Resolution No. 6759RESOLUTION NO. 6759
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS APPROVING THE
DISPOSITION AND DEVELOPMENT AGREEMENT WITH SP ACQUISITION, LLC FOR THE
SALE OF CITY OWNED PROPERTY AT THE NORTHWEST CORNER OF KATELLA
AVENUE AND WINNERS CIRCLE FOR A MIXED-USE PROJECT
WHEREAS, the City of Cypress ("City") owns approximately 13.329 acres of land located
at 5095-5275 Katella Avenue, Cypress, California (APNs 241-091-022 through -026), which is
within the City's municipal boundaries ("Site"); and
WHEREAS, the Site is currently underutilized, falling substantially short of its commercial,
retail, entertainment, residential, revenue -generating and job -generating potential; and
WHEREAS, the City entered into an Exclusive Negotiation Agreement, dated April 9,
2019, with SP Acquisition, LLC ("ENA") wherein the City exclusively negotiated with SP
Acquisition, LLC ("Developer") to reach an agreement for the acquisition and development of the
Site to provide further economic, housing, commercial and employment opportunities on and
around the Site, while maintaining high standards of development and environmental protection;
and
WHEREAS, Developer is experienced in real estate projects and specializes in
commercial, residential and mixed-use development. Developer is active in the planning of
numerous developments throughout California, and currently owns substantial mixed-use,
commercial and multi -family assets, which are in various stages of development; and
WHEREAS, the qualifications and identity of Developer are of particular concern to City,
and it is because of such qualifications and identity that City Council desires to enter into the
Disposition and Development Agreement, which is attached hereto as Exhibit "A" and
incorporated herein by this reference, with Developer ("DDA"); and
WHEREAS, Government Code Section 52201(a)(1) permits the City to "sell or lease
property to create an economic opportunity" where "economic opportunity' is defined by
Government Code Section 52200.2 as any of the following:
(a) Development agreements, loan agreements, sale agreements, lease agreements,
or other agreements that create, retain, or expand newjobs, in which the legislative
body finds that the agreement will create or retain at least one full-time equivalent,
permanent job for every thirty-five thousand dollars ($35,000) of city, county, or
city and county investment in the project after full capacity and implementation.
(b) Development agreements, loan agreements, sale agreements, lease agreements,
or other agreements that increase property tax revenues to all property tax
collecting entities, in which the legislative body finds that the agreement will result
in an increase of at least 15 percent of total property tax resulting from the project
at full implementation when compared to the year prior to the property being
acquired by the government entity.
(c) Creation of affordable housing, if a demonstrated affordable housing need exists
in the community, as defined in the approved housing element or regional housing
needs assessment.
(d) Projects that meet the goals set forth in Chapter 728 of the Statutes of 2008 and
have been included in an adopted sustainable communities strategy or alternative
planning strategy or a project that specifically implements the goals of those
adopted plans.
(e) Transit priority projects, as defined in Section 21155 of the Public Resources Code.
WHEREAS, Developer will submit an application for the City's consideration to allow the
design and construction of a mixed-use project upon the Site, as set forth in the DDA ("Project");
and
WHEREAS, prior to considering the Project, the City will prepare an Environmental Impact
Report ("EIR") to allow it to consider whether or not to approve the Project; and
WHEREAS, under the DDA, the City retains its full discretion to carry out its review of the
Project pursuant to the California Environmental Quality Act ("CEQA"), including its discretion to
0
impose mitigation measures, require modification to the Project, consider alternatives to the
Project, and to disapprove the Project; and
WHEREAS, nothing contained in the DDA commits the City to certifying the EIR or to
approving the Project or any component thereof, and the City retains its full discretion and land
use authority to consider, modify, condition, approve, or reject the Project; and
WHEREAS, it is anticipated the Project, if approved, would generate substantial revenue
and provide construction -related and permanent employment opportunities for the Cypress
community; and
WHEREAS, it is also anticipated that as part of the Project's subsequent land use
entitlement and permitting process, the Project would be required to: reflect a high quality of
development; adhere to applicable building codes and other applicable standards and
requirements; implement appropriate mitigation measures, as feasible, to address any identified
significant environmental impacts; and incorporate feasible energy efficiency, water conservation,
and other sustainability measures (to enhance the Project's efficiency and help reduce
greenhouse gas emissions, among other things); and
WHEREAS, it is anticipated that the Project will be designed to include necessary street
and utility infrastructure to serve the Project; and
WHEREAS, the Site and the DDA are not subject to the Surplus Lands Act as defined by
Government Code Sections 54220 to 54233 due to the fact the Site was acquired, and always
intended, to be exchanged for private development and has never been used for
public/governmental purposes. It is also exempt under the terms of the City's settlement
agreement with the State Department of Finance, and
WHEREAS, the City and Developer have reached mutual agreement and now desire to
voluntarily enter into the DDA to provide, among other things, for City's disposition of the Site to
Developer, subject to the terms and conditions set forth in the DDA; and
WHEREAS, the City Council conducted a duly noticed public hearing on November 25,
2019 in which the City Council received and fully considered all oral and written testimony from
members of the public and City staff.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS, CALIFORNIA,
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Recitals. The recitals set forth above are true and correct and incorporated
herein by this reference.
SECTION 2. Findings. Based upon the forgoing and all oral and written testimony from
members of the public and City staff, the City Council finds as follows:
A. Entering into the DDA will facilitate achievement of numerous goals and policies
of the City's General Plan as well as the applicable Cypress Business & Professional Center
Specific Plan ("Specific Plan"); is in conformity with the public convenience, general welfare, and
good land use practices; will not be detrimental to the health, safety, and general welfare of
persons residing in the immediate area nor be detrimental or injurious to property or persons in
the general neighborhood or to the general welfare of the residents of the City as a whole; and
will not adversely affect the orderly development of property or the preservation of property
values.
B. The execution and performance of the DDA is in the vital and best interests of the
City of Cypress and its residents and is in accord with the foregoing public purposes and
provisions of applicable laws and regulations.
C. The sale of the Site as provided in the DDA will create an economic opportunity
pursuant to Government Code Sections 52201 and 52200.2, as further described in the Summary
Report dated September 30, 2019 prepared pursuant to Section 52001 and provided with this
Resolution.
D. Based upon substantial evidence, the sale of the Site is in conformance with the
City's General Plan pursuant to Government Code Section 65402.
SECTION 4. Approval. Based upon the foregoing and all oral and written testimony from
members of the public and City staff, the City Council hereby approves the DDA as attached
hereto as Exhibit A.
�G•1
SECTION 5. The City Clerk shall certify to the passage and adoption of this Resolution
and enter it into the book of original Resolutions.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Cypress at a
regular meeting held on the 25th day of November 2019.
ATTEST:
\ 4L ]�A A It\ i
CITY 6VERK OF THE CITY OF CYPRESS
STATE OF CALIFORNIA)
COUNTY OF ORANGE ) SS
MAYOR,QF THE CITY OF CYPRESS
c
I, ALISHA FARNELL, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the
foregoing Resolution was duly adopted at a regular meeting of the said City Council held on the
25th day of November 2019; by the following roll call vote:
AYES: 3 COUNCIL MEMBERS: Morales, Peat and Johnson
NOES: 1 COUNCIL MEMBERS: Berry
ABSENT: 1 COUNCIL MEMBERS: Yarc
Iff
391
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cypress
5275 Orange Avenue
Cypress, CA 90630
Attn: City Manager
EXHIBIT A
(For Recorder's Use Only)
Exempt from filing fee pursuant to Gov. Code § 27383
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement') is entered into
as of November 25, 2019 by and between the CITY OF CYPRESS, a California charter
municipality ("City'), and SP ACQUISITION, LLC, a California limited liability company
("Developer'). City and Developer are occasionally referred to herein jointly as the "parties"
and individually as a "party'. For and in consideration of the mutual covenants and promises
set forth herein, the parties agree as follows:
RECITALS
A. The Site. City owns approximately 13.329 acres of land located at 5095-
5275 Katella Avenue, Cypress, California (APNs 241-091-022 through -026), which is within the
City's municipal boundaries and more particularly shown and described in Attachment A hereto
("Site"). Pursuant to that certain Exclusive Negotiation Agreement (dated April 9, 2019) ("ENA"),
City has entered into exclusive negotiations with Developer to reach an agreement for the
acquisition of the Site, subject to specified conditions precedent set forth herein.
B. Site is Centrally Located for A Variety of Uses. The Site fronts the arterial of
Katella Avenue and consists of multiple points of ingress and egress from the signalized
intersections of Siboney Street and Winners Circle. The Site is located on a six -lane arterial
Orange County Transit Authority "Smart Street" (Katella Avenue), and has easy regional access
from major freeways including Highway 91, Interstate 405 and Interstate 605. A major retail
magnet is already in place adjacent to the Site, Costco, which (as a chain) generates some of
the highest consumer activity in the industry.
C. Developer's Conceptual Project. Developer is active in the planning of numerous
developments throughout California, and currently owns substantial mixed-use assets, which
are in various stages of development. The qualifications and identity of Developer are of
particular concern to City, and it is because of such qualifications and identity that City has
entered into this Agreement with Developer. Developer proposes a conceptual plan to design
and construct a multi -family residential, mixed use project upon the Site (collectively, the
"Project'). If this Agreement is approved, Developer plans to file applications and seek
approval from City of several discretionary land use entitlements that would be necessary to
develop the Project, which is anticipated to consist of the following components, including a total
of approximately sixty three thousand nine hundred seventy-five (63,975) square feet of
commercial retail, restaurant and luxury cinema uses along with residential and hotel uses as
follows:
The "Residential Component," which shall be defined herein to consist
of multi -family residential uses with a maximum density of twenty (20)
dwelling units per acre, not to exceed a total of (251) multi -family dwelling
units and related improvements.
2. The "Hotel Component," which shall be defined herein to consist of that
portion of the Site to be improved with the construction and operation of a
single hotel tenant and related improvements with up to one hundred
twenty (120) keys.
3. The "Cinema Component," which shall be defined herein to consist of
that portion of the Site to be improved with the construction and operation
of a nationally -recognized cinema and related improvements.
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4. The "Retail Component," which shall be defined to consist of that portion
of the Site to be improved with the construction and operation of general
commercial retail, grocery (if such grocery uses are deemed feasible in
Developer's discretion) and/or restaurant use(s) and related
improvements, but excluding hotel or cinema use(s).
The foregoing conceptual Project components are anticipated to be revised and refined by the
discretionary entitlement application process that Developer intends to pursue once this
Agreement is approved by the City Council to obtain the necessary Discretionary Entitlements
and Ministerial Permits (as those terms are defined in Sections 231 and 253 below,
respectively), which will take place in accordance with the Schedule of Performance and as
otherwise provided for herein. Accordingly, the foregoing conceptual Project components will
be subject to further consideration and approval by City in accordance with applicable laws and
regulations, including City's review under the California Environmental Quality Act (Public
Resources Code § 21000 et seq. and CEQA Guidelines § 15000 et seq. ("CEQA"). As
described more fully herein, Developer's acquisition and development of the Site is conditioned
on City completing its compliance with CEQA before City considers whether or not to approve
the Project or any of its components. By entering into this Agreement, City is not committing
itself to approve the Project or any component of the Project. However, as detailed more fully
herein, City will undertake the steps necessary so that it may properly consider, in the future,
whether or not to approve the Project. As part of this consideration and as may be required for
purposes of CEQA compliance, it is understood and agreed by the parties that City may
consider alternatives to the Project or any of its components; it may impose feasible measures
upon the Project to mitigate identified significant impacts; it may condition approval of the
Project on Developer's willingness to modify the Project; or it may deny the Project altogether.
Accordingly, City is retaining its full discretion within the bounds of applicable laws in
considering the Project.
D. Subsequent Entitlement and Permitting Process. It is anticipated that Developer
will submit detailed concept plans, site plans, Project descriptions, and other Project application
materials as required for City (as well as any other public agencies with jurisdiction over aspects
of the Project) to process the necessary Discretionary Entitlements and Ministerial Permits to
develop the Site with the Project. As detailed more fully herein, it is the intent of City and
Developer to establish certain conditions and requirements related to review and development
of the Project, which are or will be the subject of subsequent Discretionary Entitlements and
Ministerial Permits.
E. Parties' Intentions. City and Developer have reached mutual agreement and
now desire to voluntarily enter into this Agreement to provide for City's disposition of the Site to
Developer, subject to the terms and conditions set forth herein.
F. City's Vital and Best Interests. City finds that entering into this Agreement has
the potential to facilitate achievement of numerous goals and policies of the City's General Plan
as well as the applicable Cypress Business & Professional Center Specific Plan ("Specific
Plan"); and is in conformity with the public convenience, general welfare, and good land use
practices.
G. CEQA. The Discretionary Entitlement process for the Project is subject to
compliance with CEQA. To satisfy requirements under CEQA, it is anticipated that City, as the
lead agency, will cause an Environmental Impact Report ("EIR') to be prepared by LSA
Associates, Inc.
H. Schedule of Performance. It is anticipated that the parties will use good faith,
commercially reasonable efforts to adhere to the general timeline as shown on the "Schedule
of Performance" set forth in Attachment C hereto, to facilitate, to the extent feasible, the
purposes of this Agreement including the anticipated Closing, City's consideration of Project
Approvals, and, if approved, construction of the Project in accordance with the provisions
hereof.
I. Purchase Price. To ensure the top -qualified developer was chosen and a fair
market value for sale of the Site, City marketed the Site through a competitive "request for
qualifications" process that took place in 2018, from which City ultimately selected Developer.
The parties desire to enter into this Agreement subject to the terms and conditions set forth
herein, under which Developer will purchase and City will transfer all its rights, title and interests
in the Site. As noted above and set forth herein, the purchase and sale of the Site is
conditioned upon City's compliance with CEQA, and City retains its full discretion in deciding
whether or not to approve the Discretionary Entitlements for the Project.
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J. DDA Hearing and Notice. City has given the required notice of its intention to
consider this Agreement and has conducted the necessary public hearings thereon. Specifically,
on November 25, 2019, the City Council held a duly noticed public hearing on this matter. After
taking testimony and considering the matter, the City Council closed the public hearing,
deliberated, and then conducted a review pursuant to Government Code Section 65402 and
other applicable laws and regulations.
NOW, THEREFORE, based on the above recitals, which are deemed true and correct and
which are incorporated into the terms of this Agreement, and in consideration of the mutual
covenants set forth herein, the parties agree as follows:
(4100) PURPOSE OF THE AGREEMENT.
A. (4101) Purpose of the Agreement.
Developer hereby agrees to purchase from City, and City hereby agrees to sell to
Developer all of City's rights, title and interests in the Site subject to the terms and conditions
hereinafter set forth. In accordance with the findings in Recital F above, this Agreement is
intended to effectuate the sale of the Site as well as the potential development of the Project,
subject to CEQA compliance and City's exercise of discretion in its consideration of the Project
during the anticipated future Discretionary Entitlement process.
(&200) DEFINITIONS.
The terms used in this Agreement shall have the following meanings unless otherwise
expressly set forth herein:
A. (4201) Agreement.
The term "Agreement" shall have the meaning set forth in the Preamble and shall
include all attachments, which attachments are a part hereof and incorporated herein in their
entirety.
B. (4202) As -Is Condition.
The term "As -Is Condition" shall have the meaning set forth in Section 502 below.
C. (6203) Assignment and Assumption Agreement.
The term "Assignment and Assumption Agreement" shall have the meaning set forth in
Section 303(5) below.
D. (6204) Authorized Cinema Developer List.
The term "Authorized Cinema Developer List" shall have the meaning set forth in Section
303(2)(c) below.
E. (6205) Authorized Grocer Developer List.
The term "Authorized Grocer Developer List" shall have the meaning set forth in Section
303(2)(c) below.
F. (4206) Authorized Hotel Developer List.
The term "Authorized Hotel Developer List" shall have the meaning set forth in Section
303(2)(b) below.
below.
G. (6207) CEQA.
The term "CEQA" shall have the meaning set forth in Recital C above.
H. (6208) CEQA Expenses Deposit.
The term "CEQA Expenses Deposit" shall have the meaning set forth in Section 702(3)
(6209) Certificate(s) of Completion of DDA Obligations.
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The term "Certificate(s) of Completion of DDA Obligations" shall mean the document(s)
prepared in accordance with Section 714 of this Agreement, in substantially the same form as
Attachment D hereto.
J. (4210) Cinema Component.
The term "Cinema Component" shall have the meaning set forth in Recital C above.
K. (4211) City.
The term "City' shall mean the City of Cypress, a California charter municipal
corporation, as set forth in the Preamble.
L. (4212) City Advisor.
The term "City Advisor" shall have the meaning set forth in Section 303(3)(c) below.
M. (4213) City Closing Condition(s).
The term "City Closing Condition(s)" shall have the meaning set forth in Section 406(1)
below.
N. (4214) City Expenses.
The term "City Expenses" shall have the meaning set forth in Section 702(3) below.
O. (4215) City Expenses Deposit.
The term "City Expenses Deposit" shall have the meaning set forth in Section 702(3)
M,
P. (4216) City Party(ies).
The term "City Party(ies)" shall have the meaning set forth in Section 502 below.
Q. (4217) City Representations.
The term "City Representations" shall have the meaning set forth in Section 502 below.
R. (4218) Claims.
The term "Claims' shall have the meaning set forth in Section 503(1) below.
S. (4219) Closing.
The term "Closing" shall mean the closing of the Escrow by the Escrow Agent's
distribution of the funds and the distribution (and recordation, as necessary) of documents
received through Escrow to the party entitled thereto, which Closing shall occur on or before the
Outside Closing Date subject to any extension(s) or Excused Delay(s) as provided for herein.
T. (4220) Closing Default.
The term "Closing Default" shall have the meaning set forth in Section 803(6) below.
U. 221 CO.
The term "CO" shall have the meaning set forth in Section 303(3) below.
V. (4222) Commence Construction.
The term "Commence Construction" (or any reasonable variation thereof) shall have the
meaning set forth in Section 703(1) below.
W. (4223) Confidential Information.
The term "Confidential Information" shall have the meaning set forth in Section 905
below.
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below.
X. (4224) Days.
The term "days" shall mean calendar days unless otherwise expressly indicated.
Y. (&225) Default.
The term "Default" shall have the meaning set forth in Section 801 below.
Z. (§226) Developer.
The term "Developer" shall have the meaning set forth in the Preamble.
AA. (4227) Developer Affiliate.
The term "Developer Affiliate" shall have the meaning set forth in Section 303(2)(a)
BB. (§228) Developer Closing Condition(s).
The term "Developer Closing Condition(s)" shall have the meaning set forth in Section
406(2) below.
below.
CC. (4229) Developer Parties.
The term "Developer Parties" shall have the meaning set forth in Section 904 below.
DD. (4230) Disapproved Exceptions.
The term "Disapproved Exceptions" shall have the meaning set forth in Section 408(1)
EE. (4231) Discretionary Entitlement(s).
The term "Discretionary Entitlement(s)" shall mean any and all discretionary
entitlement(s), permit(s), and approval(s) from City and/or other government or quasi -
governmental authorities with jurisdiction over aspect(s) of the Project that are necessary to
construct and operate the Project, including, without limitation, General Plan amendment(s),
specific plan amendment(s), zoning code/map amendment(s), tentative subdivision/parcel
map(s), conditional use permit(s), major and minor use permit(s), design review, encroachment
permit(s), sign permit(s), tree removal permit(s), and/or permits necessary for the purchase and
sale of alcoholic beverages.
FF. (4232) Effective Date.
The term "Effective Date' shall mean the date of the City Council's adoption of the
Resolution approving this Agreement.
GG. (4233) ENA.
The term "ENA" shall have the meaning set forth in Recital A above.
HH. (§234) Environmental Claims.
The term "Environmental Claims" shall mean any claim(s) for personal injury, death
and/or property damage made, asserted or prosecuted by or on behalf of any third party,
including, without limitation, any governmental entity other than City, made after the Closing and
relating solely to violations of Environmental Law(s) by Developer on the Site.
Il. (4235) Environmental Cleanup Liability.
The term "Environmental Cleanup Liability" shall mean any costs reasonably incurred
after the Closing to contain, remove, remedy, clean up, or abate any Environmental Claims on
or under all or any part of the Site, including the groundwater thereunder, including, without
limitation, (1) any direct costs for investigation, study, assessment, legal representation, cost
recovery by governmental agencies, or ongoing monitoring in connection therewith; and (2) any
cost, loss or damage incurred with respect to the Site or its operation as a result of actions or
measures necessary to implement or effectuate any such containment, removal, remediation,
treatment, cleanup or abatement.
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JJ. (4236) Environmental Compliance Cost.
The term "Environmental Compliance Cost' shall mean any cost(s) necessary to enable
the Site to comply with all applicable Environmental Law(s) incurred after the Closing as
required to construct and operate the Project, including the costs necessary to demonstrate said
compliance.
KK. (4237) Environmental Law.
The term "Environmental Law" shall mean any federal, state or local statute, ordinance,
rule, regulation, order, consent decree, judgment or common-law doctrine, and provisions and
conditions of permits, licenses and other operating authorizations relating to (1) pollution or
protection of the environment, including natural resources; (2) exposure of persons, including
employees, to Hazardous Materials or other products, raw materials, chemicals or other
substances; (3) protection of the public health or welfare from the effects of by-products,
wastes, emissions, discharges or releases of chemical substances from industrial or commercial
activities; or (4) regulation of the manufacture, use or introduction into commerce of chemical
substances, including, without limitation, their manufacture, formulation, labeling, distribution,
transportation, handling, storage and disposal.
LL. (4238) Escrow.
The term "Escrow" shall mean the escrow established pursuant to this Agreement for the
conveyance of the Site from City to Developer.
MM. (4239) Escrow Agent.
The term "Escrow Agent' shall mean Fidelity National Title Insurance Company, 4400
MacArthur Blvd., Suite 200, Newport Beach, CA 92660 and the individual(s) identified by the
Escrow Agent to handle the Closing.
NN. (5240) Exaction(s).
The term "Exaction(s)" means any exaction(s) that may be imposed by City or other
governmental or quasi -governmental authorities as a condition of developing the Project,
including, without limitation, requirements for acquisition, dedication or reservation of land; and
obligations to construct on-site or off-site public and private infrastructure improvements such as
roadways, utilities or other improvements; this is the case whether such exaction(s) constitute
subdivision improvements, mitigation measures in connection with environmental review of the
Project, or impositions made under applicable laws and regulations. Provided, however, any
condition imposed on the Project that meets the definition of an Exaction, but also meets the
definition of an 'Impact Fee" (as defined in Section 247 below), shall be considered an Impact
Fee.
below.
00. (5241) Excluded Claims.
The term "Excluded Claims" shall have the meaning set forth in Section 503(1) below.
PP. (5242) Excused Delay.
The term "Excused Delay" shall mean any delay described in Section 903 below.
QQ. (5243) Financial Information.
The term "Financial Information" shall have the meaning set forth in Section 600 below.
RR. (5244) FIRPTA Certificate.
The term "FIRPTA Certificate' shall have the meaning set forth in Section 406(2)(g)
SS. (5245) Future User.
The term "Future User" shall have the meaning set forth in Section 303(3)(a) below.
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TT. (4246) Grant Deed.
The term "Grant Deed" shall refer to that certain Grant Deed, which shall be substantially
in the form as Attachment E hereto, to effect the conveyance of the Site from City to
Developer.
UU. (6247) Hazardous Material.
The term "Hazardous Material' shall mean any hazardous or toxic substance, material or
waste which is or becomes regulated by any local governmental or quasi -governmental
authority (other than City), the State of California, or the United States Government. The term
"Hazardous Material" includes, without limitation, any material or substance which is:
(1) petroleum or oil or gas or any direct or derivate product or byproduct thereof; (2) defined as
a "hazardous waste," "extremely hazardous waste" or "restricted hazardous waste' under
Sections 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); (3) defined as a
"hazardous substance" under Section 25316 of the California Health and Safety Code,
Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act);
(4) defined as a "hazardous material," "hazardous substance," or "hazardous waste' under
Sections 255010) and (k) and 25501.1 of the California Health and Safety Code, Division 20,
Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (5) 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); (6) "used oil' as
defined under Section 25250.1 of the California Health and Safety Code; (7) asbestos; (8) listed
under Chapter 11 of Division 4.5 of Title 22 of the California Code of Regulations, or defined as
hazardous or extremely hazardous pursuant to Chapter 10 of Division 4.5 of Title 22 of the
California Code of Regulations; (9) defined as waste or a hazardous substance pursuant to the
Porter -Cologne Act, Section 13050 of the California Water Code; (10) designated as a "toxic
pollutant' pursuant to the Federal Water Pollution Control Act, 33 U.S.C. § 1317; (11) defined as
a "hazardous waste' pursuant to the Federal Resource Conservation and Recovery Act, 42
U.S.C. § 6901 et seq. (42 U.S.C. § 6903); (12) defined as a "hazardous substance' pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq. (42 U.S.C. § 9601); (13) defined as "Hazardous Material' pursuant to the
Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; or (14) defined as such or
regulated by any "Superfund" or "Superlien" law, or any other federal, state or local law, statute,
ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or
standards of conduct concerning Hazardous Materials and/or underground storage tanks, as
now, or at any time hereafter, in effect.
W. (6248) Hotel Component.
The term "Hotel Component' shall have the meaning set forth in Recital C above.
WW. (6249) Impact Fee(s).
The term `Impact Fee(s)" shall mean any monetary amount(s) charged by City or other
governmental or quasi -governmental authority in connection with a Project Approval in order to
lessen, offset, mitigate or compensate for the impacts of development of the Project on the
environment; facilities, services, improvements and/or infrastructure; or other public interests,
including, without limitation, any "fee" defined by Government Code section 66000(b) as well as
any fee imposed "in lieu of"an Exaction. Any such monetary amount imposed on the Project
that meets the definition of an Impact Fee as well as the definition of an Exaction shall be
considered an Impact Fee. The Parties acknowledge and agree that City Impact Fees in effect
on the Effective Date are identified in Attachment F hereto.
XX. (6250) Large Commercial Tenant.
The term "Large Commercial Tenant' shall have the meaning set forth in Section
303(3)(a) below.
YY. (6251) License Agreement.
The term "License Agreement' shall have the meaning set forth in Section 904 below.
ZZ. (6252) Maior Amendment.
The term "Major Amendment' shall have the meaning set forth in Section 908(2) below.
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AAA. (4253) Ministerial Permit(s).
The term "Ministerial Permit(s)" shall mean any and all ministerial approval(s), permit(s),
license(s) and other entitlements from City and/or other governmental or quasi -governmental
authorities with jurisdiction over aspect(s) of the Project that are necessary to construct and
operate the Project including, without limitation, final/parcel map(s), grading permit(s),
demolition permit(s), building permit(s), encroachment permit(s), certificate(s) of occupancy,
core and shell occupancy permit(s), temporary occupancy permit(s), building permit sign -off and
permits relating to the purchase and sale of alcoholic beverages and shall expressly exclude all
Discretionary Entitlements.
BBB. (4254) Minor Amendment.
The term "Minor Amendment" shall have the meaning set forth in Section 908(2) below.
CCC. (4255) Mortgage.
The term "Mortgage" shall mean any mortgage, deed of trust, security agreement, sale
and lease -back financing, or other like security instrument encumbering all or any portion(s) of
the Site and/or any of Developer's rights under this Agreement.
DDD. (4256) Mortgage Holder.
The term "Mortgage Holder" shall mean the holder of any Mortgage, and any Transferee
of any such Mortgage Holder.
EEE. (4257) Notice.
The term "Notice" shall have the meaning set forth in Section 901 below.
FFF. (6258) Notice of Default.
The term "Notice of Default" shall have the meaning set forth in Section 801 below.
GGG. (6259) Outside Closing Date.
The term "Outside Closing Date" shall have the meaning set forth in Section 407(1)(a)
below.
HHH. (6260) Pad Sale Buyer.
The term "Pad Sale Buyer' shall have the meaning set forth in Section 303(3)(a) below.
Ill. (6261) Party(ies).
The term "party(ies)" shall have the meaning set forth in the Preamble.
JJJ. (6262) Performance Deadline(s).
KKK. The term "Performance Deadline(s)" shall have the meaning set forth in Section
703(2) below.
LLL. (6263) Performance Guideline(s).
The term "Performance Guideline(s)" shall have the meaning set forth in Section 703(2)
below.
MMM. (6264) Permitted Affiliate Assignee.
The term "Permitted Affiliate Assignee" shall have the meaning set forth in Section
303(2)(a)(i) below.
NNN. (6265) Permitted Exception(s).
The term "Permitted Exception(s)" shall have the meaning set forth in Section 408(1)(a)
below.
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000. (4266) Permitted Residential Affiliate Assignee.
The term "Permitted Residential Affiliate Assignee" shall have the meaning set forth in
Section 303(2)(a)(i) below.
PPP. (4267) Permitted Transfer(s).
The term "Permitted Transfer(s)" shall have the meaning set forth in Section 303(2)
below.
QQQ. (4268) Preliminary Report.
The term "Preliminary Report" shall have the meaning set forth in Section 408(1) below.
RRR. (4269) Preliminary Report Update Review Period.
The term "Preliminary Report Update Review Period" shall have the meaning set forth in
Section 408(1)(a) below.
SSS. (4270) Proiect.
The term "Project" shall have the meaning set forth in Recital C above.
TTT. (4271) Proiect Approvals.
The term "Project Approvals" shall mean, collectively, the Discretionary Entitlements and
Ministerial Permits.
UUU. (4272) Project Phase.
The term "Project Phase' shall have the meaning set forth in Section 703(1) below.
VVV. (4273) Project Work Product.
The term "Project Work Product' shall have the meaning set forth in Section 904 below.
WWW. (4274) Property Claims.
The term "Property Claims" shall have the meaning set forth in Section 503(1) below.
XXX. (4275) Public Disclosure Laws.
The term 'Public Disclosure Laws" shall have the meaning set forth in Section 905
below.
YYY. (4276) Purchase Price.
The term "Purchase Price" shall have the meaning set forth in Section 403 below.
ZZZ. (4277) Reciprocal Easement Agreement.
The term "Reciprocal Easement Agreement' or "REA" shall mean that certain Reciprocal
Easement Agreement executed by Developer and recorded against the Site, which includes,
among other items, the provisions set forth in Section 711 below.
AAAA. (4278) Residential Component.
The term "Residential Component' shall have the meaning set forth in Recital C above.
BBBB.(4279) Retail Component.
The term "Retail Component' shall have the meaning set forth in Recital C above.
CCCC. (4280) Right of Reverter.
The term 'Right of Reverter" shall have the meaning set forth in Section 803(4) below.
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DDDDA4281) Schedule of Performance.
The term "Schedule of Performance" shall mean that certain Schedule of Performance
set forth in Attachment C hereto.
EEEE. (4282) Shea Entity.
The term "Shea Entity" shall have the meaning set forth in Section 303(a)(2)(i) below.
FFFF. (4283) Site.
The term "Site" shall have the meaning set forth in Recital A above.
GGGG. (4284) Site Documents.
The term "Site Documents" shall have the meaning set forth in Section 501 below.
HHHHA285) Specific Plan.
The term "Specific Plan" shall have the meaning set forth in Recital F above.
1111. (4286) Substantially Complete.
The term "Substantially Complete' (or any reasonable variation thereof) shall have the
meaning set forth in Section 703(1) below.
JJJJ. (4287) Taxpayer ID Certificate.
The term 'Taxpayer ID Certificate" shall have the meaning set forth in Section 407(3)
below.
KKKK. (&288) Term.
The term `Term" shall have the meaning set forth in Section 401 below.
LLLL. (4289) Third -Party Litipiation.
The term 'Third -Party Litigation" shall mean the filing of litigation by a third party
challenging this Agreement and/or other Project Approval(s) on CEQA or any other grounds.
MMMM. (4290) Title.
The term "Title" shall mean the fee interest to the Site conveyed to Developer in
accordance with the terms and conditions of this Agreement as set forth in Section 408(1)
below.
NNNNA4291) Title Company.
The term 'Title Company' shall mean Fidelity National Title, and the individual Title
Officer(s) identified by the Title Company to handle the Closing.
0000. ( 4292) Title Policy.
The term 'Title Policy" shall have the meaning set forth in Section 408(4) below.
PPPP. (&293) Transfer.
The term `Transfer" shall have the meaning set forth in Section 303(1) below.
QQQQ. (4294) Transferee(s).
The term "Transferee(s)" shall have the meaning set forth in Section 303 below.
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(G 300) PARTIES TO THE AGREEMENT.
A. (4301) City: Representations and Warranties.
City is a California charter municipal corporation. The office of City is located at 5275
Orange Avenue, Cypress, CA 90630. As of the Effective Date, City hereby represents and
warrants the following to Developer:
1. Legal Authority. City has the legal power, right and authority to enter
into this Agreement and the instruments and documents referenced herein to which City is a
party, to consummate, once all legally required steps are taken, including compliance with
CEQA, the transaction(s) contemplated hereby, to take any and all steps or actions
contemplated hereby, to perform its obligations hereunder, and has been fully authorized by all
requisite actions on the part of the City Council.
2. Valid Obligation. This Agreement is a valid obligation of City and is
enforceable in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
3. No Default. 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 City is bound.
4. No Litigation. There is no pending or threatened litigation which would
prevent the Site from being conveyed to Developer in the condition of title required hereunder,
or which would prevent, hinder or delay City from performing its obligations hereunder and/or
the development and operation of the Project.
5. No Bankruptcy. City is not the subject of any bankruptcy proceeding,
and no general assignment or general arrangement for the benefit of creditors or the
appointment of a trustee or receiver to take possession of all or substantially all of City's assets
has been made.
6. No Possession. No person or entity other than City has the right to use,
occupy, store or display item(s), or possess the Site or any portion thereof. Other than this
Agreement and the right of certain third parties to temporarily store trailers and marshal trucks
pursuant to that certain Limited License to Enter Agreement by and between City and Developer
dated May 2, 2019 (with such temporary third party rights having since terminated), as of the
Effective Date, City has not granted to any party other than Developer pursuant to this
Agreement any option, contract, or other agreement with respect to a purchase or sale of the
Site or any portion thereof or any interest therein. City shall not enter into any lease or other
agreement(s) or approve any temporary use permit(s) respecting the use (including, without
limitation, for storage purposes), occupancy, or possession of the Site or any portion(s) thereof
without the prior written consent of Developer; provided, however, that City shall have the right
to approve temporary use(s) involving the display and/or sale of seasonal items (e.g., pumpkins,
Christmas trees) or the storage of trailers and/or marshalling of trucks so long as City and the
temporary user execute a temporary license agreement in connection therewith in substantially
the same form as Attachment G hereto and City provides Developer ten (10) days' prior written
Notice of same.
7. No Environmental Law Proceedings. City has no notice of any pending
or threatened action or proceeding arising out of the condition of the Site or an alleged violation
of any Environmental Laws. To City's actual knowledge, except as may otherwise be disclosed
by City to Developer in writing in the Site Documents, the Site is in compliance with all
Environmental Laws, and City has not used, generated, transported, discharged, released,
manufactured, stored, or disposed of any Hazardous Materials from, into, at, on, under, or about
the Site.
8. No Condemnation. There is no pending condemnation or similar
proceeding affecting the Site or any portion thereof, and City has not received any written notice
and has no current actual acknowledge that any such proceeding is contemplated.
9. Not a Foreign Person. City is not a "foreign person" but is a "United
States person" as such terms are defined in the Foreign Investment in Real Property Tax Act of
1980 and Sections 1445 and 7701 of the Internal Revenue Code of 1986 (as amended from
time to time).
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10. Site Documents. The Site Documents are complete copies of such
documents and represent all of the documents in City's possession or control concerning the
physical and/or environmental condition of the Site.
11. Commission Agreements. Except as otherwise disclosed by City to
Developer in writing prior to the Effective Date, there are no listing agreements, finder's fee
agreements or other agreements pursuant to which commissions or fees are payable with
respect to the sale and/or leasing of the Site in effect as of the Effective Date that are due after
the Closing.
12. No Other Contracts. City has not made any commitment or representation
to any adjoining or surrounding property owner that would in any way be binding on Developer or
the Site or that would interfere with Developer's ability to develop the Project as it may be
approved during the anticipated future Discretionary Entitlement process, and will not make any
commitment or representation that would affect the Site or any portion thereof prior to the Close
of Escrow, without Developer's written consent, which consent may be withheld in Developer's
sole and absolute discretion. Developer, by virtue of the purchase of the Site, will not be required
to satisfy any obligations of City other than those, if any, expressly assumed by Developer
pursuant to this Agreement.
13. No Moratoria etc. There is no suit, action or arbitration, or legal,
administrative, or other proceeding or governmental investigation, formal or informal, including,
without limitation, eminent domain, condemnation, assessment district or zoning change
proceeding, pending or threatened, or any judgment, moratorium or other government policy or
practice that affects the Site or Developer's anticipated development of the Site, or that
adversely affects Developer's ability to perform hereunder, nor does City know of any fact that
might give rise to an action, investigation, proceeding or moratorium.
14. Material Disclosure. To City's actual knowledge, it has provided all
documents in City's possession or control concerning the Site or the construction, use,
operation, management, leasing, occupancy, status, condition and legal compliance of the Site
or any portion thereof.
15. No Untrue Statements or Omissions. To City's current actual
knowledge, no representation or warranty made by City in this Agreement, in any attachments
hereto, or in any letter or certificate furnished to Developer pursuant to the terms hereof, contain
any untrue statement of material fact necessary to make the statements contained herein or
therein not misleading.
As used in this Section 301, "current, actual knowledge" means the current actual
knowledge of Peter Grant (City's City Manager), and Doug Dancs (City's Community
Development Director), as of the Effective Date. Until such time as the Closing occurs, City
shall, upon learning of any fact or condition which would cause any of the warranties and
representations in this Section 301 not to be true, promptly give written Notice of such fact or
condition to Developer. The foregoing representations and warranties shall survive the Closing
for a period of twelve (12) months.
B. (4302) Developer; Representations and Warranties.
Developer is SP Acquisition, LLC, a California limited liability company. The principal
office of Developer for the purposes of this Agreement is located at 130 Vantis, Suite 200 1 Aliso
Viejo, CA 92656. As of the Effective Date, Developer hereby represents and warrants the
following to Developer:
1. Legal Authority. Developer is duly qualified to do business in good
standing under the laws of the State of California and has the legal power, right and authority to
enter into this Agreement and the instruments and documents referenced herein to which
Developer is a party, to consummate the transaction(s) contemplated hereby, to take any and
all steps or actions contemplated hereby, to perform its obligations hereunder, and has been
fully authorized by all requisite company actions on the part of Developer.
2. Valid Obligation. This Agreement is a valid obligation of Developer and
is enforceable in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
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3. No Default. Developer's execution, delivery and performance of its 403
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 Developer is bound.
4. No Bankruptcy. Developer is not the subject of any bankruptcy
proceeding, and no general assignment or general arrangement for the benefit of creditors or
the appointment of a trustee or receiver to take possession of all or substantially all of
Developer's assets has been made.
As used in this Section 302, "current, actual knowledge' means the current actual knowledge of
Brad Deck (Developer's Senior Vice President, Retail Development) and Kevin McCook
(Developer's Vice President of Acquisitions and Development), as of the Effective Date. Until
such time as the Closing occurs, Developer shall, upon learning of any fact or condition which
would cause any of the warranties and representations in this Section 302 not to be true,
promptly give written Notice of such fact or condition to City. The foregoing representations and
warranties shall survive the Closing for a period of twelve (12) months.
C. N 303) Transfer.
Except as otherwise expressly provided for herein, all of the terms, covenants and
conditions of this Agreement shall be binding on, and shall inure to the benefit of Developer and
Developer's Transferee(s) pursuant to this Section 303. Wherever the term "Developer" is used
in this Agreement, such term shall include any and all of its Transferee(s).
1. Transfer Defined.
"Transfer" shall mean any assignment, transfer, sale, hypothecation, Mortgage,
pledge, conveyance, or encumbrance of a fee interest, ground lease or lease of all or any
portion(s) of the Site and/or the Project and the respective rights and obligations hereunder
related thereto.
2. Permitted Transfers.
Notwithstanding any other provision set forth in this Agreement to the contrary,
Developer shall not be required to obtain City consent for any of the following (each, a
"Permitted Transfer'):
(a) Transfer(s) to Developer Affiliate(s). At all times, Developer
shall have the right to Transfer all or any portion(s) of the Site and/or the Project (assuming City
approves the Project during the Discretionary Entitlement process after complying with CEQA)
to any entity that is a Developer Affiliate. "Developer Affiliate" shall mean: (i) any entity that
owns or controls Developer; (ii) any entity owned or controlled by Developer; (iii) any entity
owned or controlled by or affiliated with any entity that owns or controls Developer; (iv) any
entity resulting from a consolidation for which Developer is a party; (v) the surviving entity in
case of a merger for which Developer is a party; or (vi) any entity to which all or substantially all
of the assets of Developer have been sold. The term "Developer Affiliate" shall further mean:
(i) Any entity that is (A) wholly owned by Shea Properties
LLC, Shea Properties II LLC, J.F. Shea Company, or to any of the foregoing (each, a "Shea
Entity'); or (b) any limited liability company, partnership or corporation in which Developer
and/or any Shea Entity holds a majority interest (50.1 %) in the capital and profits and in which
Developer and/or any Shea Entity agrees to hold such majority interest (50.1%) for at least the
term of this Agreement (each, a "Permitted Affiliate Assignee').
(ii) For purposes of the Residential Component only, any
limited liability company, partnership or corporation in which Developer and/or any Shea Entity
(A) holds an ownership interest in the capital and profits and in which Developer and/or such
Shea Entity agrees to hold such ownership interest for at least the term of this Agreement, and
(B) manages day to day operations thereof (each, a "Permitted Residential Affiliate
Assignee').
(b) Authorized Hotel Entity. If City approves the Project during the
anticipated future Discretionary Entitlement process after complying with CEQA, and the Project
includes a Hotel Component, then at all times thereafter Developer shall have the right to
Transfer all or any portion(s) of the Hotel Component to Authorized Hotel Entity(ies) without the
prior consent of the City. An Authorized Hotel Entity is any of the entities identified on the list
set forth in Attachment B hereto ("Authorized Hotel Developer List').
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(c) Authorized Grocery/Cinema Users. If City approves the Project
during the anticipated future Discretionary Entitlement process after complying with CEQA, and
the Project includes a Retail Component, then at all times thereafter Developer shall have the
right to Transfer all or any portion(s) of the Retail Component to Authorized Grocery User(s) and
any or all portions of the Cinema Component to Authorized Cinema User(s) without the prior
written consent of the City. An Authorized Grocery User is any of the entities identified on the
list set forth in Attachment B hereto ("Authorized Grocery Developer List') and an
Authorized Cinema User is any of the entitles identified on the list set forth in Attachment B
hereto ("Authorized Cinema Developer List').
(d) Mortgages, Deeds of Trust, and Other Forms for Financing
Purposes.
(i) At all times, Developer shall have the right to Transfer (via
Mortgage(s)) for the purpose of financing or refinancing Developer's direct and indirect costs to
(A) acquire the Site, and (B) develop all or portion(s) of the Project thereon assuming City
approves the Project during the anticipated future Discretionary Entitlement process after
complying with CEQA.
(ii) At all times, in the event of a Transfer as a result of or in
connection with: (a) the judicial or non judicial foreclosure or deed in lieu of either of the
foregoing, or (b) Transfer arising from or relating to a Mortgage Holder exercising its remedies
under such lien, City shall not have any right to consent or not consent to a Transfer to any such
Mortgage Holder and/or to any other third party or parties acquiring all or any portion(s) of the
Site and/or the Project from such holder; provided, however, that any Mortgage Holder and/or
any third party or parties acquiring all or any portion(s) of the Site and/or Project (assuming City
approves the Project during the anticipated future Discretionary Entitlement process after
complying with CEQA) from such holder shall assume Developer's rights and obligations
hereunder accruing after such Transfer to the Mortgage Holder and be bound under the terms,
conditions and covenants of this Agreement as though they were parties hereto as provided for
herein.
(e) Lease(s) to Individual Tenant(s). Except for lease(s) to Large
Commercial Tenant(s) (as that term is defined in Section 303(3)(a) below), which shall require
City's prior approval as set forth below, at all times Developer shall have the right to Transfer
(via lease(s), ground lease(s), licenses, concessions or other occupancy agreements) portion(s)
of the Site and/or the Project (assuming City approves the Project during the anticipated future
Discretionary Entitlement process after complying with CEQA) to individual commercial retail
tenant(s).
(f) Grant of Easement(s). At all times, Developer shall have the
right to convey temporary or permanent licenses, easement(s) and/or rights-of-way on, over,
across, above and below the Site (via offer(s) of dedication or other form(s) of conveyance) for
to facilitate development of the Site in accordance with the Project Approvals (assuming City
approves the Project during the anticipated future Discretionary Entitlement process after
complying with CEQA).
(g) Common Areas. At all times, Developer shall have the right to
Transfer portion(s) of the Site and/or the Project (assuming City approves the Project during the
anticipated future Discretionary Entitlement process after complying with CEQA) as common
area to property owners' association(s) (if any) formed in connection with the Project.
(h) Leases/Sales Within Residential Component. At all times,
Developer shall have the right to lease or sell individual residential unit(s) within the Residential
Component, as it may be approved by City during the anticipated future Discretionary
Entitlement process after complying with CEQA.
(i) Subsequent Transfer(s). Once a Transfer has occurred in
accordance with the requirements of this Section 303, any subsequent Transfer(s) involving
substantially the same portion(s) of the Site and/or the Project (assuming City approves the
Project during the anticipated future Discretionary Entitlement process after complying with
CEQA) shall be considered Permitted Transfer(s) and thus shall require no further City consent;
provided, however that any such Transfer(s) shall reflect use(s) that are (or will be as a result of
any necessary development application process(es) related thereto) consistent with the General
Plan and Specific Plan.
(j) All Transfers Occurring After 5 -Year Period. Once the 5 -Year
Period set forth in 303(4) below ends, Developer shall be permitted to freely Transfer all or any
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portion(s) of the Site and/or the Project (assuming City approves the Project during the
anticipated future Discretionary Entitlement process after complying with CEQA) without
obtaining City consent.
Developer shall give at least ten (10) business days' prior written Notice to City of a Permitted
Transfer, except that no such Notice shall be required for any Permitted Transfer under
subsections (d) through (i) above. In addition, upon City's request, Developer, at Developer's
election, shall either: (A) certify that the subject Transfer constitutes a Permitted Transfer, or (B)
provide City with reasonably sufficient documentation to confirm it is a Permitted Transfer.
3. Transfer Restrictions Prior to Issuance of First CO.
Subject to Section 303(2) and assuming City approves the Project during the
anticipated future Discretionary Entitlement process after complying with CEQA, prior to
issuance of the core and shell occupancy permit, temporary occupancy permit, building permit
sign -off or local equivalent (as the case may be, for core and shell) (each, a "CO") for the
Project's first (1st) building, the provisions on Transfer(s) set forth in subsections (a) through (c)
below shall apply.
The conceptual Project components shall be subject to further consideration and
approval by City in accordance with applicable laws and regulations, including City's review
under CEQA. As part of the anticipated future Discretionary Entitlement process, approved and
conditionally approved uses for the Project will be determined. The obligations in this Section
303(3) shall apply if City approves the Project, including one (1) or more of the Future Users (as
that term is defined below). Nothing in this Section 303(3) shall commit City to a particular
course of action, including, without limitation, approving the Project at all and/or with specific
Future Users. However, if the Project is approved by City during the anticipated future
Discretionary Entitlement process after compliance with CEQA, then the Transfer provisions set
forth in this Section 303(3) shall govern as set forth herein.
(a) Potential Future User(s) Subiect to City Consent.
Transfers to: (i) purchaser(s) of a commercial pad to be developed with one (1) or more
commercial building(s) containing more than five thousand (5,000) square feet for a
commercial/retail use (each a "Pad Sale Buyer') other than to an entity on the Authorized Hotel
Developer List, the Authorized Grocery Developer List or the Authorized Cinema Developer List;
(ii) any non-affiliated entity that will operate a hotel, grocery or cinema that is not an Authorized
Hotel Entity, an Authorized Grocery User and/or an Authorized Cinema User (a
"Grocery/Cinema User'); or (iii) a non-affiliated entity that will lease commercial retail space not
involving grocery or cinema uses that exceeds forty thousand (40,000) square feet of
continuous gross leasable area (each a "Large Commercial Tenant') (each such Pad Sale
Buyer, Grocery/Cinema User, and Large Commercial Tenant is referred to herein as a "Future
User'), shall be subject to City's prior written consent, which shall not be unreasonably withheld,
conditioned, delayed or denied based on the criteria set forth in subsection (b) below.
(b) Criteria to be Used in Considering Transfer Request for
Future User(s).
In considering any Transfer request for a Future User under this Section 303(3), City
shall consider factors such as (i) whether the completion of the Project Phase at issue would be
jeopardized if said Transfer request were granted; (ii) the financial strength and capability of the
proposed Transferee to perform Developer's obligations hereunder; (iii) the proposed
Transferee's experience and expertise in the planning, financing, development, ownership, and
operation of similar projects; and (iv) how the proposed Transferee will have the ability to
finance, own, operate and maintain high quality development in City, similar to the Project in
terms of reputation and amount of anticipated sales to be generated from the Site. Provided,
however, it is generally intended that City will consent to Transfer request(s) for Future User(s)
who (A) operate a chain of stores on a regional or nationwide basis; (B) are comparable, or
reasonably equivalent, to the exemplar authorized entities listed on Attachment B; and/or
(C) do or will do marketing within the general market area. In its reasonable discretion, City
may also consent to Transfer request(s) for other Future User(s) based on other appropriate
and relevant criteria, including, without limitation, those who operate local chain(s) of business.
For the avoidance of doubt, City agrees that City shall have no right to consent to any Transfer
to an entity on the Authorized Hotel Developer List, the Authorized Grocery Developer List or
the Authorized Cinema Developer List, otherwise listed on Attachment B or any other Transfer
described in Section 303(2), above.
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(c) Procedure to be Used in Considering Transfer Request for
Future User(s).
Any Transfer request by Developer for a Future User shall be in writing and shall include
such supporting information as may be reasonably requested by City within five (5) days of its
receipt of Developer's Transfer request in order for City, utilizing the criteria set forth in
subsection (b) above, to consider said request. Any financial information of a Future User
reasonably requested by City as part of its consideration of a Transfer request shall be delivered
to City's third -party advisor, such as Kosmont Realty Corporation (or another third -party
consultant reasonably approved by Developer) ("City Advisor"), as well as being shown to City,
and shall be subject to the confidentiality provisions of Section 904(3) below.
Within ten (10) days of receipt of Developer's Transfer request for a Future User (and
supporting documentation reasonably requested by City within the five (5) day period
referenced above), City shall notify Developer whether City is consenting to said request. If City
notifies Developer it does not so consent, then said Notice shall state specific reasons for this
decision. If City fails to respond to said Transfer Request within this ten-day period, then City
shall be conclusively deemed to have consented to said request. The City Manager shall have
the authority to make a decision on any and all Transfer requests involving Future User(s),
which such consideration shall occur administratively and not require a public hearing or public
notice. If the City Manager denies any such Transfer request, Developer shall have the right to
request the City Manager reconsider its decision and/or appeal this decision to the City Council.
Said request for reconsideration and/or appeal shall be filed no later than ten (10) days following
Developer's receipt of Notice of any such denial. The City Manager shall take action on any
such reconsideration request within ten (10) days' receipt thereof, and/or the City Council shall
consider any such appeal at the next available Council meeting for which proper notice can be
provided.
4. Transfer Restrictions During 5 -Year Period.
Assuming City approves the Project during the anticipated future Discretionary
Entitlement process after complying with CEQA, for a period of five (5) years from the date of
issuance of the CO for the core and shell for the Project's first (1 st) building, SP Acquisition,
LLC and/or other Shea Entity(ies) shall own the Site and operate the Project; provided,
however, the foregoing restriction shall be subject to any and all Permitted Transfer(s) and/or
other Transfer(s) to Future User(s) receiving City consent pursuant to this Section 303.
5. Assignment and Assumption Agreement.
For any Transfer made in accordance with this Section 303, Developer and its
Transferee shall execute an assignment and assumption agreement in a form substantially the
same as Attachment H hereto ("Assignment and Assumption Agreement'). No later than
ten (10) business days after the date said Transfer becomes effective, Developer shall deliver to
City a fully executed original of the Assignment and Assumption Agreement. Upon the effective
date of each such Transfer, Developer shall be released and have no further obligations or
liability under this Agreement with respect to the interest(s) which are Transferred and the
obligations assumed under the relevant Assignment and Assumption Agreement.
6. Developer To Pay Transfer Request Costs.
Developer shall pay City its actual costs (which may include City staff and/or
attorney time) expended to consider a Transfer request made pursuant to this Section 303
where City consent is required, up to a maximum amount of Two Thousand Five Hundred
Dollars ($2,500) for each Transfer request; provided, however, that Developer shall have no
obligation to pay the foregoing costs with respect to any Permitted Transfer(s) under
Section 303(2) above.
(& 400) ACQUISITION AND DISPOSITION OF THE SITE.
A. (& 401) Term of Agreement.
Subject to any extension(s) provided for herein and/or any Excused Delay, the term of
this Agreement shall commence on the Effective Date, and shall expire the earlier of: (1) the
issuance of the CO for the core and shell for the final Project building (assuming City approves
the Project during the anticipated future Discretionary Entitlement process after complying with
CEQA), or (2) seven (7) years ("Term"). Following the expiration (or earlier termination
pursuant to the terms of this Agreement) of the Term, this Agreement shall be deemed
terminated and of no further force and effect, except for the provisions of this Agreement that
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expressly survive termination. While the parties intend the foregoing termination to be
automatic and self-executing, City agrees to promptly execute and deliver such documents and
instruments in recordable form as Developer may reasonably request in order to evidence the
termination of this Agreement.
B. (& 402) Acquisition of Site.
In accordance with and subject to the terms, covenants and conditions of this
Agreement, City shall convey the Site to Developer, and Developer shall purchase the Site from
City.
C. (& 403) Purchase Price.
Subject to the credits and/or deduction(s) provided for in this Section 403, the purchase
price for the Site shall be Fifteen Million Two Hundred and Fifty Thousand Dollars ($15,250,000)
("Purchase Price"), which constitutes the fair market value of the site as determined by the
competitive RFQ process and further documented by that certain Broker's Opinion of Value
(dated November 17, 2015) prepared by the City Advisor. The Purchase Price shall be payable
in full at Closing in cash by wire transfer from the Escrow Agent of immediately available funds
received from Developer to a bank account to be designated by City in writing to Developer prior
to the Closing. Notwithstanding anything to the contrary in the foregoing, the parties
acknowledge and agree that all monies released to City pursuant to Section 6 of the ENA
(Conveyance Instrument Deposit) as non-refundable deposit(s), totaling Four Hundred
Thousand Dollars ($400,000), shall be applicable to the Purchase Price. The parties
acknowledge that the first two installments of the Conveyance Instrument Deposit of Fifty
Thousand Dollars ($50,000) each, totaling One Hundred Thousand Dollars ($100,000), have
been released to City pursuant to the timing in Section 6 of the ENA. The timing for the Three
Hundred Thousand ($300,000) balance of the Conveyance Instrument Deposit shall be revised
from the terms set forth in the ENA to comport to the following timelines:
The first One Hundred Fifty Thousand Dollars ($150,000) of the Conveyance Instrument
Deposit shall be nonrefundable and released to City, but applicable to the Purchase Price, no
later than three (3) days following Developer's submittal of the development applications for the
Discretionary Entitlements.
The second One Hundred Fifty Thousand Dollars ($150,000) of the Conveyance
Instrument Deposit shall be nonrefundable and released to City, but applicable to the Purchase
Price, no later than ten (10) days after the occurrence of both: (A) City's certification of the EIR;
and (B) the expiration of all applicable statute of limitations periods with no Third -Party Litigation
being filed; provided, however, that if Third -Party Litigation is filed, then the foregoing $150,000
shall be paid to City no later than ten (10) days following the full and final resolution of such
Third Party Litigation in a manner acceptable to Developer in its sole and absolute discretion.
The parties further acknowledge and agree that if the total amount of the Impact Fees
due for the Project (assuming City approves the Project during the anticipated future
Discretionary Entitlement process after complying with CEQA), increases from the total amount
set forth in Attachment F hereto, the difference between these two amounts shall be deducted
from the Purchase Price.
D. (& 404) City Expenses Deposit for DDA.
Pursuant to the ENA, Developer previously deposited with City the amount of Twenty
Five Thousand Dollars ($25,000) ("City Expenses Deposif') to be used to implement the ENA,
including the preparation of this Agreement. Developer shall have no further obligation to fund
City costs for implementing the ENA (including, without limitation, attorneys' fees to prepare this
Agreement) beyond the City Expenses Deposit.
E. (& 405) Openina of Escrow: Joint Escrow Instructions.
The parties shall open the Escrow for the conveyance of the Site to Developer within
thirty (30) days following the Effective Date. Escrow shall be deemed open on the date that a
fully executed copy of this Agreement is delivered to the Escrow Agent. This Agreement shall
constitute the joint escrow instructions of City and Developer. The Escrow Agent is empowered
to act under these instructions. City and Developer shall promptly prepare, execute, and deliver
to the Escrow Agent such additional escrow instructions (if any) consistent with the terms herein
as may be reasonably necessary or convenient in order to accomplish the Closing; provided,
however, that if there is any inconsistency between this Agreement and the supplemental
escrow instructions, then the provisions of this Agreement shall control.
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F. (S 406) Authority of Escrow Ascent.
The Escrow Agent is authorized to, and shall:
1. Payments and Charges. Pay to and charge the parties in accordance
with the provisions set forth herein. All required disbursements shall be made by check or wire
transfer.
2. Purchase Price. Disburse the Purchase Price (crediting any and all non-
refundable deposits and deducting for additional Impact Fees, if required pursuant to Section
403 above, as well as for all closing costs allocated to City) to City and record the Grant Deed
when both the Developer Closing Conditions and City Closing Conditions have been fulfilled or
waived in writing by Developer and City, as applicable. Immediately following recordation of the
Grant Deed, the Escrow Agent shall record all recordable documents delivered into Escrow for
the Closing.
3. Issuing Title Policy. Do such other actions as necessary, including
obtaining and issuing the Title Policy, to fulfill the Escrow Agent's obligations under this
Agreement.
4. FIRPTA Compliance. Direct City and Developer to execute and deliver
any instrument, affidavit or statement, and to perform any act, which is reasonably necessary to
comply with the provisions of FIRPTA, if applicable, and any similar state act and regulations
promulgated thereunder.
5. Settlement Statements. Prepare and release to the respective parties
and file with all appropriate governmental or taxing authorities uniform settlement statements,
closing statements, tax withholding forms (including IRS 1099-S forms), if any such forms are
provided for or required by law, and be responsible for withholding taxes as may be required.
6. All Other Actions. Any and all other actions not referenced in
subsections (1) through (5) above that are necessary or desirable to facilitate the Closing as
contemplated hereunder.
G. M 407) Conditions to Close of Escrow.
1. City's Conditions to Closing.
City's obligation to convey the Site and to Close Escrow hereunder shall be
mandatory and irrevocable once all of the following conditions have occurred; said conditions
are solely for the benefit of City and shall be fulfilled or waived within the time periods provided
for herein and in any event, no later than the Outside Closing Date (subject to any applicable
extension(s) and/or Excused Delay(s)).
(a) City shall have caused to be prepared the Project EIR, and shall
have certified the EIR as being in compliance with CEQA. This condition shall not be subject to
waiver.
(b) Developer shall have received all required Discretionary
Entitlements, which shall be final and non -appealable, and if any appeals, legal challenges,
requests for rehearing, or referenda have been filed or instituted, such appeals, legal
challenges, requests for rehearing, or referenda shall have been fully and finally resolved in a
manner acceptable to Developer in its sole and absolute discretion and such that no further
appeals, legal challenges, requests for rehearing, or referenda are possible. All Discretionary
Entitlements shall be valid (i.e., shall have not expired) as of the Closing date. Subject to the
terms of this Agreement and consistent with the Schedule of Performance, City shall reasonably
cooperate with Developer's efforts to obtain the Discretionary Entitlements.
(c) Developer shall have deposited into Escrow the full Purchase
Price for the Site, minus any amount(s) for non-refundable deposit(s) and/or credit for any
increase in Impact Fees pursuant to Section 403 above.
(d) Developer shall have deposited into the Escrow its share of the
Escrow costs, title and transfer fees as determined by the Escrow Agent.
(e) As of the Closing, Developer shall not be in Default hereunder in
any of its obligations to City, subject to Default notice and cure provisions in Section 801 below.
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(f) Developer shall have certified in writing as of the Closing that
Developer's representations and warranties in Section 302 above, continue to be true and
correct in all material respects.
(g) Developer shall have deposited an estoppel certificate pursuant to
Section 718 below certifying that City has completed all acts required hereunder to Close.
(h) Developer shall have executed and acknowledged the Grant
Deed, and Developer shall have executed (and, where appropriate, acknowledged), and
delivered into Escrow any and all other documents that Developer is required to deliver into
Escrow as required herein.
The foregoing shall be referred to herein collectively as the "City Closing Conditions". Should
City Default in its obligation to convey Title to the Site once the City Closing Conditions and
Developer Closing Conditions have been satisfied or waived, as applicable, Developer may, in
addition to all other remedies available to it hereunder, seek specific performance of this
obligation to Close Escrow pursuant to Section 804 below. Any waiver of the City Closing
Condition(s) must be express and in writing; provided, however, the City Closing Condition set
forth in subsection (a) above requiring CEQA compliance shall not be subject to waiver. If,
however, City is not in Default and if either the City Closing Conditions are not satisfied and/or
Developer Defaults in the performance of its obligations hereunder after notice and failure to
cure pursuant to Section 801 below, then City may terminate the Escrow and this Agreement by
written notice to Developer prior to the Closing.
2. Developer's Conditions to Closing.
Developer's obligation to purchase the Site and to Close Escrow hereunder shall
be mandatory and irrevocable once all of the following conditions have occurred; said conditions
are solely for the benefit of Developer and shall be fulfilled or waived in writing within the time
periods provided for herein and in any event, no later than the Outside Closing Date (subject to
any applicable extension(s) and Excused Delay(s)).
(a) City shall have executed and acknowledged the Grant Deed and
delivered it into Escrow, and City shall have executed (and, where appropriate,
acknowledged) and delivered into Escrow any and all other documents that City is required
hereunder to deliver into Escrow.
(b) Title shall be conveyed by the Grant Deed in accordance with
Section 408.4 with the Title Policy issued to Developer at Closing.
(c) As of the Closing, City shall not be in Default hereunder in any of
its obligations to Developer, subject to Default notice and cure provisions in Section 801 below
(d) City shall have caused to be prepared the Project EIR, and shall
have certified the EIR as being in compliance with CEQA, and no Third -Party Litigation has
been brought to challenge the Project based on CEQA or any other grounds, or if any such
Third -Party Litigation has been filed, then it shall have been fully and finally resolved in a
manner acceptable to Developer in its sole and absolute discretion and such that no further
legal challenges based on CEQA on other grounds are possible.
(e) Developer shall have received all required Discretionary
Entitlements for the Project (with the final design, conditions, requirements and components of
the Project approved during the Discretionary Entitlement process being acceptable to
Developer in its sole and absolute discretion), which shall be final and non -appealable, and if
any appeals, Third -Party Litigation, requests for rehearing, or referenda have been filed or
instituted, such appeals, Third -Party Litigation, requests for rehearing, or referenda shall have
been fully and finally resolved in a manner acceptable to Developer in its sole and absolute
discretion and such that no further appeals, Third -Party Litigation, requests for rehearing, or
referenda are possible. All Discretionary Entitlements shall be valid (i.e., shall have not
expired) as of the Closing date.
(f) City shall have deposited into Escrow its share of the Escrow
costs, title and transfer fees as determined by the Escrow Agent.
(g) City shall have deposited into Escrow a certificate ("FIRPTA
Certificate") in such form as may be required by the Internal Revenue Service pursuant to
Section 1445 of the Internal Revenue Code.
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(h) The Site and the conveyance of same contemplated herein shall
comply with the California Subdivision Map Act (Gov. Code § 66410 et seq.). This condition
shall not be subject to waiver.
(i) There shall be no moratorium, prohibition or any other measure,
rule, regulation or restriction whose effect would be to preclude any inspections, the issuance of
any Project Approval(s), or any pending action or proceeding before City or other governmental
or quasi -governmental authority to enact such prohibition.
0) There shall be an absence of any condemnation, environmental or
other pending governmental, quasi -governmental or any type of administrative or legal
proceedings with respect to the Site or the Project that would materially and adversely affect
Developer's intended uses of the Site or the value of the Site.
(k) There shall not have occurred between the Effective Date and the
Closing a material adverse change to the physical condition of the Site.
(1) City shall have caused all debts and liability for labor, material and
equipment incurred in connection with City's ownership, operation or improvement of the Site,
which could result in a lien against all or any portion(s) of the Site, to be promptly paid, and the
Site shall be ready to be conveyed to Developer, subject only to the Permitted Exceptions.
(m) City shall have certified in writing as of the Closing that City's
representations and warranties in Section 301 above continue to be true and correct in all
material respects.
The foregoing shall be referred to herein collectively as "Developer Closing
Conditions". Subject to the Default notice and cure provisions in Section 801 below, should
Developer Default in its obligation to purchase the Site once the Developer Closing Conditions
and City Closing Conditions have been satisfied, City's sole and exclusive remedy shall be
limited to the award of liquidated damages pursuant to Section 804(4) below. Any waiver of the
foregoing conditions must be express and in writing. If Developer is not in Default, and if either
the Developer Closing Conditions are not satisfied and/or City Defaults in the performance of its
obligations hereunder after notice and failure to cure pursuant to Section 801 below, then, in
addition to Developer's other rights and remedies hereunder, Developer may terminate the
Escrow and this Agreement by written notice to City any time prior to the Closing.
H. N 408) Conveyance of the Site.
Time for Conveyance of Site, Extension(s).
(a) Escrow shall Close within fifteen (15) days of satisfaction (or
written waiver by the benefited party) of the City Closing Conditions and the Developer Closing
Conditions, but not later than December 31, 2020 ("Outside Closing Date"), unless extended
pursuant to subsection (b) below and/or any Excused Delay(s). Upon Closing, possession of
the Site shall be delivered to Developer concurrently with the conveyance of Title free of all
matters other than any Permitted Exception(s).
(b) If satisfaction (or written waiver by the benefited party) of the City
Closing Conditions and the Developer Closing Conditions does not occur by the Outside
Closing Date, then either party, so long as such party is not then in Default, may terminate this
Agreement by written notice to the other party. Notwithstanding the foregoing, the parties shall
have the right, but not the obligation, to mutually agree to an extension of the Outside Closing
Date for whatever reason(s) the parties mutually determine appropriate. The City Manager shall
have the authority to agree to any such extension(s) on City's behalf without the need for a
public hearing or public notice regarding the matter.
2. Escrow Agent to Advise of Costs.
Within thirty (30) business days prior to the Closing, the Escrow Agent shall
advise City and Developer in writing of the fees, charges, and costs necessary to clear Title and
Close Escrow, and of any documents which have not been provided by said party and which
must be deposited in Escrow to permit timely Closing.
3. Deposits by City and Developer Prior to Closing.
On or before, but not later than 1:00 p.m. (Pacific Time) of the business day prior
to the Closing, City shall execute and deliver to the Escrow Agent a certificate ("Taxpayer ID
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Certificate") in such form as may be required by the IRS pursuant to Section 6045 of the
Internal Revenue Code, or the regulations issued pursuant thereto, certifying as to the
description of the Site, date of Closing, the Purchase Price, and the taxpayer identification
number for Developer and City. Prior to Closing, Developer and City shall cause to be delivered
to the Escrow Agent such other items, instruments, and documents, and the parties shall take
such further actions, which are identified herein and/or as may be necessary or desirable in
order to complete the Closing.
4. Recordation and Disbursement of Funds.
Upon the completion by City and Developer of the deliveries and actions
specified in this Agreement that are necessary for the Closing, the Escrow Agent shall be
authorized to buy, affix and cancel any documentary stamps and pay any transfer tax and
recording fees, if required by law, and thereafter cause to be recorded in the appropriate
records of Orange County, California, the Grant Deed, and any other appropriate instruments
delivered through this Escrow, if necessary or proper to, and provided that the Title can vest in
Developer in accordance with the terms and provisions herein. Promptly after Closing, the
Escrow Agent shall cause the Title Company to deliver the Title Policy to Developer insuring
Title and conforming to the requirements of Section 408 below, and the Escrow Agent shall
cause the Title Company to deliver copies of all recorded instruments to Developer and City. In
addition, after deducting any sums specified in this Agreement, the Escrow Agent shall disburse
funds to the party entitled thereto.
M 409) Title Matters.
Condition of Title.
At the Closing, City shall convey to Developer fee simple marketable title to the
Site ("Title"), subject only to: (i) the Grant Deed; (ii) current taxes, a lien not yet payable; and
(iii) any covenants, conditions and restrictions and other encumbrances and title exceptions
approved or caused by Developer under this Section 408 (collectively, "Permitted
Exceptions"). City shall convey Title pursuant to the Grant Deed in substantially the same form
as Attachment E. Prior to the Effective Date, Developer reviewed that certain preliminary
report of title dated August 28, 2019 and issued by the Title Company under its Order No. 012-
30028179-E-1 (the "Preliminary Report") and agrees that all exceptions set forth therein shall
constitute Permitted Exceptions other than 7, 10, 13, 17, 19, 20 and 21 (collectively, the
"Disapproved Exceptions"). City shall use its best efforts to cooperate with Developer in
terminating of record prior to Closing all Disapproved Exceptions and satisfying all of the
requirements for the issuance of the Title Policy (as defined below). If, despite City's use of
best efforts to terminate such items of record and satisfy the requirements for the issuance of
the Title Policy, City is unable to do so, at Developer's sole and exclusive option, Developer
shall have the right to terminate this Agreement and receive a full refund of the deposits
referenced in Section 403 above, the Escrow shall be canceled and the parties shall be
released from all obligations hereunder except for those obligations that expressly survive the
expiration or earlier termination hereof.
If the Preliminary Report is amended or updated after the Effective Date (each, a
"Preliminary Report Update"), then Developer shall furnish City with a written statement of
approval or objections to any matter first raised in a Preliminary Report Update that was not
caused by Developer within ten (10) business days after its receipt of such Preliminary Report
Update together with a legible copy of each new exception raised therein (each, a "Preliminary
Report Update Review Period'). Should Developer notify City in writing of its approval of such
matter first disclosed in a Preliminary Report Update prior to the expiration of the applicable
Preliminary Report Update Review Period, then the new matter shall become a Permitted
Exception. If, however, Developer either (a) objects to such new matter, or (b) fails to
affirmatively approve such new matter, then such new matter shall be deemed disapproved and
City shall have until 5:00 p.m. Pacific Time on the tenth (10th) business day after City's receipt
of Buyer's written objection (or deemed objection) in which to notify Developer either (i) that City
will remove the new disapproved matter (s) prior to the Close of Escrow, or (ii) that City will not
remove the new disapproved matter. If City does not elect to do either (i) or (ii), such silence
shall be conclusively deemed to constitute City's election not to remove any new matter(s)
disapproved (or deemed disapproved) by Developer. If, however, City elects not to remove any
new disapproved matters, then Developer shall have until 5:00 p.m. Pacific Time on the tenth
(10th) business day after City's election not to cure the disapproved exception in which to elect
(y) to terminate this Agreement by written notice to City, or (z) to waive in writing Developer's
previous disapproval of (and thereby accept) any new matter that City does not elect to remove.
Developer's failure to notify City of its election on or before 5:00 p.m. Pacific Time on the tenth
(10th) business day after City's election not to remove the new disapproved matter shall be
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deemed to constitute Developer's election to terminate this Agreement. If this Agreement is so
terminated, then the deposits referenced in Section 403, above, shall be returned to Developer
and neither party shall have any further obligations to the other hereunder except to the extent
any such obligation expressly survives the termination of this Agreement.
2. Exclusion of Oil, Gas, and Hydrocarbons.
Title shall be conveyed subject to the exclusion therefrom to the extent now or
hereafter validly excepted and reserved by the parties named in deeds, leases and other
documents of record of all oil, gas, hydrocarbon substances and minerals of every kind and
character lying more than five hundred feet (500') below the surface, together with the right to
drill into, through, and to use and occupy all parts of the Site lying more than five hundred feet
(500') below the surface thereof for any and all purposes incidental to the exploration for and
production of oil, gas, hydrocarbon substances or minerals from the Site but without, however,
any right to use either the surface of the Site or any portion thereof within five hundred feet
(500') of the surface for any purpose or purposes whatsoever.
3. City Not to Encumber Site.
Consistent with and subject to Section 301(6) above, City hereby warrants and
covenants to Developer that it has not and will not, from the time of the Effective Date until the
Closing, Transfer, sell, hypothecate, pledge, or otherwise encumber the Site without prior
express written permission of Developer, which permission Developer may withhold in its sole
and absolute discretion.
4. Title Policy.
Concurrently with recordation of the Grant Deed, the Title Company shall issue to
Developer an ALTA Extended Owner's Policy of Title Insurance ("Title Policy') insuring
Developer's fee interest, wherein the Title Company shall insure that title to the Site is vested
solely in Developer, subject only to the Permitted Exceptions and any other encumbrances
expressly contemplated by this Agreement to be recorded at Closing. City shall pay for that
portion of the title insurance premium attributable to the premium required for coverage for an
ALTA standard coverage policy in the amount of the Purchase Price and for any endorsements
necessary to cure any Disapproved Exceptions which City has agreed to cure, with Developer
paying for that portion of the premium for said additional or extended coverage, including,
without limitation, an ALTA policy or special endorsements. The Title Policy for the Site shall, at
a minimum, be in the amount of the Purchase Price.
5. City Obligations.
In connection with the foregoing, City shall deliver to the Title Company such
agreements, assurances or statements (including, without limitation, an owner's affidavit, lien
releases, quitclaim deeds, and bonds, as applicable) concerning City's authority to sell the Site
to Developer, disclosing any claims for mechanic's liens, possessory interests or otherwise as
may be reasonably required by the Title Company in order to issue the Title Policy.
J. (S 410) Procedure in Event of Failure of Conditions(s) to Closing;
Termination.
Subject to any extension(s) or Excused Delay(s), if one or more of the Developer
Closing Conditions and/or City Closing Conditions are not timely satisfied or waived by the
benefited party pursuant to the timing requirements set forth herein, and so long as the
benefitted party is not otherwise in Default, that party shall have the right to terminate the
Escrow and this Agreement. In such event, the terminating party may, in writing, demand return
of its money (including the deposits referenced in Section 403 above), papers, or documents
from the Escrow Agent and shall deliver a copy of such demand to the non -terminating party,
which Notice shall state the condition(s) that have not been satisfied. No demand shall be
recognized by the Escrow Agent until ten (10) days after the Escrow Agent shall have sent
copies of such demand to the non -terminating party in accordance with the Notice provisions of
this Agreement, and if no objections are raised in writing to the terminating party and the Escrow
Agent by the non -terminating party within said ten (10) day period, the Escrow Agent shall
comply with the terminating party's request. If the non -terminating party timely objects, an
additional thirty (30) day opportunity to cure or otherwise satisfy the unperformed
condition(s) shall be provided and only if the unperformed condition(s) remain unsatisfied at the
end of said 30 -day period shall the termination occur. Upon termination of this Agreement, the
Escrow shall terminate, and the Escrow Agent shall immediately return all documents,
instruments and monies (including the deposits referenced in Section 403 above) to the party
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that deposited same (without any additional instructions from City or Developer). Also upon
termination, except as otherwise specifically provided herein, each party shall bear its own costs
incurred, including one-half of any Escrow cancellation charges, and neither City nor Developer
shall have any further rights or obligations hereunder, except for any obligations set forth herein
that expressly survive this termination.
K. & 411) Costs of Escrow.
1. Allocation of Costs.
The Escrow Agent is authorized to allocate costs as follows. City shall pay the
cost of the Title Policy pursuant to Section 408(4) above, while Developer shall pay premiums
for any additional insurance, extended coverage or special endorsements. City shall pay the
documentary transfer tax. Developer shall pay all recording fees. Any Escrow fees for the
holding Escrow are Developer's sole responsibility. Any other closing costs and expenses not
specifically allocated to one of the parties hereunder shall be paid according to the custom for
sales of vacant land in Orange County as determined by the Escrow Agent and reflected on the
settlement statement.
2. Prorations and Adjustments.
Ad valorem taxes and assessments on the Site for the current year (if any) shall
be prorated by the Escrow Agent as of the date of Closing with City being responsible for those
levied, assessed or imposed prior to Closing and Developer responsible for those after Closing.
If the actual taxes are not known at the date of Closing, the proration shall be based upon the
most current tax figures. When the actual taxes for the year of Closing become known,
Developer and City shall, within thirty (30) days thereafter, re -prorate the taxes in cash between
the parties in accordance with this Section 410(2).
L. (§ 412) Responsibility of Escrow Anent.
Deposit of Funds.
All funds received in Escrow shall be deposited by the Escrow Agent in a special
interest-bearing escrow account for the benefit of the depositing party with any state or national
bank doing business in the State of California and may not be combined with other escrow
funds of the Escrow Agent or transferred to any other general escrow account or accounts.
2. Notices.
All communications from the Escrow Agent shall be directed to the addresses
and in the manner provided in Section 901 of this Agreement for notices, demands and
communications between City and Developer.
3. Sufficiency of Documents.
The Escrow Agent shall not be concerned with the sufficiency, validity,
correctness of form, or content of any document prepared outside of Escrow and delivered to
Escrow. The sole duty of the Escrow Agent is to accept such documents and follow
Developer's and City's instructions for their use pursuant to this Agreement.
4. Exculpation of Escrow Agent.
The Escrow Agent shall in no event be liable for the failure of any of the City
Closing Conditions or Developer Closing Conditions of this Escrow, or for forgeries or false
impersonation, unless such liability or damage is the result of the Escrow Agent's negligence or
willful misconduct.
5. Responsibilities in the Event of Controversies.
If any controversy documented in writing arises between Developer and City or
with any third party with respect to the subject matter of this Escrow or its terms or conditions,
the Escrow Agent shall not be required to determine the same, to return any monies, papers or
documents, or to take any action regarding the Site prior to settlement of the controversy by a
final decision by an arbitrator, by a court of competent jurisdiction, or by written agreement of
the parties to the controversy, as the case may be. The Escrow Agent shall be responsible for
timely notifying Developer and City of any such controversy. In the event of such a controversy,
the Escrow Agent shall not be liable for interest or damage costs resulting from failure to timely
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Close Escrow or take any other action unless such controversy has been caused by the failure
of the Escrow Agent to perform its responsibilities hereunder.
(& 5001 PHYSICAL AND ENVIRONMENTAL CONDITION OF SITE.
A. (& 501) Developer's APDroval of Phvsical and Environmental Condition of
Site: Site Assessment and Remediation.
Prior to the Effective Date, pursuant to Section 6 of the ENA and that certain Limited
License to Enter Agreement between the parties (dated May 2, 2019), Developer and its
employees, agents and contractors have been given the right to enter onto the Site to conduct
any and all Investigations (as that term is defined in the ENA) to perform preliminary work,
conduct necessary due diligence, and for any other purposes to carry out the terms of this
Agreement. In addition, pursuant to Section 6 of the ENA, Developer has conducted its due
diligence and has previously notified City of its desire to proceed with negotiating this
Agreement. Developer acknowledges and agrees that, prior to Closing, Developer will have
been given a full opportunity to obtain, review, inspect and investigate each and every aspect of
the Site, either independently or through agents of the Developer's choosing, including all of the
following:
The size and dimensions of the Site.
2. The availability and adequacy of water, sewage, fire protection, and any
other utilities serving the Site.
3. Subject to Section 408(1) above, all matters relating to title including the
extent and conditions of title to the Site, taxes, assessments, and liens.
4. All legal and governmental laws, statutes, rules, regulations, ordinances,
restrictions or requirements concerning the Site, including, without limitation, zoning, use permit
requirements and building codes.
5. Natural hazards, including, without limitation, flood plain issues, currently
or potentially concerning or affecting the Site.
6. The physical, legal, economic and environmental conditions and aspects
of the Site, and all other matters concerning the conditions, use or sale of the Site, including,
without limitation, any permits, licenses, agreements, liens, zoning reports, engineers' reports
and studies and similar information relating to the Site. Such examination of the condition of the
Site has included examinations for the presence or absence of Hazardous Materials as
Developer deemed necessary or desirable.
7. Any recorded easements and/or recorded access rights affecting the Site.
8. Any recorded contracts, documents or agreements affecting the Site.
Notwithstanding the foregoing, City acknowledges and agrees that prior to Closing, Developer
may continue to conduct further physical due diligence or other Investigations regarding the Site
so long as this Agreement remains in effect; provided, however, that except as otherwise
expressly provided in this Agreement, in no event shall Developer have any right to terminate or
otherwise modify its obligations hereunder as a result of any such further due diligence or other
Investigations regarding the Site. Further, prior to Closing, so long as this Agreement remains
in effect, City acknowledges and agrees that Developer shall have the right to grant access to
the Site to its consultants and agents as well as its proposed partners, investors, lenders,
insurers, tenants, and purchasers in order to allow them to conduct physical due diligence or
other Investigations regarding the Site.
Prior to the Effective Date and pursuant to the ENA, City delivered to Developer copies of all
documents in City's possession or control concerning the physical and/or environmental
condition of the Site (collectively, "Site Documents"). As a result of its Investigations and
subject to the other terms and conditions set forth herein, upon the Closing, Developer
acknowledges and agrees that it will be taking the Site in its As -Is Condition pursuant and
subject to the terms of Section 502 below.
B. (8 502) Disclaimer of Warranties for Site.
Subject to terms and conditions of this Agreement (including, without limitation, all
Attachments as well as the Site Documents), Developer shall acquire the Site in its "AS -IS"
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condition but subject to City's representations, warranties and covenants in this Agreement and
the documents and instruments delivered by City at the Closing (collectively, the "City's
Representations"). Developer specifically acknowledges and agrees that City is selling and
Developer is purchasing the Site on an "as is with all faults" basis, condition and state of repair
inclusive of any and all faults and defects, legal, physical, or economic, whether known or
unknown, as may exist as of the Closing ("As -is Condition") and that, except for City's
Representations, Developer is not relying on any representations or warranties from City or any
of City's elected officials, officers, agents, employees, representatives or attorneys (each, a
"City Party" and collectively, "City Parties") as to any matters concerning the Site including,
without limitation, the physical, environmental, geotechnical or other condition of the Site, the
suitability of the Site for the Project, or the present use of the Site. City specifically disclaims all
representations or warranties of any nature concerning any portion of the Site made by City or
any City Party except for the City's Representations. The foregoing disclaimer includes, without
limitation, topography, climate, air, water rights, utilities, soil, subsoil, existence of Hazardous
Materials or similar substances, or drainage.
C. (& 503) Waivers/Releases: Indemnification.
1. Waiver and Release For As -Is Condition.
Developer agrees that, from and after the Closing, Developer waives and
releases City and City Parties from any and all actions, suits, legal or administrative orders or
proceedings, demands, actual damages, punitive damages, loss, costs, liabilities and expenses
(collectively, "Claims") arising out of: (i) any and all warranties with respect to the physical or
environmental condition of the Site; (ii) Developer's use, management, ownership or operation
of the Site, whether before or after Closing; (iii) the physical, environmental or other condition of
the Site; (iv) the application of, compliance with or failure to comply with any and all applicable
laws and regulations with respect to the Site; (v) Hazardous Materials and/or underground
storage tanks in, on, under or about the Site; and (vi) the As -Is Condition of the Site; the
foregoing are collectively referred to as "Property Claims". By releasing and forever
discharging the Property Claims, Developer expressly waives any rights under California Civil
Code Section 1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT
THE CREDITOR OR RELEASING PARTY DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM
OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."
INITIALS: DEVELOPER
Notwithstanding the foregoing, the release and waiver of Property Claims set
forth in this Section 503(1) shall not apply to any Property Claims (or other claims) arising from
(a) City Default with respect to any City obligations hereunder (including, without limitation,
breaches of City's Representations); (b) any fraud committed by City in connection with the
transaction(s) contemplated hereunder; (c) any bodily injury claims accruing prior to the Closing
to the extent such claims are not based on the acts of Developer or any of its agents,
employees, contractors, consultants, officers, directors, affiliates, members, partners or other
representatives; (d) any Hazardous Materials that were brought onto the Site by City and/or City
Parties before the Closing (in which case Developer retains the right to implead or join City in
any claim brought against Developer by a third -party unaffiliated with Developer with respect to
events occurring prior to the Closing Date); and (e) any breach by City of an express obligation
of City under this Agreement which by its terms survive the Closing (collectively, the "Excluded
Claims").
2. Indemnification.
From and after the Closing, Developer shall defend, indemnify and hold harmless
City and the City Parties from and against any and all Environmental Claims, Environmental
Cleanup Liability, and/or Environmental Compliance Costs resulting directly from Developer's
violation of Environmental Laws. The obligations set forth in this Section 503(2) shall survive
termination of this Agreement for a period of two (2) years following Substantial Completion of
the first (1 11) Project Phase.
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(4600) DEVELOPER FINANCIAL CAPABILITY.
The parties acknowledge and agree that Developer previously provided City with the
required Project financial information identified in Section 3(A) of the ENA, including, without
limitation, a Project proforma, as well as sufficient information about Developer's financial
capabilities to acquire the Site and construct the Project required in Section 3(F) of the ENA
(collectively, "Financial Information"), which sufficiently documents the availability of adequate
funds for Developer to consummate the transaction(s) and development contemplated herein to
be pursued by Developer in connection with the anticipated future Discretionary Entitlement
process. No further Financial Information from Developer shall be required hereunder or as a
condition of any Project Approval(s).
(S 700) DEVELOPMENT AND OPERATION OF THE SITE
A. & 701) Scope of Phased Development.
Subject to City approving the Project during the anticipated future Discretionary
Entitlement process after CEQA compliance and further subject to the Closing occurring
pursuant to the terms and conditions hereof and any extension(s) and/or Excused Delay and so
long as Developer decides, in its sole and absolute discretion, to commence and complete any
Project Phase(s) of construction pursuant to Section 703 below, then the Site shall be
developed with the phase or phases so commenced in accordance with the Project Approvals.
B. (S 702) Subsequent Entitlement Process; Environmental Review.
1. Cooperation During Escrow and After Closing; No Prejudgment from
Cite.
Subject to the terms and conditions set forth herein, the parties acknowledge and agree
that Developer intends to apply for, and diligently seek approval of, those Discretionary
Entitlements for the Project before the Closing and Ministerial Permits after Closing. To this
end, and at no material cost to City, City shall work cooperatively with Developer to assist in
coordinating the expeditious processing and consideration of all Project Approvals so that
Developer can obtain City action on such matters in accordance with the time frames set forth in
the Schedule of Performance, which may be extended from time to time by the parties' mutual
consent as provided for herein. Provided, however, that nothing in this Agreement shall be
deemed to be a prejudgment or commitment on a particular course of action from City with
respect to compliance with CEQA or the Project Approval(s). City and Developer acknowledge
and agree that City is restricted in its authority to limit its compliance with CEQA and its police
power by contract and that the limitations, reservations and exceptions contained in this
Agreement are intended to reserve to City all of its obligations under CEQA and its police
power.
Furthermore, City and Developer acknowledge and agree that other governmental and
quasi -governmental authorities not within City's control may possess jurisdiction to regulate
aspect(s) of the development of the Site and the Project and that this Agreement does not limit
the jurisdiction of such other authorities. City shall reasonably cooperate with Developer in
Developer's effort to process its applications to obtain such permits, entitlements and approvals
as may be required by other governmental or quasi -governmental authorities in connection with
the development of, or the provision of services to, the Site and/or the Project; provided,
however, City shall have no obligation to incur any material costs, without compensation or
reimbursement, or to amend any City policy, regulation or ordinance in connection therewith.
2. Evolution of Development Plan; Subsequent Processing.
The parties acknowledge that it is anticipated the Project will be revised and refined as
part of the anticipated future Discretionary Entitlement and Ministerial Permit processes.
Accordingly, as set forth in the Schedule of Performance, which may be extended from time to
time by the parties' mutual consent pursuant to Section 703(2) below and any Excused
Delay(s): (A) Developer, at its expense, shall exercise commercially reasonable diligence to
timely submit to City all Project application materials that are necessary for City to consider the
Discretionary Entitlements, subject to the terms and conditions set forth herein; and (B) if said
entitlements are obtained after compliance with CEQA and the Closing occurs, Developer shall
thereafter exercise commercially reasonable diligence to timely submit to City all Project
application materials that are necessary for City to consider and grant the Ministerial Permits.
Furthermore, Developer shall exercise commercially reasonable diligence to timely
submit and secure any Project Approval(s) necessary from other non -City governmental or
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417
quasi -governmental authorities having jurisdiction over aspect(s) of the Project which are
required to develop the Project, including, without limitation, permits for the demolition and
removal of any temporary structures or improvements on the Site, removal or relocation of any
trees on the Site, and any other required public right-of-way improvements. Not by way of
limitation of the foregoing, Developer's Project application materials shall reflect the Project's
compliance with all applicable development standards in the City's Municipal Code and all
applicable building code, landscaping, signage, and parking requirements, except as may be
modified as part of the Project Approval(s). All signage for the Project shall comply with the City
of Cypress Sign Ordinance, unless otherwise modified pursuant to any request by Developer
and as may be approved by City as part of the anticipated future Discretionary Entitlement
process.
3. CEQA.
City shall be responsible for complying with CEQA in connection with its consideration of
the Project. Developer agrees and acknowledges that compliance with CEQA is required to
obtain the Discretionary Entitlement(s). City shall cause an EIR to be prepared in connection the
processing of the Discretionary Entitlement(s). City, as the lead agency, at Developer's sole
cost and expense, shall conduct such CEQA review expeditiously and in accordance with the
requirements of CEQA; provided, however, that Developer shall have the right to terminate the
CEQA process and withdraw all development applications submitted as part of the Discretionary
Entitlement process pursuant to this subsection (3), in which case this Agreement shall be
terminated. City shall use diligent and good faith efforts to facilitate the CEQA review consistent
with the Project description described in Recital C above (as may be refined and revised during
the anticipated future Discretionary Entitlement process) and the Schedule of Performance, as
may be extended by the parties' mutual consent and/or any Excused Delay(s). Developer
agrees and acknowledges that, notwithstanding anything in this Agreement to the contrary,
Developer will be required to adhere to any and all mitigation measures adopted in connection
with such CEQA review and the provisions of any adopted Mitigation and Monitoring Plan upon
Developer's initiation of the development of any Project Phase(s) pursuant to the terms and
conditions set forth herein. Developer acknowledges and agrees that City may consider
alternatives to the Project or any of its components; it may impose feasible measures upon the
Project to mitigate identified significant impacts; it may condition approval of the Project on
Developer's willingness to modify the Project; or it may deny the Project altogether, in which
case, this Agreement will terminate.
Pursuant to Section 1(B) of the ENA, Developer previously deposited with City the
amount of One Hundred Thousand Dollars ($100,000) ("CEQA Expenses Deposit) for the
sole purpose of reimbursing City for third -party consultant costs incurred by City to complete all
documents, reports and studies for its CEQA review of the Project in connection with the
subsequent entitlement process (collectively, "CEQA Expenses"). Subject to this subsection
(3), if the CEQA Expenses are reasonably anticipated to exceed the funds in the CEQA
Expenses Deposit, then the parties may mutually agree to increase these funds as necessary to
pay for the actual costs incurred and charged by the CEQA Consultant to City in accordance
with the following procedures. If the parties so agree, at any time the balance of the CEQA
Expenses Deposit is less than Five Thousand Dollars ($5,000), City may request that Developer
replenish the CEQA Expenses Deposit with such additional funds as is necessary to pay for the
remaining CEQA Expenses up to the agreed amount. If Developer, in its discretion, approves of
this request for an increase in funds, then Developer shall make such additional deposit no later
than thirty (30) days' receipt of the request. If Developer, in its discretion, does not approve of
any such request, then Developer shall have no obligation to replenish the CEQA Expenses
Deposit. Provided, however, then City shall temporarily halt further processing of the
Discretionary Entitlements pending resolution of the amount of any additional CEQA Expenses
required to complete the CEQA analysis for the Project; upon such resolution, City shall
immediately recommence processing of the Discretionary Entitlements and complete the
Project's CEQA analysis. The CEQA Expenses Deposit shall not applicable to any portion of the
Purchase Price. Furthermore, if Developer elects, in its discretion, to not replenish the CEQA
Expenses Deposit and therefore City cannot complete its CEQA review for the Project, then it is
understood that this Agreement will terminate pursuant to the provisions hereunder.
City shall provide Developer with a written report and accounting of expenditures from
the CEQA Expenses Deposit on a monthly basis and also upon the expiration or termination of
this Agreement, which reasonably documents said time, costs and expenses. If City has a
remaining balance in the CEQA Expenses Deposit by the time the City Council takes action on
the Discretionary Entitlements and related CEQA EIR certification, and Developer is not in
Default (after any applicable notice and cure period has elapsed), City shall return that portion of
the CEQA Expenses Deposit for which City has not incurred costs along with an accounting of
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the costs incurred by City (including reasonable supporting documentation thereof) through the
time the City Council takes action on the Discretionary Entitlements and related CEQA
determination.
C.
The conceptual Project components shall be subject to further consideration and
approval by City in accordance with applicable laws and regulations, including City's review
under CEQA, as part of the anticipated future Discretionary Entitlement process. Accordingly,
the obligations in this Section 703 shall apply if City approves the Project during the anticipated
future Discretionary Entitlement process after complying with CEQA. Nothing in this Section
703 shall commit City to a particular course of action, including, without limitation, approving the
Project at all. However, if the Project is approved by City after compliance with CEQA, then the
provisions set forth in this Section 703 shall govern as set forth herein.
Developer's Discretion to Commence and Complete Project
Phase(s).
The parties acknowledge and agree that the Project is contemplated to be constructed in
phase(s) for each of the Residential, Retail, Hotel and/or Cinema Components (each, a "Project
Phase") with each being dependent on a variety of market and other considerations.
Accordingly, the parties further acknowledge and agree the decision whether to Commence
Construction of any Project Phase(s) shall be within Developer's sole and absolute discretion.
"Commence Construction" shall mean the pouring of concrete footings for the first (1st)
building of the Project Phase at issue. Provided, however, if Developer elects to Commence
Construction of a Project Phase, then Developer shall use commercially reasonable efforts to
Substantially Complete said Project Phase within the timing milestones to complete set forth in
the Schedule of Performance, subject to any extension(s) provided for herein and/or any
Excused Delay(s). "Substantially Complete" or any verb tense thereof shall mean that the
improvements at issue shall have been completed to the point that City has issued a CO for the
core and shell for all building(s) within said Phase. Furthermore, notwithstanding anything to
the contrary in the foregoing, given City's desire for other Project Phase(s) to be constructed in
addition to the Project Phase for the Residential Component, if Developer elects, in its sole and
absolute discretion, to Commence Construction of the Residential Component, then City may, in
its sole discretion, withhold any Certificate of Compliance of DDA Obligations for such
Residential Component or certificate of occupancy on such Residential Component until such
time as Developer (or its Transferee) obtains building permits, and pays all of City's applicable
fees then due, including, without limitation, Impact Fees, therefor, for either (a) the Hotel
Component, or (b) up to twenty thousand eight hundred (20,800) square feet of the Retail
Component, with the foregoing election (i.e., hotel/20,800 sf of retail) being within Developer's
sole and absolute discretion.
2. Schedule of Performance and Progress Reports.
Subject to Developer's right to elect whether and/or when to Commence Construction of
any Project Phase(s) pursuant to Section 703(1) above, the parties acknowledge and agree that
the Schedule of Performance reflects the parties' mutual desire to consummate the
transaction(s) contemplated hereunder, including the processing and consideration of Project
Approval(s), the Closing, and the Commencement of Construction and Substantial Completion
of the Project (assuming City approves the Project after complying with CEQA), and thus the
purpose of the Schedule of Performance is to reflect a good faith estimate of anticipated timing
to achieve key milestones rather than discrete and absolute deadlines unless otherwise
expressly indicated. Accordingly, the Schedule of Performance shall: (A) identify each key
milestone; (B) identify the anticipated timeline for each milestone; and (C) confirm whether the
anticipated timeline shall be treated as (i) merely a guideline that shall be adjusted from time to
time as requested by either party so long as the requesting party is acting in a commercially
reasonable and diligent manner to achieve the milestone at issue (each, a "Performance
Guideline'), or (ii) a deadline that shall be achieved by the relevant party(ies) unless extended
pursuant to subsection (3) below or due to the occurrence of Excused Delay(s) (each, a
"Performance Deadline").
During the Term of this Agreement, the parties shall keep each other reasonably
informed of their efforts to achieve the identified milestones in the Schedule of Performance. I
after Closing, Developer elects, in its sole and absolute discretion, to Commence Construction
of a Project Phase pursuant to Section 703(1) above, then Developer shall notify City
accordingly and thereafter shall keep City reasonably informed of the progress towards
Substantial Completion of said phase.
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3. Extension of Performance Deadline(s) in Schedule of Performance.
A Performance Deadline may be extended: (A) by the parties' mutual consent in writing;
(B) as expressly provided for in the Schedule of Performance; (C) pursuant to a Excused Delay;
or (D) by delays caused by the acts or omissions of City or any City Party. The City Manager
shall have the authority to consent on City's behalf to any extension(s) under this subsection (3).
D. & 704) Costs of Proiect Construction.
Assuming City approves the Project after complying with CEQA, if Developer elects, in
its sole and absolute discretion, to Commence Construction of a Project Phase pursuant to
Section 703(1) above, then Developer shall be solely responsible for all costs to construct that
Project Phase, subject to any applicable fee credit(s) and/or reimbursement due to Developer
pursuant to the Project Approvals and/or other applicable laws and regulations. Said costs shall
include all hard and soft construction costs for said Project Phase, including costs associated
with Project design, site preparation, permitting, construction management, and payment of
applicable fees and charges.
E. (4 705) No Financial Assistance; Prevailing Wane Matters.
City is not providing any direct or indirect financial assistance to Developer that would
make any part of the Project a "public work" "paid for in whole or in part out of public funds," as
described in California Labor Code Section 1720, such that it would cause Developer to be
required to pay prevailing wages for any aspect of the Project.
F. (5 707) Bodily Injury, Site Damane and Workers' Compensation Insurance.
Types of Insurance.
Assuming City approves the Project after complying with CEQA and subject to
the Closing occurring, if Developer elects, in its sole and absolute discretion to Commence
Construction of a Project Phase pursuant to Section 703(1) above, then prior to said
commencement, Developer shall procure and maintain or cause to be procured and maintained,
at its sole cost and expense, in a form and content reasonably satisfactory to City, during the
entire term of that Project Phase's construction, the following policies of insurance:
(a) Commercial General Liability Insurance. Comprehensive
broad form commercial general liability insurance against claims and liability for personal injury
or death arising from Project construction, providing protection of at least One Million Dollars
($1,000,000) per occurrence and Two Million Dollars ($2,000,000) general aggregate.
(b) Builder's Risk Insurance. "All Risks' builder's risk insurance
including vandalism and malicious mischief, covering improvements in place and all material
and equipment at the job site furnished under contract, but excluding contractor's,
subcontractor's, and construction manager's tools and equipment and property owned by
contractor's or subcontractor's employees, with limits and at least One Million Dollars
($1,000,000.00) per occurrence.
(c) Worker's Compensation. Workers' compensation insurance as
required by law. Employer's liability limits usually should be One Million Dollars ($1,000,000) to
be equal to general and auto liability limits.
(d) Auto and Other Insurance. Automobile liability coverage in the
amount of One Million Dollars ($1,000,000) combined single limit (CSL) per accident.
Developer may procure and maintain or cause to be maintained any insurance not required by
this Agreement.
2. Insurance Policy Form, Content and Insurer.
All insurance required by this Section 707 shall be carried only by responsible
insurance companies permitted to do business by California, rated "A-" or better in the most
recent edition of the Best Rating Guide, the Key Rating Guide or in the Federal Register, and
only if they are of a financial category Class VII or better. All such policies shall contain
language, to the extent reasonably obtainable at no additional cost, to the effect that (i) any loss
shall be payable notwithstanding any act of negligence of City or Developer that might otherwise
result in the forfeiture of the insurance, (ii) the insurer waives the right of subrogation against
City and City Parties; (iii) the policies are primary and noncontributing with any insurance that
may be carried by City; and (iv) the policies cannot be canceled except after thirty (30) days'
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written notice by the insurer to City or its designated representative. Developer shall furnish
City with certificates evidencing the foregoing insurance. City shall be named as an additional
insureds on all policies of insurance required to be procured by the terms of this Agreement.
3. Failure to Maintain Insurance and Proof of Compliance.
Developer shall deliver to City, in the manner required for notices under
Section 903 below, copies of certificates evidencing the insurance required hereunder.
If Developer fails or refuses to procure or maintain (or cause to be maintained)
insurance as required hereby or fails or refuses to furnish City with required proof that the
insurance has been procured and is in force and such failure continues for ten (10) business
days after receipt of written notice, then such failure or referral shall be a Default hereunder.
G. f& 708) Rights of Access During Construction.
Assuming City approves the Project after complying with CEQA, once the Closing has
occurred, representatives of City shall have the reasonable right of access to the Site without
charges or fees, at any time during normal construction hours during any period(s) of Project
construction as part of City's standard inspection process for development projects and so long
as City agrees in writing to adhere to applicable safety and security rules and regulations at the
construction site. Each such representative of City shall identify himself or herself at the job site
office upon his or her entrance to the Site, and shall provide Developer, or the construction
superintendent or similar person in charge on the Site, a reasonable opportunity to have a
representative accompany him or her during the inspection. City shall use commercially
reasonable efforts not to interfere with the construction occurring at the Site during such
inspection. Further, City shall indemnify, defend, and hold Developer harmless from all Claims
of any kind or nature arising out of City's exercise of this right of access as provided in this
Section 708.
H. f& 709) Applicable Laws.
Assuming City approves the Project after complying with CEQA, once Closing has
occurred and subject to Developer's election, in its sole and absolute discretion, to Commence
Construction of any Project Phase pursuant to Section 703(1) above, Developer shall carry out
the construction of said Project Phase in conformity with all applicable laws and regulations,
including all applicable federal and state labor laws, and in accordance with the Project
Approvals.
M 710) Anti -discrimination During Construction and Operation.
Assuming City approves the Project after complying with CEQA, once Closing has
occurred and subject to Developer's election, in its sole and absolute discretion, to Commence
Construction of any Project Phase pursuant to Section 703(1) above, Developer agrees that in
the construction of said Project Phase, it shall not discriminate against any employee or
applicant for employment because of race, color, creed, religion, sex, marital or familial status,
sexual orientation, ancestry or national origin.
Furthermore, Developer shall not discriminate against, or segregate, any persons, or
group of persons, on account of race, color, creed, religion, sex, marital status, sexual
orientation, national origin or ancestry in the rental, sale, lease, sublease, transfer, use,
occupancy, or enjoyment of the Site or any portion(s) thereof with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of
the Project. The nondiscrimination and non -segregation covenants contained herein shall
survive termination of this Agreement and remain in effect in perpetuity.
f& 711) Maintenance of Project Improvements.
Assuming City approves the Project after complying with CEQA, once Closing has
occurred and subject to Developer's election, in its sole and absolute discretion, to Commence
Construction of any Project Phase pursuant to Section 703(1) above, Developer shall record an
REA, which shall include provisions that require the owner(s) and/or occupants of the Site to
maintain all improvements that may exist on the Site from time to time, including without
limitation, buildings, parking lots, lighting, signs, and walls as follows: (a) in good and
reasonable condition and repair, reasonable wear and tear excepted; (b) in proper operating
condition; and (c) in a neat, clean, sanitary and attractive condition, meaning that the Site shall
be kept reasonably free from accumulation of debris or waste materials. Improvements shall be
required to be regularly painted so as to avoid fading, cracking or pealing. The owner(s) or
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occupants of the Site shall also maintain all on-site landscaping required pursuant to approved
landscaping plan(s), as may be amended from time to time, in a healthy condition, including
replacement of any dead or diseased plants. City shall have the right to review said REA prior
to recordation to ensure that the provisions required by this Section 711 are included. All
maintenance work, including excavation or construction, shall be performed in compliance with
all Applicable Laws and by contractors duly licensed by the State of California. Work once
commenced shall be diligently pursued until completion. Any ingress and egress easement
area(s) shall be maintained in a smooth and level condition with the type of material originally
installed or material that is similar or better in quality, use and durability. Potholes and cracks in
any ingress and egress easement area(s) resulting in vertical displacement shall be repaired in
a timely manner.
K. (& 712) Taxes, Assessments, Encumbrances and Liens.
If applicable, City shall pay, when due, all real estate taxes and assessments assessed
or levied prior to conveyance of the Site. Developer shall pay, when due, all real estate taxes
and assessments assessed or levied subsequent to conveyance of the Site that relate to
periods after the conveyance of the Site, if any. Prior to conveyance of the Site, Developer shall
not place or allow to be placed thereon any Mortgage (except mechanic's liens prior to suit to
foreclose the same being filed) prohibited by this Agreement. Developer shall remove or have
removed any levy or attachment made on the Site after Closing and as a result of Developer's
activities, or assure the satisfaction thereof, within a reasonable time, but in any event prior to
any foreclosure or execution of any kind upon such levy or attachment. Nothing herein
contained shall be deemed to prohibit Developer from contesting the validity or amounts of any
tax, assessment, encumbrance or lien, or to limit the remedies available to Developer in respect
thereto.
L. (& 713) Rights of Mortgage Holders of Approved Security Interests in Site.
Developer's Default Shall Not Defeat Mortgage Lien.
If Developer Defaults, any such Default shall not defeat or render invalid the lien
of any Mortgage(s) made in good faith and for value as to the Site, or any portion(s) thereof or
interest(s) therein; provided, however, that unless otherwise provided herein, the terms and
conditions of this Agreement shall be binding and effective against any and all Mortgage
Holder(s) whose interest is acquired by foreclosure, trustee's sale or otherwise.
2. Holder Not Obligated to Commence or Complete Project.
Assuming City approves the Project after complying with CEQA, a Mortgage
Holder shall in no way be obligated by the provisions of this Agreement to Commence
Construction or Substantially Complete construction of any Project Phase(s) or to guarantee
any such commencement and/or completion of same nor shall any covenant or any provision in
the conveyances from City to Developer evidencing the realty comprising the Site or any part
thereof be construed so to obligate such Holder; provided, however, nothing in this Agreement
shall be deemed to or be construed to permit any such Holder to devote the Site or any
portion(s) thereof to any uses, or to construct any improvements thereon, other than those uses
or improvements provided for or authorized by this Agreement and the Project Approvals (if
approved by City after complying with CEQA).
3. Notice of Default to Mortgagee. Deed of Trust or Other Security
Interest Holders.
With respect to any Mortgage granted by Developer on the Site or any portion(s)
thereof, whenever City shall deliver any notice or demand to Developer with respect to any
Default by Developer, City shall at the same time deliver a copy of such notice or demand to
each Mortgage Holder of record who has previously made a written request to City therefor, or
to the representative of such Mortgage Holder as may be identified in such a written request.
No notice of Default shall be effective as to the Mortgage Holder unless such notice is given.
4. Right to Cure Developer Default Hereunder.
Each Mortgage Holder (insofar as the rights of City are concerned) shall have the
right, at its option, within ninety (90) days after the receipt of the notice of Default, to:
Cure or remedy or commence to cure or remedy any such Default and
diligently pursue said cure until the same is completed, and
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Add the cost of said cure to the Mortgage debt and the lien of its
Mortgage
Provided that in the case of a Default which cannot with diligence be remedied or
cured within such ninety (90) day period, such holder shall have additional time as reasonably
necessary to remedy or cure such Default.
If possession of the Site (or portion(s) thereof) is required to effectuate such cure
or remedy, the holder shall be deemed to have timely cured or remedied if it commences the
proceedings necessary to obtain possession thereof within ninety (90) days, diligently pursues
such proceedings to completion, and, after obtaining possession, diligently completes such cure
or remedy (the foregoing time periods being subject to extension during the period that such
holder is precluded from taking or pursuing any such action as a consequence of any
bankruptcy stay or other court order).
If there is more than one such holder, the right to cure or remedy a Default of
Developer under this Section 713(4) shall be exercised by the Mortgage Holder first in priority or
as the holders may otherwise agree among themselves, but there shall be only one exercise of
such right to cure and remedy a Default of Developer under this Section 713(4).
Assuming City approves the Project after complying with CEQA, nothing in this
Agreement shall be deemed to permit or authorize such holder to commence or continue the
construction of any Project Phase(s) (beyond the extent necessary to preserve or protect the
improvements or construction already made) without first having expressly assumed
Developer's obligations to City with respect to such improvements by written agreement, in
substantially the same form as Attachment H hereto, with respect to the Site or any
portion(s) thereof in which the holder has an interest. Any such Holder Substantially Completing
an Project Phase shall be entitled, upon written request made to City, to a Certificate of
Compliance of DDA Obligations pursuant to Section 714 below.
5. City's Rights upon Failure of Holder to Cure Developer Default on
Mortgage.
During the Term of this Agreement and subject to any rights of Developer to
challenge, cure, or satisfy any liens or encumbrances on the Site or any portion(s) thereof, in
any case where thirty (30) days after default by Developer on a Mortgage and the Developer
has not exercised the option to cure afforded in the Mortgage or if it has exercised such option
and has not proceeded diligently to cure, then City may cure the Mortgage default prior to
completion of any foreclosure. In such event, City shall be entitled to reimbursement from
Developer of all costs and expenses incurred by City in curing the Mortgage default, including
legal costs and attorneys' fees, which right of reimbursement shall be secured by a lien upon
the Site or portion(s) thereof to the extent of such costs and expenses. Any such lien shall be
subject to:
(a) Any Mortgage for financing permitted by this Agreement; and
(b) Any rights or interests provided in this Agreement for the
protection of such Mortgage Holders.
City shall execute from time to time any and all documentation reasonably requested by
Developer to effect such subordination.
Nothing contained herein shall be deemed to impose upon City any affirmative obligation to cure
a Mortgage default by Developer (by the payment of money, construction or otherwise) with
respect to the Site in the event of its enforcement of any such lien.
6. Modifications.
If a Mortgage Holder should, as a condition of providing financing for development of all
or a portion of the Project, request any modification of this Agreement in order to protect its
interest in the Site or this Agreement, then City shall consider such request in good faith
consistent with the rights and obligations of the parties under this Agreement.
M. N 714) Certificate(s) of Compliance of DDA Obligations.
Assuming City approves the Project after complying with CEQA, if Developer elects, in
its sole and absolute discretion to Commence Construction of a Project Phase pursuant to
Section 703(1) above, then upon Substantial Completion of each said Phase, City shall furnish
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Developer with a "Certificate of Compliance of DDA Obligations" for the relevant Phase in
substantially the same form as Attachment D upon written request therefor by Developer.
Each Certificate of Compliance of DDA Obligations shall be executed and notarized so as to
permit it to be recorded in the Office of the Recorder of Orange County, California.
Each Certificate of Compliance of DDA Obligations shall be, and shall state that it
constitutes, conclusive determination of satisfactory completion of Developer's obligations
hereunder with respect to the relevant Phase. After issuance of a Certificate of Compliance of
DDA Obligations, City shall not have any rights or remedies under this Agreement with respect
to the relevant Phase.
Except under the limited circumstances specified in Section 703.1 above, City shall not
unreasonably withhold, delay, deny or condition any Certificate(s) of Compliance of DDA
Obligations. City shall respond to Developer's request for any Certificate(s) of Compliance of
DDA Obligations within thirty (30) days after receipt thereof. If City notifies Developer in writing
that it is refusing to furnish the requested Certificate of Compliance, then City shall provide a
written statement of City's reasons for doing so and shall also contain City's opinion of the
action Developer must take to obtain the requested Certificate of Compliance. Notwithstanding
anything to the contrary in the foregoing, if the reason for such refusal is confined to the
immediate availability of specific items or materials for landscaping or other minor so-called
"punch list" items, City shall issue a Certificate of Compliance of DDA Obligations for the
relevant Phase upon the posting of a bond (or other assurance reasonably satisfactory to City)
in an amount representing one hundred fifty percent (150%) of the estimated value of the minor,
punch -list work items not yet completed. If City fails to respond in writing to Developer's request
with the foregoing 30 -day period, then City shall be conclusively deemed to have determined
Developer to be in compliance with its obligations hereunder with respect to the relevant Phase
and shall be fully and finally estopped from proclaiming otherwise in any subsequent litigation by
or against Developer or relevant Mortgage Holder.
Any Certificate(s) of Compliance of DDA Obligations shall not constitute evidence
of compliance with or satisfaction of any obligation of Developer to any Mortgage Holder, or any
insurer of a Mortgage. Any Certificate(s) of Compliance of DDA Obligations shall not constitute
notice of completion as referred to in the California Civil Code Section 8180 et seq. Nothing
herein shall prevent or affect Developer's right to obtain CO(s) or similar permits from City
before any Certificate(s) of Compliance of DDA Obligations for a particular Project Phase is
issued.
N. fS 715) Estoppels.
At the request of Developer, any potential or existing Mortgage Holder(s), tenant(s),
and/or other Transferee(s), City shall, from time to time, timely execute and deliver to the
requesting party a written statement of City that certifies the following: (a) this Agreement is in
full force and effect; (b) this Agreement has not been amended or modified or, if so amended or
modified, identifying the amendments or modifications; (c) Developer is not in Default of the
performance of its obligations, or if in Default, to describe therein the nature and extent of any
such Defaults; (d) City is not in Default of the performance of its obligations, or if in Default, to
describe therein the nature and extent of any such Defaults; (e) any or all Project Phase(s) have
been Substantially Completed, or if not Substantially Completed, to describe the nature and
extent of any additional work required to achieve Substantial Completion; and (f) any such other
matters as may be reasonably requested by the requesting party. The requesting party shall
pay, within thirty (30) days following receipt of City's invoice, the actual costs borne by City in
connection with its review of the proposed estoppel certificate, which costs shall not exceed the
total amount of Two Thousand Dollars ($2,000). The Planning Director shall be authorized to
execute any estoppel certificate requested hereunder. The form of estoppel certificate shall be
in the form of Attachment I hereto or such other form reasonably acceptable to the City
Attorney. The Planning Director shall execute and return such certificate within fifteen (15) days
following a request therefor. Developer and City acknowledge that an estoppel certificate
hereunder may be relied upon by any existing or potential Mortgage Holders, tenant(s), and/or
other Transferee(s). If City fails to deliver an estoppel certificate within the aforementioned
fifteen (15) day period, then Developer shall have the right to deliver a second request clearly
indicating thereon that failure of City to respond within five (5) days of its receipt of such second
notice shall be deemed City's approval of all of the terms and conditions set forth in the estoppel
certificate.
O. &716) Developer's Rights Regarding Project Approvals.
Notwithstanding anything to the contrary contained in this Agreement, Developer
shall have the right, exercisable in its sole and absolute discretion at any time, to elect to
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abandon processing any or all of the Project Approval(s) and terminate this Agreement at any
time prior to Close of Escrow, in which event neither City nor Developer shall be obligated to
perform their respective obligations under this Agreement other than obligations that expressly
survive the expiration or earlier termination hereof. Developer's election to terminate this
Agreement pursuant to this Section 716 shall not constitute a Default by Developer; provided,
however, that if Developer makes such election, then City, as its sole and exclusive remedy,
shall be entitled to retain the Conveyance Instrument Deposit(s) made pursuant to the ENA as
consideration for entering into this Agreement.
(6 800) DEFAULTS, REMEDIES AND TERMINATION.
A. (6 801) Defaults. Right to Cure and Waivers.
Subject to any Excused Delay, failure or delay by either party to timely perform any
material term or condition of this Agreement constitutes a default under this Agreement, but only
if the party who so fails or delays does not commence to cure, correct or remedy such failure or
delay within thirty (30) days after receipt of a written notice ("Notice of Default') from the non -
defaulting party specifying such failure or delay, and does not thereafter prosecute such cure,
correction or remedy with diligence to completion (in such case, a "Default').
Upon occurrence of a Default and without any right to further notice or additional cure
period (except with respect to the Right of Reverter pursuant to Section 803(4) below), the non -
defaulting party shall have all remedies available to it under this Agreement as set forth in
Section 803 below; provided, however, neither party shall have the right to recover any punitive,
consequential, or special damages. Failure or delay in giving any Notice of Default shall not
constitute a waiver of any Default and any waiver of a Default shall be in writing and be signed
by the non -defaulting party.
Except as otherwise provided in this Agreement, waiver by either party of the
performance of any term or condition herein shall not invalidate this Agreement, nor shall it be
considered a waiver of any other term or condition. Waiver by either party of the time for
performing any act shall not constitute a waiver of time for performing any other act or an
identical act required to be performed at a later time. The delay or forbearance by either party
in exercising any remedy or right as to any Default shall not operate as a waiver of any Default
or of any rights or remedies or to deprive 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.
B. (S 802) Legal Actions.
Institution of Legal Actions.
Upon occurrence of a Default, the non -defaulting party shall have all rights and
remedies available to it under this Agreement, including the right to institute a legal action or
proceeding to cure, correct or remedy such Default. Legal actions must be instituted and
maintained in the Superior Court of the County of Orange County, State of California, or in any
other appropriate court in that county.
2. Applicable Law and Forum.
The internal laws of the State of California shall govern the interpretation and
enforcement of this Agreement without regard to conflict of law principles.
3. Acceptance of Service of Process.
If any legal action is commenced by Developer against City, service of process
on City shall be made by personal service upon the City Clerk or City Manager, or in such other
manner as may be provided by law. If any legal action is commenced by City against
Developer, service of process on Developer shall be made by personal service upon Developer
at the address indicated in Section 903 below, or in such other manner as may be provided by
law.
C. & 803) Rights and Remedies.
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 its rights or remedies
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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.
2. Rights and Remedies Before Closing.
Before the Closing, upon the occurrence of a Developer Default, City shall have the
right, as its sole and exclusive remedy, to terminate the Escrow and this Agreement and obtain
liquidated damages pursuant to subsection (5) below. IN CONSIDERATION OF THE
PAYMENT OF SUCH LIQUIDATED DAMAGES, CITY SHALL BE DEEMED TO HAVE WAIVED
ANY AND ALL RIGHTS TO SEEK OTHER RIGHTS OR REMEDIES AGAINST DEVELOPER,
INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE.
Before the Closing, upon the occurrence of a City Default, Developer shall have the right
to: terminate the Escrow and this Agreement and obtain a refund of any and all Conveyance
Instrument Deposit(s) made pursuant to the ENA and seek recovery of its out-of-pocket costs
incurred in connection with this Agreement and the Site (if no specific performance to compel
Closing is sought); seek specific performance or other equitable relief to compel City to Close
the Escrow; and seek any other remedy available at law or in equity.
3. Rights and Remedies After Closing.
After the Closing, upon the occurrence of a City Default, Developer shall have all rights
and remedies available under applicable law including, without limitation, the right to bring a
legal action, if necessary, to enforce any City obligations hereunder that expressly survive
termination (e.g., any applicable indemnification obligation(s)).
After the Closing, upon the occurrence of a Developer Default, City shall have all rights
and remedies available under applicable law including, without limitation, the right to bring a
legal action, if necessary, to enforce any Developer obligations hereunder that expressly survive
termination (e.g., any applicable indemnification obligation(s)); provided, however, that City
shall, under no circumstances, have the right to seek specific performance or other equitable
relief to compel Developer to Commence Construction or Substantially Complete construction of
any Project Phase(s). Notwithstanding the foregoing, if Developer, in its sole and absolute
discretion elects to Commence Construction of a Project Phase pursuant to Section 703 above
and thereafter fails to Substantially Complete said Phase pursuant to the timing required
hereunder and provided that no other remedy is reasonably available to City, then City shall
have, as its sole and exclusive remedy, the Right of Reverter with respect to said Phase as
provided for under subsection (4) below.
4. Right of Reverter.
The parties acknowledge and agree that Developer shall have no obligation hereunder
or in any other documents or instruments executed and delivered by Developer, or required of
Developer, in connection with the Site; including, without limitation, as a condition of any Project
Approvals, to Commence Construction of any Project Phase, and therefore any election not to
do so shall not be deemed a Default by Developer. Nevertheless, the parties further
acknowledge and agree that City's desire to sell the Site to Developer is to facilitate the
development of the Site with the Project (assuming City approves the Project during the
anticipated future Discretionary Entitlement process after complying with CEQA). Accordingly, if
City so approves the Project, and further if after the Closing, Developer elects not to Commence
Construction of the first (1st) Project Phase by the timing requirements set forth in the Schedule
of Performance, then City shall have the right, at its option, to repurchase, reenter and take
possession ("Right of Revertet') of the entire Site pursuant to this subsection (4) but subject to
Developer's right to notice and opportunity to cure set forth therein.
In addition, assuming City approves the Project after complying with CEQA, after the
Closing, if Developer, in its sole and absolute discretion elects to Commence Construction of a
Project Phase pursuant to Section 703 above and thereafter fails to Substantially Complete said
Phase pursuant to the timing required under the Schedule of Performance, then City shall have
the Right of Reverter with respect to that Project Phase, subject to an additional opportunity for
Developer to cure as provided for in this subsection (4). Such right to repurchase, reenter and
repossess that Project Phase, to the extent provided in this Agreement, shall be subordinate
and subject to and be limited by and shall not defeat, render invalid or limit: (a) any Mortgage
permitted by this Agreement; (b) any rights or interests provided in this Agreement for the
protection of the Mortgage Holder(s); and (c) any right or interests provided in the REA or any
other covenants, conditions and restrictions recorded on the Site.
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To exercise its Right to Reverter with respect to a Project Phase as provided for under
this subsection (4), City shall pay to Developer in cash an amount equal to:
(a) The Purchase Price paid by Developer for the relevant Phase
based on the allocation set forth in the Financial Information; less
(b) The total amount of any Mortgage(s) or other liens encumbering
the relevant Project Phase at the time of the repurchase, reentry and repossession, which such
amounts shall be used by City to repay and/or satisfy any such Mortgages or other liens.
In order to exercise this Right of Reverter, City shall give Developer Notice of such
exercise and Developer shall, within sixty (60) days after Developer's receipt of such Notice,
shall have a further right to cure any Default by Substantially Completing the relevant Project
Phase (and if there is no Default, then Developer shall have the right to elect to Commence
Construction within said 60 -day period); and if the cure (or election to Commence Construction,
in the case of no Default) cannot be reasonably be completed within said 60 -day period, then
Developer's commencement of the cure (or election to Commence Construction, in the case of
no Default) and diligent prosecution thereafter to Substantial Completion shall be deemed a
cure.
If after said 60 -day period (as the same may be extended pursuant to the terms hereof),
Developer decides not to cure (or elects not to Commence Construction in the case of no
Default), or decides to cure (or elect to Commence Construction in the case of no Default) but
fails to thereafter diligently prosecute the same to Substantial Completion, then City shall
request that Developer provide it with a detailed accounting of all of Developer's costs incurred
as provided in subparagraph (b) above. City, within thirty (30) days after its receipt of such
accounting, shall have the Right of Reverter for the relevant Project Phase subject to City's
payment to Developer in cash all sums owing pursuant to this subsection (4), if any. Once City
has made said payment and repaid in full all obligations and loans secured by all Mortgages
encumbering the relevant Phase of the Project, then Developer shall thereupon execute and
deliver to City a quitclaim deed transferring to City all of Developer's interest in the relevant
Project Phase and assign to City (and City shall assume) all leases and contracts related to the
Site and all declarant rights under the REA, if any. The transfer of the Site to City pursuant to
the City's Right of Reverter shall be in its then AS -IS Condition and City shall execute a waiver
and release of known and unknown claims substantially similar to the one contained in Section
503 of this Agreement in connection with such transfer.
Notwithstanding anything to the contrary in the foregoing, City's Right of Reverter under
this subsection (4) shall terminate with respect to each Project Phase upon the Substantial
Completion of each relevant Phase. Provided, however, that City's rights under this
subsection (4) shall survive termination of this Agreement.
5. Liquidated Damages in the Event of a Closing Default.IF, FOR ANY
REASON OTHER THAN A CITY DEFAULT OR A FAILURE OF A DEVELOPER CLOSING
CONDITION, DEVELOPER DEFAULTS IN ITS OBLIGATION TO CLOSE ESCROW FOR
PURCHASE OF THE SITE BY THE OUTSIDE CLOSING DATE (-CLOSING DEFAULT'), THE
PARTIES ACKNOWLEDGE AND AGREE THAT CITY WILL SUFFER DAMAGES, INCLUDING
COSTS OF NEGOTIATING AND DRAFTING THIS AGREEMENT, COSTS OF
COOPERATING IN SATISFYING CONDITIONS TO CLOSING, COSTS OF SEEKING
ANOTHER DEVELOPER FOR THE SITE, OPPORTUNITY COSTS IN KEEPING THE SITE
OUT OF THE MARKETPLACE, AND OTHER COSTS INCURRED IN CONNECTION
HEREWITH, AND THAT IT IS IMPRACTICABLE AND INFEASIBLE TO FIX THE ACTUAL
AMOUNT OF SUCH DAMAGES. THEREFORE, CONSIDERING ALL THE CIRCUMSTANCES
EXISTING ON THE EFFECTIVE DATE, IN THE EVENT OF A CLOSING DEFAULT, CITY
SHALL RETAIN THE CONVEYANCE INSTRUMENT DEPOSITS (AS THAT TERM IS
DEFINED IN THE ENA) AND SUCH AMOUNTS SHALL SERVE AS LIQUIDATED DAMAGES
TO CITY FOR SUCH CLOSING DEFAULT. RETENTION OF THE CONVEYANCE
INSTRUMENT DEPOSITS SHALL BE CITY'S SOLE AND EXCLUSIVE REMEDY AGAINST
DEVELOPER IN THE EVENT OF A CLOSING DEFAULT, AND CITY WAIVES ANY AND ALL
RIGHTS TO SEEK OTHER RIGHTS OR REMEDIES AGAINST DEVELOPER, INCLUDING,
WITHOUT LIMITATION, SPECIFIC PERFORMANCE.
6. Statutory Acknowledgments Regarding Liquidated Damages
Remedies.THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION 803 ARE NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTIONS 3275
OR 3369 OF THE CALIFORNIA CIVIL CODE, BUT ARE INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO CITY PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE
CALIFORNIA CIVIL CODE. BY PLACING THEIR INITIALS BELOW, DEVELOPER AND CITY
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SPECIFICALLY CONFIRM THE ACCURACY OF THE STATEMENTS MADE ABOVE, THE
REASONABLENESS OF THE AMOUNT OF LIQUIDATED DAMAGES AGREED UPON, AND
THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT
THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION.
INITIALS:
CITY DEVELOPER
D. (S 805) Attorney's Fees.
In the event of any litigation by either party pertaining to this Agreement, the prevailing
party in such litigation, in addition to any other relief which may be granted, shall be entitled to
its litigation costs and expenses, including, without limitation, reasonable attorneys' fees.
E. (4806) Participation in Third -Party Litigation; Indemnity.
The parties acknowledge and agree that each shall have the right to elect to defend any
Third -Party Litigation subject to the obligations of this Section 806, which shall survive the
expiration or termination of this Agreement.
Developer Indemnification in the Event of Third -Party Litigation.
Subject to Section 806(2)(c) below, Developer agrees to indemnify City and the
City Parties and shall hold and save them and each of them harmless from any and all Claims
concerning any Third -Party Litigation except if and to the extent said Claims arise from City's
sole negligence, willful misconduct, or fraudulent acts. Third -Party Litigation shall mean any
court action or proceeding instituted by any third party (i.e., any private individual or entity or any
non -City governmental or quasi -governmental authority) challenging the validity of any provision
of this Agreement, the Discretionary Entitlements, the Ministerial Permits or any CEQA issue(s)
or document(s) approved in connection therewith. City and/or each indemnified City Party
seeking defense or indemnity from Developer concerning Third -Party Litigation shall provide
Developer with prompt notice of the pendency of any action or proceeding for which it believes it
is entitled to indemnity under this Section 806(1) and request that Developer defend it regarding
such action or proceeding (but any delay or failure to notify Developer shall reduce Developer's
obligations to so defend or indemnify to the extent of any actual prejudice suffered by Developer
due to the delay or failure). Developer's indemnification obligations under this Section 806(1)
shall survive the expiration or termination of this Agreement.
2. Cooperation in the Event of Third -Party Litigation.
Subject to Section 806(2)(c) below, Developer and City shall cooperate
defending same pursuant to this subsection (2), and the parties shall keep each other informed
of all developments relating to such defense, subject only to confidentiality requirements that
may prevent the communication of such information.
(a) Meet and Confer. If Third -Party Litigation is filed, upon receipt of
the complaint or petition, the parties shall have twenty (20) days to meet and confer regarding
the merits of such Third -Party Litigation to determine whether each party elects to defend same
and if so, whether they elect to so jointly defend, which period may be extended by the parties'
mutual agreement so long as it does not adversely and materially impact any litigation
deadlines. Subject to an election to defend, City and Developer shall mutually commit to meet
all required litigation timelines and deadlines. If City and Developer agree jointly to defend the
Third -Party Litigation, they shall expeditiously enter a joint defense agreement, which shall
include, among other things, provisions regarding the preservation of confidential
communications. The City Manager is authorized to negotiate and enter such joint defense
agreement in a form reasonably acceptable to the City Attorney and Developer's attorneys.
Such joint defense agreement shall also provide that any proposed settlement of the Third -Party
Litigation shall be subject to Developer's approval, in its reasonable discretion, except in the
event City elects to solely defend under subsection (c) below. If the terms of the proposed
settlement would constitute an amendment or modification of this Agreement, the settlement
shall not become effective unless such amendment or modification is mutually approved by the
parties in accordance with applicable laws and regulations.
(b) Defense Election. If, after meeting and conferring, the parties
mutually agree (each in its sole discretion) to defend against the Third -Party Litigation, then the
following shall apply:
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(i) For the purposes of cost -efficiency and coordination, the
parties shall first consider defending the Third -Party Litigation with common counsel and under
terms of a joint representation agreement mutually acceptable to City and Developer (each in its
sole discretion), at Developer's sole cost and expense.
(ii) If the parties cannot reach timely and mutual agreement on
joint counsel, then:
(1) Developer shall take the lead role defending such
Third -Party Litigation and may, in its sole discretion, elect to be represented by the legal counsel
of its choice.
(2) City may, in its sole discretion, elect to be
separately represented by the City Attorney with the reasonable costs of such representation to
be paid by Developer. Provided, however, if City elects to proceed with any outside legal
counsel of its choice in addition to the City Attorney, then City shall be solely responsible for any
such additional legal fees and costs.
(3) To the extent due hereunder, Developer shall
reimburse City, within twenty (20) business days following City's written demand therefor,
reasonable legal fees and costs incurred by the City Attorney, as well as court costs, incurred in
the month prior in connection with the Third -Party Litigation. Provided, however, that Developer
shall not be required to pay any internal City staff costs associated with defending the Third -
Party Litigation, nor any outside City legal costs; moreover, City shall provide Developer with
reasonably sufficient information to document the basis for said request for payment.
The parties intend that City's role under subsection (ii)(13)(2) shall be primarily oversight
although City reserves its right to protect City's interests, and City shall make good faith efforts
to maximize coordination and minimize its legal costs (for example, minimizing filing separate
briefs, and duplication of effort to the extent feasible).
(c) Election Not To Defend.
If, after meeting and conferring, Developer and City both elect not to defend against the
Third -Party Litigation, Developer shall remain obligated to indemnify and hold City harmless
from and against any damages, attorneys' fees or cost awards that are actually awarded by a
court of competent jurisdiction in accordance with Section 806(1) above.
In the alternative, if Developer elects, in its sole and absolute discretion, not to defend
against the Third -Party Litigation, it shall deliver written notice to City regarding such decision.
Developer elects not to defend, City has the right, but not the obligation, in its sole discretion to
proceed to defend against the Third -Party Litigation at its sole cost and expense, in which case
City shall then take the lead role defending such Third -Party Litigation. If, following receipt of
Developer's Notice of election not to defend, City elects to defend and takes the lead role in
such litigation, then City shall be solely responsible for all damages, attorney's fees or cost
awards, if any, which are actually incurred or awarded from and after such time City has made
such election. Provided, however, that City shall have no right to approve any settlement
obligating Developer to make any payment(s) or take any action(s) related thereto.
(6 900) GENERAL PROVISIONS.
A. M 901) Notices, Demands and Communications Between the Parties.
Any notice, consent, report, demand, document or other such item (each, a "Notice") to
be given, delivered, furnished or received hereunder shall be deemed given, delivered,
furnished, and received when given in writing and personally delivered to an authorized agent of
the applicable party, or upon delivery by the United States Postal Service, first-class registered
or certified mail, postage prepaid, return receipt requested, or by an "overnight courier" such as
Federal Express, at the time of delivery shown upon such receipt; in either case, delivered to
the address, addresses and persons as each party may from time to time by written notice
designate to the other and who initially are:
If to Developer: SP Acquisition, LLC
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attn: Brad Deck
Email: brad.deck(a)sheaproperties.com
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With copies to: Shea Properties
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attention: Julie Guizan. General Counsel
Email: iulie.guizang ifshea.com
And: Miller Starr Regalia
1331 North California Blvd., Fifth Floor
Walnut Creek, CA 94596
Attention: Hans Lapping
Email: hans.lapping(a)msriegal.com
If to City: City of Cypress
5275 Orange Avenue
Cypress, CA 90630
Attn: Peter Grant, City Manager
Email: pgrant(a)cvpressca.org
A copy to: Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 1700
Irvine, California 92612
Attn: Anthony Taylor, City Attorney
Email: ataylor(o)awattorneys.com
Notices sent by a party's attorney on behalf of such party shall be deemed delivered by such
party.
B. (& 902) Nonliability of City and City Parties: Conflicts of Interest:
Commissions.
Personal Liability.
No City Party shall be personally liable to Developer in the event of any City
Default or for any amount which may become due to Developer or on any obligations under the
terms of the Agreement; provided, it is understood that nothing in this Section 902 is intended to
limit City's liability. No member, officer, employee, agent, contractor, representative or
consultant of Developer shall be personally liable to City in the event of any Developer Default
or for any amount which may become due to City or on any obligations under the terms of the
Agreement; provided, it is understood that nothing in this Section 902 is intended to limit
Developer's liability.
2. Financial Interest.
No City Party shall have any financial interest, direct or indirect, in this
Agreement, nor participate in any decision relating to this Agreement which is prohibited by law.
3. Broker Commissions.
City represents it has engaged JLL and Kosmont Realty Corporation in
connection with the potential sale and acquisition of the Site and the transaction contemplated
hereunder. Developer agrees to hold City harmless from any claim by any other broker, agent,
or finder retained by Developer in connection with said transaction. City shall not be liable to
pay any real estate commission or any broker's fees which may arise in relation to the Project or
the transfer of Title to the Site. Assuming the Closing occurs, Developer shall pay a real estate
commission fee to JLL and Kosmont Realty Corporation in the total aggregate amount of three
percent (3%) of the Purchase Price through escrow at Closing, with said amount being
deducted from the Purchase Price. Developer's indemnification obligations set forth in this
Section 902(3) shall survive the termination or expiration of this Agreement for a period of five
(5) years from the Effective Date.
C. (& 903) Excused Delay: Extension of Times of Performance.
Time is of the essence in the performance of this Agreement. In addition to the specific
provisions of this Agreement, performance by either party hereunder shall not be deemed to be
in Default when the delay or Default is due to war; insurrection; strikes; lock -outs; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental restrictions or priority;
unusually severe weather that prevents, limits, delays or hinders the ability to perform;
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BN
environmental conditions discovered that delay construction or development, including delays
resulting from investigation and/or remediation of such conditions; initiatives, referenda, Third -
Party Litigation challenging this Agreement and/or other Project Approval(s) on CEQA or any
other grounds or any other material litigation related to the Project; delays of any contractor,
subcontractor or supplier; acts of another party; acts or the failure to act of a governmental or
quasi -governmental authority (except that acts or the failure to act of City shall not excuse
performance by City); economic or product demand declines that make it not commercially
feasible to proceed with development of the Site with the Project or a phase thereof; or any
other similar causes beyond the control or without the fault of the party claiming an extension of
time to perform (each, "Excused Delay'). Excused Delay shall also include (provided the party
seeking the extension is acting with reasonable diligence), additional reasonable
period(s) (a) required to complete compliance with and/or obtain approval, adoption or
certification (as applicable) of any supplemental or subsequent environmental analysis and/or
documentation required for the Project or any portion(s) thereof; (b) the full and final resolution
of any Third -Party Litigation filed challenging this Agreement and/or other Project Approval(s) on
CEQA or any other grounds or any other material litigation related to the Project in a manner
that is acceptable to Developer in its sole and absolute discretion; and (c) required to complete
any pending application or request before City for an action or approval under this Agreement or
before City for an action or approval under the Project Approvals. Notwithstanding anything to
the contrary in the foregoing, Developer's failure to obtain financing for the Project shall not be
considered an Excused Delay. City's financial condition shall similarly not be considered an
Excused Delay that can be relied on by City for failure to satisfy any City obligation hereunder.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, no delay shall be deemed an Excused Delay unless the party claiming the benefit of
this provision shall, as a condition thereto, give notice to the other party in writing within fifteen
(15) days of the declaring party having actual knowledge of the incident specifying with
reasonable particularity the nature thereof, the reason therefor, the date and time such incident
occurred and a reasonable estimate of the period that such incident will delay the fulfillment of
obligations contained herein. If any notice of Excused Delay is given later than fifteen (15) days
after the party declaring such delay has actual knowledge of the existence of the Excused
Delay, then the Excused Delay occurring during the period commencing on the sixteenth (16th)
day after the commencement of the Excused Delay and ending on the date of such notice, shall
be disregarded and deemed not to have occurred.
In the event of an Excused Delay, the party delayed shall continue to exercise
reasonable diligence to minimize the period of the delay. An extension of time for any such
cause shall be limited to the period of the Excused Delay, and shall commence to run from the
time of the commencement of the cause. Times of performance under this Agreement may also
be extended by mutual written agreement by City and Developer, with the City Manager having
the authority on behalf of City to so consent.
D. fS 904) Ownership of Documents, Confidentiality.
If this Agreement terminates for any reason other than a City Default, then, subject to the
terms of this Section 904, Developer shall grant City a royalty -free, one-time, non-exclusive
license to use the Project Work Product (as defined below) in strict accordance with the terms of
this Section 904. City covenants and agrees that the Project Work Product shall be used solely
in connection with the design, development and construction of the Project on the Site and shall
not be used in any other location. FURTHER, CITY EXPRESSLY ACKNOWLEDGES AND
AGREES THAT USE OF THE PROJECT WORK PRODUCT WILL BE MADE AVAILABLE ON
AN "AS IS" BASIS ONLY AND WITHOUT ANY WARRANTY OR INDEMNITY OF ANY
KIND. NEITHER DEVELOPER NOR ANY OF ITS PARTNERS, SHAREHOLDERS,
OFFICERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES OR AGENT
(COLLECTIVELY, THE "DEVELOPER PARTIES') ARE MAKING OR WILL MAKE ANY
WARRANTIES, CONDITIONS, INDEMNITIES, REPRESENTATIONS OR TERMS, EXPRESS
OR IMPLIED, WHETHER BY STATUTE, COMMON LAW, CUSTOM, USAGE OR
OTHERWISE AS TO ANY OTHER MATTERS, INCLUDING BUT NOT LIMITED TO NON -
INFRINGEMENT OF THIRD PARTY RIGHTS, TITLE, ACCURACY, SECURITY,
AVAILABILITY, SATISFACTORY QUALITY, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE WITH RESPECT TO THE PROJECT WORK PRODUCT. IN
ADDITION, DEVELOPER MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING
THE QUALIFICATIONS OF ANY CONSULTANT WHICH PREPARED ANY OF THE PROJECT
WORK PRODUCT AND DEVELOPER SHALL HAVE NO LIABILITY OR RESPONSIBILITY TO
CITY OR ANY OTHER PERSON OR ENTITY FOR ANY LOSS OR DAMAGE RESULTING
FROM RELIANCE ON THE PROJECT WORK PRODUCT OR ANY USE OF THE MATTERS
CONTAINED THEREIN.
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As consideration for the foregoing license, City agrees to indemnify, defend, protect and
hold Developer and each of the Developer Parties harmless from any and all loss, expense,
claim, damage and injury to person or property (including reasonable attorneys' fees) arising out
of or relating to any use of, or reliance on, the Project Work Product. City expressly
acknowledges and agrees that City may not rent, lease, sublicense, assign or transfer its rights
in the Project Work Product without the prior written consent of Developer which consent may
be withheld in Developer's sole and absolute discretion; provided, however, that City shall have
the one-time right to sublicense the Project Work Product to the purchaser of the Site so long as
(a) City has otherwise satisfied the requirements of Subsections (i), (ii) and (iii) of this Section
904, and (b) City obtains a License Agreement (as defined below) from the sublicensee and
delivers same to Developer. City acknowledges that the restrictions on its use of the Project
Work Product contained in this Section 904 is reasonable and necessary in order to protect
Developer's legitimate interests therein and that any violation thereof would result in irreparable
injury to Developer. City therefore acknowledges and agrees that, in the event of any violation
of any of the terms and conditions of this Section, Developer shall be authorized and entitled to
obtain, from any court of competent jurisdiction, preliminary and permanent injunctive relief as
well as an equitable accounting of all profits or benefits arising out of such violations, which
rights and remedies shall be cumulative and in addition to any other rights or remedies to which
Developer may be entitled. Notwithstanding anything to the contrary contained in this Section,
Developer shall have no obligation to grant the foregoing limited license to City unless and until
(i) City reimburses Developer for its actual out-of-pocket costs incurred in connection with
developing and obtaining the Project Work Product if the City Council denies approval of the
Discretionary Entitlements, (ii) the return of the Conveyance Instrument Deposit to Developer if
Developer is otherwise entitled to the return thereof pursuant to the terms and conditions of this
Agreement, and (iii) City's execution and delivery of a commercially reasonable license
agreement that includes the foregoing disclaimers and indemnity as well as a release of all
known and unknown claims related to the use of the Project Work Product (the "License
Agreement'). For purpose of this Section 904, the "Project Work Product' shall mean (x) all
third party inspection reports, studies, surveys, and other reports and/or test results relating to
the Site, and (y) all improvement plans and specifications including the Grading Plans,
Improvement Plans as well as the site plan but only to the extent completed as of the date this
Agreement terminates; provided, however, in no event shall the Project Work Product include
any documents, materials or information which are proprietary, confidential and/or protected by
one or more legally recognized privilege or any rights in or to use Developer's trade names or
logos. The parties' rights and obligations under this Section 904 shall expressly survive the
termination of this Agreement.
Notwithstanding the foregoing, City agrees, to the maximum extent permitted by
the California Public Records Act (Government Code Section 6253 et seq.) or other applicable
local, state or federal disclosure laws (collectively, "Public Disclosure Laws"), to keep
confidential all proprietary financial and other information submitted by Developer to City in
connection with Developer's satisfaction of its obligations under this Agreement (collectively,
"Confidential Information"). Notwithstanding the preceding sentence, City may disclose
Confidential Information to City Parties (including the City Advisor), but only if and to the extent
necessary to carry out the purpose for which the Confidential Information was disclosed
consistent with the rights and obligations provided for hereunder. Developer acknowledges that
City has not made any representations or warranties that any Confidential Information City
receives from Developer will be exempt from disclosure under any Public Disclosure Laws. If
the City Attorney determines that the release of any Confidential Information is required by
Public Disclosure Laws, or by order of a court of competent jurisdiction, City shall promptly
notify Developer in writing of City's intention to release the Confidential Information so that
Developer has the opportunity to evaluate whether to object to said disclosure and/or to
otherwise take whatever steps it deems necessary or desirable to prevent disclosure, provided
that City shall not be liable for any damages, attorneys' fees and costs for any alleged failure to
provide said notice (although such failure may be considered a City Default). If the City
Attorney, in his or her discretion, determines that only a portion of the requested Confidential
Information is exempt from disclosure under the Public Disclosure Laws, City may redact, delete
or otherwise segregate the Confidential Information that will not be released from the non-
exempt portion to be released.
Developer acknowledges that in connection with the City Council's consideration
of this Agreement, City will need to present a summary of Developer's anticipated costs of
development reflected in the Financial Information, together with such other information as may
be reasonably required for a staff report accompanying this Agreement. Provided, however,
that to the extent Developer reasonably determines it is necessary to protect Confidential
Information relating to financial data, said information may be delivered directly to City's third -
party advisor, such as Kosmont Realty Corporation (or another third -party consultant reasonably
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approved by Developer), who shall sign a confidentiality agreement to prevent disclosure of the
Confidential Information but who shall be permitted to provide to City a summary of said
information consistent with the purposes of this Agreement. Within ten (10) days of the Closing,
or in the alternative if this Agreement expires or is terminated without the Closing having
occurred, then City shall promptly return to Developer any and all Confidential Information.
E. (6 905) Assurances to Act in Good Faith; Approvals Not to Be
Unreasonably Withheld.
City and Developer agree to execute all documents and instruments and to take all
actions as may be reasonably required in order to consummate the conveyance of the Site as
well as facilitate the processing of the anticipated future Discretionary Entitlements as
contemplated herein and subject to CEQA compliance, and shall use their diligent and
commercially reasonable efforts to accomplish the Closing and subsequent development of the
Site (assuming City approves the Project during said Discretionary Entitlement after complying
with CEQA) in accordance with and subject to the provisions hereof. City and Developer shall
each diligently and in good faith pursue the satisfaction of any conditions or contingencies
subject to their respective approval. If the approval of a party is required hereunder, such
approval shall not be unreasonably withheld, delayed, or conditioned except as may be
otherwise expressly set forth herein. Notwithstanding anything to the contrary in the foregoing,
nothing in this Section 905 shall commit City to any particular course of action with respect to
the Project, nor shall it limit City's discretion in its consideration of the Project during the
anticipated future Discretionary Entitlement process.
F. (& 906) Interpretation.
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the authorship
of this Agreement or any other rule of construction which might otherwise apply. The
Section headings are for purposes of convenience only, and shall not be construed to limit or
extend the meaning of this Agreement. This Agreement includes all attachments attached
hereto, which are by this reference incorporated in this Agreement in their entirety.
G. M 907) Entire Agreement, Waivers.
This Agreement integrates all of the terms and conditions mentioned herein, or incidental
hereto, and this Agreement supersedes all negotiations and previous agreements between the
parties with respect to all or any part of the subject matter hereof, including without limitation the
ENA. All waivers of the provisions of this Agreement, unless specified otherwise herein, must
be in writing and signed by the appropriate representatives of City or Developer, as applicable.
H. (S 908) Amendments.
Amendment by Written Consent.
Except as otherwise expressly provided for herein, this Agreement may be
terminated, modified or amended only by the parties' mutual written consent.
2. Major and Minor Amendments.
Any amendment to this Agreement that affects or relates to: (i) the Term;
(ii) permitted uses on the Site; (iii) provisions for the reservation or dedication of land;
(iv) conditions, terms, restrictions or requirements for subsequent discretionary actions; (v) the
density or intensity of the use of the Site or the maximum height or size of proposed buildings;
or (vi) monetary contributions by Developer, shall be deemed a "Major Amendment' and shall
require giving of notice and a public hearing before the City Council. Any amendment that is not
a Major Amendment shall be deemed a "Minor Amendment' and shall not, except to the extent
otherwise required by applicable laws, require notice of public hearing before the parties may
execute an amendment hereto.
3. Authority to Consider Minor Amendment.
The City Manager or his or her designee shall have the authority to reasonably
determine if an amendment is a Major Amendment or a Minor Amendment, as well as the
authority to review and approve Minor Amendment(s) administratively without public notice or
hearing.
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M 909) Severability.
If any term or condition contained herein is held to be invalid, void or otherwise
unenforceable, by any court of competent jurisdiction, such holding shall in no way affect the
validity or enforceability of any other term or condition contained herein.
J. M 910) Execution.
This Agreement may be executed in counterparts, each of which shall be deemed to be
an original, and such counterparts shall constitute one and the same instrument. Delivery of the
executed Agreement may be accomplished by transmittal of a PDF by electronic mail, and if so
done, the electronically mailed copy shall be deemed an executed original counterpart of the
Agreement for all purposes.
K. (& 911) Title of Parts and Sections.
Any title of the sections or subsections of this Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any part of its provision.
L. M 912) No Third Party Beneficiaries.
The parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto.
M. M 913) Parties Not Co -Venturers.
Nothing in this Agreement is intended to or does establish the parties as partners, co -
venturers, or principal and agent with one another.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date of execution by City.
ATTEST:
A
City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
Anthony Taylor, City Attorney
"CITY"
CITY OF CYPRESS, a California Charter City
m
Mayor
"DEVELOPER"
SP ACQUISITION, LLC
a California limited liability company
By: Shea Properties Management Company,
Inc., a Delaware corporation
By:
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ATTACHMENT A
SITE DEPICTION AND LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CYPRESS IN
THE COUNTY OF
ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS
PARCEL A:
PARCELS 7, 8, AND 9 OF PARCEL MAP 96-121, IN THE CITY OF CYPRESS, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 298,
PAGE(S) 13 TO 16 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA.
SAID LAND IS ALSO DESCRIBED AS PARCEL 1 OF THAT CERTAIN LOT LINE
ADJUSTMENT NO. LL -2007-01, DATED AUGUST 16, 2007, IN THE CITY OF CYPRESS,
COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED JANUARY 30, 2008 AS
INSTRUMENT NO. 2008000044840 OFFICIAL RECORDS OF SAID COUNTY.
PARCEL B:
APPURTENANT EASEMENTS TO USE, MAINTAIN, OPERATE, ALTER, REPAIR, REPLACE,
RECONSTRUCT AND INSPECT THE UTILITIES, AS SAID EASEMENT IS SET FORTH IN
THAT CERTAIN RECIPROCAL UTILITIES EASEMENT AGREEMENT RECORDED JULY 31,
1991 AS INSTRUMENT NO. 91-404179 OFFICIAL RECORDS.
PARCEL C:
AN APPURTENANT EASEMENT FOR STORM WATER DRAINAGE, AS SAID EASEMENT IS
SET FORTH IN THAT CERTAIN GRANT OF DRAINAGE EASEMENT RECORDED
SEPTEMBER 11, 1990 AS INSTRUMENT NO. 90-482118 OFFICIAL RECORDS, AS
AMENDED BY THAT CERTAIN AMENDMENT TO DRAINAGE EASEMENT RECORDED
JANUARY 18, 1991, AS INSTRUMENT NO. 91-026004 OFFICIAL RECORDS, AND ALSO AS
AMENDED BY THAT CERTAIN GRANT OF EASEMENTS AND AGREEMENT REGARDING
DRAINAGE EASEMENT RECORDED JUNE 3, 1997 AS INSTRUMENT NO. 19970253674
OFFICIAL RECORDS.
PARCEL D:
A NON-EXCLUSIVE, PERPETUAL EASEMENTS FOR PEDESTRIAN AND VEHICULAR
ACCESS AND FOR INSTALLATION AND MAINTENANCE PURPOSES, AS SAID EASEMENT
IS SET FORTH IN THAT CERTAIN ACCESS AND UTILITY EASEMENT AGREEMENT
RECORDED SEPTEMBER 11, 1990 AS INSTRUMENT NO. 1990-482112 OFFICIAL
RECORDS, AS AMENDED BY THAT CERTAIN AMENDMENT TO ACCESS AND UTILITY
EASEMENT AGREEMENT RECORDED JANUARY 10, 1991 AS INSTRUMENT NO. 91-
025992 OFFICIAL RECORDS, AND AS FURTHER AMENDED BY THAT SECOND
AMENDMENT RECORDED OCTOBER 9, 1997 AS INSTRUMENT NO. 1997-507990
OFFICIAL RECORDS.
APN: 241-091-022 thru 026
SEPP\54334\2127334.17 Page 1 of 1 ATTACHMENT A
(Updated as of September 27, 20191
436
�
437
ATTACHMENT B
LIST OF AUTHORIZED ENTITIES FOR PURPOSES OF
THE HOTEL COMPONENT AND RETAIL COMPONENT
As detailed more fully in the Agreement, the various conceptual Project components are
anticipated to be revised and refined by the discretionary entitlement application process that
Developer intends to pursue once this Agreement is approved by the City Council to obtain the
necessary Discretionary Entitlements and Ministerial Permits. If City approves the Project during
the anticipated future Discretionary Entitlement process after complying with CEQA, and further
if the Project includes the Hotel Component and/or the Retail Component, then the followed
entities shall be treated as Authorized Hotel Entity(ies), Authorized Grocery User(s), and
Authorized Cinema User(s), as applicable.
Defined terms used in this Attachment B shall have the same meaning set forth in the
Agreement unless otherwise expressly indicated. In the event of a conflict between the
Agreement and this Scope of Development, the Agreement shall control and prevail.
Authorized Hotel Entities
Aloft by Marriott
Courtyard by Marriott
Four Points by Sheraton
Hyatt Place by Hyatt
Hilton Garden Inn
Hotel Indigo
Ayres
Cambria Suites by Choice Hotels
Homewood Suites
Authorized Cinema Users
Cinemark
Alamo Drafthouse
Cinepolis
The Lot
Arclight
Studio Movie Grill
Metro Theaters
iPic
Authorized Grocery Users
Mother's Market
Sprouts
Whole Foods
Trader Joes
Lazy Acres Market
Gelson's
SEPP\54334\2127334.17 Page 1 of 1 ATTACHMENT B
[Updated as of September 27, 2019]
ATTACHMENT C
SCHEDULE OF PERFORMANCE
SEPP\54334\2127334.17 Page 1 of 5 ATTACHMENT C
Agreement
Performance
Item To Be Performed
Time For Performance
Reference
Guideline or
Deadline
1.
Developer executes and
November 12, 2019
Performance
delivers DDA to City
Guideline
2.
City holds public hearing
November 25, 2019
Recital K,
Performance
on DDA, approves or
§229
Guideline
disapproves DDA and, if
approves, executes
DDA
3.
Open Escrow
Within 30 days after
§404
Performance
Event No. 2 above
Deadline
4.
Developer approves or
Within 10 days of any
§408.1
Performance
disapproves title
Preliminary Report
exceptions
Update
Deadline
5.
City delivers notice to
Within 10 days after
§408.1
Performance
Developer as to whether
receipt of Developer's
it will cure Disapproved
notice of any
Deadline
Exceptions
Disapproved Exception
e.
City delivers to
Prior to Effective Date of
§501
Performance
Developer all Site
DDA, pursuant to
documents required
Section 6 of the ENA
Deadline
pursuant to Section 501
of the DDA
7.
City makes Site
Prior to the Effective
§501
Performance
available to Developer
Date of DDA, pursuant to
for Inspections
Section 6 of the ENA
Deadline
8.
Developer approves the
Prior to the Effective
§501
Performance
Site Condition
Date of DDA and prior to
Closing
Deadline
9.
Developer submits
Within 60 days of the
§702.2
Performance
Project Discretionary
Effective Date of DDA
Entitlement Applications
and expiration of all
Guideline
applicable appeal/statute
of limitations periods
10
City Council completes
Within 180 days from
§§702.2,
Performance
CEQA and approves or
submittal of Project
disapproves
Discretionary
702.3
Guideline
Discretionary
Entitlements (Event No.
Entitlements
9)
11
Escrow Agent gives
Within 30 business days
§407.2
Performance
notice of fees, charges,
prior to Closing
and costs to close
Deadline
escrow
SEPP\54334\2127334.17 Page 1 of 5 ATTACHMENT C
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Agreement
Performance
Item To Be Performed
Time For Performance
Reference
Guideline or
Deadline
12
Deposits into Escrow by
City:
a) Executed Deed
On or before 1:00 p.m.
§§ 406.2,
Performance
on the business day
preceding the Closing
407.3
Deadline
Date
b) Payment of City's Share
On or before 1:00 p.m.
§§ 406.2,
Performance
of Escrow Costs
on the business day
preceding the Closing
407.3
Deadline
Date
c) Estoppel Certificate
On or before 1:00 p.m.
§§ 406.2,
Performance
on the business day
preceding the Closing
407.3
Deadline
Date
d) Taxpayer ID Certificate
Prior to Closing Date
§407.3
Performance
Deadline
e) FIRPTA Certificate
Within 15 days after
§407.3
Performance
opening
Deadline
13
Deposits into Escrow by
Developer:
a) The remaining amount
On or before 1:00 p.m.
§§ 406.1,
Performance
of the Purchase Price
on the business day
due pursuant to Section
preceding the Closing
407.3
Deadline
§403.
Date
b) Lender's Deed of Trust
On or before 1:00 p.m.
§§ 406.2,
Performance
or Security, if applicable
on business day
preceding the Closing
407.3
Deadline
Date
c) Estoppel Certificate
On or before 1:00 p.m.
§§ 406.2,
Performance
on the business day
preceding the Closing
407.3
Deadline
Date
d) Payment of Developer's
On or before 1:00 p.m.
§§ 406.2,
Performance
Share of Escrow Costs
on the business day
preceding the Closing
407.3
Deadline
Date
e) Taxpayer ID Certificate
Prior to Closing Date
§§ 406.2,
Performance
407.3
Deadline
SEPP\54334\2127334.17 Page 2 of 5 ATTACHMENT C
M I ,
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Agreement
Performance
Item To Be Performed
Time For Performance
Reference
Guideline or
Deadline
14
Close of Escrow;
Upon satisfaction of
§407.1
Performance
recordation and delivery
City's and Developer's
of documents
Closing Conditions, but
Deadline
not later than 12/31/20,
unless extended
pursuant to subsection
(b) below and/or any
Excused Delay(s)
15
Parties execute
Subject to Developer's
§703.1,
Performance
Purchase and Sale
sole and absolute
Agreement with Hotel
discretion of proceeding
Atch. B
Guideline
with the Phase in
question, within 30 days
of Approval of
Discretionary
Entitlements
16
Developer delivers to
Before Developer may
§707.1
Performance
City certificates
Commence Construction
evidencing insurance
Deadline
17
Developer submits
Subject to Developer's
§§702.2;
Performance
building
decision to Commence
permits/improvement
Construction of a
703.1
Guideline
plans
particular Project Phase,
in its sole and absolute
discretion, then:
a. Residential
Component: Within 180
days of Close of Escrow
b. Hotel Component:
Within 150 days from
Close of Escrow.
c. Cinema Component:
Within 120 days from
Close of Escrow
d. Retail
Component: Within 120
days from Close of
Escrow
18
Developer revises and
Within 30 days after
§702.2
Performance
resubmits plans,
disapproval
drawings, and
Guideline
specifications, if
necessary
19
City staff approves or
Within 30 days after
§702.2;
Performance
disapproves final
submittal of revised
drawings
plans, drawings and
Guideline
specifications, if
necessary
SEPP\54334\2127334.17 Page 3 of 5 ATTACHMENT C
441
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Agreement
Performance
Item To Be Performed
Time For Performance
Reference
Guideline or
Deadline
20
Developer pulls
Subject to Developer's
§§702.2;
Performance
necessary building
decision to Commence
permits
Construction of a
703.1
Guideline
particular Project Phase,
in its sole and absolute
discretion, then:
a. Residential
Component: Within 180
days from Submittal
b. Hotel Component:
Within 180 days from
Submittal
C. Cinema
Component: Within 180
days from Submittal
d. Retail
Component: Within 180
days from Submittal
21
Developer Commences
Subject to Developer's
Performance
Construction of Project
decision to Commence
Construction of a
Guideline
particular Project Phase,
in its sole and absolute
discretion, then:
a. Residential
Component: Within 60
days from Event 20
b. Hotel Component:
Within 60 days from
Event 20
C. Cinema
Component: Within 60
days from Permit
d. Retail Component:
Within 60 days from
Event 20
SEPP\54334\2127334.17 Page 4 of 5 ATTACHMENT C
442
It is understood that the foregoing Schedule of Performance is subject to all of the terms
and conditions set forth in the text of the Agreement, including, without limitation, Section 703 in
the Agreement. The summary of the items of performance in this Schedule of Performance is
not intended to supersede or modify the more complete description in the text; in the event of
any conflict or inconsistency between this Schedule of Performance and the text of the
Agreement, the text shall govern.
The time frames set forth in the Schedule of Performance constitute either a
Performance Guideline or a Performance Deadline, as indicate therein, which may be either
adjusted or amended pursuant to Section 703.2 of the Agreement.
SEPP\54334\2127334.17 Page 5 of 5 ATTACHMENT C
Agreement
Performance
Item To Be Performed
Time For Performance
Reference
Guideline or
Deadline
22
Developer Substantially
Subject to Developer's
§§702.2;
Performance
Completes construction
decision to Commence
of relevant Project
Construction of a
703.1
Guideline
Phase
particular Project Phase,
in its sole and absolute
discretion, then:
Residential Component:
Within 2.5 years from
Commencement of
Construction of
Residential Component
b. Hotel Component:
Within 1 year from
Commencement of
Construction of Hotel
Component
C. Cinema
Component: Within 1
year from
Commencement of
Cinema Component
d. Retail Component:
Within 1 year from
Commencement of Retail
Component
23
City issues Certificate of
Within 30 days of receipt
§714
Performance
Compliance of DDA
of written request by
Obligations for a
Developer, and
Deadline
particular Project Phase
Developer's satisfactory
completion of all
improvements of the
Project or Phase
It is understood that the foregoing Schedule of Performance is subject to all of the terms
and conditions set forth in the text of the Agreement, including, without limitation, Section 703 in
the Agreement. The summary of the items of performance in this Schedule of Performance is
not intended to supersede or modify the more complete description in the text; in the event of
any conflict or inconsistency between this Schedule of Performance and the text of the
Agreement, the text shall govern.
The time frames set forth in the Schedule of Performance constitute either a
Performance Guideline or a Performance Deadline, as indicate therein, which may be either
adjusted or amended pursuant to Section 703.2 of the Agreement.
SEPP\54334\2127334.17 Page 5 of 5 ATTACHMENT C
443
ATTACHMENT D
FORM OF CERTIFICATE OF COMPLIANCE OF DDA OBLIGATIONS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cypress
5275 Orange Avenue
Cypress, CA 90630
Attn: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for recorder's use
FORM OF CERTIFICATE OF COMPLIANCE OF DDA OBLIGATIONS
THIS CERTIFICATE OF COMPLIANCE OF DDA OBLIGATIONS ("Certificate of
Compliance of DDA Obligations') is made by the CITY OF CYPRESS, a California charter
municipality ("City"), in favor of ("Developer"), as of the date set forth below
("Effective Date').
RECITALS
A. City and Developer are parties to that certain Disposition and Development
Agreement dated as of , 2019 ("DDA") concerning (all or a portion ofj
property located at 5095-5275 Katella Avenue, Cypress, California (APNs 241-091-022 through
-026) ("Site"). This Certificate of Compliance of DDA Obligations affects (Insert as applicable:
description of the relevant Project Phase(sj of the Site as more particularly described in
attached Attachment 1 (the "Property"). Capitalized terms used herein without definition shall
have the meaning ascribed to such terms in the DDA.
B. Pursuant to Section 714 of the DDA, City is required to furnish Developer its
Transferee(s), in a form suitable for recordation, a Certificate of Compliance of DDA Obligations
upon Substantial Completion of the relevant Project Phase.
C. City has determined that the relevant Project Phase on the Property is
Substantially Complete as required by the DDA.
NOW, THEREFORE, City hereby certifies as follows:
1. This Certificate of Compliance of DDA Obligations shall constitute City's
conclusive determination that the relevant Project Phase is Substantially Completed on the
Property as required under the DDA.
2. After the Effective Date of this Certificate of Compliance of DDA Obligations, City
shall not have any rights or remedies under the DDA with respect to the relevant Project Phase
on the Property except for (a) the non-discrimination covenants contained in Section 3 of the
Grant Deed (which covenants shall remain in effect and enforceable in accordance with the
terms thereof), and (b) any Developer indemnification obligations that survive termination of the
DDA to the extent these are applicable to the Property.
3. This Certificate of Compliance of DDA Obligations shall not constitute evidence
of compliance with or satisfaction of any obligation of Developer to any Mortgage Holder, or any
insurer of a Mortgage. Any Certificate(s) of Compliance of DDA Obligations shall not constitute
notice of completion as referred to in the California Civil Code Section 8180 et seq.
4. Nothing contained in this instrument shall be deemed or construed to modify any
provisions of the DDA or any other document executed in connection therewith.
SEPP\54334\2127334.17 Page 1 of 3 ATTACHMENT D
IN WITNESS WHEREOF, City has executed and issued this Certificate of Compliance of
DDA Obligations as of the date set forth below.
CITY:
CITY OF CYPRESS, a California charter
municipality
Dated: 20_ By:
Name:
Title:
SEPP\54334\2127334.17 Page 2 of 3
FORM — DO NOT SIGN
ATTACHMENT D
445
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 Contra Costa
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
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 Contra Costa )
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
SEPP\54334\2127334.17 Page 3 of 3 ATTACHMENT D
MEI
RECORDING REQUESTED BY AND
AFTER RECORDING MAIL TO:
c/o Shea Properties
130 Vantis, Ste. 200
Alisio Viejo, CA
92656
Attn: Julie Guizan
MAIL TAX STATEMENTS TO:
Same As Above
the payment of a recording fee
Section 27383
APNs:
ATTACHMENT E
GRANT DEED
GRANT DEED
This document is exempt from
pursuant to Government Code
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, the CITY OF CYPRESS, a California charter city ("Grantor"), hereby grants to
, LLC, a California limited liability company ("Grantee"), that
certain real property located in the City of Cypress, County of Los Angeles, State of California,
and described in Exhibit "A" attached hereto and incorporated herein (the "Site") subject to the
following:
1. Conveyance in Accordance with Disposition and Development Agreement. The
Site is conveyed in accordance with and subject to that certain recorded agreement by and
between City and Grantee entitled "Disposition and Development Agreement" dated as of
, 2019 and recorded with the Los Angeles County Recorder's Office as
(the "DDA"). A copy of the DDA is on file with the City and the County Recorder's Office as a
public record. All terms used herein shall have the same meaning as those used in the DDA.
2. Nondiscrimination. Grantee herein covenants by and for itself, its heirs, executors,
administrators and assigns, and all persons claiming under or through them, that there shall be
no discrimination against or segregation of, any person or group of persons on account of any
basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of
Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease,
Transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall
Grantee or any person claiming under or through him or her, establish or permit any practice or
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees, vendees, or other Transferees in the
premises herein conveyed. The foregoing covenants shall run with the land.
Grantee shall refrain from restricting the rental, sale or lease of the premises herein
conveyed on any of the bases listed above. All such deeds, leases or contracts shall contain or
be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) In deeds: "Grantee herein covenants by and for himself or herself, his or her heirs,
executors, administrators, assigns, and other Transferees and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person or group
of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall Grantee or any person claiming under or through him or her, establish or
permit any practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, vendees or
SEPP\54334\2127334.17 Page 1 of 5 ATTACHMENT G
447
other Transferees in the premises herein conveyed. The foregoing covenants shall run with the
land."
(b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs,
executors, administrators, assigns, and other Transferees and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions: "That there shall be no discrimination against or segregation of any person or group
of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the leasing, subleasing, Transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, vendees, or other Transferees in the premises herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of, any person or
group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, Transfer, use, occupancy, tenure, or enjoyment of the premises
which are the subject of this agreement, nor shall Grantee or any person claiming under or through
him or her, establish or permit any practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, vendees or other Transferees in the premises herein conveyed. The foregoing
covenants shall run with the land."
Grantee certifies and agrees that all persons employed or applying for employment by it,
its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are
and will be treated equally by it without regard to, or because of race, color, religion, ancestry,
national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition
(cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights
Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C.
Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et
seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C.
Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section
12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government
Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and
all other anti -discrimination laws and regulations of the United States and the State of California
as they now exist or may hereafter be amended.
The foregoing covenants as set forth in this Section 2 shall run with the land and remain
in effect in perpetuity.
3. Mortgagee Protection. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or
in any way impair the lien or charge of any Mortgage permitted by this Grant Deed or the DDA;
provided, however, that any subsequent owner of all or a portion of the Site shall be bound by
such remaining covenants, conditions, restrictions, limitations and provisions, whether such
owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.
IN WITNESS WHEREOF, Grantor and Grantee have caused this Grant Deed to be
executed on their behalf by their respective officers hereunto duly authorized as of the date set
forth above.
GRANTOR:
Approved to Form:
By:
Name:
Its:
City Attorney
CITY OF CYPRESS, a California charter city
By:
Name:
Its:
SEPP\54334\2127334.17 Page 2 of 5 ATTACHMENT G
M 2 ;
M
The undersigned Grantee accepts title subject to the covenants hereinabove set forth.
LLC,
a California limited liability company
By: Shea Properties Management Company,
Inc.,
a Delaware corporation
Its: Manager
By:
Name:
Its:
By:
Name:
Its:
SEPP\54334�2127334.17 Page 3 of 5 ATTACHMENT G
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
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
SEPP\54334\2127334.17 Page 4 of 5 ATTACHMENT G
450
EXHIBIT "A" TO GRANT DEED
LEGAL DESCRIPTION OF SITE
SITE DEPICTION AND LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CYPRESS IN
THE COUNTY OF
ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCELS 7, 8, AND 9 OF PARCEL MAP 96-121, IN THE CITY OF CYPRESS, COUNTY OF
ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 298,
PAGE(S) 13 TO 16 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF ORANGE COUNTY, CALIFORNIA.
SAID LAND IS ALSO DESCRIBED AS PARCEL 1 OF THAT CERTAIN LOT LINE
ADJUSTMENT NO. LL -2007-01, DATED AUGUST 16, 2007, IN THE CITY OF CYPRESS,
COUNTY OF ORANGE, STATE OF CALIFORNIA, RECORDED JANUARY 30, 2008 AS
INSTRUMENT NO. 2008000044840 OFFICIAL RECORDS OF SAID COUNTY.
APPURTENANT EASEMENTS TO USE, MAINTAIN, OPERATE, ALTER, REPAIR, REPLACE,
RECONSTRUCT AND INSPECT THE UTILITIES, AS SAID EASEMENT IS SET FORTH IN
THAT CERTAIN RECIPROCAL UTILITIES EASEMENT AGREEMENT RECORDED JULY 31,
1991 AS INSTRUMENT NO. 91-404179 OFFICIAL RECORDS.
PARCEL C:
AN APPURTENANT EASEMENT FOR STORM WATER DRAINAGE, AS SAID EASEMENT IS
SET FORTH IN THAT CERTAIN GRANT OF DRAINAGE EASEMENT RECORDED
SEPTEMBER 11, 1990 AS INSTRUMENT NO. 90-482118 OFFICIAL RECORDS, AS
AMENDED BY THAT CERTAIN AMENDMENT TO DRAINAGE EASEMENT RECORDED
JANUARY 18, 1991, AS INSTRUMENT NO. 91-026004 OFFICIAL RECORDS, AND ALSO AS
AMENDED BY THAT CERTAIN GRANT OF EASEMENTS AND AGREEMENT REGARDING
DRAINAGE EASEMENT RECORDED JUNE 3, 1997 AS INSTRUMENT NO. 19970253674
OFFICIAL RECORDS.
PARCEL D:
A NON-EXCLUSIVE, PERPETUAL EASEMENTS FOR PEDESTRIAN AND VEHICULAR
ACCESS AND FOR INSTALLATION AND MAINTENANCE PURPOSES, AS SAID EASEMENT
IS SET FORTH IN THAT CERTAIN ACCESS AND UTILITY EASEMENT AGREEMENT
RECORDED SEPTEMBER 11, 1990 AS INSTRUMENT NO. 1990-482112 OFFICIAL
RECORDS, AS AMENDED BY THAT CERTAIN AMENDMENT TO ACCESS AND UTILITY
EASEMENT AGREEMENT RECORDED JANUARY 10, 1991 AS INSTRUMENT NO. 91-
025992 OFFICIAL RECORDS, AND AS FURTHER AMENDED BY THAT SECOND
AMENDMENT RECORDED OCTOBER 9, 1997 AS INSTRUMENT NO. 1997-507990
OFFICIAL RECORDS.
APN: 241-091-022 thru 026
SEPP\54334\2127334.17 Page 5 of 5
ATTACHMENT G
451
ATTACHMENT
IMPACT FEE SCHEDULE
For purposes of Sections 247 and 403 of the Agreement, the parties acknowledge and agree
that the Impact Fees in effect on the Effective Date shall be those set forth in the following:
1. Cypress City Council Resolution No. 6182, including any and all attached exhibits
(adopted March 8, 2010).
2. Cypress City Council Ordinance No. 1170, including any and all attached exhibits
(adopted November 27, 2017).
3. Orange County Sanitation District, Ordinance No. OCSD-50, including any and all
attached exhibits (adopted on March 28, 2018).
4. Orange County Fire Authority, Fee Schedule (Planning and Development Services),
effective as of September 29, 2017.
5. Cypress School District Resolution No. 178-17, including any and all attached exhibits
(adopted May 10, 2018).
SEPP\54334\2127334.17 Page 1 of 1 ATTACHMENT F
452
ATTACHMENT G
FORM OF TEMPORARY LICENSE AGREEMENT
FORM OF TEMPORARY LICENSE AND INDEMNIFICATION AGREEMENT
THIS TEMPORARY LICENSE AND INDEMNIFICATION AGREEMENT ("Temporary
License"), dated as of , 20_ ("Effective Date") is made and entered into by and
between CITY OF CYPRESS, a California charter municipality ("City'), and
("Licensee'). Licensee and City are hereinafter collectively referred to as the "parties" and
individually as a "party".
RECITALS
A. SP Acquisition, LLC, a California limited liability company ("Developer') and City
entered into that certain Disposition and Development Agreement, dated October 14,
2019 ("DDA") regarding the conveyance from City to Developer of that certain real
property situated in the City of Cypress, California, commonly described as 5095-5275
Katella Avenue, Cypress, California (Assessor Parcel Numbers ("APNs") 241-091-022
through 026) ("Site") for the purpose of enhancing the Site's use with the Project (as that
term is defined in the DDA).
B. Upon the Closing (as that term is defined in the DDA), Developer will own the Site.
Prior to Closing, pursuant to Section 301(6) of the DDA, City agreed not to enter into any
lease or other agreement(s) or approve any temporary use permit(s) (each, a "TUP')
respecting the use (including, without limitation, for storage purposes), occupancy, or
possession of the Site or any portion(s) thereof without the prior written consent of
Developer; provided, however, that City would have the right to approve temporary
use(s) involving the display and/or sale of seasonal items (e.g., pumpkins, Christmas
trees) or the storage of trailers and/or marshalling of trucks so long as City and the
temporary user execute a temporary license agreement, consistent with the terms and
conditions set forth herein, in connection therewith and City provides Developer ten (10)
days' prior written Notice of same.
C. Licensee has obtained a TUP pursuant to [Insert reference to
approved permit], which City granted on , 20_, to allow for the temporary
occupancy and use of a small portion of the Site for the limited purpose(s) of
[Insert reference to scope of TUP activities] (collectively, "TUP
Activities").
D. The parties hereto desire to enter into this Temporary License to satisfy the
requirements set forth in Section 301(6) of the DDA, and to memorialize the terms and
conditions of Licensee's temporary occupancy and use of the Site, which are consistent
with the conditions imposed on the TUP.
NOW, THEREFORE, for good and valuable consideration, Licensee and City agree as
follows:
1. Grant of Temporary License. Licensee shall have the right to occupy and use a
small portion of the Site pursuant to Temporary Use Permit [Insert reference to
approved TUP] ("TUP"), in the location described in and shown on attached Exhibit A ("License
Area"), subject to the terms and conditions set forth herein and the TUP. Licensee shall occupy
and use the License Area during the Term (as that term is defined below) of this Temporary
License in accordance with the terms and conditions of the TUP, for the limited purpose(s) of
the TUP Activities.
2. Conditions on TUP. City and Licensee acknowledge that, as a condition of
approval imposed on the TUP, Licensee shall not locate trailers, trucks, materials, equipment
and/or otherwise operate on the Site in a way that would impair Developer's Inspections (as that
term is defined in the DDA) and/or other due diligence conducted as provided for in the DDA.
City also has imposed on the TUP the following additional conditions: (a) it requires the
Licensee to comply with all applicable laws while on site; (b) it requires the Licensee to ensure
that no dangerous or hazardous conditions occur on the Site as a result of the Licensee's
occupancy and use of the License Area pursuant to the TUP and this Temporary License; (c) it
requires the Licensee to indemnify City and/or Developer (as detailed in Section 9 below)
against any and all Claim(s) (as that term is defined below) against City and/or Developer (as
the case may be) that result from or are in connection with Licensee's entry, presence and/or
TUP Activities on the Site that occur during the Term; (d) it requires that Licensee does not
SEPP\54334\2127334.17 Page 1 of 5 ATTACHMENT G
453
impair the transaction contemplated between Developer and City under the DDA; (e) it requires
that Licensee must keep the Site free and clear of all materialmen's liens, lis pendens and other
liens arising out of Licensee's entry and TUP Activities; and (f) it requires that Licensee name
City and Developer (and/or any additional affiliated entities requested by Developer) as
additional insured pursuant to Section 10 below.
3. Securing of Site. During the Term of the DDA, Licensee acknowledges and
agrees that City has granted to Developer the right, at Developer's cost and expense, to secure
the Site with a fence and locked gate for the purpose of ensuring no third -party entry (except for
Licensee pursuant to the TUP and this Temporary License). Said securing of the Site is to be in
accordance with a City -approved fencing plan, which includes a requirement that Licensee have
access to the License Area during the Term of this Temporary License.
4. Condition of License Area. In conducting its activities within the License Area
under the TUP, Licensee shall: (a) not permanently damage any part of the Site or any personal
property owned or held by City or any third party (including, without limitation, Developer) that is
located on the Site, (b) promptly repair any damage to the Site resulting directly from the entry
by Licensee or their agents, consultants, employees, contractors and representatives or from
any TUP Activities; (c) comply with all applicable laws; and (d) promptly return the Site to
substantially its original condition as soon as reasonably practicable upon completion of the
TUP Activities. Licensee further acknowledges and agrees that it shall be solely responsible for
all costs associated with its entry onto the Site and any and all TUP Activities that it conducts
on-site. Consistent with the obligations set forth in the foregoing, in the event any damage to the
Site or to Developer's personal property located thereon is caused by Licensee, then Licensee
shall be solely responsible for repairing any such damage and promptly returning the Site to
substantially its original condition as soon as reasonably practicable and Developer shall have
no obligations to City in this regard.
5. Term. This Temporary License shall commence on the Effective Date and shall
continue until such time as the TUP terminates pursuant to the terms thereof ("Term'), at which
time this Temporary License shall concurrently and automatically terminate, subject to the
indemnification obligations in Section 9 that shall survive termination of this License Agreement.
6. Compliance with Law. Licensee shall perform the TUP Activities in compliance
with all applicable laws including, without limitation, obtaining any and all permits required by
any applicable governmental authority having jurisdiction including, without limitation, City.
Licensee shall not allow any dangerous or hazardous conditions to occur on the Site while
conducting its TUP Activities.
7. Notice Prior to Entry. Licensee shall provide City with written notice (via email
addressed to City's representative, City Manager, or such other City representative(s) as City
may identify from time to time) at least twenty four (24) hours in advance of Licensee entering
the License Area or schedule of the dates and times of its proposed use of the License Area.
Said notice shall include the date and time, the anticipated purpose of intended entry, the
names and affiliations of the persons entering the License Area, a copy of the insurance
certificate specified in Section 10 below and copies of the TUP and any other required
governmental approvals, entitlements and/or permits in accordance with Section 3 above (if and
to the extent any are required).
8. Mechanic's Liens. Licensee shall keep the Site free and clear of all
materialmen's liens, lis pendens and other liens arising out of Licensee's entry and the TUP
Activities.
9. Indemnity. Licensee shall indemnify, defend, and hold City and its respective
elected and appointed officials, officers, attorneys, employees and agents (collectively, "City
Indemnitees") and/or Developer (as the case may be) harmless from any and all claims, actions,
suits and other liability (collectively, "Claims") asserted against City Indemnitees and/or
Developer (as the case may be) resulting from or in connection with Licensee's entry and/or
TUP Activities that occur pursuant to this Temporary License. This indemnity shall survive the
expiration or termination of this Temporary License as well as the TUP. In the event that any
Claim should be filed against any of the City Indemnitees and/or Developer (as the case may
be) that would require indemnification by Licensee hereunder, City and/or Developer (as the
case may be) shall notify Licensee of such Claim in a reasonably timely manner to permit
Licensee the opportunity to provide adequate representation to the City Indemnitees and/or
Developer (as the case may be) with respect to any such Claim.
10. Insurance. During the Term of this Temporary License, Licensee shall maintain
in full force, at its own expense, insurance meeting City's requirements set forth in the TUP.
SEPP\54334\2127334.17 Page 2 of 5 ATTACHMENT G
Licensee shall deliver to City a certificate of insurance evidencing the required insurance.
Licensee shall not enter into the License Area, as contemplated by this Temporary License, until
Licensee has provided City and Developer with certificates of insurance evidencing the required
insurance coverages and said certificates of insurance are approved by City. City reserves the
right to inspect complete, certified copies of any endorsements to all required insurance policies
at any time. Any failure to comply with the reporting or other provisions of the policies including
breaches or warranties shall not affect coverage provided to City or Developer. Licensee shall
name City and Developer (and/or any additional affiliated entities requested by Developer) as
additional insured pursuant to Licensee's obligations set forth in this Section 10.
It. Notices. Any notices, demands or communications under this Temporary
License between the parties shall be in writing, and may be given either by (i) personal service,
(ii) overnight delivery, or (iii) mailing via United States mail, certified mail, postage prepaid,
return receipt requested ("US Maif'), addressed to each party, as well as Developer, as set forth
on the signature page of this Temporary License or such other address as may be furnished in
writing by a party and/or Developer, and such notice or communication shall, if properly
addressed, be deemed to have been given as of the date so delivered, or three (3) business
days after deposit into the U.S. Mail.
12. Severability. If any term of this Temporary License is held by a court of
competent jurisdiction to be invalid or unenforceable, then this Temporary License, including all
of the remaining terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.
13. Governing Law. This Temporary License shall be construed and enforced in
accordance with the laws of the State of California. If any legal action is necessary to enforce
the terms and conditions of this Temporary License, the parties agree that a court of competent
jurisdiction in Orange County shall be the sole venue and jurisdiction for the bringing of such
action.
14. Legal Fees and Costs. In the event of any litigation or other legal proceeding
including, without limitation, arbitration or mediation, which is between the parties to enforce
provision(s) of this Temporary License, the prevailing party shall be entitled to recover, in
addition to any other relief awarded or granted, its reasonable costs and expenses (including
attorney's fees) incurred in the proceeding.
15. Third Party Beneficiary. The parties acknowledge and agree that Developer
shall be treated as a third party beneficiary under this Temporary License, and shall have the
right to enforce its rights set forth herein pursuant to all available remedies under law and
equity.
16. Final Agreement. This Temporary License terminates and supersedes all prior
understandings or agreements on the subject matter hereof as between the parties.
17. Construction. In determining the meaning of, or resolving any ambiguity with
respect to, any word, phrase or provision of this Temporary License, no uncertainty or ambiguity
shall be construed or resolved against a party under any rule of construction, including the party
primarily responsible for the drafting and preparation of this Temporary License. Headings used
in this Temporary License are provided for convenience only and shall not be used to construe
meaning or intent.
18. Qualification; Authority. Each party to this Temporary License represents and
warrants to the other that (i) such party is duly organized and existing; (ii) the person or persons
executing and delivering this Temporary License on such party's behalf are duly authorized to
do so; (iii) by executing this Temporary License, such party is formally bound to the provisions
of this Temporary License; and (iv) entering into this Temporary License does not violate any
provision of any other agreement to which said party is bound.
19. Modifications in Writing. Any modification or amendment of any provision of
this Temporary License must be in writing and bear the signature of the duly authorized
representatives of both parties, and the parties shall obtain Developer's consent thereto if and to
the extent any such modification affects Developer's rights hereunder.
20. No Waiver. The failure of either party to enforce any term, covenant, or condition
of this Temporary License on the date it is to be performed shall not be construed as a waiver of
that party's right to enforce this, or any other, term, covenant, or condition of this Temporary
License at any later date or as a waiver of any term, covenant, or condition of this Temporary
License.
SEPP\5433412127334.17 Page 3 of 5 ATTACHMENT G
455
21. Counterparts. This Temporary License may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall be deemed but
one and the same instrument, and a facsimile copy of such execution shall be deemed an
original.
Signatures on next page
SEPP\54334\2127334.17 Page 4 of 5 ATTACHMENT G
456
IN WITNESS WHEREOF, the parties hereto have caused this Temporary License to be
executed the dates hereinafter respectively set forth.
CITY LICENSEE
CITY OF CYPRESS,
a charter city and municipal corporation
By:
Peter Grant
City Manager
By:
City Attorney
Its:
Date: .2019 Date: .2019
Addresses for Notice: Addresses for Notice:
5275 Orange Avenue
Cypress, CA 90630
Attn: Peter Grant, City Manager
With Copy to: With Copy to:
Aleshire & Wynder
18881 Von Karmen Avenue, Suite 1700
Irvine, CA 92612
Attn: Anthony Taylor, City Attorney
Developer Consent and Contact Information for Notice Purposes
"DEVELOPER"
SP ACQUISITION, LLC
a California limited liability company
By: Shea Properties Management Company,
Inc., a Delaware corporation
By:
Name:
Title:
SP Acquisition, LLC
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attn: Brad Deck
With copies to:
W1
Shea Properties
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attention: Julie Guizan, General Counsel
Miller Starr Regalia
1331 North California Blvd., Fifth Floor
Walnut Creek, CA 94596
Attention: Hans Lapping
SEPP\54334\2127334.17 Page 5 of 5 ATTACHMENT G
457
ATTACHMENT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
RECORDING REQUEST BY AND
AFTER RECORDING RETURN TO:
(Space Above for Recorder's Use)
THIS PARTIAL ASSIGNMENT AND ASSUMPTION
DEVELOPMENT AGREEMENT ("Assignment Agreement") is
20_ by and between
("Assignor"), and
("Assignee'), with reference to the following facts:
OF DISPOSITION AND
made as of the [_] day of
a
A. SP Acquisition, LLC, a California limited liability company ("SP") and the City
entered into that certain Disposition and Development Agreement, recorded in the Official
Records of Los Angeles County, State of California (the "Official Records") on
, 2019 as Instrument No. (the "DDA").
B. SP assigned [all or a portion of] its rights and obligations under and with respect
to the DDA to pursuant to an Assignment and
Assumption of Disposition and Development Agreement dated and recorded in the
Official Records on as Instrument No.
C. Concurrently herewith, Assignee acquired fee title to the Property as more
particularly described on Exhibit A attached hereto ("Assigned Parcel(s)") from Assignor on
the date first written above (the "Acquisition Date").
D. Assignor desires to assign to Assignee those interests, rights, obligations,
conditions and requirements under the DDA to the extent related to the development of the
Property (collectively, "Benefits and Burdens"), and Assignee desires to accept the
assignment of such Benefits and Burdens, subject to the terms, conditions and restrictions set
forth in this Assignment Agreement.
E. Assignor [has requested approval from the City of the assignment to Assignee
described herein pursuant to Section 303(3) of the DDA // has the right to make the assignment
to Assignee described herein as a "Permitted Transfer" under Section 303(2) of the DDA.]
F. Assignor represents that neither it nor City is in violation or breach of any
provision of the DDA and that the DDA remains valid and in full force and effect as of the
Effective Date.
G. [City has consented to the assignment described herein pursuant to Section
303(3) of the DDA, as documented in City's execution of same attached hereto // Pursuant to
Section 303(2) of the DDA, the assignment contemplated herein is a Permitted Transfer
because I
NOW THEREFORE, in consideration of the foregoing facts and the mutual covenants and
conditions herein below set forth, it is agreed:
1. For good and valuable consideration, the receipt of which
is hereby acknowledged, and in accordance with Section 303 of the DDA,
Assignor hereby assigns, transfers and conveys to Assignee the Benefits
and Burdens under the DDA with respect to the Assigned Parcels and
delegates to Assignee all of the Benefits and Burdens under the DDA that
accrue after the Acquisition Date of this Assignment under the DDA with
respect to the Assigned Parcels. Upon the execution of this Assignment
Agreement [and written consent of the City// NOTE: include the foregoing
bracketed language only if City consent is required], Assignee shall
SEPP\5433412127334.17 Page 1 of 7 ATTACHMENT H
Assignee:
become substituted for Assignor as the "Developer" under the DDA with
respect to the Assigned Parcels. Assignee acknowledges that Assignor or
a predecessor -in -interest has previously made one or more partial
assignments of the DDA to a party or parties that acquired other property
subject to the DDA, and that this Assignment assigns only the Benefits
and Burdens with respect to the Assigned Parcels.
2. Notwithstanding any other provision of this Agreement,
Assignee hereby assumes and agrees to perform all of the Benefits and
Burdens under the DDA with respect to the Assigned Parcels.
3. As of the Effective Date, Assignor hereby relinquishes all
Benefits hereby assigned to Assignee under this Assignment, and all
Burdens of Assignor hereby assigned under this Assignment shall be
terminated as to, and shall have no more force or effect with respect to,
Assignor.
4. As of the Effective Date, any default or breach by Assignee
under the DDA following the Effective Date with respect to the Assigned
Parcel or the Benefits and Burdens ("Assignee Breach") shall not
constitute a breach or default by Assignor under the DDA and, provided
Assignor is not in default under the terms of the DDA shall not result in (a)
any remedies imposed against Assignor, including without limitation any
remedies authorized pursuant to Section 800 of the DDA, or (b)
modification or termination of the DDA with respect to any other property
subject to the DDA retained by Assignor after the conveyance of the
Assigned Parcel (the "Assignor Property"). Similarly, any default or
breach by Assignor under the DDA prior to or after the Effective Date
("Assignor Breach"), shall not constitute a breach or default by Assignee
under the DDA and, provided Assignee is not in default under the terms
of the DDA shall not result in (x) any remedies imposed against Assignee,
including without limitation any remedies authorized pursuant to Section
800 of the DDA, nor a (y) modification or termination of the DDA with
respect to the Assigned Parcel.
5. (City Consent) City is Third -Party Beneficiary. [The
executed City Consent below is for the limited purposes of indicating
consent to the assignment and assumption set forth in this Assignment
Agreement if and to the extent said consent is required by DDA, and for
clarifying that there is privity of contract between City and Assignee with
respect to the DDA in such circumstances.] [NOTE: Include the
foregoing bracketed language only if the City's consent to the assignment
is required.] City is an intended third -party beneficiary of this Assignment
Agreement, and has the right, but not the obligation, to enforce the
provisions hereof.
6. For purposes of Section 901 of the DDA, the address of
the owner of the Assigned Parcels is:
7. This Agreement shall be recorded in the Office of the Los
Angeles County Recorder.
8. If there is any dispute, action, lawsuit or proceeding
relating to this Assignment Agreement, or any default hereunder, whether
or not any action, lawsuit or proceeding is commenced, the non -prevailing
party shall reimburse the prevailing party for its attorneys' fees, expert
witness fees and all fees, costs and expenses incurred in connection with
such dispute, action, lawsuit or proceeding, including, without limitation,
any post -judgment fees, costs or expenses incurred on any appeal, in
collection of any judgment or in appearing in any bankruptcy proceeding.
9. Each party hereto covenants and agrees to perform all
acts to prepare, execute and deliver such written agreements,
documents, instruments, statements, filings and notices as may be
SEPP\54334\2127334.17 Page 2 of 7
ATTACHMENT H
459
reasonably necessary to carry out the terms and provisions of this
Assignment Agreement.
10. Each party to this Assignment Agreement represents and
warrants to the other that the persons executing this Assignment
Agreement on its behalf has the right, power, legal capacity and authority
to enter into and to execute this Agreement on behalf of the respective
legal entities of the Assignor and the Assignee.
11. This Assignment Agreement may only be amended or
modified by a written instrument signed by both parties hereto.
12. This Assignment Agreement shall be binding upon and
inure to the benefit of the heirs, successors and assigns of the respective
parties hereto. Assignee shall have the right to reassign these Benefits
and Burdens only in connection with a conveyance of the fee title to the
Property and in accordance with the DDA's terms and conditions.
13. This Assignment Agreement sets forth the entire
understanding between the parties hereto with respect to all matters
discussed herein and supersedes any and all prior agreements whether
written or oral regarding such matters. Should any term, condition,
covenant or provision of this Assignment Agreement be held to be invalid
or unenforceable, the remainder of this Assignment Agreement shall
continue in full force and effect.
14. This Assignment Agreement may be executed in several
counterparts and, when so executed, shall constitute one agreement
binding on both parties hereto, notwithstanding that both parties are not
signatory to the original and the same counterpart.
15. All capitalized terms used herein but not otherwise defined
herein shall have the meanings ascribed to such terms as set forth in the
DDA.
(SIGNATURE PAGES TO FOLLOW]
SEPP\54334\2127334.17 Page 3 of 7 ATTACHMENT H
M
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
Agreement as of the date first set forth above.
"Assignor"
"Assignee"
LLC,
a California limited liability company
By: Shea Properties Management Company, Inc.,
a California limited liability company,
its Manager
By:
Name:
Title:
By:
Name:
Title:
a
FORM — DO NOT SIGN
By: FORM — DO NOT SIGN
a its
By:
Name:
Title:
By:
Name:
Title:
SEPP\54334\2127334.17 Page 4 of 7
ATTACHMENT H
461
CITY OF CYPRESS CONSENT
(NOTE: THIS SIGNATURE TO BE INCLUDED ONLY IF CITY CONSENT IS REQUIRED
UNDER DDA]
The City hereby consents to the covenants, terms and conditions of the foregoing Assignment
and Assumption of Deposition and Development Agreement. In accordance with Section 303 of
the Development Agreement, City hereby releases Assignor from the Benefits and Burdens with
respect to the Assigned Parcels.
City:
Approved to Form:
By:
Name:
Its:
Date:
By:
Name:
Its:
FORM — DO NOT SIGN
City Attorney
SEPP\5433412127334.17 Page 5 of 7 ATTACHMENT H
SO%
EXHIBIT A TO PARTIAL ASSIGNMENT AND ASSUMPTION OF DISPOSITION AND
DEVELOPMENT AGREEMENT
LEGAL DESCRIPTION OF ASSIGNED PARCELS
[Attach Legal Description]
SEPP\54334\2127334.17 Page 6 of 7 ATTACHMENT H
463
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
SEPP\54334\2127334.17 Page 7 of 7 ATTACHMENT H
ME
20
c/o Shea Properties LLC
130 Vantis, Suite 200
Aliso Viejo, CA 92656
Attn: Julie Guizan
Attn:
ATTACHMENT
FORM OF ESTOPPEL CERTIFICATE
LLC ("Owner")
LLC ("Purchaser' "Lessee"))
RE: 5095-5275 Katella Avenue, Cypress, California (APNs 241-091-022 through -026) (the
"Pronert✓'): Estooael Certificate
Ladies and Gentlemen
Reference is made to that certain Disposition and Development Agreement dated
2019 and recorded as Instrument No.
of the Official Records of Los Angeles County, California (as amended, the
"DDA") attached hereto as Exhibit A, by and between the undersigned (the "City") and Owner
for the disposition and development of the Site. City understands that [Purchaser/Lessee] may
be [purchasing/leasing] all or a portion of the Site from Owner, and [Purchaser/Lessee] is relying
upon this Estoppel Certificate (this "Certificate"), as provided for in Section 718 of the DDA, in
connection with such transaction. All capitalized terms used herein have the meaning set forth
in the DDA unless otherwise expressly indicated.
With such understanding and as of the date of this Estoppel Certificate, City hereby represents,
warrants and agrees, on behalf of itself and its successors and assigns, for the benefit of
Owner; [Purchaser/Lessee]; their affiliates; their current, potential and future members, partners,
shareholders, lenders, and investors; and each of their respective transferees, successors and
assigns, as follows:
1. A true, correct and complete copy of the DDA is attached hereto as Exhibit A. The DDA
represents the entire agreement between the parties as to the Site, and there are no side
agreements, modifications, amendments, or supplements with respect thereto, except as set
forth in Exhibit A.
2. The DDA is in full force and effect and is hereby ratified and reaffirmed by City.
3. There is no default by Owner under the DDA and no event has occurred that, with the
passage of time or the giving of notice, or both, would constitute a default by Owner under the
DDA. The undersigned has not cured any default by Owner under the DDA as to which it
claims any right of reimbursement and/or lien under the DDA. City has no other claims against
Owner with respect to the Site or the DDA, and City has not disputes with Owner with respect to
the Site and/or the DDA.
4. [ 1 Project Phase(s) have been Substantially Completed, or if not Substantially
Completed, following is a description of the nature and extent of any additional work required to
achieve Substantial Completion.
5. The individual executing this Certificate on City's behalf hereby represents and warrants
that he or she is duly authorized to so execute this Certificate on behalf of City.
SEPP\54334\2127334.17 Page 1 of 3 ATTACHMENT I
465
Very truly yours,
CITY OF CYPRESS, a California charter city
By:
Name
Its:
Attest:
Name:
Its: City Clerk
Approved as to Form:
By:
Name:
Its: City Attorney
SEPP\54334\2127334.17 Page 2 of 3 ATTACHMENT i
'm
Exhibit A to Estoppel Certificate
Disposition and Development Agreement
[See Attached]
SEPP\54334\2127334.17 Page 3 of 3
ATTACHMENT