Loading...
07-1002_S.J. HILLS L.P._Term & Settlement Agr & Mutual ReleaseTERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES This Termination and Settlement Agreement and Mutual Releases ("Agreement"), dated as of October 2, 2007, is entered into by and between the CITY OF SAN JUAN CAPISTRANO, a California municipal corporation (the "City"), and S. J. HILLS, a California limited partnership ("S. J. Hills"), and TAYLOR WOODROW HOMES, INC, a California corporation ("TWH") (the City, S. J. Hills and TWH are collectively defined herein as the "Parties" and each is individually referred to as a "Party"), with reference to the following facts: RECITALS A. The City has previously approved a residential development project located in the City and commonly known as the Lomas San Juan Planned Community (the "Planned Community"). B. S. J. Hills is the current owner of certain real property located within Tract No. 13436 ("Tract 13436"), which is part of the Planned Community and is also commonly known as "Area C-2" therein. C. TWH was the owner and developer of other portions of the Planned Community, including Tract Nos. 13437 and 13866, also commonly known as "Area D- 1" and "Area D-2". D. On June 6, 1989, the City Council adopted Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C", as amended pursuant to CC Resolution No. 95-2-7-3 adopted by the City Council on February 7, 1995 (as amended, the "Development Plan Resolution"), pursuant to which the City Council approved the Area Plan/Composite Development Plan (the "Development Plan") for the Planned Community, subject to certain conditions. Condition No. 8g of the Development Plan Resolution states that, "[p]rior to approval of final tract map, applicant shall enter into an agreement with the City which will provide for the construction and method of cost apportionment for La Novia Avenue Bridge over San Juan Creek." E. Pursuant to that certain Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement") dated July 10, 1991 and July 16, 1991, by and between the City and the Lusk Company, a California corporation, the prior developer of the Planned Community, and recorded on September 12, 1991 as Instrument No. 91-496384 in the Official Records of Orange County, California, Lusk agreed to design, construct and pay a portion of the cost for certain improvements, including the widening of the existing La Novia Bridge (the "Bridge") and the related construction of bridge pier protection and a drop structure -1- DOCSOC/ 1243254x7/022658-0025 C� 0 (collectively, the "Bridge Widening Work"). In addition, Section 3 of the Cost Apportionment Agreement provides that the Bridge Widening Work must be completed prior to the issuance of certificates of occupancy for the remaining 50% of the last phase of development of Tracts 13436, 13437, 13865 or 13866, whichever is the last phase (the "Certificate of Occupancy Condition"). Tract 13436 is the last phase of development in the Planned Community. F. All of the work required to be performed under the Cost Apportionment Agreement has been completed other than the Bridge Widening Work. G. It is now unclear whether the previously contemplated Bridge Widening Work is appropriate or feasible. H. Certain claims, demands and differences have existed heretofore among the Parties with regard to the continuing purpose, validity or enforceability of the provisions in the Cost Apportionment Agreement relating to the Bridge Widening Work and the Certificate of Occupancy Condition and the interpretation of the Certificate of Occupancy Condition. I. It is the intention of the Parties to settle and dispose of, fully and completely, any and all claims, demands and causes of action heretofore arising out of, connected with or incidental to the Cost Apportionment Agreement and the previously contemplated Bridge Widening Work. NOW, THEREFORE, in furtherance of the mutual desires set forth above, and in consideration of the mutual covenants and conditions set forth below, the Parties hereby agree as follows: AGREEMENT 1. TWH Payment. As a condition to the effectiveness of this Agreement, within five (5) business days following the date on which the City takes the actions set forth in Section 3, below, TWH shall pay to the City, in the form of a certified check, the amount of One Hundred Thousand Dollars and No/100ths Dollars ($100,000.00) (the "TWH Payment"). The City shall provide written confirmation of the TWH Payment to S.J. Hills' legal counsel promptly following its receipt of such payment. 2. Termination of Cost Apportionment Agreement. The Parties agree that, effective upon the TWH Payment, the Cost Apportionment Agreement is terminated and of no further force or effect whatsoever, including without limitation the provisions relating to the Bridge Widening Work and Certificate of Occupancy Condition, and that no provision in the Cost Apportionment Agreement shall survive such termination, notwithstanding any provision therein to the contrary. -2- DOCSOC/ 1243254v7/022658-0025 0 0 3. City Actions. The City hereby represents and warrants that, on October 2, 2007, the City Council adopted the resolution attached hereto as Exhibit A and incorporated herein by reference, the effectiveness of which is conditioned upon the TWH Payment, pursuant to which the City Council approved (a) the City's execution of this Agreement, (b) the termination of the Cost Apportionment Agreement in accordance with Section 2, above, and (c) the deletion of Section 8g of the Development Plan Resolution and affirmed that the Development Plan remains in full force and effect, as so modified. The City acknowledges and agrees that, following the TWH Payment, the City shall have no right whatsoever to (i) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the Bridge or (ii) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. 4. Releases. In consideration of the payment specified above and the mutual releases contained herein, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each party hereto, the Parties promise, agree and specifically release as follows: 4.1 Except as to such rights or remedies as may be created by this Agreement, the City hereby releases, remises and forever discharges S. J. Hills, TWH and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all suits, actions or causes of action, in law or in equity, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, losses, costs or expenses, of any nature whatsoever, whether known or unknown (collectively, the "Claims"), heretofore arising out of, connected with or incidental to the Bridge Widening Work and the Cost Apportionment Agreement (collectively, the "Released Claims"). 4.2 Except as to such rights or remedies as may be created by this Agreement, S. J. Hills hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.3 Except as to such rights or remedies as may be created by this Agreement, TWH hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. -3- DOCSOC/ 1243254v7/022658-0025 0 0 4.4 Except as to such rights or remedies as may be created by this Agreement, TWH and S.J. Hills hereby forever discharge each other and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.5 The Parties acknowledge and agree that the releases in Sections 4.1 through 4.4, above, are expressly limited to Released Claims and do not include any other Claims of any kind, including without limitation any Claims for breach of this Agreement. 4.6 With respect to the Released Claims, each Party specifically waives the benefit of the provisions of Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Each Party has been advised by its attorneys of the meaning of Section 1542 of the California Civil Code, and of the implications of waiving the benefits thereof. The Parties agree that this waiver is an essential part of this Agreement, which would not have been entered into without such provision. 5. Representations and Warranties: Each of the Parties represents, warrants and agrees as to itself as follows: 5.1 Such Party has received independent legal advice from its attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement. 5.2 Neither such Party nor any officer, agent, employee, representative, or attorney of or for it has made any statement or representation to any other Party regarding any fact relied upon in entering into this Agreement, and it is not relying upon any statement, representation or warranty or promise, written or oral, of any other Party (or of any officer, agent, employee, representative, or attorney for any other Party) in executing this Agreement, or in making the settlement provided for herein, except as expressly stated in this Agreement. In DOC SOC/ 1243254v7/022658-0025 0 0 5.3 Such Party has made such investigation of the facts pertaining to this settlement and this Agreement and of all the matters pertaining thereto as it deems necessary. 5.4 Such Party or its responsible officer or attorney has read this Agreement and understands the contents hereof. Each officer, member, manager, trustee, official or attorney executing this Agreement on behalf of such Party is empowered to do so and thereby bind such Party. 5.5 Each as otherwise expressly represented, warranted or provided in this Agreement, such Party assumes the risks (a) that it may hereafter discover facts in addition to or contrary to those it believed to exist or relied upon in entering into this Agreement, (b) that it may have mistakenly understood matters relevant to entering into this Agreement and (c) that another Party may have negligently misrepresented or negligently failed to disclose facts in connection with the entering into of this Agreement. Notwithstanding any such claims of misunderstanding, mistake, negligent misrepresentation or negligent nondisclosure, such Party intends that this Agreement thereafter shall continue in full force and effect and shall not be subject to rejection or rescission for any reason, provided that such Party reserves all rights provided for in this Agreement. 5.6 It has not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the Released Claims or any part thereof. 5.7 Each term of this Agreement (other than Recitals A through I, above) is contractual and not merely a recital and each of Recitals A through I, above, is true and correct. 5.8 Such Party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the Released Claims. Nevertheless, it is the intention of such Party to fully, finally and forever settle and release the Released Claims, and all claims relative thereto, which do now exist, may exist, or heretofore have existed between them. In furtherance of such intention, the releases given herein shall be and remain in effect as full and complete mutual releases of the Released Claims, notwithstanding the discovery or existence of any additional or different claims or facts relative thereto. 5.9 It will execute all such further and additional documents as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 6. Settlement. This Agreement effects the settlement of claims, demands, and conditions which are denied and contested and nothing contained herein shall be -5- DOCSOC/ 1243254v7/022658-0025 0 construed as an admission by any Party hereto of any liability of any kind to any other Party. 7. Miscellaneous. 7.1 This Agreement is made and entered into in the State of California, and the rights and obligations of the parties hereunder shall in all respects be construed and enforced in accordance with, and governed by, the laws of the State of California. 7.2 It is expressly understood and agreed that this Agreement contains the entire agreement and understanding of the Parties concerning the Released Claims, the settlement thereof and the subject matter herein, and merges, supersedes and replaces all prior discussions, understandings, negotiations, agreements, representations, conditions, warranties, covenants and all other communications between the Parties hereto, whether written or oral, relating to the Released Claims. 7.3 No provision herein may be waived unless in writing and signed by the Party or Parties whose rights are thereby waived. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. This Agreement may be modified or amended only by written agreement executed by all of the Parties. 7.4 This Agreement is binding upon and shall inure to the benefit of the Parties and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partners, partnerships, members, managers, joint venturers, assigns, heirs and successors in interest. This Agreement may be enforced by any Party or its successors and assigns against any other Party or its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity, other than the Parties or their respective successors and assigns, any rights or benefits under or by reason of this Agreement. 7.5 Each Party has cooperated in the drafting and preparation of this Agreement and, accordingly, the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. 7.6 In the event that any litigation shall be commenced concerning this Agreement or any the Parties' performance under this Agreement, the prevailing party in such litigation shall be entitled to recover, in addition to such other relief as may be granted, its reasonable costs and expenses, including without limitation attorneys' fees and court costs, whether or not taxable, as awarded by a court of competent jurisdiction. 7.7 The descriptive headings used in this Agreement are for convenience only and shall not affect the meaning of any provision of this Agreement. I an DOCSOC/ 1243254v7/022658-0025 C� 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: LM Mark McGuire "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner By Nelson ung, Polident TAYLOR WOODROW HOMES, a California corporation Attorney for Taylor Woodrow Homes By (Print Name and Title) (SIGNATURES CONTINUED ON NEXT PAGE) -7- DOCSOC/ 1243254v7/02265 8-0025 0 0 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: By 104,L Mark McGuire "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner 0 Nelson Chung, President "T)ArH": TAYLOR WOODROW HOMES, a California corporation Attorney for Taylor Woodrow Homes By Donald D. Steffensen, Jr. General Counsel and Secretary -7- DOCSOC/ 1243254v7/022658-0025 • APPROVED AS TO FORM: STRADLING YOCCA CARLSON & n AT TlT. Special Counsel for City of San Juan Capistrano C� "City": CITY OF SAN JUAN CAPISTRANO, a municipal corporation LM -8- DOCSOC/ 1243254v7/022658-0025 Sam Allevato, Mayor 0 0 APPROVED AS TO FORM: "City": STRADLING YOCCA CARLSON & CITY OF SAN JUAN CAPISTRANO, a RAUTH municipal corporation By By Thomas P. Clark, Jr. a Allevato, Mayor Special Counsel for City of San Juan Capistrano Attest: City Clerk -8- DOCSOC/ 1243254v7/022658-0025 • EXHIBIT A • RESOLUTION NO. 07-10-02-02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, APPROVING A TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES AND TAKING OTHER ACTIONS RELATING TO COST APPORTIONMENT OBLIGATIONS FOR CERTAIN DESIGNATED OFF-SITE WORK FOR AREA C -LOS SAN JUAN PLANNED COMMUNITY(TRACT 13436) Whereas, the City Council has considered the approval of a Termination and Settlement Agreement and Mutual Release (the 'Termination and Settlement Agreement') dated as of October 2, 2007 terminating a Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement') dated July 10, 1991 between the City of San Juan Capistrano and the Lusk Company based upon changed circumstances; and Whereas, a certain designated off-site bridge work obligation describe in the Cost Apportionment Agreement and referenced in Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C' (a certified copy of which is attached), as amended pursuant to CC Resolution No. 95-2-7- 3 adopted on February 7, 1995, pursuant to which the City Council approved the Area Plan/Composite Development Plan (the 'Development Plan") for the Lomas San Juan Planned Community, is no longer practically feasible based upon changed circumstances. Now Therefore, Be It Resolved, that: 1. The City Council hereby approves the Termination and Settlement Agreement attached hereto as Exhibit "1" and incorporated herein by reference and hereby authorizes the Mayor to execute the same on behalf of the City. 2. The Cost Apportionment Agreement is hereby terminated in accordance with Section 2 of the Agreement and has no further force or effect. 3. The City Council does hereby repeal Section 8g of the Development Plan and affirms that the Development Plan otherwise remains in full force and effect. 4. The City acknowledges and agrees that the City shall have no right whatsoever to (a) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the La Novia Bridge or (b) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. Page 1 of 2 10-02-2007 0 0 6. This Resolution shall become effective upon the "TWH Payment' (as defined in the Agreement). PASSED, APPROVED, AND ADOPTED this 2nd day of October 2007. ATTEST: a City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF SAN JUAN CAPISTRANO ) 1, MARGARET R. MONAHAN, appointed City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing Resolution No. 07-10-02-02 was duly adopted by the City Council of the City of San Juan Capistrano at a Regular meeting thereof, held the 2nd day of October 2007, by the following vote: AYES: COUNCIL MEMBERS: Nielsen, Hribar, Uso, Soto and Mayor Allevato NOES: COUNCIL MEMBER: None ABSENT: COUNCIL MEMBER: None R. MONAHAN, City Clerk Page 2 of 2 10-02-2007 • EXHIBIT "1" i TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES This Termination and Settlement Agreement and Mutual Releases ("Agreement"), dated as of October 2, 2007, is entered into by and between the CITY OF SAN JUAN CAPISTRANO, a California municipal corporation (the "C"), and S. J. HILLS, a California limited partnership ("S. J. Hills"), and TAYLOR WOODROW "TWH") (the City, S. J. Hills and TWH are HOMES, INC, a California corporatigR( collectively defined herein as tie "Parties—'and each is individually referred to as a ")�"), with fefer`e%n a to the following facts: RECITALS A. The City has previously approved a residential development project located in the City and commonly known as the Lomas San Juan Planned Community (the "Planned Community"). B. S. J. Hills is the current owner of certain real property located within Tract No. 13436 ("Tract 13436"), which is part of the Planned Community and is also commonly known as "Area C-2" therein. C. TWH was the owner and developer of other portions of the Planned Community, including Tract Nos. 13437 and 13866, also commonly known as "Area D- 1" and "Area D-2". D. On June 6, 1989, the City Council adopted Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan – Glenfed Planned Community Area C", as amended pursuant to CC Resolution No. 95-2-7-3 adopted by the City Council on February 7, 1995 (as amended, the "Development Plan Resolution"), pursuant to which the City Council approved the Area Plan/Composite Development Plan (the "Development Plan") for the Planned Community, subject to certain conditions. Condition No. 8g of the Development Plan Resolution states that, "[p]rior to approval of final tract map, applicant shall enter into an agreement with the City which will provide for the construction and method of cost apportionment for La Novia Avenue Bridge over San Juan Creek." E. Pursuant to that certain Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement") dated July 10, 1991 and July 16, 1991, by and between the City and the Lusk Company, a California corporation, the prior developer of the Planned Community, and recorded on September 12, 1991 as Instrument No. 91-496384 in the Official Records of Orange County, California, Lusk agreed to design, construct and pay a portion of the cost for certain improvements, including the widening of the existing La Novia Bridge (the "Bridge") and the related construction of bridge pier protection and a drop structure -1- DOCSOCJ 1243254v7/022658-0025 0 0 (collectively, the "Bridge Widening Work"). In addition, Section 3 of the Cost Apportionment Agreement provides that the Bridge Widening Work must be completed prior to the issuance of certificates of occupancy for the remaining 50% of the last phase of development of Tracts 13436, 13437, 13865 or 13866, whichever is the last phase (the "Certificate of Occupancy Condition"). Tract 13436 is the last phase of development in the Planned Community. F. All of the work required to be performed under the Cost Apportionment Agreement has been completed other than the Bridge Widening Work. G. It is now unclear whether the previously contemplated Bridge Widening Work is appropriate or feasible. H. Certain claims, demands and differences have existed heretofore among the Parties with regard to the continuing purpose, validity or enforceability of the provisions in the Cost Apportionment Agreement relating to the Bridge Widening Work and the Certificate of Occupancy Condition and the interpretation of the Certificate of Occupancy Condition. I. It is the intention of the Parties to settle and dispose of, fully and completely, any and all claims, demands and causes of action heretofore arising out of, connected with or incidental to the Cost Apportionment Agreement and the previously contemplated Bridge Widening Work. NOW, THEREFORE, in furtherance of the mutual desires set forth above, and in consideration of the mutual covenants and conditions set forth below, the Parties hereby agree as follows: AGREEMENT 1. TWH Payment. As a condition to the effectiveness of this Agreement, within five (5) business days following the date on which the City takes the actions set forth in Section 3, below, TWH shall pay to the City, in the form of a certified check, the amount of One Hundred Thousand Dollars and No/100ths Dollars ($100,000.00) (the "TWH Payment"). The City shall provide written confirmation of the TWH Payment to S.J. Hills' legal counsel promptly following its receipt of such payment. 2. Termination of Cost Apportionment Agreement. The Parties agree that, effective upon the TWH Payment, the Cost Apportionment Agreement is terminated and of no further force or effect whatsoever, including without limitation the provisions relating to the Bridge Widening Work and Certificate of Occupancy Condition, and that no provision in the Cost Apportionment Agreement shall survive such termination, notwithstanding any provision therein to the contrary. -2- DOCSOG 1243254v7/022658-0025 • C� 3. City Actions. The City hereby represents and warrants that, on October 2, 2007, the City Council adopted the resolution attached hereto as Exhibit A and incorporated herein by reference, the effectiveness of which is conditioned upon the TWH Payment, pursuant to which the City Council approved (a) the City's execution of this Agreement, (b) the termination of the Cost Apportionment Agreement in accordance with Section 2, above, and (c) the deletion of Section 8g of the Development Plan Resolution and affirmed that the Development Plan remains in full force and effect, as so modified. The City acknowledges and agrees that, following the TWH Payment, the City shall have no right whatsoever to (i) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the Bridge or (ii) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. 4. Releases. In consideration of the payment specified above and the mutual releases contained herein, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each party hereto, the Parties promise, agree and specifically release as follows: 4.1 Except as to such rights or remedies as may be created by this Agreement, the City hereby releases, remises and forever discharges S. J. Hills, TWH and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all suits, actions or causes of action, in law or in equity, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, losses, costs or expenses, of any nature whatsoever, whether known or unknown (collectively, the "Claims"), heretofore arising out of, connected with or incidental to the Bridge Widening Work and the Cost Apportionment Agreement (collectively, the "Released Claims'). 4.2 Except as to such rights or remedies as may be created by this Agreement, S. J. Hills hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.3 Except as to such rights or remedies as may be created by this Agreement, TWH hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. -3- DOCSOC/1243254v7/022658-0025 0 0 4.4 Except as to such rights or remedies as may be created by this Agreement, TWH and S.J. Hills hereby forever discharge each other and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.5 The Parties acknowledge and agree that the releases in Sections 4.1 through 4.4, above, are expressly limited to Released Claims and do not include any other Claims of any kind, including without limitation any Claims for breach of this Agreement. 4.6 With respect to the Released Claims, each Party specifically waives the benefit of the provisions of Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Each Party has been advised by its attorneys of the meaning of Section 1542 of the California Civil Code, and of the implications of waiving the benefits thereof. The Parties agree that this waiver is an essential part of this Agreement, which would not have been entered into without such provision. 5. Representations and Warranties: Each of the Parties represents, warrants and agrees as to itself as follows: 5.1 Such Party has received independent legal advice from its attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement. 5.2 Neither such Party nor any officer, agent, employee, representative, or attorney of or for it has made any statement or representation to any other Party regarding any fact relied upon in entering into this Agreement, and it is not relying upon any statement, representation or warranty or promise, written or oral, of any other Party (or of any officer, agent, employee, representative, or attorney for any other Party) in executing this Agreement, or in making the settlement provided for herein, except as expressly stated in this Agreement. MI DOCSOC 1243254v7/022658-0025 0 0 5.3 Such Party has made such investigation of the facts pertaining to this settlement and this Agreement and of all the matters pertaining thereto as it deems necessary. 5.4 Such Party or its responsible officer or attorney has read this Agreement and understands the contents hereof. Each officer, member, manager, trustee, official or attorney executing this Agreement on behalf of such Party is empowered to do so and thereby bind such Party. 5.5 Each as otherwise expressly represented, warranted or provided in this Agreement, such Party assumes the risks (a) that it may hereafter discover facts in addition to or contrary to those it believed to exist or relied upon in entering into this Agreement, (b) that it may have mistakenly understood matters relevant to entering into this Agreement and (c) that another Party may have negligently misrepresented or negligently failed to disclose facts in connection with the entering into of this Agreement. Notwithstanding any such claims of misunderstanding, mistake, negligent misrepresentation or negligent nondisclosure, such Party intends that this Agreement thereafter shall continue in full force and effect and shall not be subject to rejection or rescission for any reason, provided that such Party reserves all rights provided for in this Agreement. 5.6 It has not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the Released Claims or any part thereof. 5.7 Each term of this Agreement (other than Recitals A through I, above) is contractual and not merely a recital and each of Recitals A through 1, above, is true and correct. 5.8 Such Party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the Released Claims. Nevertheless, it is the intention of such Party to fully, finally and forever settle and release the Released Claims, and all claims relative thereto, which do now exist, may exist, or heretofore have existed between them. In furtherance of such intention, the releases given herein shall be and remain in effect as full and complete mutual releases of the Released Claims, notwithstanding the discovery or existence of any additional or different claims or facts relative thereto. 5.9 It will execute all such further and additional documents as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 6. Settlement. This Agreement effects the settlement of claims, demands, and conditions which are denied and contested and nothing contained herein shall be -5- DOCSOGl243254v7/022658-0025 construed asan admission by any Party hereto of any liability of any kind to any other Party. 7. Miscellaneous. 7.1 This Agreement is made and entered into in the State of California, and the rights and obligations of the parties hereunder shall in all respects be construed and enforced in accordance with, and governed by, the laws of the State of California. 7.2 It is expressly understood and agreed that this Agreement contains the entire agreement and understanding of the Parties concerning the Released Claims, the settlement thereof and the subject matter herein, and merges, supersedes and replaces all prior discussions, understandings, negotiations, agreements, representations, conditions, warranties, covenants and all other communications between the Parties hereto, whether written or oral, relating to the Released Claims. 7.3 No provision herein may be waived unless in writing and signed by the Party or Parties whose rights are thereby waived. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. This Agreement may be modified or amended only by written agreement executed by all of the Parties. 7.4 This Agreement is binding upon and shall inure to the benefit of the Parties and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partners, partnerships, members, managers, joint venturers, assigns, heirs and successors in interest. This Agreement may be enforced by any Party or its successors and assigns against any other Party or its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity, other than the Parties or their respective successors and assigns, any rights or benefits under or by reason of this Agreement. 7.5 Each Party has cooperated in the drafting and preparation of this Agreement and, accordingly, the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. 7.6 In the event that any litigation shall be commenced concerning this Agreement or any the Parties' performance under this Agreement, the prevailing party in such litigation shall be entitled to recover, in addition to such other relief as may be granted, its reasonable costs and expenses, including without limitation attorneys' fees and court costs, whether or not taxable, as awarded by a court of competent jurisdiction. 7.7 The descriptive headings used in this Agreement are for convenience only and shall not affect the meaning of any provision of this Agreement. 12 DOCS OG I243254J7/022658-0025 • 11 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year fust above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: By Mark McGuire Attorney for Taylor Woodrow Homes "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner t111`W TAYLOR WOODROW HOMES, a California corporation (Print Name and Title) (SIGNATURES CONTINUED ON NEXT PAGE) -7- DOCSOG1243254v7/022658-0025 0 0 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner Lo Nelson Chung, President TAYLOR WOODROW HOMES, a By ILL California corporation Mark McGuire Attorney for Taylor Woodrow Homes By) - Donald D. Steffensen, Jr. General Counsel and Secretary -7- DOCSOU1243254W/022658-0025 APPROVED AS TO FORM: "City": STRADLING YOCCA CARLSON & CITY OF SAN JUAN CAPISTRANO, a RAUTH , municipal corporation Thomas k, Jr. Special Co r City of San Juan Capistrano 5:11 DOCSOC/1243254v7/022658-0025 Sam Allevato, Mayor APPROVED AS TO FORM: STRADLING YOCCA CARLSON & RAUTH { By Thomas P. Clark, Jr. Special Counsel for City of San Juan Capistrano L „City,,, CITY OF SAN JUAN CAPISTRANO, a municipal corporation By Sam levato, Mayor Attest: -8- DOCSOC/ ] 243254d//022658-0025 0 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAx www.sanjuancapistrano.org TRANSMITTAL M Mark R. McGuire, Esq. 2311 Calle Las Palmas San Clemente, CA 92672 /_R'I �A 11[1111111F1 • 15111LISHEI 1961 1776 Jack H. Rubens Sheppard, Mullin Richter & Hampton LLP 333 South Hope Street — 48th Floor Los Angeles, CA 90071-1448 FROM: Meg Monahan, MMC — City Clerk (949) 443-6308 MEMBERS OF THE CITY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK NIELSEN JOE SOTO DR. LONDRES USO RE: Termination & Settlement Agreement & Mutual Releases/S. J. Hills, Taylor Woodrow Home, Inc., City of San Juan Capistrano (Tract 13436) Enclosed: Original, executed agreement, as referenced above, for your records. Copies of agreement & transmittal to: Thomas P. Clark, Jr. Esq, Stradling, Yocca, Carlson & Rauth John Shaw, City Attorney San Juan Capistrano: Preserving the Past to Enhance the Future 0 Pnn1eC on 100% recycled paper 41 • RESOLUTION NO. 07-10-02-02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, APPROVING A TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES AND TAKING OTHER ACTIONS RELATING TO COST APPORTIONMENT OBLIGATIONS FOR CERTAIN DESIGNATED OFF-SITE WORK FOR AREA C -LOS SAN JUAN PLANNED COMMUNITY(TRACT 13436) Whereas, the City Council has considered the approval of a Termination and Settlement Agreement and Mutual Release (the 'Termination and Settlement Agreement') dated as of October 2, 2007 terminating a Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement') dated July 10, 1991 between the City of San Juan Capistrano and the Lusk Company based upon changed circumstances; and Whereas, a certain designated off-site bridge work obligation describe in the Cost Apportionment Agreement and referenced in Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C" (a certified copy of which is attached), as amended pursuant to CC Resolution No. 95-2-7- 3 adopted on February 7, 1995, pursuant to which the City Council approved the Area Plan/Composite Development Plan (the "Development Plan") for the Lomas San Juan Planned Community, is no longer practically feasible based upon changed circumstances. Now Therefore, Be It Resolved, that: 1. The City Council hereby approves the Termination and Settlement Agreement attached hereto as Exhibit 1" and incorporated herein by reference and hereby authorizes the Mayor to execute the same on behalf of the City. 2. The Cost Apportionment Agreement is hereby terminated in accordance with Section 2 of the Agreement and has no further force or effect. 3. The City Council does hereby repeal Section 8g of the Development Plan and affirms that the Development Plan otherwise remains in full force and effect. 4. The City acknowledges and agrees that the City shall have no right whatsoever to (a) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the La Novia Bridge or (b) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. Page 1 of 2 10-02-2007 E 0 6. This Resolution shall become effective upon the "TWH Payment" (as defined in the Agreement). PASSED,APPROVED,AND R. Monahan, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF SAN JUAN CAPISTRANO ) this 2nd day of October 2007. -fro I, MARGARET R. MONAHAN, appointed City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing Resolution No. 07-10-02-02 was duly adopted by the City Council of the City of San Juan Capistrano at a Regular meeting thereof, held the 2nd day of October 2007, by the following vote: AYES: COUNCIL MEMBERS: Nielsen, Hribar, Uso, Soto and Mayor Allevato NOES: COUNCIL MEMBER: None ABSENT: COUNCIL MEMBER: None R. MONAHAN, City Clerk Page 2 of 2 10-02-2007 0 0 EXHIBIT "1" TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES This Termination and Settlement Agreement and Mutual Releases ("Agreement'), dated as of October 2, 2007, is entered into by and between the CITY OF SAN JUAN CAPISTRANO, a California municipal corporation (the "City"), and S. J. HILLS, a California limiied partnership ("S. J. Hills"), and TAYLOR WOODROW HOMES, INC, a California corporatiq;("TWH") (the City, S. J. Hills and TWH are collectively defined herein as the "Parti es"and each is individually referred to as a Varty"), with reference to the following facts: RECITALS A. The City has previously approved a residential development project located in the City and commonly known as the Lomas San Juan Planned Community (the "Planned Community"). B. S. J. Hills is the current owner of certain real property located within Tract No. 13436 ("Tract 13436"), which is part of the Planned Community and is also commonly known as "Area C-2" therein. C. TWH was the owner and developer of other portions of the Planned Community, including Tract Nos. 13437 and 13866, also commonly known as "Area D- 1" and "Area D-2". D. On June 6, 1989, the City Council adopted Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C", as amended pursuant to CC Resolution No. 95-2-7-3 adopted by the City Council on February 7, 1995 (as amended, the "Development Plan Resolution"), pursuant to which the City Council approved the Area Plan/Composite Development Plan (the "Development Plan") for the Planned Community, subject to certain conditions. Condition No. 8g of the Development Plan Resolution states that, "[p]rior to.approval of final tract map, applicant shall enter into an agreement with the City which will provide for the construction and method of cost apportionment for La Novia Avenue Bridge over San Juan Creek." E. Pursuant to that certain Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement") dated July 10, 1991 and July 16, 1991, by and between the City and the Lusk Company, a California corporation, the prior developer of the Planned Community, and recorded on September 12, 1991 as Instrument No. 91-496384 in the Official Records of Orange County, California, Lusk agreed to design, construct and pay a portion of the cost for certain improvements, including the widening of the existing La Novia Bridge (the "Bridge") and the related construction of bridge pier protection and a drop structure -1- DOCSOC/ 1243254v7/022658-0025 0 0 (collectively, the "Bridge Widening Work"). In addition, Section 3 of the Cost Apportionment Agreement provides that the Bridge Widening Work must be completed prior to the issuance of certificates of occupancy for the remaining 50% of the last phase of development of Tracts 13436, 13437, 13865 or 13866, whichever is the last phase (the "Certificate of Occupancy Condition"). Tract 13436 is the last phase of development in the Planned Community. F. All of the work required to be performed under the Cost Apportionment Agreement has been completed other than the Bridge Widening Work. G. It is now unclear whether the previously contemplated Bridge Widening Work is appropriate or feasible. H. Certain claims, demands and differences have existed heretofore among the Parties with regard to the continuing purpose, validity or enforceability of the provisions in the Cost Apportionment Agreement relating to the Bridge Widening Work and the Certificate of Occupancy Condition and the interpretation of the Certificate of Occupancy Condition. I. It is the intention of the Parties to settle and dispose of, fully and completely, any and all claims, demands and causes of action heretofore arising out of, connected with or incidental to the Cost Apportionment Agreement and the previously contemplated Bridge Widening Work. NOW, THEREFORE, in furtherance of the mutual desires set forth above, and in consideration of the mutual covenants and conditions set forth below, the Parties hereby agree as follows: AGREEMENT 1. TWH Pa lent. As a condition to the effectiveness of this Agreement, within five (5) business days following the date on which the City takes the actions set forth in Section 3, below, TWH shall pay to the City, in the form of a certified check, the amount of One Hundred Thousand Dollars and No/100ths Dollars ($100,000.00) (the "TWH Payment"). The City shall provide written confirmation of the TWH Payment to S.J. Hills' legal counsel promptly following its receipt of such payment. 2. Termination of Cost Apportionment Agreement. The Parties agree that, effective upon the TWH Payment, the Cost Apportionment Agreement is terminated and of no further force or effect whatsoever, including without limitation the provisions relating to the Bridge Widening Work and Certificate of Occupancy Condition, and that no provision in the Cost Apportionment Agreement shall survive such termination, notwithstanding any provision therein to the contrary. -2- DOCSOC/ 1243254v7/022658-0025 0 0 3. City Actions. The City hereby represents and wan -ants that, on October 2, 2007, the City Council adopted the resolution attached hereto as Exhibit A and incorporated herein by reference, the effectiveness of which is conditioned upon the TWH Payment, pursuant to which the City Council approved (a) the City's execution of this Agreement, (b) the termination of the Cost Apportionment Agreement in accordance with Section 21 above, and (c) the deletion of Section 8g of the Development Plan Resolution and affirmed that the Development Plan remains in full force and effect, as so modified. The City acknowledges and agrees that, following the TWH Payment, the City shall have no right whatsoever to (i) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the Bridge or (ii) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. 4. Releases. In consideration of the payment specified above and the mutual releases contained herein, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each party hereto, the Parties promise, agree and specifically release as follows: 4.1 Except as to such rights or remedies as may be created by this Agreement, the City hereby releases, remises and forever discharges S. J. Hills, TWIT and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all suits, actions or causes of action, in law or in equity, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, losses, costs or expenses, of any nature whatsoever, whether known or unknown (collectively, the "Claims"), heretofore arising out of, connected with or incidental to the Bridge Widening Work and the Cost Apportionment Agreement (collectively, the "Released Claims"). 4.2 Except as to such rights or remedies as may be created by this Agreement, S. J. Hills hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.3 Except as to such rights or remedies as may be created by this Agreement, TWH hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. -3- DOCSOC/ 1243254v7/022658-0025 • C� 4.4 Except as to such rights or remedies as may be created by this Agreement, TWH and S.J. Hills hereby forever discharge each other and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.5 The Parties acknowledge and agree that the releases in Sections 4.1 through 4.4, above, are expressly limited to Released Claims and do not include any other Claims of any kind, including without limitation any Claims for breach of this Agreement. 4.6 With respect to the Released Claims, each Party specifically waives the benefit of the provisions of Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Each Party has been advised by its attorneys of the meaning of Section 1542 of the California Civil Code, and of the implications of waiving the benefits thereof. The Parties agree that this waiver is an essential part of this Agreement, which would not have been entered into without such provision. 5. Representations and Warranties: Each of the Parties represents, warrants and agrees as to itself as follows: 5.1 Such Party has received independent legal advice from its attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement. 5.2 Neither such Party nor any officer, agent, employee, representative, or attorney of or for it has made any statement or representation to any other Party regarding any fact relied upon in entering into this Agreement, and it is not relying upon any statement, representation or warranty or promise, written or oral, of any other Party (or of any officer, agent, employee, representative, or attorney for any other Party) in executing this Agreement, or in making the settlement provided for herein, except as expressly stated in this Agreement. Sl DOCSOC/ I243254v7/02265"25 0 9 5.3 Such Party has made such investigation of the facts pertaining to this settlement and this Agreement and of all the matters pertaining thereto as it deems necessary. 5.4 Such Party or its responsible officer or attorney has read this Agreement and understands the contents hereof. Each officer, member, manager, trustee, official or attorney executing this Agreement on behalf of such Party is empowered to do so and thereby bind such Party. 5.5 Each as otherwise expressly represented, warranted or provided in this Agreement, such Party assumes the risks (a) that it may hereafter discover facts in addition to or contrary to those it believed to exist or relied upon in entering into this Agreement, (b) that it may have mistakenly understood matters relevant to entering into this Agreement and (c) that another Party may have negligently misrepresented or negligently failed to disclose facts in connection with the entering into of this Agreement. Notwithstanding any such claims of misunderstanding, mistake, negligent misrepresentation or negligent nondisclosure, such Party intends that this Agreement thereafter shall continue in full force and effect and shall not be subject to rejection or rescission for any reason, provided that Such Party reserves all rights provided for in this Agreement. 5.6 It has not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the Released Claims or any part thereof. 5.7 Each term of this Agreement (other than Recitals A through I, above) is contractual and not merely a recital and each of Recitals A through I, above, is true and correct. 5.8 Such Party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the Released Claims. Nevertheless, it is the intention of such Party to fully, finally and forever settle and release the Released Claims, and all claims relative thereto, which do now exist, may exist, or heretofore have existed between them. In furtherance of such intention, the releases given herein shall be and remain in effect as full and complete mutual releases of the Released Claims, notwithstanding the discovery or existence of any additional or different claims or facts relative thereto. 5.9 It will execute all such further and additional documents as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 6. Settlement. This Agreement effects the settlement of claims, demands, and conditions which are denied and contested and nothing contained herein shall be -5- DOCSOC/ 1243 254v7/022658-0025 construed as an admission by any Parry hereto of any liability of any kind to any other Parry. 7. Miscellaneous. 7.1 This Agreement is made and entered into in the State of California, and the rights and obligations of the parties hereunder shall in all respects be construed and enforced in accordance with, and governed by, the laws of the State of California. 7.2 It is expressly understood and agreed that this Agreement contains the entire agreement and understanding of the Parties concerning the Released Claims, the settlement thereof and the subject matter herein, and merges, supersedes and replaces all prior discussions, understandings, negotiations, agreements, representations, conditions, warranties, covenants and all other communications between the Parties hereto, whether written or oral, relating to the Released Claims. 7.3 No provision herein may be waived unless in writing and signed by the Party or Parties whose rights are thereby waived. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. This Agreement may be modified or amended only by written agreement executed by all of the Parties. 7.4 This Agreement is binding upon and shall inure to the benefit of the Parties and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partners, partnerships, members, managers, joint venturers, assigns, heirs and successors in interest. This Agreement may be enforced by any Party or its successors and assigns against any other Party or its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity, other than the Parties or their respective successors and assigns, any rights or benefits under or by reason of this Agreement. 7.5 Each Party has cooperated in the drafting and preparation of this Agreement and, accordingly, the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. 7.6 In the event that any litigation shall be commenced concerning this Agreement or any the Parties' performance under this Agreement, the prevailing party in such litigation shall be entitled to recover, in addition to such other relief as may be granted, its reasonable costs and expenses, including without limitation attorneys' fees and court costs, whether or not taxable, as awarded by a court of competent jurisdiction. 7.7 The descriptive headings used in this Agreement are for convenience only and shall not affect the meaning of any provision of this Agreement. -6- DOCSOG 1243254v7/02265"025 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: Mark McGuire Attorney for Taylor Woodrow Homes "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner "TW TAYLOR WOODROW HOMES, a California corporation 0 (Print Name and Title) (SIGNATURES CONTINUED ON NEXT PAGE) -7- DOCSOG1243254v7/022658-0025 LJ 0 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP UZ Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner IM "TVM": Nelson Chung, President TAYLOR WOODROW HOMES, a By -AL California corporation Mark McGuire C Attorney for Taylor Woodrow Homes By Donald D. Steffensen, Jr. General Counsel and Secretary -7- DOC SOC/1243254v7/022658-0025 0 APPROVED AS TO FORM: STRADLING YOCCA CARLSON & RAUTH . n "City": CITY OF SAN JUAN CAPISTRANO, a municipal corporation By Jr. Sam Allevato, Mayor Special Co-u'Mel #'dr City of San Juan Capistrano -8- DOCSOC/1243254v7/022658-0025 APPROVED AS TO FORM: STRADLING YOCCA CARLSON & RAUTH M Thomas P. Clark, Jr. Special Counsel for City of San Juan Capistrano 0 "City": CITY OF SAN JUAN CAPISTRANO, a municipal corporation By Sam levato, Mayor Attest: R/ -8- DOCSOG1243254d7/022658-0025 AGENDA REPORT TO: City Council FROM: Dave Adams, City Manager i�KA SUBJECT: Proposed Settlement Agreement/Subdivision Tract 13436 RECOMMENDATION: 10/212007 D10 Adopt proposed settlement agreement and resolution for Subdivision tract 13436. SITUATION: In 1991, the City entered into a cost apportionment and reimbursement agreement with Lusk Development Company relating to a series of off-site improvements for the Glenfed Planned Community Area C. The agreement called for the developer to design, construct and pay for a portion of certain improvements such as street work, including widening of the bridge at La Novia Avenue. The apportionment and construction obligations for the bridge were also tied to phasing requirements, namely, that the bridge work would be done at such time that half of the homes were constructed for the last subdivision of the total project area. Tract 13436 is now the last phase of the development to be constructed for Area C. All other off-site work other than the bridge work has been completed. Within several years after execution of the Lusk agreement, Taylor Woodrow Homes purchased the land area comprising Area C, including Tract 13436, and took over the obligations for the several subdivisions comprising Area C. Later, San Juan Hills, LLC. then purchased tract 13436 from Taylor Woodrow. San Juan Hills, LLC. and Taylor Woodrow are now seeking relief from the bridge construction obligations under the 1991 agreement on the basis that the bridge improvements originally contemplated by the City and the 1991 agreement are no longer feasible. City staff and special counsel have reviewed this matter and agree that relief is appropriate based upon changed circumstances. Accordingly, it is recommended that the City Council adopt the attached resolution and settlement agreement which provide for deletion of the bridge work obligation, the payment of $100,000 to the City, and termination of the cost apportionment agreement. RECOMMENDATION: Adopt proposed settlement agreement and resolution for Subdivision tract 13436. 0 0 TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES This Termination and Settlement Agreement and Mutual Releases ("Agreement"), dated as of October 2, 2007, is entered into by and between the CITY OF SAN JUAN CAPISTRANO, a California municipal corporation (the "Oty"), and S. J. HILLS, a California limited partnership ("S. J. Hills"), and TAYLOR WOODROW HOMES, INC, a California corporation ("TWH") (the City, S. J. Hills and TWH are collectively defined herein as the "Parties" and each is individually referred to as a "Party"), with reference to the following facts: RECITALS A. The City has previously approved a residential development project located in the City and commonly known as the Lomas San Juan Planned Community (the "Planned Community"). B. S. J. Hills is the current owner of certain real property located within Tract No. 13436 ("Tract 13436"), which is part of the Planned Community and is also commonly known as "Area C-2" therein. C. TWH was the owner and developer of other portions of the Planned Community, including Tract Nos. 13437 and 13866, also commonly known as "Area D- 1" and "Area D-2". D. On June 6, 1989, the City Council adopted Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C", as amended pursuant to CC Resolution No. 95-2-7-3 adopted by the City Council on February 7, 1995 (as amended, the 'Development Plan Resolution"), pursuant to which the City Council approved the Area Plan/Composite Development Plan (the 'Development Plan") for the Planned Community, subject to certain conditions. Condition No. 8g of the Development Plan Resolution states that, "[p]rior to approval of final tract map, applicant shall enter into an agreement with the City which will provide for the construction and method of cost apportionment for La Novia Avenue Bridge over San Juan Creek." E. Pursuant to that certain Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement") dated July 10, 1991 and July 16, 1991, by and between the City and the Lusk Company, a California corporation, the prior developer of the Planned Community, and recorded on September 12, 1991 as Instrument No. 91-496384 in the Official Records of Orange County, California, Lusk agreed to design, construct and pay a portion of the cost for certain improvements, including the widening of the existing La Novia Bridge (the "Bridge") and the related construction of bridge pier protection and a drop structure -I- Attachment 1 (collectively, the "Bridge Widening Work"). In addition, Section 3 of the Cost Apportionment Agreement provides that the Bridge Widening Work must be completed prior to the issuance of certificates of occupancy for the remaining 50% of the last phase of development of Tracts 13436, 13437, 13865 or 13866, whichever is the last phase (the "Certificate of Occupancy Condition"). Tract 13436 is the last phase of development in the Planned Community. F. All of the work required to be performed under the Cost Apportionment Agreement has been completed other than the Bridge Widening Work. G. It is now unclear whether the previously contemplated Bridge Widening Work is appropriate or feasible. H. Certain claims, demands and differences have existed heretofore among the Parties with regard to the continuing purpose, validity or enforceability of the provisions in the Cost Apportionment Agreement relating to the Bridge Widening Work and the Certificate of Occupancy Condition and the interpretation of the Certificate of Occupancy Condition. 1. It is the intention of the Parties to settle and dispose of, fully and completely, any and all claims, demands and causes of action heretofore arising out of, connected with or incidental to the Cost Apportionment Agreement and the previously contemplated Bridge Widening Work. NOW, THEREFORE, in furtherance of the mutual desires set forth above, and in consideration of the mutual covenants and conditions set forth below, the Parties hereby agree as follows: AGREEMENT 1. TWH Payment. As a condition to the effectiveness of this Agreement, within five (5) business days following the date on which the City takes the actions set forth in Section 3, below, TWH shall pay to the City, in the form of a certified check, the amount of One Hundred Thousand Dollars and No/100ths Dollars ($100,000.00) (the "TWH Payment"). The City shall provide written confirmation of the TWH Payment to S.J. Hills' legal counsel promptly following its receipt of such payment. 2. Termination of Cost Apportionment Agreement. The Parties agree that, effective upon the TWH Payment, the Cost Apportionment Agreement is terminated and of no further force or effect whatsoever, including without limitation the provisions relating to the Bridge Widening Work and Certificate of Occupancy Condition, and that no provision in the Cost Apportionment Agreement shall survive such termination, notwithstanding any provision therein to the contrary. -2- 3. City Actions. The City hereby represents and warrants that, on October 2, 2007, the City Council adopted the resolution attached hereto as Exhibit A and incorporated herein by reference, the effectiveness of which is conditioned upon the TWH Payment, pursuant to which the City Council approved (a) the City's execution of this Agreement, (b) the termination of the Cost Apportionment Agreement in accordance with Section 21 above, and (c) the deletion of Section gg of the Development Plan Resolution and affirmed that the Development Plan remains in full force and effect, as so modified. The City acknowledges and agrees that, following the TWH Payment, the City shall have no right whatsoever to (i) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the Bridge or (ii) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. 4. Releases. In consideration of the payment specified above and the mutual releases contained herein, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each parry hereto, the Parties promise, agree and specifically release as follows: 4.1 Except as to such rights or remedies as may be created by this Agreement, the City hereby releases, remises and forever discharges S. J. Hills, TWH and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all suits, actions or causes of action, in law or in equity, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, losses, costs or expenses, of any nature whatsoever, whether known or unknown (collectively, the "Claims"), heretofore arising out of, connected with or incidental to the Bridge Widening Work and the Cost Apportionment Agreement (collectively, the "Released Claims"). 4.2 Except as to such rights or remedies as may be created by this Agreement, S. J. Hills hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.3 Except as to such rights or remedies as may be created by this Agreement, TWH hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. -3- 0 0 4.4 Except as to such rights or remedies as may be created by this Agreement, TWH and S.J. Hills hereby forever discharge each other and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.5 The Parties acknowledge and agree that the releases in Sections 4.1 through 4.4, above, are expressly limited to Released Claims and do not include any other Claims of any kind, including without limitation any Claims for breach of this Agreement. 4.6 With respect to the Released Claims, each Party specifically waives the benefit of the provisions of Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Each Parry has been advised by its attorneys of the meaning of Section 1542 of the California Civil Code, and of the implications of waiving the benefits thereof. The Parties agree that this waiver is an essential part of this Agreement, which would not have been entered into without such provision 5. Representations and Warranties: Each of the Parties represents, warrants and agrees as to itself as follows: 5.1 Such Party has received independent legal advice from its attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement. 5.2 Neither such Party nor any officer, agent, employee, representative, or attorney of or for it has made any statement or representation to any other Party regarding any fact relied upon in entering into this Agreement, and it is not relying upon any statement, representation or warranty or promise, written or oral, of any other Parry (or of any officer, agent, employee, representative, or attorney for any other Party) in executing this Agreement, or in making the settlement provided for herein, except as expressly stated in this Agreement. im 0 0 5.3 Such Party has made such investigation of the facts pertaining to this settlement and this Agreement and of all the matters pertaining thereto as it deems necessary. 5.4 Such Party or its responsible officer or attorney has read this Agreement and understands the contents hereof. Each officer, member, manager, trustee, official or attorney executing this Agreement on behalf of such Party is empowered to do so and thereby bind such Party. 5.5 Each as otherwise expressly represented, warranted or provided in this Agreement, such Party assumes the risks (a) that it may hereafter discover facts in addition to or contrary to those it believed to exist or relied upon in entering into this Agreement, (b) that it may have mistakenly understood matters relevant to entering into this Agreement and (c) that another Party may have negligently misrepresented or negligently failed to disclose facts in connection with the entering into of this Agreement. Notwithstanding any such claims of misunderstanding, mistake, negligent misrepresentation or negligent nondisclosure, such Party intends that this Agreement thereafter shall continue in full force and effect and shall not be subject to rejection or rescission for any reason, provided that such Party reserves all rights provided for in this Agreement. 5.6 It has not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the Released Claims or any part thereof. 5.7 Each term of this Agreement (other than Recitals A through I, above) is contractual and not merely a recital and each of Recitals A through I, above, is true and correct. 5.8 Such Party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the Released Claims. Nevertheless, it is the intention of such Party to fully, finally and forever settle and release the Released Claims, and all claims relative thereto, which do now exist, may exist, or heretofore have existed between them. In furtherance of such intention, the releases given herein shall be and remain in effect as full and complete mutual releases of the Released Claims, notwithstanding the discovery or existence of any additional or different claims or facts relative thereto. 5.9 It will execute all such further and additional documents as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 6. Settlement. This Agreement effects the settlement of claims, demands, and conditions which are denied and contested and nothing contained herein shall be -5- 11 construed as an admission by any Party hereto of any liability of any kind to any other Parry. Miscellaneous. 7.1 This Agreement is made and entered into in the State of California, and the rights and obligations of the parties hereunder shall in all respects be construed and enforced in accordance with, and governed by, the laws of the State of California. 7.2 It is expressly understood and agreed that this Agreement contains the entire agreement and understanding of the Parties concerning the Released Claims, the settlement thereof and the subject matter herein, and merges, supersedes and replaces all prior discussions, understandings, negotiations, agreements, representations, conditions, warranties, covenants and all other communications between the Parties hereto, whether written or oral, relating to the Released Claims. 7.3 No provision herein may be waived unless in writing and signed by the Party or Parties whose rights are thereby waived. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. This Agreement may be modified or amended only by written agreement executed by all of the Parties. 7.4 This Agreement is binding upon and shall inure to the benefit of the Parties and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partners, partnerships, members, managers, joint venturers, assigns, heirs and successors in interest. This Agreement may be enforced by any Party or its successors and assigns against any other Party or its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity, other than the Parties or their respective successors and assigns, any rights or benefits under or by reason of this Agreement. 7.5 Each Party has cooperated in the drafting and preparation of this Agreement and, accordingly, the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. 7.6 In the event that any litigation shall be commenced concerning this Agreement or any the Parties' performance under this Agreement, the prevailing party in such litigation shall be entitled to recover, in addition to such other relief as may be granted, its reasonable costs and expenses, including without limitation attorneys' fees and court costs, whether or not taxable, as awarded by a court of competent jurisdiction. 7.7 The descriptive headings used in this Agreement are for convenience only and shall not affect the meaning of any provision of this Agreement. am 0 0 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. -7- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 0 Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: Mark McGuire Attorney for Taylor Woodrow Homes APPROVED AS TO FORM: STRADLING YOCCA CARLSON & RAUTH :1 Thomas P. Clark, Jr. Special Counsel for City of San Juan Capistrano "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner Nelson Chung, President "T)IM1 : TAYLOR WOODROW HOMES, a California corporation 0 (Print Name and Title) "City": CITY OF SAN JUAN CAPISTRANO, a Sam Allevato, Mayor 0 0 EXHIBIT A A RESOLUTION APPROVING A TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES AND TAKING OTHER ACTIONS RELATING TO COST APPORTIONMENT OBLIGATIONS FOR CERTAIN DESIGNATED OFF-SITE WORK FOR AREA C -LOS SAN JUAN PLANNED COMMUNITY Whereas, the City Council has considered the approval of a Termination and Settlement Agreement and Mutual Release (the "Termination and Settlement Agreement") dated as of October 2, 2007 terminating a Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement") dated July 10, 1991 between the City of San Juan Capistrano and the Lusk Company based upon changed circumstances; and Whereas, a certain designated off-site bridge work obligation describe in the Cost Apportionment Agreement and referenced in Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C' (a certified copy of which is attached), as amended pursuant to CC Resolution No. 95-2-7-3 adopted on February 7, 1995, pursuant to which the City Council approved the Area Plan/Composite Development Plan (the "Development Plan") for the Lomas San Juan Planned Community, is no longer practically feasible based upon changed circumstances. Now Therefore, Be It Resolved, that: 1. The City Council hereby approves the Termination and Settlement Agreement attached hereto as Exhibit "1" and incorporated herein by reference and hereby authorizes the Mayor to execute the same on behalf of the City. 2. The Cost Apportionment Agreement is hereby terminated in accordance with Section 2 of the Agreement and has no further force or effect. 3. The City Council does hereby repeal Section 8g of the Development Plan and affirms that the Development Plan otherwise remains in full force and effect. 4. The City acknowledges and agrees that the City shall have no right whatsoever to (a) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the La Novia Bridge or A -t 0 0 (b) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. 6. This Resolution shall become effective upon the "TWH Payment" (as defined in the Agreement). PASSED, APPROVED, AND ADOPTED this day of 2007. ATTEST: CITY CLERK MAYOR A-2 0 0 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF SAN JUAN CAPISTRANO ) I, , City Clerk of the City of San Juan Capistrano, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. adopted by the City Council of the City of San Juan Capistrano, California, at a regular meeting thereof held on the day of 2007, by the following vote: AYES: NOES: ABSENT: (SEAL) A-3 CITY CLERK 0 0 EXHIBIT "I" TERMINATION AND SETTLEMENT AGREEMENT AND MUTUAL RELEASES This Termination and Settlement Agreement and Mutual Releases ("Agreement"), dated as of October 2, 2007, is entered into by and between the CITY OF SAN JUAN CAPISTRANO, a California municipal corporation (the "City"), and S. J. HILLS, a California limited partnership ("S. J. Hills"), and TAYLOR WOODROW HOMES, INC, a California corporation ("TWH") (the City, S. J. Hills and TWH are collectively defined herein as the "Parties" and each is individually referred to as a "P "), with reference to the following facts: RECITALS A. The City has previously approved a residential development project located in the City and commonly known as the Lomas San Juan Planned Community (the "Planned Community"). B. S. J. Hills is the current owner of certain real property located within Tract No. 13436 ("Tract 13436"), which is part of the Planned Community and is also commonly known as "Area C-2" therein. C. TWH was the owner and developer of other portions of the Planned Community, including Tract Nos. 13437 and 13866, also commonly known as "Area D- 1" and "Area D-2". D. On June 6, 1989, the City Council adopted Resolution No. 89-6-6-6, titled "Approving Area Plan/Composite Development Plan — Glenfed Planned Community Area C", as amended pursuant to CC Resolution No. 95-2-7-3 adopted by the City Council on February 7, 1995 (as amended, the "Development Plan Resolution"), pursuant to which the City Council approved the Area Plan/Composite Development Plan (the "Development Plan") for the Planned Community, subject to certain conditions. Condition No. 8g of the Development Plan Resolution states that, "[p]rior to approval of final tract map, applicant shall enter into an agreement with the City which will provide for the construction and method of cost apportionment for La Novia Avenue Bridge over San Juan Creek." E. Pursuant to that certain Construction Cost Apportionment and Reimbursement Agreement (the "Cost Apportionment Agreement") dated July 10, 1991 and July 16, 1991, by and between the City and the Lusk Company, a California corporation, the prior developer of the Planned Community, and recorded on September 12, 1991 as Instrument No. 91-496384 in the Official Records of Orange County, California, Lusk agreed to design, construct and pay a portion of the cost for 0 0 certain improvements, including the widening of the existing La Novia Bridge (the "Bridge") and the related construction of bridge pier protection and a drop structure (collectively, the "Bridge Widening Work"). In addition, Section 3 of the Cost Apportionment Agreement provides that the Bridge Widening Work must be completed prior to the issuance of certificates of occupancy for the remaining 50% of the last phase of development of Tracts 13436, 13437, 13865 or 13866, whichever is the last phase (the "Certificate of Occupancy Condition"). Tract 13436 is the last phase of development in the Planned Community. F. All of the work required to be performed under the Cost Apportionment Agreement has been completed other than the Bridge Widening Work. G. It is now unclear whether the previously contemplated Bridge Widening Work is appropriate or feasible. H. Certain claims, demands and differences have existed heretofore among the Parties with regard to the continuing purpose, validity or enforceability of the provisions in the Cost Apportionment Agreement relating to the Bridge Widening Work and the Certificate of Occupancy Condition and the interpretation of the Certificate of Occupancy Condition. L It is the intention of the Parties to settle and dispose of, fully and completely, any and all claims, demands and causes of action heretofore arising out of, connected with or incidental to the Cost Apportionment Agreement and the previously contemplated Bridge Widening Work. NOW, THEREFORE, in furtherance of the mutual desires set forth above, and in consideration of the mutual covenants and conditions set forth below, the Parties hereby agree as follows: AGREEMENT 1. TWH Payment. As a condition to the effectiveness of this Agreement, within five (5) business days following the date on which the City takes the actions set forth in Section 3, below, TWH shall pay to the City, in the form of a certified check, the amount of One Hundred Thousand Dollars and No/100ths Dollars ($100,000.00) (the "TWH Payment"). The City shall provide written confirmation of the TWH Payment to S.J. Hills' legal counsel promptly following its receipt of such payment. 2. Termination of Cost Apportionment Agreement. The Parties agree that, effective upon the TWH Payment, the Cost Apportionment Agreement is terminated and of no further force or effect whatsoever, including without limitation the provisions relating to the Bridge Widening Work and Certificate of Occupancy Condition, and that 1-2 0 0 no provision in the Cost Apportionment Agreement shall survive such termination, notwithstanding any provision therein to the contrary. 3. City Actions. The City hereby represents and warrants that, on October 2, 2007, the City Council adopted the resolution attached hereto as Exhibit A and incorporated herein by reference, the effectiveness of which is conditioned upon the TWH Payment, pursuant to which the City Council approved (a) the City's execution of this Agreement, (b) the termination of the Cost Apportionment Agreement in accordance with Section 2, above, and (c) the deletion of Section 8g of the Development Plan Resolution and affirmed that the Development Plan remains in full force and effect, as so modified. The City acknowledges and agrees that, following the TWH Payment, the City shall have no right whatsoever to (i) impose any conditions or restrictions on its issuance of any building permits or certificates of occupancy or other permits or approvals with respect to the development in accordance with the Development Plan or occupancy of Tract 13436 that relate, either directly or indirectly, in whole or in part, to the improvement, widening, alteration, modification, maintenance, repair or replacement of the Bridge or (ii) withhold or delay the issuance of any such permits or certificates of occupancy in connection therewith. 4. Releases. In consideration of the payment specified above and the mutual releases contained herein, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each party hereto, the Parties promise, agree and specifically release as follows: 4.1 Except as to such rights or remedies as may be created by this Agreement, the City hereby releases, remises and forever discharges S. J. Hills, TWH and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all suits, actions or causes of action, in law or in equity, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, losses, costs or expenses, of any nature whatsoever, whether known or unknown (collectively, the "Claims"), heretofore arising out of, connected with or incidental to the Bridge Widening Work and the Cost Apportionment Agreement (collectively, the "Released Claims"). 4.2 Except as to such rights or remedies as may be created by this Agreement, S. J. Hills hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.3 Except as to such rights or remedies as may be created by this Agreement, TWH hereby forever discharges the City and its agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, 1-3 • affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.4 Except as to such rights or remedies as may be created by this Agreement, TWH and S.J. Hills hereby forever discharge each other and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partnerships, partners, members, managers, joint venturers, assigns, heirs and successors in interest, and each of them, from any and all Released Claims. 4.5 The Parties acknowledge and agree that the releases in Sections 4.1 through 4.4, above, are expressly limited to Released Claims and do not include any other Claims of any kind, including without limitation any Claims for breach of this Agreement. 4.6 With respect to the Released Claims, each Party specifically waives the benefit of the provisions of Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Each Party has been advised by its attorneys of the meaning of Section 1542 of the California Civil Code, and of the implications of waiving the benefits thereof. The Parties agree that this waiver is an essential part of this Agreement, which would not have been entered into without such provision. 5. Representations and Warranties: Each of the Parties represents, warrants and agrees as to itself as follows: 5.1 Such Party has received independent legal advice from its attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement. 5.2 Neither such Party nor any officer, agent, employee, representative, or attorney of or for it has made any statement or representation to any other Party regarding any fact relied upon in entering into this Agreement, and it is not relying upon any statement, representation or warranty or promise, written or oral, of any other Party (or of any officer, agent, employee, representative, or attorney for any other Party) in executing this Agreement, or in making the settlement provided for herein, except as expressly stated in this Agreement. 1-4 5.3 Such Party has made such investigation of the facts pertaining to this settlement and this Agreement and of all the matters pertaining thereto as it deems necessary. 5.4 Such Party or its responsible officer or attorney has read this Agreement and understands the contents hereof. Each officer, member, manager, trustee, official or attorney executing this Agreement on behalf of such Party is empowered to do so and thereby bind such Party. 5.5 Each as otherwise expressly represented, warranted or provided in this Agreement, such Party assumes the risks (a) that it may hereafter discover facts in addition to or contrary to those it believed to exist or relied upon in entering into this Agreement, (b) that it may have mistakenly understood matters relevant to entering into this Agreement and (c) that another Party may have negligently misrepresented or negligently failed to disclose facts in connection with the entering into of this Agreement. Notwithstanding any such claims of misunderstanding, mistake, negligent misrepresentation or negligent nondisclosure, such Party intends that this Agreement thereafter shall continue in full force and effect and shall not be subject to rejection or rescission for any reason, provided that such Party reserves all rights provided for in this Agreement. 5.6 It has not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the Released Claims or any part thereof. 5.7 Each term of this Agreement (other than Recitals A through I, above) is contractual and not merely a recital and each of Recitals A through I, above, is true and correct. 5.8 Such Party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the Released Claims. Nevertheless, it is the intention of such Party to fully, finally and forever settle and release the Released Claims, and all claims relative thereto, which do now exist, may exist, or heretofore have existed between them. In furtherance of such intention, the releases given herein shall be and remain in effect as full and complete mutual releases of the Released Claims, notwithstanding the discovery or existence of any additional or different claims or facts relative thereto. 5.9 It will execute all such further and additional documents as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 6. Settlement. This Agreement effects the settlement of claims, demands, and conditions which are denied and contested and nothing contained herein shall be 1-5 construed as an admission by any Party hereto of any liability of any kind to any other Party. 7. Miscellaneous. 7.1 This Agreement is made and entered into in the State of California, and the rights and obligations of the parties hereunder shall in all respects be construed and enforced in accordance with, and governed by, the laws of the State of California. 7.2 It is expressly understood and agreed that this Agreement contains the entire agreement and understanding of the Parties concerning the Released Claims, the settlement thereof and the subject matter herein, and merges, supersedes and replaces all prior discussions, understandings, negotiations, agreements, representations, conditions, warranties, covenants and all other communications between the Parties hereto, whether written or oral, relating to the Released Claims. 7.3 No provision herein may be waived unless in writing and signed by the Party or Parties whose rights are thereby waived. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. This Agreement may be modified or amended only by written agreement executed by all of the Parties. 7.4 This Agreement is binding upon and shall inure to the benefit of the Parties and their respective agents, employees, representatives, administrators, attorneys, directors, officers, board members, divisions, affiliates, parents, partners, partnerships, members, managers, joint venturers, assigns, heirs and successors in interest. This Agreement may be enforced by any Party or its successors and assigns against any other Party or its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity, other than the Parties or their respective successors and assigns, any rights or benefits under or by reason of this Agreement. 7.5 Each Party has cooperated in the drafting and preparation of this Agreement and, accordingly, the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. 7.6 In the event that any litigation shall be commenced concerning this Agreement or any the Parties' performance under this Agreement, the prevailing party in such litigation shall be entitled to recover, in addition to such other relief as may be granted, its reasonable costs and expenses, including without limitation attorneys' fees and court costs, whether or not taxable, as awarded by a court of competent jurisdiction. 7.7 The descriptive headings used in this Agreement are for convenience only and shall not affect the meaning of any provision of this Agreement. 1-6 0 0 7.8 This Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all Parties. 1-7 • 11 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM: SHEPPARD, MULLIN, RICHTER & HAMPTON LLP LIM Jack H. Rubens Attorneys for S. J. Hills APPROVED AS TO FORM: By Mark Maguire Attorney for Taylor Woodrow Homes APPROVED AS TO FORM: STRADLING YOCCA CARLSON & RAUTH Thomas P. Clark, Jr. Special Counsel for City of San Juan Capistrano "S. J. Hills": S. J. HILLS, a California limited partnership By: Pacific Communities Builder, Inc., a California corporation, its general partner Nelson Chung, President "T)AM". TAYLOR WOODROW HOMES, a California corporation I:1 (Print Name and Title) "City": CITY OF SAN JUAN CAPISTRANO, a By Sam Allevato, Mayor 1-8