HomeMy WebLinkAboutD-4 Staff Report Purchase and Sale Agreement Costanzo DDA_PSAPUBLIC HEARING
D-4
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: KURT CHRISTIANSEN, FAICP, DIRECTOR OF COMMUNITY AND ECONOMIC
DEVELOPMENT
DATE: MARCH 6, 2017
SUBJECT: CONSIDERATION BY THE SUCCESSOR AGENCY OF A PURCHASE AND SALE
AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE AZUSA
REDEVELOPMENT AGENCY AND COSTANZO INVESTMENTS, LLC, FOR THE
SALE OF LAND ON N. AZUSA AVENUE (APNS 8608-025-902, 907, 909, AND 910)
AND BY THE CITY COUNCIL A DISPOSITION AND DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF AZUSA AND COSTANZO
INVESTMENTS, LLC FOR THE SALE AND DEVELOPMENT OF THAT CERTAIN
PORTION OF PROPERTY LOCATED AT 812 N. AZUSA AVENUE (APN 8608-025-
906)
SUMMARY:
The City and the Successor Agency to the former Redevelopment Agency are owners of several parcels
generally located on N. Azusa Avenue in the City (APNs 8608-025-902, 8608-025-906, 8608-025-907
AND 8608-025-910) (“Property”). Pursuant to the Long Range Property Management Plan, the
Successor Agency desires to sell its portion of the Property to Costanzo Investments, LLC
(“Developer”) expeditiously and in a manner aimed at maximizing value. The City additionally
negotiated with Developer for the sale of a portion of the Property owned by City. Staff is
recommending that the City Council conduct a public hearing pursuant to Government Code § 34720 et
seq., overrule any protests, and enter into a Disposition and Development Agreement with Developer,
and the Successor Agency enter into a Purchase and Sale Agreement with Developer, to allow the
parties to sell the Property to Developer and for the City to ensure the development of the Property in
accordance with the Agreement.
RECOMMENDATION:
Staff recommends that the City Council and the Successor Agency take the following actions:
APPROVED
COUNCIL MEETING
3/6/2017Corrected to include APN: 8608-025-908
Property Address: 830 N. Azusa Ave.
Purchase and Sale Agreement/DDA with Costanzo Investments LLC
March 6, 2017
Page 2
1) Open the public hearing and receive testimony from the public regarding the proposed sale of the
portion of the Property owned by City;
2) Close the public hearing and, if any protests were received regarding the sale of the City’s
portion of the Property, overrule the protest by a 4/5 majority vote;
3) Approve City Resolution No. 2017-C15 approving the Disposition and Development Agreement;
4) Approve Successor Agency Resolution No. 2017-C16 approving the Purchase and Sale
Agreement; and
5) Authorize the Mayor and Executive Director of the Successor Agency to execute the Disposition
and Development Agreement and the Purchase and Sale Agreement, in a form acceptable to the
City Attorney, on behalf of the City and the Successor Agency, respectively.
DISCUSSION:
The City and Developer are interested in developing the Property as a multi-story mixed-use
commercial, retail and perhaps residential development. By entering into the DDA, the City and the
Developer intend to for the City to sell the City’s portion of the Property to Developer and ensure that
Developer develops the Property in accordance with the DDA. By entering into the Purchase and Sale
Agreement, the Successor Agency will sell the Agency’s portion of the Property to Developer
expeditiously and in a manner aimed at maximizing value. The City shall enforce all rights and
obligations associated with the development of the Successor Agency land, in addition to the City land,
after the close of escrow to Developer.
For the City’s portion of the Property, in accordance with California Government Code § 37420 et seq.,
the City must hold a public hearing to accept any written protests received from interested parties and, if
no protests are received, or if the City Council votes to overrule a protest by a 4/5 majority, the City
Council may adopt a resolution finding that the public interest and convenience require the sale of the
property and proceed with the sale of the Property.
For the Successor Agency property, the parcels are listed as properties to be sold in the Department of
Finance approved Long Range Property Management Plan. In furtherance of the dissolution, the
Successor Agency has solicited proposals for the sale and now proposes to sell the parcels in accordance
with the approved Long Range Property Management Plan.
FISCAL IMPACT:
The Agency shall sell the Agency’s portion of the Property to Developer for the purchase price of
$1,200,000. The City shall sell the City’s portion of the Property to Developer for the purchase price of
$240,744. Both agencies shall pay customary escrow fees and costs.
Prepared by: Reviewed and Approved:
Kurt E. Christiansen, FAICP Louie F. Lacasella
Economic and Community Development Director Management Analyst
Reviewed and Approved:
Troy L. Butzlaff, ICMA-CM
City Manager
Purchase and Sale Agreement/DDA with Costanzo Investments LLC
March 6, 2017
Page 3
Attachments:
1) Resolution No. 2017-C15 of the City Approving the Disposition and Development
Agreement
2) Disposition and Development Agreement
3) Resolution No. 2017-C16 of the Successor Agency Approving the Purchase and Sale
Agreement
4) Purchase and Sale Agreement
45635.09000\29537312.1
RESOLUTION NO. 2017-C15
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF AZUSA, CALIFORNIA, APPROVING A DISPOSITION
AND DEVELOPMENT AGREEMENT BETWEEN THE
CITY OF AZUSA AND COSTANZO INVESTMENTS, LLC
FOR APNS 8608-025-902, 8608-025-906, 8608-025-907 AND
8608-025-910
WHEREAS, the City of Azusa, California (“City”) is the owner of certain real property
consisting of a portion of APN 8608-025-906, as further described in the Agreement attached to
this Resolution as Exhibit A and incorporated herein by this reference (“City Property”); and
WHEREAS, the Successor Agency to the Azusa Redevelopment Agency is the owner of
that certain real property located at 826, 858, 832, and 830 N. Azusa Avenue, Azusa (APNs
8608-025-902, 8608-025-907 and 8608-025-910) (“Agency Property”), which is adjacent to the
City Property; and
WHEREAS, on May 9, 2016, the City entered into an exclusive right to negotiate an
agreement with Costanzo Investments, LLC, a California limited liability company
(“Developer”) for the potential acquisition and development of the City Property and Agency
Property; and
WHEREAS, Developer has negotiated a purchase and sale agreement with Agency for
the purchase of the Agency Property, and desires to acquire the Agency Property and City
Property and to redevelop both properties as a commercial development and has negotiated a
Disposition and Development Agreement (Costanzo Investments, LLC/A-2 Property) with the
City (“Agreement”); and
WHEREAS, on February 6, 2017 the City Adopted Resolution No. XX declaring the
City’s intention to sell the property to the developer and setting the date and time for a public
hearing to consider the sale of the property; and
WHEREAS, Developer’s proposed acquisition of the City Property and Agency
Property, and subsequent construction and completion of the properties, is in the public interest
and convenience of the City and the community, and the health, safety and welfare of the city’s
taxpayers and residents, is in the best interests of the Successor Agency and the winding down of
the Successor Agency’s business, and will further the goals and objectives of the City’s general
plan by: (i) strengthening the City’s land use and social structure, and (ii) alleviating economic
and physical blight on the City Property and in the surrounding community.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, DOES HEREBY RESOLVE AND FIND AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
45635.09000\29537312.1
Section 2. Findings. The City Council intends to sell the City Property to Developer
and, based upon the Recitals and all other information and testimony provided, finds that the
public interest and convenience require the sale of the City Property to Developer.
Section 3. Hearing. Pursuant to California Government Code section 37423, a duly
noticed public hearing was held by the City on February 6, 2017.
Section 4. CEQA Compliance. In accordance with the California Environmental
Quality Act (Pub. Resources Code, § 21000 et seq.: “CEQA”) and the State CEQA Guidelines
(14 Cal. Code Regs., § 15000 et seq.), the City Council certified the final Azusa TOD Specific
Plan Environmental Impact Report and adopted findings pursuant to CEQA,. The City has not
received any comments or additional information that produced substantial new information
requiring recirculation or additional environmental review under Public Resources Code sections
21166 and State CEQA Guidelines, section 15162. No further environmental review is required
for the City to adopt this Resolution.
Section 5. Approval of Agreement. The City hereby approves the Agreement, in
substantially the form attached to this Resolution as Exhibit “A” subject to any non-substantive
changes approved by the City Attorney, and authorizes the Mayor to sign and enter into the
Agreement and the City Manager perform the obligations of the City pursuant to the Agreement.
Section 6. Severability. If any provision of this Resolution or the application of any
such provision to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of this Resolution that can be given effect without the invalid
provision or application, and to this end the provisions of this Resolution are severable. The City
declares that the City would have adopted this Resolution irrespective of the invalidity of any
particular portion of this Resolution.
Section 7. Certification. The City Clerk of the City of Azusa shall certify to the
adoption of this Resolution.
Section 8. Effective Date. This Resolution shall become effective immediately upon
its adoption.
APPROVED AND ADOPTED THIS ______ day of ____, 2017.
________________________________
Mayor
ATTEST:
________________________________
City Clerk
45635.09000\29537312.1
EXHIBIT A
DISPOSITION AND DEVELOPMENT AGREEMENT
(Costanzo Investments, LLC/A-2 Property)
[Attached behind this cover page]
2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)betweenTHECITYOFAZUSAaCaliforniamunicipalcorporationandCOSTANZO INVESTMENTS,LLC,aDelawarelimited liabilitycompany45635.01000\29179005.13
This2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments, LLC/A-2Property)(“Agreement”)isdatedasof_____
_____
_,2017(“DateofAgreement”),forreference purposesonly, andisenteredintobyandbetweentheCityofAzusa,aCaliforniamunicipalcorporation(“City”)andCostanzoInvestments,LLC,aDelawarelimitedliabilitycompany(“Developer”).TheCityandtheDeveloperaresometimesreferredtointhisAgreement,eachindividually,asa“Party,”orcollectively,asthe“Parties.”RECITALSThisAgreementisenteredintowithreferencetothefollowingrecitalsoffact(“Recitals”)thatCityandDeveloperbelievetobetrueasoftheEffectiveDateofthisAgreement:A.TheSuccessorAgencytotheAzusaRedevelopmentAgency(“SuccessorAgency”)istheownerofthatcertainrealpropertylocatedat$26,$58,832,and$30N.AzusaAvenue,Azusa (APNs8608-025-902,8608-025-907and8608-025-910)asmorespecificallydescribedinExhibitA-Iattached heretoandincorporatedhereinbythisreference(“SAProperty”).B.TheCityistheownerofthatcertainremnantparcellocatedat__________(aportionofAPN8608-025-906)andmorespecificallydescribedinExhibitA-2attachedheretoandincorporatedhereinbythisreference(“CityProperty”).TheSAandCity propertyarecollectivelyreferredto asthe“Properties.”C.OnMay9,2016,the CityapprovedanexclusiverighttonegotiateanagreementwiththeDeveloperforpotentialdevelopmentoftheSAProperty.TheSuccessorAgencyandDeveloperhaveenteredintoaPurchaseandSaleAgreementandJointEscrowInstructions(CostanzoInvestments,LLC/A-2Property),dated________,2017(“SAPropertyAgreement”)fortheSuccessorAgencytoselltoDeveloper,andforDevelopertopurchasefromtheSuccessorAgency,theSAProperty.AsaconditionofthecloseofescrowundertheSAPropertyAgreement,DeveloperisrequiredtoenterintothisAgreement.D.TheDeveloperproposestheacquisitionanddevelopmentofthePropertiesforconstructionofamulti-storymixed-usecommercial,retailandperhaps residentialdevelopment.TheCityPropertyisnecessaryfortheproposeddevelopment.E.TheDeveloper’sproposedacquisitionofthePropertiesandsubsequentconstructionandcompletionoftheProject(asdefinedinSection1.1.61)onthePropertiespursuanttothetermsofthisAgreementisinthebestinterestoftheCityandthehealth, safetyandwelfareoftheCity’staxpayersandresidentsandisinaccordancewiththepublicpurposessetforthinapplicablelaw.ImplementationofthisAgreementwillfurtherthegoalsandobjectivesoftheCity’sgeneralplanby:(1)strengtheningtheCity’slanduseandsocial structure,and(ii)alleviatingeconomicandphysicalblightonthe Propertiesandinthesurroundingcommunity.F.TheCitydesirestoselltheCityPropertytotheDeveloperforthedevelopmentoftheProjectandtheDeveloperdesirestopurchasetheCity PropertyfromtheCityforthesamepurpose.45635.OI000\29179005.13—I—
NOW,THEREFORE,inconsiderationofthemutualpromisessetforthinthisAgreementandothergoodandvaluableconsideration,thereceiptandsufficiencyofwhichisacknowledgedbyCityandDeveloper,thePartiesagreeasfollows:TERMSAN])CONDITIONSARTICLEIDEFINITIONS; REPRESENTATIONSAN])WARRANTIES;EFFECTIVEDATE1.1Definitions.ALlinitiallycapitalizedtermsnototherwisedefinedinthisAgreementshallhavethefollowingmeanings:1.1.1“Actualknowledge”hasthemeaningascribedtosuchterminSection1.2.1(withrespecttoCity)andSection1.2.2(withrespecttoDeveloper),respectively.1.1.2“AdditionalProjectApprovals”hasthemeaningascribedtotheterminSection 2.6.1.5.5.1.1.3“AdditionalInsureds”hasthemeaningascribedtosuchterminSection5.10.1.1.4“Affiliate”meansandreferstoany personorentity,directlyorindirectly,ControllingorControlledbyorundercommonControlwiththeDeveloper,whetherbydirectorindirectownershipofequityinterests,bycontractorotherwise.1.1.5“BuildingPermits”meansthebuildingpermitsrequiredundertheCityRequirementsfortheconstructionoftheProject.1.1.6“CEQA”meanstheCaliforniaEnvironmental QualityAct,PublicResourcesCodeSections21000,etq.1.1.7“CertificateofCompletion”meansthewrittencertificationofCitythattheconstructionofthe ProjecthasbeencompletedincompliancewiththetermsandconditionsofthisAgreement,substantiallyintheformofExhibitGattachedtothisAgreement.1.1.8“City”meanstheCityofAzusa,California,aCaliforniamunicipalcorporation.1.1.9“CityManager”meanstheCityManageroftheCityorhisorherdesigneeorsciccessorinfunction.1.1.10“CityRequirements”hasthemeaningascribedtotheterminSection2.6.1.1.1.11“CityTerminationPower”hasthemeaningascribedtotheterminSection 2.6.1.45635.O1OOO29l79OO513—2—
1.1.12“City’sTitleNoticeResponse”meansthewrittenresponseoftheCitytotheDeveloper’sTitleNotice,inwhichtheCityeither(1)electstocausetheremovalfromthePreliminaryReportofanymattersshowninScheduleBofthePreliminaryReportasexceptionstocoverageundertheproposedTitlePolicythatwereobjectedtointheDeveloper’sTitleNotice,or(ii)electsnottocausetheremovalfromthePreliminaryReportofanymattersshowninScheduleBofthePreliminaryReportasexceptionstocoverageundertheproposedTitlePolicythatwereobjectedtointheDeveloper’sTitleNotice.1.1.13“CloseofEscrow”or“Closing”meanstherecordingoftheGrantDeedfortheCity PropertyintheOfficialRecordsoftheRecorderoftheCounty,andcompletionofeachoftheactionsset forthinARTICLEIIIbytheEscrowHolderfortheCitytosell theCityPropertytotheDeveloperandtheDevelopertopurchasetheCity PropertyfromtheCity.1.1.14“ClosingDate”hasthemeaningascribedtotheterminSection3.5.7.1.1.15“CompletionofConstruction”meansthecompletionofconstructionoftheProjectinaccordancewiththeCity-approvedplanssuchthatDeveloperisentitledtotheissuanceofafinalcertificateofoccupancyfortheProjectbytheCityinaccordancewithCityRequirements.1.1.16“ConstructionCosts”meansthetotalcostincurredbyDeveloperinacquiringthePropertiesandconstructingtheProjectinaccordancewiththisAgreement.1.1.17“ConstructionLender”meansaLender(s)thatprovide(s)aConstructionLoantotheDeveloperto paytheConstructionCostsofalloraportionoftheProject.1.1.18“ConstructionLoan”meansaLoanobtainedbyDeveloperfromaConstructionLendertofinanceallorpartoftheConstructionCostsinconformitywiththeFinancingPlan.1.1.19“ConstructionLoanDeedof Trust(s)”meanstheLien(s)requiredbyaConstructionLendertosecuretheDeveloper’sperformanceundertheassociatedConstructionLoan.1.1.20“Control”meansandreferstopossession,directlyorindirectly,ofthepowertodirector causethedirectionofthemanagementandpoliciesofapersonorentity,whetherbyownershipofequityinterests,bycontractorotherwise.1.1.21“Controlling”and“Controlled”meanandrefertoexercisingorhavingControl.1.1.22“County”meanstheCountyofLosAngeles,California.1.1.23“Developer’sTitleNotice”meansawrittennoticefromtheDevelopertotheCityindicatingtheDeveloper’sacceptanceofthe stateofthe titletotheCityProperty,asdescribedinthePreliminaryReport,ortheDeveloper’sobjectiontospecificmattersshowninScheduleBofthePreliminaryReportasexceptionstocoverageundertheproposed45635.010009179005.13-3-
TitlePolicyfortheCityProperty,describinginsuitable detail theactionsthattheDeveloperreasonablybelievesareindicatedtocureorcorrecteachoftheDeveloper’sobjections.1.1.24“Developer’sTitleNoticeWaiver”meansawrittennoticefromtheDevelopertotheCitywaivingthe Developer’spreviousobjectionintheDeveloper’sTitleNoticetospecificmattersshowninScheduleBofthePreliminary ReportasexceptionstocoverageundertheproposedTitlePolicyfortheCityProperty.1.1.25“DueDiligenceInvestigations”meanstheDeveloper’sduediligenceinvestigationsoftheCity PropertytodeterminethesuitabilityoftheCityPropertyfordevelopmentandoperationoftheProject,including,withoutlimitation,investigationsoftheenvironmentalandgeotechnicalsuitabilityoftheCity Property,asdeemedappropriateinthereasonablediscretionofthe Developer,allatthesolecostandexpenseoftheDeveloper.1.1.26“DueDiligenceInvestigationConclusionNotice”meansawrittennoticeoftheDeveloperdeliveredtotheCityandtheEscrowHolder,priortotheendoftheDueDiligencePeriod,indicatingtheDeveloper’sacceptanceoftheconditionoftheCityPropertyorindicatingtheDeveloper’s rejectionoftheconditionoftheCityPropertyandrefusaltoacceptaconveyanceoffeetitletotheCityProperty,describinginreasonabledetailtheactionsthattheDeveloperbelievesarenecessaryordesirabletoallowtheDevelopertoaccepttheconditionoftheCityProperty.1.1.27“DueDiligencePeriod”meansthedatecommencingontheEffectiveDateandendingat5:00p.m.ontheonehundredtwentieth(120th)dayfollowingtheEffectiveDate.1.1.28“EarnestMoneyDeposit”meansfiveThousandDollars($5,000)payableincash orotherimmediatelyavailablefunds.1.1.29“EffectiveDate”hasthe meaningascribedtotheterminSection1.3.1.1.30“ENA”means theExclusiveNegotiation Agreement(CostanzoInvestments,LLC/A-2Property),May9,2016,byandbetweenCityandCostanzoInvestments,LLC.asamended.1.1.31“Entitlements”hasthemeaningascribedtotheterminSection2.6.1.5.1.1.32“EnvironmentalClaims”has themeaningascribedtotheterminSection5.9.1.1.33“EnvironmentalLaws”meansallfederal,state,tocal,ormunicipallaws,rules,orders,regulations,statutes,ordinances,codes,decrees,orrequirementsofanygovernmentauthority regulating,relatingto,orimposingliabilityofstandardsofcondctctconcerninganyhazardoussubstance(aslaterdefined),orpertainingtooccupationalhealthorindustrialhygiene(andonlytotheextentthattheoccupationalhealthorindustrialhygienelaws,ordinances,orregulationsrelatetohazardottssubstanceson,under,orabouttheProperties,occupationalorenvironmentalconditionson,under,orabouttheProperties,asnowormayat45635.OI000\29179005.13—4—
anylatertimebeineffect,includingwithoutlimitation,theComprehensiveEnvironmentalResponse,CompensationandLiabilityActof1980(“CERCLA”)[42UscSection9601etcil.];theResourceConseationandRecoveryActof1976(“RcRA”)[42uscSection6901ç.q.J;thecleanWaterAct,alsoknownastheFederalWaterPoLLutioncontrolAct(“FwPcA”)[33uscSection1251etseq.];theToxicSubstancescontrolAct(“TscA”)[15uscSection2601etq.J;theHazardousMaterialsTransportationAct(“HMTA”)[49uscSection1801çtheInsecticide,Fungicide,RodenticideAct[7uscSection6901etçq.JthecleanAirAct[42uscSection7401etcct.];theSafeDrinkingWater Act[42USCSection300fetçjJ;theSolidWasteDisposalAct[42USCSection6901etç.q.];theSurfaceMiningControlandReclamationAct[30USCSection101ettheEmergencyPlanningandCommunityRighttoKnowAct[42USCSection11001etq.];theOccupationalSafetyandHealth Act[29USCSection655and 657]; theCaliforniaUndergroundStorageofHazardousSubstancesAct[CaliforniaHealth&SafetyCodeSection25288etç.çj.];theCaliforniaHazardousSubstancesAccountAct[CaliforniaHealth&SafetyCodeSection25300etg.J;theCaliforniaSafeDrinkingWaterandToxicEnforcementAct[CaliforniaHealth&SafetyCodeSection24249.5çq.]thePorter-CologneWaterQualityAct[CaliforniaWaterCodeSection13000ççj.Jtogetherwithanyamendmentsoforregulationspromulgatedunderthestatutescitedaboveand anyotherfederal,state,orlocallaw,statute,ordinance,orregulationnowineffectorlaterenactedthatpertainstooccupationalhealthorindustrialhygiene,and onlytotheextenttheoccupationalhealthorindustrialhygienelaws,ordinances,orregulationsreLatetohazardoussubstanceson,under, orabouttheProperties,ortheregulationorprotectionoftheenvironment,includingambientair,soil,soilvapor,groundwater,surfacewater,orlanduse.1.1.34“EnvironmentalMatters”hasthemeaningascribedtotheterminSection5.9.1.1.35“Escrow”hasthemeaningascribedtotheterminSection2.1.1.1.36“EscrowHolder”meansFirstAmericanTitleInsuranceCompany,18500VonKarman,Suite600,Irvine,CA 92612(RyanHahn,SeniorEscrowOfficer).1.1.37“EscrowOpeningDate”hasthemeaningascribedtotheterminSection3.1.1.1.38“EventofDefault”hasthemeaningascribedtotheterminSection7.1.1.1.39“financingCommitment”means(a)oneormorecommitment(s)fromoneormoreConstructionLender(s)agreeingtoprovidesufficientfundswhich,whencombinedwithotherfundsavailabletoDeveloper,issufficient,asreasonablydeterminedbytheCity,tofullyfundtheProject’sConstructionCosts,or(b)aletterfromoneormoreConstructionLender(s)indicatingapprovalofaloantotheDeveloperforthedevelopmentoftheProperties.1.1.40“FIRPTAAffidavit”meansanaffidavitcomplyingwithSection1445oftheUnitedStatesInternalRevenueCode.1.1.41“GrantDeed”meansadeedintheformofExhibitDtothisAgreement,conveyingalloftheCity’sinterestintheCityPropertytotheDeveloper.45635.O1000\29179005.13—5—
1.1.42“GovernmentalAgency”meansanyandallcourts,boards,agencies,commissions,offices,orauthoritiesofany naturewhatsoeverforanygovernmentalunit(federal,state,county,district,municipal,city,orotherwise),whethernoworlaterinexistence,havingjurisdictionoverthePropertiesortheProject.1.1.43“GovernmentalRequirements”meansallcodes,statutes,ordinances,laws,permits,orders,andanyrulesandregulationspromulgatedthereunderofanyGovernmentalAgencyapplicabletothePropertiesor theProject.1.1.44“HazardousSubstances”means,withoutimpLiedlimitation,substancesdefinedas“hazardoussubstances,”“hazardousmaterial,”‘toxicsubstance,”“solidwaste,”or“pollutantorcontaminate”intheComprehensiveEnvironmentalResponse,CompensationandLiabilityActof1980, asamended,42U.S.C.Sections9601,etçq.;theToxicSubstances ControlAct(“TSCA”)[15U.S.C.Sections2601,ettheHazardousMaterialsTransportationAct,49U.S.C.Sections1801,etq.;theResourceConservationandRecoveryAct,42U.S.C. Sections6901,etçq.;thosesubstanceslistedintheUnited StatesDepartmentofTransportation(DOT)Table[49CFR172.101],orbytheEPA,oranysuccessorauthority,ashazardoussubstances[40CFRPart302];andthosesubstancesdefinedas“hazardouswaste”inSection25117oftheCaliforniaHealthandSafetyCodeor, as“hazardoussubstances”inSection25316oftheCaliforniaHealthandSafetyCode;other substances,materials,andwastesthatare,orbecome,regulatedor classifiedashazardousortoxicunderfederal,state,orlocallawsorregulationsandintheregulationsadoptedpursuanttosaidlaws,andshallalsoincludemanure,asbestos,polychiorinatedbiphenyl,flammableexplosives,radioactivematerial,petroleumproducts,andsubstancesdesignatedasahazardoussubstancepursuantto33USCSection1321orlistedpursuantto33USCSection1317.1.1.45“IndemnifiedParties”hasthemeaningascribedtotheterminSection5.9.1.1.46“InitialTerminationNotice”hasthemeaningascribedtotheterminSectionError!Referencesourcenotfound..1.1.47“Lender”meansany stateorfederallycharteredbank, savingsandloan,capitalinvestmentgroup,orotherthirdpartyfinancial institutionwhichmakesLoanstodevelopmentsanddeveloperssuchastheProjectandtheDeveloperinthenormalcourseofbusinessandwhichhasbeenapprovedbytheCitypursuanttoSection6.3.1.1.48“Lien”meansanymortgage,deedoftrust,orothersecurity instrumentencumberingDeveloper’sfeeinterestinthePropertiesand/orProject,oranypartthereof,oranypledgeorotheragreementgivenassecurity fortherepaymentofaLoanandbywhichaLenderwouldbeabletoacquireanyinterestintheDeveloperupon theDeveloper’sbreachofanyobligationundertheLender’sLoanDocuments.1.1.49“Loan”meansanyloanorthirdpartyequity/capitalcontribution(e.g.mezzaninefinancing)fortheProjectotherthanthatprovidedbytheCity.45635.Ot000\29179005.13—6—
1.1.50“Loan Documents”meansthevariousdocumentsandinstrumentsmadebyandbetweentheDeveloperandaLenderthatevidenceaLoanandthesecurityforrepaymentofsuchLoan.1.1.51“MaintenanceDeficiency”hasthemeaningascribedtotheterminSection5.3.1.1.1.52“NormalBusinessHours”meansthenormalbusinesshoursoftheCity.AsoftheEffectiveDate,theCity’snormalbusiness hoursareMonday throughThursday,betweenthe hoursof7:30a.m.and5:30p.m.PacificTime.1.1.53“NoticeofAgreement”meansthe noticeinthe formofExhibitEtothisAgreementtoberecordedagainstthePropertiesattheCloseofEscrowtoprovideconstructiverecordnoticeoftheexistenceandapplicationofthisAgreementtotheProperties.1.1.54“Party”means, individually,theCityortheDeveloper,asapplicable.1.1.55“Parties”means,collectively,theCityandthe Developer.1.1.56“PCOStatement”meansapreliminarychangeofownershipstatementprovidedforinCaliforniaRevenueandTaxationCode Section480.3.1.1.57“PermittedExceptions”means(1)anyandallitemsshowninScheduleBofthePreliminaryReportasexceptionstocoverageunder theproposed TitlePolicythattheDeveloperaccepts,pursuanttoSection2.4;(ii)anyexceptionsfromcoverageundertheproposedTitle PolicyresultingfromtheDeveloper’sactivitiesontheProperties(includingtheLienssecuringanyConstructionLoan);(iii)non-delinquentproperty taxesandassessments;(iv)thisAgreement;or(v)theGrantDeed.1.1.58“PermittedTransfer”meansandreferstoanyofthefollowing typesofTransfersbytheDeveloper,wherethepersonorentitytowhichsuchTransferismadeexpresslyassumestheobligationsoftheDeveloperunderthisAgreementinawritteninstrumentsubstantiallyintheformofExhibitHtothisAgreementorotherwiseapprovedbytheCity,whichapprovalshallnotbeunreasonablywithheld,conditionedordelayed.1.1.58.1AnyTransferofstockorequityoftheDeveloperthatdoesnotchangemanagementoroperationalControlofthePropertiesortheProject;1.1.58.2AnyTransferofanyinterestintheDeveloperorthePropertiesorProjectoranyportionthereofirrespectiveofthepercentageofownership(i)toanyotherownerofanydirectorindirectinterestintheDeveloper;or(ii)toany Affiliate,or(iii)toanyotherpersonor entityinwhichanyholderofadirectorindirectinterest(includinganybeneficialinterest),intheDeveloperisamanager,officerorpartnerorinwhichanyoftheaforementionedisashareholder,memberorpartner(includingabeneficialowner);and1.1.58.3AnyLiengiventoLenderinconnectionwithaLoanapprovedbytheCitypursuanttoSection6.3.45635.Ol000\29179005.13—7—
1.1.59“PlansandSpecifications”hasthemeaningascribedtotheterminSection2.6.1.1.1.60“PreliminaryReport”meansapreliminary reportissuedbytheTitleCompanyincontemplationoftheissuanceoftheTitlePolicy,accompaniedbylegible copiesofalldocumentslistedinScheduleBofthereportasexceptionstocoverageundertheproposedTitlePolicy.1.1.61“Project”meanstheconstructionanddevelopmentofthePropertiesasamulti-story center mixed-use developmentpotentiallyincludingretailstores,commercialspaceand/orresidentialuses,includingallrequiredorassociatedon-siteandoff-siteimprovementsandrelatedhardscapeandalllandscaping,allasgenerallyconsistentwiththeScopeofDevelopment,andalltobedevelopedinaccordancewiththePlansandSpecificationstobeapprovedbytheCityandanyconditionsimposedbytheCityinitsapprovalofthePlansandSpecifications. Projectshallincludeapublicplazaoroutdoor diningareaoveraportionoftheCityProperty.1.1.62“ProjectCompletionDate”meansthatdatesetforththereforbywhichaCompletionofConstructionshalloccur,asmoreparticularly providedintheScheduleofPerformance,subjecttotheprovisionsofSection4.3andSection4.3(i.e.,the datetwo(2)years aftertheissuanceofBuildingPermits,subjecttotheprovisionsofSection4.3andUnavoidableDelay).1.1.63“Properties”meansthatrealpropertyconsistingoftheSAPropertyandtheCity Property,andallcurrentandfutureimprovementsthereon(including,withoutimpliedlimitation,the Project),legallydescribedinExhibitA-iandExhibitA-2.1.1.64“PropertyTransfer”meansandreferstoany“changeinownership,”asdefinedinRevenueandTaxationCodeSections60,ofalloranyportionoftheProperties.1.1.65“PurchasePrice”meanstheamountofTwoHundredFortyThousandSevenHundredForty-fourDollars($240,744.00),incashorimmediatelyavailablefunds.1.1.66“Record”,“recorded”,“recording”or“recordation”each meanandrefertorecordationofthereferenceddocumentintheofficialrecordsoftheRecorderoftheCountyofLosAngeles,California.1.1.67“ScheduleofPerformance”meansthescheduleforthe performanceofcertainactionsbythePartiespursuanttothisAgreement, attachedtothisAgreementasExhibitC.1.1.68“ScheduledEscrowClosingDate”hasthemeaningascribedtotheterminSection3.5.7.1.1.69“ScopeofDevelopment”meansthedescriptionoftheProject attachedtothisAgreementasExhibitB.45635.01000\29179005.13-8-
1.1.70“TerminationDefault”hasthemeaningascribedtotheterminSectionError!Referencesourcenotfound..1.1.71“TerminationElectionNotice”hasthemeaningascribedtothe terminSectionError!Referencesourcenot found..1.1.72“TitleCompany”meansFirstAmericanTitleInsuranceCompany,3281E.GuastiRoad,Suite 440,Ontario,CA91761(MaftHooks,CommercialTitleOfficer).1.1.73“TitlePolicy”meansastandard CLTAowners’policyoftitleinsuranceissuedbytheTitle Company,withcoverageinthefullamountofthePurchasePriceandinsuringfeetitletotheCity Property,subjectonlytothePermittedExceptions.However,atDeveloper’soption,DevelopermayobtainanALTAextendedcoveragepolicy.CityshallpayforthestandardCLTApolicy. DevelopershallpayforanyexcessabovethepremiumforastandardCLTA policyinordertoobtainanALTAextendedcoveragepolicy.1.1.74“Transfer”meansanyofthefollowing:1.1.74.1Anytotal orpartialsale,assignment,conveyance,trust,power,ortransferinanyothermodeor form,by theDeveloperofmore thana49%interestintheDeveloper’sinterestinthisAgreement,theProperties, oraseriesofsuchsales,assignmentsandthelikethat,intheaggregate,resultinadispositionofmorethana49%interestintheDeveloper’sinterestinthisAgreement,thePropertiesortheProject;or1.1.74.2Anytotalorpartialsale,assignment,conveyance,ortransferinanyothermodeorform,oforwithrespecttoanyinterestintheDeveloperoraseriesofsuchsales,assignmentsandthelikethat,intheaggregate,resultinadispositionofmorethana49%interestinany interestintheDeveloper;or1.1.74.3Anymerger,consolidation,sale,orleaseofallorsubstantiallyalloftheassetsoftheDeveloperoraseriesofsuchsales,assignmentsandthelikethat,intheaggregate,resultinadispositionofmorethana49%interestofallorsubstantiallyalloftheassetsoftheDeveloper;or1.1.74.4Any PropertyTransfer;or1.1.74.5The recordationofanydeedoftrust,mortgage,Lienorsimilarencumbranceagainstallorany portionofthePropertiesor the Project.1.1.75“UnavoidableDelay”means anydelay thatiscausedbytheotherParty(oranyGovernmentalAgencyinthecaseofDeveloper’srequiredperformanceshereunder)andisnotcausedbytheclaimingParty,orthatisbeyondthecontroloftheCityortheDeveloper,including,withoutlimitation, delaycausedbystrikes,actsofGod,weather,inabilitytoobtainlabor ormaterials,inabilitytoobtaingovernmentalpermitsorapprovals,governmentalrestrictions,civilcommotion,fireorsimilarcauses,butexcludingcircumstancessubjecttoSection8.7.2exceptasotherwisesetforththerein.45635.O1000\29179005.13—9—
1.2RepresentationsandWarranties.1.2.1CityRepresentationsandWarranties.WheretherepresentationsandwarrantiesofCitycontainedinthisSection1.2.1arestatedtobetotheactualknowledgeofCity,“actualknowledge”shallmeantheactualknowledgeoftheCityManagerasoftheEffectiveDate.AllrepresentationsandwarrantiescontainedinthisSection1.2.1aretrueandcorrectasoftheEffectiveDate.City’sliabilityformisrepresentationorbreachofwarranty,representationorcovenant,wherevercontainedinthisAgreement,shallsurvivetheexecutionanddeliveryofthisAgreementandtheClosing.Cityhereby makesthefollowingrepresentations,covenantsandwarrantiesandacknowledgesthattheexecutionofthisAgreementbyDeveloperhasbeenmadeinmaterialreliancebyDeveloperonsuchcovenants,representationsandwarranties:1.2.1.1CityisaCaliforniamunicipalcorporation,dulyformedandoperatingunderthelawsoftheStateofCalifornia.Cityhas thelegalpower,rightandauthoritytoenterintothisAgreementand toexecutetheinstrumentsanddocumentsreferencedherein,and toconsummatethetransactionscontemplatedhereby.1.2.1.2ThepersonsexecutinganyinstrumentsfororonbehalfofCityhavebeenauthorizedtoactonbehalfofCityand,totheactualknowledgeofCity, thisAgreementisvalidandenforceableagainstCityinaccordancewithitstermsandeachinstrumenttobeexecutedbyCitypursuantheretoorinconnectiontherewithwill,whenexecuted,shallbevalidandenforceableagainstCityinaccordancewithitsterms.Noapproval,consent,orderorauthorizationof,ordesignationordeclarationofanyotherperson,isrequiredinconnectionwiththevalidexecutionanddeliveryofthisAgreementbyCityand,totheactualknowledgeofCity,compliancewiththisAgreementbyCity.1.2.1.3CityhastakenallrequisiteactionandobtainedallrequisiteconsentsforagreementsormatterstowhichCityisapartyinconnectionwithenteringintothisAgreementand theinstrumentsanddocuments referencedhereinand,totheactualknowledgeofCity,inconnectionwiththeconsummationofthetransactionscontemplatedhereby.1.2.1.4TotheactualknowledgeofCity,neithertheexecutionofthisAgreementnortheconsummationofthetransactionscontemplatedherebyshaltresultinabreachoforconstituteadefault underanyotheragreement, document,instrumentorotherobligationtowhichCityisapartyorbywhichCitymaybebound,ortinderlaw,statute,ordinance,rule,governmentalregulationoranywrit,injunction,orderordecreeofanycourtorgovernmentalbodyapplicabletoCity.1.2.1.5IftheCitybecomesawareofanyactorcircumstancethat wouldchangeorrenderincorrect,inwholeorinpart,anyrepresentationorwarrantymadebytheCityunderthisAgreement,whetherasofthedategivenoranytimethereafter,whetherornotsuchrepresentationorwarrantywasbased upontheCity’sknowledgeand/orbeliefasofacertaindate,theCitywillgiveimmediatewrittennoticeofsuchchangedfactorcircumstancetotheDeveloper.—10—
1.2.2DeveloperRepresentationsandWarranties.WheretherepresentationsandwarrantiesofDevelopercontainedinthisSection1.2.2arestatedtobetotheactualknowledgeofDeveloper,“actualknowledge”shaltmean theactualknowledgeofChrisCostanzoand/or JamesCostanzoasoftheEffectiveDate.AllrepresentationsandwarrantiescontainedinthisSection1.2.2aretrueandcorrectasoftheEffectiveDate.Developer’sliabilityformisrepresentationorbreachofwarranty,representationorcovenant,wherevercontainedinthisAgreement,shallsurvivetheexecutionanddeliveryofthisAgreementand theClosing.Developerherebymakesthefollowing representations,covenantsandwarrantiesandacknowledgesthattheexecutionofthisAgreementbyCityhas beenmadeinmaterialreliancebyCityonsuchcovenants,representationsandwarranties:1.2.2.1DeveloperisaDelawarelimitedliabilitycompany,lawfullyentitledtodobusinessintheStateofCaliforniaand the City.Developerhasthelegalright,powerandauthoritytoenterintothis Agreementandtheinstrumentsanddocumentsreferencedhereinandtoconsummatethetransactionscontemplatedhereby.ThepersonsexecutingthisAgreementandtheinstruments referencedhereinonbehalfofDeveloperherebyrepresentandwarrantthatsuchpersonshavethepower, rightandauthoritytobindDeveloper.1.2.2.2DeveloperhastakenallrequisiteactionandobtainedallrequisiteconsentsinconnectionwithenteringintothisAgreementandtheinstrumentsanddocumentsreferenced hereinand,totheactualknowledgeofDeveloper,theconsummationofthetransactionscontemplatedhereby,andnoconsentofanyotherpartyisrequiredforDeveloper’sauthorizationtoenterintoAgreement.1.2.2.3NeithertheexecutionofthisAgreementnortheconsummationofthetransactionscontemplatedherebyshallresultinabreachoforconstituteadefaultunderanyotheragreement,document,instrumentorotherobligationtowhichDeveloperisapartyorbywhichDevelopermaybebound,orunderlaw,statute,ordinance,rule,governmentalregulationorany writ,injunction, orderordecreeofanycourtorgovernmentalbodyapplicabletoDeveloper.1.2.2.4TotheactualknowledgeofDeveloper,thisAgreementis,andallagreements,instrumentsanddocumentstobeexecutedbyDeveloperpursuanttothisAgreementshallbe,dulyexecutedbyandshallbevalid andlegallybindinguponDeveloperandenforceableinaccordancewiththeirrespectiveterms.Noapproval,consent,orderorauthorizationof,ordesignationordeclarationofanyotherperson,isrequiredinconnectionwiththevalidexecutionanddeliveryofthisAgreementbyDeveloperand,totheactualknowledgeofDeveloper, compliancewiththisAgreementbyDeveloper.1.2.2.5IftheDeveloperbecomesawareofanyactorcircumstancethatwould changeorrenderincorrect,inwholeorinpart,anyrepresentationorwarrantymadebytheDeveloperunderthisAgreement,whetherasofthe dategivenorany timethereafter,whetherornotsuchrepresentationorwarrantywasbased upon theDeveloper’sknowledgeand/orbeliefasofacertaindate,theDeveloperwilt giveimmediatewritten noticeofsuchchangedfact orcircumstancetotheCity.45635.O1000\29179005.13—Il—
1.3EffectiveDate.ThisAgreementisdated_______,2017forreferencepurposesonly.ThisAgreementshallnotbecomeeffectiveuntilthedateonwhichallofthefollowingaretrue(“EffectiveDate”):(i)thisAgreementisapprovedandexecutedbytheappropriaterepresentative(s)ofDeveloperanddeliveredtoCity;(ii)DeveloperhasdeliveredtoCityacertifiedcopyoftheofficial actiontakenbyallofthemembersoftheDeveloperapprovingthisAgreement,intheformattachedtothisAgreementasExhibitF;(iii)followingalllegallyrequirednoticesandhearings,thisAgreementisapprovedbytheCityCouncilofCity;and(iv)thisAgreementisexecutedbytheauthorizedrepresentative(s)ofCityanddeliveredtoDeveloper.UpontheoccurrenceoftheEffectiveDate,thepartiesshallacknowledgetheEffectiveDatetoeachotherinwriting.1.4ExhibitList.ThefollowingisalistoftheExhibitsattachedtothisAgreement.EachoftheExhibitsisincorporatedbythisreferenceintothetextofthisAgreement.ExhibitA-iLegalDescriptionofSAPropertyExhibitA-2LegalDescriptionofCityPropertyExhibitBScopeofDevelopmentExhibitCScheduleofPerformanceExhibitDFormofGrant DeedExhibitEFormofNoticeofAgreementExhibitFFormofOfficialActionofDeveloperExhibitGFormofCertificateofCompletionExhibitHFormofAssignmentandAssumptionAgreementARTICLEIIPROPERTIESDISPOSITION2.1PurchaseandSale.InexchangeforthePurchasePriceandtheDeveloper’sother covenantsandundertakingssetforthinthisAgreement,theCityshallselltheCityPropertytotheDeveloperandtheDevelopershallpctrchasetheCityPropertyfromtheCitypursuanttothetermsandconditionsofthisAgreement.Forthepurposesofexchangingfundsanddocumentstocompletethe salefromthe CitytotheDeveloperandthepurchasebytheDeveloperfromtheCityoftheCityPropertypursuanttothetermsofthisAgreement,theCityandtheDeveloperagreetoopenanescrow(“Escrow”)withthe EscrowHolder.ARTICLEIIIofthisAgreementconstitutesthejointescrowinstructionsofthePartiestotheEscrowHolderfor completionoftheEscrowforthesaleoftheCityProperty,ascontemplatedbythisAgreement.TheDeveloperandtheCityshallexecutesuchfurtherescrowinstructions,consistentwiththeprovisionsofthisAgreement,asmaybereasonablyrequestedbytheEscrowholder.IntheeventofanyconflictbetweentheprovisionsofthisAgreementandanyotherescrowinstructionsrequestedbytheEscrowHolder,theprovisionsofthisAgreementshallcontrol.2.2PaymentofPurchasePrice.TheDevelopershalldepositthePurchasePriceintoEscrow,subjecttocredittotheDeveloperfor theEarnestMoneyDeposit.45635.O1000\29179005.13—12—
2.3EarnestMoneyDeposit.ConcurrentwithitsopeningoftheEscrow,theDevelopershalldepositintoEscrowtheEarnestMoneyDeposit.TheEscrowHoldershaltdeposittheEarnestMoneyDepositintoaninterestbearingaccount.Allinterestearnedonsuchfundsshallbeaddedtotheoriginal principalamountoftheEarnestMoneyDepositandbeconsideredpartofthesame.TheEarnestMoneyDepositshallbenonrefundableupontheconclusionoftheDueDitigencePeriodexceptasotherwiseprovidedinthisAgreement.UpontheCloseofEscrow,theEarnestMoneyDepositshallbecreditedtotheDevelopertowardthePurchasePriceandpaidtotheCityaspartofthePurchasePrice.ShouldEscrowfailtocloseduetoDeveloper’s defaultunderthisAgreement, the EarnestMoneyDepositshallbeforfeitedbyDeveloperasliquidateddamages,asprovidedforinSection7.2,andshallbepaidtotheCityupon thecancelationofEscrowinaccordancewithSection3.9.2.4TitleApproval.AssoonaspracticablefollowingtheopeningoftheEscrow,theCityshaltinstructtheTitleCompanytodeliverthePreliminaryReporttotheDeveloper.Withinthirty(30) daysfollowingtheDeveloper’sreceiptofaPreliminaryReportfor theCityProperty,theDevelopershalldelivertheDeveloper’sTitleNoticetothe City.IftheDeveloperfailstodelivertheDeveloper’sTitleNoticetotheCitywithinthirty(30)daysfollowingtheDeveloper’sreceiptofthePreliminaryReport,theDeveloperwillbedeemedtodisapprovethe statusoftitletotheCityPropertyand refusetoaccept titletotheCityProperty,inwhichcasetheCityshallhavethe right,subjectto Section2.4.2,tocanceltheEscrowandterminatethisAgreement,intheCity’ssolediscretion, withoutliabilitytotheDeveloperor anyotherperson,bydeliveryofawrittennoticeofterminationtotheDeveloperandEscrowHolder.Withintwenty(20)daysfollowing receiptbythe CityofDeveloper’sTitleNotice,ifany,theCityshallserveCity’sTitleNoticeResponse.IfDeveloper’sTitleNoticedoesnotobjecttoanymatterinthePreliminaryReport,theCityshallnotberequiredtoserve City’sTitleNoticeResponse.IftheCitydoes notserve City’s TitleNoticeResponse,ifnecessary,withintwenty(20) daysfollowingitsreceiptofDeveloper’sTitleNotice,theCityshaltbedeemedtoelectnottoremoveanymatterobjectedtoinDeveloper’sTitleNotice,ifany,fromthePreliminaryReport.IftheCity electsinCity’sTitleNoticeResponsetocausetheremovalofanymatterobjectedtoinDeveloper’sTitleNoticefromthePreliminaryReport,theCityshallcause theremovalofeachsuchobjectionablematterfromthePreliminary Reportwithinsixty(60)daysfollowingreceiptbytheDeveloperofCity’sTitleNoticeResponseorstichotherperiodoftimethatmay beagreedtoinwritingbyboththeCityand theDeveloper.Ifthe Cityisunwillingorunabletocausetheremovalofanymatter objectedtoinDeveloper’sTitleNoticefromthePreliminaryReport,then,withinten(10)daysfollowingtheDeveloper’sreceiptofCity’sTitleNoticeResponsestatingthattheCityisunwillingtoremoveorcausetheremovalofanymatterobjectedtoinDeveloper’sTitleNoticeorupon theexpirationoftheabovesixty(60)daytimeperiodduringwhichtheCity electedtoremovesuchobjectionablematters fromthePreliminaryReportandwasunabletodoso,theDevelopermayeither(1)refusetoacceptthetitletoandconveyanceoftheCity Property,inwhichcasethePartiesshallhavetheright,subjecttoSection2.4.2,tocanceltheEscrowandterminatethisAgreementwithoutliabilitytoeitherPartyoranyotherperson,bydeliveryofawrittennoticeofterminationtotheEscrowHolder,or(2)waiveitsobjectiontoanyitems setforthinDeveloper’sTitleNoticebydeliveringDeveloper’sTitleNoticeWaivertotheCity.failurebytheDevelopertodeliverDeveloper’sTitle NoticeWaiver,whereCity’sTitleNoticeResponseortheCity’sfailuretoserveCity’sTitleNotice ResponseindicatestheCity’selection nottocausetheremovalofanymatter objectedtoinDeveloper’sTitleNoticefromthePreliminaryReport,fortheCitytodeliverCity’sTitleNoticeResponse underthisAgreement,willbedeemed the45635.O1000\29179005.13—13—
Developer’s continuedrefusaltoacceptthetitletoandconveyanceoftheCityProperty,inwhichcase theCityshall havetheright,subjecttoSection 2.4.2,tocanceltheEscrowandterminatethisAgreement,intheCity’ssolediscretion,withoutliabilitytotheDeveloperor anyotherperson,bydeliveryofawrittennoticeofterminationtotheDeveloperandEscrowHolder.2.4.1Ifatanytimepriortothe CloseofEscrowtheTitleCompanyissuesanupdated PreliminaryReportcontaininganypreviouslyundisclosedmatteraffectingtitletotheCityProperty,ortheCitybecomesawareofanypreviously undisclosedmatteraffecting titletotheCityProperty,followingthedeliveryoftheDeveloper’sTitleNotice,theCityshallprovidewrittennoticetotheDeveloperofsuchmatter,togetherwith anyupdated PreliminaryReportrelatedtosuch matter.TheCityandthe Developershallhave suchrightsandobligationswithrespecttosuchpreviouslyundisclosedtitlemattersastheydidwithrespecttoanytitlematterssetforthintheoriginalPreliminaryReportassetforthinSection2.4.2.4.2 Beforeexercisingany rightaPartymayhaveunderthisSection2.4tocanceltheEscrowandterminatethisAgreement,suchPartyshallnotifythenon-terminatingPartiesinwritingofitselectiontoterminateandshall, uponanon-terminatingParty’srequest,whichmustbedelivered,ifatall,withinthree(3)daysfollowingitsreceiptoftheterminatingParty’s noticeofelectiontoterminate, meetandconferwiththenon-terminatingPartiesforaperiodofthirty(30)days.Duringsuchtime,the Partiesshallmeetasoftenasreasonablyrequestedbyany Partytonegotiate,ingoodfaith,methodsandmeansbywhichtheobjectionabletitlemattermaybeeliminatedormitigated.Nothinghereinshallconstituteanagreement,representation,orwarrantybyanyPartythatanacceptableresolutionoftheobjectionabletitlematterwillbeachieved,norshallany PartybeobligatedtoexpendanyfundsorundertakeanyotheractionwhatsoeverwithrespecttosuchtitlematterunlesssuchagreementisreducedtoawritingwhichisapprovedbyallParties,intheirsoleandabsolutediscretion.If,atthe endofsuchthirty(30)day period,thePartieshavenotbeenabletoagreeonamutuallyacceptablemethodofresolvingsuchtitle matter, orifanyproposedagreementisdisapprovedbytheCity Council,theEscrowshallbecancelled,thisAgreementshallbeterminatedwithoutliabilitytoanyParty,andthePartiesshallproceed pursuanttoSection3.9.2.5DeveloperInvestigations.2.5.1TheDevelopershallhaveuntiltheexpirationoftheDueDiligencePeriodtocompleteallofitsDueDiligence InvestigationswithrespecttotheCity Property.TheDevelopershallcompletealtofitsDueDiligence Investigations withintheDueDiligence Periodand shallconductallofitsDueDiligenceInvestigationsatitssolecostandexpense.TheDevelopershallrelysolelyandexclusivelyupontheresultsofitsDueDiligenceInvestigationsofthe CityProperty,including,withoutlimitation,investigationsregardinggeotechnicalsoilconditions, compliancewithapplicablelawspertainingtotheuseoftheCityPropertybytheDeveloperandanyothermattersrelevanttotheconditionorsuitabilityoftheCity PropertyfortheProject(including,withoutlimitation,costandabilitytoobtainentitlements,permitsandapprovals),astheDevelopermaydeemnecessaryorappropriate.CitymakesnorepresentationorwarrantytotheDeveloperrelatingtotheconditionoftheCity PropertyorsuitabilityoftheCityPropertyforanyintendeduseordevelopmentbytheDeveloper.TheDevelopershalldeliveraDueDiligence InvestigationConclusion NoticetotheCityand theEscrow Holderpriortotheendofthe DueDiligencePeriod.IftheDeveloperdoesnotunconditionallyacceptthe45635.O1000\29179005.13—14—
conditionoftheCityPropertybydeliveryofitsDueDiligenceInvestigationConclusionNoticeindicatingsuchacceptancepriortotheendofthe DueDiligencePeriod,theDevelopershallbedeemedtohaverejectedtheconditionoftheCityPropertyandrefusedtoacceptconveyanceoftitletotheCityProperty.Iftheconditionofthe CityPropertyisrejectedordeemedrejectedbytheDeveloper,thenthisAgreementshallterminateandtheEscrowshallbecancelled pursuanttoSection3.9.TheDeveloper’sdeliveryofitsDueDiligenceInvestigationConclusionNoticeindicatingtheDeveloper’sunconditionalacceptanceoftheconditionoftheCityPropertyshallevidencetheacceptanceoftheconditionoftheCityPropertybytheDeveloperinitsexisting“ASIS,”“WHEREIS”and“SUBJECTTOALLFAULTS”condition,asofthelastdayoftheDueDiligencePeriod.Initssolediscretion,theDevelopermayaccepttheCityPropertyinits“ASIS,”“WHEREIS”and“SUBJECTTOALLFAULTS”conditionatanytimebeforetheendoftheDueDiligencePeriod.TheDevelopershallconduct duringtheDueDiligence Periodsuchenvironmentalassessment(s)ofthe CityPropertyastheDeveloperdeemsappropriate.Ifsuchassessment(s)dorevealthepresenceofanyHazardous SubstancesontheCityPropertyinlevelsthatexceedapplicableGovernmentalRequirements,thentheCityandtheDevelopershallnegotiateingoodfaithinanefforttoreachagreementastothealtocationofresponsibilityandcostofremediationthereof.2.5.2AnyDueDiligence InvestigationsoftheCityPropertyby theDevelopershallnotunreasonablydisrtipt anythenexistinguseoroccupancyoftheCityPropertyortheoperationsoftheCity.TheDevelopershallbeliable foranydamageorinjurytoanypersonorpropertyarisingfromtheactsoftheDeveloper,itsemployees,agentsorrepresentatives duringthecourseofanyDueDiligenceInvestigationsontheCityPropertyandtheDevelopershaltindemnify,defendwithcounselreasonablyacceptabletotheCityandholdharmlesstheCityanditselectedofficiats,officers, directors,attorneys,contractors,agentsandemployeesfromanyandallactualorallegedliens,claims,demandsorliabilityarisingfromDeveloperoritsagents’presenceonthepropertyoranyDueDiligenceInvestigationsbytheDeveloperontheCity Property.PriortocommencinganyDueDiligenceInvestigationsontheCityProperty,theDevelopershalldelivercopiesofpoliciesorcertificatesofinsurancetotheCityevidencingthat,inaccessingthe CityPropertyormakinganyinspectionsorconductinganytestingof,onorunder theCity Property,DeveloperorDeveloper’sagentsenteringontheCityPropertycarry notlessthanOneMillionDollars($1,000,000)ofcomprehensivegeneralliabilityinsurancefromaninsurance companyreasonablyacceptabletoCity,withcontractualliabilityendorsementthatinsuresDeveloper’sindemnityobligations.InsurancecoverageintheminimumamountsetforthinthisSection2.5.2shallnotbeconstruedtorelieveDeveloperofanyliabilityorindemnityobligation,whetherwithin,outside,orinexcessofsuchcoverage.2.5.3 Beforeexercisingany rightaPartymayhavetinderthisSection2.5tocanceltheEscrowandterminatethisAgreement,stLchPartyshaltnotifythenon-terminatingPartiesinwritingofitselectiontoterminateandshall,uponanon-terminatingParty’srequest,whichmcLstbedelivered,ifatall,withinthree(3)daysfollowingitsreceiptoftheterminatingParty’snoticeofelectiontoterminate, meetandconferwiththenon-terminatingPartiesforaperiodofthirty(30)days.Duringsuchtime,thePartiesshallmeetasoftenasreasonablyrequestedbyanyPartytonegotiate,ingoodfaith,methodsandmeansbywhichtheobjectionableDueDiligencemattermaybeeliminatedormitigated.Nothinghereinshallconstituteanagreement,representation,orwarrantybyanyPartythatanacceptableresolutionofthe objectionableDueDiligencematterwillbeachieved,norshallanyPartybeobligatedto45635O1000\29179005.13—15—
expendany fundsorundertakeanyotheractionwhatsoeverwithrespecttosuchDueDiligencematterunlesssuchobligationisreducedtoawritingwhichisapprovedbyallParties,intheirsoleandabsolutediscretion.If,attheendofsuchthirty(30)day period,thePartieshavenotbeenabletoagreeonamutuallyacceptablemethodofresolvingtheobjectionableDueDiligencematter,orifanyproposedagreementisdisapprovedbytheCityCouncil,theEscrowshallbecancelled,thisAgreementshallbeterminatedwithoutliabilitytoanyParty,andthePartiesshallproceedpursuanttoSection3.9.2.6DevelopertoObtainallProjectEntitlements.2.6.1Pursuanttothe ENA,DeveloperhasdevelopedandpresentedtoCitystaffand theCityCouncil,forreview,theScopeofDevelopmentattachedheretoasExhibitB.Afterthe DueDiligencePeriodandinaccordancewiththeScheduleofPerformance(subjecttoUnavoidableDelay),Developershall,workingwithCity,developthefollowingplansandspecificationsconcerningtheProjectconsistentwiththeScopeofDevelopmentexceptasotherwiseapprovedbyCity(collectively,the“PlansandSpecifications”):2.6.1.1Aproposedcomplete conceptualdevelopmentplanfortheProjectonthePropertiesthatdescribesanddepicts:(1)thetocationandplacementofproposedbuildingsand(2)thearchitectureandelevationsoftheproposedbuildings;2.6.1.1.1NotwithstandinganyotherprovisionofthisAgreement,DevelopershallprovideCitywithinonehundredfifty(150) daysoftheEffectiveDatearefinedScopeofDevelopmentwhichshallincludeanticipatedresidentialunitcount(includemixofbedrooms/unitsizes),retail squarefootage,andother refinementstoallow CitytodeterminetheprojectisprogressingconsistentwiththeCity visionfor theProject(“RefinedScopeofDevelopment”).IfuponreceiptoftheRefinedScopeofDevelopmenttheCitydeterminesthattheProjectisnotprogressingasanticipated,thePartiesshallmeetandconfertodeterminefeasiblemodificationstotheproposedProjectplan;2.6.1.2Alistofpotential usersortenantsandanticipatedleaseratesfortheProperties,asdevelopedwith theProject;2.6.1.3Aproposedtimescheduleandcostestimates forthedevelopmentoftheProjectontheProperties;2.6.1.4AproposedfinancingplanidentifyingpossiblefinancingsourcesforallprivateandpublicimprovementsproposedfortheProject;and2.6.1.5Apreliminary financialanalysisprovidingestimatesofanticipatedcoststotheCitytobecausedbyadditionatorincreasedlevelsofpublicservicesduetotheProjectandanticipatedpublicrevenuesanticipatedtobegeneratedby theProject.2.6.1.6Developeralsoshallworkdiligentlytopreparethoseotherdocuments necessaryundertheCityRequirementstoaccompanyDeveloper’sapplication(s)forthe requisitediscretionaryCityapprovals(collectively,the“Entitlements”).Developershallmakesuchapplication(s)fortheEntitlementsandthereafterwork diligentlytoprepareand45635.Ol000\29179005.13—16-
processtheEntitlementsbythetime specifiedintheScheduleofPerformance(subjecttoUnavoidableDelay).IfCity,inCity’ssoleandunfettereddiscretion,grantstheEntitlementssubjecttoconditionsofapprovalthatareacceptabletoDeveloperinitsreasonablediscretion,Developershallpromptlycommenceandthereafterworkdiligentlytoprocessanyadditionalplans,licenses,permitsandapprovalsthatarenecessarytocommenceconstructionofthe Project(collectively,the“AdditionalProjectApprovals”)bythetimespecifiedintheScheduleofPerformance(subjecttoUnavoidableDelay).Cityshall,withreasonablediligenceandpromptness,reviewandrespondtotheDeveloper’svarioussubmittalsconcerningthePlansandSpecifications,EntitlementsandAdditionalProjectApprovalsinordertofacilitateDeveloper’sprocessingthereof.If,asDeveloperproceedswithitsefforts hereunder,DeveloperdeterminesingoodfaiththatobtainingtheCity’sapprovalofthePlansandSpecifications,EntitlementsorAdditionalProjectApprovalswillnotbeforthcomingasnecessarytomeetDeveloper’sclosingcondition underSection3.2.1.4thenDevelopermayterminatethisAgreementbygivingwrittennoticetoCity aftermeetingandconferringwithCityasreasonably requestedbyCitytoseeifthePartiescanreachanaccommodationthatwillallowDevelopertocontinuewiththeProject.2.6.2DeveloperandCitymay enterintoaleaseagreementforuptoforty(40)parkingspacesonthegroundflooroftheCityofAzusaIntermodatTransitCenterparkingstructure(the“ParkingLease”).TheParkingLeasewillprovidethat Developershallpaythemutuallyagreedupon fairmarketvalueoftheparking.IfDeveloperwillbeutilizingtheparkingspaces,theParkingLeaseshallbeenteredintobythe PartiespriortotheCloseofEscrow.2.6.3TheCity’szoning,buildingandlanduseregulations(whethercontainedinordinances,the City’smunicipalcode,conditionsofapprovaltotheEntitlementsorProjectApprovals,orpoliciesandpracticesandproceduresgenerallyapplicabletonewdevelopmentintheCity)andtheTransit-OrientedDevelopmentSpecificPlanapplicabletotheProperty (collectively,the“CityRequirements”),shallbeapplicabletotheuseanddevelopmentoftheProjectonthePropertiesbytheDeveloper.TheDeveloperacknowledgesthatallPlansandSpecificationsand anychangestothePlansandSpecificationsshallbesubjecttotheCityRequirements.NoactionbytheCitywithreferencetothisAgreementoranyrelateddocumentsshallbedeemedtoconstituteawaiverofanyCityRequirementsregardingtheProperties,theProject,theDeveloper,anysuccessor-in-interestoftheDeveloperoranysuccessor-in-interesttothePropertiesunlessexpresslystatedotherwisebytheCityinwriting.TheCityRequirementsmay onlybechangedorwaivedbymodificationorvarianceapprovedbytheCityandconsistentwiththisAgreement.ExceptasotherwiseapprovedinwritingbytheCity,noentitlement,permitorotherapprovalfromtheCityfordevelopmentoftheProjectonthePropertiesshallattachtoanyportionofthePropertiesorotherwisebecomeeffectivetoallowtheDevelopertodeveloptheProjectonthePropertiesuntilaftertheDeveloperownsfeetitletothatportionofthePropertiestowhichsuchentitlement,permitorother approvatpertains.Undernocircumstancesshall theDeveloper commenceon-site developmentactivitiesonanyportionoftheProjectonthePropertiespriortotheDeveloperowningfeetitletotheProperties.AftertheendoftheDueDiligencePeriod,DevelopermayapplyforapermittoplacesignageatthePropertiestoadvertisethatthecontemplatedProjectis“comingsoon.”2.6.4TheapprovaloftheScopeofDevelopmentshallnotbebindingontheCityCouncilor thePlanningCommissionoftheCityregardinganyapprovalsoftheProjectrequiredby suchbodies.TheDeveloperobtainsnorighttodevelopthe ProjectontheProperties45635.OI000\29179005.13—17—
oranyportionofthePropertiesbyvirtueofthisAgreement,exceptthatfollowingtheCloseofEscrow,theDevelopershallpossessthe samerightsasanyotherownerofpropertywithintheCitythatdesirestodevelopitspropertyinamannerconsistentwith theCity’sGeneralPlan,andprovidedfurtherthatDevelopershallhavesuchrightsasareprovidedpursuanttotheEntitlementsandtheProject Approvalsastheymaybeineffectfromtimetotime.IfanyrevisionsoftheScopeofDevelopmentarerequiredbyaGovernmentalAgency(otherthantheCity)havingjurisdictionoverthePropertiesortheProject,theDevelopershallpromptlymakeanysuchrevisionsthataregenerallyconsistentwiththeScopeofDevelopment.2.6.5NotwithstandinganyprovisiontothecontraryinthisAgreement,followingtheCloseofEscrow,theDeveloperagreestoacceptandcomplyfullywith anyandallconditionsofapprovalapplicabletoallapprovals,permitsandothergovernmentalactionsregardingthedevelopmentoroperationoftheProjectontheProperties,solongassuchconditionsofapprovalareconsistentwiththe ScopeofDevelopmentand thisAgreementinallmaterialrespects.2.6.6DevelopertoPayAllCostsandExpenses.ThePartiesagreethattheCityshallnotprovideanyfinancialassistancetotheDeveloperinconnectionwiththeProject.TheDevelopershallbesolelyresponsiblefor payingforthecostsofaltdesignwork,construction,labor,materials,feesandpermitexpensesassociatedwiththeProject.TheDevelopershaltpayanyandallfeespertainingtothereviewandapprovaloftheProjectbytheCityinaccordancewithCityRequirements,anyotherGovernmentalAgencyandutilityserviceproviders,includingthe costsofpreparationofallrequiredconstruction,planningandotherdocumentsreasonablyrequiredbyaGovernmentalAgencypertinenttothedevelopmentoroperationoftheProjectontheProperties,including,butnot limitedto,specifications,drawings,plans,maps,permitapplications,landuseapplications,zoningapplications,environmentalreviewanddisclosuredocumentsanddesignreviewdocuments.TheDevelopershallpayforanyandallcosts,including,butnotlimitedto,thecostsofdesign,construction,relocationandsecuringofpermitsforsewerorutilityimprovementsandconnections,thatmayberequiredindevelopmentoftheProject,whetherlocatedonoroffoftheProperties.TheDevelopershallobtainanyandallnecessaryapprovals,priortothecommencementofapplicableportionsofconstruction,andtheDevelopershalltakereasonableprecautionstoensurethesafetyandstabilityofsurroundingpropertiesduringsaidconstruction.Inaccordancewiththis Section2.6.6,Developershallberesponsibleforthecosts,orimmediate(i.e.,within30days)reimbursementtotheCityinaccordancewithCityRequirementsupondeliverybytheCityofareasonablydetailedinvoicefor thecosts(togetherwithdetailedinvoicesorotherreasonableevidenceofthird-partycosts)ofthefollowing:2.6.6.1altfeesorexpensesofengineers, architects,financialconsciltants,legal,planningorother consultantsorcontractors,retainedbytheDeveloperforanystudy, analysis,evaluation,report,schedule,estimate,environmentalreview,planningand/ordesignactivities,drawings,specificationsorother activityormatterrelatingtothePropertiesortheProjectorthenegotiationofthisAgreementthatmaybeundertakenbytheDeveloper;2.6.6.2allfees,chargesandcosts,makealldepositsandprovideallbondsorothersecurityinaccordancewithCityReqtiirementsassociatedwiththesubmissiontoandprocessingbythe Cityofanyandallapplicationsandotherdocumentsandinformationto45635.O1000\2917900513—1$—
besubmittedtotheCitybytheDeveloperpursuanttothisAgreementorotherwiseassociatedwiththeProject;and2.6.7TheDevelopershallobtainallentitlements,permitsandotherapprovalsforuseanddevelopmentoftheProjectonthePropertiesfromeachGovernmentalAgency,asprovidedintheScheduleofPerformance, subjecttotheotherapplicableprovisionsofthisAgreement.ARTICLEIIIESCROWINSTRUCTIONS3.1OpeningofEscrow.ForpurposesofthisAgreement,theopeningofEscrowshallbethefirstdateonwhichafullyexecutedcopyofthisAgreementandEarnestMoneyDepositaredepositedwithEscrowHolder(“EscrowOpeningDate”).TheDevelopershallcausetheEscrowtobeopenedwithinfive(5)daysfollowingtheEffectiveDate.EscrowHoldershaltpromptlyconfirminwritingtoeachofthePartiesthedateoftheEscrowOpeningDate.ThisARTICLEIIIshallconstitutethejointescrowinstructionsoftheCityandtheDevelopertoEscrowHolderforconductoftheEscrowtocompletethepurchaseandsaleoftheCity Propertybetweenthem,ascontemplatedinthisAgreement.3.2Conditionsto CloseofEscrow.Theconditionssetforthbelowshaltbesatisfiedorwaivedinwritingbythe respective benefitedPartyon orbeforetheClosingDateorthePartybenefitedbyanyunsatisfiedconditionshallnotberequiredtoproceedtocloseEscrow.3.2.1Developer’sConditionstoCloseofEscrow.TheDeveloper’sobligationtopurchasetheCityPropertyfromtheCityon theClosingDateshallbesubjecttothesatisfactionofthefollowingconditionsprecedent,eachofwhichcanonlybewaivedinwritingbytheDeveloper:3.2.1.1TheDeveloperagreestoacceptthetitletoandconveyanceoftheCityProperty,pursuanttoSection2.4;3.2.1.2TheDeveloperdeliversitsDueDiligenceInvestigationConclusionNoticeto boththeCityandEscrowHolderindicatingtheDeveloper’sunconditionalacceptanceoftheconditionoftheCityProperty,priortotheexpirationofthe DueDiligencePeriod;3.2.1.3ExeccitionoftheSAPropertyAgreementbytheSuccessorAgencyandDeveloper.3.2.1.4TheEntitlementsandtheAdditional ProjectApprovalsshallhavebeenobtainedandtheprojectbereadyforBuildingPermitstobepulledsubjectonlytoDeveloper’spaymentoftherequisitebuildingpermitfeesunder CityRequirements;3.2.1.5TheTitleCompanyisunconditionally committedtoissuetheTitlePolicyfortheCityProperty,subjecttoanyPermittedExceptions,totheDeveloper;45635.Ol000\29179005.13—19—
3.2.1.6TheCitydepositsthe itemsintotheEscrowrequiredbySection3.4;3.2.1.7Therepresentations,warrantiesandcovenantsoftheCitysetforthinSection1.2.1aretrueandcorrectinallmaterialrespectsontheEffective DateandontheClosingDate;3.2.1.8TheCityhascompletedalloftheirmaterialobligationsrequiredby thisAgreementtobecompletedpriortotheCloseofEscrow;3.2.1.9IfDeveloperwillbeutilizingparkingspaceswithintheIntermodalParkingStructurepursuanttoSection2.6.2; theParkingLeaseshallbeenteredintobythePartiespriortotheCloseofEscrow.3.2.1.10Thecloseofescrow undertheSAPropertyAgreementisreadytooccur concurrentlywiththeCloseofEscrow.3.2.2City’sConditionstoCloseofEscrow.TheCity’sobligationtoselltheCityPropertytotheDeveloperonorbeforetheClosingDateshallbesubjecttothesatisfactionofthefollowingconditionsprecedent,whichcanonlybewaivedinwritingbytheCity:3.2.2.1TheDeveloperhasdepositedthePurchasePricelesstheEarnestMoneyDepositintoEscrow;3.2.2.2TheDeveloperagreestoacceptthetitletoandconveyanceoftheCityProperty,pursuanttoSection2.4;3.2.2.3TheDeveloperdeliversitsDueDiligenceInvestigationConcltisionNoticetoboththeCityandEscrowHolderindicatingtheDeveloper’sunconditionalacceptanceofthephysicalconditionoftheCityProperty,priortotheexpirationoftheDueDiligencePeriod;3.2.2.4Executionofthe SAPropertyAgreementbytheSuccessorAgencyandDeveloper.3.2.2.5TheEntitlementsandtheAdditionalProjectApprovalsshallhavebeenobtainedandtheProjectisreadytopullBuildingPermitssubjectonlytoDeveloper’spaymentoftherequisitebuildingpermitfeesunderCityRequirements;3.2.2.6TheDeveloperobtainstheCity’sapprovaloftheConstructionLoanandConstructionLenderapplicabletotheCity Property,inaccordancewithSection6.3;3.2.2.7TheDeveloperhascompletedallofitsmaterialobligationsrequiredbythisAgreementtobecompletedpriortothe CloseofEscrow;45635.01000\29179005.13—20—
3.2.2.8Therepresentations,warrantiesandcovenantsoftheDevelopersetforthinSection1.2.2aretrueandcorrectinallmaterial respectsontheEffectiveDateandontheClosingDate;3.2.2.9TheDeveloperdepositsthefundsanditemsintotheEscrowrequiredbySection3.3fortheEscrow;and3.2.2.10ThecloseofescrowundertheSAPropertyAgreementisreadytooccurconcurrentlywiththeCloseofEscrow;and3.2.2.11IfDeveloperwillbeutilizingparking spaceswithintheIntermodalParkingStructurepursuanttoSection2.6.2;theParkingLeaseshallbeenteredintobythePartiespriortotheCloseofEscrow.3.3Developer’sEscrowDeposits.FollowingsatisfactionorwaiverofeachoftheDeveloper’sconditionstoCloseofEscrowsetforthinSections 3.2.1,asappticable,theDevelopershalldepositthefollowingfundsanddocumentsintoEscrowatleasttwo(2)businessdayspriortotheClosingDateinawriting deliveredtotheParties:3.3.1PurchasePrice andOtherFunds.PurchasePrice,lesstheamountoftheEarnest MoneyDeposit,plusanyadditionalfundsrequiredtobedepositedintoEscrowbytheDeveloperunderthetermsofthisAgreementtoclosetheEscrow,allinimmediatelyavailablefunds.3.3.2PCOStatement.APCOStatementexecutedbytheauthorizedrepresentative(s)oftheDeveloper.3.3.3AcceptanceofGrantDeed.TheCertificateofAcceptanceoftheDeed,inthe formattachedtotheGrantDeed,executedbytheauthorizedrepresentative(s)oftheDeveloperinrecordableform.3.3.4NoticeofAgreement.TheNoticeofAgreementexecutedbytheauthorized representative(s)oftheDeveloperinrecordableform.3.4City’sEscrowDeposits.FollowingsatisfactionorwaiverofeachoftheCity’sconditionstoCloseofEscrowsetforthinSections3.2.2,asapplicable,theCityshalldepositthefollowingdocumentsintoEscrowatleasttwo(2)businessdayspriortotheClosingDate:3.4.1GrantDeed.TheGrantDeedexecutedbytheauthorizedrepresentative(s)oftheCityinrecordableform.3.4.2FIRPTAAffidavit(City).TheFIRPTAAffidavitcompletedandexecutedbytheauthorizedrepresentative(s)oftheCity.3.4.3NoticeofAgreement.TheNoticeofAgreementexecutedbytheauthorizedrepresentative(s)oftheCityinrecordableform.45635.OL000\29179005.t3—21—
3.5CIosinProcedure.WheneachoftheDeveloper’sEscrowrequireddepositsassetforthinSection3.3(otherthanthefundsunder Section3.3.1),and eachoftheCity’sEscrowrequireddepositsassetforthinSection3.4, aredepositedintoEscrow,EscrowHoldershallrequestconfirmationinwritingfromtheCitythateachoftheconditionstotheCloseofEscrowfortheCity’sbenefitsetforthinSections3.2.2.2through3.2.2.9aresatisfiedorwaived,andconfirmationinwritingfromDeveloper thateachoftheconditionstotheCloseofEscrowforDeveloper’sbenefitsetforthinSections3.2.1.1through3.2.1.8aresatisfiedorwaived.EachoftheCityandDevelopershall givesuchconfirmation(orstateinwritingthatsuchconfirmationcannotbegiven,statingthereasonsthereforinreasonabledetail)withinthree(3)businessdaysafteritsreceiptofsuchrequestfromEscrowHolder,andthepartiesshallgivesuchconfirmationastotheconditionsinSections 3.2.1.7and3.2.1.8andSections3.2.2.7and3.2.2.8, respectively,ifthe confirming partyhasnotcommunicatedinwritingtotheotherpartywithreasonabledetailthattheconfirmingpartybelievestheotherpartyisindefaultofitsmaterialobligationsunderthisAgreementorthatitsrepresentations,warrantiesorcovenantsunder Section1.2.1or1.2.2,respectively,werenottrueandcorrectontheEffectiveDateorarenottrueandcorrectasofthedateofsuchwrittenconfirmationtoEscrowHolder.UponEscrowHolder’s receiptofsuchwrittenconfirmationfromboththeCityandtheDeveloperthattheirrespectiveconditionstotheCloseofEscrowareeithersatisfiedorwaived,Escrow Holdershallgivewrittennoticethereoftobothparties,andwithinthefollowingthree(3)businessdaysDevelopershalldepositintotheEscrowthefundsreqctiredunderSection3.3.1sothattheCloseofEscrowcanoccur,uponwhichEscrowHoldershallclosetheEscrowfortheCityPropertybydoingallofthefollowing:3.5.1RecordationofDocuments.Filethefollowingwith theOfficeoftheRecorderoftheCounty, forrecordationintheordersetforthinSection3.6(1)theGrantDeed,withtheDeveloper’scertificateofacceptanceattached,(ii)theNoticeofAgreement,and(iii)ifapplicable,theConstructionLoanDeedofTrust.3.5.2DistributionofRecordedDocuments.DistributeeachrecordeddocumenttothePartyorpersondesignatedfor suchdistributioninSection3.6.3.5.3PCOStatement.FilethePCOStatementwiththeOfficeoftheRecorderoftheCounty.3.5.4FIRPTAAffidavit.FiletheFIRPTAAffidavitwith theUnited StatesInternalRevenueService.3.5.5TitlePolicy.ObtainanddelivertheTitle PolicytotheDeveloper.3.5.6PurchasePrice.DeliverthePurchasePricetotheCity,lesstheCity’sshareofEscrowclosingcosts,andlessanyotherchargestotheaccountoftheCity,andreturnanyremainingfundsheldbyEscrow HolderfortheaccountoftheDevelopertotheDeveloper,lesstheDeveloper’sshareofEscrowclosingcosts,andlessanyotherchargestotheaccountoftheDeveloper.3.5.7CloseofEscrow.CloseofEscrowshalloccurasprovidedinSection3.5onthe nextbusinessdayfollowing EscrowHolder’sreceipttheDeveloper’sfundsreqcLiredunderSection3.3.1(the“Scheduled EscrowClosingDate”)(the“ClosingDate”shallbethe45635.01000\29179005.13—22—
dateonwhichtheCloseofEscrowactually occurs).Notwithstandingtheforegoing,theCloseofEscrowmustoccur concurrentlywiththe closeofescrow undertheSAProperty Agreement.IfanyoftheconditionstotheCloseofEscrowsetforthinSection3.2.1(forDeveloper’sbenefit)and 3.2.2(fortheCity’sbenefit)hasnotbeensatisfied(orwaived,respectively,byDeveloperorCity)and/or DeveloperandtheSuccessorAgencyarenotabletocloseescrowundertheSAPropertyAgreementconcurrentlywiththeCloseofEscrow, by thedateeighteen(18)monthsafter the EffectiveDate(the“OutsideDate”),theneitherpartywhoisnotthenindefault underthisAgreementmayterminatethisAgreementbygivingwrittennoticetotheother(withacopytoEscrowHolder);provided,however thattheCitymayextendtheOutsideDatebyaperiodofuptosix(6)monthsuponwrittenrequestofDeveloper,whichextensionshallbegrantedinthereasonablediscretionoftheCityManagerif DeveloperisnotindefaultunderthisAgreementandhasprocessedtheEntitlementsand,asapplicable,theAdditionalProject Approvalsonadiligentbasisasrequired underthisAgreement.IfforanyreasontheCloseofEscrowhasnotoccurred within thirty(30) daysaftertheScheduled EscrowClosingDate,theneitherPartynotthenindefaultofthisAgreementmaycancel theEscrowandterminatethisAgreement,subjecttothenoticeandcureprovisionsofSection7.1(totheextentapplicable),withoutliabilitytoanyotherPartyor anyother personforsuchterminationandcancellation,bydeliveringwrittennoticeofterminationtotheotherParty(ies)andEscrowHolderand,thereafter,thePartiesshallproceedpursuanttoSection3.9ifthenon-terminatingPartyisnotindefaultorpursuanttoSection7.2or Section7.3,(asapplicable)ifthenon-terminatingPartyisindefault.Withoutlimitingthe rightofanyPartytoterminatethisAgreement,pursuanttotheprecedingsentence,ifEscrowdoesnot closeonor beforethedatethirty(30)daysaftertheScheduledEscrowClosingDate,andnoPartyhasexerciseditscontractualrighttocancelEscrowandterminatethisAgreementbeforesuchtime, thenEscrowshallcloseassoonasreasonablypossiblefollowingthefirstdateonwhichEscrowHolderisinapositiontoclosetheEscrow pursuanttothetermsandconditionsofthisAgreement.3.6Recordationand DistributionofDocuments.Asapplicable,EscrowHoldershallcausethefollowing documentstoberecordedinthe official recordsoftheRecorderoftheCountyinthefollowingorderofpriorityattheCloseofEscrow:(i)theGrantDeed,withtheDeveloper’s certificateofacceptanceattached,(ii)theNoticeofAgreement,and(iii)theConstructionLoanDeedofTrust,ifapplicable,and(iv)anyotherdocumentstoberecordedthrough Escrowuponthejointinstructionsofthe Parties.AllrecordeddocumentsshallprovidethattheyaretobereturnedtoEscrowHolder afterrecordation.WhenoriginalsofsuchrecordeddocumentsarereturnedtoEscrowHolder,EscrowHoldershalldeliver:(i)theoriginalGrantDeed,with theDeveloper’s original certificateofacceptanceattached,totheDeveloperandcopiestotheCity,eachshowingallrecordinginformation,(ii)theoriginaloftheNoticeofAgreementtotheCity,withcopiestotheDeveloper,eachshowingallrecordinginformation,(iii)theConstructionLoanDeedofTrust(ifapplicable)totheConstructionLenderfortheProject,withcopiestotheDeveloperandtheCity, eachshowingallrecordinginformation,and(iv)theoriginalofanyother documentrecordedatthecloseofEscrowtothe PartyorotherpersondesignatedinthejointescrowinstructionsofthePartiesforsuchrecordationandacopyofeachsuchdocumenttotheotherPartyorParties,eachshowingallrecordinginformation.3.7EscrowClosingCosts,TaxesandTitlePolicyPremium.TheCityandtheDevelopershalleachpayone-half(1/2)oftheEscrow feesand suchothercostsasEscrowHoldermaychargefortheconductoftheEscrow.EscrowHoldershall notifytheDeveloperand45635.01000\29179005.13—23-
theCityofthecoststobebornebyeachofthemattheCloseofEscrowbydeliveringtheEscrowHolder’sestimatedclosing/settlementstatementtoboththeCityandtheDeveloperatleastfour(4)businessdaysprior totheScheduledEscrowClosingDate(asitmayhavebeendeferredpursuanttoSection3.5.7orotherwise).TheCityshallpaythepremium chargedbytheTitleCompanyforthestandardTitlePolicy fortheCityProperty,exclusiveofanyendorsementsorother supplementstothecoverageofsuchTitlePolicy thatmayberequestedbytheDeveloper,aswellasdocumentarytransfertaxesandanyandallothercharges,feesandtaxesleviedbyaGovernmentalAuthorityrelativetotheconveyanceofanyportionoftheCityPropertythroughtheEscrowtransaction contemptatedinthisAgreement.TheDevelopershaltpay anyandallrecordingfeesretativetothe conveyanceofanyportionofthe CityPropertythroughtheEscrowtransactioncontemplatedinthisAgreement.3.8EscrowCancellationChar2es.IftheEscrowfailstocloseduetoeithertheCity’smaterialdefaultunderthisAgreementandtheEscrowiscancelledand thisAgreementisterminated,theCityshallpayallordinaryandreasonableEscrowandtitleordercancellationcharges.IftheEscrowfailstoclose duetotheDeveloper’s materialdefaultunderthisAgreementand theEscrowiscancelledandthisAgreementisterminated,theDevelopershallpayallordinaryandreasonableEscrowandtitleordercancellationcharges.IftheEscrowfailstocloseforanyreasonotherthan thematerialdefaultofeithertheDeveloperorthe CityandtheEscrowiscancelledandthisAgreementisterminated,theDeveloperandtheCityshalteachpayone-half(1/2)ofanyordinaryandreasonabteEscrowandtitleordercancellationcharges.3.9EscrowCancellation.IfthisAgreementisterminatedand theEscrowcancelledpursuanttoacontractualright grantedtoaPartyinthisAgreementtoterminatethisAgreementandcancel theEscrow,otherthanduetothematerialdefaultofanotherParty, thePartiesshalldoeachofthe following:3.9.1CancellationInstructions.ThePartiesshall,withinthree(3)businessdaysofreceiptofEscrowHolder’s writtenrequest,executeanyreasonableEscrowcancellationinstructionsrequestedbyEscrowHolder;3.9.2ReturnofFundsandDocuments.Withinten(10)daysofreceiptbythePartiesofasettlementstatementofEscrowandtitleorder cancellationchargesfromEscrowHolder:(i)theDeveloperorEscrowHoldershallreturntothe City anydocumentspreviouslydeliveredbytheCitytotheDeveloperorEscrowHolder,(ii)theCityorEscrowHoldershallreturntotheDeveloperalldocumentspreviouslydeliveredbytheDevelopertotheCityorEscrowHolder; (iii)EscrowHoldershallreturntotheDeveloperanyfundsdepositedbyDeveloperintoEscrow,includingtheEarnestMoneyDeposit,lesstheDeveloper’sshareofcustomaryandreasonableEscrowandtitleordercancellationcharges,ifany;and(iv)EscrowHoldershallreturntothe CityanyfundsdepositedbyCityintoEscrowifithasalreadybeendeposited,lesstheCity’sshareofcustomaryandreasonableEscrowandtitle ordercancellationcharges,ifany.3.10ReporttoIRS.FollowingtheCloseofEscrowandpriortothelastdateonwhichsuchreportisrequiredtobefiled withtheInternal RevenueService,ifsuchreportisrequiredpursuanttoSection 6045(e)oftheInternal RevenueCode,EscrowHoldershallreportthegrossproceedsofthepurchaseandsaleofthe CityPropertytotheInternalRevenueService45635O1000\29179005.13—24—
onForm1099-B,W-9orsuchotherform(s)asmaybespecifiedbytheInternalRevenueServicepursuanttoSection6045(e).Uponthefilingofsuchreportingformwiththe InternalRevenueService,EscrowHoldershalldeliveracopyofthe filedformtotheCityandtheDeveloper.ARTICLEIVPROJECTDEVELOPMENT4.1DeveloperCovenanttoUndertakeProject.TheDevelopercovenants,foritself,itssuccessorsandassigns,toandfortheexclusivebenefitoftheCity,thattheDevelopershallcommenceandcompletethedevelopmentoftheProjectonthePropertieswithinthetimeperiodforsuchactionssetforthinthe ScheduleofPerformance,subjecttotheeffectofUnavoidableDelayandsubjecttotheprovisionsofSection4.3andSection4.3.TheDevelopercovenantsandagreesforitself,itssuccessors,andassigns,thatthePropertiesshallbeimprovedanddevelopedwiththeProjectinsubstantialconformitywith thetermsandconditionsofthisAgreement,theScopeofDevelopment(withsuchmodificationsasCityshallhaveapproved),theScheduleofPerformance(subjecttoUnavoidableDelay),theEntitlementsandtheAdditionalProjectApprovals,exceptforsuchchangesasmaybemutuallyagreeduponinwritingbyandbetweentheParties,andallapplicablelaws,regulations,ordersandconditionsofeachGovernmentalAgencywithjurisdictionoverthePropertiesorthe Project.Thecovenantsofthis Section4.1shallrun withthe landofthePropertiesuntiltheearlierofthedateofrecordationoftheCertificateofCompletionorthe fifteenth(15th)anniversaryofthedateoftheCloseofEscrow.4.2DeveloperChan%estoPlansandSpecificationsDurin%CourseofConstruction.TheDevelopershallhavetherightduringthecourseofconstructionoftheProjecttomake“minorfieldchanges,”withoutseekingtheapprovalofthe City,ifsuchchangesdonotaffect theoverallscopeofthedevelopmentinaccordancewiththeEntitlementsandAdditionalProjectApprovalsor thetypeofusetobeconductedwithinalloranyportionofastructure.“Minorfieldchanges”shallbedefinedasthosechangesfromtheapprovedplansandspecificationsuponwhich theBuildingPermitshavebeenissuedthathavenosubstantialeffectontheProjectoraremadeinordertoexpediteoraccommodatetheworkofconstructioninresponsetofieldconditions.TheDevelopershallsubmitaltotherchanges,i.e.thosechangeswhicharenot“minorfieldchanges”,tothe Cityforitsreviewandapprovalnotessthanfifteen(15)dayspriortothedatethattheDeveloperintendstoimplementsuchchanges.TheCityshallhaveten(10)daysfromitsreceiptofsuchproposedchangestoreviewthesame andadvisetheDeveloperinwritingwhethersuchchangesareapprovedbytheCity,whichapprovalshallnotbeunreasonablywithheldconditionedordelayed.AnyproposedchangeswhicharenotdisapprovedbytheCitywithinsuch ten(10)dayperiodshallbedeemedapproved.NothingcontainedinthisSection4.2shaltbedeemedtoconstituteawaiveroforchangeintheCityRequirementsgoverning“minorfieldchanges”orotherchangesorinanyapprovalsbytheCityotherwiserequiredfor“minorfieldchanges.”orotherchanges.4.3ConstructionStartandCompletionofProject.SubjecttoUnavoidableDelay,theDevelopershallcommenceconstructionoftheProjectinaccordancewiththeScheduleofPerformanceandthereafterdiligentlyproceedtocompletetheconstructionoftheProjectinagoodandworkmanlikemannerinsubstantialconformitywiththeapprovedplans,specifications,45635.OOOO\29179OO5l3—25—
andconditionsfortheProjectapprovedbytheCityandtheScheduleofPerformance.Notwithstandingtheforegoing,theCitymay extendtheProjectCompletionDatesetforthintheScheduleofPerformancebyaperiodofupto six(6)monthsuponwrittenrequestofDeveloper,whichextensionshallbegrantedinthereasonablediscretionoftheCityManagerifDeveloperisnotindefault under thisAgreementandhasprosecutedtheconstructionoftheProjectonadiligentbasisasrequiredunderthisAgreement.SubjecttoUnavoidableDelay,theDevelopershallachieveCompletionofConstructionandrequestthatCityissueafinalcertificateofoccupancyandCertificateofCompletionfromCitywithrespecttotheProjectonorbeforetheProjectCompletionDate(asitmayberevisedassetforth above).TheDeveloperwill,promptlyuponsubstantialcompletionofconstruction activitiesfortheProject,usediligenteffortstocausetheProjecttobeinspectedbyeachGovernmentalAgencywithjurisdictionovertheProject,shallcorrect any defectsanddeficiencies thatmaybedisclosedbyanysuchinspectionandshallusediligentefforts cause tobedulyissuedalloccupancycertificatesandotherlicenses,permitsandauthorizations necessaryfortheoperationandoccupancyofthecompletedProject.TheDevelopershalldoandperformalloftheforegoingacts andthingsandusediligenteffortstocausetobeissuedandexecutedallsuchoccupancycertificates,licenses,andauthorizationsfortheProjectonorbeforetheProjectCompletionDate.AftercommencementoftheworkofimprovementoftheProject,theDevelopershallnotpermittheworkofimprovementoftheProjecttoceaseorbesuspendedforatimeperiodinexcessofthirty(30)consecutivecalendardays,subjecttoUnavoidableDelay.4.4CompliancewithLaws.AllworkperformedinconnectionwiththedevelopmentoftheProjectshallcomplywithallGovernmentalRequirements.4.5ScheduleofPerformance.TheScheduleofPerformance establishesvariousdatesandtimes(subjecttoUnavoidableDelay) fortheaccomplishmentofvarious tasksassignedtotheCityandtheDeveloperand thesatisfactionoftheconditionsprecedenttothecloseoftheEscrow.TheParties agreethat timeisoftheessenceintheperformanceofsuchtasksand thesatisfactionofconditionsprecedent,inviewofthe largeinvestmentofresourcesthataltPartiesrecognizewillberequiredforassemblyofthePropertiesandtheundertakingoftheProject.Ifthedate ortimefortheperformanceofataskorthesatisfactionofacondition,assetforthineitherthetextofthisAgreementorintheScheduleofPerformance,maynotbeachieved,thenpriortosuchdateortimesetforthinthetextofthisAgreementortheScheduleofPerformance,the PartiesshaltconsiderwhetheramodificationtothetextofthisAgreementortotheScheduleofPerformanceisreasonablyrequired.Anydecisiontoapproveamodificationtoatimeor dateestablishedineither thetextofthisAgreementor theScheduleofPerformanceshallbesubjecttothereasonable approvalofeach Party.Anymodificationofatimeordateforperformanceofaparticulartaskorsatisfactionofaparticularconditionthatdoesnotresultinachangeofmorethanonehundredeighty(180)daysmaybeapprovedonbehalfoftheCitybytheCityManager,inhisorherreasonable discretion.Amodificationofatimeordateforperformanceofataskorsatisfactionofacondition(oraseriesofsuchmodifications) thatresultsinanaggregatechangeofmorethanonehundred eighty(180)daysshallbesubjecttotheapprovaloftheCityCouncil,initssoleandabsolutediscretion.Inadditiontotheforegoing,ifperformanceofataskorsatisfactionofaconditionintheSchedutePerformanceispreventedordelayedbyUnavoidableDelay, thedeadtineforcompletionofsuchtaskorsatisfactionofsuchconditionshallbeextendedbytheperiodofsuchUnavoidableDelay.45635.O1000\29179005.13—26—
4.6DeveloperAttendanceatCityMeetings.TheDeveloperagreestohave oneormoreofitsemployeesorconsultantswhoareknowledgeable regardingthisAgreementandthedevelopmentoftheProject,suchthatsuchperson(s)canmeaningfullyrespondtoCityquestionsregardingtheprogressoftheProject,attendCity Councilmeetings,whenrequestedtodosoonnotlessthanten(10)daysprior writtennoticebyCitystaff4.7City’sRighttoInspectProjectandProperties.Officers,employees, agentsandrepresentativesoftheCityshallhavetherightofreasonableaccesstotheProperties,withoutthepaymentofchargesor fees,duringnormalconstructionhours,duringtheperiodofconstructionoftheProject.Suchofficers,employees,agentsorrepresentativesoftheCityshallbethosepersonswhoaredesignatedbytheCityManager.Anyandallofficers,employees,agentsorrepresentativesoftheCitywhoenterthePropertiesshallidentifythemselvesattheconstructionmanagementofficeontheProperties,upontheirentranceontotheProperties,andshallatalltimesbeaccompaniedbyarepresentativeoftheDeveloper,whileon theProperties.TheDevelopershallmakearepresentativeoftheDeveloperavailableforthispurposeatalltimesduringnormalconstructionhours,uponreasonable noticefrom theCity.TheCityshallindemnifyandholdtheDeveloper harmlessfrominjury,propertydamageorliabilityarisingoutoftheexerciseby theCityofthe rightofaccesstotheProperties providedinthisSection4.7,otherthaninjury,propertydamageorliabilityarisingfromthenegligenceorwillfulmisconductoftheDeveloperoritsofficers, agentsoremployees.TheCityshall inspect relevantportionsoftheProperties,priortoissuinganywritten statementsreflectingadverselyontheDeveloper’scompliancewiththetermsandconditionsofthisAgreementpertainingtodevelopmentoftheProject.IfintheCity’sreasonablejudgmentitisnecessary,theCityshallhave thefurtherright,fromtimetotime,toretainaconsultantorconsultants,atCity’s expense,toinspecttheProjectandverifycompliancebytheDeveloperwiththeprovisionsofthisAgreement.TheDeveloperacknowledgesandagreesthatanyscichinspectionsareforthesolepurposeofprotectingtheCity’srightsunderthisAgreement,aremadesolelyforthe City’sbenefit,thattheinspectionsmaybesuperficialandgeneralinnature,andarefor thepurposesofinformingtheCityoftheprogressoftheProjectand theconformityoftheProjectwith thetermsandconditionsofthisAgreement,andthattheDevelopershallnotbeentitledtorelyonanysuchinspection(s)asconstitutinganapproval,satisfactionoracceptanceofany materials,workmanship,conformityoftheProjectwiththisAgreementorotherwise.TheDeveloperagreestomakeitsownregularinspectionsoftheworkofconstructionoftheProjecttodeterminethatthequalityoftheProjectandallotherrequirementsoftheworkofconstructionoftheProjectarebeingperformedinamanner satisfactorytotheDeveloper. TheDeveloperalsoagreestoimmediately notifytheCityinwritingshouldtheDeveloper’sinspectionsshowanymattersthatwill preventtheentireProjectfrom beingcompletedbytheProjectCompletionDatesetforththereforeintheScheduleofPerformance(assuchdatemay have beenmodified pursuanttothisAgreement).Withoutlimitingtheforegoing,theDevelopershallpermittheCityuponreasonablenoticetoexamineandcopyallbooksandaccountrecords (notincludingDeveloper’sfinancialbooksandrecords)andotherpapersrelatingtothePropertiesandtheconstructionoftheProject.TheDeveloperwiLlusecommerciallyreasonableeffortstocauseallcontractors, subcontractorsandmaterialmentocooperatewiththeCitytoenablesuchexamination.4.8CostofConstruction.ThecostandexpenseofundertakingandcompletingtheProject, including,withoutlimitation,constructingalllegally imposedon-siteandoff-siteimprovements,andprovidingallutilitiestherefor,shallbebornebyDeveloperatitssolecost,45635.O1000\29179005.13—27—
expenseand liability.Developershall besolelyresponsibleforpaymentofallCitylanduse,construction,inspection,plancheckanddevelopmentimpactfeesinaccordancewith CityRequirements(collectively,“DevelopmentFees”)imposedby theCityinaccordancewithCityRequirementsandapplicablelawwithrespecttothedevelopmentofthe Project.Developershallbearallcostsandexpenses associatedwith theprocessingandobtainingoftheentitlementsinaccordancewithCityRequirementsandshallbearallcostsandexpenses (excepttotheextentexpresslysetforthotherwiseinthisAgreement),associatedwithanyandallterms,conditions,requirements,mitigation measuresandotherexactionsimposedon,orrequiredinconnectionwith,theentitlements,allinaccordancewithCity Requirements.4.9PrevailingWages.4.9.1TheDeveloper acknowledgesthattheCityhasnot madeanyrepresentation,expressorimplied,totheDeveloperorany personassociatedwiththeDeveloperregarding whetherornotlaborersemployed relativetotheconstructionoftheProjectmustbepaidtheprevailingper diem wageratefortheirlaborclassification,asdeterminedbytheStateofCalifornia,pursuanttoLaborCodeSections1720,etTheDeveloperagreeswiththeCitythattheDevelopershallassumetheresponsibilityandbesolelyresponsiblefordeterminingwhetherornotlaborersemployedrelativetotheconstructionoftheProject mustbepaidtheprevailingperdiemwagerate fortheirlaborclassification.4.9.2TheDeveloper,onbehalfofitself,itssuccessors,andassigns,waivesandreleasestheCityfromanyrightofactionthatmaybeavailabletoitpursuanttoLabor CodeSections1726and1781.TheDeveloperacknowledgestheprotectionsofCivil CodeSection1542relativetothewaiverandreleasecontainedinthisSection4.9,whichreadsasfollows:“AGENERAL RELEASEDOESNOTEXTEND TOCLAIMSWHICHTHECREDITORDOESNOTKNOWORSUSPECTTOEXISTNHISOR HER FAVORATTHETIMEOFEXECUTINGTHERELEASE,WHICFIIFKNOWNBYKIMORHERMUSTHAVEMATERIALLYAFFECTEDHISORHERSETTLEMENT WITHTHEDEBTOR.”BYINITIALINGBELOW,THEDEVELOPERKNOWINGLYANDVOLUNTARILYWAIVESTHE PROVISIONSOFSECTION1542SOLELYTNCONNECTIONWITHTHEWAIVERSANDRELEASESOFTHISSECTION4.9.2.Developr’sInitials4.9.3Additionally,inaccordancewithSection7.7,theDevelopershallindemnify, defendwithcounselacceptabletotheCityandhold theCityharmlessagainstanyclaimspursuanttoLaborCodeSections1726and1781arisingfromthisAgreementortheconstructionoroperationoftheProject.4.10CertificateofCompletion.45635.O1000’29179005.13—28—
4.10.1followingthesubstantialcompletionofconstructionoftheProject,anduponwrittenrequestfrom theDeveloperforissuanceofaCertificateofCompletionfortheProject,theCityshallinspecttheProjecttodeterminewhetherornottheProjecthasbeensubstantiallycompletedincompliancewiththisAgreement.Ifthe CitydeterminesthattheProjectiscompleteandincompliancewiththisAgreement,theCityManagershallfurnishtheDeveloperwithaCertificateofCompletionfortheProject.IftheCitydeterminesthattheProjectisnotincompliancewiththis Agreement,theCityManagershall sendwrittennoticeofeachnon-conformitytotheDeveloper.UponissuanceofthefinalcertificateofoccupancyforthedevelopmentoftheProject,basedontheplanssubmittedbytheDevelopertotheCity, theCityshallfurnishtheDeveloperwithaCertificateofCompletionforthe Project.4.10.2UpontheDeveloper’ssubstantialcompletionofthe Project,theDevelopershaltrequestandbeentitledtoreceiveaCertificateofCompletion,including,withoutlimitation,therightoftheCityManagertoissuetheCertificateofCompletion,exceptthattheCertificateofCompletion,upon issuance,shallbeevidenceoftheCity’sconclusivedeterminationofsatisfactorysubstantialcompletionoftheentiretyoftheProjectpursuanttothetermsofthisAgreement.TheCertificateofCompletionshaltberecordedpromptlyuponissuanceintheOfficialRecordsoftheCounty4.10.3The Cityshallnotunreasonablywithhold,conditionordelaytheissuanceofaanycertificateofoccupancyfortheProjectortheCertificateofCompletion.ACertificateofCompletionshaltbeevidenceoftheCity’sconclusivedeterminationofsatisfactorycompletionoftheProjecttowhichitpertainspursuanttothetermsofthisAgreement. AftertherecordationofaCertificateofCompletionfortheProject(ordeemedissuanceunderSection4.10.4,asapplicable),anypersonthenowningorthereafterpurchasing,leasing orotherwiseacquiringanyinterestinthePropertiesimprovedwiththeProjectshallnot(becauseofsuchownership,purchase,leaseoracquisition)incuranyobligationorliability underthisAgreementregardingconstructionorinstallationoftheProjectexceptthatsuchpersonshallbeboundbyanyreservations, covenants,conditions, restrictionsandotherinterestsrecordedagainstthePropertiespursuanttothisAgreementandtheGrantDeed.4.10.4IftheCityfailsorrefusestoissueaCertificateofCompletionfollowingwritten requestfrom theDeveloper,theCityshall,withinfifteen(15)calendardaysoftheDeveloper’s writtenrequestorwithinthree(3)calendardays afterthenext regular meetingoftheCityCouncil,whicheverdateoccurslater,providetheDeveloperwithawrittenstatementsettingforththe reasonsfortheCity’sfailureorrefusaltoissueaCertificateofCompletion.Thestatementshallalsocontain theCity’sopinionoftheaction(s)theDevelopermusttaketoobtainaCertificateofCompletionfrom theCity.IfthereasonfortheDeveloper’sfailuretocompletetheProjectisconfinedtotheimmediateunavailabilityofspecificitemsormaterialsforconstructionorlandscapingatapricereasonabLyacceptabletotheDeveloperorotherminorbuilding“punch-list”items,theCitymayissueitsCertificateofCompletionuponthepostingofabondorirrevocablestandbyletterofcreditbytheDeveloperinaformreasonablyacceptabletotheCityinanamountrepresentingthefairvalueoftheworkontheProject remainingtobecompleted,asreasonablydeterminedbytheCity.Ifthecosttocompletesuchincompleteconstruction,landscapingorotherpunch-listitems,asreasonablydeterminedbyCity,islessthanOneHundredTwenty-fiveThousandDollars($125,000), DevelopershallbeentitledtobondaroundsuchmattersandreceivetheCertificateofCompletionasreferencedinthe45635.Ol000\29179005.13—29—
immediatelyprecedingsentence.IftheCityfails toprovidesuchwrittenstatementwithinthespecifiedtimeperiod, then,without relievingtheCityofitscontinuingobligationtoissue suchCertificateofCompletion,theDevelopershallbedeemedconclusivelyandwithoutfurtheractionofthe CitytohavesatisfiedtherequirementsofthisAgreementwithrespecttotheProject,asifaCertificateofCompletionhadbeenissuedbytheCitypursuanttothisAgreement,andallotherprovisionsofthisAgreementorCityRequirementsorotherapplicablelawshallbeappliedasifsuchCertificateofCompletionhad beenissuedbytheCity.4.10.5ACertificateofCompletionshallnotconstituteevidenceofcompliancewithorsatisfactionofanyobligationoftheDevelopertoanyholderofamortgage,oranyinsurerofamortgagesecuringmoneyloanedtofinancetheProject,oranypartsthereof.ACertificateofCompletionshatlnotbedeemedtoconstituteanoticeofcompletion underSection3093oftheCaliforniaCivilCode,norshaltitacttoterminatethecontinuingcovenants,restrictionsorconditionscontainedintheGrantDeedoranyotherinstrumentsrecordedagainstthePropertiespursuanttothisAgreement.ACertificateofCompletionisnotevidenceofthecomplianceofthe ProjectwithanyCityRequirementsor anybuildingcode,conditionsofapproval,landuse,zoningorotherrequirementsoftheCityoranyGovernmentalAgencywithjurisdictionovertheProperties,otherthan theCity.ARTICLEVDEVELOPERCOVENANTS5.1CovenanttoMaintainPropertiesonTaxRolls.TheDeveloperforitself,itssuccessorsandassignstoalloranypartorportionoftheProperties and/orProject,covenantsandagreesthat:5.1.1 ThePropertiesshallremainontheCountysecuredrealproperty taxrollsfortwentyyearsfromthedateofissuanceofacertificateofoccupancyforthe Project.5.1.2TheDevelopershallpayallpropertytaxbillswithrespecttothePropertiesandallimprovementsthereononorbeforethelastdayforthetimelypaymentofeachpropertytax installmentoneachDecember10andApril10duringsuchtimeperiodand totimelypayallsupplementaltaxbillsregardingthePropertiesissuedbytheCounty.TheDeveloperfurthercovenantsandagreestoprovidetotheCity,onorbeforeJuly31ofeachyear,commencinginthecalendaryearfollowingthecalendar yearinwhichaCertificateofCompletionisrecordedandineachcalendaryear,thereafter,forthefulltermofthiscovenant:(1)atrueandcorrectcopyofallpropertytaxassessmentnotices,propertytaxbillsandpropertytaxassessmentcorrespondencebyandbetweentheDeveloperand theCountyregardingthePropertiesandallimprovementsthereon,withrespecttotheprecedingfiscalyearoftheCounty,and(ii)cancelledchecksissuedbytheDeveloperinpaymentofallpropertytaxpaymentsthataremadetotheCountyregardingthePropertiesandallimprovementsthereon(orotherreasonablyacceptableevidenceofsuchpayment),withrespecttotheprecedingCounty fiscalyear.45635.Ol000\2917900513—30—
5.1.3ThecovenantsofthisSection5.1shall runwiththe(andoftheProperties,shallbeenforceableagainsttheDeveloperanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed.5.2NoConveyancetoTaxExempt Entity.TheDeveloperforitself,itssuccessorsandassignstoalloranypartorportionofthePropertiesand/orProject,covenantsandagreesthat:5.2.1TheDevelopershallnot useorotherwisesell,transfer,convey,assign,lease,leasebackorhypothecatetheProperties,theProject, oranyportionofanyoftheforegoingtoanyentityorperson, orforanyuseoftheProperties,theProject,oranyportionofanyoftheforegoing,thatispartiallyorwhollyexemptfromthepaymentofrealorpersonalpropertytaxesorthatwouldcause theexemptionofthepaymentofalloranyportionofrealorpersonalpropertytaxesotherwiseassessable regardingtheProperties,theProject,oranyportionofanyoftheforegoing,withoutthepriorwritten consentoftheCity,whichmaybewithheldintheCity’ssole andabsolutediscretionforaperiodoftwenty(20)yearsfrom thedateofissuanceofthecertificateofcompletion fortheProjectbytheCity..5.2.2IftheProperties,or anyportionoftheProperties,shallbeconveyed,transferredorsoldtoanyentityorpersonthatispartiallyor whollyexemptfromthepaymentofrealorpersonalpropertytaxes otherwiseassessableagainsttheProperties,or anyportionthereof,withouttheprior written consentoftheCity,then,attheCity’selectionandinadditiontoallotherremediesavailabletotheCityunderthisAgreementoratlaworinequity,theDevelopershallpaytotheCityafeeinlieuofpaymentofsuchtaxeseachyearinanamountdeterminedbytheCitytobeonepercent(1%)ofthe“fullcashvalue”oftheProperties, orportionthereof,asmaybesubjecttosuchexemptionfrompaymentofrealorpersonalpropertytaxes.TheCity’sdeterminationof“fullcashvalue”for in-lieupaymentpurposesunderthisSection5.2.2shallbeestablishedbytheCityeach year,ifnecessary,byreferencetotherealorpersonalpropertytaxvaluation principlesandpractices generally applicabletoacountypropertytax assessorunderSection1ofArticleXIIIAoftheCaliforniaConstitution.TheCity’sdeterminationof“fullcashvalue”andthatanin-lieupaymentisdue shallbeconclitsiveonsuchmatters.IftheCitydetermines thatanamountispayableasanin-lieupaymentunderthisSection5.2.2inanytaxyear,thensuchamountshallbepaidtotheCityforthattaxyearwithinforty-five(45)daysfollowingtransmittalbytheCitytotheDeveloperofaninvoiceforpaymentofthein-lieuamount.5.2.3ThecovenantsofthisSection5.2shall runwith the landoftheProperties,shallbeenforceableagainsttheDeveloperanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed.5.3MaintenanceConditionoftheProperties.TheDeveloperforitself,itssuccessorsandassignstoalloranypartorportionofthePropertiesand/orProject,covenantsandagreesthat:5.3.1TheareasoftheProperties thataresubjecttopublicview(includingallexistingandfutureimprovements,paving,walkways,landscaping,exteriorsignageandornamentation)shallbemaintainedingoodrepairandaneat,cleanandorderlycondition,45635O1000\29179005.13—31—
ordinarywearandtearexcepted.IfthereisanoccurrenceofanadverseconditiononanyareaofthePropertiesthatissubjecttopubLicviewincontraventionofthegeneral maintenance standarddescribedabove(a“MaintenanceDeficiency”),thentheCityshallnotifytheDeveloperinwritingoftheMaintenance Deficiency.IftheDeveloperfailstocureorcommenceanddiligentlypursuetocuretheMaintenanceDeficiency within thirty(30)daysofitsreceiptofnoticeoftheMaintenanceDeficiency,theCityshallhave the righttoenterthePropertiesandperformallactsnecessarytocure theMaintenanceDeficiency,ortotakeanyotheractionatlaworinequitythatmaythenbeavailabletotheCitytoaccomplishtheabatementoftheMaintenanceDeficiency. AnysumexpendedbytheCityfortheabatementofaMaintenanceDeficiencyonthePropertiespursuanttothis Section5.3.1shallbecomealienontheProperties,asapplicable.Iftheamountofthelienisnotpaidwithinthirty(30)daysafter writtendemandforpaymentfromtheCitytotheDeveloper,theCityshallhave therighttoenforcethelieninthemannerprovidedinSection5.3.3.5.3.2Graffiti,asthistermisdefinedinGovernmentCodeSection38772,thathasbeenappliedtoanyexteriorsurfaceofastructureorimprovementonthe Propertiesthatisvisiblefromanypublicright-of-wayadjacentorcontiguoustotheProperties,shallberemovedbythe Developerbyeither painting overtheevidenceofsuchvandalismwithapaintthathasbeencolor-matchedtothesurfaceonwhichthepaintisapplied,orgraffitimayberemovedwithsolvents, detergentsorwater,asappropriate.Ifany suchgraffitiisnotremovedwithinninety-six(96)hoursfollowingthetimeofthediscoveryofthegraffiti, theCityshallhavetherighttoenterthePropertiesandremovethegraffiti,withoutnoticetotheDeveloper. AnysitmreasonablyexpendedbytheCityfortheremovalofgraffitifromthePropertiespursuanttothisSection5.3.2,shallbealien onthe Properties.Iftheamountofthe lienisnotpaidwithinthirty(30) daysafterwritten demandtotheDeveloperfromtheCity,theCityshallhavetherighttoenforceitslieninthemanner providedinSection5.3.3.5.3.3ThePartiesfurthermutuallyunderstandand agree that the rightsconferredupontheCityunderthisSection5.3expresslyincludeagrantbytheDeveloperofasecurityinterestinthePropertieswiththepowertoestablishandenforcealienorotherencumbranceagainsttheProperties oranyportionthereof,inthemannerprovidedunderCivilCodeSections 2924,2924band2924c,tosecure theobligationsoftheDeveloperanditsuccessorsunderSection5.3.1orSection5.3.2,includingthereasonableattorneys’feesandcostsoftheCityassociatedwiththeabatementofaMaintenanceDeficiencyor removalofgraffiti.Forthepurposesoftheprecedingsentencethewords“reasonableattorneys’feesandcostsoftheCity”meanandincludethesalaries,benefitsandcostsoftheCityAttorneyandthelawyersemployedintheOfficeoftheCity Attorney.5.3.4TheprovisionsofthisSection5.3,shallbeacovenantrunningwith thelandoftheProperties,shallbeenforceable againsttheDeveloperanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed,andshallterminateandexpireonthe dateten(10)yearsaftertheCompletionofConstruction.NothingintheforegoingprovisionsofthisSection5.3shallbedeemedtoprecludetheDeveloperfrommakinganyalteration, addition,orotherchangetoanystructureorimprovementorlandscapingontheProperties,providedthatanysuchchangescomplywithapplicablezoningandbuiLdingreguLationsoftheCity.45635.O1000\29179005.13—32-
5.4Ob1iationtoRefrainfromDiscrimination.TheDeveloperforitself,itssuccessorsandassignstoalloranypart orportionofthePropertiesand/orProject,covenantsandagreesthat:5.4.1Thereshallbenodiscriminationagainstorsegregationofanyperson,orgroupofpersons,onaccountofsex,maritalstatus,race,color, religion,creed,nationaloriginorancestryinthesale,lease,sublease,transfer,use,occupancy, tenureorenjoymentofthePropertiesnorshalltheDeveloper,itselforany personclaimingunderorthroughit,establishorpermitanysuchpracticeorpracticesofdiscriminationorsegregationwithreferencetotheselection,location, number,useoroccupancyoftenants,lessees,sub-tenants,sub-LesseesorvendeesoftheProperties.The covenantofthisSection5.4shallrun with the landofthePropertiesandshallbeenforceableagainsttheDeveloperanditssuccessorsandassignsinperpetuityandbeacovenantintheGrantDeedand theNoticeofAgreement.5.4.2ThecovenantofthisSection5.4shallrunwiththelandofthePropertiesinperpetuity,shallbeenforceableagainsttheDeveloperanditssuccessorsandassigns,and shallbecovenantssetforthintheGrantDeed.5.5Form ofNon-DiscriminationandNon-SereationClauses.TheDeveloperforitself,itssuccessorsandassignstoalloranypartorportionofthePropertiesand/orProject,covenantsandagreesthat:5.5.1TheDeveloper,suchsuccessorsandsuchassignsshallrefrain fromrestrictingthesale,lease,sublease,rental,transfer,ttse,occupancy, tenureorenjoymentoftheProperties(oranyportionthereof)onthebasisofsex,maritalstatus,race,color, religion, creed,ancestryornational originofanyperson.Alldeeds,leasesorcontracts pertainingtothePropertiesshallcontainorbesubjecttosubstantiallythefollowingnon-discriminationornonsegregationcovenants:5.5.1.1Indeeds:“Thegranteehereincovenantsby andforitself,itssuccessorsandassigns,andallpersonsclaimingunderorthroughthem, thatthereshallbenodiscriminationagainstorsegregationof,anypersonorgroupofpersonsonaccountofrace,color,creed,religion,sex,maritalstatus,nationalorigin, orancestryinthe sale, lease,sublease,transfer,use,occupancy,tenure,orenjoymentofthepremisesherein conveyed,norshallthegranteeoranypersonclaimingunderorthroughit,establishorpermitany suchpracticeorpracticesofdiscriminationorsegregationwithreferencetotheselection,location,number,useoroccupancyoftenants,lessees,sub-tenants,sub-lessee,orvendeesinthepremiseshereinconveyed.Theforegoingcovenantsshallrunwiththeland.”5.5.1.2Inleases:“TheLesseehereincovenantsbyandforitself,itssuccessorsandassigns,andallpersonsclaimingunderorthroughthem,andthisleaseismadeandacceptedupon and stibjecttothefollowingconditions:Thatthereshallbenodiscriminationagainstorsegregationofany personor groupofpersons,onaccountofrace,color,creed,religion,sex,maritalstatus,nationalorigin,orancestry,intheleasing,subleasing,transferring,tise,occupancy,tenttre, orenjoymentofthepremiseshereinleased norshallthe lesseeitself,oranypersonclaimingtinderorthroughit,establishorpermitany suchpractice orpracticesof45635.O1000\29179005.13—33—
discriminationorsegregationwithreferencetotheselection,location,number,use,oroccupancy,oftenantslessees,sub-lessee,sub-tenants,orvendeesinthepremiseshereinleased.”5.5.1.3Incontracts:“Thereshaltbenodiscrimination againstorsegregationofany personorgroupofpersonsonaccountofrace,color,creed,religion,sex,maritalstatus,nationalorigin,orancestry,inthesale, lease,sublease,transfer,use,occupancy,tenure,orenjoymentofthepremiseshereinconveyedorleased,norshallthetransfereeoranypersonclaimingunderorthroughit,estabtishorpermitanysuchpracticeorpracticesofdiscriminationorsegregationwithreferencetotheselection,location,number,use,oroccupancy,oftenants,lessees,sub-lessees, sub-tenants,orvendeesofthepremiseshereintransferred.”Theforegoingprovisionshallbebindinguponandshallobligatethecontractingpartyor partiesandanysubcontractingpartyorparties,orother transfereesundertheinstrument.5.5.2 ThecovenantofthisSection5.5shallrunwiththelandofthePropertiesinperpetuity,shalt beenforceableagainst theDeveloperanditssuccessorsandassigns,and shallbecovenantssetforthintheGrantDeed.5.6ProhibitedUses.NoportionofthePropertyshallbeusedforajunkyard,adultentertainment,adultmovietheater, adultbookstore,massageparlor,pawnshop,dollarstore,checkcashing center(theforegoingshallinnoeventprohibit bankingfacilitieswithinagrocerystoreorawalkupATM),paydayloanorothersimilarbusiness,laundromat(notincludingfullservicedrycleaners), marijuanadispensary,tattoo parlororfortuneteller,orforthesaleofnarcoticsparaphernalia,orforthelongtermtreatment,storageordisposalofHazardousMaterials.5.7SurvivalofSpecialDevelopmentCovenants.AllofthecovenantssetforthinARTICLEV,inclusive,shallbeacovenantrunningwiththelandofthePropertiesandeach suchspecialdevelopmentcovenantshallsurvivetheCloseofEscrow,executionandrecordationoftheGrantDeed, andissuanceandrecordationofanyCertificateofCompletionforthetimeperiodspecificallysetforthineachsuchspecialdevelopmentcovenant.ThePartiesacknowledgethatalthoughthespecialdevelopmentcovenantsapplytotheProperties,portionsoftheProjectandPropertiesmay,inaccordancewiththePermittedTransferrequirements,besoldorotherwisetransferredtovarioussuccessorsandassignsoftheDeveloper.Accordingly,theCityagreesthatwithrespecttoenforcementofanyofthespecialdevelopmentcovenants,itisunderstoodandagreedthat,intheeventofabreachofanyofthespecialdevelopmentcovenants,theCitywillseektoenforcethose covenantsonlyagainstthethen-currentowner(s)ofthatportionoftheProperties whichisnotincompliancewithanyoneormorethe specialdevelopmentcovenants.NoownerofanyportionoftheProperties whichisincompliancewiththespecialdevelopmentcovenantsshallbeliableforthebreachofanyofthespecialdevelopmentcovenantsbyanyotherownerofanyotherportionoftheProperties;provided,however,thattheforegoingshallnotpreclude CityfromseekingdamagesagainstanypriorownerofanyportionofthePropertiesif,duringthetenureofsuchowner’sownership,suchowner’sportionofthePropertieswas notincompliancewithanyoneormoreofthespecialdevelopmentcovenants.5.8DeveloperCovenanttoDefendthisAgreement.TheDeveloperacknowledgesthattheCityisa“publicentity”and/or“publicagency”asdefinedunderapplicableCalifornia45635.OI000\29179005.13—34—
law.Therefore,theCitymustsatisfytherequirementsofcertainCaliforniastatutesrelatingtotheactionsofpublicentitiesandpublicagenciesincluding,withoutlimitation,CEQA.Also,asapublicbody,theCity’sactioninapprovingthisAgreementmaybesubjecttoproceedingstoinvalidatethisAgreementormandamus.TheDeveloperassumestheriskofdelaysanddamagesthatmayresulttotheDeveloperfromanythird-partylegalactionsrelatedtothe City’sapprovalofthisAgreementorthepursuitoftheactivities contemplatedbythisAgreement,evenintheeventthatanerror,omissionorabuseofdiscretionbytheCityisdeterminedtohaveoccurred.Ifathird-partyfilesalegalactionregardingtheCity’sapprovalofthisAgreementorthepursuitoftheactivitiescontemptatedbythisAgreement,eithertheCitymayterminatethisAgreementonthirty(30)dayswrittennoticetotheDeveloperoftheCity’sintenttoterminatethisAgreement,referencingthis Section5.8,withoutanyfurther obligationtoperformthetermsofthisAgreementandwithoutanyliabilitytotheDeveloper resultingfrom suchtermination,unlesstheDeveloperunconditionallyagreestoindemnifyanddefendtheCity,withlegalcounselreasonablyacceptabletotheCity,againstsuchthird-partylegalaction,asprovidedinthenextsentence. Withinthirty(30)daysofreceiptoftheCity’snoticeofintenttoterminatethisAgreement,asprovidedintheprecedingsentence,theDevelopermayoffertodefendthe City,withlegalcounselreasonablyacceptabletotheCity,inthethird-partylegalactionandpayallofthecourtcosts,reasonableattorneyfees,monetaryawards,sanctions, attorneyfeeawards,expertwitnessandconsultingfees,andtheexpensesofanyandallfinancialorperformanceobligationsresultingfromthedispositionofthelegalaction.AnysuchofferfromtheDevelopermustbeinwritingandreasonablyacceptabletotheCityinbothformandsubstance.Nothingcontainedinthis Section5.8shallbedeemedorconstruedtobeanexpressorimpliedadmissionthattheCityisliabletotheDeveloperoranyother personorentityfordamages allegedfromanyallegedorestablishedfailureoftheCitytocomplywithany statute,including,withoutlimitation,CEQA.TheDeveloper’sdefenseofsuchthirdparty actionsasdescribedinthisSection5.8shallconstituteanUnavoidableDelay.5.9EnvironmentalIndemnityoftheCitybytheDeveloper.TheDeveloperagrees,atitssolecostandexpense,tofullyindemnify,protect,holdharmless,anddefend(withcounsel selectedbytheDeveloperandreasonablyapprovedbytheCity)theCityanditscommissions,agents,attorneys,officers,employees,andauthorizedrepresentatives(collectively,the“IndemnifiedParties”),fromandagainstanyandallclaims,demands,damages,losses,liabilities,obligations, penalties,fines,actions,causesofaction,judgments,suits,proceedings,costs,disbursementsandexpenses,including,withoutlimitation,attorneyfees,disbursementsandcostsofattorneys,environmental consultantsandotherexperts,andallforeseeableandunforeseeabledamagesor costsofanykindorofanynaturewhatsoever(collectively,“EnvironmentalClaims”)thatmay,atanytime,beimposedupon,incurredorsufferedby,orclaimed,assertedorawardedagainst,theIndemnifiedParties,directlyorindirectlyrelatingtoorarisingfromanyofthefollowing“EnvironmentalMatters”existingoroccurringduringorarisingfromtheDeveloper’s ownershipofthePropertiesorconstructionoroperationoftheProject:5.9.1ThepresenceofHazardous Materialson,in,under,fromoraffectingalloranyportionofthePropertiesorthe Project.45635O1000\29179005.13—35—
5.9.2Thestorage,holding,handling, release,threatenedrelease,discharge,generation,leak,abatement,removalortransportationofanyHazardousMaterialson,in,under,fromoraffectingthePropertiesor theProject.5.9.3 Theviolationofanylaw,rule,regulation,judgment,order,permit,license,agreement,covenant,restriction, requirementor thelikebytheDeveloper,itsagentsorcontractors,relatingtoorgoverninginanywayHazardousMaterialson,in,under,fromoraffectingthePropertiesortheProject.5.9.4ThefailureoftheDeveloper,itsagentsorcontractors,toproperlycomplete,obtain,submitand/orfileanyandallnotices,permits,licenses,authorizations,covenantsandthelikerelatingtoHazardous Materialsinconnectionwith theDeveloper’sactivitiesonthePropertiesorregardingthe Project.5.9.5TheimplementationandenforcementbytheDeveloper,itsagentsorcontractorsofanymonitoring,notificationorotherprecautionarymeasuresthatmay,atanytime,becomenecessarytoprotect againsttherelease,potentialreteaseordischargeofHazardousMaterialson,in,under,fromoraffectingthePropertiesortheProject.5.9.6ThefailureoftheDeveloper,itsagentsorcontractors,incompliancewithallapplicableEnvironmentalLaws,tolawfullyremove,contain,transportordisposeofanyHazardousMaterials existing,storedorgeneratedon,in,underor fromthePropertiesortheProject.5.9.7Any investigation,inquiry,order,hearing,actionorotherproceedingby orbeforeanygovernmentalagencyaftertheCloseofEscrowinconnectionwithanyHazardousMaterialson,in,under,fromoraffectingthePropertiesortheProjectortheviolationofanyEnvironmentalLawrelatingtothePropertiesortheProject.5.9.8TheDevelopershallpaytotheIndemnifiedPartiesallcostsandexpensesincluding,withoutlimitation,reasonableattorneys’fees andcosts,incurredbytheIndemnifiedPartiesinconnectionwithenforcementoftheaforementionedenvironmentalindemnity.5.10Insurance.Inordertoprotectthe Cityanditscommissions,agents,attorneys,officers,employeesandauthorizedrepresentatives(collectively,“AdditionalInsureds”)againstanyandallclaimsandliabilityfordeath,injury,lossanddamage resultingfromtheDeveloper’sactionsinconnectionwith thisAgreement,theProperties,andtheProject,theDevelopershallsecureandmaintaintheinsurancecoverageasdescribedinandrequiredbythis Section5.10upontheCloseofEscrowandpriortoanyon-siteconstructionactivitiesatthePropertiesbyoronbehalfoftheDeveloper.TheDevelopershallpayanydeductiblesandself-insuredretentionsunderallinsurancepoliciesissuedinsatisfactionofthetermsofthisAgreement.DevelopershallretainallinsurancepoliciesassetforthinthisSection5.10untiltheissuanceoftheCertificateofCompletion.5.10.1Workers’CompensationInsuranceRequirement.TheDevelopershallsubmitwrittenproofthattheDeveloperisinsuredagainstliabilityforworkers’compensationtotheextentnecessaryinordertocomplywiththeprovisionsofSection3700of45635.O1000\29179005.13—36—
theLaborCode. ByexecutingthisAgreement,theDevelopermakesthefollowingcertification,requiredbySection1861oftheLaborCode:“Iamawareoftheprovisionsofsection3700ofthe LaborCodewhichrequireeveryemployertobeinsuredagainstliabilityforworkers’compensationortoundertakeself-insuranceinaccordancewiththeprovisionsofthatcode,andIwillcomplywithsuchprovisionsbeforecommencingtheperformanceoftheworkoftheAgreement.”TheDevelopershallrequireeachcontractorandsub-contractorperformingworkontheProjecttoprovideworkers’compensationcoverageforallofsttchcontractor’sorsub-contractor’semployees,unlessthecontractor’sorsub-contractor’semployeesarecoveredbyworkers’compensationinsuranceprovidedbytheDeveloper.Ifanyclassofemployeesengagedinworkor servicesperformedinconnectionwiththeProjectisnotcoveredbyLaborCodeSection3700,theDevelopershallprovideand/orrequireeachcontractororsub-contractortoprovideadequateworkers’compensationinsurancecoveringsuchemployees.Eachworkers’compensationpolicyprocuredpursuanttothisSection5.10.1shallcontainafullwaiverofsubrogationclauseinfavoroftheAdditionalInsureds.5.10.2LiabilityandPermanentInsuranceRequirements.5.10.2.1TheDevelopershallmaintaininfullforce andeffect,untiltheissuanceoftheCertificateofCompletion,subjecttoSection5.10.2.4,thefollowinginsurancecoverage:5.10.2.1.1CommercialGeneral LiabilityInsurancecoverage,including, butnotlimitedto,Premises-Operations,ContractualLiabilityInsurance(specificallycoveringallindemnityobligationsoftheDeveloperpursuanttothisAgreement),Products-CompletedOperationsHazards,PersonalInjury(includingbodilyinjuryanddeath),andPropertyDamageforliabilityarisingoutoftheconstructionoftheProjectand/ortheDeveloper’soperationsconcerningthePropertiesortheProject.ThecommercialgeneralliabilityinsurancecoverageshallhaveminimumlimitsforBodilyInjuryandPropertyDamageliabilityofTWOMILLIONDOLLARS($2,000,000)eachoccurrenceandFOURMILLIONDOLLARS($4,000,000)aggregate.5.10.2.1.2AutomobileLiability InsuranceagainstclaimsofPersonalInjury(includingbodilyinjuryanddeath)andPropertyDamagecoveringallowned,leased,hiredandnon-ownedvehiclesusedbytheDeveloperwithminimumlimitsforBodilyInjuryandPropertyDamageofONEMILLIONDOLLARS($1,000,000)eachoccurrenceandTWOMILLIONDOLLARS($2,000,000)aggregate.Suchinsuranceshallbeprovidedbyabusinessorcommercialvehiclepolicy.5.10.2.1.3IftheDeveloperhiresaconsultanttoprovidedesignservices,suchasarchitecturalorengineeringservicesinconnectionwiththeProject,oranyportionoftheProject,theDevelopershallrequireeachsuchconsultanttoprovideProfessionalLiability(ErrorsandOmissions)Insurance,for liabilityarisingoutof,orinconnectionwith,the45635O1000\29179005.13—37—
performanceofsuchdesignservices,withlimitsofnotlessthanONEMILLIONDOLLARS($1,000,000).5.10.2.1.4Uponacceptanceofthe Projectoranyportionthereof,fromeachcontractor,theDevelopershallmaintainFireandExtendedCoverageInsuranceontheProjectonablanketbasisorwithanagreedamountclauseinamountsnotlessthan100%ofthereplacementvalueofallportionsoftheProjectsoaccepted.5.10.2.2DuringtheconstructionoftheProject,theDevelopershallrequirethateachcontractorperformingworkontheProjectmaintainthefollowinginsurancecoverage,asspecifiedbelow,atalttimesduringtheperformanceofsaid work,ortheDevelopershallprovidefor suchcontractors“wrap”coverage,asspecifiedbelow,atalltimesduringtheperformanceofsaidwork:5.10.2.2.1TheDevelopershallmaintain Builder’sRiskInsurancetobewrittenonanAllRiskCompletedValueform,inanaggregateamountequalto100%ofthecompletedinsurablevalueoftheProjectorportionoftheProjectonwhichsuchcontractorisperformingwork.5.10.2.2.2Eachgeneralcontractorandeachsub-contractorshallmaintainCommercial GeneralLiability Insurancewith limitsofnottessthanONEMILL[ONDOLLARS($1,000,000)peroccurrenceandTWOMILLIONDOLLARS($2,000,000)aggregatetoprotecttheDeveloperduringtheconstructionoftheProjectfromclaimsinvolvingbodilyinjuryand/ordeathanddamagetothepropertyofothers.5.10.2.2.3Eachgeneralcontractorand eachsub-contractorshallmaintain AutomobileLiabilityInsuranceagainstclaimsofpersonalinjury(includingbodilyinjuryanddeath)andpropertydamagecoveringallowned,leased,hiredandnon-owned vehiclesusedintheperformanceofthecontractor’sobligationswithminimumlimits forbodilyinjuryandpropertydamageofONEMILLIONDOLLARS($1,000,000)eachoccurrenceandTWOMILLIONDOLLARS($2,000,000)aggregate.Suchautomobileliabilityinsuranceshallbeprovidedbyabusiness orcommercialvehiclepolicy.5.10.2.3 TheinsurancerequiredinSection5.10.2.1 andSection5.10.2.2aboveshallincludeendorsementsnamingtheAdditionalInsuredsasadditionalinsuredforliabilityarisingoutofthisAgreementandanyoperationrelatedtothisAgreement.5.10.2.4AnyinsurancecoveragerequiredunderthisAgreementshallnotbewrittenona“claims made”basis.Theapplicablecertificateofinsurancemustclearlyprovidethatthecoverageison an“occitrrence”basis.TherequirementsofthisSection5.10.2.4shallsurviveanyexpirationorterminationofthisAgreementandtherecordationoftheGrantDeedand anyCertificateofCompletion.5.10.2.5ReceiptbytheCityofevidenceofinsurancethatdoesnotcomplywiththeaboverequirementsshallnotconstituteawaiveroftheinsurancerequirementsofthisAgreement.45635.Ol000\29179005.13-3$-
5.10.2.6SubjecttoSection5.10.2.4,alloftheinsurancecoveragerequiredunderthisSection5.10shallbemaintainedbytheDeveloperoritscontractors,asrequiredbythe termsofthisAgreement,untiltheissuanceoftheCertificateofCompletionandshallnotbereduced, modified,orcanceledwithout,at least,thirty(30)dayspriorwritten noticetotheCity.Also,phrasessuchas“endeavorto”and“butfailuretomailsuchnoticeshallimposenoobligationorliabilityofany kinduponthecompany”shallnotbeincludedinthecancellationwordingofanycertificatesofinsuranceoranycoveragefortheAdditionalInsureds.TheDevelopershallimmediatelyobtainreplacement coverageforanyinsurance policy thatisterminated,canceled, non-renewed,orwhosepolicylimitsareexhaustedoruponinsolvencyoftheinsurerthatissuedthepolicy.5.10.2.7AllinsurancetobeobtainedandmaintainedbytheDeveloperunderthisSection5.10shallbeissuedbyacompanyorcompanieslistedinthethencurrent“Best’sKeyRating Guide”publicationwithaminimumofan“A:VI1”ratingandbeadmittedtoconductbusinessintheStateofCaliforniaby theStateofCalifornia DepartmentofInsurance.5.10.2.8TheCitywillnotacceptself-insuranceinsatisfactionoftheinsurancerequirementsofthis Section5.10.5.10.2.9AllinsuranceobtainedandmaintainedbytheDeveloperinsatisfactionoftherequirementsofthisAgreementshallbeprimarytoandnotcontributingtoanyinsurancemaintainedbytheAdditionalInstireds.5.10.2.10 Insurance coverageintheminimumamountssetforthinthisSection5.10shallnotbeconstruedtorelievetheDeveloperofany liability,whetherwithin,outside,orinexcessofsuchcoverage,andregardlessofsolvencyorinsolvencyoftheinsurerthatissues thecoverage;norshallitprecludetheAdditionalInsureds fromtakingsuchotheractionsasareavailabletothem underanyotherprovisionofthisAgreementorotherwiseatlaw.5.10.3FailurebytheDevelopertomaintainallinsurancecoveragerequiredbythisSection5.10ineffectshallbe anEventofDefaultbytheDeveloper.TheCity,atitssoleoption,mayexerciseanyremedy availabletotheminconnectionwithsuchanEventofDefault.Alternatively,theCitymay,atitssoleoption,purchaseanysuchrequiredinsurancecoverageandthe Cityshallbeentitledtoimmediate paymentfromtheDeveloperforanypremiumsandassociatedcostspaidby theCityforsuchinsurance coverage.AnyelectionbytheCitytopurchaseor nottopurchaseinsuranceotherwiserequiredtobecarriedbytheDevelopershallnotrelievetheDeveloperofitsobligationtoobtainandmaintainthe insurance coveragerequiredbythisAgreement.ARTICLEVIPROJECTFINANCING6.1RecordationofConstructionLoanDeedofTrust.TheDevelopercovenantstotheCitythat,ifDeveloperhasarrangedanysecuredConstructionLoan,theDevelopershallcause theConstructionLoan DeedofTrust(s)toberecordedagainstthePropertieswithinsixty(60) daysfollowingtheCloseofEscrow.45635.O1000\29179005.13—39—
6.2UnauthorizedLiens.ExceptasprovidedinSection6.3,untilrecordationoftheCertificateofCompletion,theDevelopershallnotrecord,andshalt notallowtoberecorded,againsttheProperties,oranyportionthereof,anyLiennotexpresslyauthorizedbythisAgreement.UntilrecordationoftheCertificateofCompletion,theDevelopershallremove,orshalt haveremoved,anyunauthorizedLienmadeorrecordedagainstthePropertiesoranyportionoftheProperties,orshallassurethesatisfactionthereoftothesatisfactionoftheCity.AfteronehcLndredtwenty(120)calendardayspriorwrittennoticetotheDeveloper,theCityshallhavetheright,butnottheobligation,tosatisfyanyunauthorizedLienmadeorrecordedpriortorecordationoftheCertificateofCompletionandreceivereimbursementfromtheDeveloperforanyamountspaidorincurredinsatisfyinganysuchLien,upondemand.NothinginthisSection6.2,though,shallrequiretheDevelopertopayormakeprovisionsforthepaymentofanytax,assessment,lien,mechanic’slienorthelikeoranyotherlienorcharge thattheDeveloperisintheprocessofcontestingthevalidityoramountthereof,ingoodfaith,andsolongassuchcontestshallnotsubjecttheProperties,oranyportionthereof,toforfeitureorsale.6.3Ri%htsofLendersandCityRe%ardingPermittedLoansand Liens.6.3.1TheCityshallhavetherightofreasonablereviewandapprovalofanyLenderfromwhichtheDeveloperproposestoobtainanyLoanthatwillbesecuredbyaLienagainstthePropertiesoranyportionthereofTheCityshallnotunreasonablywithhold,conditionordelayitsapprovalofanyproposedLenderorLoanandwillnotwithhold,conditionordelaysuchapprovalunlesssuchLenderorLoanwillposeasignificant riskofimpedingDeveloper’scompletionoftheProjectasrequiredpursuanttothisAgreement.Inmakingsuchadetermination,Citymayconsiderwhetheror notthetermsoftheLoanareoverlyburdensomesoastomakeitsubstantiallyunlikelythatDeveloperwillbeabletocompletetheProjectasrequiredpursuanttothisAgreementandwhateffect,ifany,anychangesrequestedbytheLendertoeitherthisAgreementor anyoftheexhibitstothisAgreementmayhaveupontheCity’srightsandremedieshereunder.Inconnectiontherewith,inanynoticerequestingapprovalofaproposedLenderandLoan, theDevelopershallincludeastatementidentifyinganyamendments,modifications,orother changestothisAgreementoritsexhibitswhichtheproposedLenderwillrequestinconnectionwiththeDeveloper’sobtainingoftheLoan.TheCityagreestoreasonablyconsider,butshallnotbeobligatedtoaccept,anyamendment,modification,orotherchangetothis AgreementoranyoftheexhibitstothisAgreementwhich materiallyrestricts,diminishes,orburdenstheCity’srightsand remedies.6.3.2WhenevertheCitydeliversanynoticeordemandtotheDeveloperregardinganybreachordefaultbytheDeveloperunderthisAgreementthat,ifnottimelycuredbytheDeveloper,wouldentitletheCitytoterminatethisAgreement,theCityconcurrentlyshallsendacopyofsuchnoticetoeachaffectedLenderofwhichtheCityhasreceivednoticeandacontactaddressfortransmittalofsuchnotices.WhenevertheCitydeliversanynoticeordemandtotheDeveloperregardinganybreachordefaultbytheDeveloperunderthisAgreementthat,ifnot timelycuredbytheDeveloper,wouldentitletheCitytoexercisetheCityTerminationPowerastoalloranyportionofthePropertiespursuanttoSection7.6,the CityshallatthesametimesendacopyofsuchnoticeordemandtoeachaffectedLenderofwhichtheCityhasreceivednoticeandacontactaddressfortransmittalofsuchnotice.EachaffectedLenderreceivingacopyofanysuchnoticeshallhavetheright,atitsoption,tocommencethecureorremedyofanysuchdefaultoftheDeveloperandtodiligentlyandcontinuouslyproceedwith suchcure or45635Ot000\29179005.13—40—
remedy,withinonehundredeighty(120)calendardaysfollowingitsreceiptofnoticeofthedefaultorsuchlongerperiodtowhichtheDevelopermaybeentitledhereunder.Inanyevent,ifadefaultoftheDeveloperunderthisAgreementcannot,withdiligence,beremediedorcured,ortheremedyor cureofsuchdefault cannotbecommenced, withinsuch onehundredeighty(180)calendardayperiod,theLendershallhavesuchadditionaltimeasisreasonablynecessarytoremedyorcuresuchdefaultoftheDeveloper,butinnoeventbeyondthreehundredsixtyfive(365)calendardaysfollowingitsreceiptofnoticeofthedefault.IfsuchdefaultoftheDevelopercanonlyberemediedorcuredbytheLenderuponobtainingpossessionoftheProperties,thenLender’scurerightastosuchmattersshallbesubjecttotheconditionthattheLenderseekstoobtainpossessionofthePropertieswithreasonable diligenceandcontinuitythroughareceiverorotherwise,and then,upon theLender’sobtainingpossessionoftheProperties, the Lender’scurerightassetforthaboveshaltcommence(subjecttoextinguishmentoftheCityTerminationPoweruponforeclosureiftheLenderhasrequiredasubordinationthereofasprovidedinSectionError!Referencesourcenotfound..NothingcontainedinthisAgreementshallbedeemedtopermit orauthorizeanyLendertoundertakeorcontinuetheconstructionofanyportionofthe Projectpriortoacquiring titletotheProperties(beyondtheextent necessarytoconserveorprotectimprovementsorconstructionalreadymade),withoutexpresslyassumingtheDeveloper’sobligationsunderthisAgreementbywrittenagreementapprovedbytheCity,inwhichtheLenderagreestocomplete,inthemannerprovidedinthisAgreement,theimprovementsontheportionofthePropertiestowhichtheLienortitleoftheLenderrelates,whichapprovalshallnotunreasonablybewithheld,delayed,orconditionedbytheCity.6.3.3Inanycase where,onehundredeighty(180)calendardaysafterdeliveryofnoticeofadefaultoftheDeveloperunderSection6.3.2,anaffectedLenderhasnotexercised theoptionsand/orrightsprovidedinSection6.3.2toconstructtheapplicableportionsoftheProject,orhasexercisedtheoption,buthasnotproceededasset forthinSection6.3.2,theCityshallhavetheoption,intheCity’ssoleandabsolutediscretion,topurchasetheLoanofsuchLenderand anysecurity interestofscichLenderunderitsLoanDocumentsbypaymenttotheLenderoftheamountoftheunpaidLoan,includingprincipal, accruedandunpaid interest,latecharges, costs,expensesandotheramountspayabletotheLenderbythe Developer underitsLoanDocumentsand,iftheownershipofthePropertiesoranyportionofthePropertieshaspreviouslyvestedinsuch Lender,theCity,atitsoptionbutnotasitsobligation,shallbeentitledtoaconveyanceofany titleorinterestinthePropertiesvestedinsuchLenderfromsuchLender.TheCityacknowledgesthattheprovisionsofthisSection6.3.2 willbeinapplicableastoaLender whohasrequiredtheCitytowaivesuchprovisionsunderasubordinationagreementasprovidedinSectionError!Referencesourcenotfound..6.3.4Afterexpirationoftheonehundredeighty(180)calendardayperiodprovidedforinSection6.3.3,anyaffectedLendermaydemand,inwriting,thattheCityacttoexercise orforegotheoptiongrantedinSection6.3.3.IftheCityfailstoexercisetherightgrantedinSection6.3.3withinsixty(60)calendardaysfromthe dateoftheCity’sreceiptofsuchwritten demandfromaLender,theCityshallbeconclusivelydeemedtohavewaiveditsrightofpurchaseofthatLender’sinterestpursuanttoSection6.3.3.6.3.5DevelopershallmakecommerciallyreasonableeffortstohavetheLenderincludeintheloandocumentsforeachLoanreasonablerightstotheCitytocttredefaults45635.O1000\2917900513—41—
byDeveloperthereunder, includingrequestingthattheLoanDocumentsprovidethatintheeventofadefaultorbreachbytheDeveloperunderanyLoanDocuments,wheretheLenderhasnotexerciseditsoptiontocompletetheProject(orapplicableportionthereof) underSection6.3.2,theCitymaycurethedefaultoftheDeveloperundertheapplicableLoanDocuments,butisundernoobligationtodoso,priortocompletionofanysaleorforecLosureofthePropertiesoranyportionthereofundertheapplicableLoanDocuments.TheCityshallbeentitledtoreimbursementfromtheDeveloperofallcostsandexpensesincurredbytheCityincuringanydefaultoftheDeveloper underanyLoanDocuments.FailuretoincludecurerightsthataffordtheCityatleasttwenty-oneadditional(21)daysformonetarydefaultsandforty-five(45)additionaLdaysforotherdefaults thatarereasonablycurableby theCity,ineachcase beyondthecorrespondingcurerightsofDeveloperunderaLoan,shallbeareasonableground forthe CitytorejectsuchLoanunderSection6.3.2,above.6.3.6InanycasewhereaLenderhasacquiredtitletoallor anyportionofthePropertiesorProjectthroughforeclosure,deedinlieuofforeclosure,oranyothermeans,andsuchLenderproposestoenterintoanagreementtotransferthePropertiesand/orProject,oranyportionthereof,toathirdpartytransferee,theLendershallprovidetheCity withwrittennoticethereof,whichnoticeshallincludeareasonablydetaileddescriptionofthetermsandconditionsoftheproposedtransaction.The Cityshallhavetheoption, butnottheobligation,topurchasethePropertiesand/orProjectonsubstantiallythesametermsasdescribedintheLender’snotice,whichoption,ifever,shallbeexercisedbywrittennoticefromtheCitytotheLenderwithintwenty(20)daysfollowingtheCity’sreceiptoftheLender’snotice.IftheCityelectsnottoexerciseitsoption,then,subjecttoSection8.2.2,theLendermaycompletethetransactiondescribedinitsnotice,providedthatsuchtransactionisclosedonmateriallyidenticaltermsandconditionsasthosedescribedintheLender’snoticetotheCity.IftheLenderandthirdpartytransfereedesiretomateriallyamendthetermsoftheirproposedtransaction, theLendershallgivetheCitywrittennoticeoftheproposedmodificationsandtheCityshallonceagainhavetherighttoelecttoacquirethePropertiesandtheProject(or portionthereof)ontermsandconditionssubstantiallysimilartothosemodifiedterms.If,foranyreason,theproposedtransactionbetweentheLenderandthird partytransfereefailstoclosewithintwohundredforty(240)daysfollowingthe dateonwhichtheCityfirstreceivesnoticeoftheproposed transaction(ornoticeoftheproposedmodifiedtransaction, whicheverislater),thentheCityonceagainhavetherighttoelecttoacquirethePropertiesand/orProjectpursuanttothisSection6.3.6.TheCityacknowledgesthattheprovisionsofthis Section6.3.6willbeinapplicableastoaLenderwhohasrequiredtheCitytowaivesuchprovisionsunderasubordinationagreementasprovidedinSectionError!Referencesourcenot found.orotherwise.6.3.7TherestrictionssetforthinthisSection6.3shallremainineffectonlyuntiltherecordationoftheCertificateofCompletionfortheProject.6.3.8InadditiontotheprovisionsforthebenefitofLendersinSectionError!Referencesourcenot found.,CityagreestoconsidersuchrevisionstothisSection6.3asaLendermayreasonablyrequest.45635.O1OOO29179005,13—42—
ARTICLEVIIDEFAULTS.REMEDIESAN])TERMINATION7.1Defaults-General.7.1.1SubjecttoanyextensionsoftimeprovidedforinthisAgreement,failureordelaybyanyPartytoperformanytermorprovisionofthisAgreementshaltconstitutean“EventofDefault”underthisAgreement;provided,however,thatifaPartyotherwiseindefaultcommencestocure,correctorremedysuchdefault,withinthirty(30)calendardaysafterreceiptofwrittennoticefromtheinjuredPartyspecifyingsuchdefault,andshalldiligentlyandcontinuouslyprosecutesuchcure,correctionorremedytocompletion(andwhereanytimelimitsforthecompletionofsuchcure,correctionorremedyarespecificallysetforthinthisAgreement,thenwithinsaidtimelimits),such Partyshall notbedeemedtobeindefaultunderthisAgreementandnoEventofDefaultshallbedeemedtohaveoccurred.7.1.2TheinjuredPartyshallgivewrittennoticeofdefaulttothePartyindefault,specifyingthedefaultcomplainedofbythenon-defaultingParty. Delayingivingsuchnoticeshallnotconstituteawaiverofanydefaultnorshallitchangethetimeofdefault.7.1.3Any failureordelaysbyanyPartyinassertinganyoftheirrightsand/orremediesas toanydefaultshallnotoperateasawaiverofanydefaultorofanysuchrightsorremedies.DelaysbyanyPartyinassertinganyofitsrightsand/orremediesshallnotdeprivethatPartyofitsrighttoinstituteandmaintainanyactionsorproceedingsthatitmaydeemnecessarytoprotect,assertorenforceanysuchrightsorremedies.7.1.4InadditiontootheractsoromissionsoftheDeveloperthatmaylegallyorequitablyconstituteadefaultorbreachofthisAgreement,the occurrenceofanyofthefollowingspecificevents,priortotheissuanceofaCertificateofCompletionfortheProject,shallconstitutean“EventofDefault”underthisAgreementand shallnotbesubjecttothenoticeandcureprovisionsofSection7.1.1:7.1.4.1AnymaterialdefaultbytheDeveloperunderanyLoanDocumentsforanypurposeorreasonthat remainsuncuredfollowinganyapplicablenoticeandexpirationofanyapplicablecureperiodundersuchLoanDocuments.7.1.4.2AnyrepresentationorwarrantymadetotheCitybytheDeveloperinthisAgreementhasbeenmateriallyfalseormisleadingatthetimemade.7.1.4.3TheDeveloperfailstomakeanypaymentordepositoffitndsrequiredunderthisAgreementorto payanyotherchargesetforthinthisAgreement,followingseven(7)days’writtennoticetotheDeveloperfromtheCityofsuchfailure.7.1.4.4TheconstritctionoftheProjectisdelayedorsuspendedforaperiodinexcessofthatpermittedunderSection4.3ortheDeveloperhasnotachievedCompletionofConstructionbythetimerequiredpursuanttothisAgreement.45635.O1000\29179005.13-43-
7.1.4.5Thereoccursanyeventofdissolution,reorganizationorterminationoftheDeveloperthatadverselyandmateriallyandadverselyaffectstheoperationorvalueofthePropertiesortheProject,andsucheventisnotcorrectedwithinthetimeprovidedinwithinthirty(30) daysfollowingwrittennoticeofsucheventfromtheCitytotheDeveloper.7.1.4.6TheDeveloperTransfersitsinterestinthisAgreement,theProperties,ortheProject,or anyportionthereof,whethervoluntarilyorinvoluntarilyorbyoperationoflaw,inviolationofthetermsandconditionsofthisAgreementandsuchactionisnotcuredwithintheperiodprescribedinSection8.2.2.7.1.4.7TheDeveloperbecomesinsolventorareceiverisappointedtoconducttheaffairsoftheDeveloperunderstateorfederallaw.7.1.4.8TheDeveloper’slegalstatusasalimitedliabilitycompanyauthorizedbytheSecretaryofStateofthe StateofCaliforniatotransactbusinessinCaliforniaissuspendedorterminated.7.2LIQUIDATEDDAMAGESTOTHECITY.UPON THEOCCURRENCEOFANEVENTOFDEFAULTBYTHEDEVELOPERUNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROW,THECITYMAY,SUBJECTTOTHEDEVELOPER’SCURERIGHTSUNDERSECTION7.1,CANCELTHEESCROWPURSUANTTOSECTION3.9,ANDUPONCANCELLATIONOFTHEESCROW,THECITYSHALLBERELIEVEDOFANYOBLIGATIONUNDERTHISAGREEMENTTOSELLORCONVEYTHECITYPROPERTYORANY PORTIONTHEREOFANDANYSUCHESCROWCANCELLATIONSHALLBEWITHOUTANYLIABILITYOFTHECITYTOTHEDEVELOPERORANYOTHERPERSONARISINGFROMSUCHACTIONS.THE CITYANDTHEDEVELOPERACKNOWLEDGETHATITISEXTREMELYDIFFICULTANDIMPRACTICAL,IFNOTIMPOSSIBLE,TOASCERTAINTHEAMOUNTOFDAMAGESTHATWOULDBESUFFEREDBYTHECITYINTHEEVENTOFACANCELLATIONOFTHEESCROWDUETOTHEOCCURRENCEOFANEVENTOFDEFAULTBYTHEDEVELOPERUNDERTHISAGREEMENTPRIORTOTHE CLOSEOFESCROW.HAVINGMADEDILIGENTBUTUNSUCCESSFULATTEMPTSTOASCERTAIN THEACTUALDAMAGESTHECITYWOULDSUFFERINTHEEVENTOFACANCELLATIONOFTHEESCROWDUETOTHEOCCURRENCEOFANEVENTOFDEFAULTBYTHEDEVELOPERUNDERTHISAGREEMENTPRIORTOTHE CLOSEOFESCROW,THECITYANDTHEDEVELOPERAGREETHATAREASONABLEESTIMATEOFTHECITY’SDAMAGESINSUCHEVENTISTHE TOTALSUMOFTHEDEPOSIT(THE“LIQUiDATEDDAMAGESAMOUNT”).THEREFORE,UPONTHECANCELLATIONOFTHEESCROWBYTHE CITYDUETOTHEOCCURRENCEOF ANEVENTOFDEFAULTBYTHEDEVELOPER UNDERTHISAGREEMENTPRIORTOTHECLOSEOFTHEESCROW,ESCROWHOLDERSHALLIMMEDIATELYCANCELTHE ESCROWANDPAYTHELIQUIDATEDDAMAGESAMOUNTTOTHECITY,INPART,FROMTHEEARNESTMONEYDEPOSITWITHINFIVE(5)DAYSOFESCROWCANCELLATION.RECEIPTOFTFIELIQUIDATEDDAMAGESAMOUNTSHALLBETHECITY’SSOLEANDEXCLUSIVEREMEDYUPONTHECANCELLATIONOFTHEESCROWDUETOTHEOCCURRENCEOFANEVENTOFDEFAULTBYTHEDEVELOPERUNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROW.45635.O1000\29179005.13—44—
CITY’SINITIALS:DEVELOPER’SINITIALS:____7.3LIMITATIONONRECOVERYOFDAMAGESAM)OTHERREMEDIES.INTHEEVENTOFADEFAULTBYTHECITYUNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROWWHICHDEFAULTTHECITYDOESNOTCUREWITHINTHIRTY(30)DAYSAFTERRECEIPTFROMDEVELOPEROFWRITTENNOTICEOFSUCHDEFAULT,THEDEVELOPERMAY(I)TERMINATETHISAGREEMENT,[NWHICHEVENTTHEPARTIESSHALLCANCELTHEESCROWPURSUANTTOSECTION3.9,ANDDEVELOPERSHALLBERELIEVEDOFANYOBLIGATIONUNDERTHISAGREEMENTTOPURCHASEORACCEPTTITLETOTHEPROPERTY,ANDANYESCROWCANCELLATIONCHARGESSHALLBEPAIDBYTHECITY,OR(II)PURSUESPECIFICPERFORMANCEOFTHISAGREEMENTASMAYAVAILABLEUNDERAPPLICABLELAW.IFTHEDEVELOPERCHOSESTOTERMINATETHEAGREEMENT,THEDEVELOPER’SRECOVERYOFDAMAGESAGAINSTTHECITYSHALLBELIMITEDTORECOVERINGANYAMOUNTSACTUALLYEXPENDEDBYTHEDEVELOPER[NREASONABLERELIANCEONTHISAGREEMENTPRIORTOTHEDATEOFTHEOCCURRENCEOFTHEEVENTOFDEFAULTBYTHE CITY,NOTTOEXCEEDONEHUNDREDFIFTYTHOUSANDDOLLARS($150,000)INTHEAGGREGATEWHENCOMBINEDWITHANYDAMAGESPAIDTOBUYERPURSUANTTOTHESAPROPERTYAGREEMENT.THEDEVELOPERWAIVESANYRIGHTTORECOVERANYOTHERSUMSFROMTHECITYARISINGFROMANEVENTOFDEFAULTBYTHECITY.IFTHEDEVELOPERCHOSESTOPURSUESPECIFICPERFORMANCE,DEVELOPERSHALLNOTBEENTITLEDTORECOVERMONETARYDAMAGESFROMTHECITY. THEDEVELOPERACKNOWLEDGESTHEPROTECTIONSOFCIVILCODE SECTION1542RELATIVETOTHEWAIVERANDRELEASECONTAINEDiN THISSECTION7.3,WHICHCIVILCODESECTIONREADSASFOLLOWS:“AGENERALRELEASEDOESNOTEXTENDTOCLAIMSWHICHTHECREDITORDOESNOTKNOWORSUSPECTTOEXISTINHISORHERFAVORATTHE TIMEOFEXECUTINGTHERELEASE,WHICH,IFKNOWNBYHIMORHER,MUSTHAVEMATERIALLYAFFECTEDHISORHERSETTLEMENTWITHTHEDEBTOR.”BYINITIALINGBELOW,THEDEVELOPERKNOWINGLYANDVOLUNTARILYWAIVES THEPROVISIONSOFSECTION1542SOLELYINCONNECTIONWITHTHEWAIVERSANDRELEASESOFTHISSECTION7.3./DEVELOPER’SINITIALS_________[NCONNECTIONWITHTHEWAIVERSOFTHISSECTION7.3,THEDEVELOPERFURTHERWAIVESTHERIGHTTORECORDANOTICEOFPENDENCYOFACTIONAGAINSTALLORANYPORTIONOFTHE.45635.O1000\29179005.13-45-
7.4Legal Actions.7.4.1ExceptasotherwiseprovidedbySection7.2or7.3(asapplicable),eitherPartymayinstitutelegalactiontocure,correctorremedyanydefault,torecoverdamagesforanydefault,ortoobtainanyother remedyavailabletothatPartyunderthisAgreementoratlaworinequity.Suchlegalactions mustbeinstitutedintheSuperiorCourtoftheStateofCaliforniainandfortheCountyofLosAngeles,California,inanyotherappropriatecourtwithintheCountyofLosAngeles,California.7.4.2Theproceduralandsubstantivelawsofthe StateofCaliforniashaLlgoverntheinterpretationandenforcementofthisAgreement,without regardtoconflictsofLawsprinciples.ThePartiesacknowledgeandagreethatthisAgreementisenteredinto,istobefullyperformedinandrelatestorealpropertylocatedintheCityofAzusa,CountyofLosAngeles,California.7.5RightsandRemediesareCumulative.Exceptasotherwise expresslystatedinthisAgreement,therightsandremediesofthePartiessetforthinthisARTICLEVIIarenon-exclusiveandcumulative,andtheexercisebyanyPartyofone or moreofsuchrightsorremediesshallnotprecludetheexercisebyit,atthesameordifferenttimes,ofanyotherrightsorremediesforthesamedefaultor anyotherdefaultbytheotherParty(ies).7.6CityPowerofTerminationRegardingtheProperties.7.6.1TheCity herebyreservesapowerofterminationpursuanttoCivilCodeSections885.010,etandsubjecttotheprovisionsofthisSection7.6(the“CityTerminationPower”),exercisablebytheCity,initssoleandabsolutediscretion,uponsixty(60)calendardayswrittennoticetotheDeveloperreferencingthisSection7.6,toterminatethefeeinterestoftheDeveloperintheProperty and/oranyimprovementstothePropertyandrevestsuchfeetitleintheCityandtakepossessionofalloranyportionofsuchrealpropertyandimprovements,without compensationtotheDeveloperexceptassetforthinSection7.6.5orotherwiserequiredbyapplicablelaw,upon theoccurrenceofaTerminationDefault(asdefinedbelow)bytheDeveloperfollowingtheCloseofEscrowandpriortotheCompletionofConstruction.7.6.2Beforedeliveringthesixty(60)calendar daywrittennoticespecifiedSection7.6.1(the“InitialTerminationNotice”),Cityshallhavereasonablydeterminedthat(i)oneormoreEvent(s)ofDefaulthasoccurredandiscontinuing,(ii)oneormoreofsuchEvent(s)ofDefaultconstitutesaTerminationDefault,(iii)DeveloperisnolongerabletocompletetheProjectinsubstantiallythemannerrequiredpursuanttothisAgreementandthatinsteadanotherdeveloperwouldbebetterablethanDevelopertocompletetheProjectonterms(including,withoutlimitation,thetimingofCompletionofConstruction)asclosetothosesetforthinthisAgreementasCitydeterminestobeappropriateinlightofsuchTerminationDefault(s)byDeveloper;and(iv)itisinbestinterestsofthehealth,safetyandwelfareoftheCity’staxpayersandresidentsthatCityexercisetheCityTerminationPower.forthepurposesofthisAgreementa“TerminationDefault”shallmeananEventofDefaultconsistingof(x)anactoffraudorintentionaldishonestybyDeveloper’smanagementpersonnelindealingwiththeCityinconnectionwith the Project;(y)Developer’sfallingbehindbymore thanonehundred45635.OIOOO29l79OO5.13—46—
eighty(180)daysinthetimeschedulefortheProjectwithoutreasonablecausesuchthatCityreasonablydeterminesthattheCompletionofConstructionwillnotbeaccomplisheduntilatleastonehundredeighty(180) daysafterthetimespecifiedintheScheduleofPerformanceasitmayhavebeenmodified,or(z)Develope?scommittingaparticulartypeofEventofDefaultatleastthree(3)timesduringany 12-monthperiodastoeachofwhich theCityhasgivenDeveloperwrittennoticeofsuchEventofDefault.City’sInitialTerminationNoticeshallspecifytheTermination Default(s)bytheDevelopertriggeringtheCity’sexerciseofCityTerminationPower.TheCityshaltproceedwithitsremedysetforthinSection7.6.1onlyiftheDevelopercontinuesinsuchdefaultforaperiodofsixty(60)calendardaysfollowingitsreceiptoftheInitialTerminationNoticeor,uponcommencingtocuresuchTerminationDefault,failstodiligentlyandcontinuouslyprosecutesaidcuretosatisfactoryconclusion.Inaddition,beforeexercisingitsremedytocompletetheCityTerminationPowerunderthis Section2.5,Cityshall,uponDeveloper’srequest,whichmustbedelivered,ifat all,withinfifteen(15)daysfollowingitsreceiptoftheInitialTerminationNotice,meetandconferwithDeveloper’srepresentativesforaperiodofthirty(30)days.Duringsuchtime,thePartiesshallmeetasoftenasreasonablyrequestedbyanyPartytonegotiate,ingoodfaith,methodsandmeansbywhichtheTerminationDefault(s),ifnotcuredorcurable,maybemitigatedorotherwiseaddressedbyDevelopersothattheProjectcanbecompletedonterms(including,withoutlimitation,thetimingofCompletionofConstruction)asclosetothosesetforthinthisAgreementasCitydeterminestobeappropriateinlightofsuchTerminationDefault(s)byDeveloper.Nothingherein shaltconstituteanagreement,representation,orwarrantybyanyParty thatanacceptablenegotiatedresolutionwillbereached,norshaltCitybeobligatedtoexpendanyout-of-pocketfundsorundertakeanyotheractionwhatsoeverwithrespecttocuringanyEventofDefaultbyDeveloper.If,attheendofsuchthirty(30)dayperiod,thePartieshavenotbeenabletoagreeonamutuallyacceptablemethodofmitigatingorotherwiseaddressingaTerminationDefaultthatmaynotbecuredorbecurable,thenCitymaycontinuetowardexercisingtheCityTerminationPowerpursuanttothisSection7.6withthePartiesreservingallrights.BeforeexercisingtheCityTerminationPower,however,theCityshalldeliveranadditionalwrittennoticeofitselectiontodosotoDeveloperatleast60daysaftertheCity’sprior deliveryofInitialTerminationNoticeandsolongasanTerminationDefaultcontintiestoexist(the“TerminationElectionNotice”).7.6.3TherightsoftheCity underthisSection7.6shallbesubjectandsubordinateto,shallbelimitedbyandshallnot defeat,renderinvalidorlimit:7.6.3.1 EachLienrecordedagainstthe PropertyandspecificallyauthorizedbythisAgreementasaPermitted Transfer;7.6.3.2Anyleases,declarationsofcovenants,conditionsandrestrictions,easementagreementsorotherrecordeddocumentsorinterestsapplicabletothePropertyandspecificallyauthorizedbythisAgreementasaPermittedTransfer.7.6.3.3furthernotwithstandingtheprovisionsofthisSection7.6,totheextentrequiredbyanyLender,theCityshallexecuteanddeliveracommerciallyreasonablesubordinationagreementpursuanttowhichtheCityagreestosubordinatetheCityTerminationPowerandallofCity’srightsunderthisSection7.6(andsimilarprovisionsintheGrantDeedoranyotherinstrument),totheLiensecuringsuchLoansuchthattheCityTerminationPowerandallsuchrightswillbeextinguishedintheeventofanyforeclosureofstichLien.Inaddition,45635.0l00029179005.13—47—
suchsubordination agreementshallwaivetheCity’srightsunderSection7.6and/orSection7.6totheextent requiredbytheLender.7.6.4UpontheCity’sexerciseofitspowerofterminationpursuanttothisSection7.6,theDeveloperoritssuccessorsorassignsshallconveybygrantdeedtothe CitytitletotheProperty,asspecifiedintheCity’s noticepursuanttoSection7.6.1,andallimprovementsthereon,inaccordancewithCivil Code Section1109,assuchcode section mayhereafterbeamended, renumbered,replacedorsubstituted.SuchconveyanceshallbedutyacknowledgedbytheDeveloperandanotaryinamannersuitable forrecordation.TheCitymayenforceitsrightspursuanttothis Section7.6bymeansofaninjunctiverelieforforfeitureoftitleactionfiledinanycourtofcompetentjurisdiction.7.6.5UpontherevestingintheCityoftitle totheProperty,whetherbygrantdeedorcourtdecree,theCityshallexerciseitsreasonablegood faitheffortstoresellthePropertyatitsthenfairmarket value,assoon andinsuchmannerastheCityshalt,initssolediscretion,findfeasibleandconsistentwiththeobjectivesoftheCity’sGeneralPlan, to aqualifiedandresponsiblepersonor persons(asreasonably determinedbytheCity)whowillassumetheDeveloper’sobligationstobeginand/orcomplete and/oroperatethatportionoftheProjectlocatedonthe Property, orsuchotherreplacementdevelopmentacceptabletotheCity,initssoleandabsolutediscretion.Uponany suchresaleoftheProperty(oranyportion thereof),theproceedstothe Cityfrom such saleshallbeappliedasfollows:7.6.5.1First,topay anyandallamountsrequiredtorelease/reconveyanyLienrecordedagainstalloranyportionoftheProperty;and7.6.5.2Second,toreimbursethe CityonitsownbehalforonbehalfoftheCityforallactual internal andthird-partycostsandexpenses previouslyorcurrentlyincurredbytheCityrelatedtothe Property, theProject,orthisAgreement,including,butnotlimitedto,customaryandreasonablefeesorsalariestothird-partypersonnelengagedinsuch actions,inconnectionwith therecapture,managementandresaleofthePropertyoranypart thereof;alltaxes,assessmentsandutilitychargespaidbytheCitywithrespecttothePropertyorportionthereof;anypaymentmadeornecessarytobemadetodischargeorpreventfromattachingorbeingmadeanysubsequentencumbrancesorliensduetoobligationsincurredbytheDeveloperwithrespecttotheacquisitionofthePropertyortheconstructionoftheProject; andamountsotherwiseowingtotheCitybytheDeveloperoritssuccessorsorassignspurstianttothetermsofthisAgreement;and7.6.5.3Third,totheextentthatanyproceedsfromsuchresaleare,thereafter,available,takingintoaccountanypriorencctmbranceswithaclaim thereto, toreimbursetheDeveloper,oritssuccessorsininteresttothe equaltothesumof:(I)thePurchasePrice;and(2)thethird-partycostsactuallyincurredandpaidbytheDeveloperregardingthedevelopmentoftheProjectlocatedontheProperty,including,btttnot limitedto,prorata costsofcarry,taxes,andotheritemsassetforthinacostcertificationtobemadebytheDevelopertotheCitypriortoanysitchreimbursement,whichcertificationshallbesubjecttotheCity’sreasonableapproval;provided,however, thattheDevelopershallnotbeentitledtoreimbursementforanyexpensestotheextentthatsuchexpensesrelatetoanyloans,Liensor45635.Ol000\29179005.13—48—
otherencumbrancesthatarepaidby theCitypursuanttotheprovisionsofsub-sections7.6.5.1or7.6.5.2above.7.6.5.4AnyportionoftheproceedsfromtheresaleofthePropertyremainingaftertheforegoingapplicationsshallberetainedbytheCityastheirsoleandexclusiveproperty.7.6.6IMMEDIATELYFOLLOWINGTHEEXPIRATIONOFTHIRTY(30)DAYSAFTERTHECITY’SGIVINGOFTHETERMINATIONELECTIONNOTICEPURSUANTTOINSECTION7.6.1,ABOVE,THECITY,ITSEMPLOYEESANDAGENTSSHALLHAVETHERIGHTTOREENTERANDTAKEPOSSESSIONOFTHEPROPERTYANDANYIMPROVEMENTSTHEREON,WITHOUTFURTHERNOTICEORCOMPENSATIONTO THEDEVELOPER(EXCEPTASOTHERWISEPROVIDEDINSECTION7.6.5).BYINITIALINGBELOW,THEDEVELOPERHEREBYEXPRESSLYWAIVES,TOTHEMAXIMUMEXTENTALLOWEDBYLAW,ANYANDALLRIGHTSTHATTHEDEVELOPERMAYHAVEUNDERCALIFORNIACIVILCODESECTION791AND CALIFORNIACODEOFCIVILPROCEDURESECTION1162,ASTHOSESTATUTESMAYBEAMENDED,REPLACED,RENUMBEREDORSUBSTITUTED,ORUNDERANYOTHERSTATUTESORCOMMONLAWPRINCIPLESOFSIMILAREFFECT.DEVELOPER’SINITIALS__________7.6.7THEDEVELOPERACKNOWLEDGESANDAGREESTHATTHECITY’SEXERCISEOFTHECITYTERMINATIONPOWERPURSUANTTOTHISSECTION7.6MAYWORKAFORFEITUREOFTHEESTATEINTHEDEFAULTEDPORTIONOFTHEPROPERTYCONVEYEDTOTHEDEVELOPERTHROUGHTHEGRANTDEED.THEDEVELOPERHEREBYEXPRESSLYWAIVES,TOTHEMAXIMUMEXTENTALLOWEDBYLAW,ANYANDALLEQUITABLEANDLEGALDEFENSESTHATTHEDEVELOPERMAYHAVETOTHEENFORCEABILITYOFSUCHFORFEITUREREMEDY,ANDTOTHEDEFENSESOFLACHES,WAIVER,ESTOPPEL,SUBSTANTIALPERFORMANCEORCOMPENSABLEDAMAGESASAMATTEROFLAW,BUTNOTINCLUDiNGCLAIMS,DEFENSESORDISAGREEMENTSCONCERNINGTHEPARTICULARFACTSOFTHISCASE.THEDEVELOPERFURTHEREXPRESSLYWAIVES,TOTHEMAXIMUMEXTENTALLOWEDBYLAW,ANYANDALLRIGHTSANDDEFENSESTHATTHEDEVELOPERMAYHAVEUNDERCALIFORNIACIVILCODESECTION3275ORANYOTHERSTATUTEORCOMMONLAWPRINCIPLEOFSIMILAREFFECT.THEDEVELOPERACKNOWLEDGESTHATTHETERMSANDCONDITIONSOFTHISAGREEMENTREFLECTTHEPOSSIBILiTYOFFORFEITUREBYVIRTUEOFTHEEXERCISEOFTHECITY’SPOWEROFTERMINATIONPROVIDED[NTHISSECTION7.6ANDFURTHERACKNOWLEDGETHATITHASRECEIVEDINDEPENDENTANDADEQUATECONSIDERATIONFORITSWAIVERANDRELINQUISHMENTOFRIGHTSANDREMEDIESPURSUANTTOSECTION7.6.6.ANDTHISSECTION7,6.7.,7DEVELOPER’SINITIALS__________45635.O1000\29179005.13—49—
7.6.8TheprovisionsofthisSection7.6shallterminateandexpireupon theCompletionofConstruction.7.7DeveloperIndemnificationoftheCity.InadditiontoanyotherspecificindemnificationordefenseobligationsoftheDevelopersetforthinthisAgreement,theDeveloperagreestoindemnify,defend(uponwrittenrequestbytheCityandwithcounselreasonablyacceptabletotheCity)and holdharmlesstheIndemnifiedParties,fromanyandalllosses,liabilities,charges,damages,claims,liens,causesofaction, awards,judgments,costsandexpenses,including,butnotlimitedtoreasonableattorney’sfeesofcounselretainedbytheIndemnifiedParties,expertfees,costsofstafftime, andinvestigationcosts,ofwhateverkindornature,thatareinanymannerdirectlyorindirectlycaused,occasionedorcontributedtoinwholeorinpart,throughanyact,omission,faultornegligence,whetheractiveorpassive,oftheDeveloperortheDeveloper’sofficers,agents,employees,independentcontractorsorsubcontractorsofany tier,relatinginanymannertothisAgreement,anyworktobeperformedbytheDeveloperrelatedtothisAgreement,theProperties,or theProject,oranyauthorityorobligationexercisedorundertakenbytheDeveloperunderthisAgreement.Withoutlimitingthegeneralityoftheforegoing,theDeveloper’sobligationtoindemnifytheIndemnifiedPartiesshallincludeinjuryordeathtoanypersonorpersons,damagetoanyproperty,regardlessofwherelocated,includingthepropertyoftheIndemnifiedParties,anyworkers’compensationorprevailingwagedetermination,claimor suitoranyothermatter arisingfromorconnectedwithanygoodsormaterialsprovidedorservicesor laborperformedregardingtheProject orthePropertiesonbehalfoftheDeveloperbyanypersonorentity.ARTICLEVIIIGENERALPROVISIONS.8.1IncorporationofRecitals.TheRecitalsoffactsetforthprecedingthisAgreementaretrueandcorrectandareincorporatedintothisAgreementintheirentiretybythisreference.8.2RestrictionsonTransfers.8.2.1TheDeveloperacknowledges thatthequalificationsandidentityoftheDeveloperareofparticularimportancetotheCity.TheDeveloperfurtherrecognizesandacknowledgesthattheCityhasreliedandisrelyingonthespecificqualificationsandidentityoftheDeveloperinenteringintothisAgreementwiththeDeveloperand,asaconsequence,TransfersarepermittedonlyasexpresslyprovidedinthisAgreement.TheDevelopershaltpromptlynotifytheCityinwritingofanyandallchangesintheidentityofthebusinessentitiesorindividualseither comprisingorincontroloftheDeveloper,aswellasanyandallchangesintheinterestor thedegreeofcontroloftheDeveloperbyany suchperson,ofwhichinformationtheDeveloperor anyofitspartners,membersorofficersarenotifiedormayotherwisehaveknowledgeorinformation.8.2.2ExceptasexpresslypermittedinthisAgreement,theDeveloperrepresentstotheCitythatithasnotmadeandagrees thatitwillnotmakeor create,orsuffertobemadeorcreated,anyTransferotherthanaPermittedTransfer,eithervoluntarily,involuntarily45635.Ot000\29179005.13—50—
orbyoperationoflaw,untilaftertherecordationofaCertificateofCompletionfor theProjectsubjecttotheTransfer;provided,however,thattheCitymay approveinitsreasonablediscretion,TransfersotherthanPermittedTransferspriortotherecordationofaCertificateofCompletion.IndecidingwhethertoapproveordisapproveanyproposedTransfer,theCitymayconsidertheproposedtransferee’sfinancialstrength,reputationandtheexperienceoftheproposedtransfereeanditsseniormanagement,and theCityshallconsenttoaTransferrequestedbyDeveloperif(1)theproposedtransfereeanditsseniormanagementhaveexperienceat leastequaltothatofDeveloperinundertakingandsuccessfullycompletingprojectsofasimilartypeandsizeastheProjectorthatportionoftheProjectproposedtobetransferred,(ii)hasfinancialwherewithalandliquidity(orreadyaccess theretothroughpartners,investorsorlenders)atleastequaltothatofDeveloper,and(iii)anddoesnot haveother materialandadverseattributesthatwouldmakeareasonablepersonunwillingtodobusiness withtheproposedtransferee(e.g.attributessuchasahistoryofrepeateddishonestyorbusinessfailureorpriorbankruptcy).AnyTransfermadeincontraventionofthisSection8.2shallbevoidableattheelectionoftheCityandthisAgreementmaybeterminatedbytheCityortheCitymayexerciseanyotherremedyavailabletotheCityunderthetermsofthisAgreement,provided,however,that(i)theCityshallfirst notifytheDeveloperinwritingofitsintentiontoterminatethisAgreementortoexerciseanyotherremedy,and(ii)theDevelopershallhavetwenty(20)calendardaysfollowingitsreceiptofsuchwrittennoticetocommenceand,thereafter,diligentlyandcontinuously proceedtocurethedefaultoftheDeveloperandsubmit evidenceoftheinitiationandsatisfactorycompletionofsuchcuretotheCity,inaformandsubstancereasonablysatisfactorytotheCity.8.2.3TheDevelopershaltprovidetheCityno tessthanthirty(30)dayspriorwrittennoticeofanyproposedTransferwhichtheDeveloperdesirestoenterintopriortotherecordationofaCertificateofCompletionfortheProjectsubjecttotheTransfer,otherthanaPermittedTransferforwhichnonoticeshallberequired.TheDevelopershallhavetheburdenofdemonstratingtothe City’sreasonablesatisfactionthattheproposedTransfermeetstheconditionsandrequirementsofthisAgreementwithrespecttoPermittedTransfersorthattheCityshouldapprovetheTransferunderSection8.2.2(ifsuchTransferisnotaPermittedTransfer).8.2.4InconnectionwiththeCity’sreviewofanyrequestforapprovalofanyproposedTransferunderthisSection8.2,orofanyLenderorLoanunderSection6.3,theDeveloperagreestoreimbursetheCityfor thosethirdpartycostsandexpensesreasonablyincurredbytheCityinconnectionwithitsreviewoftheDeveloper’srequestforapproval,including,withoutlimitation,thereasonablefeesandcostsofthoseoutsideconsultantsandlegalcounselretainedbytheCitytoassistitinitsreviewoftheDeveloper’srequest,includingtheCity Attorney.8.2.5AnythinginthisAgreementtothecontrarynotwithstanding,therestrictionsandprohibitionsonTransferscontainedinthisSection8.2shaLlterminateuponisstianceofaCertificateofCompletionfortheProject.45635.Ol000\291?900513—51—
8.3Notices,DemandsandCommunicationsBetweentheParties.8.3.1Anyandallnotices,demandsorcommunicationssubmittedbyanyPartytoanotherPartypursuanttoorasrequiredbythisAgreementshallbeproper,ifinwritinganddispatchedbymessengerforimmediatepersonaldelivery, byanationallyrecognizedovernightcourierserviceorbyregisteredorcertifiedUnitedStatesMail,postageprepaid,returnreceiptrequested,totheprincipal officeoftheCity ortheDeveloper,asapplicable,asdesignatedinSection8.3.2.Suchwrittennotices, demandsorcommunicationsmaybesentinthesamemannertosuchotheraddressesaseitherParty may fromtimetotimedesignate.Anysuchnotice,demandorcommunicationshallbedeemedtobereceivedbytheaddressee,regardlessofwhetherorwhenanyreturnreceiptisreceivedbythesenderor thedatesetforthonsuchreturnreceipt,onthedaythatitisdeliveredbypersonaldelivery,onthedateofdeliverybyanationallyrecognizedovernightcourierservice orthree(3)calendardaysafteritisplacedintheUnitedStatesMail,asprovidedinthisSection8.3.8.3.2Thefollowingaretheauthorized addressesfor thesubmissionofnotices,demandsorcommunicationstothePartiesorEscrowHolder:TODEVELOPER: CostanzoInvestments17CorporateP[azaDr.,Suite250,NewportBeach,CA92660Attention:ChrisCostanzo(1)949-566-08021(F)949-706-6199COPYTO:O’NeilLLP19900MacArthurBlvd.,Suite1050Irvine, CA92612Attention: JayPaichikoff(T)949-798-0730(F)949-798-051145635.O1000\29179005.13—52—
TOCITY:CityofAzusa213EastFoothillBoulevardAzusa,California91702Attention:CityManager(T)626-812-8238(F)626-334-6358COPYTO:BestBest&Krieger,LLP18101VonKarmanAye, Suite1000Irvine,CA92614Attention: MarcoMartinez(T)949-263-2600(F)949-260-0972TOESCROWFirstAmericanTitle InsuranceCompanyHOLDER:18500VonKarman,Suite600Irvine,CA92612Attention:RyanHahn,Senior EscrowOfficer(T)949-885-2472(F)877-372-02618.4ConflictofInterest.Nomember,officialoremployeeoftheCity,havinganyconflictofinterest,directorindirect,relatedtothisAgreement,theProperties,orthedevelopmentoroperationoftheProjectshallparticipateinanydecisionrelatingtothisAgreement.ThePartiesrepresentandwarrantthattheydonot haveknowledgeofanysuchconflictofinterest.8.5WarrantyAgainstPaymentofConsiderationforAgreement.TheDeveloperwarrants thatithasnotpaidorgiven,and willnotpayorgive,anythirdpartyanymoneyorotherconsiderationforobtainingthisAgreement.Thirdparties,forthepurposesofthisSection8.5,shallnotincludepersonstowhomfeesarepaidforprofessionalservices,ifrenderedbyattorneys,financialconsultants,accountants,engineers,brokers,architectsandthelikewhensuchfeesareconsidered necessarybytheDeveloper.8.6Non-liability ofCity,OfficialsandEmployees.Nomember, officialoremployeeoftheCityshallbepersonallyliabletotheDeveloper,oranysuccessorininterestoftheDeveloper,intheeventofanydefaultorbreachbytheCityunderthisAgreementorforanyamountthat maybecomeduetotheDeveloperortoitssuccessor,or onanyobligationsunderthe termsofthisAgreement,exceptasmayarise fromthe grossnegligenceorwiLlfulactsofsuchmember, officialoremployee.Nomember,officer, agentoremployeeoftheDevelopershallbepersonallyliabletothe City,oranysuccessorininterestoftheCity,intheeventofanydefaultorbreachbytheDeveloperunderthisAgreementorfor anyamount thatmaybecomeduetotheCityortoitssuccessor,oronanyobligationsunder thetermsofthisAgreement,exceptasmayarisefrom thegrossnegligenceorwillfulactsofsuchmember,officer,agentoremployee.8.7UnavoidableDelay;ExtensionofTimeofPerformance.45635.OIOOO29I79OO5.13—53—
8.7.1Subjecttospecificprovisionsofthis Agreement,performancebyanyParty underthisAgreementshallnotbedeemed,orconsideredtobe,indefaultwhereanysuchdefaultisduetoanUnavoidableDelaythatisnotattributabletothefaultofthePartyclaiminganextensionoftimetoperform.AnextensionoftimeforanyUnavoidableDelayshallbefortheperiodoftheUnavoidableDelayandshallcommencetorunfromthedateofoccurrenceofthe UnavoidableDelay,ifthePartyassertingtheexistenceoftheUnavoidableDelayprovidestheotherPartieswithwrittennoticeoftheoccurrenceoftheUnavoidableDelay,withinten(10)daysafterthenotifyingPartylearnsofthecommencementofsuchasserted UnavoidableDelay.Otherwise,theextensionoftimeforanUnavoidableDelayshallcommenceonthedateofreceiptofwrittennoticeoftheoccurrenceoftheUnavoidableDelaybythePartiesnotrequestinganextensionoftimetoperformduetosuchUnavoidableDelay.8.7.2ThePartiesexpresslyacknowledgeandagree thatchangesineithergeneraleconomicconditionsorchangesintheeconomicassumptionsofeitherofthemthatmayhaveprovidedabasisforenteringintothisAgreementandthat occuratanytimeaftertheexecutionofthisAgreement,donotconstituteanUnavoidableDelayanddonotprovideanyPartywithgrounds forassertingtheexistenceofanUnavoidableDelayintheperformanceofanycovenantorundertakingarisingunderthisAgreement.EachPartyexpresslyassumestheriskthatchangesingeneraleconomic conditionsorchangesinsucheconomicassumptionsrelatingtothetermsandcovenantsofthisAgreementcouldimposeaninconvenienceorhardshiponthecontinuedperformanceofsuchPartyunderthisAgreement.Notwithstandingtheforegoing,thepartiesagreeandacknowledgethatintheeventtherecomestoexistageneralandpervasiveunavailabilityofconstructionloansinSouthernCaliforniaforcommercialrealestateprojectsoftheapproximatesizeandtypeoftheProjectwhichsubstantiallypreventsDeveloperfromfulfillingtheconditionprecedenttotheClosingsetforthSection8.2bytheOutsideDate,thensuchgeneralunavailabilityofcreditshallconstituteUnavoidableDelayduringthependencyofsuchgeneralunavailabilityofcredit,butonlyforaperiodnotinexcessofone(1)year.8.8StudiesandReports.If,pursuanttoSection7.3,theDeveloperhasterminatedthisAgreementandreceivedtheLiquidatedDamagesamount,withininten(10)daysofreceiptoftheLiquidatedDamagesamountfromtheCity,DevelopershallprovideCitywithcompletecopiesofallenvironmentat,geotechnical,and soilsreportsorstudiesconductedonrelatingtotheProperties.8.9RealEstateCommissions.TheCityshall notbeliableforanyrealestatecommissions,brokeragefeesorfinderfeesthatmayarisefromorberelatedtothisAgreement,exceptthattheCityshallpayanyfeesorcommissionsorotherexpensesrelatedtoitsretentionoremploymentofrealestatebrokers,agentsorthelike.TheDevelopershallpayanyfeesorcommissionsorotherexpensesrelatedtoitsretentionorempLoymentofrealestatebrokers,agentsorother professionals.8.10BindingonSuccessorsandAssigns.ThisAgreementshallbebindinguponandinuretothebenefitofthePartiesandtheirrespectiveheirs,executors,administrators,legalrepresentatives,successors,andassignswho,uponvalidassignmentofthisAgreementasprovidedherein,shallbecometheDeveloperhereunder.45635.O1000\29t79005.13—54—
8.11EntireAgreement.8.11.1ThisAgreementshallbeexecutedinthree(3)duplicateoriginals,eachofwhichshallbedeemedtobe anoriginal,butallofwhichtogethershallconstituteone andthesameinstrument.ThisAgreementincludes________
______pages(exclusiveofsignaturepages)and___________________exhibits,thatconstitutetheentireunderstandingandagreementofthePartiesregardingtheProperties,theProject,andtheothersubjectsaddressedinthisAgreement.8.11.2ThisAgreement(includingtheexhibitsattachedhereto)constitutestheentireagreementbetweenthepartiesheretopertainingtothesubjectmatterhereof,andthefinal,completeandexclusiveexpressionofthetermsandconditionsthereof,andsupersedesallnegotiationsorpreviousagreementsbetweenthe PartieswithrespecttotheProperties,theProject,andtheothersubjectsaddressedinthisAgreement.8.11.3Noneoftheterms,covenants,agreementsorconditionssetforthinthisAgreementshallbedeemedtobemergedwithanydeedconveyingtitletothePropertiesandthisAgreementshallcontinueinfullforce andeffectbeforeandaftersuchconveyances.8.11.4AllwaiversoftheprovisionsofthisAgreementandallamendmentstothisAgreementmustbeinwritingandsignedbythe authorizedrepresentative(s)ofallParties.8.12Executionof thisAgreement.Followingexecutionofthree(3)originalsofthisAgreementbytheauthorizedrepresentative(s)oftheDeveloperandpromptdeliveryofsuchoriginals,thereafter,totheCity,accompaniedbyanofficialactionofthegoverningbodyoftheDeveloperauthorizingtheindividualsexecutingthisAgreementonbehalfoftheDevelopertoexecuteandperformthisAgreement,informandsubstanceacceptabletothe City,thisAgreementshallbesubjecttothereviewandapprovalbytheCity Council,intheirsoleandabsolutediscretion,nolater thanforty-five(45)calendardaysaftersuchdateofdeliverytotheCity.IftheCityhave notapproved,executed,anddeliveredanoriginalofthisAgreementtotheDeveloperwithintheforegoingtimeperiod, thennoprovisionofthisAgreementshallbeofanyforce oreffectforanypurpose.8.13SurvivalofIndemnityObligations.AllgeneralandspecificindemnityanddefenseobligationsofthePartiessetforthinthisAgreementshallsurvivetheexpirationorterminationofthisAgreement,theexecutionorrecordationoftheGrantDeed,and/ortheissuanceandrecordationofanyCertificateofCompletion.8.14TimeDeclaredtobeoftheEssence.Astotheperformanceofanyobligationhereunderastowhichtimeisacomponentthereof,theperformanceofsuchobligationwithinthetimeprovidedisoftheessence.[SignaturesonFollowingPagesJ45635.Ol000\29179005.13—55—
SIGNATUREPAGETO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)CITY:THECITYOfAZUSAaCaliforniamunicipal corporationDated:,2017By:_______________TroyButzlaffCityManagerATTEST:CityClerkAPPROVEDASTOLEGALFORM:BEST BEST&KRIEGERLLPBy:__________CityAttorney45635.Ol000\29179005.13
SIGNATUREPAGETO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)DEVELOPER:CostthizoInvestments,LLC,aDelawarelimitedliabilitycompanyDated:_____________________By:-JaeR.Cost,Co-ManagingMemberIChrisCostanzo,C64anagingMember45635.01000\29I79005.13
EXHIBITATO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)LegalDescriptionoftheProperties#166692v46144.2EXHIBITA45635.01000\29179005.13
EXHIBITBTO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(Costanzo Investments,LLC/A-2 Property)ScopeofDevelopment#166692v46144.2EXHIBITB45635.01O0029179005.13
#169781 v2 6144.2
45635.01000\29594981.3
EXHIBIT B
TO
2017 DISPOSITION AND DEVELOPMENT AGREEMENT
(Costanzo Investments, LLC/A-2 Property)
Scope of Development
Development, construction and leasing of a multi-story center mixed-use development with
between 15,000 and 50,000 square feet of retail stores and service establishments and other
commercial uses, and up to 120 residential units. The retail/commercial space will include uses such
as delis, quick-service restaurants, coffee houses, juice bars, ice cream stores, bakeries, clothing
and/or jewelry boutiques, services such as hair and nail salons and medical/dental and perhaps office
uses. The ground floor will include only retail and services facing on south side of the project and
only commercial uses (e.g., retail, medical and services) facing on west (Azusa Ave.) side of the
project, and may include residential units with entrances on 9th Street only. The above-ground
floors may include additional retail and service uses and office uses and residential units. The
Project also will include requisite parking facilities, driveways, lighting, hardscape, landscaping and
other amenities and incidental improvements such as outdoor eating areas for restaurants.
In the course of proceeding with the Plans and Specifications, the Entitlements and the
Additional Project Approvals and continuing to assess market trends, absorption rates, demographics
and the potential profitability of alternative uses, it is anticipated that the foregoing description of
uses may evolve, but that the goal will be to develop the most advantageous mix of retail and other
uses that are feasible on the Properties, compatible with surrounding existing and future uses,
consistent with the City’s vision for the area and otherwise mutually advantageous to the Developer
and the citizens of the City consistent with all land use regulations and use restrictions contained
within in this Agreement.
EXHIBITCTO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)ScheduleofPerformanceActionDateActiontobeCompletedByEffectiveDateSeeSection1.32.DeveloperandCitytoopenEscrowand,concurrently,DeveloperWithin5daystodepositEarnestMoneyDepositintoEscrowfollowingtheEffectiveDate3.DueDiligencePeriodcommencesThe dateoftheEscrowOpeningDate4.TitleCompanytodeliverPreliminaryReporttoDeveloperWithin3daysfollowingCity’sreceiptofthePreliminaryReportfromTitleCompany5.DevelopertodeliverDeveloper’sTitleNoticetoAgencyWithin30daysfollowingDeveloper’sreceiptofthePreliminaryReport6.CitytodeliverCity’sTitleNoticeResponsetoDeveloper,ifWithin20daysappropriatefollowingCity’sReceiptofDeveloper’sTitleNotice7.DevelopertodeliverDeveloper’sTitleNoticeWaiver,ifWithin10daysappropriatefollowingDeveloper’sreceiptofCity’sTitleNoticeResponse2.DevelopertodeliveritsDueDiligenceInvestigationConclusionOnorbeforetheNoticeendoftheDueDiligencePeriod9.DueDiligencePeriodendsOn the120thdayfollowingtheEscrowOpeningDate1I66692v46144.2EXHIBITC45635.0I000\29179005.13
ActionDateActiontobeCompletedBy10.ProvideCitywithrefinedScopeofDevelopmentWithin150daysoftheEffectiveDate11.DevelopertocommenceprocessingofPlansandSpecifications180daysafterDuewithCityDiligencePeriod12.DevelopertocommenceprocessingofEntitlementswithCity180daysafterDueDiligencePeriod13.DevelopertocommencepreparationofmaterialsforAdditionalPromptlyafterProjectApprovalsandthereafterdiligentlypursueprocessingcompLetionofthereofwithCityEntitlements14.OutsideDateforDevelopertoobtain Entitlementsand18monthsafterAdditionalProjectApprovalsEffectiveDate,subjecttoextensionperSection4.3iS. ScheduledEscrowClosingDate15daysafternotificationtoEscrowHolderthatBuildingPermitsarereadytobepulled16.ClosingDateActualDateoftheCloseofEscrowwhichshalloccurwithin18monthsaftertheEffectiveDate,subjecttoextensionperSection3.5.717.DevelopertotenderpaymentofBuildingPermitfeesandrequestNolaterthan30issuanceofBuildingPermitsdaysafterClosingDate18.Developertocommence constructionoftheProjectanddeliverNolaterthan30ProjectCommencementNoticetoCitydaysafterissuanceofBuildingPermits19.ProjectCompletionDateNolaterthan27monthsafterissuanceofBuildingPermits;subjecttoextensionperSection4.3#166692v46144.2EXHIBITC45635.01000\29I79005.13
EXHIBITD102017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)FormofGrantDeedlAttachedBehindThisPage]#166692v46144.2EXHIBITD45635O1000\29179005.13
RECORDING REQUESTEDBYANDWHENRECORDEDMAILTO:THE CITYOFAZUSAGRANTDEEDPART ONEFORAVALUABLE CONSIDERATION,receiptofwhichisherebyacknowledged,THECITYOfAZUSA,aCaliforniamunicipalcorporation(“Grantor”),herebygrantstoCostanzoInvestments,LLC,aDelawarelimitedliability company(“Grantee”),thatcertain realpropertylocatedintheCityofAzusa,CountyofLosAngeles,StateofCalifornia,specificallydescribedinExhibit“A”attachedtothisGrantDeed(“Property”)andmadeapartofthisGrantDeedbythis reference.PARTTWOTheconveyanceofthePropertybytheGrantortotheGranteeinPartOneissubjecttothefollowing communitydevelopmentterms,conditions,covenantsandrestrictions:Section1.ConveyanceSubjecttoTermsofaDispositionandDevelopmentAgreement.ThePropertyisconveyed subjecttothatcertain 2017DispositionandDevelopmentAgreement(CostanzoInvestments,LLC/A-2Property), datedasof________,2017,betweentheGrantorandtheGrantee(the“Agreement”).TheprovisionsoftheAgreementareincorporatedintothisGrantDeedbythisreferenceandaredeemedtobeapartofthisGrantDeed,asthoughfullysetforthinthisGrantDeed.Section2.ConditionofProperty.TheGranteeacknowledgesandagrees thatthePropertyisconveyedbytheGrantortotheGranteeinits“ASIS,”“WHEREIS”and“SUBJECTTOALLFAULTSCONDITION,”asofthedateofrecordationofthisGrantDeed,withnowarranties,expressedor implied,astotheenvironmentalorotherphysicalconditionoftheProperty,thepresenceor absenceofanypatentor latentenvironmentalorotherphysicalconditiononorintheProperty,oranyothermattersaffectingtheProperty.Section3.ObligationtoRefrainfromDiscrimination.TheGranteeforitself,itssuccessorsandassignstoalloranypartorportionofthePropertyand orthe“Project”(asdefinedintheAgreement),covenantsandagreesthat:3.1Thereshallbenodiscriminationagainst orsegregationofanyperson, orgroupofpersons,onaccountofsex,maritalstatus,race,color,religion,creed,nationalorigin orancestryinthesale,lease,sublease,transfer,use,occupancy,tenureorenjoymentoftheProperty#166692v46144.2EXHIBITD45635.0I000\29179005.13
norshalltheGrantee,itselforanypersonclaimingunderorthroughit,establishorpermitanysuchpracticeorpracticesofdiscriminationorsegregationwith referencetotheselection,location,number,useoroccupancyoftenants,lessees,sub-tenants,sub-lesseesorvendeesoftheProperty.ThecovenantofthisSection3shallrunwiththelandofthePropertyandshallbeenforceableagainsttheGranteeanditssuccessorsandassignsinperpetuityandbeacovenantintheGrantDeedandtheNoticeofAgreement.3.2ThecovenantofthisSection3shallrunwith thelandofthePropertyinperpetuity,shallbeenforceable againsttheGranteeanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed.Section4.FormofNon-DiscriminationandNon-SegregationClauses.TheGranteeforitself,itssuccessorsandassignstoalloranypartorportionoftheProperty and/orProject,covenantsandagreesthat:4.1TheGrantee,suchsuccessorsand suchassignsshallrefrainfromrestrictingthesale,lease,sublease,rental,transfer,use,occupancy,tenureorenjoymentoftheProperty(oranyportionthereof)onthebasisofsex,maritalstatus,race, color, religion,creed,ancestryornationaloriginofanyperson.Alldeeds,leasesorcontractspertainingtothePropertyshallcontainorbesubjecttosubstantiallythefoLlowingnon-discriminationornonsegregationcovenants:(a)Indeeds:“Thegranteehereincovenantsbyandforitself,itssuccessorsandassigns,andallpersonsclaimingunderorthroughthem,thatthereshallbenodiscriminationagainstorsegregationof,anypersonorgroupofpersonsonaccountofrace,color,creed,religion,sex,marital status,nationalorigin,orancestryinthesale,lease,sublease,transfer,use,occupancy,tenure,orenjoymentofthepremisesherein conveyed,norshallthegranteeor anyperson claimingunder or throughit,establishorpermitanysuchpracticeorpracticesofdiscriminationorsegregationwithreferencetothe selection,location,number, useoroccupancyoftenants,lessees,sub-tenants,sub-lessee,orvendeesinthepremiseshereinconveyed. Theforegoingcovenantsshallrunwiththeland.”(b)Inleases:“TheLesseehereincovenantsbyand foritself,itssuccessorsandassigns,andallpersonsclaimingunder or throughthem,andthisleaseismadeandaccepteduponandsubjecttothefollowingconditions:Thatthereshallbe nodiscriminationagainstorsegregationofanypersonorgroupofpersons,onaccountofrace,color,creed,religion,sex,maritalstatus,nationalorigin,orancestry,intheleasing, subleasing,transferring,use,occupancy,tenure,orenjoymentofthepremisesherein[easednorshallthelesseeitself,oranypersonclaimingunderorthroughit,establishorpermitanysuchpracticeorpracticesofdiscriminationorsegregationwithreferencetotheselection,location,number,use,oroccupancy,oftenantslessees,sub-lessee,sub-tenants,orvendeesinthepremiseshereinleased.”(c)Incontracts:“Thereshallbenodiscriminationagainstorsegregationofanypersonorgroupofpersonsonaccountofrace,color,creed,religion,sex,maritalstatus,nationalorigin, orancestry,inthesale,lease,sublease,transfer,use,occupancy,tenure,orenjoymentofthepremiseshereinconveyedorleased,norshallthetransfereeoranypersonclaimingunderorthroughit,establishorpermitanysuchpracticeorpracticesof#166692v46144.2EXHIBITD4563501000\29 179005.13
discriminationorsegregationwithreferencetotheselection,location,number,use,oroccupancy,oftenants,lessees,sub-lessees,sub-tenants,orvendeesofthepremiseshereintransferred.”Theforegoingprovisionshallbebindinguponandshallobligatethecontractingpartyorpartiesandanysubcontractingpartyor parties, orother transfereesundertheinstrument.4.2ThecovenantsofthisSection4shaLlrunwiththelandofthePropertyinperpetuity.Section5.CovenanttoMaintainPropertyonTaxRolls.TheGranteeforitself,itssuccessorsandassignstoalloranypartorportionofthePropertyand/orProject,covenantsandagreesthat5.1ThePropertyshallremainontheCountysecuredrealpropertytax rollsfortwentyyearsfromthedateofissuancebytheGrantorofthecertificateofcompletionfortheProject(the“CertificateofCompletion”).5.2TheGranteeshallpayallpropertytaxbillswithrespecttothePropertyandallimprovementsthereononorbeforethelast dayforthetimelypaymentofeachpropertytax installmentoneachDecember10andApril10duringsuchtimeperiodandtotimelypayallsupplementaltax billsregardingthePropertyissuedbytheCounty.TheGranteefurthercovenantsandagreestoprovidetotheGrantor,on orbefore July31ofeachyear,commencinginthecalendaryearfollowingthecalendaryearinwhichtheCertificateofCompletionfortheProjectisrecordedandineachcalendaryear,thereafter,forthefulltermofthiscovenant:(i)atrueandcorrectcopyofallpropertytax assessmentnotices,propertytaxbillsandpropertytaxassessmentcorrespondencebyandbetweentheGranteeand theCountyregardingthePropertyandallimprovementsthereon,withrespecttotheprecedingfiscalyearoftheCounty,and(ii)cancelledchecksissuedby theGranteeinpaymentofallpropertytax paymentsthataremadetotheCountyregardingthePropertyandallimprovementsthereon,withrespecttotheprecedingCountyfiscalyear.5.3ThecovenantsofthisSection5shallrunwiththelandoftheProperty,shallbeenforceableagainsttheGranteeanditssuccessorsandassigns,andshallterminateandexpireupontheissuanceoftheCertificateofCompletion.Section6.No ConveyancetoTaxExemptEntity.TheGranteeforitself,itssuccessorsandassignstoallorany partorportionofthePropertyand/orProject,covenantsandagreesthat:6.1TheGranteeshallnot useorotherwisesell,transfer, convey,assign,lease,leasebackorhypothecatetheProperty,theProject,orany portionofanyoftheforegoingtoanyentityorperson,orforanyuseoftheProperty,theProject,or anyportionofanyoftheforegoing,whoGranteeknowstobepartiallyorwhollyexemptfromthepaymentofrealorpersonalpropertytaxesorthatwouldcausetheexemptionofthepaymentofalloranyportionofrealorpersonalpropertytaxesotherwiseassessableregardingtheProperty,theProject,oranyportionofanyoftheforegoing,withoutthepriorwrittenconsentoftheGrantor, whichmaybewithheldintheGrantor’ssoleandabsolutediscretion,fortwentyyearsfromthedateofissuanceofthecertificateofcompletionfortheProject.#166692v46144.2EXHIBITD45635.O1000’29179005.13
6.2IftheProperty,oranyportionoftheProperty,shallbeconveyed,transferredorsoldtoanyentityorperson thatispartiallyorwhollyexemptfromthepaymentofrealorpersonalpropertytaxesotherwiseassessableagainsttheProperty,oranyportionthereof,withoutthepriorwrittenconsentoftheGrantor,thentheGranteeshaltpaytotheGrantora feeinlieuofpaymentofsuchtaxeseachyearinanamountdeterminedbytheGrantortobeonepercent(1%)ofthe“fullcashvalue”oftheProperty,orportionthereof,asmaybesubjecttosuchexemptionfrompaymentofreal orpersonalpropertytaxes.TheGrantor’sdeterminationof“fullcashvalue”forin-lieupaymentpurposesunderthis Section6shallbeestablishedbytheGrantoreachyear,ifnecessary,byreferencetotherealorpersonalpropertytaxvaluationprinciplesandpracticesgenerallyapplicabletoacountypropertytaxassessorunderSection1ofArticleXIIIAoftheCaliforniaConstitution.TheGrantor’sdeterminationof“fullcashvalue”andthatanin-lieupaymentisdueshaltbeconclusiveonsuchmatters.IftheGrantordeterminesthatanamountispayabteasanin-lieupaymentunderthisSection6inanytaxyear,thensuchamountshallbepaidtotheGrantorfor thattax yearwithinforty-five(45)daysfollowingtransmittalbytheGrantortotheGranteeofaninvoiceforpaymentofthein-lieuamount.6.3ThecovenantsofthisSection6shallrunwiththelandoftheProperty,shallbeenforceableagainsttheGranteeanditssuccessorsandassignsofthe Property,andshallterminateandexpireupontheissuanceofthe CertificateofCompletion.Section7.MaintenanceConditionoftheProperty.The Granteeforitself,itssuccessorsandassignstoalloranypartorportionofthePropertyand/orProject,covenantsandagreesthat:7.1TheareasofthePropertythataresubjecttopublicview(includingaltexistingandfutureimprovements,paving,walkways,landscaping,exteriorsignageandornamentation)shallbemaintainedingoodrepairandaneat,cleanandorderlycondition,ordinarywearandtearexcepted.Ifthereisanoccurrenceofanadverseconditiononany areaofthePropertythatissubjecttopublicviewincontraventionofthegeneralmaintenancestandarddescribedabove(a“MaintenanceDeficiency”),thentheGrantorshallnotifytheGranteeinwritingoftheMaintenanceDeficiency.IftheGranteefailstocureorcommenceanddiligentlypursuetocuretheMaintenanceDeficiencywithinsixty(60)daysofitsreceiptofnoticeoftheMaintenanceDeficiency,theGrantorshallhavetherighttoenterthePropertyandperformallactsnecessarytocuretheMaintenanceDeficiency,ortotakeanyotheractionattaworinequitythatmaythenbeavailabtetotheGrantortoaccomplishtheabatementoftheMaintenanceDeficiency.AnysumexpendedbytheGrantorfortheabatementofaMaintenanceDeficiencyonthePropertypursuanttothisSection7.1shallbecomealienontheProperty,asapplicable.Iftheamountofthelienisnotpaidwithinthirty(30)daysafterwrittendemandforpaymentfromtheGrantortotheGrantee,theGrantorshall havetherighttoenforcethelieninthemannerprovidedinSection7.1.7.2Graffiti,asthistermisdefinedinGovernmentCodeSection38772,thathasbeenappliedtoanyexteriorsurfaceofastructureorimprovementonthePropertythatisvisiblefromanypitblicright-of-wayadjacentorcontiguoustotheProperty,shallberemovedbytheGranteebyeither paintingovertheevidenceofsuchvandalismwithapaintthathasbeencolor-matchedtothesurfaceonwhichthepaintisapplied,orgraffitimayberemovedwithsolvents,detergentsor water,asappropriate.Ifanysuchgraffitiandisnotremovedwithin#166692v46144.2EXHIBITD45635.OI000\29179005.13
ninety-six(96)hoursfollowingthetimeofthediscoveryofthegraffiti, theGrantorshallhavetherighttoenterthePropertyandremovethegraffiti,withoutnoticetotheGrantee.AnysumexpendedbytheGrantorfortheremovalofgraffitifromthePropertypursuanttothisSection7.2, shallbealienontheProperty.Iftheamountofthelienisnotpaidwithinthirty(30)daysafter writtendemandtotheGranteefromtheGrantor,theGrantorshallhavetherighttoenforceitslieninthemannerprovidedinSection7.2.7.3ThePartiesfurthermutuallyunderstandandagreethatthe rightsconferredupontheGrantorunderthisSection7.3expresslyincludeagrantbytheGranteeofasecurityinterestinthePropertywiththepowertoestablishandenforcealienorotherencumbranceagainstthePropertyoranyportionthereof,inthemannerprovidedunderCivilCodeSections2924,2924band2924c,tosecuretheobligationsoftheGranteeanditsuccessorsunderSection7.1orSection7.2,includingthereasonableattorneys’feesandcostsoftheGrantorassociatedwiththeabatementofaMaintenanceDeficiencyorremovalofgraffiti.Forthepurposesoftheprecedingsentencethewords“reasonableattorneys’feesandcostsoftheGrantor”meanandincludethesalaries,benefitsandcostsoftheCityAttorneyofGrantorandthelawyersemployedintheOfficeoftheCityAttorneyofGrantor.7.4Theprovisionsofthis Section7.4,shallbeacovenantrunningwiththelandoftheProperty,shalLbeenforceableagainsttheGranteeanditssuccessorsandassignsinperpetuity,andshallterminateandexpireonthedateten(10)yearsaftertheissuanceoftheCertificateofCompletion.Nothingintheforegoing provisionsofthisSection7shallbedeemedtoprecludetheGranteefrommakinganyalteration,addition,orotherchangetoanystructureorimprovementorlandscapingontheProperty,provided thatanysuchchangescomplywithapplicablezoningandbuildingregulationsoftheCityofAzusa.Section$GrantorPowerofTermination RegardingtheProperty.8.1TheGrantorherebyreservesapowerofterminationpursuanttoCivilCodeSections885.010,et.q.andsubjecttotheprovisionsofSection7.6oftheAgreementandthisSection8(the“CityTerminationPower”),exercisablebytheGrantor,in itssoleandabsolutediscretion,uponsixty(60)calendardayswrittennoticetotheGranteereferencingSection7.6oftheAgreementandthisSection8.1,toterminatethefeeinterestoftheGranteeinthePropertyand/oranyimprovementstothePropertyandrevestsuchfeetitleintheGrantorandtake possessionofallor anyportionofsuchrealpropertyandimprovements,withoutcompensationtotheGranteeexceptassetforthinSection8.5beloworotherwiserequiredbyapplicablelaw,pursuanttothetermsofSection7.6oftheAgreementandthisSection8.1upontheoccurrenceofTerminationDefaultbytheGranteeoccurringfollowingtheCloseofEscrowandpriortotheCompletionofConstruction(asdefinedintheAgreement).8.2AsprovidedinSection7.6.2oftheAgreement,Beforedeliveringthesixty(60)calendardaywrittennoticespecifiedSection8.1(the“InitialTerminationNotice”),Grantorshalthavereasonablydeterminedthat(i)oneormoreEventofDefaulthasoccurredandiscontinuing,(ii)oneormoreofsuchEvent(s)ofDefaultconstitutesaTerminationDefault,(iii)GranteeisnolongerabletocompletetheProjectinsubstantiallythemannerrequiredpursuanttothisAgreementandthatinsteadanotherdeveloperwouldbebetterablethanGranteetocompletetheProjectonterms(including,withoutlimitation,thetimingofCompletionof#166692v46144.2EXHIBITD45635.010029179005.13
Construction)asclosetothosesetforthinthisAgreementasGrantordeterminestobeappropriateinlightofsuchTerminationDefault(s)byGrantee;and(iv)itisinbestinterestsofthe health,safetyandwelfareoftheGrantor’s taxpayersandresidentsthatGrantorexercisetheCityTerminationPower.ForthepurposesofthisAgreementa“TerminationDefault”shaltmeananEventofDefaultconsistingof(x)anactoffraudorintentionaldishonestybyGrantee’smanagementpersonnelindealingwiththeGrantorinconnectionwiththeProject;(y)Grantee’sfallingbehindbymorethanonehundredeighty(180)daysinthetimeschedulefortheProjectwithoutreasonablecausesuchthatGrantorreasonablydeterminesthattheCompletionofConstructionwillnotbeaccomplisheduntilatleastonehundredeighty(1$0)daysafterthetimespecifiedinthe“ScheduleofPerformance”(asdefinedintheAgreement),or(z)Grantee’scommittingaparticulartypeofEventofDefaultatleastthree(3)timesduringany12-monthperiodastoeachofwhichGrantorhasgivenGranteewrittennoticeofsuchEventofDefault.Grantor’sInitialTerminationNoticeshallspecifytheTerminationDefautt(s)bytheGranteetriggeringtheGrantor’sexerciseofCityTerminationPower.TheGrantorshaltproceedwithitsremedysetforthinSection8.1onlyiftheGranteecontinuesinsuchdefaultforaperiodofsixty(60)calendardaysfollowingitsreceiptoftheInitialTerminationNoticeor,uponcommencingtocuresuchTerminationDefault,failstodiligentlyandcontinuouslyprosecutesaid curetosatisfactoryconclusion.Inaddition,beforeexercisingitsremedytocompletetheCityTerminationPowerunderthis Section8,Grantorshall,uponGrantee’srequest,whichmustbedelivered,ifatall,within fifteen(15) daysfollowingitsreceiptoftheInitialTerminationNotice,meetandconferwithGrantee’srepresentativesforaperiodofthirty(30)days.Duringsuchtime,thePartiesshallmeetasoftenasreasonablyrequestedbyany Partytonegotiate,ingoodfaith,methodsandmeansbywhichtheTerminationDefault(s),ifnotcuredorcurable,maybemitigated orotherwiseaddressedbyGranteesothattheProjectcanbecompletedonterms(including,withoutlimitation,thetimingofCompletionofConstruction)asclosetothosesetforthintheAgreementasGrantordeterminestobeappropriateinlightofsuchTerminationDefault(s)byGrantee.Nothinghereinshallconstituteanagreement,representation,orwarrantybyanyPartythatanacceptablenegotiated resolutionwiltbereached,norshallGrantorbeobligatedtoexpendanyout-of-pocketfundsorundertakeanyotheractionwhatsoeverwithrespecttocuringanyEventofDefaultbyGrantee.If,attheendofsuchthirty(30)dayperiod,thePartieshavenotbeenabletoagreeonamutuallyacceptablemethodofmitigatingorotherwiseaddressingaTerminationDefaultthatmaynotbecuredorbecurable,thenGrantormaycontinuetowardexercisingtheCityTerminationPowerpursuanttothisSection8withthePartiesreservingallrights.BeforeexercisingtheCityTerminationPower,however,GrantorshalldeliveranadditionalwrittennoticeofitselectiontodosotoGrantoratleast60daysaftertheGrantor’spriordeliveryofInitialTerminationNoticeandsolongasanTerminationDefaultcontinuestoexist(the“TerminationElectionNotice”).8.3TherightsoftheGrantorunderthisSection8shallbesubjectandsubordinateto,shallbelimitedbyand shallnotdefeat,renderinvalidorlimit:(1)EachLienrecordedagainstthePropertyandspecificallyauthorizedbythisAgreementasaPermittedTransfer;(2)Anyleases,declarationsofcovenants,conditionsandrestrictions,easementagreementsorotherrecordeddocumentsorinterests#166692v46144.2EXHIBITD45635.0100O29I79005.13
applicabletothePropertyandspecificallyauthorizedbythisAgreementasaPermittedTransfer.8.4UpontheGrantor’sexerciseoftheCityTerminationPowerpursuanttothisSection8,theGranteeoritssuccessorsorassignsshallconveybygrantdeedtotheGrantortitletotheProperty,asspecifiedintheGrantor’snoticepursuanttoSection8.1,andallimprovementsthereon,inaccordancewithCivilCodeSection1109,assuchcodesectionmayhereafterbeamended, renumbered,replacedorsubstituted.SuchconveyanceshaltbedulyacknowledgedbytheGranteeandanotaryinamannersuitableforrecordation.TheGrantormayenforceitsrightspursuanttothisSection8.4bymeansofaninjunctiverelieforforfeitureoftitleactionfiledinanycourtofcompetentjurisdiction.8.5UpontherevestingintheGrantoroftheProperty,whetherbygrantdeedorcourtdecree,theGrantorshallexerciseitsreasonablegoodfaitheffortstoresell thePropertyatitsthenfairmarketvalue,assoonandinsuchmannerastheGrantorshall,initssolediscretion,findfeasibleandconsistentwiththeobjectivesoftheCityofAzusaGeneralPlan,toaqualifiedandresponsiblepersonorpersons(asreasonablydeterminedbytheGrantor)whowillassumetheGrantee’sobligationstobeginand/orcompleteand/oroperatetheProjectlocatedontheProperty,orsuchotherreplacementdevelopmentacceptabletotheGrantor,initssoleandabsolutediscretion.UponanysuchresaleoftheDefaultedPortionoftheProperty(oranyportionthereof),theproceedstotheGrantorfromsuchsale shallbeappliedasfollows:(1)First,topayanyandallamountsrequiredtorelease/reconveyanyLienrecordedagainstalloranyportionoftheProperty;and(2)Second,toreimbursetheGrantoronitsownbehalforonbehalfoftheGrantorforallactualinternalandthird-partycostsandexpensespreviouslyorcurrentlyincurredbytheGrantor,ortheGrantorrelatedtotheProperty,the Project,orthisAgreement,including,butnotlimitedto,customaryandreasonablefeesorsalariestothird-partypersonnelengagedinsuchactions,inconnectionwiththerecapture,managementandresaleoftheProperty’oranypartthereof;alltaxes,assessmentsandutilitychargespaidbytheGrantorand/ortheGrantororauthoritywithrespecttothePropertyorportionthereof;anypaymentmadeornecessarytobemadetodischargeorpreventfromattachingorbeingmadeanysubseqitentencumbrancesorliensduetoobligationsincurredbytheGranteewithrespecttotheacquisitionofthePropertyortheconstructionoftheProjectandamountsotherwiseowingtotheGrantororauthoritybytheGranteeoritssuccessorsorassignspursuanttothetermsofthisAgreement;and(3)Third,totheextentthatanyproceedsfromsuchresaleare,thereafter,available,takingintoaccountanypriorencumbranceswithaclaimthereto,toreimbursetheGrantee,oritssuccessorsininteresttotheequaltothesumof:(I)PurchasePrice;and(2)thethird-partycostsactuallyincurredandpaidbytheGranteeregarding#166692v46144.2EXHIBITD45635.O1000\29179005.13
thedevelopmentoftheProject,including,butnotlimitedto,proratacostsofcarry,taxes,andotheritemsassetforthinacostcertificationtobemadebytheGranteetotheGrantorpriortoanysuchreimbursement,whichcertificationshallbesubjecttotheGrantor’sreasonableapproval;provided,however,thattheGranteeshallnotbeentitledtoreimbursementforanyexpensestotheextentthatsuchexpensesrelatetoanyloans,Liensorotherencumbrancesthatarepaidby theGrantorpursuanttotheprovisionsofsubsections(1)or(2)above.(4)AnyportionoftheproceedsfromtheresaleofthePropertyremainingaftertheforegoingapplicationsshaltberetainedbytheGrantorasitssoleandexclusiveproperty.2.6IMMEDIATELYFOLLOWINGTHEEXPIRATIONOFTHIRTY(30)DAYSAFTERTHEGRANTOR’SGIVINGOFTHETERMINATIONELECTIONNOTICEPURSUANTTOSECTION7.6.1,ABOVE,GRANTOR,ITSEMPLOYEESANDAGENTSSHALLHAVETHERIGHTTOREENTERANDTAKEPOSSESSIONOFTHEPROPERTYANDANYIMPROVEMENTSTHEREON,WITHOUTFURTHERNOTICEORCOMPENSATIONTOGRANTEE(EXCEPTASOTHERWISEPROVIDED[NSECTION8.5).BYINITIALINGBELOW,THEGRANTEE HEREBYEXPRESSLYWAIVES,TOTHEMAXIMUMEXTENTALLOWEDBYLAW,ANY ANDALLRIGHTSTHATTHEGRANTEEMAYHAVEUNDERCALIFORNIACIVILCODESECTION791ANDCALIFORNIACODEOFCIVILPROCEDURESECTION1162,ASTHOSE STATUTESMAYBEAMENDED,REPLACED,RENUMBERED ORSUBSTITUTED,ORUNDERANYOTHERSTATUTESORCOMMONLAWPRINCIPLESOFSIMILAREFFECT.GRANTEE’SINITIALS2.7THEGRANTEEACKNOWLEDGESAND AGREESTHATTHEGRANTOR’SEXERCISEOFTHE CITYTERMINATIONPOWER PURSUANTTOTHISSECTION2.7MAYWORKAFORFEITUREOFTHE ESTATEINTHEPROPERTYCONVEYEDTOTHEGRANTEETHROUGHTHEGRANTDEED.THEGRANTEEHEREBY EXPRESSLYWAIVES,TOTHE MAXIMUMEXTENTALLOWEDBYLAW,ANYANDALLEQUITABLEAND LEGALDEFENSESTHAT THEGRANTEEMAYHAVETOTHEENFORCEABILITYOFSUCHFORFEITUREREMEDY,ANDTOTHEDEFENSESOFLACHES,WAIVER,ESTOPPEL,SUBSTANTIALPERFORMANCEORCOMPENSABLEDAMAGESASAMATTEROFLAW,BUTNOTINCLUDING CLAIMS,DEFENSESORDISAGREEMENTSCONCERNINGTHEPARTICULARFACTSOFTHISCASE.THEGRANTEEFURTHEREXPRESSLYWAIVES,TOTHEMAXIMUMEXTENTALLOWEDBYLAW,ANYAND ALLRIGHTSANDDEFENSESTHATTHEGRANTEEMAYHAVEUNDERCALIFORNIACIVILCODESECTION3275ORANYOTHERSTATUTEORCOMMONLAWPRINCIPLEOFSUBSTANTIALLYTHESAMEEFFECT.THEGRANTEEACKNOWLEDGESTHATTHETERMSAND CONDITIONSOFTHEAGREEMENTREFLECTTHEPOSSIBILITYOFFORFEITUREBYVIRTUEOFTHEEXERCISEOFTHEGRANTOR’SPOWEROFTERMINATIONPROVIDEDINTHISSECTION2.7ANDFURTHERACKNOWLEDGETHATITHASRECEIVED#I66692v461442EXHIBITD45635.01000\29179005.13
INDEPENDENTANDADEQUATECONSIDERATIONFORITSWAIVERANDRELINQUISHMENTOFRIGHTSANDREMEDIESPURSUANTTOSECTION8.6ANDTHISSECTION8.7.8.8.TheprovisionsofthisSection8shallrunwiththelandofthe Property,shallbeenforceableagainsttheGranteeanditssuccessorsandassigns,andshallterminateandexpireuponCompletionofConstruction.GRANTEE’SINITIALSPARTTHREESection9.Grantee CovenanttoUndertakeProject. TheGranteecovenants,,foritself,itssuccessorsandassigns,toandfortheexclusivebenefitofGrantor,thatGranteeshallcommenceandcompletethedevelopmentoftheProjectonthePropertywithinthetimeperiodforsuchactionssetforthintheScheduleofPerformance, subjecttotheeffectof“UnavoidableDelay”(asdefinedintheAgreement)andsubjecttotheprovisionsofSection4.1oftheAgreement.Granteecovenantsandagreesforitself,itssuccessors,andassigns,thatthePropertyshallbeimprovedanddevelopedwiththeProjectinsubstantialconformitywiththetermsandconditionsoftheAgreement,theScopeofDevelopment(withsuchmodificationsasGrantorshallhaveapproved),theScheduleofPerformance,the“Entitlements”(asdefinedintheAgreement)andthe“AdditionalProjectApprovals”(asdefinedintheAgreement),exceptforsuchchangesasmaybemutuallyagreeduponinwritingbyandbetweenGrantorandGrantee,andallapplicablelaws,regulations,ordersandconditionsofeachGovernmentalAgencywithjurisdictionoverthePropertyortheProject.Section10.CovenantsRunwiththeLandoftheProperty.EachofthecovenantsandagreementscontainedinthisGrantDeedtouchandconcernthePropertyandeachofthemisexpresslydeclaredtobeacommunitydevelopmentcovenantthatrunswiththelandforthebenefitoftheGrantor,andsuchcovenantsrunwiththelandinfavoroftheGrantorfortheentireperiodthatsuchcovenantsareinfullforceandeffect,regardlessofwhethertheGrantorisorremainsanownerofanylandorinterestinlandtowhichsuchcovenantsrelate.TheGrantor,intheeventofanybreachofanysuchcovenants,hastherighttoexercisealloftherightsandremedies,andtomaintainanyactionsatlawor suitsinequityorotherproperproceedings,toenforcethecuringofsuchbreach,asprovidedintheAgreementorbylaw.ThecovenantscontainedinthisGrantDeedareforthebenefitofandareenforceableonlybytheGrantorandshallsurvivetheexecutionandrecordationofthisGrantorDeed andtheissuanceandrecordationofeachandeveryCertificateofCompletion,forthetime periodsetforthabovefor eachcovenant.SectionIi.CostsandAttorneys’FeesforEnforcementProceeding.Iflegalproceedingsareinitiatedtoenforcetherights,dutiesorobligationsofanyofthecovenantssetforthinthisGrantDeed,thentheprevailingpartyinsuchproceedingshallbeentitledtocollectitsreasonableattorneyfeesandcostsfromtheotherpartyinadditiontoanyotherdamagesorreliefobtainedinsuchproceedings./fl66692v46144.2EXHIBITD45635.O1000\29179005.13
Section12.EffectofUnlawful Provision; Severability.IntheeventthatanyprovisionofthisGrantDeedisheldtobeinvalid orunlawfulbyafinaljudgmentofacourtofcompetentjurisdiction,suchinvalidityshallnotaffectthevalidityofanyotherprovisionofthisGrantDeed.#166692v46144.2EXHIBITD45635.010O029179005.13
[NWITNESS WHEREOF,theGrantorhascaused thisGrantDeedtobeexecutedbyitsauthorizedrepresentative(s)onthisdayof,2017.GRANTOR:THECITYOFAZUSAaCaliforniamunicipalcorporationBy:_______________________TroyButzlaffCityManager[ALLSIGNATURESMUSTBENOTARYACKNOWLEDGEDJ#166692v46144.2EXHIBITD45635.O1000\29179005.13
EXFIIBITATOGRANT DEEDPropertyLegalDescription#166692v46144.2EXHIBITD45635.0100029I79005.13
CERTIFICATEOFACCEPTANCEOFGRANTDEEDTheundersignedherebyacknowledgesacceptancebyCostanzoInvestments,aCalifornialimitedliability company,theGranteeinthewithinGrantDeed,ofthedeliveryofthesubjectPropertydescribedinthewithin GrantDeed fromtheCityofAzusa.GRANTEE:CostanzoInvestments,aDelawarelimitedliabilitycompanyDated:_____________________By:__________________________________JamesR.Costanzo,Co-ManagingMemberBy:__________________________ChrisCostanzo,Co-ManagingMemberFALLSIGNATURESMUSTBENOTARYACKNOWLEDGEDI#166692v46144.2EXHIBITD45635.0100O29179005.13
EXHIBITETO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)FormofNoticeofAgreementjAttachedBehindThis Pagel#166692v46144.2EXHIBITE45635.01000\29179005.13
RECORDINGREQUESTEDBYANDWHENRECORDEDRETURNTO:TheCityofAzusa213E.FoothillBlvd.Azusa,California91702Attn:CityManagerExemptfromRecordingfeepursuanttoGov’tCode§27383NOTICEOFAGREEMENT2017DispositionandDevelopmentAgreement(CostanzoInvestments,LLC/A-2Property)TOALLINTERESTEDPERSONSPLEASETAKENOTICEthatCostanzoInvestments,aCalifornialimitedliabilitycompany(the“Developer”)andtheCityofAzusa,aCaliforniamunicipalcorporation(the“City”)enteredintoanagreemententitled2017DispositionandDevelopmentAgreement(CostanzoInvestments,LLC/A-2Property),datedasof______,2017(the“Agreement”).AcopyoftheAgreementisonfilewith theCityandisavailableforinspectionandcopyingbyinterestedpersonsasapublic recordoftheCityattheCity’soffices locatedat 213E.FoothillBlvd.,Azusa,California91702,duringtheCity’sregularbusinesshours.TheAgreementaffectstherealpropertydescribedinExhibitAattachedtothisNoticeofAgreement(the“Properties”).Themeaningofdefinedterms,indicatedbyinitialcapitalization,usedinthisNoticeofAgreementshallbethesameasthemeaning ascribedtosuchtermsintheAgreement.PLEASETAKEFURTHERNOTICEthattheAgreementcontainscertaindevelopmentcovenantsrunningwiththelandofthePropertiesandotheragreementsbetweentheDeveloperandtheCityaffectingtheProperties,assetforthbelow(allsectionreferencesaretotheAgreement):Section4.1oftheAgreementprovides:4.1DeveloperCovenanttoUndertakeProject.TheDevelopercovenants,foritself,itssuccessorsandassigns,toandfortheexcltLsivebenefitofthe City,thattheDeveLopershallcommenceandcompletethedevelopmentoftheProjectonthePropertieswithinthetimeperiodforsuchactionssetforthintheScheduleofPerformance,subjecttotheeffectofUnavoidableDelayandsubjecttotheprovisionsofSection4.1.TheDevelopercovenantsandagrees foritself,itssuccessors,andassigns,thatthePropertiesshallbeimprovedanddevelopedwiththeProjectinsubstantialconformitywiththetermsandconditionsofthisAgreement,theScopeofDevelopment (withsuchmodificationsasCityshall haveapproved),theScheduleofPerformance,theEntitlementsandthe AdditionalProjectApprovals,exceptforsuchchangesasmaybemutuallyagreeduponinwritingbyandbetweentheParties,andallapplicablelaws,#166692v46144.2EXHIBITE45635.0100029I79005.13
regulations,ordersandconditionsofeachGovernmentalAgencywithjurisdictionoverthePropertiesor theProject.ThecovenantsofthisSection4.1shallrunwiththelandofthePropertiesuntiltheearlierofthedateofrecordationoftheCertificateofCompletionorthefifteenth(15th)anniversaryofthedateoftheCloseofEscrow.Section5.1oftheAgreementprovides:5.1CovenanttoMaintainPropertiesonlaxRolls.TheDeveloperforitself,itssuccessorsandassignstoalloranypartorportionofthePropertiesand/orProject,covenantsandagreesthat:5.1.1ThePropertiesshallremainontheCountysecuredrealpropertytaxrollsfortwentyyearsfromthe dateofissuanceofacertificateofoccupancyfortheProject.thefulltermofthisAgreement.5.1.2TheDevelopershallpayallpropertytaxbillswithrespecttothePropertiesandallimprovements thereononorbeforethe lastdayforthetimelypaymentofeachpropertytaxinstallmentoneachDecember10andApril10duringsuchtimeperiodandtotimelypayallsupplementaltaxbillsregardingthePropertiesissuedbytheCounty.TheDeveloperfurthercovenantsandagreestoprovidetothe City,onor beforeJuly31ofeachyear,commencinginthecalendaryearfollowingthecalendaryearinwhichaCertificateofCompletionisrecordedandineachcalendaryear,thereafter,forthefulltermofthiscovenant:(i)atrueandcorrectcopyofallpropertytaxassessmentnotices,propertytaxbillsandpropertytaxassessmentcorrespondencebyandbetweentheDeveloperandtheCountyregardingthePropertiesandallimprovementsthereon,withrespecttotheprecedingfiscalyearoftheCounty,and(ii)cancelledchecksissuedbytheDeveloperinpaymentofallpropertytaxpaymentsthataremadetotheCountyregardingthePropertiesandallimprovementsthereon(orotherreasonablyacceptableevidenceofsuchpayment),withrespecttotheprecedingCountyfiscalyear.5.1.3Thecovenantsofthis Section5.1shallrunwiththelandoftheProperties,shallbeenforceableagainsttheDeveloperanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed.Section5.2oftheAgreementprovides:5.2NoConveyancetoTaxExemptEntity.TheDeveloperforitself,itssuccessorsandassignstoalloranypartorportionofthePropertiesand/orProject,covenantsandagreesthat:5.2.1TheDevelopershallnotuseorotherwisesell,transfer,convey,assign,lease,leasebackorhypothecatetheProperties,theProject,oranyportionofanyoftheforegoingtoanyentityorperson,orfor anyuseoftheProperties,theProject,oranyportionofanyoftheforegoing,thatispartiallyorwhollyexemptfrom thepaymentofrealorpersonalpropertytaxesorthatwouldcausetheexemptionofthepaymentofallor anyportionofrealorpersonalpropertytaxesotherwiseassessableregardingtheProperties,theProject,oranyportionofanyofthe foregoing,withoutthepriorwrittenconsentoftheCity,whichmaybewithheldintheCity’ssoleandabsolutediscretionforaperiodof20yearsfrom the dateofissuanceofthecertificateofcompletionfortheProjectbytheCity..#166692v46144.2EXHIBITE45635.01000\29I79005.13
Section5.3oftheAgreementprovides:5.3MaintenanceCondition oftheProperties.TheDeveloperforitself,itssuccessorsandassignstoallorany partorportionoftheProperties and/orProject,covenantsandagreesthat:5.3.1TheareasofthePropertiesthataresubjecttopublicview(includingallexistingand futureimprovements,paving,walkways,landscaping,exteriorsignageandornamentation)shallbemaintainedingoodrepairandaneat,cleanandorderlycondition, ordinarywearandtearexcepted.IfthereisanoccurrenceofanadverseconditiononanyareaofthePropertiesthatissubjecttopublicviewincontraventionofthegeneralmaintenancestandard describedabove(a“MaintenanceDeficiency”),thentheCityshallnotifytheDeveloperinwritingoftheMaintenanceDeficiency.IftheDeveloperfailstocureorcommenceanddiligentlypursuetocurethe MaintenanceDeficiency withinthirty(30)daysofitsreceiptofnoticeoftheMaintenanceDeficiency,theCityshallhave therighttoenterthePropertiesandperformallactsnecessarytocuretheMaintenanceDeficiency,ortotakeanyotheractionatLaworinequitythatmaythenbeavailabletotheCitytoaccomplishtheabatementoftheMaintenance Deficiency.AnysumexpendedbytheCityfortheabatementofaMaintenanceDeficiencyonthePropertiespursuanttothisSection5.3.1shallbecomealien ontheProperties,asapplicable.Iftheamountofthelienisnotpaidwithinthirty(30)daysafterwrittendemandforpaymentfromtheCitytotheDeveloper,theCityshall havetherighttoenforcethelieninthemannerprovidedinSection5.3.3.5.3.2Graffiti,asthistermisdefinedinGovernmentCodeSection38772,thathasbeenappliedtoanyexteriorsurfaceofastructureorimprovementonthePropertiesthatisvisiblefromanypublicright-of-wayadjacentorcontiguoustotheProperties,shallberemovedbytheDeveloperbyeitherpaintingoverthe evidenceofsuchvandalismwithapaintthathasbeencolor-matchedtothesurfaceonwhichthepaintisapplied,or graffitimayberemovedwithsolvents, detergentsorwater,asappropriate.Ifanysuchgraffitiisnotremovedwithinninety-six(96)hoursfollowingthetimeofthediscoveryofthegraffiti,theCityshallhavethe righttoenterthePropertiesandremove the graffiti,withoutnoticetotheDeveloper.Anysumreasonablyexpendedby theCityfortheremovalofgraffiti fromthePropertiespursuanttothisSection5.3.2,shaLlbealienontheProperties.Iftheamountofthelienisnotpaidwithinthirty(30)daysafter writtendemandtotheDeveloper from theCity,theCityshallhavetheright toenforceitslieninthemannerprovidedinSection5.3.3.5.3.3ThePartiesfurther mutuallyunderstandandagree thattherightsconferred upontheCityunderthis Section5.3expresslyincludeagrantby theDeveloperofasecurityinterestinthe Propertieswith thepowertoestablishandenforcealienorotherencumbranceagainstthePropertiesoranyportionthereof,inthemannerprovidedunderCivil CodeSections 2924,2924band2924c,tosecuretheobligationsoftheDeveloperanditsuccessorsunder Section5.3.1orSection5.3.2,includingthereasonableattorneys’feesandcostsoftheCityassociatedwiththeabatementofaMaintenanceDeficiencyorremovalofgraffiti.forthepurposesoftheprecedingsentencethewords“reasonableattorneys’feesandcostsoftheCity”meanandinclude thesalaries,benefitsandcostsoftheCityAttorneyandtheLawyersemployedintheOfficeoftheCityAttorney.#166692v46144.2EXHIBITE45635.01000\29179005.13
5.3.4TheprovisionsofthisSection5.3,shallbeacovenantrunningwiththelandoftheProperties,shallbeenforceable againsttheDeveloperanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed.NothingintheforegoingprovisionsofthisSection6.3shallbedeemedtopreclude theDeveloperfrommakinganyalteration, addition,orotherchangetoanystructureorimprovementorlandscapingontheProperties, provided thatanysuchchanges complywith applicablezoningandbuildingregulationsoftheCity.Section5.4oJtheAgreementprovides.5.4ObligationtoRefrainfromDiscrimination.TheDeveloperforitself,itssuccessorsandassignstoalloranypartor portionofthePropertiesand/orProject,covenantsandagreesthat:5.4.1Thereshallbenodiscriminationagainstorsegregationofanyperson,orgroupofpersons,onaccountofsex,marital status,race,color,religion,creed,nationaloriginorancestryinthesale, tease,sublease,transfer,use,occupancy, tenureorenjoymentofthePropertiesnorshalltheDeveloper,itselforanypersonclaimingunderorthroughit,establishorpermitanysuchpracticeorpracticesofdiscriminationorsegregationwithreferencetothe selection,location,number,use oroccupancyoftenants,lessees,sub-tenants,sub-lesseesorvendeesoftheProperties.ThecovenantofthisSection5.4shall runwiththelandofthePropertiesandshallbeenforceableagainsttheDevetoperanditssuccessorsandassignsinperpetuityandbeacovenantintheGrantDeedandtheNoticeofAgreement.5.4.2ThecovenantofthisSection5.4shall runwith thelandofthePropertiesinperpetuity,shallbeenforceable againsttheDeveloperanditssuccessorsandassigns,andshallbecovenantssetforthintheGrantDeed.#166692v46144.2EXHIBITE45635.01029179005.13
NOTICEOfAGREEMENT2017DispositionandDevelopmentAgreement(CostanzoInvestments,LLC/A-2Property)ThisNOTICEOfAGREEMENTisdatedasof________________,2017,andhasbeen executedonbehalfoftheDeveloperandtheCitybyandthroughthesignaturesoftheirauthorizedrepresentative(s)set forthbelow.ThisNoticeofAgreementmaybeexecutedincounterpartsandwhenfullyexecutedeachcounterpartshallbedeemedtobeoneoriginalinstrument.CITY:THECITYOFAZUSAaCaliforniamunicipal corporationDated:_______________,2017By:______
____TroyButzlaffCityManagerATTEST:CityCLerkAPPROVEDASTOLEGALFORM:BESTBEST&KRIEGERLLPBy:___________________CityAttorney#166692v46144.2EXHIBITE45635.0100029179005.13
DEVELOPER:CostanzoInvestments,aCalifornialimitedliabiLitycompanyDated:______________________By:___________________________________JamesR.Costanzo,Co-ManagingMemberBy:___________________________ChrisCostanzo,Co-ManagingMember[ALLSIGNATURES MUSTBENOTARYACKNOWLEDGEDJ#166692v46144.2EXHIBITE45635.O1000\29179005.13
EXHIBITATONOTICEOFAGREEMENTLegalDescriptionofProperty#166692v46144.2EXHIBITE45635.O1OOO29179005.13
EXHIBITFTO2017DISPOSITIONAND DEVELOPMENTAGREEMENT(Costanzo Investments,LLC/A-2Property)FormofOfficialActionofDeveloperCERTIFICATIONOF LLCAUTHORITYTheundersignedmembersof______________,aDelawarelimited liabilitycompany(the“LLC”),docertifythatwe areallofthemembersoftheLLCandthattherearenoothermembers.Wefurther certify thatany one(I) ofthefollowingnamedpersons,individually:[INSERTNAMESJbe,andtheyare,authorizedandempoweredfor andonbehalfofandinthe nameoftheLLCtoexecuteanddeliver thatcertain2017DispositionandDevelopmentAgreement______________),dated______
,2017,betweentheCityofAzusa,aCaliforniamunicipalcorporation,(“City”)andtheLLC (the“Agreement”),topurchase certainrealpropertylocatedintheCityofAzusa,California,asspecificallydescribedintheAgreement,andallotherdocumentstobeexecutedbytheLLCinconnection withthetransactionscontemplatedintheAgreement,andtotakeallactionsthatmaybeconsiderednecessarytoconcludethetransactionscontemplatedintheAgreementandperformtheotherobligationsoftheLLCpursuanttotheAgreement.Theauthorityconferredshallbeconsideredretroactive,andanyandallactsauthorizedinthis documentthatwereperformed beforetheexecutionofthisCertificateareapprovedandratified.Theauthorityconferredshallcontinueinfullforce andeffectuntiltheCityofAzusa,aCaliforniamunicipal corporationshallhavereceivednoticeinwritingfromtheLLCoftherevocationofthisCertificate.Wefurthercertifythattheactivitiescoveredbytheforegoing certificationsconstituteduly authorized activitiesoftheLLC;thatthesecertificationsarenowinfullforce andeffect;andthatthereisnoprovisioninanydocumentunderwhichtheLLCisorganizedand/orthatgovernstheLLC’scontinuedexistence,limitingthepoweroftheundersignedtomakethecertificationssetforthinthiscertificate,andthatsuchcertificationsareinconformitywith theprovisionsofallsuchdocuments.LLCMembers:#166692v46144.2EXHIBITF45635.01000\29I79005.13
EXHIBITGTO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)FormofCertificateofCompletion[AttachedBehind ThisPageJ#166692v46144.2EXHIBITG45635.01000\29179005.13
RECORDING REQUESTEDBYAND WHEN RECORDEDMAILTO:Attention:ExemptfromRecordingfeepursuanttoGov’tCode§27383CITYOFAZUSACERTIFICATEOFCOMPLETION(CostanzoInvestments,LLC/A-2Property)I,TroyButzlaff,CityManageroftheCityofAzusa(the“City”)certifythat:ByitsResolutionNo.______,adoptedandapproved_____________,_____
,theCity Councilresolved:Section1.TheProjectdescribedas[1requiredtobeconstructedinaccordancewiththat certain2017DispositionandDevelopmentAgreement______________),dated_______,2017(“DDA”),betweentheCityand_
___________
_
,aCalifornialimitedliabilitycompany(the“Developer”),onthatcertainrealpropertyspecificallydescribedinthelegaldescription(s)attachedtothisCertificateofCompletionasExhibitA(the“Property”),iscompleteinaccordancewiththeprovisionsoftheAgreement.ThisCertificateofCompletionconstitutesconclusiveevidenceoftheCity’sdeterminationoftheDeveloper’ssatisfactionofitsobligationundertheAgreementtoconstructand installthe ProjectontheProperty,including,withoutlimitation,anyandallbuildings,parkingareas,landscapingareasandrelatedimprovementsnecessarytosupportormeetanyrequirementsapplicabletotheProjectanditsuseandoccupancyontheProject,whetherornotsuchimprovementsarelocatedonoroffthePropertyoronotherpropertysubjecttotheAgreement.NotwithstandinganyprovisionofthisCertificateofCompletion,theCitymayenforceanycovenant survivingthisCertificateofCompletioninaccordance withthetermsandconditionsoftheAgreementandtheGrantDeedbywhichthePropertywasconveyedtotheDeveloperbytheCityundertheAgreement.TheAgreementisanofficial recordoftheCityandacopyoftheAgreementmaybeinspectedattheCity’sofficelocatedat 213E.Foothill Blvd.,Azusa,California91702,duringtheCity’sregular businesshours.DATEDANDISSUEDthis____dayof45635.01000\29179005.13
THE CITYOFAZUSAaCaliforniamunicipalcorporationBy:TroyButzlaffCityManager45635.O1000\29179005.13
EXHIBITATOCERTIFICATEOFCOMPLETIONLegalDescriptionoftheProperty45635.01000\29179005.13
STATEOFCALIFORNIA))ss.COUNTYOF__________)On_________________,beforeme,________________________________,NotaryPublic,personallyappeared____________________________,personallyknownto me tobetheperson(s)whose name(s)is/aresubscribedtothewithin instrumentandacknowledgedtomethathe/she/theyexecutedthesameinhis/her/their authorizedcapacity(ies),andthatbyhis/her/theirsignature(s)ontheinstrumenttheperson(s),ortheentityuponbehalfofwhichtheperson(s)acted,executedthe instrument.WITNESSmyhandandofficialseal.NotaryPublic45635.01002917905.13
EXHIBITHTO2017DISPOSITIONANDDEVELOPMENTAGREEMENT(CostanzoInvestments,LLC/A-2Property)FormofAssignmentandAssumptionAgreementjAttachedBehindThisPageJ45635.O1000\29179005.13
45635.09000\29537310.1
RESOLUTION NO. 2017-C16
A RESOLUTION OF THE SUCCESSOR AGENCY TO
THE AZUSA REDEVELOPMENT AGENCY APPROVING
A PURCHASE AND SALE AGREEMENT WITH
COSTANZO INVESTMENTS, LLC FOR APNS 8608-025-
902, 8608-025-907 AND 8608-025-910
WHEREAS, pursuant to Health and Safety Code section 34173(d), the City of Azusa
(“Successor Agency”) is the successor agency to the Azusa Redevelopment Agency (“Agency”);
and
WHEREAS, pursuant to Health and Safety Code section 34179(a), the Oversight Board
is the Successor Agency’s oversight board; and
WHEREAS, as part of the dissolution of the Agency, the Successor Agency developed a
Long Range Property Management Plan (LRPMP) to identify the disposition and use of the real
properties of the Agency; and
WHEREAS, the LRPMP was approved by the Oversight Board of the Successor
Agency and by the Department of Finance (“DOF”); and
WHEREAS, as part of the LRPMP, the DOF approved the Successor Agency’s plan to
sell APNs 8608-025-902, 8608-025-907 and 8608-025-910 (“Agency Property”) expeditiously
and in a manner aimed at maximizing value; and
WHEREAS, Developer’s proposed acquisition of the Agency Property is in the best
interest of the Successor Agency and the winding down of the Successor Agency’s business.
NOW, THEREFORE, THE SUCCESSOR AGENCY TO THE AZUSA
REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AND FIND AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
Section 2. CEQA Compliance. In accordance with the California Environmental
Quality Act (Pub. Resources Code, § 21000 et seq. “CEQA”) and the State CEQA Guidelines
(14 Cal. Code Regs., § 15000 et seq.), the City Council certified the final Azusa TOD Specific
Plan Environmental Impact Report and adopted findings pursuant to CEQA. The City has not
received any comments or additional information that produced substantial new information
requiring recirculation or additional environmental review under Public Resources Code sections
21166 and State CEQA Guidelines, section 15162. No further environmental review is required
for the City to adopt this Resolution.
Section 3. Findings. The Successor Agency finds and declares that the sale of the
Agency property pursuant to the Purchase and Sale Agreement is consistent with and in
45635.09000\29537310.1
furtherance of the dissolution of the Former Redevelopment Agency of the City Of Azusa and
the Department of Finance approved Long Range Property Management Plan.
Section 4. Approval of Agreement. The Successor Agency hereby approves the
Agreement, in substantially the form attached to this Resolution as Exhibit “A,” and authorizes
the Executive Director, acting on behalf of the Successor Agency, to sign and enter into the
Agreement and perform the obligations of the Successor Agency pursuant to the Agreement.
Section 5. Severability. If any provision of this Resolution or the application of any
such provision to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of this Resolution that can be given effect without the invalid
provision or application, and to this end the provisions of this Resolution are severable. The
Successor Agency declares that the Successor Agency would have adopted this Resolution
irrespective of the invalidity of any particular portion of this Resolution.
Section 6. Certification. The City Clerk of the City of Azusa, acting on behalf of
the Successor Agency, shall certify to the adoption of this Resolution.
Section 7. Effective Date. This Resolution shall become effective immediately upon
its adoption.
APPROVED AND ADOPTED THIS ______ day of ____, 2017.
________________________________
Chair
ATTEST:
________________________________
City Clerk
45635.09000\29537310.1
EXHIBIT A
PURCHASE AND SALE AGREEMENT
(Costanzo Investments, LLC/A-2 Property)
[Attached behind this cover page]
2017PURCHASEANDSALEAGREEMENTANDJOINTESCROWINSTRUCTIONS(CostanzoInvestments,LLC/A-2Property)betweenTHESUCCESSORAGENCYTOTHEAZUSAREDEVELOPMENTAGENCY,apublicbody,corporateandpoliticandCOSTANZOINVESTMENTS,LLC,ADELAWARELIMITEDLIABILITYCOMPANY45635.09000\29464256.5
This2017PURCHASEANDSALEAGREEMENTANDJO[NTESCROWINSTRUCTIONS(CostanzoInvestments,LLC/A-2Property)(“Agreement”)isdatedasof__________2017(“DateofAgreement”),forreferencepurposesonly,andisenteredintobyandbetweentheSuccessorAgencytotheAzusaRedevelopmentAgency,apublicbody,corporateandpolitic(“Seller”)andCostanzo Investments,LLC,aDelawarelimitedliabilitycompany(“Buyer”).SellerandBuyeraresometimesreferredtointhisAgreement,eachindividually,asa“Party,”orcollectively,asthe“Parties.”RECITALSThisAgreementisenteredintowith referencetothefollowingrecitalsoffact(“Recitals”)SellerandBuyerbelievetobetrueasoftheEffectiveDateofthisAgreement:A.Selleristheownerofthatcertainrealpropertylocatedat826,858,832,and$30N.AzusaAvenue,Azusa(APN58608-025-902, 8608-025-907and8608-025-910)andmorespecificallydescribedinExhibitAattachedhereto andincorporatedhereinbythisreference(“Property”).B.OnMay9,2016,theCityofAzusa(“City”)approvedanexclusiverighttonegotiateanagreementwithBuyer forpotentialdevelopmentofthePropertyaswellascertainpropertyownedbythe City.Buyerproposedtheacquisitionanddevelopmentofthesepropertiesforconstructionofamulti-storymixed-usecommercial,retail andperhapsresidentialdevelopment.TheCityandBuyerarecurrentlynegotiatingaDispositionandDevelopmentAgreement(“DDA”)forthepurposeofselling certain propertyownedbytheCitytoBuyer,andfor Buyertodevelopthe citypropertiesaswellastheProperty.C.Seller desirestoseltthePropertytoBuyerandBuyerdesirestopurchasethePropertyfromSellerinaccordancewiththetermsandconditionsofthisAgreement.NOW,THEREFORE,inconsiderationofthe mutualpromisessetforthinthisAgreementandothergoodandvaluableconsideration,thereceiptandsufficiencyofwhichisacknowledgedbySellerandBuyer,thePartiesagreeasfollows:TERMSANDCONDITIONSARTICLEIDEFINITIONS;REPRESENTATIONSANDWARRANTIES;EFFECTIVEDATE1.1Definitions.Allinitiallycapitalizedtermsnototherwise definedinthisAgreementshallhavethefollowingmeanings:1.1.1“ActualKnowledge”hasthemeaning ascribedtosuchterminSection1.2.1(withrespecttoSeller) andSection1.2.2(with respecttoBuyer),respectively.1.1.2“Buyer’sTitleNotice”meansawrittennoticefrom BuyertoSellerindicatingBuyer’sacceptanceofthestateofthetitletotheProperty,asdescribedinthe45635.09000\29464256.5—I—
PreliminaryReport,orBuyer’sobjectiontospecific mattersshowninScheduleBofthePreliminaryReportasexceptionstocoverage undertheproposedTitlePolicyfortheProperty,describinginsuitabledetail theactionsthatBuyerreasonablybelievesareindicatedtocureorcorrecteachofBuyer’sobjections.1.1.3“Buyer’sTitleNoticeWaiver”meansawrittennoticefrom BuyertoSellerwaivingBuyer’spreviousobjectioninBuyer’sTitleNoticetospecific mattersshowninScheduleBofthePreliminaryReportasexceptionstocoverageundertheproposedTitle PolicyfortheProperty.1.1.4“CEQA”meanstheCaliforniaEnvironmental QualityAct,PublicResources CodeSections21000,etq.1.1.5“CloseofEscrow”or“Closing”meanstherecordingoftheGrantDeedforthePropertyintheOfficialRecordsoftheRecorderoftheCounty,andcompletionofeachoftheactionssetforthinARTICLEIIIbytheEscrow Holder for SellertosellthePropertytoBuyerandBuyertopurchasethePropertyfromSeller.1.1.6“ClosingDate”hasthemeaningascribedtotheterminSection3.5.7.1.1.7“Control”means andreferstopossession,directlyorindirectly,ofthepowertodirector causethedirectionofthemanagementandpoliciesofaperson or entity,whetherbyownershipofequityinterests,bycontractorotherwise.1.1.8“Controlling”and“Controlled”mean andrefertoexercisingorhavingControl.1.1.9“County”meanstheCountyofLosAngeles, California.1.1.10“DueDiligenceInvestigations”meansBuyer’sduediligenceinvestigationsofthePropertytodeterminethesuitabilityofthePropertyfordevelopmentandoperationofthe Project,including,without[imitation,investigationsoftheenvironmentalandgeotechnicalsuitabilityoftheProperty,asdeemedappropriateinthereasonablediscretionofBuyer,allatthesolecostandexpenseofBuyer.1.1.11“DueDiligenceInvestigationConclusionNotice”meansawrittennoticeofBuyerdeliveredtoSellerand theEscrow Hotder,priortotheendoftheDueDiligencePeriod, indicatingBuyer’sacceptanceoftheconditionofthePropertyorindicating Buyer’srejectionoftheconditionofthePropertyandrefusaltoacceptaconveyanceoffeetitletotheProperty,describinginreasonabledetail theactionsthatBuyerbelievesarenecessaryordesirabletoallowBuyertoaccepttheconditionoftheProperty.1.1.12“DueDiligencePeriod”meansthedatecommencingontheEffectiveDateandendingat5:00 p.m.ontheninetieth(90th)dayfollowingtheEffectiveDate.1.1.13“EarnestMoneyDeposit”meansFifteenThousandDollars($15,000.00)payableincashorotherimmediately availablefunds.45635.O9OOO29464256.5—2-
1.1.14“EffectiveDate”hasthemeaning ascribedtotheterminSection1.3.1.1.15“Escrow”hasthemeaningascribedtotheterminSection2.1.1.1.16“EscrowHolder”meansfirstAmericanTitle InsuranceCompany,18500VonKarman,Suite600,Irvine, CA92612(RyanKahn,SeniorEscrowOfficer).1.1.17“EscrowOpeningDate”hasthemeaningascribedtothe terminSection3.1.1.1.18“ExecutiveDirector”meanstheCityManageroftheCityofAzusaorhis or herdesigneeorsuccessorinfunction, actingonbehalfoftheSelLer.1.1.19“Event ofDefault”hasthemeaning ascribedtotheterminSection4.1.1.1.20“FIRPTAAffidavit”meansanaffidavitcomplyingwithSection1445oftheUnitedStatesInternalRevenueCode.1.1.21“GrantDeed”meansadeedintheformofExhibitBtothisAgreement,conveyingallofSeller’sinterestinthePropertytoBuyer.1.1.22“GovernmentalAgency”meansanyandallcourts,boards,agencies,commissions,offices,orauthoritiesofanynaturewhatsoeverforanygovernmentalunit(federal,state, county,district,municipal,Seller,orotherwise),whethernoworlaterinexistence,havingjurisdictionovertheProperty.1.1.23“GovernmentalRequirements”meansallcodes,statutes,ordinances,laws,permits,orders,andany rulesandregulationspromulgatedthereunderofanyGovernmentalAgency applicabletotheProperty.1.1.24“HazardousSubstances”means,withoutimpliedlimitation,substances definedas“hazardoussubstances,”“hazardous material,”“toxicsubstance,”“solidwaste,”or“pollutantorcontaminate”intheComprehensiveEnvironmentalResponse,CompensationandLiabilityActof1980,asamended,42U.S.C.Sections9601,et.;theToxicSubstances ControlAct(“TSCA”)[15U.S.C.Sections260!,etct.];theHazardousMaterialsTransportationAct, 49U.S.C.Sections1801,et.;theResourceConservationandRecoveryAct,42U.S.C.Sections6901,et;thosesubstanceslistedintheUnitedStatesDepartmentofTransportation(DOT)Table[49CFR172.101],orbytheEPA,oranysuccessorauthority,ashazardous substances[40CFRPart302];andthosesubstancesdefinedas“hazardous waste”inSection25117oftheCaliforniaHealthandSafetyCodeor,as“hazardoussubstances”inSection25316oftheCaliforniaHealthandSafetyCode;othersubstances,materials,andwastesthatare,orbecome, regulatedorclassifiedashazardousor toxicunderfederal,state,orlocallawsorregulationsandintheregulations adoptedpursuanttosaid laws,andshallalsoinclude manure,asbestos,polychlorinatedbiphenyl,flammableexplosives,radioactivematerial,petroleumproducts,andsubstancesdesignatedasahazardoussubstancepursuantto33USCSection1321orlistedpursuantto33USCSection1317.45635.09000’29464256.5—3—
1.1.25“Party”means,individually,SellerorBuyer,asapplicable.1.1.26“Parties”means,collectively,SellerandBuyer.1.1.27“PCOStatement”meansapreliminarychangeofownershipstatementprovidedforinCaliforniaRevenueandTaxationCodeSection480.3.1.1.28“PermittedExceptions”means(1)anyandallitemsshowninScheduleBofthePreliminary Reportasexceptionstocoverage undertheproposedTitlePolicythatBuyeraccepts,pursuanttoSection2.4;(ii)anyexceptionsfromcoverageundertheproposedTitlePolicyresultingfromBuyer’sactivitiesontheProperty;(iii)non-delinquentpropertytaxesandassessments;(iv)thisAgreement;or(v)theGrantDeed.1.1.29“PreliminaryReport”meansapreliminaryreportissuedbytheTitleCompanyincontemplationoftheissuanceoftheTitle Policy,accompaniedbylegiblecopiesofalldocumentsListed inScheduleBofthereportasexceptionstocoverageundertheproposedTitlePolicy.1.1.30“Project”meanstheconstructionanddevelopmentofthePropertyasamulti-storycentermixed-use developmentpotentiallyincludingretailstores,commercialspaceand/orresidentialuses,includingallrequiredorassociated on-siteandoff-siteimprovementsandrelated hardscapeandalllandscaping,inaccordancewiththetermsandconditionsoftheDDA.1.1.31“Property”meansthatcertainrealpropertylocatedat826, 858,832,and830N.Azusa Avenue,Azusa(APNs8608-025-902,8608-025-907and8608-025-910),aslegallydescribedinExhibitA.1.1.32“PurchasePrice”meanstheamountofOneMillionTwoHundredThousandDollars($1,200,000),incashorimmediatelyavailablefunds.1.1.33“Record”, “recorded”,“recording”or“recordation”each meanandrefertorecordationofthereferenceddocumentintheofficialrecordsoftheRecorderoftheCountyofLosAngeles,California.1.1.34“ScheduledEscrowClosingDate”hasthemeaning ascribedtotheterminSection3.5.7.1.1.35“Seller”meanstheSuccessorAgencytotheAzusaRedevelopmentAgency,apublicbody,corporateand politic.1.1.36SellerParties.Collectively, SellerandSeller’selected officials,employees,agentsandattorneys.1.1.37“Seller’sTitleNoticeResponse”meansthewrittenresponseofSellertoBuyer’sTitleNotice,inwhich Sellereither(1)electstocausetheremovalfromthePreliminaryReportofanymattersshowninScheduleBofthePreliminaryReportasexceptionstocoverageundertheproposedTitlePolicythat were objectedtoinBuyer’sTitle Notice,or(ii)electsnot tocausetheremovalfromthePreliminaryReportofanymattersshowninScheduleBofthe45635.09000\29464256.5—4—
Preliminary Reportasexceptionstocoverage undertheproposedTitlePolicythatwereobjectedtoinBuyer’sTitleNotice.1.1.38“TitleCompany”meansFirstAmericanTitleInsuranceCompany,3281E.GuastiRoad,Suite440,Ontario,CA91761(MailKooks,CommercialTitleOfficer).1.1.39“Title Policy”meansastandardCLTAowners’policyoftitleinsuranceissuedbytheTitleCompany, withcoverageinthefullamountofthePurchasePriceandinsuringfeetitletotheProperty,subjectonlytothePermitted Exceptions.However,atBuyer’s option,BuyermayobtainanALTAextendedcoveragepolicy.Sellershallpayfor thestandardCLTApolicy.Buyershallpay foranyexcessabovethepremiumforastandardCLTApolicyinordertoobtainanALTA extended coveragepolicy.1.1.40“UnavoidableDelay”meansanydelay thatiscausedbytheotherParty (or anyGovernmentalAgencyinthecaseofBuyer’srequiredperformanceshereunder)andisnotcausedbythecLaimingParty,orthatisbeyondthecontrolofSellerorBuyer,including,withoutlimitation, delaycausedbystrikes,actsofGod,weather,inabilitytoobtainlaborormaterials, inabilitytoobtaingovernmentalpermitsorapprovals,governmentalrestrictions,civilcommotion,fire orsimilarcauses, butexcludingcircumstancessubjecttoSection5.7.2.1.2RepresentationsandWarranties.1.2.1SellerRepresentationsandWarranties.WheretherepresentationsandwarrantiesofSellercontainedinthisSection1.2.1arestatedtobetotheactualknowledgeofSeller,“actualknowledge”shallmeantheactualknowledgeoftheCityManagerasoftheEffectiveDate.AllrepresentationsandwarrantiescontainedinthisSection1.2.1aretrue andcorrectasofthe EffectiveDate.Seller’sliabilityformisrepresentationorbreachofwarranty,representationorcovenant,wherevercontainedinthisAgreement,shallsurvivetheexecutionanddeliveryofthisAgreementandtheClosing.Sellerherebymakesthefollowingrepresentations, covenantsandwarrantiesandacknowledges thattheexecutionofthisAgreementbyBityerhasbeenmadeinmaterialreliancebyBuyeronsuchcovenants,representationsandwarranties:1.2.1.1Sellerisapublicbody,corporateandpolitic,dulyformedandoperating underthelawsoftheStateofCalifornia.Sellerhasthelegalpower, rightandauthoritytoenterintothisAgreementandtoexecutetheinstrumentsanddocumentsreferencedherein,andtoconsummatethetransactionscontemplatedhereby.1.2.1.2ThepersonsexectitinganyinstrumentsfororonbehalfofSellerhavebeenauthorizedtoactonbehalfofSellerand,totheactualknowledgeofSeller,thisAgreementisvalidandenforceableagainstSellerinaccordancewithitstermsandeachinstrumenttobeexecutedbySellerpursuantheretoorinconnectiontherewithwill,whenexecuted,bevalidandenforceable againstSellerinaccordancewithitsterms.Noapproval,consent,orderorauthorizationof,ordesignationordeclarationofanyotherperson,isrequiredinconnectionwiththevalidexecutionanddeliveryofthisAgreementbySellerand, totheactualknowledgeofSeller,compliancewiththisAgreementbySeller.45635.09000\29464256.5—5—
1.2.1.3SellerhastakenallrequisiteactionandobtainedallrequisiteconsentsforagreementsormatterstowhichSellerisapartyinconnectionwithenteringintothisAgreementandtheinstrumentsanddocumentsreferencedhereinand,totheactualknowledgeofSeller,inconnectionwiththeconsummationofthetransactionscontemplatedhereby.1.2.1.4Tothe actualknowledgeofSeller,neithertheexecutionofthisAgreementnortheconsummationofthetransactionscontemplatedherebyshallresultinabreachoforconstituteadefaultunderanyotheragreement, document, instrumentorotherobligationtowhichSellerisapartyorbywhich Seller maybebound, orunderlaw,statute,ordinance,rule,governmental regulationoranywrit,injunction,orderordecreeofanycourtorgovernmentalbodyapplicabletoSeller.1.2.1.5IfSellerbecomesawareofanyactorcircumstance thatwouldchangeorrender incorrect,inwholeorinpart,anyrepresentationorwarrantymadebySellerunderthisAgreement,whetherasofthe dategivenoranytimethereafter,whetherornot suchrepresentationorwarrantywasbaseduponSeller’sknowledgeand/orbeliefasofacertaindate,Sellerwill giveimmediatewrittennoticeofsuchchangedfactorcircumstancetoBuyer.1.2.2BuyerRepresentationsandWarranties.WheretherepresentationsandwarrantiesofBuyercontainedinthis Section1.2.2arestatedtobetotheactualknowledgeofBuyer,“actualknowledge”shallmeantheactualknowledgeofChrisCostanzoand/orJamesCostanzoasoftheEffectiveDate. Allrepresentationsandwarrantiescontainedinthis Section1.2.2aretrueandcorrectasoftheEffectiveDate.Buyer’sliability formisrepresentationorbreachofwarranty,representationorcovenant,wherevercontainedinthisAgreement,shallsurvivetheexecutionanddeliveryofthisAgreementandtheClosing.Buyerherebymakesthefollowingrepresentations,covenantsandwarrantiesandacknowledgesthattheexecutionofthisAgreementbySellerhasbeenmadeinmateriat reliancebySelleronsuchcovenants,representationsandwarranties:1.2.2.1BuyerisaDelawarelimitedliability company,lawfully entitledtodobusinessintheStateofCaliforniaandSeller.Buyerhasthelegalright,powerandauthoritytoenterintothisAgreementandtheinstrumentsanddocuments referencedhereinandtoconsummatethetransactionscontemplatedhereby.ThepersonsexecutingthisAgreementand the instrumentsreferencedhereinonbehalfofBuyerherebyrepresentandwarrant thatsuchpersonshave the power,rightandauthoritytobindBuyer.1.2.2.2BuyerhastakenallrequisiteactionandobtainedallrequisiteconsentsinconnectionwithenteringintothisAgreementand theinstrumentsanddocumentsreferencedhereinand,totheactualknowledgeofBuyer, theconsummationofthetransactionscontemplatedhereby, andnoconsentofanyotherpartyisrequiredforBuyer’sauthorizationtoenterintoAgreement.1.2.2.3NeithertheexecutionofthisAgreementnortheconsummationofthetransactionscontemplatedherebyshallresultinabreachoforconstituteadefaultunderanyother agreement,document, instrumentorother obligationtowhichBuyerisapartyorbywhichBuyermaybebound,or underlaw,statute,ordinance,nile,governmentalregulationoranywrit,injunction,orderordecreeofanycourtorgovernmentalbodyapplicabletoBuyer.45635.09000\29464256.5-6-
1.2.2.4Tothe actualknowledgeofBuyer,thisAgreementis,andallagreements,instrumentsanddocumentstobeexecutedbyBuyerpursuanttothisAgreementshallbe,dulyexecutedby andshallbevalidandlegallybindinguponBuyerandenforceableinaccordancewiththeirrespectiveterms.Noapproval, consent,orderorauthorizationof,ordesignationordeclarationofanyotherperson,isrequiredinconnectionwith the validexecutionanddeliveryofthisAgreementbyBuyerand,totheactualknowledgeofBuyer,compliancewith thisAgreementbyBuyer.1.2.2.5IfBuyerbecomesawareofanyactorcircumstancethatwouldchangeorrenderincorrect,inwholeorinpart,anyrepresentationorwarrantymadebyBuyerunderthisAgreement,whetherasofthedategivenoranytimethereafter,whetheror not suchrepresentationorwarrantywasbaseduponBuyer’sknowledgeand/orbeliefasofacertain date,Buyerwill giveimmediatewrittennoticeofsuchchangedfact orcircumstancetoSeller.1.3Effective Date.ThisAgreementisdated_______
,2017forreferencepurposesonly. ThisAgreementshallnotbecomeeffectiveuntilthedateonwhichallofthefollowingaretrue(“EffectiveDate”):(i)thisAgreementisapprovedandexecutedby theappropriaterepresentative(s)ofBuyeranddeliveredtoSeller;(ii)BuyerhasdeliveredtoSelleracertifiedcopyoftheofficialaction takenbyaLlofthemembersofBuyerapprovingthis Agreement,intheformattachedtothisAgreementasExhibitC;(iii)followingalllegallyrequirednoticesandhearings,thisAgreementisapprovedbythegoverning boardofSeller; and(iv)thisAgreementisexecutedby theauthorized representative(s)ofSelleranddeliveredtoBuyer. Upontheoccurrenceofthe EffectiveDate, thepartiesshallacknowledgetheEffectiveDatetoeachotherinwriting.1.4ExhibitList.ThefollowingisalistoftheExhibits attachedtothisAgreement.EachoftheExhibitsisincorporatedbythisreferenceintothetextofthisAgreement.ExhibitALegalDescriptionofPropertyExhibitBformofGrantDeedExhibitCform ofOfficialActionofBuyerARTICLE IIPROPERTYDISPOSITION2.1PurchaseandSale.InexchangeforthePurchasePriceandBuyer’sothercovenantsandundertakingssetforthinthisAgreement,SellershallsellthePropertytoBuyerandBuyershallpurchasethePropertyfromSellerpursuanttothetermsandconditionsofthisAgreement.ForthepurposesofexchangingfundsanddocumentstocompletethesalefromSellertoBuyerandthepurchasebyBuyerfromSellerofthePropertypursuanttothetermsofthisAgreement,SellerandBuyeragreetoopenanescrow(“Escrow”)withtheEscrowHolder.ARTICLEIIIofthisAgreementconstitutesthejointescrow instructionsofthePartiestotheEscrowHolderforcompletionoftheEscrowfor thesaleoftheProperty,ascontemplatedbythisAgreement. BuyerandSellershallexecutesuchfurther escrowinstructions,consistentwiththeprovisionsofthisAgreement,asmaybereasonablyrequestedbytheEscrowHolder.Inthe45635.09000\29464256.5—7—
eventofanyconflictbetweentheprovisionsofthisAgreementandanyotherescrowinstructionsrequestedbytheEscrowHolder,theprovisionsofthisAgreementshallcontrol.2.2Paymentof PurchasePrice.Buyershalldepositthe PurchasePriceintoEscrow,subjecttocredittoBuyerfor theEarnestMoneyDeposit.2.3EarnestMoney Deposit.ConcurrentwithitsopeningoftheEscrow,BuyershalldepositintoEscrowtheEarnestMoneyDeposit.TheEscrowHoldershalldeposittheEarnestMoneyDepositintoaninterestbearingaccount.Altinterestearnedonsuchfundsshallbeaddedtotheoriginalprincipal amountoftheEarnestMoneyDepositandbeconsideredpartofthesame.TheEarnestMoneyDepositshallbenonrefundableupontheconclusionoftheDueDiligence PeriodexceptasotherwiseprovidedinthisAgreement.UpontheCloseofEscrow,the EarnestMoneyDepositshallbecreditedtoBuyertowardthePurchasePriceandpaidtoSelleraspartofthe PurchasePrice.ShouldEscrowfailtocloseduetoBuyer’sdefault underthisAgreement,theEarnestMoney DepositshallbeforfeitedbyBuyerasliquidated damages,asprovidedforinSection4.2, andshallbepaidtoSelleruponthecancelationofEscrowinaccordancewithSection3.9.2.4TitleApproval.AssoonaspracticablefollowingtheopeningoftheEscrow,SellershallinstructtheTitleCompanytodeliverthePreliminaryReporttoBuyer.Withinthirty(30)daysfollowingBuyer’s receiptofaPreliminary ReportfortheProperty,BuyershalldeliverBuyer’sTitleNoticetoSeller.IfBuyerfailstodeliverBuyer’sTitleNoticetoSellerwithinthirty(30)daysfollowingBuyer’sreceiptofthePreliminaryReport,BuyerwillbedeemedtodisapprovethestatusoftitletothePropertyandrefusetoaccepttitletotheProperty,inwhichcase Sellershallhavetheright,subjecttoSection2.4.2,tocanceltheEscrow andterminatethisAgreement,inSeller’ssolediscretion,withoutliabilitytoBuyeror anyotherperson,bydeliveryofawrittennoticeofterminationtoBuyerandEscrowHolder.Withintwenty(20)daysfollowingreceiptbySellerofBuyer’s TitleNotice,ifany,SellershallserveSeller’sTitleNoticeResponse.IfBuyer’sTitleNoticedoesnotobjecttoanymatterinthePreliminaryReport,Sellershall notberequiredtoserve Seller’sTitleNoticeResponse.IfSellerdoesnot serveSeller’sTitleNoticeResponse,ifnecessary,withintwenty(20)daysfollowingitsreceiptofBuyer’sTitleNotice,SellershallbedeemedtoelectnottoremoveanymatterobjectedtoinBuyer’sTitleNotice,ifany,fromthePreliminaryReport.IfSellerelectsinSeller’sTitleNoticeResponsetocactsetheremovalofanymatterobjectedtoinBuyer’sTitleNoticefromthePreliminaryReport,SellershallcausetheremovalofeachsuchobjectionablematterfromthePreliminaryReportwithinsixty(60)daysfollowingreceiptbyBuyerofSeller’s TitleNoticeResponseor suchotherperiodoftimethatmaybeagreedtoinwritingbybothSellerandBuyer.IfSellerisunwillingorunabletocausetheremovalofanymatterobjectedtoinBuyer’sTitleNoticefrom thePreliminaryReport,then,withinten(10) daysfollowingBuyer’sreceiptofSeller’sTitleNoticeResponsestatingthatSellerisunwillingtoremoveorcausetheremovalofanymatterobjectedtoinBuyer’sTitleNoticeorupon theexpirationoftheabovesixty(60)daytimeperiodduringwhichSellerelectedtoremovesuchobjectionablemattersfromthePreliminaryReportandwasunabletodoso,Buyermayeither(1)refusetoacceptthetitletoandconveyanceofthe Property,inwhichcase thePartiesshallhavethe right,subjecttoSection2.4.2,tocancel theEscrowandterminatethisAgreementwithoutliabilitytoeitherPartyoranyotherperson,bydeliveryofawritten noticeofterminationtotheEscrowHolder,or(2)waiveitsobjectiontoanyitemsset forthinBuyer’sTitleNoticebydeliveringBuyer’sTitleNotice45635.09000\29464256.5—8—
WaivertoSeller.FailurebyBuyertodeliverBuyer’sTitleNoticeWaiver,whereSeller’sTitleNoticeResponseorSeller’sfailuretoserveSeller’sTitleNoticeResponseindicates Seller’selectionnottocausetheremovalofanymatter objectedtoinBuyer’sTitle NoticefromthePreliminaryReport, forSellertodeliverSeller’sTitleNoticeResponseunderthisAgreement,willbedeemedBuyer’scontinuedrefusaltoacceptthetitletoandconveyanceoftheProperty,inwhichcaseSellershallhavethe right,subjecttoSection2.4.2,tocanceltheEscrowandterminatethisAgreement,inSeller’ssolediscretion,withoutliabilitytoBuyeroranyotherperson,bydeliveryofawrittennoticeofterminationtoBuyerandEscrowHolder.2.4.1IfatanytimepriortotheCloseofEscrowtheTitleCompanyissuesanupdated PreliminaryReportcontaininganypreviously undisclosedmatteraffectingtitletotheProperty,orSellerbecomes awareofanypreviously undisclosedmatteraffectingtitletotheProperty,followingthedeliveryofBuyer’sTitleNotice,SellershallprovidewrittennoticetoBuyerofsuchmatter,togetherwith any updatedPreliminaryReportrelatedtosuchmatter.SellerandBuyershallhavesuchrightsandobligationswithrespecttosuchpreviouslyundisclosedtitlemattersastheydidwithrespecttoanytitlematterssetforthintheoriginalPreliminaryReportassetforthinSection2.4.2.4.2BeforeexercisinganyrightaPartymayhaveunderthisSection2.4 tocanceltheEscrowandterminatethisAgreement,suchPartyshallnotifythenon-terminatingPartiesinwritingofitselectiontoterminateandshall,uponanon-terminatingParty’srequest,whichmustbedelivered,ifatall,withinthree(3)daysfollowingitsreceiptoftheterminatingParty’snoticeofelectiontoterminate,meetandconferwiththenon-terminatingPartiesforaperiodofthirty(30)days.Duringsuchtime,thePartiesshallmeetasoftenasreasonablyrequestedbyanyPartytonegotiate,ingoodfaith,methodsandmeansbywhichtheobjectionabletitlematter maybeeliminatedormitigated.Nothinghereinshallconstituteanagreement,representation,orwarrantybyanyPartythatanacceptableresolutionoftheobjectionabletitlematterwillbeachieved,norshallanyPartybeobligatedtoexpendanyfundsorundertakeanyotheractionwhatsoeverwithrespecttosuchtitlematterunlesssuchagreementisreducedtoawritingwhichisapprovedby allParties,intheirsoleandabsolutediscretion.If,atthe endofsuchthirty(30)dayperiod,thePartieshavenotbeenabletoagreeonamutuallyacceptablemethodofresolvingsuchtitlematter,orifanyproposedagreementisdisapprovedbySeller’sgoverningboard,theEscrowshallbecancelled, thisAgreementshallbeterminatedwithoutliabilitytoanyParty,andthePartiesshallproceedpursuanttoSection3.9.2.5BuyerInvesti%ations.2.5.1Buyer shall haveuntil theexpirationoftheDueDiligencePeriodtocompleteallofitsDueDiligenceInvestigationswithrespecttotheentiretyoftheProperty.BuyershallcompleteallofitsDueDiligenceInvestigationswithintheDueDiligencePeriodandshallconductallofitsDueDiligence Investigationsatitssolecostandexpense.BuyershallrelysolelyandexclusivelyupontheresultsofitsDueDiligenceInvestigationsoftheProperty,inclctding,withoutlimitation,investigationsregardinggeotechnicalsoilconditions,compliancewithapplicablelawspertainingtotheuseofthePropertybyBuyerandanyothermattersrelevanttotheconditionorsuitabilityoftheProperty fortheProject(including,withotttlimitation,costandabilitytoobtainentitlements,permitsandapprovals),asBuyermaydeemnecessaryorappropriate. Seller makesnorepresentationorwarrantytoBuyerrelatingtothe45635.O9OOO29464256.5—9—
conditionofthePropertyorsuitabilityofthePropertyforanyintendeduseordevelopmentbyBuyer.BuyershalldeliveraDueDiligence Investigation ConclusionNoticetoSellerandtheEscrowHolderpriortotheendoftheDueDiligencePeriod.IfBuyerdoesnotunconditionallyaccepttheconditionofthePropertybydeliveryofitsDueDiligenceInvestigation ConclusionNotice indicatingsuchacceptancepriortotheendoftheDueDiligencePeriod,BuyershallbedeemedtohaverejectedtheconditionofthePropertyandrefusedtoacceptconveyanceoftitletotheProperty.Ifthe conditionofthePropertyisrejectedordeemed rejectedbyBuyer,thenthisAgreementshallterminateand theEscrowshallbecancelledpursuanttoSection3.9.Buyer’sdetiveryofitsDueDiligenceInvestigationConclusionNoticeindicatingBuyer’sunconditionalacceptanceoftheconditionofthePropertyshallevidencetheacceptanceoftheconditionofthe PropertybyBuyerinitsexisting“ASIS,”“WHEREIS”and“SUBJECTTOALLFAULTS”condition,asofthelastdayoftheDueDiligencePeriod.In itssolediscretion,BuyermayacceptthePropertyinits“ASIS,”“WHEREIS”and“SUBJECTTOALLFAULTS”conditionatanytimebeforetheendofthe DueDiligencePeriod.BuyershallconductduringtheDueDiligencePeriodsuchenvironmentalassessment(s)ofthePropertyasBuyerdeemsappropriate.Ifsuchassessment(s)dorevealthepresenceofanyHazardousSubstancesonthePropertyinlevelsthatexceedapplicableGovernmentalRequirements,thenSellerandBuyershallnegotiateingoodfaithinanefforttoreachagreementastotheallocationofresponsibilityandcostofremediationthereof.2.5.2AnyDueDiligenceInvestigationsofthePropertybyBuyershallnotunreasonablydisruptanythen existinguse oroccupancyofthePropertyortheoperationsofSeller.BuyershallbeliableforanydamageorinjurytoanypersonorpropertyarisingfromtheactsofBuyer,itsemployees,agentsorrepresentativesduringthecourseofanyDueDiligenceInvestigationsonthePropertyandBuyershallindemnify,defendwithcounselreasonablyacceptabletoSellerandholdharmlessSelleranditselectedofficials,officers,directors,attorneys,contractors, agentsandemployeesfromanyandallactual orallegedliens,claims,demandsorliabilityarisingfromBuyerorBuyer’sagentspresenceonthe propertyor anyDueDiligenceInvestigationsbyBuyeronthe Property.PriortocommencinganyDueDiligenceInvestigationsontheProperty,BuyershalldelivercopiesofpoliciesorcertificatesofinsurancetoSellerevidencingthat,inaccessingthePropertyormakinganyinspectionsorconductinganytestingof,onorundertheProperty, BuyerorBuyer’sagentsenteringonthePropertycarry notlessthanOneMillion Dollars ($1,000,000)ofcomprehensivegeneralliabilityinsurancefromaninsurancecompanyreasonablyacceptableto Seller,withcontractual liabilityendorsementthatinsuresBuyer’sindemnityobligations.InsurancecoverageintheminimumamountsetforthinthisSection2.5.2shallnotbeconstruedtorelieveBuyerofanyliabilityorindemnityobligation,whetherwithin,outside,orinexcessofsuchcoverage.2.5.3Beforeexercisingany rightaPartymayhaveunderthis Section2.5tocanceltheEscrowandterminatethisAgreement,suchPartyshallnotifythenon-terminatingPartiesinwritingofitselectiontoterminateandshall,uponanon-terminatingParty’srequest,whichmustbedelivered,ifatall,within three(3)daysfollowingitsreceiptoftheterminatingParty’snoticeofelectiontoterminate,meetandconferwiththenon-terminatingPartiesforaperiodofthirty(30)days.Duringsuch time,thePartiesshallmeetasoftenasreasonablyrequestedbyanyPartytonegotiate,ingoodfaith,methodsandmeansbywhichtheobjectionableDueDiligencemattermaybeeliminatedormitigated.Nothingherein shallconstitctteanagreement,representation,orwarrantybyany Partythatanacceptableresolutionof45635.09000\29464256.5—10—
theobjectionableDueDiligencematterwillbeachieved,norshallanyPartybeobligatedtoexpendanyfundsorundertakeanyotheractionwhatsoever withrespecttosuchDueDiligencematterunless suchobligationisreducedtoawritingwhichisapprovedbyallParties,intheirsoleandabsolute discretion.If,attheendofsuchthirty(30)day period, thePartieshavenotbeenabletoagreeonamutuallyacceptablemethodofresolvingtheobjectionableDueDiligencematter,orifanyproposedagreementisdisapprovedbySeller’sgoverningboard, theEscrowshallbecancelled,thisAgreementshallbeterminatedwithoutliabilitytoanyParty,andthePartiesshallproceedpursuanttoSection3.9.ARTICLEIIIESCROWINSTRUCTIONS3.1OpeningofEscrow.ForpurposesofthisAgreement,theopeningofEscrowshallbethefirstdateonwhichafullyexecutedcopyofthisAgreementandEarnestMoneyDepositaredepositedwithEscrowHolder(“EscrowOpeningDate”).BuyershallcausetheEscrowtobeopenedwithinfive(5)daysfollowingtheEffectiveDate.EscrowHoldershallpromptlyconfirminwritingtoeachofthePartiesthedateofthe EscrowOpeningDate.ThisARTICLEIIIshallconstitutethejointescrow instructionsofSellerand BuyertoEscrowHolderforconductoftheEscrowtocompletethepurchaseandsaleofthePropertybetweenthem,ascontemplatedinthisAgreement.3.2ConditionstoCloseofEscrow.TheconditionssetforthbelowshallbesatisfiedorwaivedinwritingbytherespectivebenefitedPartyon orbeforetheClosingDateor thePartybenefitedby anyunsatisfiedconditionshallnotberequiredtoproceedtocloseEscrow.3.2.1Buyer’sConditionstoCloseofEscrow.Buyer’sobligationtopurchasethePropertyfromSellerontheClosingDateshallbesubjecttothesatisfactionofthefollowingconditions precedent,eachofwhichcanonlybewaivedinwritingbyBuyer:3.2.1.1Buyeragreestoaccept thetitletoandconveyanceoftheProperty,pursuanttoSection2.4;3.2.1.2BuyerdeliversitsDueDiligenceInvestigationConclusionNoticetoboth SellerandEscrowHolderindicating Buyer’sunconditionalacceptanceoftheconditionoftheProperty,priortotheexpirationoftheDueDiligencePeriod;3.2.1.3BuyerandtheCityhaveexecutedtheDDA.3.2.1.4TheTitleCompanyisunconditionallycommittedtoissuetheTitlePolicyfor theProperty,subjecttoanyPermitted Exceptions,toBuyer;3.2.1.5 Sellerdepositstheitemsintothe EscrowrequiredbySection3.4;3.2.1.6Therepresentations,warrantiesandcovenantsofSellersetforthinSection1.2.1aretriteandcorrectinallmaterialrespectsontheEffectiveDateandontheClosingDate;45635.09000\29464256.5—11—
3.2.1.7SellerhascompletedalloftheirmaterialobligationsrequiredbythisAgreementtobecompletedpriortotheCloseofEscrow;and3.2.1.8ThecloseofescrowundertheDDAisreadytooccurconcurrentlywiththeCloseofEscrow.3.2.2Seller’sConditionstoCloseofEscrow.Seller’sobligationto sellthePropertytoBuyeronorbeforetheClosingDateshallbesubjecttothesatisfactionofthefollowingconditionsprecedent,whichcanonlybewaivedinwritingbySeller:3.2.2.1BuyerhasdepositedthePurchasePricelesstheEarnestMoneyDepositintoEscrow;3.2.2.2BuyeragreestoacceptthetitletoandconveyanceoftheProperty,pursuanttoSection2.4;3.2.2.3 BuyerdeliversitsDueDiligenceInvestigationConclusionNoticeto bothSellerandEscrowHolder indicatingBuyer’sunconditional acceptanceofthephysicalconditionoftheProperty,priortotheexpirationofthe DueDiligencePeriod;3.2.2.4Buyer andtheCity haveexecutedtheDDA.3.2.2.5BuyerhascompletedallofitsmaterialobligationsrequiredbythisAgreementtobecompletedpriortotheCloseofEscrow;3.2.2.6Therepresentations, warrantiesandcovenantsofBuyersetforthinSection1.2.2aretrueandcorrectinallmaterialrespectsontheEffectiveDateandontheClosingDate;3.2.2.7 Buyerdepositsthe fundsanditemsintotheEscrowrequiredbySection3.3fortheEscrow;and3.2.2.8ThecloseofescrowundertheDDAisreadytooccurconcurrentlywiththe CloseofEscrow.3.3Buyer’sEscrowDeposits.FollowingsatisfactionorwaiverofeachofBuyer’sconditionstoCloseofEscrowsetforthinSections3.2.1,asapplicable,BuyershalldepositthefollowingfundsanddocumentsintoEscrowatleasttwo(2)businessdayspriortotheClosingDateinawritingdeliveredtotheParties:3.3.1PurchasePrice andOtherFunds.Purchase Price,lesstheamountoftheEarnestMoneyDeposit,plusanyadditionalfundsrequiredtobedepositedintoEscrowbyBuyerunderthetermsofthisAgreementtoclosetheEscrow,allinimmediatelyavailablefunds.3.3.2PCOStatement.APCOStatementexecutedbytheauthorizedrepresentative(s)ofBuyer.45635.09000\29464256.5—I2—
3.3.3AcceptanceofGrantDeed.TheCertificateofAcceptanceoftheDeed,intheformattachedtotheGrantDeed,executedbytheauthorized representative(s)ofBuyerinrecordabteform.3.4Seller’sEscrowDeposits.FollowingsatisfactionorwaiverofeachofSeller’sconditionstoCloseofEscrowsetforthinSections3.2.2,asapplicable,SellershalldepositthefollowingdocumentsintoEscrowatleasttwo(2)businessdayspriortotheClosingDate:3.4.1GrantDeed.TheGrantDeedexecutedbytheauthorizedrepresentative(s)ofSellerinrecordableform.3.4.2FIRPTAAffidavit(Seller).TheFIRPTAAffidavitcompletedandexecutedbytheauthorizedrepresentative(s)ofSeller.3.5ClosingProcedure.WheneachofBuyer’sEscrowrequireddepositsassetforthinSection3.3(otherthanthefunds underSection3.3.1),andeachofSeller’sEscrowrequireddepositsassetforthinSection3.4,aredepositedintoEscrow,Escrow HoldershallrequestconfirmationinwritingfromtheCitythateachoftheconditionstotheCloseofEscrowfortheCity’sbenefitsetforthinSections3.2.2.2through3.2.2.7aresatisfiedorwaived,andconfirmationinwritingfromDeveloper thateachoftheconditionstotheCloseofEscrowforDeveloper’sbenefitsetforthinSections3.2.1.1through 3.2.1.7aresatisfiedorwaived.EachoftheCityandDevelopershallgivesuchconfirmation(orstateinwritingthatsuchconfirmationcannotbegiven,statingthereasonsthereforinreasonable detail)withinthree(3)businessdaysafteritsreceiptofsuchrequestfromEscrowHolder,andthepartiesshallgivesuchconfirmationastotheconditionsinSections3.2.1.6and3.2.1.7andSections3.2.2.5and3.2.2.6,respectively,iftheconfirmingpartyhasnotcommunicatedinwritingtotheotherpartywithreasonabledetailthattheconfirmingpartybelievestheotherpartyis indefaultofitsmaterialobligationsunderthisAgreementorthatitsrepresentations,warrantiesorcovenantsunderSection1.2.1or1.2.2,respectively,werenottrueandcorrectontheEffectiveDateorarenot trueandcorrectasofthedateofsuchwrittenconfirmationtoEscrowHolder.Upon EscrowHolder’sreceiptofsuchwrittenconfirmationfrombothSellerandBuyerthattheirrespectiveconditionstothe CloseofEscrowareeithersatisfiedorwaived,Escrow Holdershallgive written noticethereoftobothparties,andwithinthefollowingthree(3)businessdaysBuyershalldepositintotheEscrowthefunds requiredunderSection3.3.1sothattheCloseofEscrowcanoccur,uponwhichEscrowHoldershallclosetheEscrowforthePropertybydoingallofthefollowing:3.5.1Recordation ofDocuments.FilewiththeOfficeoftheRecorderoftheCountythedocumentssetforthinSection3.6.3.5.2DistributionofRecordedDocuments.DistributeeachrecordeddocumenttothePartyorpersondesignatedforsuchdistributioninSection3.6.3.5.3PCOStatement.FilethePCOStatementwiththeOfficeoftheRecorderoftheCounty.3.5.4FIRPTAAffidavit.FiletheFIRPTAAffidavitwiththeUnitedStatesInternalRevenue Service.45635.09000\29464256.5—13—
3.5.5TitlePolicy.ObtainanddelivertheTitlePolicytoBuyer.3.5.6PurchasePrice.DeliverthePurchasePricetoSeller,lessSeller’sshareofEscrowclosingcosts,andlessanyotherchargestotheaccountofSeller,andreturnanyremainingfunds heldbyEscrowHolderfortheaccountofBuyertoBuyer,tessBuyer’sshareofEscrowclosingcosts,andlessanyotherchargestotheaccountofBuyer.3.5.7 CloseofEscrow.CLoseofEscrowshalloccurasprovidedinSection3.5onthenextbusinessdayfollowingEscrow Holder’sreceiptofBuyer’sfundsrequired underSection3.3.1(the“Scheduled EscrowClosing Date”)(the“ClosingDate”shallbethe dateonwhichtheCloseofEscrowactuallyoccurs).Notwithstandingtheforegoing,theCloseofEscrowmust occurconcurrentlywiththecloseofescrow undertheDDA.IfanyoftheconditionstotheCLoseofEscrowsetforthinSections3.2.1(fortheBuyer’sbenefit)and3.2.2(fortheSeller’sbenefit)havenotbeensatisfied (or waived,respectiveLy,byBuyerorSeller)and/orBuyerandCityarenot abletocloseescrow undertheDDAconcurrentlywith theCloseofEscrowbythedateeighteen(1$)monthsaftertheEffectiveDate(the“OutsideDate”),then eitherparty whoisnotthenindefaultunderthisAgreementmayterminatethisAgreementbygivingwrittennoticetothe other(withacopytoEscrowHolder);provided,however thatSellermayextendtheOutsideDatebyaperiodofuptosix(6)monthsuponwrittenrequestofBuyer,which extensionshallbegrantedtotheextenttheoutsidedateforthecloseofescrow undertheDDAhasbeenextendedandotherwiseshallbegrantedinthereasonablediscretionoftheExecutiveDirectorifBuyerisnotindefault underthisAgreement.IfforanyreasontheCloseofEscrowhasnotoccurredwithinthirty(30)daysaftertheScheduled EscrowClosingDate,theneitherParty notthenindefaultofthisAgreementmay canceltheEscrow andterminatethisAgreement, subjecttothenoticeandcureprovisionsofSection4.1(totheextentapplicable),withoutliabilitytoanyotherPartyoranyotherpersonforsuchterminationandcancellation,bydeliveringwrittennoticeofterminationtotheother Party(ies)andEscrowHolderand,thereafter,thePartiesshallproceedpursuanttoSection3.9ifthenon-terminatingPartyisnotindefaultorpursuanttoSectionARTICLEIVifthenon-terminatingPartyisindefault.WithoutlimitingtherightofanyPartytoterminatethisAgreement,pursuanttotheprecedingsentence,ifEscrowdoesnotcloseonor beforethedatethirty(30)daysaftertheScheduledEscrowClosingDate, andnoPartyhasexerciseditscontractualrighttocancelEscrowandterminatethisAgreementbeforesuchtime,thenEscrowshall closeassoonasreasonablypossiblefollowingthe firstdateonwhichEscrowHolderisinapositiontoclose the EscrowpursuanttothetermsandconditionsofthisAgreement.3.6RecordationandDistributionofDocuments.Asapplicable,EscrowHoldershallcause thefollowingdocumentstoberecordedintheofficialrecordsoftheRecorderoftheCountyinthefollowingorderofpriorityattheCloseofEscrow:(i)theGrantDeed,withBuyer’scertificateofacceptanceattached,and (ii)anyother documentstoberecordedthroughEscrowctponthejointinstructionsoftheParties.AllrecordeddocumentsshallprovidethattheyaretobereturnedtoEscrowHolderafterrecordation.WhenoriginalsofsuchrecordeddocumentsarereturnedtoEscrowHolder,EscrowHoldershalldeliver:(i)theoriginalGrantDeed,withBuyer’soriginalcertificateofacceptanceattached,toBuyerandcopiestoSeller,eachshowingallrecordinginformation,and(ii)theoriginalofanyotherdocumentrecordedatthe closeofEscrowtothe Party orotherpersondesignatedinthejointescrowinstrctctionsofthe45635.09000\29464256.5-14-
PartiesforsuchrecordationandacopyofeachsuchdocumenttotheotherPartyorParties,eachshowingallrecordinginformation.3.7EscrowClosing Costs,TaxesandTitlePolicyPremium.SellerandBuyershalleach payone-half(1/2)oftheEscrowfeesandsuchothercostsasEscrowHoldermaychargefortheconductofthe Escrow. EscrowHoldershallnotifyBuyerandSellerofthecoststobebornebyeachofthemattheCloseofEscrowbydeliveringtheEscrowHolder’sestimatedclosing/settlementstatementtobothSellerandBuyeratleastfour(4)businessdayspriortotheScheduledEscrowClosingDate(asitmayhavebeendeferred pursuanttoSection3.6orotherwise).Sellershallpaythepremium chargedbytheTitleCompanyforthestandardTitlePolicy fortheProperty,exclusiveofanyendorsementsor other supplementstothecoverageofsuchTitlePolicythatmayberequestedbyBuyer,aswellasdocumentary transfertaxesandanyandallothercharges,feesandtaxesleviedbyaGovernmentalAuthorityrelativetotheconveyanceofanyportionofthePropertythroughtheEscrowtransactioncontemplatedinthisAgreement.BuyershaLlpayanyandallrecordingfeesrelativetotheconveyanceofanyportionoftheProperty throughtheEscrow transactioncontemplatedinthis Agreement.3.8EscrowCancellationCharges.IftheEscrowfailstocloseduetoeitherSeller’smaterialdefault underthisAgreementandtheEscrowiscancelledandthisAgreementisterminated,Sellershallpayallordinaryandreasonable Escrowandtitleordercancellationcharges.IftheEscrowfailstocloseduetoBuyer’smaterialdefaultunderthisAgreementandtheEscrowiscancelledandthisAgreementisterminated, BuyershallpayallordinaryandreasonableEscrowandtitle ordercancellationcharges.Ifthe Escrow failstoclose foranyreason otherthanthematerialdefaultofeitherBuyerorSellerandtheEscrowiscancelledandthisAgreementisterminated,BuyerandSellershalleachpayone-half(l/2) ofanyordinaryandreasonable Escrowandtitle order cancellationcharges.3.9EscrowCancellation.IfthisAgreementisterminatedandtheEscrowcancelledpursuanttoacontractualrightgrantedtoaPartyinthisAgreementtoterminatethisAgreementandcanceltheEscrow,otherthanduetothematerial defaultofanotherParty,thePartiesshalldoeachofthefollowing:3.9.1CancellationInstructions.ThePartiesshall,within three(3)businessdaysofreceiptofEscrowHolder’swrittenrequest,executeanyreasonable Escrowcancellationinstructionsrequestedby EscrowHolder;3.9.2ReturnofFundsandDocuments.Withinten (10)daysofreceiptbythePartiesofasettlement statementofEscrowand titleorder cancellation charges fromEscrowHolder:(i)BuyerorEscrowHoldershallreturntoSelleranydocumentspreviously deliveredbySellertoBuyerorEscrowHolder,(ii)Selleror EscrowHoldershallreturntoBuyeralldocuments previouslydeliveredbyBuyertoSellerorEscrow Holder;(iii)EscrowHoldershallreturntoBuyeranyfunds depositedbyBuyerintoEscrow,includingtheEarnest MoneyDeposit,lessBuyer’s shareofcustomaryandreasonableEscrowandtitleordercancellationcharges,ifany;and(iv)EscrowHoldershallreturntoSelleranyfundsdepositedbySellerintoEscrowifithasalreadybeendeposited,lessSeller’sshareofcustomaryandreasonableEscrowandtitleordercancellationcharges,ifany.45635.09000\29464256.5-15—
3.10ReporttoIRS.FollowingtheCloseofEscrowandpriortothelastdateonwhichsuchreportisrequiredtobefiledwith the InternalRevenueService,ifsuchreportisrequired pursuanttoSection6045(e)oftheInternalRevenue Code,Escrowholdershaltreportthegrossproceedsofthepurchaseand saleofthePropertytotheInternalRevenueServiceonForm1099-B,W-9orsuchother form(s)asmaybespecifiedbytheInternalRevenueServicepursuanttoSection6045(e). Uponthefilingofsuchreportingform withtheInternalRevenueService,EscrowHoldershalldeliveracopyofthefiledformtoSellerand Buyer.ARTICLEIVDEFAULTS,REMEDIESANDTERMINATION4.1Defaults-General.4.1.1SubjecttoanyextensionsoftimeprovidedforinthisAgreement,failureordelaybyanyPartytoperformanytermorprovisionofthisAgreementshallconstitutean“EventofDefault” underthisAgreement;provided, however,thatifaPartyotherwiseindefaultcommencestocure,correctorremedysuchdefault,withinthirty(30)calendardaysafterreceiptofwrittennoticefrom theinjuredPartyspecifyingsuchdefault,andshalldiligentlyandcontinuouslyprosecutesuchcure,correctionorremedytocompletion(andwhere anytimelimitsforthecompletionofsuch cure,correctionorremedyarespecificallysetforthinthisAgreement,thenwithinsaidtimelimits), suchPartyshallnotbedeemedtobeindefault underthisAgreementandnoEventofDefaultshallbedeemedtohaveoccurred.4.1.2TheinjuredPartyshall givewritten noticeofdefaulttothePartyindefault,specifyingthedefaultcomplainedofbythenon-defaultingParty.Delayingiving suchnoticeshallnotconstituteawaiverofanydefaultnorshallitchangethetimeofdefault.4.1.3Any failureordelaysbyany Partyinassertinganyoftheir rightsand/orremediesastoanydefaultshallnotoperateasawaiverofanydefaultorofany suchrightsorremedies.DelaysbyanyPartyinassertinganyofitsrightsand/orremediesshallnotdeprivethatPartyofitsrighttoinstituteandmaintainanyactionsorproceedingsthatitmaydeemnecessarytoprotect,assertorenforceanysuchrightsorremedies.4.2LIQUIDATEDDAMAGES TOSELLER.UPON THEOCCURRENCEOFANEVENTOFDEFAULTBYBUYERUNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROW,SELLERMAY,SUBJECTTOBUYER’SCURERIGHTSUNDERSECTION4.1,CANCELTHEESCROWPURSUANTTOSECTION3.9,ANDUPONCANCELLATIONOFTHEESCROW,SELLERSHALLBERELIEVEDOFANYOBLIGATIONUNDERTHISAGREEMENTTOSELLORCONVEYTHEPROPERTY ORANYPORTION THEREOF AND ANYSUCHESCROWCANCELLATIONSHALLBEWITHOUTANY LIABILITYOFSELLERTOBUYER ORANYOTHERPERSONARISINGFROMSUCHACTIONS.SELLER ANDBUYERACKNOWLEDGETHATITISEXTREMELYDIFFICULTANDIMPRACTICAL,IFNOTIMPOSSIBLE,TOASCERTA[NTHEAMOUNTOFDAMAGESTHAT WOULDBESUFFEREDBYSELLER[NTHEEVENTOFACANCELLATIONOFTIlEESCROWDUETOTHEOCCURRENCEOFANEVENTOFDEFAULTBYBUYERUNDERTHISAGREEMENTPRIORTOTHECLOSE45635.09000\29464256.5-16-
OFESCROW. HAVINGMADEDILIGENTBUTUNSUCCESSFULATTEMPTSTOASCERTAINTHEACTUAL DAMAGESSELLER WOULDSUFFER[NTHEEVENTOFACANCELLATIONOFTHEESCROWDUETOTHEOCCURRENCEOFANEVENTOFDEFAULTBYBUYER UNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROW,SELLERANDBUYERAGREETHATAREASONABLEESTIMATEOFSELLER’SDAMAGES[NSUCHEVENTISTHETOTALSUM OFTHE DEPOSIT(THE“LIQUIDATEDDAMAGESAMOUNT”).THEREFORE,UPONTHE CANCELLATIONOFTHEESCROWBYSELLERDUETOTHEOCCURRENCEOFANEVENTOFDEFAULTBYBUYERUNDERTHISAGREEMENTPRiORTOTHECLOSEOFTHEESCROW,ESCROW HOLDERSHALLIMMEDIATELY CANCELTHEESCROWANDPAYTHELIQUIDATED DAMAGESAMOUNTTOSELLER,INPART, FROMTHEEARNEST MONEYDEPOSITWITHINFIVE(5)DAYSOFESCROWCANCELLATION.RECEIPTOFTHELIQUIDATEDDAMAGES AMOUNTSHALLBESELLER’SSOLE ANDEXCLUSIVEREMEDY UPONTHECANCELLATIONOFTHEESCROWDUE TOTHEOCCURRENCEOF ANEVENTOFDEFAULTBYBUYERUNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROW.//SELLER’SINITIALS:BUYER’S INITIALS:
____4.3LIMITATIONONRECOVERYOFDAMAGESANDOTHERREMEDIES.INTHEEVENTOFADEFAULTBYTHESELLERUNDERTHISAGREEMENTPRIORTOTHECLOSEOFESCROWWHICHDEFAULTTHESELLERDOESNOTCUREWITHINTHIRTY(30)DAYSAFTERRECEIPTFROMDEVELOPEROFWRITTENNOTICEOFSUCHDEFAULT, THE BUYERMAY(I)TERMINATETHISAGREEMENT,INWHICHEVENT THE PARTIESSHALLCANCEL THEESCROWPURSUANTTOSECTION3.9,ANDDEVELOPERSHALLBERELIEVEDOFANYOBLIGATION UNDERTHISAGREEMENTTOPURCHASE ORACCEPTTITLETOTHEPROPERTY,ANDANYESCROWCANCELLATIONCHARGESSHALLBEPAIDBYTHESELLER,OR(II)PURSUESPECIFICPERFORMANCEOFTHISAGREEMENTASMAYBEAVAILABLEUNDERAPPLICABLELAW.IFTHE BUYERCHOSESTOTERMINATETHEAGREEMENTANDCANCELTHEESCROWTHEBUYER’SRECOVERYOFDAMAGESAGAINSTTHESELLERSHALLBELIMITEDTORECOVERINGANYAMOUNTSACTUALLYEXPENDEDBYTHEBUYERINREASONABLERELIANCEONTHISAGREEMENTPRIORTOTHEDATEOFTHEOCCURRENCEOFTHEEVENTOFDEFAULTBYTHESELLER,NOTTOEXCEED ONEHUNDREDFIFTYTHOUSANDDOLLARS ($150,000)INTHEAGGREGATEWHENCOMBINEDWITH ANYDAMAGESPAIDTOBUYERPURSUANTTOTHEDDA.THEBUYER WAIVESANYRIGHTTORECOVERANYOTHERSUMS FROM THE SELLERARISINGFROMADEFAULTBYTHESELLER,PRIORTOTHE CLOSEOFESCROW.IFTHEBUYERCHOSESTOPURSUESPECIFICPERFORMANCE,BUYERSHALLNOTBEENTITLEDTORECOVERMONETARYDAMAGES.THEBUYER ACKNOWLEDGESTHE PROTECTIONSOFCIVILCODESECTION1542RELATIVETOTHEWAIVERSANDRELEASESCONTAINEDINTHISSECTION4.3,WHICHCIVILCODESECTIONREADSASFOLLOWS:AGENERALRELEASEDOESNOTEXTENDTOCLAIMSWHICHTHECREDITORDOESNOTKNOW ORSUSPECTTOEXISTINHISORHERFAVOR45635.09000\29464256.5—17—
ATTHE TIMEOFEXECUTING THERELEASE,WHICHIFKNOWNBYHIMORHERMUSTHAVE MATERIALLYAFFECTEDHISORHER SETTLEMENTWITHTHEDEBTOR.BYINITIALINGBELOW, THEBUYERKNOWINGLYANDVOLUNTARILYWAIVESTHEPROVISIONSOFSECTION1542SOLELYINCONNECTIONWITHTHEWAIVERSANDRELEASESOFTHISSECTION4.3.BUYER’SINITIALS____
_____/4.4Lea1Actions.4.4.1Exceptasotherwise providedbySection4.2orSection4.3 (asapplicable),eitherPartymayinstitutelegalactiontocure,correctorremedyanydefault,torecover damages foranydefault,ortoobtainanyotherremedyavailabletothatPartyunderthisAgreementoratlaworinequity.Suchlegalactions mustbeinstitutedintheSuperiorCourtoftheStateofCaliforniainand fortheCountyofLosAngeles,California,inanyotherappropriatecourt withintheCountyofLosAngeles,California.4.4.2The proceduralandsubstantivelawsofthe StateofCaliforniashallgoverntheinterpretationandenforcementofthisAgreement,withoutregardtoconflictsoflawsprinciples.The PartiesacknowledgeandagreethatthisAgreementisenteredinto,istobefullyperformedinandrelatestorealpropertylocatedintheCityofAzusa,CountyofLosAngeles,California.4.5RightsandRemediesare Cumulative.Exceptasotherwise expresslystatedinthisAgreement,therightsandremediesofthePartiessetforthinthisARTICLEIVarenon-exclusiveandcumulative,andtheexercisebyany Partyofoneormoreofsuchrights orremediesshall notprecludetheexercisebyit,atthesameordifferenttimes,ofanyotherrightsorremedies forthe samedefaultoranyotherdefaultbytheother Party(ies).4.6Buyer IndemnificationofSeller.Inadditiontoanyotherspecificindemnificationor defenseobligationsofBuyersetforthinthisAgreement,Buyeragreestoindemnify,defend(uponwrittenrequestbySellerandwithcounsel reasonably acceptabletoSeller) and holdharmlesstheSellerParties,fromanyandalllosses,liabilities,charges, damages,claims,liens,causesofaction,awards,judgments,costsandexpenses,including,but notlimitedtoreasonableattorney’sfeesofcounsel retainedbytheSellerParties,expertfees,costsofstafftime,andinvestigationcosts,ofwhateverkindornature, thatareinanymannerdirectlyorindirectlycaused,occasionedorcontributedtoinwholeorinpart,throughanyact,omission,faultornegligence,whetheractiveorpassive,ofBuyerorBuyer’sofficers,agents,employees,independentcontractorsorsubcontractorsofanytier,relatinginanymannertothisAgreement,any worktobeperformedbyBuyer relatedtothisAgreementandtheProperty,oranyauthorityorobligationexercisedorundertakenbyBuyerunderthisAgreement.Without limiting thegeneralityoftheforegoing,Buyer’sobligationtoindemnifytheSellerPartiesshallincludeinjuryordeathtoanypersonorpersons,damagetoanyproperty,regardlessofwherelocated,includingthepropertyoftheSellerParties,anyworkers’compensationorprevailingwagedetermination,claimorsuitoranyothermatterarisingfromorconnectedwithany goodsor45635.O9OOO29464256.5—I8—
materialsprovidedorservicesor laborperformed regardingthePropertyonbehalfofBuyerbyany personor entity.4.7StudiesandReports.If,pursuanttoSection7.3,theDeveloperhasterminatedthisAgreementandreceivedtheLiquidatedDamagesamount,withininten(10)daysofreceiptoftheLiquidated Damages amountfromtheCity,DevelopershallprovideCitywithcompletecopiesofallenvironmental,geotechnical,andsoils reportsorstudiesconductedonrelatingtothe Properties.ARTICLEVGENERAL PROVISIONS.5.1IncorporationofRecitals.TheRecitalsoffactsetforthprecedingthisAgreementaretrueandcorrectandareincorporatedintothisAgreementintheir entiretybythisreference.5.2Notices,DemandsandCommunicationsBetweentheParties.5.2.1Anyandallnotices,demandsorcommunicationssubmittedbyanyPartytoanotherPartypursuanttoorasrequiredbythisAgreementshallbeproper,ifinwritinganddispatchedbymessengerfor immediatepersonaldelivery,byanationallyrecognizedovernightcourierserviceor byregisteredorcertifiedUnitedStatesMail,postageprepaid, returnreceiptrequested,totheprincipalofficeofSellerorBuyer,asapplicable,asdesignatedinSection5.2.2.Suchwrittennotices,demandsorcommunicationsmaybesentinthesamemannertosuchotheraddressesaseitherPartymay from timetotimedesignate.Anysuchnotice,demandorcommunicationshallbedeemedtobereceivedbytheaddressee,regardlessofwhetherorwhenanyreturnreceiptisreceivedbythesenderorthe datesetforthonsuchreturnreceipt,onthedaythatitisdeliveredbypersonaldelivery,onthe dateofdeliverybyanationallyrecognizedovernightcourierserviceorthree(3)calendardaysafteritisplacedintheUnitedStates Mail, asprovidedinthisSection5.2.5.2.2Thefollowingaretheauthorizedaddressesforthesubmissionofnotices,demandsorcommunicationstothe Parties orEscrowHolder:TOBUYER:CostanzoInvestments17CorporatePlazaDr.,Suite 250,NewportBeach,CA92660Attention:Chris Costanzo(T)949-566-08021(F)949-706-619945635.09000\29464256.5—19-
COPYTO:O’NeilLLP19900MacArthurBlvd.,Suite1050Irvine,CA92612Attention:JayPaichikoff(T)949-798-0730(F)949-798-0511TOSELLER:Successor Agencytothe AzusaRedevelopmentAgency213EastFoothillBoulevardAzusa,California91702Attention:CityManager(T)626-812-8238(F)626-334-6358COPYTO:BestBest&Krieger,LLP18101VonKarmanAye,Suite1000Irvine,CA92614Attention:MarcoMartinez(T)949-263-2600(F)949-260-0972TOESCROWFirstAmerican TitleInsurance CompanyHOLDER:18500VonKarman,Suite600Irvine,CA92612Attention:Ryan Hahn,SeniorEscrowOfficer(T)949-825-2472(F)877-372-02615.3ConflictofInterest.Nomember,officialoremployeeofSeller,havinganyconflictofinterest,directorindirect,relatedtothisAgreement,theProperty,orthedevelopmentoroperationoftheProjectshallparticipateinanydecision relatingtothisAgreement.ThePartiesrepresentandwarrantthattheydonothaveknowledgeofanysuchconflictofinterest.5.4BuyerCovenantto Defend thisAgreement.BuyeracknowLedgesthatSellerisa“public entity”and/or“publicagency”asdefinedunderapplicable Californialaw.Therefore,Seller mustsatisfytherequirementsofcertainCaliforniastatutes relatingtotheactionsofpublicentitiesandpublicagenciesincluding,withoutlimitation, CEQA.Also,asapublicbody,Seller’sactioninapprovingthisAgreementmaybesubjecttoproceedingstoinvalidatethisAgreementormandamus.Buyerassumestheriskofdelaysanddamagesthat mayresulttoBuyerfromanythird-partylegalactionsrelatedtoSeller’s approvalofthisAgreementortheptirsuitoftheactivitiescontemplatedbythisAgreement,evenintheeventthatanerror,omissionorabtiseofdiscretionbySellerisdeterminedtohaveocctirred.Ifathird-partyfilesalegalactionregardingSeller’sapprovalofthisAgreementorthepctrsuitoftheactivitiescontemplatedbythisAgreement, eitherSellermayterminatethisAgreementonthirty(30)dayswrittennoticetoBuyerofSeller’sintenttoterminatethisAgreement,referencingthis Section5.4,withocLtanyfurther obligationtoperformthetermsofthisAgreementandwithoutany45635.09000\29464256.5—20—
liabilitytoBuyer resultingfromsuchtermination,unlessBuyerunconditionallyagreestoindemnifyanddefendSeller,withlegalcounselreasonablyacceptabletoSeller,againstsuchthird-partylegalaction,asprovidedinthenextsentence.Withinthirty(30)daysofreceiptofSeller’snoticeofintenttoterminatethisAgreement,asprovidedintheprecedingsentence,BuyermayoffertodefendSeller,withlegalcounselreasonablyacceptabletoSeller,inthethird-partylegalactionandpayallofthecourtcosts,reasonabLeattorneyfees,monetaryawards,sanctions,attorneyfeeawards,expert witnessandconsultingfees,andtheexpensesofanyandallfinancialorperformanceobligationsresultingfrom thedispositionofthelegalaction.AnysuchofferfromBuyer mustbeinwritingandreasonablyacceptabletoSellerinbothformandsubstance.NothingcontainedinthisSection5.4shallbedeemedorconstruedtobeanexpressorimpliedadmissionthatSellerisliabletoBuyer or anyother personorentityfor damagesallegedfromanyallegedorestablishedfailureofSellertocomplywith any statute,including,withoutlimitation,CEQA.Buyer’sdefenseofsuchthirdpartyactionsasdescribedinthisSection5.4shaltconstituteanUnavoidableDelay.5.5WarrantyAgainstPaymentofConsiderationforA%reement.Buyerwarrantsthatithasnotpaidorgiven,andwillnot payorgive,anythirdpartyanymoneyorotherconsiderationforobtainingthisAgreement.Thirdparties,for thepurposesofthisSection5.5,shallnotincludepersonstowhomfeesarepaidforprofessionalservices,ifrenderedbyattorneys,financialconsultants,accountants,engineers,brokers,architectsandthelikewhensitchfeesareconsidered necessarybyBuyer.5.6Non-liabilityofSellergOfficialsandEmployees.Nomember,officialoremployeeofSellershallbepersonallyliabletoBuyer,oranysuccessorininterestofBuyer,intheeventofanydefaultor breachbySellerunderthisAgreementorforanyamountthat maybecomeduetoBuyerortoitssuccessor,oronanyobligationsunderthetermsofthisAgreement,exceptasmayarisefromthegrossnegligenceorwillfulactsofsuchmember,officialoremployee.Nomember, officer, agentoremployeeofBuyershallbepersonallyliabletoSeller,oranysuccessorininterestofSeller,intheeventofanydefaultorbreachbyBuyerunderthisAgreementorforanyamountthatmaybecomeduetoSellerortoitssuccessor,oronanyobligationsunderthetermsofthisAgreement, exceptasmayarisefrom thegrossnegligenceorwillfulactsofsuchmember,officer,agentoremployee.5.7UnavoidableDelay;ExtensionofTimeofPerformance.5.7.1SubjecttospecificprovisionsofthisAgreement,performancebyanyPartyunderthisAgreementshallnotbedeemed,orconsideredtobe,indefaultwhereanysuchdefaultisduetoanUnavoidableDelaythatisnotattributabletothefaultofthePartyclaiminganextensionoftimetoperform.AnextensionoftimeforanyUnavoidableDelay shallbefortheperiodoftheUnavoidableDelayandshallcommencetorunfrom thedateofoccurrenceoftheUnavoidableDelay,ifthePartyassertingtheexistenceoftheUnavoidableDelayprovidestheother PartieswithwrittennoticeoftheoccurrenceoftheUnavoidableDelay,withinten (10)daysafterthenotifyingParty learnsofthecommencementofsuchassertedUnavoidableDelay.Otherwise, theextensionoftimeforanUnavoidableDelayshallcommenceonthe dateofreceiptofwrittennoticeoftheoccurrenceoftheUnavoidableDelaybythePartiesnotrequestinganextensionoftimetoperformduetosuchUnavoidableDelay.45635.09000\29464256.5—21—
5.7.2The Partiesexpressly acknowledgeandagree thatchangesineithergeneraleconomicconditionsorchangesintheeconomicassumptionsofeitherofthemthat mayhaveprovidedabasisforenteringintothisAgreementandthatoccuratanytimeaftertheexecutionofthisAgreement,donotconstituteanUnavoidableDelayanddonotprovideanyPartywith groundsforassertingtheexistenceofanUnavoidableDelayintheperformanceofanycovenantorundertakingarisingunderthisAgreement.EachPartyexpressly assumestheriskthatchangesingeneraleconomic conditionsorchangesinsucheconomicassumptionsrelatingtothe terms andcovenantsofthisAgreementcouldimposeaninconvenienceorhardshiponthecontinuedperformanceofsuchPartyunderthisAgreement.5.8RealEstateCommissions.Sellershallnotbeliableforanyrealestatecommissions, brokeragefeesorfinderfeesthatmayarisefromorberelatedtothisAgreement,exceptthatSellershallpay anyfeesorcommissionsorotherexpensesrelatedtoitsretentionorempLoymentofrealestate brokers,agentsorthelike.Buyershall payany feesorcommissionsorotherexpensesrelatedtoitsretentionoremploymentofrealestatebrokers,agentsorotherprofessionals.5.9BindingonSuccessorsandAssi%ns.ThisAgreementshallbebindinguponandinuretothebenefitoftheParties andtheir respectiveheirs,executors,administrators,legalrepresentatives,successors,andassigns.5.10EntireAireement.5.10.1ThisAgreementshallbeexecutedinthree(3)duplicateoriginals,eachofwhichshallbedeemedtobeanoriginal,butallofwhichtogethershallconstituteone and thesameinstrument. ThisAgreementincludes______________pages(exclusiveofsignature pages)and___________________exhibits,thatconstitutetheentire understandingandagreementofthePartiesregardingthePropertyandtheothersubjectsaddressedinthisAgreement.5.10.2 ThisAgreement(includingtheexhibitsattachedhereto)constitutestheentireagreement betweentheparties heretopertainingtothesubjectmatter hereof,and thefinal,completeandexclusiveexpressionofthetermsandconditionsthereof,andsupersedesallnegotiationsorprevious agreementsbetweenthePartieswith respecttothePropertyandtheothersubjectsaddressedinthisAgreement.5.10.3Noneoftheterms,covenants,agreementsorconditionssetforthinthisAgreementshallbedeemedtobemerged withanydeedconveyingtitletothePropertyandthis Agreementshallcontinueinfullforceandeffect beforeandaftersuchconveyances.5.10.4AllwaiversoftheprovisionsofthisAgreementandaltamendmentstothisAgreementmustbeinwritingandsignedbytheauthorized representative(s)ofaltParties.5.11ExecutionofthisA%reement.Followingexectitionofthree(3)originalsofthisAgreementbytheactthorizedrepresentative(s)ofBuyerandpromptdeliveryofsuchoriginals,thereafter,toSelter,accompaniedby anofficialactionofthegoverningbodyofBuyerauthorizingtheindividuals executingthisAgreementonbehalfofBuyertoexecuteandperformthisAgreement,informandsubstance acceptabletoSeller,thisAgreementshallbesubjecttothereviewandapprovalbySeller’sgoverningboard,intheirsoleandabsolute discretion,no45635.09000\29464256.5-22-
later thanforty-five(45)calendardaysaftersuchdateofdeliverytoSeller.IfSellerhavenotapproved, executed,anddeliveredanoriginalofthisAgreementtoBuyerwithintheforegoingtimeperiod,thennoprovisionofthisAgreementshallbeofanyforceoreffectfor any purpose.5.12SurvivalofIndemnityObligations.AllgeneralandspecificindemnityanddefenseobligationsofthePartiesset forthinthisAgreementshallsurvivetheexpirationorterminationofthisAgreementand/orthe executionorrecordationoftheGrantDeed.5.13TimeDeclaredtobeoftheEssence.Astotheperformanceofanyobligationhereunderastowhichtimeisacomponentthereof,theperformanceofsuchobligationwithinthetimeprovidedisoftheessence.[SignaturesonFollowingPagesJ45635.09000\29464256.5-23-
SIGNATUREPAGETO2017PURCHASEANDSALEAGREEMENTAND JOINTESCROWINSTRUCTIONS(CostanzoInvestments,LLC/A-2Property)SELLER:SUCCESSORAGENCYTOTHEAZUSAREDEVELOPMENTAGENCY,apublic body,corporateandpoliticDated:,2017By:_________________TroyButzlaffExecutive DirectorATTEST:SecretarytotheBoardAPPROVEDASTOLEGALFORM:BESTBEST&KRIEGERLLPBy:_________
_
_GeneralCounsel45635.09000\29464256.5
Dated:SIGNATUREPAGETO2017PURCHASEANDSALEAGREEMENTANDJOINTESCROWINSTRUCTIONS(CostanzoInvestments, LLC/A-2Property)BUYER:liabilitycoiBy:aDelawarelimitedChrisCostanzo,Member45635.09000\29464256.5
EXHIBITATO2017PURCHASEANDSALEAGREEMENTAND JO[NTESCROWINSTRUCTIONS(CostanzoInvestments,LLC/A-2Property)LegalDescriptionoftheProperty#169170v26144.2EXHIBITA45635.09000\29464256.5
EXHIBITBTO2017PURCHASEANDSALEAGREEMENTANDJO[NTESCROWINSTRUCTIONS(Costanzo Investments, LLC/A-2Property)FormofGrantDeed[AttachedBehindThis Pagel#169170v26144.2EXHIBITB45635.09000\29464256.5
RECORDINGREQUESTEDBYANDWHENRECORDEDMAILTO:SUCCESSORAGENCYTOTHEAZUSAREDEVELOPMENTAGENCYGRANTDEEDPARTONEFORAVALUABLECONSIDERATION,receiptofwhichisherebyacknowledged,SUCCESSORAGENCYTOTHEAZUSA REDEVELOPMENTAGENCY,apublicbody,corporateandpolitic(“Grantor”),herebygrantstoCostanzoInvestments,LLC,aDelawarelimited liabilitycompany(“Grantee”),thatcertainrealpropertylocatedinCityofAzusa, CountyofLosAngeles,StateofCalifornia,specificallydescribedinExhibit“A”attachedtothisGrantDeed(“Properly”)andmadeapartofthisGrantDeedbythisreference.PARTTWOTheconveyanceofthePropertybytheGrantortotheGranteeinPart Oneissubjecttothe following terms, conditions,covenantsandrestrictions:Section1.ConditionofProperty. TheGranteeacknowledgesandagreesthatthePropertyisconveyedbytheGrantortotheGranteeinits“AS IS,”“WHEREIS”and“SUBJECTTOALLFAULTSCONDITION,”asofthedateofrecordationofthisGrantDeed,withnowarranties,expressedorimplied,as totheenvironmentalorotherphysical conditionoftheProperty,thepresenceorabsenceofanypatentor latentenvironmentalorotherphysicalconditiononorintheProperty,oranyothermattersaffectingtheProperty.Section2.ObligationtoRefrainfromDiscrimination.The Granteehereincovenantsbyandforitself,itssuccessorsandassigns,andallpersonsclaimingunderorthroughthem,thatthereshallbenodiscriminationagainst orsegregationof,anypersonorgroupofpersonsonaccotintofrace,color, creed, religion,sex,maritalstatus,national origin,orancestryinthesale,lease,sublease,transfer,use,occupancy,tenure,orenjoymentofthepremiseshereinconveyed,norshallthe granteeoranypersonclaimingttnderorthroughit,establishorpermitany suchpracticeorpracticesofdiscriminationorsegregationwithreferencetotheselection, location,number,useoroccupancyoftenants,lessees,sub-tenants,sub-lessee,orvendeesinthepremiseshereinconveyed.Theforegoingcovenantsshallrunwiththeland.#169170v26144.2EXHIBITB45635.09000\29464256.5
Section3.EffectofUnlawfulProvisionSeverability.IntheeventthatanyprovisionofthisGrantDeedisheldtobeinvalidorunlawfulbyafinaljudgmentofacourtofcompetentjurisdiction,suchinvalidityshall notaffectthevalidityofanyotherprovisionofthisGrantDeed.INWITNESSWHEREOF,theGrantorhascausedthisGrantDeedtobeexecutedbyitsauthorized representative(s)onthisdayof,2017.GRANTOR:SUCCESSORAGENCYTOTHEAZUSAREDEVELOPMENTAGENCY,apublicbody,corporateandpoliticBy:______________________TroyButzlaffExecutiveDirectorjALLSIGNATURESMUSTBENOTARYACKNOWLEDGED]#169170v26144.2EXHIBITB45635.09000\29464256.5
EXHIBITATOGRANTDEEDPropertyLegalDescription#169170v26144.2EXHIBITB45635.09000\29464256.5
CERTIFICATEOFACCEPTANCEOFGRANTDEEDTheundersignedherebyacknowledgesacceptancebyCostanzoInvestments,aCalifornialimitedliabilitycompany, the GranteeinthewithinGrantDeed,ofthedeliveryofthesubjectPropertydescribedinthewithinGrantDeedfromtheSuccessorAgencytotheAzusaRedevelopmentAgency.GRANTEE:Costanzo Investments,aDelawarelimitedliabilitycompanyDat
ed:_____________________By:______
___________
__
___________
__
__JamesR.Costanzo,Co-Managing MemberBy:___________________________ChrisCostanzo,Co-ManagingMember[ALLSIGNATURESMuSTBENOTARY ACKNOWLEUGEDJ#169170v26144.2EXHIBITB45635.09000\29464256.5
EXHIBITCTO2017PURCHASEANDSALEAGREEMENTAND JOINTESCROWINSTRUCTIONS(CostanzoInvestments,LLC/A-2Property)FormofOfficial ActionofBuyerCERTIFICATIONOFLLCAUTHORITYTheundersigned membersofCostanzoInvestments,aDelawareLimitedliabilitycompany(the“LLC”),docertify thatweareallofthemembersoftheLLCandthat therearenoothermembers.Wefurthercertifythatanyone(1)ofthefollowingnamed persons,individually:[INSERTNAMES]be,andtheyare,authorizedandempoweredforandonbehalfofandinthenameoftheLLCtoexecuteanddeliverthatcertain 2017 Purchaseand SaleAgreementandJointEscrowInstructions(Costanzo Investments,LLC/A-2 Property), dated____
__
,2017,betweentheSuccessor AgencytotheAzusa RedevelopmentAgency,(“Seller”)andthe LLC(the“Agreement”),topurchase certainrealpropertylocatedintheCityofAzusa,California,asspecificallydescribedintheAgreement,andallother documentstobeexecutedbytheLLCinconnectionwiththetransactions contemplatedintheAgreement,andtotakeallactionsthatmaybeconsiderednecessarytoconcludethetransactionscontemplatedintheAgreementandperformtheotherobligationsoftheLLCpursuanttotheAgreement.Theauthorityconferredshallbeconsidered retroactive,andanyandallactsauthorizedinthisdocumentthatwereperformed beforetheexecutionofthisCertificateareapprovedandratified.Theauthorityconferredshallcontinueinfullforce andeffectuntiltheSuccessorAgencytotheAzusa RedevelopmentAgency,apublicbody,corporateandpolitic,oritssuccessorsorassigns,shallhavereceivednoticeinwritingfromtheLLCoftherevocationofthisCertificate.Wefurthercertifythattheactivities coveredbytheforegoingcertificationsconstitutedulyauthorizedactivitiesofthe LLC;thatthesecertificationsare nowinfullforceandeffect;andthatthereisnoprovisioninanydocumentunder whichtheLLCisorganizedand/orthatgoverns theLLC’scontinued existence, limitingthepoweroftheundersignedtomakethecertificationssetforthinthiscertificate,andthatsuchcertificationsareinconformitywiththeprovisionsofallsuchdocuments.LLCMembers:45635.09000\29464256.5