18-0619_SANTA MARGARITA WATER DISTRICT_E11_Agenda ReportTO:
FROM:
SUBMITTED BY:
PREPARED BY:
DATE:
SUBJECT:
City of San Juan Capistrano
Agenda Report
Honorable Mayor and Members of the City
;mfnjamin Siegel, .City Manager
Steve May, Public Works & Utilities ,.LI'fA,A._
Eric P. Bauman, Assistant Utilities Director
June 19, 2018
6/19/2018
E11
Grant of Easement for Water, Recycled Water, and Sewer Pipelines
within the Eastern Open Space (Santa Margarita Water District)
RECOMMENDATION :
1. Grant an easement within the Eastern Open Space to the Santa Margarita Water
District for water, recycled water, and sewer pipelines; and,
2. Authorize the City Manager to execute the grant of easement on behalf of the City.
DISCUSSION/ANALYSIS :
The Rancho Mission Viejo Community Development LLC has requested that the City
provide an easement to the Santa Margarita Water District (SMWD) for water, recycled
water, and sewer pipelines at the Rancho Mission Viejo Riding Park at San Juan
Capistrano (Riding Park) at the location shown on Attachment 1. The specific easement
is for a segment of sewer pipeline that already exists, and for which the acquisition of the
easement was inadvertently missed when the sewer pipeline was constructed several
years ago. There currently is an easement through the Riding Park for the other parts of
the SMWD sewer. The easement being requested is located adjacent to Ortega Highway
and Avenida Ia Pata at the northern boundary of the Riding Park as more specifically
described in the Grant of Easement (Attachment 2). The easement and the existing facility
do not conflict with current City utilities or operations plans.
The City is obligated to provide the requested easement under provisions of the Purchase
and Sale Agreement for the Riding Park (Attachment 4 ), which provides in Section 15.2
(c)(i) that the Seller (Rancho Mission Viejo Community Development LLC) reserves the
right to install utilities and storm drain facilities of any kind on the Property to carry out
City Council Agenda Report
June 19, 2018
Page 2 of 2
development of its remaining property pursuant to the approved Ranch Plan entitlements,
and Buyer (City of San Juan Capistrano) shall provide easements for installation and
maintenance of said utilities and facilities.
FISCAL IMPACT:
The proposed action will have no fiscal impact.
ENVIRONMENTAL IMPACT:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to
section 15060(c)(3) of CEQA Guidelines because the activity is not a project as defined
in Section 15378 of the CEQA Guidelines, California Code of Regulations, Title
14,Chapter 3, and the action has no potential for resulting in physical change to the
environment, directly or indirectly.
PRIOR CITY COUNCIL REVIEW :
On June 4, 2013, the City Council granted easements within the Rancho Mission Viejo
Riding Park at San Juan Capistrano to the Santa Margarita Water District for a sewer line,
and to the County of Orange for a storm drain line.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable.
NOTIFICATIONS:
Rancho Mission Viejo Community Development LLC
Santa Margarita Water District
Blenheim Facilities Management
ATTACHMENTS :
Attachment 1 : Location Map
Attachment 2: Draft Grant of Easement to Santa Margarita Water District
Attachment 3: Purchase and Sale Agreement
Location Map
ATTACHMENT 1
Page 1 of 1
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
Santa Margarita Water District
P.O. Box 7005
Mission Viejo, CA 92690-7005
Mail Tax Statements to:
Santa Margarita Water District
P.O. Box 7005
Mission Viejo, CA 92690
[Space Above This line Is For Recorder's Use Only]
This document is recorded for the benefit of SANTA MARGARITA
WATER DISTRICT. The recording fee is exempt under Section 6103
of the Government Code. NO CONSIDERATION
(Signature)
GRANT OF EASEMENT
TO
SANTA MARGARITA WATER DISTRICT
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
CITY OF SAN JUAN CAPISTRANO, a California municipal corporation, ("Grantor"), hereby
grants and conveys to SANTA MARGARITA WATER DISTRICT, a California water
district formed and existing pursuant to Section 34000, et. seq., of the Water Code of the State
of California ("Grantee"), a perpetual non-exclusive easement and right-of-way for the
installation, operation and maintenance of water, recycled water and sewer pipelines,
together with incidental appurtenances, connections and structures in, over, under, upon, along,
through and across the portions of the real property described in Exhibit "A" attached hereto
and diagrammed in Exhibit "B" attached hereto (the "Easement Area"). The easement and right-
of-way granted herein are in gross.
The easement and right-of-way granted herein include the incidental rights to enter upon
and pass and repass over and along the Easement Area for the construction (including, without
limitation, grading, excavation and compaction of the Easement Area), reconstruction,
enlargement, improvement, repair, operation and maintenance of the facilities to be constructed
by Grantee and for ingress and egress to Grantee's property. After completion of any work
performed by Grantee or its agents, contractors or employee which disturbs the surface of
Grantors' property, including without limitation the Easement Area, Grantee shall, at its own
expense restore the surface of such property as close as reasonable to its original character.
Attachment 2, Page 1 of 9
The easement rights acquired by Grantee herein are acquired subject to the right of
Grantor, their successors and assigns, to use the surface and subsurface of the land within the
Easement Area to the extent that such use is compatible with the full and free exercise of the
easement and right-of-way by Grantee; provided, however, that no fences, block walls, or other
structures or other improvements shall be constructed upon, over and along the Easement Area
without the prior written consent of Grantee, which consent shall not be unreasonable withheld
or delayed.
No fill or paving of any nature shall be placed or maintained on the surface ofthe ground
within the Easement Area, nor shall any earth be removed from the cover of the pipeline after
construction, without prior written consent of Grantee, which consent shall not be unreasonably
withheld or delayed.
Grantee shall have the right to use gates in all of Grantors' fences which presently or
hereafter cross the Easement Area, and to remove, trim, cut and clear away any trees and brush
whenever in Grantee's reasonable judgment the same shall be necessary for the convenient and
safe exercise ofthe rights granted hereby.
Grantee, its successors and assigns shall save, indemnify and hold harmless Grantor and
Grantor's successors and assigns against any claims, losses, liabilities, damages, expenses, fines,
costs and reasonable counsel fees paid, suffered or incurred as a result of bodily injury, death or
property damages to Grantor or third parties, the extent arising from (i) use of the Eastment Area
by Grantee, its employees, contractors, agents, representatives, guests, invitees, successors and
assigns and the exercise of any/all rights granted to Grantee herein, (ii) acts or omissions of
Grantee, its employees, agents, contractors, guests, invitees, successors and/or assigns
(including, but not limited to, failure to comply with all codes, ordinances, laws, regulations,
statutes and other requirements relevant to any work performed by Grantee, its employees,
agents, contractors, guests, invitees, successors and/or assigns on or in relation to the Easement
Area), or (iii) the location and existence of Grantee's facilities, whether defective or otherwise.
Grantor, its successors and assigns shall save, indemnify and hold harmless Grantee and
Grantee's successors and assigns against any liability, loss, cost, damage, and expense sustained
by Grantee or third parties, the extent arising from (i) use of the Easement Area by Grantor, its
·employees, contractors, agents, representatives, guests, invitees, successors and assigns and the
exercise of any/all rights retained by Grantor herein and (ii) acts or omissions of Grantor, its
employees, agents, contractors, guests, invitees successors and assigns in relation to the exercise
of any/all rights retained by Grantor herein (including, but not limited to, failure to comply with
all codes, ordinances, laws, regulations, statutes and other requirements relevant to the exercise
of any such retained rights).
In the event that any action is instituted with respect to the subject matter of this Grant of
Easement, the party prevailing in such action shall be enttled to recover from the other party
reasonable attorneys' fees and costs for such action.
This Grant of Easement shall bind and inure to the benefit of the parties and their respective
successors and assigns.
Attachment 2, Page 2 of 9
[THIS SPACE INTENTIONALLY LEFT BLANK; SIGNATURES TO FOLLOW]
IN WITNESS WHEREOF, this Grant of Easement has been executed this ___ day
of ______________ ,, 2018 .
APPROVED AS TO FORM:
By: _____________ _
Name : -------------
City of San Juan Capistrano Attorney
"GRANTOR"
CITY OF SAN JUAN CAPISTRANO,
a California municipal corporation
By: ---------------
Name: ------------
Title: ___________ _
Attachment 2, Page 3 of 9
PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
State of California )
County of Orange ) ss.
City of San Juan Capistrano )
(Gov't Code 40814 & Civil Code 1181)
On 2018, before me, a
Notary Public, personally appeared ______________ ,, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is tru~ and correct.
WITNESS my hand and official seal.
Maria Morris, City Clerk
Attachment 2, Page 4 of 9
CERTIFICATE OF ACCEPTANCE
The undersigned, being the duly appointed agent of SANTA MARGARITA WATER
DISTRICT, a public corporation ("District"), Orange County, California, pursuant to its
Resolution No. 88-10-2, does hereby accept on behalf of District, the grant of all interests in real
estate for public purposes as described in the attached Grant of Easement dated the ___ _
day of __________ ,, 2018, by and between District and CITY OF SAN JUAN
CAPISTRANO, a California municipal corporation and does hereby certify District consents to
the recordation ofthe attached Grant of Easement.
DATED: ______________ _
SANTA MARGARITA WATER DISTRICT
By: ----------------
Secretary
(SEAL)
Attachment 2, Page 5 of 9
EXHIBIT "A"
LEGAL DESCRIPTION OF THE EASEMENT AREA
(See Attached)
Attachment 2, Page 6 of 9
HLJI
HUm· ZOLLARS, INC.• 2603 Main Street • Suite 400 • Irvine, CA 92614·4250 • 949.988.5815 phone • 949.988 .5820 fax • hviH·zollan.com
EXHIBIT A
LEGAL DESCRIPTION
R307804.03
04-11-18
SANTA MARGARITA WATER DISTRICT
PIPELINE AND ACCESS EASEMENT
Parcel 1:
That portion of Parcel 104 of Certificate of Compliance CC 2001-01, recorded July 26,
2001 as Instrument No. 20010508635 of Official Records, in the office of the County
Recorder of said County, being a strip of land, 30.00 feet wide, the centerline of which is
described as follows:
Commencing at the Easterly terminus of that certain course on the Northerly sideline of
Parcel 2, as described in the Grant of Easement to Santa Margarita Water District,
recorded September 12,2013 as Instrument No. 2013000532836 of said Official Records,
shown as having a bearing and distance of "North 88°16'13" East 378.42' "in said Grant
of Easement; thence along said Northerly sideline South 88°16'13" West 83.27 feet to the
TRUE POINT OF BEGINNING; thence leaving said Northerly sideline North 07°56'13"
West 34.47 feet to the Southerly right-of-way line of Ortega Highway, as shown on
Record of Survey No. 2011-1118, filed in Book 256, Pages 46 through 49, inclusive, of
Records of Survey, in the office ofthe said County Recorder.
The sidelines of said strip of land shall be lengthened or shortened so as to originate
along said Northerly sideline of said Parcel 2, of said Grant of Easement to Santa
Margarita Water District and terminate along said Southerly right-of-way line of Ortega
Highway, as shown on said Record of Survey No. 20 ll-1118.
Containing an area of 1,034 square feet, more or less.
Subject to covenants, conditions, reservations, restrictions, rights-of-way and easements,
if any, of record.
As shown on Exhibit B attached hereto and by this reference made a part hereof.
RUSSELL H. HANSON, PLS 8873
qfR307804.03/02/02.1 0/Pipel ineAccessEsmtlzk!hpm
Attachment 2, Page 7 of 9
EXHIBIT "B"
DEPICTION OF THE EASEMENT AREA
(See Attached)
Attachment 2, Page 8 of 9
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082121183021.2
PURCHASEANDSALEAGREEMENT
AND ESCROW INSTRUCTIONS
BY AND BETWEEN
RMV COMMUNITY DEVELOPMENT, LLC,
a California limited liability company, and
DMB San Juan Investment North, LLC,
a Delaware limited liability company
CSeller")
AND
CITY OF SAN JUAN CAPISTRANO
a California municipal corporation
("Buyer")
ATTACHMENT 3
Page 1 of 32
TABLE OF CONTENTS
Page
1. BASIC TERMS AND DEFINITIONS; REFERENCES .................................................................... 2
1.1 Basic Terms and Definitions .............................................................................................. 2
1.2 References ........................................................................................................................ 2
2 . PURCHASE AND SALE ................................................................................................................. 2
3. PURCHASE PRICE ........................................................................................................................ 3
3 .1 Purchase Price .................................................................................................................. 3
3.2 Payment of Purchase Price ............................................................................................... 3
4. PROPERTYINFORMATION; TITLE REVIEW; INSPECTIONS; CONFIDENTIALITY;
RELOCATION RIGHTS ................................................................................................................. 3
4.1 Property Information .......................................................................................................... 3
4.2 Title; Tille Polley ................................................................................................................ 4
4.2.1 Delivery of Tille Report.. ....................................................................................... 2
4.2.2 Tille Conditions ..................................................................................................... 2
4.2.3 Delivery of Title Polley at Closing ......................................................................... 3
4.3 Inspections ........................................................................................................................ 3
4.3.1 Inspections in General .......................................................................................... 3
4.3 .2 Environmental Inspections ................................................................................... 4
4.3.3 Conditions/Suitability of Real Property ................................................................. 4
4.4 Confidentiality .................................................................................................................... 4
5 . OPERATIONS AND RISK OF LOSS ............................................................................................. 4
5.1 Ongoing Operations .......................................................................................................... 4
5.2 New Contracts ................................................................................................................... 5
5.3 Damage or Condemnation ................................................................................................ 5
6. SELLER'S AND BUYER'S DELIVERIES ....................................................................................... 5
6.1 Seller's Deliveries Into Escrow .......................................................................................... 5
6.2 Buyer's Deliveries into Escrow .......................................................................................... 6
6.3 Closing Statements/Escrow Fees; Notices ....................................................................... 6
6.4 Post-Closing Deliveries ..................................................................................................... 6
7. CONDITIONS TO BUYER'S AND SELLER 'S OBLIGATIONS ...................................................... 6
7.1 Conditions to Buyer's Obligations ..................................................................................... 6
7.2 Conditions to Seller's Obligations .......... .' ........................................................................... 7
8. CLOSE OF ESCROW; POSSESSION .......................................................................................... 8
9. ESCROW ....................................................................................................................................... 8
9.1 Closing ............................................................................................................................... 8
9.2 Escrow and Title Charges ................................................................................................. 9
9.3 Procedures Upon Failure of Condition .............................................................................. 9
082/21183021.2 -1-
ATTACHMENT 3
Page 2 of 32
TABLE OF CONTENTS
(continued)
Page
10. PRORATIONS ................................................................................................................................ 9
10.1 Collected Rent ................................................................................................................. 10
10.2 Operating Costs and Additional Rent Reconciliation ...................................................... 10
10.3 Taxes and Assessments ................................................................................................. 10
1 0.4 Utilities and Utility Deposits ............................................................................................. 11
10.5 Final Adjustment After Closing ........................................................................................ 11
11. SELLER'S REPRESENTATIONS AND WARRANTIES; AS-18 ................................................... 11
11.1 Seller's Representations and Warranties ........................................................................ 11
11.2 As-Is ................................................................................................................................ 12
12. BUYER'S COVENANTS, REPRESENTATIONS AND WARRANTIES; RELEASE; ERISA;
INDEMNIFICATION ...................................................................................................................... 13
12.1 Buyer's Representations and Warranties ........................................................................ 13
12.2 Release ........................................................................................................................... 14
12.3 ERISA .............................................................................................................................. 15
12.4 Indemnification ................................................................................................................ 15
13. DEFAULT AND DAMAGES ......................................................................................................... 15
13.1 Default by Buyer .............................................................................................................. 15
13.2 Default by Seller ................................................ _. ............................................................. 16
14. BROKER'S COMMISSIONS ........................................................................................................ 16
15. USE RESTRICTIONS; SELLER'S RESERVED RIGHTS ............................................................ 16
15.1 Restrictions on Use of Real Property .............................................................................. 17
15.2 Seller's Reserved Rights ................................................................................................. 19
15.3 Incorporation into Grant Deed ......................................................................................... 19
16. ADDITIONAL POST-CLOSING COVENANTS ............................................................................ 20
16.1 Buyer's Covenants-General. ........................................................................................ 20
16.2 Buyer's Covenants-Habitat Reserve ............................................................................ 20
16.3 Incorporation Into Grant Deed ......................................................................................... 20
16.4 Buyer's and Seller's Covenants-Parcel 8 Ci trus Grove ................................................ 21
17. RODEO LICENSE AGREEMENT ................................................................................................ 21
18; MISCELLANEOUS PROVISIONS ............................................................................................... 22
18.1 Notices ............................................................................................................................. 21
18.2 Assignment; Binding on Successors and Assigns .......................................................... 23
18.3 Work Product. .................................................................................................................. 23
18.4 Further Assurances ......................................................................................................... 23
18.5 Attorneys' Fees ................................................................................................................ 23
18.6 Survival of Representations, Warranties and Agreements ............................................. 23
082/21183021.2 11
ATTACHMENT 3
Page 3 of 32
TABLE OF CONTENTS
(continued)
Page
18.7 Entire Agreement ................................................................................. '" ......................... 24
18.8 Governing Law ................................................................................................................ 24
18.9 Counterparts .................................................................................................................... 24
18.1 0 Headings; Construction ................................................................................................... 24
18.11 Time of Essence .............................................................................................................. 24
18.12 Partial Validity; Severability ............................................................................................. 24
18.13 No Third Party Beneficiaries ............................................................................................ 24
18.14 Waiver of CC Section 1662 ............................................................................................. 24
18.15 Joint Product of Parties ................................................................................................... 25
18.16 Calculation of Time Periods ............................................................................................ 25
18.17 Procedure for Indemnity .................................................................................................. 25
18.18 Waiver of Natural Hazards Disclosure Statement.. ......................................................... 25
18.19 Waiver of Jury Trial ......................................................................................................... 25
18.20 No Personal liability ........................................................................................................ 25
082/21183021.2 ill
ATTACHMENT 3
Page 4 of 32
PURCHASE AND SALE AGREEMENT •
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Agreement") Is made and ente re d Into as of ~s-\ \8 , 2009, between RMV COMMUNITY
DEVELOPMENT, LLC, a California limited liabilit~ompany, and OMS SAN JUAN INVESTMENT
NORTH, LLC, a Oelaware limited liability compa_ny ("Seller" or "RMV"), and CITY OF SAN JUAN
CAPISTRANO, a California municipal corporation ("Buyer" or "City"), with reference to the following:
A. Seller is the owner of the real property (the "Real Property") described on Exhibit A
attached hereto . The Real Property consists of four (4) separate parcels designated as Parcel 7 (±70.572
acres), ParcelS (±18.403 acres), the Creek Open Space Parcel (±17.142 acres) and the La Pata Open
Space Parcel (two parcels with ±25.417 acres combined), respectively.
B. Buyer regards the Real Property as the eastern gateway to the City of San Juan
Capistrano, and the Real Property currently hosts about forty separate events during the year, held on
approximately 112 days and accommodating more than 125,000 visitors, Including participants and
spectators, annually.
C. The Real Property Is strategically located at the intersection of two major arterials, Ortega
Highway and La Pata Avenue . Annual average dally traffic along Ortega Highway Is currently
approximately 27,000 ADT (as published by Caltrans for 2006) and this state highway is being expanded
to accommodate current and future additional traffic. Visibility and access to the site are excellent and
access will be Improved further by a signalized Intersection with the Ortega Highway widening project.
D. The Real Property Is currently the site of the "Rancho Mission Viejo Riding Park", as well
as certain agricultural and ranch-related uses, and Parcels 7 and 8 are currently entitled to allow for
development of multiple uses including Urban Activity Center uses, single family residential units, and a
community park. A grading permit has been obtained for Parcel a.
E. Given its location, the Real Property can be developed Independently of other parcels In
the area-particularly since It Is relatively flat and has water and electricity service in place.
F. Furthermore, given its strategic location, It Is expected that the Real Property will
increase substantially In value as development occurs In surrounding areas
G. Acquisition of the Real Property by Buyer would allow for: (1) preservation of a citrus
grove and lands wf:llch reflect the agricultural and rural equestrian legacy of San Juan Capistrano; (2)
retention of the Rancho Mission VIejo Riding Park as a venue for local equestrian activities including the
annual Rancho Mission VIejo Rodeo which serves as a key fundralser for charities In San Juan
Capistrano and throughout South Orange County; (3) retention of a venue for local and regional sports
and community events, for youths and adults; and (4) facilitation of planned Regional riding and hiking
trails, and a Class 1 Bikeway on the Real Property.
H. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Real
Property.
I. Seller and Buyer previously entered Into a term sheet dated June 4, 2009 (the "Term
Sheet") concerning the desired transaction.
J. Pursuant to the Term Sheet, Seller has delivered to Buyer certain Information and
documentation pertaining to the Real Property (collectively, the wProperty Information") and a
preliminary title report covering the Real Property (the "Title Report"), together with copies of all
documents (collectively, the "Title Documents") referenced In the Title Report .
082/21183021.2 1
ATTACHMENT 3
Page 5 of 32
K. Buyer has carried out certain due diligence activities including reviewing the Property
Information and Title Documents, Inspecting the Real Property, and completing a Phase 1 study and/or
other environmental reports.
L. Buyer has obtained an MAl appraisal of the Real Property al or above the Purchase Price
(as defined below).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. BASIC TERMS AND DE FINITIONS; REFERENCES
1.1 Basic Terms and D efinitions.
(a) E ffec tr ve D a l e. The effective date of this Agreement shall be the date set forth
above ("Effective Date").
(b) C losin g Da te . The last day that Close of Escrow may occur shall be on that date
that Is one-hundred eighty (180) days from the Effective Date, at 1:00 p.m. (the "Closing Date").
(c) Escrow Holder. The escrow holder shall be Fidelity National Title Company
("Escrow Holder"), whose address is 1300 Dove Street, Suite 310, Newport Beach, California 92660,
Escrow Officer: Natalie Priestley; Telephone: (949} 622-4911; Telecopier: (949) 221-4799.
(d) Title Comp any. The title company shall be Fidelity National Title Company
("Title Company") whose address Is 1300 Dove Street, Suite 310, Newport Beach, California 92660,
Title Coordinator: Steven Ball; Telephone: (949) 477-3608; Telecopier: (949) 221-4799.
1.2 References. All references to Exhibits refer to Exhibits attached to this Agreement and
all such Exhibits are Incorporated herein by reference. The words "herein," "hereof," "hereinafter" and
words of similar Import refer to this Agreement ~s a whole and not to any particular Section hereof.
2. PURCHASE AND SALE.
Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign and transfer
to Buyer and Buyer agrees to purchase from Seller, for the purchase price set forth In Sectio n 3 hereof,
all of Seller's right, title and Interest in and to the following (collectively, the "Property"):
2.1 The Real Property, together with the buildings/structures located thereon, and all other
improvements located thereon (the buildings/structures and such other improvements are listed/shown on
Exh ibi t B attached hereto and are referred to herein collectively as the ("Improvements")), except for any
Improvements that are listed/shown on Exhibit B as being owned by the existing licensee and/or lessee
(the ''Licensee" and "Lessee", respectively); except as otherwise noted herein, all references hereinafter
made to the Real Property shall be deemed to include all rights, privileges, easements and
appurtenances benefiting the Real Property and/or the Improvements situated thereon, Including, without
limitation, all easements, rights-of-way and other appurtenances used or connected with the beneficial
use or enjoyment of the Real Property;
2.2 All of Seller's Interest in the license and lease affecting the Real Property as of the Close
of Escrow (the "License" and "Lease'', respectively), copies of which are Included as Exhibits C and 0
attached hereto; and
Notwithstanding anything to the contrary contained herein, the term "Property'' shall expressly exclude
any Rents (as such term is defined in S ecllon 10 .1 hereof) or any other amounts payable by Licensee
and Lessee under the License and Lease for periods prior to the Close of Escrow, any Rents or other
082/21183021.2 2
ATTACHMENT 3
Page 6 of 32
amounts payable by any former tenants of the Prop~rty, and any judgments, stipulations, orders, or
settlements with any licensee and/or lessee under the License or Lease or former tenants of the Property
(hereinafter collectively referred to as the "Excluded Property").
3. PURCHASE PRICE .
3.1 Purchase Price. The purchase price for the Property shall be Twenty~Seven Million Five
Hundred Thousand Dollars ($27,500,000.00} (the ''Purchase Price").
3 ;2 Payment of Purchase Price. Provided all the conditions in Section 7.1 hereof have
been satisfied or waived by Buyer, Buyer shall deposit in cash or current funds with Escrow Holder no
later than 1:00 p.m . (California time) one (1} business day prior to the Closing Date (as defined in Section
.1J.ill hereof) an amount equal to the Purchase Price plus or minus applicable prorations pursuant to
Section 1 0 hereof.
4. PROPERTY INFORMATION; TITLE REVIEW; INSPECTIONS; CONFIDENTIALITY;
RELOCATION RIGHTS.
4.1 Property Information. A list of the Property Information previously provided by Seller to
Buyer is set forth on Exhibit E attached hereto.
4.2 Title; Title Policy.
4.2.1 Delivery of Title Report. As noted above, Seller has previously delivered to
Buyer the Title Report and other Title Documents covering the Real Property. Buyer acknowledges that
Seller makes no representations or warranties, and Seller shall have no responsibility, with respect to the
completeness of the Title Documents made available to Buyer.
4.2.2 Title Conditions. Except for the deeds of trust referenced In the Title Report as
exception Nos. 26 and 27 which shall be removed prior to Closing of Escrow, Buyer shall take the
Property subject to all existing conditions of (exceptions to) title as set forth In the Title Documents
(collectively, the "Permitted Exceptions"). Buyer specifically acknowledges the Permitted Exception
relating to property tax liens, Including any assessments collected with taxes, and Is aware that these
liens include, but are not limited to, those assessments collected for the benefit of the Santa Margarita
Water District ("SMWD") as reflected on the County's secured property tax bills. Buyer further specifically
acknowledges the Permitted Exception relating to rights of the parties in possession of any portion of the
Property, which rights are not disclosed by the public record. In that regard, Buyer has reviewed the
Lease and License pertaining to the Property, namely, the lease held by The Oaks and the license held
by Blenheim Facilities Management, LLC (copies of which were included with the Property Information
provided by Seller and which are included as Exhibits C and D hereto}, and Is accepting the assignment
of same In conjunction with Its purchase of the Property.
4.2.3 Delivery of Title Policy at Closing. As a condition precedent to the Close of
Escrow, the Title Company shall have issued and delivered to Buyer, or shall have committed to Issue
and deliver to Buyer, with respect to the Real Property, a Standard Coverage Owner's Policy of Title
Insurance (2006 Form) (the "Title Polley") issued by the Title Company as of the date and time of the
recording of the Deed (as such term Is defined In Section 6.1 hereof) for the Real Property, in the amount
of the Purchase Price insuring Buyer as owner of good, marketable and indefeasible fee simple title to the
Real Property, subject only to the Permitted Exceptions.
4.3 Inspections.
4.3.1 Inspections in General. As noted above, as part of Its due diligence activities
carried out pursuant to the Term Sheet, Buyer has inspected the Real Property. Buyer shall provide
Seller (at no cost to Seller) with a copy of the results of any tests and Inspections made by Buyer upon
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the Real Property, excluding only market and economic feasibility studies. To the extent any Inspection
or test disturbed the Real Property, and Buyer has not yet restored the Real Property to the same
condition as existed before the inspection or test, Buyer shall do so. Buyer shall defend, Indemnify Seller
and hold Seller, Seller's trustees, officers, tenants, agents, contractors and employees and the Real
Property harmless from and against any and all losses, costs, damages, claims, or liabilities, Including but
not limited to, mechanic's and materialmen's liens and Seller's attorneys' fees, arising out of or In
connection with Buyer's, Its agents, contractors, employees, or Invitees entry l,lpon or Inspection of the
Real Property.
4.3.2 Environmental Inspections. As part of Its Investigation, Buyer has had an
environmental report prepared by EEl, Inc. dated July 21, 2009 (the "EEl Report") that examines the
existing environmental conditions of Parcels 7 and 8. The Information provided In the EEl Report,
together with the materials provided directly by Seller to Buyer, are acknowledged by Buyer to be a part
of Seller's disclosures to Buyer regarding the environmental conditions of the Property. Buyer shall
deliver lo Seller (at no cosllo Seller) copies of the EEl Report and any other environmental reports made
by Buyer relating to the Real Property.
4.3.3 CondltfonfSultablllty of Real Property. Based upon its due diligence activities
carried out to date, Buyer shalt be deemed to be satisfied with all aspects of all the Real Property,
including, without limitation, the condition and suitability of all the Real Property for Buyer's Intended use,
and Buyer shall be obligated to acquire the Real Property in accordance with the provisions of this
Agreement.
4.4 Confldentlallty. Prior to the Close of Escrow or In the event the Close of Escrow never
occurs, the Property Information and all other Information, other than matters of public record or matters
generally known to the public, furnished to, or obtained through Inspection of the Real Property by, Buyer,
Its affiliates, lenders, employees, attorneys, accountants and other professionals or agents relating to the
Real Property, will be treated by Buyer, Its affiliates, lenders, employees and agents as confidential, and
will not be disclosed to anyone (except as reasonably required In connection with Buyer's evaluation of
the Real Property} except to Buyer's consultants who agree to maintain the confidentiality of such
Information, and will be returned to Seller by Buyer If the Close of Escrow does not occur. The terms of
this Agreement will not be disclosed to anyone prior to or after the Close of Escrow except to Buyer's and
Seller's consultants who agree to maintain the confidentiality of such Information and Seller and Buyer
agree not to make any public announcements or public disclosures or communicate with any media with
respect to the subject matter hereof without the prior written consent of the other party (In their sole and
absolute discretion). The confidentiality provisions of this Section 4.4 shall not apply to any disclosures
made by Buyer or Seller as required by law (including the disclosure required to be made by Buyer
pursuant to California Government Code §54957.1 (a)), by court order, or in connection with any
subpoena served upon Buyer or Seller; provided Buyer and Seller shall provide each other with written
notice before making any such disclosure.
4.5 Relocation Rights Under License and leaso. At Buyer's reqvest, Seller has included
In the License a provision whereby L11=ensee waives any right to relocation assistance or benents (see
Section 15 of License attached as Exhibit C hereto) which provision is acceptable to Buyer.
With regard to the Lease, prior to Close of Escrow, Setler shall attempt to obtain a waiver
of relocation assistance and benefits from Lessee ("Waiver of Relocation Rights") substantially In the
form of Exhibit s· attached hereto. In the event Seller obtains said waiver from Lessee, Seller shall be
relieved of any liability to Buyer regarding the provision of relocation assistance and benefits to Lessee.
In the event Seller Is unable to obtain said waiver, Buyer shall have the option of either {a) receiving an
ass ign ment of Seller's Interest In the lease at the Close of Escrow pursuant to Sections 2.2 and 6. 1lb)
hereof, In which case Seller shall also be relieved of any liability to Buyer regarding the provision of
relocation assistance and benefits to lessee, or (b) requiring that Seller deliver a notice of termination to
Lessee ("Notice of lease Termination~) pursuant to Section 2 of the lease, In which case Seller shall
Indemnify Buyer for the relocation assistance required to be paid by Buyer as a result of any legal action
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brought by Lessee to recover its costs of relocation as a result of the termination of the Lease, provided
however, in no event shall Seller be required to pay more than the actual cost of Lessee's relocation.
5. OPERATIONS AND R_IS,K OF LOSS
5.1 Ongoing Operations. During the pendency of this Agreement, but subject to the
limitations set forth below, Seller shall carry on its businesses and activities relating to the Real Property
substantially in the same manner as it did before the date of this Agreement.
5.2 New Contracts. Seller will not enter into any contract that will be an obligation affecting
the Real Property subsequent to the Close of Escrow (except contracts entered Into in the ordinary
course of business that are terminable without cause on 30-days' notice), without the prior consent of the
Buyer, which shall not be unreasonably withheld or delayed .
5.3 Damage or Condemnation. Risk of loss resulting from any condemnation or eminent
domain proceeding which Is commenced or has been threatened against the Real Property before the
Close of Escrow, and risk of loss to the Real Property due to fire, flood or any other cause before the
Close of Escrow, shall remain with Seller. If before the Close of Escrow the Real Property or any portion
thereof shall be materially damaged, or if the Real Property or any material portion thereof shall be
subjected to a ~ fide threat of condemnation or shall become the subject of any proceedings, judicial,
administrative or otherwise, with respect to the taking by eminent domain or condemnation, then Buyer
may elect not to acquire the Real Property by delivering written notice of such election to Seller within five
(5) days after Buyer learns of the damage or taking, in which event Buyer shall no longer be obligated to
purchase, and Seller shall no longer be obligated to sell, the Real Property. If the Closing Date is within
the aforesaid 5-day period, then the Close of Escrow shall be e><tended to the next business day following
the end of said 5-day period. If no such election Is made, and In any event If the damage Is not material,
this Agreement shall remain in full force and effect, and the purchase contemplated herein, less any
interest taken by eminent domain or condemnation, shall be effected with no further adjustment, and
upon.the Close of Escrow, Seller shall assign, transfer and set over to Buyer all of the right, title and
interest of Seller In and to any awards that have been or that may thereafter be made for such taking. For
purposes of this Section 5 .3, the phrase(s) (I) "Material damage" or "Materially damaged" means
damage reasonably exceeding ten percent of the Purchase Price of the Real Property, and (II) "material
portion" means any portion of the Real Properly that has a "fair market value" exceeding 10% of the
Purchase Price of the Real Property.
6. SELLER'S AND BUYER'S DELIVERIES
6.1 Seller's Deliveries into Escrow. No less than one (1) business day prior to the Closing
Date, Seiler shall deliver into Escrow (as such term is defined In Section 9 hereof) to the Escrow Holder
the following:
(a) Deed. A grant deed (the "Deed") In the form attached hereto as Exhibit F,
executed and acknowledged by Seller, conveying to Buyer Seller's title to the Real Property.
(b) Assignment of Lease and License and Bill of Sale. An Assignment of the
Lease and License and Bill of Sale ("Assignment of Lease and License and Bill of Sale") in the form of
Exhibit G attached hereto, executed by Seller.
(c) State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of the Real Property.
(d) Water Agreement. The Water Agreement (the "Water Agreement")
substantially in the form of Exhibit H attached hereto, executed by Seller.
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(e) Rodeo License. The Rodeo License Agreement (the "Rodeo License
Agreement") substantially in the form of Exh ib it I attached hereto, executed by Seller .
(f) Conservation Easement. If It has not been previously recorded by Seller as
provided herein, the conservation easement (the "Conservation Easement") in the form of Exh ibit J
attached hereto, executed by Seller and The Reserve at Rancho Mission Viejo ("The Reserve").
(g) FIRPTA. A Foreign Investment In Real Property Tax Act affidavit executed by
Seller substantially in the form of Exhibit K attached hereto .
(h) Additional Documents. Any additional documents that Escrow Holder or the
Title Company may reasonably require for the proper consummation of the transaction contemplated by
this Agreement.
6.2 Buyer's Deliveries into Escrow. No less than one (1) business day prior to the Closing
Date, Buyer shall deliver into Escrow to the Escrow Holder the following:
(a) Purchase Price. The Purchase Price, plus or minus applicable prorations,
deposited by Buyer with the Escrow Holder In immediate, same-day federal funds wired for credit into the
Escrow Holder's escrow account and deposited In Escrow Holder's escrow account no later than 1:00
p.m. (California time) one business day prior to the Closing Date.
(b) Assignment of Lease and License and Bill of Sale. An Assignment of Lease
and License and Bill of Sale executed by Buyer.
(c) State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of the Real Property.
(d) Water Agreement. The Water Agreement executed by Buyer.
(e) Rodeo License Agreement. The Rodeo License Agreement executed by
Buyer.
(f) Additional Documents. Any additional documents that Escrow Holder or the
Title Company may reasonably require for the proper consummation of the transaction contemplated by
this Agreement.
6.3 Closing Statements/Escrow Fees; Notices. Concurrently with the Close of Escrow,
Seller and Buyer shall deposit with the Escrow Holder executed closing statements consistent with this
Agreement in the form required by the Escrow Holder and, Seller and Buyer shall execute at the Close of
Escrow, and deliver to licensee and Lessee immediately after the Close of Escrow, notices regarding the
sale of the Real Property In substantially the form of Exhib it L attached hereto, or such other form as may
be required by applicable state law.
6.4 Post-Closing Deliveries. Immediately after the Close of Escrow, to the extent In Seller's
possession, Seller shall deliver to the offices of Buyer the original Lease and License.
7. CONDITIONS TO BUYER 'S AND SELLER 'S OBLIGATIONS .
7.1 Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligation to
consummate the transaction contemplated by this Agreement are subject to the satisfaction of the
following conditions for Buyer's benefit (or Buyer 's waiver thereof, it being agreed that Buyer may waive
any or all of such conditions) on or prior to the Closing Date or on the dates designated below for the
satisfaction of such conditions :
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(a) All of Seller's representations and warranties contained herein shall be true and
correct In all material respects as of the date of this Agreement and as of the Closing Dale, Sl.lbject to any
qualifications hereafter made to any of Seller's representations as provided for In Section 1~ .1 hereof;
(b) As of the Closing Date, Seller shall have performed Its respective obligations
hereunder and all delfverles to be made at Close of Escrow by Seller shall have been tendered;
(c) There shall exist no actions, suits, arbitrations, claims, attachments, proceedings,
assignments for the benefit of creditors, Insolvency, bankruptcy, reorganization or other pr oceedings,
pending or threatened against Seller that would materially and adversely affect Seller's ablllty to perform
Its respective obligations under this Agreement;
(d) There shall exist no pending or threatened action, suit or proceeding with respect
to Seller before or by any court or administrative agency which seeks to restrain or· prohibit, or to obtain
damages or a discovery order with respect to, this Agreement or the consummation of the transaction
contemplated hereby; and
(e) As of the Closing Dale, Seller shall have relocated the existing Freddie Love
facility off of the Property.
(f) As of the Closing Dale, if the Waiver of Relocation Rights has been executed by
Lessee, Seller shall have delivered or caused to be delivered to Buyer a copy of said waiver. If Lessee
has not executed said waiver and If Buyer has required Seller to deliver the Notice of Lease Termination
to Lessee pursuant to Section 4 .5 hereof, Seller shall deliver or cause to be delivered a copy of said
notice to Buyer.
If, notwithstanding lhe nonsatisfaction of any such condition, the Close of Escrow occurs, there shall be
no liability on the part of Seller for breaches of representations and warranties of which Buyer had
knowledge as of the Close of Escrow .
7.2 Conditions to Seller's Obligations.
The Close of Escrow and Seller's obligations to consummate the transaction
contemplated by this Agreement are subject to the satisfaction of the following conditions for Seller's
benefit (or Seller's waiver thereor, It being agreed that Seller may waive any or all of such conditions) on
or prior to the Closing Date or the dates designated below for the satisfaction of such conditions:
(a) All of Buyer's representations and warranties contained herein shall be true and
correct In all material respects as of the date of this Agreement and as of the Closing Qate;
(b) As of the Closing Date, Buyer has performed Its obligations hereunder and all
deliveries to be made at Close of Escrow by Buyer shall have been tendered Including, without limitation,
the deposit with Escrow Holder of the amounts set forth In Section 6.2(a) hereof;
(c) There shall exist no actions, suits, arbitrations, claims, attachments, proceedings,
assignments for the benefit of creditors, Insolvency, bankruptcy, reorganlzallon or other proceedings,
pending or threatened against Buyer that would materially and adversely affect Buyer's ability to perform
Its obligations under this Agreement; and
(d) There shall exist no pending or threatened aotlon, suit or proceeding with respect
to Buyer before or by any court or administrative agency which seeks to restrain or prohibit, or to obtain
damages or a discovery order with res peel to, this Agreement or the consummallon of the transaction
contemplated hereby.
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B. CLOSE OF ESCROW; POSSESSION.
8.1 "Close of Escrow" shall mean and refer to Seller's receipt of the Purchase Price and the
other amounts due Seller In accordance with the provisions of Section 9, 1(b} below. The Escrow and
Buyer's right to purchase the Real Property willlermlnate automatically If the Close of Escrow does not
occur on or before 1:00 p.m. (California time) on the Closing Date.
8.2 Sole exclusive possession or the Real Property, subject only to 1he Permitted Exceptions
(as defined rn Section 4 .2.2 hereof), shall be delivered to Buyer on the Closing Dale.
9. ESCROW.
. 9.1 Closing. The escrow (the ~escrow") for the consummation of this transaction shall be
established with Escrow Holder at the address Indicated In Section 18 .1 hereof by the deposit of an
original signed copy of this Agreement with Escrow Holder contemporaneously with the execution hereof.
This Agreement sh all constitute both an agreement among Buyer and Seller and escrow Instructions for
Escrow Holder. If Escrow Holder requires separate or additional escrow Instructions which It deems
necessary for its protection, Seller and Buyer hereby agree promptly upon request by Escrow Holder to
execute and deliver to Escrow Holder such separate or additional escrow Instructions (the • Additional
Instructions"). In the event of any conflict or Inconsistency between this Agreement and the Additional
Instructions, this Agreement shall prevail and govern, and the Additional Instructions shall so provide.
The Additional Instructions shall not modify or amend the provisions of this Agreement unless otherwise
agreed to In writing by Seller and Buyer.
On the Closing Date, provided that the conditions set forth In Sections 7 .1 and 7.2 hereof have
been satisfied or waived, Escrow Holder shall take the following actions In the order lnd lcated below:
(a) With respect to all closing documents delivered to Escrow Holder hereunder, and
to the extent necessary, Escrow Holder Is authorized to insert Into all blanks requiring the Insertion of
dates the date of the recordation of the Deed or such other date as Escrow Holder may be Instructed In
writing by Seller and Buyer;
(b) Deliver to Seller, In cash or current funds, the Purchase Price, plus or minus, as
the case may be, the amounts determined In accordance with the provisions of Section 10 hereof,
Buyer's signed counterparts of the Assignment of Lease and License and Bill of Sale, the Rodeo License
Agreement, and conformed (,)opies of the recorded Conservation Easement, Water Agreement and Deed;
(c) Record the Conservation Easement In the official ~ecords of Orange County;
(d) Record the Deed in the official records of Orange County;
(e) Record the Water Agreement In the official records of Orange County;
(f) Deliver to Buyer those Items referred to In Section 6.1 hereof and conformed
copies of the recorded Conservation Agreement, Water Agreement and Deed;
(g) Cause the Tille Company to Issue the Title Polley for the Real Property In
accordance with the provisions of Section 4.2.3 hereof; and
(h) Deliver to Seller and Buyer a final closing statement which has been certified by
Escrow Holder to be true and correct.
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9.2 Escrow and Title Charges.
(a) Upon the Close of Escrow, escrow, title charges and other closing costs shall be
allocated between Seller and Buyer as follows:
(i} Seller shall pay: (1) the premiums for the Title Policy, (2) the cost of
recording the Conservation Easement, Water Agreement and Deed, and (3) one-half (J.'2) of any escrow
fees or similar charges of Escrow Holder.
(il) Buyer shall pay one-half (Y2) of any escrow fees or similar charges of
Escrow Holder and all sales, gross receipts, compensating, stamp, excise, documentary, transfer, deed or
similar taxes or fees (City, County and State) payable In connection with the consummation of the
transactions contemplated by this Agreement. If Buyer desires ALTA extended coverage for any Title
Polley, Buyer shall pay the premiums and any additional costs (Including any survey costs) for such
coverage (additional to the premiums for standard coverage) and the cost of any endorsements to the
Title Poi ley, if required by Buyer.
(ill) Buyer shall pay all costs Incurred in connection with Buyer's updating or
obtaining any surveys for the Real Property.
(iv) Except to the extent otherwise specifically provided herein, all other
expenses incurred by Seller and Buyer with respect to the negotiation, documentation and closing of this
transaction, InCluding, without limitation, Buyer's and Seller's attorneys' fees, shall be borne and paid by
the party incurring same.
(b) If the Close of Escrow does not occur by reason of Buyer's or Seller's default
under this Agreement, then all escrow and title charges (Including cancellation fees) shall be borne by the
party In default.
9.3 Procedures Upon Failure of Condition. Except as otherwise expressly provided
herein, if any condition set forth In Sections 7.1 or 7 .2 hereof Is not timely satisfied or waived for a reason
other than the default of Buyer or Seller in the performance of Its respective obligations under this
Agreement:
(a) This Agreement, the Escrow and the respective rights and obligations of Seller
and Buyer hereunder shall terminate (other than the indemnity and insurance obligations of Buyer set
forth In Sections 4.3 .1 and 14 hereof and the confidentiality provisions of Section 4.4 hereof which shall
survive such termination) at the written election of the party for whose benefit such condition was
imposed, which written election must be made (I) within two (2) business days after the date such
condition was to be satisfied, or (ii) on the date the Close of Escrow occurs, whichever occurs first;
(b) Escrow Holder shall promptly return to Buyer all funds of Buyer In Its possession,
and to Seller and Buyer all documents deposited by them respectively, which are then held by Escrow
Holder;
(c) Buyer shall return to Seller the Property Information and Buyer shall deliver to
Seller all Work Product (as such term is defined in Section 18.3 hereof); and
(d) Any escrow cancellation and title charges shall be borne equally by Seller and
Buyer.
10. PRORATIONS.
If the Purchase Price Is received by Seller's depository bank In time to credit to Seller's account
on the Closing Date, the day the Close of Escrow occurs shall belong to Buyer and all prorations
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hereinafter provided to be made as of the Close of Escrow shall each be made as of the end of the day
before the Closing Date. If the cash portion of the Purchase Price Is not so received by Seller's
depository bank on the Closing Date, then the day the Close of Escrow occurs shall belong to Seller and
such proration shall be made as of the end of the day that is the Closing Date. In each such proration set
forth below, the portion thereof applicable to periods beginning as of Close of Escrow shall be credited to
Buyer or charged to Buyer as applicable and the portion thereof applicable to periods ending as of Close
of Escrow shall be credited to Seller or charged to Seller as applicable.
10.1 Collected Rent. All rent (including, without limitation, all base rents, additional rents and
retroactive rents, and expressly excluding Licensee/Lessee reimbursements for Operating Costs, as
hereinafter defined) and all other income {and any applicable st~te or local tax on rent) (hereinafter
collectively referred to as "Rents") collected under Lease and License In effect on the Closing Date shall
be prorated as of the Close of Escrow. Uncollected Rent shall not be prorated and, to the extent payable
for the period prior to the Close of Escrow, shall remain the property of Seller. Buyer shall apply Rent
from Licensee and Lessee that are collected after the Close of Escrow first to Rents which were due to
Seller on or before the Close of Escrow and second to Rents which are due to Buyer after the Close of
Escrow. Any prepaid Rents for the period following the Closing Date shall be paid over by Seller to
Buyer. Buyer will make reasonable efforts, without suit, to collect any Rents applicable to the period
before the Close of Escrow including, without limitation, sending to Licensee and Lessee bills for the
payment of past due Rents during the first twelve (12) month period following the Closing Date. Seller
may pursue collection of any Rents that were past due as of the Closing Date, provided that Seller shall
have no right to terminate the Lease or License or any occupancy under the Lease or License In
connection therewith .
10.2 Operating Costs and Additional Rent Reconciliation. Seller, as landlord under the
Lease and License, Is entitled under certain circumstances to collect from Lessee and Licensee under the
Lease and License additional rent to cover taxes, Insurance, utilities (to the extent not paid directly by
Licensee and Lessee), and other operating costs and expenses {collectively, "Operating Costs") in
connection with the ownership, operation, maintenance and management of the Real Property. To the
extent that any additional rent (including, without limitation, estimated payments for Operating Costs) Is
paid by Licensee and Lessee to the landlord under the Lease or License based on an estimated payment
basis (monthly, quarterly, or otherwise) for which a future reconciliation of actual Operating Costs to
estimated payments Is required to be performed at the end of a reconciliation period, Buyer and Seller
shall make an adjustment at the Close of Escrow for the applicable reconciliation period (or periods, if the
Lease and License do not have a common reconciliation period) based on a comparison of the actual
Operating Costs to the estimated payments at the Close of Escrow. If, as of the Close of Escrow, Seller
has received additional rent payments in excess of the amount that Licensee and Lessee will be required
to pay, based on the actual Operating Costs as of the Close of Escrow, Buyer shall receive a credit in the
amount of such excess. If, as of the Close of Escrow, Seller has received additional rent payments that
are less than the amount that Licensee and Lessee would be required to pay based on the actual
Operating Costs as of the Close of Escrow, Seller shall receive a credit In the amount of such deficiency;
provided, however, Seller shall not be entitled to the portion, If any, of such deficiency for which Seller
received a credit at the Close of Escrow under clause (b) of Section 10 ,3 hereof. Operating Costs that
are not payable by Licensee and Lessee either directly or reimbursable under the Lease or License shall
be prorated between Seller and Buyer and shall be reasonably estimated by the parties if final bills are
not available.
10.3 Taxes and Assessments. Real estate taxes and assessments imposed by any
governmental authority ("Taxes") with respect to the Real Property for the relevant tal< year in which · the
Real Property is being sold and that are not yet due and payable or that have not yet been paid and that
are not (and will not be) reimbursable by Licensee and Lessee under the Leases as Operating Costs shall
be prori;lted as of the Close of Escrow based upon the most recent ascertainable assessed values and
tax rates and based upon the number of days Buyer and Seller will have owned the Real Property during
such relevant tax year. Seller shall receive a credit for any Taxes paid by Seller and applicable to (a) any
period after the Close of Escrow, and (b) any period before the Close of Escrow to the extent
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reimbursable as Operating Costs by the existing Licensee or Lessee under the License and Lease and
not yet received from such Licensee or Lessee.
10.4 Utilities and Utllltv Deposits. Utilities for the Real Property (excluding utilities for which
payment Is made directly by Licensee and Lessee), Including water, sewer, electric, and gas, based upon
the last reading of meters prior to the Close of Escrow, shall be prorated. Seller shall be entitled to a
credit for all security deposits held by any of the utility companies providing service to the Real Property.
Seller shall endeavor to obtain meter readings on the day before the Closing Date, and If such readings
are obtained, there shall be no proration of such Items and Seller shall pay at Close of Escrow the bills
therefor for the period to the day preceding the Close of Escrow, and Buyer shalt pay the bills therefor for
the period subsequent thereto. If the utlllty company wfll not Issue separate bills, Buyer will receive a
credit against the Purchase Price for Seller's portion and will pay the entire bill prior to delinquency after
Close of Escrow. If Seller has paid utilities no more than thirty (30) days In advance In the ordinary
course of business, then Buyer shall be charged Its portion of such payment at Close of Escrow. Buyer
shall be responsible for making any securlly deposits required by utility companies providing service to
the Real Property.
10.~ Final Adlustment After Closing. If final prorations cannot be made at the Close of
Escrow for any Item being prorated under this Sect jon 10, then, provided Buyer or Seller Identify any such
proration ("Post Closing ~roration") in writing before the Close of Escrow, Buyer and Seller agree to
allocate such items on a fair and equitable basis as soon as Invoices or bills are available and applicable
reconciliation with tenants have been completed, with final adjustment to be made as soon as reasonably
possible after the Close of Escrow {but In no event later than ninety (90) days after the Close of Escrow.
Payments in connection with. the final adjustment shall be due no later than ninety (90) days after the
Close of Escrow. Seller shall have reasonable access to, and the right to Inspect and audit, Buyer's
books To confirm the final prorations for a period of one {1) year after the Close of Escrow.
Notwithstanding anything to the contrary stated In this Secti on 10, except for any Post Closing Prorations
(which must be determined and paid within ninety (90) days after the Close of Escrow), all prorations
made under this Secti on 10 shall be final as of the Close of Escrow and shall not be subject to further
adjustment (whether due to an error or for any other reason) after the Close of Escrow.
11. SELLER'S R~PRESEN T A T IONS AND WARRANTIES; AS·IS.
11 .1 Seller's Repre&entatfons and Warranties. In consideration of Buyer's entering Into this
Agreement and as an Inducement to Buyer to purchase the Real Property from Seller, Seller makes the
following representations and warranties to Buyer:
(a) Seller has the legal right, power and authority to enter Into this Agreement and to
consummate the transactions contemplated hereby, and the execution, delivery and performance of this
Agreement have been duty authorized and no other action by Seller is requisite to the valid and binding
execution, delivery and performance of this Agreement.
(b) There is no agreement to which Seller Is a party or to Seller's Actual Knowledge
binding on Seller which would prevent Seller from consummating the transaction contemplated by this
Agreement.
For purposes of this Section 11,1, the phrase "To Saller's Actual Knowledge" shall mean the actual
(and not Implied, Imputed, or constructive) knowledge of Anthony R. Moiso, Donald L. Vodra and Richard
Bromlng (whom the Seller represents are the asset managers for the Real Property), without any Inquiry
or Investigation of any other parties.
The representations and warranties made by Seller In this Agreement shall survive the recordation of the
Deed for a period of six (6) months and any action for a breach of Seller's representations or warranties
must be made and flied wlthln said six (6) month period. If, after the Effective Date, but before the Close
of Escrow, Seller becomes aware of any facts or changes In circumstances that would cause any of Its
representations and warranties in this Agreement to be untrue at Close of Escrow, Seller shall notify
euy~r In writing of svch fact. In such case , or In the event Buyer obtains Information which would cause
082/21183021 .2 11
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any of Seller's representations and warranties to be untrue at Close of Escrow, Buyer, as its sole and
exclusive remedy, shall have the right to either (i) terminate this Agreement, and neither party shall have
any rights or obligations under this Agreement (except for Sections 4 .3.1, 18.3 a nd 18.5 which survive
termination of this Agreement); or (ii) accept a qualification to Seller's representations and warranties as
of the Close of Escrow and complete the purchase and sale of the Property without any rights to recovery
for breach of the unqualified representation and warranty. Other than as set forth In the immediately
preceding sentence, if Buyer proceeds with the Close of Escrow, Buyer shall be deemed to have
expressly waived any and all remedies for the breach of any representation or warranty discovered by
Buyer prior to the Close of Escrow.
11.2 As~ls. As of the Effective Date, Buyer has:
(a) examined and inspected the Property and is satisfied with the physical condition,
quality, quantity and state of repair of the Property in all respects and by proceeding with this transaction
shall be deemed to have determined that the same is satisfactory to Buyer;
(b) reviewed the Property Information and all instruments, records and documents
which Buyer deems appropriate or advisable to review in connection with this transaction, and Buyer, by
proceeding with this transaction shall be deemed to have determined that the same and the information
and data contained therein and evidenced thereby are satisfactory to Buyer;
(c) reviewed all applicable laws, ordinances, rules and governmental regulations
(including, but not limited to, those relating to building, zoning and land use) affecting the development.
use, occupancy or enjoyment of the Real Property, and Buyer, by proceeding with this transaction shall
be deemed to have determined that the same are satisfactory to Buyer; and
(d) at its own cost and expense, made its own independent Investigation respecting
the Property and all other aspects of this transaction, and is relying thereon and on the advice of its
consultants In entering into this Agreement, and Buyer, by proceeding with this transaction shall be
deemed to have determined that the same are satisfactory to Buyer.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT FOR SELLER'S
REPRESENTATIONS AND WARRANTIES IN S ECI ION 11 .1 OF THIS AGREEMENT AND ANY
WARRANTIES OF TITLE CONTAINED IN THE DEED DELIVERED AT THE CLOSE OF ESCROW
("SELLER'S WARRANTIES"), THIS SALE IS MADE AND WILL BE MADE WITHOUT
REPRESENTATION, COVENANT, OR WARRANTY OF ANY KIND (WHETHER EXPRESS, IMPLIED,
OR, TO THE MAXIMUM EXTENT PERMITIED BY APPLICABLE LAW, STATUTORY) BY SELLER. AS
A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, BUYER AGREES TO
ACCEPT THE PROPERTY ON AN "AS IS" AND "WHERE IS" BASIS, WITH ALL FAULTS, AND
WITHOUT ANY REPRESENTATION OR WARRANTY, ALL OF WHICH SELLER HEREBY DISCLAIMS,
EXCEPT FOR SELLER'S WARRANTIES. EXCEPT FOR SELLER'S WARRANTIES, NO WARRANTY
OR REPRESENTATION IS MADE BY SELLER AS TO FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN, QUALITY, CONDITION, OPERATION OR INCOME, COMPLIANCE
WITH DRAWINGS OR SPECIFICATIONS, ABSENCE OF DEFECTS, ABSENCE OF HAZARDOUS OR
TOXIC SUBSTANCES, ABSENCE OF FAULTS, FLOODING, OR COMPLIANCE WITH LAWS AND
REGULATIONS INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND
THE ENVIRONMENT. BUYER ACKNOWLEDGES THAT BUYER HAS ENTERED INTO THIS
AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS OWN INVESTIGATION
OF THE PHYSICAL, ENVIRONMENTAL, ECONOMIC USE, COMPLIANCE, AND LEGAL CONDITION
OF THE PROPERTY AND THAT BUYER IS NOT NOW RELYING, AND WILL NOT LATER RELY,
UPON ANY REPRESENTATIONS AND WARRANTIES MADE BY SELLER OR ANYONE ACTING OR
CLAIMING TO ACT, BY, THROUGH OR UNDER OR ON SELLER'S BEHALF CONCERNING THE
PROPERTY. ADDITIONALLY, BUYER AND SELLER HEREBY AGREE THAT (A) EXCEPT FOR
SELLER'S WARRANTIES, BUYER IS TAKING THE PROPERTY ''AS IS" WITH ALL LATENT AND
PATENT DEFECTS AND THAT EXCEPT FOR SELLER'S WARRANTIES, THERE IS NO WARRANTY
BY SELLER THAT THE PROPERTY IS FIT FOR A PARTICULAR PURPOSE, (B) EXCEPT FOR
082/21183021.2 12
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SELLER'S WARRANTIES, BUYER IS SOLELY RELYING UPON ITS EXAMINATION OF THE
PROPERTY, AND (C) BUYER TAKES THE PROPERTY UNDER THIS AGREEMENT UNDER THE
EXPRESS UNDERSTANDING THAT THERE ARE NO EXPRESS OR IMPLIED WARRANTIES
(EXCEPT FOR THE LIMITED WARRANTIES OF TITLE SET FORTH IN THE DEED AND SELLER'S
WARRANTIES).
WITH RESPECT TO THE FOLLOWING, BUYER FURTHER ACKNOWLEDGES ANO AGREES THAT
SELLER SHALL NOT HAVE ANY LIABILITY, OBLIGATION OR RESPONSIBILITY OF ANY KIND AND
THAT SELLER HAS MADE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND:
1. THE CONTENT OR ACCURACY OF ANY REPORT, STUDY, OPINION OR CONCLUSION OF
ANY SOILS, TOXIC, ENVIRONMENTAL OR OTHER ENGINEER OR OTHER PERSON OR
ENTITY WHO HAS EXAMINED THE PROPERTY OR ANY ASPECT THEREOF;
2. THE CONTENT OR ACCURACY OF ANY OF THE ITEMS (INCLUDING, WITHOUT
LIMITATION, THE PROPERTY INFORMATION) DELIVERED TO BUYER PURSUANT TO
BUYER 'S REVIEW OF THE CONDITION OF THE PROPERTY; OR
3 . THE CONTENT OR ACCURACY OF ANY PROJECTION, FINANCIAL OR MARKETING
ANALYSIS OR OTHER INFORMATION GIVEN TO BUYER BY SELLER OR REVIEWED BY
BUYER WITH RESPECT TO THE PROPERTY.
BUYER ALSO ACKNOWLEDGES THAT THE REAL PROPERTY MAY OR MAY NOT CONTAIN
ASBESTOS AND, IF THE REAL PROPERTY CONTAINS ASBESTOS, THAT BUYER MAY OR MAY
NOT BE REQUIRED TO REMEDIATE ANY ASBESTOS CONDITION IN ACCORDANCE WITH
APPLICABLE LAW.
BUYER IS A SOPHISTICATED REAL ESTATE INVESTOR AND IS, OR WILL BE AS OF THE CLOSE
OF ESCROW, FAMILIAR WITH THE REAL PROPERTY AND ITS SUITABILITY FOR BUYER'S
INTENDED USE . THE PROVISIONS OF THIS SECTION 11 .2 SHALL SURVIVE INDEFINITELY ANY
CLOSING OR TERMINATION OF THIS AGREEMENT AND SHALL NOT BE MERGED INTO THE
DOCUMENTS EXECUTED AT CLOSE OF ESCROW. ?.!./_
~B~~~~~~S ~IN~IT_I_A-LS ____ __
12. BUYER'S COVENANTS, REPRESENTATIONS AND WARRANTIES; RELEASE; ERISA;
INDEMNIFICATION . '
In consideration of Seller entering into this Agreement and as an inducement to Seller to sell the
Real Property to Buyer, Buyer makes the following covenants, representations and warranties:
12.1 Buyer's Representations and Warranties.
(a) Authority. Buyer has the legal right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and
performance of this Agreement have been duly authorized and no other action by Buyer is requisite to the
valid and bindfng execution, delivery and performance of this Agreement, except as otherwise expressly
set forth herein. There is no agreement to which Buyer Is a party or to Buyer's knowledge binding on
Buyer which is In conflict with this Agreement.
(b) Executive Order 13224. To the best of Buyer's knowledge, neither Buyer nor
any of its respective affiliates or constituents, nor any of their respective brokers or other agents acting in
any capacity in connection with the transactions contemplated by this Agreement is or will be (a)
conducting any business or engaging In any transaction or dealing with any person appearing on the U .S.
082121183021.2 13
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Treasury Department's Office of Foreign Assets Control ("OFAC") list of restrictions and prohibited
persons ("Prohibited Person"} (which lists can be accessed at the following web address:
http://www.ustreas.gov/offlces/enforcementlofac/), Including the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Prohibited Person; (b) dealing in, or otherwise
engaging In any transaction relating to, any property or Interests in property blocked pursuant to
Executive Order No. 13224 dated September 24, 2001, relating to "Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism"; or (c) engaging In
or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempting to violate, any of the prohibitions set forth in any U.S. anti-money laundering law.
12.2 Release. By proceeding with this transaction, Buyer shall be deemed to have made Its
own independent Investigation of the Property, the Property Information and the presence of Hazardous
Materials on the Real Property as Buyer deems appropriate. Accordingly, subject to the representations
and warranties of Seller expressly set forth in Section 11 .1 hereof, Buyer, on behalf of itself and all of Its
officers, directors, shareholders, employees, representatives and affiliated entities (collectively, the
"Releasors") hereby expressly waives and relinquishes any and all rights and remedies Releasers may
now or hereafter have against Seller, its successors and assigns, partners, shareholders, officers and/or
directors (the useller Parties"), whether known or unknown, which may arise from or be related to (a) the
physical condition, quality, quantity and state of repair of the Real Property and the prior management
and operation of the Real Property, (b) the Property Information, (c) the Real Property's compliance or
lack of compliance with any federal. state or local laws or regulations, and (d) any past, present or future
presence or existence of Hazardous Materials on, under or about the Real Properly or with respect to any
past, present or future violation of any rules, regulations or laws, now or hereafter enacted, regulating or
governing the use, handling, storage or disposal of Hazardous Materials, Including, without limitation,
(i) any and all rights and remedies Releasers may now or hereafter have under the Comprehensive
Environmental Response Compensation and Liability Act of 1980 ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, and the
Toxic Substance Control Act, all as amended, and any similar state, local or federal environmental law,
rule or regulation, and (li) any and all claims, whether known or unknown, now or hereafter existing, with
respect to the Real Properly under Section 107 of CERCLA (42 U.S.C.A. §9607). As used herein, the
term "Hazardous Material(s)" includes, without limitation, any hazardous or toxic materials, substances
or wastes, such as (1) any materials, substances or wastes which are toxic, ignitable, corrosive or
reactive and which are regulated by any local governmental authority, or any agency of the United States
government, (2) any other material, substance, or waste which is defined or regulated as a hazardous
material, extremely hazardous material, hazardous waste or toxic substance pursuant to any laws, rules,
regulations or orders of the United States government, or any local governmental body, (3) asbestos,
(4) petroleum and petroleum based products, (5) formaldehyde, (6) polychlorinated biphenyls (PCBs),
and (7) freon and other chlorofluorocarbons.
BUYER, ON BEHALF OF ITSELF AND THE OTHER RELEASORS, HEREBY
ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 1542 ("SECTION 1542"), WHICH IS SET FORTH BELOW:
"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."
BY INITIALING BELOW, BUYER, ON BEHALF OF ITSELF AND THE OTHER RELEASORS,
HEREBY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE
MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.
Buyer's Initials : )~j _
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER, ON B~
ITSELF AND THE OTHER RELEASORS, HEREBY ASSUMES ALL RI SK AND LIA BILIT Y RESULTING
082/21183021.2 14
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Page 18 of 32
OR ARISING FROM, OR RELATING TO THE OWNERSHIP, USE, CONDITION, LOCATION,
MAINTENANCE, REPAIR, OR OPERATION OF, THE PROPERTY.
THE FOREGOING WAIVERS, RELEASES AND AGREEMENTS BY BUYER, ON BEHALF OF
ITSELF AND THE RELEASORS, SHALL SURVIVE THE CLOSE OF ESCROW AND THE
RECORDATION OF THE DEED ANO SHALL NOT BE DEEMED MERGED INTO THE DEE!;> UPON ITS
RECORDATION .
12.3 ERISA. Buyer Is not purchasing any of the Property with "plan assets• of an Employee
Benefit Plan subject to Title I of the Employee Retirement Income Security Act of 1974 (as amended from
time to time, the "Act," and together with any regula!lon, rule or judicial or administrative case, order, or
pronouncement arising under or connected with the Act, "ERISA") or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"). Buyer shall take all actions reasonably
requested by Seller for the purpose of ensuring, to Seller's satlsfaclion, that the transactions
contemplated herein will comply with ERISA and not result In an imposition of an excise tax under
Section 4975 of the Code; such actions shall include, without limitation, the making of such further
representations and warranties as Seller's counsel reasonably deems necessary to ensure that neither
this Agreement nor any of the transactions contemplated herein will violate ERISA or result In an
fmposftlon of an excise tax under Section 4975 of the Code. In the event that this Agreement, Qr any
transaction or other action by Seller in connection herewith, shall be deemed to violate ERISA or result In
an imposition of an excise tax under Section 4976 of the Code, Seller may Immediately terminate this
Agreement (without any liability to Seller) In accordance with, and subject to the terms and conditions of,
Section 9.3 hereof as if such termination arose from a failed condition under Section 9.3 hereof.
I J
12.4 Indemnification . Buyer, on behalf of itself and all of Its officers. directors, shareholders,
employees, representatives and affiliated entitles (collectively, •lndemnltors") hereby agree, at their sole
cost and expense, to Indemnify, protect, hold harmless and defend (with counsel of Seller's choice) tt\e
Seller Parties from any and all claims, liabilities, suits, demands, obligations, duties, acts, omissions,
causes of action, damages, losses, and Indemnification obligations of every type, kind, nature, description
or character whatsoever, and Irrespective of how, why, or by what reason or facts now existing or
hereafter arising, or which could, might, or may be claimed to exist, whether known or unknown,
suspected or unsuspected, which In any way arise out of, are connected with, pertain or relate to, either
directly or indirectly, the Property, after the Close of Escrow, including, without limitation, the physical,
environmental, title, leasing, and financial condition of the Property and Property operations. The
provisions of this Section 12.4 shall survive the Close of Escrow and shall not be deemed merged Into tile
Deed upon its recordation . I
13. DEFAULT ~D OAMAGES.
13.1 Default by Buver. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE
THAT, IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER OEFAt,JLT
(ALL OF THE CONPITIONS TO BUYER'S OBLIGATIONS TO CLOSE HAVING BEEN SATISFIED OR
WAIVED), SELLER WILL SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL
NATURE OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL
NATURE OF THE NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT. BE IMPRACTICAL OR
EXTREMELY DIFFICULT TO ASCERTAIN. IN ADDITION, BUYER WISHES TO HAVE A LIMITATION
PLACED UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT THE CLOSE OF
ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT, AND WISHES TO INDUCE SELLER TO
WAIVE OTHER REMEOIES WHICH SELLER MAY HAVE IN THE EVENT OF A BUYER DEFAULT.
BUYER AND SELLER, AFTER DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT
THE AMOUNT OF ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000 .00) (WHICH WOULD
HELP REIMBURSE SELLER FOR ITS COSTS INCLUDING BUT NOT LIMITED TO LEGAL AND
CONSULTING SERVICES) REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH
SELLER WILL SUSTAIN IN THE EVENT OF SUCH BUYER DEFAULT . BUYER AND SELLER HEREBY
AGREE THAT SELLER MAY, IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCt,JR DUE TO A
BUYER DEFAULT, TERMINATE THIS AGREEMENT BY WRmEN NOTICE TO BUYER AND
ESCROW HOLDER. CANCEL THE ESCROW AND REQUEST THAT THE ABOVE-SPECIFIED
082/21183021 .2 15
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I
(
AMOUNT BE PAID TO IT BY CITY AS LIQUIDATED DAMAGES. CITY'S PAYMENT TO SELLER IS
INTENQED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671,
1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE
A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION 3369 OF
THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR PROVISION.
NOTHING IN THIS SECTION 13.1 SHALL {A) PREVENT OR PRECLVDE ANY RECOVERY OF
ATIORNEYS' FEES OR OTHER COSTS INCURRED BY SELLER PURSUANT TO SECTION 18.5 OR
(B) IMPAIR OR LIMIT THE EFFECTIVENESS OR ENFORCEABILITY OF THE INDEMNIFICATION
OBLIGATIONS OF BUYER CONTAINED IN SECTIONS 4 .3.1 AND 14 HEREOF. SELLER ANO BUYER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERST AND 'THE PROVISIONS OF THIS
SECTjQt;:J 13.1 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUN IT
TERMS.
Seller's In l als:---P'-f"'~___;:oc_
Buyer's I ltlats :._...,..,..,._ __ _
13.2 Default bv Seller. If Seller defaults In Its obligations to sell and convey the r erty to
Buyer pursuant to this Agreement, Buyer's sole and exclusive remedy shall be to elect one of the
following: (a) to terminate this Agreement. or (b) to bring a suit for specific performance provided that any
suit for specific performance must be brought as to the Property wilhln thirty (30) days of Seller's default,
Buyer's waiving the right to bring suit at any later date to the extent permitted by law. This Agreement
confers no present right, title or Interest In the Property to Buyer and Buyer agrees not to file a lis
pendens or other similar notice against the Real Property except in connection with, and after, the proper
filing of a suit for specific performance.
14. BROKER'S COMMISSIONS.
Neither party hereto has had any contact or dealing regarding the Real Property, or any
communication In connection with the subject matter of this transaction, through any licensed real estate
broker or other person who can claim a right to a commission or rinder's fee as a procuring cause of the
sale contemplated herein. In lhe event that any other broker or finder perfects a claim for a commission
or finder's fee, the party responsible for the contact or communication on which the broker or finder
perfected such claim shall Indemnify, save harmless and defend the other party from said claim and all
costs and expenses (including reasonable attorneys' fees) Incurred by the other party In defending
against the same.
15. USE RESTRICTION~; SELLER'S RESERVED RIGHTS.
The Property Is located within an area owned by Seller and its affiliated entities which Is
commonly known as the "Ranch Plan Property," which Is described/depleted on Exh ibit q attached
hereto . The Ranch Plan Property has been comprehensively planned over many yea~s and has received
several governmental approvals Including, but not limited to: 1) approval by the Orange County Board of
Supervisors on November 8, 2004 of General Plan Amendments, the Ranch Plan Planned Community
Zoning (the "Ranch Plan PC''), with Its associated "PC Text," and a Development Agreement, all of which
Include provision for needed residential and commercial uses, and the future preservation of open space
uses on over 16,000 acres of the Ranch Plan Property ("Future RMV Habitat Reserve Dedication
Areas"), and 2) .approval by the County and the US Fish and Wildlife Service ("USFWS") of the Southern
Subregion Habitat Conservation Plan ("Southern Subregion HCP") dated January 10, 2007 that
provides a comprehensive conservation strategy including designation of the Future RMV Habitat
Reserve DedlcaUon Areas for eventual Inclusion as part of the HCP Habitat Reserve . The use restrictions
and covenants set forth In this S ection 15 and In the following Section 16 are critical to implementation of
the Ranch Plan PC and the Southern Subregion HCP In an Integrated fashion and will greatly benefit the
entire Ranch Plan Property (the "Benefited Area").
Pursuant to this section, the "Ranch Plan• Is defined by the entitlements and approvals thereof
including the above-referenced General Plan Amendments, Ranch Plan PC and Development
Agreement, all as amended by certain settlement agreements with the cities of San Clemente and
Mission VIejo and a settlement agreement with certain resource organizations (NRDC, Sierra Club,
Endangered Habitats League, Sea & Sage Audubon and Laguna Greenbelt) dated December 8, 2004,
June 9, 2005 and August 16, 2005, respectively. Additional entitlements and approvals defining the
OB2/21183021.2 16
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Ranch Plan Include the Southern Subregion HCP, the San Juan Creek and Western San Mateo Creek
Watersheds Special Area Management Plan ("SAMP") approved by the US Atmy Corps of Engineers
("USACE") dated March 16, 2007, the Master Streambed Alteration Agreement approved by the
California Oepartment of Fish and Game ("CDFG") dated September 29, 2008, and various existing
approvals by the San Diego Regional Water Quality Control Board ("SDRWQCB"):
15.1 R,estrlctlona on Use of Real Property.
(a) Parcels 7 and 8.
(I) The use of Parcels 7 and 8 shall be restricted to (1) those uses
described as existing uses on the Property In Section 4 .1.2 (and depicted on Exhibit 4.1-3) of the EIR for
the Ranch Plan certified by the Board of Supervisors on November 8, 2004 (the "Ranch Plan EIR"),
Including equestrian and sports fleld uses (Exhibit M-1 attached hereto}, (2) new agricultural uses as
allowed under Section lll.H of the PC Text (Exhibit M-2 allached hereto), and (3) temporary uses as
allowed under Section lli.J of the PC Text (Exhibit M·3 attached hereto), subject to the further restriction
that the uses described under (1), (2) and (3) above, Individually and/or cumulatively, shall not Increase
traffic beyond the number of peak hour trips shown on Exhibit N attached hereto which represent a level
of traffic that Is consistent with the existing uses on the Property together with certain additional trips
corresponding to a portion of the trips associated with new sports field uses entitled as part of the Ranch
Plan.
Any uses other than the foregoing described uses are prohibited, Including, but not limited to,
residential, commercial (except one commercial equestrian facility) and Industrial uses. Any permanent
lighting, other than for security purposes, Is also prohibited.
(II) Certain portions of Parcels 7 and 6 contain Important vegetation/habitat
areas that are Identified as "Sensitive Resource Areas" on Exhibit 0 attached hereto. RMV Is the only
entity avthorized by USFWS, CDFG, USAGE and SDRWQCB to remove or otherwise Impact the
vegetation In these Sensitive Resource Areas. As such, If and when Buyer decides It would like to
remove or otherwise Impact any of these areas, Buyer must request RMV to do so. Within ninety (90)
days of receiving Buyer's request, at Buyer's expense. Seller/RMV will remove the Sensitive Resource
Area vegetation. Said vegetation will not be able to be removed during the bird breeding season-
January 15 to September 15.
(Ill) The location of any vehicular access Into Parcels 7 and 8 from La Pata
Road, current or future, shall be consistent with the approved Ranch Plan entitlements and shall reqLJire
Seller's prior written consent . To the extent practicable, existing access points to Parcels 7 and 8 will be
maintained and Buyer agrees that it will not make any modifications to access from La Pata Road until
after ultimate Ranch Plan ac~ess has been finalized.
(lv) City shall be prohibited from using any plants Identified on the Qallfornta
Invasive Plant Council (Cai-IPO) as part of its landscaping on Parcels 7 and 6. At Seller's request, City
shall provide Its landscaping plans to Seller for review and approval prior to Installation of same.
(v) No portion of the Property (Including Parcels 7 and 8, as well as the two
open space parcels) may be used or otherwise employed in the operation, distribution, transmission
and/or provision of telecommunications and associated/related services ("Telecommunications Services")
from, on or about the Property. Buyer, Its successors and assigns shall not grant, dedicate or otherwise
provide any easements, licenses or other rights on, under, over, across or affecting the Property that are
Intended to (or otherwise may) permit, authorize or allow any person or entity to (I) provide, engage In or
fac;;ilitate any Telecommunications Services from or upon the Property or (II) build or operate any
Telecommunications Facilities from or upon the Property.
(1) For purposes of this Agreement, "Telecommunications Facilities"
shall mean (aa) Improvements, equipment and facllllles for (I) telecommunications, (II) transfer of audio,
video and data signals, (Ill) transfer of any other signals used for transmission of Intelligence by electrical,
light wave, wireless frequencies or radio frequencies, and (lv) any other methods of communication and
information transfer, {bb) all associated improvements, equipment and facilities, Including, but not limited
to, antennas, towers, broadcasting and receiving devices, conduits, junction boxes, wires, cables, fiber
082121183021.2 17
ATTACHMENT 3
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optics, and any other necessary or appropriate enclosures and connections, and (cc) power generation
serving the Improvements, equipment and facilities described In subparts (aa) and (bb) of this definition.
(b) La Pata ORen Space and Creek Open Space Parcels.
(I) Prior to Close of Escrow, Seller shall have fully executed and delivered
to Escrow Holder, In recordable form, the Conservation Easement covering the Creek Open Space Parcel
and the La Pata Open Space Parcel. The form of the Conservation Easement (see Exhibit J) has
previously been negotiated with the wildlife agencies and Is not subject to amendment pursuant to this
Agreement. On the Closing Date, Escrow Holder shall be entitled to record the Conservation Easement
In accordance with the provisions of 9.1 hereof which shall result In andfor confirm the enrollment of the
respective parcels as part of the HCP Habitat Reserve pursuant to the Implementation Agreement for the
Southern Subregion HCP which was entered Into on January 10, 2007 by and between Rancho Mission
Viejo, the County of Orange, SMWD and the USFWS. Notwithstanding anything to the contrary herein,
Seller, In its sole and absolute discretion, shall have the right to record the Conservation Easement over
all or any portion of the open space parcels at any time prior to the Close of Escrow.
(II) Upon their enrollment In the HCP Habitat Reserve, the use of the Creek
Open Space Parcel and La Pata Open Space Parcel, both of which are within the "Oo Not Disturb" areas
Identified on Exhlbjt 0 attached hereto, shall be restricted in accordance with the Conservation Easement
and the Implementation Agreement for the Southern Subregion HCP. Prohibited uses on these parcels
are more particularly described In the Conservation Easement, the relevant portion of which Is set forth In
Exhibit P attached hereto.
(HI) Should Buyer desire to allow any grazing of the La Pata Open Space
Parcel, It would need to prepare and have approved by USFWS a grazing management plan for this area.
The Buyer, RMV and the Rancho Mission VIejo land Trust (the "RMVL T") shall cooperate In the
preparation of said grazing management plan. Said grazing management plan shall require RMV's and
RMVLT's approval prior to submission to USFWS. Any costs associated with RMV's and RMVL T's
review of said grazing management plan shall be borne by Buyer. No grazing shall be allowed on the
Creek Open Space Parcel under any circumstances
(lv) If Buyer desires to construct any trail or biKeway over, through or within
the Creek Open Space Parcel and/or La Pata Open Space Parcel other than the trails and bikeway
described In Section 16.1(d) below, It shall obtain required approvals from the USFWS and all other
federal, state and/or local agencies with jurisdiction over these areas, as well as the prior written consent
of RMV and The Reserve.
(c) Reatrlctloqs Run with the land. The use restrictions set forth in (a) and (b)
above (oollectlvely, the "Use Restrictions") shall run with the land and be binding upon any person or
entity who/that acquires any right, title or interest In or to any portion of the Property and shall be
enforceable by the assigns of and successors-In-Interest to Sellers. Every person or entity who hereafter
owns or acquires any right, title or Interest In or to any portion of the Property Is and shall be conclusively
deemed to have consented and agreed to the Use Restrictions contained herein, whether or not any
reference to the Deed Is contained In the instrument by which such parson acquired an Interest In such
portion of the Property.
(d) Right of Re-Entry; Power of TermlnaUon. The grant of the Property to Buyer
Is subject to the express condition that If the Property is ever used for any use other than those allowed
uses specified In (a) and (b) above, then the Seller, Its successors or assigns, shall have the right tore-
enter the Property and exercise the power of termination of Buyer's estate In the Property; provided,
however, Seller shall give Buyer at least fifteen (15) days prior written notice before exercising the power
of termination and Buyer shall have the right to cure any use violation within that period.
082/21183021.2 18
ATTACHMENT 3
Page 22 of 32
15.2 Seller's Reserved Rights.
(a) The Seller shall reserve all water rights, including riparian, pertaining to Parcels 7
and 8 except for that amount of water necessary to reasonably and beneficially Irrigate and maintain
landscaping (turf, trees and plants) and domestic use for the operation of the allowed uses on those
parcels. To allow Buyer to utilize water for the foregoing uses (on Parcels 7 and 8 only), Seller shall
consent to the Buyer constructing a well on either Parcel 7 or Parcel 8. The well pump shall not exceed a
capacity, at any lime, of 300 gallons per minute and Buyer's use of the water rights conveyed to It
hereunder shall not exceed that amount. Seller shall have the right to Install, and maintain, a well
monitoring device In order to track Buyer's water extraction and use. Should any controlling local, state or
federal agency adopt regulations restricting the amount of water that any landowner may extract, or if any
court issues a decision restricting the amount of water any landowner may extract, then the Buyer shall
reduce its use of water from said well on a correlative basis with any reduction of use by Seller. The
foregoing provisions have been Incorporated into the Water Agreement {see Exhibit H) to be executed by
Seller and the Buyer and recorded concurrently with the Close of Escrow.
(b) The Seller shall also reserve all mineral rights pertaining to the entire Property.
Sellers' exploration and extraction activities pursuant to their mineral rights shall be restricted to that zone
below a depth of 500 feet of the surface of the Property.
(c) The Seller shall further reserve:
(I) the right to Install utilities and storm drain facilities of any kind on the
Pl'operty to carry out development of Its remaining property pursuant to the approved Ranch Plan
entitlements (and Buyer shall provide eas-ements for Installation and maintenance of said utilities and
facilities). Seller agrees, to the extent practicable,-to locate such utilities and facilities in a way such that
they do not conflict with the Buyer's utilization of the Property.
(II) the right to require that Buyer grant to the County a construction
easement (the "La Pata Construction Easement") and an Irrevocable offer of dedication of right of way
in fee (the "La Pata 100"), at no cost to either County or Seller, covering those portions of the Property as
may be Identified by County In order to provide for the Improvement of La Pata Road to its ultimate width
as a primary arterial highway, in fulfillment of Seller's obligations as described In Section I.E of Exhibit D
(see Items No.1 and No. 14) of that certain Development Agreement for the Ranch Plan Project entered
into between County and Seller (and/or Seller's predecessors-In-interest) and recorded on December 6,
2004 as Instrument No. 2004001082094 (the "Rancho Mission Viejo Development Agreement"). Both
the La Pata Construction Easement and La Pata 100 shall be executed and delivered to County by Buyer
within thirty (30) days of either County's or Seller's request and shall be In a form reasonably satisfactory
to County and suitable for recordation. At County's option, the grant of the La Pata Construction
Easement and La Pata IOD may be phased to accommodate phasing of the La Pata Road
lm provements.
(iii) Its development rights under the governmental entitlements/approvals It
has received pertaining to the Ranch Plan Property (of which the Property has been a part) Including but
not limited to its rights under the Ranch Plan PC. Seller/RMV shall have no obligation to assign or
otherwise transfer any of said rights to Buyer.
15.3 Incorporation Into Grant Deed. The provisions in 15.1 and 15.2 hereof regarding
restrictions on use and Seller's reserved rights shall be Incorporated into the Deed attached hereto as
Exhibit F.
082/21183021.2 19
ATTACHMENT 3
Page 23 of 32
16. ADDITIONAL POST-CLOSING COVENANTS.
16.1 Buyer's Covenants-General. Buyer agrees:
(a) that It shall not itself, nor counsel others to, directly or indirectly, initiate, aid,
request, encourage, file, fund or participate In any administrative hearing, litigation or other action related
In any way to the approval and/or implementation of the Ranch Plan project on the Ranch Plan Property,
(b) that the Initiation of any annexation of the Property shall follow Closing of Escrow
and all costs of the annexation shall be borne by the City. Seller shall cooperate and support annexation
of the Property to City. In connection with and prior to any annexation of the Property, Buyer further
agrees that It shall prezone the entire Property to the "open space" category and designate It as "open
space" on the City General Plan, ·
(c) not to Initiate annexation of, or expansion of Its Sphere of Influence over, any part
of the Ranch Plan Property (as shown on Exhibit Q attached hereto) other than the Property acquired
pursuant to this acquisition,
(d) to reserve rights of way for, and to construct, the proposed Regional riding and
hiking trails and the Class 1 Bikeway in and around the Property as shown on the Trails and Bikeways
Concept for Planning Area 1 of the Ranch Plan Planned Community (Exh ibit R). Said trails and Class 1
bikeway shall be constructed by Buyer within one (1) year of RMV's completion of construction of
connecting trails and bikeway within and across Planning Area 1,
(e) to grant to the County the La Pata Construction Easement and the La Pata 100
for the improvement of La Pata Road south of Ortega Highway as more fully set forth In Section 15.2(c)(ll)
above,and ·
(f) that the area commonly known as the "Rancho Mission VIejo Riding Park at San
Juan Capistrano" (on Parcel 7) shall perpetually be known, identified and advertised by that name, and
that City shall use no other name for that area.
16.2 Buyer's Covenants-Habitat Reserve. Buyer acknowledges that, upon their
enrollment In the HCP Habitat Reserve as described in Section 15.1(b) hereof, the Creek Open Space
Parcel and La Pata Open Space Parcel will be subject to the Habitat Reserve Management Program
("HRMP"). Pursuant to the HRMP, various habitat monitoring and management actions will be
undertaken by RMVL T and RMV on these open space parcels pursuant to their obligations under the
Southern Subregion HCP. In conjunction with this transaction, SellerJRMV shall reserve (a) the right to
enter upon the open space parcels to carry out the HRMP and every other permitted use under the
Southern Subregion HCP, and (b) the right to enforce the terms and conditions of the Conservation
Easement. Buyer agrees to cooperate with RMVL T and RMV to the fullest extent to allow their respective
obligations to be fulfilled on the open space parcels. SellerJRMV shall have no obligation to assign or
otherwise transfer any of Its rights as permltee under the Southern Subregion HCP to Buyer.
16.3 Incorporation Into Grant Coed. The provisions in 16.1 and 16.2 hereof regarding
Buyer's additional post-closing covenants shall be incorporated into the Deed attached hereto as
Exhibit F. The covenants set forth above In 16.1 and 16.2 are for the benefit of the Benefited Area and
shall run with the Property and be binding upon any person or entity who/that acquires any right, title or
Interest In or to any portion of the Property and shall be enforceable by the assigns of and successors-In-
Interest to Sellers. Every person or entity who hereafter owns or acquires any right. title or Interest in or to
any portion of the Property is and shall be conclusively deemed to have consented and agreed to the
covenants contained herein, whether or not any reference to this Deed Is contained in the instrument by
which such person acquired an interest in such portion of the Property.
082/21183021,2 20
ATTACHMENT 3
Page 24 of 32
16.4 Buyer's and Seller's Covenants-Parcel 8 Citrus Grove.
(a) Removal of T re es and Soil. Within one (1) year from Close of Escrow, Seller
shall remove the existing citrus trees from 3.7 acres of ParcelS (the "Removal Area") and any
contaminated soil relating thereto at Seller's expense. Seller shall notify Buyer when Seller has
completed the removal of said trees and soli from the Removal Area.
(b) Gr adi ng of Removal Area. After receipt of notice of tree and soil removal from
Seller, and as a precondition to Seller's obligations for replanting of the citrus trees on the Removal Area
pursuant to subsection (c) below, Buyer shall be responsible for grading the Removal Area to a finish
grade at its expense.
(c) Rep lan ti ng. Within one (1) year from Close of Escrow (the "Election Period"),
Buyer shall make an election as to which portions of the Removal Area that Buyer desires to have
replanted and notify Seller of Its election. Provided that the Removal Area has already been graded by
Buyer pursuant to subsection (b) above, Seller shall replant citrus trees in those portions of the Removal
Area designated by Buyer for replanting within one hundred twenty (120) days of receiving Buyer's notice.
If the Removal Area has not yet been graded when Seller receives Buyer's notice, Seller shall replant the
citrus trees within one hundred twenty (120) days after completion of grading by Buyer and Buyer's notice
to Seller regarding same.
(d) C re di t.
(i) In the event that Buyer makes no election by the end of the Election
Period (In which case no replanting will be done by Seller), or if Buyer elects to have less than the entire
Removal Area replanted, Buyer shall be entitled to a credit from Seller for that portion not replanted.
(II) The credit shall be Six Thousand Dollars ($6,000.00) per acre far each
acre not replanted.
(iii) Buyer and Seller shall mutually agree on the acreage for which credit Is
to be given.
(iv) Seller shall pay any credit due to Buyer upon the earlier of (1) thirty (30)
days from the date on which Buyer made its election to have less than the entire Removal Area planted,
or (2) thirty (30) days from the last day of the Election Period.
17. RODEO LICENSE AGREEMENT.
Concurrently with Close of Escrow, Seller and Buyer shall enter Into the Rodeo License
Agreement (see Exhib it I) at no expense to Seller, for a term of fifty {50) years, and Seller (RMV) shall
have the right under the Rodeo License Agreement to hold the Rancho Mission Viejo Rodeo yearly as
currently operated. The Rodeo License Agreement shall provide that the rodeo held by RMV shall
continue to be named and referred to as the "Rancho Mission Viejo Rodeo." Buyer shall waive all City
fees, taxes and other charges required for or related to this event Including, but not limited to, any City
fees, taxes or other charges related to vendor services and operations. The majority of the net proceeds
from the Rodeo shall be available to the City's and South Orange County's charities including, but not
limited to, the San Juan Capistrano Open Space Foundation, the Camino Health Center, the R.H. Dana
Exceptional Needs Facility and the Shea Therapeutic Riding Center. In the event RMV relocates the
Rancho Mission VIejo Rodeo off of the Property, the Buyer's obligations under this section shall
terminate. Buyer shall agree not to host any rodeo on the Property unless RMV ceases operating the
Rancho Mission Viejo Rodeo for a period of three consecutive years.
082/21183021.2 21
ATTACHMENT 3
Page 25 of 32
18. MISCELLANEOUS PROVISIONS.
18.1 Notices. All written notices or demands of any kind which either party hereto may be
required or may desire to serve on the other In connection with this Agreement shall be served by
personal service, by registered or certified mail, recognized overnight courier service or facsimile
transmission. Any such notice or demand so to be served by registered or certified mall, recognized
overnight courier service or facsimile transmission shall be delivered with all applicable delivery charges
thereon fully prepaid and, If the party so to be served be Buyer, addressed to Buyer as follows:
with a copy thereof to:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attention: City Manager
Telephone No: (949) 443-6314
Fax No.: (949) 488-3874
Woodruff, Spradlin & Smart
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Attention: Omar Sandoval. Esq.
Telephone No: (714) 558-7000
Direct Dial No.: (714) 415-1049
Fax No.: (714) 835-7787
Direct Dial Fax No.: (714) 415-1149
and, If the party so to be served be Seller, addressed to Seller as follows ;
with copies thereof to:
Rancho Mission VIejo
28811 Ortega Highway
San Juan Capistrano, California 92675
Attention: Donald L. Vodra and Richard Broming
Telephone No.: (949) 240-3363
Fax No.: (949) 248-1763
Morgan, Lewis & Bocklus LLP
5 Park Plaza, Suite 1750
Irvine, California 92614
Attention: Stephen R. Finn, Esq.
Telephone No.: (949) 399-7105
Fax No.: (949) 399-7001
and, if the party to be served be Escrow Holder, addressed to Escrow Holder as follows:
082/21183021.2
Fidelity National Title Company
1300 Dove Street, Suite 310
Newport Beach, California 92660
Attention: Natalie Priestley
Telephone No.: (949) 622-4911
Fax No.: (949) 221-4799
22
ATTACHMENT 3
Page 26 of 32
Service of any such notice or demand so made by personal delivery, registered or certified mail,
recognized overnight courier or facsimile transmission shall be deemed complete an the date of actual
delivery as shown by the addressee's registry or certification receipt or, as to facsimile transmissions, by
"answer back confirmation" (provided that a copy of such notice or demand Is delivered by any of the
other methods provided above within one (1) business day following receipt of such facsimile
transmission), as applicable, or at the expiration of the third (3rd) business day after the date of dispatch,
whichever Is earlier in time. Either party hereto may from time to time, by notice in writing served upon
the other as aforesaid, designate a different mailing address to which or a different person to whose
attention ali such notices or demands are thereafter to be addressed.
18.2 Assignment; Binding on Successors and Assigns. Buyer shall not assign, transfer or
convey its rights or obligations under this Agreement or with respect to the Property without the prior
written consent of Seller, which consent Seller may withhold In its sole, absolute and subjective
discretion. Any attempted assignment without the prior written consent of Seller shall be void and Buyer
shall be deemed in default hereunder. Any permitted assignments shall not relieve the assigning party
from its liability under this Agreement. Subject to the foregoing, and except as provided to the contrary
herein, the terms, covenants, conditions and warranties contained herein and the powers granted hereby
shall inure to the benefit of and bind all parties hereto and their respective heirs, executors,
administrators, successors and assigns, and all subsequent owners of the Property.
18.3 Work Product. Effective upon and in the event of a termination of this Agreement for
any reason, Buyer shall assign and deliver to Seller (at no cost to Seller), af'Jd does hereby assign without
the need for any further act or instrument (at no cost to Seller), all reports, plans, studies, documents,
written Information and the like which has been generated by Buyer In-house or by Buyer's third party
consultants, whether prior to the Opening of Escrow or during the period of Escrow In connection with
Buyer's proposed acquisition, development, use or sale of the Real Property (collectively, the "Work
Product"). In such event, Buyer shall deliver the Work Product which has been assigned to Seller not
later than five (5) days after the date of the termination of this Agreement. The Work Product shall be
fully paid for and shall not be subject to any lien, encumbrance or claim of any kind. Buyer shall also
return all materials and information (including, without limitation, the Property Information) given to It by
Seller or Its consultants during Escrow, In the same condition as delivered Ia Buyer.
18.4 Further Assurances. In addition to the acts and deeds recited herein an9 contemplated
to be performed, executed or delivered by Seller or Buyer, Seller and Buyer hereby agree to perform,
execute and deliver, or cause to be performed, executed and delivered, on the Closing Date or thereafter
any and all such further acts, deeds and assurances as Buyer or Seller, as the case may be, may
reasonably require in order to consummate fully the transactions contemplated hereunder.
18.5 Attorneys' Fees. If any legal action or any arbitration or other proceeding Is brought or If
an attorney is retained for the enforcement of this Agreement or any portion thereof, or because of any
alleged dispute, breach, default or misrepresentation In connection with any of the provisions of this
Agreement, the prevailing party shall be entitled to recover from the other reimbursement for the
reasonable fees of attorneys and other costs (including court costs and witness fees) incurred by It, In
addition to any other relief to which it may be entitled. The term "prevailing party" means the party
obtaining substantially the relief sought, whether by compromise, settlement or judgment.
18.6 Survival of Representations, Warranties and Agreements. Unless otherwise
expressly stated in this Agreement (a) each of the covenants, obligations, representations, and
agreements contained in this Agreement shall survive the Close of Escrow and the execution and delivery
of the Deed only for a period of 6 months Immediately following the Closing Date, and (b) any claim
based upon a misrepresentation or a breach of a warranty contained In this Agreement shall be
actionable or enforceable if and only If notice of such claim is given to the party which allegedly made
such misrepresentation or breached such covenant, obligation, warranty or agreement within 6 months
after the Closing Date; provided, however, in no event shall Seller's liability, tf any, with respect to any
breach of Seller's representations or warranties hereunder exceed $100,000 in the aggregate.
Notwithstanding anything stated to the contrary In this Agreement, the indemnification provisions of
082/211 83021.2 23
ATTACHMENT 3
Page 27 of 32
Sections 4.3 .1 and H hereof and the prov isions of Sections 4.4. 10.1. 10.3. 11.2. 12 .1. 12 .2. 12 .3. 12 .4.
13 .2. 18 .3. 18.5, 18.17 and jj!.gQ hereof shall survive the termination of th is Agreement or the Close of
Escrow wlthoullimitaiion, and shall nol be merged with the recording of the Deed.
16.7 Entire Agreement. This Agreement contains the entire agreement and understanding of
the parties In respecrto the subject matter hereof, and the parties Intend for the literal words of this
Agreement to govern and for all prior negotiations, drafts, and other extrinsic communications, whether
oral or written, to have no significance or evidentiary effect. The parties further Intend that neither this
Agreement nor any of its provisions may be changed, amended, discharged, waived or otherwise
modified orally except only by an instrument In writing duly executed by the party to be bound thereby.
The parties hereto fully understand and acknowledge the importance of the foregoing sentence and are
awa(e that the law may permit subsequent oral modification of a contract notwithstanding contract
language which requires that any such modification be In writing; but Buyer and Seller fully and expressly
intend that the foregoing requirements as to a writing be strictly adhered to and strictly Interpreted and
enforced by any court which may be asked to decide the question. Each party hereto acknowledges that
this Agreement accurately reflect the agreements and understandings of the parties hereto with respect to
the subject matter hereof and hereby waive any claim against the other party which such party may now
have or may hereafter acquire to the effect that the actual agreements and understandings of the parties
hereto with respect to the subject matler hereof may not be accurately set forth In this Agreement.
18.8 Governing Law. This Agreement shall be governed by the laws of the State of
California.
18.9 Counterparts. This Agreement may be executed simultaneously In one or more
counterparts, each of which shall be deemed an original but all of which together shall constitute one and
the same Instrument.
18.10 Headlngsj Construction. The various headings of this Agreement are Included for
convenience only and shall not affect the meaning or Interpretation of this Agreement or any provision
hereof. When the context and construction so require, all words used in the singular herein shall be
deemed to have been used In the plural and the masculine shall include the feminine and the neuter and
vice versa. The use In this Agreement of the term "Including" and related terms such as •include" shall In
all cases mean "without limitation.• All references to "days" In this Agreement shall be construed to mean
calendar days unless otherwise expressly provided and all references to "business days" shall be
construed to mean days on which national banks are open for business.
16.11 Time of Essence. Seller and Buyer hereby acknowledge and agree that time is strlcUy
of the essence with respect to each and every term, condition, obligation and provision hereof and failure
to perform timely any of the terms, condiltons, obligations or provisions hereof by either party shall
constitute a material breach of, and non-curable (but waivable) default under this Agreement by the
parties so falling to perform.
16.12 Partial Validity; Severability, if any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be held Invalid or unenforceable,
the remainder of this Agreement, or the application of such term or provision to persons or circumstances
other than those as to which ft is held Invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by
law.
18.13 No Third Party Beneficiaries. This Agreement Is for the sole and exclusive benefit of
the parties hereto and their respective permiHed successors and assigns, and no third party Is Intended
to, or shall have, any rights hereunder.
18.14 Waiver of CC Section 1662, Seller and Buyer each expre$sly waive the provisions of
California Civil Code Section 1662 and hereby agree that the provisions of Sect ion 5.3 hereof shall
092121183021.2 24
ATTACHMENT 3
Page 28 of 32
govern their obligations In the event of damage or destruction to the Real Property or condemnation of all
or part of the Real Property.
18.15 Joint Product of Parties. This Agreement Is the result of arms-length negotiations
between Seller and Buyer and their respective attorneys. Accordingly, neither party shall be deemed to
be the author of this Agreement and this Agreement shall not be construed against either party.
18.16 Calculation of Time Periods. Unless otherwise specified, in computing any period of
time describ ed herein, the day of the act or event after which the designated period of time begins to run
is not to be included and the last day of the period so computed is to be Included at, unless such last day
Is a Saturday, Sunday or legal holiday for national banks in California, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal holiday. Unless otherwise
expressly provided herein, the last day of any period of time described herein shall be deemed to end at
5:00p.m., California time.
18.17 Procedure for Indemnity. The following pro visions govern actions for Indemnity under
this Agreem ent. Promptly after receipt by an indem ni tee of notice of any claim, such indemnitee will, if a
claim In respect thereof is to be made against the Indemnitor, deliver to the indemnitor written notice
thereof and the indemnitor shall have the right to participate in and, if the Indemnitor agrees in writing that
it will be responsible for any costs, expenses, judgments, damages, and losses incurred by the
indemnitee with respect to such claim, to assume the defense thereof, with counsel mutually satisfactory
to the parties; provided, however, that an indemnitee shall have the right to retain Its own counsel, with
the fees and expenses to be paid by the indemnitor, if the indemnitee reasonably believes that
representation of such indemnitee by the counsel retained by the Indemnitor would be inappropriate due
to actual or potential differing Interests between such indemnitee and any other party represented by such
counsel in such proceeding. The failure of indemnitee to deliver written notice to the indemnitor within a
reasonable time after indemnitee receives notice of any such claim shall relieve such indemnitor of any
liability to the indemnitee under this Indemnity only if and to the extent that such failure Is prejudicial to its
ability to defend such action, and the omission so to deliver written notice to the indemnitor will not relieve
it of any liability that It may have to any indemnitee other than under this Indemnity. If an indemnitee
settles a claim without the prior written consent of the indemnitor, then the indemnitor shall be released
from liability with respect to such claim unless the indemnitor has unreasonably withheld such consent.
18.18 Waiver of Natural Hazards Disclosure Statetnent . California Assembly Bill 1195
Imposes on sellers of real property the obligation to disclose to buyers Information about whether or not
property is within certain natural hazard zones. Buyer intends to ascertain such information, as it deems
necessary, during Its due diligence investigation of the Property. Therefore, to the extent that it is
walveable, Buyer waives the natural hazard disclosure reporting requirements under Assembly Bill1195.
Buyer Is not now relying, and will not later rely, upon any representations and warranties made by Seller
or anyone acting or claiming to act, by through or under or on Seller's behalf concerning the Property,
except as set forth in Section 11.
18.19 Waiver of Jury TriaL To the extent permitted by applicable law, the parties hereby
waive any right to trial by jury In any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
18.20 No Personal liability. Notwithstanding anything stated to the contrary herein, Seller's
liability under this Agreement shall be limited to Seller's interest In the Property and neither Seller, Seller's
constituent partners and/or members, Seller's asset manager, nor Seller's directors, employees or
agents shall have any personal liability hereunder.
[remainder of page intentionally blank]
DB2/211 83021.2 25
ATTACHMENT 3
Page 29 of 32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first
above written,
Seller
RMV Community Development, LLC,
a California limited liability cornpany
By: Rancho Mission VIejo, LLC,
a Delaware limited liability company
as authorized agent and manager
By :~
Donald L. Vodra
Chief Operating Officer
By~ 'RJCaidBfOITln9V -=
Senior VIce President, Planning and Entitlement
DMB San Juan Investment North, LLC,
a Delaware limited liability company
By: Rancho Mission VIejo, LLC,
a Delaware limited liability company ,
~ oonacvora
Chief Operating Officer
~~· By; ~
RICilard8iOii19 b'"
Senior VIce President, Planning and Entitlement
082/21183021.2
Buyer
ATTACHMENT 3
Page 30 of 32
AGREED TO THIS
DAY OF , 200_
AS TO PROVISIONS RELATING
TO ESCROW HOLDER:
FIDELITY NATIONAL TITLE COMPANY
By ~lt_s ______________________ __
082121183021.2
ATTACHMENT 3
Page 31 of 32
EXHIBI A
EXHIBIT B
EXHIBIT C
EXHIBIT 0
EXHIBIT E:
EXHIBIT F
EXHIBIT G
EXHIBIT H
EXHIBIT I
EXHIBIT J
EXHIBIT K
EXHIBIT L
EXHIBIT M
EXHIBIT N
EXHIBIT 0
0
EXHIBIT P
EXHIBITQ
EXHIBIT R
EXHIBITS
082/21183021.2
LIST OF EXHIBITS
Description of Real Property
Inventory of Facility Structures and Other Property/Improvements
Copy of License
Copy of Lease
List of Property Information
Form of Deed
Form of Assignment of Lease, License and Bill of Sale
Form of Water Agreement
Form of Rodeo License Agreement
Form of Conservation Easement
Form of FIRPTA Affidavit
Form of Notice to Licensee/Lessee
Use Restrictions -Parcels 7 and 8
M-1: Exhibit 4.1-3 of Ranch Plan EIR
M-2: Section II!.H of PC Text
M-3: Section III.J of PC Text}
Maximum Allowed Traffic
Map of KSensltlve Resource Areas" and "Do Not Dist~:~rb Areas"
Prohibited Uses -La Pata and Creek Open Space Parcels
Ranch Plan Property (Benefited Area)
Trails and Bikeways Concept for Planning Area 1
Waiver of Relocation Rights
ATTACHMENT 3
Page 32 of 32