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Ordinance Number 906 ORDINANCE NO. 906 AN ORDINANCE OF THE CITY OF SAN JUAN CAPISTRANO APPROVING A DEVELOPMENT AGREEMENT FOR THE WHISPERING HILLS ESTATES PROJECT (WHISPERING HILLS LLC) The City Council of the City of San Juan Capistrano hereby ordains as follows: SECTION 1. Recitals and Findings 1. Whispering Hills LLC has requested approval of a Development Agreement, entitled "Development Agreement for Whispering Hills Estates By and Between the City of San Juan Capistrano and Whispering Hills, LLC"; and, 2. On May 21, 2002, the City Council of the City adopted Resolution No. 02-05-21-07, certifying a Final Environmental Impact Report ("EIR") for a similar but more intensive development project covering the property which is the subject of the Development Agreement ("Agreement') identified herein; and, 3. Subsequently, on July 20, 2004, the City Council adopted Resolution No. 04-07-20-01 certifying an Addendum to the EIR ("Addendum") and approving - Vesting Tentative Tract Map 16634 ("VTTM 16634") for a subdivision with 155 single-family residential lots plus open space lots; and, 4. On July 20, 2004, the City Council also approved first reading and introduction of an ordinance approving Comprehensive Development Plan 04-01 ("CDP 04-01"), which was subsequently approved by a second reading and adoption of Ordinance No. 896 on August 3, 2004, for the Whispering Hills Estates project; and, 5. On December 7, 2004, the City Council adopted Resolution No. 04-12-07-03 approving General Plan Amendment (GPA 04-01) and also approved first reading and introduction of an ordinance pre-zoning 34 acres of unincorporated territory located on the West Side of La Pata Avenue, approximately one mile south of Ortega Highway for a portion of Whispering Hills Estates (RZ 04-05), which pre-zoning was approved by second reading and adoption of Ordinance No. 899 on January 1, 2005; and, 6. The City Council finds that, per Section 15153 of the California Environmental Quality Act (CEQA) Guidelines, the potential environmental impacts of the project have been previously addressed in the EIR and Addendum, that the project does not meet the CEQA Guidelines criteria requiring preparation of a subsequent EIR per Sec. 15162(a), that all potentially significant effects of the Whispering Hills project have been adequately analyzed and potentially significant impacts have been avoided or mitigated pursuant to the previously certified EIR and Addendum, and that no new environmental impact report is required; and, 0906 1 07-19-2005 7. City and Owner desire to enter into this Development Agreement to further confirm their rights and obligations to each other regarding the EIR, the Addendum, CDP 04-01, TTM 16634, GPA-04-01, RZ04-05 and other land use entitlements; and, 8. The Planning Commission conducted a duly-noticed public hearing on May 24 and June 14, 2005 pursuant to the provisions of Section 9-2 335 of Title 9 (Land Use Code), Administrative Policy 409, and Planning Department Policy 510 to consider public testimony on the proposed Agreement, and then forwarded the Agreement to the City Council with a recommendation of approval; and, 9. Pursuant to Government Code section 65867.5, the City Council hereby finds that the provisions of this development agreement are consistent with the City's General Plan; and 10. The City Council finds it appropriate to establish a development agreement because the Agreement will generate approximately $1,126,000 in funds for the City, which can be used for community-wide facilities and infrastructure. SECTION 2. Approval and Adoption of Development Agreement Pursuant to Government Code sections 65864 et seq., the City Council does hereby approve and adopt the "Development Agreement for Whispering Hills Estates By and Between the City of San Juan Capistrano and Whispering Hills, LLC", which is attached as Exhibit A and incorporated herein by reference. The Mayor is hereby authorized to execute said agreement on behalf of the City of San Juan Capistrano. SECTION 3. Effective Date This Ordinance shall take effect and be in force thirty (30) days after its passage. SECTION 4. City Clerk's Certification The City Clerk shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and adoption as required by law; or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five (5) days prior to the date of adoption of this Ordinance; and, within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of the City Clerk. 0906 2 07-19-2005 PASSED, APPROVED AND ADOPTED this 19th day of July 2005. YAT A T, MAYOR ATTEST: MA A T R. MONAHAN, CITY CLERK STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF SAN JUAN CAPISTRANO ) I, MARGARET R. MONAHAN, appointed City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing is a true and correct copy of Ordinance No. 906 which was regularly introduced and placed upon its first reading at the Regular Meeting of the City Council on the 5`h day of July 2005 and that thereafter, said Ordinance was duly adopted and passed at the Regular Meeting of the City Council on the 19th day of July 2005 by the following vote, to wit: AYES: COUNCIL MEMBERS: Allevato, Bathgate, Soto, Swerdlin, and Mayor Hart NOES COUNCIL MEMBERS: None ABSENT: COUNCI EpoFQERS: one c� / M RGARET R. MONAHAN, City Clerk 0906 3 07-19-2005 EXHIBIT A RECORDING REQUESTED AND WHEN RECORDED, RETURN TO: City Clerk 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Space Above This Line for Recorder's Use DEVELOPMENT AGREEMENT FOR WHISPERING HILLS ESTATES BY AND BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND WHISPERING HILLS, LLC EFFECTIVE DATE: , 2005 249020v10 06/29/05 280268-0001 TABLE OF CONTENTS PAGE 1. AGREEMENT............................................................................................................ 2 1.1 Code Authorization............................................................................................. 2 1.2 Interest of Owner................................................................................................ 2 1.3 Intent of Parties................................................................................................... 3 1.3.1 Achievement of General and Comprehensive Development Plan Goals ... 3 1.3.2 Consistency Finding........................ ................... ....................................... 3 1.4 Certainty of Process............................................................................................ 4 1.5 Compliance With California Environmental Quality Act .................................. 4 1.6 Planning Commission - City Council Hearings.................................................. 4 1.7 City Council Findings......................................................................................... 5 1.8 City Ordinance.................................................................................................... 5 1.9 Consideration...................................................................................................... 5 2. DEFINITIONS............................................................................................................ 6 2.1 Addendum........................................................................................................... 6 2.2 Adopting Ordinance............................................................................................ 7 2.3 Agreement................... ....................................................................................... 7 2.4 Annual Review.................................................................................................... 7 2.5 Annual Review Letter......................................................................... ............... 7 2.6 Approval Date..................................................................................................... 7 2.7 Assign, Assignment and Assignee...................................................................... 7 2.8 CEQA.......................... ....................................................................................... 7 _ 2.9 City................................................................... ....................................... ..... .... 7 2.10 City Council........................................................................................................ 7 2.11 Comprehensive Development Plan..................................................................... 7 2.12 Cure Period...................................... .................................................................. 8 2.13 Day or days......................................................................................................... 8 2.14 Default.......................................................... ...................................................... 8 2.15 Director............................................................................................................... 8 2.16 Effective Date..................................................................................................... 8 2.17 EIR...................................................................................................................... 8 2.18 Exhibit................................................................................................................. 8 2.19 Existing Development Approval......................................................................... 8 2.20 Existing Exactions .............................................................................................. 9 2.21 Existing Land Use Regulations........................................................................... 9 2.22 FEIR.................................................................................................................... 9 2.23 General Fees........................................................................................................ 9 2.24 General Plan........................................................................................................ 9 2.25 Land Use Regulations......................................................................................... 9 2.26 Mortgage........................................................................................................... 10 2.27 Mortgagee......................................................................................................... 10 2.28 Notice................................................................................................................ 10 2.29 Operative Date.................................................................................................. 10 2.30 Owner................................................................................................................ 10 - 2.31 Parties................................................................................................................ 10 2.32 Project............................................................................................................... 11 249020v10 06/29/05 280268-0001 TABLE OF CONTENTS PAGE 2.33 Project Plans...................................................................................................... 11 2.34 Property............................................................................................................. 11 2.35 Review Letter.................................................................................................... 11 2.36 Subdivision Map............................................................................................... 11 2.37 Subsequent Development Approvals................................................................ 11 2.38 Subsequent Land Use Regulations.................................................................... 11 2.39 Term.................................................................................................................. 11 3. EXHIBITS ................................................................................................................ 12 4. GENERAL PROVISIONS ....................................................................................... 12 4.1 Term of Agreement; Operative Date ................................................................ 12 4.2 Assignments...................................................................................................... 13 4.3 Amendment or Cancellation of Agreement...................................................... 13 4.4 Unforeseen Circumstances................................................................................ 13 4.5 Enforcement..................................................................................................... 15 4.6 Relationship of the Parties................................................................................ 15 4.7 Sale to Public; Automatic Termination............................................................. 15 4.8 Modification or Suspension by State or Federal Law....................................... 15 5. DEVELOPMENT OF THE PROPERTY................................................................. 16 5.1 Permitted Uses; Vested Rights.......................................................................... 16 5.2 Application of Subsequently Enacted Rules, Regulations................................ 16 5.3 Project CEQA Documentation.......................................................................... 17 5.4 Time For Construction and Completion of Project; Compliance with Growth Management Ordinance.................................................................................... 17 5.5 Cooperation in Securing Government Permits/Conflict of Laws..................... 19 5.6 Compliance with Government Code Section 66473.7...................................... 19 6. PUBLIC IMPROVEMENTS AND PUBLIC BENEFITS....................................... 19 6.1 Responsibility for Public Improvements .......................................................... 19 6.2 Phasing of Public Improvements...................................................................... 20 6.3 Improvements Scheduling ................................................................................ 20 6.4 Financing for Public Improvements.................................................................. 20 6.5 Sewer Capacity................................................................................................. 20 6.6 Reimbursement Agreements............................................................................. 21 6.7 Public Benefit Payment to the City................................................................... 21 6.8 Public Benefits to and Easement Agreement with the County of Orange Relating to Avenida La Pata and Trail Improvements...................................... 21 7. ANNUAL REVIEW................................................................................................. 24 7.1 City and Owner Responsibilities ...................................................................... 24 7.2 Review Letter.................................................................................................... 24 7.3 Estoppel Certificates......................................................................................... 25 7.4 Failure of Annual Review................................................................................. 25 8. DEFAULT AND REMEDIES.................................................................................. 26 8.1 Performance Remedy........................................................................................ 26 8.2 Applicable Laws/Attorney's Fees ..................................................................... 26 9. ENCUMBRANCES AND RELEASES ON PROPERTY....................................... 27 9.1 Discretion to Encumber.................................................................................... 27 TABLE OF CONTENTS PAGE 9.2 Entitlement to Written Notice of Default.......................................................... 27 9.3 Property Subject to Pro Rata Claims ................................................................ 27 10. MISCELLANEOUS PROVISIONS..................................................................... 27 10.1 Rules of Construction ....................................................................................... 27 10.2 Severability....................................................................................................... 28 10.3 Entire Agreement Waivers. and Amendments.. ............................................... 28 10.4 Project as a Private Undertaking....................................................................... 29 10.5 Incorporation of Recitals................................................................................... 29 10.6 Captions............................................................................................................ 29 10.7 Consent ............................................................................................................. 29 10.8 Covenant of Good Faith and Fair Dealing........................................................ 29 10.9 Covenant of Cooperation.................................................................................. 30 10.10 Further Actions and Instruments....................................................................... 30 10.11 Successors and Assigns..................................................................................... 30 10.12 Third Party Beneficiary..................................................................................... 30 10.13 Notices .............................................................................................................. 31 10.14 Recording.......................................................................................................... 32 10.15 Effective Date ................................................................................................... 32 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into between the CITY OF SAN JUAN CAPISTRANO, a municipal corporation ("City"), and WHISPERING HILLS, LLC, a Delaware limited liability company("Owner"), and its successors or assigns. City and Owner are sometimes referred to singularly herein as a "Party" and collectively as the "Parties." RECITALS A. On May 21, 2002,the City Council of the City adopted Resolution No. 02-05-21-07, certifying a Final Environmental Impact Report ("EIR") for a similar but more intensive development project covering the property which is the subject of this Agreement. Subsequently, on July 20, 2004, the City Council adopted Resolution No. 04-07-20-01 certifying an Addendum to the EIR ("Addendum") and approving Vesting Tentative Tract Map 16634 ("VTTM 16634") for a subdivision proposing 155 single-family residential lots plus open space lots. On July 20, 2004, the City Council also approved first reading and introduction of an ordinance approving Comprehensive Development Plan 04-01 ("CDP 04-01")which was subsequently approved by a second reading and adoption of Ordinance No. 896 on August 3, 2004, all for the Whispering Hills Estates project. B. On December 7, 2004,the City Council of City adopted Resolution No. 04-12-07-03 approving General Plan Amendment(GPA 04-01) and also approved first reading and introduction of Ordinance No. 899 (RZ 04-05) pre-zoning 34 acres of -1- 249020v10 06/29/05 280268-0001 unincorporated territory located on the West Side of La Pata Avenue, approximately one — mile south of Ortega Highway for a portion of Whispering Hills Estates. Second reading of Ordinance No. 899 occurred on January 1, 2005, was adopted, and such ordinance became effective 30 days later on January 31, 2005. C. City and Owner desire to enter into this Development Agreement to further confirm their rights and obligations to each other regarding the EIR, the Addendum, CDP 04-01, TTM 16634, GPA-04-01, RZ04-05 and other land use entitlements (collectively referred to as the "Existing Development Approvals"). 1. AGREEMENT. 1.1 Code Authorization. This Agreement is authorized by and has been prepared in accordance with Government Code Sections 65864 through 65869.5 — and related City Ordinances and policies. These laws and policies allow the City to enter into binding development agreements with persons or entities having legal or equitable interests in real property for the purpose of establishing certainty in the development process for both the City and the property owner. 1.2 Interest of Owner. Owner is the legal and/or equitable owner of approximately 348 acres of real property, 314 acres of which real property are located in the City and 34 acres of which real property are located in the unincorporated area of County but within the City's Sphere of Influence (the "Property"). The Property is legally described on Exhibit "A"and shown on Exhibit `B"attached hereto, and is sometimes referred to as Whispering Hills Estates. As further provided herein, this Agreement shall not become operative with respect to the 34 acres of the Property located -2- 249020x10 06/29/05 280268-0001 in the unincorporated area of the County until the later to occur of(a) the Operative Date of this Agreement as provided in Section 4, or(b) the date the annexation proceedings for the annexation of the 34 acres of Property into the City are completed. Owner intends to develop the Property pursuant to the Land Use Entitlements (the"Project"). City and Owner wish to provide for the development of the Property and obtain certainty with respect to implementation of Existing Development Approvals and the obligations required of Owner by City in connection therewith. 1.3 Intent of Parties. The development of the Project is intended to implement specific land uses, provide public infrastructure and generate revenues to the City, all in promotion of the health, safety and general welfare of the residents of City. 1.3.1 Achievement of General and Comprehensive Development Plan Goals. Achieving the goals of the City General Plan and the Comprehensive Development Plan for the Project as well as City policies governing development requires the cooperation of Owner and City. As a result of the development of the Property, the City will benefit from added residential housing, significant increases to the real property tax base, and substantial improvements to public infrastructure and facilities including arterial streets, sewer, water, storm drainage facilities, as well as parks, open space and expansion of General Plan trails. 1.3.2 Consistency Finding. By approving and executing this Agreement, the City finds that its provisions are consistent with and in furtherance of the City's General Plan and the Comprehensive Development Plan, and the City further -3- 249020v10 06/29/05 280268-0001 finds and determines that execution of this Agreement is in the best interests of the public — health, safety and general welfare of the City's present and future residents, property owners and taxpayers. The Project has been analyzed and reviewed by the City as part of its process of granting the Existing Development Approvals, in view of the enacted land use standards and policies of the City embodied In its Existing Land Use Regulations and in view of State law including, without limitation, CEQA. 1.4 Certainty of Process. The phasing, timing and development of the Project and the associated Public Improvements, as further provided in Section 6, herein, necessitate a significant commitment of resources, planning and effort by Owner and City, thus requiring certainty in the development process. In return for Owner's commitment to the significant contribution of private resources, including substantial economic resources for public purposes, the City wishes to provide certainty in the development process for the Project. 1.5 Compliance With California Environmental Quality Act. On May 21, 2002, the City Council adopted Resolution No. 02-05-21-07, certifying the EIR, and subsequently thereafter on July 20, 2004 adopted Resolution No. 04-07-20-01 certifying an Addendum to the EIR. Both the EIR and the Addendum addressed environmental impacts associated with the Project, the Existing Development Approvals and this Agreement pursuant to the provisions of the California Environmental Quality Act (Public Resources Code section 21000 et seq.) ("CEQA") 1.6 Planning Commission- City Council Hearings. On June 14, 2005, the Planning Commission of City, after giving notice pursuant to Government -4- 249020v10 06/29/05 280268-0001 _ Code Section 65867, held a public hearing to consider Owner's application for this Agreement, and took action to recommend approval of the subject Agreement. On , 2005, the City Council, after providing public notice as required by law, held a public hearing to consider Owner's application for the Agreement. 1.7 City Council Findings. The City Council has found that this Agreement is consistent with the General Plan, the Existing Land Use Regulations,the Existing Development Approvals and all other applicable plans, ordinances, policies and regulations of the City. 1.8 City Ordinance. On , 2005 ("Approval Date"), the City Council adopted Ordinance No. approving this Agreement (the"Adopting Ordinance"). The Adopting Ordinance became effective thirty(30) days following City Council adoption (the"Effective Date"). 1.9 Consideration. The City has determined that this Agreement will further the goals and objectives of the City's land use planning policies, by eliminating uncertainty in planning for the orderly development of the Project, and assuring that adequate infrastructure for existing and future city residents can be developed and implemented. Without limiting the generality of the foregoing, the benefits conferred by the Project pursuant to this Agreement will facilitate the installation of certain significant public improvements, including, but not limited to installation of a water system, installation of a sewer system,provision of additional housing, provision of open space, provision of trails in accordance with the City Master Plan of Trails and the -5- 249020v10 06/29/05 280268-0001 reservation of a site for a reclaimed water reservoir, all of which will significantly promote the health, safety and general welfare of present and future residents of the City. In exchange for these benefits to the City and its residents, the Owner wishes to receive the assurances permitted by State law that the Owner may proceed to develop the Project in accordance with the Existing Development Approvals, and the certified EIR and Addendum, aaa at a rate of development subject to the terms and conditions of this Agreement. The rights, duties, obligations and assurances provided by the City and the Owner to each other in this Agreement are being provided pursuant to and as contemplated by State law, are bargained for and in consideration for the undertakings of the parties, and are intended to be and have been relied upon by the parties to their — detriment, such that the Owner will be deemed to have a vested interest in the Existing Development Approvals, which will be the controlling land use plan for the Project in combination with this Agreement. 2. DEFINITIONS. The following definitions apply only to their use within this Agreement and not to any other document or agreement pertaining to the Project, including the Existing Development Approvals. These definitions are intended to have substantive effect. 2.1 "Addendum"refers to the Addendum to the EIR certified on July 20, 2004 by City Council Resolution No. 04-07-20-01. -6- 249020v10 06/29/05 280268-0001 2.2 "Adopting Ordinance"refers to City Ordinance No. adopted by the City Council and authorizing the City to enter into this Agreement. 2.3 "Agreement"refers to this Development Agreement for Whispering Hills Estates. 2.4 "Annual Review"refers to the review by City of Owner's good faith substantial compliance with this Agreement, as provided in Section 7.1 of this Agreement. 2.5 "Annual Review Letter" refers to the letter specified in Section 7.2 of this Agreement. 2.6 "Approval Date"refers to the date on which the City Council approved the Adopting Ordinance. 2.7 All forms of use of the verb "assign" " and the nouns "assignment" and "assignee" shall include all contexts of hypothecations, sales, conveyances,transfers, leases and assignments. 2.8 "CEQA"refers to the California Environmental Quality Act (Public Resources Code Sections 21000, et seq.). 2.9 "City"refers to the City of San Juan Capistrano, California. 2.10 "City Councir'refers to the city council of the City. 2.11 "Comprehensive Development Plan"refers to CDP 04-01 approved by City Council Ordinance No. 896 on August 3, 2004, a copy of which is on file with the City Clerk. -7- 249020x10 06/29/05 280268-0001 212 "Cure Period'refers to the period of time permitted — pursuant to Section 9 in this Agreement. 2.13 "Day" or"days"refers to a calendar day, unless expressly stated to be a business day 2.14 "Default"refers to any material default,breach or violation of the provisions of this Agreement. A"City Default"or"City default"refers to a Default by the City, while an "Owner Default" or"Owner default"refers to a Default by Owner. 2.15 "Director"refers to the Director of Planning Services of the City or any successor to that title or a successor title. 2.16 "Effective Date"refers to the effective date of the Adopting Ordinance which is thirty(30) days following the Approval Date. 2.17 "EIR"refers to the Environmental Impact Report certified by City Council Resolution No. 02-05-21-07 on May 21, 2002. 2.18 "Exhibit"refers to an exhibit to this Agreement as listed in Section 3 below. All Exhibits are incorporated by reference as a substantive part of this Agreement. 2.19 "Existing Development Approvals"means those certain land use entitlement approvals, development permits and other related approvals issued, approved, and/or certified by the City Council or the City's Planning Commission as of -8- 249020v10 06/29/05 280268-0001 the Approval Date including but not limited to the EIR, the Addendum, GPA-04-01, RZ 04-05, CDP 09-01, and VTTM 16634. 2.20 "Existing Exactions"refers to any fee, charge, requirement, dedication, condition, restriction or limitation imposed by the City upon the development of the Property in effect and operation as of the Approval Date. 2.21 "Existing Land Use Regulations"means any Land Use Regulations accepted, effective and a matter of public record as of the Approval Date. 2.22 "FEIR"refers collectively to the EIR certified by City Council Resolution No. 02-05-21-07 on May 21, 2002 and the Addendum certified by City Council Resolution No. 04-07-20-01 on July 20, 2004. 2.23 "General Fees"refers to all application fees, processing fees, utility connection fees, inspection fees, and development impact fees (including, but not limited to, general development fees, traffic impact fees, park fees and such other similar fees as may be enacted from time to time) generally applied throughout the City to development projects or types of development similar to the Project. 2.24 "General Plan"refers to the City's general plan in effect on the Approval Date of this agreement. 2.25 "Land Use Regulations"refers to all the ordinances, resolutions, laws, codes, official policies, regulations and orders of the City affecting (a) the permitted uses and development of the Property, including without limitation the General Plan of the City, the City Zoning ordinances, subdivision ordinances, building or -9- 249020v10 06/29/05 280268-0001 other development regulations; (b) the density or intensity of use; (c) subdivision requirements; (d) limitation or control on the rate, timing or sequence of development; (e) the maximum height and size of proposed buildings; (f) the provisions for reservation and dedication of land for public purposes; (g) the design, improvement and construction standards for the Project and (h) the Existing Development Approvals. 2.26 "Mortgage"refers to the lien of any mortgage, deed of trust, sale-leaseback agreement, lease, sublease or other transaction under which all or a portion of the Property, including those portions acquired by assignees, is used as security. 2.27 "Mortgagee"refers to the holder of a beneficial interest under a Mortgage or the owner of any interest in all or any portion of the Property under -- a Mortgage, including those portions acquired by assignees. 2.28 "Notice"refers to any written notice or demand between the Parties required or permitted by this Agreement. 2.29 "Operative Date"is the date of formation of the Capistrano Unified School District No. 2005-1. 2.30 "Owner"refers to Whispering Hills, LLC, a Delaware limited liability company. 2.31 "Parties"refers to the City and Owner and a"Party" shall refer to either of the "Parties." -10- 249020v10 06/29/05 280268-0001 2.32 "Project"refers to the development of the Property pursuant to the Existing Development Approvals and the certified FEIR. 2.33 "Project Plans"refers to specific residential and other construction plans which shall include elevations, landscaping and architectural designs and features consistent with CDP 04-01 and the Existing Development Approvals. 2.34 "Property"refers to the real property legally described on Exhibit"A"and depicted on Exhibit `B"to this Agreement. 2.35 "Review Letter"refers to the letter in Section 7.2 below. 2.36 "Subdivision Map"refers to VTTM 16634 approved by the _ City Council on July 20, 2004. 2.37 "Subsequent Development Approvals"means any land use development permit and/or approval obtained after the Effective Date in connection with the development of the Property. 2.38 "Subsequent Land Use Regulations"means any Land Use Regulation adopted, effective and made a matter of public record after the Approval Date. 2.39 "Term"refers to the term of this Agreement as provided in Section 4.1 below. -11- 249020v10 06/29/05 280268-0001 3. EXHIBITS. The following Exhibits to this Agreement are incorporated herein by this reference, whether attached hereto or contained in the Technical Appendices: Exhibit "A": Legal Description of the Property Exhibit `B": Map of the Property 4. GENERAL PROVISIONS. 4.1 Term of Agreement; Operative Date. Unless otherwise extended, terminated or modified pursuant to this Agreement, the term of this Agreement (the"Term") shall commence and shall not become operative until the date of formation of the proposed Capistrano Unified School District Communities Facilities District No. 2005-1, and shall extend for a period of five (5) years following the Operative Date. If the Owner is unable to complete the Project within the Term of this Agreement, the City Council will consider granting, at its discretion, an extension of an additional five (5) years upon terms and conditions mutually agreeable to the Parties. Notwithstanding anything to the contrary herein, this Agreement shall not be effective or operative with respect to the 34 acres of the Property located in the unincorporated area of the County until the later to occur of(a) the Operative Date, or(b) the date annexation proceedings are completed. If any such annexation proceedings are not completed prior to December 30, 2010 or any extension thereof, then pursuant to Government Code section 65865(b), this Agreement shall be null and void with respect to the 34 acres of Property located in the unincorporated area of the County. -12- 249020v10 06/29/05 280268-0001 4.2 Assignments. The rights and obligations of Owner under this Agreement may be assigned in writing in whole or in part as part of an assignment of all or a portion of the Property. Any assignment shall be subject to the provisions of the Agreement and to the prior written consent of City, which shall not be unreasonably withheld. During the Term, any assignee shall have those rights, benefits and obligations of Owner under this Agreement as expressly assigned with respect to the portion of the Property owned by assignee. Immediately upon delivery by Owner to the City of the assignee's written assumption of Owner's rights and obligations under this Agreement with respect to any portions of the Property being assigned, Owner shall be released from all obligations as to any portions of the Property so assigned. 4.3 Amendment or Cancellation of Agreement. This Agreement may be extended, canceled or amended from time to time by the mutual consent of the Parties,but only in the manner provided by the Government Code section 65868 and the City's Ordinances. The Agreement shall include any amendment properly approved and executed. 4.4 Unforeseen Circumstances. If, as a result of facts, events or circumstances presently unknown and unforeseen, and which could not have been known or foreseen by the Parties, the City determines in good faith that the immediate physical health and safety of the City necessitate the modification, suspension or termination of the Agreement. the City shall: (i) give Notice to Owner of a. the City's intended action, and -13- 249020v10 06/29/05 280268-0001 b. the reasons and factual basis for the City's — determination; (ii) forward to Owner a minimum of thirty(30) days prior to a public hearing, all documents relating to that determination; (iii) give Notice to Owner at least thirty(30) days prior to the hearing date, of the time and place of the hearing; and (iv) hold a City Council hearing on the determination, at which hearing Owner shall have the right to present witnesses, reports, and oral and written testimony, and further have the right to examine witnesses, City staff, or other persons. The City shall have the obligation, based upon clear and convincing evidence, of establishing that: (i) the circumstances were unknown and unforeseen and could not have been known or foreseen; (ii) the immediate physical health or safety of the community require the suspension, modification or termination of the Agreement in contrast to any other alternative; and (iii) the City and Owner shall have developed an equitable program to adjust the obligations proportionately to meet the changed circumstances. This provision shall neither limit nor expand the rights or liabilities of either of the Parties with respect to the enforcement of the Agreement, the reimbursement of costs related to the Project, or the development of the Property. If the City Council fails to make such findings, then the Agreement shall not be terminated, modified or suspended. The unforeseen circumstances which justify the suspension, modification or termination of the Agreement shall not include changes in state or federal law. In the event of changes in state or federal law, the provisions of Section 4 below shall govern. -14- 249020v10 06/29/05 280268-0001 4.5 Enforcement. Unless amended or terminated as provided in Section 4.3, the Agreement is enforceable by any Party or its assigns,notwithstanding any Subsequent Land Use Regulations which alter or amend the Existing Land Use Regulations. 4.6 Relationship of the Parties. The contractual relationship between the City and Owner arising out of this Agreement is one of independent contractor and not agency. 4.7 Sale to Public: Automatic Termination. The provisions of Section 4.2 regarding the assignment of the Agreement shall not apply to sale or long term lease of individual, finally subdivided lots or parcels to members of the public for —. their use or occupancy. This Agreement shall automatically terminate with respect to such lot or parcel upon the occurrence of the two following events: (i) sale or long term lease to a member of the public and(ii) issuance of a certificate of occupancy for the building(s) constructed thereon. The provisions of this Section 4.7 shall be self-executing without the necessity of execution or recordation of any further document. 4.8 Modification or Suspension by State or Federal Law. In the event that State or Federal laws or regulations prevent or preclude or affect compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations; provided, however, that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions -15- 249020v10 06/29/05 280268-0001 impractical or impossible to enforce. 5. DEVELOPMENT OF THE PROPERTY. 5.1 Permitted Uses; Vested Rights. During the Term, the rules, regulations and official policies governing the permitted uses of the Property pursuant to the Existing Development Approvals, the density or intensity of use, the timing and phasing of development of the Project, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards for the Project shall be only those set forth in this Agreement, and the Existing Development Approvals and the Existing Land Use Regulations, and Owner shall have a vested right to complete development of the Project in accordance with such Existing Development Approvals. In the event of any inconsistencies, the provisions of the Existing Development Approvals shall prevail over all other Land Use Regulations and this Agreement. All future amendments of the Existing Development Approvals which are approved by the City Council and Owner shall be deemed consistent with this Agreement. Other than as provided by the Existing Development Approvals, no additional fee, charge, requirement, dedication, condition, restriction or limitation shall be imposed by City on the development of the Project other than the Existing Exactions;provided however, that any fees due the City at the time of building permit or grading permit issuance shall be payable at the rate in effect at that time of such issuance. 5.2 Application of Subsequent Land Use Regulation, Subsequently Enacted Rules, Regulations. Subsequent Land Use Regulations or other -16- 2a9020v10 06/29/05 280268-0001 subsequently adopted or enacted rules, official policies or regulations of the City affecting the development of the Property may be applied to the Project only if they are not in conflict with or are more restrictive than the Existing Land Use Regulations and will not prevent, hinder, delay or financially impact development of the Property in accordance with the Existing Development Approvals and in the time frame desired by Owner. Provided, however, the City may apply future changes to the uniform codes such as the Uniform Building Code, Uniform Electrical Code and Uniform Mechanical, Plumbing and Fire Codes which are enacted by the City Council at it's legislative discretion based on public health safety and welfare considerations. 5.3 Proiect CEOA Documentation. The Parties intend that the EIR and the Addendum constituting the FEIR shall be the Project environmental documentation required under CEQA for the Project, and no future environmental impact reports are required. Notwithstanding the foregoing, the City may conduct, if legally required in accordance with CEQA, an environmental review of Subsequent Development Approvals. The City may impose, if legally required by CEQA, additional reasonable and customary mitigation measures to mitigate significant adverse environmental effects which were not previously considered at the time of approval of CDP 04-01, the EIR, and/or the Existing Development Approvals. 5.4 Time For Construction and Completion of Project; Compliance with Growth Management Ordinance. Owner and City cannot predict when or the rate or the order in which the Project will be developed, if at all. Such decisions depend upon numerous factors which are not within the control of Owner, such as market -17- 249020v10 06/29/05 280268-0001 orientation and demand, interest rates, absorption, completion, and other similar factors. — Therefore, Owner may develop the Project and construct individual residential dwelling units thereon at the rate deemed appropriate in Owner's subjective business analysis; provided that the Project shall be developed in accordance with the Existing Development Approvals, including the phasing of construction of public improvements. Notwithstanding the California Supreme Court decision in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), the Parties emphasize it is the intention and purpose of this Agreement that Owner shall have the right to develop the Project and construct individual residential dwelling units thereon at such rate, and at such times as Owner deems appropriate,provided that the Project shall be developed in accordance with the Existing Development Approvals, including the phasing of construction of public improvements. It is the intent of the parties hereto that no moratorium or other limitation(whether relating to the rate, timing or sequencing of the development or construction of all or any part of the Project and whether enacted by initiative or otherwise) affecting parcel or subdivision maps (whether tentative, vesting tentative or final), building permits, occupancy certificates or other entitlements for use approved, issued or granted within the City, or any portion thereof, shall apply to the Project to the extent such moratorium or other limitation is inconsistent or in conflict with this Agreement. Pursuant to and in accordance with City's Growth Management Ordinance set forth in Municipal Code section 9-2.325 establishing annual allocations of building permits issued within the City, the City shall process an application for the Project for those lots in the East Canyon area of the Project for an allocation of not to exceed a total of 140 dwelling units consisting of 70 dwelling units in year 2006 and 70 dwelling units -18- 249020v10 06/29/05 280268-0001 in year 2007. Notwithstanding the procedures described in Municipal Code section 9- 2.325, City has determined that there will be sufficient capacity under the City's Growth Management Ordinance and hereby authorizes Owner or its successors in interest, as a matter of right, to obtain building permits for those remaining allocated dwelling units which are not actually constructed during years 2006 and 2007, in successive years on an as needed basis. The Parties acknowledge and agree that the 15 custom home lots in the West Canyon area of the Project will be processed pursuant to the City's Growth Management Ordinance, Municipal Code section 9-2.325(d)(3). 5.5 Cooperation in Securing Government Permits/Conflict of Laws. The City shall cooperate with Owner in submitting infonnation which may be required by any other governmental agency in order to develop the Project in accordance with this Agreement. Owner will reimburse City for all reasonable costs incurred in providing such assistance. 5.6 Compliance with Government Code Section 66473.7. Pursuant to Government Code section 65867.5, any tentative subdivision map processed with respect to the development of the Property shall comply with the provisions of Government code section 66473.7, if determined to be applicable to the Project. 6. PUBLIC IMPROVEMENTS AND PUBLIC BENEFITS. 6.1 Responsibility for Public Improvements. The Owner shall construct the on-site public improvements and construct or contribute the Project's pro-rata share of the off-site public improvements as required by the findings and conditions of the Existing Development Approvals and the certified FEIR. -19- 249020x10 06/29/05 280268-0001 6.2 Phasing of Public Improvements. Although Owner may — determine the timing of development of the construction of individual residential dwelling units on the Project as provided in Section 5.4 above, the Public Improvements may be completed in one or more phases as outlined above and in accordance with the Existing Development Approvals and as required to serve the particular increment of development as determined necessary by the City Engineer. 6.3 Improvements Scheduling. Dates or times of performance by either Party may be subject to revision from time to time due to economic conditions and other causes as mutually agreed to by the Parties in writing. Such revisions are deemed to be within the framework of the Agreement and do not constitute amendments to the Agreement. 6.4 Financing for Public Improvements. From time to time, Owner may propose to City use of public district financing, including but not limited to, Mello-Roos Community Facilities Districts ("CFDs") to facilitate the construction or acquisition of Public Improvements to be constructed and financed by the Project. City agrees to consider such proposals, and to use its best efforts to cause the establishment of a CFD if so requested by Owner. 6.5 Sewer Capacity. In further consideration of the mutual obligations contained herein, City agrees to use its best efforts to assure the availability of sufficient sewer capacity for construction, development and occupancy of the Property consistent with this Agreement. -20- 249020x10 06/29/05 280268-0001 6.6 Reimbursement Agreements. To the extent that Owner is required by City, as a condition of approval for the CDP 04-01 or other Existing Development Approvals or Subsequent Development Approvals to construct, install or otherwise provide financing for public facilities or other infrastructure improvements not required to serve the Project benefiting lands within the City outside the Property, City shall adopt such ordinances as are necessary to create a benefit district by which a fee, assessment or charge will be imposed upon such other properties and reimbursed to Owner for the pro-rata share of the benefits conferred upon such Owner lands other than property by such public facilities or infrastructure improvements and shall enter into a reimbursement agreement with Owner pursuant to such ordinance, setting forth the mechanism for the repayment of such costs to the Owner. 6.7 Public Benefit Payment to the City. Prior to the issuance of any building permit identified in Section 5.4, Owner shall pay City a lump sum of not less than $1,126,000, either from proceeds of the community facilities district financing identified in Section 6.4, or as otherwise provided by Owner. The payment will fund infrastructure and other public improvements beyond conditions of approval. Use of the funds shall be at the sole discretion of the City Council. 6.8 Public Benefits to and Easement Agreement with the County of Orange Relating to Avenida La Pata and Trail Improvements. Owner and City agree to cooperate with the County of Orange ("County') in the planning, design, construction and implementation of the ultimate improvements to Avenida La Pata and related improvements adjacent to and in the vicinity of the Property and the provision of -21- 249020v10 06/29/05 280268-0001 right-of-way for Regional Riding and Hiking Trail Improvements in the vicinity of the —. Property, as set forth below. (i) Within sixty days of Owner receiving written notice from the County, Owner shall irrevocably offer to dedicate in fee for Regional Riding and Hiking Trail improvement purposes, sixteen feet of right-of-way along the length of the Property from the southerly most portion of the Property through the planned access road that will connect the Property to Avenida La Pata from the existing right-of-way limits of La Pata Avenue. (ii) Within 60 days of Owner receiving written notice from the -- County, Owner shall irrevocably offer to dedicate in fee fifty feet of right-of-way from the proposed access road to the northern boundary of the Property for ultimate improvements to Avenida La Pata(including but not limited to adjacent slope areas). (iii) Owner shall grant to County a non-exclusive, nontransferable license and right of entry over, on and under the portion of the Property described as the Easement Agreement No. D05-045 between the Owner and County. Said Easement Agreement shall not become effective until and unless this Development Agreement becomes effective -22- 249020v10 06/29/05 280268-0001 _ and shall, among other this, allow County the use of the entire Parcel adjacent to La Pata Avenue to grade and construct slopes in support of the implementation of Avenida La Pata to its ultimate Master Plan of Arterial Highways (MPAH) standard. Prior to relinquishment of Project improvement bonds, Owner shall obtain written concurrence from the Resources Development Management Department Director, County of Orange, providing to City evidence that Owner has complied with the dedication requirements of Agreement No. D05-045. As provided for herein and in consideration of Owner's provision of the benefits to the County described in this Section, the Project shall be exempt from the payment to County of any and all existing or future traffic and transportation improvement fees, including but not limited to any and all Major Thoroughfare and Bridge Improvement Regional Fee Programs ("Fee Programs") presently enacted or adopted in the future by the Orange County Board of Supervisors, including,but not limited to a Fee Program adopted with respect to the future extension of Avenida La Pata. County has committed to City and Owner that it shall perform all required grading and do all things necessary or required on said parcel per the plans and specifications for the Avenida La Pata widening program and related trail projects. The County also acknowledges and represents to City and Owner that it has specifically agreed that in undertaking the Avenida La Pata project, the County will use its best efforts to re-contour the hills and knoll that provide a visual and sound buffer between -23- 249020v10 06/29/05 280268-0001 Avenida La Para and the Project to the condition existing prior to the commencement of any activities associated with County's project 7. ANNUAL REVIEW. 7.1 City and Owner Responsibilities. City shall review this Agreement at least once every twelve (12) months during the term of this Agreement to determine the good faith substantial compliance by Owner with the terms of this Agreement (the "Annual Review")pursuant to Government Code section 65865.1 and applicable City ordinances. During each Annual Review, Owner shall submit to City a report ("Annual Review Report") within thirty(30) days of each anniversary date of this Agreement demonstrating its good faith substantial compliance with the terms of this Agreement, and shall furnish such reasonable evidence of good faith substantial compliance as the City may require in the exercise of its reasonable discretion. At the conclusion of the Annual Review, the City's finding of good faith compliance by Owner with the terns of the Agreement shall be conclusive up to the date of such finding for the purposes of future Annual Reviews or legal action between the Parties pursuant to Government Code Section 65865.1, as amended, and applicable City Ordinances. 7.2 Review Letter. If Owner is found to be in compliance with the Agreement after the Annual Review, City shall issue, upon written request by Owner, a letter to Owner(the "Annual Review Letter") stating that, based upon information ]mown or made known to the City Council, the City Planning Commission, and/or the City Manager, the Agreement remains in effect and Owner is not in Default. -24- 249020x10 06/29/05 280268-0001 7.3 Estoppel Certificates. Either party may at any time, and from time to time, deliver written Notice to the other Party requesting that the other Party certify in writing that to the knowledge of the certifying Party: (i) The Agreement is in full force and effect and is a binding obligation of the Parties. (ii) The Agreement has not been amended or modified either orally or in writing or, if so amended, identifying the amendments. (iii) No Default in the performance of the requesting Party's obligations under the Agreement exists or, if in Default, the nature and amount or description of any Default. A Party receiving a request under this provision shall execute and return a certificate within thirty(30) days following receipt of the request. The Director shall have the right to execute any certificate requested by Owner on behalf of City. A certificate given pursuant to this section may be relied on by assignees and Mortgagees. 7.4 Failure of Annual Review. City's failure to review at least annually (as described herein) Owner's compliance with the terms and conditions of this Agreement shall not constitute or be asserted by City as an Owner Default. -25- 249020v10 06/29/05 280268-0001 8. DEFAULT AND REMEDIES. 8.1 Performance Remedy. Owner has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate Owner for such efforts. In addition, City and Owner agree that monetary damages are not available if City fails to carry out its obligations under this Agreement. Therefore, specific performance of this Agreement is the only remedy which would compensate Owner if City fails to cavy out its obligations under this Agreement, and City hereby agrees that Owner shall be entitled to seek specific performance in the event of a default by City hereunder. 8.2 Applicable Laws/Attorney's Fees. The Agreement shall be construed and enforced in accordance with the laws of the State of California. All statutory references are to California statutes. Should any action between the Parties be brought in any court of competent jurisdiction arising out of or in connection with the Agreement, the prevailing Party in the action shall be entitled to recover reasonable attorney's fees, court costs, and necessary disbursements in connection with this litigation. -26- 249020v10 06/29/05 280268-0001 9. ENCUMBRANCES AND RELEASES ON PROPERTY. 9.1 Discretion to Encumber. The Agreement shall not prevent or limit Owner, in any manner, at Owner's sole discretion, from encumbering the Property or any portion of the Property or any improvement on the Property by any Mortgage. City acknowledges that lenders providing financing may require modifications to the Agreement and City agrees, upon request, from time to time, to meet with Owner and/or representatives of lenders to negotiate in good faith any lender request for modification. City agrees to not withhold unreasonably its consent to any lender requested modification to the Agreement. 9.2 Entitlement to Written Notice of Default. Any Mortgagee and its successors and assigns, upon written request to City, shall be entitled to receive from City written Notice of any Owner Default at the same time Owner is provided with Notice pursuant to Section 8.4 above. 9.3 Property Subject to Pro Rata Claims. Any person or entity who/which comes into possession of any portion of the Property pursuant to foreclosure of a Mortgage or deed in lieu of foreclosure, shall take possession, on an average pro rata basis, subject to claims for payments or charges established by the Agreement against the Property and which accrue prior to the time the person or entity comes into possession. 10. MISCELLANEOUS PROVISIONS. 10.1 Rules of Construction. The singular includes the plural; the masculine, gender includes the feminine; "shall is mandatory; "may" is permissive. -27- 249020v10 06/29/05 280268-0001 10.2 Severability. If any non-material provision of the — Agreement shall be adjudged by a court of competent jurisdiction to be invalid, void or illegal, it shall in no way affect, impair or invalidate any other provision of the Agreement. hi the event a material part of the Agreement is adjudged by a court of competent jurisdiction to be invalid, void or illegal, the entire Agreement is deemed to be unenforceable or void. For purposes of this Section 11.2, all provisions of Section 6 are deemed to be a"material part" of the Agreement. If any portion of the Agreement is adjudged to be unenforceable, that portion shall be deemed to be a statement of intention by the Parties and the Parties snah take all steps necessary to make valid the Agreement or that portion which is adjudged to be unenforceable. 10.3 Entire Agreement, Waivers and Amendments. This Agreement constitutes the entire understanding and agreement of the Parties with respect to the subject matter of this Agreement. This Agreement supersedes all negotiations and previous agreements between the Parties with respect to that subject matter. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate agents of City or of Owner. All amendments to this Agreement must be in writing signed by the appropriate agents of City and Owner, in a form suitable for recording in the Official Records of Orange County, California. Within ten (10) days following the Effective Date, a copy of this Agreement shall be recorded in the Official Records of Orange County, California. Upon the completion of performance of this Agreement or its revocation or termination, a statement evidencing completion, revocation or termination signed by the appropriate agents of Owner and City shall be recorded in the Official _ Records of Orange County, California. -28- 249020v10 06/29/05 280268-0001 10.4 Project as a Private Undertaking. It is specifically understood by the Parties that: (a) the Project is a private development; (b) City has no interest in or responsibilities for or duty to third parties concerning any Private Improvements to the Property; and(c) Owner shall have the full power and exclusive control of the Property subject to the obligations of Owner set forth in the Agreement. 10.5 Incorporation of Recitals . The Recitals set forth in this Agreement are made a part of this Agreement. 10.6 Captions. The captions of this Agreement are for convenience and reference only and shall not define, explain, modify, construe, limit, amplify or aid in the interpretation, construction or meaning of any of the provisions of this Agreement. 10.7 Consent. Where the consent or approval of a Party is required in or necessary under this Agreement, the consent or approval shall not be unreasonably withheld. 10.8 Covenant of Good Faith and Fair Dealing. Neither Party shall do anything which shall have the effect of harming or injuring the right of the other Party to receive the benefits of this Agreement. Each Party shall refrain from doing anything which would render its performance under this Agreement impossible. Each Party shall do everything which this Agreement contemplates that such Party shall do to accomplish the objectives and purposes of this Agreement. -29- 249020v10 06/29/05 280268-0001 10.9 Covenant of Cooperation. The Parties shall cooperate with — and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining permits for the development of the Property which may be required from public agencies other than City. Owner reserves the right to challenge any ordinance,measure, moratorium, initiative, referendum or other limitation in a court of law to the extent deemed necessary to protect the development rights vested in the Property pursuant to this Agreement. 10.10 Further Actions and Instruments. Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of either Party, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 10.11 Successors and Assigns. Subject to Section 4.2, the burdens of this Agreement shall be binding upon, and the benefits of the Agreement inure to, all successors-in-interest and assigns of the Parties to all or any portion of the Property, and shall run with and burden and benefit the Property, and all portions thereof. 10.12 Third Party Beneficiary. The County of Orange is a Third Party Beneficiary of this Development Agreement pursuant to Section 6.8 herein. -30- 249020v10 06/29/05 280268-0001 10.13 Notices. All notices required or permitted by this Agreement shall be in writing and may be delivered in person (by hand delivery or professional messenger service) to either Party or may be sent by registered or certified mail, with postage prepaid, return receipt requested or delivered by Express Mail of the U.S. Postal Service or Federal Express or any other courier service guaranteeing overnight delivery, charges prepaid, or may be transmitted by facsimile transmission and addressed as follows: To City: City Clerk/City Manager City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Telephone: (949) 493-1171 Facsimile: (949) 493-1053 With a copy to: Planning Director of Planning Services City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Telephone: (949) 493-1171 Facsimile: (949)493-1053 To Owner: Whispering Hills LLC c/o Concorde Development 19700 Fairchild Road, Suite 120 Irvine, CA 92612 Attn: Dennis Gage Telephone: (949) 833-1100 Facsimile: (949) 833-0477 With a copy to: John P. Erskine Nossaman, Guthner, Knox &Elliott, LLP 18101 Von Karman Avenue, Suite 1800 Irvine, CA 92612 Telephone: (949) 833-7800 Facsimile: (949) 833-7878 -31- 249020v10 06/29/05 280268-0001 Any such notice sent by registered or certified mail, return receipt requested, shall be — deemed to have been duly given and received seventy-two (72) hours after the same is so addressed and mailed with postage prepaid. Notices delivered by overnight service shall be deemed to have been given twenty-four(24)hours after delivery of the same, charges prepaid, to the U.S. Postal Service or private courier. If any notice is transmitted by facsimile transmission or similar means, the same shall be deemed served or delivered upon confirmation of transmission thereof. Any notice or other document sent by any other manner shall be effective only upon actual receipt thereof. Any Party may change its address for purposes of this paragraph by giving notice to the other Party as provided herein. 10.14 Recording. The City Clerk shall cause a copy of the Agreement to be recorded with the Office of the County Recorder of Orange County, California within ten (10) days following the Effective Date. 10.15 Effective Date. This Agreement shall not take effect and no rights or obligations contained herein shall vest or inure to the benefit of any Party hereto until the Operative Date of the ordinance specified in Section 1.8 of this Agreement pursuant to Government Code Section 65867.5 and the completion of any referendum process initiated thereunder. -32- 249020v10 06/29/05 280268-0001 This Agreement has been executed by the Parties as of the date set forth next to their respective signatures. Dated: CITY OF SAN JUAN CAPISTRANO, a municipal corporation By: Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Dated: WHISPERING HILLS, LLC, a Delaware limited liability Company By: Concorde Development, L.P., a California limited partnership By: Ferrari Investments, a California corporation, General Partner By: Dennis Gage Managing Member -33- 249020v10 06/29/05 280268-0001 State of ) County of ) On before me, personally appeared personally known to me - OR- 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 this instrument the person(s), or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. Notary Public State of ) County of ) On before me, personally appeared personally known to me - OR- 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 this instrument the person(s), or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. Notary Public 249020v10 EXHIBIT "A" LEGAL DESCRIPTIONS I. MAIN PORTION OF THE PROPERTY PARCEL 1: THAT PORTION OF SECTIONS 4, 5, 8 AND 9, TOWNSHIP 8 SOUTH, RANGE 7 WEST OF THE SAN BERNARDINO BASE AND MERIDIAN, IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA,ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE APRIL 12, 1875, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT OF THE SOUTHERLY LINE OF THE LAND DESCRIBED IN PARCEL 2 OF A DEED TO CLARENCE C. REED AND MARGARET U. REED, HUSBAND AND WIFE,RECORDED JUNE 8, 1956, IN BOOK 3538,PAGE 550 OF OFFICIAL RECORDS, SAID POINT BEING SOUTH 86°09'20" EAST 1078.60 FEET FROM THE WESTERLY TERMINUS OF THAT CERTAIN COURSE DESCRIBED IN SAID DEED AS "SOUTH 860 09'20" EAST 2306.60 FEET';THENCE LEAVING SAID BOUNDARY LINE, NORTH 250 00'00" EAST 1690.00 FEET; THENCE NORTH 34° 59'45" EAST 1501.80 FEET; THENCE NORTH 420 00'00" WEST 1624.40 FEET; THENCE, SOUTH 870 03,41" EAST 770.02 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 870 03'41" EAST 835.00 FEET; THENCE NORTH 39°00'00" EAST 1440.00 FEET; THENCE NORTH 63° 00' 00" EAST 940.00 FEET TO A POINT ON THE SOUTHWESTERLY LINE OF THE RANCHO MISSION VIEJO, SAID POINT BEING SOUTH 20° 02'23" EAST 4500.00 FEET FOR THE SOUTHEASTERLY CORNER OF THE LAND DESCRIBED IN A DEED TO PIERRE LACOUASUE,RECORDED OCTOBER 15, 1927, IN BOOK 99,PAGE 5 OF OFFICIAL RECORDS; THENCE NORTH 200 02'23" WEST ALONG SAID SOUTHWESTERLY LINE, 4500.00 FEET TO SAID SOUTHEASTERLY CORNER OF THE LAND OF LACOUASUE; THENCE SOUTH 700 02'00" WEST 2866.50 FEET TO THE MOST SOUTHERLY CORNER OF SAID LACOUASUE, SAID POINT ALSO BEING THE MOST EASTERLY CORNER OF THE LAND DESCRIBED IN A DEED TO PAUL HERBOLD,RECORDED SEPTEMBER 5, 1957, IN BOOK 4026,PAGE 483 OF OFFICIAL RECORDS; THENCE SOUTH 31° 22'28" WEST 500.42 FEET TO THE MOST SOUTHERLY CORNER OF SAID LAND OF HERBOLD; THENCE SOUTH 16' 07' 56" WEST 1355.04 FEET TO A POINT ON THE EASTERLY PROLONGATION OF THAT CERTAIN COURSE DESCRIBED IN A DEED TO LOUIS ROMOFF AND WIFE, RECORDED JUNE 12, 1943, IN BOOK 1189,PAGE 508 OF OFFICIAL RECORDS, AS "SOUTH 80° 30'00" WEST 966.50 FEET", SAID POINT BEING NORTH 800 30'00" EAST 500.00 FEET FROM THE EASTERLY TERMINUS OF SAID COURSE; THENCE SOUTH 80° 30'00" WEST ALONG SAID PROLONGATION, 201.62 FEET; THENCE SOUTH 40° 10'01" EAST 3814.50 FEET,MORE OR LESS TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF INTEREST IN AND TO THE RESERVOIR SITE DESCRIBED AS BEGINNING AT THE SOUTHERLY TERMINUS OF THE COURSE IN THE EASEMENT DESCRIBED IN PARCEL 2 OF DEED RECORDED NOVEMBER 10, 1953, IN BOOK 2610, PAGE 129 OF OFFICIAL RECORDS AS "SOUTH 46' 28'95 FEET";THENCE NORTH 55° 12'EAST 120.50 FEET;THENCE SOUTH 34'48' EAST 78.00 FEET; THENCE SOUTH 55° 12'WEST 120.50 FEET TO THE CENTERLINE OF SAID EASEMENT HEREINBEFORE MENTIONED; THENCE NORTH 34° 48'WEST - ALONG SAID EASEMENT CENTERLINE 78.00 FEET TO THE POINT OF BEGINNING. ALSO EXCEPTING THAT PORTION THEREOF INCLUDED WITHIN THE LAND _ DESCRIBED IN DEED TO SAN DIEGO GAS&ELECTRIC COMPANY, RECORDED MARCH 4, 1964 IN BOOK 6948,PAGE 462 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN PARCEL GA 1236- 5.01 OF DEED TO THE COUNTY OF ORANGE RECORDED SEPTEMBER 23, 1982,AS INSTRUMENT NO. 82-334432 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION OF THE DEED TO THE CAPISTRANO UNIFIED SCHOOL DISTRICT BY GRANT DEED RECORDED APRIL 30, 2003 AS INSTRUMENT NO. 2003000487413 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF INTEREST IN ALL THE OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN,UPON AND UNDER SAID LAND, TOGETHER WITH THE INCOME ACCRUING THEREFROM,AS RESERVED BY HOWARD L. KRUM AND FAY WILSON KRUM, HUSBAND AND WIFE, BY DEED RECORDED JUNE 8, 1956, IN BOOK 3538, PAGE 550 OF OFFICIAL RECORDS, AND RE- RECORDED JULY 20, 1956, IN BOOK 3584, PAGE 339 OF OFFICIAL RECORDS. PARCEL 2: AN EASEMENT FOR ROAD PURPOSES OVER THOSE PORTIONS OF SECTIONS 4 AND 5,TOWNSHIP 8 SOUTH, RANGE 7 WEST, IN THE SAN BERNARDINO MERIDIAN, IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THOSE CERTAIN STRIPS OF LAND 60.00 FEET IN WIDTH, LYING 30 FEET,MEASURED AT RIGHT ANGLES ON EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINES: PARCEL 2A: BEGINNING AT CORNER NO. 3 OF RANCHO MISSION VIEJO, OR LA PAZ, ACCORDING TO THE MAP RECORDED DECEMBER 19, 1867, IN BOOK 1,PAGES 63 AND 64 OF PATENTS,RECORDS OF LOS ANGELES COUNTY, CALIFORNIA; THENCE SOUTH 200 00'28" EAST,ALONG THE WESTERLY BOUNDARY LINE OF SAID RANCHO MISSION VIEJO OR LA PAZ, A DISTANCE OF 5926.28 FEET TO A POINT THEREIN, HEREINAFTER KNOWN AND DESIGNATED AS POINT "A", SAID POINT "A" ALSO BEARS SOUTH 200 00'28" EAST,A DISTANCE OF 41.86 FEET FROM THE POINT OF INTERSECTION OF THE NORTH LINE OF SECTION 9, OF SAID TOWNSHIP 8 SOUTH, RANGE 7 WEST,WITH SAID WESTERLY BOUNDARY LINE OF SAID RANCHO MISSION VIEJO OR LA PAZ; THENCE FROM SAID POINT "A"NORTH 68° 26' 18" WEST A DISTANCE OF 1090.00 FEET TO A POINT, WHICH POINT IS THE TRUE POINT OF BEGINNING; THENCE FROM SAID TRUE POINT OF BEGINNING NORTH 21° 33'42" EAST A DISTANCE OF 100.00 FEET TO THE NORTHEASTERLY LINE OF THE LAND DESCRIBED IN PARCEL 2 OF DEED RECORDED MARCH 4, 1964 IN BOOK 6948, PAGE 462 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. ALSO: BEGINNING AT THE LAST MENTIONED TRUE POINT OF BEGINNING; THENCE SOUTH 210 33'42" WEST A DISTANCE OF 50.00 FEET TO THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED IN SAID PARCEL 2. PARCEL 2B: BEGINNING AT CORNER NO. 3 OF RANCHO MISSION VIEJO OR LA PAZ, ACCORDING TO THE MAP RECORDED DECEMBER 19, 1867, IN BOOK 1, PAGES 63 AND 64 OF PATENTS,RECORDS OF LOS ANGELES COUNTY, CALIFORNIA; THENCE SOUTH 200 00'28" EAST, ALONG THE WESTERLY BOUNDARY LINE OF SAID RANCHO MISSION VIEJO OR LA PAZ, A DISTANCE OF 5926.28 FEET TO A POINT 2 THEREON,HEREINAFTER KNOWN AND DESIGNATED AS POINT "A", SAID POINT "A" ALSO BEARS SOUTH 200 00'28" EAST A DISTANCE OF 41.86 FEET FROM THE POINT OF INTERSECTION OF THE NORTH LINE OF SECTION 9, OF SAID TOWNSHIP 8 SOUTH,RANGE 7 WEST WITH THE SAID WESTERLY BOUNDARY LINE OF SAID RANCHO MISSION VIEJO OR LA PAZ; THENCE FROM SAID POINT "A"NORTH 68' 26' 18" WEST A DISTANCE OF 2700.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE FROM SAID TRUE POINT OF BEGINNING,NORTH 8°26' 18" WEST A DISTANCE OF 115.47 FEET TO THE NORTHEASTERLY LINE OF THE LAND DESCRIBED IN PARCEL 2 OF THE DEED RECORDED MARCH 4, 1964, IN BOOK 6948, PAGE 462 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. ALSO: BEGINNING AT THE LAST MENTIONED TRUE POINT OF BEGINNING; THENCE SOUTH 80 26' 18" EAST A DISTANCE OF 57.73 FEET TO THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED IN SAID PARCEL 2. THE SIDELINES OF THE ABOVE DESCRIBED 60.00 FOOT WIDE ROAD EASEMENTS SHALL BE PROLONGED AND/OR SHORTENED SO AS TO TERMINATE IN THE BOUNDARIES OF THE LAND DESCRIBED IN SAID PARCEL 2. ASSESSOR'S PARCEL NOS: 124-140-49, 124-140-50, 124-140-51, 124-140-53, 124-223-23, 124-223-45 3 II. ANNEXATION PORTION OF THE PROPERTY All of that portion of land lying within the unincorporated territory of the County of Orange, State of California,being a portion of Parcel 1 of Lot Line Adjustment LL 2003- 004, recorded as Instrument No. 2003-294469, Official Records of said county, as more particularly described as follows: Beginning at Rancho Mission Viejo Comer# 3, said point being Orange County Surveyor's Horizontal Control Station G.P.S. No. 4404, having a coordinate values (U.S. Survey Foot) of North 2133123.106 and East of 6142442.702 based upon the California Coordinate System (CCS83), Zone VI 1983 NAD, (1991.35 epoch O.C.S. GPS Adjustment)per records on file on the Office of the Orange County Surveyor; said point being on the existing City of San Juan Capistrano Boundary as created by "Incorporation"; Thence southerly along said existing boundary line, South 20°02'23" East 3177.31 feet to the northwest comer of Parcel 1 of said Lot Line Adjustment LL2003-004, said point being South 20°02'23"East 7.92 feet from the southeast corner of"Reorganization# 61 (Lacouague Ranch)to the City of San Juan Capistrano", said point also being the True Point of Beginning; Thence leaving said existing boundary and continuing along the boundary of said Parcel — 1, North 67'28'19"East 200.02 feet to a point on the existing right-of-way line of La Para Avenue as recorded in Instrument No. 19980260408, O.R.; Thence continuing southerly along said right-of-way line the following courses: a) South 20°02'23" East 265.25 feet; b) Thence, South 56°19'45" East 126.51 feet to a line that is parallel and concentric with and 20 feet southwesterly to the existing southwesterly line of La Pata Avenue(100 feet wide); Thence along said parallel and concentric lines the following courses: a) South 22°31'41" East 1238.66 feet to the beginning of a tangent curve, concave northeasterly, having a radius of 3070.00 feet; b) Thence southeasterly along said curve, an arc distance of 61.19 feet through a central angle of 1°08'31"; c) Thence tangent to said curve, South 23'40'12"East 1412.00 feet to the beginning of a tangent curve, concave southwesterly, having a radius of 2930.00 feet; d) Thence southeasterly along said curve, an arc distance of 387.94 feet -" through a central angle of 7'35'10"; 4 e) Thence tangent to said curve, South 16°05'02" East 431.74 feet to the beginning of a tangent curve, concave northeasterly, having a radius of 1670.00 feet; f) Thence southeasterly along said curve, an arc distance of 191.25 feet through a central angle of 6'33'41"; Thence leaving said parallel and concentric line and continuing along the southeasterly line of said Parcel 1 of said Lot Line Adjustment LL2003-004, South 52°21'26" West 407.07 feet to a point on the existing City of San Juan Capistrano boundary line as created by"Incorporation"; Thence continuing along said existing city boundary line,North 20°02'23" West 4198.76 feet to the True Point of Beginning. This area contains 33.00 acres, more or less. Unless otherwise noted all bearings and distances in this description are ground based upon the California Coordinate System, (CCS 83) Zone VI NAD 83 (1991.35 epoch O.C.S. GPS Adjustment)per records on file on the Office of the Orange County Surveyor. To obtain grid distance, multiply the ground distance by 0.99994996. 5 9a�t` eP� 9°�e