to the
City shall not terminate or release any liability or obligation of the Developer Property to comply
with the provisions of this Agreement that survive the termination of this Agreement, except for
those liabilities and obligations that relate to the ownership and development of the Repurchase
Property. In the event the City purchases any portion of the Property, under no circumstances shall
the Developer have any right or claim to, or against, the Repurchase Property.
16.3.12 Survival of Provisions. The provisions of this Section 16.3 shall survive
the termination of this Agreement.
16.4The Right of Reversion.
Following Close of Escrow and prior to the Vertical Improvements Commencement Date,
in the event of the occurrence of any Reversion Action Trigger (defined in Section 16.4.1), and in
addition to its other rights or remedies as a result of the occurrence of any such Reversion Action
Trigger, the City shall have the right on the terms and subject to the conditions set forth in this
Section 16.4 to re-enter and take possession of the Reversion Property and to revest title thereto in
the City (“Right of Reversion”) notwithstanding that the Reversion Property may be encumbered
by liens, including Construction Liens and Mortgages. The revesting of title to any Reversion
Property by the City is referred to in this Agreement as a “Reversion Event”, whether based on
voluntary action of Developer or otherwise after notice by the City of its intent to exercise the
Right of Reversion. The City shall be entitled to exercise the Right of Reversion at any time on or
after the occurrence of any one or more of the Reversion Action Triggers and prior to the Vertical
Improvements Commencement Date; provided that the City has complied with the conditions to
exercise of the Right of Reversion set forth in Section 16.4.2. The Right of Reversion shall
constitute a lien and encumbrance on the Real Property and Project Improvements thereon then
subject to the Right of Reversion, which lien and encumbrance shall have priority over the lien
and charge of any Mortgage, Construction Lien and/or other lien upon the Real Property and any
improvements thereon; provided, however, such lien shall be deemed to be automatically released
and discharged for portions of the Property and Project for which it has not been exercised upon
termination of the Right of Reversion.
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16.4.1Certain Defaults Triggering the Right of Reversion. Following the Close
of Escrow and prior to the Vertical Improvements Commencement Date, the City may exercise the
Right of Reversion if it elects to do so with respect to the applicable portions of the Real Property
as set forth in Section 16.4.7, and all applicable Entitlements, Development Permits and other
development rights, consents, authorizations, variances, waivers, licenses, permits, certificates and
approvals from any Governmental Authority, the Transferable Products, the Intangible Property
and all other appurtenant rights applicable thereto (collectively, “Reversion Property”) upon the
occurrence of any one of the following (each, a “Reversion Action Trigger”, and the date on
which the Reversion Action Trigger occurs is referred to in this Agreement as the “Reversion
Action Trigger Date”). The occurrence of any of the following shall be a Reversion Action
Trigger:
16.4.1.1Developer fails to commence construction in accordance
with the Approved Plans and all Governmental Requirements of either of the Active Adult Project
Horizontal Improvements or the AL/MC Project Horizontal Improvements within the time period
for commencement of such construction set forth in the Schedule of Performance, as the date for
such commencement of construction in the Schedule of Performance may be extended for Force
Majeure Delay pursuant to this Agreement;
16.4.1.2Developer fails to commence construction of the Active
Adult Project Vertical Improvements or the AL/MC Project Vertical Improvements accordance
with the Approved Plans and all Governmental Requirements within the applicable time period for
commencement of such construction set forth in the Schedule of Performance, as the date for such
commencement of construction in the Schedule of Performance may be extended for Force
Majeure Delay pursuant to this Agreement;
16.4.1.3Developer fails to Complete construction of the Project on
the Development Parcel in accordance with the Approved Plans and all Governmental
Requirements within the applicable time period for Completion of such construction set forth in
the Schedule of Performance as the date for Completion of construction in the Schedule of
Performance may be extended for Force Majeure Delay pursuant to this Agreement;
16.4.1.4Developer abandons or, substantially suspends or a period of
six (6) consecutive months, construction of the Active Adult Project or the AL/MC Project
following commencement of such construction for reasons other than for Force Majeure Delay;
16.4.1.5The occurrence of a Developer Insolvency Event or a
Material Default with respect to Transfer or Transfer of Control; and/or
16.4.1.6With respect to any Guarantor which has provided a
Guaranty to the City, the occurrence of a Guarantor Illiquidity Event, unless Developer shall,
within the time period required thereby and in Section 14.2.1, provide substitute security meeting
the requirements of Section 8.9.3.
16.4.2Conditions to Exercise of the Right of Reversion. The City shall be
entitled to exercise the Right of Reversion at any time after the Reversion Action Trigger has
occurred and prior to the Vertical Improvements Commencement Date without regard to any notice
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and cure periods except as expressly provided in Section 16.4.1; provided that the City has
provided written notice to Developer that the City elects to exercise its Right of Reversion and
such notice states the date for the Reversion Event. The provisions of Section 16.5 shall be
applicable to exercise of the Right of Reversion. The date for the Reversion Event shall not occur
before the later of (i) the date that is ninety (90) Business Days after the date of such notice of
exercise; and (ii) the date that is five (5) Business Days after Developer has had the opportunity to
address the City Council at a public meeting regarding the Reversion Action Trigger. In the event
that, following the first notice by the City of its election to exercise the Right of Reversion and
prior to the Reversion Event, Developer or any Person on behalf of Developer cures, within the
time period provided for such cure in this Agreement, the Reversion Action Trigger which is the
basis for the City’s exercise of its Right of Reversion, such Right of Reversion shall cease and
terminate as to such event of Default; provided that the provisions of this sentence shall not be
applicable to any subsequent notice by the City of its election to exercise the Right of Reversion
with respect to a subsequent Reversion Event.
16.4.3Exercise and Effect of Right of Reversion.
16.4.3.1Cooperation. If the City exercises its Right of Reversion in
accordance with the provisions of this Agreement, Developer shall, and shall cause each
Mortgagee (if any) to use all reasonable efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary or desirable under applicable law to consummate the
revesting of title to the Reversion Property in the name of the City, including the execution and
delivery of such other documents, certificates, agreements, deeds and other writings and the taking
of such other actions as may be reasonably necessary to consummate such revesting and the other
provisions of this Section 16.4.
16.4.3.2Effect on Mortgages. Subject to the provisions of any
Subordination Agreement then in effect entered into by the City and a Permitted Mortgagee with
respect to an existing Construction Loan, a Reversion Event shall foreclose, defeat and render
invalid each and every Construction Lien and Mortgage.
16.4.4Sale of Reversion Property. Upon the revesting in the City of title to the
Reversion Property, the City shall use reasonable efforts to resell the Reversion Property as soon
and in such manner as the City shall find feasible, in accordance with applicable law and consistent
with the objectives of this Agreement, to a qualified and responsible Person or Persons as
determined by the City in its sole discretion that will assume the obligation of making or
completing the Project Improvements upon the Reversion Property. Concurrently with such resale
of the Reversion Property, and each part thereof, the proceeds thereof shall be applied in the
following order and amounts to the extent of funds available and the City shall have no liability to
Developer or any Person to the extent the balance is insufficient to pay any or all of the following
amounts nor shall the City have any obligation to make payments to any Person except in
accordance with the priorities and obligations set forth below:
16.4.4.1Delinquencies. First, to repayment in full of all delinquent
tax and delinquent assessment liens with respect to the portion of the Reversion Property sold.
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16.4.4.2Reimbursement to the City. Second, to payment in full of
City Liens and to reimburse the City on its own behalf for all costs and expenses incurred by the
City, in connection with the recapture, management, maintenance, repair, and resale of the
Reversion Property, or any part thereof and the enforcement of City’s rights under this Agreement
and the Other Agreements including City’s exercise of the Right of Reversion, taxes, assessments,
and other delinquent liens, if any, whether arising before or after the acquisition by the City of: a
pro-rata share of the salaries of personnel engaged in such action (based on the amount of time
spent by such personnel on such matters relating to the Reversion Property as compared to the
aggregate amount of time worked by such personnel; all taxes, assessments and utility charges
with respect to the Reversion Property; any payments made or necessary to be made to discharge
or prevent from attaching or being made any subsequent encumbrances or liens due to obligations,
Defaults or acts of Developer or any Successor Owner or each and every Person claiming by,
through or under Developer or any Successor Owner (but specifically excluding any End Users);
any expenditures made or obligations incurred with respect to the making or completion of the
agreed improvements or any part thereof on the Reversion Property; all costs of sale and marketing,
including reasonable brokers’ fees and costs incurred in the marketing and sale of the Reversion
Property; all legal fees and expenses; all escrow and title fees and costs; all survey and due
diligence fees and costs; all the Lien Release Amounts, if any, paid by the City to third parties; and
any amounts otherwise owing to the City by Developer and/or any Successor Owner under this
Agreement or the Other Agreements, including any City Liens and the actual cost incurred by the
City to acquire environmental and pollution legal liability insurance coverage for the Reversion
Property, including coverage for loss, remediation expense and legal defense expenses.
16.4.4.3Release of Claims. Third, at the election of the City in its
sole discretion, (i) to release any Claims affecting the Reversion Property in such amounts as may
be determined by the City in its sole discretion to be required to satisfy such Claims or to reinstate
service or work on the Reversion Property or to pay utility charges with respect to the Reversion
Property; (ii) to make any payments necessary to be made to discharge or prevent from attaching
or being made any subsequent Claims, encumbrances or liens due to obligations, Defaults or acts
of Developer or any Successor Owner or each and every Person claiming by, through or under
Developer or any Successor Owner; (iii) to make any expenditures or incur any obligations with
respect to completion of the agreed improvements or any part thereof on the Reversion Property,
including the construction to Completion of the Project Improvements, and (iv) to pay all costs of
sale and marketing, including reasonable brokers’ fees and costs incurred in the marketing and sale
of the Reversion Property; and (v) to pay all legal fees and expenses, escrow and title fees and
costs, survey and due diligence fees and costs; and any amounts otherwise owing to any other
Person whether by Developer, Ground Lessee and/or any Successor Owner or otherwise with
respect to the Project or any of the foregoing, in each case whether arising prior to or following
the acquisition by the City of the Reversion Property and only to the extent that any Claim is not
fully foreclosed or otherwise terminated by or as a result of the exercise by the City of the Right
of Reversion.
16.4.4.4Reimbursement to Developer. Fourth, to reimburse
Developer up to the amount equal to the Repurchase Price attributable to the portion of the
Reversion Property sold.
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16.4.4.5Balance Retained by the City. Any balance remaining after
such reimbursements shall be retained by the City as its property.
16.4.5Effect of Exercise of Right of Reversion. The provisions of Section 16.6
shall apply with respect to the Reversion Property following the revesting of title thereto in the
City. Following the revesting of title pursuant to this Section 16.4, under no circumstances shall
Developer or any lienholder have any right or claim to, or against, the Reversion Property.
Notwithstanding the acquisition of the Reversion Property by the City as provided in this Section
16.4, this Agreement shall remain in full force and effect with respect to the portions of the
Property and Project Improvements not acquired by the City. The City’s Right of Reversion shall
not defeat or render invalid or limit any rights or interests provided in easements, covenants,
conditions or restrictions in favor of third parties who are not Developer Affiliates that are
approved by the City (or constituting a Permitted Transfer) and Recorded on the portion of the
Property for which the City exercises its rights under this Section 16.4.
16.4.6Cooperation and Grant of Easements. Concurrently with close of escrow
for the Reversion Property, the Parties shall each reserve and/or grant to the other such roadway,
utility, access and other easement rights as may be required by the other Party and its successors
in interest to develop the Property as a unified development and as contemplated by the
Entitlements, this Agreement and the Other Agreements. In the event the City has declared a
Default, Developer shall have the right to apply for building permits for Horizontal Improvements
or Vertical Improvements or to commence construction thereof in a manner that affects or thwarts
the ability of the City to exercise its Right of Reversion.
16.4.7Additional Terms Applicable To Right of Reversion. Following the
Vertical Improvements Commencement Date, the City shall not have the right to exercise the Right
of Reversion.
16.4.8Survival of Provisions. The provisions of this Section 16.4 shall survive
the termination of this Agreement.
16.5Access and Inspection.
From and after the occurrence of any Default for which the City has the right to exercise
the Right of Reversion or any Reversion Action Trigger occurring prior to the Vertical
Improvements Commencement Date, the City and its appointed and elected officials, agents,
attorneys, employees, contractors, consultants and representatives shall have the non-exclusive
right, exercising such right in the Proprietary Capacity of the City, to enter upon at any reasonable
time, at its own cost and expense entirely and upon not less than forty-eight (48) hours prior
telephonic or email notice to Developer, the Potential Returned Property for the purpose of making
such feasibility and other studies, inspections, appraisals, audits, tests, evaluations, investigations,
surveys and reports of the Potential Returned Property (including engineering and environmental
audits, evaluations and tests relative to the presence of any Hazardous Material within, under or
upon the Potential Returned Property) (collectively, “City Inspections”) as City may elect to make
or obtain in connection with its exercise of its Right of Repurchase or Right of Reversion; provided
that during such City Inspections, the City shall use commercially reasonable efforts to minimize
its interference with Developer’s activities on the Property. The City shall indemnify, protect and
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defend Developer against any and all Claims which Developer may incur or suffer by reason of
any acts or omissions to act of the City or its appointed and elected officials, agents, attorneys,
employees, contractors, consultants and representatives in the conduct of any City Inspections on
the Potential Returned Property, provided that the foregoing indemnity shall not apply to the extent
of (i) the gross negligence, willful misconduct or fraud of Developer or any of the Developer
Representatives, or (ii) Hazardous Materials conditions unless such condition is exacerbated by,
or any Release caused by, negligent acts of City or its employees, consultants or contractors, or
(iii) the acts or the negligence, gross negligence, or willful misconduct of Developer or any of the
Developer Representatives in performance of work on the Development Parcel Accruing prior to
the close of escrow pursuant to this Article 16; provided that in no event shall the foregoing apply
with respect to inspections conducted by the City in its Governmental Capacity.
16.6Obligations and Release Following Repurchase or Reversion.
Except as set forth in Sections 16.3 and 16.4, if the City exercises the Right of Repurchase
or the Right of Reversion, the obligations of Developer under this Agreement and the Other
Agreements, and Guarantor under the Guaranty and the Equity Investor under the Equity
Commitment and the obligations of the City under this Agreement and the Other Agreements shall
be released and terminated as to the Returned Property as of the close of escrow associated with
such repurchase or as of the Reversion Event, as applicable, provided that the foregoing does not
release Developer, Equity Investor, Guarantor or the Guaranty or the City with respect to matters
Accruing prior to the date of such termination.
16.7Cooperation.
If the City exercises its Right of Repurchase or Right of Reversion in accordance with the
provisions of this Agreement, Developer shall use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things reasonably necessary or desirable under
applicable law to consummate the repurchase of the Repurchase Property or revesting of the
Reversion Property, as the case may be, including the execution and delivery of such other
documents, certificates, agreements, deeds and other writings and the taking of such other actions
as may be reasonably necessary to consummate such transactions.
17.Mortgages and Mortgagee Protection for Project.
17.1Restrictions on Mortgages.
17.1.1Generally. Developer shall not encumber any portion of the Property or the
Project Improvements, or the Boundary Landscape Area associated with the Real Property with
any Mortgage except in accordance with the terms of this Agreement; provided that the foregoing
restrictions shall not apply to any portion of the Real Property for which a Certificate of
Compliance has been Recorded by the City. The Developer of the Project shall have the right
during the Term to enter into a Construction Loan secured by a Permitted Mortgage encumbering
the fee interest of Developer in the Real Property consistent with the requirements set forth in this
Article 17. Any Mortgage or other encumbrance of any portion of the Real Property in violation
of this Article 17 prior to Recording by the City of a Certificate of Compliance as to such portion
of the Real Property shall be a prohibited Transfer and a Material Default by Developer.
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17.1.2Permitted Mortgage and Permitted Mortgagee Definitions. A Mortgage
shall be a Permitted Mortgage and a Mortgagee shall be a Permitted Mortgagee if: (i) such
Mortgagee is a Qualified Institutional Lender or other lender identified in the most recent
Financing Plan approved by the City in accordance with Section 4.6; (ii) the terms of its Mortgage
and all of the loan documents executed in connection with the corresponding Construction Loan
are materially consistent with the portion of such Financing Plan and the requirements of Section
4.6 and this Article 17; (iii) complete copies of the loan documents have been provided to the City
in accordance with Section 17.2.3 and the City has not identified that such loan documents fail to
materially comply with the requirements of Sections 17.1 through 17.3; (iv) the loan proceeds will
be used to finance the entitlement, development and the construction of the Project Improvements
for the Project for which they are intended and lease up through stabilization costs andfor
associated costs and expenses (including financing costs) and for no other purpose.
17.2Restrictions on Transfer to Mortgagee.
In addition to the other restrictions on Mortgages set forth in this Agreement, the following
requirements shall apply to the Real Property and portion thereof and all Project Improvements
thereon:
17.2.1Neither this Agreement, nor the Property, nor any portion thereof or all or
any portion of the Project Improvements shall be cross collateralized with any other contract or
real or personal property, nor shall this Agreement or the Property (or any portion thereof) or all
or any portion of the Project Improvements serve as additional security for any other loan by a
Mortgagee, nor any debt other than a Construction Loan. In addition, no Mortgage shall serve as
additional security for any loan other than a Construction Loan, or any other debt of Developer
and shall not be cross collateralized or cross defaulted with any other indenture of mortgage or
deed of trust, hypothecation, pledge, assignment for security purposes, bond, grant of taxable or
tax-exempt funds from a governmental agency or other security interest.
17.2.2Developer shall not transfer the Property or any portion thereof or any
interest therein or all or any portion of the Project Improvements or any interest therein to a third
party for purposes of a sale-leaseback transaction.
17.2.3Developer shall deliver to the City loan documents for the proposed
Permitted Mortgage, including all documents and guaranties securing the interest of the proposed
Permitted Mortgagee, with drafts of the core documents (i.e., the Loan Agreement, Deed of Trust,
Assignment of Rent (if applicable), Environmental Indemnity and any Guaranty Agreement) to be
delivered at least twenty-five (25) Business Days prior to the proposed date of entry into the
Mortgage, and substantially final versions, which shall be red-lined to show changes from the
drafts reviewed by the City, to be delivered at least five (5) Business Days prior to the date of entry
into the Mortgage, and executed copies to be delivered within three (3) Business Days after the
date of entry into the Mortgage, and either indicating no change in the previously submitted forms
or providing documents red-lined to show changes from the versions previously delivered to the
City), and such other information as may be reasonably requested by the City to confirm the
matters that require the City’s determinations described in Section 17.1 and this Section 17.2,
provided that all drafts of the documents related to any Mortgage that are not loan agreements,
trust indentures, deeds of trust, indemnities and guaranties (or documents performing similar
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functions) may be provided thereafter, but in any event no later than the earlier of one (1) Business
Day after receipt by Developer and ten (10) calendar days prior to entering into the Mortgage. The
City shall determine, in its reasonable discretion, whether the loan documents for the proposed
Permitted Mortgage comply with the requirements of this Agreement, including:
17.2.3.1With respect to any Permitted Mortgage, whether the
proposed Permitted Mortgagee is a Qualified Institutional Lender or, if the proposed Permitted
Mortgagee is not a Qualified Institutional Lender, whether the proposed Permitted Mortgagee was
identified in the most recent Financing Plan or Updated Financing Plan for the Project approved
by the City.
17.2.3.2The loan documents shall include a Subordination
Agreement or if there are modifications proposed thereto, in such other form and substance as shall
be approved by the City, Developer and the Permitted Mortgagee, each in its reasonable discretion,
provided that it shall not be unreasonable for the City to withhold its approval to any form of
Subordination Agreement that differs in any substantive respect from the form of Attachment 24,
or would have the effect, among other things, when compared to the terms reflected in Attachment
24, of (i) imposing on the City any additional cost, liability, or obligation that is more than
administrative or transactional in nature, (ii) altering the extent or priority of the interests described
in Attachment 24, or (iii) creating a conflict with an express requirement of this Agreement or the
Other Agreements. The Subordination Agreement shall be Recorded at the Closing, immediately
after the Mortgage to which it relates is Recorded.
17.2.3.3Developer shall not obtain or utilize Mezzanine Financing
without the prior consent of the City in its sole discretion.
17.2.3.4Developer shall not encumber any City owned property
within the Boundary Landscape Area with any Mortgage under any circumstances.
17.2.3.5The City shall have reasonably determined that the amount
of the financing provided for in the Construction Loan, together with the equity to be committed
by the Developer for the construction of the Project, is sufficient to pay for the costs of constructing
the Project in accordance with the construction budget, including appropriate construction
contingencies and the costs of Developer’s performance under this Agreement and the Other
Agreements.
17.3Subordination of Permitted Mortgage. Subject to the foregoing and the terms,
conditions, and limitations of this Article 17, the Developer shall have the right to encumber its
fee interest in the Property with one Construction Loan that is secured by a Permitted Mortgage.
All Mortgages shall be subject to and subordinate to the SLA Covenant, this Agreement, including
the City Lien, the Right of Repurchase and the Right of Reversion contained herein and therein,
and the additional Other Agreements shall be superior in priority to all Mortgages and the
foregoing rights and agreements shall not be subordinated to any Mortgage or other instrument
without the express written consent of the City in its sole discretion.
17.4Loan Documents.
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17.4.1Loan Documents Negotiation. Developer, at the Developer’s sole cost and
expense, shall obtain and negotiate the terms of the Construction Loan. The City shall have the
right to review and approve or disapprove any Permitted Mortgagee, Permitted Mortgage, and the
Construction Loan documents as set forth in Section 17.2.3. The costs incurred by the City to
review and approve the foregoing and/or negotiate any agreements between the City and any
Mortgagee, including, third party fees and costs incurred for legal counsel, financial consultants
and other consultants, shall be DDA Transaction Expenses reimbursed to the City pursuant to
Section 1.8 and 2.4.
17.5Acknowledgment by City of Permitted Mortgagee.
Within fifteen (15) Business Days following Developer’s delivery of the first set of loan
documents and information required under Section 17.2.3 and within ten (10) Business Days
following delivery of a set of modified documents and information that are substantively
responsive to City’s initial comments to the same, (i) the City shall acknowledge receipt of the
same and (ii) in its response, if not previously addressed, the City shall confirm in writing to
Developer whether the proposed Mortgagee is a Permitted Mortgagee or explain why the City
reasonably considers the proposed Mortgagee not to be a Permitted Mortgagee, and (iii) the City
shall confirm in writing to Developer whether it has determined, in its reasonable discretion, if the
loan documents comply with the requirements of Sections 17.1 and 17.2, or explain why the City
reasonably considers the loan documents not to comply. If the loan documents are determined by
the City, in its reasonable discretion, not to comply, then Developer shall promptly cause revisions
in the loan documents and resubmit the same to the City for further consideration pursuant to this
Section 17.5 and, if requested by Developer, the City shall agree to meet and confer with Developer
and such other Persons as Developer may request with respect to open issues pertaining to the loan
documents.
17.6Change in Loan Documents, Special Restrictions and/or Landscape
Installation and Maintenance Agreement.
17.6.1Following approval by the City of the loan documents and Subordination
Agreement pursuant to Section 17.3 (and subject to the terms and conditions of any then effective
Subordination Agreement), Developer shall not, without the prior written approval of the City in
its sole discretion, modify or agree to modify the loan documents in a manner that would effect
any of the following (each or any combination of which is referred to as a “Material Loan
Modification”): (a) an increase in the financial obligations of Developer for interest or fees,
whether absolute or contingent, or (b) a change in the amount or timing of required principal
payments, (c) an increase in the release price for any partial release of collateral, (d) a change
unfavorable to the Developer in the conditions to any advance of funds under the loan documents,
or (e) the modification of any event of default under the loan documents in a manner unfavorable
to the Developer. If such approval is not obtained for such loan modification, then, notwithstanding
any other provision of this Agreement or the Subordination or any subsequent correspondence
from the City specifying that the Mortgagee is a Permitted Mortgagee, from and after the date of
the loan modification, such Mortgagee shall be deemed to have lost its status as a Permitted
Mortgagee.
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17.7Effect of a Mortgage.City and Developer hereby agree that neither City nor
Developer shall unreasonably withhold its consent to approval of any requested modifications to
either the Special Restrictions or the Landscape Installation and Maintenance Agreement made by
any Permitted Mortgagee in connection with and prior to the funding of the related financing
associated with a Construction Loan; provided that it shall not be unreasonable for the City to
withhold its approval of any proposed modification that would have the effect, among other things,
when compared to the terms of the particular instrument then in effect (or if not then in effect, in
the form attached to this Agreement) of (i) removing or reducing the extent of an obligation of
Developer under such agreement, (ii) removing or reducing the extent of an obligation of any
Owner to the City thereunder, (iii) imposing on the City any additional cost, liability, or obligation
that is more than administrative in nature, (iv) altering the priority of the interests described in
such instrument or the obligations of any Mortgagee to comply with the terms of such instruments
or to cure prior defaults in accordance with the terms as currently stated, or (v) creating a conflict
with an express requirement of this Agreement.
17.8Constructive Notice and Acceptance.
Subject to the provisions of Article 2 or this Article 17 and the terms of any then effective
Subordination Agreement, all of the provisions contained in this Agreement shall be binding upon
and benefit any Person who acquires a portion of the Property; provided that the foregoing shall
not apply to any Property for which a Certificate of Compliance has been Recorded by the City
unless otherwise set forth in the Recorded Certificate of Compliance.
17.9Bankruptcy Affecting Developer.
Developer and City hereby agree that this Agreement (including the Right of Repurchase
and Right of Reversion), the Quitclaim Deed and the Other Agreements shall contain and consist
of covenants running with the land and that neither this Agreement, the Quitclaim Deed or the
Other Agreements shall be subject to rejection in any Bankruptcy Proceeding and Developer
hereby waives its rights to reject this Agreement, Quitclaim Deed and the Other Agreements in
any Bankruptcy Proceeding.
17.10Mortgagee Protections.A Permitted Mortgagee shall be entitled to the Permitted
Mortgagee protections provided for under this Section 17.10 from and after such time as the
Developer and such Permitted Mortgagee have provided the City notice, in accordance with the
provisions of Section 18.6, of the name and address of such Permitted Mortgagee, accompanied
by a copy of the executed loan documents for the Permitted Mortgage. The Permitted Mortgagee
of a then-existing Permitted Mortgage affecting a portion of the Property which has provided
notice to the City as required herein shall, until its Permitted Mortgage is satisfied of record or
until written notice of satisfaction is given by Permitted Mortgagee to the City or it ceases to be a
Permitted Mortgagee, be entitled to the following:
(a)Provision of concurrent notice of any default by any Party
hereunder; provided, however, that a failure of a Party to deliver a concurrent copy of such notice
of default to Permitted Mortgagee shall not affect in any way the validity of the notice of default
as it relates to the defaulting Party, but in any subsequent proceedings arising from the notice of
default with respect to which there was a failure to provide the requested concurrent notice to
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Permitted Mortgagee, the interest of Permitted Mortgagee and its lien upon the Real Property 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, and provided, further, 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.
(b)The right, but not the obligation, at any time prior to the earlier to
occur of exercise of the Right of Repurchase and/or Right of Reversion, or the termination of this
Agreement and without payment of any additional penalty or assumption of the obligations of
Developer under this Agreement, to cure or remedy such Potential Default or Material Default, to
effect any insurance, to pay any amounts due to the City, to make any repairs or improvements, to
do any other act or thing required of Developer under this Agreement and to do any act or thing
which may be necessary and proper to be done in the performance and observance of this
Agreement to prevent termination of this Agreement. To carry out the foregoing, the Developer
hereby agrees that such Permitted Mortgagee and its agents and contractors shall have full access
to the Property for purposes of accomplishing any of the foregoing. Any of the foregoing done by
such Permitted Mortgagee shall be as effective to prevent a termination of this Agreement or the
exercise by the City of the Right of Repurchase or the Right of Reversion as the same would have
been if done by Developer.
18.General Provisions.
18.1Applicable Law; Consent to Jurisdiction; Service of Process.
This Agreement shall be governed by, interpreted under, construed and enforced in
accordance with the laws of the State, irrespective of California’s choice-of-law principles.
Developer and the City agree that any disputes arising between them in connection with this
Agreement or in connection with or under any instrument, agreement or document provided for or
contemplated by this Agreement, including in connection with the execution of this Agreement,
the Close of Escrow or any other matter arising under, related to or in connection with this
Agreement (including a determination of any and all issues in such dispute, whether of fact or of
law) shall be tried and litigated exclusively in the Superior Court of the County of Orange in the
State, 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 Developer and the City to be
mandatory and not permissive in nature, thereby precluding the possibility of litigation between or
among Developer and the City with respect to or arising out of or related to this Agreement in any
jurisdiction other than that specified in this Section 18.1. Each Party hereby waives any right that
it may have to assert forum non conveniens or similar doctrine or to object to venue with respect
to any proceeding brought in accordance with this Section 18.1 and stipulates that the state of
California and federal courts located in the County of Orange, in the State, shall have in personam
jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy or
proceeding arising out of or related to 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 18.1 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 18.6(i) or (iii) of this Agreement pertaining to notice. Any final judgment rendered against
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a Party in any Action shall be conclusive as to the subject of such final judgment and may be
enforced in other jurisdictions in any manner provided by law.
18.2Counsel for Indemnified Obligations; Legal Fees and Costs. Wherever
Developer has an obligation to defend the City under this Agreement, Developer shall, prior to
selection of counsel, consult in good faith with the City to ensure that the City is satisfied, in its
sole discretion that the proposed legal counsel has the professional expertise and experience to
demonstrate they are well-qualified to defend the City against the Claim(s). If any Party to this
Agreement institutes any action, suit, proceeding, counterclaim or other proceeding for any relief
against another Party, declaratory or otherwise (collectively an “Action”), to enforce the terms
hereof or to declare rights under this Agreement or with respect to any inaccuracies or material
omissions in connection with any of the covenants, representations, warranties or obligations on
the part of the other Party to this Agreement, then the Prevailing Party in such Action shall be
entitled to have and recover of and from the other Party all costs and expenses of the Action,
including (i) the Prevailing Party’s reasonable attorneys’ fees (which shall be payable at the
contractual hourly rate for City’s litigation counsel at the time the fees were incurred, but in no
event more than Four Hundred Dollars ($400.00) per hour with this rate being used to calculate
the attorneys’ fees to be recovered by the Prevailing Party regardless of whether the City or another
Person is the Prevailing Party), and (ii) costs actually 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 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
18.2 includes a Party who agrees to dismiss an Action in consideration for the other Party’s
payment of the amounts allegedly due or performance of the covenants allegedly breached or
obtains from a court of competent jurisdiction substantially the relief sought by such Party.
18.3Memorandum of DDA; Modifications or Amendments.
The Parties shall cause the Memorandum of DDA to be Recorded concurrently with the
Close of Escrow. 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. Except with respect to changes to Attachments 1, 2A and 2B and 13, and/or changes
to Attachment 7 that extend the date of Completion of the Active Adult Project Improvements or
the AL/MC Project Improvements, as applicable, by more than six (6) months (exclusive of any
extensions resulting from any Force Majeure Delay which shall be subject to the limitations set
forth in Section 18.7), each of which shall require consent of the City Council, the Parties (with
the City Manager or his or her designee having delegated authority to act on behalf of the City)
may by mutual written agreement (in the Parties’ respective sole discretion) update and substitute
any updated Attachment for the Attachment attached hereto as of the Effective Date, and such
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substitution shall be deemed an administrative amendment of this Agreement and shall not require
Recording of an amendment of the Memorandum of DDA. In addition, the City Manager is
authorized, without further approval of the City, to waive or modify any City Closing Conditions
or to make them conditions subsequent to the close of escrow under this Agreement. The
provisions of this Section do not modify or supersede the retention of authority set forth in Section
18.11.3.
18.4Further Assurances.
Each of the Parties hereto shall execute and deliver at their own cost and expense, any and
all additional papers, documents, or instruments, and shall do any and all acts and things reasonably
necessary or appropriate in connection with the performance of its obligations under this
Agreement in order to carry out the intent and purposes of this Agreement.
18.5Rights and Remedies Are Cumulative; Limitation on Damages.
18.5.1Cumulative Remedies. Except with respect to the rights and remedies
expressly declared to be exclusive in this Agreement or the Other Agreements, 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 Material Default or any other Material Default by the other Party. Except
as otherwise specifically set forth in this Agreement, and subject to Section 18.5.2, wherever a
Party has a right to damages for the Material Default of another Party (i) such damages shall be
limited to direct (actual) damages for the Material Default of the other Party, and (ii) each of the
Parties, on behalf of itself and its successors and assigns, hereby expressly waives, releases and
relinquishes any and all right to any lost profits, incidental, special, collateral, expectation,
anticipation, indirect, consequential, exemplary or punitive damages or losses.
18.5.2Limitation on Damages Payable by the City. Developer acknowledges
that the City would not have entered into this Agreement if the City could become liable for
significant damages under or with respect to this Agreement, the Other Agreements and/or any
estoppels or other certificates executed by Developer in connection with the transaction described
in this Agreement. Consequently, and notwithstanding any other provision of this Agreement,
except for (i) the monetary damages that may arise from the City’s obligations referenced in
Section 18.5.3, and (ii) the payment of attorneys’ fees and Costs in accordance with Section 18.2,
the City shall not be liable in damages under this Agreement, the Other Agreements and/or any
estoppels or other certificates executed by Developer in connection with the transaction described
in this or any Other Agreement to Developer or to any Successor Owner and Developer, on behalf
of itself, each Successor Owner and each and every Person claiming by, through or under
Developer or any Successor Owner hereby waives any and all rights to claim damages of any kind
or nature from the City except as set forth in Section 18.5.3.
18.5.3Special Circumstances Where Damages may be Payable by the City.
Subject to Section 18.5.1, the limitations on damages set forth in Section 18.5.2 shall not preclude
Developer from seeking (i) payment of amounts, if any, which the City is obligated to pay to
Developer or Escrow Holder pursuant to Sections 1.8.3, 7.4.1, 7.4.4, 14.2.5, 14.3.2 or 18.2, or
Article 15 provided that (a) the provisions of Section 18.5.1 shall apply to such claims and
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payments, and (b) Developer shall not be entitled to any damages in addition to the actual amounts
owed by the City to Developer pursuant to this Agreement or the Other Agreements, or (ii)
damages which arise out of a breach of the City’s representations and warranties contained in
Sections 3.3 or 18.12.2, provided that the amount of any damages payable pursuant to this clause
(ii) shall be the lesser of (x) actual damages, or (y) Five Hundred Thousand Dollars ($500,000.00)
or (z) the value of any of the rights reserved to the City pursuant to Section 1.2.2.1 through Section
1.2.2.3 and as the same shall be included in the Quitclaim Deed.
18.5.4Right to Specific Performance. Developer’s right to seek specific
performance prior to the Close of Escrow shall be limited to the circumstance set forth in Section
15.3. In the event the City is in Material Default following the Close of Escrow, Developer shall
be entitled to seek mandamus or special writs, specific performance, or injunctive relief in order
to enforce the rights expressly granted to Developer pursuant to this Agreement. For purposes of
clarity, in the event that the City is obligated to pay any amounts to Developer pursuant to this
Agreement, and the City fails to pay such amounts to Developer as and when required by this
Agreement, Developer shall be entitled to seek specific performance of such obligation,
notwithstanding the other provisions of this Section 18.5.
18.6Notices, 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 (i) when hand delivered to the other Party; (ii) three (3) Business Days after such
notice has been sent by U.S. Postal Service via certified mail, return receipt requested, postage
prepaid, and addressed to the other Party as set forth below; (iii) the next Business Day after such
notice has been deposited for overnight delivery with an overnight delivery service reasonably
approved by the Parties (Federal Express, Overnite 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 (iv)
when transmitted if sent by email (referencing “TUSTIN LEGACY DDA” in the subject matter
line) to the email address set forth below; provided that notices given by email shall not be effective
unless either (a) a duplicate copy of such notice is promptly sent by any method permitted under
this Section 18.6 other than by email (provided that the recipient Party need not receive such
duplicate copy prior to any deadline set forth in this Section); or (b) the receiving Party delivers a
written confirmation of receipt for such notice either by email or any other method permitted under
this Section. Any notice given by email shall be deemed received on the next Business Day if such
notice is received after 5:00 p.m. Pacific Time or on a non-Business Day. Unless otherwise
provided in writing, all notices with respect to this Agreement shall be addressed as follows:
City: City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Aldo E. Schindler
Email: CityManager@tustinca.org
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With a copy to: Deputy City Manager – Real Property
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Brian Moncrief
Email: DCM-RP@tustinca.org
City Attorney
And with a copy to:
Woodruff & Smart
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Attention: David Kendig, Esq.
Email: dkendig@woodruff.law
And with a copy to: Hepner & Myers LLP
1241 Johnson Avenue, Suite 360
San Luis Obispo, CA 93401
Attention: Amy E. Freilich. Esq.
Email:afreilich@HepnerMyers.com
Developer:CD-CW (Tustin) LLC
c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: H McNeish and Steve Strom
Email: HMcNeish@confluentdev.com and
steve.strom@confluentdev.com
And with a copy to: CD-CW (Tustin) LLC
c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: Legal Department
Email: legal@confluentdev.com
And with a copy to: Polsinelli
1401 Lawrence Street, Suite 2300
Denver, CO 80202
Attention: Nick McGrath
Email: nmcgrath@polsinelli.com
The Rebecca P. Samberg 2018 Revocable Trust
And for notices of Default only with a
Dated March 26, 2018
copy to:
77 Bedford Road
Katonah, NY 10536
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Attention: Aryeh Davis
Email: Aryeh@hawkesllc.com
Any Party may by written notice to the other Party in the manner specified in this
Agreement, add additional parties in the United States to receive notice hereunder and/or change
the address to which notices to such Party shall be delivered.
18.7Delay.
18.7.1Definition of Force Majeure Delay. “Force Majeure Delay” shall mean
the occurrence of any of the following events when such event is beyond the control of the First
Party and such Party’s officers, directors, employees, contractors, consultants, agents and
representatives and is not due to an act or omission of such Party or its officers, directors,
employees, contractors, consultants, agents or representatives or other Person for whom such Party
may be contractually or legally responsible, which directly, materially and adversely affects the
ability of the First Party to meet its non-monetary obligations under this Agreement, including the
deadlines imposed by the Schedule of Performance, or the ability of Developer to Complete the
Project and which events (or the effect of which events) could not have been avoided by use of
commercially reasonable efforts by the Party claiming Force Majeure Delay:
18.7.1.1Civil Unrest. An epidemic, pandemic, shut-down,
widespread disease, blockade, quarantine, rebellion, war, insurrection, act of terrorism, strike or
lock-out, riot, act of sabotage, civil commotion, act of a public enemy, freight embargo, or lack of
transportation;
18.7.1.2Unforeseeable Conditions. Reasonably unforeseeable
physical condition of the Real Property including the presence of Hazardous Materials;
18.7.1.3Casualty. Fire, earthquake or other casualty, including
liquefaction resulting from an earthquake, in each case only if causing material physical
destruction or damage on the Real Property;
18.7.1.4Litigation. Any lawsuit seeking to restrain, enjoin,
challenge or delay any issuance of any of the Entitlements or seeking to restrain, enjoin, challenge,
or delay construction of the Project which is diligently defended by the First Party;
18.7.1.5Change of Law. The passage of a referendum or initiative
or any change in law by Governmental Authorities other than the City that results in the inability
of such Party to perform its material obligations under this Agreement; provided that the foregoing
shall not apply to a Party’s performance regarding the Close of Escrow, which are governed by
Articles 7 and 15;
18.7.1.6Weather. Unusually severe weather conditions not
reasonably anticipatable for the City of Tustin, based upon U.S. Weather Bureau climatological
reports for the months included plus a report indicating average precipitation, temperature, etc. for
the last ten (10) years from the nearest reporting station;
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18.7.1.7Materials Shortage. Inability to secure adequate supplies or
types of materials necessary to prosecute construction of the Project hereunder (but not an increase
in material costs); and/or
18.7.1.8Delays Caused by Governmental Authorities other than
City. Delay in time to obtain, and comply with, any permits issued or to be issued by any state or
federal governmental entities and which are required for construction of the Project.
18.7.2Limitation. The term “Force Majeure Delay” shall be limited to the
matters listed in Section 18.7.1 and specifically excludes from its definition the following matters
which might otherwise be considered Force Majeure Delay:
18.7.2.1Entitlements. The suspension, termination, interruption,
denial or failure to obtain or nonrenewal of any of the Entitlements, permits, including
Development Permits, license, consent, authorization or approval which is necessary for the
development of the Project except for any such matter resulting from a lawsuit or referendum as
described in Section 18.7.1.4 or 18.7.1.5;
(a)Foreseeable Changes in Governmental Requirements. Any
change in Governmental Requirements by the City or any such change by any Governmental
Authority other than the City which was formally proposed or was otherwise reasonably
foreseeable at the Close of Escrow;
18.7.2.2Failure to Perform Obligations. Failure of Developer or
any Successor Owner or other Person to perform any obligation to be performed by Developer or
any Successor Owner or such other Person under this Agreement as the result of adverse changes
in the financial condition of Developer or such Successor Owner or other Person, as applicable;
18.7.2.3Failure to Provide Financial Security. Failure of
Developer or any Successor Owner to provide financial security required by this Agreement when
due or to submit evidence of financing of the Project or failure to perform any obligation to be
performed by Developer or any Successor Owner or other Person under this Agreement as the
result of adverse changes in market conditions;
18.7.2.4Failure to Submit Required Documentation. Failure of
the First Party to submit documentation as and when required by this Agreement;
18.7.2.5Failure to Submit Basic Concept Plan or Other Plans and
Entitlements. Failure of Developer, or a Successor Owner, as applicable, to submit a modification
of the Basic Concept Plan, and/or applications for Entitlements or Development Permits required
for construction of the Project Improvements, and/or development of the Project.
18.7.2.6Failure to Maintain Required Insurance. Failure to
acquire, maintain and submit evidence of insurance policies as required by Article 11;
18.7.2.7Failure to Execute Documents. Failure of the First Party to
execute documents; and
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18.7.2.8Other Matters. All other matters not caused by the Second
Party and not listed in Section 18.7.1.1 through 18.7.1.8.
18.7.3Procedure. If any Party (“First Party”) believes that it is entitled to an
extension of time due to Force Majeure Delay, it shall notify the other Party (“Second Party”) in
writing within ninety (90) calendar days from the date upon which the First Party becomes aware
of such Force Majeure Delay, generally describing the Force Majeure Delay and its date of
commencement. Upon written request from the Second Party, the First Party shall promptly
provide the following information with respect to such Force Majeure Delay: a more detailed
description of the Force Majeure Delay, when and how the First Party obtained knowledge thereof,
the date the First Party understands the event commenced, the steps the First Party anticipates
taking to respond to such Force Majeure Delay, and the estimated delay resulting from such Force
Majeure Delay and such other information as the Second Party may reasonably request. The
extension for Force Majeure Delay shall be granted or denied in writing by the Second Party in its
reasonable discretion in compliance with this Section 18.7. If the First Party fails to notify the
Second Party in writing of its request for a given Force Majeure Delay within the ninety (90)
calendar days specified above, there shall be no extension for such Force Majeure Delay.
18.7.4Extension of Time Periods. Except as otherwise specifically set forth in
Section 18.7.5, the time periods under this Agreement, including the Schedule of Performance
shall be extended for Force Majeure Delay in accordance with this Section 18.7, such that the First
Party shall not be in default for an excused Force Majeure Delay; provided that the limitations set
forth on the maximum period for Force Majeure Delay in this Agreement shall in all cases apply.
18.7.5Force Majeure Not Applicable to Certain Matters. The Closing Date and
Outside Closing Date shall not be extended by Force Majeure Delay and, except as specifically
provided in Section 16.4, the Reversion Action Trigger Dates shall not be extended for Force
Majeure Delay. In addition, matters related to Close of Escrow in Articles 7 and 15 and the
provisions of Sections 2.2.7.3, 2.7, 6.3, 8.9.3, 8.9.4, 11.2.4, 14.2.1, 14.2.3 or 14.2.4 shall not be
subject to extension for Force Majeure Delay.
18.7.6Limitations on Force Majeure Delay. The outside dates in the Schedule
of Performance for commencement and/or Completion of the Active Adult Project Improvements
and the AL/MC Project Improvements may be extended individually, provided as to each of the
Active Adult Project and the AL/MC Project the aggregate of Force Majeure Delay with respect
to such commencement and/or Completion dates shall not exceed twelve (12) months.
18.8Conflict of Interest.
No appointed or elected official or employee of the City shall have any personal interest,
direct or indirect, in this Agreement nor shall any official or employee participate in any decision
relating to this Agreement which affects his interests or the interests of any corporation,
partnership, or association in which he is directly or indirectly interested. Developer warrants that
it has not paid or given and will not pay or give any third person any money or other consideration
for obtaining this Agreement, and the City warrants that no City official, officer or employee has
a financial interest in this Agreement in violation of California Government Code Section 1090.
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18.9Non-liability of City Officials and City or Developer Employees.
No natural person serving as an elected or appointed official, representative, employee,
agent, consultant, legal counsel or employee of the City shall be personally liable to Developer,
any successor or assign of Developer, or any Successor Owner in the event of any Default or
breach by the City for any amount which may become due to Developer or Successor Owners on
any obligation under the terms of this Agreement or any direct agreement between the City and
Developer. No natural person serving as an officer, director, member, shareholder, partner in,
representative, agent, consultant, legal counsel or employee of Developer shall be personally liable
to the City or any Successor Owner of the City in the event of any Default or breach by Developer
for any amount which may become due to the City or any Successor Owner of the City or on any
obligation under the terms of this Agreement.
18.10Inspection of Books and Records.
The City shall have the right at all reasonable times, upon ten (10) Business Days prior
written notice but, unless Developer is then in Default, not more than one time per twelve (12)
month period during the Term, to inspect the books and records of Developer pertaining to the
Project, the Property, the Project Improvements and the areas subject to any encroachment permit,
only as pertinent to the purposes of this Agreement.
18.11Consents and Approvals.
18.11.1 Consent. In any instance in which a Party’s has a right to approve
or disapprove of any matter with respect to which such Party’s approval is required by any of the
provisions of this Agreement, such approval shall only be effective if given in writing and except
as otherwise provided in this Agreement (e.g., where reasonable discretion review and approval is
expressly indicated) shall be in the sole discretion of the Party whose approval is required and shall
not be unreasonably delayed; provided that nothing in this Agreement shall modify the City’s
regulatory authority.
18.11.2 Deemed Submitted. Any matter required by this Agreement to be
submitted by Developer to the City shall be deemed submitted upon the submittal to the Deputy
City Manager – Real Property or designee, provided that the provisions of this Section shall not
amend or modify the requirement to deliver notice pursuant to Section 18.6 whenever notice is
provided for in this Agreement.
18.11.3 Action Taken. Following its approval by the City, this Agreement
shall be administered by the Deputy City Manager – Real Property or any designee. Except where
the terms of this Agreement expressly require the approval of a matter or the taking of any action
by the City Council, any matter to be approved by the City shall be deemed approved, and any
action to be taken by the City shall be deemed taken, upon the written approval by the City
Manager (or designee). The City Manager or designee shall have the authority to issue
interpretations with respect to this Agreement and to determine whether any action requires the
approval of the City Council. All amendments or modifications of this Agreement shall require
the approval of the City Council. All waivers and extensions of time for performance under this
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Agreement shall be approved by the City Manager (or designee) unless in the City Attorney’s
opinion such action requires a waiver to be approved by the City Council under applicable law.
18.12Real Estate Commissions.
18.12.1 Developer Representation and Indemnity. The City shall not be
liable for any real estate commissions, brokerage fees or finder’s fees which may arise from this
Agreement unless due to a broker or other party (other than CBRE) retained by the City. The City
has retained CBRE pursuant to a separate agreement which provides that Developer will be
responsible for payment of a brokerage commission to CBRE thereunder in connection with the
conveyance of the Property by the City to Developer in an amount equal to one (1) percent (1%)
of the Purchase Price (“Developer Commission Payment”). For avoidance of doubt, the
Developer Commission Payment is not based upon nor does it include any commission payment
with respect to all or any portion of the Project Fair Share Contribution. Developer agrees to
indemnify and hold the City and the City Parties harmless from any and all Claims arising from or
in any way related to any claim by CBRE for the Developer Commission Payment or by any other
broker, agent, or finder retained by Developer regarding this Agreement or the sale, lease or
development of the Property or any portion thereof. The City represents that it has not engaged
any broker, agent, or finder in connection with this Agreement other than CBRE. Developer
represents that it has engaged no broker, agent or finder in connection with this Agreement or the
transactions identified in this Agreement or the Other Agreements. Developer, on behalf of itself,
and its successors and assigns, each Successor Owner and each and every Person claiming by,
through or under Developer or any Successor Owner (but only with respect to such Person’s
acquisition or disposition of the Property owned by such Person or a leasehold interest in such
Property) but excluding End Users hereby agrees to indemnify and hold the City and the City
Parties harmless from any and all Claims arising from or in any way related to any claim by CBRE
for the Developer Commission Payment or by any other broker, agent, or finder retained by
Developer regarding this Agreement or the Other Agreements or for the sale or lease of the Real
Property or any portion thereof or development of the Project or the transactions identified in this
Agreement or the Other Agreements. The provisions of this Section 18.12.1 shall survive the
termination of this Agreement.
18.12.2 City Representation. The City represents that except as disclosed
in Section 18.12.1, it has engaged no broker, agent, or finder in connection with this Agreement or
the transactions identified in this Agreement or the Other Agreements.
18.12.3 Survival. The indemnity set forth in Section 18.12.1 shall survive
the termination of this Agreement.
18.13Date and Delivery of Agreement; Term of Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the Parties intend
that this Agreement shall be deemed effective, executed and delivered for all purposes under this
Agreement and for the calculation of any statutory time periods based on the date an agreement
between the Parties is effective, executed and/or delivered, as of the Effective Date. Subject to the
foregoing and the provisions of Article 9, the term of this Agreement (“Term”) shall commence
as of the Effective Date and shall terminate as to each portion of the Project and the Real Property
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upon the Recording by the City of a Certificate of Compliance as to such portion of the Project
and Real Property unless earlier terminated as provided in this Agreement.
18.14Constructive Notice and Acceptance.
Every Successor Owner and each and every Person claiming by, through or under
Developer or any Successor Owner, is and shall be conclusively deemed to have consented and
agreed to every provision contained in this Agreement, whether or not any reference to this
Agreement is contained in the instrument by which such Person acquired an interest in the Project
or the Property.
18.15Survival of Covenants, Representation and Warranties.
18.15.1 Runs with the Land. The covenants, representations, warranties,
and indemnities specified in this Agreement shall survive any investigation made by any Party
hereto and the closing of the transactions contemplated hereby for the Term and for such additional
period as is set forth in this Agreement. This Agreement and the covenants, representations,
warranties, releases and indemnities specified in this shall run with the Real Property and any
interest therein, and except as provided in this Agreement, be binding upon Developer, each
Successor Owner, unless and until terminated in accordance with the terms of this Agreement, any
Recorded Certificate of Compliance or the remaining Other Agreements. Notwithstanding
anything contained in this Agreement to the contrary, except for the express provisions contained
in the Affordable Housing Declaration, the Quitclaim Deed, the Access Easement Agreement, the
Bioswale Easement, the Memorandum of DDA, the Special Restrictions, and the Landscape
Installation and Maintenance Agreement and other matters Recorded against the Property or any
portion thereof, the obligations, covenants, conditions and restrictions set forth in this Agreement
shall not run with that portion of the Real Property Transferred to an End User, and each End User
shall take title to that portion of the Real Property conveyed to it free and clear of the lien or charge
of this Agreement or any of the obligations, covenants, conditions and restrictions set forth set
forth in this Agreement.
18.15.2 Rights of the City to Enforce. The City is the beneficiary of the
terms and provisions of this Agreement and of the covenants running with the Property and any
interest therein for and in its own right and for the purposes of protecting the interests of the
community and other parties, public or private, in whose favor and for whose benefit this
Agreement and the covenants running with the land have been provided, without regard to whether
the City has been, remains or is an owner of any land or interest in the Property, the Development
Parcel, the Project. Subject to the terms and conditions of this Agreement and the Other
Agreements, the City shall have the right, if this Agreement or any covenants set forth in this
Agreement are breached, to exercise all rights and remedies, and to maintain any actions or suits
at law or in equity or other proper proceedings to enforce the curing of such breaches to which it
or any other beneficiaries of this Agreement and any covenants may be entitled.
18.16Construction and Interpretation of Agreement.
18.16.1 Construction. 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
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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. The
provisions of California Civil Code Section 1654 are specifically waived by each Party hereto.
18.16.2 Effect of Invalidity or Unenforceability. If any term or provision
of this Agreement, the deletion of which would not modify or affect the receipt of any material
benefit by any Party under this Agreement, 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.
18.16.3Conclusivity of Certain Matters. Any matters or facts included in
Article 1 shall be conclusively deemed true.
18.16.4 Captions. The captions of the articles, sections and clauses in this
Agreement are inserted solely for convenience and under no circumstances are they or any of them
to be treated or construed as part of this instrument.
18.16.5 Gender, Singular and Plural. 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.
18.16.6 No Merger. Any provision of this Agreement stated to survive the
Close of Escrow (or with respect to the Returned Property, the close of escrow) shall be interpreted
to mean that such provision shall not merge with any deed conveying the Property or any portion
thereof, including the Quitclaim Deed.
18.17Time 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 that the foregoing shall not be construed to limit or
deprive a Party of the benefits of any cure period or Force Majeure Delay expressly provided for
in this Agreement.
18.18Fees and Other Expenses.
Except as otherwise provided in this Agreement, each of the Parties hereto shall pay its
own fees and expenses, including attorneys’ fees, experts’ fees and consultants’ fees and costs, in
connection with negotiation and preparation of this Agreement and compliance with its terms.
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18.19No Partnership; Binding Effect.
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/developer
and seller/municipality according to the provisions contained in this Agreement or cause the City
to be responsible in any way for the debts or obligations of Developer. This Agreement and terms,
provisions, promises, covenants, conditions and restrictions contained herein shall be binding upon
and shall inure to the benefit of the Parties hereto and their respective heirs, legal representatives,
successors and assigns.
18.20Compliance with Law. Developer agrees to comply with all laws and requirements
now in force, or which may thereafter be in force, of all municipal, county, State and federal
authorities, applicable to Developer or pertaining to the Property and the Project Improvements as
well as operations conducted thereon.
18.21No Third-Party Beneficiaries.
This Agreement has been made and entered into solely for the benefit of the Parties to this
Agreement and their respective successors and permitted assigns. Nothing in this Agreement
confers any rights or remedies on any other Person. Nothing in this Agreement relieves or
discharges the obligation or liability of any third Persons to any Parties to this Agreement.
18.22Counterparts.
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 email or other electronically transmitted signatures; provided that
such execution by email or other electronic transmission shall not be effective unless a manually
executed copy of the signature page is promptly sent by U.S. Postal Service, postage prepaid or
overnight delivery service or is hand delivered to the Parties or Escrow Holder, as applicable,
pursuant to Section 4.4. The Parties hereby authorize each other (and Escrow Holder) to detach
and combine original signature pages and consolidate them into a single identical original. Any
one of such completely executed counterparts shall be sufficient proof of this Agreement.
18.23Duplicate Originals, Entire Agreement and Waivers.
18.23.1 Duplicate Originals. This Agreement is executed in three (3)
duplicate originals, each of which is deemed to be an original.
18.23.2 Entire Agreement. This Agreement, including the Attachments
hereto, together with the Other Agreements, constitute the entire agreement between the Parties
with respect to the subject matter hereof. Except as set forth in the last sentence of this Section
18.23.2, this Agreement and the Other Agreements supersede and replace any and all prior
agreements, proposed agreements, negotiations and communications, oral or written, relating to
the subject matter hereof and contain the entire agreement between the Parties as to the subject
matter hereof and any and all prior agreements, understandings or representations between the
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Parties and/or any Developer Affiliate 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 in this
Agreement or the Other Agreements, to induce such Party to execute this Agreement, and each
Party acknowledges that it has not executed this Agreement in reliance on any such promise,
representation or warranty not contained in this Agreement or any Other Agreements. For the
avoidance of doubt, this Agreement shall terminate and supersede the ENA, except that this
Agreement does not supersede Sections 3.5, 3.6, 4.3, 4.4.3, 4.4.5, 4.4.6, 4.4.7, 4.5.2, 4.5.3, 4.5.4,
6.3.2, 6.9.3, 11.1, 11.10 and Exhibit B, including Section 1.1.3 thereof, which shall remain in effect
with respect to claims arising during or related to the term of the ENA and the provisions of 4.5.2,
4.5.3 and Exhibit B thereof (including Section 1.1.3 of Exhibit B) which shall remain in effect and
shall not merge with any deed.
18.23.3 No Waiver. 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. All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities for the City and Developer and all amendments hereto must be in writing
and signed by the appropriate authorities of the City and Developer.
18.24Confidentiality.
18.24.1 Public Records Act; Confidentiality Exceptions. Subject to the
provisions of the Public Records Act, which governs the City’s use and disclosure of its agreements
and records, the City and Developer hereby agree that each shall keep confidential information
provided by the other and denominated as confidential and will not disclose any such information
to any Person without obtaining the prior written consent of the other Party, except that (i) the City
shall have the right to disclose any information contained in any third party reports produced or
obtained by Developer and required to be disclosed by it pursuant to law, (ii) Developer shall have
the right to disclose any Developer Excluded Information, (iii) the City shall have the right to
disclose any City Excluded Information, (iv) Developer shall have the right to disclose to its
consultants, employees, professional advisors, existing and prospective investors and lenders,
members, and their respective consultants, employees, professional advisors and members, any
information to the extent necessary or desirable in connection with Developer’s due diligence on
the Development Parcel and performance of its obligations under this Agreement and the Other
Agreements, (v) City shall have the right to disclose to its officials, employees and the City retained
consultants, attorneys and representatives all information received by it from Developer as
required to perform its obligations under this Agreement and the Other Agreements and (vi) either
Party shall have the right to disclose any information to the extent that it is legally required or
compelled to do so provided that (to the extent permitted) it provides the other Party with prior
notice of such disclosure obligation and cooperates with such other Party (at no cost or liability to
the cooperating Party) in any attempts to obtain confidential treatment of such disclosed
information. The Parties’ obligations pursuant to this Section 18.24 shall terminate as to each
portion of the Project and the Real Property upon the Recording by the City of a Certificate of
Compliance as to such portion of the Project and Real Property or upon the earlier of the
termination of this Agreement.
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18.24.2 Financial Information. Developer shall identify with specificity
any submitted financial documents (including equity financing documents and Guarantor
information) which Developer wants the City to maintain as confidential documents and a
statement as to why the request is consistent and complies with specific provisions of the Public
Records Act. The City’s staff, agents, negotiators and consultants may review the statements as
necessary as long as such parties agree to maintain the confidentiality of such statements.
Developer acknowledges that documents or other “records” (as that term is defined in the Public
Records Act) related to the Project may be required to be made public upon request. California
Government Code Section 7922.525 provides that “\[p\]ublic records are open to inspection at all
times during the office hours” of the City. If Developer believes that any documents or other
records provided to the City are exempt from the Public Records Act, Developer shall state in
writing at the time of submittal of the documents or records the legal basis for Developer’s belief
that such documents or other records are exempt from the Public Records Act, Developer and City
shall meet and confer about exemption of such documents or other records, and City shall evaluate
the asserted basis for the exemption(s) in good faith. If City determines that the requested
documents or other records qualify for an exemption, the City shall conspicuously mark the
documents and other records “Confidential”, and the City will not make the records public except
as required by law or by court order. The City’s failure to correctly determine the applicability or
inapplicability of an exemption to the Public Records Act shall not constitute a breach of this
Agreement.
18.24.3 Cooperation; Indemnity. In the event that the City obtains a
request pursuant to the provisions of the Public Records Act to disclose any of Developer’s
information which the City is required to keep confidential pursuant to the terms of this Agreement,
the City shall provide Developer with prompt written notice thereof and the City and Developer
shall cooperate at Developer’s sole cost and expense to seek to avoid disclosure of such matters to
the extent legally permissible pursuant to the provisions of the Public Records Act. Developer
agrees to defend, indemnify and hold harmless the City and the City Parties from any claims for
damages, costs, court costs, awards of attorney fees, or related claims in all lawsuits and writ
proceedings seeking to make records public that Developer has marked “Confidential” hereunder
and requests the City to protect as confidential. The City shall promptly notify Developer of any
claim made against City of an alleged violation of the Public Records Act resulting from
document(s) that Developer elected to mark as “Confidential” so that Developer may evaluate
such claim and its determination of the confidentiality of such document(s). In no event shall the
City be required to maintain as confidential any materials required by law to be disclosed by the
City, or by Developer, or otherwise disclosed by Developer as part of its public filings.
18.25Proprietary and Governmental Roles; Actions by Parties.
Except where expressly provided otherwise in this Agreement, the capacity of the City in
this Agreement shall be as owner, lessor, assembler, redeveloper and/or seller of property only
(“Proprietary Capacity”), and any obligations or restrictions imposed by this Agreement on the
City, shall be limited to that capacity and shall not relate to, constitute a waiver of, supersede or
otherwise limit or affect the exercise by the City of its governmental authority with respect to any
matter related to this Agreement which shall include the regulation and entitlement of the
Development Parcel and/or Project Improvements pursuant to the Entitlements, Development
Permits and/or Governmental Requirements, including enacting laws, inspecting structures,
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reviewing and issuing permits, and all of the other legislative and administrative or enforcement
functions of each pursuant to federal, State or local law (“Governmental Capacity”). In addition,
nothing in this Agreement shall supersede or waive any discretionary or regulatory approvals
required to be obtained from the City in its Governmental Capacity under applicable Governmental
Requirements.
18.26Performance of Acts on Business Days.
In the event that the final date for payment of any amount or performance of any act under
this Agreement falls on a day other than a Business Day, such payment may be made or act
performed on the next succeeding Business Day.
\[signatures commence on following page\]
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IN WITNESS WHEREOF, the City and Developer have signed this Agreement as of the
date first set forth above.
Dated:CITY OF TUSTIN:
By:
Aldo E. Schindler
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
DEVELOPER:
CD-CW (TUSTIN) LLC,
a Colorado limited liability company
By:
Name: Marshall Burton
Title: Chief Executive Officer
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JOINDER OF ESCROW HOLDER
The undersigned is joining this Agreement to evidence its agreement to receive, hold and disburse
the funds in accordance with the terms of this Agreement and otherwise to comply with the escrow
instructions set forth in this Agreement.
FIRST AMERICAN TITLE INSURANCE
COMPANY
By:
Name:
Title:
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LIST OF ATTACHMENTS
ATTACHMENT 1 GLOSSARY OF DEFINED TERMS
ATTACHMENT 2A LEGAL DESCRIPTION OF DEVELOPMENT PARCEL
ATTACHMENT 2B DEPICTION OF DEVELOPMENT PARCEL AND LOCATION
ATTACHMENT 3 SITE PLAN
ATTACHMENT 4 TITLE COMMITMENT
ATTACHMENT 5 FORM OF CITY ESTOPPEL FOR TRANSFERS, TRANSFERS
OF CONTROL
ATTACHMENT 6 INTENTIONALLY OMITTED
ATTACHMENT 7 SCHEDULE OF PERFORMANCE
ATTACHMENT 8 SCOPE OF DEVELOPMENT
ATTACHMENT 9 INTENTIONALLY OMITTED
ATTACHMENT 10 LIST OF ENVIRONMENTAL REPORTS AND STATEMENTS
ATTACHMENT 11 FORM OF QUITCLAIM DEED
ATTACHMENT 12 FORM OF MEMORANDUM OF DDA
ATTACHMENT 13 FORM OF VERTICAL IMPROVEMENTS COMMENCEMENT
DATE CERTIFICATE
ATTACHMENT 14A FORM OF GUARANTY
ATTACHMENT 14B FORM OF GUARANTOR ORIGINAL CERTIFICATE
ATTACHMENT 14C FORM OF GUARANTOR DATE DOWN CERTIFICATE
ATTACHMENT 14D FORM OF GUARANTY LEGAL OPINION
ATTACHMENT 14E FORM OF REAFFIRMATION OF GUARANTY
ATTACHMENT 14F FORM OF REAFFIRMATION OF LEGAL OPINION
ATTACHMENT 15A FORM OF EQUITY INVESTOR ORIGINAL CERTIFICATE
ATTACHMENT 15B FORM OF EQUITY INVESTOR DATE DOWN CERTIFICATE
ATTACHMENT 15C FORM OF INITIAL EQUITY INVESTOR EQUITY
COMMITMENT
ATTACHMENT 15D INTENTIONALLY OMITTED
ATTACHMENT 15E FORM OF CONFLUENT ADDITIONAL EQUITY
COMMITMENT
ATTACHMENT 16 FORM OF CERTIFICATE OF COMPLIANCE
ATTACHMENT 17A FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ATTACHMENT 17B FORM OF TRANSFEREE CERTIFICATE
ATTACHMENT 18 FORM OF CITY REAFFIRMATION CERTIFICATE
ATTACHMENT 19A FORM OF DEVELOPER ORIGINAL CERTIFICATE
ATTACHMENT 19B FORM OF DEVELOPER DATE DOWN AND
REAFFIRMATION CERTIFICATE
ATTACHMENT 20 FORM OF DECLARATION OF SPECIAL RESTRICTIONS
ATTACHMENT 21 FORM OF LANDSCAPE INSTALLATION AND
MAINTENANCE AGREEMENT
ATTACHMENT 22 FORM OF BILL OF SALE
ATTACHMENT 23 MAXIMUM TAX BURDEN SCHEDULE
ATTACHMENT 24 FORM OF SUBORDINATION AGREEMENT
ATTACHMENT 25 FORM OF SLA COVENANT
ATTACHMENT 26 FORM OF AFFORDABLE HOUSING DECLARATION
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ATTACHMENT 27 FORM OF TRANSFERABLE PRODUCTS CERTIFICATION
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2
ATTACHMENT 1
GLOSSARY OF DEFINED TERMS
For purposes of this Agreement, the following capitalized terms shall have the following
meanings:
“Access Easement Agreement” shall mean that certain Access Easement Agreement to
be executed and delivered by the City and Developer and Recorded against the Real Property at
the Close of Escrow, in substantially the form and substance of the Access Easement Agreement
attached to the Development Agreement as Exhibit F.
“Accrue”, “Accrued” or “Accruing” shall mean, with respect to any Claim, the date and
time at which such Claim arises as a matter of law and could then or thereafter be asserted by any
Person.
“Action” shall have the meaning set forth in Section 18.2.
“Active Adult Project Certificate of Compliance” shall have the meaning set forth in
Section 9.2.
“Active Adult Project” shall have the meaning set forth in Section 1.3.2.
“Active Adult Project Improvements” shall have the meaning set forth in Section 1.3.2.
“Active Adult Project Horizontal Improvements” shall mean the Grading Work and
below gradeinfrastructure improvements and utilities and utility systems required to be
constructed or installed on or in connection with the development of the Active Adult Project on
the Active Adult Real Property as required by the Approved Plans which may include (i) all public
and private streets, roadways, drives, bike paths, alleyways, sidewalks, medians, including the
Private Drives and Sidewalks, landscaping, including Landscape Improvements, courtyards,
hardscaping, fountains and parking structures and parking lots within the Real Property and all
traffic and circulation mitigation to support the Project; (ii) all utilities and utility systems required
for the Project from the mainline utility systems constructed in adjoining streets to each building,
structure and other improvement requiring such utilities, including domestic and reclaimed water;
sewer, telemetry, utilities (electricity, gas, telephone, cable, telecommunications, etc.), and other
infrastructure normally required to service a new High Quality Project; and (iii) all improvements
required as “Public Benefit Improvements” in the Development Agreement and all sidewalks
within the Boundary Landscape Area; and shall include all improvements required by the Tentative
Parcel Map, the Entitlements, Development Permits conditions and all other Governmental
Requirements as a condition to development of the Project, all as generally described in
Attachment 8 and depicted on Attachment 3.
“Active Adult Project Vertical Improvements” shall mean all buildings, structures and
other improvements other than the Horizontal Improvements to be constructed or installed on the
Active Adult Real Property as part of the Active Adult Project, as described in Section 1.3.2 and
the Scope of Development and as further depicted on the Site Plan.
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“Active Adult Real Property” shall have the meaning set forth in Sections 1.2.1 and 1.2.3.
“Active Negligence” shall mean an affirmative act performed negligently and not a failure
to act.
“Additional ALTA Coverage” shall have the meaning set forth in Section 6.4.
“Additional Equity Commitment” shall have the meaning set forth in Section 4.6.2.3.
“Additional Equity Investor” shall have the meaning set forth in Section 4.6.2.3.
“Affordable Housing Declaration” shall have the meaning set forth in Section 7.2.1.1(iv).
“Agreement” shall mean this Tustin Legacy Disposition and Development Agreement
including all Attachments attached hereto.
“AL/MC” shall have the meaning set forth in Section 1.1.9.
“AL/MC Project” shall have the meaning set forth in Section 1.3.3.
“AL/MC Project Certificate of Compliance” shall have the meaning set forth in Section
9.2.
“AL/MC Project Improvements” shall have the meaning set forth in Section 1.3.3.
“AL/MC Project Horizontal Improvements” shall mean the Grading Work and below
grade infrastructure improvements and utilities and utility systems required to be constructed or
installed on or in connection with the development of the AL/MC Project on the AL/MC Real
Property as required by the Approved Plans which may include (i) all public and private streets,
roadways, drives, bike paths, alleyways, sidewalks, medians, including the Private Drives and
Sidewalks, landscaping, including Landscape Improvements, courtyards, hardscaping, fountains
and parking structures and parking lots within the Real Property and all traffic and circulation
mitigation to support the Project; (ii) all utilities and utility systems required for the Project from
the mainline utility systems constructed in adjoining streets to each building, structure and other
improvement requiring such utilities, including domestic and reclaimed water, sewer, telemetry,
utilities (electricity, gas, telephone, cable, telecommunications, etc.), and other infrastructure
normally required to service a new High Quality Project; and (iii) all improvements required as
“Public Benefit Improvements” in the Development Agreement and all sidewalks within the
Boundary Landscape Area; and shall include all improvements required by the Tentative Parcel
Map, the Entitlements, Development Permits conditions and all other Governmental Requirements
as a condition to development of the Project, all as generally described in Attachment 8 and
depicted on Attachment 3.
“AL/MC Project Vertical Improvements” shall mean all buildings, structures and other
improvements other than the Horizontal Improvements to be constructed or installed on the
AL/MC Real Property as part of the AL/MC Project, as described in Section 1.3.3 and the Scope
of Development and as further depicted on the Site Plan.
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“AL/MC Real Property” shall have the meaning set forth in Sections 1.2.1 and 1.2.3.
“ALTA Policy” shall mean an ALTA extended coverage owner’s policy of insurance for
the Property as such term is used in Section 6.2.
“Approved Equity Investor” shall have the meaning set forth in Section 4.6.2.3.
“Approved Plans” shall mean, collectively: (i) the Entitlements which govern
development of the Project Improvements on the Real Property and Development Permits,
including encroachment permits, necessary for development of the Project, including approval of
plans by the City pursuant to the Design Review process; (ii) the Basic Concept Plan and any
modification thereto approved by the City pursuant to Section 8.5; and (c) construction level
drawings approved by the City as required to obtain the Development Permits.
“Area Median Income” shall mean the area median income, as adjusted for household
size, for Orange County, established periodically by HUD and published in the Federal Register.
In the event HUD ceases to publish an established Area Median Income as aforesaid, AMI shall
mean the then current area median income as determined by HCD. If such income standards are
no longer in existence, the City will designate another reasonably comparable method of
computing Area Median Income.
“Assignment Agreement” shall have the meaning set forth in Section 2.2.4.1.
“Attachment” shall mean all Attachments to this Agreement, including any and all
exhibits and attachments thereto as required thereby.
“Bankruptcy Proceeding” shall mean any proceeding involving Developer under the
United States Bankruptcy Code or any similar state or federal statute for the relief of debtors.
“Base Closure Law” shall have the meaning set forth in Section 1.1.1.
“Basic Concept Plan” shall mean the design, phasing, product mix and other related
submittals by Developer to the City on or before the Effective Date for purposes of obtaining
Entitlements approvals and to satisfy the City’s design approval rights as set forth in Section 8.5
and shall include the phasing and proposed product mix as set forth in the Phasing and
Implementation Plan, Site Plan and the Scope of Development.
“Best’s” shall have the meaning set forth in Section 11.1.1.
“Bill of Sale” shall have the meaning set forth in Section 7.2.1.1(xii).
“Bioswale Easement” shall mean that certain Bioswale Easement to be executed and
delivered by Developer and Recorded against the Real Property at the Close of Escrow, in
substantially the form and substance of the Bioswale Easement Agreement attached to the
Development Agreement as Exhibit G.
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“Boundary Landscape Area” shall mean that portion of the Real Property and the City
Property (as defined in the Landscape Installation and Maintenance Agreement), in each case
generally between the back of curb on each public street adjoining the Real Property and the
buildings on the Real Property, as more particularly depicted on Exhibit C to the Landscape
Installation and Maintenance Agreement.
“Budget Statement” shall mean a document delivered by Developer to the City in the
format approved by the City for the Financial Plan, and which shows, as of the end of the
immediately preceding quarter, (i) the fees paid through the end of such prior quarter and estimated
fees to be paid prior to Completion of the Project in connection with the development and
construction of the Project and (ii) out-of-pocket costs spent through the end of such prior quarter
and estimated out-of-pocket costs to be paid prior to Completion of the Project, as applicable for
each of the major categories of hard and soft costs for the development and construction of the
Project.
“Business Day(s)” shall mean any day other than Saturday, Sunday and each City observed
legal holiday.
“CEQA” shall mean the California Environmental Quality Act and implementing
regulations and guidelines, contained in California Public Resources Code Section 21000 et seq.,
and California Code of Regulations, title 14, Section 15000 et seq., respectively.
“Certificate of Compliance” and “Certificates of Compliance” shall have the meaning
set forth in Section 9.2.
“CFD 18-01 Zone 5” shall mean a new zone associated with CFD 18-01 with respect to
and affecting the Property to be formed by the City prior and as a condition to Close of Escrow.
“CFD 18-01 Zone 5 Special Tax” shall mean a special tax levied by the City for CFD
1801 Zone 5 of the District, the proceeds of which shall be used by the City to fund a portion of
City essential services, including but not limited to police protection services, fire protection
services, ambulance and paramedic services, recreation program services, street sweeping, traffic
signal maintenance and the maintenance of City-owned parks, parkways and open spaces, lighting,
flood control and storm drain services and other City services and facilities at Tustin Legacy.
“City” shall mean the City of Tustin and each assignee or successor to the City’s rights,
powers and responsibilities as described in Section 1.4.1; provided that when in this Agreement
the term “City and its Governmental Successors” is used, the term “City” shall be deemed to mean
solely the City of Tustin.
“City Attorney” shall mean the individual appointed by the City Council as “City
Attorney.”
“City Closing Conditions” shall have the meaning set forth in Section 7.2.2.
“City Code” shall mean the Tustin City Code for the City of Tustin, California, as the same
may be amended from time to time.
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“City Costs Deposit” shall have the meaning set forth in Section 1.8.2.
“City Council” shall mean the City Council of the City of Tustin which serves as the City’s
legislative body.
“City Cure Period” shall have the meaning set forth in Section 15.3.1.
“City Estoppel” shall have the meaning set forth in Section 2.5.
“City Excluded Information” shall mean information that is (i) known by the City prior
to the disclosure thereof by Developer or its officers, employees, agents, attorneys, affiliates,
representatives, contractors, successors or assigns; (ii) developed by or on behalf of the City
without the use of any confidential information provided by Developer or its officers, employees,
agents, attorneys, affiliates, representatives, contractors, successors or assigns; (iii) disclosed to
the City by a third party other than Developer or any of its officers, employees, agents, attorneys,
affiliates, representatives or contractors; or (iv) known to the public through no act or fault of the
City in violation of this Agreement.
“City Hall” shall mean the seat of government for the City of Tustin, presently located at
300 Centennial Way, Tustin, California.
“City Indemnified Parties” shall mean the City, the Successor Agency to the Tustin
Community Redevelopment Agency, the Tustin Housing Authority, the Tustin Finance Authority,
and their respective elected and appointed officials, employees, agents, representatives, attorneys,
affiliates, consultants, contractors, successors and assigns.
“City Inspections” shall have the meaning set forth in Section 16.5.
“City Lien” shall have the meaning set forth in Section 16.2.
“City Manager” shall mean Mr. Aldo E. Schindler or his successor in such capacity, or
other designee as identified in writing by the City Manager.
“City Premium” shall mean the premium attributed to the so-called standard coverage or
CLTA coverage portion of the ALTA Policy in the face amount of the Purchase Price.
“City Released Parties” shall mean the City, the Successor Agency to the Tustin
Community Redevelopment Agency, the Tustin Housing Authority, the Tustin Finance Authority,
and their respective elected and appointed officials, employees, agents, representatives, attorneys,
affiliates, consultants, contractors, successors and assigns.
“City Representatives” shall have the meaning set forth in Section 3.3.7.
“City Title Policy” shall have the meaning set forth in Section 6.5.
“City’s Knowledge” shall have the meaning set forth in Section 3.3.7.
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“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, consultants’ fees and court and litigation
costs), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, monetary payment or reimbursements or any other type
of compensation of any kind whatsoever, direct or indirect, known or unknown, foreseen or
unforeseen.
“Class “A” Operator” shall mean a nationwide or regional operator that shall operate the
Active Adult Project and/or AL/MC Project upon completion thereof and that: (i) has at least ten
(10) years’ experience in the operation and management of comparable high-quality senior
housing projects, including active adult and/or independent living, assisted living, memory care of
similar quality, scale and complexity to the applicable Project and having amenities and services
comparable to those contemplated for the Project; and (ii) has demonstrated experience in the
operation and management of rental housing projects containing below-market-rate or income-
restricted units, and has maintained a satisfactory record of compliance with all applicable federal,
state and local fair housing, nondiscrimination, affordability and other regulatory requirements
applicable to such projects; and (iii) possesses, and shall maintain throughout its operation of the
applicable Project, all licenses, permits, certifications and other governmental approvals required
by applicable law to operate the applicable Project, and is in good standing with all applicable
federal, state and local governmental and regulatory authorities; and (iv) has demonstrated
sufficient financial strength, organizational capacity, management expertise and staffing to operate
a project of the size, quality and complexity contemplated hereby.
“Close of Escrow” or “Closing” shall mean the close of escrow for the Property and the
transfer of fee title to the Property by the City to Developer pursuant to the Quitclaim Deed, and
execution and, where applicable, Recording of the Other Agreements and additional documents
associated therewith, as more fully set forth in Article 7, which shall take place on the Closing
Date.
“Closing Conditions” shall mean the Developer Closing Conditions and the City Closing
Conditions.
“Community Development Department” shall mean the Community Development
Department of the City of Tustin.
“Complete”, “Completed” and “Completion” shall mean the point in time when all of the
following shall have occurred with respect to the Active Adult Project or the AL/MC Project: (i)
the Active Adult Project Improvements and/or the AL/MC Project Improvements, as applicable,
have been completed in accordance with this Agreement in a good and workmanlike manner and
substantially in accordance with the Approved Plans and specifications for each; (ii) the issuance
of a final certificate of occupancy by the City for the applicable Project Improvements, or, to the
extent a certificate of occupancy is not required by the City for such Project Improvements, as
applicable, the equivalent final inspection, signoff or other permit activity with respect to such
improvements has been issued by the City and/or any other Governmental Authority with
jurisdiction over such Project Improvement, (iii) Recording of a Notice of Completion pursuant to
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California Civil Code Section 8182 in each case by an “owner” as defined in Section 8182(e) with
respect to both: (x) private improvements and (y) public improvements constructed by Developer
any Successor Owner, or any such Person’s contractor, but not with respect to other public
improvements, (iv) a certification by the Project Architect that such 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; and (v) all
contractors, subcontractors, laborers, suppliers, architects, and engineers who performed work on
the Active Adult Project and/or AL/MC Project, as applicable, either (x) shall paid in full and shall
have executed final unconditional lien waivers or (y) any Construction Liens that have been
Recorded or stop notices that have Recorded or delivered in connection with the Active Adult
Project or the AL/MC Project, as applicable, have been paid, settled or otherwise extinguished,
discharged, released, waived, bonded around or insured against, or (z) the statutory period for
filing liens or stop notices with respect to the applicable Project Improvements shall have expired
without any liens or stope notices being filed.
“Conditions Precedent” shall mean the conditions precedent to execution and Recording
by the City of each Certificate of Compliance which are, as to the Active Adult Project, set forth
in Section 9.3.1 and as to the AL/MC Project are set forth in Section 9.3.2.
“Confluent” shall have the meaning set forth in Section 1.3.1.
“Construction Liens” shall have the meaning set forth in Section 8.11.6.
“Construction Loan” shall mean, with respect to the Project a loan made by a Permitted
Mortgagee and that will be secured by a Permitted Mortgage on the Property, the proceeds of
which are required to be used by Developer only to entitle, develop, and construct all or a portion
of the Project Improvements and to pay other Development Costs for Project.
“Control”, “Controlled” or “Controlling”, as used with respect to any Person, shall mean
the possession, directly or indirectly (including through one or more intermediaries), of the current
power to direct or cause the direction of the management and policies of such Person, including
through the ownership or control of voting securities, partnership interests, membership interests,
or other equity interests. Notwithstanding the foregoing, (i) the right of a Person to participate
directly or indirectly (including through one or more intermediaries) in significant management
decisions of another Person, without more, does not constitute “Control” if such Person with the
right to participate in decisions does not also possess, directly or indirectly (including through one
or more intermediaries), the current ability to direct or cause the direction of the management and
policies of such other Person and (ii) the fact that a Person acts as the Manager does not without
more constitute “Control”. Without limiting the generality of the foregoing, it shall be a
presumption that control with respect to a corporation or limited liability company is the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting rights granted to all
equity holders in the corporation or limited liability company. It shall be a presumption that control
with respect to other types of entities such as a partnership, trust, other entity or association, is the
possession by a Person, indirectly or directly, of the power to direct or cause (by such Person’s
sole action) the direction of the management or policies of the controlled entity.
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7Portion of Disposition Area 8
“Controlling Person” shall mean, as to any Person, any other Person who Controls the
Person in question. Notwithstanding the foregoing, if a Person has the right to participate directly
or indirectly (including through one or more intermediaries) in significant management decisions
of Developer, such Person shall not be deemed to be a Controlling Person of Developer unless
such Person also possesses, directly or indirectly (including through one or more intermediaries),
the power to direct or cause the direction of the management and policies of Developer.
“Costs” shall have the meaning set forth in Section 18.2.
“CPL Policy” shall have the meaning set forth in Section 11.1.4.
“DDA Transaction Expenses” shall mean the City’s predevelopment, negotiation and
implementation costs incurred in connection with this Agreement, the Other Agreements, the
Active Adult Project and the AL/MC Project and all related instruments and documents prepared
in connection with the transaction, (i) the City’s staff costs attributable to the Project, (ii) fees,
expenses and costs of third-party consultants, legal counsel (including, without, limitation, fees,
expenses and costs of the City Attorney and outside legal counsel), financial advisors, engineers,
appraisers and environmental and other consultants incurred by the City, and (iii) any other
expenditures incurred by the City in connection with the implementation of the transaction
described in this Agreement and the Other Agreements, the implementation and termination of the
ENA and the Project, the drafting, negotiation, execution, implementation and, if applicable,
amendment or termination of this Agreement and the Other Agreements (including any requested
modification to thereto or to the attachments thereto; the preparation of City Estoppels); the review
and approval of requested Transfers, Transferees, Mortgages and Mortgagees, Subordination
Agreement and documentation submitted by Developer or any proposed Transferee or Mortgagee
in connection therewith), and other acts carried out in connection with Project, this Agreement or
the Other Agreements whether Accrued prior to or following the Effective Date and continuing
for the period described in Section 1.8, provided that the same shall not include fees or deposits
required of Developer for processing entitlement applications or complying with the provisions of
CEQA or its State CEQA implementing regulations which shall be separately payable by
Developer pursuant to the Development Agreement, or if the Development Agreement is not then
in effect, pursuant to Sections 1.8.5 and 8.4.7.
“Decision” shall have the meaning set forth in Section 18.2.
“Default” shall mean a Potential Default and/or Material Default.
“Default Notice” shall have the meaning set forth in Section 14.1.
“Default Rate” shall mean an interest rate of ten percent (10%) per annum, compounded
annually, but in no event in excess of the maximum legal rate.
“Defaulting Party” shall have the meaning set forth in Section 14.1.
“Defended Party” shall have the meaning set forth in Section 10.8.
“Defending Party” shall have the meaning set forth in Section 10.8.
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8Portion of Disposition Area 8
“Design Guidelines” shall mean the design guidelines for the City contained in the
Neighborhood D South Design Guidelines, the City Code and the Specific Plan.
“Design Review” shall mean the site plan and design review approvals as required by the
City Code and the Specific Plan, which shall be part of the Entitlements.
“Developer” shall mean Initial Developer and following any Transfer pursuant to a
Permitted Transfer or any other Transfer authorized by this Agreement and approved by the City
pursuant to Article 2 each Transferee that is a Successor Owner with respect to all of a Developer’s
interest in the Transferable Interests.
“Developer Affiliate” shall mean (a) with respect to Initial Developer, any Person that
Controls, is under common Control with, or is Controlled by Confluent and for which Confluent
or another Person Controlled by Confluent or Marshall Burton is Manager and (b) with respect to
any Responsible Developer, any Person that directly or indirectly Controls, is Controlled by or is
under common Control with the Controlling Person of the Responsible Developer.
“Developer Closing Conditions” shall have the meaning set forth in Section 7.2.1.
“Developer Closing Payment” shall have the meaning set forth in Section 4.3.3.
“Developer Commission Payment” shall have the meaning set forth in Section 18.12.1.
“Developer Date Down and Reaffirmation Certificate” shall have the meaning set forth
in Section 2.2.4.2.
“Developer Excluded Information” shall mean information that is (i) known by
Developer prior to the disclosure thereof by the City or its elected and appointed officials,
employees, agents, attorneys, affiliates, representatives, contractors, successors or assigns; (ii)
developed by or on behalf of Developer without the use of any confidential information provided
by the City or its officers, employees, agents, attorneys, affiliates, representatives, contractors,
successors or assigns; (iii) disclosed to Developer by a third party other than the City or any of its
elected and appointed officials, employees, agents, attorneys, affiliates, representatives or
contractors; or (iv) known to the public through no act or fault of Developer in violation of this
Agreement.
“Developer Insolvency Event” shall have the meaning set forth in Section 2.2.6.
“Developer Knowledge Parties” shall mean with respect to the Initial Developer, the Key
Employees of Initial Developer, and following any Transfer, shall mean individuals in positions
of responsibility and involvement in the Project at the time any representations and warranties are
to be made who hold positions of authority commensurate with the positions held by the Developer
Knowledge Parties of the Initial Developer as of the Effective Date.
“Developer Original Certificate” shall have the meaning set forth in Section 4.6.2.1.
“Developer Releasing Party” shall have the meaning set forth in Section 4.5.3.
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“Developer Representatives” shall have the meaning set forth in Section 5.1.
“Developer Title Endorsements” shall have the meaning set forth in Section 6.4.
“Developer’s Knowledge” shall have the meaning set forth in the last paragraph of Section
3.1 (following Section 3.1.16).
“Development Agreement” shall have the meaning set forth in Section 1.6.2.
“Development Costs” shall have the meaning set forth in Section 8.2.
“Development Parcel” shall have the meanings set forth in Section 1.2.1.
“Development Permits” shall mean all ministerial permits, certificates and approvals
which may be required by the City or any other Governmental Authority for the development and
construction of the Project Improvements, including any engineering permits, grading permits,
parking structure permits, construction permits, encroachment permits, demolition permits,
building permits or other permits as may be necessary pursuant to Chapter 4 of the Specific Plan
and/or the City Code and which shall be obtained and maintained in each case in accordance with
this Agreement, the Development Agreement, the Entitlements and any required environmental
mitigation.
“Disapproved Exception” shall have the meaning set forth in Section 6.3.
“District” shall have the meaning set forth in Section 8.7.3.1.
“DTSC” shall mean the California Department of Toxic Substances Control.
“Due Diligence Information” shall mean any and all information or documentation
relating to the Development Parcel furnished to Developer by the City, or its elected and appointed
officials, employees, agents, attorneys, affiliates, representatives, contractors or consultants or
obtained by Developer with respect to the Property or the Project prior to the Close of Escrow.
“Effective Date” shall have the meaning set forth in the first paragraph of this Agreement
and if no date is set forth in that location shall be the date of City Council approval of this
Agreement (even if executed subsequent to such date).
“ENA” shall have the meaning set forth in Section 1.1.8.
“ENA Extension Deposits” shall mean the amount of Nine Hundred and Fifty Thousand
Dollars ($950,000.00)paid to the City by Developer as Extension Deposits pursuant to the ENA.
The ENA Extension Deposits are nonrefundable under all circumstances, but shall in all cases be
applicable to the Purchase Price.
“ENA Expenses Deposit” shall have the meaning set forth in Section 1.8.1.
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“End User” shall mean any (i) utility or Governmental Authority with respect to any
transfer of portions of the Real Property or grants of easements affecting the Real Property
desirable for the development of the Real Property, including the City or any lighting or
landscaping district and (ii) for the term in which such contract is in effect, any natural person that
has a contractual right to inhabit and does inhabit a Residential Unit or Room.
“Entitlements” shall mean the Development Agreement and all discretionary land use
approvals and entitlements legally required by the City or any other Governmental Authority as a
condition of subdivision of the Real Property or any portion thereof, development of the Real
Property and/or construction of the Project Improvements and shall include those specific
Entitlements described in Section 8.4.2, but specifically excluding Development Permits.
“Environmental Agency” shall mean any federal, State, or regional agency with
applicable jurisdiction over the environmental conditions of the Real Property.
“Environmental Claims” shall have the meaning set forth in Section 10.2.
“Environmental Laws” shall mean any federal, State, regional or local laws, ordinances,
rules, regulations, 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 1980, as amended (42 U.S.C. Section 9601, et seq.) (“CERCLA”); the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 6901 et seq.)
(“RCRA”); the federal Water Pollution Control Act, as amended, (33 U.S.C. Section 1251 et seq.);
the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601 et seq.); the Hazardous
Substances Account Act (Part 2 commencing with Section 78000 of Division 45 of the California
Health and Safety Code); Chapter 6.5 commencing with Section 25100 (Hazardous Waste Control)
and Chapter 6.7 commencing with Section 25280 (Underground Storage of Hazardous Substances)
of the California Health and Safety Code; and the California Water Code, Sections 13000 et seq.
“Environmental Matters” shall mean (i) the environmental condition of the Development
Parcel; (ii) the compliance of the Development Parcel with Environmental Laws; (iii) the
existence, Release, threatened Release, presence, storage, treatment, transportation or disposal of
any Hazardous Materials at any time on, in, under, or from, the Development Parcel or any current
or future improvement thereon or any portion thereof, and/or (iv) Claims of or acts or omission to
act of any Governmental Authority or any other third party arising or resulting directly or indirectly
from or related to any actual, threatened, or suspected Release of a Hazardous Material on, in,
under, from, about, or adjacent to the Development Parcel or any current or future improvement
thereon, including any Investigation or Remediation at or about the Development Parcel or any
current or future improvement thereon; provided that if the property in question is Returned
Property, the foregoing shall apply as to the Returned Property only.
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“Equity Commitment” shall have the meaning set forth in Section 4.6.2.3.
“Equity Investor” shall mean one or more other Persons selected by Developer and
approved by the City in its sole discretion, to provide equity funding for the Project and which has
Net Worth and Liquid Assets, as determined by the City in its sole discretion, to fund all
Development Costs for the Project as described in the last Financing Plan approved by the City for
the Project.
“Equity Investor Date Down Certificate” shall have the meaning set forth in Section
2.2.4.3.
“Equity Investor Original Certificate” shall have the meaning set forth in Section
4.6.2.3.
“Escrow” shall have the meaning set forth in Section 4.4.
“Escrow Holder” shall mean First American Title Insurance Company.
“Evidence of Equity” shall have the meaning set forth in Section 4.6.2.2.
“Federal Deed” shall have the meaning set forth in Section 1.2.1.
“Federal Government” shall mean the United States of America (including the Navy), by
and through the Secretary of the Navy, or designee.
“Final Certificate of Compliance” shall mean the Certificate of Compliance executed and
Recorded by the City for entirety of the Project upon satisfaction of all Conditions Precedent
therefor set forth in Sections 9.3.1 and 9.3.2, provided that if the Final Parcel Map is Recorded
prior to execution and Recording by the City of the first Certificate of Compliance, then the second
Certificate of Compliance executed and Recorded by the City shall be the Final Certificate of
Compliance.
“Final EIS/EIR” shall have the meaning set forth in Section 1.1.2.
“Final Parcel Map” shall have the meaning set forth in Section 1.2.3.
“Finally Approved” shall mean, with (i) respect to CFD 18-01 Zone 5 described by this
Agreement, that the City Council has approved annexation of the Property into the District and the
creation of CFD 18-01 Zone 5 and the RMA, that the property owners having a vote shall have
voted to approve such formation and annexation, all applicable appeal and statute of limitations
periods relating thereto shall have expired without the filing of any appeal or legal challenge or
any such appeal or legal challenge shall have been resolved in a manner that permits formation
and annexation in a manner acceptable to the City in its sole discretion and (ii) with respect to
Entitlements, that all applicable appeal and statute of limitations periods relating thereto shall have
expired without the filing of any appeal or legal challenge or any such appeal or legal challenge
shall have been resolved in a manner that permits development of Project in a manner acceptable
to each of the City and Developer in their respective sole discretion.
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12Portion of Disposition Area 8
“Financing Plan” shall mean the Financing Plan or Updated Financing Plan for the
Project, in satisfaction of the requirements in Sections 2.2.3.5, 4.6.1, and 8.6 and last approved by
the City in satisfaction of such requirements.
“FIRPTA Affidavit” shall mean an affidavit in form reasonably satisfactory to Developer
certifying that the City is not a “foreign person” under the federal Foreign Investment in Real
Property Tax Act of 1980.
“First Party” shall have the meaning set forth in Section 18.7.3.
“Force Majeure Delay” shall have the meaning set forth in Section 18.7.1 as limited by
Section 18.7.2.
“Foreclosed Collateral” shall mean the Property, the Project Improvements and/or this
Agreement, the Other Agreements and all other documents and agreements with respect to the
Project acquired by a Foreclosure Transferee pursuant to a Foreclosure.
“Foreclosure” shall mean the foreclosure of any Permitted Mortgage (or any sale
thereunder), whether by judicial proceedings, by virtue of any power of sale under the Permitted
Mortgage, by acceptance of a deed-in-lieu of foreclosure, or by any other conveyance of all or any
portion of the Property, the Project Improvements by other appropriate proceedings in the nature
of a foreclosure, resulting in the Transfer of all or any portion of the Property and/or the Project
Improvements to (i) any Permitted Mortgagee, (ii) any entity that Controls Permitted Mortgagee,
is Controlled by Permitted Mortgagee, or is Controlled by an entity that also Controls Permitted
Mortgagee, (iii) any participating lender in the Construction Loan (excluding Developer or any
Developer Affiliate) secured by a Permitted Mortgage, and/or (iv) any agent or nominee for one
or more of the lenders in clauses (i) through (iii) of this definition under the Permitted Mortgage
that secures the Construction Loan.
“Foreclosure Transferee” shall have the meaning set forth in Section 2.2.7.3.
“FOST” shall mean the Department of Navy findings and determinations that the
Development Parcel was suitable for transfer to the City, pursuant to Finding of Suitability for
Transfer for Southern Parcels 4-8, 10-12, 14, and 42 and Parcels 25, 26, 30-33, 37, and Portions
of 40 and 41 dated September 28, 2001 (FOST #2).
“Full Insurable Value” shall have the meaning set forth in Section 11.2.2.
“GAAP” shall mean generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (FASB).
“General Plan” shall mean the most current general plan for the City of Tustin.
“Governmental Authority” and “Governmental Authorities” shall mean, respectively,
each and all federal, State, county, municipal and local governmental and quasi-governmental
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bodies and authorities (including the United States of America, 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 either or any of the Parties, the
Project, the Development Parcel, the Property or over any property owned by the City upon which
work is conducted by or on behalf of Developer in connection with construction of the Project or
such portions of the foregoing as the context indicates.
“Governmental Capacity” shall have the meaning set forth in Section 18.25.
“Governmental Requirements” shall mean all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines, conditions, instructions, and other requirements issued by any
Governmental Authority having jurisdiction over, governing, applying to or otherwise affecting
any or all of the Parties, the Project, the Project Improvements, the Development Parcel or any
portion thereof or over any property owned by the City upon which work is conducted by or on
behalf of Developer in connection with construction of the Project, and including the California
Surplus Land Act and Guidelines as the same may be amended from time to time, Environmental
Laws, the City Code, the Specific Plan, the Entitlements, the Development Permits and the
Approved Plans.
“Governmental Successors” shall mean each and every Person that is a successor or an
assignee of the City and that is a governmental entity or agency.
“Grading Work” shall mean all of the grading work required to be completed by
Developer on the Real Property pursuant to the Approved Plans, which shall include rough and
precise grading of the Real Property and the portions of the Boundary Landscape Area owned by
the City depicted on Exhibit C to the Landscape Installation and Maintenance Agreement,
including internal drives and access points.
“Guarantor” shall mean each and every Person(s) approved by the City in its sole
discretion as Guarantor.
“Guarantor Date Down Certificate” shall have the meaning set forth in Section 2.2.4.4.
“Guarantor Illiquidity Event” shall have the meaning set forth in the Guaranty.
“Guarantor Original Certificate” shall have the meaning set forth in Section 2.2.4.4.
“Guaranty” shall mean a guaranty made by a Guarantor and to which the City is a named
beneficiary, which shall be in substantially the form and substance of the guaranty attached to this
Agreement as Attachment 14A, as the same shall be reaffirmed, amended, or replaced in
accordance with this Agreement.
“Guaranty Legal Opinion” shall have the meaning set forth in Section 2.2.4.4.
“Hazardous Materials” shall mean and include the following:
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14Portion of Disposition Area 8
(i)“Hazardous Substance”, “Hazardous Material”, “Hazardous Waste”,
or “Toxic Substance” under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101, et
seq., or the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq.;
(ii)An “Extremely Hazardous Waste”, a “Hazardous Waste”, or a
“Restricted Hazardous Waste”, under Sections 25115, 25117, or 25122.7
of the California Health and Safety Code, or is listed or identified pursuant
to Section 25140 or 44321 of the California Health and Safety Code;
(iii)“Hazardous Material”, “Hazardous Substance”, “Hazardous Waste”,
“Toxic Air Contaminant”, or “Medical Waste” under Sections 25281,
78075(a), 25501, 117690 or 39655 of the California Health and Safety
Code;
(iv)“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;
(v)Listed or defined as a “Hazardous Waste”, “Extremely Hazardous
Waste”, or an “Acutely Hazardous Waste” pursuant to Chapter 11 of Title
22 of the California Code of Regulations;
(vi)Listed by California as a chemical known by California to cause cancer or
reproductive toxicity pursuant to Section 25249.8 of the California Health
and Safety Code;
(vii)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;
(viii)Any material whose presence would require remediation pursuant
to the guidelines set forth in the California Leaking Underground Fuel Tank
Field Manual, whether or not the presence of such material resulted from a
leaking underground fuel tank;
(ix)Pesticides regulated under the Feral Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Section 136 et seq.;
(x)Asbestos, PCBs and other substances regulated under the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.;
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(xi)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. Section 2011 et seq., the
Nuclear Waste Policy Act, 42 U.S.C. Section 10101 et seq., or pursuant to
the California Radiation Control Law, California Health and Safety Code
Section 114960 et seq.;
(xii)Regulated under the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq., or the California Occupational Safety and Health Act,
California Labor Code Section 6300 et seq.;
(xiii)Regulated under the Clean Air Act, 42 U.S.C. Section 7401 et seq.
or pursuant to Division 26 of the California Health and Safety Code; and/or
(xiv)Any substance or compound regarding which a federal or State
agency has established a health advisory, including but not limited to,
Perfluorooctanoic Acid (PFOA) and Perfluorooctane Sulfonate (PFOS) or
any associated additives or degradation byproducts thereof.
“HCD” shall have the meaning set forth in Section 1.1.6.
“High Quality Project” shall mean an age restricted (55 years or older) and/or senior
congregate care development that represents the highest quality in design and construction in the
market area and very well maintained and professionally managed to the highest industry
standards.
“Horizontal Improvements” shall mean the Active Adult Project Horizontal
Improvements and/or the AL/MC Project Horizontal Improvements or any portion thereof,
collectively or, if the context so indicates, individually.
“HUD” shall mean the U.S. Department of Housing and Urban Development.
“Includes”, “Included” and “Including” shall have the meanings set forth in Section
1.9.3.
“Independent Contract Consideration” shall have the meaning set forth in Section 1.8.2.
“Information” shall mean any and all information or documentation relating to the
Development Parcel, the Property or the Project Improvements or any portion thereof furnished to
Developer by the City, or its elected and appointed officials, employees, agents, attorneys,
affiliates, representatives, contractors or consultants whether occurring prior to or following the
Effective Date.
“Initial Developer” shall have the meaning set forth in Section 1.4.2.
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“Initial Equity Commitment” shall have the meaning set forth in Section 4.6.2.3.
“Initial Equity Investor” shall have the meaning set forth in Section 4.6.2.3.
“Injured Party” shall have the meaning set forth in Section 14.1.
“Intangible Property” shall mean all rights, claims (other than claims under insurance
policies maintained by or for the benefit of the City) and all permits, licenses, approvals,
authorizations, issued by any Governmental Authorities in connection with the Real Property; but
with respect to the Navy Responsibilities shall be a non-exclusive assignment of rights and shall
not be deemed an assignment or release by the City of its rights against any responsible party or
against the Federal Government or any third party with respect to the Navy Responsibilities.
“Investigation(s)” shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Development Parcel, or any other property upon which Developer is required
to construct the Project Improvements, including the air, soil, surface water, and groundwater, and
the surrounding population or properties, or any of them, to characterize or evaluate the nature,
extent or impact of Hazardous Materials.
“IRWD” shall mean the Irvine Ranch Water District.
“JV Entity” shall have the meaning set forth in Section 1.3.1.
“Key Employees” shall mean the following employees of Initial Developer: Marshall
Burton, Steve Strom and H. McNeish, provided that following any Transfer or Transfer of Control,
the Transferee shall specify its Key Employees.
“Landscape Improvements” shall mean any and all landscaping, irrigation, lighting
(other than City street lighting) and related utilities, street furniture, structures, and/or hardscape
improvements required by the Approved Plans, the Entitlements, the Development Permits, this
Agreement, the Development Agreement, and the Landscape Installation and Maintenance
Agreement to be constructed in connection with the Project upon the Boundary Landscape Area.
“Landscape Installation and Maintenance Agreement” shall have the meaning set forth
in Section 7.2.1.1(ix).
“Lien Release Amounts” shall mean the amounts, if any, (i) of any City Lien and (ii)
required to be paid to third parties by the City to clear all monetary liens (including all Construction
Liens) and which, with respect to taxes and assessments, are then due and payable.
“Liquid Assets” shall mean assets held in the form of cash, marketable securities,
unconditional unfunded capital commitments reviewed and confirmed in writing by City, credit
facility commitments from Qualified Institutional Lenders with respect to which and to the extent
to which all conditions for drawing have been satisfied, and other cash equivalents, and, in the case
of each of the foregoing, that have not been pledged as collateral for any debt or other obligations.
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“Liquidated Damages” shall have the meaning set forth in Section 15.2.1.1.
“Lower Income Households” shall mean persons and families whose income does not
exceed the qualifying limits for lower income families as established and amended from time to
time pursuant to Section 8 of the United States Housing Act of 1937. The limits shall be published
by the Department of Housing and Community Development in the California Code of Regulations
as soon as possible after adoption by the Secretary of Housing and Urban Development. In the
event the federal standards are discontinued, the Department of Housing and Community
Development shall, by regulation, establish income limits for lower income households for all
geographic areas of the state at eighty percent (80%) of Area Median Income, adjusted for family
size and revised annually. “Lower Income Households” includes Very Low Income Households.
“Lower Income Units” shall mean Residential Units that are constructed and rented to,
occupied by, or held available for Lower Income Households.
“Major Modifications” shall mean, with respect to Basic Concept Plan or any component
thereof (i.e., the Site Plan, the Scope of Development, or the Phasing and Implementation Plan),
any modification, revision, or change that is not a Minor Modification.
“Manager” shall mean the Person vested by Developer with the authority and
responsibility for day-to-day management of the development and construction of the Project on
behalf of Developer.
“Material Default” shall have the meaning set forth in Sections 14.2.1 and 14.2.2.
“MCAS Tustin” shall have the meaning set forth in Section 1.1.1.
“Memorandum of Agreement” shall have the meaning set forth in Section 1.1.3.
“Memorandum of DDA” shall mean a memorandum of record of this Agreement to be
Recorded against the Property in substantially the form and substance of the memorandum
attached to this Agreement as Attachment 12.
“Mezzanine Financing” shall mean, with respect to any Person, a loan that is secured by
a pledge of the equity interests in such Person or any entity in the chain of ownership of such
Person. For the avoidance of doubt, Mezzanine Financing does not include a senior/subordinate
note structure in which a single deed of trust or other security interest secures both a senior and
subordinate loan obligation held by Qualified Institutional Lenders, and for which a single
Qualified Institutional Lender acts as agent for the holders of both the senior and subordinate loan
obligations.
“Minimum Asset Standards” shall mean, (a) as to the Guarantor approved by the City as
of the Closing Date, “Guarantor Net Worth” and “Guarantor Liquid Assets” as those terms are
defined in, and in the minimum amounts required by, the Guaranty to be delivered by Guarantor
at Close of Escrow (and any “Approved Substitute Guaranty” as that term is defined in the
Guaranty required to be delivered by Guarantor at Close of Escrow), (b) as to Initial Equity
Investor, Liquid Assets in at least the amount specified as the “Funding Limit” in the form of
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18Portion of Disposition Area 8
Equity Commitment attached to this Agreement as Attachment 15C, and, (c) as to the Additional
Equity Investors, Liquid Assets in at least the respective amounts specified as the “Funding Limit”
in the form of Equity Commitment attached to this Agreement as Attachment 15E. As to any other
Guarantor and any other Equity Investor, the term “Minimum Asset Standards” shall mean the
minimum amounts of Net Worth and Liquid Assets required by the City in its sole discretion.
“Minor Modifications” shall mean, with respect to the review by the City in its Proprietary
Capacity of the Basic Concept Plan or any component thereof (i.e., the Site Plan, the Scope of
Development, or the Phasing and Implementation Plan), any modification, revision, or change that
(i) as to the Site Plan, the Scope of Development and the Basic Concept Plan, is substantially
consistent with the most recent such documents approved by the City, does not increase or reduce
by more than five percent (5%) the overall gross square footage of any building containing
Residential Units or Rooms, and does not result in any modification to or reduction in (unless
offset within the Project) the character of the development concept or the design and materials to
be used in enhancing the architecture and aesthetics of the Project Improvements, or (ii) as to the
Basic Concept Plan conforms to or represents a logical or commercially reasonable
implementation of the previously approved Basic Concept Plan.
“Mortgage” shall mean any indenture of mortgage or deed of trust, hypothecation, pledge,
assignment for security purposes, bond, grant of taxable or tax exempt funds from a governmental
agency or other security interest affecting the Real Property or any portion thereof or any
documents constituting or relating to a sale-leaseback transaction, in each case together with all
loan documents related thereto, but excluding any community facilities districts, service districts,
assessment districts, landscape and lighting districts, or other assessments created or imposed by
any Governmental Authority.
“Mortgagee” shall mean any mortgagee, beneficiary, secured party (or any agent for one
or more lenders acting in any of the foregoing capacities) or other provider of funds or grantee of
title under any Mortgage.
“Navy” shall have the meaning set forth in Section 1.1.2.
“Navy Responsibilities” shall have the meaning set forth in Section 4.5.2.3.
“Net Worth” shall mean, in the case of the Guarantor approved by the City as of the
Closing Date, the “Guarantor Net Worth” as that term is defined in the Guaranty to be delivered
by Guarantor at Close of Escrow (and any “Approved Substitute Guaranty” as that term is defined
in the Guaranty required to be delivered by Guarantor at Close of Escrow), and otherwise shall
mean the net worth of Guarantor or Equity Investor which shall be determined based on (i) the fair
market value of the assets of each of the Persons comprising Guarantor or Equity Investor, as
applicable (including the aggregate amount of uncalled capital commitments from such Persons’
creditworthy direct and/or indirect limited partners (but excluding all intangible assets such as
goodwill, intellectual property, licenses, organizational costs, deferred amounts, accumulated
depreciation, intercompany receivables, covenants not to compete, unearned income, restricted
funds and like matters), investments in subsidiaries or other Persons Controlled by, or is under
common Control with Guarantor or Equity Investor, as applicable, less (ii) all liabilities of the
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19Portion of Disposition Area 8
Persons comprising Guarantor or Equity Investor, as applicable (as determined in accordance with
GAAP).
“Non-Environmental Claims” shall mean all Claims brought by third parties that are not
Environmental Claims.
“Non-Permitted Foreclosure Event” shall mean a Transfer as a result of which the
Transferee acquires any portion of the Property through or following a Foreclosure and is not a
Permitted Mortgage Transferee or Qualified Foreclosure Purchaser.
“Non-Qualified Foreclosure Transferee” shall mean a Transferee that acquires any
portion of the Property through a Non-Permitted Foreclosure Event.
“Notice of Completion” shall mean the notice of completion filed pursuant to California
Civil Code Section 8182 after Completion in each case by an “owner” as defined in Section
8182(e) with respect to both: (i) private Project Improvements and (ii) public Project
Improvements performed by Developer, any Successor Owner, or such Person’s contractor.
“Opening of Escrow” shall have the meaning set forth in Section 4.4.
“Original ALTA Coverage” shall have the meaning set forth in Section 6.4.
“Other Agreements” shall mean the Development Agreement, the Memorandum of DDA,
the Affordable Housing Declaration, the SLA Covenant, the Special Restrictions, the Quitclaim
Deed, the Landscape Installation and Maintenance Agreement, the Access Easement Agreement,
and the Bioswale Easement.
“Outside Closing Date” shall have the meaning set forth in Section 7.1.1.
“Owner” shall mean Developer, provided that following Recording by the City of a
Certificate of Compliance as to any portion of the Real Property, as to such Real Property and the
portion of the Project thereon shall have the meaning set forth in the Special Restrictions.
“Owner Affiliate” shall mean with respect to any Owner, any entity that directly or
indirectly Controls, is Controlled by or is under common Control with that Owner.
“Parties” shall mean the City and Developer, collectively.
“Party” shall mean either of the City or Developer, individually, as parties to this
Agreement.
“Permitted Exceptions” shall have the meaning set forth in Section 6.2 as may be
modified by Section 6.3.
“Permitted Mortgage” shall mean any indenture of mortgage or deed of trust, bonds, or
other conveyance of a security interest in the Property or any portion thereof, to a Permitted
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20Portion of Disposition Area 8
Mortgagee for the purpose of development and construction of all or a portion of the Project. There
shall not be more than one (1) Permitted Mortgage for the Property.
“Permitted Mortgagee” shall mean a Mortgagee meeting the criteria set forth in Article 17
and accordingly entitled to the Permitted Mortgagee protections provided by this Agreement. For
purposes of any acts under a Permitted Mortgage with respect to and/or following a Foreclosure
thereunder, “Permitted Mortgagee” shall mean such Permitted Mortgagee or any wholly-owned
subsidiary thereof designated by Permitted Mortgagee to take title to the foreclosed property. The
participation, securitization or assignment of a loan (or any portion thereof) by a Permitted
Mortgagee (acting in an individual capacity or as agent for other lenders) shall not give rise to any
requirement that each lender participating in such participation, securitization or assignment itself
be a Permitted Mortgagee (acting in an individual capacity or as agent for other lenders), so long
as (i) at the inception of the loan, the originating and agent lender is a Permitted Mortgagee, and
(ii) at the time of any subsequent assignment of the loan, the successor owner and agent lender is
a Permitted Mortgagee.
“Permitted Mortgage Transferee” shall mean any Transferee of all or any Portion of the
Property through Foreclosure that is one (or any combination of) the following: (i) any Permitted
Mortgagee, (ii) any entity that Controls Permitted Mortgagee, is Controlled by Permitted
Mortgagee, or is Controlled by an entity that also Controls Permitted Mortgagee, (iii) any
participating lender in the Construction Loan (excluding Developer or any Developer Affiliate),
and/or (iv) any agent for one or more of the lenders in clauses (i) through (iii) above under the
Permitted Mortgage that secures the Construction Loan.
“Permitted Transfer” shall have the meaning set forth in Section 2.2.2.
“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 have the meaning set forth in Section 14.1.
“Potential Returned Property” shall mean those portions of the Property which are
eligible for repurchase pursuant and subject to Section 16.3 or revesting pursuant to Section 16.4,
together with all Project Improvements constructed thereon by or on behalf of Developer.
“Pre-Closing Entitlements” shall mean the Entitlements listed in clauses (i) through (v)
of Section 8.4.2 as the same may be modified from time to time with the approval of the City.
“Prevailing Party” shall have the meaning set forth in Section 18.2.
“Private Drives and Sidewalks” shall mean those private streets, roadways, sidewalks,
pedestrian pathways, and bike ways to be constructed by Developer on the Real Property.
“Products” shall have the meaning set forth in Section 14.3.2.
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21Portion of Disposition Area 8
“Project” shall mean the Active Adult Project and the AL/MC Project, collectively.
“Project Architect” shall mean HPI (formerly The Hill Partnership, Inc.)
“Project Fair Share Contribution” shall have the meaning set forth in Section 4.2.2.
“Project Improvements” shall mean the Active Adult Project Improvements and the
AL/MC Project Improvements, collectively or, if the context so indicates, individually.
“PropCo” shall have the meaning set forth in Section 1.3.1.
“Property” shall have the meaning set forth in Section 4.1.1.
“Proprietary Capacity” shall have the meaning set forth in Section 18.25.
“Public Records Act” shall mean the Public Records Act of the State of California,
California Government Code Sections 7920.000-7931.000).
“Purchase Price” shall have the meaning set forth in Section 4.2.1.
“Qualified Equity Investor” shall mean any Person proposed by Developer and that:
(i)has as its Controlling Person a Person having at least ten (10) years of
experience in investing in projects similar to the Project and of equivalent or larger size.
(ii)together with its Affiliates, within the preceding eighteen (18) months prior
to the date of determination, has not been the subject of any Insolvency Event;
(iii)has not, nor has its Controlling Person or any key employee thereof: (a) been
indicted or convicted for any felony or crime involving moral turpitude, (b) been debarred by any
public entity in California, or (c) been engaged in litigation with the City or any other governmental
entity within the preceding five (5) years (other than tax contests or litigation unrelated to
development) where such party was not the successful litigant; and
(iv)has, when determined in the aggregate for such Person and its Controlling
Persons and Affiliates, met the Minimum Asset Standards specified in Attachment 15C; or
any other Person that is approved as a Qualified Equity Investor by the City in its sole
discretion.
“Qualified Foreclosure Purchaser” shall mean any Person, other than a Permitted
Mortgagee Transferee, that through Foreclosure or as a result of a Transfer from a Permitted
Mortgagee or Permitted Mortgagee Transferee following a Foreclosure, acquires Foreclosed
Collateral comprising all of the Real Property and Improvements previously owned by Developer
and that:
(i)is licensed to do business in the State of California;
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22Portion of Disposition Area 8
(ii)has as its Controlling Person a Person having at least ten (10) years of
experience in developing or owning projects similar to the Project and of equivalent or larger size.
(iii)together with its Affiliates, within the preceding eighteen (18) months prior
to the date of the Foreclosure, has not been the subject of any Insolvency Event;
(iv)has not, nor has its Controlling Person or any key employee thereof: (a)
been indicted or convicted for any felony or crime involving moral turpitude, (b) been debarred by
any public entity in California, or (c) been engaged in litigation with the City or any other
governmental entity within the preceding five (5) years (other than tax contests or litigation
unrelated to development) where such party was not the successful litigant; and
(v)has, when determined in the aggregate for such Person and its Controlling
Persons and Affiliates, Liquid Assets in an amount not less than the amount then required to
complete the Project in accordance with the provisions of this Agreement, after taking into account
debt financing committed to such Person for the purpose of completing the Project; or
(vi)any other Person that is approved as a Qualified Foreclosure Purchaser by
the City in its sole discretion.
“Qualified Institutional Lender” shall mean a nationally chartered bank, national
association, federal association bank, savings and loan association, investment bank, state
chartered bank, lending institution, pension fund, insurance company or other institutional lender
which is duly established and in the business of financing the size and type of development
contemplated hereunder and which, in the reasonable opinion of the City, has a sufficient net worth
and liquidity position to meet the contemplated financing commitment. An institutional lender
shall be rebuttably presumed to be acceptable to the City if it has received a “Best’s Rating of “aa”
or higher from A.M. Best Company, a “Safe & Sound” rating of four (4) stars or higher from Bank
Rate, Inc., or a similar rating from a rating service reasonably acceptable to the City and is not
included on any State, county or municipal list of banned or restricted vendors and has a net worth
of Five Billion Dollars ($5,000,000,000) or more, and such term shall include but not be limited
to Fannie Mae, Freddie Mac, FHA, CapitalOne, Citibank, Wells Fargo, Union Bank, US Bank,
and Bank of America, East West Bank, Bank of America, Citi Community Capital, JP Morgan
Chase, Merchants Capital, Berkadia, U.S. Bank, JLL, Lument, Greystone, Deutsche Bank, Walker
& Dunlop, CBRE, Bellwether Enterprise, PNC, RBC, or California Bank & Trust, and Banner
Bank.
“Quitclaim Deed” shall mean the quitclaim deed to be executed and delivered by the City
at the Close of Escrow to quitclaim all of the City’s interests in the Property (subject to all
Permitted Exceptions, the reservations identified in Sections 1.2.2 and 4.1.2 and the terms of this
Agreement) to Developer. The Quitclaim Deed shall be in substantially the form and substance of
the deed attached hereto as Attachment 11, acknowledged and in Recordable form.
“Reaffirmation Legal Opinion” shall mean a legal opinion in the form and substance of
the legal opinion attached to this Agreement as Attachment 14F, or other form required by
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23Portion of Disposition Area 8
Guarantor’s legal counsel and approved by the City in its sole discretion, executed by legal counsel
to Guarantor when required by this Agreement.
“Reaffirmation of Guaranty” shall mean a reaffirmation of the Guaranty executed by
Guarantor at each Transfer which shall be in substantially the form and substance of the
Reaffirmation of Guaranty attached to this Agreement as Attachment 14E.
“Real Property” shall have the meaning set forth in Section 1.2.2.
“Record”, “Recording” and “Recorded” shall mean to record the specified instrument, or
the current or past recording of the specified instrument, in the office of the Clerk Recorder for
Orange County, California.
“Recordable” shall mean with respect to any document, that such document has been
acknowledged and is otherwise in a form that would permit Recording thereof.
“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(23) through (25) of CERCLA, and similar actions with respect to Hazardous
Materials as defined under comparable state and local laws, and any other cleanup, removal,
containment, abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure,
restoration or other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
“Repurchase Price” shall mean the lesser of (i) fair market value of the Returned Property
or (ii) seventy five percent (75%) of the Purchase Price for the Property, provided that if the
Returned Property is less than the entirety of the Property, the Purchase Price shall be allocated
pro rata on a land square foot basis to the Returned Property.
“Repurchase Property” shall have the meaning set forth in Section 16.3.1.
“Residential Unit” or “Residential Units” shall mean the age restricted (55 years or older)
active adult and independent living facilities to be developed on the Active Adult Real Property.
“Responsible Developer” shall mean the Initial Developer or if Initial Developer has been
previously released pursuant to Section 2.3.2 shall mean any Transferee approved by the City in
accordance with Section 2.2.3.
“Returned Property” shall mean those portions of the Property repurchased by the City
pursuant to Section 16.3 or revested by the City pursuant to Section 16.4.
“Reuse Plan” shall have the meaning set forth in Section 1.1.1.
“Reversion Action Trigger” shall have the meaning set forth in Section 16.4.1.
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24Portion of Disposition Area 8
“Reversion Action Trigger Date” shall have the meaning set forth in Section 16.4.1.
“Reversion Event” shall have the meaning set forth in Section 16.4.
“Reversion Property” shall have the meaning set forth in Section 16.4.1.
“RFP” shall mean request for proposal.
“Right of Repurchase” shall have the meaning set forth in Section 16.3.1.
“Right of Reversion” shall have the meaning set forth in Section 16.4.
“RMA” shall have the meaning set forth in Section 7.1.2.
“Rooms” shall mean the assisted living and memory care rooms within each building to
be developed on the AL/MC Real Property.
“Schedule of Performance” shall mean the document attached as Attachment 7 to this
Agreement, as the same may be revised or extended from time to time in accordance with this
Agreement, setting forth the dates and time periods for submissions, approvals and actions for the
Term of this Agreement, including the construction and Completion of the Project Improvements.
“Scope of Development” shall have the meaning set forth in Section 1.3.2.
“Second Party” shall have the meaning set forth in Section 18.7.3.
“Shall”; “Shall Not” shall have the meanings set forth in Section 1.9.4.
“Site Plan” shall have the meaning set forth in Section 1.2.1.
“SLA Covenant” shall have the meaning set forth in Section 1.6.1.
“SLA Regulations” shall have the meaning set forth in Section 1.1.6.
“Sole” shall have the meaning set forth in Section 1.9.5.
“Special Restrictions” shall mean the Declaration of Special Restrictions for a Portion of
Disposition Area 8, in substantially the form and substance of the document attached hereto as
Attachment 20 to be executed by the City and accepted by Developer and acknowledged in
Recordable form and Recorded at the Close of Escrow immediately prior to Recording of the
Quitclaim Deed.
“Specific Plan” shall mean the Tustin Legacy Specific Plan as the same has been or shall
be amended from time to time.
“Subdivision Map” shall mean any Recorded Final Parcel Map or parcel map (or
exemption therefrom or waiver thereof) subdividing the Development Parcel pursuant to the
Subdivision Map Act substantially consistent with the Tentative Parcel Map or such other tentative
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25Portion of Disposition Area 8
or vesting tentative map or tentative or vesting tentative parcel map as may be approved by the
City with respect to the Real Property or any portion thereof.
“Subdivision Map Act” shall mean the California Subdivision Map Act as codified in
California Government Code Section 66410 et seq.
“Subordination Agreement” shall have the meaning set forth in Section 2.2.5.
“Substantially in the Form and Substance” shall have the meaning set forth in Section
1.9.2.
“Successor Agency” shall mean the Successor Agency to the Tustin Community
Redevelopment Agency.
“Successor Owner” shall mean each and every Person owning or acquiring fee title to all
or any portion of the Real Property from and after the conveyance of such Real Property to
Developer by the City, but excluding each and every End User; provided that any such Transfer
shall be subject to the applicable limitations set forth in Article 2.
“Supplemental Title Report” shall have the meaning set forth in Section 6.3.
“Surplus Land Act” shall have the meaning set forth in Section 1.1.6.
“Survey” shall have the meaning set forth in Section 6.1.
“Surveyor” shall have the meaning set forth in Section 6.1.
“Tentative Parcel Map” shall have the meaning set forth in Section 1.2.3.
“Term” shall have the meaning set forth in Section 18.13.
“Title Commitment” shall have the meaning set forth in Section 6.2.
“Title Company” shall mean First American Title Insurance Company.
“Transfer” shall mean (i) the transfer, sale, assignment, lease, sublease, license, gift,
hypothecation, mortgage, pledge or encumbrance, merger or other similar conveyance by
Developer of its interest in this Agreement, the Other Agreements, the Project, the Property, the
Project Improvements or any portion thereof or interest therein, whether voluntary, involuntary,
by operation of law or otherwise, or any agreement to do so; (ii) the granting by Developer of any
Mortgage, easement, license, lien or other encumbrance and/or the execution of any installment
land sale contract or similar instrument affecting all or a portion of the Project, the Property, the
Project Improvements, or any portion thereof or interest of Developer therein; (iii)any merger or
similar term as such term is defined by the law of the state in which the transferor entity is formed
and that has the same effect as any of the circumstances described in clauses (i) or (ii) of this
definition, and (iv) shall also include any conversion of Developer to an entity form other than that
of Developer at the time of execution of this Agreement, provided that a lease by Developer of the
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26Portion of Disposition Area 8
Property to an operating entity that directly or indirectly Controls, is Controlled by or is under
common Control with Developer for the purpose of operating the Project upon occupancy and
with an effective or commencement date on or after the date on which a final or temporary
certificate of occupancy is obtained for the Property shall not constitute a “Transfer” within the
meaning of this definition.
“Transfer Date” shall mean the effective date of any Transfer or Transfer of Control by
or affecting Developer and with respect to a Transfer, shall be the date upon which the Assignment
Agreement becomes effective.
“Transfer of Control” shall mean, with respect to Developer or Developer’s Controlling
Person, the occurrence, directly or indirectly, in a single transaction or a series of transactions, of
any of the following:
(i)the conveyance, sale, assignment, transfer or disposition of all or
substantially all of that Person’s (or its Controlling Person’s) assets, stock, membership or
partnership interests or other equity interests;
(ii)the dissolution, merger, reorganization, share exchange, recapitalization,
restructuring or consolidation of that Person (or its Controlling Person), other than a transaction
that would result in all of the voting securities of that Person (or its Controlling Person) outstanding
immediately prior thereto to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50.01% of the combined voting
power of all of the voting securities of that Person (or its Controlling Person) or such surviving
entity outstanding immediately after such transaction; and
(iii)the acquisition by any “Person” or “Group” (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) of an aggregate of 50.01% or more of
the beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934) of the issued and outstanding voting securities or other equity interests of that Person (or its
Controlling Person), where such acquiring “Person” or “Group” did not directly or indirectly (or
through an affiliate) already Control or own at least 50.01% of the voting securities or other equity
interests of such Person (or its Controlling Person).
“Transferable Interests” shall have the meaning set forth in Section 2.2.
“Transferable Products” shall have the meaning set forth in Section 14.3.2.
“Transferee” shall mean any Person to which a Transfer or Transfer of Control is made,
of the Transferable Interests or any portion thereof or interest therein, including by Transfer to a
Successor Owner or Developer Affiliate.
“Transferee Certificate” shall have the meaning set forth in Section 2.2.4.2.
“Transferor” shall mean any Person that is a Developer under this Agreement which
Transfers all of the Transferable Interests, including by Transfer to a Successor Owner or
Developer Affiliate or Mortgagee.
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27Portion of Disposition Area 8
“Tustin Legacy” shall have the meaning set forth in Section 1.1.3.
“Tustin Legacy Backbone Infrastructure Program” shall have the meaning set forth in
Section 8.7.1.
“Updated Financing Plan” shall have the meaning set forth in Section 4.6.1.2.
“Vertical Improvements” shall mean the Active Adult Project Vertical Improvements and
the AL/MC Project Vertical Improvements or any portion thereof, collectively or, if the context so
indicates, individually.
“Vertical Improvements Commencement Date” shall mean the date on which the
inspection of the reinforcing steel for the walls and/or columns of the ground-level parking
structure for the Active Adult Project or AL/MC Project has been undertaken and passed, and the
passing of such inspection shall constitute commencement of vertical construction.
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28Portion of Disposition Area 8
ATTACHMENT 2A
LEGAL DESCRIPTION OF DEVELOPMENT PARCEL
The Land referred to herein below is situated in the City of Tustin, County of Orange, State of
California, and is described as follows:
LOT 14, INCLUSIVE OF TRACT NO. 18197 AS SHOWN ON A MAP FILED IN BOOK 990,
PAGES 25 THROUGH 33, INCLUSIVE OF TRACT MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
For conveyancing purposes only: APN 430-481-12
Tustin Confluent DDA 09.08.26 (HM)(3).docx Attachment 2A City of Tustin/Confluent Development
Portion of Disposition Area 8
ATTACHMENT 2B
DEPICTION OF DEVELOPMENT PARCEL AND LOCATION
{see attached}
Tustin Confluent DDA 10.01.26 (HM).docx Attachment 2B City of Tustin/Confluent Development
Portion of Disposition Area 8
B
MAPSHOWINGP AND ITS LOCATION
CityofTustin/Confluent
Development
C
NBQ!TIPXJOH!Q
ATTACHMENT 3
SITE PLAN
{see attached}
Tustin Confluent DDA 10.01.26 (HM).docx Attachment 3 City of Tustin/Confluent Development
Portion of Disposition Area 8
TJUF!QMBO
ATTACHMENT 4
TITLE COMMITMENT
{see attached}
Tustin Confluent DDA 10.01.26 (HM).docx Attachment 4 City of Tustin/Confluent Development
Portion of Disposition Area 8
ATTACHMENT 5A
FORM OF CITY ESTOPPEL
\[Date\]
\[Transferee\]
\[Address\]_________________
Attn: ____________
Re: \[Developer/Development Name\]
Ladies and Gentlemen:
The undersigned is writing this letter to you (“Transferee”) regarding that certain
residential development project (“Project”) that {\[has been\] \[may be\]}constructed on the land
legally described on Exhibit A attached hereto and incorporated herein by this reference (“Real
Property”).
The City of Tustin, a municipal corporation of the State of California (“City”), and Tustin
Legacy Acquisition LLC, a Delaware limited liability company (“Developer”), entered into that
certain Tustin Legacy Disposition and Development Agreement for Portion of Disposition Area 8,
dated as of _____________, 20__ {if amended, insert relevant amendment information}
(“DDA”), relating to the conveyance of the Real Property by the City to Developer and the
subsequent development thereon of the Project, all as more particularly set forth therein \[{POST-
CLOSING:} and in the executed agreements listed below\]. All initially capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the DDA.
\[{If Property has been conveyed} The City has conveyed the Real Property to Developer
pursuant to Quitclaim Deed for Portion of Disposition Area 8 and Covenants, Conditions and
Restrictions, Including Environmental Restriction Pursuant to Civil Code Section 1471
(“Quitclaim Deed”) with respect to the Real Property dated ________________, 20__ recorded
in the in the Office of the County Recorder, Orange County, California (“Official Records”) on
_____________, 20__ as Instrument No. _______________, pursuant to which the City conveyed
to Developer the fee title to the Real Property, subject to certain restrictions and limitations set
forth in the Quitclaim Deed.\]
\[{If Property has been conveyed or any of the following have been executed:} The City has
executed the following documents (each executed or acknowledged and accepted by Developer)
that were recorded against the Real Property prior to conveyance to Developer:
1.Surplus Land Act Covenant (per Government Code Section 54233 (“SLA
Covenant”) dated _____________, 20__, which was recorded in the Official
Records against the Real Property on _____________, 20)_ as Instrument No.
__________;
Tustin Confluent DDA Att 5 City Estoppel Attachment 5 City of Tustin/Confluent Dev.
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2.Declaration of Affordable Housing Restrictive Covenants and Regulatory
Agreement {if amended, insert relevant amendment information}
(“Affordable Housing Declaration”) dated _______________, 20__ and
recorded in the Official Records against the Real Property and certain
additional property on _______________, 20__ as Instrument No.
_______________ {If amended, insert relevant amendment information}; and
3.Declaration of Special Restrictions for Portion of Disposition Area 8 {if
amended, insert relevant amendment information} (“Special Restrictions”),
dated _____________, 20__, recorded in the Official Records against the Real
Property on _____________, 20__ as Instrument No. __________,
\[INSERT OTHER AGREEMENTS AS APPLICABLE\]
And the following agreements entered into by City and Developer:
1.Development Agreement (“DA”) dated ___________, 20__, which was
recorded in the Official Records against the Real Property and certain
additional property on ________________, 20)_ as Instrument No.
__________ {If amended, insert relevant amendment information};
2.Memorandum of Tustin Legacy Disposition and Development Agreement for
Portion of Disposition Area 8 (“Memorandum of DDA”), dated
_____________, 20__, which was recorded in the Official Records against the
Real Property on _____________, 20)_ as Instrument No. __________, and
provided record notice of the DDA {If amended, insert relevant amendment
information};
3.Landscape Installation and Maintenance Agreement (“Landscape Installation
and Maintenance Agreement”) dated _______________, 20__ and recorded
in the Official Records against the Real Property and certain additional
property on _______________, 20__ as Instrument No. _______________. {If
amended, insert relevant amendment information.};
4.Access Easement Agreement dated _______________, 20__ and recorded in
the Official Records against the Real Property on _______________, 20__ as
Instrument No. _______________ (“Access Easement Agreement”); and
5.Bioswale and Utility Easement Agreement dated _______________, 20__ and
recorded in the Official Records against the Real Property on
_______________, 20__ as Instrument No. _______________ (“Bioswale
Easement”)
The DDA, the SLA Covenant, the Affordable Housing Declaration, the Special
Restrictions, the DA, the Memorandum of DDA, the Quitclaim Deed, the Landscape Installation
and Maintenance Agreement, the Access Easement Agreement and the Bioswale Easement {if
applicable insert other agreements listed above} are collectively referred to herein as the
Tustin Confluent DDA Att 5 City Estoppel Attachment 5 City of Tustin/Confluent Dev.
9.27.26 (HM).docx2Portion ofDisp. Area8
“Property Documents.”\] and each of Property Documents contains, among other matters,
certain requirements regarding the use and maintenance of the Real Property and each, other than
the Memorandum of DDA and DA, sets forth certain provisions of the DDA which survive the
issuance of a Certificate of Compliance with respect to the Project.
You have informed the undersigned City that Developer intends to Transfer its interest in
the Transferable Interests or a direct or indirect interest therein to Transferee on or around the date
of this letter (“Transaction”).
By its execution of this letter, the City hereby confirms to Transferee that:
1. Except as set forth on Schedule 1 to this letter, the Property Documents are in full
force and effect and have not been modified, supplemented or amended, whether orally or in
writing, and have not been assigned or otherwise transferred by the City to any other person or
entity.
2. To City’s Knowledge, except as set forth on Schedule 2 to this letter: (a) there are
no defaults of Developer (including, without limitation, any Potential Defaults or Material
Defaults) under the DDA or any defaults under the Property Documents nor any facts which now,
or after the giving of notice or the passage of time, or both, would constitute a default (including,
without limitation, a Potential Default or Material Default) under the DDA or a default under any
of the Property Documents or which would entitle the City to exercise any of its rights or remedies
under any of the Property Documents, including, without limitation, its Right of Reversion or Right
of Purchase pursuant to the DDA; and (b) the City has no current claim of breach, counterclaim,
lien or offset presently existing under any of the Property Documents.
The undersigned acknowledges that Transferee may rely upon this letter in entering into
the proposed Transaction. This letter is written in connection only with the proposed Transaction
and may be relied upon only by Transferee as to the matters addressed herein. This letter may not
be relied upon by any other party or for any other purpose without the express written consent of
the City. This letter shall be binding upon the City and its successors and assigns. In no event shall
the individual executing this letter on behalf of the City or any of the City Representatives have
any personal liability hereunder.
{Remainder of page is blank; signatures on following page}
Tustin Confluent DDA Att 5 City Estoppel Attachment 5 City of Tustin/Confluent Dev.
9.27.26 (HM).docx3Portion ofDisp. Area8
CITY OF TUSTIN
Dated: ________, 20__ By:
Aldo E. Schindler, City Manager
ATTEST:
By:
Erica S. Yasuda
City Clerk
APPROVED AS TO FORM:
By:_________________________
Name: David Kendig
City Attorney
Tustin Confluent DDA Att 5 City Estoppel Attachment 5 City of Tustin/Confluent Dev.
9.27.26 (HM).docxS-1Portion ofDisp. Area 8
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
\[see attached\]
Tustin Confluent DDA Att 5 City Estoppel Attachment 5 City of Tustin/ Confluent Dev.
9.27.26 (HM).docx Exhibit A Portion of Disp. Area 8
SCHEDULE 1
MODIFICATIONS, SUPPLEMENTS OR AMENDMENTS
TO PROPERTY DOCUMENTS
\[enter “None” if there are no qualifications\]
Tustin Confluent DDA Att 5 City Estoppel Attachment 5 City of Tustin/ Confluent Dev.
9.27.26 (HM).docx Schedule 1 Portion of Disp. Area 8
SCHEDULE 2
QUALIFICATIONS TO MATTERS CONFIRMED IN ESTOPPEL
\[enter “None” if there are no qualifications\]
Tustin Confluent DDA Att 5 City Estoppel Attachment 5A City of Tustin/ Confluent Dev.
9.27.26 (HM).docxSchedule 2Portion ofDisp. Area8
ATTACHMENT 6
Tustin Confluent DDA Att 6Attachment 6City of Tustin/Confluent Development
8.29.26 (HM)Portion of Disposition Area 8
ATTACHMENT 7
SCHEDULE OF PERFORMANCE
Note: References herein made to “DDA” shall mean the Tustin Legacy Disposition and
Development Agreementfor Portion of Disposition Area 8 of which this Attachment is a part.
Except as otherwise noted, all capitalized terms within the DDA and the Attachments shall retain
the meaning as defined in the DDA. Any dates identified in this attachment are intended to reflect
the provisions of the DDA. For purposes of determining any Potential Default or Material Default,
Section 14 of the DDA shall apply. In addition, to the extent any of the terms and provisions of
this Attachment are inconsistent with or otherwise are in conflict with the terms and provisions of
the DDA or the Other Agreements, the DDA or Other Agreements, as applicable, shall control.
If authorized pursuant to the terms of the DDA, the dates and time periods set forth in this Schedule
of Performance may be extended by Force Majeure Delay.
DDA Item Action Responsible
Section Party
1. CONVEYANCE OF PROPERTY FROM CITY TO DEVELOPER
A 4.3.1; Payment of Within five (5) Business Days after Developer
4.4 Purchase Price approval by City Council of the DDA.
Deposit, City
Costs Deposit
and Delivery of
DDA, Insurance
Binders and
Other
Documents by
Developer
6.3
BSupplemental Within ten (10) calendar days after Developer
Title Reports Developer’s receipt of any report issued
by the Title Company concerning the Real
Property (a “Supplemental Title
Report”), Developer shall cause to be
provided to the City a copy of such
Supplemental Title Report and shall
specify in writing Developer’s
disapproval of any item or exception
shown on such Supplemental Title Report
not previously included in the Preliminary
Report and that is not acceptable to
Developer with suggested cure
information.
Tustin Conf DDA Att 7 Schedule of Perf Attachment 7City of Tustin/Confluent Development
8.27.26 (HM)-c1Portion of Disposition Area 8
DDA ItemActionResponsible
Section Party
Failure of Developer to disapprove any
item or exception shown on any such
Supplemental Title Report on or before
the expiration of such ten (10) calendar
day period shall be deemed to be an
approval of the matters set forth in such
Supplemental Title Report.
C6.3 Supplemental If the City fails to notify Developer of the City
Title Report City’s election to remove or cure such
Disapproved Exception within ten (10)
Business Days after the City’s receipt of
Developer’s notice of disapproval, the
City shall be deemed to have elected not
to cure such Disapproved Exception.
D 6.3 Election to Notification by Developer to City five (5) Developer
Terminate Business Days after the City’s election or
Escrow deemed election not to cure an exception
whether Developer elects to terminate
Escrowor continue to Closing, provided
that Developer’s failure to provide the
City within said five (5) Business Days
with written notice of either Developer’s
acceptance of such Disapproved
Exception or Developer’s election to
terminate shall constitute Developer’s
election to terminate Escrow.
E8.7.3.6 CFD 18-01 Zone The City will provide Developer with the City
5 opportunity to review and provide input
on all documents and budgets relating to
the formation of CFD 18-01 Zone 5,
annexation of the Real Property into CFD
18-01 Zone 5 and adoption of the RMA at
least thirty (30) Business Days prior to the
date on which the formation, annexation
and RMA documents are expected to be
submitted for the agenda package related
to the formation of CFD 18-01 Zone 5 and
adoption of the RMA by the City Council.
Tustin Conf DDA Att 7 Schedule of Perf Attachment 7City of Tustin/Confluent Development
8.27.26 (HM)-c2Portion of Disposition Area 8
DDA ItemActionResponsible
Section Party
F 4.3.3, Deposit into Not later than one (1) Business Day prior Developer
7.2.2.1 Escrow of to Close of Escrow.
Developer
Closing Payment
and other costs
payable by
Developer at
Close of Escrow
G 7.2.1.1. Document Not later than two (2) Business Days prior Developer
City
and Deliveries by to Close of Escrow, each Party shall have
executed and delivered to Escrow Holder
7.2.2.2 City and
Developer the documents specified in the respective
Sections.
H 7.3, Statement of Escrow Holder shall have delivered at Escrow
7.4.5 Costs; Prorations least seven (7) Business Days prior to the Holder, City
Close of Escrow a statement of costs to and
each Party and at least two (2) Business Developer
Days prior to the Close of Escrow each of
the Parties shall have approved such
statement as being consistent with the
provisions of Section 7.4 and
A copy of the schedule of prorations as
agreed upon by Developer and the City
shall be delivered to Escrow Holder at
least three (3) Business Days prior to the
Close of Escrow.
I7.1.1 Close of Escrow Twenty (20) Business Days following the
City and
satisfaction or waiver by Developer of the
Developer
Developer Closing Conditions set forth in
Sections 7.2.1. and satisfaction or waiver
by the City of the City Closing Conditions
set forth in Sections 7.2.2, subject to the
advance notice requirement in Section
7.1.1 and the Outside Closing Date and all
subject to the more specific terms in the
DDA.
Tustin Conf DDA Att 7 Schedule of Perf Attachment 7City of Tustin/Confluent Development
8.27.26 (HM)-c3Portion of Disposition Area 8
DDA ItemActionResponsible
Section Party
J7.1,2, Outside Closing December 23, 2026, subject to extensions City and
7.1.3, Developer
Date pursuant to Sections 7.1.2, 7.1.3 and
15.1.1 15.1.1.
K 7.2.1.1
Delivery of Not later than two (2) Business Days prior
and Closing to the Close of Escrow.
7.2.2.2 Documents
L7.4.5 Prorations Developer
Any prorations not determined or not
Following agreed upon as of the Close of Escrow and City
Closingshall be paid by Developer to the City, or
by the City to Developer, as the case may
be, in cash as soon as practicable
following the Close of Escrow, but in no
event later than sixty (60) calendar days
after the Close of Escrow.
M14.3.1 Failure to Close Within five (5) Business Days following a Developer
Escrow and termination of the DDA occurring prior to
Termination of the Close of Escrow, Developer shall use
DDA commercially reasonable efforts to return
to the City all written Due Diligence
Information in Developer’s possession.
Developer’s obligation to return Due
Diligence Information to the City is
without representation or warranty of any
kind by Developer.
2. MAPPING, GRADING, INFRASTRUCTURE, UTILITIES, BUILDING PERMITS
Developer
A 7.2.1.4; Pre-Closing Prior to Close of Escrow, all Pre-Closing
7.2.2.3 Entitlements Entitlements shall have been approved by
Approvalthe City.
B8.8.2 Horizontal Developer
Not later than thirty (30) calendar days
Improvements after Effective Date of DDA but in all
plans (other than events prior and as a condition to Close of
Landscape Escrow.
Improvements)
submitted for
approval by City
Tustin Conf DDA Att 7 Schedule of Perf Attachment 7City of Tustin/Confluent Development
8.27.26 (HM)-c4Portion of Disposition Area 8
DDA ItemActionResponsible
Section Party
C8.8.2 City issues City shall use good faith efforts to issue City
Horizontal permits within ten (10) Business Days
Improvement following: (a) Community Development
permitsDepartment and Public Works approval of
final grading plans; and (b) Developer’s
(i) payment of all required permit fees,
(ii)delivery of any associated subdivision
bonds or other security, and
(iii) satisfaction of all required conditions
of approval associated with grading and
Horizontal Improvements.
D 8.8.3 City issues With respect to each building permit City
building permits application, City shall use good faith
efforts to issue such permit within ten (10)
Business Days following satisfaction of
all of the following: (a) building division
approval of building plans;
(b) Developer’s payment of all required
fees associated with applicable building
permit; and (c) satisfaction of all required
conditions of approval associated with
applicable building permit.
3. DESIGN APPROVAL
A 8.5.5; Basic Concept Developer shall submit any modifications Developer
8.5.6 Plan to the Basic Concept Plan to City in
Modification writing. The City, in its Proprietary
Capacity only, shall within fifteen (15)
Business Days after the City’s receipt of
such modifications, give written notice of
approval or disapproval to Developer.
Developer shall make changes in response
to the City’s notice of disapproval and
resubmit such Basic Concept Plan to the
City for review and approval in
accordance with the provisions of
Section 8.5.6 (and in such case the City’s
review period shall be ten (10) Business
Days).
Tustin Conf DDA Att 7 Schedule of Perf Attachment 7City of Tustin/Confluent Development
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DDA ItemActionResponsible
Section Party
B8.5.3 Submission of Developer shall submit for approval by Developer
Construction the City in its Governmental Capacity, not
Design Drawings later than August 17, 2026, construction
design drawings and related documents
conforming to the requirements of the
City Code, the Specific Plan and all other
Entitlements and conditions of approval.
4. CONSTRUCTION OF IMPROVEMENTS
A 8.3; Start of Grading The Grading Work shall commence Developer
8.8.1 Work/Horizontal within sixty (60) calendar days following
Improvements the Close of Escrow.
BN/ABoundary The public right-of-way improvements Developer
Landscape Area within the entirety of the Boundary
public right-of-Landscape Area surrounding the Real
way Property shall be completed prior to
improvements issuance of the first certificate of
inclusive of occupancy.
sidewalks and
landscaping and
irrigation
C8.3; Vertical The Vertical Improvements Developer
8.8.3 Improvements Commencement Date shall have occurred
Commencement by the date that is one hundred eighty
Date (180) calendar days after Close of Escrow.
D8.11.5Bonding or Developer shall, within thirty (30) Developer
Removal of Business Days following receipt of notice
Construction thereof, cause to be removed or bonded
Liens against (such bonding to be by the
provision of the bonds satisfying
California statutory requirements) any
Construction Liens.
E8.3; Outside Date Construction of the Project (including Developer
8.8.1; Completion of Horizontal Improvements, Vertical
8.8.2; Construction Improvements and all of the Active Adult
8.8.3; Residential Units andAL/MC Rooms
9.1; 9.2shall be Completed not later than thirty-
six(36) months from the Close of Escrow.
Tustin Conf DDA Att 7 Schedule of Perf Attachment 7City of Tustin/Confluent Development
8.27.26 (HM)-c6Portion of Disposition Area 8
ATTACHMENT 8
SCOPE OF DEVELOPMENT
Note: References herein to the “DDA” shall mean the Disposition and Development Agreement
of which this Attachment is a part; references to “Attachments” mean the Attachments to the DDA
unless otherwise specified. Capitalized terms not otherwise defined in this Attachment have the
meaning set forth in the DDA. This Attachment presents the Scope of Development. Additional
requirements may be contained in the text of the DDA, the Entitlements and the conditions of
approval related thereto, the Basic Concept Plan, the Approved Plans and in the Other Agreements.
In the event of any conflict between the provisions of this Attachment and the Entitlements or the
Approved Plans, the Entitlements and Approved Plans, as applicable shall control. In addition, to
the extent any of the terms and provisions of this Attachment are inconsistent with or otherwise
are in conflict with the terms and provisions of the DDA or the Other Agreements, the DDA or
Other Agreements, as applicable, shall control.
1.0 General Information
1.1 The scope of development of the Project is the development of the Active Adult
Project (as further described below and in the DDA) which shall be a senior residential rental
apartment community project comprised of a residential apartment building containing a total of
172 residential units with 26 of the residential units affordable to lower income households, with
five levels and a podium parking garage on the Active Adult Real Property (2.79 acres), and the
AL/MC Project (as further described below and in the DDA) which shall be a commercial assisted
living project comprised of a commercial assisted living and memory care facility with two levels
and a single-level parking garage including up to 103 Rooms consisting of 75 assisted living (AL)
Rooms and 28 memory care (MC) Rooms with a total of 134 beds on the AL/MC Real Property
(3.35 acres) in Neighborhood D South of the Tustin Legacy Specific Plan area (Planning Areas 13
and 14). The land is currently identified as part of a larger parcel, Lot 14 of Tract 18197. A final
parcel map associated with Subdivision 2025-0003 (TPM 2025-151) shall be allowed subject to
any conditions of approval as approved by the City Council but is not required. If Developer
proceeds with a final parcel map, it will subdivide the Real Property into two Parcels, the Active
Adult Real Property (Parcel 1) and the AL/MC Real Property (Parcel 2).
1.2Improvements on the Active Adult Real Property shall include one residential
building, with podium parking structure, recreation facilities, and resident amenities including
amenity roof decks, a swimming pool, restroom facilities, pickleball, fitness center, lounge areas,
architectural features, lighting, trash facilities, and pedestrian amenities. Additionally, on-site
access, circulation, utilities and other infrastructure would be installed, as necessary to serve the
proposed uses as shown on the Approved Plans. The residential building on the Active Adult Real
Property shall contain deed-restricted Lower Income Units and one manager unit. (which may be
included as a deed-restricted Lower Income Unit at the discretion of Developer). Pursuant to State
Density Bonus Law, the Project proposes 124 base units plus 48 density bonus units for a total of
172 units. Pursuant to the Surplus Land Act, at least fifteen percent (15%) of the total number of
Residential Units actually constructed (e.g., 26 units based on 172 units constructed) would be
Attachment 8 City of Tustin/Confluent Development
Tustin Confluent DDA Att 8 Scope of Dev
1 Portion of Disposition Area 8
9.26.26 (HM).docx
provided as Lower Income Units consistent with the Affordable Housing Declaration. Allowable
rents for Lower Income Units would be established consistent with applicable state and federal
laws including the Surplus Land Act and State Density Bonus Law (as applicable).The Lower
Income Units shall be dispersed throughout the Project and the occupants of those units shall have
access to all amenities offered by the Project to occupants of market rate Residential Units. The
quality of construction and exterior design of the Lower Income Units shall be comparable to the
market rate Residential Units.
1.3Improvements on the AL/MC Real Property shall be comprised of one commercial
two-story building, associated parking facility, recreation facilities and resident amenities such as
a community theater, dining areas, salon, gym & wellness center, gardens and lounge areas,
architectural features, lighting, trash facilities, and pedestrian amenities. The memory care wing
contains purpose-built areas including an activity room, dining area, and communal living room.
Additionally, on-site access, circulation, utilities and other infrastructure would be installed, as
necessary to serve the proposed uses as shown on the Approved Plans.
1.4 Landscaping would be provided at the perimeter and throughout the Real Property
as described in the Landscape Installation and Maintenance Agreement (Attachment 21 to the
DDA) and the Special Restrictions (Attachment 20 to the DDA), respectively. Additionally, on-
site access, circulation, utilities and other infrastructure would be installed, as necessary to serve
the proposed uses as shown on the Approved Plans.
1.4The Project is entered from driveways on John Johnson Way and Veterans Way.
The shared driveway from John Johnson Way features an internal roundabout at the center of the
site providing resident drop-off and access to on-site parking. The building on the AL/MC Real
Property shall share amenities with the adjacent building on the Active Adult Real including a full-
service kitchen, community theater, café and market, and salon. New public sidewalks surrounding
the Real Property and internal walkways within the Real Property shall connect to both building
entries and the internal roundabout at multiple points. To maintain these shared rights, if the Real
Property is later subdivided, then as a condition to any Transfer of a portion of the Real Property,
Developer shall cause to be Recorded concurrently with or prior to such Transfer a reciprocal
easement agreement or declaration for the benefit of the Owners (and as applicable, residents and
other users thereof) of each parcel of the Real Property providing easements for access, use,
operation, maintenance, repair and replacement with respect to portions of the shared facilities on
any other parcel comprising the Real Property.
2.0 Developer Improvements
As part of the Project, Developer shall construct all of the Horizontal Improvements and Vertical
Improvements as required and approved by the City, including without limitation, the City
Planning Commission and City Council. The Improvements shall generally consist of the
following:
2.1 Vertical Improvements. Developer shall complete the development of the Vertical
Improvements to consist of construction and installation of the elements included in the definition
of Vertical Improvement in the DDA with design quality and amenities consistent with a High
Attachment 8 City of Tustin/Confluent Development
Tustin Confluent DDA Att 8 Scope of Dev
2 Portion of Disposition Area 8
9.26.26 (HM).docx
Quality Project and with architectural design and project amenities consistent with the Approved
Plans. Modifications may occur during the building permit process, subject to prior approval by
the City, consistent with DDA Section 8.5.
2.2 Horizontal Improvements. Developer shall be responsible for construction of all
Horizontal Improvements. Horizontal Improvements generally include grading, wet and dry utility
connections, Private Drives and Sidewalks, walls and fences, landscape and hardscape, irrigation,
parkways, and other site amenities and furnishings, and any necessary private and public
infrastructure and utilities including, without limitation:
(a)All Grading Work (including any necessary import and/or export) and
completion of the Private Drives and Sidewalks as well as the sidewalks within the public
right of way as further described and depicted in the Landscape Installation and
Maintenance Agreement.
(b)Any drainage improvements needed to convey the drainage from the Active
Adult Real Property or AL/MC Real Property, as applicable.
(c)Landscape Improvements and landscape, irrigation and/or hardscape
improvements including the landscape of Parcels, and within the existing and proposed
public right-of-way. Developer and the City shall enter into a Landscape Installation and
Maintenance Agreement pursuant to which Developer shall install and maintain all
Landscape Improvements (as defined therein) within the Boundary Landscape Area in the
locations depicted in the exhibits to Attachment 21 to the DDA.
(d)All utilities including connection of all utilities, including but not limited to
sewer, domestic and reclaimed water, electrical, gas, telephone, cable and
telecommunication service connections from their origin as shown in the Specific Plan, the
Approved Plans and/or Irvine Ranch Water District Sub Area Master Plan for Tustin
Legacy, the Water Quality Management Plan for the Project and/or as approved by the City
and responsible private utility purveyors.
All scope of work for design and construction includes, without limitation, all surveying, rough
and precise grading, import and export of dirt as required, asphalt paving, including, without
limitation, any necessary overlays, driveways, sidewalks, concrete, curb and gutter, landscaping,
irrigation, lighting, all traffic control, striping and signage and other work to construct
improvements in accordance with Tustin City standards.
2.3 Compliance with Codes and Conditions. As more particularly described and
provided in Sections 8.1.3 and 8.4.2 of the DDA, all Improvements and the design and construction
thereof shall conform to all applicable requirements of the Specific Plan, the Approved Plans, the
Entitlements including all “Conditions of Approval” adopted therewith or otherwise stipulated by
the City of Tustin, the Development Permits, the Tustin City Code, and any other applicable
Governmental Requirements of any Governmental Authority. As more particularly described and
provided in Section 8.5 of the DDA, all final working drawings, specifications, grading plans, soil
reports, landscaping plans, color and finish schedules shall be approved by the City prior to start
Attachment 8 City of Tustin/Confluent Development
Tustin Confluent DDA Att 8 Scope of Dev
3 Portion of Disposition Area 8
9.26.26 (HM).docx
of the construction.
2.4 Compliance with DDA. Developer shall comply with all provisions of the DDA
related to the planning, design, construction, maintenance and operation of the Improvements and
the development shall be in general conformance with the Site Plan (Attachment 3 to the DDA).
3.0 Development Standards
The Improvements shall be designed and developed as a planned development in which all
construction shall have architectural quality and character, consistent with Approved Plans. All
open space areas shall be designed, landscaped and developed, consistent with a High Quality
Project.
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.
3.1 Architecture and Project Design. The architectural style of the buildings
comprising the Active Adult Vertical Improvements and AL/MC Vertical Improvements is
Contemporary Modern with large windows, wrap around corner balconies and projected eaves.
The buildings maximizes the views and private open spaces with use of balconies and ground floor
patios and incorporates interior courtyards for private amenities. The exterior building materials
are to primarily consist of stucco, Hardie siding and limestone tile, metal trims and metal window
frames, and decorative glass balcony railings. Architecture, features, and quality standards shall
be consistent with the design contained in the Entitlements and the conditions of approval related
thereto, the Basic Concept Plan, the Approved Plans and in the Other Agreements. Quality of the
Project Improvements shall be consistent with the Approved Plans.
3.2 Vehicular Access. The placement of vehicular driveways have been coordinated
with the needs of proper street traffic flow. In the interest of minimizing traffic congestion, the
City will control the number and location of curb breaks for access to theReal Property. Access
to the Real Property shall be provided as depicted on the Site Plan attached as Attachment 3 to the
DDA and any modifications shall be subject to approval by the City Traffic Engineer.
3.3 Signs. Project signage shall be designed to contribute positively to the
environment. Any signs identifying the Project shall be subject to City approval and must conform
to provisions of the Specific Plan and/or Tustin City Code, as applicable.
3.4 Screening. All outdoor storage of materials or equipment shall be compatibly
screened to the extent and manner required by the Tustin City Code. Rooftop equipment shall be
compatibly screened from view from the surrounding streets.
3.5 Landscaping. Developer shall provide (a) landscape, hardscape and irrigation
improvements within the Landscape Areas of the Project as required by and subject to the Special
Attachment 8 City of Tustin/Confluent Development
Tustin Confluent DDA Att 8 Scope of Dev
4 Portion of Disposition Area 8
9.26.26 (HM).docx
Restrictions and the Approved Plans, and (b) Landscape Improvements within the Boundary
Landscape Areas as depicted on Exhibit C attached to the Landscape Installation and Maintenance
Agreement, as required by and subject to the Landscape Installation and Maintenance Agreement.
3.6 Utilities. Unless otherwise approved by the City in the Approved Plans with
respect to above grade cabinets, or an exception requested by the applicable utility provider and
approved by the City, all utilities on and serving the Real Property shall be undergrounded.
3.7 Maximum Development Thresholds. Development of the Active Adult Project
shall not exceed 172 Residential Units (124 base units + 48 density bonus units) and the AL/MC
Project shall not exceed 103 Rooms consisting of 75 assisted living (AL) Rooms and 28 memory
care (MC) Rooms for a total of 134 beds.
4.0 Demolition.
Demolition activities shall include the following insofar and only to the extent as may be necessary
to provide the Project Improvements:
(a)The reduction and removal of any structures and improvements from the
Real Property existing as of the Effective Date, including any subsurface structures, and
the removal of all, materials, and debris and rubbish resulting from such demolition.
(b)The removal of any paving (including catch basins, curbs, gutters, drives
and sidewalks) existing as of the Effective Date within or on the Real Property.
(c)Coordination of any removal and abandonment by public utility companies
of such utility lines, installation, facilities and related equipment existing as of the Effective
Date withinReal Property required to effectuate the purposes of the Project and this
Agreement.
Attachment 8 City of Tustin/Confluent Development
Tustin Confluent DDA Att 8 Scope of Dev
5 Portion of Disposition Area 8
9.26.26 (HM).docx
ATTACHMENT 9
Tustin Confluent DDA Att 9Attachment 9City of Tustin/Confluent Development
8.29.26 (HM)Portion of Disposition Area 8
ATTACHMENT 10
LIST OF ENVIRONMENTAL REPORTS AND STATEMENTS
1.Department of Navy “Final Environmental Baseline Survey” dated March 2001
2.Finding of Suitability to Transfer for Southern Parcels 4-8, 10-12, 14, and 42 and
Parcels 25, 26, 30-33, 37, and Portions of 40 and 41 Marine Corps Air Station Tustin,
California” dated September 28, 2001.
3.Finding of Suitability for Transfer for Parcels 23, 29, 34, 35, and 36, and Portions of 1,
16, 17, 24, 27, 28, 40 and 41 dated April 22, 2002
4.Agreement Between The United States of America and The City of Tustin, California
for the Conveyance of a Portion of the Former Marine Corps Air Station Tustin dated
May 13, 2002
5.Quitclaim Deed D and Environmental Restriction Pursuant to California Civil Code
Section 1471 dated May 13, 2002
6.Quitclaim Deed G and Environmental Restriction Pursuant to California Civil Code
Section 1471 dated May 13, 2002.
7.Geotechnical Report of Observation and Testing during Rough Grading,
“Neighborhood D” Phases I and II, Disposition Area 8, 2C and a Portion of 2B, Tustin
Legacy, City of Tustin, California dated September 26, 2014.
8.Final Summary Report for Per-and Polyfluoroalkyl Substances Sampling at Operable
Unit 3, IRP Site 1, Former Marine Corps Air Station Tustin dated April 2018
9.Final Site Assessment and Soil Removal Action Report Tustin Neighborhood D-South,
Areas 1 and 2 Total Petroleum Hydrocarbon Impacts Former Marine Corps Air Station
Tustin, Tustin, California dated September 2018.
10.Determination of No Further Action for Petroleum Release at Neighborhood D South
at Former Marine Corps Air Station Tustin, Orange County, California dated
September 10, 2018.
11.Final Summary Report for PFAS Groundwater Sampling in Carve-Outs 5 and 6
(November 2018)
12.N-D South PFAS Investigation Report (August 2019)
13.N-D South PFAS Investigation Report Appendices
14.Final Summary Report, Additional Assessment of PFAS in Groundwater in Carve-Outs
2, 5, 6 and 9 and near OU-3 (June 2020)
Tustin Confluent DDA 10.01.26 (HM).docx Attachment 10 City of Tustin/Confluent Development
Page 1 of 2Portion of Disposition Area 8
15.Final Summary Report, Additional Assessment of PFAS in Groundwater in Carve-Outs
2, 5, 6 and 9 and near OU-3 Phase 2 (October 2020)
16.Final Preliminary Assessment/Site Inspection Report Basewide Investigation of Per-
and Polyfluoroalkyl Substances (December 2021)
17.Revised Final Preliminary Assessment/Site Inspection Report Basewide Investigation
of Per- and Polyfluoroalkyl Substances (August 2022)
18.Draft Work Plan Remedial Investigation of Per- and Polyfluoroalkyl Substances (June
2023)
19.Final Work Plan Remedial Investigation of Per- and Polyfluoroalkyl Substances
(January 2024)
20.Grading Report for ND South Phase 2 Package 1, including without limitation the
rough grade certificates by David Hoopfer, civil engineer for Michael Baker
International, as to bridge mounds on October 21, 2024 and January 27, 2026 and
Jeremy Beck for Landmark Surveying on January 16, 2026.
Tustin Confluent DDA 10.01.26 (HM).docx Attachment 10 City of Tustin/Confluent Development
Page 1 of 2Portion of Disposition Area 8
ATTACHMENT 11
FORM OF QUITCLAIM DEED
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND TO BE
EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §6103
AND §27383.
Recording requested by and when
recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Mail Tax Statements to:
SPACE ABOVE THIS LINE FOR RECORDER’S USE
QUITCLAIM DEED FOR PORTION OF DISPOSITION AREA 8
AND COVENANTS, CONDITIONS AND RESTRICTIONS, INCLUDING
ENVIRONMENTAL RESTRICTION PURSUANT TO CIVIL CODE SECTION 1471
This Quitclaim Deed for Portion of Disposition Area 8 and Covenants, Conditions and
Restrictions, Including Environmental Restriction Pursuant to Civil Code Section 1471
(“Quitclaim Deed”) is made on this ___ day of __________, 20__ (“Quitclaim Deed Effective
Date”), by the CITY OF TUSTIN, California a municipal corporation of the State of California
(“Grantor”), in favor of ___________________, a ________________ (“Grantee”).
WHEREAS:
A.The United States of America (“Government”) and Grantor entered into that
certain Agreement between the United States of America (acting by and through the Secretary of
the Navy or designee) and Grantor, for the Conveyance of a Portion of the Former Marine Corps
Air Station Tustin (“MCAS Tustin”), dated May 13, 2002 (“Conveyance Agreement”);
B.Pursuant to the Conveyance Agreement, the Government, acting by or through the
Department of the Navy, conveyed property at the Marine Corps Air Station Tustin (such property,
“Grantor Property”) to Grantor pursuant to Quitclaim Deed D and Environmental Restriction
Pursuant to Civil Code Section 1471 dated May 13, 2002, that was recorded on May 14, 2002 in
the office of the County Clerk Recorder for Orange County, California (“Official Records”) as
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docx Portion of Disposition Area 8
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Instrument Number 20020404594 (“Government Deed”), which included that certain real
property, comprising approximately 6.14 acres of land, more particularly described on Exhibit A
attached hereto and incorporated herein by this reference (“Development Parcel”);
C.Pursuant to California Civil Code Section 1471, the Government determined that it
is reasonably necessary to impose certain restrictions on the use of the Grantor Property to protect
present and future human health or safety or the environment as a result of the presence of
hazardous materials on portions of the Grantor Property described hereinafter with particularity;
D.Grantor and Grantee entered into (1) that certain Tustin Legacy Disposition and
Development Agreement for Portion of Disposition Area 8, dated as of___________, 20___
(“Original DDA”), {if amended, insert relevant amendment information} (as the same may
hereafter be {further} amended, modified or supplemented in accordance with its terms, the
“DDA”) providing for the sale and development of a portion of the Grantor Property and (2) that
certain Memorandum of Tustin Legacy Disposition and Development Agreement for Portion of
Disposition Area 8 (Tustin Legacy) dated as of the effective date of the DDA and recorded in the
Official Records immediately prior to the Recording of this Quitclaim Deed(as the same may
hereafter be amended, modified or supplemented, “Memorandum of DDA”);
E.Grantor has executed the Surplus Land Act Covenant (per Government Code
Section 54233) (“SLA Covenant”), the Declaration of Affordable Housing Restrictive Covenants
and Regulatory Agreement (“Affordable Housing Declaration”), and theDeclaration of Special
Restrictions for Portion of Disposition Area 8 (“Special Restrictions”)each consented to by
Grantee, each of which shall be recorded in the Official Records immediately prior to the recording
of this Quitclaim Deed; and
F.Grantor desires to convey and Grantee desires to acquire the Real Property (as
defined below) to facilitate economic redevelopment in accordance with that certain MCAS Tustin
Reuse Plan adopted by the City Council of the City on October 17, 1996, and amended in
September, 1998, as the same has been subsequently amended (“Reuse Plan”) and approved by
the Government for MCAS Tustin.
1.NOW THEREFORE, Grantor, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, does hereby remise, release and forever quitclaim
to Grantee, all of Grantor’s right, title and interest in and to the “Real Property,” which is
comprised of (a) the Development Parcel less and except all of the matters in Section 2 of this
Quitclaim Deed, (b) all existing improvements, if any, located on the Real Property as of the
Quitclaim Deed Effective Date, (c) all appurtenances pertaining to the Real Property or such
improvements, and (d) all permits, licenses, approvals and authorizations issued prior to the
Quitclaim Deed Effective Date for development of the Real Property in accordance with the DDA
including those development rights for construction of an active adult and assisted living/memory
care facility as limited in Section 2.3 of this Quitclaim Deed and governed by the restrictions set
forth in the SLA Covenant, the Affordable Housing Declaration and the Special Restrictions.
2.EXCEPTING THEREOUT AND THEREFROM, however, and reserving to Grantor, its
successors and assigns, together with the right to grant and transfer all or a portion of the same,
the following:
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2.1 Any and all oil, oil rights, minerals, mineral rights, natural gas, natural gas rights
and other hydrocarbons by whatsoever name known, geothermal steam and all products derived
from any of the foregoing, that may be within or under the Development Parcel together with the
perpetual right of drilling, mining, exploring for and storing in and removing the same from the
Development Parcel or any other land, including the right to whipstock or directionally drill and
mine from lands other than the Development Parcel, oil or gas wells, tunnels and shafts into,
through or across the subsurface of the Development Parcel and to bottom such whipstocked or
directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits
thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate any such well or
mines; but without, however, the right to enter upon or use the surface of the Development Parcel
in the exercise of such rights or otherwise adversely affect the use or operation of the Development
Parcel as anticipated by the DDA or the structural integrity of any improvements on the
Development Parcel; and
2.2 Any and all water, water rights or interests therein appurtenant or relating to the
Development Parcel or owned or used by Grantor in connection with or with respect to the
Development Parcel no matter how acquired by Grantor, whether such water rights shall be
riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated, statutory or
contractual, together with the perpetual right and power to explore, drill, re-drill and remove the
same from or in the Development Parcel, to store the same beneath the surface of the Development
Parcel and to divert or otherwise utilize such water, rights or interests on any other property owned
or leased by Grantor; but without, however, the right to enter upon or use the surface of the
Development Parcel in the exercise of such rights or otherwise adversely affect the use or operation
of the Development Parcel as anticipated by the DDA or the structural integrity of any
improvements on the Development Parcel.
2.3 All those excess development rights remaining within Tustin Legacy Specific Plan
Neighborhood D, Planning Areas 13 and 14 after deducting (i) from the number of residential units
authorized by the Specific Plan, the lesser of (a) 172 age restricted (55 years or older) active adult
and independent living facilities (comprised of 124 base units and 48 density bonus units) or (b)
the number of such age restricted (55 years or older) active adult and independent living facilities
constructed on the Real Property and reflected in any Certificate of Compliance recorded by the
City in the Official Records against the Real Property or portion thereof, which excess residential
units and development rights retained by Grantor shall be freely transferable by Grantor, and (ii)
from the number of rooms and square footage authorized by the Specific Plan for commercial
purposes the lesser of (a) 103 assisted living/memory care rooms in up to 147,500 square feet or
(b) the number of such assisted living/memory care rooms and square footage constructed on the
Real Property and reflected in a Certificate of Compliance recorded by the City in the Official
Records against the Real Property or portion thereof, which excess rooms, square footage and
development rights retained by Grantor shall be freely transferable by Grantor. Development rights
granted by this Quitclaim Deed are restricted to the rights described in this Section 2.3 and the
same must be exercised in accordance with the requirements of the DDA, the SLA Covenant,
Affordable Housing Declaration and the Special Restrictions.
2.4 Notwithstanding anything to the contrary set forth in this Quitclaim Deed, the
reservation by Grantor of the rights and interests in this Section 2 (a) restricts in quantity and type
the scope of development upon the Real Property to that authorized by this Quitclaim Deed, the
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SLA Covenant, Affordable Housing Declaration and Special Restrictions, each for the term
thereof, and (b) shall not be deemed to limit Grantee’s right to construct foundations, utilities and
other subsurface improvements for the purpose of constructing the Project and otherwise engage
in subsurface construction activity in order to construct the Project.
3.The conveyance of the Real Property to Grantee made by this Quitclaim Deed is SUBJECT
TO THE FOLLOWING NOTICES, COVENANTS, CONDITIONS AND RESTRICTIONS,
which shall be binding upon and enforceable against the Real Property and Grantee, and its
successors and assigns, in perpetuity:
3.1 Grantee agrees to accept conveyance of the Real Property subject to all covenants,
conditions, restrictions, easements, rights-of-way, reservations, rights, agreements and
encumbrances of record, including, without limitation, the DDA, the Memorandum of DDA, the
SLA Covenant, the Affordable Housing Declaration, and the Special Restrictions, which are and
shall be covenants running with the land, shall not merge into this Quitclaim Deed and are and
shall be binding upon Grantee and all successors and assigns of Grantee owning all or any portion
of Real Property for the benefit of Grantor and its successors and assigns, unless or until such
responsibilities and obligations are released pursuant to the provisions of the aforesaid documents,
including the release of obligations under the DDA that Grantee may obtain as to any portion of
the Real Property pursuant to a Certificate of Compliance (as defined and further provided for in
the DDA) executed by Grantor and recorded against such portion of the Real Property.
3.2 The Government Deed conveying the Grantor Property to Grantor was recorded
prior to recordation of this Quitclaim Deed. Grantor has no knowledge regarding the accuracy of
information provided by the Government regarding the environmental condition of the
Development Parcel and makes no warranties regarding the environmental conditions of the
Development Parcel. Grantor has no knowledge regarding the accuracy or adequacy of the
Government’s remediation of the Development Parcel as provided in the Government Deed. The
foregoing provisions of this Section 3.2 do not limit or restrict any representations, warranties,
covenants or obligations that Grantor may have made solely for the benefit of Grantee (and its
permitted transferees) in the DDA or any other agreement.
3.3 Government Deed D. The italicized information below is copied verbatim (except
as discussed below) from Sections 2.2, 2.3, 2.5, 2.6, 2.8, 2.9 and Section 3 of the Government
Deed. To the extent applicable to the Property conveyed hereunder, by acceptance of this
Quitclaim Deed, Grantee, on behalf of itself and its successors and assigns acquiring fee title to all
or any portion of the Real Property and each and every Person claiming by, through or under
Grantee or such successors or assigns, hereby acknowledges and assumes all responsibilities
placed upon Grantor under the terms of the aforesaid Government Deed. Within the italicized
information contained in this Section 3.3 only, the term “GRANTOR” shall mean the Government,
the term “GRANTEE” shall mean the City of Tustin and the term “Property” shall mean the
Grantor Property, including, without limitation, the Real Property. To avoid confusion, within the
italicized information, the word “Government” has been added in brackets after the word
“GRANTOR”, and the words “City of Tustin” have been added in brackets after the word
“GRANTEE”.
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
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“2.2 A FOST has been completed and an Environmental Baseline Survey (“EBS”)
report is referenced in the FOST. The FOST and EBS reference environmental conditions
on the Property and on other property not subject to this Deed. GRANTEE \[“City of
Tustin”\] acknowledges that it has received copies of the EBS and the FOST and that all
documents referenced therein have been made available to GRANTEE \[“City of Tustin”\]
for inspection and copying.
2.3 Except as otherwise provided herein, or as otherwise provided by law, the
GRANTEE \[“City of Tustin”\] acknowledges that it has inspected, is aware of, and accepts
the condition and state of repair of the Property, and that the Property is conveyed “as is”
and “where is” without any representation, promise, agreement, or warranty on the part
of the GRANTOR \[“Government”\] regarding such condition and state of repair, or
regarding the making of any alterations, improvements, repairs or additions. Except for
the environmental remediation which may be required to be undertaken by GRANTOR
\[“Government”\] pursuant to paragraph 2.6 below, the GRANTEE \[“City of Tustin”\]
further acknowledges that the GRANTOR \[“Government”\] shall not be liable for any
latent or patent defects in the Property except to the extent required by applicable law.”
“2.5. Lead Based Paint (LBP)
2.5.1. The Property may include improvements . . . that are presumed to contain
LBP because they are thought to have been constructed prior to 1978. … Lead from paint,
paint chips, and dust can pose health hazards if not managed properly. Pursuant to 40
CFR Section 745.113 the following notice is provided: “Every purchaser of any interest in
residential real property on which a residential dwelling was built prior to 1978 is notified
that such property may present exposure to lead from lead-based paint that may place
young children at risk of developing lead poisoning. Lead poisoning in young children may
produce permanent neurological damage, including learning disabilities, reduced
intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also
poses a particular risk to pregnant women. The seller of any interest in residential real
property is required to provide the buyer with any information on lead-based paint hazards
from risk assessments or inspections in the seller’s possession and notify the buyer of any
known lead-based paint hazards. A risk assessment or inspection for possible lead-based
paint hazards is recommended prior to purchase.”
2.5.2 The GRANTEE \[“City of Tustin”\] hereby acknowledges the required
disclosure of the presence of any known LBP and/or LBP hazards in target housing
constructed prior to 1978 in accordance with the Residential Lead-Based Paint Hazard
Reduction Act of 1992, 42 U.S.C. Section 4852d (Title X). The GRANTEE \[“City of
Tustin”\] acknowledges the receipt of available records and reports pertaining to LBP
and/or LBP hazards and receipt of the Environmental Protection Agency (EPA) approved
pamphlet “Protect Your Family from Lead in Your Home” (EPA 747-K-94¬001).
Furthermore, the GRANTEE \[“City of Tustin”\] acknowledges that it has read and
understood the EPA pamphlet.
2.5.3 The GRANTEE \[“City of Tustin”\] covenants and agrees that, in any
improvements on the Property defined as target housing by Title X and constructed prior
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to 1978, LBP hazards will be disclosed to potential occupants in accordance with Title X
before use of such improvements as a residential dwelling (as defined in Title X). Further,
the GRANTEE \[“City of Tustin”\] covenants and agrees that LBP hazards in target housing
will be abated in accordance with Title X before use and occupancy as a residential
dwelling. “Target housing” means any housing constructed prior to 1978, except housing
for the elderly or persons with disabilities (unless any child who is less than six \[6\] years
of age resides, or is expected to reside, in such housing) or any zero-bedroom dwelling.
2.5.4 The GRANTEE \[“City of Tustin”\] covenants and agrees that in its use and
occupancy of the Property, it will comply with Title X and all applicable federal, state, and
local laws relating to LBP. The GRANTEE \[“City of Tustin”\] acknowledges that the
GRANTOR \[“Government”\] assumes no liability for damages for personal injury, illness,
disability, or death to the GRANTEE \[“City of Tustin”\], or to any other person, including
members of the general public, arising from or incident to the purchase, transportation,
removal, handling, use, disposition, or other activity causing or leading to contact of any
kind whatsoever with LBP on the Property, arising after the conveyance of the Property
from the GRANTOR \[“Government”\] to the GRANTEE \[“City of Tustin”\], whether the
GRANTEE \[“City of Tustin”\] has properly warned, or failed to properly warn, the persons
injured.”
{SECTION 2.5.5 INTENTIONALLY DELETED}
“2.6 Notices And Covenants.
2.6.1. Notices: Hazardous Substance Notification. Pursuant to 42 U.S.C.
§9620(h)(3)(A), and the provisions of 40 C.F.R. part 373, the GRANTOR \[“Government”\]
hereby gives notice that hazardous substances were stored for one year or more, released
or disposed of on the Property. The information contained in this notice is required by
regulations promulgated under Section 120(h) of the Comprehensive Environmental
Response, Liability, and Compensation Act (CERCLA or “Superfund”), 42 U.S.C. §
9620(h). The GRANTOR \[“Government”\] has made a complete search of its files and
records concerning the Property. Based on that search, the type and quantity of such
hazardous substances, the time at which such storage, release or disposal took place, to
the extent such information is available, and a description of the remedial action taken, if
\[1\]
any, is contained in Exhibit “B”.
2.6.2. Grant of Covenant \[CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(ii)(I)\].
The GRANTOR \[“Government”\] covenants and warrants that all remedial action
necessary to protect human health and the environment with respect to any hazardous
substance remaining on the Property has been taken before the date of transfer.
2.6.3. Additional Remediation Obligation \[CERCLA 42 U.S.C. Section
9620(h)(3)(A)(ii)(II)\]. The GRANTOR \[“Government”\] covenants and warrants that
GRANTOR \[“Government”\] shall conduct any additional remedial action found to be
1
The referenced Exhibit “B” in the Government Deed is attached to this Quitclaim Deed as Exhibit B and
incorporated herein by this reference.
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necessary after the date of transfer for any hazardous substance existing on the Property
prior to the date of this Deed. This covenant shall not apply to the extent that the GRANTEE
\[“City of Tustin”\] caused or contributed to any release or threatened release of any
hazardous substance, pollutant, or contaminant.
2.6.4. Access \[CERCLA 42 U.S.C. Section 9620 (h)(3)(A)(iii)\]. In connection
with GRANTOR’S \[“Government”\] covenant in 2.6.3 above and in connection with
ongoing remediation on GRANTOR’S \[“Government”\] property adjacent to the Property,
GRANTEE \[“City of Tustin”\] agrees on behalf of itself, its successors and assigns, as a
covenant running with the land, that GRANTOR \[“Government”\], or its officers, agents,
employees, contractors and subcontractors, shall have the right, upon reasonable notice
to GRANTEE \[“City of Tustin”\], to enter upon the Property in any case in which a
response or corrective action is found to be necessary at such property after the date of
this deed, or such access is necessary to carry out a response action or corrective action
on adjoining property. Neither GRANTEE \[“City of Tustin”\], nor its successors and
assigns, shall have any claim on account of such entries against the United States or any
of its officers, agents, employees, contractors or subcontractors. The right to enter shall
include the right to conduct tests, investigations and surveys, including, where necessary,
drilling, test-pitting, boring and other similar activities. Such right shall also include the
right to construct, operate, maintain or undertake any other response or corrective action
as required or necessary, including, but not limited to monitoring wells, pumping wells,
treatment facilities, and the installation of associated utilities. In exercising these rights of
access, except in case of imminent and substantial endangerment to human health or the
environment, the GRANTOR \[“Government”\] (1) shall give the GRANTEE \[“City of
Tustin”\] reasonable notice of any action to be taken related to such remedial or corrective
actions on the Property, and (2) make reasonable efforts to minimize interference with the
on-going use of the Property. Furthermore, the GRANTOR \[“Government”\] and
GRANTEE \[“City of Tustin”\] agree to cooperate in good faith to minimize any conflict
between the necessary environmental investigation and remediation activities and the
GRANTEE’S \[“City of Tustin”\] use of the Property. Any inspection, survey, investigation
or other response, corrective or remedial action undertaken by GRANTOR
\[“Government”\] will, to the maximum extent practical, be coordinated with
representatives designated by the GRANTEE \[“City of Tustin”\].
In connection with GRANTOR’S \[“Government”\] remedial actions described
above, GRANTEE \[“City of Tustin”\] agrees on behalf of itself, its successors and assigns,
as a covenant running with the land, to comply with the provisions of any health or safety
plan in effect during the course of any such action.”
“2.8 Indemnification Regarding Transferees. The GRANTOR \[“Government”\] hereby
recognizes its obligations under Section 330 of the National Defense Authorization Act of
1993 (Pub. L. 102-484), as amended, regarding indemnification of transferees of closing
Department of Defense property.
2.9 Non-Discrimination. GRANTEE \[“City of Tustin”\] covenants for itself, its
successors and assigns, that it will comply with all applicable provisions of the Civil Rights
Act of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination in
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Employment Act of 1975 in the use, occupancy, sale or lease of the Property. The foregoing
shall not be construed to prohibit the operation of federal or state approved programs
focusing on the special needs of the homeless, veterans, victims of domestic violence and
other classes of persons at risk; nor shall it be construed to prohibit employment practices
not otherwise prohibited by law. The GRANTOR \[“Government”\] shall be deemed a
beneficiary of this covenant without regard to whether it remains the owner of any land or
interest therein in the locality of the Property hereby conveyed and shall have the sole right
to enforce this covenant in any court of competent jurisdiction.”
“3. NO HAZARD TO AIR NAVIGATION: GRANTEE \[“City of Tustin”\] covenants
for itself, its successors and assigns, that in connection with any construction or alteration
on the Property, it will obtain a determination of no hazard to air navigation from the
Federal Aviation Administration in accordance with Title 14, Code of Federal Regulations,
part 77, entitled “Objects Affecting Navigable Airspace,” or under the authority of the
Federal Aviation Act of 1958, as amended.”
3.4 The responsibilities and obligations placed upon Grantor by the Government shall
run with the land and be binding on Grantee and all subsequent owners of the Real Property or any
portion thereof, unless and until such responsibilities and obligations are released pursuant to the
provisions set forth in the Government Deed.
3.5 As further set forth in and subject to the terms and conditions of the DDA, Grantee
acknowledges that it has examined the Real Property and is buying the Real Property from Grantor
in an “AS IS, WHERE IS, WITH ALL FAULTS” condition, in its present state and condition and
with all faults, which provisions shall survive the close of escrow related to this transaction and do
not merge with this Quitclaim Deed.
4.This Quitclaim Deed is made and accepted upon (i) the covenants, conditions, restrictions
and other matters set forth in the SLA Covenant, the Special Restrictions and Affordable Housing
Declaration which are incorporated herein by reference with the same force and effect as though
fully set forth herein, and (ii) subject to reservations, covenants and restrictions as set forth in the
Government Deed, including without limitation those provisions set forth herein. Each future
transfer or conveyance of the Real Property or any portion thereof shall include notice of the SLA
Covenant, the Special Restrictions and Affordable Housing Declaration and in addition shall
include those disclosures and environmental covenants contained in the Government Deed.
5.The terms of this Quitclaim Deed are hereby agreed and declared by Grantee and Grantor
to be covenants running with the land and enforceable as restrictions and equitable servitudes
against the Real Property, and are hereby declared to be and shall be binding upon and burden the
Real Property and Grantee and all successors and assigns of Grantee owning all or any portion of
the Real Property and all Persons claiming by, through or under Grantee or such successor or
assign for the benefit of Grantor and Grantor and its Governmental Successors shall retain the right
to enforce the restrictions and equitable servitudes against the Real Property and the same shall be
enforceable solely by Grantor and its governmental successors.
{signatures on next page}
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IN WITNESS WHEREOF, Grantor, THE CITY OF TUSTIN, has caused this Quitclaim Deed to
be executed on the day first above written.
CITY OF TUSTIN:
Dated: ________________
By: ___________________________
Aldo E. Schindler
CityManager
ATTEST:
By: ______________________
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By: ___________________________
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By: __________________________
AmyE.Freilich
{signatures continued on next page}
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
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ACKNOWLEDGEMENT OF GRANTEE’S COVENANTS
BY EXECUTING THIS QUITCLAIM DEED BELOW, ON AND AS OF THE DATE WRITTEN
BELOW, Grantee on behalf of itself and all subsequent owners of the Real Property or any portion
thereofand each and every Person claiming by, through or under Grantee, on behalf of itself and
its successors and assigns acquiring fee title to all or any portion of the Real Property and each and
every Person claiming by, through or under Grantee or such successors or assigns, hereby
acknowledges and accepts and agrees to be bound by this Quitclaim Deed and the covenants and
agreements of Grantee contained in this Quitclaim Deed.
________________________, a
_________________
By: ________________________
Name: ______________________
Title: _______________________
By: ________________________
Name: ______________________
Dated: __________________ Title: _______________________
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docxS-2Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docxS-3Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docxS-3Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docxS-3Portion of Disposition Area 8
EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PARCEL
The Land referred to herein below is situated in the City of Tustin, County of Orange, State of
California, and is described as follows:
LOT 14, INCLUSIVE OF TRACT NO. 18197 AS SHOWN ON A MAP FILED IN BOOK 990,
PAGES 25 THROUGH 33, INCLUSIVE OF TRACT MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
For conveyancing purposes only: APN 430-481-12
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docxExhibit APortion of Disposition Area 8
EXHIBIT B
DESCRIPTION OF THE REMEDIAL ACTION TAKEN BY THE GOVERNMENT
PURSUANT TO FEDERAL DEED
{see attached}
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
09.25.26 (HM).docxExhibit BPortion of Disposition Area 8
Tustin Confluent DDA Att 11 Quitclaim Deed ATTACHMENT 11 City of Tustin/Confluent Dev.
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ATTACHMENT 12
FORM OF MEMORANDUM OF DDA
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND TO BE
EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §6103
AND §27383.
Recording requested by and
when recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER’S USE
MEMORANDUM OF
TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT
FOR PORTION OF DISPOSITION AREA 8
This MEMORANDUM OF TUSTIN LEGACY DISPOSITION AND DEVELOPMENT
AGREEMENT FOR PORTION OF DISPOSITION AREA 8 (this “Memorandum”) is made as
of___________, 202__ (“Memorandum Effective Date”)by and among the CITY OF TUSTIN,
a municipal corporation of the State of California (“City”) and
_____________________________, a _________________ (“Developer”) to provide record
notice that City and Developerhave entered into that certain Tustin Legacy Disposition and
Development Agreement for Portion of Disposition Area 8, dated as of ___________________,
2026 \[{if amended:} (“Original DDA”) as amended by that certain
___________________\](“DDA”). The City and Developer are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.” Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the DDA. \[{if amended:}
Wherever in this Memorandum reference to a Section of the DDA is made, such reference shall be
to the text of that Section in the Original DDA as the text of that Section has been amended, if at
all, by the text of the First Amendment.\]
1.Property Affected by the DDA.
1.1Property. The property affected by the DDA is the “Property,” consisting of (as
more fully described in the DDA): (a) the Real Property as legally described on Exhibit A attached
hereto, (b) all existing improvements, if any, located on the Real Property; (c) all appurtenances
pertaining to the Real Property or such improvements; (d)all permits, licenses, approvals and
authorizations issued prior to the Close of Escrow by any Governmental Authority in connection
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx 1 Portion of Disposition Area 8
with the Real Property for development of any improvements; (e) the right to construct up to 172
Residential Units (consisting of 124 base units and 48 density bonus units, including approximately
26 Lower Income Units) on the Active Adult Real Property and up to 103 Rooms in up to 147,500
square feet of building on the AL/MC Real Property as described in Section 4.1.1 of the DDA; and
(f) all of City’s right, title and interest in, to and arising out of the Intangible Property; but excepting
from all of the foregoing the matters set forth in Section 2 of that certain Quitclaim Deed For Portion
of Disposition Area 8 and Covenants, Conditions and Restrictions, Including Environmental
Restriction Pursuant to Civil Code Section 1471 made by the City in favor of Developer, dated as
of _________, 20__ (“Quitclaim Deed”)and Recorded in the Office of the County Recorder,
Orange County, California immediately following recording of this Memorandum.
1.2Binding Agreement. The DDA shall, in accordance with its terms, run with the land
and burden and be binding upon the Real Property and Developer and each Successor Owner as an
equitable servitude, unless and until terminated in accordance with its terms, and shall govern the
use and development of the Property and the Project Improvements by Developer and each
successor and assign of Developer and each Successor Owner.
2.Effect of the DDA. The DDA imposes certain obligations, agreements, covenants,
conditions and restrictions with respect to the Property and with respect to Developer’s acquisition,
development, use, operation, maintenance and ultimate disposition thereof, that run with the Real
Property, unless and until terminated in accordance with their respective terms, as further set forth
in the DDA. Among these obligations are the following:
(a)Certain restrictions on Transfer, conveyance, and assignment of the DDA,
the Property, and the Improvements or any portion thereof or interest therein, whether voluntary
or involuntary, and certain restrictions on the Transfer of Control of Developer, each contained in
Article 2 of the DDA, that terminate as to the Real Property upon execution and Recording by the
City of the Final Certificate of Compliance for the Real Property, as further set forth in the DDA;
(b)Certain restrictions on Mortgages contained in Articles 2 and 17 of the
DDA, including prohibitions on encumbrance of the Real Property with any Mortgage except in
accordance with the requirements of the DDA, which limitations terminate upon execution and
Recording by the City of the Final Certificate of Compliance for the Real Property as further set
forth in the DDA;
(c)Certain releases, waivers, and indemnities made by Developer in favor of
the City and its Governmental Successors that are also set forth in the Declaration of Special
Restrictions, dated as of the Memorandum Effective Date and intended to be Recorded
contemporaneously with the Recording of this Memorandum (the “Special Restrictions”), which
releases, waivers, and indemnities are, in accordance with their terms, binding on Developer and
its successors and assigns under the DDA, each Successor Owner and each and every Person
claiming by, through or under Developer or any Successor Owner, for the term of such releases,
waivers, and indemnities as further set forth in the Special Restrictions;
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx 2 Portion of Disposition Area 8
(d)The Right of Repurchase in favor of the City, described in the DDA, which
gives the City the right to purchase the Real Property or portions thereof under certain
circumstances, as further set forth in the DDA; and
(e)The Right of Reversion in favor of the City, described in the DDA, which
entitled the City to a reversion of title to the Real Property or portions thereof under certain
circumstances, as further set forth in the DDA.
3.Effect of DDA on End Users. Notwithstanding anything to the contrary set forth in this
Memorandum, the general prohibition against Transfer outlined herein shall not be applicable to
any End User, defined asany (i) utility or Governmental Authority with respect to any transfer of
portions of the Real Property or grants of easements affecting the Real Property desirable for the
development of the Real Property, including the City or any lighting or landscaping district and
(ii) for the term in which such contract is in effect, any natural person that has a contractual right
to inhabit and does inhabit a Residential Unit or Room.
4.Certificates of Compliance. If Developer is entitled under the terms of the DDA to the
issuance of a Certificate of Compliance, then the City shall furnish Developer with a Certificate of
Compliance in recordable form upon written request by Developer. Each Certificate of
Compliance shall be deemed to be the City’s conclusive determination of satisfactory Completion
of the Project Improvements and compliance with all other conditions required by the DDA for
the Real Property or portion thereof described in such Certificate of Compliance, subject only to
such obligations of Developer under the DDA and the Other Agreements as expressly survive the
issuance of such Certificate of Compliance, which shall survive in accordance with its respective
terms. Each Certificate of Compliance shall state the actual number of Residential Units and/or
Rooms and square footage, as applicable, constructed on portion of the Real Property subject to
the issued Certificate of Compliance as of the date of issuance thereof, and such Residential Unit
or Room and square footage count shall establish the actual number of Residential Units and
AL/MC Real Property square footage allocated to Developer by the City pursuant to Section 4.1.2
of the DDA.
5.DDA and Memorandum Run With the Land. The DDA and this Memorandum, including,
without limitation, the provisions of the DDA referred to above, and all other obligations,
agreements, covenants, representations, warranties, and indemnities set forth in the DDA and this
Memorandum, are hereby agreed by Developer and by the City, subject to their respective terms,
to be covenants running with the land and enforceable as equitable servitudes against the Real
Property, and are hereby declared to be and shall, subject to their respective terms, burden and be
binding upon the Real Property and Developer and its successors and assigns, each Successor
Owner and each and every Person claiming by, through or under Developer or any Successor
Owner for the benefit of the City and its successors and assigns, subject to the effects of Recording
of one or more Certificates of Compliance as described in Section 4 of this Memorandum.
6.City Lien Rights; Priority. The DDA provides that certain amounts payable by the
Developer under the terms of the DDA and the Other Agreements are entitled to the benefit of a
lien (referred to in the DDA and in this Memorandum as the “City Lien”). The City Lien shall to
the greatest extent permitted by applicable law, be a lien and charge upon the Property and shall
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx 3 Portion of Disposition Area 8
be a continuing lien upon the Property in favor of the City effective upon the Recording of this
Memorandum paramount to the lien and charge of each and every Mortgage, Construction Lien
and other lien upon or affecting the Property to the extent provided in the DDA. The encumbrance
of the DDA (including the City Lien), the Right of Purchase, and the Right of Reversion, each as
created under the DDA, are superior to the lien of each and every Mortgage encumbering any
portion of the Real Property. The DDA provides that the City will enter into a Subordination
Agreement under certain circumstances with a Permitted Mortgagee pursuant to which cure rights
and other protections are afforded to such Permitted Mortgagee with respect to a Construction
Loan.
7.Acknowledgment and Assumption by Developer. Acceptance and Recording of the
Quitclaim Deed concurrently with or following Developer’s execution of the DDA is Developer’s
acknowledgement that it assumes all responsibilities placed upon Developer under the terms of the
DDA.
8.Public Documents. The documents constituting the DDA are public documents and may
be reviewed at the official offices of the City.
9.Interpretation; Notice. This Memorandum is prepared for recording and notice purposes
only and in no way modifies the terms, conditions, provisions and covenants of the DDA. In the
event of any inconsistency between terms, conditions, provisions and covenants of this
Memorandum and the DDA, the terms, conditions, provisions and covenants of the DDA shall
prevail.
10.Attachments. The Attachments attached to this Memorandum are hereby incorporated by
this reference into this Memorandum as though fully set forth in the text of this Memorandum.
11.Termination. This Memorandum shall terminate as to the Real Property upon the earlier of
(a) termination of the DDA, or (b) issuance by the City and Recording of the Final Certificate of
Compliance for the Real Property.
{signatures on next pages}
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx 4 Portion of Disposition Area 8
IN WITNESS WHEREOF, the City and Developer have executed this Memorandum as
of the Memorandum Effective Date.
CITY OF TUSTIN:
Dated:
By:
Aldo E. Schindler
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx S-1 Portion of Disposition Area 8
DEVELOPER:
CD-CW (Tustin) LLC,
a Colorado limited liability company
By: CD Manager LLC,
a Colorado limited liability company,
its Manager
By: Confluent Development LLC,
a Colorado limited liability company,
its Manager
By: ____________________________
Name: Marshall M. Burton
Title: Chief Executive Officer
STATE OF COLORADO )
CITY AND ) SS:
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this ____ day of _______, 2026,
by Marshall M. Burton, as Chief Executive Officer of Confluent Development, LLC, a Colorado
limited liability company, as Manager of CD Manager LLC, a Colorado limited liability
company, as Manager of CD-CW (Tustin) LLC, a Colorado limited liability company.
WITNESS my hand and official seal. ___________________________________
Notary Public
My Commission Expires: __________________________________
\[SEAL\]
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx S-2 Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx S-3 Portion of Disposition Area 8
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TUSTIN,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Tustin Confluent DDA Att 12 Memo of DDA ATTACHMENT 12 City of Tustin/Confluent Development
9.27.26 (HM).docx S-3 Portion of Disposition Area 8
ATTACHMENT 13
FORM OF VERTICAL IMPROVEMENTS COMMENCEMENT DATE CERTIFICATE
AND CONFIRMATION
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND TO BE
EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §6103
AND §27383.
Recording requested by and when
recorded mail to:
City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER’S USE
DEVELOPER’S CERTIFICATEAND CITY CONFIRMATION REGARDING
VERTICAL IMPROVEMENTS COMMENCEMENT DATE
Reference is hereby made to that certain Tustin Legacy Disposition and Development Agreement
for Portion of Disposition Area 8 dated as of ___________, 2026 (“DDA”), by and
between,___________________ a __________limited liability company (“Developer”), as
successor-in-interest to CD-CW (TUSTIN) LLC, aColorado limited liability company(“Initial
Developer”), and the City of Tustin, a municipal corporation of the State of California (“City”).
Capitalized terms used herein that are not defined herein shall have the meanings specified in the
DDA.
This Certificate is being delivered by Developer pursuant to Section ________ of the DDA.
I, the undersigned, am an authorized signatory of Developer, which is a limited liability company
duly organized and existing under the laws of the State of ___________, and am authorized by
Developer to make the certifications contained in this Certificate. I further certify to the City for
and on behalf of Developer as follows:
1. Confirmation Information. The reinforcing steel has passed inspection for the
walls and/or columns of the ground-level parking structure for the Active Adult Project or
AL/MC Project, and as such the Vertical Improvements Commencement Date has occurred.
Tustin Confluent DDA Att 13 Vert Constr 1 City of Tustin/Confluent Development
Commenc Date Cert 8.31.26 (HM)
Portion of Disposition Area 8
2. Authority of Signatory. ________________ is an Authorized Signatory of
Developer and is in such capacity duly authorized by Developer to execute this Certificate.
Without the written consent ofDeveloper, no Person other than the City may rely on this
Certificate for any purpose.
In no event shall the individual executing this Certificate on behalf of Developer have any personal
liability hereunder.
“DEVELOPER”
Dated: ______________________
By: __________________________
Name:
Title:
\[INSERT CORRECT STATE ACKNOWLEDGEMENT FOR DEVELOPER\]
{signatures continued on following page}
Tustin Confluent DDA Att 13 Vert Constr 2 City of Tustin/Confluent Development
Commenc Date Cert 8.31.26 (HM)
Portion of Disposition Area 8
ACCEPTED AND AGREED:
The City hereby executes this Certificate for the sole purpose of confirming the occurrence of the
Vertical Improvements Commencement Date pursuant to the DDA.
CITY OF TUSTIN:
Date: _____________________
By: ___________________________
Aldo E. Schindler
City Manager
ATTEST:
By: ______________________
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By: ___________________________
David Kendig
City Attorney
Tustin Confluent DDA Att 13 Vert Constr 3 City of Tustin/Confluent Development
Commenc Date Cert 8.31.26 (HM)
Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public orother officercompleting this certificate verifiesonly theidentity of the
individual whosigned thedocument towhichthiscertificate is attached, andnot the
truthfulness,accuracy, or validity of thatdocument.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s)ofSigner(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Tustin Confluent DDA Att 13 Vert Constr 4 City of Tustin/Confluent Development
Commenc Date Cert 8.31.26 (HM)
Portion of Disposition Area 8
ATTACHMENT 14A
FORM OF GUARANTY
This GUARANTY (this “Guaranty”) is made as of the ______ day of ___________, 202_
(the “Effective Date”), by ______________________, a ____________________
1
(“Guarantor”), in favor of the CITY OF TUSTIN, a municipal corporation of the State of
California (“City”).
RECITALS
A. CD-CW (TUSTIN) LLC, a Colorado limited liability company, and City have
entered into that certain Tustin Legacy Disposition and Development Agreement for Portion of
Disposition Area 8 (Tustin Legacy), dated as of ________________202_, including all
Attachments thereto (as the same may be amended, updated or modified from time to time, the
“DDA”), under the terms of which {insert name of entity taking title to the Development Parcel}
(referred to as “Developer”) has acquired certain real property referred to in the DDA as the
Active Adult Real Property and the AL/MC Real Property as more particularly described in the
DDA (“Real Property”) and certain additional rights that together with the Real Property
comprise the Active Adult Property and the AL/MC Property as more particularly described in the
DDA (“Property”). Initially capitalized terms used and not otherwise defined in this Guaranty are
used with the meanings set forth in the DDA.
B. Pursuant to the DDA, Developer has agreed to bear responsibility for the design,
development, construction and operation of the Active Adult Project and the AL/MC Project.
C.Guarantor directly or indirectly owns a substantial equity interest in Developer and
thus will derive substantial benefits from Developer owning the Property and the development of
the Project. Guarantor will also derive direct and substantial benefits by guaranteeing Developer’s
obligations to undertake the actions with respect to the Property required of Developer under the
DDA and the Other Agreements.
AGREEMENT
As required by the terms of the DDA, and in consideration of the benefits to Guarantor
described above, Guarantor hereby makes the guaranties, obligations, covenants and agreements
set forth below in this Guaranty.
Section 1.Guaranty.
1.1 Payment and Performance Obligations. Subject to the limitations expressed
in Sections 2.1, 2.3, and 2.4, Guarantor absolutely and unconditionally guarantees (a) the payment
when due by Developer of all payment obligations, including all indemnity obligations, of
Developer under the DDA and the Other Agreements (the “Payment Obligations”) and (b) the
1
NOTE: If Guarantor is comprised of more than one entity, joint and several liability
language will be added and conforming changes will be made throughout.
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx Por. Disp. Area 8
performance (whether for construction, Completion, maintenance, operation or otherwise) when
due by Developer of all obligations of Developer under the DDA and the Other Agreements before
the date provided in the Schedule of Performance or otherwise in the DDA and the Other
Agreements (the “Performance Obligations”); provided that the Payment and Performance
Obligations shall not include the operation or maintenance of any Building on a Parcel for which
a Certificate of Compliance has been Recorded by City. Collectively the Payment Obligations and
the Performance Obligations are referred to as the “Payment and Performance Obligations.”
1.2 Payment of Enforcement Costs. In addition to its obligations under Section
1.1 (but subject to the provisions of Section 2.1 and those of Section 11 with respect to prevailing
parties), Guarantor agrees to pay all costs and expenses incurred by City, including reasonable
attorneys’ fees and costs, court costs and all other litigation expenses (including reasonable expert
witness fees, costs of depositions and other discovery, travel expenses, exhibit preparation, and
courier, postage, communication and document copying expenses), in enforcing this Guaranty (the
“Enforcement Payment Obligations”). The provisions of this Section 1.2 shall survive the
termination of this Guaranty.
1.3 Performance of Work. Subject to the provisions of Sections 2.3 and 2.4, any
work required for Guarantor to satisfy the Payment and Performance Obligations: (a) shall be
performed in accordance with the Scope of Development and within the time periods set forth in
the Schedule of Performance (to the extent such time periods have not then already expired) all as
and to the extent set forth in the DDA and the Other Agreements and in accordance with the other
requirements set forth in the DDA and the Other Agreements; and (b) shall be diligently pursued
by Guarantor to Completion of the Project and issuance of a Certificate of Compliance for the
Project.
1.4 Guaranteed Obligations. “Guaranteed Obligations” means, collectively,
the Payment and Performance Obligations and the Enforcement Payment Obligations.
Section 2.Performance of Payment and Performance Obligations upon Default by
Developer.
2.1Default by Developer. If Developer is in Material Default under the DDA
for any reason, including for failure to commence or prosecute the development of the Project in
accordance with the Schedule of Performance or the Scope of Development, then City may, but
shall not be obligated to, deliver written notice to Guarantor (a “Guaranty Notice”), notifying
Guarantor of such default. Guarantor, promptly after receipt of the Guaranty Notice, shall perform
the Payment and Performance Obligations and the Enforcement Payment Obligations that are the
subject of the Guaranty Notice. Guarantor shall take whatever actions may be necessary to perform
the Guaranteed Obligations, including the following to the extent applicable to the Guaranty
Notice:
(a)Diligently and expeditiously proceed to ensure the Completion of
the Project, at the times set forth in the DDA and in accordance with the Schedule of Performance
and subject to the other terms and conditions set forth in the DDA and the Other Agreements;
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(b)To the extent unpaid, fully pay and discharge all Development Costs
incurred or required to be incurred in connection with the Completion of the Project; and
(c)Pay any amounts necessary to release and discharge any mechanics’,
material providers’, or other liens that may exist or come into existence in connection with all or
any of the Real Property, the Project, and the Completion of the Improvements, or, in the
alternative, contest the same subject to the terms and conditions set forth in the DDA.
2.2Difficulty or Expense of Completion of the Project Does Not Excuse
Guarantor or Guaranty. Guarantor’s obligations under this Guaranty will remain in full force and
effect until all of the Guaranteed Obligations are fully and finally paid and performed, regardless
of any Transfer and regardless of whether Completion of the Project is difficult, more expensive
than originally intended, or involves any event or circumstance that would make the Completion
of the Project more costly or would delay the Completion of the Project, including: (a) a casualty
that affects the Real Property or any Project Improvements that may have been constructed; (b)
the discovery of unanticipated soils conditions or Hazardous Materials in, on, or under the Real
Property; (c) Governmental Requirements or court orders applicable to the Project; (d) any lack of
debt or equity financing for Development Costs; (e) any change in market conditions; and (f) other
events or circumstances beyond the control of Developer or Guarantor relating to the Project.
2.3No Discharge Until Completion. It is the intent of Guarantor and City that
the obligations and liabilities of Guarantor hereunder are absolute, irrevocable and unconditional
under any and all circumstances and that, until the Guaranteed Obligations are fully and finally
performed, the obligations and liabilities of Guarantor hereunder shall not be discharged or
released, in whole or in part, by any act or occurrence that might, but for the provisions of this
Guaranty, be deemed a legal or equitable discharge or release of Guarantor. Subject to the
provisions of Section 18, the Guaranteed Obligations shall be deemed to be fully and finally
performed for purposes of this Guaranty and this Guaranty shall terminate only on the date on
which the Certificate of Compliance for the Project has been recorded by City.
2.4Liability Cap. Notwithstanding anything to the contrary contained in this
Guaranty, the liability of Guarantor pursuant to this Guaranty (including for all Payment and
Performance Obligations, but excluding the Enforcement Payment Obligations) shall be capped at
Ten Million Dollars ($10,000,000.00).
Section 3.Absolute, Irrevocable and Unconditional Guaranty.
3.1Irrevocable Guaranty. This Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and performance. This Guaranty shall be effective as a waiver
of, and Guarantor hereby expressly waives, any right to which Guarantor may otherwise have been
entitled, whether now existing under statute, at law or in equity, or arising under any statute enacted
after the date hereof or arising under any doctrine of law or equity promulgated after the date
hereof to require City to take prior recourse or proceedings against any collateral, security or
Person. It shall not be necessary for City, in order to enforce such payment or performance by
Guarantor, to first institute suit or pursue or exhaust any rights or remedies against Developer or
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any other Person liable on such indebtedness or for such performance, or to enforce any rights
against any security given to secure such indebtedness or performance, or to join any other Person
liable for the performance of the Guaranteed Obligations or any part thereof in any action to
enforce this Guaranty, or to resort to any other means of obtaining performance of the Guaranteed
Obligations.
3.2Demand Against Guarantor. City may bring suit or make a demand
against Developer or against Guarantor or any other parties who have signed this Guaranty or any
other guaranty covering all or any part of the Guaranteed Obligations, or against any one or more
of them, separately or together, without impairing the rights of City against Guarantor.
3.3Independent Guaranty. The obligations of Guarantor under this Guaranty
are independent of, and in addition to, the obligations and liabilities of Developer under the DDA
and the Other Agreements. This Guaranty is independent of (and shall not be limited by) any other
guaranty now existing or hereafter given by Guarantor, or any other Person, under or in connection
with the Property, the Improvements, the DDA or the Other Agreements. The liability of Guarantor
under this Guaranty is in addition to any and all other liability Guarantor may have in any other
capacity with respect to Developer, including, if applicable, any direct or indirect ownership or
control of any debt or equity securities of Developer or any Controlling Person of Developer.
Section 4.Certain Agreements and Waivers by Guarantor.
4.1Waivers. Guarantor agrees that (a) neither City’s rights or remedies nor
Guarantor’s obligations under the terms of this Guaranty shall be released, diminished, impaired,
reduced or affected by any one or more of the following events, actions, facts, or circumstances,
(b) Guarantor waives any rights, claims or defenses arising from any one or more of such events,
actions, facts, or circumstances, and (c) the liability of Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of any one or more of:
(a)any limitation on the liability of, or recourse against, any other
Person, including City, in the DDA or any of the Other Agreements or arising under any law;
(b)any claim or defense that this Guaranty was made without
consideration or is not supported by adequate consideration or that the obligations of Guarantor
hereunder exceed or are more burdensome than those of Developer under the DDA or the Other
Agreements;
(c)the taking or accepting of any other security or guaranty for, or right
of recourse with respect to, any or all of the Guaranteed Obligations;
(d)any homestead exemption or any other exemption under applicable
law;
(e)any release, surrender, abandonment, exchange, alteration, sale or
other disposition, subordination, deterioration, waste, failure to protect or preserve, impairment,
or loss of, or any failure to create or perfect any lien or security interest with respect to, or any
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other dealings with, any collateral or security at any time existing or purported, believed or
expected to exist in connection with any or all of the Guaranteed Obligations, or any impairment
of Guarantor’s recourse against any Person or collateral;
(f)whether express or by operation of law, any partial release of the
liability of Guarantor hereunder (except to the extent expressly so released in writing by City with
respect to this Guaranty) or any complete or partial release of Developer or any other Person liable,
directly or indirectly, for the performance of any or all of the Guaranteed Obligations;
(g)the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of
Developer or any other Person at any time liable for the performance of any or all of the Guaranteed
Obligations;
(h)the death, insolvency, bankruptcy, disability, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation, change of form,
structure or ownership, sale of all assets, or lack of corporate, partnership or other power of
Guarantor or its successors or assigns;
(i)either with or without notice to or consent of Guarantor, any
renewal, extension, modification, supplement, subordination or rearrangement of any or all of the
terms of the Guaranteed Obligations or the DDA or any of the Other Agreements or any other
agreements that may have been executed by Developer, City or any third party affecting the
obligations of Developer or City under the DDA or the Other Agreements, or performance
(including changes with respect to the construction of the Improvements) of any other terms
thereof, or any waiver, termination, or release of, or consent to departure from, any of the DDA,
the Other Agreements, any other agreements that may have been executed by Developer, City or
any third party affecting the obligations of Developer or City under the DDA, the Other
Agreements or any other guaranty of any or all of the Guaranteed Obligations, or any adjustment,
indulgence, forbearance, or compromise that may be granted from time to time by City to
Developer or to any other Person at any time liable for the payment or performance of any or all
of the Guaranteed Obligations;
(j)any neglect, lack of diligence, delay, omission, failure, or refusal of
City to take or prosecute (or in taking or prosecuting) any action for the collection or enforcement
of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action to foreclose
(or in foreclosing or taking or prosecuting any action to foreclose) upon any security therefor, or
to exercise (or in exercising) any other right or power with respect to any security therefor, or to
take or prosecute (or in taking or prosecuting), or any failure to sell or otherwise dispose of in a
commercially reasonable manner any collateral securing any or all of the Guaranteed Obligations;
(k)any failure of City to notify Guarantor of any creation, renewal,
extension, rearrangement, modification, supplement, subordination, or assignment of the DDA or
any of the Other Agreements or any of the Guaranteed Obligations or any part thereof (or any other
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agreement relating in any way to the Property or the Guaranteed Obligations), or of any release of
or change in any security, or of the occurrence or existence of any Material Default, or of any other
action taken or refrained from being taken by City against Developer or any security or other
recourse, or of any new agreement between City and Developer, it being understood that, except
as expressly set forth in this Guaranty, City shall not be required to give Guarantor any notice of
any kind under any circumstances with respect to or in connection with the Guaranteed
Obligations, any and all rights to other notice Guarantor may have otherwise had being hereby
waived by Guarantor, and except for any notices expressly required to be delivered to Guarantor
under this Guaranty, Guarantor shall be responsible for obtaining for itself information regarding
Developer and any collateral, including any changes in the business or financial condition of
Developer or any collateral, and Guarantor acknowledges and agrees that City shall have no duty
to notify Guarantor of any information which City may have concerning Developer or any
collateral;
(l)the existence of any claim, counterclaim, set-off or other right that
Guarantor may at any time have against Developer, or any other Person (except City), whether or
not arising in connection with this Guaranty, the DDA, or any of the Other Agreements;
(m)the unenforceability of all or any part of the Guaranteed Obligations
against Developer, whether because the Guaranteed Obligations exceed the amount permitted by
law or violate any usury or other law (subject to the provisions of Section 12), or because the
Persons creating the Guaranteed Obligations acted in excess of their authority, or because of a lack
of validity or enforceability of or defect or deficiency in the DDA or the Other Agreements, and
regardless of any joinder of Developer or any other Person in any action to obtain payment or
performance of any or all of the Guaranteed Obligations;
(n)any order, ruling or plan of reorganization emanating from
proceedings under Title 11 of the United States Code with respect to Developer or any other
Person, including any extension, reduction, composition, or other alteration of the Guaranteed
Obligations, whether or not consented to by City, or any action taken or omitted by City in any
such proceedings, including any election to have City’s claim allowed as being secured, partially
secured or unsecured, any extension of credit by City in any such proceedings or the taking and
holding by City of any security for any such extension of credit;
(o)any other condition, event, omission, action that would in the
absence of the provisions of this Section 4 result in the release or discharge of Guarantor from the
performance or observance of any obligation, covenant or agreement contained in this Guaranty
or any other agreement, other than the full and final performance of the Guaranteed Obligations;
(p) except as provided in this Guaranty, any notice to Guarantor of the
existence of or the extending to Developer of any grace or cure period for the performance of any
of the Guaranteed Obligations or any failure to provide notice thereof;
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(q)any defense of waiver, release, discharge in res judicata, statute of
frauds, fraud, or ultra vires acts that may be available to Developer in respect of the DDA or any
of the Other Agreements;
(r)to the fullest extent permitted by law: (A) any defense arising as a
result of City’s election, in any proceeding instituted under the Bankruptcy Code, of the application
of Section 1111(b)(2) of the Bankruptcy Code; and (B) without limiting the generality of any other
provision hereof, all rights and benefits that might otherwise be available to Guarantor under any
guarantor, suretyship or other defenses under any law of the State of California or otherwise
(including California Civil Code Sections 2787 through 2855, inclusive, 2899 and 3433), including
any rights of subrogation, reimbursement, indemnification, or contribution and any other rights
and defenses that are or may become available to Guarantor by reason of such provisions of the
California Civil Code;
(s)the benefit of any statute of limitations affecting the liability of the
Developer under the DDA or any of the Other Agreements;
(t)any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Developer in respect of the Guaranteed Obligations or Guarantor in
respect of this Guaranty; and
(u)any early termination of any of the Guaranteed Obligations, except
as expressly agreed to in writing by City, it being agreed that, among other things, that Guarantor
shall be obligated to pay all costs and expenses incurred by City in its exercise of its rights under
Sections 16.3 and 16.4 of the DDA.
4.2Additional Waivers.
Without limiting any of the waivers contained in Section 4.1,
Guarantor waives all rights and defenses that Guarantor may have because some or all of
Developer’s obligations may be, or may be deemed to be, secured by real property (although
Guarantor acknowledges that as of the Effective Date the Guaranteed Obligations are not secured
by any real property). This means, among other things:
(a)City may collect from Guarantor without first foreclosing on any
real or personal property collateral pledged by Developer.
(b)If City forecloses on any real property collateral pledged by
Developer: (i) the amount of the obligation owed to City may be reduced only by the net price for
which that collateral is sold at the foreclosure sale or proceedings, even if the collateral is worth
more than the sale price and (ii) City may collect from Guarantor even if City, by foreclosing on
the real property collateral, has destroyed any right Guarantor may have to collect from the
Developer.
This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have
because the Guaranteed Obligations may be, or may be deemed to be, secured by real property.
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These rights and defenses include, but are not limited to, any rights or defenses directly or
indirectly based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.
\[Intentionally Omitted.\]
Guarantor also hereby waives any rights or defenses Guarantor may
otherwise have had in respect of Guarantor’s obligations as a guarantor or other surety by reason
of any election of remedies by City, as well as any rights or defenses Guarantor may otherwise
have had because Developer’s obligations may be or may be deemed to be secured by real property
or an estate for years (although Guarantor acknowledges that as of the Effective Date the
Guaranteed Obligations are not so secured).
Also, without limiting the generality of any other waiver or
provision contained in this Guaranty, Guarantor hereby waives any and all benefits and defenses
under California Commercial Code Section 3605.
4.3Preferences. In the event any payment by Developer or any other Person
to City is held to constitute a preference, fraudulent transfer or other voidable payment under any
bankruptcy, insolvency or similar law, or if for any other reason City is required to refund such
payment or pay the amount thereof to any other Person, such payment by Developer or any other
Person to City shall not constitute a release of Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release,
surrender or discharge by City of this Guaranty or of Guarantor or the prior expiration of this
Guaranty), as the case may be, with respect to, and this Guaranty shall apply to, any and all
amounts so refunded by City or paid by City to another Person (which amounts shall constitute
part of the Guaranteed Obligations), and any interest paid by City and any attorneys’ fees, costs
and expenses paid or incurred by City in connection with any such event.
4.4Defenses. Guarantor waives all rights and defenses arising out of an
election of remedies by City, including exercise by City of its Right of Reversion upon occurrence
of a Reversion Event or a repurchase of the Property pursuant to City’s Right of Purchase pursuant
to the DDA, even though such election of remedies may have destroyed such Guarantor’s rights
of subrogation and reimbursement against Developer by operation of California Code of Civil
Procedure Section 580d or otherwise.
4.5\[Intentionally Omitted.\]
4.6Waiver of Notice of Acceptance. Guarantor waives notice of acceptance
of this Guaranty.
4.7No Limitation on Waivers. No provision or waiver in this Guaranty shall
be construed as limiting the generality of any other provision or waiver contained in this Guaranty.
All of the waivers contained herein are irrevocable and unconditional and are intentionally and
freely made by Guarantor.
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Section 5.Subordination.
If, for any reason whatsoever, Developer is now or hereafter becomes indebted, directly or
indirectly to Guarantor including by operation of California Civil Code Sections 2847 and 2848,
or any successor statutes or similar law (any such indebtedness being referred to as the
“Subordinated Debt”):
(a)The Subordinated Debt and all interest thereon and all
liens, security interests and rights now or hereafter existing with respect to property of any
Developer securing the Subordinated Debt shall, at all times, be subordinate in all respects to the
Guaranteed Obligations and to all liens, security interests and rights now or hereafter existing to
secure the Guaranteed Obligations, until the Guaranteed Obligations have been paid or performed
in full; and
(b)In the event of receivership, bankruptcy, reorganization,
arrangement or other debtor relief or insolvency proceedings involving Developer as debtor, City
shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder
and shall have the right to receive directly from the receiver, trustee or other custodian, dividends
and payments that are payable upon any obligation of Developer to Guarantor now existing or
hereafter arising, and to have all benefits of any security therefor, until the Guaranteed Obligations
have been fully and finally performed; and
(c) Guarantor shall promptly upon request of City from time to time
execute such documents and perform such acts as City may reasonably require to evidence and
perfect its interest and to permit or facilitate exercise of its rights under this Section 5, including
execution and delivery of proofs of claim, further assignments and security agreements, and
delivery to City of copies of any promissory notes or other instruments evidencing indebtedness
of Developer to Guarantor. All promissory notes, accounts receivable ledgers or other evidence
now or hereafter held by Guarantor of obligations of Developer to Guarantor shall contain a
specific written notice thereon that the indebtedness evidenced thereby is subordinated under and
is subject to the terms of this Guaranty; and
(d)The Guarantor shall not accept any payments in respect of the
Subordinated Debt until the Guaranteed Obligations are fully and finally performed. If,
notwithstanding the foregoing provisions in this Section 5, Guarantor should receive any payment,
claim or distribution that is prohibited as provided above in this Section 5, Guarantor shall pay the
same to City immediately, Guarantor hereby agreeing that it shall receive the payment, claim or
distribution from Developer in trust for City and shall have absolutely no dominion over the same
except to pay it immediately to City.
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Section 6.Other Liability of Guarantor or Developer.
6.1Other Liability. If Guarantor is or becomes liable, by endorsement or
otherwise, for any indebtedness owing by Developer to City other than under this Guaranty, such
liability shall not be in any manner impaired or affected hereby, and the rights of City hereunder
shall be cumulative of any and all other rights that City may have against Guarantor. If Developer
is or becomes obligated to City for any liabilities or indebtedness other than or in excess of the
Guaranteed Obligations, any payment received or recovery realized upon such other liabilities or
indebtedness of Developer to City may be applied by City to such other liabilities or indebtedness.
2
6.2Guarantor Net Worth and Guarantor Liquidity Covenants. Guarantor
hereby covenants, represents, and warrants to and for the benefit of City as follows:
(a)For the purposes of this Guaranty (1) the term “Guarantor Liquid
Assets” means the Liquid Assets of Guarantor and the term “Guarantor Net Worth” means the
Guarantor Liquid Assets plus the value of Guarantor’s investments in reputable investment funds
not Controlled by or under common Control with Guarantor, which value is certified by the
managers of the investment funds, minus the fixed and contingent liabilities of Guarantor, and (2)
the term “City Designee” means any attorney authorized by City from time to time to review
financial or other confidential information provided by Guarantor under non-disclosure
arrangements with Guarantor approved by City and such attorney.
(b)Guarantor shall maintain sufficient Guarantor Net Worth and
Guarantor Liquid Assets to fully discharge its obligations under this Guaranty. As of the Effective
Date, Guarantor has, and until the termination of this Guaranty in accordance with Section 2.3
shall maintain, a Guarantor Net Worth of at least Forty Million Dollars ($40,000,000) and
Guarantor Liquid Assets of not less than Ten Million Dollars ($10,000,000) measured as of the
end of each calendar quarter.
(c)Guarantor shall deliver: (i) to City Designee non-GAAP net worth
statements as of June 30 and December 31 of each year, sufficient to substantiate that Guarantor
satisfies the Minimum Asset Standards, prepared on a consistent basis, within ninety (90) calendar
days after such dates with quarterly brokerage statements, quarterly bank statements, and quarterly
investment statements from managers of investment funds substantiating the calculations of the
net worth statements; and (ii) to City and City Designee, contemporaneously with the delivery of
each net worth statement provided by Guarantor to City Designee, a certification from the chief
financial officer (or equivalent officer or agent) or trustee of Guarantor (x) that the net worth
statement then delivered to City Designee fairly presents in all material respects the information
set forth therein and does not omit any material facts necessary to make the information set forth
2
NOTE: The provisions of this section are applicable only to the Guaranty required to be
delivered by Guarantor at Close of Escrow and to any Guaranty from an Approved Substitute
Guarantor referred to in Section 8. Any other Guaranty required under the terms of the DDA shall
provide such covenants regarding net worth, liquid assets, reporting requirements, and Guarantor
Illiquidity Events as City may require in its sole discretion.
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therein true in all material respects and not misleading in any material respect and (y) calculating
and stating Guarantor Net Worth and Guarantor Liquid Assets as of the end of the fiscal period for
which the net worth statements are delivered. Notwithstanding the foregoing, (1) if and for so long
as Guarantor is a publicly traded entity, the filings of Guarantor as required by the Securities and
Exchange Commission, if made within the time periods required by all Governmental
Requirements, shall be deemed to satisfy the above obligations, and (2) if Guarantor is required to
provide to any Permitted Mortgagee financial statements or other reports that are more frequent or
more extensive that those required in the foregoing provisions of this Section 6.2(b), Guarantor
shall provide such financial statements or other reports to City contemporaneously with providing
them to the Permitted Mortgagee.
(d)For the purposes of this Guaranty, the term “Major Guarantor
Affiliate” means Acadia Woods Partners, LLC, a Delaware limited liability company. Major
Guarantor Affiliate is the only material investment entity in which all of the beneficiaries and the
trustor of Guarantor are equity owners. If a Guarantor Insolvency Event shall occur or if Guarantor
fails to timely comply with any of the requirements set forth in this Section 6.2 or if any
representation made in any certificate delivered in accordance with Section 6.2(b) shall be
materially false or misleading (each, a “Guarantor Illiquidity Event”), Guarantor shall notify
City in writing within five (5) Business Days following Guarantor’s knowledge that a Guarantor
Illiquidity Event has occurred. As used in the immediately preceding sentence, the term
“Guarantor Insolvency Event” means any of the following:
(i)If Guarantor or Major Guarantor Affiliate is or becomes
bankrupt or insolvent or if any involuntary bankruptcy proceeding is brought against
Guarantor or Major Guarantor Affiliate (unless, in the case of an involuntary bankruptcy
proceeding brought against any of them, the same is dismissed within ninety (90) calendar
days), or Guarantor or Major Guarantor Affiliate 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;
(ii)If a writ of attachment or execution is levied on any property
of Guarantor or Major Guarantor Affiliate and such writ is not discharged within ninety
(90) calendar days; or
(iii)If, in any proceeding or action in which Guarantor or Major
Guarantor Affiliate is a party, a receiver is appointed with authority to take possession of
any property of Guarantor or Major Guarantor Affiliate, or any portion thereof, where
possession is not restored to Guarantor or Major Guarantor Affiliate within ninety (90)
calendar days.
The occurrence of a Guarantor Illiquidity Event, whether or not Developer
shall have provided notice to City of the Guarantor Illiquidity Event, shall constitute a default
under this Guaranty, following which City shall have the right, but not the obligation, to treat the
Guarantor Illiquidity Event as a Material Default by Developer under the DDA; provided that, in
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the case of a Guarantor Illiquidity Event arising from the failure of Guarantor to timely deliver a
financial statement or a certificate required under Section 6.2(b), no Material Default shall exist as
a consequence thereof under the DDA unless City shall first have provided notice of such failure
to Guarantor and Guarantor shall not have cured such failure within ten (10) Business Days
following the giving of such notice.
(e)Within thirty (30) calendar days following the provision of notice
by Guarantor or Developer to City or by City to Developer and Guarantor of the occurrence of a
Guarantor Illiquidity Event constituting a failure to satisfy the Minimum Asset Standards,
Guarantor shall supplement its Net Worth and Liquid Assets to meet the Minimum Asset Standards
or shall provide additional security satisfactory to City in City’s sole discretion. Failure of
Guarantor to comply with the requirements of the immediately preceding sentence within such
thirty- (30-) calendar day period shall be a default under this Guaranty.
Section 7.City Assigns.
This Guaranty is for the benefit of City and City’s successors and assigns, and in the event
of an assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be transferred
with such Guaranteed Obligations. Guarantor waives notice of any transfer or assignment of the
Guaranteed Obligations or any part thereof.
Section 8.Binding Effect; Successors and Assigns.
This Guaranty is binding not only on Guarantor, but also on Guarantor’s successors and
assigns. Guarantor covenants and agrees that it will not attempt to assign or delegate any of its
obligations under this Guaranty without the prior written consent of City, which may be withheld
by City in its sole and absolute discretion. Any attempt to assign or delegate any of Guarantor’s
obligations under this Guaranty without City’s prior written approval in City’s sole discretion shall
not operate as a release of Guarantor of any of its obligations. Guarantor shall have the right to
continue to manage, invest, reinvest, distribute, and otherwise dispose of Guarantor’s assets from
time to time; provided that Guarantor covenants and agrees that any sale or transfer or any
attempted sale or transfer of assets or undertaking any other transaction that would reasonably be
expected to reduce the Net Worth or Liquid Assets of Guarantor to less than the Minimum Asset
Standards will constitute a default under this Guaranty and will also constitute a Material Default
by Developer under the DDA. Notwithstanding the foregoing provisions of this Section 8, if the
Guarantor is a revocable trust of which the sole trustor is a natural person, upon the death of the
trustor, the distribution by Guarantor of the trust assets in accordance with the terms of the trust
shall not be deemed a breach of this Guaranty if the following conditions have been satisfied: (a)
sufficient assets from the trust have been conveyed to a successor trust or other Person to satisfy
the Minimum Asset Standards, (b) such successor trust or other Person has entered into a new
guaranty on the terms of this Guaranty and otherwise in form reasonably satisfactory to City, (c)
such successor trust or other Person is approved by City as a substitute guarantor in the exercise
of City’s reasonable discretion (a successor trust or other Person satisfying the requirements of the
foregoing clauses (a) through (c) is referred to as an “Approved Substitute Guarantor”). Upon
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx 12 Por. Disp. Area 8
the City’s receipt of a guaranty meeting the requirements of the immediately preceding sentence
and duly executed by an Approved Substitute Guarantor (and City’s receipt of a legal opinion and
certificates with respect to Approved Substitute Guarantor as required by the DDA for any
successor Guarantor), this Guaranty shall be deemed terminated as to Guarantor, and Approved
Substitute Guarantor shall be responsible for the Guaranteed Obligations.
Section 9.Governing Law.
The validity, enforcement, and interpretation of this Guaranty shall for all purposes
be governed by and construed in accordance with the laws of the State of California (without
regard to its conflicts of law principles) and applicable United States federal law, and is intended
to be performed in accordance with, and only to the extent permitted by, such laws. Guarantor and
City agree that any disputes arising between them in connection with this Guaranty or in
connection with or under any instrument, agreement or document provided for or contemplated by
this Guaranty, including in connection with the execution of this Guaranty, the Guaranteed
Obligations or any other matter arising under, related to or in connection with this Guaranty
(including a determination of any and all issues in such dispute, whether of fact or of law) shall be
tried and litigated exclusively in the 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 Guarantor and City to be mandatory and
not permissive in nature, thereby precluding the possibility of litigation between or among
Guarantor and City with respect to or arising out of this Guaranty in any jurisdiction other than
that specified in this Section 9. Each party hereby waives any right that it may have to assert forum
non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this Section 9, 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 Guaranty.
Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in
any action against it as contemplated by this Section 9 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
Guaranty, or in the manner set forth below for notices. Any final judgment rendered against a party
in any action or proceeding shall be conclusive as to the subject of such final judgment and may
be enforced in other jurisdictions in any manner provided by law.
Section 10.Invalidity of Certain Provisions.
If any provision of this Guaranty or the application thereof to any Person or circumstance
shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the
remaining provisions of this Guaranty nor the application of such provision to any other Person or
circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the
applicability of such provision to other Persons or circumstances, as applicable, shall remain in
effect and be enforceable to the maximum extent permitted by applicable law.
Section 11.Costs and Expenses of Enforcement.
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx 13 Por. Disp. Area 8
Guarantor agrees to pay to City within thirty (30) calendar days after written demand all
amounts for which Guarantor is liable as part of the Enforcement Payment Obligations. All such
amounts incurred by City shall constitute a portion of the Guaranteed Obligations hereunder, shall
be subject to the provisions hereof with respect to the Guaranteed Obligations and shall be payable
by Guarantor. In the event of any suit or proceeding to adjudicate or resolve any dispute in
connection with this Guaranty, the prevailing party shall be entitled to recover its reasonable
attorneys’ fees which shall be payable at the actual contractual hourly rate for City’s litigation
counsel at the time the fees were incurred, but, in no event more than Four Hundred Dollars ($400)
per hour and costs, court costs and all other litigation expenses (including reasonable expert
witness fees, costs of depositions and other discovery, travel expenses, exhibit preparation, and
courier, postage, communication and document copying expenses).
Section 12.No Usury.
It is not the intention of City or Guarantor to obligate Guarantor to pay interest in excess
of that lawfully permitted to be paid by Guarantor under applicable law. Should it be determined
that any portion of the Guaranteed Obligations or any other amount payable by Guarantor under
this Guaranty constitutes interest in excess of the maximum amount of interest that Guarantor, in
its capacity as guarantor, may lawfully be required to pay under applicable law, the obligation of
Guarantor to pay such interest shall automatically be limited to the payment thereof in the
maximum amount so permitted under applicable law. The provisions of this Section shall override
and control all other provisions of this Guaranty and of any other agreement between Guarantor
and City.
Section 13.Representations, Warranties, and Covenants of Guarantor.
Until the Guaranteed Obligations are performed in full and each and every term, covenant
and condition of this Guaranty is fully performed, Guarantor hereby represents, warrants, and
covenants that: (a) Guarantor will derive a material and substantial benefit, directly or indirectly,
from the development of the Project and from the making of this Guaranty by Guarantor, either
from a financial interest in Developer or otherwise; (b) this Guaranty is duly authorized and valid,
and is binding upon and enforceable against Guarantor subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and limitations imposed by general principles of equity and applicable law; (c)
Guarantor is not, and the execution, delivery and performance by Guarantor of this Guaranty will
not cause Guarantor to be, in violation of or in default with respect to any law or in default (or at
risk of acceleration of indebtedness) under any agreement or restriction by which Guarantor is
bound or affected; (d) Guarantor is duly organized, validly existing, and (if applicable) in good
standing under the laws of the state of its organization and has full power and authority to enter
into and perform this Guaranty; (e) except as may have been previously disclosed to City in
writing, there is no litigation pending or, to the knowledge of Guarantor, threatened by or before
any tribunal against or affecting Guarantor that would have a material adverse impact on
Guarantor’s ability to perform its obligations hereunder; (f) all financial statements and
information heretofore furnished to City by Guarantor do, and all financial statements and
information hereafter furnished to City by Guarantor will, in all material respects, fully and
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx 14 Por. Disp. Area 8
accurately present the condition (financial or otherwise) of Guarantor as of their dates, and, since
the date of the most recent financial statement or net worth statement of Guarantor heretofore
furnished to City, no material adverse change has occurred in the financial condition of Guarantor,
nor, except as heretofore disclosed in writing to City, has Guarantor incurred any material liability,
direct or indirect, fixed or contingent that would materially adversely affect Guarantor’s ability to
perform obligations hereunder; (g) after giving effect to this Guaranty, Guarantor is solvent, is not
engaged or about to engage in business or a transaction for which the property of Guarantor is an
unreasonably small capital, and does not intend to incur or believe that it will incur debts that will
be beyond its ability to pay as such debts mature; and (h) Guarantor has read and fully understands
the provisions contained in the DDA and the Other Agreements. Guarantor’s representations,
warranties and covenants are a condition precedent to the performance by City of certain
obligations under the DDA and shall survive the execution hereof and any bankruptcy, foreclosure,
transfer of security or other event affecting Developer, any other Person, or any security for all or
any part of the Guaranteed Obligations until the Guaranteed Obligations are performed in full and
each and every term, covenant, and condition of this Guaranty is fully performed.
Section 14.Notices.
All notices, requests, consents, demands and other communications required or which any
party desires to give hereunder shall be in writing and shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight courier service, or
by certified United States mail, postage prepaid, addressed to the party to whom directed at the
addresses specified in this Guaranty (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by email (with a courtesy copy promptly sent
by one of the other means permitted herein).
Notice to Guarantor shall be delivered to the following addresses:
Guarantor:
And with a copy to:
Any notice or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of email, upon receipt; provided receipt
is confirmed by electronic means; further provided that service of a notice required by any
applicable statute shall be considered complete when the requirements of that statute are met.
Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual
receipt. This Section shall not be construed in any way to affect or impair any waiver of notice or
demand provided in this Guaranty, the DDA or the Other Agreements or to require giving of notice
or demand to or upon any Person in any situation or for any reason.
Section 15.Cumulative Rights.
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx 15 Por. Disp. Area 8
All of the rights and remedies of City under this Guaranty, the DDA, and the Other
Agreements are cumulative of each other and of any and all other rights at law or in equity, and
the exercise by City of any one or more of such rights and remedies shall not preclude the
simultaneous or later exercise by City of any or all such other rights and remedies. No single or
partial exercise of any right or remedy shall exhaust it or preclude any other or further exercise
thereof, and every right and remedy may be exercised at any time and from time to time. No failure
by City to exercise, or delay in exercising, any right or remedy shall operate as a waiver of such
right or remedy or as a waiver of any Material Default. No notice to or demand on Guarantor in
any case shall of itself entitle Guarantor to any other or further notice or demand in similar or other
circumstances. No provision of this Guaranty or any right or remedy of City with respect hereto,
or any default or breach, can be waived, nor can this Guaranty or Guarantor be released or
discharged in any way or to any extent, except specifically in each case by a writing intended for
that purpose (and which refers specifically to this Guaranty) executed and delivered by City to
Guarantor.
Section 16.Subrogation.
Guarantor shall not have any right of subrogation under the DDA or the Other Agreements
or any right to participate in any security for the Guaranteed Obligations or any right to
reimbursement, exoneration, contribution, indemnification or any similar rights from or against
Developer, until the Guaranteed Obligations have been fully and finally discharged in accordance
with Section 2.3, and Guarantor hereby waives all of such rights. Guarantor shall not exercise any
rights that it may acquire by way of subrogation under this Guaranty, by virtue of any payment
made hereunder or otherwise, until all the Guaranteed Obligations have been paid or performed in
full. If any amount is paid to Guarantor on account of such subrogation rights before the
Guaranteed Obligations have been paid or performed in full, the amount will be held in trust for
the benefit of City and will immediately be paid to City to be credited and applied upon the
Guaranteed Obligations, whether matured or unmatured, in such order as City, in its sole and
absolute discretion, determines. Until the Guaranteed Obligations are paid or performed in full,
any indebtedness of Developer to Guarantor is hereby subordinated to all obligations and liabilities
of Developer to City arising out of or related to the DDA.
Section 17.Time of Essence.
Time shall be of the essence in this Guaranty with respect to all of Guarantor’s obligations
hereunder.
Section 18.Continuation and Reinstatement of Guarantor’s Obligations.
The obligations of Guarantor under this Guaranty will continue to be effective, or be
automatically reinstated (notwithstanding any prior release, surrender or discharge by City of this
Guaranty or of Guarantor or the prior expiration of this Guaranty): (a) if the performance or the
payment, in whole or in part, of any of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned by City (as a preference, fraudulent conveyance or otherwise) upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of City, Guarantor, Developer
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx 16 Por. Disp. Area 8
or any other Person, or (b) upon or as a result of the appointment of a custodian, receiver, trustee
or other officer with similar powers with respect to Developer, Guarantor, or any other Person, or
any substantial part of its property, or otherwise, all as though such payments had not been made.
If a Material Default has occurred and continues or exists under or with respect to the DDA or if
any default occurs under this Guaranty or with respect to any of the Guaranteed Obligations at
such time as City is prevented by reason of the pendency against Guarantor, Developer or any
other Person of a case or proceeding under a bankruptcy or insolvency law, Guarantor agrees that
this Guaranty and the Guaranteed Obligations will be deemed to have been declared in default or
accelerated with the same effect as if this Guaranty and the Guaranteed Obligations had been
declared in default and accelerated in accordance with their respective terms. Guarantor will
immediately perform or pay the Guaranteed Obligations as required under this Guaranty without
further notice or demand.
Section 19.Entire Agreement; Counterparts; Construction.
This Guaranty embodies the entire agreement between City and Guarantor with respect to
the guaranty by Guarantor of the Guaranteed Obligations. This Guaranty supersedes all prior
agreements and understandings, if any, with respect to the guaranty by Guarantor of the
Guaranteed Obligations. This Guaranty shall be effective upon execution by Guarantor and
delivery to City. This Guaranty may not be modified, amended or superseded except in a writing
signed by City and Guarantor referencing this Guaranty by its date and specifically identifying the
portions hereof that are to be modified, amended or superseded. If multiple signatories are required
on behalf of Guarantor, this Guaranty may been executed in a number of identical counterparts,
each of which shall be deemed an original for all purposes and all of which constitute, collectively,
one agreement. As used herein, the words “include” and “including” shall be interpreted as if
followed by the words “without limitation.”
{Signatures appear on the following page}
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx 17 Por. Disp. Area 8
IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date first
written above.
_____________________, a _____________________
By:
Name:
Title:
By:
Name:
Title:
Tustin Confluent DDA ATT 14A Attachment 14A City of Tustin/Confluent
Guaranty 9.16.26 (HM).docx S-1 Por. Disp. Area 8
ATTACHMENT 14B
FORM OF ORIGINAL GUARANTOR CERTIFICATE
This Certificate is being delivered pursuant to that certain Tustin Legacy Disposition and
Development Agreement for Disposition Area 8 dated as of _______________, 2026 (“DDA”),
by and betweenCD-CW (Tustin) LLC, a Colorado limited liability company (“Developer”), and
the City of Tustin, a municipal corporation of the State of California (the “City”). Capitalized
terms used and not defined herein shall have the meanings specified in the DDA.
I, the undersigned, am the duly elected and qualified {insert officer title} of ________________,
a \[corporation/limited liability company/trust\], duly formed and existing under the laws of the
State of \[___________\] (“Guarantor”), and I am authorized by Guarantor to make the
certifications contained in this Certificate. This Certificate is provided at the request of Developer
to satisfy the requirements set forth in the DDA for the Close of Escrow and is provided in
furtherance of the Project contemplated in the DDA.
I further certify to the City, for and on behalf of Guarantor, as follows as of the date of this
Certificate:
1. {Specify relationship of Guarantor to Developer}.
2. The undersigned is the duly appointed {insert officer title} of Guarantor and has the
authority on behalf of Guarantor to execute and deliver this Certificate as evidenced by the
incumbency certificate attached as Exhibit A and the other documents attached as exhibits to this
Certificate.
3. \[___________\] is a {state office held} of Guarantor (“Authorized Officer”) and is
duly authorized by Guarantor to execute the Guaranty and any and all instruments, documents and
other agreements required in connection therewith in accordance with the documents attached as
exhibits to this Certificate. The undersigned certifies that the signature affixed to the Guaranty is
the genuine signature of the Authorized Officers.
4. Attached hereto as Exhibit B are true and correct copies of the {Certificate of
Formationof Guarantoror other formation document}and any and all amendments thereto in
effect on the date hereof which, except as attached, have not been amended or revised in any way
1
and remain in full force and effect as of the date hereof.
1
Guarantor to attach the following if applicable:
(a) A certificate of formation or incorporation, California foreign entity registration, and a fully executed
copy of the bylaws (including any amendments thereto) of Guarantor, (or if Guarantor is not a limited
liability company, provide comparable documents for entity type proposed) and copies of any
applicable operating agreements, joint venture agreements or equivalent instruments governing the
entity;
(b) Certificates of good standing and tax good standing, for Guarantor, and if applicable, its managing
members or general partners, issued within thirty (30) calendar days prior to the effective date of the
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14B City of Tustin/Confluent Development
9.6.26 (HM)1 Portion of Disposition Area 8
5. Attached hereto as ExhibitCare true and correct copies of the \[limited liability
company operating agreement{or insert equivalent formation document}\]of Guarantor and any
and all amendments thereto in effect on the date hereof which, except as attached, have not been
amended or revised in any way and remain in full force and effect as of the date hereof.
6. Attached hereto as Exhibit D are true and correct copies of the certificates of good
standing for Guarantor issued by the appropriate officials of the Guarantor’s state of formationand
the State of California, each of which certificates of good standing is dated not earlier than thirty
2
(30) days prior to the date of this Certificate.
7. Attached hereto as ExhibitE are true and complete copies of the resolutions adopted
by the board of directors or equivalent authority of Guarantor to authorize the execution, and
delivery of the Guaranty, which resolutions have not been amended or revised in any way and
remain in full force and effect as of the date hereof.
8. As of the date of this Certificate,Guarantor has (without the requirement of or
reliance upon third party financing) a Net Worth of not less than $_________________ and Liquid
Assets of not less than ________________________, which is sufficient to meet the Minimum
Asset Standards under the DDA.
9. Attached hereto as Exhibit F are current brokerage statements, bank statements, or
similar documents evidencing the Guarantor’s satisfaction of the Minimum Asset Standards under
the DDA.
10. Guarantor has not taken any action looking toward its dissolution or termination,
and no event, whether voluntary or involuntary, has occurred that has caused the dissolution of
Guarantor,and there are no proceedings pending or contemplated for the merger, consolidation,
conversion, dissolution, liquidation or termination of Guarantor. If Guarantor is a common law
trust, Guarantor’s settlor has not taken any action looking to its revocation, dissolution or
termination.
11. All of the statements made in this Certificate are true and correct as of the date
hereof, and all financial information provided to the City on behalf of Guarantor was true and
Guaranty by the Secretary of State of the state of incorporation and the applicable taxing authority of
the state in which Guarantor is formed, if other than California, and by the California Secretary of
State (if registration is required by applicable law); in the case of a trust, comparable documents, if
any;
(c) Copies of all resolutions or other necessary actions, if any, taken by Guarantor to authorize the
execution of the Guaranty;
(d) Evidence of authority of the individual(s) executing the Guaranty to bind Guarantor and to execute the
Guaranty; and
(e) A copy of any Fictitious Business Name Statement, if any, as published and filed with the Clerk
Recorder of Orange County, California.
2
Delete if Guarantor is a common law trust.
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14B City of Tustin/Confluent Development
9.6.26 (HM)2 Portion of Disposition Area 8
correct as of the date thereof, and there has been no material adverse change to Guarantor’s
financial situation since the date thereof.
This Certificate is being furnished to the City to assist City in conducting its investigation
of Developer’s and Guarantor’s financial resources in connection with Guarantor’s obligations
under the Guaranty. The undersigned acknowledges and agrees on behalf of Guarantor that this
Certificate is being furnished to the City in order to induce the City to execute the DDA and that
the City intends to rely on the information in this Certificate for the purposes described in this
paragraph.
Dated: ________________, 20__ GUARANTOR:
\[insert entity\]
By:
Name: _________________________
Title: __________________________
By:
Name: _________________________
Title: __________________________
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14B City of Tustin/Confluent Development
9.6.26 (HM)3 Portion of Disposition Area 8
EXHIBIT A
INCUMBENCY CERTIFICATE
{see attached}
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14BCity of Tustin/Confluent Development
9.6.26 (HM)Exhibit APortion of Disposition Area 8
EXHIBIT B
CERTIFICATE OF FORMATION
{see attached}
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14BCity of Tustin/Confluent Development
9.6.26 (HM)Exhibit BPortion of Disposition Area 8
EXHIBITC
LIMITED LIABILITY COMPANY OPERATING AGREEMENT AND BYLAWS
{see attached}
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14BCity of Tustin/Confluent Development
9.6.26 (HM)Exhibit CPortion of Disposition Area 8
EXHIBITD
CERTIFICATESOF GOOD STANDING
{see attached}
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14BCity of Tustin/Confluent Development
9.6.26 (HM)Exhibit CPortion of Disposition Area 8
EXHIBIT E
RESOLUTIONS
{see attached}
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14BCity of Tustin/Confluent Development
9.6.26 (HM)Exhibit E Portion of Disposition Area 8
EXHIBITF
EVIDENCE OF SATISFACTION OF MINIMUM ASSET STANDARDS
{see attached}
Tustin Confluent DDA Att 14B Guarantor Cert Attachment 14BCity of Tustin/Confluent Development
9.6.26 (HM)Exhibit FPortion of Disposition Area 8
ATTACHMENT 14C
FORM OF GUARANTOR DATE DOWN CERTIFICATE
This Certificate is being delivered pursuant to that certain Tustin Legacy Disposition and
Development Agreement for Portion of Disposition Area 8, dated as of _______________, 2026
{if amended, insert relevant amendment information } (“DDA”), by and between {if amended,
insert relevant amendment information and insert relevant current Developer
information;}___________, a ____________ successor in interest to\] CD-CW (Tustin) LLC, a
Colorado limited liability company (“Developer”), and the City of Tustin, a municipal corporation
of the State of California (the “City”). Capitalized terms used herein that are not defined herein
shall have the meanings specified in the DDA.
I, the undersigned, am the duly elected and qualified {state office held} of ________________, a
1
_____________________ (“Guarantor”),
duly organized and existing under the laws of the
State of _________________, and I am authorized by Guarantor to make the certifications
contained in this Certificate. This Certificate is provided at the request of Developer to satisfy the
requirements set forth in the DDA as well as to reaffirm the effectiveness of the Guarantyand is
provided in furtherance of the Project contemplated in the DDA.
I further certify to the City, for and on behalf of Guarantor, as followsas of the date ofthis
Certificate:
1. Except as otherwise set forth on Schedule 1 attached hereto and made a part hereof,
all of the matters set forth in the Original Guarantor Certificate dated \[___________\], 202_
attached hereto as Exhibit A (“Original Certificate”) are true and correct in all material respects
as of the date hereof, and the instruments attached there have not, except as identified on and
attached to Schedule 1, been amended or revised in any way and remain in full force and effect as
of the date hereof.
2. Attached to this Certificate as Exhibit B is a true and correct copy of the certificate
of good standing for Guarantorissued by the appropriate officials of the Guarantor’s state of
formation and the State of California, each dated not earlier than thirty (30) days prior to the date
2
of this Certificate.
3. The Guaranty as amended by the Reaffirmation of Guaranty is in full force and
effect and has not been modified, and will not be modified, amended or terminated without the
prior consent of the City, in its sole discretion.
4. \[___________\] is a {state office held} of Guarantor (“Authorized Officer”) and is
duly authorized by Guarantor to execute the Guaranty and any and all instruments, documents and
other agreements required in connection therewith in accordance with the documents attached as
1
Note to Draft: If Guarantor is comprised of more than one entity, each entity will be required to execute a certificate
in this form, with appropriate modifications to the defined terms in the text.
2
Note to Draft: Delete if Guarantor is a common law trust.
Tustin Confluent DDA Att 14C Guarantor ATTACHMENT 14C City of Tustin/Confluent Development
Date Down 9.7.26 (HM) 1Portion of Disposition Area 8
exhibits to this Certificate. The undersigned certifies that the signature affixed to the Guaranty is
the genuine signature of the Authorized Officers.
Dated: ______________________ GUARANTOR:
\[insert entity\]
By:
Name:_________________________
Title: __________________________
By:
Name: _________________________
Title: __________________________
Tustin Confluent DDA Att 14C Guarantor ATTACHMENT 14C City of Tustin/Confluent Development
Date Down 9.7.26 (HM) 2Portion of Disposition Area 8
EXHIBIT A
ORIGINAL GUARANTORCERTIFICATE
{see attached}
Tustin Confluent DDA Att 14C Guarantor ATTACHMENT 14C City of Tustin/Confluent Development
Date Down 9.7.26 (HM) Exhibit A Portion of Disposition Area 8
EXHIBIT B
CERTIFICATES OF GOOD STANDING
________________SECRETARY OF STATE AND
CALIFORNIA SECRETARY OF STATE
{see attached}
Tustin Confluent DDA Att 14C Guarantor ATTACHMENT 14C City of Tustin/Confluent Development
Date Down 9.7.26 (HM) Exhibit BPortion of Disposition Area 8
SCHEDULE 1
{If none—enter None}
Tustin Confluent DDA Att 14C Guarantor ATTACHMENT 14C City of Tustin/Confluent Development
Date Down 9.7.26 (HM) Schedule 1 Portion of Disposition Area 8
ATTACHMENT 14D
FORM OF GUARANTY OPINION
\[LETTERHEAD OF LAW FIRM\]
___________________, 20__
City of Tustin, California (the “City”)
300 Centennial Way
Tustin, CA 92780
Re:Guaranty Agreement made by Guarantor (as defined herein) in favor of City dated
as of ________________, 20__(“Guaranty”)
Ladies and Gentlemen:
We have acted as special counsel to _______________, a
______________(“Guarantor”), in connection with the Guaranty (as defined above).
In our capacity as such special counsel, and in connection with this opinion letter, we have
examined and relied upon copies of each of the following, each of which is attached to the
Certificate of \[Officer\] of Guarantor (“Guarantor Certificate”) executed by the officer(s) named
1
therein on behalf of Guarantor in favor of the City on this date:
1. Certificate of Formation ______________ ({if applicable} as amended\],
“Certificate of Formation”);
2. (\[{if applicable} as amended\], and together with the Certificate of Formation,
“Guarantor’s Organizational Documents”);
3. Certificate of Good Standing of Guarantorissued by the Secretary of State of the
State of _______________, dated __________________, 20__;
4. Certificate of Good Standing Foreign ______________ of Guarantor issued by the
Secretary of State of the State of California, dated ___________, 20__;
5. Action by Unanimous Written Consent of the Board of Directors of Guarantor,
dated as of _____________________, 20__; and
6. The Guaranty.
We have assumed the genuineness of all signatures including, relying on the Guarantor
Certificate, the genuineness of the signatures on the Guaranty of the persons signing the Guaranty,
1
To the extent the form of entity of Guarantor or the documents referenced in the Guarantor Certificate are different
from those listed here, this list to be updated to reflect the correct information.
Tustin Confluent DDA Att 14D Guaranty Opinion Attachment 14DCity of Tustin/Confluent Development.
8.21.25 (HM) 1 Portion of Disposition Area 8
City of Tustin
_____________, 20__
Page 2
on behalf of the Guarantor. We also have assumed the authenticity and completeness of all items
submitted to us as originals, the conformity with originals of all items submitted to us as copies,
and the accuracy and completeness of all records made available to us by Guarantor. We have
assumed that any certificate or other document on which we have relied that was given or dated
earlier than the date of this opinion letter continued to remain accurate insofar as relevant to our
opinions from such earlier date through and including the date of this opinion letter. In making our
examination of the Guaranty, we have assumed: that City was in legal existence and had the power
to accept the Guaranty, and that any person acting on behalf of the City was duly authorized to act
in that capacity; that the conduct of the City in connection with the transaction to which the
Guaranty relates (the “Transaction”) has complied with any requirement of good faith, fair
dealing and conscionability; and that the City and any agent acting for the City in connection with
the Transaction have acted in good faith and without notice of any defense against the enforcement
of any rights created by, or adverse claim to any property or security interest transferred to the City
or created in favor of the City as part of, the Transaction. We have assumed the legal capacity of
all natural persons executing the Guaranty or any other document on which our opinions expressed
in this opinion letter have relied. We have assumed that there are no agreements or understandings
among the parties, written or oral, and there is no usage of trade or course of prior dealing among
the parties that would, in either case, define, supplement, or qualify the terms of the Guaranty. We
have assumed that there has not been any mutual mistake of fact or other mutual misunderstanding,
or any fraud, duress or undue influence relevant to the Guaranty.
All assumptions stated herein have been made based upon appropriate certifications of
parties purporting to have knowledge of the facts and we are not aware of any inconsistent
information.
Based upon and subject to the foregoing, and subject to the qualifications set forth below,
we are of the opinion that:
(a) Guarantor is a ________________ validly existing and in good standing
under the laws of the State of_____________.Guarantor has full limited
liability company power and authority under the \[___________ Limited
Liability Company Act\](the “Act”) and Guarantor’s Organizational
2
Documents to enter into and perform its obligations under the Guaranty.
Guarantor has duly registered to transact intrastate business as a foreign
limited liability company in, and is in good standing in, the State of
California.
(b) The execution, delivery and performance of the Guaranty and the Guarantor
Certificate have been duly authorized by all requisite action under the Act
and Guarantor’s Organizational Documents on the part of Guarantor, and
the Guaranty and the Guarantor Certificate have been duly executed and
delivered by Guarantor.
2
Cite to relevant statutory section for the type of entity and relevant state.
Tustin Confluent DDA Att 14D Guaranty Attachment 14D City of Tustin/Confluent Development
Opinion 8.21.25 (HM)2 Portion of Disposition Area 8
City of Tustin
_____________, 20__
Page 3
(c) The Guaranty constitutes the valid and binding obligation of Guarantor and
is enforceable against Guarantor in accordance with its terms.
(d) Guarantor’s execution and delivery of the Guaranty and Guarantor’s
performance and observance of and compliance with the provisions of the
Guaranty do not conflict with or result in a violation of Guarantor’s
Organizational Documents.
The opinions expressed in paragraph (c) above are subject to each of the following
qualifications:
(i) The enforceability of the Guaranty is subject to the effect of bankruptcy,
insolvency, fraudulent transfer, reorganization, arrangement, moratorium or
other similar laws relating to or affecting the rights of creditors generally.
(ii) The enforceability of the Guaranty is subject to limitations imposed by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(iii) We advise you of California statutory provisions and case law to the effect
that a guarantor may be discharged, in whole or in part, if the beneficiary of
the guaranty alters the obligation of the principal, fails to inform the
guarantor of material information pertinent to the principal or any collateral,
elects remedies that may impair either the subrogation or reimbursement
rights of the guarantor against the principal or the value of any collateral,
fails to accord the guarantor the provisions afforded a debtor under Division
9 of the California UCC or otherwise takes any action that materially
prejudices the guarantor, unless in any such case, the guarantor has
effectively waived such rights or the consequences of such action or has
consented to such action. See, e.g., California Civil Code Section 2799
through Section 2855; California Uniform Commercial Code § 9-602,
Sumitomo Bank of California v. Iwasaki, 70 Cal. 2d 81, 73 Cal. Rptr. 564
(1968); Union Bank v. Gradsky, 265 Cal. App. 2d 40, 71 Cal. Rptr. 64
(1968). While California Civil Code Section 2856 and related case law
provide that express waivers of a guarantor’s right to be discharged, such as
those contained in the Guaranty, are generally enforceable under California
law, we express no opinion regarding the effectiveness of the waivers in the
Guaranty.
(iv) Certain provisions of the Guaranty may not be enforceable; nevertheless,
subject to the limitations expressed elsewhere in this opinion letter, upon
the material breach by Guarantor of its obligations thereunder, such
unenforceability will not preclude the City from recovering from Guarantor,
in accordance with applicable law, such damages as were proximately
caused by such breach.
Tustin Confluent DDA Att 14D Guaranty Attachment 14D City of Tustin/Confluent Development
Opinion 8.21.25 (HM)3 Portion of Disposition Area 8
City of Tustin
_____________, 20__
Page 4
Our examination of law relevant to the matters herein is limited to the laws of the State of
California, the State of _____________, and federal law. We have not made an independent review
of the laws of any state other than as set forth in the immediately preceding sentence.
This opinion letter is furnished by us as special counsel for Guarantor solely in connection
with the Guaranty and may be relied upon only by you and by transferees of the Guaranty and
solely in connection with the Guaranty. No attorney-client relationship has existed or exists
between our firm and you regarding this matter. Our opinion letter may not be used, quoted from,
referred to or relied upon in whole or in part by you or by any other person for any other purpose,
nor may copies be delivered to any other person, without our prior written consent in each instance.
We shall have no obligation to revise or reissue this opinion letter with respect to any change in
law or any event, fact, circumstance or transaction which occurs after the date hereof.
This opinion letter and the opinions it contains shall be interpreted in accordance with the
Legal Opinion Principles issued by the Committee on Legal Opinions of the American Bar
Association Business Law Section as published in 53 Business Lawyer 831 (May 1998).
Very truly yours,
______________________________\[name of firm\]
Tustin Confluent DDA Att 14D Guaranty Attachment 14D City of Tustin/Confluent Development
Opinion 8.21.25 (HM)4 Portion of Disposition Area 8
ATTACHMENT 14E
FORM OF GUARANTY REAFFIRMATION
Reaffirmation of Guaranty
Reference is made to (a) the Disposition and Development Agreement for Portions of Disposition
Area 8 (Tustin Legacy), dated as of _______________, 202_ {if amended, insert relevant
amendment information} (the “DDA”), by and between_______________, a ____________
(“Developer”) and the City of Tustin, a municipal corporation of the State of California (the
“City”) and (b) the Guaranty, dated as of ___________, 202_ (the “Guaranty”), made by
_________________, a __________________(“Guarantor”) in favor of the City, under the terms
of the DDA. Capitalized terms used herein that are not defined herein shall have the meanings
specified in the DDA.
1. This Reaffirmation of Guaranty (this “Reaffirmation”) is made by Guarantor in
satisfaction of the condition to the Transfer described in Section _____ of the DDA or as otherwise
required under the terms of the DDA.
2. Guarantor represents and warrants to the City that the execution, delivery, and
performance of this Reaffirmation is not in contravention of any law, rule, or regulation, of any
order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of any contract or undertaking to which Guarantor is a party or by which any of its
properties may be bound or affected.
3. Guarantor hereby agrees that the Guaranty is and will remain in full force and effect
following the Transfer and acknowledges and reaffirms all of Guarantor’s obligations owing to the
City under the Guaranty, whenever arising.
{signature page follows}
Tustin Confluent DDA Att 14E Guaranty ATTACHMENT 14E City of Tustin/Confluent Development
Reaffirmation 8.21.25 (HM)1Portion ofDisposition Area 8
\[INSERT GUARANTOR ENTITY NAME\]
Dated: ______________________
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Tustin Confluent DDA Att 14E Guaranty ATTACHMENT 14E City of Tustin/Confluent Development
Reaffirmation 8.21.25 (HM)2Portion ofDisposition Area 8
City of Tustin
_____________, 20__
Page 1
ATTACHMENT 14F
FORM OF REAFFIRMED GUARANTY OPINION
\[LETTERHEAD OF FIRM EXECUTING ORIGINAL GUARANTY OPINION\]
___________________, 20__
City of Tustin, California (the “City”)
300 Centennial Way
Tustin, CA 92780
Re:Guaranty Agreement made by Guarantor (as defined herein) in favor of City dated
as of ________________, 20_ (“Guaranty”)
Ladies and Gentlemen:
We have acted as special counsel to ________________, a _________________
(“Guarantor”), in connection with the Guaranty (as defined above).
In our capacity as such special counsel, and in connection with this opinion letter, we have
examined and relied upon copies of each of the following, each of which is attached to the
Certificate of \[Officer\] of Guarantor (“Guarantor Certificate”) executed by the officer(s) named
1
therein on behalf of Guarantor in favor of the City on this date:
1. Certificate of Formation ______________ ({if applicable} as amended\],
“Certificate of Formation”);
2. (\[{if applicable} as amended\], and together with the Certificate of Formation,
“Guarantor’s Organizational Documents”);
3. Certificate of Good Standing of Guarantorissued by the Secretary of State of the
State of _______________, dated __________________, 20__;
4. Certificate of Good Standing Foreign ______________ of Guarantor issued by the
Secretary of State of the State of California, dated ___________, 20__;
5. Action by Unanimous Written Consent of the Board of Directors of Guarantor,
dated as of _____________________, 20__; and
6. The Guaranty.
1
To the extent the form of entity of Guarantor or the documents referenced in the Guarantor Certificate are different
from those listed here, this list to be updated to reflect the correct information.
Tustin Confluent DDA Att 14F Reaff Attachment 14F City of Tustin/Confluent Development
Legal Opinion 8.21.25 (HM) Portion of Disposition Area 8
1
City of Tustin
_____________, 20__
Page 2
7. The Reaffirmation of Guaranty, dated _____________, 20__ (the “Reaffirmation
of Guaranty”), executed by the Guarantor for the benefit of the City (the Guaranty
and the Reaffirmation of Guaranty are referred to collectively as the “Guaranty
Documents”).
We have assumed the genuineness of all signatures including, relying on the Guarantor
Certificate, the genuineness of the signatures on the Guaranty Documents of the persons signing
the those instrumentson behalf of the Guarantor. We also have assumed the authenticity and
completeness of all items submitted to us as originals, the conformity with originals of all items
submitted to us as copies, and the accuracy and completeness of all records made available to us
by Guarantor. We have assumed that any certificate or other document on which we have relied
that was given or dated earlier than the date of this opinion letter continued to remain accurate
insofar as relevant to our opinions from such earlier date through and including the date of this
opinion letter. In making our examination of the Guaranty Documents, we have assumed: that City
was in legal existence and had the power to accept the Guaranty Documents, and that any person
acting on behalf of the City was duly authorized to act in that capacity; that the conduct of the City
in connection with the transaction to which the Guaranty relates (the “Transaction”) has complied
with any requirement of good faith, fair dealing and conscionability; and that the City and any
agent acting for the City in connection with the Transaction have acted in good faith and without
notice of any defense against the enforcement of any rights created by, or adverse claim to any
property or security interest transferred to the City or created in favor of the City as part of, the
Transaction. We have assumed the legal capacity of all natural persons executing the Guaranty
Documents or any other document on which our opinions expressed in this opinion letter have
relied.We have assumed that there are no agreements or understandings among the parties, written
or oral, and there is no usage of trade or course of prior dealing among the parties that would, in
either case, define, supplement, or qualify the terms of the Guaranty Documents. We have assumed
that there has not been any mutual mistake of fact or other mutual misunderstanding, or any fraud,
duress or undue influence relevant to the Guaranty Documents.
All assumptions stated herein have been made based upon appropriate certifications of
parties purporting to have knowledge of the facts and we are not aware of any inconsistent
information.
Based upon and subject to the foregoing, and subject to the qualifications set forth below,
we are of the opinion that:
(a) Guarantor is a ________________ validly existing and in good standing
under the laws of the State of _____________. Guarantor has full limited
liability company power and authority under the \[___________ Limited
Liability Company Act\] (the “Act”) and Guarantor’s Organizational
2
Documents to enter into and perform its obligations under the Guaranty.
Guarantor has duly registered to transact intrastate business as a foreign
2
Cite to relevant statutory section for the type of entity and relevant state.
Tustin Confluent DDA Att 14F Reaff Attachment 14F City of Tustin/Confluent Development
Legal Opinion 8.21.25 (HM) Portion of Disposition Area 8
2
City of Tustin
_____________, 20__
Page 3
limited liability company in, and is in good standing in, the State of
California.
(b) The execution, delivery and performance of the Guaranty Documents and
the Guarantor Certificate have been duly authorized by all requisite action
under the Act and Guarantor’s Organizational Documents on the part of
Guarantor, and the Guaranty Documents and the Guarantor Certificate have
been duly executed and delivered by Guarantor.
(c) The Guaranty, as reaffirmed under the terms of the Reaffirmation of
Guaranty, constitutes the valid and binding obligation of Guarantor and is
enforceable against Guarantor in accordance with its terms.
(d) Guarantor’s execution and delivery of the Guaranty Documents and
Guarantor’s performance and observance of and compliance with the
provisions of the Guaranty, as reaffirmed under the terms of the
Reaffirmation of Guaranty, do not conflict with or result in a violation of
Guarantor’s Organizational Documents.
The opinions expressed in paragraph (c) above are subject to each of the following
qualifications:
(i) The enforceability of the Guaranty Documents is subject to the effect of
bankruptcy, insolvency, fraudulent transfer, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally.
(ii)The enforceability of the Guaranty Documents is subject to limitations
imposed by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(iii)We advise you of California statutory provisions and case law to the effect
that a guarantor may be discharged, in whole or in part, if the beneficiary
of the guaranty alters the obligation of the principal, fails to inform the
guarantor of material information pertinent to the principal or any
collateral, elects remedies that may impair either the subrogation or
reimbursement rights of the guarantor against the principal or the value of
any collateral, fails to accord the guarantor the provisions afforded a debtor
under Division 9 of the California UCC or otherwise takes any action that
materially prejudices the guarantor, unless in any such case, the guarantor
has effectively waived such rights or the consequences of such action or
has consented to such action. See, e.g., California Civil Code Section 2799
through Section 2855; California Uniform Commercial Code § 9-602,
Sumitomo Bank of California v. Iwasaki, 70 Cal. 2d 81, 73 Cal. Rptr. 564
Tustin Confluent DDA Att 14F Reaff Attachment 14F City of Tustin/Confluent Development
Legal Opinion 8.21.25 (HM) Portion of Disposition Area 8
3
City of Tustin
_____________, 20__
Page 4
(1968); Union Bank v. Gradsky, 265 Cal. App. 2d 40, 71 Cal. Rptr. 64
(1968). While California Civil Code Section 2856 and related case law
provide that express waivers of a guarantor’s right to be discharged, such
as those contained in the Guaranty, are generally enforceable under
California law, we express no opinion regarding the effectiveness of the
waivers in the Guaranty.
(iv) Certain provisions of the Guaranty may not be enforceable; nevertheless,
subject to the limitations expressed elsewhere in this opinion letter, upon
the material breach by Guarantor of its obligations thereunder, such
unenforceability will not preclude the City from recovering from
Guarantor, in accordance with applicable law, such damages as were
proximately caused by such breach.
Our examination of law relevant to the matters herein is limited to the laws of the State of
California, the State of ___________ and federal law. We have not made an independent review
of the laws of any state other than as set forth in the immediately preceding sentence.
This opinion letter is furnished by us as special counsel for Guarantor solely in connection
with the Guaranty Documents and may be relied upon only by you and by transferees of the
Guaranty and solely in connection with the Guaranty Documents. No attorney-client relationship
has existed or exists between our firm and you regarding this matter. Our opinion letter may not
be used, quoted from, referred to or relied upon in whole or in part by you or by any other person
for any other purpose, nor may copies be delivered to any other person, without our prior written
consent in each instance. We shall have no obligation to revise or reissue this opinion letter with
respect to any change in law or any event, fact, circumstance or transaction which occurs after the
date hereof.
This opinion letter and the opinions it contains shall be interpreted in accordance with the
Legal Opinion Principles issued by the Committee on Legal Opinions of the American Bar
Association Business Law Section as published in 53 Business Lawyer 831 (May 1998).
Tustin Confluent DDA Att 14F Reaff Attachment 14F City of Tustin/Confluent Development
Legal Opinion 8.21.25 (HM) Portion of Disposition Area 8
4
City of Tustin
_____________, 20__
Page 5
Very truly yours,
______________________________\[name of firm\]
Tustin Confluent DDA Att 14F Reaff Attachment 14F City of Tustin/Confluent Development
Legal Opinion 8.21.25 (HM) Portion of Disposition Area 8
5
ATTACHMENT 15A
FORM OF ORIGINAL EQUITY INVESTOR CERTIFICATE
This Certificate is being delivered in connection with that certain Tustin Legacy
Disposition and Development Agreement for Portion of Disposition Area 8, dated as of
_______________, 20__ {if amended, insert relevant amendment information} (the
“DDA”), by and between ____________, a_____________, and the City of Tustin, a
municipal corporation of the State of California (the “City”). Capitalized terms used herein
that are not defined herein shall have the meanings specified in the DDA.
I, the undersigned, am the duly elected and qualified \[officer title\] of______________
(“Company”), a _______________ organized and existing under the laws of the State of
_______, and I am authorized by Company to make the certifications contained in this
Certificate. This Certificate is provided at the request of _____________, a _________
(“Developer”) to \[{For contemporaneous delivery with the DDA} induce the City to enter
into the DDA\] \[{For Close of Escrow or Transfer} to satisfy the requirements for \[{For
Close of Escrow:} Close of Escrow {For Transfer:} a Transfer\] set forth in the DDA\] \[and
{insert name of post-closing agreement if applicable}\].
I further certify to the City, for and on behalf of Company, as follows as of the date of this
Certificate:
1. Company is the Controlling Person of Developer and is the “Equity
Investor” as such term is defined in the DDA with respect to the Project described in the
1
DDA.
2.The undersigned is the duly appointed \[officer title\]and has the authority
on behalf of Company to execute and deliver this Certificate on behalf of Company as
evidenced by the incumbency certificate attached as ExhibitA and the other documents
attached as exhibits to this Certificate.
3. Company and Developer have entered into that certain Equity Funding
Agreement, dated as of ____________, 20__ (“Equity Commitment”), which is attached
hereto as Exhibit B, pursuant to which Company has agreed to make certain contributions
to Developer as equity capital to pay Development Costs (as defined in the DDA) incurred
by Developer(“Contributions”), all as more particularly set forth and in and subject to
the terms of the Equity Commitment. Exhibit B is a true and complete copy of the Equity
Commitment, is in full force and effect and has not been modified, and will not be
modified, amended or terminated without the prior consent of the City, in its sole
discretion. The Equity Commitment wasduly executed and delivered by
_________________, an authorized signatory of the Company, who had the authority to
do so and each is a valid and binding obligation of the Company, in full force and effect
1
Modify text to describe relationship of Equity Investor to Developer.
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) 1 Portion of Disposition Area 8
and fully enforceable in accordance with its terms.
4. Attached hereto as Exhibit C are true and complete copiesof the \[Certificate
of Formationor equivalent document\] of Company and any and all amendments thereto
in effect on the date hereof which, except as attached, have not been amended or revised
2
in any way and remain in full force and effect as of the date hereof.
5. Attached hereto as Exhibit D are true and complete copy of the \[Limited
Liability Company Agreement or equivalent document\]of Company and any and all
amendments thereto in effect on the date hereofwhich, except as attached, havenot been
amended or revised in any way and remain in full force and effect as of the date hereof.
6. Attached hereto as Exhibit E are a true and complete copy of (a) a certificate
of good standing for Company from the Secretary of State of the State of Delaware, and
(b) a certificate of good standing and foreign entity registration from the Secretary of State
of the State of California, each dated not earlier than thirty (30) days prior to the date of
this Certificate.
7. Attached hereto as Exhibit F is a true and complete copies of the resolutions
adopted by the \[board of directors or equivalent governing body\] of Equity Investor to
authorize the funding of the Contributions and the execution of the Equity Commitment,
which resolutions have not been amended or revised in any way and remain in full force
and effect as of the date hereof. All required approvals of or from the Company required
2
Equity Investor to attach the following as applicable:
(a) A certificate of formation or incorporation, California foreign entity registration, and a fully
executed copy of the bylaws (including any amendments thereto) of Approved Equity Investor (or
if Approved Equity Investor is not a limited liability company, provide comparable documents for
entity type proposed) and copies of any applicable operating agreements, joint venture agreements
or equivalent instruments governing the entity;
(b) Certificates of good standing and tax good standing for the Approved Equity Investor and, if
applicable, its managing members or general partners, issued within thirty (30) calendar days prior
to the effective date of the Equity Commitment by the Secretary of State of the state of incorporation
and the applicable taxing authority of the state in which the Approved Equity Investor is formed, if
other than California, and by the California Secretary of State (if registration is required by
applicable law);
(c) Copies of all resolutions or other necessary actions, if any, taken by Approved Equity Investor to
authorize the funding of the Development Costs and the Project and the execution of the Equity
Commitment;
(d) Evidence of authority of the individual(s) executing the Equity Investor Original Certificate and the
Equity Commitment to bind Approved Equity Investor to, and to execute the Equity Investor
Original Certificate and the Equity Commitment; and
(e) A copy of any Fictitious Business Name Statement, if any, as published and filed with the Clerk
Recorder of Orange County, California.
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) 2 Portion of Disposition Area 8
prior to execution of the Equity Commitment were properly obtained.
8.Company has not taken any action looking toward its dissolution, and no
event, whether voluntary or involuntary, has occurred that has caused the dissolution of
Company or Developer, and there are no proceedings pending or contemplated for the
merger, consolidation, conversion, dissolution, liquidation or termination of Company or
Developer.
9.Company’s ability to make Contributions as and when required under the
Equity Commitment is not contingent on third-party financing. Company has the financial
capacity, Liquid Assetsand Net Worth sufficient to meet the requirements of the DDA and
to allow Company to make the Contributions as and when required under the Equity
Commitment.
This Certificate is being furnished to the City solely to assist it in conducting its
investigation of Company’s financial resources in connection with Company’s obligation
to make contributions in accordance with the terms of the Equity Commitment. The
undersigned acknowledges and agrees on behalf of Company that the City intends to rely
on the information in this Certificate and that this Certificate may be relied upon by the
City for the purposes described in this paragraph.
{signature page follows}
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) 3 Portion of Disposition Area 8
COMPANY
Dated: ______________________
_____________________, a ____________
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) S-1 Portion of Disposition Area 8
EXHIBIT A
INCUMBENCY CERTIFICATE
\[see attached\]
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) EXHIBIT APortion ofDisposition Area 8
EXHIBIT B
EQUITY COMMITMENT
\[see attached\]
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) EXHIBIT BPortion ofDisposition Area 8
EXHIBIT C
CERTIFICATE OF FORMATION
\[see attached\]
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) EXHIBIT CPortion ofDisposition Area 8
EXHIBIT D
OPERATING AGREEMENT AND BYLAWS
\[see attached\]
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) EXHIBIT DPortion ofDisposition Area 8
EXHIBIT E
CERTIFICATES OF GOOD STANDING
\[see attached\]
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A City of Tustin/Confluent Dev.
Investor Cert 09.12.26 (HM) EXHIBIT E Portion ofDisposition Area 8
EXHIBIT F
RESOLUTIONS
\[see attached\]
Tustin Confluent DDA Att 15A Equity ATTACHMENT 15A
Investor Cert 09.12.26 (HM) EXHIBIT F
ATTACHMENT 15B
FORM OF EQUITY INVESTOR DATE DOWN CERTIFICATE
This Certificate is being delivered pursuant to certain Tustin Legacy Disposition and Development
Agreement for Portions of Disposition Area 8, dated as of _______________, 20__ {if amended,
insert relevant amendment information} (the “DDA”), by and between _____________, a
____________, and the City of Tustin, a municipal corporation of the State of California (the
“City”). Capitalized terms used herein that are not defined herein shall have the meanings
specified in the DDA.
I, the undersigned, am the duly elected and qualified {state office held} of ________________
(“Company”), a _______________ duly organized and existing under the laws of the State
of__________, and I am authorized by Company to make the certifications contained in this
Certificate. This Certificate is provided at the request of ___________, a __________
(“Developer”) to satisfy the requirements for \[{For Close of Escrow:} Close of Escrow {For
Transfer:} a Transfer\] set forth in the DDA.
I further certify to the City, for and on behalf of Company, as follows as of the date of this
Certificate:
1. Except as otherwise set forth on Schedule 1 attached hereto and made a part hereof,
all of the matters set forth in the Original Equity Investor Certificate dated ___________, 20__
attached hereto as Exhibit A (“Original Certificate”) are true and correct in all material respects
as of the date hereof, and the instruments attached there have not, except as identified on and
attached to Schedule 1, been amended or revised in any way and remain in full force and effect as
of the date hereof.
2. Attached hereto as Exhibit Bare a true and complete copy of (a) a certificate of
good standing for Company from the Secretary of State of the State of ___________, and (b) a
certificate of good standing and foreign entity registration from the Secretary of State of the State
of California, each dated not earlier than thirty (30) days prior to the date of this Certificate.
3. The Equity Commitment (as defined in the Original Certificate) is in full force and
effect and has not been modified, and will not be modified, amended or terminated without the
prior consent of the City, in its sole discretion.
4. The Equity Commitment (as defined in the Original Certificate) is in full force and
effect and has not been modified, and will not be modified, amended or terminated without the
prior consent of the City, in its sole discretion.
{If the Equity Commitment has been amended or modified, delete the text above and replace
with the following:} Company and Developerhave entered into that certain {specify document
committing to provide funds and amendments or restatements} (“Equity Commitment”), a copy
of which is attached hereto as Exhibit C, which Equity Commitment will not be further modified,
amended or terminated without the prior consent of the City, in its sole discretion.\]
5. This date down certificate provided by Company to the City prior and as a condition
to \[{For Close of Escrow:} Close of Escrow {For Transfer:} a Transfer\] shall reflect Company’s
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15B City of Tustin/Confluent Dev.
Down 09.12.26 (HM)1Portion ofDisposition Area 8
commitment to make Contributions in the amount of the required peak capital set forth in the
Updated Financing Plan approved by the City.
6. \[Insert name of person signing\], is a{state office held} of Company and is in such
capacity, duly authorized by Company to execute any and all instruments, documents and other
agreements required in connection with the Equity Commitment in accordance with the
proceedings showing authority attached to the Original Certificate.
{signature page follows}
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15B City of Tustin/Confluent Dev.
Down 09.12.26 (HM)2Portion ofDisposition Area 8
Dated: ______________________ COMPANY:
_______________ , a ____________
By:
Name:
Title:
By:
Name:
Title:
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15B City of Tustin/Confluent Dev.
Down 09.12.26 (HM) S-1 Portion ofDisposition Area 8
EXHIBIT A
ORIGINAL EQUITY INVESTOR CERTIFICATE
\[see attached\]
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15B City of Tustin/Confluent Dev.
Down 09.12.26 (HM) EXHIBIT A Portion of Disposition Area 8
EXHIBIT B
CERTIFICATE\[S\]OF GOOD STANDING
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15B City of Tustin/Confluent Dev.
Down 09.12.26 (HM) EXHIBIT B Portion of Disposition Area 8
\[EXHIBIT C
UPDATED COMMITMENT LETTER AGREEMENT\]
\[see attached\]
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15BCity of Tustin/Confluent Dev.
Down 09.12.26 (HM) EXHIBIT C Portion of Disposition Area 8
SCHEDULE 1
{If none—enter None}
Tustin Confluent DDA Att 15B Equity Date ATTACHMENT 15BCity of Tustin/Confluent Dev.
Down 09.12.26 (HM) SCHEDULE 1Portion of Disposition Area 8
ATTACHMENT 15C
FORM OF INITIAL EQUITY INVESTOR EQUITY COMMITMENT
EQUITY FUNDING AGREEMENT
This Equity Funding Agreement (this “Agreement”) is entered into as of October 1, 2026
(the “Effective Date”), by PRISA II LHC, LLC,a Delaware limited liability company(“Equity
Investor”), for the benefit of PII SL Tustin Legacy Propco, LLC, a Delaware limited liability
company, as “Developer” under the DDA referred to below (in such capacity “Developer”).
BACKGROUND
A. The City of Tustin, a California municipal corporation (“City”), and CD-CW
(Tustin) LLC, a Colorado limited liability company (“Initial Developer”), are parties to the Tustin
Legacy Disposition and Development Agreement for Portion of Area 8, dated as of
_____________, 2026 (as it may be amended from time to time, the “DDA”). Capitalized terms
used in this Agreement without other definition are used with the meanings specified in the DDA.
B.Under the terms of the DDA, Initial Developer has agreed to acquire the Real
Property and to develop and Complete the Project.
C. Upon the Close of Escrow, Developer, which will then be Controlled by Equity
Investor, will become the “Developer” under the terms of the DDA.
D. As a condition to entering into the DDA, City has required that Equity Investor
execute and deliver this Agreement to provide assurance to City that equity capital up to the
Funding Limit (as defined below) will be made available to Developer to permit Developer to
Complete the Project.
AGREEMENT
To induce City to enter into the DDA, Equity Investor agrees as follows:
1. Commitment to Fund; Purpose.
Following Equity Investor’s delivery of a written acknowledgment (a “Satisfaction Notice”) of
the satisfaction of the conditions (the “Pre-Closing Conditions”) described on the attached
Schedule 1to this Agreement prior to or concurrently with the Close of Escrow, Equity Investor
agrees to make, or cause to be made, contributions not exceeding the Funding Limit (as defined
below) in cash to the equity of Developer as and when needed so that Developer will at all times
have the equity capital necessary to fund budgeted costs as set forth in the budget attached to the
Updated Financing Plan(“Equity Contributions”) (i) to Complete the Project as required by the
terms of the DDA and (ii) to otherwise perform and satisfy Developer’s obligations under the DDA
and the Other Agreements (the obligations described in the foregoing clauses (i) and (ii) being
referred to as the “DDA Obligations”), in each case until the issuance of the Final Certificate of
Compliance under the DDA. This Agreement is intended to provide assurance to Developer and
City that such equity capital will be available to Developer on a timely basis.
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15CCity of Tustin/Confluent Development
Commitment 10.1.26 (HM) Portion of Disposition Area 8
2. Use of Funds.
Equity Contributions shall be used by Developer exclusively for the payment of Development
Costs under the DDA, other than pre-development costs incurred prior to the Close of Escrow,
which may notbe funded with Equity Contributions under this Agreement.To the extent that any
Development Costs consist of payments (including without limitation, distributions to or returns
of previously invested equity contributions) to entities Controlling, Controlled by, or under
common Control with, Developer, the Manager, Clearwater, Confluent, or Equity Investor, the
Funding Limit shall automatically be increased by the amount of such payments, provided however
that the Funding Limit shall not be increased as a result of any such payments comprising budgeted
development fees, contractor fees, and other fees made in the ordinary course and in amounts
consistent with line items on the then-Approved Financing Plan.
3. Requisitions.
Developer shall have the right, and shall be obligated, to periodically make demand upon Equity
Investor for Equity Contributions as and when needed for the timely payment of Development
Costs (each, a “Requisition”). Each Requisition shall specify the amount requested and the
Development Costs to be paid from the proceeds of the Requisition. Equity Investor shall fund
each properly submitted Requisition in cash when necessary to permit Developer to make timely
payment of the applicable Development Costs and perform the DDA Obligations.
4. Funding Limit.
Equity Investor’s obligation to make Equity Contributions under this Agreement shall not exceed
$69,434,688.60 in the aggregate (the “Funding Limit”), exclusive of any reasonable attorney fees
and costs awarded pursuant to the provisions of Section 10.
5. Unconditional and Unqualified Obligation.
Subject only to the satisfaction of the Pre-Closing Conditions and until Equity Investor’s
obligations are discharged in accordance with Section 7, Equity Investor’s obligation to make
Equity Contributions under this Agreement is absolute, unconditional, and irrevocable, up to the
Funding Limit, and shall not be affected, impaired, reduced, released, or discharged by, and Equity
Investor waives to the fullest extent permitted by law any defense to its obligation to make Equity
Contributions arising out of, any of the following:
(a) any financial distress, insolvency, or other inability of Developer to perform the DDA
Obligations;
(b) any delay, Force Majeure Delay, or other circumstance hindering or preventing
completion of the Project, except as provided in the DDA;
(c) any bankruptcy, insolvency, reorganization, receivership, or similar proceeding
involving Developer;
(d) the failure to satisfy any conditions to draws under any debt financing for the Project
due to or as a result of a failure by Equity Investor to timely advance equity contributions as
required by this Agreement or the joint venture agreement for the JV Entity; and
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 2Portion of Disposition Area 8
(e) any failure by Developer to comply with the DDA Obligations.
6. Third-Party Beneficiary; City’s Enforcement Rights.
City is an intended third-party beneficiary of this Agreement and shall have the right, but not the
obligation, (i) to enforce directly against Equity Investor the obligations of Equity Investor under
this Agreement, and (ii) to require Developer to submit a Requisition for Equity Contributions as
and when needed for the timely payment of Development Costs. No amendment, modification,
waiver, or termination of this Agreement, and no consent to any departure by Equity Investor or
Developer from the terms of this Agreement, shall be effective against City without City’s prior
written consent.
7. Term.
This Agreement is effective as of the Effective Date and shall continue in full force and effect until
the later to occur of (i) the date of the Recording by City of the Final Certificate of Compliance
and (ii) the date on which all of Developer’s obligations to pay Development Costs under the DDA
have been satisfied in full, but this Agreement shall in any case terminate when Equity Investor
has made Equity Contributions in the amount of the Funding Limit; provided, however, this
Agreement shall terminate on January 31, 2027 if Equity Investor fails to deliver a Satisfaction
Notice prior to such date.
8. Representations and Warranties of Equity Investor.
Equity Investor represents and warrants to Developer and City, as of the Effective Date, as follows:
(a) Organization and Authority. Equity Investor is duly organized, validly existing, and in
good standing under the laws of its state of formation, and has all requisite power and
authority to execute, deliver, and perform this Agreement.
(b) Due Authorization; Enforceability. This Agreement has been duly authorized, executed,
and delivered by Equity Investor and constitutes the legal, valid, and binding obligation of
Equity Investor, enforceable against Equity Investor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, or other laws affecting
creditors’ rights generally and by general principles of equity.
(c) No Conflict. Neither the execution and delivery of this Agreement nor the performance by
Equity Investor of its obligations hereunder will conflict with, or constitute a default under,
Equity Investor’s organizational documents or any material agreement to which Equity
Investor is a party.
(d) Control of Developer. Upon the occurrence of the Close of Escrow, Equity Investor will
Control Developer.
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 3Portion of Disposition Area 8
9. Default; Remedies.
If Equity Investor fails to make any Equity Contribution required under this Agreement when
required, City or Developer(or both of them)may (i) bring an action for specific performance of
Equity Investor’s obligations under this Agreement, and (ii) pursue any other remedy available to
enforce Equity Investor’s obligations hereunder. The rights and remedies of City and Developer
under this Agreement are cumulative and not exclusive of any other rights and remedies provided
by law or available in equity.
10. Attorneys’ Fees and Costs.
In the event City brings any enforcement action against Equity Investor or Developer arising out
of or relating to a breach by Equity Investor or Developer of its obligations under this Agreement,
and if City is the party substantially prevailing in such enforcement action as awarded by a final
judgment by a court of competent jurisdictionor as a result of dismissal of such action by the City
in consideration for payment of the amounts allegedly due or performance of the covenants
allegedly breached by Equity Investor, then Equity Investor shall be responsible for, and shall
reimburse City for, all of City’s reasonable costs and expenses incurred in connection with such
enforcement action, including reasonable attorneys’ fees and costs (“City Fees and Costs”) in
addition to, and without regard to, the Funding Limit; providedhowever that Equity Investor’s
obligation for such costs and expenses in excess of the Funding Limit shall not exceed One
Hundred Thousand Dollars ($100,000.00). For avoidance of doubt, the first $100,000 in City Fees
and Costs paid by Equity Investor to the City shall not reduce the Funding Limit but additional
City Fees and Costs paid by Equity Investor to the City shall, when paid, be a charge against and
reduce the Funding Limit.
11. Notices.
All notices, demands, and other communications required or permitted under this Agreement shall
be in writing and shall be deemed given (i) upon personal delivery, (ii) one Business Day after
deposit with a nationally recognized overnight courier, or (iii) three Business Days after deposit in
the United States mail, certified or registered, postage prepaid, return receipt requested, in each
case addressed as set forth below, or to such other address as a Developer, Equity Investor, or City
may designate for itself by notice given in accordance with this Section 11:
If to Equity Investor:
PRISA II LHC, LLC
c/o PGIM Real Estate
655 Broad Street, Floor 14
Newark, New Jersey 07102
Attn: PRISA II Asset Manager
E-mail: _________________
And with a copy PRISA II LHC, LLC
to: c/o PGIM Real Estate
655 Broad Street, Floor 14
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 4Portion of Disposition Area 8
Newark, New Jersey 07102
Attn: Law Department
E-mail: _________________
And with a copy Allen Matkins Leck Gamble Mallory & Natsis LLP
to: 2010 Main Street, 8th Floor
Irvine, California 92614
Attn: Dean Pappas and Mike Pruter
E-mail: dpappas@allenmatkins.com and mpruter@allenmatkins.com
If to Developer:
CD-CW (Tustin) LLC
c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: Steve Strom
Email: steve.strom@confluentdev.com
And with a copy CD-CW (Tustin) LLC
to: c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: General Counsel
Email: legal@confluentdev.com
Polsinelli
And with a copy
1401 Lawrence Street, Suite 2300
to:
Denver, CO 80202
Attention: Nick McGrath
Email: nmcgrath@polsinelli.com
If to City:
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Aldo E. Schindler
Email: CityManager@tustinca.org
With a copy to: Deputy City Manager – Real Property
City of Tustin
300 Centennial Way
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 5Portion of Disposition Area 8
Tustin, CA 92780
Attention: Brian Moncrief
Email: DCM-RP@tustinca.org
And with a copy City Attorney
to: Woodruff & Smart
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Attention: David Kendig, Esq.
Email: dkendig@woodruff.law
And with a copy Hepner & Myers LLP
to: 1241 Johnson Avenue, Suite 360
San Luis Obispo, CA 93401
Attention: Amy E. Freilich. Esq.
Email: afreilich@HepnerMyers.com
12. Governing Law; Venue.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of
California, without regard to conflict of laws principles. Any action or proceeding arising out of
or relating to this Agreement shall be brought exclusively inthe state courts of the County of
Orange, State of California, or, if federal jurisdiction exists, in the United States District Court for
the Central District of California. Equity Investor and Developerconsent to the personal
jurisdiction of such courts and waive any objection to venue therein.
13. Assignment.
Equity Investor may not assign or delegate its obligations under this Agreement, in whole or in
part, without the prior written consent of Developer and City, and any purported assignment or
delegation without such consent shall be void. Developer may not assign its rightsunder this
Agreement, in whole or in part, without the prior written consent of Equity Investor and City, and
any purported assignment without such consent shall be void. City may not assign its rights under
this Agreement, in whole or in part, without the prior written consent of Equity Investor and
Developer, and any purported assignment without such consent shall be void. This Agreement
shall be binding upon and inure to the benefit of the Parties and their respective successors and
permitted assigns.
14. Waiver.
No waiver of any provision of this Agreement shall be effective unless (a) in writing and signed
by the party against whom the waiver is sought to be enforced and (b) consented to in writing by
City. No failure or delay by any Party or City in exercising any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other
or further exercise thereof.
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 6Portion of Disposition Area 8
15. Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable, the remaining provisions shall continue in full force and effect so long as the
essential terms and conditions of this Agreement remain valid, binding, and enforceable.
16. Entire Agreement; Amendment.
This Agreement, together with the DDA to the extent incorporated by reference in this Agreement,
constitutes the entire agreement between the Equity Investor and Developer with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements, understandings,
negotiations, and discussions, whether oral or written. This Agreement may not be amended,
modified, or supplemented except by a written instrument signed by Equity Investor and
Developer and consented to in writing by City, as provided in Section 6.
18. Interpretation.
The headings used in this Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. Unless the context otherwise requires, the
singular includes the plural and the masculine, feminine, and neuter genders each include the
others. The words “include,” “includes,” and “including” shall be deemed to be followed by the
phrase “without limitation.” This Agreement shall not be construed against the drafter.
19. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed
an original, and all of which together shall constitute a single instrument. Counterparts of this
Agreement may be delivered by facsimile or electronic mail (including with any electronic
signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act,
the Electronic Signatures and Records Act or other applicable law, and through services such as
Docusign or Adobe Signature) or other transmission method and any counterpart so delivered shall
be deemed to have been duly and validly delivered and be valid and effective for all purposes.
\[signature page follows\]
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 7Portion of Disposition Area 8
IN WITNESS WHEREOF, Equity Investor and Developer have executed this Agreement as of the
Effective Date.
EQUITY INVESTOR:
PRISA II LHC,LLC,
a Delaware limited liability company
By: _______________________________
Name: _____________________________
Title: ______________________________
DEVELOPER:
PII SL Tustin Legacy Propco, LLC,
a Delaware limited liability company
By: _______________________________
Name: _____________________________
Title: ______________________________
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15C City of Tustin/Confluent Development
Commitment 10.1.26 (HM) 8Portion of Disposition Area 8
SCHEDULE 1
Pre-Closing Conditions
Satisfaction of each of the following conditions, as each is approved by Equity Investor in Equity
Investor’s sole and absolute discretion:
1. Investment Committee Approval.
2. Approval of the Updated Financing Plan and final development budget.
3. Approval of final plans and specifications for the Project.
4. Approval of all final loan documents with loan terms consistent with the Updated
Financing Plan.
5. Receipt and approval of all Pre-Closing Entitlements and issuance of building permits.
6. Satisfaction of all Closing Conditions other than payment of Development Costs.
7. Approval of the Limited Liability Company Agreement of Developer.
8. Approval of the Development Services Agreement between Developer, or its affiliate, and
________________________.
9. Approval of the Property Management Agreement between Developer, or its affiliate, and
________________________.
Tustin Confluent DDA Att 15C Form Equity ATTACHMENT 15CCity of Tustin/Confluent Development
Commitment 10.1.26 (HM) Portion of Disposition Area 8
ATTACHMENT 15D
INTENTIONALLY OMITTED
Tustin Confluent DDA Att 15D Attachment 15D City of Tustin/Confluent Development
10.1.26 (HM)Portion of Disposition Area 8
ATTACHMENT 15E
FORM OF ADDITIONAL EQUITY COMMITMENT
EQUITY FUNDING AGREEMENT
This Equity Funding Agreement (this “Agreement”) is entered into as of \[Date of Close of Escrow\]
(the “Effective Date”), by \[Additional Equity Investor\] a ____________________ (“Equity Investor”), for
the benefit of \[Name of Developer as of Closing\], a ____________________, as “Developer” under the
DDA referred to below (in such capacity “Developer”).
BACKGROUND
A. The City of Tustin, a California municipal corporation (“City”), and CD-CW
(Tustin) LLC, a Colorado limited liability company (“Initial Developer”), are parties to the Tustin
Legacy Disposition and Development Agreement for Portion of Area 8, dated as of
_____________, 2026 (\[Describe any amendments\] as it may be \[further\] amended from time to
time, the “DDA”). Capitalized terms used in this Agreement without other definition are used with
the meanings specified in the DDA.
B. The Initial Developer’s interests in the DDA and the other Transferable Interests
have been assigned to _________________ (“Developer”). Under the terms of the DDA,
Developer has agreed to acquire the Real Property and to develop and complete the Project.
C. As a condition to the Close of Escrow, City has required that Equity Investor
execute and deliver this Agreement to provide assurance to City that equity capital sufficient for
Developer to complete the Project will be made available to Developer.
AGREEMENT
To induce City to enter into the DDA, Equity Investor agrees as follows:
1. Commitment to Fund; Purpose.
Equity Investor agrees to make, or cause to be made, contributions (“Equity Contributions”) in
cash to the equity of Developer as and when needed so that Developer will at all times have the
equity capital necessary (i) to Complete the Project as required by the terms of the DDA and (ii)
to otherwise perform and satisfy Developer’s obligations under the DDA and the Other
Agreements (the obligations described in the foregoing clauses (i) and (ii) being referred to as the
“DDA Obligations”), in each case until the issuance of the Final Certificate of Compliance under
the DDA. This Agreement is intended to provide assurance to Developer and City that such equity
capital will be available to Developer on a timely basis.
2. Use of Funds.
Equity Contributions shall be used by Developer exclusively for the payment of Development
Costs under the DDA, other than pre-development costs incurred prior to the Close of Escrow,
which may not be funded with Equity Contributions under this Agreement.
Tustin Confluent DDA Att 15E Add'l 1 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
3. Requisitions.
Developer shall have the right, and shall be obligated, to periodically make demand upon Equity
Investor for Equity Contributions as and when needed for the timely payment of Development
Costs (each, a “Requisition”). Each Requisition shall specify the amount requested and the
Development Costs to be paid from the proceeds of the Requisition. Equity Investor shall fund
each properly submitted Requisition in cash when necessary to permit Developer to make timely
payment of the applicable Development Costs and perform the DDA Obligations.
4. Funding Limit.
Equity Investor’s obligation to make Equity Contributions under this Agreement shall not exceed
$\[_________\]in the aggregate (the “Funding Limit”), exclusive of any costs, expenses, and fees
(including attorneys’ fees) incurred in enforcing this Agreement, which are payable by Equity
Investor in addition to, and without regard to, the Funding Limit. To the extent that any
Development Costs consist of payments to entities Controlling, Controlled by, or under common
Control with, Developer, the Manager, Clearwater,Confluent, or Equity Investor, the Funding
Limit shall automatically be increased by the amount of such payments.
5. Unconditional and Unqualified Obligation.
Until Equity Investor’s obligations are discharged in accordance with Section 7, Equity Investor’s
obligation to make Equity Contributions under this Agreement is absolute, unconditional, and
irrevocable, up to the Funding Limit, and shall not be affected, impaired, reduced, released, or
discharged by, and Equity Investor waives to the fullest extent permitted by law any defense to its
obligation to make Equity Contributions arising out of, any of the following:
(a) any financial distress, insolvency, or other inability of Developer to perform the DDA
Obligations;
(b) any delay, Force Majeure Delay, or other circumstance hindering or preventing
completion of the Project;
(c) any bankruptcy, insolvency, reorganization, receivership, or similar proceeding
involving Developer;
(d) the failure of Developer to obtain any debt financing or construction arrangements, or
the failure to satisfy any conditions to draws under any debt financing for the Project;
(e) any failure by Developer to comply with the DDA Obligations;
(f) any other circumstance affecting the Project, Developer, Equity Investor, or any
member, partner, or investor in Developer or Equity Investor, or any of their respective
managers or affiliates; and
(g) any other circumstance that might otherwise constitute a legal or equitable defense or
discharge of a guarantor, surety, or indemnitor generally.
Tustin Confluent DDA Att 15E Add'l 2 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
6. Third-Party Beneficiary; City’s Enforcement Rights.
City is an intended third-party beneficiary of this Agreement and shall have the right, but not the
obligation, (i) to enforce directly against Equity Investor the obligations of Equity Investor under
this Agreement, and (ii) to require Developer to submit a Requisition for Equity Contributions as
and when needed for the timely payment of Development Costs. No amendment, modification,
waiver, or termination of this Agreement, and no consent to any departure by Equity Investor or
Developer from the terms of this Agreement, shall be effective against City without City’s prior
written consent.
7. Term.
This Agreement is effective as of the Effective Date and shall continue in full force and effect until
the later to occur of (i) the date of the Recording by City of the Final Certificate of Compliance
and (ii) the date on which all of Developer’s obligations to pay Development Costs under the DDA
have been satisfied in full.
8. Representations and Warranties of Equity Investor.
Equity Investor represents and warrants to Developer and City, as of the Effective Date, as follows:
(a) Organization and Authority. Equity Investor is duly organized, validly existing, and in
good standing under the laws of its state of formation, and has all requisite power and
authority to execute, deliver, and perform this Agreement.
(b) Due Authorization; Enforceability. This Agreement has been duly authorized, executed,
and delivered by Equity Investor and constitutes the legal, valid, and binding obligation of
Equity Investor, enforceable against Equity Investor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, or other laws affecting
creditors’ rights generally and by general principles of equity.
(c) No Conflict. Neither the execution and delivery of this Agreement nor the performance by
Equity Investor of its obligations hereunder will conflict with, or constitute a default under,
Equity Investor’s organizational documents or any material agreement to which Equity
Investor is a party.
9. Default; Remedies.
If Equity Investor fails to make any Equity Contribution required under this Agreement when
required, City or Developer(or both of them)may (i) bring an action for specific performance of
Equity Investor’s obligations under this Agreement, and (ii) pursue any other remedy available to
enforce Equity Investor’s obligations hereunder. The rights and remedies of City and Developer
under this Agreement are cumulative and not exclusive of any other rights and remedies provided
by law or available in equity.
Tustin Confluent DDA Att 15E Add'l 3 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
10. Attorneys’ Fees and Costs.
In the event City brings any enforcement action against Equity Investor or Developer arising out
of or relating to this Agreement, Equity Investor shall be responsible for, and shall reimburse City
for, all of City’s reasonable costs and expenses incurred in connection with such enforcement
action, including reasonable attorneys’ fees and costs, regardless of which party prevails, and such
amounts shall be payable by Equity Investor in addition to, and without regard to, the Funding
Limit.
11. Notices.
All notices, demands, and other communications required or permitted under this Agreement shall
be in writing and shall be deemed given (i) upon personal delivery, (ii) one Business Day after
deposit with a nationally recognized overnight courier, or (iii) three Business Days after deposit in
the United States mail, certified or registered, postage prepaid, return receipt requested, in each
case addressed as set forth below, or to such other address as a Developer, Equity Investor, or City
may designate for itself by notice given in accordance with this Section 11:
If to Equity Investor:
And with a copy
to:
If to Developer:
CD-CW (Tustin) LLC
c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: Steve Strom
Email: steve.strom@confluentdev.com
And with a copy CD-CW (Tustin) LLC
to: c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: General Counsel
Email: legal@confluentdev.com
Tustin Confluent DDA Att 15E Add'l 4 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
Polsinelli
And with a copy
1401 Lawrence Street, Suite 2300
to:
Denver, CO 80202
Attention: Nick McGrath
Email: nmcgrath@polsinelli.com
If to City:
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Aldo E. Schindler
Email: CityManager@tustinca.org
With a copy to: Deputy City Manager – Real Property
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Brian Moncrief
Email: DCM-RP@tustinca.org
And with a copy City Attorney
to: Woodruff & Smart
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Attention: David Kendig, Esq.
Email: dkendig@woodruff.law
And with a copy Hepner & Myers LLP
to: 1241 Johnson Avenue, Suite 360
San Luis Obispo, CA 93401
Attention: Amy E. Freilich. Esq.
Email: afreilich@HepnerMyers.com
12. Governing Law; Venue.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of
California, without regard to conflict of laws principles. Any action or proceeding arising out of
or relating to this Agreement shall be brought exclusively inthe state courts of the County of
Orange, State of California, or, if federal jurisdiction exists, in the United States District Court for
the Central District of California. Equity Investor and Developer consent to the personal
jurisdiction of such courts and waive any objection to venue therein.
Tustin Confluent DDA Att 15E Add'l 5 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
13. Assignment.
Equity Investor may not assign ordelegate its obligations under this Agreement, in whole or in
part, without the prior written consent of Developer and City, and any purported assignment or
delegation without such consent shall be void. Developer may not assign its rightsunder this
Agreement, in whole or in part, without the prior written consent of Equity Investor and City, and
any purported assignment without such consent shall be void. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
14. Waiver.
No waiver of any provision of this Agreement shall be effective unless (a) in writing and signed
by the party against whom the waiver is sought to be enforced and (b) consented to in writing by
City. No failure or delay by any Party or City in exercising any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other
or further exercise thereof.
15. Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable, the remaining provisions shall continue in full force and effect so long as the
essential terms and conditions of this Agreement remain valid, binding, and enforceable.
16. Entire Agreement; Amendment.
This Agreement, together with the DDA to the extent incorporated by reference in this Agreement,
constitutes the entire agreement between the Equity Investor and Developer with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements, understandings,
negotiations, and discussions, whether oral or written. This Agreement may not be amended,
modified, or supplemented except by a written instrument signed by Equity Investor and
Developer and consented to in writing by City, as provided in Section 6.
17. Further Assurances.
At City’s request, each of Developer and Equity Investor shall from time to time execute and
deliver such further instruments and take such further actions as may be reasonably necessary or
appropriate to carry out the intent and purposes of this Agreement.
18. Interpretation.
The headings used in this Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. Unless the context otherwise requires, the
singular includes the plural and the masculine, feminine, and neuter genders each include the
others. The words “include,” “includes,” and “including” shall be deemed to be followed by the
phrase “without limitation.” This Agreement shall not be construed against the drafter.
Tustin Confluent DDA Att 15E Add'l 6 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
19. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed
an original, and all of which together shall constitute a single instrument. Counterparts of this
Agreement may be delivered by facsimile or electronic mail (including with any electronic
signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act,
the Electronic Signatures and Records Act or other applicable law, and through services such as
Docusign or Adobe Signature) or other transmission method and any counterpart so delivered shall
be deemed to have been duly and validly delivered and be valid and effective for all purposes.
IN WITNESS WHEREOF, Equity Investor and Developer have executed this Agreement as of the
Effective Date.
EQUITY INVESTOR:
\[____________________\]
By: _______________________________
Name: _____________________________
Title: ______________________________
DEVELOPER:
\[_____________________________\]
By: _______________________________
Name: _____________________________
Title: ______________________________
Tustin Confluent DDA Att 15E Add'l 7 Tustin/Confluent Development
Equity Commitment 09.28.26 (HM) Portion Disposition Area 8
ATTACHMENT 16
FORM OF CERTIFICATE OF COMPLIANCE
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND TO BE
EXEMPT FROM RECORDING
FEES PER GOVERNMENT CODE
6103 AND 27383.
Recording requested by and
When recorded mail to:
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER’S USE
FINAL CERTIFICATE OF COMPLIANCE
\[{If no Final Parcel Map Recorded Prior to Recording :}\]
or
CERTIFICATE OF COMPLIANCE FOR
\[{If Final Parcel Map Recorded Prior to Recording of Final Certificate, and if issued for
Active Adult: Project}PARCEL 1\] or \[{if issued for AL/MC Project:}PARCEL 2\]
OF PARCEL MAP NO. 2025-151
This\[FINAL\] CERTIFICATE OF COMPLIANCE (“Certificate of Compliance”) is made
as of _____________________, 20__ by the CITY OF TUSTIN, a municipal corporation of the
State of California (“City”), in favor of ____________________ {insert name of Developer under
DDA at time of execution, state of formation and type of entity} (“Developer”), with reference
to the following matters:
A. The City and CD-CW (Tustin) LLC, a Colorado limited liability company (“Initial
Developer”), entered into that certain Tustin Legacy Disposition and Development Agreement
For Portion of Disposition Area 8 dated as of _______________, 20__ \[{if amendments are made
to DDA insert the following:} (“Original DDA”) {insert any amendments to DDA} (collectively
(“DDA”)\]\[{(if no amendments are made to DDA, insert the following:} (“DDA”)\]. Developer
is the successor in interest to Initial Developer.
B. The DDA is evidenced by that certain Memorandum of Tustin Legacy Disposition
and Development Agreement For Portion of Disposition Area 8 dated as of ____________ and
recorded on ________________ in the Office of the County Recorder, Orange County, California
(the “Official Records”) as Instrument No. ______________ {insert any amendments to
Memorandum of DDA} (the “Memorandum of DDA”) with respect to certain real property
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docx1Portion of Disposition Area 8
legally described on Exhibit A attached hereto and incorporated herein by this reference (“Real
Property”). All initially capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the DDA.
C. Pursuant to the DDA, the Developer agreed to develop and construct certain Project
Improvements comprising the Active Adult Project and the AL/MC Project on the Real Property.
D. The City has determined that Developer has satisfied the Conditions Precedent set
forth in
\[{if issued for Active Adult Project:} Section 9.3.1 of the \[Original\] DDA with respect to
development of the Active Adult Project on Parcel 1 ofParcel Map No. 2025-151 (“Certified
Parcel”)\]
\[{if issued for AL/MC Project:} Section 9.3.2 of the \[Original\] DDA with respect to
development of the AL/MC Project on Parcel 2 ofParcel Map No. 2025-151 (“Certified Parcel”)\]
\[{if Final Certificate:} Sections 9.3.1 and 9.3.2of the \[Original\] DDA withrespect to
development of the Project on the Real Property\]
for the City’s issuance of a Certificate of Compliance with respect to the \[{for Final Certificate:}
the Real Property,\]\[{for any other Certificate:} the Certified Parcel\] and the Project
Improvements constructed thereon.
\[{For first of the Active Adult Project or AL/MC Project Certificates of Compliance only:} For
avoidance of doubt, this Certificate of Compliance applies only with respect to the Certified
Parcel, and does not apply to any other portion of the Real Property or any Project Improvements
thereon.\]
\[{For Final Certificate of Compliance (i.e., Project as a whole or second of the Active Adult
Project and AL/MC Project Certificates of Compliance Recorded only:} For avoidance of doubt,
this Certificate of Compliance is a Final Certificate of Compliance and, subject to its terms, and
the term of any previously recorded Certificate of Compliance which are incorporated herein by
this reference, applies to the entirety of the Real Project and the Project Improvements thereon.\]
NOW, THEREFORE, the City certifies as follows:
1.This \[Final\] Certificate of Compliance applies to and shall be recorded in the
Official Records against \[{for Final Certificate:} the Real Property,\]\[{for any other Certificate:}
the Certified Parcel\] and that portion of the Project Improvements constructed thereon \[as depicted
and described on Exhibit B attached hereto and incorporated herein by this reference (the
“Certified Improvements”)\].
2.This \[Final\]Certificate of Compliance shall be deemed conclusive evidence of the
City’s determination that Developer has satisfactorily Completed construction and development
with respect to the Project Improvements on the Certified Parcel and has satisfied all Conditions
Precedent set forth in \[{if issued for Active Adult Project:} Section 9.3.1 of\] \[{if issued for AL/MC
Project:} Section 9.3.2 of\] the DDA for issuance of this \[Final\]Certificate of Compliance.
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docx2Portion of DispositionArea8
1
3.Prior to issuance of this Certificate, Developer has completed\[{if issued for Active
Adult Project:} ____ Residential Unitsupon the Certified Parcel including ______ Residential
Units comprising Lower Income Units as such term is defined in the Affordable Housing
Declaration (defined below)\] \[{if issued for AL/MC Project:} ____ Rooms/________ square feet
of commercial development upon the Certified Parcel\].
Except to the extent that any of such rights were conveyed by the City to third parties prior to the
Effective Date, reserved to Developer per the first sentence of this Certificate \[{for any Certificate
other than a Final Certificate:}or reserved to Developer pursuant to the terms of the DDA during
its term or identified in any previously recorded Certificate of Compliance,\] the City retains all
development rights associated with Specific Plan Neighborhood D, Planning Areas 13 and 14 all
of which shall be freely transferable by the City throughout Tustin Legacy.
4.Except as set forth in Section 5 of this Certificate, upon recording of this \[Final\]
Certificate of Compliance in the Official Records, the DDA shall terminate and shall be of no
further force and effect with respect to \[{for Final Certificate:} the Real Property and the Project
Improvements thereon {for any other Certificate:} only the Certified Parcel and any portion
thereof or Certified Improvements thereon, and no other portion of the Real Property or Project
Improvements thereon.\] Any Person thereafter purchasing, leasing or otherwise acquiring {for
Final Certificate}: such interests {for any other Certificate:} the Certified Parcelor the Certified
Improvements\] shall not be subject to the DDA with respect thereto except as set forth in Section
5 of this Certificate.
5.Notwithstanding any other provision of the DDA to the contrary or the issuance or
recording in the Official Records of this \[Final\]Certificate of Compliance and the termination of
the DDA as to the \[{for Final Certificate:} theReal Property and the Project Improvements\] \[{for
any other Certificate:} the Certified Parceland the Certified Improvements thereon\] as a result
thereof:
(a)The obligations in Sections 11.1.1 and 11.1.4 of the DDA shall survive for
the following periods:
(i)The provisions of Section 11.1.1 of the DDA requiring liability
insurance shall be maintained in full force and effect until Recording by the City of the Certificate
of Compliance and, subject to the provisions of Section 11.1.1 of the DDA, so long thereafter as
necessary to cover any Claims of damages suffered by persons or property prior to Recording by
the City of the Certificate of Compliance resulting from any acts or omissions of Developer,
Developer’s employees, agents, contractors, suppliers, consultants or other related parties.
(ii)The provisions of Section 11.1.4 of the DDA shall survive until the
expiration of the time period for provision of the contractors pollution liability insurance policy
described thereby; and the obligation to provide such insurance policy shall remain in effect for
the applicable period specified in Section 11.1.4 of the DDA and no Developer nor any successor
or assign or Successor Owner shall modify or terminate any prepaid environmental insurance
policy in effect as of the issuance of any Certificate of Compliance.
1
NTD: To be filled in at time of issuance.
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docx3Portion of DispositionArea8
(b)The following instruments shall survive the termination of the DDA, each
in accordance with its terms and without modification or amendment and shall be binding on all
Persons owning, leasing, or occupying the \[{for Final Certificate:} Real Property and/or the
Project Improvements\]\[{for any other Certificate:} the Certified Parceland/or the Certified
Improvements\], each in accordance with its terms:
(i)Tustin Legacy Development Agreement dated _________, 20__ and
recorded on ____________, 20__ in the Official Records as Instrument No. ______________;
(ii)Surplus Land Act Covenant (Per Government Code Section 54233)
dated _________, 20__ and recorded on ____________, 20__ in the Official Records as
Instrument No. ______________;
(iii)Declaration of Affordable Housing Restrictive Covenants and
Regulatory Agreement dated _________, 20__ and recorded on ____________, 20__ in the
Official Records as Instrument No. ______________ (“Affordable Housing Declaration”),
provided that the Affordable Housing Declaration shall cease to apply as to the AL/MC Property
upon _________________;
(iv)Declaration of Special Restrictions dated _________, 20__ and
recorded on ____________, 20__ in the Official Records as Instrument No.
______________(“Special Restrictions”);
(v)Quitclaim Deed for Portion of Disposition Area 8 and Covenants,
Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil Code Section
1471, dated _________, 20__ and recorded on ____________, 20__ in the Official Records as
Instrument No. ______________;
(vi)Access Easement Agreement dated _________, 20__ and recorded
on ____________, 20__ in the Official Records as Instrument No. ______________;
(vii)Bioswale Easement dated _________, 20__ and recorded on
____________, 20__ in the Official Records as Instrument No. ______________; and
(viii)Landscape Installation and Maintenance Agreement dated
_________, 20__ and recorded on ____________, 20__ in the Official Records as Instrument No.
______________.
(c)The issuance of this \[Final\]Certificate of Compliance shall not waive any
rights or claim that the City may have against any Person:
(i)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 third parties who are not a party to the DDA, or
(ii)with respect to Claims the City may have against Developer, if any,
that Accrued during the period in which the DDA was in effect as to the \[{for Final Certificate:}
Real Property and/or the Project Improvements\]\[{for any other Certificate:} the Certified Parcel
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docx4Portion of DispositionArea8
and/or the Certified Improvements\], and that are also addressed by provisions of the DDA
incorporated into the Special Restrictions.
(d)The Guaranty, as the same may be reaffirmed at each Transfer by a
Reaffirmation of Guaranty, or, if applicable, any alternative security provided by Developer and
approved by the City in its sole discretion, shall remain in full force and effect until the Recording
by the City of the Final Certificate of Compliance or for such longer period specified in the
Guaranty or any reaffirmation thereof.
(e)Any and all obligations contained in the Federal Deed shall survive in
perpetuity or for such lesser time period as may be expressly set forth therein, unless such
obligations are released by the Federal Government.
6.This \[Final\] Certificate of Compliance is not a Notice of Completion as referred to
in California Civil Code Section 8182.
7.Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the documents executed by the City and Developer.
{remainder of page is blank / signatures on following page}
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docx5Portion of DispositionArea8
IN WITNESS WHEREOF, the City has caused this Certificate of Compliance to be duly
executed by its officer duly authorized as of the date first above written.
CITY OF TUSTIN:
Dated:
By: ,
Aldo E. Schindler
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
ACCEPTED AND AGREED:
DEVELOPER:
\[__________________________________\]
By:
Name:________________________
Title: ________________________
By:
Name:________________________
Title: _______________________
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docxS-1Portion of Disposition Area 8
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docxEXHIBIT APortion of Disposition Area 8
\[EXHIBIT B\]
\[DESCRIPTION/DEPICTION OF COMPLETED IMPROVEMENTS\]
Tustin Confluent DDA Att 16 Cert of ATTACHMENT 16 City of Tustin/Confluent Development
Compliance 09.27.26 (HM).docxEXHIBIT BPortion of Disposition Area 8
ATTACHMENT 17A
ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND TO BE
EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE 6103
AND 27383.
Recording requested by and
When recorded mail to:
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn:CityManager
SPACE ABOVE THIS LINE FOR RECORDER’S USE
ASSIGNMENT AND ASSUMPTION AGREEMENT
Portions of Disposition Areas 2B, 2C and 8 (Tustin Legacy)
This ASSIGNMENT AND ASSUMPTION AGREEMENT (“Assignment”) is made as of
__________, 20__ (the “Assignment Effective Date”) by and between __________, a _________
(“Transferor”) which is the “Developer” under the DDA and _________________, a
_________________________ (“Transferee”), \[{to be inserted only in connection with a
Transfer that is not a Permitted Transfer:}with the consent of the CITY OF TUSTIN, a municipal
corporation of the State of California (the “City”),\] with reference to the following matters:
The City and \[{if Initial Developer:} Transferor / {if predecessor to Transferor:}
\[_____________, _________________a predecessor in interest to Transferor\] entered
into that certain Tustin Legacy Disposition and Development Agreement for Portion of
Disposition Area 8 dated as of _________________, 20__ \[{if amended:} (“Original
DDA”) as amended by that certain Amendment No. __ to Tustin Legacy Disposition
and Development Agreement for Portion of Disposition Area 8 dated as of ______,
20__ (as amended, “DDA”)\] /{if not amended:} (“DDA”)\], relating to the conveyance
from the City to Developer pursuant to the DDA of that certain real property legally
described on Exhibit A attached hereto (“Real Property”) and the subsequent
development of the Real Property by Developer, all as more particularly set forth in the
DDA. All initially capitalized terms not otherwise defined in this Assignment shall
have the meanings ascribed to such terms in the DDA.
Pursuant to the DDA, Developer agreed to develop and construct on the Real Property
certain Project Improvements.
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx1Portion of Disposition Area 8
Initial Developer and the City executed that certain Tustin Legacy Development
Agreement (“DA”), dated _______________, 20__, which was recorded in the Official
Records against title to the Real Property on _________________, 20__ as Instrument
No. _______________.\]
\[{Alternative 1--If Close of Escrow has not previously occurred and will not take place
concurrently with the Assignment:} The DDA contemplates the execution and delivery at
the Close of Escrow of the Memorandum of DDA, the SLA Covenant, the Special
Restrictions, the Affordable Housing Declaration, the Quitclaim Deed, the Landscape
Installation and Maintenance Agreement, the Access Easement Agreement and the
Bioswale Easement, which, together with the DDA and the DA and the other agreements
then required to be executed by Developer (or Developer and the City) and Recorded and
relating to one or more of the Development Parcels, are collectively referred to herein as
the “Property Documents.”\]
\[{Alternative 2--If Close of Escrow has previously occurred or will concurrently take
place:} In connection with the DDA, the instruments described on Exhibit B attached
hereto have previously been Recorded with respect to the Real Property. Such instruments,
together with the DDA, are collectively referred to herein as the “Property Documents.”\]
\[{Alternative 1--if Close of Escrow has not occurred and will not take place
concurrently with the Assignment:} Concurrently with the execution and delivery of
this Assignment, Transferor is conveying to Transferee all right, title and interest of
Transferor in and to the DDA, the DA and its legal and equitable interests, if any, in
the Real Property as established by the DDA (the “Transfer Property”)\],
\[{Alternative 2--if Close of Escrow has occurred:}Concurrently with the execution
and delivery of this Assignment, Transferor is conveying to Transferee all of the
Transferable Interests of Developer under the DDA comprised of \[{if all of the Real
Property} the Real Property excluding only those portions of the Real Property
previously conveyed to End Users (“Transfer Property”) /{if only a portion of the
Real Property as Certificates of Compliance have been issued for other portions} that
certain real property legally described on Exhibit “A-1” attached hereto} (“Transfer
Parcel”)\] together with (1) all Project Improvements, if any, located on the Transfer
Parcel as of the Assignment Effective Date, (2) all appurtenances pertaining to the
Transfer Parcel or such improvements, (3) all Entitlements, Development Permits and
other permits, licenses, approvals and authorizations issued by any Governmental
Authority in connection with the Transfer Parcel for development of the Project
Improvements and the Project, and (4) the right to construct a maximum of _______
Residential Units (being all of the units allocated to the Transfer Property pursuant to
the Entitlements) {if Lot 13 is part of Transfer} of which _______, located on Lot 13,
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx2Portion of Disposition Area 8
shall be developed and rented as Lower Income Units} and the (5) Intangible
Property, collectively, the “Transfer Property”),{INSERT OTHER SPECIFICS}
and excluding only those portions of the Transfer Property previously conveyed to End
Users.\]
The Property Documents impose certain covenants, conditions, payment obligations
and restrictions on Developer and the Transferable Interests and, prior to the filing of a
Certificate of Compliance, and the DDA restricts Developer’s ability to Transfer
ownership and/or control of all or any portion of the Transferable Interests.
Transferor desires to convey the Transfer Property to Transferee \[{if Close of Escrow
has occurred:}and to assign to Transferee all of Transferor’s right, title and interest
in and to the Property Documents with respect to the Transfer Property\] (the “Transfer
Event”)\[{to be inserted only in connection with a Transfer that is NOT a Permitted
Transfer:}, to have such assignment approved by the City, and to have Transferee
approved by the City as a “Transferee” (as that term is defined in and used in the
DDA).\] In accordance with the requirements of the DDA, Transferee shall develop the
Transfer Parcel in accordance with the requirements of the Property Documents.
Pursuant to Section 2 of the DDA, a Transfer must include, among other things, the
execution and delivery of an assignment and assumption agreement. Transferor and
Transferee are entering into this Assignment in order to fulfill the obligations of
Developer under the DDA and Transferee as a “Transferee” under the DDA.
\[{Insert if applicable:}\[{Prior to/Simultaneously with/Following this Transfer
Event:}, Transferee {has acquired/will be acquiring}\] the Transfer Property from
Transferor pursuant to and in accordance with the terms of the DDA.\]
\[{Insert if applicable:} Transferee is a Developer Affiliate of Transferor.
NOW, THEREFORE, for good and valuable consideration, Transferor and Transferee
agree as follows:
1.Assignment.
1.1.As of the Assignment Effective Date, Transferor hereby assigns, conveys, transfers,
bargains, grants, sells and sets over to Transferee, as and to the extent owned or held by Transferor,
the following (collectively, the “Assigned Interests”):
1.2.all right, title, interest and obligation of Transferor as the “Developer” under the
\[{if Close of Escrow has not occurred:}DDA and DA\]/ {if Close of Escrow has occurred:}
Property Documents\] with respect to the Transfer Property, including (i) all benefits provided to
and burdens imposed upon Developer pursuant to the \[{if Close of Escrow has not occurred:}
DDA / {if Close of Escrow has occurred:} Property Documents\] with respect to the Transfer
Property each of which runs with the land in accordance with its terms, and (ii) all benefits
provided to and burdens imposed upon the Transfer Property and all improvements thereon and
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx3Portion of Disposition Area 8
all personal property associated therewith pursuant to the \[{if Close of Escrow has not occurred:}
DDAandDA} / {if Close of Escrow has occurred:} Property Documents\] arising from and after
the Assignment Effective Date; provided that this assignment does not release Transferor from any
obligations arising under the Property Documents with respect to Environmental Claims or with
respect to Claims Accrued during Transferor’s period of ownership thereof, or for which
Developer may be liable if not released pursuant to Article 2 of the DDA and Transferor
acknowledges and agrees for the benefit of Transferee and the City that as to the matters set forth
in Section 2.1 below, Transferor and Transferee have joint and several liability, but solely to the
extent set forth in Article 2 of the DDA:
(a)all plans, specifications, maps, drawings, and other renderings owned by
Transferor and relating to the \[{if Close of Escrow has occurred:} Transfer Parcel\], the
Development Parcels and the Entitlements or such portion thereof as is subject to this Assignment;
{and, if Close of Escrow has occurred:}
(b)all Entitlements and Development Permits with respect to the Transfer
Parcel;
(c)all warranties, claims, and any similar rights of Transferor relating to and
benefiting the Transfer Parcel or the rights and interests transferred pursuant to this Assignment;
(d)all development rights relating to the Transfer Parcel.
The Assigned Interests together with the Transfer Property are collectively referred to in
this Assignment as the “Assigned Property.”
2.Assumption.
2.1.Transferee, on behalf of itself and its successors and assigns, from and after the
Assignment Effective Date, hereby (a) accepts the Assigned Property, (b) accepts all of the rights
and benefits accruing to Developer under the \[{if Close of Escrow has not occurred:} DDA and
DAand upon execution thereof, the remaining Property Documents / {if Close of Escrow has
occurred:} Property Documents\], arising from and after the Assignment Effective Date, and
(c) agrees with Transferor (and such agreement is expressly made for the benefit of the City and
may be directly enforced by the City) to assume, and to be bound by, perform and discharge, (i) all
of the obligations, conditions, limitations and restrictions related to the Assigned Property and/or
the Assigned Interests imposed upon Developer under the \[{if Close of Escrow has not occurred:}
DDA and DAand upon execution thereof, the remaining Property Documents / {if Close of Escrow
has occurred:} Property Documents\] arising from and after the Assignment Effective Date, and
(ii) all Environmental Claims that Accrue regardless of the time period in which such
Environmental Claims Accrue, except to the extent stated in Section 10.2 of the DDA.
2.2.The assumption stated in Section 2.1 above does not release Transferor from any
obligations arising under the Property Documents with respect to Environmental Claims or with
respect to Claims Accrued during Transferor’s period of ownership thereof, or for which
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx4Portion of Disposition Area 8
Developer is may be liable if not released pursuant to Article 2 of the DDA and Transferee
acknowledges and agrees for the benefit of Transferor and the City that as to the matters set forth
in Section 2.1, Transferor and Transferee have joint and several liability, but solely to the extent
set forth in Article 2 of the DDA.
2.3.Transferee shall remain fully responsible to perform and satisfy all of the
obligations and liabilities assumed by Transferee pursuant to Section 2.1 above regardless of any
of the following:
(a)the value of the Assigned Property or the income to be derived from the
Assigned Property;
(b)the existence or non-existence of any liens, easements, covenants,
conditions, restrictions, claims or encumbrances affecting the Assigned Property (including
without limitation any of the foregoing arising from or related to the Entitlements or any of the
Property Documents now or hereafter in effect);
(c)the suitability of the Assigned Property for any and all future development
of the Project Improvements and the uses and activities which Transferee or Transferor may
conduct upon the Transfer Parcel and Project Improvements, including the development of Project
on the Real Property as described in the Property Documents;
(d)the ability of the City or any third party to complete, or likelihood of the
completion of, any of the improvements and infrastructure described by the General Plan, the
Specific Plan, the Tustin Legacy Backbone Infrastructure Program or any other plan or policy of
the City or any other Governmental Authority;
(e)the compliance with or enforcement by the City or any third party of the
General Plan, the Specific Plan, the Special Restrictions applicable to the Transfer Property or any
other portion of the Real Property or the special restrictions or other covenants, conditions
restrictions and/or agreements applicable to other property at Tustin Legacy, the Tustin Legacy
Backbone Infrastructure Program or any other agreement or governmental restriction or plan
affecting Tustin Legacy;
(f)the habitability, merchantability or fitness for a particular purpose of the
Assigned Property;
(g)the manner, quality, state of repair or lack of repair of the Assigned
Property;
(h)the nature, quality or condition of the Transfer Parcel, including water, soil
and geology;
(i)the compliance of or by the Assigned Property and/or its operation in
accordance with any of the Entitlements or any Governmental Requirements, including without
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx5Portion of Disposition Area 8
limitation, the National Environmental Policy Act, CEQA and the Americans with Disabilities Act
of 1990;
(j)the manner or quality of the construction or materials, if any, incorporated
into any part of the Transfer Parcel or the Project Improvements;
(k)the presence or absence of Hazardous Materials, including without
limitation, asbestos or lead paint at, on, under, or adjacent to the Transfer Parcel, any other portion
of the Real Property or in other locations at Tustin Legacy;
(l)the content, completeness or accuracy of the information, documentation,
studies, reports, surveys and other materials, delivered to Transferee by Transferor or others in
connection with Transferee’s review of the Assigned Property and the transactions contemplated
in the Property Documents now or hereafter in effect;
(m)the conformity of the existing improvements, if any, on the Transfer Parcel,
and/or at Tustin Legacy to any plans or specifications;
(n)compliance of the Assigned Property with past, current or future
Governmental Requirements (including, without limitation, the Entitlements) relating to zoning,
subdivision, planning, building, fire, safety, health or Environmental Matters and/or covenants,
conditions, restrictions or deed restrictions;
(o)the deficiency of any undershoring or of any drainage to, on or from the
Transfer Parcel or any other portion of Tustin Legacy;
(p)the condition of any adjoining land owned by the City, including, without
limitation, any property and improvements covered by the Landscape Installation and Maintenance
Agreement;
(q)the fact that all or a portion of the Transfer 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 2621-2630 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 of Title 14 of the California Code
of Regulations;
(r)the existence or lack of vested land use, zoning or building entitlements
affecting the Transfer Parcel;
(s)the construction or lack of construction of Tustin Legacy or if constructed,
the construction of Tustin Legacy in accordance with design guidelines, plans and specifications
previously or to be prepared therefor;
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx6Portion of Disposition Area 8
(t)the conditions, covenants and restrictions imposed or to be imposed upon
the Assigned Property or any portion thereof under the Property Documents now or hereafter in
effect, or the Entitlements;
(u)the contents of the Memorandum of Agreement, the Federal Deed, the Base
Closure Law and the FOST; and
(v)any other matters.
2.4.No Representations or Warranties. Without limiting the applicability of all other
provisions of the DDA which shall remain in effect and applicable to Transferee and the Transfer
Property, Transferee recognizes that the City would not {sell/have sold} the Property except on an
“AS, IS, WHERE IS, WITH ALL FAULTS” basis, and Transferee acknowledges that the City has
made no representations or warranties of any kind whatsoever (excepting only those
representations and warranties of the City expressly set forth in Sections 3.3 of the DDA made
prior to and restated at the Close of Escrow), either express or implied in connection with any
matters with respect to the Transfer Parcel or any portion thereof.
3.Representations and Warranties.
3.1.As an inducement to the City to consent to the Transfer and this Assignment and to
1
perform its obligations hereunder, Transferee represents and warrants to the City as follows:
(a)Transferee has the necessary expertise, experience, financial experience,
financial capacity, qualifications and legal status necessary to perform as Transferee pursuant to
this Assignment and to construct and Complete the Project as contemplated by this Assignment.
Without limiting the foregoing, Developer (i) is and has determined that Transferee is experienced
in the development, management, and sale of multifamily residential rental projects of the size and
type described in this Assignment and (ii) understands the process and requirements associated
with projects such as the Project described in the Property Documents.
(b)Except as set forth in the DDA with respect to financing for construction of
the Project, Transferee’s acquisition of the Assigned Property and assumption of the Assigned
Interests is subject to no financing contingency whatsoever with respect to either private or public
financing and that its acquisition of third-party financing for the Project is not a condition
precedent to Transferee’s acquisition of the Assigned Property, its assumption of the Assigned
Interests or of its ability to fund construction of the Project.
(c)Transferee’s acquisition of the Assigned Property, development of the
Project and its other undertakings pursuant to this Assignment are for the purpose of timely
1
NTD: The reps and warranties are to be conformed to the Developer representations set forth in DDA Section
3.1.
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx7Portion of Disposition Area 8
development of the Project upon the Transfer Parcel in accordance with the Schedule of
Performance attached to the DDA and not for speculation or land holding.
(d)Transferee is a \[insert type of legal entity\], duly organized, \[or incorporated
or formed\] and validly existing and in good standing under the laws of the State of \[insert state of
formation\], is duly qualified to do business and in good standing in the State and in each other
jurisdiction where the operation of its business or its ownership of property or the performance of
Transferee’s obligations under this Assignment make such qualification necessary.
(e)Subject to all of the conditions in the DDA for the benefit of Transferee,
Transferee has (or will have prior to the date by which a particular step is required to be taken or
performance of a particular obligation is required to be commenced pursuant to this Assignment,
the DDA, the DA and the other Property Documents) all requisite power and authority required to
enter into this Assignment and the instruments referenced in this Assignment, to consummate the
transaction contemplated hereby and thereby and to take any steps contemplated thereby or hereby,
and to perform its obligations under this Assignment, the DDA, the DA and the Property
Documents now or hereafter in effect.
(f)Transferee has obtained (or will have obtained prior to the date by which a
particular step is required to be taken or performance of a particular obligation is required to be
commenced pursuant to this Assignment, the DDA, the DA and the Property Documents now or
hereafter in effect) all required consents in connection with entering into this Assignment and the
instruments and documents referenced in this Assignment to which Transferee is or shall be a party
and the consummation of the transactions contemplated hereby and thereby.
(g)The individuals executing this Assignment and the individuals that will
execute the instruments referenced in this Assignment on behalf of Transferee have, or will have
upon execution thereof, the legal power, right and actual authority to bind Transferee to the terms
and conditions hereof and thereof.
(h)This Assignment has been duly authorized, executed and delivered by
Transferee and all documents required in this Assignment to be executed by Transferee pursuant
to this Assignment shall be, at such time as they are required to be executed by Transferee, duly
authorized, executed and delivered by Transferee 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
Transferee in accordance with their terms, except as enforceability may be limited by bankruptcy
laws or other similar laws affecting creditors’ rights.
(i)Neither the execution or delivery of this Assignment or the Property
Documents, nor the incurring of the obligations set forth in this Assignment or the Property
Documents, and the certificates, declarations and other documents referenced therein, nor the
consummation of the transactions contemplated in this Assignment, the DDA, the DA and the
Property Documents now or hereafter in effect nor compliance with the terms of this Assignment,
the DDA, the DA and the Property Documents now or hereafter in effect will violate any provision
of law or any order of any court or Governmental Authority to which Transferee is subject or
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx8Portion of Disposition Area 8
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 Transferee,
one of its owners, members or partners are a party and which affect the Assigned Property or the
transactions contemplated by this Assignment.
(j)No attachments, execution proceedings, assignments of benefit to creditors,
bankruptcy, reorganization or other proceedings are pending or, to the best of Transferee’s
knowledge, threatened against Transferee, or any of its owners, members or partners.
(k)Except for those representations and warranties of the City expressly set
forth in Sections 3.3 of the DDA made prior to and restated at the Close of Escrow, Transferee is
relying solely upon its own inspections and investigations in proceeding with this Assignment and
the transactions contemplated hereby and in the Property Documents now or hereafter in effect,
and is not relying on the accuracy or reliability of any information provided to it by the City, on
any oral or written representation or on any facts or conclusions of law made by the City, or any
of its elected and appointed officials, officials, employees, agents, attorneys or representatives
made in connection with this Assignment. In making such investigation and assessment,
Transferee has been provided access to any persons, records or other sources of information which
it has deemed appropriate to review and it has thereafter completed such investigation and
assessment. Without limiting the generality of the foregoing provisions or any of the provisions of
the Property Documents, Transferee acknowledges that the City has not made and will not make
any representations or warranties concerning the condition of the Assigned Property, the
compliance or non-compliance of the Assigned Property or any portion thereof with
Environmental Laws or the existence or non-existence of Hazardous Materials in relation to the
Assigned Property or any portion thereof or otherwise.
(l)\[Except as described on Exhibit __,\] there are no adverse conditions or
circumstances existing and no litigation or governmental action either pending or, to the
knowledge of Transferee or its officers, directors, employees, agents, representatives, consultants,
contractors, and other Persons accessing the Assigned Parcel by, through or with the permission
or under the direction or auspices of Transferee, threatened, to which Transferor or any Controlling
Person of Transferor is or may be a party or to which the Transfer Parcel are or may become
subject, which would reasonably be expected to prevent or materially impair Transferee’s ability
to carry out its obligations under the Property Documents now or hereafter in effect to develop the
Transfer Parcel and the Project or carry out its other obligations under the Property Documents
now and hereafter in effect as contemplated by the terms of this Assignment and the Property
Documents.
(m)Except as set forth in this Assignment and the Property Documents now or
hereafter in effect, Transferee has not paid or given, and will not pay or give, any third Person any
money or other consideration for obtaining this Assignment, or the transactions contemplated by
the Property Documents other than the purchase price paid to the Transferor and the normal cost
of conducting business and cost of professional services such as architects, engineers and
attorneys.
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx9Portion of Disposition Area 8
(n)All reports, documents, instruments, information, and forms of evidence
delivered by Transferee to the City concerning or related to this Assignment, the Property
Documents and the transactions contemplated hereby and thereby are, to Transferee’s knowledge,
accurate and correct and sufficiently complete at the time of submission to give the City true and
accurate knowledge of the subject matter, and do not contain any material misrepresentation or
omission.
(o)As of the Assignment Effective Date, Transferee will have the equity capital
and financial capacity required to pay all Development Costs and to achieve Completion of the
Project in accordance with the Financing Plan.
(p)Transferee does not have any contingent obligations or any other contracts
the performance or nonperformance of which could adversely affect the ability of Transferee to
fund the Project or to carry out its obligations under this Assignment or the Property Documents.
Transferee has not and 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
purposes expressed in the preceding sentence.
(q)Transferee is capable of acquiring the Assigned Property and developing
the Project without a capital partner or financing from a bank group or other institutional lender,
and without utilizing the Assigned Property and/or the Project or the Real Property as collateral,
other than as set forth in the DDA with respect to financing for such Project.
Transferee’s representations and warranties set forth in this Section 3.1 shall be deemed to
be restated at the Close of Escrow of the Assigned Property covered by this Assignment if the
same has not yet occurred, and shall survive the Close of Escrow (and any other close of escrow
with respect to conveyance of the Assigned Property to Transferee) until the earlier to occur of the
following (a) termination of the DDA or (b) issuance of the Final Certificates of Compliance, and
shall not be merged with the Quitclaim Deed or any other deed. As used in Sections 3.1 and 3.2,
“to Transferee’s knowledge” and similar phrases means the actual present knowledge of the
“Transferee Knowledge Parties” as of the Effective Date, in each case without any duty of inquiry;
provided, however, that in the event any of the Transferee Knowledge Parties are unavailable at
the time these representations and warranties set forth in this Section 3.1 are restated at the close
of escrow for the Assigned Property covered by this Assignment, Transferee may specifically
identify different Transferee’s Knowledge Parties, subject to the City’s reasonable approval.
Notwithstanding anything to the contrary contained herein, none of the Transferee Knowledge
Parties shall be personally liable for any inaccuracy or breach by Transferee of the representations
and warranties contained in Section 3.1 or elsewhere in this Assignment.
3.2.Transferee Covenants Regarding Representations and Warranties. Transferee shall
promptly advise the City in writing if any of the Transferee Knowledge Parties becomes aware
(without any duty of inquiry) that any representation or warranty made by Transferee in Section
3.1 is or becomes untrue in any material respect prior to the close of escrow of the Assigned
Property covered by this Assignment.
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx10Portion of Disposition Area 8
3.3.Transferee Knowledge Parties. For purposes of the DDA, the “Developer
Knowledge Parties” of Transferee (also referred to in this Assignment as the “Transferee
Knowledge Parties”) are ______________, _______________, and ___________________.
{insert names of employees, officers, etc. of Transferee acceptable to the City in its sole
discretion}
4.No Waiver or Modification. Nothing contained in this Assignment shall modify in
any way any provisions of the Property Documents or the Entitlements.
5.Additional Documents. Transferor and Transferee shall each execute and deliver to
the other party, upon demand, such further documents, instruments, and conveyances, and shall
take such further actions as are necessary or desirable to effectuate the intent and purposes of this
Assignment. In addition to the foregoing, Transferor shall reasonably cooperate with Transferee,
at the expense of Transferee, to allow Transferee to submit and process any warranty claim under
any warranty in which Transferee obtained an interest as part of the Assigned Interests.
6.Miscellaneous.
6.1.Modification. No amendment, change, modification or supplement to this
Assignment shall be valid and binding on Transferor or Transferee unless it is represented in
writing and signed by both Transferor and Transferee. \[{To be inserted only in connection with a
Transfer that is not a Permitted Transfer:} No amendment, change, modification or supplement
to this Assignment shall be deemed to be part of the consent or deemed to be consented to by the
City, unless the City executes a separate written consent to such amendment, change, modification
or supplement.\]
6.2.Applicable Law. This Assignment 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.
6.3.Binding Effect. This Assignment and the terms, provisions, promises, covenants
and conditions hereof shall be binding upon and inure to the benefit of Transferor and Transferee
and their respective heirs, legal representatives, successors and assigns.
6.4.Counterparts. This Assignment 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 Assignment
shall not be effective until the execution and delivery by Transferor and Transferee of at least one
set of counterparts \[{to be inserted only in connection with a Transfer that is not a Permitted
Transfer:} (together with an executed counterpart of the City’s consent attached to this
Assignment).\]A counterpart of this Assignment that is executed and delivered electronically (by
facsimile machine or email) shall not be effective unless an ink-signed original executed copy of
the signature page of this Assignment is also promptly delivered to the other party, and such ink-
signed original executed page is actually received by the other party. Transferor and Transferee
hereby authorize each other to detach and combine original signature pages and notarial
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx11Portion of Disposition Area 8
acknowledgements and consolidate them into a single identical original. Any one of such
completely executed counterparts shall be sufficient proof of this Assignment as a duly and validly
executed agreement.
6.5.City as Third-Party Beneficiary. Transferor and Transferee hereby acknowledge
and agree that until Certificates of Compliance for all of the Development Parcels are recorded in
the Official Records, the City shall be an intended third-party beneficiary under this Assignment
and the City shall have the right to enforce the terms and provisions of this Assignment applicable
to the City. Other than the City, there shall be no third-party beneficiaries of this Assignment.
6.6.\[{To be inserted only in connection with a Transfer that is not a Permitted
Transfer:}Notices. From and after the Assignment Effective Date, all notices that the City may
desire or is required to deliver to the “Developer” under the DDA \[{if the DA is then in effect},
and the DA} / {if Close of Escrow has occurred:} and the Property Documents\]and/or the
Entitlements with respect to the Transfer Parcel, and pursuant to Section 18.6 of the DDA, shall
be delivered to Transferee only at the following addresses:
Transferee:
\[__entity_______\]
_______________________
_______________________
_______________________
with a copy to:
\[legal counsel\]
_______________________
_______________________
_______________________\]
{signatures on next page}
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docx12Portion of Disposition Area 8
Transferor and Transferee each has caused this Assignment to be duly executed by its duly
authorized officer as of the Assignment Effective Date
TRANSFEROR:
\[___entity___\],
a _______________________________
By:
Name:________________________
Title: ________________________
By:
Name:________________________
Title: _______________________
TRANSFEREE:
\[___entity___\],
a _______________________________
Dated: __________________ By:
Name:________________________
Title: ________________________
By:
Name:________________________
Title: _______________________
{City consent on next page}
Tustin Confluent DDA Att 17A Attachment 17A Tustin/Confluent Development
Assignment Agt 9.27.26 (HM).docxS-1Portion of Disposition Area 8
\[{FOR TRANSFERS PURSUANT TO SECTION 2.2.3 OF THE DDA IF
APPLICABLE PURSUANT TO SECTION 2.5.2} AND RELEASE OF TRANSFEROR\]
ACKNOWLEDGMENT AND CONSENT BY CITY OF TUSTIN
By executing in the space set forth below, the City of Tustin hereby:
(a)Acknowledges receipt of the Assignment and Assumption Agreement (the
“Assignment”) to which this Consent is attached;
(b)Consents to the making of the Assignment between Transferor and Transferee,
subject to the terms and conditions set forth in the Assignment;
(c)This consent by the City constitutes the consent required pursuant to Article 2 of
the DDA and constitutes satisfaction of Transferor’s obligation to obtain the City’s consent
pursuant to Article 2 of the DDA;
(d)Agrees that \[insert name of Transferee\], a _____________________ (the assignee
in the Assignment) shall be deemed by the City to be the “Developer” and “Owner” as applicable
under the Property Documents with respect to the Transfer Property, from and after the
Assignment Effective Date;
(e)Confirms that \[{applies only if there is a release of Transferor:}Transferor shall
be released from any of its obligations related to the Transfer Property arising from and after the
Assignment Effective Date;under the \[{if Close of Escrow has not occurred:} DDA \[{if the DA is
then in effect}, the DA/ {if Close of Escrow has occurred:} and the Property Documents\];
provided, however, that notwithstanding the assignment by Transferor and the assumption by
Transferee in this Assignment, Transferor is not released from, and remains fully liable for all
obligations and liabilities with respect to: (i) matters or circumstances (including any payment
obligations) which relate to or Accrued during the period that such Transferor was the Developer
hereunder (or during such longer period for which such Transferor is liable under the Property
Documents), (ii) t he releases set forth in Section 4.5.3 of the DDA and in the other Property
Documents, including the Special Restrictions. (iii) Developer’s indemnity obligations under the
Property Documents and (iv) Developer’s obligations under the DDA and DA\[{if Close of
Escrow has occurred:} and the Property Documents\] to the extent that the same arise prior to the
Assignment Effective Date.
(f)Acknowledges the new addresses for Notices for Transferee set forth in the
Assignment and agrees that such new addresses shall be the effective notice addresses for the
Developer from and after the Assignment Effective Date under the DDA and DA \[{if Close of
Escrow has occurred:} and the Property Documents\] and the Entitlements.
This Consent shall not constitute evidence of compliance with or satisfaction of any
obligation of Transferor under any of the Property Documents, or any other agreement between
Transferor and the City, except for the obligation of Transferor to obtain the City’s consent to any
Transfer pursuant to Section 2.2.3 of the DDA and the satisfaction of the conditions to granting by
the City of such consent in the DDA.
Tustin Confluent DDA Att 17A Assignment Attachment 17A Tustin/Confluent Development.
Agt 9.27.26 (HM).docxCity ConsentPortion of Disposition Area 8
CITY OF TUSTIN:
Dated:
By:
_______________
City Manager
ATTEST:
By:
_________________
City Clerk
APPROVED AS TO FORM
By:
____________________
City Attorney
____________________________
Special Real Estate Counsel to the City
By:
___________________________
{signatures continue on following page}
Attachment 17A
Tustin Confluent DDA Att 17A Tustin/Confluent Development
City Consent
Assignment Agt 9.27.26 (HM).docx Portion of Disposition Area 8
S-1
ACKNOWLEDGED AND AGREED:
TRANSFEROR
\[___entity___\],
a _______________________________
By:
Name:________________________
Title: ________________________
By:
Name:________________________
Title: _______________________
TRANSFEREE:
\[___entity___\],
a _______________________________
By:
Name:________________________
Title: ________________________
By:
Name:________________________
Title: _______________________
Tustin Confluent DDA Att 17A Assignment Attachment 17A Tustin/Confluent Development.
Agt 9.27.26 (HM).docx City Consent Portion of Disposition Area 8
S-1
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Attachment 17A Tustin/Confluent Development
Tustin Confluent DDA Att 17A Assignment
S-4 Portion of Disposition Area 8
Agt 9.27.26 (HM).docx
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Attachment 17A Tustin/Confluent Development
Tustin Confluent DDA Att 17A Assignment
S-4 Portion of Disposition Area 8
Agt 9.27.26 (HM).docx
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Attachment 17A Tustin/Confluent Development
Tustin Confluent DDA Att 17A Assignment
S-4 Portion of Disposition Area 8
Agt 9.27.26 (HM).docx
EXHIBIT A
Legal Description of the Real Property
{Attach Real Property legal description excluding oil, gas and water rights reserved by
City in DDA or, if then executed, in the Quitclaim Deed}
{to be attached}
Tustin Confluent DDA Att 17A Assignment Exhibit A to Tustin/Confluent Dev.
Agt 9.27.26 (HM).docxAttachment 17APortion of Disposition Area 8
EXHIBIT A-1
Legal Description of the Transfer Parcel
{to be attached}
{Attach legal description excluding oil, gas and water rights
reserved by City in the Quitclaim Deed}
Tustin Confluent DDA Att 17A Assignment Exhibit A-1 to Tustin/Confluent Development
Agt 9.27.26 (HM).docxAttachment 17APortion of Disposition Area 8
2
EXHIBIT B
Certain Instruments Affecting the Development Parcels
The following documents, executed by City and Initial\] Developer each dated as of
.
________, 202_, comprise the Property Documents.3
The DDA, having an effective date of ________________.
1.
2.The DA, recorded in the Official Records of Orange County, California (Ð Official
Records Ñ) against title to the Real Property on _________________, 20__ as Instrument No.
_______________.
3.The Memorandum of DDA, as Recorded in the Official Records against title to the
Real Property\[{If Recording information is available:} on _____________, 20__ as Instrument
No. __________\],providing record notice of the DDA and setting forth certain provisions of the
DDA that survive Recording of a Certificate of Compliance with respect to any portion of the Real
Property.
4.The SLA Covenant as Recorded in the Official Records against title to the
Development Parcels \[{If Recording information is available:} on _____________, 20__ as
Instrument No. __________\].
5.The Special Restrictions, as Recorded in the Official Records against title to the
Development Parcels\[{If Recording information is available:} on _____________, 20__ as
Instrument No. __________\].
6.The Affordable Housing Declaration, as Recorded in the Official Records against
title to Parcel C\[{If Recording information is available:} on _____________, 20__ as Instrument
No. __________\].
7.The Quitclaim Deed, as Recorded in the Official Records,\[{If Recording
information is available:} on _____________, 20__ as Instrument No. __________\].
8.The Landscape Installation and Maintenance Agreement, as Recorded in the
Official Records against title to the Development Parcels\[{If Recording information is available:}
on _____________, 20__ as Instrument No. __________\].
9.The Access Easement Agreement as Recorded in the Official Records against title
to the Development Parcels\[{If Recording information is available:} on _____________, 20__
as Instrument No. __________\].
10.The Bioswale Easement as Recorded in the Official Records against title
to the Development Parcels\[{If Recording information is available:} on _____________, 20__
as Instrument No. __________\].
2
This Exhibit to be included only if Alternative 2 is applicable for Recital C to this instrument.
3 Add additional agreements as applicable.
Tustin Confluent DDA Att 17A Assignment Exhibit B to Tustin/Confluent Development
Agt 9.27.26 (HM).docxAttachment17APortion ofDispositionArea8
ATTACHMENT 17B
FORM OF TRANSFEREE CERTIFICATE
Reference is hereby made to that certain Tustin Legacy Disposition and Development
Agreement for Portion of Disposition Area 8 dated as of _____, 20__ {if amended, insert relevant
amendment information} (as amended, the “DDA”)\] /{if not amended:} (“DDA”)\], by and
between the City of Tustin, a municipal corporation of the State of California (“City”) and
\[______________, a ______________\] \[{if no Assignment:}(“Developer”) / {if Assignment:}
(“Original Developer”) which has, by assignment pursuant to that certain Assignment Agreement
by and between _________________, a _________________ (“Developer”) and Original
Developer), assigned all of its right, title and interest in and to the DDA to Developer.\] Capitalized
terms used and not defined herein shall have the meanings specified in the DDA.
I, the undersigned, am the duly elected and qualified \[state office held\]of \[{Insert name of
Transferee entity, a ___________\] (“Transferee”) and am authorized by Transferee to make the
certifications contained in this Certificate. I further certify for and on behalf of Transferee to the
City, as of the date hereof as follows:
1. Transferee is the Assignee under an Assignment and Assumption Agreement dated
__________, between \[insert Assignor name\], a ________ and Transferee (the “Transfer
Agreement”). Transferee is \[Insert full description of the relationship between Assignor and
Transferee.\] The Transferee is authorized to enter into the Transfer Agreement and the
undersigned officer of Transferee has the authority from Transferee to execute and deliver this
Certificate on behalf of Transferee, both as evidenced by the \[corporate resolution and /or other
information\]attached as ExhibitA.
2. Attached hereto as ExhibitBis a true and correct copy of the\[Articles of
Incorporation/Certificate of Formation\] of Transferee and any and all amendments thereto in
1
effect on the date hereof.
1
Transferee shall provide the following documents that are certified to be accurate, true and complete and in full
force and effect without amendment as of the date of the certificate:
1. A certificate of formation or incorporation, California foreign entity registration, and a fully executed copy
of the bylaws (including any amendments thereto) of Transferee (or if Transferee is not a limited liability
company, provide comparable documents for entity type proposed), or in the event of a Transfer of Control,
of the new Controlling Person and Developer and copies of any applicable operating agreements, joint
venture agreements or equivalent instruments governing the entity;
2. Certificates of good standing and tax good standing for the Approved Equity Investor and, if applicable, its
managing members issued within thirty (30) calendar days prior to the effective date of the Equity
Commitment, by the Secretary of State of the state of incorporation if other than California and the applicable
taxing authority of the state in which Transferee is formed and by the California Secretary of State and the
California Secretary of State (if registration is required by applicable law);
3. Copies of all resolutions or other necessary actions, if any, taken by Transferee to authorize the execution of
the Assignment Agreement.
4. Evidence of authority of the individual(s) executing the Certificate to bind Transferee and to execute the
Assignment Agreement;
Tustin Confluent DDA Att 17B Transferee Cert Attachment 17B
City of Tustin/Confluent Development
9.3.26 (HM)1
Portion of DispositionArea 8
3. Attached hereto as Exhibit C is a true and correct copy of the \[Bylaws/Operating
Agreementor comparable document\]of Transferee and any and all amendments thereto in effect
on the date hereof.
4. Attached hereto as Exhibit D {is/are} true and correct copies of the certificate of
good standing for Developer from the\[{if foreign entity provide certificate from State of
formation} __________Secretary of Stateand the\]California Secretary of State, and {the/each}
attached certificate of good standing is dated not earlier than thirty (30) calendar days prior to the
date of this Certificate.
5.\[{If applicable:} attached hereto as ExhibitEis a true and correct copy of the
Certificate of Status of Foreign Corporation of Transferee from the California Secretary of State
and any and all amendments thereto in effect on the date hereof.\]
6. \[{If applicable:}attached hereto as Exhibit F is a true and correct copy of the
County of Orange Fictitious Business Name Statement of Transferee and any and all amendments
thereto in effect on the date hereof.\]
7. Transferee has provided City with financial statements dated no more than ninety
(90) calendar days prior to the date hereof that were prepared in accordance with GAAP. Since the
date thereof, there have been no material adverse changes to the financial position of the
Transferee.
8. Transferee has adequate liquid assets to fully fund the development of the Project,
pay the Development Costs and to discharge all obligations under the DDA in accordancewith the
terms of the DDA.
9. Transferee has not taken any action looking toward its dissolution, no event,
whether voluntary or involuntary, has occurred that has caused the dissolution of Transfereeand
there are no proceedings pending or contemplated for the merger, consolidation, conversion,
dissolution, liquidation or termination of Transferee.
10. Transferee’s ability to fully fund the development of the Project and to discharge
all obligations under the DDA in connection with the Project in accordance with its terms is not
contingent on third party financing other than as permitted in the DDA with respect to financing
for construction of the Project.
11. The Financing Plan remains in full force and effect and unmodified. As of the
5. A copy of any Fictitious Business Name Statement if any, as published and filed with the Clerk Recorder of
Orange County, California;
6. If Transferee intends to fund the Project equity, attaching Evidence of Equity approved by the City and
certifying as to the validity and enforceability of the Evidence of Equity as of the Transfer Date; and
7. If an Approved Equity Investor shall fund the Project equity, attaching an updated or new Equity
Commitment, together with the documentation from the Approved Equity Investor certifying as to the
validity and enforceability of the Equity Commitment.
Tustin Confluent DDA Att 17B Transferee Cert Attachment 17B
City of Tustin/Confluent Development
9.3.26 (HM)2
Portion of DispositionArea 8
Transfer Date, the Financing Plan is accurate and complete. If in connection with the Transfer
effected by the Transfer Agreement Transferee was required under the terms of the DDA to furnish
the City with Evidence of Equity, Transferee has furnished the City with Evidence of Equity which
the City has approved, and such Evidence of Equity is or will be accurate and complete as of the
Transfer Date.
12.This Certificate is being furnished to the City solely to assist it in conducting its
investigation of Transferee’s financial resources in connection with Transferee’s obligation to
discharge its obligations in accordance with the terms of the DDA. Transferee acknowledges and
agrees that the City intends to rely on the information in this Certificate and this Certificate may
be relied upon by the City for these purposes.
Without the written consent of the Transferee no Person other than the City may rely on
this Certificate for any purpose.
In no event shall the individual executing this Certificate on behalf of the Transfereehave
any personal liability hereunder.
{signatures on next page}
Dated: ________________, 20________________________________
a _____________________________,
Transferee
By: _______________________________
Name:
Authorized Signatory
Tustin Confluent DDA Att 17B Transferee Cert Attachment 17B
City of Tustin/Confluent Development
9.3.26 (HM)3
Portion of DispositionArea 8
EXHIBITA
\[CORPORATE RESOLUTION/OTHER AUTHORIZATION\]
{to be attachedat time of Transfer}
Tustin Confluent DDA Att 17B Transferee Cert Attachment 17B
City of Tustin/Confluent Development
9.3.26 (HM)Exhibit A
Portion of DispositionArea 8
EXHIBIT B
\[ARTICLES OF INCORPORATION/CERTIFICATE OF FORMATION\]
{to be attachedat time of Transfer}
Tustin Confluent DDA Att 17B Transferee Attachment 17B
City of Tustin/Confluent Development
Cert 9.3.26 (HM) Exhibit B
Portion of Disposition Area 8
EXHIBITC
\[BYLAWS/OPERATING AGREEMENT\]
{to be attached at time of Transfer}
Tustin Confluent DDA Att 17B Transferee Attachment 17B
City of Tustin/Confluent Development
Cert 9.3.26 (HM) Exhibit B
Portion of Disposition Area 8
EXHIBITD
CERTIFICATE OF GOOD STANDING FROM THE CALIFORNIA
\[AND DELAWARE\] SECRETARY\[IES\] OF STATE
{to be attached at time of Transfer}
Tustin Confluent DDA Att 17B Transferee Attachment 17B
City of Tustin/Confluent Development
Cert 9.3.26 (HM) Exhibit D
Portion of Disposition Area 8
\[EXHIBIT E
CALIFORNIA CERTIFICATE OF STATUS OF FOREIGN CORPORATION\]
{to be attached at time of Transfer}
Tustin Confluent DDA Att 17B Transferee Cert Attachment 17B
City of Tustin/Confluent Development
9.3.26 (HM)Exhibit F
Portion of DispositionArea 8
\[EXHIBIT F
FICTITIOUS NAME STATEMENT\]
{to be attachedat time of Transfer}
Tustin Confluent DDA Att 17B Transferee Cert Attachment 17B
City of Tustin/Confluent Development
9.3.26 (HM)Exhibit F
Portion of DispositionArea 8
ATTACHMENT 18
FORM OF CITY CERTIFICATE REAFFIRMING
REPRESENTATIONS AND WARRANTIES
This Certificate is being delivered concurrently with the Close of Escrow pursuant to
Section 7.2.1.1(xv) of that certain Tustin Legacy Disposition and Development Agreement for
Portion of Disposition Area 8, dated as of _______________, 20__ {if amended, insert relevant
amendment information} (the “DDA”), by and between _______________, a _______________
(“Developer”), and the City of Tustin, a municipal corporation of the State of California (the
“City”). Capitalized terms used herein that are not defined herein shall have the meanings
specified in the DDA.
I, the undersigned, am the City Manager of the City, and I am authorized by the City to make the
certifications contained in this Certificate. I hereby certify to Developer for and on behalf of the
City that all of the representations and warranties made by the City in Sections 3.3 and 18.12.2 of
the DDA (as the same may have been modified pursuant to Section 3.4 of the DDA) are true and
correct as of the date hereof, except as set forth on Schedule 1 attached hereto.
Without the written consent of the City: (i) no Person other than Developer may rely on this
Certificate for any purpose; and (ii) copies of this Certificate may not be furnished to anyone for
purposes of encouraging such reliance.
In no event shall the individual executing this Certificate on behalf of the City have any personal
liability hereunder.
{signatures on next page}
Tustin Confluent DDA Att 18 City ATTACHMENT 18 City of Tustin/Confluent Development
Reaffirmation Cert 8.29.26 (HM).docx1Portion of Disposition Area8
CITY OF TUSTIN:
Dated:
By: ,
Aldo E. Schindler
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
Tustin Confluent DDA Att 18 City ATTACHMENT 18 City of Tustin/Confluent Development
Reaffirmation Cert 8.29.26 (HM).docxS-1Portion of Disposition Area8
SCHEDULE 1
{If none—enter None}
Tustin Confluent DDA Att 18 City Reaffirmation ATTACHMENT 18 City of Tustin/Confluent Development
Cert 8.29.26 (HM).docx Portion of Disposition Area 8
SCHEDULE 1
ATTACHMENT 19A
FORM OF DEVELOPER ORIGINALCERTIFICATE
REGARDING REPRESENTATIONS AND WARRANTIES
This Certificate (this “Certificate”) is being delivered pursuant to Section 4.6.2.1of that certain
Tustin Legacy Disposition and Development Agreement for Portion of Disposition Area 8 dated
as of _______________, 20__ {if amended, insert relevant amendment information} (the
“DDA”), by and between CD-CW (Tustin) LLC, a Colorado limited liability company
(“Developer”), and the City of Tustin, a municipal corporation of the State of California (the
“City”). Capitalized terms used herein that are not defined herein shall have the meanings specified
in the DDA.
This Certificate is being delivered by Developer concurrently with the execution of the DDA to
induce City to execute the DDA.
I, the undersigned, am the duly elected and qualified \[state office held\] of Developer, and I am
authorized by Developer to make the certifications contained in this Certificate. I further certify to
the City for and on behalf of Developer as follows:
1. Representations and Warranties. Except as set forth on Schedule 1 attached hereto
and made a part hereof, all of the representations and warranties made by Developer in the DDA,
including, but not limited to, those contained in Sections3.1, 13.3.1, and 18.12.1 of the DDA, are
true and correct as of the date of this Certificate.
2. Financial and Other Information. The Financing Plan for the Project and all
financial and other information submitted by Developer to the City in connection with the DDA,
including, but not limited to, the financial information submitted by Developer to the City pursuant
toArticle 4 of the DDA (“Financing Plan”), aretrue and correct as of the date of this Certificate.
Developer has the financial capacity to provide sufficient equity, when combined with the other
sources and uses set forth in the Financing Plan, to fund the Development Costs for the Project.
The Financing Plan demonstrates that there is sufficient financial capacity through Developer and
third party contributed equity and debt to pay through issuance of the Certificate of Compliance
for the Project the Development Costs and all other costs for the construction, marketing, and
leasing of the Project Improvements as described in the Scope of Development for the Project.
3. Certificate of Formation of Developer. Attached hereto as Exhibit A is a true and
correct copy ofthe Certificate of Formation of Developer,which is dated as of____________ ,
filed with Secretary of State of the State of ___________, which, except as attached, has not been
amended or revised in any way and remains in full force and effect as of the date of this
1
Certificate.
1
Developer shall provide the following documents that are certified to be accurate, true and complete and in full force
and effect without amendment (or as amended) as of the date of the certificate:
1. A certificate of formation or incorporation, California foreign entity registration, and a fully executed copy
of the bylaws (including any amendments thereto) and all applicable operating agreements, joint venture
agreements or equivalent instruments governing the entity;
Tustin Confluent DDA Att 19A Developer ATTACHMENT 19ACity of Tustin/Confluent Development
Orig Cert 9.3.26 (HM) 1 Portion of Disposition Area 8
4. Limited Liability Company Agreement of Developer. Attached hereto as Exhibit B
is atrue andcorrect copyof the Limited Liability Company Agreementof Developer,
dated_______________, which, except as attached, has not been amended or revised in any way
and remains in full force and effect as of the date of this Certificate.
5. Good Standing. Attached hereto as Exhibit C are true and correct copies of the
certificate of good standing for Developer from the Colorado Secretary of State and the California
Secretary of State and each attached certificate of good standing is dated not earlier than thirty (30)
days prior to the date of this Certificate.
6. Consents and Approvals. Attached hereto as Exhibit D are true and correct copies
of all required approvals, consents, resolutions or other proceedings of Developer to authorize
execution and delivery of the DDA by Developer and performance of the matters required to be
performed by Developer thereunder, and in each case the conditions to the effectiveness thereof
have occurred in accordance with the documents attached hereto as Exhibit D.
7. \[{insert if applicable:} Fictitious Business Name Statement. Attached hereto as
Exhibit E are true and correct copies of the County of Orange Fictitious Business Name Statement
of Developer, if any, together with any and all amendments thereto in effect on the Effective Date.\]
8. Authority of Signatory. \[Insert name of person signing\], is a \[insert office held\]
of Developer and is in such capacity, duly authorized by Developer to execute the DDA and any
and all instruments, documents and other agreements required in connection therewith in
accordance with the proceedings showing authority attached hereto as Exhibit D.
Without the written consent ofDeveloper, no Person other than the City may rely on this
Certificate for any purpose.
In no event shall the individual executing this Certificate on behalf of Developer have any personal
liability hereunder.
{signatures on following page}
2. A certificate of good standing and tax good standing of Developer and its managing member issued by the
Secretary of State and the applicable taxing authority of the state of its formation and by the California
Secretary of State within thirty (30) calendar days prior to the Effective Date;
3. Copies of all resolutions or other necessary actions, if any, taken by Developer to authorize the execution of
this Agreement, the Evidence of Equity and, if applicable, the Equity Commitment;
4. Evidence of authority of the individual(s) executing the Developer Original Certificate to bind Developer to
and to execute this Agreement, the Developer Original Certificate and the Equity Commitment;
5. A copy of any Fictitious Business Name Statement if any, as published and filed with the Clerk Recorder of
Orange County, California;
6. If Developer intends to fund the Project equity, attaching Evidence of Equity approved by the City and
certifying as to the validity and enforceability of the Evidence of Equity as of the Close of Escrow; and
7. If an Approved Equity Investor shall fund the Project equity, attaching an Equity Commitment, together with
the documentation from the Approved Equity Investor certifying as to the validity and enforceability of the
Equity Commitment.
Tustin Confluent DDA Att 19A Developer ATTACHMENT 19ACity of Tustin/Confluent Development
Orig Cert 9.3.26 (HM) 2 Portion of Disposition Area 8
“DEVELOPER”
Dated: ________________, 202_
CD-CW (Tustin) LLC,
a Colorado limited liability company
By: CD Manager LLC,
a Colorado limited liability company,
its Manager
By: Confluent Development LLC,
a Colorado limited liability company,
its Manager
By: ________________________
Name: Marshall M. Burton
Title: Chief Executive Officer
Tustin Confluent DDA Att 19A Developer ATTACHMENT 19ACity of Tustin/Confluent Development
Orig Cert 9.3.26 (HM) S-1 Portion of Disposition Area 8
EXHIBITA
CERTIFICATE OF FORMATION
{see attached}
Tustin Confluent DDA Att 19A Developer ATTACHMENT 19A City of Tustin/Confluent Development
Orig Cert 9.3.26 (HM) EXHIBIT A Portion of Disposition Area 8
EXHIBIT B
LIMITED LIABILITY COMPANYAGREEMENT
{see attached}
Tustin Confluent DDA Att 19A Developer Orig ATTACHMENT 19ACity of Tustin/Confluent Development
Cert 9.3.26 (HM) EXHIBIT B Portion of Disposition Area 8
EXHIBIT C
CERTIFICATES OF GOOD STANDING
{see attached}
\]
Tustin Confluent DDA Att 19A Developer Orig ATTACHMENT 19ACity of Tustin/Confluent Development
Cert 9.3.26 (HM) EXHIBIT C Portion of Disposition Area 8
EXHIBIT D
CONSENTS AND APPROVALS
{see attached}
Tustin Confluent DDA Att 19A Developer Orig ATTACHMENT 19ACity of Tustin/Confluent Development
Cert 9.3.26 (HM) EXHIBIT D Portion of Disposition Area 8
EXHIBIT E
FICTITIOUS NAME STATEMENT
{see attached}
Tustin Confluent DDA Att 19A Developer Orig ATTACHMENT 19ACity of Tustin/Confluent Development
Cert 9.3.26 (HM) EXHIBIT E Portion of Disposition Area 8
Schedule 1
{If none—enter None}
Tustin Confluent DDA Att 19A Developer Orig ATTACHMENT 19ACity of Tustin/Confluent Development
Cert 9.3.26 (HM) SCHEDULE 1 Portion of Disposition Area 8
ATTACHMENT 19B
FORM OF DEVELOPER DATE DOWN AND REAFFIRMATION CERTIFICATE
This Developer Date Down and Reaffirmation Certificate (this “Date Down Certificate”) is being
delivered pursuant to Section 7.2.2.2(xvii) of that certain Tustin Legacy Disposition and
Development Agreement for Portion of Disposition Area 8 dated as of _______________, 20__
{if amended, insert relevant amendment information} (the “DDA”), by and between CD-CW
(Tustin) LLC, a Colorado limited liability company (“Developer”), and the City of Tustin, a
municipal corporation of the State of California (the “City”) concurrently with the Close of Escrow
(which term and other capitalized terms used herein that are not defined herein being used with
the meanings specified in the DDA).
I, the undersigned, am the duly elected and qualified \[state office held\] of Developer, and I am
authorized by Developer to make the certifications contained in this Date Down Certificate. I
further certify to the City for and on behalf of Developer as follows:
1.Representations and Warranties. Except as set forth on Schedule 1 attached hereto
and made a part hereof, all of the representations and warranties made by Developer in the DDA,
including, but not limited to, those contained in Sections 3.1 of the DDA, are true and correct as
of the date hereof and all information and statements contained in the Developer’s Original
Certificate Regarding Representations and Warranties dated ________, 2026 (“Original
Certificate”) remain true and correct as of the date of this Date Down Certificate.
2.Financial and Other Information. Except as set forth on Schedule 2 attached hereto
and made a part hereof:
3.The Financing Plans for the Project and all financial and other information
submitted by Developer to the City in connection with the DDA, including but not limited to the
financial information submitted by Developer pursuant to Article 4 of the DDA, as the same has
been modified or supplemented by any Updated Financing Plans submitted by Developer pursuant
to the DDA in accordance with Section 4.6 of the DDA (as so modified and supplemented,
collectively, the “Financing Plan”), and all financial and other information submitted to the City
on or since the Effective Date of the DDA, remains true and correct as of the date of this Date
Down Certificate. As of the date of this Date Down Certificate, to the knowledge of Developer,
there exists no circumstance that is reasonably likely to have a material adverse effect on
Developer’s ability to construct, market, and lease the Project Improvements as described in the
Scope of Development for the Project in accordance with the Financing Plans. The Financing Plan
demonstrates that that there is sufficient financial capacity through Developer and third party
contributed equity and debt to pay through issuance of the Final Certificate of Compliance for the
Project the Development Costs and all other costs for the construction, marketing, and leasing of
the Project Improvements as described in the Scope of Development for the Project.
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docx1Portion of Disposition Area 8
(a)Developer has the financial capacity to provide sufficient equity, when
combined with the other sources and uses set forth in the Financing Plan, as applicable, to fund
1
the Development Costs for the Project.
(b)The Financing Plan remains sufficient to pay through issuance of the
Certificate of Compliance for the Project, all Development Costs of the Project and all other costs
for the construction, marketing, and leasing of the Project Improvements as described in the Scope
of Development for the Project.
4.Certificate of Formation; Bylaws. As of the date of this Date Down Certificate, and
except as otherwise specifically set forth on Schedule 3 attached hereto and made a part hereof,
each of the Certificate of Formation of Developer, the Bylawsof Developer,and all consents and
approvals referred to in Section 6 of Original Certificate remain in full force and effect and in the
forms attached as exhibits to the Original Certificate and have not been modified, revoked or
otherwise amended or terminated.
5.Good Standing. Developer remains in good standing in _____________ and
California as of the date of this Date Down Certificate. Attached to this Date Down Certificate as
Exhibit A are true and correct copies of the certificates of good standing for Developer from the
______________ Secretary of State and the California Secretary of State, and each attached
certificate of good standing is dated not earlier than thirty (30) days prior to the date of this Date
Down Certificate.
6.Authority of Signatory. \[Insert name of person signing\], is a \[insert office held\]
of Developer and is in such capacity, duly authorized byDeveloper to execute any and all
1
Developer shall update the documents provided in the Original Developer Certificate and certify that they remain
accurate, true and complete and in full force and effect (without amendment or as amended) as of the date of the
certificate:
1.A certificate of formation or incorporation, California foreign entity registration, and a fully executed copy
of the bylaws (including any amendments thereto) and all applicable operating agreements, joint venture
agreements or equivalent instruments governing the entity;
2.A certificate of good standing and tax good standing of Developer and its managing member issued by the
Secretary of State and the applicable taxing authority of the state of its formation and by the California
Secretary of State within thirty (30) calendar days prior to the Effective Date;
3.Copies of all resolutions or other necessary actions, if any, taken by Developer to authorize the execution of
this Agreement, the Evidence of Equity and, if applicable, the Equity Commitment;
4.Evidence of authority of the individual(s) executing the Developer Original Certificate to bind Developer to
and to execute this Agreement, the Developer Original Certificate and the Equity Commitment;
5.A copy of any Fictitious Business Name Statement if any, as published and filed with the Clerk Recorder of
Orange County, California;
6.If Developer intends to fund the Project equity, attaching any update to the Evidence of Equity approved by
the City and certifying as to the validity and enforceability of the Evidence of Equity as of the Close of
Escrow.
7.If an Approved Equity Investor shall fund the Project equity, attaching any update to the Equity Commitment,
together with the documentation from the Approved Equity Investor certifying as to the validity and
enforceability of the Equity Commitment as of the Close of Escrow.
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docx2Portion of Disposition Area 8
instruments, documents and other agreements required in connection with the DDA in accordance
with the proceedings showing authority attached to the Original Certificate.
Without the written consent of Developer, no Person other than the City may rely on this Date
Down Certificate for any purpose.
In no event shall the individual executing this Date Down Certificate on behalf of Developer have
any personal liability hereunder.
{signatures on following page}
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docx3Portion of Disposition Area 8
“DEVELOPER”
Dated: ______________________
_____________________, a ____________
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docxS-1Portion of Disposition Area 8
EXHIBIT A
CERTIFICATES OF GOOD STANDING
\[see attached\]
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docxExhibit APortion of Disposition Area 8
Schedule 1
{If none—enter None}
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docxSchedule 1Portion of Disposition Area 8
Schedule 2
{If none—enter None}
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docxSchedule 2Portion of Disposition Area 8
Schedule 3
{If none—enter None}
Tustin Confluent DDA Att 19B Dev Date ATTACHMENT 19B City of Tustin/Confluent Development
Down Cert 9.27.26 (HM).docxSchedule 3Portion of Disposition Area 8
ATTACHMENT 20
DECLARATION OF SPECIAL RESTRICTIONSFOR PORTION OF DISPOSITION
AREA 8 (TUSTIN LEGACY)
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE RECORDED
AND TO BE EXEMPT FROM RECORDING
FEES PER GOVERNMENT CODE 6103 AND
27383.
Recording requested by and
when recorded mail to:
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DECLARATION OF SPECIAL RESTRICTIONS
FOR PORTION OF DISPOSITION AREA 8
(TUSTIN LEGACY)
This DECLARATION OF SPECIAL RESTRICTIONS FOR PORTION OF DISPOSITION
AREA 8 (TUSTIN LEGACY) (this “Declaration”), is made as of ______________, 20__ (the
“Restrictions Date”) by the CITY OF TUSTIN, a municipal corporation of the State of California
(as further defined below, the “City”), and is accepted and agreed to by ____________, a
_____________ (“Developer”), \[{if assignment to new developer entity will occur following
recording:} and CD-CW (Tustin) LLC, a Colorado limited liability company (“Initial
Developer”)\] under the DDA (defined below).
A. Pursuant to the Defense Base Closure and Realignment Act of 1990 (Part A of Title
XXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note) (“Base Closure Law”), as amended,
the Federal Government (defined below) determined to close the Marine Corps Air Station-Tustin
(“MCAS Tustin”) located substantially in the City of Tustin, California. In 1992, the City was
designated as the lead agency or local redevelopment authority for preparation of a reuse plan for
MCAS Tustin in order to facilitate the closure of MCAS Tustin and its reuse in furtherance of the
economic development of the City and surrounding region. The MCAS Tustin Reuse Plan
developed in accordance with this procedure was adopted by the City Council of the City of Tustin
(“City Council”) on October 17, 1996 and amended in September 1998 (“Reuse Plan”).
B.In May 2002, the Navy and the City entered into that certain Agreement Between
the United States of America and the City of Tustin, California for the Conveyance of a Portion of
the Former Marine Corps Air Station Tustin dated as of May 13, 2002 (“Navy Conveyance
Agreement”), pursuant to which the Navy agreed to convey approximately 1,153 acres of MCAS
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Tustin to the City. The 1,153 acres of MCAS Tustin located within the City of Tustin either
conveyed by the Navy to the City or subject to ground lease between the Navy and the City is
referred to in this Declaration as “Tustin Legacy”.
C.The “Development Parcel”, comprised of approximately 6.14 acres of land located
in the City of Tustin, County of Orange, California and legally described on Exhibit A-1 attached
hereto and incorporated herein by reference, constitute a portion of Tustin Legacy conveyed to the
City pursuant to the Navy Conveyance Agreement. The Development Parcel is also subject to the
certain SLA Covenant and the Affordable Housing Declaration.
D. On or about the Restrictions Date, Developer is acquiring the Property pursuant to
that certain Tustin Legacy Disposition and Development Agreement for Portion of Disposition
Area 8, dated as of October __, 2026 \[{if amendments are made to DDA insert the following:}
(“Original DDA”) {insert any amendments to DDA}(collectively (“DDA”)\]\[{(if no
amendments are made to DDA, insert the following:} (“DDA”)\]. Developer is the successor in
interest to Initial Developer.
E. The “Property” consists of and shall for all purposes hereunder mean: the “Real
Property” which is comprised of the Development Parcel but excluding therefrom the matters
described in Section 2 of the Quitclaim Deed, together with (a) all existing improvements, if any,
presently located on the Real Property, (b) all rights, claims (other than claims under insurance
policies maintained by or for the benefit of the City) and appurtenances pertaining to the Real
Property or such improvements, and (c) all permits, licenses, approvals and authorizations issued
by any Governmental Authority in connection with the Real Property. The Real Property is
comprised of the Active Adult Real Property and the AL/MC Real Property as defined in the DDA
as each is generally depicted on the Site Plan attached to this Declaration as Exhibit A-2.
F. Upon acquisition of the Property, Developer has agreed to develop the Real
Property with age restricted (55 years or older) active adult and independent living facilities and
senior congregate care comprised of assisted living and memory care facilities and related
amenities and improvements (“Project”) pursuant to and in accordance with the DDAand the
Other Agreements.
G. The City now desires to impose on the Real Propertythis Declaration, for these
purposes, among others: (i) to preserve the general plan for the use and maintenance of Tustin
Legacy, including the plan for the use and maintenance of the Real Property as aHigh Quality
Project, (ii) to ensure proper use and maintenance of the Project, and (iii) in general, to provide for
maintenance of the Project meeting High Quality Standards, in each case upon and subject to the
terms of this Declaration.
H. This Declaration also sets forth those rights of the City and certain obligations of
Developer and its Successor Owners specified in the DDA which shall remain in full force and
effect for the applicable term specified herein, notwithstanding the termination of the DDA and/or
the recording in the Official Records by the City of a Certificate of Complianceas to all or any
portion of the Real Property. In order to create and preserve the value, desirability and
attractiveness of the Real Property, for the term set forth herein, Developer and its Successor
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9.26.26 (HM)2Portion of Disposition Area 8
Owners shall be required to hold and convey title to the Real Property subject to the covenants,
conditions and restrictions set forth in this Declaration.
I. Capitalized terms not otherwise defined herein shall have the meaning set forth for
such terms on Exhibit B attached hereto and incorporated herein by this reference.
NOW, THEREFORE, the City hereby covenants and declares that theProperty is now held
and, to the specific extentand subject to the limitations more specifically set forth herein, shall
hereafter be held, transferred, conveyed, sold, leased, subleased, encumbered, mortgaged, used,
occupied and improved subject to the covenants, conditions and restrictions herein set forth, each
and all of which is and are for the purpose of uniformly enhancing and protecting the value,
attractiveness and desirability of the Real Property and Tustin Legacy. The covenants, conditions
and restrictions set forth in the Declaration shall run with the Real Property and are hereby declared
to (a) inure to the benefit of and pass with, the Real Property and every portion of or interest in the
Project for the benefit of the City Property and City and its Governmental Successors, (b) in
accordance with the provisions of these Restrictions, including Sections 6 and 7 of this
Declaration, shall be binding upon Developer and each Successor Owner claiming by through or
under Developer or any Successor Owner but excluding any End Users, and (c) be enforceable as
restrictions and equitable servitudes against the Real Property. Following its conveyance of the
Real Property, the City and its Governmental Successors shall retain the right to enforce the
restrictions and equitable servitudes set forth in this Declaration against the Real Property and the
same shall be enforceable solely by the City and its Governmental Successors and no private right
of action shall exist or be implied by the existence of this Declaration. The Restrictions shall
survive termination of the DDA, the Close of Escrow and the execution and recording in the
Official Records by the City of each Certificate of Compliance, and shall not merge with any deed
and shall continue in effect for the Term of this Declaration or with respect to any provision
(including those inserted from the DDA) stating a longer or shorter term, for such longer period as
is set forth in such provision.
The City hereby further declares as follows:
1. Covenants, Conditions and Restrictions. For the benefit of the City, and as an
inducement for the City to consummate the transactions contemplated by the DDA, but subject to
Section 8.2, the violation of any of the Restrictions (as hereinafter defined) set forth in this
Declaration for the applicable period set forth herein, shall at the City’s option constitute a Material
Default hereunder and entitle the City to exercise any of the rights and remedies set forth herein.
The covenants, conditions and restrictions set forth in this Declaration are collectively referred to
herein as the “Restrictions”. Although certain provisions of the DDA are included in this
Declaration andremain in effect in accordance with their terms (and in that manner survive the
termination of the DDA), during any period in which the DDA is in effect as to aportion of the
Real Property, the provisions in each such Section of this Declaration shall not be interpreted more
broadly than, nor be applied in addition to, nor be deemed to increase the obligations of Developer
with respect to the Project or the Real Property in the counterpart provisions in the DDA. During
the period in which the DDA is in effect as to a portion of the Real Property, if any conflict arises
between the provisions in each such Section of this Declaration and the counterpart provisions in
the DDA, the provisions in the DDA shall control as to such portion of the Real Property; provided
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9.26.26 (HM)3Portion of Disposition Area 8
that recording in the Official Records by the City of a Certificate of Compliance for any portion
of the Real Property shall not affect, modify or terminate the provisions of the DDA sections
incorporated into this Declaration as to such portion of the Real Property.
For purposes of this Declaration, the following shall apply:
(i) The terms “include” and “including” (in each case, without initial
capitalization) mean, respectively, “include, without limitation” and “including, without
limitation.
(ii) When stated in connection with a performance obligation, the word
“shall” imposes a mandatory requirement to perform the stated act or requirement (and
shall be synonymous with “must”) and the term “shall not” imposes a mandatory
requirement not to perform the stated act or requirement (and shall be synonymous with
“must not”). The word “may” is permissive and does not impose any mandatory
requirement to perform the stated act.
(iii) When stated in connection with the discretion of any Person (i.e., in
the “sole discretion” of such Person, the word “sole” means “sole and absolute”.
2. Use Covenants and Restrictions. During the Term of this Declaration, the Real Property
shall be utilized only for construction, occupancy and use as an age restricted(55 years or older)
facility containing active adult and independent living Residential Units and senior congregate
care assisted living and memory care Rooms, together with on-site infrastructure and a complete
accompanying set of high quality amenities, including rooftop amenities and private open space,
consistent with the Entitlements and Development Permits and in conformance with the
Affordable Housing Declaration and other uses (e.g., nonrestricted residential and commercial
uses and related amenities and uses incidental thereto) are hereby prohibited without consent of
the City in its sole discretion.
3. Maintenance Covenants and Restrictions.
3.1.Maintenance Standards.Each Owner shall, from and after the Close of Escrow,
maintain the Real Property, and the Project Improvements, consistent with the following
requirements:
3.1.1. Prior to commencement of construction, each Owner shall be
responsible, at its sole cost and expense, (i) to secure and maintain the Real Property and the
Project Improvements in a clean, safe and secure condition, in compliance with all Governmental
Requirements, (ii) to abateweeds and other hazards and nuisances on the Real Property and the
Project Improvements, (iii) to erect and maintain barricades and fencing, and provide security,
with respect to the Real Property and Project Improvements as reasonably necessary to protect the
public and any Project Improvements already constructed, and (iv) to maintain (in compliance with
all Governmental Requirements) erosion control on the Real Property.
3.1.2. From the date of commencement and during the continuance of
construction of any Project Improvements, each Owner shall maintain the Real Property and the
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Project Improvements then under construction consistent with normal and customary construction
industry practice.
3.1.3. From and after the issuance of a (temporary) certificate of
occupancy for any Building on the Real Property, each Owner shall maintain all Project
Improvements on such Real Property not then under construction in a clean, sanitary, orderly and
attractive condition, and in accordance with High Quality Standards, subject to reasonable wear
and tear and further subject to Section 3.2, change or damage by casualty or condemnation. Each
Owner shall be required to meet the standard for the quality of maintenance of the Project
Improvements on the Real Property required by this Section regardless of whether or not a specific
item of maintenance is listed below, except that, in each case, and notwithstanding anything in this
Section 3.1.3 to the contrary, no Owner shall be obligated to maintain improvements owned or
controlled by or on property owned or maintained by a public utility or utility franchisee, lighting
and landscaping district or, except as set forth in the Landscape Installation and Maintenance
Agreement, by the City. Representative items of maintenance shall include: (1) maintenance,
repair and replacement on a regular schedule, consistent with High Quality Standards, of all Project
Improvements; (2) regular inspection for graffiti or damage or deterioration or failure, and
reasonably prompt (or, in the case of graffiti, within 48 hours) repainting or repair or replacement
of all surfaces, fencing, walls, equipment, etc., as necessary; (3) emptying of trash receptacles and
removal of litter; (4) regular sweeping of Private Drives and Sidewalks throughout the Real
Property; (5) fertilizing, irrigating, trimming and replacing vegetation within the Real Property, as
necessary; (6) cleaning exterior windows on a regular basis; (7) painting the Buildings and other
structures on the Real Property on a regular program and prior to the material deterioration of the
painted surfaces; (8) conducting roof inspections on a regular basis and maintaining roofs in a
leak-free and weather-tight condition and (9) complying with all Governmental Requirements.
3.2.Casualty. In the event of casualty occurring with respect to any portion of the Real
Property, the Owner(s) of such affected portions shall, in its sole discretion, either (i) promptly
repair the Project Improvements and prior to commencement of such repair maintain the portions
of the Real Property subject to casualty in accordance with Section 3.1.2, or (ii) if such Owner
determines in its sole discretion not to repair such Project Improvements, maintain the applicable
portion of the Real Property subject to casualty in accordance with Section 3.1.1. In each case,
upon commencement of any construction with respect to the affected portions of the Real Property
and until completion thereof, the Owner(s) thereof shall comply with the requirements set forth in
Section 3.1.2 andupon completion of the repair work, shall comply with the requirements set forth
in Section 3.1.3. Notwithstanding the foregoing, the portions of the Real Property unaffected by
any such casualty shall be maintained as otherwise required by this Declaration, including pursuant
to Section 3.1.3, and unless not economically feasible due to cost or physical proximity as
demonstrated to the reasonable satisfaction of the City, the applicable Owner(s) shall provide
appropriate barriers to shield the portions of the Real Property remaining in use and adjacent public
roadways from those subject to casualty and from adjoining streets in order to maintain the portions
of the Real Property and the Project Improvements thereon unaffected by such casualty as required
pursuant to Section 3.1.3.
3.3.Failure of Owner to Maintain. If an Owner fails to maintain the Project
Improvements on the Real Property in accordance with the standards for the quality of
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maintenance set forth in Section3, then subject to the provisions of Sections 8.1 and 8.2, such
failure shall constitute a Material Default byOwner.
3.4. City Rights to Maintain. In the event of a Material Default by any Owner relating
to a breach of this Section 3, the City or its designee shall have the right but not the obligation to
enter the Real Property, upon reasonable prior written notice, to correct any such failure, and hold
such Owner responsible for the cost thereof, and such cost, until paid, shall constitute a City Lien,
as and the extent described in Section 8.5.
3.5.Maintenance Responsibilities.Each Owner’s maintenance responsibilities as to
the Real Property shall be vested in and the obligation of the entity that owns the Real Property.
Each Owner shall have the right to subcontract, assign, or delegate its maintenance responsibilities
under this Declaration to a first-class property management company or to another Owner,
provided that such subcontracting, assignment, or delegation shall not relieve such Owner of any
liability for its obligations under this Section 3.
4. Term. The covenants in this Declaration shall, except as otherwise providedherein,
commence as of the Restrictions Date and remain in full force and effect as to the entirety of the
Real Property until the later of (i) the date which is the fifty-fifth (55th) anniversary of the
recording in the Official Records by the City of the Final Certificate of Compliance, or (ii) the date
upon which the Affordable Housing Declaration shall terminate in its entirety as to the Real
Property and each portion thereof (“Term”), unless in either case released at an earlier date by the
City in writing; provided that if the Final Parcel Map is recorded in the Official Records, then at
th
the twenty-fifth (25) anniversary of the recording in the Official Records by the City of the Final
Certificate of Compliance, this Declaration shall terminate as to the AL/MC Real Property only.
Upon the expiration of the Term, this Declaration shall automatically terminate, provided that the
provisions of this Declarationthat are incorporated from the DDA and that are stated to survive
for a different term or in perpetuity, shallsurvive and remain in effect for the period specified
therein, notwithstanding the Close of Escrow, the termination of the DDA and/or the recording in
the Official Records by the City of a Certificate of Compliance.
5. Project Restrictions; Non-Compete Provisions.
5.1.Design of the Project. Each Owner shall comply with the Entitlements and
Development Permits as and to the extent required by the DDA and the Development Agreement
in connection with its development of the Project and the Real Property.
5.2.Restrictions on Sale of Residential Units or Condominium
Development; Rental of Residential Units and Rooms. The Real Property shall not be made
subject to condominium laws (whether residential or commercial) and shall be developed solely
for rental of Residential Units and Rooms and not with the intent to sell individual Residential
Units or Rooms, and the general prohibition against Transfer outlined in this Declaration shall be
applicable to the sale of individual Residential Units in the Active Adult Project and Rooms in the
AL/MC Project.
5.3.Non Compete Provisions. In order to facilitate and encourage development
of the Project on the Real Property, the City and Developer hereby agree that, except as expressly
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9.26.26 (HM)6Portion of Disposition Area 8
permitted below, during the Non-Compete Period, (i) the City shall not enter into any Binding
Agreement authorizing any Restricted Use on the Non-Compete Property, (ii) to the extent the
City retains any ownership or other proprietary interest in the Non-Compete Property, the City
shall not consent to, authorize, or otherwise allow any Restricted Use in its capacity as owner or
holder of such proprietary interest unless the law otherwise requires. The foregoing restrictions are
referred to as the “Non-Compete Provisions”.
5.3.1. Definitions. For purposes of this Section, the following terms shall
have the meanings set forth below:
(i) “Binding Agreement” shall mean an executed exclusive negotiation
agreement(s), disposition and development agreement(s), purchase agreement(s), lease(s),
ground lease(s), and/or any other agreement(s) which authorizes or permits the entitlement,
permitting, construction or operation of Restricted Uses.
(ii) “Non-Compete Period” shall mean the period commencing upon the
Restrictions Date and terminating upon the earlier of (a) the fifth (5th) anniversary of the
Restrictions Date or (b) the dateof repurchase or revesting of the Real Property pursuant
to the DDA, provided that the Non-Compete Period shall be in abeyance upon occurrence
of the events described in Section 5.3.2.
(iii) “Non-Compete Property” shall mean the real property owned in fee
by the City within the area regulated by the Tustin Legacy Specific Plan as of the
Restrictions Date as depicted on Exhibit D, but shall exclude any property previously
identified as Non-Compete Property which the City has transferred or conveyed to be
developed for uses that are not Restricted Uses and upon such transfer or conveyance, the
transferred/conveyed property shall no longer be subject to the Non-Compete Provisions.
(iv) “Restricted Uses” shall mean an age restricted (55 years or older)
active adult and independent living facilities and senior congregate care comprised of
assisted living and memory care facilities in one or more buildings containing any
combination of active adult independent senior living, assisted senior living and senior
memory care units, provided thatfor-saleagerestricted (55 years or older) residential uses
and affordable housing shall not be Restricted Uses.
5.3.2. Non-Applicabilityof Non-Compete Provisions During Material
Default. The Non-Compete Provisions shall be in abeyance and shall not apply during any period
in which Developer is in Material Default under the DDA or any of the Other Agreements and
shall not apply with respect to any Binding Agreement entered into during the time period in which
the Non-Compete Provisions are not applicable, or any use for which a building permit application
is filed during the time period in which the Non-Compete Provisions are not applicable, even if
the Non-Compete Period subsequently becomes effective prior to issuance of such building permit
or construction of the building. The abeyance of the Non-Compete Provisions for Material Default
of Developer pursuant to this Section 5.3.2 shall not extend the term of the Non-Compete Period.
5.3.3. Remedies for Breach. The provisions of Section 5.3 shall be
enforceable against the City and Developer’s sole remedies with respect to Section 5.3 and the
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9.26.26 (HM)7Portion of Disposition Area 8
Non-Compete Provisions shall be the right to bring an action in equity (without a right to monetary
awards) against the City for injunctive relief and specific performance of this Declaration and the
Non-Compete Provisions. Developer shall not be a third party beneficiary of any Binding
Agreement nor shall Developer have any right to enforce the terms ofany Binding Agreement.
5.3.4. City Rights. Nothing in this Section 5.3 shall restrict the right of the
City (i) to enter into Binding Agreements in its Proprietary Capacity affecting the Non-Compete
Property, (ii) to act in its Governmental Capacity, or (iii) to convey or lease land to any
Governmental Authority or other government agency for any purpose, in each case that are
consistent with the foregoing Non-Compete Provisions.
5.3.5. Effect of Termination. Upon the termination of the Non-Compete
Period, the Non-Compete Provisions shall be of no further force and effect as to the City or any
Person.
6. DDA Provisions Incorporated into Declaration. Pursuant to the DDA, the City has
imposed certain covenants, conditions and restrictions on the Real Property, each of which is set
forth verbatim below in italics and each of which is hereby declared to be a covenant running with
the land in accordance with Sections 1, 6 and 7 of this Declaration. Within the italicized language
incorporated from the DDA which follows, (i) certain terms shall have the following meanings
and the remaining terms shall have the meanings set forth in this Declaration including Exhibit B
attached hereto: (a) the term “Developer” and the term “City” shall each have the meanings set
forth in Exhibit B attached hereto; (b) the term “Agreement” shall mean the DDA as defined in
this Declaration; (c) the terms “Close of Escrow” and “Closing Date” shall mean the Restrictions
Dateof this Declaration; (d) the term “Developer Representatives” shall mean “Owner
Representatives” as defined in this Declaration; (e) the term “Property” shall mean the “Property”
as defined in this Declaration; (f) the term “Project” shall mean the “Project” as defined in this
Declaration; (g) the term “Quitclaim Deed” shall mean the “Quitclaim Deed” as defined in this
Declaration; and the term “Special Restrictions” shall mean this Declaration, and (h) the term
“Term of this Agreement” shall mean the term of the DDA, (ii) references to Sections and Articles
shall be references to Sections and Articles, respectively, within the Original DDA as the same
may have been modified by subsequent amendment, unless otherwise indicated, and (iii) unless
otherwise noted in a footnote to this Declaration, initially capitalized terms used and not defined
in these Restrictions and sections of the DDA referenced in the copied text from the DDA below,
and not also copied into this Section 6, do not contain any obligations or limitations that apply
beyond the term of the DDA.
6.1. AS-IS; WHERE IS. Section 4.5.2 of the DDA provides a s follows:
“\[insert text\]”
6.2. Release. Section 4.5.3 of the DDA provides as follows:
“\[insert text\]”
6.3. Construction Liens. Section 8.11.6 of the DDA provides as follows:
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9.26.26 (HM)8Portion of Disposition Area 8
“\[insert text\]”
6.4. Disclaimer of Responsibility by City and Exculpation. Section 8.13 of the DDA
provides as follows:
“\[insert text\]”
6.5. Local, State and Federal Laws. The applicable portion of Section 8.14 of the
DDA provides as follows:
“\[insert text\]”
6.6. Liens, Taxes and Assessments. Section 8.15 of the DDA provides a s follows:
“\[insert text\]”
6.7. Duration of Article 8 Indemnities; Post-Certificate of Compliance Affiliate
Responsibilities.
.Section 8.16 of the DDA provides as follows:
“\[insert text\]”
6.8. Developer’s Indemnification for Non-Environmental Matters.
Section 10.1 of the DDA provides asfollows:
“\[insert text\]”
6.9. Environmental Indemnity. Section 10.2 of the DDA provides as follows:
“\[insert text\]”
6.10. Effect of Recording Special Restrictions.Section 10.3 of the DDA provides as
follows:
“\[insert text\]”
6.11. Claim Response. Section 10.4 of the DDA provides as follows:
“\[insert text\]”
6.12. Release Notification and Remedial Actions. Section 10.5 of the DDA provides
as follows:
“\[insert text\]”
6.13. Conflict with Section 330 and Other Federal Government Obligations. Section
10.6 of the DDA provides as follows:
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6.14.Insurance and Indemnification. Section 10.7 of the DDA provides as follows:
“\[insert text\]”
6.15. Selection of Counsel and Defense Obligations. Section 10.8 of the DDA provides
as follows:
“\[insert text\]”
6.16. Settlement Procedures. Section 10.9 of the DDA provides as follows:
“\[insert text\]”
7.Enforcement of Covenants.
7.1.General Purpose and Constructive Notice. Subject to the applicable time
limitations set forth in Sections 4 and 6 of this Declaration, each Owner that now or hereafter owns
or acquires title to any portion of the Real Property is and shall be conclusively deemed to have
consented to and agreed to every Restriction, provision, covenant, condition, right and limitation
contained inthis Declaration, including the provisions of this Declaration incorporated from the
DDA, whether or not any reference to this Declaration is contained in the instrument by which
such Person acquired title to the Real Property or portion thereof.
7.2.Covenants and Equitable Servitudes; Runs With the Land. ThisDeclaration
and the Restrictions, covenants and conditions hereof constitute and shall be enforceable as
equitable servitudes and covenants running with the land comprising the Real Property and
burdening the Real Property and, in accordance with the provisions of this Declaration, including
the provisions in this Section 7, binding upon Developer and each Successor Owner and each and
every Person claiming by, through or under Developer or any Successor Owner, but excluding any
End Users, for the benefit of the City and its Governmental Successors. Each Owner shall only be
liable for the obligations and liabilities under this Declaration related to the portion of the Real
Property owned or leased by such Person and which Accrue during the period that such Owner
owns its interest in such property and such Owner shall not be liable for those obligations or
liabilities that first Accrue after such period of ownership and no such Owner shall be liable for
those obligations or liabilities of another Owner, except that:
(a) the foregoing shall not be deemed to modify or negate any longer or
shorter periods of liability or scope of responsibility for any Owner pursuant to the
provisions ofSection 6of this Declaration or, during its term, the terms of the DDA or the
Affordable Housing Declaration and during its term, where in conflict, the terms of the
DDA shall govern over those in this Declaration;
(b) prior to recording in the Official Records by the City of a Certificate
of Compliance for a portion of the Real Property, any Transfer (as defined in the DDA)
shall be permitted only in accordance with the requirements of the DDA and Developer
shall remain liable under this Declarationfor matters Accruing prior to recording by the
City in the Official Records of the Certificate of Compliance for that portion of the Real
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Property, notwithstanding the Transfer, until released from its obligations pursuant to the
DDA or in the conditions to Transfer (as defined in the DDA) imposed by the City, if any;
(c) following recording in the Official Records by the City of a
Certificate of Compliance for a portion of the RealProperty, if a transferee acquiring fee
title to the Real Property is an Owner Affiliate, the transferee Owner shall be deemed to
have assumed and be liable for the obligations and liabilities of the transferor Owner and
each consecutive prior transferor Owner Affiliate as though such transferee Owner had
held joint ownershipwith the transferor Owner and each consecutive prior transferor
Owner Affiliate of it during their respective prior consecutive periods of ownership of such
portion of the Real Property; and
(d) Notwithstanding the foregoing or any other provision of this
Declaration, the City shall have the right to look to each Person that is the Developer under
the DDA (unless released pursuant to Article 2 of the DDA), jointly and severally, rather
than any Successor Owner, with respect to the indemnity provided pursuant to DDA
Section 10.1(viii) (incorporated into Section 6.8 of this Declaration).
7.3.Responsibilities of Owner During Term of Any Ground Lease and/or
Operating Agreement. Each Owner shall, notwithstanding that there is a ground lease, lease, or
operating agreementin effect, be responsible to perform all obligations and to assume all liabilities
of Owner under this Declaration with respect to each portion of the Real Property owned in fee by
such Owner and the Project Improvementsthereon as though the ground lease, lease, or operating
agreement were not in effect.
7.4. Inspection. In addition to, and without in any way limiting, the City’s rights or
authority in its governmental capacity, upon one (1) Business Days’ notice, or such other period
as may be explicitly set forth in this Declaration, and subject to reasonable security provisions of
Developer and any rights of Developer’s tenants, licensees or other occupants, the City and its
authorized representatives may from time to time enter upon and inspect the Real Property or any
portion thereof or any Project Improvements thereon (excluding, however, the interior space of
any buildings on the Real Property, including any apartment units) during regular business hours
(except in the case of an emergency) for purposes of ascertaining compliance with the Restrictions,
but without obligation to do so or liability therefor.
7.5. Restrictions on Transfer During Term of DDA. Until recording in the Official
Records by the City of a Certificate of Compliance for a portion of the Real Property, as to such
portion of the Real Property Developer shall not Transfer (as defined in the DDA) its interests in
the Real Property or any portion thereof except in accordance with the terms of the DDA.
7.6.Other Restrictions. Nothing contained in this Declarationshall prejudice or
diminish in any way the City’s rights or authority in its governmental capacity, nor the rights and
authority of any other Governmental Authority having jurisdiction over the Project or any portion
thereof, and the exercise of any rights or remedies by the City hereunder shall be considered
separate from and independent of any breach or violation by Developer which is also a breach or
violation of any Governmental Requirements.
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)11 Portion of Disposition Area 8
8. Potential a nd Material Defaults.
(a)In the event of any breach, violation or failure to perform or satisfy any of
the Restrictions which has not been cured within the applicable cure period set forth below, the
City may in its sole discretion enforce any one or more of the remedies set forth in Section 8.3.
(b) Notwithstanding any other provision of this Declaration, during the term of
the DDA as applicable to each portion of the Real Property, the default and notice of default
provisions and the remedies of the City and Developer under the DDA shall govern and supersede
the default, notice of default and remedies provisions of this Declaration with respect to the
provisions incorporated from the DDA as set forth in Section 6 of this Declaration.
8.1.Potential Defaults. Except as otherwise provided in this Declaration, it shall be a
“Potential Default” if:
8.1.1. Developer fails to pay timely any sum required to be paid to the City
pursuant to this Declaration; or
8.1.2. Developer fails to perform, or delays in the performance of, in whole
or in part, any obligation required to be performed under, or otherwise violates the provisions of
this Declaration, other than as set forth in Section 8.1.1.
8.2.Material Defaults.
8.2.1. Subject to Section 8(b) above, a Potential Default under Section
8.1.1shall become a “Material Default” if it is not cured within fifteen (15) Business Days of
receipt by Developer of the notice of Potential Default from the City.
8.2.2. Subject to Section 8(b)above, a Potential Default under Section
8.1.2shall become a “Material Default” if it is not cured, at Developer’s expense, (a) within thirty
(30) calendar days after receipt by Developer of written notice of such Potential Default from the
City, or (b) if such cure cannot be reasonably accomplished within such thirty (30) calendar day
period, within one hundred twenty (120) calendar days after receiving written notice of such
Potential Default from the City, but only if Developer has commenced such cure within such thirty
(30) calendar day period and diligently pursues such cure to completion, or (c) within such longer
period of time as may be expressly granted by the City in the City’s sole discretion, taking into
account the nature of the Potential Default and diligence and good faith efforts of Developer to
cure such Potential Default. Unless otherwise set forth in the DDA with respect to Potential
Defaults arising during the term thereof, the foregoing cure periods for Potential Defaults under
this Section 8.2.2 shall be extended by Force Majeure Delays.
8.3.Certain City Remedies. In the event of a Material Default, and without limiting
the rights and remedies of the City under the DDA, the City may do any or all of the following:
8.3.1. The City may bring a suit for damages for any compensable breach
of or noncompliance with any of the Restrictions, or declaratory relief to determine the
enforceability of any of the Restrictions; provided, however, that (i) such damages shall be limited
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)12 Portion of Disposition Area 8
to direct (actual) damages to the City for such Material Default, and (ii) the City hereby expressly
waives, releases and relinquishes any and all right to any consequential, exemplary or punitive
damages; and/or
8.3.2. The City may bring an action in equity or otherwise for specific
performance to enforce compliance with the Restrictions or an injunction to enjoin the continuance
of any such breach or violation thereof, whether or not the City exercises any other remedy set
forth herein, and each Owner acknowledges that a particular or ongoing violation of one or more
of the Restrictions may cause the City to suffer material injury or damage not compensable in
money (including irreparable effects on the type and quality of development on theRealProperty
or portions thereof and/or the maintenance of the Real Property and Project Improvements thereon
in accordance with the standards for the quality of maintenance set forth in Section 3); and/or
8.3.3.Any such breach or violation of the Restrictions or any provision
hereof is hereby declared to be a nuisance, and City shall be entitled, upon not less than one (1)
Business Days’ notice, except in the case of an emergency to enter the Real Propertyand
summarily abate and remove, without further legal process to the maximum extent permitted by
law, any structure, thing or condition that may exist in violation of any of these Restrictions, or to
prosecute any remedy allowed by law or equity for the abatement of such nuisance against any
person or entity acting or failing to act in violation of the Restrictions, all at the sole cost and
expense of the Owner.
8.4. Failur e to Timely Pay Amounts Due. If there is a Material Default under this
Section 8, then in addition to any other remedies conferred upon the City pursuant to this
Declaration, Developer shall pay to the City, in addition to all principal amounts due, interest from
the date of such payment or part thereof was due until the date paid at the default rate of eight
percent (8%) per annum, compounded annually, but in no event in excess of the maximum legal
rate.
8.5.Lien Rights.The delinquent amount for any Material Default of any payments due
hereunder, together with any late charges or interest due on any such delinquent payment,
reasonable attorneys’ fees, experts’ fees and consultants’ fees and collection costs related to such
delinquent payment shall, to the greatest extent permitted by applicable law, be a lien and charge
upon the Real Propertyand improvements for which such Owner is then the fee owner with respect
to such Material Default and shall be a continuing lien upon such Real Property in favor of the
City (“City Lien”) and such City Lien shall apply to all portions of the Real Property for which
no Certificate of Compliance has been recorded in the Official Records by the City, provided that
following recording in the Official Records by the City of a Certificate of Compliance for a portion
of the Real Property, the City Lien shall apply to the portion of the Real Property for which such
certificate has been recorded in the Official Records only if the default arises from or is related to
such portion of the Real Property or if the City Lien is as a result of a default by the Owner thereof;
and provided, further that subject to Section 9, such lien and charge in favor of the City shall be
paramount to the lien and charge of any Mortgage upon fee title to such portion of the Real
Property and all other liens, except all taxes, bonds, assessments and other levies which, by law,
would be superior thereto. The City Lien on the Real Property may be enforced by foreclosure and
sale of the Real Property after failure by the Owner thereof to timely pay any special assessment
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)13 Portion of Disposition Area 8
as provided in this Declaration. The sale shall be conducted in accordance with the provisions of
the California Civil Code applicable to the exercise of powers of sale in Mortgages, or in any
manner permitted by law.
9. Rights of Mortgagees and Mortgagee Protection. No breach or violation of this
Declaration, nor any City Lien, shall defeat or render invalid the lien of, prior to recording in the
Official Records by the City of a Certificate of Compliance for a portion of the Real Property, any
Permitted Mortgage for such portion of the Real Property, and thereafter as to such portion of the
Real Property, any Mortgage securing a loan made in good faith and for value, provided, however,
that this Declaration and all provisions hereof shall be binding upon each and every Person
claiming by, through our under Developer or any Successor Owner including each other occupant
of the Real Property or portion thereof whose title is acquired by foreclosure, trustee’s sale, deed
in lieu of foreclosure or otherwise, but (a) such Successor Owner shall have a reasonable time,
after acquiring title, to cure any violations or correct and change any facts giving rise to the City’s
rights under this Declaration occurring prior to such transfer of title or occupancy and which are
reasonably capable of being cured or changed (i.e., within the time periods set forth in Section
8.2.2commencing as of the date of such acquisition of title thereto), provided that such Successor
Owner diligently acts to effect such cure or change (and in the event of such diligent and timely
cure, such Successor Owner shall have no further liability in connection with such prior violation
or the continued existence of such violation until such cure is completed), and (b) City’s right to
damages or abatement shall not be applicable as to such Successor Owner with regard to any
noncurable default occurring prior to the time such Successor Owneracquired title.
Notwithstanding the foregoing, each Successor Owner shall be required to use the Real Property
in accordance with the Restrictions set forth inthis Declaration and the provisions of this Section
shall be subject to the rights and protections afforded to any Permitted Mortgagee pursuant to any
Subordination Agreement between the City and such Mortgagee, and the right and protections of
the Permitted Mortgagee under the Subordination Agreement shall not be abridged, limited or
otherwise affected by the provisions of this Section or any other provisions of this Declaration.
10. Non-Discrimination Covenants. There shall be no discrimination against or segregation
of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees of the land.
11. Miscellaneous.
11.1.Modification. No amendment, change, modification or supplement to this
Declaration shall be valid and binding unless (a) it is represented in writing and signed by (i) the
City, as the first party, and (ii) Developer and/or any Successor Owners then owning any portion
of the Real Property or any interest in the Project, as the second parties; provided such instrument
is signed by the first party and all of the second parties then holding an interest in the Real Property
and/or the Project, and (b) is duly recorded in the Official Records. This Declaration shall be
administered by the City Manager. Any matter to be approved by the City shall be deemed
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)14 Portion of Disposition Area 8
approved, and any action to be taken by the City shall be deemed taken, upon written approval by
the City Manager (or his or her designee). The City Manager or his or her designee shall have the
authority to issue interpretations with respect to this Declaration and to determine whether any
action requires the approval of the City Council.
11.2.Applicable Law. This Declaration 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.
11.3. Attorneys’ Fees and Costs. In the event thatany legal or equitable action or
proceeding shall be instituted between the City and Developer or any Successor Owner relating to
this Declaration, the party prevailing in such action shall be entitled to recover from the other party
all of its costs, including court costs and reasonable attorneys’ fees. During any period prior to
recording by the City of a Certificate of Compliance in the Official Records for a portion of the
Real Property, as to such portion of the Real Property with respect to the matters in Section 6 of
this Declaration the provisions of Section 18.2 of the DDA shall supersede the provisions of this
Section in all respects.
11.4.Conflict of Interest. No appointed or elected official or employee of the City shall
have any personal interest, direct or indirect, in this Declaration nor shall any official or employee
participate in any decision relating to the Declaration which affects his or her interestsor the
interests of any corporation, partnership, or association in which he or she is directly or indirectly
interested. Developer warrants that it has not paid or given and will not pay or give any third person
any money or other consideration for obtaining this Declaration.
11.5. Non-liability of City Officials and Employees. No elected or appointed official,
representative, employee, agent, consultant, legal counsel or employee of the City shall be
personally liable under this Declaration.
11.6.Construction and Interpretation of Declaration.
11.6.1.The language in all parts of this Declaration shall in all cases be
construed simply, as a whole and in accordance with its fair meaning and not strictly for or against
any Person.
11.6.2. Any provision of this Declaration that is deemed to be illegal,
invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to
the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from
this Declaration. Any stricken provision shall not affect the legality, enforceability or validity of
the remainder of this Declaration. If any provision or part thereof of this Declaration is stricken in
accordance with the provisions of this Section, then the stricken provision shall be replaced, to the
extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent
to the stricken provision as is legally possible.
11.6.3. The captions of the sections and subsections in this Declaration 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.
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)15 Portion of Disposition Area 8
11.6.4. References in this instrument to “this Declaration” mean, refer to
and include this instrument as well as any riders, schedules, exhibits, addenda and attachments
hereto (which are hereby incorporated in this Declaration by this reference). 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 Declaration and any riders, schedules, exhibits, addenda,
attachments or other documents affixed to this instrument.
11.6.5. As used in this Declaration and as the context may require, the
singular includes the plural and vice versa and the masculine gender includes the feminine and
vice versa.
11.6.6. As used in this Declaration the words “include” and “including”
mean respectively “include, without limitation” and “including, without limitation”.
11.6.7. Unless otherwise indicated, references in this Declaration to
sections, paragraphs, clauses, exhibits, attachments and schedules are to the same contained in or
attached to this Declaration.
11.7. Time of Essence. Time is of the essence with respect to all
provisions of this Declaration in which a definite time for performance is specified.
11.9. Counterparts. This Declaration 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 Declaration
shall not be effective until the execution by the City and Developer of at least one set of
counterparts. Any one of such completely executed counterparts shall be sufficient proof of this
Declaration.
11.10.Estoppel.The City shall, from time to time upon not less than twenty (20) days’
notice from Developer, but not more often than four times annually, execute and deliver to
Developer a certificate in recordable form stating that this Declaration is unmodified and in full
force and effect or, if modified, that this Declaration is in full force and effect, as modified, and
stating the modifications and stating whether or not, to the actual knowledge of the City Manager
(and without duty of inquiry), (a) a Potential Default or Material Default by Developer has
occurred and is continuing and (b) if a Potential Default or Material Default by Developer has
occurred and is continuing, specifying the same. In connection with any such certificate, and to
the extent that the City still has copies thereof in its possession or control, the City shall provide a
copy of the DDA, together with all amendments, supplements and modifications thereto. Any such
certificate may be relied upon by Developer or any prospective purchaser or lender of Developer.
Developer shall promptly pay all third party costs incurred by the City in the preparation and
delivery of any such estoppel, provided that such costsshall not exceed Five Thousand Dollars
($5,000.00) with respect to any single estoppel.
11.11.Force Majeure Procedures. If any Person having an obligation under this
Declaration(the “Claiming Party”) believes that it is entitled to an extension of time to perform
any obligation hereunder due to Force Majeure Delay, it shall notify the Person to which that
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)16 Portion of Disposition Area 8
obligation is owed (the “Second Party”) in writing within thirty (30) calendar days from the date
upon which the Claiming Party becomes aware of such Force Majeure Delay, describing the Force
Majeure Delay, when and how the Claiming Party obtained knowledge thereof, the date the event
commenced, the steps the Claiming Party anticipates taking to respond to such Force Majeure
Delay, and the estimated delay resulting from such Force Majeure Delay and response. The
extension for Force Majeure Delay shall be granted or denied in writing in by the Second Party in
its reasonable discretion. If the Claiming Party fails to notify the Second Party in writing of its
request for a given Force Majeure Delay within the thirty (30) calendar days specified above, there
shall be no extension for such Force Majeure Delay.
11.12.Notices. All notices, demands, consents, requests and other communications
required or permitted to be given under this Declaration shall be in writing and shall be deemed
conclusively to have been duly given (a) when hand delivered; (b) three (3) Business Days after
such notice has been sent by U.S. Postal Service via certified mail, return receipt requested, postage
prepaid, and addressed to the party to whom notice is being sent as set forth below; (c) the next
Business Day after such notice has been deposited with an overnight delivery service reasonably
approved by the Parties (Federal Express, Overnite Express, United Parcel Service and U.S. Postal
Service are deemed approved), 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 transmitted if
sent by email to the email address for the applicable representative; provided that notices given by
email shall not be effective unless either (i) a duplicate copy of such notice is promptly sent by
any method permitted under this Section 11.12 other than by email (provided that the recipient
party need not receive such duplicate copy prior to any deadline set forth herein and as no email
address is set forth below for delivery to the Senior Vice President of Developer/Owner, delivery
to Developer/Owner by email shall be deemed to have been made upon email to the email address
provided below for the general counsel of Developer/Owner); or (ii) the receiving party delivers a
written confirmation of receipt for such notice either by, email or any other method permitted
under this Section. Unless otherwise provided in writing, all notices with respect to this
Declaration shall be addressed as follows:
City: City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Aldo E. Schindler
Email: citymanager@tustinca.org
With a copy to: Deputy City Manager – Real Property
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Brian Moncrief
Email: DCM-RP@tustinca.org
And with a copy to: City Attorney
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)17 Portion of Disposition Area 8
Woodruff & Smart, APC
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Attention: David Kendig, Esq.
Email: dkendig@woodruff.law
Developer/Owner: \[CD-CW (Tustin) LLC
c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: General Counsel
Email: legal@confluentdev.com\]
And with a copy to:
\[Polsinelli
1401 Lawrence Street, Suite 2300
Denver, CO 80202
Attention: Nick McGrath
Email: nmcgrath@polsinelli.com\]
{signatures continued on next page}
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)18 Portion of Disposition Area 8
IN WITNESS WHEREOF, the City has executed this Declaration as of the date first set forth
above.
CITY OF TUSTIN:
Dated:
By: ,
Aldo E. Schindler
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)S-1 Portion of Disposition Area 8
INITIAL DEVELOPER AND DEVELOPER ACCEPTANCE AND AGREEMENT
By executing below to evidence acceptance of and agreement to the terms of this
Declaration, \[{if Transfer of DDA to new Developer occurs following recording:} CD-CW
(Tustin) LLC and\] _________ \[each\] on behalf of itself and each Successor Owner, declares for
the benefit of the City and its successors and assigns its understanding and agreement that by virtue
of its obtaining title to the Real Property, it is agreeing to assume and be bound by all of the
Restrictions set forth in this Declaration during its term of ownership of the Real Property or any
portion thereofor for such longer period as is provided herebyor as provided by the DDA during
the term thereof, and that this Declaration is and shall be binding upon it, each Successor Owner
and each and every Person claiming by, through or under Developer or any Successor Owner.
CD-CW (Tustin) LLC,
a Colorado limited liability company
Dated: __________________ By: CD Manager LLC,
a Colorado limited liability company,
its Manager
By: Confluent Development LLC,
a Colorado limited liability company,
its Manager
By: ______________________________
Name: Marshall M. Burton
Title: Chief Executive Officer
Dated: __________________ Developer
By: ___________________________
Name: _________________________
Title: __________________________
By: ___________________________
Name: _________________________
Dated: __________________ Title: __________________________
Tustin Confluent DDA Att 20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)S-2 Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
____________________________________
Signature of Notary Public Place Notary Seal and/or Stamp above
Tustin Confluent DDA Att 20 Special Restrictions S-3 City of Tustin/Confluent Development
9.26.26 (HM)Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
____________________________________
Signature of Notary Public Place Notary Seal and/or Stamp above
Tustin Confluent DDA Att 20 Special Restrictions S-3 City of Tustin/Confluent Development
9.26.26 (HM)Portion of Disposition Area 8
STATE OF COLORADO )
CITY AND ) SS:
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this ____ day of _______, 2026, by
Marshall M. Burton, as Chief Executive Officer of Confluent Development, LLC, a Colorado limited
liability company, as Manager of CD Manager LLC, a Colorado limited liability company, as Manager of
CD-CW (Tustin) LLC, a Colorado limited liability company.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
\[SEAL\]
Tustin Confluent DDA Att 20 Special Restrictions S-3 City of Tustin/Confluent Development
9.26.26 (HM)Portion of Disposition Area 8
EXHIBIT A-1
LEGAL DESCRIPTION OF DEVELOPMENT PARCEL
The Land referred to herein below is situated in the City of Tustin, County of Orange, State of
California, and is described as follows:
LOT 14, INCLUSIVE OF TRACT NO. 18197 AS SHOWN ON A MAP FILED IN BOOK 990,
PAGES 25 THROUGH 33, INCLUSIVE OF TRACT MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
For conveyancing purposes only: APN 430-481-12
Tustin Confluent DDA Att20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)Exhibit APortion of Disposition Area 8
EXHIBIT A-2
SITE PLAN DEPICTING ACTIVE ADULT REAL PROPERTY AND AL/MC REAL
PROPERTY
{see attached}
Tustin Confluent DDA Att20 Special Restrictions Attachment 20 City of Tustin/Confluent Development
9.26.26 (HM)Exhibit APortion of Disposition Area 8
EXHIBIT E
EXHIBIT A-2
TO DEVELOPMENT AGREEMENT
SITE PLAN DEPICTING ACTIVE ADULT REAL PROPERTY AND
SITE PLAN
AL/MC REAL PROPERTY
EXHIBIT B
DEFINED TERMS
“Access Easement Agreement” shall mean that certain Access Easement Agreement to
be executed and delivered by the City and recorded in the Official Records against the Real
Property concurrently with recording of this Declaration.
“Accrue”, “Accrued” or “Accruing” shall mean with respect to any Claim, the date and
time such Claim arises as a matter of law and could then or thereafter be asserted by any Person.
“Action” shall mean any action, suit, proceeding, counterclaim or other proceeding for any
relief against another Person, declaratory or otherwise.
“Active Adult Project” shall mean the development, construction, maintenance, leasing
and use of the by Developer of an age restricted (55 years or older) residential independent living
and active adult component of the Project and related Project Improvements on the Active Adult
Real Property.
“Active Adult Real Property” shall mean the approximately 2.79 acre portion of the Real
Property depicted as such on Exhibit A-2 to this Declaration and if the Final Parcel Map is recorded
in the Official Records, shall be comprised of Parcel 1 on the Final Parcel Map.
“Active Negligence” shall mean an affirmative act performed negligently and not a failure
to act.
“Affordable Housing Declaration” shallmean that certain Declaration of Affordable
Housing Restrictive Covenants and Regulatory Agreement by and between the Tustin Housing
Authority and the City dated as of the Restrictions Date and recorded in the Official Records
substantially concurrently with the recording of this Declaration, as the same may be amended or
modified from time to time.
“Agreement” shall mean the DDA as defined in this Declaration.
“AL/MC Project” shall mean the development, construction, maintenance, leasing and
use of the by Developer of the senior congregate care assisted living and memory care components
of the Project and related Project Improvements on the AL/MC Real Property.
“AL/MC Real Property” shall mean the approximately 3.35 acre portion of the Real
Property depicted as such on Exhibit A-2 to this Declaration, and if the Final Parcel Map is
recorded in the Official Records, shall be comprised of Parcel 2 of the Final Parcel Map.
“Approved Plans” (a) shall, during the term of the DDA, have the meaning set forth in the
DDA and (b) upon termination of the DDA, shall meanconstruction level drawings consistent
with the Entitlement Approvals and approved by the City or responsible agency as required to
obtain any required Development Permits.
Tustin Confluent DDA Att 20 Special Restrictions Exhibit B City of Tustin/Confluent Development
9.26.26 (HM)Page 1 of 16 Portion of Disposition Area 8
“Base Closure Law” shall have the meaning set forth in Recital A.
“Basic Concept Plan” shall mean the design, phasing, product mix and other related
submittals by Developer to the City on or before the Restrictions Date for purposes of obtaining
Entitlements approvals and to satisfy the City’s design approval rights pursuant to the DDA and
shall include the phasing and product mix as set forth in the Scope of Developmentattached to the
DDA, as the same may have been revised from time to time in accordance with the terms of the
DDA.
“Binding Agreement” shall have the meaning set forth in Section 5.3.1.
“Bioswale Easement” shall mean that certain Bioswale Easement to be executed and
delivered by the City and recorded in the Official Records against the Real Property concurrently
with recording of this Declaration.
“Boundary Landscape Area” shall mean that portion of the Real Property and the City
Property (as defined in the Landscape Installation and Maintenance Agreement), in each case
generally between the back of curb on each public street adjoining the Real Property and the
buildings on the Real Property, as more particularly depicted on Exhibit C to the Landscape
Installation and Maintenance Agreement.
“Business Day(s)” shall mean any day other than Saturday, Sunday and each City observed
legal holiday.
“CEQA” shall mean the California Environmental Quality Act and implementing
regulations and guidelines, contained in CaliforniaPublic Resources Code Section 21000 et seq.,
and California Code of Regulations, title 14, Section 15000 et seq., respectively.
“Certificate of Compliance” means a certificate issued and recorded in the Official Records
by the City upon Completion by Developer of the Project Improvements on the Active Adult Real
Property and/or the Project Improvementson the AL/MC Real Property, as applicable, and
satisfaction of all additional Conditions Precedent thereto as described in the DDA, provided that if
the Final Parcel Map is not recorded in the Official Records prior to issuance and recording by the
City in the Official Records of the first of these two Certificates of Compliance, then in lieu of
separate Certificates of Compliance for each component of the Project, there shall be only one
Certificate of Compliance issued and it shall be issued after Completion of the entirety of the Project
and satisfaction of all additional Conditions Precedent set forth in the DDA for both the Active Adult
Project and AL/MC Project. For avoidance of doubt, the number, timing, issuance and recording of
Certificates of Compliance shall be governed by Sections 1.1.13 and 1.1.34 of the Development
Agreement, and nothing in this Declaration shall impose any additional condition upon such issuance
or recording.
“City” shall mean the City of Tustin and each assignee or successor to the City of Tustin’s
rights and powers under this Declaration provided that in this Declaration where the term “City
and its Governmental Successors” is used, the term “City” shall be deemed to mean solely the City
of Tustin.
Tustin Confluent DDA Att 20 Special Restrictions Exhibit B City of Tustin/Confluent Development
9.26.26 (HM)Page 2 of 16 Portion of Disposition Area 8
“City Code” shall mean the Tustin City Code for the City of Tustin, California, as the same
may be amended from time to time.
“City Council” shall have the meaning set forth in Recital A.
“City Indemnified Parties” shall meanthe City the Successor Agency to the Tustin
Community Redevelopment Agency, the Tustin Housing Authority, the Tustin Finance Authority,
and their respective elected and appointed officials, employees, agents, representatives, attorneys,
affiliates, consultants, contractors, successors and assigns.
“City Lien” shall have the meaning set forth in Section 8.5.
“City Manager” shall mean the City Council appointed City Manager of the City of
Tustin, or other designee as identified in writing by the City Manager.
“City Property” shall have the meaning set forth in the Landscape Installation and
Maintenance Agreement.
“City Released Parties” shall mean the City, the Successor Agency to the Tustin
Community Redevelopment Agency, the Tustin Housing Authority, the Tustin Finance Authority,
and their respective elected and appointed officials, employees, agents, representatives, attorneys,
affiliates, consultants, contractors, successors and assigns.
“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, consultants’ fees and court and litigation
costs), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, monetary payment or reimbursements or any type of
compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen.
“Claiming Party” shall have the meaning set forth in Section 11.11.
“Close of Escrow” shall mean the conveyance of the Property by the City to Developer
upon the Restrictions Date.
“Closing Date” shall mean the Restrictions Date.
“Construction Liens” shall have the meaning set forth in Section 8.11.6 of the DDA (as
incorporated in Section 6.3 of this Declaration).
“Control”, “Controlled” or “Controlling”, as used with respect to any Person, shall mean
the possession, directly or indirectly (including through one or more intermediaries), of the current
power to direct or cause the direction of the management and policies of such Person, including
through the ownership or control of voting securities, partnership interests, membership interests,
or other equity interests. Notwithstanding the foregoing, (i) the right of a Person to participate
directly or indirectly (including through one or more intermediaries) in significant management
Tustin Confluent DDA Att 20 Special Restrictions Exhibit B City of Tustin/Confluent Development
9.26.26 (HM)Page 3 of 16 Portion of Disposition Area 8
decisions of another Person, without more, does not constitute “Control” if such Person with the
right to participate in decisions does not also possess, directly or indirectly (including through one
or more intermediaries), the current ability to direct or cause the direction of the management and
policies of such other Person and (ii) the fact that a Person acts as the Manager does not without
more constitute “Control”. Without limiting the generality of the foregoing, it shall be a
presumption that control with respect to a corporation or limited liability company is the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting rights granted to all
equity holders in the corporation or limited liability company. It shall be a presumption that control
with respect to other types of entities such as a partnership, trust, other entity or association, is the
possession by a Person, indirectly or directly, of the power to direct or cause (by such Person’s
sole action) the direction of the management or policies of the controlled entity.
“Controlling Person” shall mean, as to any Person, any other Person who Controls the
Person in question. Notwithstanding the foregoing, if a Person has the right to participate directly
or indirectly (including through one or more intermediaries) in significant management decisions
of Developer, such Person shall not be deemed to be a Controlling Person of Developer unless
such Person also possesses, directly or indirectly (including through one or more intermediaries),
the power to direct or cause the direction of the management and policies of Developer.
“DDA” shall have the meaning set forth in Recital D.
“Declaration” shall have the meaning set forth in the preamble to this Declaration.
“Default” shall mean a Potential Default and/or Material Default.
“Defended Party” shall have the meaning set forth in Section 10.8 of the DDA (as
incorporated in Section 6.15 of this Declaration).
“Defending Party” shall have the meaning set forth in Section 10.8 of the DDA (as
incorporated in Section 6.15 of this Declaration).
“Developer” shall mean (i) prior to recording in the Official Records by the City of a
Certificate of Compliance, each Person that is the Developer under the DDA and (ii) following
recording in the Official Records by the City of a Final Certificate of Compliance, the Owner of
the Real Property or any interest therein or component thereof.
“Developer Final Parcel Map” shall mean a final map based on the Tentative Parcel Map
or other subdivision map approved by the City approved by the City and the Orange County
Surveyor’s office to further subdivide the Real Property and recorded in the Official Records.
“Developer Releasing Party” shall have the meaning set forth in Section 4.5.3 of the DDA
(incorporated as part of Section 6.2 of this Declaration).
“Developer Representatives” shall have the meaning set forth in Section 6(i)(d) of this
Declaration.
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9.26.26 (HM)Page 4 of 16 Portion of Disposition Area 8
“Development Agreement” shall mean that certain Tustin Legacy Development
Agreement (undated), by and between the City and Developer, recorded on
___________________ in the Official Records as Instrument No. _____________________ \[{if
applicable}, as amended by that certain {insert new document name and date and recording
information if applicable}\], and as the same may hereafter be further amended, modified or
1
supplemented in accordance with its terms.
“Development Parcel” shall have the meaning set forth in Recital C.
“Development Permits” shall mean all ministerial permits, certificates and approvals
which may be required by the City or any other Governmental Authority for the development and
construction of the Project Improvements, respectively, including any engineering permits,
grading permits, parking structure permits, construction permits, encroachment permits,
demolition permits, building permits or other permits as may be necessary pursuant to Chapter 4
of the Specific Plan and/or the City Code and which shall be obtained and maintained in each case
in accordance with the DDA, the Development Agreement, the Entitlements and any required
environmental mitigation.
“Due Diligence Information” shall mean any and all information or documentation
relating to the Development Parcel furnished to Developer by the City, or its elected and appointed
officials, employees, agents, attorneys, affiliates, representatives, contractors or consultants or
obtained by Developer with respect to the Property or the Project prior to the Close of Escrow.
“Effective Date” shall mean ______________, 202_, the effective date of the \[original\]
2
DDA.
“End User” shall mean any (i) utility or Governmental Authority with respect to any
transfer of portions of the Real Property or grants of easements affecting the Real Property
desirable for the development of the Real Property, including the City or any lighting or
landscaping district and (ii) for the term in which such contract is in effect, any natural person that
has a contractual right to inhabit and does inhabit a Residential Unit or Room.
“Entitlements” shall mean the Development Agreement and all discretionary land use
approvals and entitlements legally required by the City or any other Governmental Authority as a
condition of subdivision of the Real Property or any portion thereof, development of the Real
Property and/or construction of the Project Improvements and shall include those specific
Entitlements described in the Development Agreement, butspecifically excluding Development
Permits.
“Environmental Agency” shall mean any federal, State, or regional agency with
1
NTD: To be filled in.
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9.26.26 (HM)Page 5 of 16 Portion of Disposition Area 8
applicable jurisdiction over the environmental conditions of the Real Property.
“Environmental Claims” shall have the meaning set forth in Section 10.2 of the DDA (as
incorporated in Section 6.9 of this Declaration).
“Environmental Documents” shall mean the documents delivered by the City to
Developer as set forth on Attachment 10 to the DDA (the list of such documents is attached to this
Declaration for reference as Exhibit C).
“Environmental Laws” shall mean any federal, State, regional or local laws, ordinances,
rules, regulations, 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 1980, as amended (42 U.S.C. Section 9601, et seq.) (“CERCLA”); the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 6901 et seq.)
(“RCRA”); the federal Water Pollution Control Act, as amended, (33 U.S.C. Section 1251 et seq.);
the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601 et seq.); the Hazardous
Substances Account Act (Part 2 commencing with Section 78000 of Division 45 of the California
Health and Safety Code); Chapter 6.5 commencing with Section 25100 (Hazardous Waste Control)
and Chapter 6.7 commencing with Section 25280 (Underground Storage of Hazardous Substances)
of the California Health and Safety Code; and the California Water Code, Sections 13000 et seq.
“Environmental Matters” shall mean (i) the environmental condition of the Development
Parcel; (ii) the compliance of the Development Parcel with Environmental Laws; (iii) the
existence, Release, threatened Release, presence, storage, treatment, transportation or disposal of
any Hazardous Materials at any time on, in, under, or from, the Development Parcelor any current
or future improvement thereon or any portion thereof, and/or (iv) Claims of or acts or omission to
act of any Governmental Authority or any other third party arising or resulting directly or indirectly
from or related to any actual, threatened, or suspected Release of a Hazardous Material on, in,
under, from, about, or adjacent to the Development Parcel or any current or future improvement
thereon, including any Investigation or Remediation at or about the Development Parcelor any
current or future improvement thereon; provided that if the property in question is Returned
Property, the forgoing shall apply as to the Returned Property only.
“Federal Deed” shall mean that certain Quitclaim Deed D and Environmental Restriction
Pursuant to Civil Code Section 1471 dated May 13, 2002, that was recorded in the Official Records
on May 14, 2002 as Instrument Number 20020404594.
“Federal Government” shall mean the United States of America (including the Navy), by
and through the Secretary of the Navy, or designee.
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“Final Certificate of Compliance” means the Certificate of Compliance issued and
recorded by the City in the Official Records for the last of the Active Adult Project or the AL/MC
Project upon satisfaction of all Conditions Precedent therefor set forth in the DDA, provided that
if the Final Parcel Map is not recorded in the Official Records prior to issuance and recording by
the City in the Official Records of the first of those two Certificates of Compliance, then the single
Certificate of Compliance recorded by the City in the Official Records after Completion of the
entirety of the Project and satisfaction of all additional Conditions Precedent set forth in the DDA
or both the Active Adult Project and AL/MC Project shall be the Final Certificate of Compliance.
“Final Parcel Map” means final parcel map No. 2025-151 approved by the City and the
Orange County Surveyor’s office and recorded in the Official Records, subdivide the Real
Property into Parcel 1 (comprised of the Active Adult Real Property) and Parcel 2 (comprised of
the AL/MC Real Property).
“Force Majeure Delay” shall mean any cause whatsoever beyond the reasonable control
of a party and which directly, materially and adversely affects the ability of such party to meet its
non-monetary obligations under this Declaration, and which events (or the effect of which events)
could not have been avoided by due diligence and use of reasonable efforts by such party and shall
include without limitation, epidemic, pandemic, shut-down, blockade, quarantine, rebellion, war,
act of terrorism, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of
God, freight embargoes, lack of transportation, change in governmental restrictions or
requirements, administrative appeals, arbitration or litigation (including litigation challenging any
Entitlement or permits), unusually severe weather, inability to secure necessary labor, materials or
tools, acts or failure to act of any Governmental Authority, the presence of Hazardous Materials
on the Development Parcel or substantial interruption of work due to other construction by third
parties in the immediate vicinity of the Development Parcel. A cause shall not be deemed beyond
the reasonable control of a party when such cause is peculiar to a party (such as a party’s financial
condition, illiquidity, or insolvency), when arising out of the inaction or delay of a party, or to the
extent caused by the negligent or intentional act or omission of a party or any of its agents,
contractors or affiliates or the breach by a party of its obligations under this Declaration.
Notwithstanding the foregoing, prior to recording in the Official Records by the City of a
Certificate of Compliance as to a portion of the Real Property, no cause or event shall constitute a
“Force Majeure Delay” for purposes of this Declaration as to such portion of the Real Property
unless such cause or event comprises a “Force Majeure Delay” pursuant to the DDA entitling a
party under the DDA to suspend or otherwise delay performance. From and after recording in the
Official Records by the City of a Certificate of Compliance as to a portion of the Real Property, as
to such portion of the Real Property the definition of “Force Majeure Delay” for purposes of this
Declaration shall be solely as set forth in this Declaration without regard to the definition of “Force
Majeure Delay” as set forth in the DDA.
“FOST” shall mean the Department of Navy findings and determinations that the
Development Parcel was suitable for transfer to the City, pursuant to Finding of Suitability for
Transfer for Southern Parcels 4-8, 10-12, 14, and 42 and Parcels 25, 26, 30-33, 37, and Portions
of 40 and 41 dated September 28, 2001 (FOST #2).
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“General Plan” shall mean the most current General Plan of the City of Tustin.
“Governmental Authority”and “Governmental Authorities”shall mean, respectively,
each 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 either or any of the Parties,
the Project, the Development Parcel or over any property owned by the City upon which work is
conducted by or on behalf of Developer in connection with construction of the Project or such
portions of the foregoing as the context indicates.
“Governmental Capacity” shall mean the exercise by the City of its governmental
authority with respect to any matter related to this Declaration which shall include the regulation
and entitlement of the Development Parcelpursuant to the Entitlements, Development Permits
and/or Governmental Requirements, including enacting laws, inspecting structures, reviewing and
issuing permits, and all of the other legislative and administrative or enforcement functions of each
pursuant to federal, State or local law.
“Governmental Requirements” shall mean all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines, conditions, instructions, and other requirements issued by any
Governmental Authority having jurisdiction over, governing, applying to or otherwise affecting
any or all of the Parties, the Project, the Project Improvements, the Development Parcel or any
component thereof or over any property owned by the City upon which work is conducted by or
on behalf of Developer in connection with construction of the Project, as applicable, and including
the California Surplus Land Act and Guidelines as the same may be amended from time to time,
Environmental Laws, the City Code, the Specific Plan, the Entitlements, the Development Permits
and the Approved Plans.
“Governmental Successors” shall mean each and every Person that is a successor or an
assignee of the City of Tustin and that is a governmental entity or agency.
“Grading Work” shall mean all of the grading work required to be completed by
Developer pursuant to the Approved Plans, which shall include rough and precise grading of the
Real Property and the portions of the Boundary Landscape Area owned by the City, including
internal drives and access points.
“Hazardous Materials” shall mean and include the following:
(a) “Hazardous Substance”, “Hazardous Material”, “Hazardous Waste”,
or “Toxic Substance” under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. Section 5101, et seq., or the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq.;
(b) An “Extremely Hazardous Waste”, a “Hazardous Waste”, or a
“Restricted Hazardous Waste”, under Sections 25115, 25117, or 25122.7 of the California
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9.26.26 (HM)Page 8 of 16 Portion of Disposition Area 8
Health and Safety Code, or is listed or identified pursuant to Section 25140 or 44321 of the
California Health and Safety Code;
(c) “Hazardous Material”, “Hazardous Substance”, “Hazardous Waste”,
“Toxic Air Contaminant”, or “Medical Waste” under Sections 25281, 25501, 78075(a), 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 Title 22 of the California
Code of Regulations;
(f)Listed by California as a chemical known by California to cause cancer or
reproductive toxicity pursuant to Section 25249.8 of the California Health and Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public 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 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. Section 136 et seq.;
(j) Asbestos, PCBs and other substances regulated under the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.;
(k) Any radioactive material including any “source material”, “special nuclear
material”, “by-product material”, “low-level wastes”, “high-level radioactive waste”, “spent
nuclear fuel” or “transuranic waste”, and any other radioactive materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. Section 2011 et seq., the
Nuclear Waste Policy Act, 42 U.S.C. Section 10101 et seq.,or pursuant to the California Radiation
Control Law, California Health and Safety Code Section 114960 et seq.;
(l) Regulated under the Occupational Safety and Health Act, 29 U.S.C. Section
651 et seq., or the California Occupational Safety and Health Act, California Labor Code Section
6300 et seq.;
(m) Regulated under the Clean Air Act, 42 U.S.C. Section 7401 et seq. or
Tustin Confluent DDA Att 20 Special Restrictions Exhibit B City of Tustin/Confluent Development
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pursuant to Division 26 of the California Health and Safety Code; and/or
(n)Any substance or compound regarding which a federal or State agency has
established a health advisory, including but not limited to, Perfluorooctanoic Acid (PFOA) and
Perfluorooctane Sulfonate (PFOS) or any associated additives or degradation byproducts thereof.
“High Quality Project” shall mean an age restricted (55 years or older) and/or senior
congregate care development that represents the highest quality in design and construction in the
market area and very well maintained and professionally managed to the highest industry
standards.
“High Quality Standards” shall mean, in terms of the quality of maintenance, standards
consistent with a High Quality Project.
“Horizontal Improvements” shall mean with respect to both the Active Adult Project and
the AL/MC Project, the Grading Work and below grade infrastructure improvements and utilities
and utility systems required to be constructed or installed on or in connection with the development
of the Project on the Real Property as required by the Approved Plans which may include (i) all
public and private streets, roadways, drives, bike paths, alleyways, sidewalks, medians, including
the Private Drives and Sidewalks, landscaping, including Landscape Improvements, courtyards,
hardscaping, fountains and parking structures and parking lots within the Real Property and all
traffic and circulation mitigation to support the Project; (ii) all utilities and utility systems required
for the Project from the mainline utility systems constructed in adjoining streets to each building,
structure and other improvement requiring such utilities, including domestic and reclaimed water;
sewer; telemetry; utilities (electricity, gas, telephone, cable, telecommunications, etc.), and other
infrastructure normally required to service a new High Quality Project; and (iii) all improvements
required as “Public Benefit Improvements” in the Development Agreement and all sidewalks
within the Boundary Landscape Area; and shall include all improvements required by the Tentative
Parcel Map, the Entitlements, Development Permits conditions and all other Governmental
Requirements as a condition to development of the Project.
“Investigation(s)” shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Development Parcel, or any other property upon which Developer is required
to construct the Project Improvements, including the air, soil, surface water, and groundwater, and
the surrounding population or properties, or any of them, to characterize or evaluate the nature,
extent or impact of Hazardous Materials.
“Landscape Improvements” shall have the meaning set forth in the Landscape
Installation and Maintenance Agreement.
“Landscape Installation and Maintenance Agreement” shall mean the agreement of the
same name executed by the City and Developer and recorded in the Official Records against the
Real Property substantially concurrently with recording of this Declaration in the Official Records.
“Material Default” shall mean any Potential Default that is not timely cured in accordance
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9.26.26 (HM)Page 10 of 16 Portion of Disposition Area 8
with Section 8.2, provided that as to any Potential Default under the DDA or this Declaration, the
default and notice of default provisions and the remedies of the City and Developer under the DDA
shall govern as to each portion of the Real Property until recording by the City in the Official
Records of a Certificate of Compliance forthat portion of the Real Property and during that period
shall supersede the default, notice of default and remedies provisions of this Declaration.
“MCAS Tustin” shall have the meaning set forth in Recital A.
“Memorandum of Agreement” shall mean that certain Memorandum of Agreement by
and between The United States of America (through the Secretary of the Army or designee) and
the City dated May 13, 2002.
“Mortgage” shall mean any indenture of mortgage or deed of trust, hypothecation, pledge,
assignment for security purposes, bond, grant of taxable or tax-exempt funds from a governmental
agency or other security interest or any documents constituting or relating to a sale-leaseback
transaction, together with all loan documents related thereto, but excluding any community
facilities districts, service districts, assessment districts, landscape and lighting districts or other
assessments created or imposed by any Governmental Authority, and for the avoidance of doubt
shall include any Permitted Mortgage.
“Mortgagee” shall mean any mortgagee, beneficiary, secured party (or any agent for one
or more lenders acting in any of the foregoing capacities) under any Mortgage or, with respect to
any property that is the subject of a sale-leaseback transaction, the Person acquiring fee title, and
for the avoidance of doubt shall include any Permitted Mortgagee.
“Navy” shall mean the United States Department of Navy.
“Navy Conveyance Agreement” shall have the meaning set forth in Recital B.
“Navy Responsibilities” shallhave the meaning set forth in Section 4.5.2.3 of the DDA
(incorporated as part of Section 6.1 of this Declaration).
“Non-Compete Period” shall have the meaning set forth in Section 5.3.1.
“Non-Compete Property” shall have the meaning set forth in Section 5.3.1.
“Non-Compete Provisions” shall have the meaning set forth in Section 5.3.
“Non-Environmental Claims” shall mean all Claims brought by third parties that are not
Environmental Claims.
“Official Records” shall the Office of the County Clerk Recorder, Orange County,
California.
“Original DDA” shall have the meaning set forth in Recital D.
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“Other Agreements” shall mean the Development Agreement, the Memorandum of DDA,
the SLA Covenant, this Declaration, the Affordable Housing Declaration, the Quitclaim Deed, the
Landscape Installation and Maintenance Agreement, the Access Easement Agreement and the
Bioswale Easement.
“Owner” shall mean Developer and each Successor Owner holding fee title to all or any
portion of the Real Property.
“Owner Affiliate” shall mean with respect to any Owner, any entity that directly or
indirectly Controls, is Controlled by or is under common Control with that Owner.
“Owner Representatives” shall mean as to an Owner, such Owner’s officers, directors,
employees, agents, representatives, consultants, contractors, and other persons accessing the
Boundary Landscape Area by, through or with the permission or under the direction or auspices
of such Owner.
“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 any portion of the Real Property for the purpose of development, construction or
refinancing of all or any portion of the Project and approved by the City pursuant to the DDA.
There shall not be more than one Permitted Mortgage for the Real Property.
“Permitted Mortgagee” shall mean the Mortgagee with respect to any Permitted
Mortgage affecting the Real Property or any portion thereof, and any successor or assign of such
having all right, title and interest in and to the loan documents, and in each case meeting the criteria
set forth in the DDA and accordingly entitled to the Permitted Mortgagee protections provided by
the DDA.
“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 any default that is by the terms of this Declaration a
“Potential Default.
“Private Drives and Sidewalks” shall mean those private streets, roadways, sidewalks,
pedestrian pathways, and bike ways to be constructed by Developer on the Real Property.
“Project” shall have the meaning set forth in Recital F.
“Project Fair Share Contribution” shall mean the fair share of the Tustin Legacy
Backbone Infrastructure Program required to be paid by Developer to the City at the Close of
Escrow.
“Project Improvements” shall mean and all Buildings, structures, improvements, Private
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9.26.26 (HM)Page 12 of 16 Portion of Disposition Area 8
Drives and Sidewalks and all other roads, drives, bike paths, alleyways, sidewalks, utilities,
courtyards, landscaping, hardscaping and fountains.
“Property” shall have the meaning set forth in Recital E.
Proprietary Capacity” shall mean the exercise by the City of its rights under this
Declaration and the Other Agreements in its proprietary capacity of the City as owner, lessor,
assembler, redeveloper and/or seller of property as opposed to its Governmental Capacity.
“Quitclaim Deed” shall mean that certain Quitclaim Deed for Portion of Disposition Area
8 and Covenants, Conditions and Restrictions, Including Environmental Restriction Pursuant to
Civil Code Section 1471 dated as of the Restrictions Date, from the City to Developer and recorded
in the Official Records following recording in the Official Records of this Declaration.
“Real Property” shall have the meaning set forth in Recital E.
“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(23) through (25) of CERCLA, and similar actions with respect to Hazardous
Materials as defined under comparable state and local laws, and any other cleanup, removal,
containment, abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure,
restoration or other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
“Repurchase Property” shall mean the portion of the Property, if any, repurchased by
City pursuant to Section 16.3 of the DDA, which right of repurchase expires on the Vertical
Improvements Commencement Date.
“Residential Unit” or “Residential Units” shall mean age restricted (55 years or older)
active adult and independent living residential units to be developed on the Active Adult Real
Property.
“Restricted Uses” shall have the meaning set forth in Section 5.3.1.
“Restrictions” shall have the meaning set forth in Section 1.
“Restrictions Date” shall have the meaning set forth in the preamble to this Declaration.
“Returned Property” shall mean the Repurchase Property or the Reversion Property as
the case may be.
“Reuse Plan” shall have the meaning set forth in Recital A.
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“Reversion Event” shall mean the revesting of any Reversion Property by the City
pursuant to Section 16.4 of the DDA during the term of the DDA.
“Reversion Property” shall mean the portion of the Property, if any, reverted to City
pursuant to Section 16.4 of the DDA, which right of reversion expires on the Vertical
Improvements Commencement Date.
“Rooms” shall mean the senior congregate care assisted living and memory care rooms
within each building to be developed on the AL/MC Real Property.
“Second Party” shall have the meaning set forth in Section 11.10.
“SLA Covenant” means that certain Surplus Land Act Covenant (per Government Code
Section 54233) made by the City and recorded in the Official Records against the Real Property
substantially concurrently with the recording of this Declaration.
“SLA Regulations” shall mean those statutes and guidelines promulgated from time to
time imposing requirements upon the City with respect to disposition of real property owned by
it, including the requirements of California Government Code Section 54220-54234 and the
Updated Surplus Land Act Guidelines issued by the California Department of Housing and
Community Development on August 1, 2024, as each may be amended from time to time.
“Specific Plan” shall mean the MCAS Tustin S pecific Plan/Reuse Plan originally adopted
by the City on February 3, 2003, as the same may have been previously or may be subsequently
amended.
“State” shall mean the State of California.
“Successor Owner” shall mean each and every Person owning or acquiring fee title to all
or any portion of the Real Property from and after the conveyance of such Real Property to
Developer by the City, but excluding any End Users; provided that prior to recording by the City
in the Official Records of a Certificate of Compliance for a portion of the Real Property, as to such
portion of the Real Property any Transfer shall be subject to the applicable limitations set forth in
Article 2 of the DDA.
“Tentative Parcel Map” shall mean Tentative Parcel Map No. 2025-151 approved by the City
on September 2, 2026.
“Term” shall have the meaning set forth in Section 4.
“Term of this Agreement” shall have the meaning set forth in Section 6(i)(h) of this
Declaration.
“Transfer” shall mean (i) the transfer, sale, assignment, lease, sublease, license, gift,
hypothecation, mortgage, pledge or encumbrance, or other similar conveyance by any Developer
of Developer’s interests in this Declaration, the Project, the Property, the Project Improvements
Tustin Confluent DDA Att 20 Special Restrictions Exhibit B City of Tustin/Confluent Development
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thereon, as applicable, or any portion thereof or interest therein, whether voluntary, involuntary,
by operation of law or otherwise, or any agreement to do so; (ii) the granting by Developer of any
Mortgage, easement, license, lien or other encumbrance and/or the execution of any installment
land sale contract or similar instrument affecting all or a portion of the Project, the Property, the
Project Improvements thereon, or any portion thereof or interest of Developer therein; (iii) any
merger or similar term as such term is defined by the law of the state in which the transferor entity
is formed, and that has the same effect as any of the circumstances described in clauses (i) or (ii)
of this definition, and (iv) shall also include any conversion of Developer to an entity form other
than that of Developer at the time of execution of this Declaration,provided that a lease by
Developer of the Property to an operating entity that directly or indirectly Controls, is Controlled
by or is under common Control with Developerfor the purpose of operating the Project upon
occupancy and with an effective or commencement date on or after the date on which afinal or
temporary certificate of occupancy is obtained for the Property shall not constitute a “Transfer”
within the meaning of this definition.
“Transfer of Control” shall mean, with respect to Developer or Developer’s Controlling
Person, the occurrence, directly or indirectly, in a single transaction or a series of transactions, of
any of the following:
(i) the conveyance, sale, assignment, transfer or disposition of all or
substantially all of that Person’s (or its Controlling Person’s) assets, stock, membership or
partnership interests or other equity interests;
(i) the dissolution, merger, reorganization, share exchange, recapitalization,
restructuring or consolidation of that Person (or its Controlling Person), other than a transaction
that would result in all of the voting securities of that Person (or its Controlling Person) outstanding
immediately prior thereto to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50.01% of the combined voting
power of all of the voting securities of that Person (or its Controlling Person) or such surviving
entity outstanding immediately after such transaction; and
(ii) the acquisition by any “Person” or “Group” (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) of an aggregate of 50.01% or more of
the beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934) of the issued and outstanding voting securities or other equity interests of that Person (or its
Controlling Person), where such acquiring “Person” or “Group” did not directly or indirectly (or
through an affiliate) already Control or own at least 50.01% of the voting securities or other equity
interests of such Person (or its Controlling Person).
“Tustin Legacy” shall have the meaning set forth in Recital B.
“Tustin Legacy Backbone Infrastructure Program” shall mean the Tustin Legacy
Backbone Infrastructure Program in effect as of the Effective Date.
“Vertical Improvements” shall mean all buildings, structures and other improvements,
other than the Horizontal Improvements, to be constructed or installed on the Property, consistent
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with the Specific Plan, the Approved Plans, the Entitlements and the Development Permits.
“Vertical Improvements Commencement Date” shall mean the date on which the
inspection of the reinforcing steel for the walls and/or columns of the ground-level parking
structure for the Active Adult Project or AL/MC Project has been undertaken and passed, and the
passing of such inspection shall constitute commencement of vertical construction.
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EXHIBIT C
LIST OF ENVIRONMENTAL REPORTS AND STATEMENTS
1. Department of Navy “Final Environmental Baseline Survey” dated March 2001
2. Finding of Suitability to Transfer for Southern Parcels 4-8, 10-12, 14, and 42 and Parcels
25, 26, 30-33, 37, and Portions of 40 and 41 Marine Corps Air Station Tustin, California”
dated September 28, 2001.
3. Finding of Suitability for Transfer for Parcels 23, 29, 34, 35, and 36, and Portions of 1,
16, 17, 24, 27, 28, 40 and 41 dated April 22, 2002
4. Agreement Between The United States of America and The City of Tustin, California for
the Conveyance of a Portion of the Former Marine Corps Air Station Tustin dated May
13, 2002
5. Quitclaim Deed D and Environmental Restriction Pursuant to California Civil Code
Section 1471 dated May 13, 2002
6. Quitclaim Deed G and Environmental Restriction Pursuant to California Civil Code
Section 1471 dated May 13, 2002.
7. Geotechnical Report of Observation and Testing during Rough Grading, “Neighborhood
D” Phases I and II, Disposition Area 8, 2C and a Portion of 2B, Tustin Legacy, City of
Tustin, California dated September 26, 2014.
8. Final Summary Report for Per-and Polyfluoroalkyl Substances Sampling at Operable
Unit 3, IRP Site 1, Former Marine Corps Air Station Tustin dated April 2018
9. Final Site Assessment and Soil Removal Action Report Tustin Neighborhood D-South,
Areas 1 and 2 Total Petroleum Hydrocarbon Impacts Former Marine Corps Air Station
Tustin, Tustin, California dated September 2018.
10. Determination of No Further Action for Petroleum Release at Neighborhood D South at
Former Marine Corps Air Station Tustin, Orange County, California dated September 10,
2018.
11. Final Summary Report for PFAS Groundwater Sampling in Carve-Outs 5 and 6
(November 2018)
12. N-D South PFAS Investigation Report (August 2019)
13. N-D South PFAS Investigation Report Appendices
14. Final Summary Report, Additional Assessment of PFAS in Groundwater in Carve-Outs
2, 5, 6 and 9 and near OU-3 (June 2020)
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15. Final Summary Report, Additional Assessment of PFAS in Groundwater in Carve-Outs
2, 5, 6 and 9 and near OU-3 Phase 2 (October 2020)
16. Final Preliminary Assessment/Site Inspection Report Basewide Investigation of Per- and
Polyfluoroalkyl Substances (December 2021)
17. Revised Final Preliminary Assessment/Site Inspection Report Basewide Investigation of
Per- and Polyfluoroalkyl Substances (August 2022)
18. Draft Work Plan Remedial Investigation of Per- and Polyfluoroalkyl Substances (June
2023)
19. Final Work Plan Remedial Investigation of Per- and Polyfluoroalkyl Substances (January
2024)
20. Grading Report for ND South Phase 2 Package 1, including without limitation the rough
grade certificates by David Hoopfer, civil engineer for Michael Baker International, as to
bridge mounds on October 21, 2024 and January 27, 2026 and Jeremy Beck for Landmark
Surveying on January 16, 2026.
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EXHIBIT D
MAP OF NON-COMPETE PROPERTY
\[see attached\]
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ATTACHMENT 21
FORM OF LANDSCAPE INSTALLATION
AND MAINTENANCE AGREEMENT
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND TO BE
EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE 6103
AND 27383.
Recording requested by and
When recorded mail to:
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER’S USE
LANDSCAPE INSTALLATION
AND MAINTENANCE AGREEMENT
This LANDSCAPE INSTALLATION AND MAINTENANCE AGREEMENT
(“Agreement”) is entered into this___ day of ____________, 202_ (“Effective Date”) by and
between the CITY OF TUSTIN, a municipal corporation of the State of California (as further
defined below, “City”) and _____________________, a ___________ limited liability company
(“Developer”).
RECITALS
A.The City and Developer, as successor in interest to CD-CW (Tustin) LLC, a
Colorado limited liability company, have entered into the Tustin Legacy Disposition and
Development Agreement for Portion of Disposition Area 8, dated as of _______, 2026 \[{if
amended, insert amendment information:}as amended by __________, collectively,\](“DDA”)
and a memorandum of the DDA has been recorded in the office of the Orange County Clerk
Recorder (“Official Records”) immediately prior to recording in the Official Records of the
Quitclaim Deed (defined below).
B.The City and Developer, as successor in interest to CD-CW (Tustin) LLC, a
Colorado limited liability company, have also entered into certain Tustin Legacy Development
Agreement (undated) recorded in the Official Records on _______________, 2026 as Instrument
No. ___________\[{if amended, insert amendment information:}as amended by __________,
collectively,\] (“Development Agreement”). The Development Agreement imposes certain
obligations upon Developer, including, without limitation, the obligation to construct certain
public benefit improvements including entry into this Agreement and installation, maintenance,
repair and replacement of the Landscape Improvements.
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C.As of the Effective Date, Developer is the Owner of that certain land legally
described on Exhibit A to this Agreement (“Real Property”) upon which shall be developed an
age restricted (55 years or older) active adult and independent living facility and senior congregate
care comprised of assisted living and memory care facilities and related improvements and
amenities to be constructed in accordance with the Approved Plans, the Entitlements and the
Development Permits (collectively, “Project”).
D.The City is the owner of certain land located adjacent to and surrounding the Real
Property comprising a portion of the Boundary Landscape Area (defined below) as depicted on
Exhibit B (“City Property”).
E.The City has approved certain Entitlements (defined below) with respect to the Real
Property, including, without limitation, (i) Design Review approval (Design Review application
2025-0008) adopted by the City of Tustin City Council pursuant to Resolution No.__________,
on ___________, 2026; and (ii) Conditional Use Permit approval (CUP 2025-0012); adopted by
the City of Tustin City Council pursuant to Resolution No.__________, on ___________, 2026.
The conditions of approval with respect to the Entitlements (collectively, “Conditions”) and the
terms of the DDA and the Development Agreement require that Developer install the Landscape
Improvements (defined below) within the Boundary Landscape Area and maintain the Landscape
Improvements as described in this Agreement.
F.Developer has agreed to execute this Agreement to provide for installation of the
Landscape Improvements and the maintenance by Developer and its Successor Owners of the
Boundary Landscape Area and the Landscape Improvements. This Agreement shall be a covenant
running with the land and burdening the Real Property for the benefit of the portions of the City
Property and the City and its successors and assigns.
NOW, THEREFORE, in consideration of the benefits conferred, the mutual covenants and
conditions contained herein, and the duties and obligations incurred, the parties hereto agree as
follows:
AGREEMENT
1.Definitions. For purposes of this Agreement, the following capitalized terms shall have the
following meanings:
“Accrue”, “Accrued” or “Accruing” shall mean with respect to any Claim, the date and
time such Claim arises as a matter of law and could then or thereafter be asserted by any Person.
“Affiliate” shall mean with respect to any Owner, any entity that directly or indirectly
Controls, is Controlled by or is under common Control with that Owner.
“Affordable Housing Declaration” shall mean the Declaration of Affordable Housing
Restrictive Covenants and Regulatory Agreement by and between the Tustin Housing Authority
and the City recorded in the Official Records immediately prior to recording of the Quitclaim
Deed.
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“Agreement” shall have the meaning set forth in the preamble to this Agreement.
“Approved Plans” shall, during the term of the DDA, have the meaning set forth in the
DDA and, upon termination of the DDA, shall mean construction level drawings consistent with
the Entitlements and approved by the City or responsible agency as required to obtain any required
Development Permits.
“Boundary Landscape Area” shall mean that portion of the City Property and that portion
of the Real Property, in each case generally between the back of curb on each public street
adjoining the Real Property and the buildingson the Real Property, as more particularly depicted
on Exhibit C.
“Business Day(s)” shall mean any day other than Saturday, Sunday and each City observed
legal holiday.
“Certificate of Compliance” shall mean a certificate of compliance issued by the City and
recorded in the Official Records pursuant to the terms of the DDA to document the completion of
the improvements comprising the Project, including without limitation the Landscape
Improvements and, except as otherwise set forth therein, the termination of the DDA as to all or a
portion of the Real Property and the Project.
“City” shall have the meaning set forth in the preamble to this Agreement and where used
in this Agreement shall include the successors and assigns of the City.
“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 Improvement Areas” shall have the meaning set forth in Section 7.2.
“City Improvements” shall mean the standard and/or meandering perimeter public street
sidewalks on the Boundary Landscape Area and the existing bioswale and rock wall located on
the Real Property, but shall exclude public sidewalks in the Enhancement Areas, if any.
“City Indemnified Parties” shall mean the City, the Successor Agency to the Tustin
Community Redevelopment Agency, the Tustin Housing Authority, the Tustin Finance Authority,
and their respective elected and appointed officials, employees, agents, representatives, attorneys,
affiliates, consultants, contractors, successors and assigns.
“City Indemnified Party” shall mean any one or more of the City Indemnified Parties,
individually.
“City Lien” shall have the meaning set forth in Section 12.2.
“City Property” shall have the meaning set forth in Recital D.
“Claims” shall have the meaning set forth in Section 9.1.
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“Conditions” shall have the meaning set forth in Recital E.
“Control” “Controlled” or “Controlling”, as used with respect to any Person, shall mean
the possession, directly or indirectly (including through one or more intermediaries), of the current
ability to direct or cause the direction of the management and policies of such Person, including
through the ownership or control of voting securities, partnership interests, membership interests,
or other equity interests. Notwithstanding the foregoing, (i) the right of a Person to participate
directly or indirectly (including through one or more intermediaries) in significant management
decisions of another Person, without more, does not constitute “Control” if such Person with the
right to participate in decisions does not also possess, directly or indirectly (including through one
or more intermediaries), the current ability to direct or cause the direction of the management and
policies of such other Person and (ii) the fact that a Person acts as the Manager does not without
more constitute “Control”. Without limiting the generality of the foregoing, it shall be a
presumption that control with respect to a corporation or limited liability company is the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting rights granted to all
equity holders in the corporation or limited liability company. It shall be a presumption that control
with respect to other types of entities such as a partnership, trust, other entity or association, is the
possession by a Person, indirectly or directly, of the power to direct or cause (by such Person’s
sole action) the direction of the management or policies of the controlled entity..
“Controlling Person” shall mean (i) any Person who Controls Developer (or either of
them) during the term of this Agreement and (ii) any Person who Controls a Controlling Person.
Notwithstanding the foregoing, if a Person has the right to participate directly or indirectly
(including through one or more intermediaries) in significant management decisions of Developer,
such Person shall not be deemed to be a Controlling Person unless such Person also possesses,
directly or indirectly (including through one or more intermediaries), the power to direct or cause
the direction of the management and policies of such Developer.
“DDA” shall have the meaning set forth in Recital A.
“Default Interest Rate” shall mean an interest rate of ten percent (10%) per annum,
compounded annually, but in no event in excess of the maximum legal rate.
“Default Notice” shall have the meaning set forth in Section 12.1.
“Developer” shall mean (i) as to the Real Property or any subdivided portion thereof for
which a Certificate of Compliance has not been recorded by the City in the Official Records, the
Developer under the DDA with respect thereto, and (ii) following recording in the Official Records
by the City of a Certificate of Compliance for the Real Property or any subdivided portion thereof,
the Owner of such portion of the Real Property.
“Development Agreement” shall have the meaning set forth in Recital B.
“Development Permits” shall mean all ministerial permits, certificates and approvals
which may be required by the City or any other governmental entity for the development and
construction of the Landscape Improvements.
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“Effective Date” shall have the meaning set forth in the preamble to this Agreement.
“End User” shall mean any (i) utility or Governmental Authority with respect to any
transfer of portions of the Real Property or grants of easements affecting the Real Property
desirable for the development of the Real Property, including, without limitation, the City or any
lighting or landscaping district and (ii) for the term in which such contract is in effect, any natural
person that has a contractual right to inhabit and does inhabit a residential unit or room upon the
Real Property.
“Enhancement Areas” shall have the meaning set forth in Section 3.
“Entitlements” shall mean all discretionary land use approvals and entitlements legally
required by the City or any other governmental entity as a condition of subdivision of the Real
Property, development of the Project and construction of the Landscape Improvements and all
conditions thereto, including, without limitation, the Conditions, but excluding Development
Permits.
“Environmental Agency” shall mean any federal, State, or regional agency with
applicable jurisdiction over the environmental conditions of the Real Property.
“Environmental Laws” shall mean any federal, State, regional or local laws, ordinances,
rules, regulations, 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, without limitation, 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, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.)
(“CERCLA”); the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section
6901 et seq.) (“RCRA”); the federal Water Pollution Control Act, as amended, (33 U.S.C. Section
1251 et seq.); the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601 et seq.); the
Hazardous Substances Account Act (Part 2 commencing with Section 78000 of Division 45 of the
California Health and Safety Code); Chapter 6.5 commencing with Section 25100 (Hazardous
Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground Storage of
Hazardous Substances) of the California Health and Safety Code; and the California Water Code,
Sections 13000 et seq.
“Governmental Authority” shall mean each and all federal, State, county, municipal and
local governmental and quasi-governmental bodies and authorities (including, without limitation,
the United States of America, the State and any political subdivision, public corporation, district,
joint powers authority or other political or public entity) or departments thereof having or
exercising jurisdiction over either or any of City, any Developer or Owner, the Project, the Real
Property or over any property, including, without limitation, the City Property, owned by the City
upon which work is conducted by or on behalf of Developer in connection with installation,
construction or maintenance of the Landscape Improvements on the Boundary Landscape Area.
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“Hazardous Materials” shall mean and include the following:
(a) “Hazardous Substance”, “Hazardous Material”, “Hazardous Waste”,
or “Toxic Substance” under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. Section 5101, et seq., or the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq.;
(b) An “Extremely Hazardous Waste”, a “Hazardous Waste”, or a
“Restricted Hazardous Waste”, under Sections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to Section 25140 or 44321 of the
California Health and Safety Code;
(c) “Hazardous Material”,
“Hazardous Substance”, “Hazardous Waste”, “Toxic Air Contaminant”, or “Medical Waste”
under Sections 25281, 25501, 78075(a), 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 Title 22 of the California
Code of Regulations;
(f) Listed by California as a chemical known by California to cause cancer or
reproductive toxicity pursuant to Section 25249.8 of the California Health and Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to damage, health,
safety, or the environment, or is required by any law or public 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 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 Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136 et seq.;
(j) Asbestos, PCBs and other substances regulated under the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.;
(k) Any radioactive material including without limitation any “source
material”, “special nuclear material”, “by-product material”, “low-level wastes”, “high-level
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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.
Section 2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. Section 10101 et seq., or pursuant
to the California Radiation Control Law, California Health and Safety Code Section 114960 et
seq.;
(l) Regulated under the Occupational Safety and Health Act, 29 U.S.C. Section
651 et seq., or the California Occupational Safety and Health Act, California Labor Code Section
6300 et seq.;
(m) Regulated under the Clean Air Act, 42 U.S.C. Section 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code; and/o
(n) Any substance or compound regarding which a federal or State agency has
established a health advisory, including, but not limited to, Perfluorooctanoic Acid (PFOA) and
Perfluorooctane Sulfonate (PFOS) or any associated additives or degradation byproducts thereof.
“High Quality Project” shall mean an age restricted (55 years or older) and/or senior
congregate care development that represents the highest quality in design and construction in the
market area and very well maintained and professionally managed to the highest industry
standards.
“High Quality Standards” shall mean, in terms of the quality of maintenance, standards
consistent with a High Quality Project.
“Investigation(s)” shall mean any observation, inquiry, examination, sampling,
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Real Property, or any other property upon which Owner is required to
construct or maintain improvements pursuant to the DDA, the DA or this Agreement, including
the air, soil, surface water, and groundwater, and the surrounding population or properties, or any
of them, to characterize or evaluate the nature, extent or impact of Hazardous Materials.
“Landscape Improvements” shall mean any and all landscaping, irrigation, lighting
(other than City street lighting) and related utilities, street furniture, structures, and/or hardscape
improvements required by the Approved Plans, the Entitlements, the Development Permits, the
Development Agreement and/or the DDA to be constructed in connection with the Project upon
the Boundary Landscape Area and shall include any and all such improvements within the
Boundary Landscape Area installed by Developer and/or its Successor Owner(s). For avoidance
of doubt, the Landscape Improvements to be installed by Developer include the City
Improvements per the Approved Plans, including without limitation, public sidewalks, other than
those already installed.
“Laws” shall mean all laws, statutes, codes, ordinances, rules, regulations, standards,
guidelines, conditions, instructions and other requirements issued by any all federal, State, county,
municipal and local governmental and quasi-governmental bodies and authorities and including,
without limitation, the City Code, the Specific Plan, the Entitlements, the Development Permits
and Environmental Laws.
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“Mortgage” shall mean any indenture of mortgage or deed of trust, hypothecation, pledge,
assignment for security purposes, bond, grant of taxable or tax-exempt funds from a governmental
agency or other security interest affecting the Real Property or any portion thereof, in each case
together with all loan documents related thereto, but excluding any community facilities districts,
service districts, assessment districts, landscape and lighting districts or other assessments created
or imposed by any Governmental Authority.
“Mortgagee” shall mean any mortgagee, beneficiary, secured party (or any agent for one
or more lenders acting in any of the foregoing capacities) under any Mortgage.
“Official Records” shall have the meaning set forth in Recital A.
“Owner” shall mean Developer and each Successor Owner holding fee title to all or any
portion of the Real Property.
“Owner Representatives” shall mean as to an Owner, such Owner’s officers, directors,
employees, agents, representatives, consultants, contractors, and other persons accessing the
Boundary Landscape Area by, through or with the permission or under the direction or auspices
of such Owner.
“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 any portion of the Real Property for the purpose of development, construction or
refinancing of all or any portion of the Project and approved by the City pursuant to the DDA.
There shall not be more than one Permitted Mortgage for the Real Property.
“Permitted Mortgagee” shall mean the Mortgagee with respect to any Permitted
Mortgage affecting the Real Property or any portion thereof, and any successor or assign of such
having all right, title and interest in and to the loan documents, and in each case meeting the criteria
set forth in the DDA and accordingly entitled to the Permitted Mortgagee protections provided by
the DDA.
“Person” shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
“Project” shall have the meaning set forth in Recital C.
“Quitclaim Deed” shall mean the Quitclaim Deed for Portion of Disposition Area 8 and
Covenants, Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil
Code Section 1471 of even date herewith made by the City in favor of and conveying the Real
Property to Developer, which has been recorded in the Official Records immediately prior to the
recording of this Agreement.
“Real Property” shall have the meaning set forth in Recital C.
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“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(23) through (25) of CERCLA, and similar actions with respect to Hazardous
Materials as defined under comparable state and local laws, and any other cleanup, removal,
containment, abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure,
restoration or other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
“State” shall mean the State of California.
“Special Restrictions” shall mean the Declaration of Special Restrictions for Portion of
Disposition Area 8 affecting the Real Property, which has been executed by the City and recorded
in the Official Records immediately prior to recording of the Quitclaim Deed.
“Specific Plan” shall mean the Tustin Legacy Specific Plan as the same has been or shall
be amended from time to time.
“Subordination Agreement” shall mean an executed subordination agreement between
the City and a Permitted Mortgagee.
“Successor Owner” shall mean each and every Person owning or acquiring fee title to all
or any portion of the Real Property from and after the conveyance of the Real Property by the City
pursuant to the Quitclaim Deed, but excluding each and every End User, provided that each
Transfer of the Real Property or any interest therein or portion thereof shall be subject to the
applicable limitations set forth in Article 2 of the DDA until recording by the City in the Official
Records of a Certificate of Compliance applicable to the Real Property or subdivided portion
thereof or interests related thereto so Transferred.
2.Installation Obligations. Within the time periods established in the DDA, and in
accordance with the Approved Plans and all Laws, Developer shall design and install the initial
Landscape Improvements within the Boundary Landscape Area and shall install public sidewalks
in the locations shown on the Approved Plans within the public right of way adjacent to all public
streets abutting the Real Property, all as shown on the Approved Plans applicable to the Real
Property.
3.Landscape Improvements Maintenance and Replacement Obligations. Each Owner
shall maintain, repair, replace and restore, at its sole cost and expense, the Landscape
Improvements and the Boundary Landscape Area, including, without limitation, all street
furniture, structures, and hardscape in accordance with the requirements of this Agreement,
excepting only reasonable wear and tear and any necessary replacement of Landscape
Improvements pursuant to this Agreement. Where enhancements to public sidewalks are installed
that are inconsistent with the City’s standard specifications for public sidewalks (e.g., pavers), the
Landscaping Improvements shall include all public sidewalks within the area in which such
enhancements are made (“Enhancement Areas”) and the same shall be the responsibility of
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Owner under this Agreement to maintain, repair, replace and restore. Public sidewalks located
outside of the Enhancement Areas (i.e., public sidewalks installed consistent with City standard
specifications) shall be City Improvements and the responsibility of the City to maintain, repair,
replace and restore. Any necessary replacements of Landscape Improvements shall be consistent
with the Approved Plans and all Laws and shall in addition be subject to any applicable City review
and approvals to the extent the City Code requires a Development Permit in connection with such
replacements. The Boundary Landscape Area and Landscape Improvements installed from time
to time shall be installed, maintained repaired, replaced and restored in accordance with High
Quality Standards and the requirements of this Agreement. All utilities required to maintain, repair,
replace and/or restore the Landscape Improvements including, without limitation, water and
electrical, shall be paid for by the Owner of the Real Property.
4.Standard of Maintenance. The standard for the quality of maintenance of the Boundary
Landscape Area and Landscape Improvements shall be met whether or not a specific item of
maintenance is listed below. However, representative items of maintenance shall include, without
limitation:
(i)proper maintenance such that such areas and improvements are reasonably
free of bare and brown spots, debris, trash, litter, droppings and weeds;
(ii)maintenance, repair and replacement on a regular schedule, of landscaping,
hardscaping, fencing, irrigation systems and utilities pertaining to the Landscape
Improvements;
(iii)regular inspection for graffiti or damage or deterioration or failure, and
reasonably prompt repair or replacement of all surfaces, fencing, walls, lighted bollards,
decorative pavement, equipment, etc., as necessary;
(iv)fertilizing, irrigating and replacing vegetation, as necessary;
(v)use and replacement of vegetation of a type and amount as may reasonably
be required to maintain the Boundary Landscape Area in accordance with the Conditions
and the Specific Plan and consistent with High Quality Standards;
(vi)adequate maintenance of all Boundary Landscape Area and Landscape
Improvements such as not to be detrimental to public health, safety, or general welfare;
and
(vii)regular trimming and pruning of all trees and shrubs so they do not impede
vehicular or pedestrian traffic and do not intrude into neighboring properties including,
without limitation, root pruning to eliminate exposed surface roots and damage to curbs
and gutters, sidewalks, driveways, utilities and other structures or improvements.
5.Allocation of Maintenance Responsibilities. Maintenance responsibilities shall be vested
in the Owner of the Real Property provided that if the Real Property is later subdivided, such
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responsibilities shall be vested in the Owner of the parcel or lot that contains the applicable portion
of the Boundary Landscape Area as depicted on Exhibit C.
6.Term. The term of this Agreement with respect to the Real Property shall expire on the
fifty-fifth (55th) anniversary of the Recording in the Official Records of the Final Certificate of
Compliance, unless termination at an earlier date is consented to by the City in writing and in its
sole discretion. The easements set forth in Section 7.2 remain in effect in perpetuity.
7.Easements and Licenses.
7.1.License in Favor of Owner. The City hereby grants (a) to Developer a
license authorizing access by Developer and its Owner Representatives to the City Property for
purposes of installation (subject to the requirements of the encroachment permit issued by the City
for installation work) of the Landscape Improvements and the public sidewalks on the City
Property in accordance with Section 2 and to the public right of way as reasonably required to
construct public sidewalks as described in this Agreement, until completion of such installations
and (b) to Owner, a license authorizing access by Owner and its Owner Representatives to the City
Property, provided that in the event the Real Property is subdivided and owned by different
Owners, such license shall extend as to each Owner only to portions of the City Property adjacent
to the portion of the Real Property owned by such Owner, for maintenance, repair and replacement
of landscape and hardscape, including, without limitation, the Landscape Improvements, in
accordance with Section 3 of this Agreement, including, without limitation, for installation of
replacement landscaping (subject to the requirements of the encroachment permit issued by the
City for installation work). The licenses granted in this Section are in public right of way and may
be suspended or revoked by the City in their entirety or in part at any time, at the will of the City,
upon provision of thirty (30) calendar days written notice by the City to the Owner, provided that
if the City suspends or revokes the license for maintenance, repair and replacement of Landscape
Improvements, the Owner shall be relieved, for the period of suspension or permanently in the
event of revocation, of the obligation to maintain, repair and replace Landscape Improvements
within the portion of the City Property for which the license is suspended or revoked. At the
termination date of any license granted in this Section, the Owner shall unless otherwise requested
by the City: (i) surrender the portion of the Boundary Landscape Area for which the license(s) is
terminated to the City in good order and repair except for ordinary wear and tear or damage by
casualty, and (ii) vacate and surrender the Boundary Landscape Area or portion thereof for which
the license(s) is terminated to the City in lien free condition as further described in Section 10.
Notwithstanding the termination of any license granted in this Section, the Owner shall remain
responsible to fulfill all outstanding obligations of such Owner under the Agreement with respect
to the Landscape Improvements and Boundary Landscape Area Accruing during the term of the
license granted hereby.
7.2.Easement in Favor of City for Access to and Maintenance of City
Improvements. Developer hereby grants to the City and its successors and assigns a perpetual and
non-exclusive easement for access to and maintenance, repair and replacement of the City
Improvements in, upon, over, across, under and through the portions of the Boundary Landscape
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Area comprising a portion of the Real Property as reasonably necessary to access the City
Improvements (the “City Improvement Areas”).
8.Insurance.
8.1.Each Owner of the Real Property or any portion thereof, at its cost, shall
maintain commercial general liability insurance with not less than Five Million Dollars
($5,000,000) per occurrence; and automobile liability limits of not less than Five Million Dollars
($5,000,000) insuring against all liability of such Owner and its Owner Representatives arising out
of or in connection with: (a) the license granted to such Owner in Section 7.1; (b) such Owner’s
installation, maintenance, repair or replacement of, or such Owner’s failure to maintain, repair or
replace, the Landscape Improvements in accordance with the requirements of Sections 3 through
6; and (c) such Owner’s installation of the public sidewalks, as the same may be enhanced pursuant
to the Approved Plans, in the Boundary Landscape Area in accordance with the requirements of
Section 3 through 6. The required Commercial General Liability and Automobile Liability limits
may be satisfied through any combination of primary and umbrella or excess liability insurance,
provided the combined limits equal or exceed $5,000,000 per occurrence or accident, as applicable.
The umbrella or excess policy shall follow form over the applicable primary coverage and shall
provide coverage at least as broad as the underlying policies. All required endorsements, including
additional insured, primary and noncontributory coverage, and waiver of subrogation, shall apply
to both the primary and umbrella or excess policies, as applicable. In addition, each Owner shall
cause the applicable Owner’s Representatives to provide workers’ compensation insurance
meeting statutory limits for all persons employed by such Owner’s Representative in connection
with performing any of the work on the City Property in connection with the license granted to
Owner in Section 7.1. The foregoing may be satisfied during the term of the DDA by insurance
required thereby but shall not subtract from any insurance obligations of such Owner to the City
under the DDA. Each Owner shall furnish to the City duly authenticated Certificates of Insurance
evidencing maintenance of the insurance required under this Agreement and such other evidence
of insurance as may be reasonably required by City from time to time.
8.2.Insurance must be placed with insurers with a current A.M. Best Company
Rating equivalent to at least a Rating of “A-/VII” (if an admitted carrier) or “A-/X” (if offered by
a surplus line broker). If not previously delivered, an ACORD certificate evidencing the foregoing
and providing the following endorsements signed by the authorized representative of the
underwriter (or copies of the applicable pages from the policy if the applicable endorsement
coverage is part of the policy rather than provided by separate endorsement) and reasonably
approved by City shall be delivered within ten (10) calendar days following the Effective Date and
annually evidencing renewals of each policy and endorsement. The endorsements shall provide as
follows: (i) designate “the City of Tustin and the Successor Agency to the Tustin Community
Redevelopment Agency, and their respective elected and appointed officials, agents,
representatives and employees” as additional insureds on the commercial general liability policies;
(ii) the commercial general liability insurance coverage shall be primary, and not contribute with
any insurance or self-insurance maintained by City; and (iii) for each policy, a waiver of
subrogation for the benefit of the City and the Successor Agency to the Tustin Community
Redevelopment Agency, and their respective elected and appointed officials, agents,
representatives and employees. “Blanket” endorsements (or coverage within the policy itself)
providing the same protection as required by written contract shall be acceptable to the City. Each
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Owner shall also cause evidence of workers’ compensation insurance meeting statutory limits to
be provided to City covering all persons employed by such Owner (if Owner’s employees are
performing any work on City Property in connection with the license granted to Owner in Section
7.1) and its Owner Representatives that are performing any of the work on City Property in
connection with the license granted to Owner in Section 7.1, and for each such policy, a waiver of
subrogation for the benefit of the City and the Successor Agency to the Tustin Community
Redevelopment Agency, and their respective elected and appointed officials, agents,
representatives and employees. All such insurance will be on an “occurrence,” not a “claims made”
and will be prepaid on an annual basis. The procuring of such insurance and the delivery of
policies, certificates or endorsements evidencing the same shall not be construed as a limitation on
the obligation of each Owner to indemnify City as set forth herein. Notwithstanding the foregoing,
while these insurance requirements are able to be satisfied as of the Effective Date, if any of the
foregoing requirements are not commercially available at the time required to be obtained or
maintained during the term of this Agreement, the applicable Owner and the City shall promptly
meet and confer in good faith to seek to resolve such issue and to facilitate the securing such Owner
mutually acceptable insurance meeting, as closely as commercially available, the foregoing
requirements.
8.3.If, after meeting and conferring in good faith, Owner and City are unable to
resolve the issue and Owner fails to procure or to cause timely procurement and maintenance of
insurance as required by this Agreement, the City shall have the right, at the City’s election, and
upon ten (10) calendar days’ prior written notice to the applicable Owner(s), to procure and
maintain such insurance. The premiums paid by the City shall be treated as a loan by the City, due
from the applicable Owner(s), to be paid on the first calendar day of the month following the date
on which the premiums were paid and such cost, until paid, shall constitute a City Lien on the Real
Property of the applicable Owner(s) and with the rights of the City with respect to such City Lien
as described in Section 12. The City shall give prompt notice of the payment of such premiums,
stating the amounts paid and the name of the insured(s).
9.Indemnity.
9.1.Owner Indemnity on City Property. Each Owner hereby agrees to protect,
indemnify, defend and hold harmless the City Indemnified Parties from and against any and all
loss, cost, expense, injury, claim, action, cause of action, suit, proceeding, damage, liability,
deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys’
fees and court costs), and liability (collectively, “Claims”) arising out of or in connection with (i)
such Owner’s activities within or work on the Boundary Landscape Area in connection with this
Agreement; (ii) any willful misconduct or negligence of such Owner and/or its Owner
Representatives with respect to the Boundary Landscape Area; and/or (iii) bodily injury to or death
of any person (including, without limitation, any employee or contractor of the City Indemnified
Parties) or damage to or loss of use of property resulting from acts or omissions of Owner or any
Owner Representative with respect to or within the Boundary Landscape Area; provided that the
foregoing indemnity shall not apply to the extent of the active negligence or willful misconduct of
any City Indemnified Party. The provisions of this Section shall survive the termination of the
licenses granted herein and this Agreement.
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9.2. City Indemnity on City Improvement Areas. City hereby agrees to protect,
indemnify, defend and hold harmless the applicable Owner and Owner Representatives from and
against any and all Claims arising out of or in connection with (i) City’s work on the City
Improvements in the City Improvement Areas in connection with the easements granted pursuant
to Section 7.2 above; (ii) any willful misconduct or negligence of any City Indemnified Party with
respect to the City’s work on the City Improvements in the City Improvement Areas; and/or (iii)
bodily injury to or death of any person (including, without limitation, any employee or contractor
of such Owner or any Owner Representatives) or damage to or loss of use of property resulting
from acts or omissions of any City Indemnified Party with respect to the City’s work on the City
Improvements in the City Improvement Areas; provided that the foregoing indemnity shall not
apply to the extent of the active negligence or willful misconduct of any Owner or Owner
Representative. The provisions of this Section shall survive the termination of this Agreement.
10.Liens. As between Owner and City, each Owner shall bear all costs related to the
installation, maintenance, repair and replacement of the Landscape Improvements on the Boundary
Landscape Area. Each Owner shall keep the Boundary Landscape Area and other real property
owned by the City free and clear of any mechanics’ liens or materialmen’s liens in connection with
such work, and no Owner nor any Owner Representatives shall place, allow to be placed on, or
incur any such liens against such property or any portion thereof in connection with the Landscape
Improvements or in any way attributable to the acts of such Owner and/or its Owner
Representatives thereon. Each Owner agrees to indemnify, defend, and hold the City Indemnified
Parties free and harmless from and against any and all Claims arising with respect to payment of
liens assessed or levied against the Boundary Landscape Area in connection with work performed,
improvements constructed, materials furnished, or any other activities of such Owner or its Owner
Representatives in connection with this Agreement which, pursuant to the laws of California, may
become a lien upon or be the subject of a stop notice with respect to the Boundary Landscape Area.
Should any lien be filed against the foregoing property in connection with the work of such Owner
as described by this Agreement, such Owner shall promptly bond around the lien as part of
disputing the lien with the Person asserting the lien. The City may post notices of non-
responsibility on the City Property prior to Owner’s commencement of any work under this
Agreement.
11.Compliance with Laws.
11.1.By Owner. Each Owner shall comply with all Laws in connection with its
activities under this Agreement including, without limitation, those issued by the Santa Ana
Regional Water Quality Control Board, Environmental Protection Agency, or any federal, State,
interstate, or local governmental agency having jurisdiction to abate or prevent pollution. Each
Owner covenants that it will not generate, use, or store Hazardous Materials on the City Property
in violation of Environmental Laws. The disposal of any Hazardous Materials within the City
Property is specifically prohibited. No Owner shall discharge waste or effluent from the Boundary
Landscape Area in such a manner that the discharge will contaminate streams or other bodies of
water or otherwise become a public nuisance. The foregoing shall not subtract from any
environmental responsibilities of Developer to the City under the DDA or any other agreement.
Each Owner shall investigate the applicability of and, if and to the extent required by applicable
Laws, pay prevailing wages meeting the requirements of such laws and regulations for all of its or
its Owner Representatives’ work within the Boundary Landscape Area. Each Owner shall defend,
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indemnify and hold harmless the City Indemnified Parties from and against all Claims which the
City of Tustin may incur by reason of such Owner's action or non-action in violation of its
obligations under this Section; provided however, that the foregoing indemnity shall not apply to
the extent a Claim relates to or arises from the active negligence or willful misconduct of a City
Indemnified Party. The provisions of this Section shall survive the expiration or termination of the
licenses granted herein and this Agreement.
11.2.By City. City shall comply with all Laws in connection with its activities
related to the City Improvements under this Agreement including, without limitation, those issued
by the Santa Ana Regional Water Quality Control Board, Environmental Protection Agency, or
any federal, State, interstate, or local governmental agency having jurisdiction to abate or prevent
pollution. City covenants that it will not generate, use, or store Hazardous Materials on the City
Improvement Areas in violation of Environmental Laws. The disposal of any Hazardous Materials
within the City Improvement Areas is specifically prohibited. City shall defend, indemnify and
hold harmless each Owner and its Owner Representatives from and against all Claims which such
Owner or its Owner Representative may incur by reason of City's action or non-action in violation
of its obligations under this Section; provided however, that the foregoing indemnity shall not
apply to the extent a Claim relates to or arises from the active negligence or willful misconduct of
an Owner or its Owner Representative. The provisions of this Section shall survive the expiration
or termination of this Agreement.
12.City Remedies.
12.1.In the event of a breach of any provision of this Agreement by any Owner,
including, without limitation, failure of any Owner to pay to the City all costs or expenses incurred
by the City pursuant to this Agreement and charged by the City to such Owner, the City may
demand by written notice (“Default Notice”) that the violation be cured. With respect to
emergencies, including, without limitation, utility service interruptions or similar emergencies,
which shall not require advance notice or cure periods hereunder, or with respect to any other
breach of this Agreement if the same is not cured by the applicable Owner within (a) thirty (30)
calendar days after receipt of the Default Notice, or (b) if such cure cannot be reasonably
accomplished within such thirty (30) calendar day period, within one hundred twenty (120)
calendar days after receiving the Default Notice from the City, but only if such Owner has
commenced such cure within such thirty (30) calendar day period and diligently pursues such cure
to completion, or (c) within such longer period as may be approved by the City in advance in its
sole discretion, then in each case the City shall have the right, but not the obligation, to exercise
all rights and remedies, and to maintain any actions or suits at law or in equity or other proper
proceedings to enforce the curing of such default including, without limitation, (i) to institute legal
action against such Owner for specific performance, injunction, declaratory relief, damages, or any
other remedy provided by law, (ii) to enter, or permit its designees to enter upon the Real Property
and the Boundary Landscape Area, after two (2) Business Days’ prior written notice (or lesser
time in the event of an emergency), and to summarily remove any structure or object or to abate
any condition that may exist in violation of this Agreement, (iii) to procure and maintain insurance
and hold Owner responsible for the costs thereof as described in Section 8.3, and/or (iv) to
prosecute any remedy allowed by law or equity for the foregoing against any person or entity
acting or failing to act in violation of this Agreement, all at the sole cost of the applicable Owner
in an amount equal to all out-of-pocket costs and expenses incurred by City in undertaking any of
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the actions described in this Section 12, together with interest thereon as described in Section 12.2,
and the foregoing shall constitute a City Lien on the Real Property with the rights of the City with
respect to such City Lien to be as described in Sections 12.2 and 12.3.
12.2.Any amounts due to City under this Agreement shall bear interest at the
Default Interest Rate from the date the City provides the applicable Owner with an invoice
detailing such costs until the date paid. Charges and fees collectible by the City and included in
said invoice may include, without limitation, the delinquent amount of any payments due under
this Agreement, together with any late charges or interest due on any such delinquent payment,
reasonable attorneys’ fees, experts’ fees and consultants’ fees and collection costs and collection
costs related to such or previous delinquent payment(s) and all fines and/or penalties incurred by
or charged by the City, and the foregoing shall, to the greatest extent permitted by applicable law,
be a continuing lien and charge upon the Real Property in favor of the City (“City Lien”); and
such City Lien shall apply to all portions of the Real Property for which no Certificate of
Compliance has been recorded in the Official Records by the City, provided that following
recording in the Official Records by the City of a Certificate of Compliance for any subdivided
portion of the Real Property, the City Lien shall apply to such portion of the Real Property for
which a Certificate of Compliance has been recorded only if the default arises from or is related to
such subdivided portion of the Real Property or if the City Lien is as a result of a default by the
Owner thereof.
12.3.All City Liens levied in accordance with this Agreement shall be paramount
to the lien and charge of any Mortgage upon fee title to such portion of the Real Property and all
other liens, except all taxes, bonds, assessments and other levies which, by law, would be superior
thereto. The City Lien on the Real Property (or following subdivision, on any subdivided portion
thereof) may be enforced by foreclosure and sale of the Real Property (or such subdivided portion
thereof, if any), after failure by the Owner thereof to timely pay any special assessment as provided
in this Agreement. The sale shall be conducted in accordance with the provisions of the California
Civil Code applicable to the exercise of powers of sale in Mortgages, or in any manner permitted
by law.
12.4.Nothing in this Agreement shall restrict the City’s rights to enter and utilize
its reserved rights pursuant to the DDA, the Affordable Housing Declaration or the Special
Restrictions.
12.5.The rights and remedies given to the City by this Agreement shall be
deemed to be cumulative and no one of such rights and remedies shall be exclusive of any of the
others, or of any other right or remedy at law or in equity which City might otherwise have by
virtue of a default under this Agreement, and the exercise of one such right or remedy by any City
shall not impair the City’s standing to exercise any other right or remedy.
12.6.Any claim for damages under this Agreement shall be limited to direct
(actual) damages, and City and each Owner on behalf of itself and its successors and assigns hereby
expressly waives, releases and relinquishes any and all right to any lost profits, incidental, special,
collateral, expectation, anticipation, indirect, consequential, exemplary or punitive damages or
losses.
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13.Rights of Mortgagees and Mortgagee Protection. No breach or violation of this
Agreement, nor any City Lien, shall defeat or render invalid the lien of, prior to recording in the
Official Records by the City of a Certificate of Compliance for a portion of the Real Property, any
Permitted Mortgage for such portion of the Real Property, and thereafter as to such portion of the
Real Property, any Mortgage securing a loan made in good faith and for value, provided, however,
that this Agreement and all provisions hereof shall be binding upon and effective against each
Successor Owner and each other occupant of the Real Property or portion thereof whose title is
acquired by foreclosure, trustee’s sale, deed in lieu of foreclosure or otherwise, but (a) such
Successor Owner shall have a reasonable time, after acquiring title, to cure any violations or correct
and change any facts giving rise to the City’s rights under this Agreement occurring prior to such
transfer of title or occupancy and which are reasonably capable of being cured or changed (i.e.,
within the time periods set forth in Section 12.1 commencing as of the date of such acquisition of
title thereto), provided that such Successor Owner diligently acts to effect such cure or change
(and in the event of such diligent and timely cure, such Successor Owner shall have no further
liability in connection with such prior violation or the continued existence of such violation until
such cure is completed), and (b) City’s right to damages or abatement shall not be applicable as to
such Successor Owner with regard to any noncurable default occurring prior to the time such
Successor Owner acquired title. Notwithstanding the foregoing, each Successor Owner shall be
required to use the Real Property accordance with the requirements of this Agreement and, the
provisions of this Section shall be subject to the rights and protections afforded to any Permitted
Mortgagee pursuant to any Subordination Agreement between the City and such Permitted
Mortgagee, and the right and protections of the Permitted Mortgagee under any such Subordination
Agreement shall not be abridged, limited or otherwise affected by the provisions of this Section or
any other provisions of this Agreement.
14.Estoppel Certificate. Each party hereby covenants that within thirty (30) calendar days of
the written request of any other party, but not more than annually, it will issue to such other party
an estoppel certificate stating: (i) whether the party to whom the request has been directed knows
of any default under this Agreement and if there are known defaults specifying the nature thereof;
(ii) whether to its knowledge this Agreement has been assigned, modified, or amended in any way
(and if it has, then stating the nature thereof); and whether to the party’s knowledge this Agreement
is as of that date is in full force and effect, provided that in no event shall an estoppel be requested
more often than annually.
15.Runs With the Land; Release and Termination.
15.1.This Agreement and the terms, provisions, promises, covenants and
conditions hereof constitute and shall be enforceable as equitable servitudes and covenants running
with the land comprising the Real Property and burdening the Real Property in accordance with
the provisions of this Agreement, including without limitation the provisions in this Section 15,
binding upon Developer and each Successor Owner having any right, title or interest in such Real
Property and each and every Person claiming by, through or under Developer or any Successor
Owner but excluding any End Users, for the benefit of the City Property and City. In the event of
a future subdivision of the Real Property, each Owner shall only be liable for the obligations and
liabilities under this Agreement related to the subdivided parcels or lots owned by such Owner and
which Accrue during the period that such Owner owns its interest in such parcels or lots and such
Owner shall not be liable for those obligations or liabilities that first Accrue after such period of
Tustin Confluent DDA Att 21 Landscape Agt 17 City of Tustin/Confluent Development
9.25.26 (HM)(2).docxPortionofDispositionArea 8
ownership and no such Owner shall be liable for those obligations or liabilities of another Owner
except that:
(a)the foregoing shall not be deemed to modify or negate any longer or
shorter periods of liability, or scope of responsibility for Developer or any Owner set forth
in the DDA, during its term, or in the Special Restrictions (as to provisions of the DDA
incorporated therein);
(b)prior to recording in the Official Records by the City of a Certificate
of Compliance for the Real Property or any subdivided portion thereof, any Transfer (as
defined in the DDA) shall be permitted (i.e., authorized) only in accordance with the
requirements of the DDA and Developer shall remain liable under this Agreement for
matters Accruing prior to recording in the Official Records by the City of the Certificate
of Compliance for such portion of the Real Property, notwithstanding the Transfer, until
released from its obligations pursuant to the DDA or in the conditions to Transfer (as
defined in the DDA) imposed by the City, if any;
(c)following recording in the Official Records by the City of a
Certificate of Compliance for the Real Property or any subdivided portion thereof, if a
transferee is an Affiliate of the transferor Owner, the transferee Owner shall be deemed to
have assumed and be liable for the obligations and liabilities of the transferor Owner and
each consecutive prior transferor Affiliate as though such transferee Owner had held joint
ownership with the transferor Owner and each consecutive prior transferor Affiliate of it
during their respective prior consecutive periods of ownership of the Real Property or
subdivided portion thereof; and
15.2.Each Owner shall be responsible to perform all obligations and assume all
liabilities of Owner under this Agreement with respect to the portions of the Real Property owned
by such Owner and the Landscape Improvements thereon and the adjoining Boundary Landscape
Area.
16.Miscellaneous.
16.1.Excuse for Non-Performance. Each party shall be excused from performing
any obligation or undertaking provided in this Agreement except any obligation to pay any sum of
money under the applicable provisions hereof, in the event and so long as the performance of any
such obligation is prevented or delayed, retarded, or hindered by act of God, fire, earthquake,
floods, explosion, actions of the elements, war, invasion, insurrection, riot, mob violence,
sabotage, inability to procure or general shortage of labor, equipment, facilities, materials, or
supplies in the ordinary course on the open market; failure of normal transportation strikes,
lockouts, action of labor unions, condemnation, requisition, laws, orders of governmental or civil
or military authorities, provided that delays resulting from a lack of funding or financing or from
pandemic, epidemic or quarantine or similar matters shall not be an excuse for nonperformance.
16.2.Effect on Third Parties. Except as herein specifically provided, no person
shall be deemed to be a third-party beneficiary of any of the provisions contained herein.
Tustin Confluent DDA Att 21 Landscape Agt 18 City of Tustin/Confluent Development
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16.3.Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and the final, complete and
exclusive expression of the terms and conditions thereof. Prior agreements, representations,
negotiations, and understandings of the parties hereto, oral or written, express or implied, are
hereby superseded and merged herein, provided that nothing in this Agreement shall limit or
restrict the applicability of the DDA, the Quitclaim Deed, the Affordable Housing Declaration, the
SLA Covenant and the Special Restrictions for the respective terms thereof.
16.4.Modification. Except as set forth in Section 7 with respect to termination of
licenses and access rights, this Agreement may not be modified in any respect or rescinded, in
whole or in part, except by an instrument in writing, duly executed and acknowledged by the City
or its successors and assigns and the Owner(s) that are the record owners of the portion of the
Boundary Landscape Area that is the subject of such change, modification, amendment or
rescission. Any change, modification, amendment or rescission which is made without the written
consent of such owners shall be null and void and of no effect. No consent or approval of any
lessee, easement holder or of any owner other than those owners described in the first sentence of
this Section shall be required to modify or amend any provisions of this Agreement.
16.5.Severability. If any term, covenant, condition or provision of this
Agreement, or the application thereof to any person or circumstance, shall to any extent be held
by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the
terms, covenants, conditions or provisions of this Agreement, or the application thereof to any
person or circumstance, shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
16.6.Governing Law. This Agreement and the obligations of the parties
hereunder shall be interpreted, construed, and enforced in accordance with the laws of the State of
California.
16.7.Waiver and Default. The waiver by one party of the performance of any
provision of this Agreement shall not invalidate this Agreement nor shall it be considered a waiver
by it of any other provision under this Agreement or of any subsequent breach by the other party
of the same provision.
16.8.References to Sections, Clauses and Exhibits. Unless otherwise indicated,
references in this Agreement to sections, clauses and exhibits are to the same contained in or
attached to this Agreement and all exhibits referenced in this Agreement are incorporated in this
Agreement by this reference as though fully set forth in this Section.
16.9.Counterparts. This Agreement may be executed in one or more
counterparts. All counterparts so executed shall constitute one agreement, binding on all parties,
even though all parties are not signatory to the same counterpart.
16.10.Construction. 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
Tustin Confluent DDA Att 21 Landscape Agt 19 City of Tustin/Confluent Development
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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. The
provisions of California Civil Code Section 1654 are specifically waived by each party hereto.
16.11.Additional Definitions. When stated in connection with performance by a
party, the word “shall” imposes a mandatory requirement on that party to perform the stated act or
requirement (and shall be synonymous with “must”) and the term “shall not” imposes a mandatory
requirement on that party not to perform the stated act or requirement (and shall be synonymous
with “must not”). The word “may” is permissive and does not impose any mandatory requirement
on a party to perform the stated act.
{signature pages follow}
Tustin Confluent DDA Att 21 Landscape Agt 20 City of Tustin/Confluent Development
9.25.26 (HM)(2).docxPortionofDispositionArea 8
IN WITNESS WHEREOF, City and Developer have signed this Agreement as of the date
first set forth above.
CITY OF TUSTIN:
Dated:
By: ,
Aldo E. Schindler
City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
{signatures continue on following page}
Tustin Confluent DDA Att 21 Landscape Agt S-1 City of Tustin/Confluent Development
9.25.26 (HM)(2).docxPortionofDispositionArea 8
DEVELOPER:
{insert signature block}
Tustin Confluent DDA Att 21 Landscape Agt S-2 City of Tustin/Confluent Development
9.25.26 (HM)(2).docxPortionof DispositionArea 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 21 Landscape Agt S-3 City of Tustin/Confluent Development
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CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 21 Landscape Agt S-3 City of Tustin/Confluent Development
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CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 21 Landscape Agt S-3 City of Tustin/Confluent Development
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EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TUSTIN,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT 14, INCLUSIVE OF TRACT NO. 18197 AS SHOWN ON A MAP FILED IN BOOK 990,
PAGES 25 THROUGH 33, INCLUSIVE OF TRACT MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
EXCEPTING THEREFORE THE MATTERS SET FORTH IN SECTION 2 OF THE
QUITCLAIM DEED FOR PORTION OF DISPOSITION AREA 8 AND COVENANTS,
CONDITIONS AND RESTRICTIONS, INCLUDING ENVIRONMENTAL RESTRICTION
PURSUANT TO CIVIL CODE SECTION 1471 DATED OF EVEN DATE HEREWITH AND
RECORDED PRIO TO THE RECORDING HEREOF IN THE OFFICE OF THE COUNTY
CLERK RECORDER FROR ORANGE COUNTY, CALIFORNIA.
FOR CONVEYANCING PURPOSES ONLY: APN 430-481-12
Tustin Confluent DDA Att 21 Landscape Agt Exhibit A City of Tustin/Confluent Development
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EXHIBIT B
DEPICTION OF CITY PROPERTY
\[see attached\]
Tustin Confluent DDA Att 21 Landscape Agt Exhibit B City of Tustin/Confluent Development
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EXHIBIT C
DEPICTION OF BOUNDARY LANDSCAPE AREA
\[see attached\]
Tustin Confluent DDA Att 21 Landscape Agt Exhibit C City of Tustin/Confluent Development
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ATTACHMENT 22
FORM OF BILL OF SALE
FOR FORMER MILITARY PERSONAL PROPERTY AND OTHER PERSONAL
PROPERTY LOCATED AT THE FORMER MARINE CORPS AIR STATION, TUSTIN
This Bill of Sale (“Bill of Sale”) dated as of ___________, 20__ is made by and between the
CITY OF TUSTIN, a municipal corporation organized under the laws of the State of California
(“City”), acting in its capacity as the Local Redevelopment Authority for the disposition and
conveyance of portions of the former Marine Corps Air Station Tustin, and ______________, a
_____________ (“Developer”).
RECITALS
A.Pursuant to the Agreement Between the United States of America and the City of
Tustin, California For the Conveyance of a Portion of the Former Marine Corps Air Station Tustin
dated May 13, 2002 (“Conveyance Agreement”), the Federal Government through the Secretary
of the Navy (“Navy”) conveyed or leased to the City portions of the former Marine Corps Air
Station Tustin (“MCAS Tustin”). The Transferred Utility Systems (as defined below) conveyed
under this Bill of Sale were acquired by the City from the Navy by reason of the closure of the
MCAS Tustin.
B.The City and Developer entered into that certain Tustin Disposition and
Development Agreement for Portion of Disposition Area 8, dated as of ___________, 20__ \[{if
not amended insert:} (the “DDA”) /{if amended insert:}(“Original DDA”) {and insert any
amendments to the DDA:} (the “DDA”)\] pursuant to which, among other things, the City agreed
to sell, and Developer agreed to purchase the Property, including certain Intangible Property, as
those terms are defined in the DDA. The property conveyed to Developer by the City in fee
pursuant to that certain Quitclaim Deed For Portion of Disposition Area 8 and Covenants,
Conditions and Restrictions, Including Environmental Restriction Pursuant to Civil Code Section
1471 of even date herewith (“Quitclaim Deed”) is referred to herein as the “Real Property”.
Initially capitalized terms used and not otherwise defined in this Bill of Sale shall have the
meanings set forth in the DDA.
C.Pursuant to this Bill of Sale, the City intends to transfer to Developer (1) all
Intangible Property, (2) the Transferred Utility Systems owned by the City, and (3) all Horizontal
Improvements constructed on the Real Property (whether complete or under construction), in each
case subject to the limitations set forth below.
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx 1 Portion of Disposition Area 8
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other consideration set forth
herein, it is mutually agreed as follows:
1.Transfer. For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the City hereby quitclaims and transfers to Developer all of the City’s right,
title and interest in the following with respect tothe Real Property, comprising the “Personal
Property”: (a) the Intangible Property and (b) the Transferred Utility Systems (whether complete
or under construction), but in each case, specifically excluding the City’s interest in any franchise
or similar agreements with third parties and the right of the City to negotiate and enter into
franchise agreements or grant franchise rights to third parties under applicable law.
2.Definition of Transferred Utility Systems. For purposes of this Bill of Sale the following
terms shall have the meanings set forth below:
a.“Transferred Utility Systems” shall mean those Utility Systems in the Real
Property which were transferred from the Navy to the City, and which are not being
used by or reserved for future use by the City or any third Person as a public service
infrastructure.
b.“Utility Systems” shall mean all utility distribution systems and shall include the
following: (a) all current City-owned electrical, gas, telephone and cable television
systems, including distribution lines, pad mounted and overhead distribution poles
and/or transformers, (b) all conduits and duct banks from outlet or master meters or
connection points outside the Real Property to end usage points on the Real
Property; and (c) all water, sewer and storm drain systems (other than culvert
ditches), including distribution lines and pipelines from outlet or master meters or
connection points outside the Real Property to end usage points on the Real
Property.
3.Reversion. In the event of a default by Developer or any of its successors in title to the
Real Property and upon the exercise by the City of its Right of Repurchase or Right of Reversion
under the DDA with respect to all or any portion of the Real Property, at the option of the City, all
right, title and interest of Developer in and to the Personal Property, or any portion thereof as
determined by the City, shall, upon written notice from the City to Developer, pass to and become
the property of the City, the City shall have an immediate right to such Personal Property, and
Developer and its successors and assigns shall forfeit all right, title, and interest in and to such
Personal Property. Developer hereby agrees for itself and its successors and assigns to execute any
assignments, transfers of title, bills of sale or other documents to effectuate the foregoing.
4.Former Military Property; No Warranty. Developer hereby agrees and acknowledges
that the City has no knowledge and makes no representations as to the accuracy of the description
of the Transferred Utility Systems or the fitness, adequacy or safety of the Personal Property for
any particular purpose. The Personal Property is delivered to Developer on an “AS-IS-WHERE-
IS, WITH ALL FAULTS” basis, and Developer acknowledges that the City has made no
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx 2 Portion of Disposition Area 8
representations or warranties of any kind whatsoever (excepting only those representations and
warranties of the City expressly set forth in Section 3.3 of the DDA), either express or implied in
connection with any matters with respect to the Personal Property or any portion thereof, and
further that, except as otherwise specifically provided in Section 3.3 of the DDA, the City has not
made and does not make and specifically negates and disclaims any representations, warranties,
promises, agreements or guaranties of any kind or character, whether express or implied, oral or
written, past, present or future, whether by the City or any of its agents, elected or appointed
officials, representatives or employees, of concerning or with respect to:
a.the value of the Personal Property or the income to be derived from the Personal
Property;
b.the existence or non-existence of any liens, easements, covenants, conditions,
restrictions, claims or encumbrances affecting the Personal Property (including any of the
foregoing arising from or related to the Entitlements or any of the Other Agreements);
c.the suitability of the Personal Property for any and all future development of the
Project Improvements and the other uses and activities which Developer may conduct upon the
Real Property, including the development and use of the Personal Property and Property as
described in the DDA and the Other Agreements;
d.the ability of the City or any third party to complete, or likelihood of the completion
of, any of the improvements and infrastructure described by the General Plan, the Specific Plan,
the Tustin Legacy Backbone Infrastructure Program or any other plan or policy of the City or any
other Governmental Authority;
e.the compliance with or enforcement by the City or any third party of the General
Plan, the Specific Plan, the Special Restrictions and other agreements applicable to the Real
Property or the special restrictions or other covenants and agreements applicable to other property
at Tustin Legacy, any covenants, conditions and restrictions, the Tustin Legacy Backbone
Infrastructure Program or any other agreement or governmental restriction or plan affecting Tustin
Legacy;
f.the habitability, merchantability or fitness for a particular purpose of the Personal
Property;
g.the manner, quality, state of repair or lack of repair of the Personal Property;
h.the nature, quality or condition of the Personal Property;
i.the compliance of or by the Personal Property and/or its operation in accordance
with any of the Entitlements or any Governmental Requirements, including the National
Environmental Policy Act, CEQA and the Americans with Disabilities Act of 1990;
j.the manner or quality of the construction or materials, if any, incorporated into the
Personal Property;
k.the presence or absence of Hazardous Materials, including asbestos or lead paint
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx 3 Portion of Disposition Area 8
at, on, under, or adjacent to the Personal Property or in other locations at Tustin Legacy;
l.the content, completeness or accuracy of the information, documentation, studies,
reports, surveys and other materials delivered to Developer in connection with the Personal
Property and the transactions contemplated in the DDA and the Other Agreements;
m.the conformity of the existing improvements comprising the Personal Property to
any plans or specifications for the Personal Property relating to the Development Parcelsor the
Project;
n.compliance of the Personal Property with past, current or future Governmental
Requirements relating to zoning, subdivision, planning, building, fire, safety, health or
Environmental Matters and/or covenants, conditions, restrictions or deed restrictions;
o.the deficiency of any undershoring or of any drainage to on or from the Real
Property or the Personal Property or any other portion of Tustin Legacy or its effect on the Personal
Property;
p.the condition of any adjoining land owned by the City, including any property and
improvements covered by the Landscape Installation and Maintenance Agreement;
q.the fact that all or a portion of the Personal Property may be located on or near an
earthquake fault line or falls within an earthquake fault zone established under the Alquist-Priolo
Earthquake Zone Act, California Public Resources Code Sections 2621-2630 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 of Title 14 of the California Code of
Regulations;
r.the existence or lack of vested land use, zoning or building entitlements, permits or
approvals affecting the Personal Property;
s.the construction or lack of construction of Tustin Legacy or if constructed, the
construction of Tustin Legacy in accordance with design guidelines, plans and specifications
previously or to be prepared therefor;
t.the conditions, covenants and restrictions imposed or to be imposed upon the
Personal Property or any portion thereof under the DDA, the Other Agreements or the
Entitlements;
u.the contents of the Memorandum of Agreement, the Federal Deed, the Base Closure
Law and the FOST; and
v.any other matters.
5.Environmental Condition of the Personal Property; Restrictions. Without limiting the
generality of the foregoing provisions, the City makes no representation or warranty as to the
environmental condition of the Personal Property or any portion thereof, the Navy’s obligations
with respect to the environmental condition of the Personal Property, if any, or the adequacy or
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx 4 Portion of Disposition Area 8
accuracy of any environmental report that has been rendered. Developer acknowledges and agrees
that (i) there may be some residual contamination on the Personal Property as a result of Navy
historic activities; (ii) the Navy has agreed to accept certain limited responsibility for any
contamination it caused, including any contamination discovered after transfer from the Navy, in
accordance with existing Governmental Requirements including the National Defense
Authorization Act For Fiscal Year 1993 as amended (Public Law No. 102-434) Section 330 and
Section 120(h) of the Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. § 9620(h) (“Navy Responsibilities”); and (iii) the deed restrictions contained in the
Federal Deed are binding upon the City and its successor and assigns (and therefore, shall be
binding upon Developer with respect to the Real Property and the Personal Property upon
Developer’s acquisition of the Real Property).
6.Indemnification. The City shall not be responsible for, and Developer hereby agrees that
it shall be responsible for and at all times shall relieve, indemnify, protect, defend and hold
harmless the City and its successors and assigns and its appointed and elected officials, agents,
attorneys, affiliates, employees, contractors and representatives and their respective successors and
assigns (collectively referred to as “Indemnified Parties”), from any and all claims and demands,
actions, proceedings, losses, liens, costs and judgments of any kind and nature whatsoever,
including expenses incurred by the Indemnified Parties in defending against legal actions, for death
or injury to persons or damage to property and for civil fines and penalties arising or growing out
of, or in any manner connected with, any alteration of the Transferred Utility Systems or the
Horizontal Improvements or Developer's failure to obtain consent prior to any such alteration, or
the ownership, use, operation, maintenance, storage, alteration, sale or lease of any Personal
Property transferred under this Bill of Sale.
7.Miscellaneous.
a.Modification. No amendment, change, modification or supplement to this Bill of
Sale shall be valid and binding on the City or Developer unless it is evidenced in a writing signed
by the party against which enforcement is sought.
b.Applicable Law. This Bill of Sale 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.
c.Binding Effect. This Bill of Sale and the terms, provisions, promises, covenants
and conditions hereof shall be binding upon and inure to the benefit of the City and Developer and
their respective heirs, legal representatives, successors and assigns.
d.Counterparts. This Bill of Sale 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 Bill of Sale
shall not be effective until the execution and delivery by the City and Developer of at least one set
of counterparts. The City and Developer agree to recognize execution of this Bill of Sale by
facsimile or other electronically transmitted signatures; provided that such execution by facsimile
or electronic transmission shall not be effective unless a manually executed copy of the signature
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx 5 Portion of Disposition Area 8
page is promptly sent by U.S. Postal Service, postage prepaid or overnight delivery service or is
hand delivered to the City and Developer. The City and Developer hereby authorize each other to
detach and combine original signature pages and consolidate them into a single identical original.
Any one of such completely executed counterparts shall be sufficient proof of this Bill of Sale.
\[signature page follows\]
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx 6 Portion of Disposition Area 8
IN WITNESS WHEREOF, the Developer and City have executed this Bill of Sale on the
date first above written.
CITY OF TUSTIN:
Dated:
By:
Name: Aldo E. Schindler
Title: City Manager
ATTEST:
By:
Erica N. Yasuda
City Clerk
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
Amy E. Freilich
DEVELOPER:
By:
Name: ________________________
Title: ________________________
Tustin Confluent DDA Att 22 Bill of Sale Attachment 22 City of Tustin/Confluent Development
09.27.26 (HM).docx S-1 Portion of Disposition Area 8
Attachment 23
MAXIMUM SPECIAL TAXES FOR DEVELOPED PROPERTY
FOR FISCAL YEAR 2026-2027
COMMUNITY FACILITIES DISTRICT NO. 2018-01 ZONE 5
Land Use Fiscal Year 2026-2027
Land Use
Class Maximum Special Tax
APARTMENTPROPERTY--$1,459.30
ACTIVE ADULT
PER RESIDENTIAL UNIT
1
(excluding Active Adult
Affordable Apartments) \[currently
26 exempt units\]
COMMERCIAL PROPERTY –$1,459.30 PER ROOM
2ASSISTED LIVING/
MEMORY CARE
COMMERCIAL PROPERTY– $2.82
3
RETAIL/SERVICE AMENITIES PER BUILDING SQUARE FOOT
Exclusion of Certain Amenities from Commercial Property
The term “Commercial Property – Retail/Service Amenities” shall be defined in the RMA to
exclude (1) any amenities or amenity spaces operated or managed by Developer or Operator (or
their respective affiliates), and (2) any amenities or amenity spaces leased or licensed by Developer
or Operator (or their respective affiliates) to third parties, in each case provided exclusively to
residents and/or occupants of the Real Property.
Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2027, the Maximum Special Tax for Developed Property
shall be increased annually by the greater of (a) the change in the Consumer Price Index during
the twelve (12) months prior to December of the previous Fiscal Year and (b) two percent (2.00%).
Any incremental adjustment shall be rounded to the nearest one-tenth of a percent.
“Consumer Price Index” means, for each Fiscal Year, the Consumer Price Index published by
the U.S. Bureau of Labor Statistics for “All items in Los Angeles-Long Beach-Anaheim, CA, all
urban consumers, not seasonally adjusted" index (Series Id: CUURS49ASA0, CUUSS49ASA0),
measured as of the month of December in the calendar year that ends in the previous Fiscal Year.
In the event this index ceases to be published, the Consumer Price Index shall be another index as
determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index.
“Fiscal Year” means the period starting July 1 and ending on the following June 30.
Tustin Confluent DDA Att 23 Max Tax ATTACHMENT 23City of Tustin/Confluent Development
Burden 9.8.26 (HM)Page 1 of 1 Portion of Disposition Area 8
ATTACHMENT 24
FORM OF SUBORDINATION AGREEMENT
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE
RECORDED AND TO BE EXEMPT
FROM RECORDING FEES PER
GOVERNMENT CODE 6103 AND 27383
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The City of Tustin
300 Centennial Way
Tustin, CA 92708
Attn: City Manager
SPACE ABOVE THIS LINE FOR RECORDER’S USE
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT(this “Agreement”) is entered into as of
___________ __, 202__ (“Effective Date”), by and between ________________, a
1
________________ (“Lender”), and CITY OF TUSTIN, CALIFORNIA, a municipal
corporation duly organized and existing under the laws of the State of California (“City”).
RECITALS
The City and CD-CW (TUSTIN) LLC, a Colorado limited liability company
(“Initial Developer”), entered into that certain Disposition and Development Agreement for
Portion of Disposition Area 8 (Tustin Legacy), dated as of ____________, 202_, as the same may
have been and may be amended from time to time (“DDA”), with respect to certain real property
legally described on Exhibit A attached hereto and incorporated herein by this reference
(“Development Parcel”). A Memorandum of DDA was recorded against the Development Parcel
in the Official Records of Orange County, California (“Official Records”) on _______________
202_ as Instrument No. ________ (the “DDA Memorandum”). Under the DDA, and as reflected
in the DDA Memorandum, the City is entitled to a lien to secure certain amounts payable to the
City, which lien is referred to in the DDA, the DDA Memorandum, and in this Agreement as the
“City Lien” (and which term as used in this Agreement shall also include any lien created pursuant
1
NTD: Lender to be revised to reference the administrative agent or collateral agent, if applicable.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent.
Agmt 9.25.26 (HM).docxPor. Disp. Area8
to any Property Document, as such term is defined below, regardless of how designated in the
Property Document).
City and Initial Developer entered into that certain Development Agreement, dated
as of __________, 202_, and recorded in the Official Records on ________, 202_ as Instrument
No. _______________ (“DA”).
Pursuant to the DDA, the City has conveyed the Development Parcel to
___________________________ {insert name of borrower} (“Borrower”) by a Quitclaim Deed
for Portion of Disposition Area 8 and Covenants, Conditions and Restrictions, Including
Environmental Restriction Pursuant to Civil Code Section 1471, dated _____________, 20__ (the
“Quitclaim Deed”), which \[is intended to be recorded in the Official Records
contemporaneously with the recording of this Agreement/was recorded in the Official Records
on _____________, 20__ as Instrument No. ____________\].
The fee interest created by the Quitclaim Deed in the Development Parcel in favor
of the Borrower, together with the improvements and related personal and other property described
in the Security Instrument (as defined below), are referred to as the “Mortgaged Property”.
The City and \[Initial Developer/Developer\] have also previously executed the
following documents, each of which has been recorded against the Parcel (as well as, in some
cases, also against other real property) in the Official Records on ___________, 202_ (collectively
with the Quitclaim Deed, and the DA, as the same may be amended from time to time, the
“Property Documents”):
(1)Declaration of Special Restrictions, dated as of _______________, 202_,
and recorded in the Official Records as Instrument No. ______________ (the “Special
Restrictions”);
(2)Landscape Installation and Maintenance Agreement, dated as of
_______________, 202_, and recorded in the Official Records as Instrument No.
______________ (the “Landscape Agreement”) against the Development Parcel;
(3) Declaration of Affordable Housing Restrictive Covenants and Regulatory
Agreement, dated as of _______________, 202_, and recorded in the Official Records as
Instrument No. ______________;\] and
(4) the SLA Covenant.
Borrower’s interest created under the Quitclaim Deed in the Development Parcel is
subject to the encumbrance of the Property Documents and the City Lien.
In connection with the conveyance of the Development Parcel to the Borrower,
{insert name of guarantor}, a ___________________, has executed and delivered a Guaranty to
the City dated _______________, 202_, which Guaranty has been reaffirmed by the Reaffirmation
of Guaranty, dated _________, 202_.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx2Portion of Disposition Area 8
Lender has agreed to make a loan to Borrower in the maximum principal amount
of $ _______________ (the “Loan”) for the design, construction, development, equipping and/or
operation of the Development Parcel, which Loan is initially evidenced by that certain \[Note\],
dated as of ________, 202_, made by Borrower payable to the order of Lender (the “Note”) and
that certain \[Construction Loan Agreement\], dated as of ________, 202_, between Borrower and
Lender (the “Loan Agreement”).
The Loan is secured by, among other things, that certain {insert full document title
for Deed of Trust}, dated as of the date hereof and executed by Borrower for the benefit of Lender
(“Security Instrument”; together with the Note, the Loan Agreement, and all other documents
executed in connection with the Loan, are referred to collectively as the “Loan Documents”),
which Security Instrument encumbers the Mortgaged Property and was recorded in the Official
Records concurrently herewith.
As a condition to the making of the Loan, Lender requires and Borrower requests
that the City and Lender execute and deliver this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Lender and the City agree as follows:
DEFINITIONS.
The following terms, when used in this Agreement (including, as appropriate, when used in the
above recitals), shall have the following meanings.
“Action” has the meaning specified in Section 5(h).
“Bankruptcy Proceeding” means any bankruptcy, reorganization,
insolvency, composition, restructuring, dissolution, liquidation, receivership, assignment for the
benefit of creditors, or custodianship action or proceeding under any federal or state law with
respect to Borrower, any guarantor of any of the Indebtedness, any of their respective properties,
or any of their respective partners, members, officers, directors, or shareholders.
“Borrower” means all Persons identified as “Borrower” in the Recitals of
this Agreement, together with their successors and assigns, and any other Person who acquires title
to the Mortgaged Property after the Effective Date, provided that the term “Borrower” shall not
include Lender in the event that Lender acquires title to the Mortgaged Property.
“Borrower Document Breach” means any act, failure to act, event,
condition, or occurrence that allows (but for any contrary provision of this Agreement), or which
with the giving of notice or the passage of time, or both, would allow (but for any contrary
provision of this Agreement), the City to take an Enforcement Action.
“Borrower Document Default” means the City has delivered to Lender an
Enforcement Action Notice and Borrower and Lender have failed to cure the Borrower Document
Breach within the cure period granted to Lender as a Permitted Mortgagee under the applicable
Property Document for the applicable type of Borrower Document Breach.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx3Portion of Disposition Area 8
“Business Day” means any day other than Saturday, Sunday and each City
observed legal holiday.
“Certificate of Compliance Date” means the date on which a “Certificate
of Compliance” (as that term is defined in the DDA) with respect to the Development Parcel is
recorded by the City in the Official Records.
“City” means the Person named as such in the preamble to this Agreement.
“City Lien” has the meaning specified in Recital A to this Agreement.
“City Lien Claim” means a claim that is entitled to the benefit of the City
Lien.
“Control,” “Controlled,” or “Controlling,” as used with respect to any
Person, shall mean the possession, directly or indirectly (including through one or more
intermediaries), of the current ability to direct or cause the direction of the management and
policies of such Person, including through the ownership or control of voting securities,
partnership interests, membership interests, or other equity interests, acting as the manager of a
limited liability company, the administrative general partner of a partnership or otherwise.
Notwithstanding the foregoing, the right of a Person to participate directly or indirectly (including
through one or more intermediaries) in significant management decisions of another Person,
without more, does not constitute “Control” if such Person with the right to participate in decisions
does not also possess, directly or indirectly (including through one or more intermediaries), the
current ability to direct or cause the direction of the management and policies of such other Person.
“Costs” has the meaning specified in Section 5(h).
“DA” has the meaning specified in Recital B to this Agreement.
“DDA” has the meaning specified in Recital A to this Agreement.
“DDA Memorandum” has the meaning specified in Recital A to this
Agreement.
“Decision” has the meaning specified in Section 5(h).
“Development Parcel” has the meaning specified in Recital A to this
Agreement.
“Effective Date” has the meaning specified in the preamble to this
Agreement.
“Enforcement Action” means any of the following actions taken by or at
the direction of the City: the seeking of default interest or charges, the seeking of or obtaining the
appointment of a receiver, the taking of possession or control of any of the Mortgaged Property
(including the fee interest therein), the commencement of any suit or other legal or administrative
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx4Portion of Disposition Area 8
proceeding based upon the Property Documents or the City Lien, or the exercise of any other
remedy against Borrower, provided that the term “Enforcement Action” shall not include any
rights or actions taken by the City in the exercise of its police powers.
“Enforcement Action Notice” means a written notice from the City to
Lender, given following one or more Borrower Document Breaches, setting forth in reasonable
detail the nature of the breach by Borrower.
“Foreclosure” shall mean the foreclosure of the Security Instrument (or any
sale thereunder), whether by judicial proceedings, by virtue of any power of sale under the Security
Instrument, by acceptance of a deed-in-lieu of foreclosure, or by any other conveyance of all or
any portion of the Mortgaged Property by other appropriate proceedings in the nature of a
foreclosure, resulting in the transfer of all or any portion of the Mortgaged Property to (i) Lender,
(ii) any entity that Controls Lender, is Controlled by Lender, or is Controlled by an entity that also
Controls Lender, (iii) any participating lender in the Loan (excluding Borrower or any Person that
Controls Borrower, is Controlled by Borrower, or is Controlled by an entity that also Controls
Borrower), and/or (iv) any agent or nominee for one or more of the Lenders described in clauses
(i) through (iii) of this definition.
“Governmental Authority” and “Governmental Authorities”shall
mean, respectively, each 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 Borrower,
the development, construction, maintenance, leasing, and use of improvements on the Parcel.
“Governmental Capacity” means the City’s governmental authority with
respect to any matter related to the Development Parcel, the Property Documents, the DDA, or the
DA, which shall include the regulation and entitlement of the Development Parcel pursuant to all
applicable entitlements, permits, and Governmental Requirements, including enacting laws,
inspecting structures, reviewing and issuing permits, and all of the other legislative and
administrative or enforcement functions of each pursuant to federal, State or local law.
“Governmental Requirements” shall mean all laws, statutes, codes,
ordinances, rules, regulations, standards, guidelines, conditions, instructions, and other
requirements issued by any Governmental Authority having jurisdiction over, governing, applying
to or otherwise affecting Borrower, the Development Parcel, the improvements from time to time
constructed on the Development Parcel, the development, construction, maintenance, leasing, and
use of such improvements or any component thereof.
“Indebtedness” means “Indebtedness” as defined in the Security
Instrument. {confirm this term is used in Security Instrument or define “Indebtedness” using
the term used in the Security Instrument}
“Initial Developer” has the meaning specified in Recital A to this
Agreement.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx5Portion of Disposition Area 8
“Landscape Agreement” has the meaning specified in Recital E to this
Agreement.
“Lender” means the entity named as such in the preamble to this
Agreement which is initially the holder of the Note, and any other Person subsequently becoming
the holder of the Note, as the case may be.
“Loan” has the meaning specified in Recital G to this Agreement.
“Loan Agreement” has the meaning specified in Recital G to this
Agreement.
“Loan Default” means any act, failure to act, event, condition, or
occurrence which constitutes, or which with the giving of notice or the passage of time, or both,
would constitute, an “Event of Default” {or insert comparable term from Security Instrument}
as defined in the Security Instrument.
“Loan Documents” has the meaning specified in Recital H to this
Agreement.
“Mortgage” means an indenture of mortgage or deed of trust encumbering
any portion of the Mortgaged Property.
“Mortgaged Property” has the meaning specified in Recital D to this
Agreement.
“Mortgagee” means any mortgagee, beneficiary, secured party (or any
agent for one or more lenders acting in any of the foregoing capacities) under any Mortgage.
“Note” has the meaning specified in Recital G to this Agreement.
“Official Records” has the meaning specified in Recital A to this
Agreement.
“Permitted Mortgage” means a Mortgage held by a Permitted Mortgagee.
“Permitted Mortgagee” means a Person approved as a “Permitted
Mortgagee” under the terms of the DDA.
“Person” means an individual, partnership, limited partnership, trust,
estate, association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, or other entity, domestic or foreign.
“Prevailing Party” has the meaning specified in Section 5(h).
“Property Documents” has the meaning specified in Recital E to this
Agreement.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx6Portion of Disposition Area 8
Ð Quitclaim Deed Ñ has the meaning specified in Recital C to this
Agreement.
Ð Right of Repurchase Ñ has the meaning specified in Section 3(b).
Ð Right of Reversion Ñ has the meaning specified in Section 3(b).
Ð Security Instrument Ñ has the meaning specified in Recital H to this
Agreement.
Ð Special Restrictions Ñ has the meaning specified in Recital E to this
Agreement.
.϶
PERMITTED MORTGAGEE. The City hereby (a) approves Lender as a Permitted
Mortgagee under the Loan with respect to the Mortgaged Property, (b) approves the Security
Instrument and the other Loan Documents (including, without limitation, the amount and terms of
the financing to be provided thereunder and the amount of equity to be committed by the Borrower
pursuant to the terms thereof, but without prejudice to the CityÓs right to enforce any agreements
to provide equity to the Borrower under other agreements made for the benefit of the City),
(c)consents to the execution and delivery of the Loan Documents by all parties thereto and
(d)confirms that, after the Security Instrument is properly recorded as an encumbrance against
title to the Mortgaged Property, the Security Instrument shall be deemed a Permitted Mortgage for
purposes of this Agreement. If the legal or beneficial ownership of Lender changes after the
Effective Date but prior to the Certificate of Compliance Date such that Lender Controls, becomes
Controlled by, or becomes under common Control with Developer or Borrower, the Lender and
the Mortgaged Property shall remain bound by the terms of this Agreement, but the Lender shall
cease to have the benefits of this Agreement.
SUBORDINATION.
Lender hereby agrees, acknowledges and confirms that the Security
Instrument is subordinate to the terms, covenants, conditions, operations, and effects of each of
the DDA, the Property Documents, and the City Lien.
Lender acknowledges that, under the terms of the DDA, the City is entitled
under certain circumstances to reacquire title to the fee interest in the Development Parcel through
the exercise of the CityÓs ÐRight of RepurchaseÑ and ÐRight of ReversionÑ under the DDA (which
rights are referred to in this Agreement as, respectively, the Ð Right of Repurchase Ñ and Ð Right
of Reversion Ñ).
The effect of the subordination of the Security Instrument under Section
3(a) shall apply and continue notwithstanding (i) the actual date and time of execution, delivery,
recording, filing or perfection of each of the Loan Documents and each of the Property Documents
and the Memorandum of DDA, and (ii) the respective rights of Lender and the City to obtain a
security interest in any collateral, including any collateral other than the Mortgaged Property. For
the avoidance of doubt, from and after the date on which the Lender has advanced at least $10,000
to the Borrower under the terms of the Loan Documents and until such time as the City acquires
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx7Portion of Disposition Area 8
fee title to the Mortgaged Property pursuant to the exercise of its Right of Repurchase or Right of
Reversion, the rents, issues and profits from the Mortgaged Property and any insurance proceeds
or condemnation awards payable with respect to the Mortgaged Property are expressly subject to
the rights and claims of the Lender under the Loan Documents.
The City represents and warrants to Lender as follows: (i) that as of the
Effective Date, to the actual knowledge of the City Manager (without a duty of inquiry), the
Property Documents are in full force and effect; (ii) that the Property Documents have not been
modified or amended from the executed copies of the Property Documents delivered by the City
2
to Lender concurrently with the Effective Date; (iii) that to the actual knowledge of the City
Manager (without a duty of inquiry), the City has not received written notice that any event has
occurred, which with the giving of notice or the passage of time, or both, would constitute a default
under any Property Document or a City Lien Claim.
Lender represents and warrants to the City as follows: (i) that, as of the
Effective Date, to the actual knowledge of Lender, the Loan Documents are in full force and effect;
(ii) that the Loan Documents have not been modified or amended from the executed copies of the
Loan Documents delivered by the City to Lender concurrently with the Effective Date; (iii) that,
as of the Effective Date, Lender has no actual knowledge (without duty of inquiry) of any fact or
circumstance, the continuation of which would constitute a default by Borrower under any Loan
Document; and (iv) that, on or before the Effective Date, Lender has not received written notice
that any event has occurred which, with the giving of notice or the passage of time, or both, would
constitute a default under any Loan Document.
Within twenty (20) Business Days after written request by the City, but not
more often than once per year (but nevertheless at any time following the occurrence and during
the continuation of a default by Borrower under the Loan Documents or the Property Documents),
Lender shall furnish the City with a statement, duly acknowledged and certified on behalf of
Lender, confirming that to the Lender’s actual knowledge, there exists no default under the Loan
Documents (or describing any default that does exist), certifying to Lender’s actual knowledge as
to the other matters described in Section 3(e), and certifying to such other information with respect
to the Loan Documents as the City may reasonably request, specifically including the amount of
the Indebtedness. Lender agrees that upon the occurrence and during the continuance of any
default (which remains in existence beyond any applicable notice and/or cure period) under the
Loan Documents, Lender shall provide the City, within ten (10) Business Days of receipt of a
written request from the City (which request may be made from time to time, but no more than
once in any calendar quarter), with a statement of the amount of the Indebtedness owed and the
then-current balance due and, until the Certificate of Compliance Date, shall keep the City
reasonably informed of any actions that Lender intends to take to address such defaults, including
the enforcement of any claims against Borrower, any guarantors of the Loan, or any other Person
in connection with the Loan.
2
NTD: The substance of the requested representation as to defaults under the Property Documents appears in the
City Estoppel, in which the City will add the Lender as a reliance party.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx8Portion of Disposition Area 8
Within twenty (20) Business Days after request by Lender, but not more
often than once per year (but nevertheless at any time following the occurrence and during the
continuation of a default by Borrower under the Loan Documents or the Property Documents), the
City shall furnish Lender with a statement, duly acknowledged and certified on behalf of the City,
certifying as to the matters described in Section 3(d), and certifying to such other information with
respect to the Property Documents and the City Lien as Lender may reasonably request.
Lender hereby agrees that it shall not advance more than $10,000 of the
Loan to Borrower until the Vertical Improvements Commencement Date (as that term is defined
in the DDA) shall have occurred.
Lender hereby agrees that it shall provide written notice to the City when
any material modification of the Loan Documents is proposed to be agreed to or permitted by
Lender, which modification shall be subject to approval by the City to the extent required under
the DDA.
City hereby agrees that it shall provide written notice to the Lender when
any material modification of the Property Documents is proposed to be agreed to or permitted by
the City, which modification shall be subject to approval by the Lender.
DEFAULT UNDER PROPERTY DOCUMENTS, CITY LIEN CLAIM.
In the event of a Borrower Document Breach or the existence of a City
Lien Claim, (i) Lender shall have the right to cure any Borrower Document Breach or City Lien
Claim in the manner and to the extent provided for in Section 4(b) (which cure shall be accepted
by the City if tendered and prosecuted to completion) and the City’s ability to commence any
Enforcement Action with respect to such Borrower Document Breach or City Lien Claim shall be
limited as and to the extent provided for in Section 4(b), (ii) Lender shall not have any obligation
to cure any Borrower Document Breach or City Lien Claim, and (iii) Lender shall not be
subrogated to the rights of the City under the Property Documents or otherwise by reason of Lender
having cured any Borrower Document Breach or City Lien Claim. However, the City
acknowledges that all amounts advanced or expended by Lender in accordance with the Loan
Documents or to cure a Borrower Document Breach or City Lien Claim shall be added to and
become a part of the Indebtedness under the Security Instrument and shall be secured by the lien of
the Security Instrument.
Notwithstanding the provisions of the Property Documents, if any Borrower
Document Breach or City Lien Claim shall occur which, pursuant to any provision of the Property
Documents or the DDA, entitles the City to take any Enforcement Action upon the occurrence of a
Borrower Document Default or under the terms of the City Lien, the City shall not be entitled to take
such Enforcement Action unless the City, following the expiration of any cure periods provided in
the applicable Property Document or the DDA to cure such Borrower Document Breach or City Lien
Claim, shall have given an Enforcement Action Notice to the Mortgagee, and the Mortgagee shall fail
to do either of the following:
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within thirty (30) calendar days after delivery of such Enforcement
Action Notice, cure the Borrower Document Default or City Lien Claim if the same consists of
the nonperformance by Borrower of any covenant or condition of the Property Documents
requiring the payment of money by Borrower to the City; or
if the Borrower Document Breach is not of the type described in clause
(i) of this sentence, within one hundred eighty (180) days after delivery of such Enforcement
Action Notice, in Lender's sole discretion, either:
(1)cure such Borrower Document Default, if the same is capable of being
cured within such one hundred and eighty (180) calendar day period; or
(2)if the Borrower Document Default or City Lien Claim arises from the
nonperformance by Borrower of any covenant or condition of the Property Documents
which is also an event of default pursuant to the Security Instrument, commence, or cause
any trustee under the Security Instrument to commence, and thereafter diligently pursue to
completion, Foreclosure proceedings with respect to all or substantially all of the Mortgaged
Property, and thereafter cure such Borrower Document Default within ninety (90) days
following the completion of the Foreclosure, provided that except as extended by Section
3
4(c), such Foreclosure shall be completed within a maximum of one (1) year following the
commencement of such proceedings.
If Lender is prohibited from commencing or prosecuting a Foreclosure by
any process or injunction issued by any court or by reason of any action by any court having
jurisdiction of any Bankruptcy Proceeding, the times specified in clause (ii)(2) of Section 4(b) for
commencing or prosecuting a Foreclosure or other proceedings shall be extended for the period of the
prohibition, provided that Lender shall have fully cured any Borrower Document Default or City Lien
Claim required by clause (i) of Section 4(b) and shall continue to cure all such obligations as and
when the same fall due. Notwithstanding the foregoing provisions of this Section 4(c), if the
Foreclosure is not consummated on or before the date that is 18 months after the date of giving of the
Enforcement Action Notice (which period shall be extended, on a day-for-day basis, during any
period in which Lender is prevented from consummating the Foreclosure by reason of a Force
Majeure Delay (as that term is defined in and limited by the provisions of the DDA), then at any time
after such date (which shall not be further extended by any Bankruptcy Proceeding relating to
Borrower), the City may (in its sole discretion and without any further notice to Lender) commence
and continue any Enforcement Action.
Lender shall deliver to the City a copy of any notice sent by Lender to
Borrower of a Loan Default contemporaneously with sending such notice to Borrower. Failure of
Lender to send notice to the City shall not subject Lender to any liability, but Lender shall not
exercise Lender's rights and remedies under the Loan Documents with respect to the Loan Default
until such notice is given to the City and the City shall have had the opportunity to cure the Loan
Default as provided in this Section 4(d). Following the delivery of such notice to the City, the City
3
NTD: Judicial foreclosures are exceedingly rare in California, except as a means of having a receiver appointed,
following (or even before) which the lender typically begins a non-judicial foreclosure.
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shall have the right, but not the obligation, to cure (i) any monetary Loan Default that is the subject
of such notice within thirty (30) days following the delivery of the notice to the City and (ii) any
non-monetary Loan Default that is the subject of such notice within ninety (90) days following the
delivery of the notice to the City, provided that Lender shall have the right, at its option, to
commence the exercise of all available remedies (including, without limitation, commencement of
Foreclosure) during such ninety (90) day period. The City shall not be subrogated to the rights of
Lender under the Loan Documents by reason of the City having cured any Loan Default. Amounts
paid by the City to Lender to cure a Loan Default shall not be secured by the City Lien and shall
be subordinate to the Security Instrument.
Lender shall not be obligated to perform any of Borrower’s obligations
under the DDA or otherwise to construct or complete any improvements or to guarantee such
construction or completion thereof. Notwithstanding the foregoing, if any Person acquires title to
any part of the Mortgaged Property or the improvements as a result of a Foreclosure or from Lender
after the completion of a Foreclosure, then such Person or entity shall be subject to all of the
Property Documents and the City Lien, provided, however, that such Person (i) shall not be
personally liable for any act or omission of Borrower or any other person under the Property
Documents (although such Person’s interest in the Mortgaged Property will continue to be subject
to the effects of the Property Documents and the City Lien) or (ii) bound by any amendment or
modification to the Property Documents made without the Lender’s prior written consent. If
Lender elects to construct any improvements on the Mortgaged Property, Lender must first acquire
title to the Mortgaged Property and assume all of the obligations of Borrower under all of the
Property Documents, and the improvements so constructed may only be those improvements that
Borrower would be permitted to construct under the DDA. In all events, Lender shall only be
liable to the City under the DDA and the other Property Documents after completion by Lender of
a Foreclosure, such liability shall be limited to Lender’s interest in the portion of the Mortgaged
Property and improvements thereon owned by Lender, and Lender shall have no further liability
under the DDA or the other Property Documents following transfer by Lender of its interest in the
Mortgaged Property and improvements made in accordance with the requirements of the DDA.
Subject to the provisions of Section 4(e) and the other terms of this
Agreement, Lender may pursue all rights and remedies against Borrower available to it under the
Loan Documents, at law, or in equity, regardless of any Enforcement Action Notice or
Enforcement Action by the City. No action or failure to act on the part of Lender in the event of
a Borrower Document Default or commencement of an Enforcement Action shall constitute a
waiver on the part of Lender vis-à-vis Borrower of any provision of the Loan Documents or this
Agreement.
Neither the limitations on the City’s exercise of any Enforcement Action nor
any other provision of this Agreement shall restrict or limit the right of City to exercise its
Governmental Capacity remedies.
MISCELLANEOUS PROVISIONS.
In the event of any conflict or inconsistency between the terms of the
Property Documents and the terms of this Agreement, the terms of this Agreement shall control.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx11Portion of Disposition Area 8
This Agreement shall be binding upon and shall inure to the benefit of the
respective legal successors and permitted assigns of the City and the Lender. Neither the Borrower
nor any other party shall be entitled to any benefits hereunder, whether as a third-party beneficiary
or otherwise.
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 (1) when hand delivered to the party for which it is intended;
(2) three (3) Business Days after such notice has been sent by U.S. Postal Service via certified
mail, return receipt requested, postage prepaid, and addressed to the party for which it is intended
as set forth below; (3) the next Business Day after such notice has been deposited with an overnight
delivery service reasonably approved by Lender and the City (Federal Express, Overnite Express,
United Parcel Service and U.S. Postal Service are deemed so approved), 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 sender receives a confirmation of delivery from the delivery
service provider; or (4) when transmitted if sent by email to the email address set forth below,
provided that notices given by email shall not be effective unless either (i) a duplicate copy of such
notice is promptly sent by any other method permitted under this Section 5(c) (provided that the
recipient need not receive such duplicate copy prior to any deadline set forth herein), or (ii) the
receiving party delivers a written confirmation of receipt for such notice either by email or any
other method permitted under this Section 5(c). Any notice given by email shall be deemed
received on the next Business Day if such notice is received after 5:00 p.m. Pacific Time or on a
non-Business Day. Unless otherwise provided in writing, all notices with respect to this
Agreement shall be addressed as follows:
Notices intended for Lender shall be addressed to:
If to Lender:
With a copy to:
With a copy to:
With a copy to:
Notices intended for the City shall be addressed to:
If to the City: Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
Email: citymanager@tustinca.org
With a copy to:City of Tustin City Attorney
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx12Portion of Disposition Area 8
Woodruff Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626
Attn: David E. Kendig, Esq.
Email: dkendig@wss-law.com
Any party, by notice given pursuant to this Section 5(c), may change the person or persons or
address or addresses, or designate an additional person or persons or an additional address or
addresses, for its notices, but notice of a change of address shall only be effective upon receipt.
Neither party shall refuse or reject delivery of any notice given in accordance with this Section
5(c).
Nothing herein or in any of the Loan Documents or Property Documents
shall be deemed to constitute Lender as a joint venturer or partner of the City.
This Agreement shall be governed by the laws of the State of California,
irrespective of California’s choice-of-law principles.
The City and Lender agree to submit to personal jurisdiction in the State of
California in any action or proceeding arising out of this Agreement. The City and Lender hereby
agree and consent that without limiting other methods of obtaining jurisdiction, personal
jurisdiction over them in any such action or proceeding may be obtained within or without the
jurisdiction of any court located in California and that any process or notice of motion or other
application to any such court in connection with any such action or proceeding may be served upon
the Person for which such service is intended by registered or certified mail to or by personal
service at such Person’s last known address, whether such address be within or without the
jurisdiction of any such court. Any legal suit, action or other proceeding arising out of or relating
to this Agreement shall be instituted only in the courts of the State of California, County of Orange
or the United States District Court for the Central District of California, and each of the City and
Lender hereby waives any objections which it may now or hereafter have based on venue or forum
non-conveniens of any such suit, action or proceeding and submits to the jurisdiction of such
courts.
To the extent permitted by law, each of Lender and the City waives its
respective rights to a trial by jury of any claim or cause of action based on, arising from, or related
to or arising out of this Agreement, in any action, proceeding, or other litigation of any type brought
by either against the other, whether with respect to any cause of action in law or equity. Lender
and the City agree that any such claim or cause of action shall be tried by a court in a trial without
a jury. Without limiting the foregoing, the City and Lender further agree that their respective right
to a trial by jury is waived by operation of this Section 5(g) as to any action, claim, counter-claim,
or other proceeding that seeks, in whole or in part, to challenge the validity or enforceability of
this Agreement. This waiver shall apply to any future amendments, renewals, supplements, or
modifications to this Agreement.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx13Portion of Disposition Area 8
If either the City or Lender institutes any action, suit, counterclaim or other
proceeding for any relief against the other, declaratory or otherwise (collectively, an “Action”), to
enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or
material omissions in connection with any of the covenants, representations, warranties or
obligations on the part of the other, then the Prevailing Party in such Action shall be entitled to
have and recover of and from the other party all costs and expenses of the Action, including (1) the
Prevailing Party’s reasonable attorneys’ fees which shall be payable at the actual contractual
hourly rate for City’s litigation counsel at the time the fees were incurred, and (2) costs actually
incurred in bringing and prosecuting such Action and 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 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 Section 5(h), 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: (1) post-judgment motions and
collection actions; (2) contempt proceedings; (3) garnishment, levy, debtor and third-party
examinations; (4) discovery; (5) bankruptcy litigation; and (6) appeals of any order or judgment.
“Prevailing Party” within the meaning of this Section 5(h) includes a party who agrees to dismiss
an Action in consideration for the other party's payment of the amounts allegedly due or
performance of the covenants allegedly breached, or a party who obtains substantially the relief
sought by such party.
If any one or more of the provisions contained in this Agreement, or any
application thereof, shall be invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein, and any other application thereof,
shall not in any way be affected or impaired thereby.
This Agreement shall terminate upon the earlier to occur of (i) payment of
all the Indebtedness and the release of record of the Security Instrument or (ii) the Certificate of
Compliance Date.
No failure or delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder.
References in this Agreement to “Sections” are to the sections of this
Agreement unless otherwise specified. As used in this Agreement the words “include” and
“including” mean, respectively, “include, without limitation” and “including, without limitation”.
This Agreement may be amended, changed, modified, altered or terminated
only by a written instrument or written instruments signed by the parties to this Agreement.
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx14Portion of Disposition Area 8
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.
\[Signature and Acknowledgement Pages to Follow\]
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docx15Portion of Disposition Area 8
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
LENDER:
By:
__________________________________
Name:
Title:
CITY:
CITY OF TUSTIN:
Dated: _______________________ By:
__________________________________
Aldo E. Schindler, City Manager
ATTEST:
_________________________________
Erica S. Yasuda, City Clerk
APPROVED AS TO FORM:
By: ______________________________
David Kendig, City Attorney
Hepner & Myers LLP
City of Tustin Special Real Estate Counsel
By: ______________________________
Amy E. Freilich
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docxS-1Portion of Disposition Area 8
CONSENT OF BORROWER
Borrower hereby acknowledges receipt of a copy of this Subordination Agreement, dated
as of___________, 20__, by and between _____________and The City of Tustin and consents to
the agreement of the parties set forth herein.
{INSERT BORROWER ENTITY}
By: __________________________
Name:
Title:
Date:
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docxS-2Portion of Disposition Area 8
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California )
County of ______________________ )
On _________________________, before me, ,
(insert name of notary)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docxS-3Portion of Disposition Area 8
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California )
County of ______________________ )
On _________________________, before me, ,
(insert name of notary)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Tustin Confluent DDA Att 24 ATTACHMENT 24 City of Tustin/Confluent Development
Subordination Agmt 9.25.26 (HM).docx(2)S-3Portion of Disposition Area 8
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California )
County of ______________________ )
On _________________________, before me, ,
(insert name of notary)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Tustin Confluent DDA Att 24 ATTACHMENT 24 City of Tustin/Confluent Development
Subordination Agmt 9.25.26 (HM).docx(2)S-3Portion of Disposition Area 8
EXHIBIT A
LEGAL DESCRIPTION OF PARCEL
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TUSTIN,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Tustin Confluent DDA Att 24 Subordination ATTACHMENT 24 City of Tustin/Confluent Development
Agmt 9.25.26 (HM).docxEXHIBIT APortion of Disposition Area 8
ATTACHMENT 25
FORM OF SLA COVENANT
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND EXEMPT FROM
RECORDING FEES PER
GOVERNMENT CODE SECTION 6103
AND SECTION 27383
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, California 92780
Attention: City Clerk
APN 430 481 12
\[SPACE ABOVE LINE FOR RECORDER’S USE ONLY\]
SURPLUS LAND ACT COVENANT
(per Government Code Section 54233)
If ten (10) or more residential units are developed on the real property described on Exhibit
“A” attached hereto, then not less than 15 percent of the total number of residential units developed
on the property shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of
the California Health and Safety Code, or affordable rent, as defined in Section 50053 of the
California Health and Safety Code, to lower income households, as defined in Section 50079.5 of
the California Health and Safety Code. Rental units shall remain affordable to and occupied by
lower income households for a period of 55 years for rental housing and 45 years for ownership
housing. The initial occupants of all ownership units shall be lower income households, and the
units shall be subject to an equity sharing agreement consistent with the provisions of paragraph
(2) of subdivision (c) of Section 65915 of the California Government Code.
These requirements shall be restrictions running with the land and shall be enforceable
against any owner who violates such restrictions and each successor-in-interest who continues the
Tustin Confluent DDA Att 25 SLA Covenant ATTACHMENT 25 City of Tustin/Confluent Development
8.31.26 (HM) 1 Portion of Disposition Area 8
violation by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5
of the California Government Code.
CITY OF TUSTIN, a municipal corporation
Date: By: ______________________________
Aldo E. Schindler, City Manager
Tustin Confluent DDA Att 25 SLA Covenant ATTACHMENT 25 City of Tustin/Confluent Development
8.31.26 (HM) 2 Portion of Disposition Area 8
CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ______________________________________
Signature of Notary Public
Tustin Confluent DDA Att 25 SLA Covenant ATTACHMENT 25 City of Tustin/Confluent Development
8.31.26 (HM) 3 Portion of Disposition Area 8
Exhibit “A”
The Land referred to herein below is situated in the City of Tustin, County of Orange, State of
California, and is described as follows:
LOT 14, INCLUSIVE OF TRACT NO. 18197 AS SHOWN ON A MAP FILED IN BOOK 990,
PAGES 25 THROUGH 33, INCLUSIVE OF TRACT MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
For conveyancing purposes only: APN 430-481-12
Tustin Confluent DDA Att 25 SLA Covenant ATTACHMENT 25 City of Tustin/Confluent Development
8.31.26 (HM) Exhibit “A”Portion of Disposition Area 8
ATTACHMENT 26
DECLARATION OF AFFORDABLE HOUSING RESTRICTIVE COVENANTS AND
REGULATORY AGREEMENT
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
TO BE RECORDED AND EXEMPT FROM
RECORDING FEES PER
GOVERNMENT CODE SECTION 6103
AND SECTION 27383
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, California 92780
Attention: City Clerk
\[SPACE ABOVE LINE FOR RECORDER’S USE ONLY\]
DECLARATION OF AFFORDABLE HOUSING RESTRICTIVE COVENANTS AND
REGULATORY AGREEMENT
THIS DECLARATION OF AFFORDABLE HOUSING RESTRICTIVE
COVENANTS AND REGULATORY AGREEMENT (“Declaration”) is made and entered
into as of _______________________, 20__, by and between the TUSTIN HOUSING
AUTHORITY, a California housing authority (“Authority”) and the CITY OF TUSTIN, a
municipal corporation and public body corporate and politic of the State of California (together
with any successor of City, hereinafter the “City”; and the City together with the Authority
sometimes collectively referred to as “Tustin”). All capitalized terms set forth in this Declaration
that are not otherwise defined below have the meanings set forth in the Glossary of Defined Terms
in Exhibit B.
R E C I T A L S
A.The City and CD-CW(TUSTIN) LLC, a Colorado limited liability company
(“Initial Developer”) have entered into that certain Tustin Legacy Disposition and Development
Agreement for Portion of Disposition Area 8, dated as of ______________, 2026 {insert reference
to amendments if any} (“DDA”), a Memorandum of which was recorded in the official records of
the Orange County Recorder’s Office (“Official Records”) against the Real Property substantially
concurrently with the recording of this Declaration. This Declaration affects the Real Property.
B.Pursuant to the DDA, the City intends to convey to ____________, a
____________ ____ (“Initial Owner”) the successor in interest to Initial Developer under the
Tustin Confluent DDA Att 26 Aff Housing ATTACHMENT 26 City of Tustin/Tustin Housing Authority/
Decl 9.28.26 (HM).docx1Confluent/Portion ofDispositionArea8
DDA, approximately 6.14 acres of land as legally described in that certain Quitclaim Deed for
Portion of Disposition Area 8 and Covenants, Conditions and Restrictions, including
Environmental Restriction Pursuant to Civil Code Section 1471 (“Quitclaim Deed”) recorded
immediately following recording of this Declaration in the Official Records. The term “Real
Property” as used in this Declaration means the real property conveyed to Initial Owner pursuant
to the Quitclaim Deed and legally described on Exhibit A to this Declaration, excluding the rights
and interests of the City reserved to the City in the Quitclaim Deed. The Real Property is comprised
of the Active Adult Real Property and the AL/MC Real Property as defined in the DDA as each is
generally depicted on the Site Plan attached to this Declaration as Exhibit C.
C.Upon acquisition of the Property, the DDA obligates the Owner to develop the
Active Adult Project (further defined below) consisting of an age restricted (55 years or older)
residential active adult and independent living development with 172 Units (consisting of 124 base
Units and 48 density bonus Units), including one manager Unit (which may be a Lower Income
Unit), including approximately 26 Lower Income Units, with the final number of such Units to be
shown on the Approved Plans, provided that in no event shall the number of Lower Income Units
be less than fifteen percent (15%) of the total Units constructed on the Active Adult Real Property.
The DDA also obligates the Owner to develop the AL/MC Project, consisting of a commercially
zoned assisted living and memory care facility upon the AL/MC Real Property. As further set forth
below, this Declaration shall remain in effect as to the Active Adult Real Property until the
termination of the Qualified Period and shall remain in effect as to the AL/MC Real Property until
issuance and recording by the City in the Official Records of the Final Certificate of Compliance;
provided, however, that if the Final Parcel Map is recorded in the Official Records prior to the
recording by the City in the Official Records of the first Certificate of Compliance, the AL/MC
Real Property shall be released from this Declaration concurrently with issuance and recording by
the City in the Official Records of the Certificate of Compliance for the Active Adult Project.
D.Pursuant to the Specific Plan and City Ordinance No. _____, City Council
Resolution No. CC ______ and Planning Commission Resolutions No. _____ and ______, the
City has approved the following entitlements for the Real Property (“Entitlements”): (i) Design
Review approval (Design Review application ______________); (ii) Tentative Parcel Map No.
2025-151 approved pursuant to the Subdivision Map Act and the City Code (“Tentative Parcel
Map”); (iii) a statutory Development Agreement (2025-0001) between the City and Initial
Developer dated _______ and recorded in the Official Records on ____________ as Instrument
No. ____________ (“Development Agreement”); (iv) the density bonus application, density
bonus exceptions and related concessions and incentives authorized under Tustin City Code (“City
Code”) Section 9123 related to the provision of affordable housing units in compliance with Govt.
Code Section 54220-54234 and 65915; (v) Conditional Use Permit (CUP 2025-0012); and (vi) any
other approvals to the extent required by the City Code to permit the uses contemplated by the
Project.
E.Resolution No. CC _______, concurrently adopted by the City, requires that a
housing incentive agreement pursuant to City Code Section 9142 (“Housing Incentive
Agreement”) be executed to ensure implementation of the Affordable Housing Requirements of
the Specific Plan and the City’s Density Bonus Ordinance with respect to the Project, compliance
with California Health and Safety Code Section 33413(b)(2), and that the Units constructed on the
Tustin Confluent DDA Att 26 Aff Housing ATTACHMENT 26 City of Tustin/Tustin Housing Authority/
Decl 9.28.26 (HM).docx2Confluent/Portion ofDispositionArea8
Active Adult Real Property comply with the rental, occupancy and other requirements of this
Declaration for its Term. This Declaration serves as the Housing Incentive Agreement required
under the City Code.
F.The development envelope, Unit count, concessions and restrictions authorized by
the DDA and the Entitlements for the Real Property were determined based on the following facts
and the application of the Density Bonus Laws:
(1)Government Code Sections 65915 to 65918 (“Density Bonus Statute”) and
the City Code Article 9, Chapter 1 (“Density Bonus Ordinance” and collectively with the Density
Bonus Statute, “Density Bonus Laws”) provide certain density bonuses and other concessions and
waivers to applicants restricting a portion of the base Unit count as affordable housing. City Code
Section 9122 requires that the City grant a density bonus of up to thirty-eight and three-quarters
percent (38.75%) (“Mandatory Density Bonus”) when an applicant proposes to restrict a
minimum of twenty-one percent (21%) of the base Unit count permitted as Lower Income Units
and City Code Section 9123 provides that a proposed development that exceeds that percentage is
entitled to concessions or incentives unless otherwise determined by the City pursuant to the
Density Bonus Ordinance.
(2)Prior to calculation of density bonuses under the Density Bonus Laws, the
maximum residential density that is to be constructed collectively on the Active Adult Real
Property is 124 base Units.
(3)Pursuant to the applications for Entitlements submitted by Initial Developer
and processed by the City, Initial Developer has proposed to construct 26 Lower Income Units on
the Active Adult Real Property comprising approximately twenty-one percent (21%) of the base
Units.
(4)Applying the Density Bonus and as further set forth in the Entitlements,
density bonus Units may be constructed on the Active Adult Real Property provided that at least
the minimum number of Lower Income Units are constructed on the Real Property upon the terms
and conditions set forth in the DDA, wherein not less than fifteen percent (15%) of the total Units
constructed on the Active Adult Real Property shall be Lower Income Units and shall be made
available for rental only to Lower Income Households. The Lower Income Units are to be operated
in accordance with this Declaration during the Term of this Declaration.
(5)Development of the Project, including the AL/MC Project, has received the
benefit of certain Density Bonus concessions and waivers and therefore is subject to the terms of
this Declaration.
NOW, THEREFORE, Tustin hereby covenants and declares that this Declaration
is made pursuant to and in accordance with the Density Bonus Laws, the provisions of this
Declaration comply with the Specific Plan, the Density Bonus Ordinance, California Government
Code Section 65915, and California Health and Safety Code Sections 33334.3, 33413(b) and
33334.14, this Declaration comprises the Housing Incentive Agreement required by Tustin as
described in Recital E and complies with the requirements of City Code Section 9142, and
Tustin Confluent DDA Att 26 Aff Housing ATTACHMENT 26 City of Tustin/Tustin Housing Authority/
Decl 9.28.26 (HM).docx3Confluent/Portion ofDispositionArea8
accordingly, and for the purpose of assuring development, maintenance, management, leasing and
use of the Real Property in accordance with the requirements of the Specific Plan, the Entitlements,
and the Density Bonus Laws, for the Term of this Declaration, the Real Property is now held and
shall hereafter be held, transferred, conveyed, sold, leased, subleased, encumbered, mortgaged,
used, occupied and improved subject to the covenants, conditions and restrictions herein set forth,
each and all of which is and are for, and shall inure to the benefit of and pass with, the Real Property
and every portion of or interest in the Real Property and the Project Improvements and shall apply
to each Owner and the covenants, conditions and restrictions set forth in the Declaration shall run
with the Real Property, shall inure to the benefit of Tustin and its Governmental Successors and
shall burden and be binding upon the Real Property and Owner and each and every Person claiming
by, through or under any Owner, including each and every Successor Owner, each End User, and
where not otherwise specified, excluding any End Users.
Tustin hereby further declares as follows:
1.Effect of Declaration; Affected Property.
1.1.Effect of Declaration. To the specific extent, and subject to the limitations,
more specifically set forth below, Owner and all Persons claiming by, through or under such
Owner and End User, shall be subject to and shall comply with the Restrictions set forth in this
Declaration. This Declaration and all and each of the provisions of this Declaration shall become
effective upon recordation in the Official Records and shall remain in full force and effect
thereafter except as expressly provided herein. The provisions of this Declaration are intended to
survive any close of escrow and the expiration or termination of the DDA and the Development
Agreement and shall not merge with any deed.
1.2.Property Affected by this Declaration. The “Property” consists of the Real
Property together with (i) all existing improvements, if any, located on the Real Property as of the
date of conveyance to Initial Owner pursuant to the Quitclaim Deed; (ii) all appurtenances
pertaining to the Real Property or such improvements; (iii) all permits, licenses, approvals and
authorizations issued by any Governmental Authority for development of the Project prior to the
recording in the Official Records of the Quitclaim Deed; and (iv) the right to construct a maximum
of 172 Units (consisting of 124 base Units and 48 density bonus Units)on the Real Property and
(v) City’s rights in the intangible property, all as further described in the Quitclaim Deed and as
restricted by requirements of the Quitclaim Deed and this Declaration.
1.3.Restrictions Run With the Land. Tustin hereby declares that it has executed
and recorded this Declaration against the Real Property to set forth the obligations of each and
every Owner of the Real Property or any portion thereof regarding the Restrictions and to cause
said Restrictions to run with the land for the benefit of Tustin for the Term set forth in this
Declaration in accordance with Section 9.1. Accordingly, during the Term, and except as
specifically authorized by this Declaration or approved by the City in its sole discretion, each
Owner must comply with this Declaration with respect to the construction, leasing, subleasing,
Transfer, and management of any Project Improvements or use of the portion of the Real Property
and/or Improvements owned or leased by such Owner.
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2.Restrictions on Use. The development, use, conveyance, Transfer, leasing,
subleasing, maintenance, repair and replacement of the Project Improvements on the Real Property
shall be subject to all obligations, covenants, agreements and indemnities set forth herein
(collectively referred to herein as the “Restrictions”).
3.Local, State and Federal Law. Each Owner shall carry out the construction
described and all other terms and conditions in this Declaration in connection with the Real
Property in conformity with the City Code, the Specific Plan, the Entitlements and all applicable
Governmental Requirements.
4.Additional Covenants.
4.1.Authorized Construction; Construction of Lower Income Units and
Manager Units; No Other Uses. During the Term, development of the Real Property shall be
restricted to construction of, on the Active Adult Real Property, age restricted (55 years or older)
active adult and independent living Units and on the AL/MC Real Property, senior congregate care
comprised of assisted living and memory care Rooms (and including the additional Project
Improvements authorized by the DDA) only and Owner shall concurrently with construction of
such active adult Units construct the required number of Lower Income Units and a maximum of
one (1) managerial Unit (which may, at the discretion of Owner, be a Lower Income Unit) on the
Active Adult Real Property. The required Lower Income Units shall be rented to, occupied by, or
held available only for rental to Qualified Households at an Affordable Rent subject to the
occupancy restrictions contained in this Section 4. Other uses (e.g., nonrestricted residential and
commercial uses) are prohibited without the consent of the City as set forth in the Special
Restrictions.
4.2.Development Plan; Location, Unit Size and Mix of Lower Income Units.
During the Qualified Period, all Lower Income Units shall be located on the Active Adult Real
Property and occupied in a manner consistent with this Declaration. Prior to and as a condition to
issuance of a building permit for and commencement of construction of any building on the Active
Adult Real Property: (a) the applicable Owner shall submit for review and approval by the Program
Administrator a Unit mix plan for the Active Adult Real Property that shall establish the Unit size
and bedroom mix of Lower Income Units to be constructed, together with a proposed schedule for
completion and occupancy of the targeted Units and (b) upon approval by Program Administrator
of the Unit mix plan for each applicable building, Owner shall execute and record in the Official
Records a certificate in the form and substance of the certificate attached hereto as Exhibit E (“Unit
Requirements Certificate”) applicable to such building and shall provide evidence of such
recording to the City. Program Administrator’s approval rights under this Section are limited to
confirming the Unit mix plan complies with the terms of this Declaration and Approved Plans.
4.3.Limitations on Tenants and Occupancy of Lower Income Units. Owner and
each and every Person claiming by, through or under such Owner shall cause Lower Income Units
to be rented to Qualified Households and in accordance with the following terms:
4.3.1.Rent May Not Exceed Affordable Rent. Owner may not charge or
collect any Rent Consideration for a Lower Income Unit in excess of an Affordable Rent for such
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Lower Income Unit.
4.3.2.Occupancy. To the fullest extent allowed by law, only one
Qualified Household shall be permitted to occupy and reside in a Lower Income Unit at any one
time. The Lower Income Unit shall be used as the principal residence of at least one (1) adult
member of the Qualified Household during the term of any rental agreement and for no other
purpose. To the fullest extent allowed by law, neither Owner nor a Qualified Household may lease,
sublease, or grant a license or any other right to any other persons to occupy the Lower Income
Unit, or permit persons who are not members of the one Qualified Household to occupy the Lower
Income Unit.
4.3.3.Persons Occupying. The number of persons permitted to occupy
the Lower Income Unit shall not exceed the occupancy permitted by law or the following
maximum occupancy, whichever is more restrictive, but subject in all events to the requirements
of applicable law: two persons per bedroom plus one person (i.e., for 1-bedroom Units, no more
than 3 occupants; for 2-bedroom Units, no more than 5 occupants, and for 3-bedroom Units, no
more than 7 occupants.)
4.3.4.Basis for Selection of New Qualified Households. If multiple
households apply to Owner to occupy a vacant Lower Income Unit, and if such prospective tenants
are all Qualified Households, then Owner shall lease the Lower Income Unit to one such Qualified
Household on a first-come, first-priority basis, which shall be determined by the waiting list
maintained by Owner following the process set forth in Section 4.3.6.
4.3.5.Failure to Lease; Notification to City. Owner shall notify the
Program Administrator of any Lower Income Unit that fails to be leased to a Qualified Household
within one hundred twenty (120) calendar days after the issuance of a certificate of occupancy
(“Initial Leasing Period”).
4.3.6.Interest List. During the Initial Leasing Period, Owner shall create
and maintain an “interest list,” which includes all those potential tenants who have expressed an
interest in leasing a Lower Income Unit and, to the extent then verified by Owner, who are
Qualified Households. The interest list shall be maintained with an order of priority based on a
first-come, first-priority basis.
4.3.7.Continuation of Occupancy. Each Qualified Household which
occupies a Lower Income Unit at the expiration of the Qualified Period and remains a Qualified
Household for the Lower Income Unit it occupies on such date and otherwise complies with all of
its rental agreement obligations shall be permitted to continue to occupy such Unit for a period of
one (1) year, beginning on the first day after the expiration of the Qualified Period; provided that
the annual rent increase during such one (1) year period shall not exceed an amount allowed under
applicable law. Except for the continued right of occupancy as provided in the preceding sentence,
upon the expiration of the Qualified Period, the Lower Income Units shall no longer be subject to
any other provisions of this Declaration.
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4.3.8.Written Notice of Rent Increase. Owner shall deliver written
notice to all occupants of the Lower Income Units stating each rent increase and stating that such
rent increase has been made pursuant to all applicable Governmental Requirements.
4.3.9.Determination Prior to Rental Agreement. Prior to entering into a
rental agreement with a tenant for a Lower Income Unit, Owner shall first determine that such
tenant is a Qualified Household in accordance with Section 4.9.
4.3.10.Voucher Holders. Owner shall not refuse to lease a Lower Income
Unit to a Qualified Household if such Qualified Household is a holder of a certificate or voucher
under 24 CFR Part 982 Section 8 Rental Certificate Program or Section 8 Rental Voucher Program
or to the holder of a comparable document evidencing participation in a tenant-based assistance
program, solely because of the status of the Qualified Household as a holder of such certificate of
family participation, rental voucher, or comparable tenant-based assistance document.
4.3.11.Vacancies. Following issuance of a certificate of occupancy for
any building containing Lower Income Units, Owner shall use its commercially reasonable efforts
to fill with a Qualified Household each vacancy in a Lower Income Unit as soon as possible
following the date that such Lower Income Unit becomes vacant so that at all times after occupancy
there are Qualified Households occupying all of the Lower Income Units on the Active Adult Real
Property. The Lower Income Units may change their type from time to time (such as a Very Low
Income Unit becoming a Low Income Unit) in accordance with this Declaration. Owner is not
required to maintain a particular Lower Income Unit in a particular location on the Active Adult
Real Property. However, Owner shall use its commercially reasonable efforts to lease vacant
Lower Income Units so that the number, income level, and number of bedrooms in all of the Lower
Income Units at the Active Adult Real Property most closely match the requirements in the Unit
Requirements Certificate.
4.4.Rental Rates and Changes to Rent.
4.4.1.Maximum Monthly Affordable Rent. Each Lower Income Unit
shall be leased to a Qualified Household for monthly Rent Consideration in an amount not to
exceed the applicable Maximum Monthly Affordable Rent for such Lower Income Unit, calculated
in accordance with the definition for Maximum Monthly Affordable Rent in Exhibit B and as
described in this Section 4.4. The Maximum Monthly Affordable Rent for each Lower Income
Unit shall initially be calculated as set forth in this Section and shall be determined thereafter when
new income limits are published. Owner shall deliver to the Program Administrator their proposed
list of Maximum Monthly Affordable Rent for each Lower Income Unit (“Proposed List”) no
later than the Outside Rent Calculation Date. The “Outside Rent Calculation Date” for each
calendar year means the date that is sixty (60) calendar days after the date on which the HCD
publishes its Income Limits for California counties (“Annual List”) during such calendar year.
The Program Administrator shall have thirty (30) calendar days after receipt of the Proposed List
to approve the Proposed List or to provide Owner with suggested corrections to the Proposed List
so that the Proposed List will comply with the Maximum Monthly Affordable Rent permitted
under this Declaration. Owner shall modify the Proposed List as necessary to comply with this
Declaration and resubmit the same to the Program Administrator for approval to address any
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corrections required to comply with this Declaration. If the Program Administrator fails to approve
or provide corrections to a Proposed List within thirty (30) calendar days after receipt of the same,
then the Proposed List shall be deemed to be approved on the thirty-first day after receipt by the
Program Administrator; but only to the extent the Proposed List otherwise complies with the
Maximum Monthly Affordable Rent that would be permitted under this Declaration (the approved,
or deemed approved, list being referred to herein as the “Approved List”). Owner shall not charge
Rent Consideration for a Lower Income Unit that exceeds the applicable Maximum Monthly
Affordable Rent for such Lower Income Unit set forth on the most recently approved (or deemed
approved) Proposed List. The Maximum Monthly Affordable Rent for Lower Income Units shall
comply with the applicable subsection of Health and Safety Code Section 50053(b)(1) as modified
by Section 50053(b)(2), or amendments thereto (“HSC Rents”). HSC Rents are calculated using
the Orange County Median Income.
4.4.2.Adjustments to Rent. Owner shall, in accordance with Section 4.9,
re-examine the income of each Qualified Household that is a tenant living in a Lower Income Unit
at least annually to confirm that such tenant household remains a Qualified Household pursuant to
tenant income certification obtained, as amended from time to time, to the extent applicable. The
Maximum Monthly Affordable Rent shall be recalculated by Owner and reviewed and approved
by the Program Administrator annually pursuant to the terms of Section 4.4.1, and may change as
changes in the income limits, or the monthly allowance for utilities and services warrant and shall
be set forth in the Approved List. Owner shall not impose on a tenant an increase in rent if that
increase is not permitted to be imposed under the rental agreement between Owner and the tenant.
Owner shall provide not less than thirty (30) calendar days prior written notice to affected tenants
before implementing any increase in rents. In establishing Maximum Monthly Affordable Rent for
each Qualified Household in a Lower Income Unit, Owner shall not exceed the rental amounts
specified on the then-current Approved List.
4.5.Maximum Monthly Affordable Rent. Notwithstanding the other provisions
of this Section 4, the Maximum Monthly Affordable Rent for each Lower Income Unit shall not
be less than the Maximum Monthly Affordable Rent for such Lower Income Unit that Owner
would have been permitted to charge for such Lower Income Unit on the date of this Declaration,
assuming that such Lower Income Unit was occupied by a Qualified Household of a family size
appropriate to the Unit, which shall mean two persons in a one-bedroom Unit, three persons in a
two-bedroom Unit, and four persons in a three-bedroom Unit in such Lower Income Unit
consistent with the requirements of Health & Safety Code Section 50052.5(h) as amended from
time to time. The Maximum Monthly Affordable Rent shall be as set forth in Exhibit F.
4.6.Utility Allowances. The Program Administrator shall annually provide
Owner with a schedule establishing the monthly allowances for utilities and services as published
by the Orange County Community Resources / Orange County Housing Authority or their
equivalent. Owner shall deduct the appropriate utility allowances that the Qualified Household is
responsible for from the maximum rent the Owner can charge as established on the then-current
Approved List.
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4.7.Increases in Tenant Income.
4.7.1.Over-Income Very Low Income Units. If, as a result of the annual
re-examination of incomes required pursuant to Section 4.9.5, Owner determines that a household
occupying a Very Low Income Unit or a Low Income Unit has income that exceeds one hundred
percent (100%) of the then applicable income limit for such Unit, but does not exceed one hundred
forty percent (140%) of the then applicable Income limit for such Unit, then the Unit occupied by
such household shall continue to be treated as a Very Low Income Unit or a Low Income Unit, as
applicable. If, as a result of the annual Income Verification required pursuant to Section 4.9.5,
Owner determines that a household occupying a Very Low Income Unit or a Low Income Unit
has Income that exceeds one hundred forty percent (140%) of the then applicable Income limit for
such Unit, then such Unit shall be an “Over-Income Unit”. An Over-Income Unit shall be deemed
to be a Lower Income Unit until the time of the next required Income Verification. In such event,
Owner shall lease the next available Lower Income Unit (regardless of its previous
characterization) to a Qualified Household that is a Very Low Income Household if the Over-
Income Unit was previously a Very Low Income Unit. As an example of the foregoing and not in
limitation thereof, if a tenant is a Very Low Income Household when such tenant first leased a
Very Low Income Unit, and such tenant subsequently provides an Income Verification that
exceeds one hundred forty percent (140%) of the then-applicable Income limit for a Very Low
Income Unit, then the Unit occupied by such tenant shall be deemed to be a Low Income Unit until
the next Income Verification is required.
4.7.2.Over-Income Lower Income Units. If, as a result of the annual
Income Verification required pursuant to Section 4.9.5, Owner determines that a household
occupying a Lower Income Unit has income that exceeds one hundred forty percent (140%) of the
then applicable Income limit for such Unit, then the Unit occupied by such household shall remain
a Lower Income Unit until the next annual Income Verification.
4.7.3.Vacant Units. At all times, Owner shall attempt to lease vacant
Lower Income Units on the Active Adult Real Property so that the number, income level, and
number of bedrooms in all of the Lower Income Units most closely match the requirements set
forth in the recorded Unit Requirements Certificate. Notwithstanding anything in this Section 4.7
to the contrary, at all times during the Qualified Period, there shall be the greater of 26 Lower
Income Units or 15% of the Units rented to (or available for rent to) Qualified Households at the
Active Adult Project in accordance with the requirements of this Section 4. A vacant Lower
Income Unit will continue to be treated as a Lower Income Unit provided that reasonable attempts
are made to rent the Unit.
4.7.4.Allocation of Units. Notwithstanding the foregoing provisions, it
is the intent of this Declaration that all of the Lower Income Units shall be allocated among the
applicable levels of affordability and Unit mix as provided in the Unit Requirements Certificate.
In the event the application of the provisions in this Section 4 results in an allocation of Lower
Income Units different from that provided in the Unit Requirements Certificate, Owner shall lease
the next available Lower Income Unit to a Qualified Household (whether Lower Income
Household or Very Low Income Household, as the case may be) to correct the allocation.
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4.8.Rental Agreements for Lower Income Units.
4.8.1.Rental Agreement.
4.8.1.1.The rental agreement for a Lower Income Unit must
be for an initial term of not less than twelve (12) months unless the Program Administrator
provides prior written approval.
4.8.1.2.The rental agreement for a Lower Income Unit shall
prohibit the tenant from subleasing or licensing the premises and to the fullest extent allowed by
law shall prohibit the tenant from allowing any persons who are not members of the Qualified
Household from occupying the Unit and from exceeding the occupancy limitations set forth in this
Declaration.
4.8.1.3.To the extent permitted by law (including, without
limitation, California Civil Code Section 1954), the rental agreement for a Lower Income Unit
shall include the right of Tustin to inspect the interior of any Lower Income Unit two times per
year during normal business hours with reasonable prior written notice of not less than forty-eight
(48) hours.
4.8.2.Tenant Protections. The rental agreement for a Lower Income Unit
may not contain any of the following provisions:
4.8.2.1.Any agreement by the tenant to admit guilt or to
admit a judgment in favor of Owner in a lawsuit brought in connection with the rental agreement.
4.8.2.2.Any agreement by the tenant that Owner may take,
hold, or sell personal property of household members without notice to the tenant and a court
decision on the rights of the parties. This prohibition, however, does not apply to an agreement by
the tenant concerning disposition of personal property remaining in the Unit after the tenant has
moved out of the Unit. Owner may dispose of such personal property in accordance with applicable
state law.
4.8.2.3.Any agreement by the tenant not to hold Owner or its
agents legally responsible for any action or failure to act by Owner or its agent, whether intentional
or negligent.
4.8.2.4.Any agreement of the tenant that Owner may evict
the tenant or household members without notice to the tenant.
4.8.2.5.Any agreement by the tenant that Owner may evict
the tenant or household members without instituting a civil court proceeding in which the tenant
has the opportunity to present a defense, or before a court decision on the rights of the parties.
4.8.2.6.Any agreement by the tenant to waive any right to a
trial by jury.
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4.8.2.7.Any agreement by the tenant to waive the tenant’s
right to appeal, or to otherwise challenge in court, a court decision in connection with the rental
agreement.
4.8.2.8.Any agreement by the tenant to pay attorney’s fees
or other legal costs in a court proceeding by Owner against the tenant. The tenant, however, may
be obligated to pay court costs if the landlord is the prevailing party.
4.8.3.Termination of Tenancy. Owner may not terminate the tenancy or
refuse to renew the rental agreement of a Qualified Household except for violation of the terms
and conditions of the rental agreement; for violation of applicable federal, state, or local law; or
for other good cause as established by state and local laws. Any termination or refusal to renew
must be preceded (by not less than three (3) calendar days, or such longer amount of time to the
extent required by this Declaration or law) by Owner’s service upon the tenant of a written notice
specifying the grounds for the action.
4.9.Qualified Households; Records and Reports.
4.9.1.Certificate Regarding Affordability Commencement Date. Within
thirty (30) calendar days after the Affordability Commencement Date has occurred with respect to
the Active Adult Project, Owner shall execute and deliver to the Program Administrator a copy of
a certificate in the form and substance of the certificate attached to this Declaration as Exhibit D
(“Qualified Period Certificate”) identifying the Affordability Commencement Date and the last
day of the Qualified Period. The City shall record a copy of such certificate against title to the Real
Property in the Official Records. Failure of Owner to timely execute and deliver the Qualified
Period Certificate after applicable notice and cure periods shall be a default by Owner.
4.9.2.Initial and Annual Verification of Income. Prior to considering a
household as a tenant for a Lower Income Unit, Owner shall obtain from the applicant a complete
verification with all required documentation of income qualification in accordance with the
requirements of this Declaration or, such other income verification procedure as may be reasonably
approved in writing by the Program Administrator (“Verification of Income”). Prior to the
renewal or extension of the term of any rental agreement for a Lower Income Unit, Owner shall
obtain from the Qualified Household a current Verification of Income.
4.9.3.Verification Procedure. Owner shall make a diligent and good-
faith effort to verify that the information provided by an applicant in the Verification of Income is
accurate by taking the following steps, as a part of the verification process: (a) copy of driver’s
license or government issued identification card for all adult household members; (b) obtain pay
stubs for the most recent one-month period; (c) obtain income W-2 Wage and Earning Statements,
1099’s and other statements of income, as applicable, and tax returns for the most recent tax year;
and (d) obtain any other information or documentation reasonably necessary to determine whether
the applicant is a Qualified Household. In the alternative, if approved by the Program
Administrator, the following may be submitted (i) proof of identity and (ii) either (a) income
verification from the Social Security Administration and/or the California Department of Social
Services if the applicant receives assistance from either of such agencies; or (b) if the applicant is
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unemployed, does not have income tax returns or is otherwise unable to provide other forms of
verification as required above, obtain another form of independent verification satisfactory to the
Program Administrator. If applicable law prohibits Owner from requiring any particular
documentation or information described above, Owner may use another reasonable method of
verification approved in writing by the Program Administrator.
4.9.4.Qualified Household. A “Qualified Household” is any household
of persons that has completed the Verification of Income qualification and for which Owner, in
good-faith pursuant to Section 4.9.3, has confirmed that such household is a Lower Income
Household, calculated using the definition of Income set forth in Exhibit B.
4.9.5.Files. Owner shall obtain, complete, and maintain on file
Verifications of Income qualification from each Qualified Household that executes a rental
agreement for a Lower Income Unit, including (a) a Verification of Income dated within thirty
(30) calendar days prior to the date of initial occupancy by such Qualified Household and (b)
thereafter, annual Verifications of Income, which must be dated within thirty (30) calendar days
of the annual renewal of their rental agreement, or such other date as may be mutually agreed upon
by the Program Administrator and Owner. Annual Verifications of Income shall be obtained by
Owner for each tenant occupying a Lower Income Unit not less than once in every twelve-month
period following such Qualified Tenant’s occupancy of a Lower Income Unit.
4.9.6.Certificate of Continuing Program Compliance. The Certificate of
Continuing Program Compliance, in the form provided by Program Administrator or otherwise
approved by Program Administrator, along with copies of the most recent Verification of Income
forms for ten percent (10%) of the Lower Income Units occupied by Qualified Households is to
be filed with the Program Administrator (subject to confidentiality and privacy restrictions in
accordance with applicable law) in the month in which the Affordability Commencement Date has
occurred. During the Initial Leasing Period, the Program Administrator may request to review
additional Verification of Income forms. After the Affordability Commencement Date, the
Certificate of Continuing Program Compliance, along with copies of the most recent Verification
of Income forms for five percent (5%) of the Lower Income Units occupied by Qualified
Households, shall be delivered by Owner to the Program Administrator no later than July 1 of each
calendar year during the Qualified Period.
4.9.7.Records. Owner will maintain complete and accurate records
pertaining to the Lower Income Units and will permit (during normal business hours on reasonable
prior written notice) any duly authorized representative of Tustin to inspect the books and records
of Owner pertaining to any of the following: (a) the occupancy of the Lower Income Units; and
(b) the Verification of Income.
4.9.8.Contents of Certificate. Owner will prepare and submit to the
Program Administrator no later than July 1 of each calendar year during the Qualified Period, a
Certificate of Continuing Program Compliance executed by Owner with the following
information:
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4.9.8.1.A written occupancy summary listing the number of
the Units on the Active Adult Real Property that were occupied by Qualified Households during
such period and such other tenant information as may be reasonably required as stated on the form
of the Certificate of Continuing Program Compliance acceptable to the Program Administrator;
4.9.8.2.A statement that either (a) no uncured default has
occurred under this Declaration or (b) a default has occurred; in which event the Certificate of
Continuing Program Compliance shall describe the nature of the default in detail and set forth the
measures being taken by Owner to remedy such default; and
4.9.8.3.Copies of the most recent Verification of Income
forms from five percent (5%) of the Qualified Households.
4.9.9.Rental Agreement Provisions. Each rental agreement for a Lower
Income Unit shall contain a provision to the effect that Owner has relied on the Verification of
Income and supporting information supplied by the tenant in determining qualification for
occupancy of the particular Lower Income Unit and that any material misstatement in such
verification (whether or not intentional) will be good cause for termination of such rental
agreement. Each such rental agreement shall also provide that the tenant’s income is subject to
annual verification in accordance with this Section 4.9.
4.9.10.Termination of Declaration. This Declaration shall terminate (i) as
to the Active Adult Real Property upon termination of the Qualified Period and (ii) as to the
AL/MC Real Property, concurrently with issuance and recording by the City in the Official
Records of the Final Certificate of Compliance; provided, however, that if the Final Parcel Map is
recorded in the Official Records prior to the recording by the City in the Official Records of the
first Certificate of Compliance, the AL/MC Real Property shall be released from this Declaration,
and this Declaration shall terminate as to the AL/MC Real Property, concurrently with issuance
and recording by the City in the Official Records of the Certificate of Compliance for the Active
Adult Project. If requested by the Owner of the portion of the Real Property as to which this
Declaration has terminated, the City shall execute and record in the Official Records a
memorandum confirming such termination.
4.10.Payment of Fees and Tax Equivalent Payments.
4.10.1.Administrative Fee. On April 1 following the Affordability
Commencement Date and, on April 1 every year thereafter through the Qualified Period, the
Owner shall pay to the City an administrative fee (“Administrative Fee”) in an amount equal to
$800 (Eight Hundred Dollars) annually (as such amount will be increased as set forth below). The
Administrative Fee shall increase each calendar year by two percent (2%) and the fee shall be paid
each year until the end of the Qualified Period.
4.10.2.Payment of Administrative Fee. The Administrative Fee shall be
payable to the City of Tustin, c/o the Office of the City of Tustin Finance Director, at 300
Centennial Way, Tustin, California 92780, or at such other place or places as the City from time
to time may designate by written notice to Owner.
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4.10.3.Interest on Late Administrative Fees. If the Administrative Fee is
not paid when due then Owner shall also pay to the City interest on the unpaid Administrative Fee
calculated at the rate of eight (8%) simple interest per annum, until paid.
5.Non-Discrimination Covenants.
5.1.Obligation to Refrain from Discrimination. There shall be no discrimination
against or segregation of any person, or group of persons, on account of sex, race, color, creed,
religion, ancestry, national origin, disability, medical condition, marital status, or sexual
orientation in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property or in development of the Project, nor shall the applicable Owner or any Person claiming
under or through it establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the Property, the Project Improvements or in development of
the Project or any part thereof. Any deed, lease, or contract shall contain the following respective
provisions:
5.1.1.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 sex, race, color, creed, religion, ancestry,
national origin, disability, medical condition, marital status, or sexual orientation in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein
conveyed, nor shall the grantee itself or any personclaiming under or through it, establish
or permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees
or vendees in the land herein conveyed. The foregoing covenants shall run with the land.”
5.1.2.In rental agreements:
“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 sex, race, color, creed, religion, ancestry, national origin, disability,
medical condition, marital status, or sexual orientation 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.”
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5.1.3.In contracts:
“There shall be no discrimination against or segregation of any person or group of persons
on account of sex, race, color, creed, religion, ancestry, national origin, disability, medical
condition, marital status, or sexual orientation in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person
claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.”
6.Maintenance. Owner shall maintain the Real Property at its sole cost, in accordance
with the applicable requirements of the Special Restrictions and that certain Landscape Installation
and Maintenance Agreement each recorded in the Official Records with respect to the Real
Property substantially concurrently with the recording of this Declaration in the Official Records;
provided, however, that the liability of Owner for any breach of the applicable requirements of the
Special Restrictions or the Landscape Installation and Maintenance Agreement shall be as set forth
in such document and not create any separate liability of Owner under this Declaration. Any
property management or operating agreement shall require such property manager or operator to
expressly acknowledge and agree to comply with this Declaration, and shall be subject to approval
by the Program Administrator.
7.Assignment, Transfer and Transfer of Control.
7.1.Transfers and Transfer of Control During Term. The delivery by the City of
written consent required under Section 7.1.1 and under Section 7.1.2 to any Transfer of all or any
portion of the Property or Project Improvements or interests therein or to any Transfer of Control
shall constitute conclusive evidence that the Transfer or Transfer of Control, as applicable, is not
in violation of this Section 7.1. Authority hereby delegates its consent with respect to all Transfers
and Transfer of Control to the City and agrees that any consent by the City shall also be a consent
by the Authority.
7.1.1.Limitations on Transfer Prior to Certificate of Compliance. Until
recording by the City in the Official Records of a Certificate of Compliance as to a portion of the
Real Property, no Owner shall Transfer such portion of the Real Property or any portion thereof,
or Project Improvements thereon or its interest therein or in the Project or engage in a Transfer of
Control, except in compliance with the requirements of the DDA, including Article 2 and, if
applicable, Article 17, which provisions, and all definitions and other provisions of the DDA
required to interpret and apply such provisions, shall be deemed to be incorporated into this Section
by this reference and to be in effect whether or not the DDA is then in effect or has terminated.
Any purported Transfer or Transfer of Control that does not comply with the requirements of
Article 2 and, if applicable, Article 17 of the DDA shall, at the election of the City, be null and
void.
7.1.2.Limitations on Transfer Following Certificate of Compliance.
After a Certificate of Compliance has been recorded by the City in the Official Records as to the
Real Property or any portion thereof, any Transfer of the Real Property subject to such Certificate
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of Compliance, or of ownership of the Project Improvements thereon or its interest therein or in
the Project, and any Transfer of Control by the Owner thereof, shall in each case require the
consent of the Program Administrator, which shall not be withheld or delayed if the following
conditions are satisfied: (a)(i) the Owner of the portion of the Real Property being transferred is
not in default under this Declaration or the purchaser or assignee undertakes to cure any default of
the applicable Owner to Program Administrator’s reasonable satisfaction; and (ii) either (1) the
transferee has at least five (5) years’ experience in the operation and management of comparable
rental housing projects, and at least five (5) years’ experience in the operation and management of
rental housing projects containing below-market-rate units, without any record of material
violations of discrimination restrictions or other state or federal laws or regulations or local
governmental requirements applicable to such projects, or (2) the transferee has retained a property
management firm with the experience and record described in clause (ii)(1) above, and (iii) the
transferee does not have pending against it, and does not have a recent history (i.e., within the prior
five (5) years) of, significant and material building code violations concerning the maintenance,
upkeep, operation, and regulatory agreement compliance of any of its projects as identified by any
local, state or federal regulatory agencies; (b) if a Transfer, the execution by the transferee of any
document reasonably requested by the City with respect to the assumption of the Owner’s
obligations under this Declaration to the extent arising after such Transfer; and (c) the receipt by
the City of all fees and/or expenses then currently due and payable to the City under this
Declaration with respect to the portion of the Real Property being transferred. Owner shall not
enter into an operating agreement or a property management agreement with an operator or a
property management firm for the management of the Real Property unless that firm has the
experience and record described in clause (ii)(1) above.
7.1.3.In addition to the foregoing, no portion of the Real Property shall
be conveyed separately from any other portion of the Real Property unless a Final Parcel Map has
then been recorded in the Official Records or such conveyance otherwise complies with the
requirements of the California Subdivision Map Act and the Tustin City Code.
7.2.Assignment of Obligations. If the Program Administrator approves the sale
of the Real Property or the Project Improvements or any portion thereof or interest therein, Owner
shall cause the purchaser of such portion of the Real Property to assume in writing all of the
obligations of Owner under this Declaration with respect to such transferred interest and to the
extent arising after such Transfer pursuant to an assignment and assumption agreement reasonably
approved by the Program Administrator (“Assignment Agreement”), Owner and the purchaser
shall cause the Assignment Agreement to be recorded in the Official Records against the
purchaser’s portion of the Real Property.
8.Release of Owner Upon Transfer.
8.1.Prior to Termination of Declaration as to AL/MC Real Property. Until this
Declaration terminates as to the AL/MC Real Property and the AL/MC Project, the Initial Owner
and each and every Successor Owner of the Real Property shall remain jointly and severally liable
for the obligations of Owner under this Declaration with respect to the Real Property unless
released in writing by the City in accordance with this Declaration and the DDA. Notwithstanding
the foregoing, the then-Owner shall be released from all obligations under this Declaration if the
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Real Property is acquired by the City pursuant to Article 16 of the DDA, except with respect to
each indemnity and each breach or default of this Declaration that Accrued during such Owner’s
period of ownership.
8.2.Following Termination of Declaration as to AL/MC Real Property. As to
matters Accruing after the later of the recording of the Final Parcel Map in the Official Records
and termination of this Declaration as to the AL/MC Real Property, the Owner of the Active Adult
Parcel shall be liable with respect to each indemnity and each breach or default under this
Declaration for the period of its ownership and shall be released as to matters Accruing subsequent
to its period of ownership upon its assignment to and the assumption of its obligations under this
Declaration by a Successor Owner.
9.Covenants and Restrictions to Run with the Land.
9.1.Covenants That Run With the Land. This Declaration and all Restrictions
contained in this Declaration are intended to be covenants running with the land (including the
entire Real Property until terminated as set forth herein), and shall, in any event, and without regard
to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by
law and equity, binding for the benefit and in favor of, and enforceable by Tustin,and shall be
binding upon and burden the Real Property and for the period described in Section 8 and to the
extent not terminated or otherwise limited pursuant to Section 4.9.10, Initial Owner and each
Successor Owner and their respective successors and assigns and each and every Person claiming
by, through or under Initial Owner and each Successor Owner of the Property or Project
Improvements thereon or portion thereof or interest therein including each and every End User,
for the benefit of the City and its Governmental Successors. Except to the extent terminated or
otherwise limited pursuant to Section 4.9.10, this Declaration shall survive each and every close
of escrow with respect to the Real Property and shall not merge with any deed.
9.2.Tustin as Identified Beneficiary. In amplification and not in restriction of
the provisions set forth hereinabove, each Owner by execution of this Declaration or by execution
of the assignment and assumption agreement with respect to this Declaration confirms and agrees
that the City and the Authority shall each be deemed a beneficiary of the agreements, covenants
and restrictions herein both for and in its own right and also for the purposes of protecting the
interests of the community. All covenants and restrictions without regard to technical classification
or designation shall be binding for the benefit of both the City and the Authority, and such
covenants and restrictions shall run in favor of both the City and the Authority for the entire period
during which such covenants and restrictions shall be in force and effect, without regard to whether
the City is or remains an owner of any land or interest therein to which such covenants and
restrictions relate. The City and the Authority shall each have the independent right, in the event
of any breach of this Declaration or covenant or restriction herein, to exercise all the rights and
remedies, and to maintain any action at law or suit in equity or other proper proceedings to enforce
the curing of such breach of this Declaration or covenants or restrictions.
9.3.No Third-Party Beneficiaries. This Declaration is not enforceable by and
does not run to the benefit of any Person other than the City and the Authority and their respective
successors and assigns.
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10.Burden and Benefit; Priority.
10.1.Tustin hereby declares that all of the terms and provisions in this
Declaration are covenants and restrictions that touch and concern the Property and the Project
Improvements to be constructed thereon and that each Successor Owner’s legal interest in the
Property and such Project Improvements is rendered less valuable thereby.
10.2.This Declaration is superior in priority to all Mortgages and other
instruments affecting the Property and/or Project Improvements thereon made or recorded on or
after the date of the recordation of this Declaration.
11.Intentionally Omitted.
12.Default Enforcement.
12.1.Default. “Event of Default” under this Declaration means any of the
following:
12.1.1.A breach or default by Owner occurs under the Other Agreements
during the term thereof and after expiration of any applicable cure periods;
12.1.2.A breach or default by Owner occurs under the DDA prior to the
recording by the City in the Official Records of the Final Certificate of Compliance or under the
Development Agreement during its term and after expiration of any applicable cure periods; or
12.1.3.Owner fails to perform fully any of its obligations set forth in this
Declaration within thirty (30) calendar days following receipt of written notice regarding such
other default to Owner; provided, that if such failure is capable of being remedied but not capable
of being remedied within thirty (30) calendar days and Owner has diligently pursued a cure, then
the defaulting party shall have an additional sixty (60) calendar days to remedy such failure. The
failure of the Program Administrator to notify Owner or a Successor Owner of any such default
shall not be deemed a waiver of the default, and Tustin shall have no obligation to notify the
defaulting party of the default. Notwithstanding the foregoing, while the DDA remains in effect,
any default governed by the DDA shall be subject to the terms, remedies, and cure provisions of
the DDA and not this Declaration.
12.2.Remedies. Following an Event of Default, the City and the Authority, and
each of them, may pursue all of their respective rights and remedies set forth in the DDA or the
Other Agreements or this Declaration or otherwise available at law, in equity or by statute. The
City’s and the Authority’s respective rights and remedies shall be cumulative (but not duplicative)
and no one of such rights and remedies shall be exclusive of any of the others, or of any right or
remedy at law or in equity which the City or the Authority, as applicable, might otherwise have
under or by virtue of this Declaration and the exercise of one such right or remedy by the City or
the Authority, as applicable, shall not impair City or Authority’s standing to exercise any other
right or remedy. By accepting this Declaration, each Owner agrees that this Declaration may be
specifically enforced.
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12.3.Non-Complying Lower Income Units. The Program Administrator may
make a determination that Owner has breached its obligations regarding leasing of the Lower
Income Units based on information provided in the Certificate of Continuing Program Compliance
or determined by the Program Administrator in their reasonable discretion based on information
otherwise available to them. In addition to any other rights and remedies set forth in this
Declaration or otherwise available to any party legally entitled to enforce this Declaration, if a
Default with respect to Section 4 occurs resulting in a Lower Income Unit becoming a Non-
Complying Unit, and (a) if the Event of Default is not cured on a going forward basis within sixty
(60) calendar days after notice from the Program Administrator to Owner, or (b) if such Event of
Default cannot reasonably be cured within the sixty (60) day period and Owner has not commenced
the curing of such Default, or if Owner is not otherwise diligently prosecuting such cure to
completion, then, with respect to such Non-Complying Unit, Owner shall pay to the City the
Compliance Fee for the Non-Compliance Period regarding such Non-Complying Unit. Owner
th
shall pay the Compliance Fee for the Non-Complying Unit on the fifteenth (15) day of the
calendar month immediately following the end of the Non-Compliance Period for such Non-
Complying Units.
12.4.Obligation of Owner During Default. Each Owner shall remain liable under
this Declaration for any breach or default of this Declaration that occurs or is alleged to have
occurred to the extent set forth in Section 8.
12.5.Lien of Mortgage; Priority. No breach or violation of any of the provisions
of this Declaration shall impair, defeat or render invalid the lien of any Permitted Mortgage prior
to recording by the City of the Certificate of Compliance applicable to the portion of the Real
Property encumbered by such Permitted Mortgage in the Official Records and thereafter, any
Mortgage; provided, however, that any Person that is a Successor Owner shall be bound by the
covenants, conditions, restrictions, limitations and provisions of this Declaration, whether such
successor’s title was acquired by foreclosure, deed in lieu of foreclosure, trustee’s sale or
otherwise, but such Successor Owner shall have a reasonable time after acquiring title in which to
cure any violations or correct and change any facts giving rise to the City’s rights under this
Declaration occurring prior to such transfer of title or occupancy and which are reasonably capable
of being cured or changed provided that such Successor Owner diligently acts to effect such cure
or change (and in the event of such diligent and timely cure, such Successor Owner shall have no
further liability in connection with such prior violation or the continued existence of such violation
until such cure is completed). Prior to recording by the City in the Official Records of the
applicable Certificate of Compliance, any Permitted Mortgagee and following recording by the
City in the Official Records of the applicable Certificate of Compliance, any Mortgagee, shall be
entitled to written notice in connection with any breach under this Declaration at the address set
forth in the Mortgage or recorded assignment of Mortgage.
13.Administration, Recording and Filing.
13.1.Administration. The administration of this Declaration by the City and the
Authority shall be delegated by the City and the Authority to the Program Administrator. The
Program Administrator shall have the authority to act on behalf of the City and the Authority for
all purposes under this Declaration and provide all approvals, notices, consents and interpretations
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that may be required under this Declaration from either the City or the Authority or both; provided
that the Program Administrator shall not have the authority to modify or amend this Declaration.
13.2.Recording. This Declaration, and all amendments and supplements hereto
and thereto, shall be recorded and filed in the Official Records. Owner shall pay all fees and
charges incurred in connection with any such recording.
14.Indemnification. Each Owner shall defend, indemnify and hold harmless Tustin and
their respective officers, officials, agents, employees, representatives, and volunteers (collectively,
the “Tustin Parties”) from and against all loss, damage, costs, expenses, liability, claim or
judgment relating in any manner to Owner’s performance or non-performance under this
Declaration, except to the extent cause by the gross negligence or willful misconduct of any of the
Tustin Parties. Sections 10.1 through 10.9 of the DDA (as incorporated in the Special Restrictions)
are incorporated herein by this reference with respect to the obligations under this Section 14.
15.Limitation of Liability. Notwithstanding any other provision or obligation to the
contrary contained in this Declaration: (a) the liability of Owner under this Declaration to any
Person, including Tustin, is limited to the Owner’s interest in the Real Property and Project
Improvements, and such persons and entities shall look exclusively to the Real Property and
Project Improvements for satisfaction of any claim arising under this Declaration, and may also
look to such other security as may from time to time be given for the payment of obligations arising
out of this Declaration or any other agreement securing the obligations of the Owner under this
Declaration; and (b) from and after the date of this Declaration, no deficiency or other personal
judgment for monetary damages shall be rendered against Owner, the assets of Owner (other than
Owner’s interest in the Real Property and Project Improvements), or against Owner’s partners,
members, successors, transferees or assigns or against each of their respective officers, directors,
employees, partners, agents, heirs and personal representatives, as the case may be, in any action
or proceeding arising out of this Declaration or arising out of any other agreements securing the
obligations of Owner under this Declaration, or any judgment, order or decree rendered pursuant
to any such action or proceeding. Nothing in this Declaration shall limit the City’s rights and
remedies pursuant to the Other Agreements. Notwithstanding the foregoing, nothing in this Section
shall be deemed to limit or restrict any liability, obligation, or remedy to the extent such limitation
is prohibited by applicable law, including, without limitation, any obligations arising under
applicable provisions of the California Surplus Land Act or other Governmental Requirements.
16.Miscellaneous.
16.1.Governing Law. This Declaration shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California, without giving effect
to any choice of law provisions.
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16.2.Amendment or Modification of Declaration Without the Consent of Tenants
and Mortgagees. The City and its successors and assigns, as the first party, and each Owner then
owning all or any portion of the Real Property or any Project Improvements that are then subject
to this Declaration, as the second parties, shall have the right upon written agreement signed by
the first party and all of the second parties then holding such interests, to consent and agree to
changes in, or to eliminate in whole or in part, any of the terms or provisions in this Declaration
without the consent of any tenant, lessee, easement holder, licensee, Mortgagee, trustee,
beneficiary under a deed of trust, or any other Person having any interest less than a fee in the Real
Property. No separate consent of the Authority shall be required for any such amendment or
modification. Any such amendment or modification shall be duly recorded in the Official Records.
16.3.Approvals by City and Authority. This Declaration shall be administered by
the Program Administrator on behalf of both the City and the Authority pursuant to Section 13.1
above. Except where the Program Administrator determines that the approval of a matter may
require approval by the City Council or the taking of an action by the City Council, any matter to
be approved by the City shall be deemed approved, and any action to be taken by the City shall be
deemed taken, upon the written approval by the Program Administrator. The Program
Administrator shall have the authority to issue interpretations with respect to this Declaration and
to determine whether any action requires the approval of the City Council. Any matter to be
approved by the Authority shall be deemed approved, and any action to be taken by the Authority
shall be deemed taken, upon the written approval by the Program Administrator. The Program
Administrator shall have the authority to issue interpretations on behalf of the Authority with
respect to this Declaration and to determine whether any action requires the approval of the
Authority board.
16.4.Waiver. No waiver of any provision or consent to any action under this
Declaration 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 provided
negligent or willful misrepresentations of any material facts relevant to the waiver requested.
16.5.Notices. All notices, demands, consents, requests and other
communications required or permitted to be given under this Declaration shall be in writing and
shall be deemed conclusively to have been duly given (a) when hand delivered to the Person to
which notice is being provided; (b) three (3) Business Days after such notice has been sent by U.S.
Postal Service via certified mail, return receipt requested, postage prepaid, and addressed to the
other party as set forth below; or (c) the next Business Day after such notice has been deposited
with an overnight delivery service, 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. Unless otherwise provided
in writing, all notices with respect to this Declaration shall be addressed as follows:
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City: City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Aldo E. Schindler
Email: CityManager@tustinca.org
With a copy to: Deputy City Manager – Real Property
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Brian Moncrief
Email: DCM-RP@tustinca.org
And with a copy City Attorney
to: Woodruff, Spradlin & Smart
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Attention: David Kendig, Esq.
Email: dkendig@woodruff.law
Owner:CD-CW (Tustin) LLC
c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: Steve Strom
Email: steve.strom@confluentdev.com
And with a copy CD-CW (Tustin) LLC
to:c/o Confluent Development, LLC
2215 Market Street
Denver, CO 80205
Attention: General Counsel
Email: legal@confluentdev.com
And with a copy Polsinelli
to: 1401 Lawrence Street, Suite 2300
Denver, CO 80202
Attention: Nick McGrath
Email: nmcgrath@polsinelli.com
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Any Owner, the City, or Authority may by written notice in the manner specified in this
Declaration change the address to which notices to such Person shall be delivered.
16.6.Severability. Any provision of this Declaration that is deemed to be illegal,
invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to
the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from
this Declaration. Any stricken provision shall not affect the legality, enforceability or validity of
the remainder of this Declaration. If any provision or part of this Declaration is stricken in
accordance with the provisions of this Section, then the stricken provision shall be replaced, to the
extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent
to the stricken provision as is legally possible. Any such invalidity or unenforceability of any
provision in any jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
16.7.Consent to Jurisdiction. All actions or proceedings arising in connection
with this Declaration shall be tried and litigated exclusively in the state and federal courts located
in the County of Orange, State of California. This choice of venue is mandatory and not permissive
in nature, thereby precluding the possibility of litigation with respect to or arising out of this
Declaration in any jurisdiction other than that specified in this Section, and without the right it may
have to assert the doctrine forum non conveniens or similar doctrine or to object to venue with
respect to any proceeding brought in accordance with this Section, and stipulates that the state and
federal courts located in the County of Orange, State of California, shall have in personam
jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy or
proceeding arising out of this Declaration. By executing a consent to this Declaration, each Owner
authorizes and accepts service of process sufficient for personal jurisdiction in any action against
it as contemplated by this Section 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 Declaration and in the
manner set forth in Section 16.5. Any final judgment rendered against the party in any action or
proceeding (after expiration of applicable appeal periods without having timely filed any such
appeal) shall be conclusive as to the subject of such final judgment and may be enforced in other
jurisdictions in any manner provided by law.
16.8.Time Is of the Essence. Time is of the essence in this Declaration and failure
to timely comply with provisions of this Declaration shall be a breach under this Declaration.
16.9.Attorneys’ Fees. If any party that is subject to this Declaration (including
City, Authority, and any Owner) files an action or brings any proceeding against another party
arising from this Declaration, the prevailing party shall be entitled to recover as an element of its
costs of suit, and not as damages, reasonable attorneys’ fees and costs to be fixed by the court. A
party not entitled to recover its costs shall not recover attorneys’ fees. No sum for attorneys’ fees
shall be included in calculating the amount of a judgment for purposes of deciding whether a party
is entitled to its costs or attorneys’ fees.
16.10.Recitals. The recitals set forth at the beginning of this Declaration of
any matters or facts shall be conclusive proof of the truthfulness thereof and the terms and
conditions set forth in the recitals, if any, shall be deemed a part of this Declaration.
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16.11.Exhibits. Unless otherwise indicated, references in this Declaration to
articles, sections, paragraphs, subsections, clauses, exhibits, attachments and schedules are to the
same contained in or attached to this Declaration and all exhibits and attachments referenced in
this Declaration are incorporated in this Declaration by this reference and made a part of this
Declaration as though fully set forth in this Section.
16.12.Captions. All captions, titles or headings of the articles, sections,
paragraphs or subparagraphs of this Declaration are inserted solely for reference, shall not be
deemed to be a part of this Declaration, and shall not define, limit, extend or describe the scope of
this Declaration nor be used or construed in the interpretation or determination of the validity of
this Declaration or any provision thereof.
16.13.Additional Definitions. As used in this Declaration the words
“include”, “includes” and “including” mean, respectively, “include, without limitation,”,
“includes, without limitation,” and “including, without limitation,” when stated in connection with
performance by a Party, the word “shall” imposes a mandatory requirement on that Party to
perform the stated act or requirement (and shall be synonymous with “must”) and the term “shall
not” imposes a mandatory requirement on that Party not to perform the stated act or requirement
(and shall be synonymous with “must not”). The word “may” is permissive and does not impose
any mandatory requirement on a Party to perform the stated act.
16.14.Counterparts. This Declaration may be executed in counterparts, and all
such counterparts when taken together shall constitute a single instrument.
{signature page follows}
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IN WITNESS WHEREOF, this Declaration is executed by City and Authority as of the
date first written above.
CITY OF TUSTIN:
By: ,
Dated:
Aldo E. Schindler
CityManager
ATTEST:
By:
Erica N. Yasuda
CityClerk
TUSTIN HOUSING AUTHORITY:
APPROVED AS TO FORM
By: ,
By:
Aldo E. Schindler
David Kendig
Executive Director
City Attorney
Hepner & Myers LLP
Special Real Estate Counsel to the City
By:
AmyE.Freilich
{signatures continue on following page}
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S-1
ACCEPTANCE AND CONSENT BY \[{If Transfer of DDA to Initial Owner occurs
following recording:} INITIAL DEVELOPER AND\] INITIAL OWNER
By executing below to evidence acceptance of and agreement to the terms of this Declaration, \[{If
Transfer of DDA to Initial Owner occurs following recording:} CD-CW (Tustin) LLC (“Initial
Developer”) and\] ______________, LLC (“Initial Owner”) as a holder of a future interest in the
Real Property,\[each\] on behalf of itself and each Successor Owner, declares for the benefit of
Tustin and its successors and assigns: (a) its understanding and intent that the benefit of the
covenants and restrictions that run with the land and touch and concern the Real Property are made
for the enhancement and enjoyment and use of the Real Property and Project Improvements by
Qualified Households who may be entitled to lease Lower Income Units under the terms of this
Declaration and for the benefit of the City, (b) that this Declaration furthers the public purposes
for which the DDA and the Development Agreement were entered into with Initial Developer and
assumed by Initial Owner and each and every Successor Owner’s legal interest in the Real Property
is rendered less valuable thereby and (c) Initial Owner’s understanding and agreement that, upon
acquiring ownership of the Real Property, Initial Owner and each Successor Owner shall assume
and be bound by the obligations of Owner under this Declaration for the period provided herein.
Initial Developer executes this Declaration solely to evidence its acknowledgment and consent and
does not assume the obligations of Owner under this Declaration except to the extent expressly
required by the DDA. \[{If Transfer of DDA to Initial Owner occurs following recording:} Initial
Developer shall be released from any obligations it may have under this Declaration upon
conveyance of the Real Property to Initial Owner, except for obligations that Accrued before such
conveyance or that the DDA expressly provides shall survive such conveyance.\]
INITIAL DEVELOPER:
CD-CW(TUSTIN) LLC, a Colorado limited
liability company
By: CD Manager LLC,
a Colorado limited liability company,
its Manager
By: Confluent Development LLC,
a Colorado limited liability company,
its Manager
By: ___________________________
Marshall M. Burton
Chief Executive Officer
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S-2
INITIAL OWNER:
\[enter signature block\]
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CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A NOTARY PUBLIC OR OTHER OFFICER COMPLETING
THIS CERTIFICATE VERIFIES ONLY THE IDENTITY OF
THE INDIVIDUAL WHO SIGNED THE DOCUMENT TO
WHICH THIS CERTIFICATE IS ATTACHED, AND NOT THE
TRUTHFULNESS, ACCURACY, OR VALIDITY OF THAT
DOCUMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and
Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ________________________________
Signature of Notary Public
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STATE OF COLORADO )
CITY AND ) SS:
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this ____ day of _______, 2026, by
Marshall M. Burton, as Chief Executive Officer of Confluent Development, LLC, a Colorado limited
liability company, as Manager of CD Manager LLC, a Colorado limited liability company, as Manager of
CD-CW (Tustin) LLC, a Colorado limited liability company.
WITNESS my hand and official seal.
Notary Public
My Commission Expires:
\[SEAL\]
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CALIFORNIA ALL PURPOSE ACKNOWLEDGEMENT
A NOTARY PUBLIC OR OTHER OFFICER COMPLETING
THIS CERTIFICATE VERIFIES ONLY THE IDENTITY OF
THE INDIVIDUAL WHO SIGNED THE DOCUMENT TO
WHICH THIS CERTIFICATE IS ATTACHED, AND NOT THE
TRUTHFULNESS, ACCURACY, OR VALIDITY OF THAT
DOCUMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California
County of _________________________________
On _________________ before me, ________________________________________________,
Date (Insert Name and
Title of the Officer)
personally appeared ___________________________________________________________
Name(s) of Signer(s)
____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Place Notary Seal and/or Stamp above Signature: ________________________________
Signature of Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
That certain real property located in the City of Tustin, County of Orange, State of California, and
legally described as follows:
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TUSTIN,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT 14, INCLUSIVE OF TRACT NO. 18197 AS SHOWN ON A MAP FILED IN BOOK 990,
PAGES 25 THROUGH 33, INCLUSIVE OF TRACT MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA.
EXCEPTING THEREFORE THE MATTERS SET FORTH IN SECTION 2 OF THE
QUITCLAIM DEED FOR PORTION OF DISPOSITION AREA 8 AND COVENANTS,
CONDITIONS AND RESTRICTIONS, INCLUDING ENVIRONMENTAL RESTRICTION
PURSUANT TO CIVIL CODE SECTION 1471 DATED OF EVEN DATE HEREWITH AND
RECORDED PRIO TO THE RECORDING HEREOF IN THE OFFICE OF THE COUNTY
CLERK RECORDER FROR ORANGE COUNTY, CALIFORNIA.
FOR CONVEYANCING PURPOSES ONLY: APN 430-481-12
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EXHIBIT B
GLOSSARY OF DEFINED TERMS
For purposes of this Declaration, the following initially capitalized terms shall have the
meanings set forth below and unless otherwise indicated, defined terms may be used in the singular
or plural form, as the context requires :
“Accrue”, “Accrued”, or “Accruing” means with respect to any Claim, the date and time
such Claim arises as a matter of law and could then or thereafter be asserted by any Person.
“Active Adult Project” means the development, construction, maintenance, leasing and
use of the by Developer of the age restricted (55 years or older) residential active adult and
independent living component of the Project and related Project Improvements on the Active Adult
Real Property.
“Active Adult Real Property” means the approximately 2.79 acre portion of the Real
Property depicted as such on Exhibit C to this Declaration and if the Final Parcel Map is recorded
in the Official Records, shall be comprised of Parcel 1 on the Final Parcel Map.
“Administrative Fee” has the meaning set forth in Section 4.10.1.
“Affordability Commencement Date” means the date on which all of the following have
occurred on the Real Property: (a) all Lower Income Units required by the DDA to be constructed
have been completed, and (b) the first occupancy by a Qualified Household of a Lower Income
Unit.
“Affordable Rent” means for any Lower Income Unit, monthly Rent Consideration
payable by the tenant that does not exceed the Maximum Monthly Affordable Rent applicable to
that Lower Income Unit.
“AL/MC Project” means the development, construction, maintenance, leasing and use of
the by Developer of the senior congregate care assisted living and memory care components of the
Project and related Project Improvements on the AL/MC Real Property.
“AL/MC Real Property” means the approximately 3.35 acre portion of the Real Property
depicted as such on Exhibit C to this Declaration, and if the Final Parcel Map is recorded in the
Official Records, shall be comprised of Parcel 2 of the Final Parcel Map.
“AnnualList” has the meaning set forth in Section 4.4.1.
“Approved List” has the meaning set forth in Section 4.4.1.
“Approved Plans” means, collectively: (i) the Entitlements which govern development of
the Project Improvements on the Real Property and Development Permits, including encroachment
permits, necessary for development of the Project, including approval of plans by the City pursuant
to the Design Review process; (ii) the Basic Concept Plan and any modification thereto approved
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by the City; and (iii) construction level drawings approved by the City as required to obtain the
Development Permits.
“Assignment Agreement” has the meaning set forth in Section 7.2.
“Authority” has the meaning set forth in the introductory paragraph of this Declaration.
“Business Day(s)” means any day on which City Hall is open for business and shall
specifically exclude Saturday, Sunday or a legal holiday or City holiday.
“Certificate of Compliance” means a certificate issued and recorded in the Official
Records by the City upon Completion by Developer of the Active Adult Project Improvements
and/or the AL/MC Project Improvements, as applicable, and satisfaction of all additional
Conditions Precedent thereto as described in the DDA, provided that if the Final Parcel Map is not
recorded in the Official Records prior to issuance and recording by the City in the Official Records
of the first of these two Certificates of Compliance, then in lieu of separate Certificates of
Compliance for each component of the Project, there shall be only one Certificate of Compliance
issued and it shall be issued after Completion of the entirety of the Project and satisfaction of all
additional Conditions Precedent set forth in the DDA for both the Active Adult Project and AL/MC
Project. For avoidance of doubt, the number, timing, issuance and recording of Certificates of
Compliance shall be governed by Sections 1.1.13 and 1.1.34 of the Development Agreement, and
nothing in this Declaration shall impose any additional condition upon such issuance or recording.
“Certificate of Compliance for Active Adult Project” means the certificate of
compliance that shall be issued by the City for the Active Adult Project upon (1) satisfaction of
the conditions precedent thereto set forth in the DDA and (2) recording by the City in the Official
Records of the Final Parcel Map.
“Certificate of Continuing Program Compliance” means the annual report of occupancy
for the Lower Income Units including the Verification of Income provided by each Owner to
Authority as described in Section 4.9 or such other form as may be prescribed by the Authority.
“City” has the meaning set forth in the introductory paragraph of this Declaration.
“City Code” has the meaning set forth in Recital D.
“City Council” means the City Council of the City of Tustin.
“City Hall” means the seat of government for the City of Tustin, presently located at 300
Centennial Way, Tustin, California.
“Claim” or “Claims” means 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, consultants’ fees and court and litigation costs), costs and
expenses attributable to compliance with judicial and regulatory orders and requirements, fines,
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penalties, liens, taxes, monetary payment or reimbursements or any type of compensation
whatsoever, direct or indirect, known or unknown, foreseen or unforeseen.
“Compliance Fee” for a Non-Complying Unit means an amount equal to (a) twenty-five
percent (25%) multiplied by (b) the Rent Consideration or rent being paid by the tenant, whichever
is greater, under its rental agreement for the entire Non-Compliance Period.
“Control”, “Controlled”, or “Controlling”, as used with respect to any Person, means the
possession, directly or indirectly (including through one or more intermediaries), of the current
power to direct or cause the direction of the management and policies of such Person, including
through the ownership or control of voting securities, partnership interests, membership interests,
or other equity interests. Notwithstanding the foregoing, (i) the right of a Person to participate
directly or indirectly (including through one or more intermediaries) in significant management
decisions of another Person, without more, does not constitute “Control” if such Person with the
right to participate in decisions does not also possess, directly or indirectly (including through one
or more intermediaries), the current ability to direct or cause the direction of the management and
policies of such other Person and (ii) the fact that a Person acts as the day-to-day manager of any
Person does not without more constitute “Control”. Without limiting the generality of the
foregoing, it shall be a presumption that control with respect to a corporation or limited liability
company is the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights granted to all equity holders in the corporation or limited liability company. It shall be a
presumption that control with respect to other types of entities such as a partnership, trust, other
entity or association, is the possession by a Person, indirectly or directly, of the power to direct or
cause (by such Person’s sole action) the direction of the management or policies of the controlled
entity.
“Controlling Person” means, as to any Person, any other Person who Controls the Person
in question. Notwithstanding the foregoing, if a Person has the right to participate directly or
indirectly (including through one or more intermediaries) in significant management decisions of
Owner, such Person shall not be deemed to be a Controlling Person of an Owner unless such
Person also possesses, directly or indirectly (including through one or more intermediaries), the
power to direct or cause the direction of the management and policies of such Owner.
“DDA” has the meaning set forth in Recital A.
“Declaration” has the meaning set forth in the introductory paragraph to this instrument.
“Density Bonus Laws” has the meaning set forth in Recital F(1).
“Density Bonus Ordinance” has the meaning set forth in Recital F(1).
“Density Bonus Statute” has the meaning set forth in Recital F(1).
“Development Agreement” has the meaning set forth in Recital D.
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“End User” means any (i) utility or Governmental Authority with respect to any transfer
of portions of the Real Property or grants of easements affecting the Real Property desirable for
the development of the Real Property, including the City or any lighting or landscaping district
and (ii) for the term in which such contract is in effect, any natural person that is the tenant under
a rental agreement for a Unit and inhabits the Unit for which it is the tenant.
“Entitlements” has the meaning set forth in Recital D and shall include the Development
Agreement and all discretionary land use approvals and entitlements legally required by the City
or any other Governmental Authority as a condition of subdivision of the Real Property or any
portion thereof, development of the Real Property and/or construction of the Project.
“Event of Default” has the meaning set forth in Section 12.1.
“Federal Government” means the United States of America (including the Navy), by and
through the Secretary of the Navy, or designee.
“Final Certificate of Compliance”means the Certificate of Compliance issued and
recorded by the City in the Official Records for the last of the Active Adult Project or the AL/MC
Project upon satisfaction of all Conditions Precedent therefor set forth in the DDA, provided that
if the Final Parcel Map is not recorded in the Official Records prior to issuance and recording by
the City in the Official Records of the first of those two Certificates of Compliance, then the single
Certificate of Compliance recorded by the City in the Official Records after Completion of the
entirety of the Project and satisfaction of all additional Conditions Precedent set forth in the DDA
or both the Active Adult Project and AL/MC Project shall be the Final Certificate of Compliance.
“Final Parcel Map” means final parcel map No. 2025-151 approved by the City and the
Orange County Surveyor’s office and recorded in the Official Records, subdivide the Real
Property into Parcel 1 (comprised of the Active Adult Real Property) and Parcel 2 (comprised of
the AL/MC Real Property).
“Fiscal Year” means the property tax year for the State of California from July 1 until the
following June 30, as such fiscal year may be changed from time to time by the State of California.
“Governmental Authority” and “Governmental Authorities” means, respectively, each
and all federal, state, county, municipal and local governmental and quasi-governmental bodies
and authorities (including the United States of America, the State and any political subdivision,
public corporation, district, joint powers authority or other political or public entity) or departments
thereof having or exercising jurisdiction over either or any of the Parties, the Project, the Property,
the Project Improvements or over any property owned by the City upon which work is conducted
by or on behalf of Owner in connection with construction of the Project or such portions of the
foregoing as the context indicates.
“Governmental Requirements” means all laws, statutes, codes, ordinances, rules,
regulations, standards, guidelines, conditions, instructions, and other requirements issued by any
Governmental Authority having jurisdiction over, governing, applying to or otherwise affecting
any or all of the Parties, the Project, the Project Improvements, the Real Property or any component
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thereof or over any property owned by the City upon which work is conducted by or on behalf of
Owner in connection with construction of the Project, and including the California Surplus Land
Act and Guidelines as the same may be amended from time to time, Environmental Laws, the City
Code, the Specific Plan, the Entitlements, the Development Permits and the Approved Plans.
“Governmental Successors” means each and every Person that is a successor or an
assignee of the City and/or Authority and that is a governmental entity or agency.
“HCD” means the California Department of Housing and Community Development.
“Housing Incentive Agreement” has the meaning set forth in Recital E.
“HSC Rents” has the meaning set forth in Section 4.4.1.
“Income” means “annual income” as defined in California Code of Regulations, Title 25,
Section 6914, as amended from time to time; provided, however, that to the extent required by any
applicable financing source or regulatory agreement, Income may be determined in accordance
with the requirements of such financing source or regulatory agreement, including, without
limitation, those of the U.S. Department of Housing and Urban Development.
As used herein, “Income” shall be the anticipated Income of a person or family for the
twelve-month period following the date of determination of Income. To make the projection, a
“snapshot” of the household’s current circumstances is used to project future Income. The
circumstances on the date of measurement should be assumed to continue for the next twelve (12)
months unless there is verifiable evidence to the contrary.
“Initial Leasing Period” has the meaning set forth in Section 4.3.5.
“Initial Developer” has the meaning set forth in Recital A.
“Initial Owner” has the meaning set forth in Recital B.
“Low Income Unit” means a Unit that is reserved for occupancy by, and affordable to, a
Lower Income Household whose income does not exceed eighty percent (80%) of Area Median
Income, adjusted for household size, as determined from time to time by the California Department
of Housing and Community Development, and for which the rent does not exceed the Maximum
Monthly Affordable Rent applicable to such Unit under this Declaration and California Health and
Safety Code Section 50053.
“Low Income Households” means persons and families whose incomes do not exceed the
qualifying limits for lower income families as established and amended from time to time pursuant
to Section 8 of the United States Housing Act of 1937 and California Health and Safety Code
Section 50079.5. These qualifying limits shall be published by the Department of Housing and
Community Development in the California Code of Regulations as soon as possible after adoption
by the Secretary of Housing and Urban Development. In the event the federal standards are
discontinued, the Department of Housing and Community Development shall, by regulation,
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establish income limits for lower income households for all geographic areas of the state at 80
percent of area median income, adjusted for family size and revised annually.
“Lower Income Households” means persons and families whose income does not exceed
the qualifying limits for lower income families as established and amended from time to time
pursuant to Section 8 of the United States Housing Act of 1937 and Health & Safety Code section
50093. The limits shall be published by the Department of Housing and Community Development
in the California Code of Regulations as soon as possible after adoption by the Secretary of
Housing and Urban Development. In the event the federal standards are discontinued, the
Department of Housing and Community Development shall, by regulation, establish income limits
for lower income households for all geographic areas of the state at eighty percent (80%) of Orange
County Area Median Income, adjusted for family size and revised annually. “Lower Income
Households” includes Low Income Households, Very Low Income Households and Extremely
Low Income Households, as defined in California Health & Safety Code section 50105.
“Lower Income Unit” means the Units, if any, required to be constructed and rented to,
occupied by, or held available for LowerIncome Households in accordance with this Declaration.
Lower Income Units include Very Low Income Units and Low Income Units.
“Lower Income Households” includes Lower Income Households and Very Low Income
Households as defined herein.
“Mandatory Density Bonus” has the meaning set forth in Recital F.
“Maximum Monthly Affordable Rent” means for any Lower Income Unit, the maximum
monthly Rent Consideration payable by the tenant under the rental agreement that does not exceed
the following: (a) with respect to Very Low Income Units, the Annual Maximum Very Low
Income Rent for a Very Low Income Household (calculated in accordance with the requirements
below) divided by twelve (12) as specifically applicable to the particular Qualified Household that
is the tenant, and (b) with respect to Lower Income Units, the Annual Maximum Low Income Rent
for a Lower Income Household (calculated in accordance with the requirements below) divided
by twelve (12), as specifically applicable to the particular Qualified Household that is the tenant.
The applicable Maximum Monthly Affordable Rent for a particular Qualified Household shall
consider and include a reasonable allowance for utilities and shall otherwise be an amount not in
excess of the following:
For “Lower Income Households”, as more particularly defined in Health and Safety Code
Sections 50079.5 and 50053, and as generally described herein, the “Annual Maximum
Low Income Rent” shall be equal to the product obtained by multiplying (a) thirty percent
(30%) by (b) sixty percent (60%) of the annual Orange County Median Income adjusted
for family size appropriate for the Units, including a reasonable utility allowance or the
Low Income Rent for the bedroom size, including a reasonable utility allowance, or, to the
extent applicable, the Low Income Rent for the applicable bedroom size, including a
reasonable utility allowance, as published by the California Tax Credit Allocation
Committee, as amended from time to time, if higher. It shall be optional for any Owner to
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calculate Affordable Rent for those low income households with gross incomes that exceed
sixty percent (60%) of the annual Orange County Area Median Income adjusted for family
size at a level that does not exceed thirty percent (30%) of the annual gross income of the
household. Notwithstanding the foregoing, Annual Maximum Low Income Rent may, at
the option of any Owner, be established in accordance with the TCAC monthly rent limits
for Lower Income Households. The Annual Maximum Low Income Rent shall be
calculated in accordance with the applicable subsection of Health and Safety Code Section
50053(b)(1) as modified by Section 50053(b)(2).
For “Very Low Income Households”, as more particularly defined in Health and Safety
Code Sections 50105 and 50053, and as generally described herein, the “Annual
Maximum Very Low Income Rent” shall either be equal to the product obtained by
multiplying (i) thirty percent (30%) by (ii) fifty percent (50%) of the annual Orange County
Median Income adjusted for family size appropriate for the Units, including a reasonable
utility allowance. Notwithstanding the foregoing, Annual Maximum Very Low Income
Rent may, at the option of any Owner, be established in accordance with the TCAC
monthly rent limits for very low income households or, to the extent applicable, the Low
Income Rent for the applicable bedroom size, including a reasonable utility allowance, as
published by the California Tax Credit Allocation Committee, as amended from time to
time, provided such amounts do not exceed the rent permitted under Section 50053. The
Annual Maximum Very Low Income Rent shall be calculated in accordance with the
applicable subsection of Health and Safety Code Section 50053(b)(1) as modified by
Section 50053(b)(2).
“Mortgage” means any indenture of mortgage or deed of trust, hypothecation, pledge,
assignment for security purposes, bond, grant of taxable or tax exempt funds from a governmental
agency or other security interest affecting the Real Property or any portion thereof or any
documents constituting or relating to a sale-leaseback transaction, in each case together with all
loan documents related thereto, but excluding any community facilities districts, service districts,
assessment districts, landscape and lighting districts, or other assessments created or imposed by
any Governmental Authority.
“Mortgagee” means any mortgagee, beneficiary, secured party (or any agent for one or
more lenders acting in any of the foregoing capacities) under any Mortgage. or other provider of
funds or grantee of title under any Mortgage.
“Non-Compliance Period” for a Non-Complying Unit means the period commencing on
the date that is sixty-one (61) calendar days after notice from Tustin to Owner pursuant to Section
12.3, or as otherwise may be extended by Tustin in writing upon request of Owner, and ending on
the date that is the earlier of (a) the date that Owner cures the Default that resulted in the Non-
Complying Unit or (b) the date that the tenant of the Non-Complying Unit vacates the Non-
Complying Unit. Owner shall provide Tustin with reasonable evidence of the date that either (i)
Owner cures the Default that resulted in the Non-Complying Unit or (ii) the tenant of the Non-
Complying Unit vacates the Non-Complying Unit, as applicable.
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“Non-Complying Units” means a Lower IncomeUnit which is occupied and/or leased in
violation of Section 4 of this Declaration.
“Official Records” has the meaning set forth in Recital A.
“Orange County Median Income” or “AMI” means the median family income for the
Orange County Primary Metropolitan Statistical Area as most recently established by official
annual publication of the Federal Department of Housing and Urban Development as published,
modified and released by the State Department of Housing and Community Development, adjusted
for household size.
“Other Agreements” means the Quitclaim Deed, this Declaration, the SLA Covenant, the
Memorandum of DDA, the Development Agreement, the Landscape Installation and Maintenance
Agreement and the Special Restrictions.
“Outside Rent Calculation Date” has the meaning set forth in Section 4.4.1.
“Over-Income Unit” has the meaning set forth in Section 4.7.1.
“Owner” means the Initial Owner and the applicable Successor Owner holding fee title to
all or any portion of the Real Property.
“Parties” means the City and Owner, collectively.
“Party” means either of the City or Owner, individually, as parties to this Declaration.
“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 any portion of the Real Property for the purpose of development, construction or
refinancing of all or any portion of the Project and approved by the City pursuant to the DDA.
There shall not be more than one Permitted Mortgage for the Real Property.
“Permitted Mortgagee” shall mean the Mortgagee with respect to any Permitted
Mortgage affecting the Real Property or any portion thereof, and any successor or assign of such
having all right, title and interest in and to the loan documents, and in each case meeting the criteria
set forth in the DDA and accordingly entitled to the Permitted Mortgagee protections provided by
the DDA.
“Person” means 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.
“Program Administrator” means the City Manager or person designated by the City
Manager to act as the program administrator under this Declaration.
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“Project” means the development, construction, maintenance, leasing and use of the
Project Improvements on the Real Property.
“Project Improvements” means the buildings, structures, parking, fixtures, site
improvements (including landscaping and hardscaping), amenities and facilities constructed or
installed on the applicable portions of the Real Property together with all related appurtenances.
“Property” has the meaning set forth in Section 1.2.
“Proposed List” has the meaning set forth in Section 4.4.1.
“Qualified Household” has the meaning set forth in Section 4.9.4.
“Qualified Period” means the period beginning on the Affordability Commencement Date
and ending on the date which is fifty-five (55) years thereafter as set forth in the Qualified Period
Certificate.
“Qualified Period Certificate” has the meaning set forth in Section 4.9.1.
“Quitclaim Deed” shall have the meaning set forth in Recital B.
“Real Property” has the meaning set forth in Recital B.
“Rent Consideration” means all mandatory consideration actually paid by a tenant to the
landlord under a rental agreement for housing services and amenities. Housing services and
common amenities include, but are not limited to, the following: parking for one (1) vehicle for a
one- or up to two-bedroom Unit and two (2) vehicles for more than a two-bedroom Unit, use of
common facilities including pools or health spas, and utilities if the development is master-
metered. Notwithstanding the foregoing, utility charges, to the extent individually metered for each
Lower Income Unit, reimbursement for damages caused by a tenant, and optional fees like
additional vehicle parking fees and pet fees may be passed through or billed directly to the
occupants of Lower Income Units in addition to and separate from any items of Rent
Consideration.
“Restrictions” has the meaning set forth in Section 2.
“Rooms” shall mean the senior congregate care assisted living and memory care rooms
within each building to be developed on the AL/MC Real Property.
“SLA Covenant” means that certain Surplus Land Act Covenant (per Government Code
Section 54233) made by the City and recorded in the Official Records against the Real Property
on the Restrictions Date.
“Special Restrictions” means the declaration denominated as Special Restrictions and
recorded in the Official Records against the Real Property substantially concurrently with the
recording in the Official Records of this Declaration.
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“Specific Plan” means that certain Marine Corps Air Station-Tustin Specific Plan/Reuse
Plan initially adopted on February 3, 2003, as the same has been amended and may be further
amended from time to time setting forth the zoning and entitlement framework for future
development of the former Marine Corps Air Station, Tustin.
“Successor Owner” means each and every Person owning or acquiring fee title to all or
any portion of the Real Property from and after the conveyance to Initial Owner by the City, but
excluding each and every End User provided that during the term of the DDA, any such Transfer
shall be subject to the applicable limitations set forth in Article 2 of the DDA.
“Tentative Parcel Map” has the meaning set forth in Recital D.
“Term” means the period commencing upon the recording of this Declaration in the
Official Records and ending upon the end of the Qualified Period.
“Transfer” means (i) the transfer, sale, assignment, lease, sublease, license, gift,
hypothecation, mortgage, pledge or encumbrance, merger or other similar conveyance by any
Owner of its interest in this Declaration, the Other Agreements, the Project, the Property, the
Project Improvements, or any portion thereof or interest therein, whether voluntary, involuntary,
by operation of law or otherwise, or any agreement to do so; (ii) the granting by any Owner of any
Mortgage, easement, license, lien or other encumbrance and/or the execution of any installment
land sale contract or similar instrument affecting all or a portion of the Project, the Property, the
Project Improvements, or any portion thereof or interest of any Owner therein; (iii)any merger or
similar term as such term is defined by the law of the state in which the transferor entity is formed
and that has the same effect as any of the circumstances described in clauses (i) or (ii) of this
definition, and (iv) shall also include any conversion of an Owner to an entity form other than that
of Owner at the time of execution of this Declaration.
“Transfer of Control” means, with respect to Owner or Owner’s Controlling Person, the
occurrence, directly or indirectly, in a single transaction or a series of transactions, of any of the
following:
(i) the conveyance, sale, assignment, transfer or disposition of all or
substantially all of that Person’s (or its Controlling Person’s) assets, stock, membership or
partnership interests or other equity interests;
(ii)the dissolution, merger, reorganization, share exchange, recapitalization,
restructuring or consolidation of that Person (or its Controlling Person), other than a transaction
that would result in all of the voting securities of that Person (or its Controlling Person) outstanding
immediately prior thereto to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50.01% of the combined voting
power of all of the voting securities of that Person (or its Controlling Person) or such surviving
entity outstanding immediately after such transaction; and
the acquisition by any “Person” or “Group” (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) of an aggregate of 50.01% or more of
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit B Confluent/Portion of Disposition Area 8
Page 10
the beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934) of the issued and outstanding voting securities or other equity interests of that Person (or its
Controlling Person), where such acquiring “Person” or “Group” did not directly or indirectly (or
through an affiliate) already Control or own at least 50.01% of the voting securities or other equity
interests of such Person (or its Controlling Person).
“Tustin” has the meaning set forth in the introductory paragraph of this Declaration.
“Tustin Parties” has the meaning set forth in Section 14.
“Unit” means each dwelling unit in the Active Adult Project that is used as a primary
residence by its occupants, consistent with the definition of a unit as used by the United States
Census Bureau and the California Department of Finance, including efficiency units, residential
hotel units, and units used as transitional housing.
“Unit Requirements Certificate” has the meaning set forth in Section 4.2.
“Verification of Income” has the meaning set forth in Section 4.9.2.
“Very Low Income Households” means persons and families whose incomes do not
exceed the qualifying limits for very low income families as established and amended from time
to time pursuant to Section 8 of the United States Housing Act of 1937 and Health & Safety Code
section 50105. These qualifying limits shall be published by the Department of Housing and
Community Development in the California Code of Regulations as soon as possible after adoption
by the Secretary of Housing and Urban Development. In the event the federal standards are
discontinued, the Department of Housing and Community Development shall, by regulation,
establish income limits for very low income households for all geographic areas of the state at 50
percent of area median income, adjusted for family size and revised annually.
“Very Low Income Unit” means a Unit that is reserved for occupancy by, and affordable
to, a Very Low Income Household whose income does not exceed fifty percent (50%) of Area
Median Income, adjusted for household size, as determined from time to time by the California
Department of Housing and Community Development, and for which the rent does not exceed the
Maximum Monthly Affordable Rent applicable to such Unit under this Declaration and
California Health and Safety Code Section 50053.
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit B Confluent/Portion of Disposition Area 8
Page 11
EXHIBIT C
SITE PLAN
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docxExhibit CConfluent/Portion ofDispositionArea 8
TJUF!QMBO
EXHIBIT D
QUALIFIED PERIOD CERTIFICATE
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
BE RECORDED AND EXEMPT FROM
RECORDING FEES PER
GOVERNMENT CODE SECTION 6103
AND SECTION 27383
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, California 92780
Attention: City Clerk
\[SPACEABOVELINEFORRECORDER’SUSEONLY\]
PROJECT QUALIFIED PERIOD CERTIFICATE
In accordance with Section ___ of the Declaration of Affordable Housing Restrictive Covenants
and Regulatory Agreement dated as of _______________, 20__ and recorded in the Official
Records of Orange County on _______________, 20__ as Document No. _______________
recorded against the \[{if no Final Parcel Map has then recorded:} Real Property/{if Final Parcel
Map has then recorded:} Active Adult Real Property\] as the same is legally described on Schedule
1 attached hereto and made a part hereof (collectively, “Declaration”), the undersigned confirms
that the Qualified Period for the Project commenced on __________________, 20__ and will
terminate on ____________, ____. Capitalized terms not defined in this certificate shall have the
meanings given to such terms in the Declaration.
Dated: ____________________ OWNER:
{insert signature block}
{signatures continued on following page}
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docxExhibit DConfluent/Portion ofDispositionArea 8
ACCEPTED AND AGREED:
CITY OF TUSTIN:
Dated:
By: ,
Aldo E. Schindler
CityManager
ATTEST:
TUSTIN HOUSING AUTHORITY:
By:
Erica N. Yasuda
By: ,
City Clerk
Aldo E. Schindler
Executive Director
APPROVED AS TO FORM
By:
David Kendig
City Attorney
{insert form of acknowledgement}
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit D Confluent/Portion of Disposition Area 8
S-1
SCHEDULE 1
LEGAL DESCRIPTION OF REAL PROPERTY
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit D Confluent/Portion of Disposition Area 8
Schedule 1
EXHIBIT E
UNIT REQUIREMENTS CERTIFICATE
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST DOCUMENT
BE RECORDED AND EXEMPT FROM
RECORDING FEES PER
GOVERNMENT CODE SECTION 6103
AND SECTION 27383
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, California 92780
Attention: City Clerk
\[SPACEABOVELINEFORRECORDER’SUSEONLY
UNIT REQUIREMENTS CERTIFICATE
In accordance with Section ___ of the Declaration of Affordable Housing Restrictive Covenants
and Regulatory Agreement dated as of _______________, 20__ and recorded in the Official
Records of Orange County on _______________, 20__ as Document No. _______________
against the Real Property as the same is legally described on Schedule 1 attached hereto and made
a part hereof (collectively, “Declaration”), the undersigned Owner of the \[{if no Final Parcel
Map has then recorded:} Real Property/{if the Final Parcel Map has then recorded:} Active
Adult Real Property\] confirms that the following shall be the allocation of affordable unit types,
sizes and mix for the Units on the Active Adult Real Property:
Unit Type Unit Size (sf) Very Low Lower Income
Income Units Units
TBD TBD
Totals
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx) Exhibit E Confluent/Portion of Disposition Area 8
Page 1
This allocation and mix may be amended at any time by recording of a new certificate executed
by the then Owner and Program Administrator, each in its sole discretion.
Dated: ____________________ OWNER:
{insert signature block}
{signatures continued on following page}
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit E Confluent/Portion of Disposition Area 8
Page 2
ACCEPTED AND AGREED:
CITY OF TUSTIN:
Dated:
By: ,
Aldo E. Schindler
CityManager
ATTEST:
TUSTIN HOUSING AUTHORITY:
By:
Erica N. Yasuda
By: ,
City Clerk
Aldo E. Schindler
ExecutiveDirector
APPROVED AS TO FORM
By:
David Kendig
City Attorney
{insert form of acknowledgement}
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit E Confluent/Portion of Disposition Area 8
Page 3
SCHEDULE 1
LEGAL DESCRIPTION OF REAL PROPERTY
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docx Exhibit E Confluent/Portion of Disposition Area 8
Schedule 1
EXHIBIT F
MAXIMUM MONTHLY AFFORDABLE RENT
\[see attached\]
Tustin Confluent DDA Att 26 Aff Housing Decl ATTACHMENT 26City of Tustin/Tustin Housing Authority/
9.28.26 (HM).docxExhibit FConfluent/Portion ofDispositionArea 8
ATTACHMENT 27
TRANSFERABLE PRODUCTS CERTIFICATE
Letterhead of Consultant
Date
To: City of Tustin and Tustin Housing Authority (“City Parties”)
Re: Certification of \[insert exact report/plan title\] dated \[insert date and insert any report/plan
reference number or attach and reference report/plan\] (“Transferable Product”) for Confluent
Development Active Adult and Assisted Living/Memory Care Project, Tustin Legacy, Parcel
_______ (“Project”).
In consideration of the terms set forth herein, \[Insert Name of Consultant Firm\] (“Consultant”)
hereby certifies the Transferable Productin favor of the City and confirms that the City Parties
may use and rely upon the findings, conclusions, and recommendations contained withinthe
Transferable Product. The Consultant understands and agrees that the City Parties will utilize this
Transferable Product for the specific purpose of evaluating and developing the real property upon
which the Project is proposed to be developed and that is the subject of the Transferable Product.
1. Standard of Care: Consultant warrants that the Transferable Product was prepared in
accordance with the professional standards, care, and diligence normally exercised by
members of the profession currently practicing under similar conditions in the same
locality.
2. Limits and Conditions:The City Partiesacknowledges and agrees that:
o This reliance letter does not constitute an update, amendment, or modification to
the findings of the Transferable Product. No fieldwork or additional investigation
has been conducted since the original Transferable Product date.
o The reliance granted herein is strictly subject to the same terms, conditions, scope
of work, and liability caps set forth in the original professional services agreement
executed between the Consultant and the original client.
o \[Insert for engineering plans, if applicable: The recommendations contained in the
report are dependent on GMU Engineers & Geologists being involved in the
design process and in the performance of all observation and testing
recommended/required in the report. If GMU is not involved, then these tasks
shall be assumed by another competent Geotechnical Engineer whowill assume
the responsibility in full of being the Geotechnical Engineer of Record.\]
Tustin Confluent DDA Att 27 Transferable Attachment 27City of Tustin/Confluent Development
Products Cert 8.23.26 1 Portion of Disposition Area 8
120829126.2
3. Insurance Coverage: Consultant certifies that it maintains professional liability (Errors
and Omissions) insurance coverage with a minimum limit of $1,000,000 perclaim. A
certificate of insurance verifying this coverage is attached hereto.
4. Governing Law: This reliance letter shall be governed by, and construed in accordance
with, the laws of the State of California.
Sincerely,
\[insert name of firm\]
\[signature by authorized representative\]
Tustin Confluent DDA Att 27 Transferable Attachment 27City of Tustin/Confluent Development
Products Cert 8.23.26 2 Portion of Disposition Area 8
120829126.2