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HomeMy WebLinkAboutItem No. 18 Devel Agrmnt City of LE & Kathryn J AboodText File City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 17-770 Agenda Date: 8/14/2018 Status: Approval FinalVersion: 1 File Type: ReportIn Control: City Council / Successor Agency Agenda Number: 18) Page 1 City of Lake Elsinore Printed on 8/9/2018 REPORT TO CITY COUNCIL To:Honorable Mayor and Members of the City Council From:Grant Yates, City Manager Date:August 14, 2018 Subject:Disposition and Development AgreementBy and BetweenCity of Lake Elsinoreand Nicolas Abood and Kathryn J. Abood, Trustees Recommendation approve A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ADISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF LAKE ELSINORE AND NICOLAS ABOOD AND KATHRYN J. ABOOD, TRUSTEES Background In July 2018, the City acquired an unimproved surplus parcel from the Riverside County Transportation Commission comprised of approximately 73,616 square feet (1.69 acres) located on the south side of Central Avenue, just east of Trellis Lane in the City of Lake Elsinore(the “City Property”). The City acquired the City Property to advance an economically feasible development opportunity with the expectation that the City Property would be sold to anadjacent property ownerand merged with adjacent properties to create aviable development site that could support commercial uses to serve City residents and visitors. Discussion The City Property is located adjacent to approximately 11.3 acres of unimproved properties zoned Commercial Mixed Use (CMU) (the “Developer Property”). Development of the Developer Property is hampered by limited circulation and street access. The owner of the Developer Property desires to (i) purchase the City Property for the full appraised fair market value of $73,500, (ii) reimburse the City for acquisition costs, including escrow, title and legal fees,and (iii) merge the City Property and the Developer Property. By merging the City Property with the Developer Property, the “Merged Property”will provide a viable commercial mixed use development site with direct access to/from Central Avenue. A Map of the City Property and Developer Property is attached (Exhibit A). Government Code Section 52201 et seq. (the “Act”) authorizes the City to sell property to create an economic opportunity. Pursuant to the Act and in furtherance of the City’s intent in acquiring the City Property to create an economic opportunity, the City proposes to enter into a Disposition and Development Agreement (DDA) with the owner of the Developer Property. A Summary Report describing (i) the cost of the proposed conveyance, (ii) the estimated value of the interest to be conveyed, and (iii) why the conveyance will assist in creating an economic opportunity has been prepared in accordance with the Act (Exhibit C). Disposition and Development Agreement (Abood) August 14, 2018 Page2 Pursuant to the terms of the DDA(Exhibit D), the City will convey the City Property to the Developer for the appraised fair market valueof $73,500 which is the purchase price paid by the City to acquire the City Property from the Riverside County Transportation Commission. In addition, the Developer will be required to satisfy the following conditions precedent to the close of escrow: (i) reimburse the City’s costs of acquiring the City Property, including escrow, title and legal fees, and (ii) obtain all necessary entitlements, including a tentative tract map to merge the City Property and the Developer Property (the “Merged Property”), a Conditional Use Permit and Design Review approval for the development of the Merged Property consistent with the CMU zoning and incompliance with all requirements of the California Environmental Quality Act (CEQA) and the Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP). Environmental Determination The approval of the DDA is exempt for the requirements of CEQA because this action does not constitute approval of a “Project” as defined by CEQA. Approval of the DDA does notcommit the City to approving a project nor constitute an entitlementfor the development of the City Property. Pursuant to the DDA, the Developer must obtain all necessary entitlementsfor the merger and development of the City Property, including compliance with CEQA and MSHCP. Such environmental compliance must be satisfactorily completed prior to the close of escrow conveying the City Property. Fiscal Impact The DDA provides for full cost recovery from the Developer to the City for all acquisition and disposition costs, including the purchase price and all escrow, title and legal fees. The conveyance of the City Property will provide an economic opportunity to develop commercial uses that will serve City residents and visitors, provide jobsand generate tax revenues. Exhibits A -Vicinity Map B -Resolution C.Summary Report D.Disposition and Development Agreement RESOLUTION NO. 2018-___ A RESOLUTION OFTHE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA,APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LAKE ELSINORE AND NICOLAS ABOOD AND KATHRYN J. ABOOD, TRUSTEES WHEREAS, the City of Lake Elsinore (“City”) is a municipal corporation organized and operating under the laws of the State of California; and WHEREAS,in July 2018 the City acquired certain unimproved real property comprised of approximately 1.69 acres located on the south side of Central Avenue, just east of Trellis Lane in the City of Lake Elsinore (Assessor’s Parcel No. 347-110-089) from the Riverside County Transportation Commission (the “City Property”); and WHEREAS, the City acquired the City Property to create an economic opportunity pursuant to California Government Code Section 52201; and WHEREAS, the City Property is located adjacent to approximately 11.3 acres of unimproved properties zoned Commercial Mixed Use (CMU) (the “Developer Property”); and WHEREAS,the development of the Developer Property is hampered by limited circulation and street accessand remain unimproved; WHEREAS, by conveying the City Property to the Developer and merging the City Property with the Developer Property(the “Merged Property”)the City will facilitate the creation of a viable commercial mixed use development site with direct access to/from Central Avenuethat will serve City residents andvisitors, provide jobs and generate tax revenues; and WHEREAS, the City Council has duly considered all of the terms and conditions of the Disposition and DevelopmentAgreement, as set forth in the agenda report presented to itand as attached heretoandany testimony received at the public hearingat which this matter was considered, and believes that the sale of theCityPropertyis in the best interests of the City, its residents and visitorsin accord with the public purposes and provisions of applicable State and local law; and WHEREAS, notice of the public hearing was published in accordance with the requirements of Government Code section 52201, the Summary Report prepared pursuant thereto was available for public review, and all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, THE CITY COUNCIL OFTHE CITY OF LAKE ELSINORE,DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1.The Recitals set forth above are true and correct and incorporated herein by reference. SECTION 2.The CityCouncil finds that the proposed saleof the City Property will assist in the creation of an economic opportunityby facilitating the creation of an economically viable commercial mixed use development site that will serve City residents and visitors, create jobs and generate tax revenues. RESOLUTION NO. 2018-___ Page 2 SECTION 3.The City Council hereby approves the saleof the City Propertyfor apurchase price of $73,500subject to the satisfaction of certain conditions, including (i) reimbursement by the Developer of the City’s costs associated with the acquisition and disposition of the City Property, and (ii) application by the Developer and approval by the City of all necessary entitlements in compliance with the City’s zoning ordinance and applicable land use regulations, CEQA and MSHCP. The terms and provisions of the Disposition and DevelopmentAgreement between the City and the Developerwith respect to the saleof the City Propertyin the form attached hereto is hereby approved, with such changes as may be mutually agreed upon by the City Manager (or his duly authorized representative), in consultation with the City Attorney, as are minor and in substantial conformance with the form of the Disposition and Development Agreement submitted herewith. SECTION 4.Approval of the Disposition and DevelopmentAgreement is exempt from CEQA because it does not constitute a “project” for purposes of CEQA nor does it commit the City to approving a project and any subsequent action taken by the City Council with respect to the future use of the City Propertyshall be precededby and is conditional and contingent upon environmental assessment and review under,and in compliance with, CEQA. The escrow for the conveyance of the City Property will not close unless and until the entitlements for development of the Merged Property are approved in compliance with CEQA and all applicable laws. SECTION 5.The City Manager is hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest, to the final version of the Disposition and DevelopmentAgreement after completion of any such non-substantive, minor revisions. Copies of the final form of the Agreement, when duly executed and attested, shall be placed on file in the office of the City Clerk. Upon satisfaction of the conditions present to conveyance, the Mayor is authorized to execute the Grant Deed conveyingthe City Property. SECTION 6.In addition, the City Manageris authorized and directed to do any and all things, and to execute any and all additional documents, which he may deem necessary or advisable to effectuate this Resolution, includingall escrow instructions and documents, which in consultation with the City Attorney, he may deem necessary or advisable in order to carry out and implement the Disposition and DevelopmentAgreementand otherwise effectuate the purposes of this Resolution and to administer the City’s obligations, responsibilities and duties to be performed under the Disposition and DevelopmentAgreement. SECTION 7.If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. SECTION 8.The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. RESOLUTION NO. 2018-___ Page 3 SECTION 9.This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this 14thday of August2018. Natasha Johnson, Mayor ATTEST: Susan M. Domen, MMC City Clerk APPROVED AS TO FORM: Barbara Leibold City Attorney RESOLUTION NO. 2018-___ Page 4 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. ______ was adopted by the City Council of the City of Lake Elsinore, California, at the regular meeting of August14, 2018, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Susan M. Domen, MMC City Clerk SUMMARY REPORT FOR THE PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LAKE ELSINORE(CITY) ANDNICHOLAS ABOOD AND KATHRYN J. ABOOD, TRUSTEES This Summary Report has been prepared pursuant to California Government Code Section 52201. The reportsets forth certain details of the proposed Disposition and Development Agreement (DDA) By and Between the City of Lake Elsinore (City) and Nicholas Abood and Kathryn J. Abood, Trustees. A.The Agreement. A copy of the DDAis attached. B.The basic terms ofthe Agreement: (i)The Property.In July 2018, theCity purchased that certain unimproved real property comprised of approximately 1.69 acres located on the south side of Central Avenue, just east of Trellis Lane in the City of Lake Elsinore (Assessor’s Parcel No. 347-110- 089)(“City Property”). The City Property is located adjacent to approximately 11.3 acres of unimproved properties zoned Commercial Mixed Use (CMU) (the “Developer Property”). A Map of the City Property and Developer Property is attached as Attachment No. 1 to the DDA. (ii)Cost of the Agreementand Value of the Interest to be Conveyed.The City purchased the City Property for the appraised fair market value of $73,500 and proposes to sell the City Property to the Developer for the same appraised fair market value of $73,500. In additionto payment of the purchase price, the DDA provides that the Developer will reimburse the City the costs associated with the acquisition and disposition of the City Property, including escrow, title and legal fees. The City Property will be conveyed in “as is” condition and no other costs related to the City Property or the proposed conveyancewill be incurred by the City. (iii)Economic Opportunity.The City Property is unimproved and was owned by the Riverside County Transportation Commission prior to the City’s acquisition in July 2018. As a publicly-owned property, the City Property has not generated any tax revenue. Development of the adjacent Developer Property is hampered by limited circulation and street access. Since the great recession of the late 2000’s, market conditions have been improving and the City has experienced significant growth. By conveying the City Property to the Developer and merging the City Propertywith the Developer Property, the “Merged Property” will provide a viable commercial mixed use development site with direct access to/from Central Avenue. New commercial development will serve City residents and visitors, provide jobs and generate tax revenuesto the benefit of the City and other taxing entities. Because there is no net investment of public resources, the increased property taxes, potential sales taxes and job generation meets the “economic opportunity” described in Government Code 52200.2. DISPOSITION AND DEVELOPMENT AGREEMENT By and Between CITY OF LAKE ELSINORE, a municipal corporation and NICOLAS ABOOD and KATHRYN J. ABOOD, Trustees TABLE OF CONTENTS 100. DEFINITIONS.....................................................................................................................2 200. DISPOSITION OF THE CITY PROPERTY......................................................................5 201. Purchase and Sale.....................................................................................................5 201.1 Developer Deposit .......................................................................................5 201.2 Purchase Price and Escrow Costs................................................................5 202. Representations and Warranties...............................................................................6 202.1 City's Representations.................................................................................6 202.2 Developer's Representations .......................................................................6 203. Condition of the City Property.................................................................................7 203.1 Condition of City Property...........................................................................7 203.2 Delivery of Natural Hazard Zone Disclosure Report ..................................7 203.3 Due Diligence Period...................................................................................7 203.4 Access to City Property ...............................................................................8 203.5 No Further Warranties as to City Property; Release of City .......................8 204. Escrow......................................................................................................................9 204.1 Escrow Instructions......................................................................................9 204.2 Costs of Escrow...........................................................................................9 204.3 Title Policy; Review of Title......................................................................10 204.4 Conditions of Closing................................................................................10 204.5 Termination of Escrow ..............................................................................12 204.6 Closing of Escrow......................................................................................12 204.7 Closing Procedure......................................................................................13 300. DEVELOPMENT OF THE MERGED PROPERTY........................................................13 301. Merger....................................................................................................................13 302. Entitlements............................................................................................................13 303. Development..........................................................................................................14 304. Schedule of Performance .......................................................................................14 305. Cost of Construction ..............................................................................................14 306. Compliance With Laws..........................................................................................14 307. Release of Construction Covenants .......................................................................14 308. Indemnification......................................................................................................14 400. DEFAULTS AND REMEDIES DEVELOPMENT OF THE MERGED PROPERTY.......................................................................................................................15 401. Default....................................................................................................................15 402. Institution of Legal Actions ...................................................................................15 403. Termination by Developer Prior to Conveyance ...................................................15 404. Termination by City Prior to Conveyance.............................................................16 405. Specific Performance.............................................................................................16 406. Acceptance of Service of Process..........................................................................16 407. Rights and Remedies Are Cumulative...................................................................17 408. Consequential Damages.........................................................................................17 @BCL@D01D39CB.doc 1 409. Inaction Not a Waiver of Default...........................................................................17 410. Applicable Law......................................................................................................17 411. Attorneys' Fees ......................................................................................................17 500. TRANSFERS AND ASSIGNMENTS OF INTEREST IN MERGED PROPERTY OR AGREEMENT............................................................................................................18 501. General Prohibition Against Developer's Transfers and Assignments..................18 502. Permitted Transfers by Developer .........................................................................18 503. City Consideration of Requested Transfer.............................................................18 504. Assignment by City................................................................................................19 505. Successors and Assigns..........................................................................................19 600. GENERAL PROVISIONS ................................................................................................19 601. Notices, Demands and Communications Between the Parties...............................19 602. Enforced Delay; Extension of Times of Performance ...........................................20 603. Relationship Between City and Developer............................................................21 604. No Third Party Rights............................................................................................21 605. City Approvals and Actions...................................................................................21 606. Integration..............................................................................................................21 607. Real Estate Brokerage Commission.......................................................................22 608. Titles and Captions.................................................................................................22 609. Interpretation..........................................................................................................22 610. No Waiver..............................................................................................................22 611. Modifications .........................................................................................................22 612. Severability ............................................................................................................22 613. Computation of Time.............................................................................................23 614. Legal Advice..........................................................................................................23 615. Time of Essence.....................................................................................................23 616. Cooperation............................................................................................................23 617. Conflicts of Interest................................................................................................23 618. Non-Liability of Officials and Employees of City.................................................23 619. Representation by Counsel.....................................................................................24 @BCL@D01D39CB.doc ii ATTACHMENTS Attachment No. 1 Map Attachment No. 2 City Property Legal Description Attachment No. 3 Grant Deed Attachment No. 4 Schedule of Performance Attachment No. 5 Memorandum of Agreement Attachment No. 6 Release of Construction Covenants @BCL@DOID39CB.doc 111 DISPOSITION AND DEVELOPMENT AGREEMENT This DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement"), dated for identification purposes only as of August 14, 2018 is entered by and between the CITY OF LAKE ELSINORE, a municipal corporation (the "City"), and NICOLAS ABOOD and KATHRYN J. ABOOD, Trustees of the Abood Family Trust Dated March 23, 1990 ("Developer"). RECITALS The following recitals are a substantive part of this Agreement. All capitalized terms set forth in the recitals shall have the meanings ascribed to such terms in Section 100 hereof. A. City is the present owner of that certain unimproved real property comprised of approximately 1.69 acres located on the south side of Central Avenue,just east of Trellis Lane, in the City of Lake Elsinore, California, generally described as Assessor's Parcel No. 347-110- 089 as depicted on the Map (Attachment No. 1) and more particularly described in Attachment No. 2 (the "City Property"). B. The City Property is adjacent to certain real property owned by Developer comprised of approximately 11.3 acres generally described as Assessor's Parcel Nos. 347-110- 048, -057, -059, -070 and -077 as depicted on the Map (Attachment No. 1) (the "Developer Property"). C. The Developer Property is zoned Commercial Mixed Use (CMU) and the Developer desires to develop the Developer Property as a mixed use project consistent with such zoning designation to include not less than ninety-two thousand (92,000) square feet of commercial development that will serve City residents and visitors and which could include a residential component of up to ninety-two (92)residential units. D. Development of the Developer Property is hampered by limited circulation and street access which if combined with the City Property would abut and provide direct access to Central Avenue and provide a viable development site. D. The purpose of this Agreement is to create an economic opportunity pursuant to Government Code Section 52201 et seq. (the "Act") by conveying the City Property to the Developer in order to allow the City Property and the Developer Property to be merged and promote the economic feasibility and development viability of the Developer Property. D. City desires to sell and Developer desires to purchase the City Property, merge the City Property and the Developer Property into one legal parcel (hereinafter, the "Merged Property") and develop and improve the Merged Property in accordance with City land use entitlements. NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL PROMISES, COVENANTS AND CONDITIONS CONTAINED HEREIN, CITY AND DEVELOPER AGREE AS FOLLOWS: 100. DEFINITIONS The following terms as used in this Agreement shall have the meanings given unless expressly provided to the contrary: `Agreement" means this Disposition and Development Agreement between City and Developer. "CEQA "means the California Environmental Quality Act (Pub. Res. Code §§ 21000, et seq), and the State of California Guidelines for the California Environmental Quality Act (14 Cal. Code Regs. §§15000 et seq). "City"means the City of Lake Elsinore, a California municipal corporation. "City Manager"means the City Manager of City or his designee. "City Property"is defined in Recital A. "City's Conditions Precedent to Closing"is defined in Section 204.4(a)hereof. "Closing"is defined in Section 204.9 hereof "Closing Date" is defined in Section 204.6 hereof "Condition of Title"is defined in Section 204.3 hereof. "Conveyance"is defined in Section 201 hereof "City Costs Reimbursement"means the costs incurred by the City in connection with the acquisition of the City Property and the preparation of the purchase and sale documents, including this Agreement, in the aggregate amount of Five Thousand Five Hundred and Fifty Dollars ($5,550) to be reimbursed to City by Developer as a condition precedent to Closing. "Default"means the failure of a Party to perform any action or covenant required by this Agreement within the time periods provided therein following notice and opportunity to cure, as set forth in Section 401 hereof. "Developer"means Nicolas Abood and Kathryn J. Abood, Trustees of the Abood Family Trust dated March 23, 1990, and any permitted assignees. "Developer Deposit"means the deposit as set forth in Section 201.1 hereof. "Developer's Conditions Precedent to Closing"is defined in Section 204.4(b) hereof. "Developer Property"is defined in Recital B. "Development" means grading, construction and/or installation of public or private improvements, infrastructure structures, buildings and facilities and the installation of landscaping on the Merged Property pursuant to the Entitlements. @BCL@D01D39CB.doc 2 "Effective Date" means the date upon which this Agreement shall have been fully executed by Developer and City. "Entitlements" means each application and discretionary action of the City, its Planning Commission, and City Council for the development of the Merged Property, including, as applicable, compliance with all requirements of the California Environmental Quality Act (CEQA) and the Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP), a Tentative Tract Map, a Conditional Use Permit, a Commercial Design Review, and any and all other land use entitlements and the conditions of approval related thereto, and any amendments, supplements, and modifications thereto, for the Development of the Merged Property. "Environmental Laws"means any and all present and future federal, state and local laws (whether under common law, statute, ordinance, rule, regulation or otherwise), court or administrative orders or decrees, requirements of permits issued with respect thereto, and other requirements of governmental authorities relating to the environment or to any Hazardous Substance or Hazardous Substance Activity (including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. § 9601, et seq.), as heretofore or hereafter amended from time to time ("CERCLA"), and the applicable provisions of the Health and Safety Code and the Water Code, and any and all successor statutes and regulations, orders, decrees, guidelines, or pronouncements promulgated thereunder). "Escrow"is defined in Section 204 hereof. "Escrow Agent"means the escrow agent of the Escrow Company for the Conveyance. "Escrow Costs"is defined in Section 204.2 hereof "Escrow/Title Company" means First American Title Insurance Company (the "Escrow/Title Company") located at 43620 Ridge Park Drive, Suite 200, Temecula, CA 92590. "Governmental Requirements" means all laws, statutes, codes, ordinances, rules, resolutions, policies and regulations (including, without limitation, those relating to land use, subdivision, zoning, building, Environmental Laws, and labor laws) of the United States, the State of California, the County of Riverside, the City and of any other governmental agency exercising jurisdiction over City, Developer or the Merged Property. "Grant Deed" means the grant deed by which City will convey the City Property substantially in the form attached to the Agreement as Attachment No. 3 and incorporated therein by this reference. "Hazardous Materials" means any substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste", "acutely hazardous waste", "extremely hazardous waste", or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and @BCL@DOID39CB.doc 3 Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material", "hazardous substance", or "hazardous waste"under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance"under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as "hazardous substances"pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., (xii) methyl-tert butyl ether, or (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Governmental Requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to human health or the environment. "Merged Property"means (i) prior to the merger of the City Property and the Developer Property into a single legal parcel in accordance with applicable requirements of the Subdivision Map Act, Government Code Section 66410, et seq., and the City's applicable subdivision ordinance, the City Property and the Developer Property; or (ii) subsequent to the merger of the City Property and the Developer Property into a single legal parcel in accordance with applicable requirements of the Subdivision Map Act, Government Code Section 66410, et seq., and the City's applicable subdivision ordinance, the single legal parcel consisting of the land constituting the City Property and the Developer Property. "Notice"shall mean a notice in the form prescribed by Section 601 hereof. "Outside Closing Date"means February 28, 2019, or such later date as may be agreed to in a writing signed by the City and Developer. "Party" and "Parties" means individually City or Developer and collectively City and Developer. `Purchase Price"means Seventy-Three Thousand Five Hundred Dollars ($73,500). "Schedule of Performance" means that certain Schedule of Performance which is attached hereto as Attachment No. 4 and incorporated herein by this reference, setting forth the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between Developer and the City Manager. "Title Policy"is defined in Section 204.3 hereof. "Transfer"is defined in Section 501 hereof. @BCL@D01D39CB.doc 4 200. DISPOSITION OF THE CITY PROPERTY 201. Purchase and Sale Subject to all of the terms and conditions set forth in this Agreement, City agrees to sell to Developer and Developer agrees to purchase from City (the "Conveyance") all of City's right, title and interest in and to the City Property. City has determined that the Purchase Price is the fair market value of the City Property and that the consideration for the Conveyance shall be Developer's payment of the Purchase Price, plus Developer's satisfaction of the City's Conditions Precedent to Closing set forth in Section 204.4 herein. Developer's acquisition of the City Property and development of the Merged Property pursuant to the Entitlements, and the fulfillment generally of this Agreement, are in the best interests of the City and the welfare of its residents, and in accordance with the public purposes and provisions of Government Code Section 52201 et seq. and other applicable Governmental Requirements. 201.1 Developer Deposit Developer shall deposit into Escrow, within thirty (30) days of the Effective Date, Six Thousand Dollars ($6,000) in cash (the "Developer Deposit"). The Developer Deposit shall be applied to the City Costs Reimbursement and Escrow Costs. In the event that the Closing does not occur, the Parties shall instruct the Escrow Agent to disburse Five Thousand Five Hundred Fifty Dollars ($5,550) of the Developer Deposit to City to pay the City Costs Reimbursement with the balance of the Developer Deposit to be applied to any Escrow Costs. Any funds remaining after the disbursements of the Developer's Deposit shall be refunded to the Developer. Notwithstanding the foregoing, in the event the reason for the Closing not occurring is the Default of City, then the Developer Deposit shall be refunded to the Developer and the City shall be responsible for the payment of all Escrow Costs. 201.2 Purchase Price and Escrow Costs Within 24 hours prior to the Closing, Developer shall deposit cash into Escrow in the amount of the Purchase Price of Seventy-Three Thousand Five Hundred Dollars ($73,500) and any unfunded Escrow Costs as itemized in the Estimated Settlement Statement prepared by the Escrow Agent. Upon Closing, the City Costs Reimbursement and the Purchase Price shall be delivered to the City and the Escrow Costs shall be disbursed in accordance with the Final Settlement Statement by the Escrow Agent. Any remaining funds shall be refunded to Developer. In the event that the Closing does not occur, the Parties shall instruct the Escrow Agent to disburse the City Costs Reimbursement to City and refund the Purchase Price and other funds in Escrow, less Escrow Costs, to the Developer. Notwithstanding the foregoing, in the event the reason for the Closing not occurring is the Default of City, then all funds deposited in Escrow by Developer shall be refunded to the Developer and the City shall be responsible for the payment of all Escrow Costs. @BCL@D01D39CB.doc 5 202. Representations and Warranties 202.1 City's Representations City represents and warrants to Developer as follows: (a) Authori . City is a municipal corporation, existing pursuant to the general laws of the State of California. The execution, performance and delivery of this Agreement by City have been fully authorized by all requisite actions on the part of City. (b) Title. City holds fee title to the City Property free and clear of all liens, encumbrances and other matters other than those set forth in the Title Policy and the City Property is not subject to any outstanding contract of sale, right of first refusal or purchase option, in favor of any person or entity, except Developer. (c) No Conflict. To the best of City's knowledge, City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound. (d) Liti ag tion. To the best of City's knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting the City Property or any portion thereof. (e) Governmental Compliance. To the best of City's knowledge, City has not received any notice from any governmental City or authority alleging that the City Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. If any such notice or notices are received by City following the Effective Date of this Agreement, City shall, within ten (10) days of receipt of such notice, notify Developer. Until the Closing, City shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true, immediately give written notice of such fact or condition to Developer. 202.2 Developer's Representations Developer represents and warrants to City as follows: (a) Authori . Developer has full right, power and lawful authority to undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Abood Family Trust dated as of March 23, 1990. (b) No Conflict. To the best of Developer's knowledge, Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. @BCL@DOID39CB.doc 6 (c) No Developer Bankruptcy. Developer is not the subject of a bankruptcy proceeding. Until the Closing, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true, immediately give written notice of such fact or condition to City. 203. Condition of the City Property 203.1 Condition of City Property Developer understands and acknowledges that City acquired the City Property on July 9, 2018 in order to provide the economic opportunity to merge the City Property with the Developer Property to improve access and facilitate development of the Merged Property. Developer acknowledges that for the period in which the City has held fee title to the City Property, the City Property has not been used to generate, manufacture, process, refine, treat, transfer, store or dispose of any Hazardous Materials in violation of any Environmental Law. The City expressly and specifically disclaims the making of any representations or warranties, express or implied, regarding the City Property or matters affecting the City Property, including (without limitation) the physical and environmental condition of the City Property. The City shall, to the greatest extent legally allowable, assign to the Developer all rights, claims, actions and/or causes of action it may have against prior owners of the City Property and tenants and/or anyone who has occupied the City Property in connection with the environmental condition of the City Property. Developer acknowledges and agrees that the City Property is to be conveyed to, and accepted by, Developer, in its present condition, "AS IS." After the Closing, the Developer shall be solely responsible for responding to and complying with any administrative notice, order, request or demand, or any third party claim or demand relating to potential or actual contamination of the City Property. 203.2 Delivery of Natural Hazard Zone Disclosure Report Within five (5) days following the opening of Escrow and at Developer's expense, Escrow/Title Company shall deliver to Developer a Natural Hazard Zone Disclosure Report, including environmental hazards("NHZ Report"). 203.3 Due Diligence Period Developer shall have twenty-five (25) days after the delivery of the NHZ Report (the "Due Diligence Period") to conduct or review such surveys, investigations, studies and inspections and make or review such geologic, environmental and soils tests and other studies of the City Property which Developer deems necessary and appropriate in its sole and absolute discretion, including any"Phase 1" and/or"Phase 2"investigations of the City Property and such soils, geological, toxic waste, hazardous substance, and/or any other kind of soil or water contamination tests and analyses. Developer shall promptly provide to City a copy of all reports and test results. If the Developer reasonably determines within the Due Diligence Period that the condition of the City Property is not satisfactory for any reason, Developer may elect to @BCL@DOID39CB.doc 7 terminate this Agreement by promptly notifying the City and Escrow/Title Company in writing of Developer's decision to terminate. 203.4 Access to City Property City hereby grants to Developer and any of Developer's consultants a right of entry to the City Property at reasonable times for the purpose of conducting soils and geological investigation and tests for toxic or hazardous substances and other contamination. Developer may perform such tests either before or after the opening of Escrow as part of an environmental site assessment or in accordance with the Comprehensive, Environmental Response, Compensation and Liability Act (42 USC 9061 et seq.). With respect to such entry and investigation, Developer shall be responsible for all costs and expenses associated with the inspection and such other cost as may be related thereto. Prior to Developer or its agents or contractors entering upon the City Property, Developer shall (i) give City forty-eight (48) hours prior notice of such entry, (ii) provide satisfactory evidence to City that Developer, or its agents or contractors, have obtained commercial general liability insurance, with limits of not less than $1,000,000.00 per occurrence and $2,000,000.00 in aggregate; workers compensation insurance in statutory limits and employers liability insurance with limits not less than $1,000,000.00 each incident; and umbrella excess liability insurance excess of the underlying commercial general liability and employers liability insurance with limits not less than $1,000,000.00 per occurrence and $2,000,000.00 aggregate, and (iii) restore the City Property to the condition it was in City Property to Developer's investigation. Developer will defend, indemnify and hold City free and harmless from and against any and all claims, damages and liabilities relating to or arising out of Developer's exercise of its rights under this Section. Developer will assure that all costs associated with its conduct of the investigations are fully satisfied and that the City Property is not subjected to any liens with respect thereto. 203.5 No Further Warranties as to City Property; Release of City Upon the Closing, the physical and environmental condition,possession or title of the City Property is and shall be delivered from City to Developer in an"as-is" condition, with no warranty expressed or implied by City. Pursuant to Section 203.3, Developer has or shall have inspected and conducted tests, inspections, investigations and studies of the City Property as Developer, in Developer's discretion, deems necessary. Developer acknowledges and agrees that, except as otherwise specifically provided herein, City has not made, does not make and specifically negates and disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written,past, present or future, of, as to, concerning or with respect to (i) value; (ii) the income to be derived from the City Property; (iii) the nature, quality or condition of the City Property, including, without limitation, the water, soil and geology; (iv) the compliance of or by the City Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body; (v) compliance with any Environmental Laws; (vi) the presence or absence of hazardous materials at, on, under, or adjacent to the City Property; (vii) deficiency of any undershoring; (viii) deficiency of any drainage; (ix) the fact that all or a portion of the City @BCL@DOID39CB.doc 8 Property may be located on or near an earthquake fault line or a flood zone; or(x)with respect to any other matter. Developer further acknowledges and agrees that it has or will have been given the opportunity to inspect the City Property and review information and documentation affecting the City Property, and that, except for City's express representations and warranties contained herein, Developer is relying solely on its own investigation of the City Property and review of such information and documentation, and not on any information provided or to be provided by City. Except for City's express representations and warranties contained in Section 202.1, City is not liable or bound in any manner by any oral or written statements, representations or information pertaining to the City Property, or the operation thereof, furnished by any real estate broker, agent, employee, servant or other person. Developer further acknowledges and agrees that to the maximum extent permitted by law, except for City's express representations and warranties contained in Section 202.1, the conveyance of the City Property as provided for herein is made on an "as is" condition and basis with all faults, and that City has no obligations to make repairs, replacements or improvements except as may otherwise be expressly stated herein. Developer represents, warrants and covenants to City that, except for City's express representations and warranties specified in this agreement, Developer is relying solely upon Developer's own investigation of the City Property. With respect to the waivers and releases set forth in this Section 203.5, Developer expressly waives any of its rights granted under California Civil Code Section 1542, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Developer's Initials Nothing contained in this Section 203.5 is intended to modify the indemnities contained in this Agreement. 204. Escrow 204.1 Escrow Instructions This Agreement shall constitute joint primary escrow instructions to the Escrow/Title Company; provided, however, that the parties shall execute such additional instructions as requested by the Escrow/Title Company not inconsistent with the provisions hereof. In the event of any inconsistency between such escrow instructions and this Agreement, this Agreement shall control the rights and obligations of the parties. 204.2 Costs of Escrow Developer shall pay or satisfy, as applicable all (a) the cost of recording the Grant Deed and all other documents recorded at the Closing (b) all documentary transfer taxes imposed in connection with the recording of the Grant Deed; (c) the cost of the NHZ @BCL@DOID39CB.doc 9 Report, (d) all escrow fees; (e) any other customary fees and charges and expenditures authorized by Developer(collectively, the "Escrow Costs"). 204.3 Title Policy; Review of Title City obtained a Standard Coverage Owner's Policy of Title Insurance ("Title Policy") in connection with the acquisition of the City Property. The Title Policy includes a resale binder which allows the Title Policy to pass through to the Developer at no cost. Within five (5) days of the Effective Date, City shall cause the Title Company to deliver to Developer the Title Policy and updated standard preliminary title report with respect to the City Property. Developer shall have twenty-five (25) days from Developer's receipt of the Title Policy and preliminary title report to give Notice to City and the Escrow Agent of Developer's approval or disapproval of the Title Policy and the updated preliminary title report, including without limitation any Exceptions. If Developer notifies City of Developer's disapproval of any items, City shall have the right, but not the obligation, to remove any disapproved items after receiving Notice of Developer's disapproval or provide assurances reasonably satisfactory to Developer that such items will be removed or remedied on or before the Closing. City shall exercise such right by Notice to Developer within ten (10) days of receipt of Notice from Developer of Developer's disapproval. If City cannot or does not elect to remove any disapproved items, Developer shall have ten (10) days after the expiration of City's ten (10) day election period to either (i) give City Notice that Developer intends to proceed with the Conveyance subject to the disapproved items or (ii) give City Notice that Developer does not elect to accept the Conveyance and elects to terminate the Escrow and this Agreement, whereupon any sums deposited by Developer into Escrow shall be disbursed by the Escrow Agent in accordance with the provisions of Section 201.1 and 201.2. The Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the "Condition of Title." Developer shall have the right to approve or disapprove in the manner provided in this Section any Exceptions reported by the Title Company or otherwise discovered after Developer has approved the Condition of Title (which are not created by Developer). Notwithstanding anything herein to the contrary, City shall remove prior to Closing all monetary liens other than non-delinquent taxes and assessments. Developer shall have the right to procure an ALTA Extended Coverage Owner's Policy of Title Insurance ("ALTA Policy") and Developer shall pay for the cost of such ALTA Policy, the cost of any survey that the Escrow/Title Company requires for issuance of an ALTA Policy and for the cost of any other increase in the amount or scope of title insurance if Developer elects to increase the amount or scope of title insurance coverage or to obtain endorsements to the Title Policy or ALTA Policy 204.4 Conditions of Closing The purchase and sale under this Agreement shall be subject to the satisfaction of the conditions precedent set forth in this Section 204.4 (unless waived in writing by the party to whom the benefit of such condition runs) on or before the Closing Date or such @BCL@D01D39CB.doc 10 earlier date as is specified in this Agreement, each of which conditions shall be a covenant of the party required to perform such condition. (a) City's Conditions. City's obligation to close Escrow is conditioned upon the satisfaction or written waiver by City of each and every one of the conditions precedent (i) through (vi), inclusive, described below (the "City's Conditions Precedent to Closing"), which are solely for the benefit of City, and which shall be satisfied or waived by the time periods provided for herein: (i) No Default. Developer is not in default of any of its material obligations under the terms of this Agreement. (ii) Execution of Documents. Developer shall have executed and delivered into Escrow all Closing documents, including, without limitation, this Agreement, the Memorandum of Agreement, the Change of Ownership Statement and such documents and instruments as Escrow/Title Company may reasonably require to evidence the due authorization and execution of the documents and instruments to be delivered by Developer under this Agreement and to issue the Title Policy or ALTA Policy. (iii) Deposit of Funds. Developer shall have deposited into Escrow the Escrow Costs and all amounts necessary to pay any required costs of the Title Policy or ALTA Policy. (iv) No Litigation._ No litigation shall be pending or threatened by any third parties which seeks to enjoin the transactions contemplated herein or to obtain damages in connection with this Agreement. (v) Representations and Warranties. Each of the representations and warranties by Developer contained in Section 202.2 shall be determined to have been true and correct in all material respects as of the date made and shall continue to be true and correct in all material respects as of the Closing. (vi) Entitlements. Developer shall have obtained all Entitlements necessary for the Development of the Merged Property consistent with the Commercial Mixed Use (CMU) Zoning designation. (b) Developer's Conditions. Developer's obligation to close Escrow is conditioned upon the satisfaction or written waiver by Developer of each and every one of the conditions precedent (i) through (vi), inclusive, described below (the "Developer's Conditions Precedent to Closing"), which are solely for the benefit of Developer, and which shall be satisfied or waived by the time periods provided for herein: (i) No Default. City is not in default of any of its obligations under the terms of this Agreement. (ii) Execution of Documents. City shall have executed and delivered into Escrow all Closing documents, including, without limitation, this Agreement, the Memorandum of Agreement, the Grant Deed and such documents and instruments as @BCL@DOID39CB.doc 11 Escrow/Title Company may reasonably require to evidence the due authorization and execution of the documents and instruments to be delivered by City under this Agreement. (iii) Review and Approval of Title. Developer shall have reviewed and approved the Condition of Title, as provided in Section 204.3. (iv) Title Policy. The Title Company shall, upon payment of any applicable premium or fee, be irrevocably committed to issue the Title Policy or ALTA Policy upon the Closing, in accordance with Section 204.3. (v) No Litigation. No litigation shall be pending or threatened by any third parties which seeks to enjoin the transactions contemplated herein or to obtain damages in connection with this Agreement. (vi) Representations and Warranties. Each of the representations and warranties by City contained in Section 202.1 shall be determined to have been true and correct in all material respects as of the date made and shall continue to be true and correct in all material respects as of the Closing. 204.5 Termination of Escrow If the Escrow is not in a condition to close by the Outside Closing Date, as the same may be extended pursuant to this Agreement, then either Parry which has fully performed under this Agreement may, in writing, demand the return of money, documents or property and terminate the Escrow and this Agreement. If either Party makes a written demand for the return of its money, documents or property, this Agreement shall not terminate until ten (10) business days after the Escrow Agent shall have delivered copies of such demand to the other Party at the respective addresses set forth in Section 601 hereof. If any objections are raised by written Notice within such ten (10) day period, the Escrow Agent is authorized to hold all money, documents or property until instructed by a court of competent jurisdiction or by mutual written instructions of the Parties. If no such objections are timely made, the Escrow Agent shall immediately return the demanded money and/or documents, and the escrow cancellation charges shall be paid by the undemanding Party. Termination of the Escrow shall be without prejudice as to whatever legal rights, if any, either Party may have against the other arising from this Agreement. If no demands are made, the Escrow Agent shall proceed with the Closing as soon as possible consistent with the terms of this Agreement. Nothing in this Section shall be construed to impair or affect the rights of Developer to specific performance. 204.6 Closing of Escrow The Conveyance shall close (the "Closing") within five (5) days of the Parties' satisfaction or written waiver of both Developer's Conditions Precedent to Closing and the City's Conditions Precedent to Closing, but in no event later than the Outside Closing Date. The Closing shall occur at the offices of the Escrow/Title Company. The Closing shall mean the time and day that the Grant Deed is filed for recording with the Riverside County Recorder. The Closing Date shall mean the day on which the Closing occurs. @BCL@D01D39CB.doc 12 204.7 Closing Procedure The Escrow Agent shall Close the Escrow as follows: (a) record the Grant Deed with instruction to the Riverside County Recorder to deliver the Grant Deed to Developer and a conforming copy thereof to City; (b) record the Memorandum of Agreement with instruction to the Riverside County Recorder to deliver the Memorandum to City and a conforming copy to Developer; (c) deliver the Title Policy or ALTA Policy issued by the Title Company to Developer; (d) deliver to City funds in an amount equal to the (1) the Purchase Price, and(ii) City Costs Reimbursement; (e) file any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; (f) deliver the FIRPTA Certificate, if any, to Developer; and (g) forward to Developer and City a separate accounting of all funds received and disbursed for each Party and copies of all executed, recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon. 300. DEVELOPMENT OF THE MERGED PROPERTY 301. Merger Within the time set forth in the Schedule of Performance, Developer shall submit an application for a lot merger combining the City Property and the Developer Property into one legal parcel in accordance with applicable requirements of the Subdivision Map Act, Government Code Section 66410, et seq., and the City's applicable subdivision ordinance. Such merger shall ensure that the Merged Property is comprised of a legal, insurable parcel sufficient to allow development and operation of the Project. 302. Entitlements The execution of this Agreement does not constitute the granting of or a commitment to obtain any required Entitlements required by City for the Development of the Merged Property. Within the time set forth in the Schedule of Performance, Developer shall, at its own expense, submit an application for and shall secure or cause to be secured all Entitlements necessary to develop the Merged Property consistent with the Commercial Mixed Use (CMU) zoning designation. @BCL@D01D39CB.doc 13 303. Development Developer shall develop the Merged Property in substantial accordance with the Entitlements. 304. Schedule of Performance Developer shall satisfy all conditions of this Agreement within the times established therefor in the Schedule of Performance. 305. Cost of Construction All of the cost of planning, designing, and developing the Merged Property in conformance with the Entitlements shall be borne by Developer. 306. Compliance With Laws Developer shall carry out the Development of the Merged Property in conformity with all Governmental Requirements. 307. Release of Construction Covenants Within ten(10) days of final inspection and issuance of a certificate of occupancy for the Development of the Merged Property, City shall furnish Developer with the Release of Construction Covenants. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Merged Property shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement. The Release of Construction Covenants shall be in such form as to permit it to be recorded in the Recorder's Office of Riverside County and shall be in substantially the form of Attachment No. 6. 308. Indemnification Developer shall save, protect, pay for, defend, indemnify and hold harmless the City and the City and their respective officers, employees, representatives and agents, from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses (including foreseeable and unforeseeable consequential damages), costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, attorneys' fees and remedial and response costs) including, without limitation, personal injury, accidental death and property damage (the foregoing are hereinafter collectively referred to as "Liabilities")which may now or in the future be incurred or suffered by the City or the City or their officers, employees, representatives or agents by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of(a) Developer's purchase, development, or ownership of all or any part of the Merged Property, (b) any negligent act or omission on the part of Developer, or its agents, employees, representatives, agents, contractors or invitees, (c)the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Merged Property of @BCL@D01D39CB.doc 14 any Hazardous Materials or Hazardous Materials contamination after the Conveyance, (d) the environmental condition of the Merged Property, except for conditions (including the presence of any Hazardous Materials or Hazardous Materials contamination) resulting directly from activities approved by the City and conducted on the Merged Property in accordance with such approval(s), and (e) any Liabilities incurred after Developer's acquisition of the City Property under any Governmental Requirements relating to Hazardous Materials. 400. DEFAULTS AND REMEDIES DEVELOPMENT OF THE MERGED PROPERTY 401. Default A Party claiming a Default shall give written Notice of Default to the other Parry specifying such Default. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other Party, and the other Party shall not be in Default if such Party within thirty (30) days from receipt of such Notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay. If the Default is not cured or commenced to be cured and thereafter diligently pursued to completion by the defaulting party within thirty (30) calendar days after service of the Notice of Default, such failure shall constitute an "Event of Default" under this Agreement and the defaulting party will be liable to the other party for any damages caused by the Default and other relief as is afforded by applicable law. 402. Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to cure, correct or remedy any Event of Default, to recover damages as provided herein for any Event of Default, or to obtain any other remedy consistent with the purpose of this Agreement. All legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in Riverside County, or in the United States District Court for District of California in which Riverside County is located. 403. Termination by Developer Prior to Conveyance In the event that Developer is not in Default and prior to the Closing: (a) City does not (or demonstrably cannot) deliver title to any portion of the City Property pursuant to the Grant Deed in the manner and condition on or before the Outside Closing Date, or (b) City is in Default, or (c) one or more of Developer's Condition Precedent to Closing is not satisfied on or before the Outside Closing Date; then this Agreement may, at Developer's option, be terminated by Notice to City. From the date of the Notice of termination of this Agreement by Developer to City and thereafter this @BCL@D01D39CB.doc 15 Agreement shall be deemed terminated and there shall be no further rights or obligations between the Parties. Upon such termination by Developer, all documents deposited by any Party into Escrow shall be returned to that Party and all funds deposited into Escrow shall be disbursed in accordance with Section 201.1 and 201.2. 404. Termination by City Prior to Conveyance In the event that City is not in Default and prior to the Closing and either: (a) Developer is in Default, or (b) one or more of City's Condition Precedent to Closing is not satisfied on or before the Outside Closing Date; then this Agreement may, at City's option, be terminated by Notice to Developer. From the date of the Notice of termination of this Agreement by City to Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the Parties. Upon such termination by City, all documents deposited by any Party into Escrow shall be returned to that Party and all funds deposited into Escrow shall be disbursed in accordance with Section 201.1 and 201.2. 405. Specific Performance If either Developer or City defaults under any of the provisions of this Agreement after the Conveyance of title and prior to the recordation of a Release of Construction Covenants for the Development to be made on the Merged Property, the nondefaulting party will serve written notice of the Default on the defaulting party. If the default is not commenced to be cured and thereafter diligently pursued to completion by the defaulting party within thirty(30) calendar days of service of the notice of default, such Default shall constitute an Event of Default hereunder and the nondefaulting party at its option may, in addition to any other remedies to which it may be entitled, institute an action for specific performance of the terms of this Agreement. The rights established in this Section are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right,power and remedy authorized herein or now or hereafter existing at law or in equity. 406. Acceptance of Service of Process In the event that any legal action is commenced by Developer against City, service of process on City shall be made by personal service upon the City Manager or in such other manner as may be provided by law. In the event that any legal action is commenced by City against Developer, service of process on Developer shall be made in such manner as may be provided by law. @BCL@D01D39CB.doc 16 407. Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party. 408. Consequential Damages Without limiting the generality of the foregoing, Developer shall not in any event be entitled to, and Developer hereby waives, any right to seek consequential damages of any kind or nature from City or City arising out of or in connection with this Agreement, and in connection with such waiver Developer is familiar with and hereby waives the provision of § 1542 of the California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." 409. Inaction Not a Waiver of Default Any failures or delays by either Party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 410. Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement and the Parties shall comply with all Governmental Requirements. 411. Attorneys' Fees If any action, proceeding or arbitration is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover from the other party, in addition to all other damages, all costs and expenses of such action, proceeding or arbitration, including but not limited to actual attorneys' fees (including the allocated costs of in-house counsel), witness fees' and court costs. The phrase "prevailing party" as used in this Section shall mean the party who receives substantially the relief desired whether by dismissal, summary judgment or otherwise. The terms of this Section shall survive the Closing and shall not be merged with the Grant Deed. @BCL@D01D39CB.doc 17 500. TRANSFERS AND ASSIGNMENTS OF INTEREST IN MERGED PROPERTY OR AGREEMENT 501. General Prohibition Against Developer's Transfers and Assignments The qualifications and identity of Developer are of particular concern to City. It is because of those unique qualifications and identity that City has entered into this Agreement with Developer. For the period commencing upon the Effective Date and until the recordation of the Release of Construction Covenants, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement, nor shall Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or other transfer of the whole or any part of the Merged Property (collectively, a "Transfer") without prior written approval of City, except as expressly set forth herein. Any proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Merged Property without the approval of City in accordance with this Section 501 shall entitle City to terminate this Agreement, as set forth in Section 404 hereof, and/or pursue Specific Performance or any other remedy authorized herein or now or hereafter existing at law or equity. 502. Permitted Transfers by Developer Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or conveyance of the Merged Property, or any part thereof, shall not be required in connection with any of the following: (a) Any transfers to an entity or entities in which Developer or members of their immediate families, or trusts for their benefit, retain (i) a minimum of fifty one percent (51 %) of the ownership or other beneficial interests; and (ii) day to day management and control of the transferee entity or entities; (b) The conveyance or dedication of any portion of the Merged Property to the City or other appropriate governmental City, or the granting of easements or permits to facilitate the Development; and (c) Any approved financing, any foreclosure or deed in lieu transaction, or any transfer by the holder of any deed of trust or mortgage granted in connection with such financing following any such foreclosure or deed in lieu transaction. In the event of an assignment by Developer under subparagraphs (a) and (b), inclusive, above not requiring City's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such assignment it shall give Notice to City of such assignment and satisfactory evidence that the assignee has assumed the obligations of this Agreement. 503. City Consideration of Requested Transfer City reserves sole and absolute discretion to approve or disapprove a request for Transfer made pursuant to this Section, upon Developer's delivery of written Notice to City requesting such approval. Such Notice shall be accompanied by sufficient evidence regarding @BCL@D01D39CB.doc 18 the proposed assignee's or purchaser's development and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable City to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section and as reasonably determined by City. An assignment and assumption agreement in form satisfactory to City's legal counsel shall also be required for all proposed assignments. Within thirty (30) business days after the receipt of Developer's written notice requesting City approval of an assignment or Transfer pursuant to this Section, City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, City reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, Developer shall promptly furnish to City such further information as may be reasonably requested. Developer agrees to promptly pay all of City's out-of-pocket costs, including attorneys' fees, incurred in connection with review and processing of any request for Transfer and/or consummation of such Transfer and preparation of any documentation and/or agreements in connection therewith. 504. Assignment by City City may assign or transfer any of its interests hereunder to any public or private entity controlled by the City at any time without the consent of Developer. 505. Successors and Assigns All of the terms, covenants and conditions of this Agreement shall be binding upon Developer, City and their permitted successors and assigns. Whenever the term "Developer" or "City" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 600. GENERAL PROVISIONS 601. Notices,Demands and Communications Between the Parties Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Agreement from one Party to another (collectively, "Notices") must be in writing and may be personally delivered, or mailed via the United States Postal Service, postage prepaid, registered or certified mail, return receipt requested, to the address of the other Party as stated in this Section, and shall be deemed to have been given or sent at the time of personal delivery or, if mailed, on the third day following the date of deposit in the course of transmission with the United States Postal Service. Notices shall be sent as follows: @BCL@D01D39CB.doc 19 If to City: With a copy which shall not constitute notice to: City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 Attn: Grant Yates, City Manager Telephone: (951) 674-3124 Facsimile: (951) 674-2392 E-Mail: g. ay tesglake-elsinore.org With a copy which shall not constitute notice to: Leibold McClendon &Mann PC 9841 Irvine Center Drive, Suite 230 Irvine, CA 92618 Attention: Barbara Leibold Telephone: (949) 585-6300 ext. 101 Facsimile: (949) 585-6305 E-Mail: barbara@ceqa.com.com If to Developer: Nicolas Abood and Kathryn J. Abood, Trustees 4254 Motor Avenue Culver City, CA 90232 Telephone: Facsimile: E-Mail: Nicolas Abood c/o Ara Berberyan 11143 Tampa Ave., Northridge, CA 91326 Telephone: Facsimile: E-Mail: 602. Enforced Delay; Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either Party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine; restrictions; freight embargoes; lack of transportation; governmental @BCL@DOID39CB.doc 20 restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other Party; acts or failures to act of the City or any other public or governmental City or entity (other than the acts or failures to act of City which shall not excuse performance by City); or any other causes beyond the control or without the fault of the Party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Parry claiming such extension is sent to the other Party within thirty (30) days of the date commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Development shall not by itself constitute grounds of enforced delay pursuant to this Section. 603. Relationship Between City and Developer It is hereby acknowledged by Developer that the relationship between City and Developer is not that of a partnership or joint venture and that City and Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. Developer agrees to indemnify, hold harmless and defend City from any claim made against City arising from a claimed relationship of partnership or joint venture between City and Developer with respect to the development, operation, maintenance or management of the Merged Property or the Project. 604. No Third Party Rights The Parties intend that no rights or remedies be granted to any third party as a beneficiary of this Agreement or of any covenant, duty, obligation or undertaking established herein. 605. City Approvals and Actions Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager is authorized to act on behalf of City unless specifically provided otherwise herein. The City Manager is further authorized to execute documents contained in the Attachments hereto or such modified similar documents that are in substantially the form of the Attachments and approved by the City Attorney. Notwithstanding the foregoing authorization, the City Manager may elect not to exercise her authority under this Agreement and refer such matters to the City's Board for consideration. To the extent that the Attachments conflict or are otherwise inconsistent with this Agreement, the terms of this Agreement shall control. 606. Integration This Agreement contains the entire understanding between the Parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement @BCL@DOID39CB.doc 21 and shall be of no further force or effect. Each Party is entering this Agreement based solely upon the representations set forth herein and upon each Party's own independent investigation of any and all facts such Parry deems material. This Agreement includes pages 1 through 25 and Attachment Nos. 1 through 6, which constitute the entire understanding and agreement of the Parties, notwithstanding any previous negotiations or agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 607. Real Estate Brokerage Commission City and Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with this transaction, and each agrees to defend and hold harmless the other from any claim to any such commission or fee resulting from any action on its part. 608. Titles and Captions Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 609. Interpretation As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both Parties. 610. No Waiver A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 611. Modifications Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. 612. Severability If any term, provision, condition or covenant of this Agreement or its application to any Party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. @BCL@DOID39CB.doc 22 613. Computation of Time The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 614. Legal Advice Each Party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matter set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 615. Time of Essence Time is expressly made of the essence with respect to the performance by City and Developer of each and every obligation and condition of this Agreement. 616. Cooperation Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 617. Conflicts of Interest No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 618. Non-Liability of Officials and Employees of City No member, official or employee of City shall be personally liable to Developer, or any successor in interest, in the event of any Default or breach by City or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement. Developer hereby waives and releases any claim it may have against the members, officials or employees of City with respect to any Default or breach by City or for any amount which may become due to Developer or its successors, or on any obligations under the @BCL@D01D39CB.doc 23 terms of this Agreement. Developer makes such release with full knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 619. Representation by Counsel Developer acknowledges that this Agreement has been prepared by Leibold McClendon & Mann, P. C., as City Attorney to the City. Developer acknowledges that they have been informed that they are entitled to, and have been advised to seek, separate legal representation, and, accordingly, Developer represents that they either (i) have engaged such counsel in connection with this Agreement, or (ii) have voluntarily decided to enter into this Agreement without such representation. @BCL@DOID39CB.doc 24 IN WITNESS WHEREOF, City and Developer have executed this Disposition and Development Agreement as on the date set forth below. "CITY" CITY OF LAKE ELSINORE, a municipal corporation Dated: By: Its: Grant Yates, City Manager ATTEST: By: Susan M. Domen, MMC, City Clerk APPROVED AS TO FORM: By: Barbara Leibold, City Attorney "DEVELOPER" Dated: Kathryn J. Abood, Trustee Dated: Nicolas Abood, Trustee @BCL@DOID39CB.doc 25 ATTACIQrf NO.1 MAP a. city 3 S?�� l ll.L1L € ® ,. . ©�M .__ '• _ e M,4 Mal yµa® 1a''m ® ® E e 0 N® ..3 Y " ' TM �yWas am GR .uea u ® e ga, ..Y. �nwky..o¢sicx ATiACNhQiNT NO. 1 ATTACHMENT NO. 2 CITY PROPERTY LEGAL DESCRIPTION Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows: ALL THAT PORTION OF THE FOLLOWING DESCRIBED PROPERTY LYING SOUTH OF STATE HIGHWAY 74; THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND THE WEST HALF OF THE EAST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; EXCEPTING THEREFROM THAT PORTION INCLUDED IN THE PUBLIC HIGHWAY, THE ABOVE BEING THAT CERTAIN PARCEL OF LAND CONVEYED TO THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION, PURSUANT TO GRANT DEED RECORDED DECEMBER 5, 2001 AS INSTRUMENT NO. 2001-600651 OF OFFICIAL RECORDS RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL THAT PORTION CONVEYED FROM RIVERSIDE COUNTY TRANSPORTATION COMMISSION TO THE STATE OF CALIFORNIA BY DEED RECORDED NOVEMBER 20, 2008 AS INSTRUMENT NO. 2008-0615446 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL OIL AND MINERAL RIGHTS AS RESERVED BY W. J PEARSON AND E. B. PEARSON RECORDED MARCH 11, 1920 IN BOOK 519, PAGE 257 OF DEEDS, RECORDS OF RIVERSIDE COUNTY. A.P.N.: 347-110-089-5 and 347-110-008 and 347-110-089 @BCL@D01D39CB.doc ATTACHMENT NO. 2 ATTACHMENT NO. 3 GRANT DEED [See Attached] @BCL@Do1D39CB.doc ATTACHMENT NO. 3 WHEN RECORDED MAIL AND MAIL TAX STATEMENTS TO: Nicolas Abood and Kathryn J. Abood 4254 Motor Avenue Culver City, CA 90232 DOCUMENTARY TRANSFER TAX $ GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the CITY OF LAKE ELSINORE, a California municipal corporation hereby GRANT(S) to NICOLAS ABOOD AND KATHRYN J. ABOOD, TRUSTEES OF THE ABOOD FAMILY TRUST DATED MARCH 23, 1990 the real property described as: SEE EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE CITY OF LAKE ELSINORE, a California municipal corporation Dated: By: Natasha Johnson, Mayor @BCL@D01D39CB.doc EXHIBIT A LEGAL DESCRIPTION Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows: ALL THAT PORTION OF THE FOLLOWING DESCRIBED PROPERTY LYING SOUTH OF STATE HIGHWAY 74; THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND THE WEST HALF OF THE EAST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; EXCEPTING THEREFROM THAT PORTION INCLUDED IN THE PUBLIC HIGHWAY, THE ABOVE BEING THAT CERTAIN PARCEL OF LAND CONVEYED TO THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION, PURSUANT TO GRANT DEED RECORDED DECEMBER 5, 2001 AS INSTRUMENT NO. 2001-600651 OF OFFICIAL RECORDS RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL THAT PORTION CONVEYED FROM RIVERSIDE COUNTY TRANSPORTATION COMMISSION TO THE STATE OF CALIFORNIA BY DEED RECORDED NOVEMBER 20, 2008 AS INSTRUMENT NO. 2008-0615446 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL OIL AND MINERAL RIGHTS AS RESERVED BY W. J PEARSON AND E. B. PEARSON RECORDED MARCH 11, 1920 IN BOOK 519, PAGE 257 OF DEEDS, RECORDS OF RIVERSIDE COUNTY. A.P.N.: 347-110-089-5 and 347-110-008 and 347-110-089 @BCL@D01D39CB.doc A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) County of ) On , before me, a Notary Public,personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal. Signature of Notary (Affix seal here) @BCL@D01D39CB.doc ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE BENCHMARK DATE City Council Consideration of DDA August 14, 2018 Effective Date of DDA August 21, 2019 (City and Developer sign DDA) Open Escrow August 22, 2018 Submission by Developer of application to City for Entitlements - Tentative Tract Map (lot merger), CUP, Design Review October 1, 2018 CEQA and MSHCP compliance complete December 31, 2018 City Planning Commission consideration of Entitlements January 15, 2019 City Council consideration of Entitlements February 12, 2019 Close of Escrow- Outside Closing Date February 28, 2019 Developer Obtain Grading/Building Permits Within 90 days of Closing, but no later than May 28, 2019 Start of Development Within 180 days of Closing, but no later than November 28, 2019 Completion of Construction Within 12 months after (Certificate of Occupancy/ Start of Development Final Inspection Approval) Issuance by City of Release of Within 10 days of issuance Construction Covenants of Certificate of Occupancy @BCL@D01D39CB.doc ATTACHMENT NO. 4 ATTACHMENT NO. 5 MEMORANDUM OF AGREEMENT [See Attached] @BCL@Do1D39CB.doc ATTACHMENT NO. 5 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) City of Lake Elsinore ) 130 S. Main Street ) Lake Elsinore, California 92530 ) Attention: City Clerk ) Project: North Peak Plaza ) This document is exempt from a recording fee pursuant to Government Code Section 27383. MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT (this "Memorandum"), dated for purposes of identification only as of August 14, 2018, is entered by and between the CITY OF LAKE ELSINORE, a California municipal corporation (the "City") and NICOLAS ABOOD and KATHRYN J. ABOOD, Trustees, (the "Developer"). Section 1. Disposition and Development Agreement. City and Developer have executed a Disposition and Development Agreement dated for identification purposes as of August 14, 2018 (the "Agreement"), which provides for the acquisition by Developer from City of certain real property located in the City of Lake Elsinore, County of Riverside, State of California, more particularly described in Exhibit A which is attached hereto and incorporated herein by this reference (the "City Property"). The Agreement further provides for the merger of the City Property with adjacent properties owned by the Developer (collectively, the "Merged Property") and the Development thereon of a mixed use project consistent with the City's Commercial Mixed Use (CMU) zoning regulations and the Entitlements obtained by Developer. Copies of the Agreement are available for public inspection and copying as a public record in the office of the City Clerk located at 130 S. Main Street, Lake Elsinore, California. All of the terms, conditions, provisions and covenants set forth in the Agreement are incorporated in this Memorandum by reference as though fully set forth herein at length, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document. Capitalized terms not defined herein shall have the meanings ascribed to such terms in the Agreement. Section 2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants set forth in the Agreement. The inclusion of the following provisions shall not limit the incorporation of the Agreement, but is merely for convenience. In the event of any inconsistency between the terms, conditions, provisions and covenants set forth in the Agreement and this Memorandum, the terms, conditions, provisions and covenants set forth in the Agreement shall prevail. @BCL@DOID39CB.doc _ 1 _ Section 3. Transfers And Assignments Of Interest In Merged Property or Agreement 301. General Prohibition Against Developer's Transfers and Assignments The qualifications and identity of Developer are of particular concern to City. It is because of those unique qualifications and identity that City has entered into this Agreement with Developer. For the period commencing upon the Effective Date and until the recordation of the Release of Construction Covenants, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement, nor shall Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or other transfer of the whole or any part of the Merged Property (collectively, a "Transfer") without prior written approval of City, except as expressly set forth herein. Any proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Merged Property without the approval of City in accordance with this Section 501 shall entitle City to terminate this Agreement, as set forth in Section 404 hereof, and/or pursue Specific Performance or any other remedy authorized herein or now or hereafter existing at law or equity. 302. Permitted Transfers by Developer Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or conveyance of the Merged Property, or any part thereof, shall not be required in connection with any of the following: (d) Any transfers to an entity or entities in which Developer or members of their immediate families, or trusts for their benefit, retain (i) a minimum of fifty one percent (51 %) of the ownership or other beneficial interests; and (ii) day to day management and control of the transferee entity or entities; (e) The conveyance or dedication of any portion of the Merged Property to the City or other appropriate governmental City, or the granting of easements or permits to facilitate the Development; and (f) Any approved financing, any foreclosure or deed in lieu transaction, or any transfer by the holder of any deed of trust or mortgage granted in connection with such financing following any such foreclosure or deed in lieu transaction. In the event of an assignment by Developer under subparagraphs (a) and (b), inclusive, above not requiring City's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such assignment it shall give Notice to City of such assignment and satisfactory evidence that the assignee has assumed the obligations of this Agreement. 303. City Consideration of Requested Transfer City reserves sole and absolute discretion to approve or disapprove a request for Transfer made pursuant to this Section, upon Developer's delivery of written Notice to City @BCL@D01D39CB.doc - 2 - requesting such approval. Such Notice shall be accompanied by sufficient evidence regarding the proposed assignee's or purchaser's development and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable City to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section and as reasonably determined by City. An assignment and assumption agreement in form satisfactory to City's legal counsel shall also be required for all proposed assignments. Within thirty (30) business days after the receipt of Developer's written notice requesting City approval of an assignment or Transfer pursuant to this Section, City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, City reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, Developer shall promptly furnish to City such further information as may be reasonably requested. Developer agrees to promptly pay all of City's out-of-pocket costs, including attorneys' fees, incurred in connection with review and processing of any request for Transfer and/or consummation of such Transfer and preparation of any documentation and/or agreements in connection therewith. 304. Assignment by City City may assign or transfer any of its interests hereunder to any public or private entity controlled by the City at any time without the consent of Developer. 305. Successors and Assigns All of the terms, covenants and conditions of this Agreement shall be binding upon Developer, City and their permitted successors and assigns. Whenever the term "Developer" or "City" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. Section 4. Development of Merged Property. Developer shall obtain all necessary Entitlements and complete Development of the Merged Property in conformity therewith and in accordance with all applicable Governmental Requirements. Upon completion of the Development of the Merged Property as evidenced by final inspection and issuance by City of a certificate of occupancy, City shall furnish Developer with a Release of Construction Covenants in such form as to permit it to be recorded in the Recorder's Office of Riverside County. [SIGNATURE PAGE FOLLOWS] @BCL@D01D39CB.doc - 3 - IN WITNESS WHEREOF, CITY AND DEVELOPER HAVE EXECUTED THIS MEMORANDUM AS OF THE DATE SET FORTH ABOVE. "CITY" CITY OF LAKE ELSINORE, a municipal corporation Dated: By: Its: Grant Yates, City Manager ATTEST: By: Susan M. Domen, MMC, City Clerk APPROVED AS TO FORM: By: Barbara Leibold, City Attorney "DEVELOPER" Dated: Kathryn J. Abood, Trustee Dated: Nicolas Abood, Trustee @BCL@D01D39CB.doc -4 - EXHIBIT A LEGAL DESCRIPTION OF CITY PROPERTY Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows: ALL THAT PORTION OF THE FOLLOWING DESCRIBED PROPERTY LYING SOUTH OF STATE HIGHWAY 74; THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND THE WEST HALF OF THE EAST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; EXCEPTING THEREFROM THAT PORTION INCLUDED IN THE PUBLIC HIGHWAY, THE ABOVE BEING THAT CERTAIN PARCEL OF LAND CONVEYED TO THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION, PURSUANT TO GRANT DEED RECORDED DECEMBER 5, 2001 AS INSTRUMENT NO. 2001- 600651 OF OFFICIAL RECORDS RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL THAT PORTION CONVEYED FROM RIVERSIDE COUNTY TRANSPORTATION COMMISSION TO THE STATE OF CALIFORNIA BY DEED RECORDED NOVEMBER 20, 2008 AS INSTRUMENT NO. 2008-0615446 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL OIL AND MINERAL RIGHTS AS RESERVED BY W. J PEARSON AND E. B. PEARSON RECORDED MARCH 11, 1920 IN BOOK 519, PAGE 257 OF DEEDS, RECORDS OF RIVERSIDE COUNTY. A.P.N.: 347-110-089-5 and 347-110-008 and 347-110-089 @BCL@D01D39CB.doc A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) County of ) On ,before me, a Notary Public,personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal. Signature of Notary (Affix seal here) @BCL@D01D39CB.doc ATTACHMENT NO. 6 RELEASE OF CONSTRUCTION COVENANTS [See Attached] @BCL@Do1D39CB.aoc ATTACHMENT NO. 6 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) City of Lake Elsinore ) 130 S. Main Street ) Lake Elsinore, California 92530 ) Attention: City Clerk ) Project: North Peak Plaza ) (Space above for Recorder's Use Only) This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383. RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS ("Release") is hereby made as of this _ day of , 20_, by the CITY OF LAKE ELSINORE, a California municipal corporation (the "City") in favor of NICOLAS ABOOD and KATHRYN J. ABOOD, Trustees, (collectively, "Developer"). RECITALS A. The City and the Developer entered into that certain Disposition and Development Agreement dated for identification purposes only as of August 14, 2018 (the "Agreement"). B. The Agreement provides for the disposition of certain City Property to Developer, the merger of the City Property with adjacent properties owned by Developer (collectively, the "Merged Property") and the Development thereon of a mixed use project consistent with the City's Commercial Mixed Use (CMU) zoning regulations and the Entitlements obtained by Developer. The City Property is described on Exhibit "A" attached hereto and made a part hereof by this reference. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Agreement. C. As required in the Agreement, the City shall furnish the Developer with a Release of Construction Covenants upon completion of the Development which Certificate shall be in such form as to permit it to be recorded in the Riverside County Recorder's Office. D. The City has conclusively determined that the Development on the Merged Property as required by the Agreement has been satisfactorily completed. @BCL@D01D39CB.doc 1 NOW, THEREFORE, City hereby certifies as follows: 1. As provided in the Agreement, the City does hereby certify that the Development on the Merged Property has been fully and satisfactorily performed and completed in accordance with the Agreement. 2. After the recordation of this Release, any person or entity then owning or thereafter purchasing, or otherwise acquiring any interest in the Merged Property or any part thereof will not (because of such ownership, purchase, or acquisition) incur any obligation or liability under the Disposition and Development Agreement. 3. This Release is not a notice of completion as referred to in Section 3093 of the California Civil Code. IN WITNESS WHEREOF, the City has executed this Release as of the date set forth above. "CITY" CITY OF LAKE ELSINORE, a municipal corporation Dated: By: Its: Grant Yates, City Manager ATTEST: By: Susan M. Domen, MMC, City Clerk APPROVED AS TO FORM: By: Barbara Leibold, City Attorney @13CL@D01D39CB.doc 2 EXHIBIT A LEGAL DESCRIPTION OF CITY PROPERTY Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows: ALL THAT PORTION OF THE FOLLOWING DESCRIBED PROPERTY LYING SOUTH OF STATE HIGHWAY 74; THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND THE WEST HALF OF THE EAST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 29, TOWNSHIP 5 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; EXCEPTING THEREFROM THAT PORTION INCLUDED IN THE PUBLIC HIGHWAY, THE ABOVE BEING THAT CERTAIN PARCEL OF LAND CONVEYED TO THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION, PURSUANT TO GRANT DEED RECORDED DECEMBER 5, 2001 AS INSTRUMENT NO. 2001- 600651 OF OFFICIAL RECORDS RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL THAT PORTION CONVEYED FROM RIVERSIDE COUNTY TRANSPORTATION COMMISSION TO THE STATE OF CALIFORNIA BY DEED RECORDED NOVEMBER 20, 2008 AS INSTRUMENT NO. 2008-0615446 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY. ALSO EXCEPTING THEREFROM ALL OIL AND MINERAL RIGHTS AS RESERVED BY W. J PEARSON AND E. B. PEARSON RECORDED MARCH 11, 1920 IN BOOK 519, PAGE 257 OF DEEDS, RECORDS OF RIVERSIDE COUNTY. A.P.N.: 347-110-089-5 and 347-110-008 and 347-110-089 @BCL@D01D39CB.doc A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) County of ) On ,before me, a Notary Public,personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal. Signature of Notary (Affix seal here) @BCL@D01D39CB.doc ATTACHMENT NO. 1 MAP c I PAR T °� V. I PAR3 PAR4 m 3 � $ @ PARf R 7'� a 75 _ ! $ 74 =2.38 AC 2.32 AC 1 Oe 2.aa AC X14AC 13!.74 72 Oa J 6 6a o AC tzi 24.63 AC 7.31AC ML 276 2sf.1t 197.53 t°i� b a $ AC PAL POR PAR 3 4r. tO 81 2.29AC 40 , cit 3.1AC -1101. tops -- Arty �� .� ^ ° 88 p99x Et r b Ds Po 50 ';. _ . 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