Resolution Number 20-12-07-03RESOLUTION NO. 20-12-07-03
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO APPROVING A 2020 AGREEMENT AFFECTING REAL
PROPERTY (LOWER ROSAN PROPERTY) BY AND BETWEEN THE
CITY OF SAN JUAN CAPISTRANO AND GANAHL LUMBER COMPANY
WHEREAS, pursuant to Health and Safety Code Section 34173(d), the City of San
Juan Capistrano ("City") elected to serve as the successor agency ("Successor Agency")
to the former San Juan Capistrano Redevelopment Agency ("Agency"), following
dissolution of the Redevelopment Agency; and
WHEREAS, the Successor Agency owned that certain real property generally
known as Lower Rosan property in San Juan Capistrano, California (Assessor Parcel
Numbers: 121-253-13; 121-253-15; 121-240-39; 121-240-73; 121-240-76) ("Property");
and
WHEREAS, pursuant to the Long Range Property Management Plan approved by
the Successor Agency, the Oversight Board, and the Department of Finance, the Property
was transferred to the City for future development; and
WHEREAS, the City and Ganahl Lumber Company ("Developer") have entered
into that certain Purchase and Sale Agreement ("PSA") for the disposition of the Property;
and
WHEREAS, as a condition precedent to the close of escrow under the PSA,
Developer is required to enter into an agreement with the City for the development of the
Property subject to certain terms and conditions and, as such, the City and Developer
have negotiated an Agreement Affecting Real Property (Lower Rosan) ("Agreement"), a
copy of which is attached hereto as Exhibit "A" and incorporated herein by this reference.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
Section 2. CEQA Compliance. The Final Environmental Impact Report (EIR),
State Clearinghouse Number 2019050015, for the Ganahl Lumber Project was certified
by the City Council on June 2, 2020, prior to the City Council's consideration of the
Agreement Affecting Real Property. The certified EIR determined that the project,
including the Agreement Affecting Real Property, will have a significant effect on the
environment, mitigation measures and monitoring plan included, and a Statement of
Overriding Considerations and Findings of Fact were made pursuant to the provisions of
California Environmental Quality Act (CEQA). In compliance with Section 21152 of the
Public Resource Code, a Notice of Determination (NOD) was filed. Because the
environmental impacts of the Agreement Affecting Real Property have previously been
analyzed by the EIR, no further environmental review is necessary.
12/7/2020
Section 3. Approval of Agreement. The City hereby approves the
Agreement, in substantially the form attached to this Resolution as Exhibit "A."
Section 4. Implementation. The City Manager or his or her designee is
hereby authorized and directed to execute any and all documents, and take any and all
action necessary to carry out the purposes of this Resolution in compliance with
applicable law, including, authorizing non -substantive changes to the Agreement and
executing the Agreement.
Section 5. Severability. If any provision of this Resolution or the application
of any such provision to any person or circumstance is held invalid, such invalidity shall
not affect other provisions or applications of this Resolution that can be given effect
without the invalid provision or application, and to this end the provisions of this
Resolution are severable. The City declares that it would have adopted this Resolution
irrespective of the invalidity of any particular portion of this Resolution.
Section 6. Certification. The City Clerk shall certify to the adoption of this
Resolution.
Section 7. Effective Date. This Resolution shall become effective immediately
upon its adoption.
PASSED AND ADOPTED THIS 7th day of December 2020.
r
JOHN YAYLOR, MAYOR
r
ATTES :
MARIA R! , CITY CL
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF SAN JUAN CAPISTRANO )
I, Maria Morris, appointed City Clerk of the City of San Juan Capistrano, do hereby certify
that the foregoing Resolution No. 20-12-07-03 was duly adopted by the
City Council of the City of San Juan Capistrano at a Regular meeting thereof, held the 7th
day of,,December 2020, by the following vote:
AYES:O NCIL MEMBERS: Hart, Bourne, Farias, Reeve and Mayor Taylor
NOES: 110 NCIL MEMBERS: None
ABSEN a CIL MEMBERS: None
RI,S,
2 12/7/2020
EXHIBIT A
AGREEMENT AFFECTING REAL PROPERTY
(Lower Rosan)
[Attached behind this cover page]
12/7/2020
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
by and between the
THE CITY OF SAN JUAN CAPISTRANO ,
a public body, corporate and politic
and
GANAHL LUMBER COMPANY,
a California corporation
[Dated as of December 7, 2020, for reference purposes only]
EXHIBIT A
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber)
This AGREEMENT AFFECTING REAL PROPERTY (Ganahl Lumber Company)
("Agreement") is dated as of December 7, 2020, for reference purposes only, and is entered into
by and between the CITY OF SAN JUAN CAPISTRANO, a public body, corporate and politic
("City"), and Ganahl Lumber Company, a California corporation ("Developer"). City and
Developer enter into this Agreement with reference to the following recitals of fact (each, a
"Recital"):
RECITALS
A. The City of San Juan Capistrano Redevelopment Agency ("RDA") purchased
approximately 16.4 acres of that certain real property generally located on the north side of
Stonehill Drive (APNs 121-240-39, 73, 76; 121-253-13,15) ("Property"), as more particularly
defined in this Agreement.
B. Assembly Bill 1X 26, enacted as part of the 2011-2012 State of California budget
bill, and as modified by the Supreme Court of the State of California in the matter of California
Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. S 194861 dissolved and set
out procedures for the wind -down of all redevelopment agencies throughout the State effective
February 1, 2012, and in June 2012, the California Legislature adopted Assembly Bill 1484
(Assembly Bill 1X 26 and Assembly Bill 1484 are collectively referred to herein as the
"Dissolution Act") further modifying some of the procedures set forth in Assembly Bill 1X 26,
and adding certain other procedures and requirements for the dissolution and wind -down of
redevelopment agencies.
C. The Successor Agency to the San Juan Capistrano Community Redevelopment
Agency ("Agency") is the successor entity to the RDA and, pursuant to the Dissolution Act, upon
the RDA's dissolution, the Property automatically transferred to the Agency.
D. Pursuant to Health and Safety Code section 34177(e), the Agency is responsible for
disposing of the assets and properties of the former RDA, as directed by the Oversight Board to
the Agency, expeditiously and in a manner aimed at maximizing value.
E. Pursuant to Health and Safety Code section 34191.5, the Long Range Property
Management Plan and Amended Long Range Property Management Plan identified the Lower
Rosan Ranch (Site 9) to be conveyed to the City for development.
F. City and Developer entered into that certain Purchase and Sale Agreement dated
December 7, 2020 ("Purchase and Sale Agreement") for the sale of the Property to Developer.
To ensure the Property is disposed expeditiously and in a manner aimed at maximizing value, a
condition precedent to the close of escrow is that City and Developer enter into the "Project." All
initially capitalized words used and not defined herein shall have the meaning set forth in the
Purchase and Sale Agreement.
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-� NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE
PROMISES AND COVENANTS OF CITY AND DEVELOPER SET FORTH IN THIS
AGREEMENT, CITY AND DEVELOPER AGREE, AS FOLLOWS:
TERMS AND CONDITIONS
1. DEFINITIONS
1.1 Definitions. The following words, terms and phrases are used in this Agreement
with the following meanings, unless the particular context or usage of a word, term or phrase
requires another interpretation:
1.1.1 Actual Knowledge. With respect to Developer, whenever reference is
made to Developer's "Actual Knowledge" or words to that effect relating to the knowledge
of Developer, that shall be deemed to refer exclusively to matters within the current actual
(as opposed to constructive) knowledge of Patrick Ganahl ("Developer"s Representative").
No duty of inquiry or investigation on the part of Developer or Developer's Representative
will be required or implied in instances when Developer's knowledge is referenced herein,
and in no event shall Developer's Representative have any personal liability for
representations or warranties or covenants of Developer that involve Developer's
knowledge.
1. 1.2 Affiliate. Any other Person, directly or indirectly, Controlling or
Controlled by or under common Control with the specified Person.
1. 1.3 Agency. The Successor Agency to the Redevelopment Agency for the City
of San Juan Capistrano, a public body, corporate and politic.
1. 1.4 Agreement. This Agreement Affecting Real Property (Ganahl Lumber) by
and between City and Developer, including all of the exhibits attached to this Agreement.
1.1.5 Application. Any agreement, application, certificate, document or
submission (or amendment of any of the foregoing): (a) necessary or desirable for the
Project, including any application for any building permit, Certificate of Completion,
utility service or hookup, easement, covenant, condition, restriction, subdivision or such
other instrument as Developer may reasonably request for the Project; or (b) to enable
Developer to seek any Approval or to use and operate the Project in accordance with this
Agreement.
1.1.6 Approval. Any license, permit, approval, consent, certificate, ruling,
variance, authorization, conditional use permit, or amendment to any of the foregoing, as
shall be necessary or desirable under any Law to commence, perform or complete the
construction of the Project on the Property, including any associated CEQA Document.
1.1.7 Automobile Liability Insurance. Insurance coverage against claims of
personal injury (including bodily injury and death) and property damage covering all
owned, hired and non -owned vehicles used by Developer regarding the Project, with
minimum limits for bodily injury and property damage of One Million Dollars
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($1,000,000). Such insurance shall be provided by a business or commercial vehicle policy
and may be provided through a combination of primary and excess or umbrella policies,
all of which shall be subject to pre -approval by City, which approval shall not be
unreasonably withheld.
1.1.8 Bankruptcy Proceeding. Any proceeding, whether voluntary or
involuntary, under Title 11, United States Code, and any other or successor State or Federal
statute relating to assignment for the benefit of creditors, appointment of a receiver or
trustee, bankruptcy, composition, insolvency, moratorium, reorganization, or similar
matters.
1.1.9 Builder's Risk Insurance. Builder's risk or course of construction
insurance covering all risks of loss, less policy exclusions, on a completed value (non -
reporting) basis, in an amount sufficient to prevent co-insurance, but in any event not less
than one hundred percent (100%) of the completed value of the on Site B, including cost
of debris removal, but excluding foundation and excavations. Such insurance shall also:
(a) grant permission to occupy; and (b) cover, for replacement cost, all materials on or
about any offsite storage location intended for use in, or in connection with, the Property.
1.1.10 Business Day. Any weekday on which City is open to conduct regular
business functions with City personnel.
1.1.11 CEQA. The California Environmental Quality Act, Public Resources Code
Section 21000 et seq.
1.1.12 CEQA Documents. Any exemption determination, any Negative
Declaration (mitigated or otherwise) or any Environmental Impact Report (including any
addendum or amendment to, or subsequent or supplemental Environmental Impact Report)
for the Project required or permitted by any Government, pursuant to CEQA, to issue any
Approvals.
1.1.13 Certificate of Completion. With respect to each Site, the written
certification of City that the portion of the Project to be completed on such Site is complete
and in compliance with the terms and conditions of this Agreement, in substantially the
form of Exhibit D attached to this Agreement with Site specific modifications as needed.
1.1.14 City. The City of San Juan Capistrano, a California municipal corporation.
1.1.15 City Parties. Collectively, City and the officials, officers, employees,
agents and volunteers of City.
1.1.16 Claim. Any claim, loss, cost, damage, expense, liability, lien, action, cause
of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge,
award, assessment, fine or penalty of any kind (including consultant and expert fees and
expenses and investigation costs of whatever kind or nature, and if an Indemnitor
improperly fails to provide a defense for an Indemnitee, then Legal Costs of the Indemnitee
arising from such failure) and any judgment.
3
1.1.17 Control. Possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether by ownership of Equity
Interests, by contract or otherwise.
1.1.18 County. The County of Orange, California.
1.1.19 Default. A Monetary Default or Non -Monetary Default.
1. 1.20 Default Interest. Interest at an annual rate equal to the lesser of: (a) eight
percent (8%) per annum; or (b) the highest rate of interest, if any, that Law allows under
the circumstances.
1.1.21 Developer. Ganahl Lumber Company, a California corporation, and any
successors or assigns of the Ganahl Lumber Company permitted under the terms and
conditions of this Agreement.
1.1.22 Developer Parties. Collectively, Developer and the directors, officers,
employees, agents, and shareholders of Developer.
1.1.23 Effective Date. The Close of Escrow pursuant to the Purchase and Sale
Agreement.
1.1.24 Environmental Claim. Any and all claims, demands, damages, losses,
liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits,
proceedings, costs, disbursements and expenses, including Legal Costs and fees and costs
of environmental consultants and other experts, and all foreseeable and unforeseeable
damages or costs of any kind or of any nature whatsoever, directly or indirectly, relating to
or arising from any actual violation of any Environmental Laws or Hazardous Material
Discharge.
1.1.25 Environmental Laws. All Federal, State, local, or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees, or requirements of any
Government regulating, relating to, or imposing liability or standards of conduct
concerning any Hazardous Material (as later defined), or pertaining to occupational health
or industrial hygiene (and only to the extent that the occupational health or industrial
hygiene laws, ordinances, or regulations relate to Hazardous Material on, under, or about
the Property), occupational or environmental conditions on, under, or about the Property,
as now or may at any later time be in effect, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601
et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section
6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act
("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA")
[15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA")
[49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section
6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water
Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et
seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the
Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.];
V.
the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California
Underground Storage of Hazardous Substances Act [California Health & Safety Code
Section 25288 et seq.]; the California Hazardous Substances Account Act [California
Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and
Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.]; the
Porter -Cologne Water Quality Act [California Water Code Section 13000 et seq.]; together
with any amendments of or regulations promulgated under the statutes cited above or any
other Federal, State, or local law, statute, ordinance, or regulation now in effect or later
enacted that pertains to occupational health or industrial hygiene (to the extent the
occupational health or industrial hygiene laws, ordinances, or regulations relate to
Hazardous Materials on, under or about the Property) or the regulation or protection of the
environment, including ambient air, soil, soil vapor, groundwater, surface water, or land
use.
1.1.26 Equity Interest. All or any part of any direct equity or ownership
interest(s) (whether stock, partnership interest, beneficial interest in a trust, membership
interest in a limited liability company, or other interest of an ownership or equity nature)
in any entity, at any tier of ownership, that directly owns or holds any ownership or equity
interest in a Person.
1. 1.27 Event of Default. The occurrence of any one or more of the following:
(a) Monetary Default. A Monetary Default that continues for seven (7)
calendar days after Notice from the non -defaulting Party, specifying in reasonable detail the
amount of money not paid and the nature and calculation of each such payment;
(b) Bankruptcy or Insolvency. Developer admits in writing that
Developer is unable to pay its debts as they become due or becomes subject to any
Bankruptcy Proceeding (except an involuntary Bankruptcy Proceeding dismissed within
ninety (90) calendar days after commencement), or a custodian or trustee is appointed to take
possession of, or an attachment, execution or other judicial seizure is made with respect to,
substantially all of Developer's assets or Developer's interest in this Agreement, the Property
or the Project (unless such appointment, attachment, execution, or other seizure was
involuntary, and is contested with diligence and continuity and vacated and discharged
within ninety (90) calendar days);
(c) Transfer. The occurrence of a Transfer, whether voluntarily or
involuntarily or by operation of Law, in violation of the terms and conditions of this
Agreement; or
(d) Non -Monetary Default. Any Non -Monetary Default other than
those specifically addressed in Section 1.1.27(b) that is not cured within thirty (30) calendar
days after Notice to the Party alleged to be in Default describing the Non -Monetary Default
in reasonable detail, or, in the case of a Non -Monetary Default that cannot with reasonable
diligence be cured within thirty (30) calendar days after the effective date of such Notice, if
the Party alleged to be in Default does not do all of the following: (a) within thirty (30)
calendar days after the initial Notice of such Non -Monetary Default, advise the other Party of
5
the intention of the Party alleged to be in Default to take all reasonable steps to cure such
Non -Monetary Default; (b) duly commence such cure within such period; and (c) diligently
prosecute such cure to completion within a reasonable time under the circumstances.
1. 1.28 Federal. The federal government of the United States of America.
1.1.29 Government. Any and all courts, boards, agencies, commissions, offices,
or authorities of any nature whatsoever for any governmental unit (Federal, State, County,
district, municipal, City or otherwise) whether now or later in existence.
1. 1.30 Hazardous Material. Any flammable substances, explosives, radioactive
materials, asbestos, asbestos -containing materials, polychlorinated biphenyls, chemicals
known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous
wastes, medical wastes, toxic substances or related materials, explosives, petroleum,
petroleum products and any "hazardous" or "toxic" material, substance or waste that is
defined by those or similar terms or is regulated as such under any Law, including any
material, substance or waste that is: (a) defined as a "hazardous substance" under Section
311 of the Water Pollution Control Act (33 U.S.C. § 1317), as amended; (b) designated as
"hazardous substances" pursuant to 33 U.S.C. § 1321; (c) defined as a "hazardous waste"
under Section 1004 of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §
6901 et seq., as amended; (d) defined as a "hazardous substance" or "hazardous waste"
under Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Reauthorization Act of 1986, 42
U.S.C. § 9601 et seq., or any so-called "superfund" or "superlien" law; (e) defined as a
"pollutant" or "contaminant" under 42 U.S.C. § 9601(33); (f) defined as "hazardous waste"
under 40 C.F.R. Part 260; (g) defined as a "hazardous chemical" under 29 C.F.R. Part 1910;
(h) any matter within the definition of "hazardous substance" set forth in 15 U.S.C. § 1262;
(i) any matter, waste or substance regulated under the Toxic Substances Control Act
("TSCA") [15 U.S.C. Sections 2601 et seq.]; 0) any matter, waste or substance regulated
under the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq.; (k)
those substances listed in the United States Department of Transportation (DOT) Table [49
C.F.R. 172.101]; (1) any matter, waste or substances designated by the EPA, or any
successor authority, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste
or substances defined as "hazardous waste" in Section 25117 of the California Health and
Safety Code; (n) any substance defined as a "hazardous substance" in Section 25316 of the
California Health and Safety Code; (o) subject to any other Law regulating, relating to or
imposing obligations, liability or standards of conduct concerning protection of human
health, plant life, animal life, natural resources, property or the enjoyment of life or
property free from the presence in the environment of any solid, liquid, gas, odor or any
form of energy from whatever source; or (p) other substances, materials, or wastes that are,
or become, regulated or classified as hazardous or toxic under Law or in the regulations
adopted pursuant to said Law, including manure, asbestos, polychlorinated biphenyl,
flammable explosives and radioactive material.
1.1.31 Hazardous Material Discharge. Any deposit, discharge, generation,
release, or spill of a Hazardous Material that occurs after the Effective Date at, on, under,
into or from the Property, or during transportation of any Hazardous Material to or from
Co
the Property, or that arises at any time from the construction, installation, use or operation
of the Project or any activities conducted at, on, under or from the Property, whether or not
caused by a Party.
1.1.32 In Lieu Fees. Fees payable by Developer in the event Developer exercises
its right to extend the Site B Completion Date as set forth below. The In Lieu Fees are
intended as a payment to the City in lieu of Sales Tax that might have been generated if
Developer's project on Site B had been completed without extension.
1.1.33 Indemnify. Where this Agreement states that any Indemnitor shall
"indemnify" any Indemnitee from, against, or for a particular Claim, that the Indemnitor
shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and
against such Claim (alleged or otherwise). "Indemnified" shall have the correlative
meaning.
1. 1.34 Indemnitee. Any Person entitled to be Indemnified under the terms of this
Agreement.
1. 1.35 Indemnitor. A Party that agrees to Indemnify any other Person under the
terms of this Agreement.
1. 1.36 Institutional Lender. Any of the following: (a) a bank (State or Federal),
trust company (in its individual or trust capacity), insurance company, credit union, savings
bank (State or Federal), pension, welfare or retirement fund or system, real estate
investment trust (or an umbrella partnership or other entity of which a real estate
investment trust is the majority owner), Federal or State agency regularly making or
guaranteeing mortgage loans, investment bank or a Fortune 500 company; or (b) any
Person that is an Affiliate of or is a combination of any one or more of the Persons described
in clause "(a)" of this Section 1.1.36.
1.1.37 Insurance Documents. Insurance policies and endorsements evidencing
all insurance coverage required to be obtained by Developer pursuant to Section 4.
1.1.38 Law. Every law, ordinance, requirement, order, proclamation, directive,
rule, or regulation of any Government applicable to the Property or the Project, in any way,
including any development, use, maintenance, taxation, operation, or occupancy of, or
environmental conditions affecting the Property or the Project, or relating to any taxes, or
otherwise relating to this Agreement or any Party's rights, obligations or remedies under
this Agreement, whether in force on the Effective Date or passed, enacted, modified,
amended or imposed at some later time, subject in all cases, however, to any applicable
waiver, variance, or exemption.
1.1.39 Legal Costs. In reference to any Person, all reasonable costs and expenses
such Person incurs in any legal proceeding (or other matter for which such Person is legally
entitled to be reimbursed for its Legal Costs), including reasonable attorneys' fees, court
costs and expenses and consultant and expert witness fees and expenses.
7
1. 1.40 Liability Insurance. Commercial general liability insurance against claims
for bodily injury, personal injury, death, or property damage occurring upon, in, or about
the Property, the Project or adjoining streets or passageways, at least as broad as Insurance
Services Office Occurrence Form CG0001, with a minimum liability limit of Two Million
Dollars ($2,000,000) for any one occurrence and which may be provided through a
combination of primary and excess or umbrella insurance policies. If commercial general
liability insurance or other form with a general aggregate limit is used, either the general
aggregate limit shall apply separately to the Property or the general aggregate limit shall
be twice the required minimum liability limit for any one occurrence.
1. 1.41 Monetary Default. Any failure by either Party to pay or deposit, when and
as this Agreement requires, any amount of money, any bond or surety or evidence of any
insurance coverage required to be provided under this Agreement, whether to or with a
Party or a Third Person.
1. 1.42 Non -Monetary Default. The occurrence of any of the following, except to
the extent constituting a Monetary Default: (a) any failure of a Party to perform any of its
obligations under this Agreement; (b) any failure of a Party to comply with any material
restriction or prohibition in this Agreement; or (c) any other event or circumstance that,
with passage of time or giving of Notice, or both, or neither, would constitute a breach of
this Agreement by a Party.
1. 1.43 Notice. Any consent, demand, designation, election, notice, or request
relating to this Agreement, including any Notice of Default. All Notices must be in writing.
1. 1.44 Notice of Agreement. A notice in substantially the form of Exhibit B
attached to this Agreement, to be signed by both City and Developer and recorded against
the Property at the Close of Escrow to provide constructive record notice of the existence
and application of this Agreement to the Property.
1.1.45 Notice of Default. Any Notice claiming or giving Notice of a Default or
alleged Default.
1. 1.46 Notify. To give a Notice.
1. 1.47 Parties. Collectively, City and Developer.
1. 1.48 Party. Individually, either City or Developer, as applicable.
1. 1.49 Permanent Loan. A loan from an Institutional Lender to Developer that
will be used solely to completely pay-off the Project Construction Financing, including the
reasonable costs of obtaining the loan and any reasonable and customary fees or charges
relating to pay-off of the Project Construction Financing.
1.1.50 Permitted Encumbrance. Any or all of the following: (a) all Permitted
Exceptions; (b) any Laws applicable to the Property; (c) this Agreement; (d) the covenants,
conditions or powers in the deed recorded pursuant to the Purchase and Sale Agreement;
(e) the Notice of Agreement; (f) any existing improvements on the Property; (g) a Permitted
Security Instrument; (h) reasonable construction, utility, access or other easements or
licenses, reciprocal easement agreements, declarations of conditions, covenants and
restrictions, memoranda of lease or similar agreements made or entered into in connection
with the development or operation of the Project on the Property by Developer in
accordance with this Agreement and the agency deed to be recorded pursuant to the
Purchase and Sale Agreement; the Emergency Egress Easement and (i) any other document
or encumbrance expressly required or allowed to be recorded against the Property or the
Project under the terms of the Purchase Agreement or this Agreement.
1. 1.51 Permitted Security Instrument. Any Security Interest: (a) that encumbers
only the Property, a Site, or any interest in the Property or a Site; (b) a copy of which
(recorded or unrecorded) is promptly after execution delivered to City, with a certification
by the Institutional Lender that the copy is accurate and stating the Institutional Lender's
name and notice address; (c) that is held by an Institutional Lender that is subject to the
jurisdiction of the courts of the State, not immune from suit and cannot elect to be immune
from suit; and (d) only secures: (i) the repayment of the Project Construction Financing;
(ii) the Permanent Loan; (iii) a delivery assurance fee regarding a Permanent Loan that is
refundable to Developer at the close of the Permanent Loan; or (iv) any refinancing
permitted under the terms and conditions of this Agreement.
1.1.52 Person. Any association, corporation, governmental entity or agency,
individual, joint venture, joint-stock company, limited liability company, partnership, trust,
unincorporated organization, or other entity of any kind.
1.1.53 Prevailing Wage Action. Any of the following: (a) any determination by
the State Department of Industrial Relations that prevailing wage rates should have been
paid, but were not; (b) any determination by the State Department of Industrial Relations
that higher prevailing wage rates than those paid should have been paid; (c) any
administrative or legal action or proceeding arising from any failure to comply with any of
California Labor Code Sections 1720 through 1781, as amended from time to time, or any
Federal Law regarding prevailing wages, including maintaining certified payroll records
pursuant to California Labor Code Section 1776; or (d) any administrative or legal action
or proceeding to recover wage amounts at law or in equity, including pursuant to California
Labor Code Section 1781 or applicable Federal Law.
1.1.54 Prohibited Encumbrance. Any Security Instrument, mechanic's lien,
easement or other encumbrance recorded or asserted against the Property or the Project
that is not a Permitted Encumbrance.
1.1.55 Project. The planning, design, construction and initial occupancy by
Developer of certain private, commercial improvements on the Property, including all
required or associated on-site and off-site improvements, all hardscape and all landscaping,
all as specifically described in the Scope of Development, and all to be developed in
accordance with plans and specifications approved by City and any conditions imposed by
City in its approval of Developer's development application related to the Project.
X
- 1.1.56 Project Completion Date(s). The date of recordation of the Certificate of
Completion for the development of Site B (Ganahl Lumber store) shall be no later than
eight (8) years following the Close of Escrow, and the date of recordation of the Certificate
of Completion for the development of Site C (Vehicle Storage) shall be no later than thirty-
six (36) months following the Close of Escrow.
1.1.57 Project Construction Financing. One (1) or more loans that Developer
shall obtain from one or more Institutional Lenders, the proceeds of which are to be used
and applied solely to pay the reasonable costs of obtaining such loan(s) and the costs of
acquiring the Property, planning, designing and building the Project. Such loan(s) shall
provide for normal and customary disbursement controls for the payment of construction
costs as construction progresses and normal and customary fees and expenses for loan(s)
of similar size and purpose.
1.1.58 Property. Lower Rosan Ranch as more particularly described in Exhibit A
attached to this Agreement.
1.1.59 Sales Tax. Sales tax under the Bradley -Burns Uniform Local Sales and Use
Tax Law (Cal. Rev. & Tax. Code § 7200, et seq.), the Transactions and Use Tax Law (Cal.
Rev. & Tax. Code § 7251), et seq. and San Juan Capistrano Municipal Code Section 3-
3.402.
1.1.60 Schedule of Performance. The schedule for the performance of certain
actions by City or Developer pursuant to the terms and conditions of this Agreement, as
set forth in Exhibit E attached to this Agreement, as extended by Force Majeure events.
1.1.61 Scope of Development. The detailed description of the primary elements
of the Project, as set forth in Exhibit C attached to this Agreement.
1. 1.62 Security Instrument. Any security instrument, deed of trust, security deed,
contract for deed, deed to secure debt, or other voluntary real property (including leasehold)
security instrument(s) or agreement(s) intended to grant real property (including leasehold)
security for any obligation (including a purchase -money or other promissory note)
encumbering the Property, as entered into, renewed, modified, consolidated, increased,
decreased, amended, extended, restated, assigned (wholly or partially), collaterally
assigned, or supplemented from time to time, unless and until completely paid, satisfied,
and discharged of record.
1. 1.63 Site. A division of the Property corresponding to lots on the final tract map
for the Property, as shown on Exhibit F attached hereto, and identified as "Site A," "Site
B," or "Site C."
1.1.64 Site B Completion Date. The date prescribed for the completion of
construction of Site B on the Schedule of Performance.
1.1.65 Site Plan. The site plan attached to the Scope of Development, which the
Parties acknowledge may change from time to time subject to the mutual agreement of the
Parties.
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1. 1.66 State. The State of California.
1. 1.67 Third Person. Any Person that is not a Party, an Affiliate of a Party or an
elected official, officer, director, manager, shareholder, member, principal, partner,
employee or agent of a Party.
1.1.68 Transfer. Regarding the Property or each and every right or obligation of
Developer under this Agreement, any of the following, whether by operation of Law or
otherwise, whether voluntary or involuntary, and whether direct or indirect: (a) any
assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer,
whether direct or indirect, of all or any part of the Property or any or all of Developer's
rights or obligations under this Agreement, or of any legal, beneficial, or equitable interest
or estate in all or any part of the Property or any or all of Developer's rights or obligations
under this Agreement (including the grant of any easement, lien, or other encumbrance);
(b) any conversion, exchange, issuance, modification, reallocation, sale or other transfer of
any Equity Interest(s) in the owner of all or any part of the Property or any or all of
Developer's rights or obligations under this Agreement by the holders of such Equity
Interest(s); (c) any conversion, exchange, issuance, modification, reallocation, sale, or
other transfer of any Equity Interest(s) in any Person or combination of Persons owning
fifty percent (50%) or more of the Equity Interests in Developer or otherwise in Control of
Developer by the holders of such Equity Interest(s) (any such transactions occurring within
twenty-four (24) months of each other shall be aggregated for the purpose of determining
whether or not a Transfer has occurred pursuant to this clause); or (d) any transaction that
is in substance equivalent to any of the foregoing. A transaction affecting Equity Interests,
as referred to in clauses "(b)" through "(c)" of this Section 1.1.68, shall be deemed a
Transfer by Developer even though Developer is not technically the transferor. A
"Transfer" shall not, however, include any of the following (provided that the other Party
has received fifteen (15) days written Notice of such occurrence) relating to the Property
or any Equity Interest: (i) a mere change in form of ownership, with no material change in
beneficial ownership, that constitutes a tax-free transaction under, as applicable, Federal
income tax law or State real estate transfer tax law; (ii) a conveyance of stock in Seller to
member(s) of the family(ies) (including spouses) of the current shareholders of Seller or to
trusts for their benefit; (iii) a conveyance of stock in Seller to previous, current or future
employees of Seller or its affiliates, (iv) a conveyance only to any Person that, as of the
Effective Date, holds an Equity Interest in the entity whose Equity Interest is being
transferred, (v) the assignment of the rights and obligations of Developer under this
Agreement to a single purpose entity under common control with Developer; or (vi) the
Lease to Tenant.
1. 1.69 Unavoidable Delay. A delay in either Party performing any obligation
under this Agreement arising from or on account of any cause whatsoever beyond the
Party's reasonable control, including without limitation strikes, labor troubles including
shortage of labor, or other union activities, rain, floods, earthquakes, fires, other casualties,
or unforeseeable geological conditions, acts of war, acts of terrorism, riots, litigation,
pandemic, epidemic, public health crisis, governmental action or inaction, natural disasters,
or inability to obtain materials. Unavoidable Delay shall not include delay caused by a
Party's financial condition or insolvency.
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1. 1.70 Waiver of Subrogation. A provision in, or endorsement to, any insurance
policy, by which the carrier agrees to waive rights of recovery by way of subrogation
against either Party to this Agreement for any loss such policy covers.
1.1.71 Worker's Compensation Insurance. Worker's compensation insurance
complying with the provisions of State law and an employer's liability insurance policy or
endorsement to a liability insurance policy, with a minimum liability limit of One Million
Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of
Developer.
2. PROJECT DEVELOPMENT
For each Site, until the Certificate of Completion is recorded for such Site, Developer
agrees to do the following:
2.1 Developer Covenant to Undertake Each Site. Developer covenants to and for the
exclusive benefit of City that Developer shall commence and complete the development of each
Site comprising the Project within the time period for such Site set forth in the Schedule of
Performance. Developer covenants and agrees to complete each such Site in conformity with the
terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance,
any and all Approvals required by this Agreement, except for such changes as may be mutually
agreed upon in writing by and between Developer and City, and all applicable Laws of each
Government with jurisdiction over Property or the applicable Site. The covenants of this Section
2.1 shall run with the land with respect to each Site, until the earlier of the date of recordation of
the Certificate of Completion applicable to such Site or the fifteenth (15th) anniversary of the
Effective Date of this Agreement.
2.2 DevelgPer Changs to Project During Course of Construction. Developer shall
have the right during the course of construction of the Project to make "minor field changes,"
without seeking the approval of City, if such changes do not affect the type of use to be conducted
within all or any portion of a structure. "Minor field changes" shall be defined as those changes
from the approved construction drawings, plans and specifications that have no substantial effect
on the Project and are made in order to expedite the work of construction in response to field
conditions. Nothing contained in this Section 2.2 shall be deemed to constitute a waiver of or
change in the Approvals governing any such "minor field changes" or in any approvals by any
Government otherwise required for any such "minor field changes."
2.3 Construction Start and Completion of Site C vehicle storage site . Developer shall
use commercially reasonable efforts to enter into licenses with car dealerships having existing
licenses for temporary vehicle storage on Site C to provide automobile storage on Site C following
the completion of construction. Developer shall commence construction of Site C in accordance
with the Schedule of Performance. Thereafter, Developer shall use commercially reasonable
efforts to pursue and complete the construction of C, in a good and workmanlike manner, in
accordance with the Schedule of Performance and all Laws and Approvals applicable to Site C.
Promptly upon completion of Site C it may be inspected by each Government with jurisdiction
over the Project, and Developer shall correct any defects and deficiencies that may be disclosed
by any such inspection and shall apply for all Approvals necessary for the operation and occupancy
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of the completed Site. Developer shall do and perform all of the foregoing acts and things and
request to be issued and executed all such Approvals within thirty-six (36) months following the
Close of Escrow.
2.4 Construction Start and Completion of Site B. Developer shall commence
construction of Site B in accordance with the Schedule of Performance. Thereafter, Developer
shall use commercially reasonable efforts to pursue and complete the construction of Site B, in a
good and workmanlike manner, in accordance with the Schedule of Performance, all Laws and
Approvals applicable to Site B. Promptly upon completion of Site B it may be inspected by each
Government with jurisdiction over the Project, and Developer shall correct any defects and
deficiencies that may be disclosed by any such inspection and shall apply for all Approvals
necessary for the operation and occupancy of the completed Site B. Developer shall do and
perform all of the foregoing acts and things and request to be issued and executed all such
Approvals on or before the Project Completion Date for Site B.
2.5 Construction Start and Completion of Site A. Developer shall commence
construction of Site A in accordance with the Schedule of Performance. Thereafter, Developer
shall use commercially reasonable efforts to pursue and complete the construction of Site A, in a
good and workmanlike manner, in accordance with the Schedule of Performance, all Laws and
Approvals applicable to Site A. Promptly upon completion of Site A it may be inspected by each
Government with jurisdiction over the Project, and Developer shall correct any defects and
deficiencies that may be disclosed by any such inspection and shall apply for all Approvals
necessary for the operation and occupancy of the completed Site A. Developer shall do and
perform all of the foregoing acts and things and request to be issued and executed all such
Approvals on or before the Project Completion Date for Site A.
2.6 Payment In Lieu Of Tax (PILOT). Developer acknowledges that generation of
Sales and Use Tax in accordance with Bradley—Burns Uniform Local Sales and Use Tax Law
(Revenue and Taxation Code 7200, et seq.) by a future business on Site B is a goal of the City. If
Site B is not developed or able to operate and generate Sales and Use Tax in accordance with the
Schedule of Performance, Developer shall not be in default under this Agreement provided that
Developer provides City with a payment in lieu of sales tax ("PILOT Payment") as follows:
2.6.1 For the first thirty-six (36) months following Close of Escrow, Developer
shall not be required to make a PILOT Payment.
2.6.2 For the following twelve (12) months, Developer shall make a PILOT
Payment in an amount equal to One Hundred Sixty Thousand Dollars ($160,000). PILOT
Payments shall be made quarterly in the amount of Forty Thousand Dollars ($40,000) no
later than March 31, June 30, September 30 and December 31.-
2.6.3 For the following twenty four (24) months, Developer shall make a PILOT
Payment in an amount equal to Two Hundred Forty Thousand Dollars ($240,000). PILOT
Payments shall be made quarterly in the amount of Sixty Thousand Dollars ($60,000) on
March 31, June 30, September 30 and December 31.
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-- 2.6.4 For the following twenty four (24) months, Developer shall make a PILOT
Payment in an amount equal to Four Hundred Eighty Thousand Dollars ($480,000).
PILOT Payments shall be made quarterly in the amount of One Hundred Twenty Thousand
Dollars ($120,000) on March 31, June 30, September 30 and December 31.
The last PILOT Payment shall be paid for the quarter immediately preceding the date Developer's
Site B project begins to generate Sales Tax. If Site B has not begun generating Sales and Use Tax
by the end of the eighth year following the Close of Escrow, City may retake possession of the
Property pursuant to Section 9. Sales and Use Tax generated from Site A for a given calendar
quarter shall reduce PILOT payments otherwise owing and payable by Developer for that quarter
on a dollar by dollar basis.
2.7 Compliance with Laws. All work performed in connection with the construction
of the Project shall comply with all applicable Laws and Approvals.
2.8 Developer Attendance at Ci!y Meetings. Developer agrees to identify one or more
of its employees or consultants who are knowledgeable regarding this Agreement and the Project,
such that such person(s) can meaningfully respond to City questions regarding the progress of the
Project, attend meetings of the City governing body, when requested to do so by City staff.
2.9 Ci1y Right to Inspect Project and Property. Developer agrees that City shall have
the right of reasonable access to the Property, without the payment of charges or fees, during
normal construction hours, during the period of construction of the Project, provided that the City
shall not to do anything during such access that could unreasonably interfere with Developer's
activities on the Property. Any and all City representatives who enter the Property shall at all times
be accompanied by a representative of Developer, while on the Property. Developer shall make a
representative of Developer available for this purpose at all times during normal construction
hours, upon reasonable advance Notice from City, in no event less than twenty four (24) hours.
City shall Indemnify Developer regarding Claims arising out of the exercise by City of the right
of access to the Property provided in this Section 2.9 except to the extent that any such Claim
arises from the gross negligence or willful misconduct of Developer Parties. Developer agrees
that City shall have the further right, from time to time, at City's cost, to retain a consultant or
consultants to inspect the Property or the Project on the same terms as the City's inspection and
verify compliance by Developer with the provisions of this Agreement. Developer acknowledges
and agrees that any such City inspections are for the sole purpose of protecting City's rights under
this Agreement, are made solely for City's benefit, may be superficial and general in nature, are
for the purposes of informing City of the progress of the Project and the conformity of the Project
with the terms and conditions of this Agreement, and Developer shall not be entitled to rely on any
such inspection(s) as constituting City's approval, satisfaction or acceptance of any materials,
workmanship, conformity of the Project with this Agreement or otherwise. Developer agrees to
make its own regular inspections of the work of construction of the Project to determine that the
progress and quality of the Project and all other requirements of the work of construction of the
Project are being.performed in a manner satisfactory to Developer. City agrees that although this
Agreement grants City a reasonable right to approve Developer's selection of the Tenant, City
shall have no right to approve any other tenant of the Property and no right to approve the Lease
or any other agreement entered into between the Developer and any tenant of the Property.
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2.10 PREVAILING WAGES.
2.10.1 RESPONSIBILITY. DEVELOPER AGREES WITH CITY THAT
DEVELOPER SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE
SOLELY RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS
EMPLOYED RELATIVE TO THE CONSTRUCTION OF THE PROJECT MUST BE
PAID THE PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR
CLASSIFICATION, AS DETERMINED BY THE STATE, PURSUANT TO LABOR
CODE SECTIONS 1720 ET SEQ., OR PURSUANT TO APPLICABLE FEDERAL
LAW.
2.10.2 WAIVERS AND RELEASES. DEVELOPER, ON BEHALF OF
ITSELF, ITS SUCCESSORS AND ASSIGNS, WAIVES AND RELEASES CITY FROM
ANY RIGHT OF ACTION THAT MAY BE AVAILABLE TO ANY OF THEM
PURSUANT TO STATE LABOR CODE SECTION 1781 OR OTHER STATE OR
FEDERAL LAW REGARDING PAYMENT OF MINIMUM OR PREVAILING WAGE
AMOUNTS. RELATIVE TO THE WAIVERS AND RELEASES CONTAINED IN
THIS SECTION 2.10.2, DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF
CIVIL CODE SECTION 1542, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.
2.10.3 INITIALS. BY INITIALING BELOW, DEVELOPER KNOWINGLY
AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES CONTAINED IN SECTION
2.10.2:
Initials of Authorized
Developer Representative
2.11 Certificates of Completion.
2.11.1 Following the completion of the portion of the Project to be completed on a
Site, excluding any normal and minor building "punch -list" items to be completed by
Developer or Tenant, and upon written request from Developer for issuance of a Certificate
of Completion, City shall promptly inspect such portion of the Project to determine whether
the Project has been completed in compliance with this Agreement. If City determines that
such portion of the Project is complete and in compliance with this Agreement, City shall
furnish Developer with a Certificate of Completion for such portion of the Project. If City
determines that such portion of the Project is not in compliance with this Agreement, City
shall send Notice of each non -conformity to Developer, pursuant to Section 2.11.3.
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2.11.2 City shall not unreasonably withhold the issuance of a Certificate of
Completion. A Certificate of Completion shall be evidence of City's conclusive
determination of satisfactory completion of a portion of the Project pursuant to the terms
of this Agreement. After the recordation of a Certificate of Completion, any person then
owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property
or any Site shall not (because of such ownership, purchase, lease or acquisition) incur any
obligation or liability under this Agreement regarding construction or installation of the
portion(s) of the Project to which such Certificate of Completion relates, except that such
person shall be bound by any reservations, covenants, conditions, restrictions and other
interests recorded against the Property pursuant to this Agreement.
2.11.3 If City fails or refuses to issue a Certificate of Completion for a portion of
the Project after written request from Developer, City shall, within fifteen (15) calendar
days after Developer's written request or within three (3) calendar days after the next
regular meeting of City governing body, whichever date occurs later, provide Developer
with a written statement setting forth the reasons for City's failure or refusal to issue a
Certificate of Completion. The statement shall also contain City's opinion of the action(s)
Developer must take to obtain a Certificate of Completion from City. If the reason for such
refusal is confined to the immediate unavailability of specific items or materials for
construction or landscaping at a price reasonably acceptable to Developer or other minor
building "punch -list" items, City may issue its Certificate of Completion upon the posting
of a bond or irrevocable standby letter of credit by Developer in a form reasonably
acceptable to City in an amount representing the fair value of the work remaining to be
completed, as reasonably determined by City. If City fails to provide such written
statement, within the specified time period, Developer shall be deemed conclusively and
without further action of City to have satisfied the requirements of this Agreement with
respect to the applicable portion(s) of the Project as if a Certificate of Completion had been
issued by City pursuant to this Agreement.
2.11.4 A Certificate of Completion shall not be deemed to constitute a Notice of
Completion under Section 3093 of the California Civil Code, nor shall it act to terminate
the continuing covenants, restrictions or conditions contained in the City Deed or any other
instruments recorded against the Property pursuant to this Agreement. A Certificate of
Completion is not evidence of the compliance of any portion of the Project with any Laws
of a Government with jurisdiction over the Property, other than City.
2.12 Public Benefits. In addition to complying with the Project conditions of approval
which are designed to mitigate any significant environmental impacts of the Project, Developer
has committed by this Agreement to contribute to the acquisition, construction and maintenance
of certain "Public Benefits." The Public Benefits consist of a one-time payment to the City at the
Close of Escrow in the amount of Five Hundred Thousand Dollars ($500,000) which the City will
use toward public facilities including but not limited to: park maintenance, rehabilitation and
improvements, public facility upgrades and improvements, street maintenance and improvements,
or any other improvement to the public facilities as the City deems necessary to provide
appropriate facilities and services to the residents of this community and the City at large. City
shall have no obligation to construct specific public facilities as a result of this Agreement. In
y addition to payment for the construction and maintenance of Public Benefits, Developer shall
16
provide a one-time payment to the City at the Close of Escrow in the amount of Eighty Two
Thousand Dollars ($82,000) ($25,000 of which Developer has already paid via a Developer
Deposit provided to the City)_which the City will use toward recovering a portion of staff cost
associated with the processing of the sale of the Property. Payment of this latter amount by
Developer shall supersede Developer's obligations under section 3 of that certain Exclusive
Negotiating Agreement between the Parties, dated August 31, 2017.
3. SPECIAL COVENANTS OF DEVELOPER
3.1 Maintenance Condition of the Propeqy. Developer for itself, its successors and
assigns covenants and agrees that:
3.1.1 The areas of the Property that are subject to public view (including all
existing and future improvements, paving, walkways, landscaping, exterior signage and
ornamentation) shall be maintained in good repair and a neat, clean and orderly condition,
ordinary wear and tear excepted. If, at any time within fifteen (15) years following the
Close of Escrow, there is an occurrence of an adverse condition on any area of the Property
that is subject to public view in contravention of the general maintenance standard
described above (a "Maintenance Deficiency"), then City shall Notify Developer in
writing of the Maintenance Deficiency. If Developer fails to cure or commence and
diligently pursue to cure the Maintenance Deficiency within thirty (30) calendar days of its
receipt of Notice of the Maintenance Deficiency, City may conduct a public hearing,
following transmittal of Notice of the hearing to Developer, at least ten (10) calendar days
prior to the scheduled date of such public hearing, to verify whether a Maintenance
Deficiency exists and whether Developer has failed to comply with the provisions of this
Section 3.1. If, upon the conclusion of the public hearing, City finds that a Maintenance
Deficiency exists and that there appears to be non-compliance with the general
maintenance standard described in this Section 3.1.1, City shall have the right to enter the
Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any
other action at law or in equity that may then be available to City to accomplish the
abatement of the Maintenance Deficiency. Any sum expended by City for the abatement
of a Maintenance Deficiency on the Property as authorized by this Section 3.1 shall become
a lien on the Property until paid.
3.1.2 Graffiti, as this term is defined in Government Code Section 38772, that has
been applied to any exterior surface of a structure or improvement on the Property that is
visible from any public right-of-way adjacent or contiguous to the Property, shall be
removed by Developer by either painting over the evidence of such vandalism with a paint
that has been color -matched to the surface on which the paint is applied, or graffiti may be
removed with solvents, detergents or water, as appropriate. If any such graffiti and is not
removed within 72 hours following the time of the discovery of the graffiti by Developer,
City shall have the right to enter the Property and remove the graffiti, after not less than 48
hours' Notice to Developer during Business Days; provided, however, if the extent and
nature of the graffiti is such that more than 72 hours is reasonably necessary to remove the
graffiti, then Developer shall have such additional time as is reasonably necessary to
remove the graffiti so long as Developer commences the removal of the graffiti during such
72 hour period and thereafter diligently continues the removal process until complete. Any
17
sum expended by City for the removal of graffiti from the Property as authorized by this
Section 3.1.2, shall become a lien on the Property until paid.
3.2 Covenant to Maintain P roi)ertv on Tax Rolls for 10 Years.
3.2.1 The Developer shall assure that the entire Property remains on the County
of Orange, California, secured real property tax rolls for the ten (10) years following the
Project Completion Date.
3.2.2 For the ten (10) year period following the Project Completion Date, the
Developer for itself and its successors and assigns covenants and agrees to pay all property
tax bills with respect to the Property and all improvements thereon on or before the last
day for the timely payment of each property tax installment on December 10 and April 10
and to timely pay all supplemental tax bills regarding the Property issued by the County of
Orange, California.
3.2.3 The Developer understands and agrees that neither the Developer, nor its
successors or assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback
or hypothecate the Property or the Project or any portion thereof to any entity or person, or
for any use of the Property or the Project, or any portion thereof, that is partially or wholly
exempt from the payment of real property taxes or that would cause the exemption of the
payment of all or any portion of real property taxes otherwise assessable regarding the
1 Property or the Project, without the prior written consent of the City for a period of ten (10)
years after the Project Completion Date.
3.2.4 The covenants of this Section 3.2 shall run with the land of the Property and
shall be covenants set forth in the City Deed. Upon an approved or Permitted Transfer of
the Property by Developer, Developer shall be deemed released from any obligations
pursuant to this Section 3.
3.3 No Discrimination or Segregation. The Developer covenants by and for itself,
himself or herself, its, his or her heirs, executors, administrators, and assigns, and all Persons
claiming under or through it, him or her, that this Agreement is made and accepted upon and
subject to the following conditions:
3.3.1 Standards. 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 Property nor shall the Developer, itself, himself or
herself, or any Person claiming under or through it, 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, subtenants, sublessees, or vendees
in the Property.
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3.3.2 Covenant Running With Land. The provisions of this Section 3.3 shall be
a covenant running with the land of the Property and binding on all successive owners and
users of the Property.
3.4 Developer Covenant to Defend this Agreement. The Developer acknowledges that
the City is a "public entity" and/or a "public agency" as defined under applicable California law.
Therefore, the City must satisfy the requirements of certain California statutes relating to the
actions of public entities, including, without limitation, CEQA. Also, as a public body, the City's
action in approving this Agreement may be subject to proceedings to invalidate this Agreement or
mandamus. The Developer assumes the risk of delays and damages that may result to the
Developer from any third -party legal actions related to the City's approval of this Agreement or
the pursuit of the activities contemplated by this Agreement, even in the event that an error,
omission or abuse of discretion by the City is determined to have occurred. If a third -parry files a
legal action regarding the City's approval of this Agreement or the pursuit of the activities
contemplated by this Agreement, the City may terminate this Agreement on thirty (30) calendar
days written notice to the Developer of the City's intent to terminate this Agreement, referencing
this Section 3.4, without any further obligation to perform the terms of this Agreement and without
any liability to the Developer resulting from such termination, unless the Developer
unconditionally agrees to indemnify and defend the City, with legal counsel acceptable to the City,
against such third -party legal action, as provided hereinafter in this Section 3.4. Within thirty (30)
calendar days of receipt of the City's notice of intent to terminate this Agreement, as provided in
the preceding sentence, the Developer may in Developer's sole and absolute discretion offer to
defend the City, with legal counsel acceptable to the City, in the third -party legal action and pay
all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert
witness and consulting fees, and the expenses of any and all financial or performance obligations
resulting from the disposition of the legal action. Developer is under no obligation to indemnify
and defend City unless and until it elects to make the offer required by this Section 3.4. Any such
offer from the Developer must be in writing and reasonably acceptable to the City in both form
and substance. Nothing contained in this Section 3.4 shall be deemed or construed to be an express
or implied admission that either party hereto is liable to the other party hereto or any other person
or entity for damages alleged from any alleged or established failure to comply with any statute,
including, without limitation, CEQA
3.5 Environmental Indemnity of the City by the Develo er. The Developer agrees, at
its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel
selected by the Developer and reasonably approved by the City) the City and its elected officials,
officers, attorneys, agents and employees and each of them, from and against any and all claims,
demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action,
judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation,
attorney fees, disbursements and costs of attorneys, environmental consultants and other experts,
and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever
(collectively, "Environmental Losses") that may, at any time, be imposed upon, incurred or
suffered by, or claimed, asserted or awarded against, the City directly or indirectly relating to or
arising from any of the following "Environmental Matters" existing or occurring during or arising
from the Developer's ownership of the Property or construction or operation of the Project:
19
3.5.1 The presence of Hazardous Materials on, in, under, from or affecting all or
any portion of the Property or the Project;
3.5.2 The storage, holding, handling, release, threatened release, discharge,
generation, leak, abatement, removal or transportation of any Hazardous Materials on, in,
under, from or affecting the Property or the Project;
3.5.3 The violation of any law, rule, regulation, judgment, order, permit, license,
agreement, covenant, restriction, requirement or the like by the Developer, its agents or
contractors, relating to or governing in any way Hazardous Materials on, in, under, from
or affecting the Property or the Project;
3.5.4 The failure of the Developer, its agents or contractors, to properly complete,
obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants
and the like in connection with the Developer's activities on the Property or regarding the
Proj ect;
3.5.5 The implementation and enforcement by the Developer, its agents or
contractors of any monitoring, notification or other precautionary measures that may, at
any time, become necessary to protect against the release, potential release or discharge of
Hazardous Materials on, in, under, from or affecting the Property or the Project;
3.5.6 The failure of the Developer, its agents or contractors, in compliance with
all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of
any Hazardous Materials existing, stored or generated on, in, under or from the Property
or the Project;
3.5.7 Any investigation, inquiry, order, hearing, action or other proceeding by or
before any governmental agency in connection with any Hazardous Materials on, in, under,
from or affecting the Property or the Project or the violation of any Environmental Law
relating to the Property or the Project;
3.5.8 The Developer shall pay to the City all costs and expenses including,
without limitation, reasonable attorney's fees and costs, incurred by the City in connection
with enforcement of the aforementioned environmental indemnity.
The provisions of this Section 3.5 shall not limit or affect in any way the provisions and obligations
of Purchase and Sale Agreement Section 4.16 (Holdback Pending Property Characterization).
3.6 Survival of Covenants. Each of the covenants set forth in this Section 3 shall be a
covenant running with the land of the Property and each such covenant shall survive the
recordation of the Agency Deed, and issuance and recordation of each and every Certificate of
Completion for the Project, for the time period specifically set forth in each such covenant.
3.7 Mortgaizee Protection. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations set forth in this Agreement shall defeat or render invalid or
in any way impair the lien or charge of any Permitted Security Instrument or, following the
issuance of a Certificate of Completion for the portion of the Project to be completed upon a Site,
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any Security Instrument encumbering such Site; provided, however, that any successor in interest
to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations
and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale or otherwise.
3.8 Prohibited Uses. No portion of the Property shall be used for a junkyard, adult
entertainment, adult movie theater, adult bookstore, massage parlor, pawn shop, dollar store, check
cashing center (the foregoing shall in no event prohibit banking facilities within a grocery store or
a walk up ATM), payday loan or other similar business, laundromat, marijuana dispensary, tattoo
parlor or fortuneteller, or for the sale of narcotics paraphernalia, or for the long term treatment,
storage or disposal of Hazardous Materials.
4. INSURANCE
4.1 Insurance Policies. To protect City Parties against all insurable Claims resulting
from the actions of Developer in connection with this Agreement, the Property or the Project, at
the sole cost and expense of Developer, Developer shall obtain and maintain for the Project, until
the Project Completion Date, the following insurance (or its then reasonably available equivalent):
(a) Liability Insurance; (b) Automobile Liability Insurance; (c) Builder's Risk Insurance; and (d)
Worker's Compensation Insurance to the extent Developer has any employees.
4.2 Nature of Insurance. All insurance policies this Agreement requires shall be issued
by carriers that: (a) are listed in the then current "Best's Key Rating Guide—Property/Casualty—
United States & Canada" publication (or its equivalent, if such publication ceases to be published)
with a minimum financial strength rating of "A-" and a minimum financial size category of "VII"
(exception may be made for the State Compensation Insurance Fund when not specifically rated);
and (b) are authorized to do business in the State. Developer may provide any insurance under a
"blanket" or "umbrella" insurance policy, provided that: (i) such policy or a certificate of such
policy shall specify the amount(s) of the total insurance allocated to the Property and the Project,
which amount(s) shall equal or exceed the amount(s) required by this Agreement; and (ii) such
policy otherwise complies with the insurance requirements in this Agreement.
4.3 Policy Requirements and Endorsements. All insurance policies required by this
Agreement shall contain (by endorsement or otherwise) the following provisions:
4.3.1 Insured. Liability Insurance policies shall name City Parties as "additional
insured."
4.3.2 Primary Coverage. Any insurance or self-insurance maintained by City
Parties shall be excess of all insurance required under this Agreement and shall not
contribute with any insurance required under this Agreement.
4.3.3 Deliveries to City. Developer shall deliver to City certified copies of all
Liability Insurance required by this Agreement prior to the commencement of any Due
Diligence Investigations. Developer shall deliver to City certified copies of all insurance
policies required by this Agreement prior to the Close of Escrow. Builder's Risk Insurance
coverage shall commence no later than the time of initial contractor mobilization for the
Project. No later than ten (10) calendar days before any insurance required by this
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Agreement expires, is cancelled or its liability limits are reduced or exhausted, Developer
shall deliver to City certified copies of all such insurance policies showing coverage for, at
least, six (6) months after such event. Each insurance policy required by this Agreement
shall state or be endorsed to state that coverage shall not be cancelled, suspended, voided,
reduced in coverage or in limits, except after thirty (30) calendar days advance written
notice of such action has been given to City by certified mail, return receipt requested;
provided; however, that only ten (10) calendar days advance written notice shall be
required for any such action arising from non-payment of the premium for the insurance.
Phrases such as "endeavor to" and "but failure to mail such Notice shall impose no
obligation or liability of any kind upon the company" shall not be included in the
cancellation wording of any certificates or policies of insurance or endorsements to such
policies applicable to City Parties pursuant to this Agreement or otherwise required under
this Agreement.
4.3.4 Waiver of Certain Claims. Developer shall cause each insurance carrier
providing Builder's Risk Insurance or Worker's Compensation Insurance coverage to
Developer in satisfaction of the requirements of this Agreement to endorse their applicable
policy(ies) with a Waiver of Subrogation with respect to City Parties, if not already in the
policy. To the extent that Developer obtains insurance with a Waiver of Subrogation, the
Parties release each other, and their respective authorized representatives, from any Claims
for damage to any Person or property to the extent such Claims are paid by such insurance
policies obtained pursuant to and in satisfaction of the provisions of this Agreement.
4.3.5 No Representation. No Parry makes any representation that the limits,
scope, or forms of insurance coverage this Agreement requires are adequate or sufficient.
4.3.6 No Claims Made Coverage. None of the insurance coverage required
under this Agreement may be written on a claims -made basis.
4.3.7 Fully Paid and Non -Assessable. All insurance obtained and maintained in
satisfaction of the requirements of this Agreement shall be fully paid for and non -
assessable.
4.3.8 City Option to Obtain Coverage. During the continuance of an Event of
Default arising from the failure of Developer to carry any insurance required by this
Agreement, City may, in City's sole and absolute discretion, purchase any such required
insurance coverage. City shall be entitled to immediate payment from Developer of any
premiums and associated reasonable costs paid by City to obtain or maintain such insurance
coverage. Any amount becoming due and payable to City under this Section 4.3.8 that is
not paid within fifteen (15) calendar days after written demand from City for payment of
such amount, with an explanation of the amounts demanded, will bear Default Interest from
the date of the demand until paid in full, including payment of all such accrued Default
Interest. Any election by City to purchase or not to purchase insurance otherwise required
by the terms of this Agreement to be carried by Developer shall not relieve Developer or
any other Person of its obligation to obtain or maintain or cause any other Person to obtain
or maintain any insurance coverage required by this Agreement.
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4.3.9 Separation of Insured. All Liability Insurance and Automobile Liability
Insurance shall provide for separation of insured for the named insured and City Parties.
Insurance policies obtained in satisfaction of or in accordance with the requirements of this
Agreement may provide a cross -suits exclusion for suits between named insured Persons,
but shall not exclude suits between named insured Persons and additional insured Persons.
4.3. 10 Deductibles and Self -Insured Retentions. Any deductibles or self-
insured retentions under insurance policies required by this Agreement shall be declared to
and approved by City. In the event of an insured loss, the named insured under the
applicable insurance policy shall pay all such deductibles or self-insured retentions
regarding City Parties. Each Liability Insurance or Automobile Liability Insurance policy
issued in satisfaction of the requirements of this Agreement shall provide that, to the extent
the named insured under the policy fails to pay all or any portion of a self-insured retention
under such policy in reference to an otherwise insured loss, City may pay the unpaid portion
of such self-insured retention, in City's sole and absolute discretion.
4.3.11 No Separate Insurance. Developer shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that required under
this Agreement, unless City is made an additional insured under such insurance, as required
by this Agreement for the type of insurance required to be carried under this Agreement.
5. DEVELOPER FINANCING AND PROPERTY TAXES
5.1 Only Permitted Encumbrances. Developer shall not record and shall not allow to
be recorded against the Property any Security Instrument, lien or other encumbrance that is not a
Permitted Encumbrance, without the prior written consent of City, which consent may be given,
withheld or conditioned in City's sole and absolute discretion. Developer shall remove or cause
to be removed any Prohibited Encumbrance made or recorded against the Property or shall assure
the complete satisfaction of any such Prohibited Encumbrance to the satisfaction of City, in City's
sole and absolute discretion. The covenants of Developer set forth in this Section 5.1 regarding
the placement and removal of encumbrances on the Property shall run with the land of each Site
and bind successive owners, but such covenants shall forever terminate upon issuance by City of
a Certificate of Completion for the portion of the Project to be completed upon such Site.
5.2 Notice of Liens. Prior to the date of issuance by City of a Certificate of Completion
for the portion of the Project to be completed upon a Site, if Developer obtains Actual Knowledge
of a Security Instrument or lien asserted against or attached to such Site, Developer shall promptly
Notify City of the same, whether by voluntary act of Developer or otherwise; provided, however,
that no Notice of filing of preliminary notices or mechanic's liens need be given by Developer to
City, prior to suit being filed to foreclose any such mechanic's lien.
5.3 Property Taxes and Assessments. Developer shall pay prior to delinquency all real
property taxes and assessments assessed and levied on or against the Property or the Project.
Nothing in this Agreement shall be deemed to prohibit Developer from contesting the validity or
amounts of any tax assessment, encumbrance or lien in accordance with applicable Law, or to limit
the remedies available to Developer in respect thereto.
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- 6. REPRESENTATIONS AND WARRANTIES OF DEVELOPER
6.1 Re resentations and Warranties by Developer. Developer makes the following
representations, covenants and warranties as of the Effective Date and acknowledges that the
execution of this Agreement by City is made in material reliance by City on such covenants,
representations and warranties of Developer:
6.1.1 Developer has taken all requisite action and obtained all requisite consents
in connection with entering into this Agreement, such that this Agreement is valid and
enforceable against Developer in accordance with its terms and each instrument to be
executed by Developer pursuant to or in connection with this Agreement will, when
executed, be valid and enforceable against Developer in accordance with its terms. No
approval, consent, order or authorization of, or designation or declaration of any other
person, is required in connection with the valid execution, delivery or performance of this
Agreement by Developer.
7. REMEDIES, INDEMNITY AND TERMINATION
7.1 Legal Actions. Either Party may institute legal action, at law or in equity, to enforce
or interpret the rights or obligations of the Parties under this Agreement or recover damages.
7.2 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the Parties set forth in this Agreement are cumulative and
the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise
by such Party, at the same or different times, of any other rights or remedies for the same Default
or the same rights or remedies for any other Default by the other Party.
7.3 Indemnification.
7.3.1 Developer Indemnity Obligations. Developer shall Indemnify City Parties
against any Claim to the extent such Claim arises from: (a) any wrongful intentional act or
negligence of Developer Parties; (b) any Application made by or at Developer's request;
(c) any agreements that Developer (or anyone claiming by or through Developer) makes
with a Third Person regarding the Property or the Project; (d) any worker's compensation
claim or determination relating to any employee of Developer Parties or their contractors;
or (e) any Prevailing Wage Action relating to this Agreement or the Project; (f) any
Environmental Claim regarding the Project, the Property or attributable to any action or
failure to act by Developer Parties. Notwithstanding the foregoing, Developer shall have
no obligation under this paragraph for and to the extent of Claims arising from or related
to the gross negligence or intentional misconduct of the City Parties or any of them.
7.3.2 Independent of Insurance Obligations. Developer's indemnification
obligations under this Agreement shall not be construed or interpreted as in any way
restricting, limiting, or modifying Developer's insurance or other obligations under this
Agreement. Developer's obligation to Indemnify City Parties under this Agreement is
independent of Developer's insurance and other obligations under this Agreement.
t- Developer's compliance with Developer's insurance obligations and other obligations
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under this Agreement shall not in any way restrict, limit, or modify Developer's
indemnification obligations under this Agreement and are independent of Developer's
indemnification and other obligations under this Agreement.
7.3.3 Survival of Indemnification and Defense Obligations. The indemnity and
defense obligations under this Agreement shall survive the expiration or earlier termination
of this Agreement, until any and all Claims arising prior to such expiration or termination
and subject to indemnification under this Agreement are fully, finally, absolutely and
completely barred by applicable statutes of limitations.
7.3.4 Indemnification Procedures. Wherever this Agreement requires any
Indemnitor to Indemnify any Indemnitee:
(a) Prompt Notice. The Indemnitee shall promptly Notify the
Indemnitor of any Claim.
(b) Selection of Counsel. The Indemnitor shall select counsel
reasonably acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier
that is providing coverage for a Claim shall be deemed reasonably satisfactory,
except in the event of a potential or actual conflict of interest for such counsel
regarding such representation or such counsel proves to be incompetent regarding
such representation. Even though the Indemnitor shall defend the Claim,
Indemnitee may, at Indemnitee's option and expense (except in a situation where
the Indemnitor is defending Indemnitee under a reservation of rights, in which
situation the Indemnitor shall pay for such separate counsel), engage separate
counsel to advise it regarding the Claim and its defense. The Indemnitee's separate
counsel may attend all proceedings and meetings. The Indemnitor's counsel shall
reasonably cooperate with the Indemnitee's separate counsel.
(c) Cooperation. The Indemnitee shall reasonably cooperate with the
Indemnitor's defense of the Indemnitee.
(d) Settlement. The Indemnitor may only settle a Claim with the
consent of the Indemnitee unless that settlement involves a dismissal of the Claim
and/or a monetary payment in which case Indemnitor alone shall have the right to
settle the Claim. Any settlement shall procure a release of the Indemnitee from the
subject Claims, shall not require the Indemnitee to make any payment to the
claimant and shall provide that neither the Indemnitee nor the Indemnitor on behalf
of Indemnitee admits any liability.
8. GENERAL PROVISIONS
8.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement
are true and correct and are incorporated into this Agreement in their entirety by this reference.
8.2 Notices, Demands and Communications Between the Parties. Any and all Notices
submitted by any Party to the other Party pursuant to or as required by this Agreement shall be
proper, if in writing and sent by messenger for immediate personal delivery, nationally recognized
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overnight (one Business Day) courier (i.e., United Parcel Service, Federal Express, etc.) or by
registered or certified United States mail, postage prepaid, return receipt requested, or by email, to
the address of the recipient Party, as designated below in this Section 8.2. Notices may be sent in
the same manner to such other addresses as either Party may from time to time designate by Notice
in accordance with this Section 8.2. Notice shall be deemed received by the addressee, regardless
of whether or when any return receipt is received by the sender or the date set forth on such return
receipt, on the day that the Notice is sent by messenger for immediate personal delivery, one
Business Day after delivery to a nationally recognized overnight carrier or three (3) calendar days
after the Notice is placed in the United States mail in accordance with this Section 8.2, except if a
Notice is given by email, it shall be deemed received upon the earlier of: (a) the date the recipient
actually received and read the notice as evidenced by the recipient's (non -automatic) reply to such
notice or other competent evidence of actual receipt, or (b) the deemed given date of duplicate
notice given by the sender by any mode of transmission allowed above other than email.. Any
attorney representing a Party may give any Notice on behalf of such Party. The Notice addresses
for the Parties, as of the Effective Date, are as follows:
To Developer: Ganahl Lumber Company
1220 E. Ball Road
Anaheim, CA 92805
Attn: Mr. Dan Delaney
Email: dandelaney@ganahl.com
Ganahl Lumber Company
With Copy To: 1220 E. Ball Road
Anaheim, CA 92805
Attn: Mr. Alex Uniack
Email: alexuniack@ganahl.com
To City: City of San Juan Capistrano
Attn: City Manager
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Email: bsiegel@sanjuancapistrano.org
With Copy to: Best, Best & Krieger LLP
18101 Van Karman Avenue, Suite 1000
Irvine, CA 92614
Attention: Elizabeth W. Hull, Esq.
Email: Elizabeth.Hull@bbklaw.com
8.3 Relationship of Parties. The Parties each intend and agree that City and Developer
are independent contracting entities and do not intend by this Agreement to create any partnership,
joint venture, or similar business arrangement, relationship or association between them.
8.4 Warranly Against Pa meet of Consideration for Agreement. Developer represents
and warrants to City that: (a) Developer has not employed or retained any Person to solicit or
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secure this Agreement upon an agreement or understanding for a commission, percentage,
brokerage, or contingent fee, excepting bona fide employees of Developer and Third Persons to
whom fees are paid for professional services related to planning, design or construction of the
Project or documentation of this Agreement; and (b) no gratuities, in the form of entertainment,
gifts or otherwise have been or will be given by Developer or any of Developer's agents,
employees or representatives to any elected or appointed official or employee of City in an attempt
to secure this Agreement or favorable terms or conditions for this Agreement. Breach of the
representations or warranties of this Section 8.4 shall entitle City to terminate this Agreement or
cancel the Escrow (or both) upon seven (7) calendar days' Notice to Developer and, if during the
pendency of the Escrow, also to Escrow Agent.
8.5 Inspection of Books and Records. Until the recordation of the Certificate of
Completion for Site "B," City shall have the right at all reasonable times, at City's cost and
expense, to inspect the books and records of Developer pertaining to the Property or the Project.
City shall not disclose proprietary information of Developer to Third Persons, unless required by
law or otherwise resulting from or related to the pursuit of any remedies by or the assertion of any
rights of City under this Agreement.
8.6 Calculation of Time Periods. Unless otherwise specified, all references to time
periods in this Agreement measured in days shall be to consecutive calendar days, all references
to time periods in this Agreement measured in months shall be to consecutive calendar months and
all references to time periods in this Agreement measured in years shall be to consecutive calendar
years. Any reference to Business Days in this Agreement shall mean consecutive Business Days.
8.7 Principles of Interpretation. No inference in favor of or against any Parry shall be
drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both
participated substantially in the negotiation, drafting and revision of this Agreement, with advice
from legal and other counsel and advisers of their own selection. A word, term or phrase defined
in the singular in this Agreement may be used in the plural, and vice versa, all in accordance with
ordinary principles of English grammar, which shall govern all language in this Agreement. The
words "include" and "including" in this Agreement shall be construed to be followed by the words:
"without limitation." Each collective noun in this Agreement shall be interpreted as if followed
by the words "(or any part of it)," except where the context clearly requires otherwise. Every
reference to any document, including this Agreement, refers to such document, as modified from
time to time (excepting any modification that violates this Agreement), and includes all exhibits,
schedules, addenda and riders to such document. The word "or" in this Agreement includes the
word "and." Every reference to a law, statute, regulation, order, form or similar governmental
requirement refers to each such requirement as amended, modified, renumbered, superseded or
succeeded, from time to time.
8.8 Governing Law. The procedural and substantive laws of the State shall govern the
interpretation and enforcement of this Agreement, without application of conflicts of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully
performed in and relates to real property located in the County. All legal actions arising from this
Agreement shall be filed in the Superior Court of the State in and for the County or in the United
States District Court with jurisdiction in the County.
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8.9 Unavoidable Dela • Extension of Time of Performance.
8.9.1 Notice. Subject to any specific provisions of this Agreement stating that
they are not subject to Unavoidable Delay or otherwise limiting or restricting the effects of
an Unavoidable Delay (if any), performance by either Party under this Agreement shall not
be deemed or considered to be in Default, where any such Default is due to the occurrence
of an Unavoidable Delay. Any Party claiming an Unavoidable Delay shall Notify the other
Party: (a) within twenty (20) calendar days after such Party knows of any such
Unavoidable Delay; and (b) within ten (10) calendar days after such Unavoidable Delay
ceases to exist. To be effective, any Notice of an Unavoidable Delay must describe the
Unavoidable Delay in reasonable detail. Any Party claiming an extension of time to
perform due to an Unavoidable Delay shall exercise reasonable efforts to cure the condition
causing the Unavoidable Delay, within a reasonable time.
8.9.2 Assumption of Economic Risks. EACH PARTY EXPRESSLY AGREES
THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF EITHER PARTY
SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET
CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC ASSUMPTIONS
OF EITHER PARTY THAT MAY HAVE PROVIDED A BASIS FOR ENTERING INTO
THIS AGREEMENT SHALL NOT OPERATE TO EXCUSE OR DELAY THE
PERFORMANCE OF EACH AND EVERY ONE OF EACH PARTY'S OBLIGATIONS
AND COVENANTS ARISING UNDER THIS AGREEMENT. ANYTHING IN THIS
AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE PARTIES
EXPRESSLY ASSUME THE RISK OF UNFORESEEABLE CHANGES IN
ECONOMIC CIRCUMSTANCES OR MARKET DEMAND OR CONDITIONS AND
WAIVE, TO THE GREATEST EXTENT ALLOWED BY LAW, ANY DEFENSE,
CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART ON ECONOMIC
NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC CIRCUMSTANCES,
FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES. THE PARTIES AGREE
THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, EITHER OF THE
PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN
MARKET CONDITIONS OR DEMANDS, SHALL NOT OPERATE TO EXCUSE OR
DELAY THE STRICT OBSERVANCE OF EACH AND EVERY ONE OF THE
OBLIGATIONS, COVENANTS, CONDITIONS AND REQUIREMENTS OF THIS
AGREEMENT. THE PARTIES EXPRESSLY ASSUME THE RISK OF SUCH
ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER OR NOT
FORESEEABLE AS OF THE EFFECTIVE DATE.
Initials of Authorized
City Representative
Initials of Authorized
Developer Representative
8.10 Tax Consequences. Developer acknowledges and agrees that Developer shall bear
any and all responsibility, liability, costs or expenses connected in any way with any tax
consequences experienced by Developer related to this Agreement.
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8.11 No Third -Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement on any Person
other than the Parties and their respective permitted successors and assigns, nor is anything in this
Agreement intended to relieve or discharge any obligation of any Third Person to any Parry or give
any Third Person any right of subrogation or action over or against any Party.
8.12 Developer Assumption of Risks of Legal Challenges. Developer assumes the risk
of delays or damages that may result to Developer from any Third Person legal actions related to
City's approval of this Agreement or any associated Approvals, even in the event that an error,
omission or abuse of discretion by City is determined to have occurred. If a Third Person files a
legal action regarding City's approval of this Agreement or any associated Approval (exclusive of
legal actions alleging violation of Government Code Section 1090 by elected officials of City),
Developer shall Indemnify City against such Third Person legal action, including all Legal Costs,
monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the
expenses of any and all financial or performance obligations resulting from the disposition of the
legal action. If such challenge to this Agreement occurs prior to the Close of Escrow pursuant to
the Purchase and Sale Agreement, Developer may choose to cancel the Escrow as provided for in
the Purchase and Sale Agreement and terminate this Agreement. This Agreement may not be
terminated and Developer shall be required to defend and indemnify the City as provided herein if
Escrow is not terminated. City shall reasonably cooperate with Developer in defense of City in
any legal action subject to this Section 8.12, subject to Developer performing Developer's
indemnity obligations for such legal action. Nothing contained in this Section 8.12 is intended to
be nor shall be deemed or construed to be an express or implied admission that City may be liable
to Developer or any other Person for damages or other relief regarding any alleged or established
failure of City to comply with any Law. Any legal action that is subject to this Section 8.12
(including any appeal periods and the pendency of any appeals) shall constitute an Unavoidable
Delay and the time periods for performance by either Party under this Agreement may be extended
pursuant to the provisions of this Agreement regarding Unavoidable Delay.
8.13 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective heirs, executors, administrators, legal representatives,
successors and assigns. If Developer sells or ground leases one or more Sites and causes the buyer
or ground lessee to contractually assume the provisions of this Agreement for the benefit of the
City, the provisions of this Agreement applicable to such Site(s) shall no longer apply to Developer
and shall then apply solely to the buyer or ground lessee assuming such obligations provided
Developer has provided City with written notice of the intent to assign this Agreement not less
than thirty (30) days prior to the assignment and City has consented to the assignment. City's
consent shall not be unreasonably withheld, delayed or conditioned.
8.14 Time Declared to be of the Essence. As to the performance of any obligation under
this Agreement of which time is a component, the performance of such obligation within the time
specified is of the essence.
8.15 Entire Agreement. This Agreement integrates all of the terms, conditions and
exhibits mentioned in this Agreement or incidental to this Agreement, including the Purchase and
Sale Agreement, and supersedes all negotiations or previous agreements between the Parties with
29
respect to all or any portion of the Property or the development of the Project (excluding the
Purchase and Sale Agreement).
8.16 Waivers and Amendments. All waivers of the provisions of this Agreement must
be in writing and signed by the authorized representative(s) of the Party making the waiver. All
amendments to this Agreement must be in writing and signed by the authorized representative(s)
of both City and Developer. Failure to insist on any one occasion upon strict compliance with any
term, covenant, condition, restriction or agreement contained in this Agreement shall not be
deemed a waiver of such term, covenant, condition, restriction or agreement, nor shall any waiver
or relinquishment of any rights or powers under this Agreement, at any one time or more times, be
deemed a waiver or relinquishment of such right or power at any other time or times.
8.17 Prohibition Against Changes in Ownership, Mana ement or Control of Developer
or Assignment. Developer acknowledges and agrees that the qualifications and identity of
Developer are of particular importance and concern to City. Developer further acknowledges and
agrees that City has relied and is relying on the specific qualifications and identity of Developer
and that City would not have entered into this Agreement but for the specific qualifications and
identity of Developer. As a result, Developer and City agree that the following restrictions on
Transfers shall apply: (a) Developer may not make any Transfer of a Site prior to the issuance by
City of a Certificate of Completion for the portion of the Project to be completed upon such Site,
except that, after the Close of Escrow, Developer may grant easements and other encumbrances
that are Permitted Encumbrances; and (b) after the Project Completion Date, the restrictions on
Transfers set forth in this Section 8.17 shall terminate. Any Transfers of all or any portion of
Developer's rights or obligations under this Agreement or of all or any portion of the Property, not
expressly allowed in this Section 8.17, or that are not otherwise Permitted Encumbrances, are only
permitted with the prior written consent of City, which may be withheld or conditioned in City's
sole and absolute discretion. Any Transfer made in violation of this Section 8.17 shall be voidable
at the election of City. Developer acknowledges and agrees that the restrictions on Transfers set
forth in this Section 8.17 are reasonable.
8.18 CAY Manager Implementation. City shall implement this Agreement through the
City Manager. The City Manager is hereby authorized by City to enter into agreements referenced
in this Agreement or reasonably required to implement this Agreement on behalf of City, issue
approvals, interpretations or waivers and enter into amendments to this Agreement on behalf of
City, to the extent that any such action(s) does/do not materially or substantially change the Project
or increase the monetary obligations of City by more than Fifty Thousand Dollars ($50,000) in the
aggregate. All other actions shall require the consideration and approval of City Council, unless
expressly provided otherwise by action of City Council. Nothing in this Section 8.18 shall restrict
the submission to City Council of any matter within the City Manager's authority under this
Section 8.18 in the City Manager's sole and absolute discretion, to obtain City Council
authorization on such matter. The specific intent of this Section 8.18 is to authorize certain actions
on behalf of City by the City Manager, but not to require that such actions be taken by the City
Manager, without consideration by City Council.
8.19 Survival of Agreement. All of the provisions of this Agreement shall be applicable
to any dispute between the Parties arising from this Agreement, whether prior to or following
expiration or termination of this Agreement, until any such dispute is finally and completely
30
resolved between the Parties, either by written settlement, entry of a non -appealable judgment or
expiration of all applicable statutory limitations periods and all terms and conditions of this
Agreement relating to dispute resolution and limitations on damages or remedies shall survive any
expiration or termination of this Agreement.
8.20 Counterparts. This Agreement shall be signed in three (3) counterpart originals,
each of which is deemed to be an original. This Agreement includes 35 pages and seven (7)
exhibits (each exhibit is incorporated into this Agreement by reference) that constitute the entire
understanding and Agreement of the Parties regarding the subject matter of this Agreement.
8.21 Facsimile or Electronic Signatures. Signatures delivered by facsimile or electronic
means shall be binding as originals upon the Party so signing and delivering; provided, however,
that original signature(s) of each Party shall be required for each document to be recorded.
9. CITY POWER OF TERMINATION REGARDING PROPERTY.
9.1 Reservation. If the City has not issued a Certificate of Completion for Site B and
Site B has not begun generating Sales and Use Tax within eight (8) years after the Close of Escrow,
at any time thereafter while that situation persists, the City reserves a power of termination
pursuant to Civil Code Sections 885.010, et seq., exercisable by the City, in its sole and absolute
discretion, to terminate the fee interest of the Developer in any portion of the Property and any
improvements on that portion of the Property for which the City has not issued a Certificate of
Completion ("POT Property"), and re -vest such fee interest in the City and take possession of
such POT Property, without compensation to the Developer except as set forth below.
9.2 Notice. The power reserved in this Section 9 shall be exercisable by delivering
written Notice to the Developer triggering the City's exercise of its power of termination, at least,
thirty (30) calendar days in advance of the effective date of termination.
9.3 No Effect on Permitted Encumbrances. The rights of the City under this Section 9
shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit
any Permitted Encumbrance:
9.4 Grant Deed. Upon the City's exercise of its power of termination pursuant to this
Section 9, the Developer or its successors or assigns shall convey fee title to the POT Property and
all improvements thereon to the City by grant deed, in accordance with Civil Code Section 1109,
as such code section may hereafter, from time to time, be amended, renumbered, replaced or
substituted. Such conveyance shall be duly acknowledged by the Developer and a notary in a
manner suitable for recordation. The City may enforce its rights pursuant to this Section 9 by
means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction.
9.5 Distribution of Resale Proceeds. Upon the re -vesting in the City of title to the POT
Property, whether by grant deed or court decree, the City shall exercise its reasonable good faith
efforts to resell the POT Property at the POT Property's then Fair Market Value, as soon and in
such manner as the City shall, in its sole and absolute discretion, find feasible to a qualified and
responsible Person or Persons (as determined by the City in its sole and absolute discretion) who
will assume the Developer's obligations to begin, and/or complete and/or operate the POT
Property, or such other replacement development acceptable to the City, in its sole and absolute
31
discretion. Upon any such resale of all or a portion of the POT Property, the proceeds received by
the City from such resale shall be applied, as follows:
a. First, to pay any and all amounts required to release/reconvey any Permitted
Mortgage recorded against the Property; and
b. Second, to reimburse the City on its own behalf or on behalf of the City for
all actual internal and third -Person costs and expenses previously or currently incurred by
the City or the City related to the POT Property or this Agreement, including customary
and reasonable fees or salaries to third -Person consultants (including Legal Costs) in
connection with the recapture, management or resale of the POT Property; all taxes,
assessments and utility charges paid by the City and/or the City with respect to the POT
Property; any payment made or necessary to be made to discharge or prevent from
attaching or being made any subsequent encumbrances or liens due to obligations incurred
by the Developer with respect to the acquisition of the POT Property or the construction or
installation of the Project thereon; and amounts otherwise owing to the City or the City by
the Developer, or its successors or assigns, pursuant to the terms of this Agreement; and
C. Third, to the extent that any proceeds from such resale are available, after
payment of all amounts described in (a) and (b), above, to reimburse the Developer or its
successors in interest to the POT Property, the amount of. (1) the pro -rata portion (based
on the square footage of the POT Property transferred to the new developer relative to the
square footage of the entire Property) of the Purchase Price paid to the City by the
Developer; and (2) the third -Person costs actually incurred and paid by the Developer
regarding the development of the Project on the POT Property not already addressed by
the price adjustments made pursuant to the Keyser Marten and Associates analysis,
attached hereto as Exhibit G, including, but not limited to, costs of carry, taxes, and other
items, each as set forth in a cost certification to be made by the Developer to the City
("Development Costs"), under penalty of perjury under the laws of the State, prior to any
such reimbursement and, which certification shall be subject to the City's reasonable
approval; provided, however, that the Developer shall not be entitled to reimbursement for
Development Costs to the extent that such expenses relate to any loans, liens or other
encumbrances that are paid by the City pursuant to the provisions of sub -sections (a) or
(b), above;
d. Fourth, any portion of the proceeds from the resale of the Property
remaining after payment of all amounts described in (a), (b), and (c) above, shall be retained
by the City, as the City's sole and exclusive property.
9.6 RIGHT OF RE-ENTRY. IMMEDIATELY FOLLOWING THE THIRTY (30)
DAY PERIOD SPECIFIED IN SECTION 9.2, THE CITY, ITS EMPLOYEES AND AGENTS
SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY
PORTION OF THE CITY PROPERTY AND ANY IMPROVEMENTS ON OR TO THE CITY
PROPERTY, WITHOUT FURTHER NOTICE OR COMPENSATION TO THE DEVELOPER.
BY INITIALING BELOW, THE DEVELOPER HEREBY EXPRESSLY WAIVES, TO THE
MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT THE
DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND
32
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES
MAY, FROM TIME TO TIME, BE AMENDED, REPLACED, RENUMBERED OR
SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES
OF SIMILAR EFFECT.
Initials of Authorized
Developer Representative
9.7 WAIVERS. THE DEVELOPER ACKNOWLEDGES AND AGREES THAT
THE CITY'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY
PURSUANT TO THIS SECTION 9 MAY WORK A FORFEITURE OF THE ESTATE IN THE
CITY PROPERTY CONVEYED TO THE DEVELOPER THROUGH THE CITY DEED. THE
DEVELOPER HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED
BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT THE DEVELOPER
MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE
DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR
COMPENSABLE DAMAGES. THE DEVELOPER FURTHER EXPRESSLY WAIVES, TO
THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES
THAT THE DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275
OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. THE
DEVELOPER ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THIS
AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE
EXERCISE OF THE CITY'S POWER OF TERMINATION PROVIDED IN THIS SECTION 9
AND FURTHER ACKNOWLEDGE THAT IT HAS RECEIVED INDEPENDENT AND
ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS
AND REMEDIES PURSUANT TO THIS SECTION 9.
Initials of Authorized
Developer Representative
[Signatures on following page]
33
SIGNATURE PAGE
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
IN WITNESS WHEREOF, the Parties have signed and entered into this Agreement by and
through the signatures of their respective authorized representative(s) as follow:
AGENCY:
DEVELOPER:
THE CITY OF SAN JUAN CAPISTRANO, a Ganahl Lumber Company,
public body, corporate and politic a California corporation
City Manager
ATTEST:
a
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
City Attorney
34
am
Dan Delaney
Chief Financial Officer
Alex Uniack
Vice President and General Manager
EXHIBIT A
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
LEGAL DESCRIPTION
[Attached behind this cover page]
At the request of either Party, upon the recording of the final subdivision map for the Property,
the Parties agree to cooperate to substitute the legal description referencing the final map
recording information in place of the Property graphic on the following page.
Exhibit A
Exhibit A
cm
LOT 4
Lor 5
LOT 3
JM wA
LOT Lor I
Exhibit A
EXHIBIT B
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
NOTICE OF AGREEMENT
[Attached behind this cover page]
Exhibit B
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Juan Capistrano
San Juan Capistrano, CA
Attention: City Manager
SPACE ABOVE FOR RECORDER'S USE ONLY
EXEMPT FROM RECORDING FEES - GOVT. CODE § 27383
THE CITY OF SAN JUAN CAPISTRANO
Notice of Agreement
Agreement Affecting Real Property
(Ganahl Lumber Company)
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of
, 2020, Ganahl Lumber Company, a California corporation
("Developer"), and the City of San Juan Capistrano, a public body, corporate and politic ("City"),
entered into an agreement entitled "Agreement Affecting Real Property (Ganahl Lumber
Company)" ("Agreement"). A copy of the Agreement is available for inspection and copying by
interested persons as a public record of City at the City of San Juan Capistrano's offices located
32400 Paseo Adelanto, San Juan Capistrano, California, during the regular business hours of the
City.
The Agreement affects the real property described in Exhibit "1" attached to this Notice of
Agreement ("Property"). The meaning of defined terms, indicated by initial capitalization, used
in this Notice of Agreement shall be the same as the meaning ascribed to such terms, respectively,
in the Agreement.
PLEASE TAKE FURTHER NOTICE that the Agreement contains certain covenants
running with the land of the Property and other agreements between Developer and City affecting
the Property, including, without limitation (all section references are to the Agreement):
2.1 Developer Covenant to Undertake Each Site. Developer covenants to and for
the exclusive benefit of City that Developer shall commence and complete the development of
each Site comprising the Project within the time period for such Site set forth in the Schedule of
Performance. Developer covenants and agrees to complete each such Site in conformity with the
terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance,
any and all Approvals required by this Agreement, except for such changes as may be mutually
agreed upon in writing by and between Developer and City, and all applicable Laws of each
Government with jurisdiction over Property or the applicable Site. The covenants of this Section
2.1 shall run with the land with respect to each Site, until the earlier of the date of recordation of
the Certificate of Completion applicable to such Site or the fifteenth (15th) anniversary of the
Effective Date of this Agreement.
3.1 Maintenance Condition of the Property. Developer for itself, its successors and
assigns covenants and agrees that:
3.1.1 The areas of the Property that are subject to public view (including all existing and
future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall
be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear
excepted. If, at any time within fifteen (15) years following the Close of Escrow, there is an
occurrence of an adverse condition on any area of the Property that is subject to public view in
contravention of the general maintenance standard described above (a "Maintenance Deficiency"),
then City shall Notify Developer in writing of the Maintenance Deficiency. If Developer fails to
cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30)
calendar days of its receipt of Notice of the Maintenance Deficiency, City may conduct a public
hearing, following transmittal of Notice of the hearing to Developer, at least ten (10) calendar days
prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency
exists and whether Developer has failed to comply with the provisions of this Section 3.1. If, upon
the conclusion of the public hearing, City finds that a Maintenance Deficiency exists and that there
appears to be non-compliance with the general maintenance standard described in this Section
3.1.1, City shall have the right to enter the Property and perform all acts necessary to cure the
Maintenance Deficiency, or to take any other action at law or in equity that may then be available
to City to accomplish the abatement of the Maintenance Deficiency. Any sum expended by City
for the abatement of a Maintenance Deficiency on the Property as authorized by this Section 3.1
shall become a lien on the Property until paid.
3.1.2 Graffiti, as this term is defined in Government Code Section 38772, that has been
applied to any exterior surface of a structure or improvement on the Property that is visible from
any public right-of-way adjacent or contiguous to the Property, shall be removed by Developer by
either painting over the evidence of such vandalism with a paint that has been color -matched to
the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or
water, as appropriate. If any such graffiti and is not removed within 72 hours following the time
of the discovery of the graffiti by Developer, City shall have the right to enter the Property and
remove the graffiti, after not less than 48 hours' Notice to Developer during Business Days;
provided, however, if the extent and nature of the graffiti is such that more than 72 hours is
reasonably necessary to remove the graffiti, then Developer shall have such additional time as is
reasonably necessary to remove the graffiti so long as Developer commences the removal of the
graffiti during such 72 hour period and thereafter diligently continues the removal process until
complete. Any sum expended by City for the removal of graffiti from the Property as authorized
by this Section 3.1.2, shall become a lien on the Property until paid.
3.2 Covenant to Maintain Property on Tax Rolls for 10 Years.
3.2.1 The Developer shall assure that the entire Property remains on the County of
Orange, California, secured real property tax rolls for the ten (10) years following the Project
Completion Date.
3.2.2 For the ten (10) year period following the Project Completion Date, the Developer
for itself and its successors and assigns covenants and agrees to pay all property tax bills with
Pa
respect to the Property and all improvements thereon on or before the last day for the timely
payment of each property tax installment on December 10 and April 10 and to timely pay all
supplemental tax bills regarding the Property issued by the County of Orange, California.
3.2.3 The Developer understands and agrees that neither the Developer, nor its successors
or assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the
Property or the Project or any portion thereof to any entity or person, or for any use of the Property
or the Project, or any portion thereof, that is partially or wholly exempt from the payment of real
property taxes or that would cause the exemption of the payment of all or any portion of real
property taxes otherwise assessable regarding the Property or the Project, without the prior written
consent of the City for a period of ten (10) years after the Project Completion Date.
3.2.4 The covenants of this Section 3.2 shall run with the land of the Property and shall
be covenants set forth in the City Deed. Upon an approved or Permitted Transfer of the Property
by Developer, Developer shall be deemed released from any obligations pursuant to this Section
3.
3.3 No Discrimination or Segregation. The Developer covenants by and for itself,
himself or herself, its, his or her heirs, executors, administrators, and assigns, and all Persons
claiming under or through it, him or her, that this Agreement is made and accepted upon and
subject to the following conditions:
3.3.1 Standards. 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 Property
nor shall the Developer, itself, himself or herself, or any Person claiming under or through it, 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, subtenants,
sublessees, or vendees in the Property.
3.3.2 Covenant Running With Land. The provisions of this Section 3.3 shall be a
covenant running with the land of the Property and binding on all successive owners and users of
the Property.
3.6 Mortgagee Protection. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations set forth in this Agreement shall defeat or render invalid or
in any way impair the lien or charge of any Permitted Security Instrument or, following the
issuance of a Certificate of Completion for the portion of the Project to be completed upon a Site,
any Security Instrument encumbering such Site; provided, however, that any successor in interest
to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations
and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale or otherwise.
3
3.7 Prohibited Uses. No portion of the Property shall be used for a junkyard, adult
entertainment, adult movie theater, adult bookstore, massage parlor, pawn shop, dollar store, check
cashing center (the foregoing shall in no event prohibit banking facilities within a grocery store or
a walk up ATM), payday loan or other similar business, laundromat, marijuana dispensary, tattoo
parlor or fortuneteller, or for the sale of narcotics paraphernalia, or for the long term treatment,
storage or disposal of Hazardous Materials.
THIS NOTICE OF AGREEMENT is dated as of , 2020, and
has been signed and made by and on behalf of Developer and City by and through the signatures
of their authorized representative(s) set forth below. This Notice of Agreement may be signed in
counterparts and each counterpart shall, collectively, be deemed to be one original instrument.
Signatures on following page
4
CITY:
THE CITY OF SAN JUAN CAPISTRANO, a
public body, corporate and politic
By:
City Manager
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
City Attorney
DEVELOPER:
Ganahl Lumber Company,
a California corporation
Dan Delaney
Chief Financial Officer
Alex Uniack
Vice President and General Manager
EXHIBIT "1"
TO
NOTICE OF AGREEMENT
Property Le al Description
[Attached behind this cover page]
EXHIBIT C
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
SCOPE OF DEVELOPMENT
The Property shall be developed into three separate Sites: Area A, Area B and Area C as
follows:
Area A would be graded to create a pad that could accommodate up to 6,000 feet of
restaurant space.
Area B would be developed with the Ganahl Lumber hardware store and lumber yard.
Area C would be developed into a crushed -rock gravel area that could accommodate
vehicle storage.
Site Plan
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EXHIBIT D
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
FORM OF CERTIFICATE OF COMPLETION
[Attached Behind This Cover Page]
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
(Space above for Recorder's Use Only)
CERTIFICATE OF COMPLETION
(For Site _ )
I, , City Manager of the City of San Juan Capistrano ("City") certify that:
Section 1. The required to be constructed in
accordance with that certain Agreement Affecting Real Property ( }
(the "Agreement") dated , by and between the City and Ganahl Lumber
Company, a California corporation ("Developer"), on that certain real property specifically
described in the legal description(s) attached to this Certificate of Completion as Exhibit "A" (the
"Property"), is complete in accordance with the provisions of the Agreement.
Section 2. This Certificate of Completion constitutes conclusive evidence of
City's determination of Developer's satisfaction of its obligation under the Agreement to construct
and install the on the Property, including any and all buildings,
parking areas, landscaping areas and related improvements necessary to support or meet any
requirements applicable to the and its use and occupancy on the
Property, whether or not such improvements are located on the Property or on other property
subject to the Agreement, excluding any normal and customary tenant improvements and minor
building "punch -list" items. Notwithstanding any provision of this Certificate of Completion, the
City may enforce any covenant surviving this Certificate of Completion in accordance with the
terms and conditions of the Agreement. The Agreement is an official record of the City and a copy
of the Agreement may be inspected at the City of San Juan Capistrano's offices located at
San Juan Capistrano, California, during the regular business hours of the City.
DATED AND ISSUED this _ day of ,
City Manager
1
Mayor
—1
EXHIBIT 1
TO
CERTIFICATE OF COMPLETION
Legal Description of Pra er
[To Be Inserted]
Exhibit D
EXHIBIT E
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
SCHEDULE OF PERFORMANCE
A. Days shall be calendar days, unless otherwise specified.
B. The City Manager is authorized by City to make minor changes to the schedule of
ninety (90) calendar days or less.
C. In the event of any conflict between this schedule and the Agreement, the terms and
provisions of this schedule shall control, subject to extension for Unavoidable Delays.
D. All defined terms indicated by initial capitalization used in this schedule shall have
the meanings ascribed to the same terms in the Agreement.
Action
Date Action to be
Completed By
Completion of construction of Site A
Within 24 -months after
Effective Date*
Completion of construction of Site B
Within 24 -months after
Effective Date*
Completion of construction of Site C
Within 36 -months after
Effective Date*
*Subject to extension by Unavoidable Delay. Also, if the Effective Date occurs between
October 1 of one year and March 31 of the following year, for purposes of this Schedule of
Performance only, the Effective Date shall be deemed to be April 1 of such following year.
Exhibit E
EXHIBIT F
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
DEPICTION OF SITES
1
SnTE 'x"
Q
LOT 4
LOT 5
a
LOT 3
c
SM "A'
LOT Z LOT I
4
sraw&j
EXHIBIT G
TO
AGREEMENT AFFECTING REAL PROPERTY
(Ganahl Lumber Company)
KMA ANALYSIS