HomeMy WebLinkAboutCDC/2006-42
IMPORTANT NOTE: AGREEMENT GOING BACK TO
COUNCIL FOR REVISIONS. AGREEMENT WILL NOT
BE EXECUTED.
RESOLUTION NO. CDC/2006-42
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO (1) APPROVING THE 2006 DISPOSITION
AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") AND HSB 1-215, A CALIFORNIA LIMITED PARTNERSHIP
AND SE 1-215, A CALIFORNIA LIMITED PARTNERSHIP (COLLECTIVELY
REFERRED TO AS "HILLWOOD")j (2) AUTHORIZING THE EXECUTIVE
DIRECTOR OF THE AGENCY TO EXECUTE SAID DDA RELATING TO
THE TRANSFER OF THE AGENCY PROPERTY LOCATED SOUTH OF THE
HILLWOOD PROPERTY AND WEST OF THE 1-215 FREEWAY - (10.53
ACRES IN THE CITY OF SAN BERNARDINO) ("AGENCY PROPERTY"); (3)
ACCEPTANCE BY THE AGENCY OF THE ADJACENT EXCHANGE
TRACT; AND (4) MAKING CERTAIN FINDINGS THERETO RELATED TO
THE DEVELOPMENT OF THE PROJECT
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WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency")
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is a public body, corporate and politic existing under the laws of the State of California, Healt
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and Safety Code 33101, and is charged with the mission of redeveloping blighted an
underutilized land; and
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WHEREAS, the Agency is the current owner of that certain real property consisting 0
approximately 10.53 acres (APN: 0148-011-39 AND APN: 0266-073-08) located south of th
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Hillwood property and west of 1-215 Freeway, (the "Agency Property") in the State Colleg
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Redevelopment Project Area ("Project Area"); and
WHEREAS, the Agency has determined that the Agency Property is no longer necessar
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for the Agency's use; and
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WHEREAS, an updated MAl appraisal of the Agency Property has bee
completed by Villegas Appraisal Company (the "Appraisal"), and said Appraisal has confirme
the fair market value of the Agency Property to be Nine Hundred Seventy Thousand Dollar
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($970,000); and
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WHEREAS, the Agency is entering into a 2006 Disposition and Development Agreemen
(the "DDA") with HSB 1-215, a California Limited Partnership and SE 1-215, a Californi
Limited Partnership (collectively referred to as "Hill wood") pursuant to which the Agency wil
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transfer the Agency Property to Hillwood in exchange for property which Hillwood owns alon
the south side of University Parkway ("Exchange Tract"); and
WHEREAS, the fair market value of the Exchange Tract is in excess of that of $1.8
million; and
WHEREAS, the Exchange Tract is necessary for the University Parkway/BNSF trac
crossing improvement; and
WHEREAS, the DDA provides for the reconfiguration and development of the Agenc
Property into a flood control retention basin, and adjacent property owned by Hillwood to b
developed into approximately six (6) warehouse/distribution facilities totaling approximatel
2,000,000 square feet (the "Project"); and
WHEREAS, the Agency has prepared and published a notice of joint public hearing i
The San Bernardino County Sun Newspaper on September 4 and II, 2006, regarding th
consideration and approval of the DDA and also the certification of a Final Environmenta
Impact Report ("FEIR") related to the Project in accordance with California Environmenta
Quality Act ("CEQA"); and
WHEREAS, pursuant to Health and Safety Code Section 33433, the Agency may transfe
the Agency Property to the Hillwood subject to the Mayor and Common Council ("Council"
and Community Development Commission ("Commission") adopting a Resolution consenting t
and authorizing the Agency to transfer the Agency Property in light of the findings set fort
herein, pursuant to Health and Safety Code Section 33433; and
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
Code Section 33433 that describes the salient points of the DDA and identifies the cost of the
DDA to the Agency; and
WHEREAS, the Agency is the "lead agency" for the Project, under CEQA, California
Public Resources Code Sections 21000, et seq., in accordance with Public Resources Code
Section 21067 and Title 14 California Code of Regulations Sections 15050 and 15051; and
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WHEREAS, the FEIR was prepared with respect to the Project in accordance with th
provisions of CEQA and the CEQA Guidelines developed thereunder and the Commission ha
concurrently taken action certifying the FEIR; and
WHEREAS, it is appropriate for the Commission to take action with respect to th
disposition of the Agency Property to the Hillwood by the Agency and to approve the DDA a
set forth in this Resolution.
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
FOLLOWS:
Section 1. On September 18, 2006, the Commission, as the governing board of th
Agency, conducted a full and fair joint public hearing with the Council, relating to th
disposition of the Agency Property from the Agency to HiIIwood and the development thereo
pursuant to the DDA. The minutes of the City Clerk for the September 18, 2006, meeting ofth
Commission shall include a record of all communication and testimony submitted to th
Commission by interested persons relating to the public hearing and the approval of the DD
and the Certification of the FEIR and Mitigation Monitoring Measures.
Section 2. The Commission hereby receives and approves the 33433 Report and th
other written materials submitted to the Commission at the meeting at which this Resolution i
adopted. The 33433 Report contains information required under Health and Safety Code Sectio
33433.
Section 3. This Resolution is adopted in satisfaction of the provisions of Health an
Safety Code Section 33433 relating to the disposition and the transfer of the Agency Property b
the Agency to HiIIwood on the terms and conditions set forth in the DDA. A copy of the DD
in the form submitted at this joint public hearing is on file with the City Clerk. The Commissio
hereby finds and determines that the disposition and redevelopment of the Agency Property b
HiIIwood, in accordance with the DDA, is consistent with the Project Area Redevelopment Plan
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the Five Year Implementation Plan and the City's General Plan and that the value of the transfe
of the Exchange Tract by Hillwood to the Agency as the purchase price for the Property
pursuant to the DDA, is an amount that is in excess of the fair market value of the Agenc
Property.
Section 4. The Commission hereby approves the DDA. The Executive Director i
hereby authorized and directed to execute the DDA on behalf of the Agency together wit
nonsubstantive and conforming changes as may be recommended by the Executive Director an
Agency Counsel. The Executive Director is hereby authorized to take all appropriate actions a
set forth in the DDA to implement the disposition, redevelopment of the Agency Property an
acceptance of the Exchange Tract.
The Resolution shall become effective immediately upon its adoption.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO (1) APPROVING THE 2006 DISPOSITION
AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") AND HSB 1-215, A CALIFORNIA LIMITED PARTNERSHIP
AND SE 1-215, A CALIFORNIA LIMITED PARTNERSHIP (COLLECTIVELY
REFERRED TO AS "HILLWOOD"); (2) AUTHORIZING THE EXECUTIVE
DIRECTOR OF THE AGENCY TO EXECUTE SAID DDA RELATING TO
THE TRANSFER OF THE AGENCY PROPERTY LOCATED SOUTH OF THE
HILLWOOD PROPERTY AND WEST OF THE 1-2l5 FREEWAY - (10.53
ACRES IN THE CITY OF SAN BERNARDINO) ("AGENCY PROPERTY"); (3)
ACCEPTANCE BY THE AGENCY OF THE ADJACENT EXCHANGE
TRACT; AND (4) MAKING CERTAIN FINDINGS THERETO RELATED TO
THE DEVELOPMENT OF THE PROJECT
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Communit
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Development Commission of the City of San Bernardino at a j oint regular
meetin
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thereof, held on the 18th day of September ,2006, by the following vote to wit:
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Commission Members:
Navs
Abstain
Absent
Aves
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ESTRADA
BAXTER
VACANT
DERRY
KELLEY
JOHNSON
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MC CAMMACK
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-f', -
}/} r:J~.:--
secretary /
~
The foregoing resolution is hereby approved this ~O""~y of
, 2006.
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S~F'
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trick. orris, erson
Co ity Development Commission
of the City of San Bernardino
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AppMOO ~ '"ill-
By:_V~
Agency sel
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
(Space Above Line for Use By Recorder)
Recording Fee Exempt Pursuant to Government Code Section 6103
2006
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
HSB 1-215, L.P. a California Limited Partnership, and
SE 1-215, L.P., a California Limited Partnership
4838-7503-7441.9
TABLE OF CONTENTS
Section 1.01. Purpose of Agreement............................................................................................. 1
Section 1.02. The Property and the Project................................................................................... 1
Section 1.03. Parties to the Agreement. ........................................................................................ 2
Section 1.04. Restrictions Against Change in Ownership, Management and Control of
Developer and Assignment of Agreement. ............................................................. 2
Section 1.05. Benefit to Project Area............................................................................................ 3
ARTICLE 11 DISPOSITION OF THE PROPERTY.................................................................... 3
Section 2.01. Purchase and Sale of the Property. ......................................................................... 3
Section 2.02. Deposit and Payment of Purchase Price. ................................................................ 4
Section 2.03. Opening and Closing of Escrow. ............................................................................ 6
Section 2.04. Escrow Instructions........................................................................... ...................... 6
Section 2.05. Conveyance of TitIe. ...............................................................................................6
Section 2.06. Additional Closing Obligations of Agency............................................................. 7
Section 2.07. Closing Obligations of Developer. ......................................................................... 8
Section 2.08. Inspection and Review. ........................................................................................... 8
Section 2.09. Due Diligence Investigation of the Property By the Developer. ..........................10
Section 2.10. Due Diligence Approval Certificate. ....................................................................11
Section 2.11. Books and Records. .............................................................................................. 11
Section 2.12. Condition of the Property-Developer's Release. .................................................. 11
Section 2.13. Review and Approval of Condition ofTitIe by the Developer............................. 13
Section 2.14. Survey. ..................................................................................................................14
Section 2.15. Extension of Due Diligence Period....................................................................... 14
Section 2.16. Developer's Conditions Precedent to Close Escrow. ...........................................15
Section 2.17. The Agency's Conditions Precedent to Close Escrow. ........................................ 15
Section 2.18. Distribution of Documents and Purchase Price after Closing Date by Escrow
Holder. .................................................................................................................. 16
Section 2.19. Satisfaction of Conditions. .................................................................................... 16
Section 2.20. [RESERVED - NO TEXT]. ................................................................................. 16
Section 2.21. Prorations, Closing Costs, Possession. ................................................................. 16
Section 2.22. Breach of Article 11 by the Agency; Specific Performance Remedy of Developer. .
.......................................................................................................................18
Section 2.23. Breach by the Developer of Article 11; Liquidated Damages Payable by the
. Developer to the Agency. ..................................................................................... 18
Section 2.24. Representations and Warranties............................................................................ 18
Section 2.25. Damage, Destruction and Condemnation. ............................................................ 22
ARTICLE III DEVELOPMENT OF THE PROJECT. .............................................................. 23
Section 3.01. Development of the Project by Developer............................................................ 23
Section 3.02. RESERVED - NO TEXT..................................................................................... 29
Section 3.03. Taxes and Assessments.........................................................................................29
Section 3.04. Change in Ownership Management and Control of the Developer - Assignment
and Transfer. ......................................................................................................... 29
4838-7503-7441.9
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Section 3.05. RESERVED - NO TEXT..................................................................................... 31
Section 3.06. Right of the Agency to Satisfy Other Liens on the Property after Conveyance of
Title. .................. ....................................... ... ........................ .................................. 31
Section 3.07. Certificate of Completion. ....................................................................................32
Section 3.08. Property Tax Assessed Valuation. ........................................................................33
Section 3.09. Interchange Improvements; Pledge of Tax Increment Revenues; ........................ 33
ARTICLE IV USE OF THE FULL DEVELOPMENT SITE AND THE EXCHANGE TRACT..
....................................................................................................................... 38
Section 4.01. Uses of the Full Development Site. ...................................................................... 38
Section 4.02. Maintenance ofthe Property. ................................................................................38
Section 4.03. Obligation to Refrain from Discrimination........................................................... 39
Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. ................................... 39
ARTICLE V DEFAULTS, REMEDIES AND TERMINATION.............................................. 40
Section 5.01. Defaults - General. ................................................................................................40
Section 5.02. Legal Actions. .......................................................................................................41
Section 5.03. Rights and Remedies are Cumulative. .................................................................. 41
Section 5.04. Damages. ............................................................................................................... 41
Section 5.05. Specific Performance Prior to Close of Escrow. .................................................. 41
Section 5.06. Agency Rights of Termination Following Close of Escrow................................. 42
Section 5.07. Right to Reenter, Repossess and Revest. .............................................................. 43
ARTICLE VI GENERAL PROVISIONS ...................................................................................45
Section 6.01. Notices, Demands and Communications Between the Parties. ............................45
Section 6.02. Conflict of Interest. ............................................................................................... 46
Section 6.03. Warranty Against Payment of Consideration for Agreement. ............:................. 46
Section 6.04. Nonliability of Agency Officials and Employees. ................................................ 46
Section 6.05. Enforced Delay: Extension of Time of Performance............................................ 46
Section 6.06. Inspection of Books and Records. ........................................................................ 47
Section 6.07. Approvals. ............................................................................................................. 47
Section 6.08. Real Estate Commissions...................................................................................... 47
Section 6.09. Indemnification. .......................................................................... .......................... 48
Section 6.10. Release of Developer from Liability..................................................................... 48
Section 6.11. Attorneys' Fees. ...................................:................................................................48
Section 6.12. Effect. .................................................................................................................... 48
Section 6.13. Business Registration Certificate. .........................................................................48
ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS............................ 48
Section 7.01. Entire Agreement. .................................................................................................48
ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND
RECORDATION ..................................................................................................49
Section 8.01. Execution and Recordation. .................................................................................. 49
4838-7503-7441.9
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EXHIBIT "A"
EXHIBIT "B"
EXHIBIT- "B-1 "
EXHIBIT "c"
EXHIBIT "0"
EXHIBIT "0-1"
EXHIBIT "E"
EXHIBIT "F"
EXHIBIT "G"
EXHIBIT "H"
EXHIBIT "I"
EXHIBIT "J"
EXHIBIT "J-l"
EXHIBIT "K"
EXHIBIT "L"
EXHIBIT "M"
4838-1503-1441.9
THE PROPERTY......................................................................................A
FULL DEVELOPMENT SITE ................................................................. B
DESCRIPTION OF FULL DEVELOPMENT SITE.............................B-l
PHASE I DRAWING ................................................................................ C
EXCHANGE TRACT ...............................................................................0
EXCHANGE P ARCEL.........................................................................0-1
AGENCY GRANT DEED ........................................................................ E
PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT ........... F
STREET IMPROVEMENT USES OF THE EXCHANGE TRACT .......G
CERTIFICATE OF COMPLETION.........................................................H
PROMISSORY NOTE............................................................................... I
WATER LINE EASEMENT ..................................................................... J
WATERLINE EASEMENT ...................................................................J-l
CITY ENGINEER LETTER.....................................................................K
REIMBURSEMENT AMOUNT .............................................................. L
DETENTION BASIN .............................................................................. M
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2006
DISPOSiTION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND HSB 1-215, L.P. AND SE 1-215, L.P.
THIS 2006 DISPOSITION AND DEVELOPMENT AGREEMENT (the
"Agreement") is entered into as of September 18, 2006, by and between the Redevelopment
Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), and
HSB 1-215, L.P., a California Limited Partnership, and SE 1-215, L.P., a California Limited
Partnership (collectively, the "Developer"). The Agency and the Developer hereby agree as
follows:
Section 1.01. Puroose of Agreement. The purpose of this Agreement is to
implement the Redevelopment Plan for the State College Redevelopment Project Area (the
"Redevelopment Plan") by providing for the purchase and redevelopment of certain unimproved
land by the Developer. The land, which is subject to this Agreement and is intended to be
transferred from the Agency to the Developer, is referred to herein as the "Property". As of the
date of this Agreement, the Property is owned by the Agency, and the Property is more
particularly described in the attached Exhibit "A". The redevelopment of the Property pursuant
to this Agreement is in the vital and best interests of the City of San Bernardino (the "City") and
the health, safety and welfare of its residents, and in accord with the public purposes and
provisions of applicable state and local laws. The Agency has determined that the development
and use of the Property contemplated by this Agreement is consistent with the Redevelopment
Plan for the State College Redevelopment Project Area.
Section 1.02. The Property and the Proiect. The Property includes approximately
10.53 acres of land, more or less, and is situated within the City of San Bernardino, California,
and referred to as Assessor Parcel Number 0148-011-39 and Assessor Parcel Number 0266-073-
08. Promptly following the purchase of the Property from the Agency and the obtaining of all
applicable governmental approvals and permits, the Developer shall undertake the
redevelopment, improvement and use of the Property primarily for its continued use as a storm
drain facility and storm drain detention basin (the "Basin") improved to accornmodate storm
water drainage from the improvements planned to be constructed on approximately 142 acres
adjacent to the Property currently owned by the Developer described in the attached Exhibit "B".
The term "Full Development Site" as used in this Agreement means the real property described
in the attached Exhibit "B" save and except for the Exchange Tract (hereinafter defined). The
Property shall be as of the date of this Agreement, that certain real property identified as
Assessor's Parcel Number 0148-011-39 and Assessor's Parcel Number 0266-073-08, and upon
the completion of a parcel map by the Developer and the reconfiguration of such real property,
such real property shall be that reconfigured real property as thereaftrr established by said parcel
map. The Property as then reconfigured and after offer for dedication to the City will include
appropriate water and sewer line easements as required to serve the Full Development Site. The
Property, together with the Full Development Site, is referred to in this Agreement as the
"Project Site". The development of the Full Development Site is referred to herein as the
"Project". The Developer represents to the Agency that the Project is planned to consist at full
build-out of not less than 2,000,000 square feet of industrial, warehouse and distribution facility
4838-7503-7441.9
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buildings, with a portion of the Property (approximately 31,517 square feet) to be used for
parking and traffic circulation but with the majority of the Property together with a portion of the
Full Development Site (approximately 122,877 square feet) to be used for a Basin as further set
forth in the attached Exhibit "M". It is contemplated that the Project will be developed in phases
based upon market conditions and City approvals. The first phase of the development of the
Project will consist of approximately 700,000 square feet of industrial, warehouse and
distribution facility building or buildings, together with ancillary streets, utilities, parking and
other related improvements, as generally shown on the attached Exhibit "c" (the "Phase I"). It is
contemplated that there will be further development of the Full Development Site so that within
five (5) years after the Close of Escrow (hereinafter defined) an aggregate of not less than
2,000,000 square feet of building square footage will have been developed on the Full
Development Site. The Developer represents that it has commenced the process for the City
review and approval of the development of the Phase I. The term "Project" as used in this
Agreement means the completion on the Full Development Site (including the Phase I) of the
lesser of (a) at least 2,000,000 square feet of industrial, warehouse and distribution facility
buildings, or (b) the maximum square footage of industrial, warehouse and distribution facility
buildings that the City will permit to be constructed on the Full Development Site.
Section 1.03. Parties to the Agreement.
(a) The Agency is a public body, corporate and politic, exercising
governmental functions and powers and organized and existing under Chapter 2 of the
Community Redevelopment Law of the State of California (Health and Safety Code Section
33000, et seq.). The principal office of the Agency is located at 201 North "E" Street, Suite 301,
San Bernardino, California 92401.
(b) The Developer consists of two California limited partnerships. The
principal office of the Developer is 105 North Leland Norton Way, Suite 3, San Bernardino,
California 92408.
(c) The City of San Bernardino is not a party to this Agreement and shall have
no obligations pursuant to this Agreement except to the limited extent as provided in Section
3.09(b) hereof.
Section 1.04. Restrictions Against Change in Ownership. Management and
Control of Developer and Assignment of Agreement. The qualifications and identity of the
Developer are of particular concern to the Agency. It is because of those qualifications and
identity that the Agency has entered into this Agreement with the Developer. Prior to the
issuance of one (1) or more Certificates of Completion as set forth in Section 3.07, no voluntary
or involuntary successor in interest of the Developer shall acquire any rights or powers under this
Agreement except as expressly set forth herein. Except as set forth in Section 3.04, the
Developer shall not assign all or any part of this Agreement or any rights hereunder prior to the
issuance of the Certificate of Completion with respect to the Project without the prior written
approval of the Executive Director of the Agency, which approval shall not be unreasonably
withheld or delayed.
4838-7503-7441.9
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The Developer shall promptly notifY the Agency in writing of any and all changes
prior to the issuance of the applicable Certificate of Completion whatsoever in the identity of the
business entities and individuals in control of the Developer, as well as any and all changes in the
interest or the degree of control of the Developer by any such party, of which information the
Developer or any of its partners or officers have been notified or may otherwise have knowledge
or information. This Agreement may be terminated by the Agency prior to the Close of the
Escrow as set forth in Section 2.03 if there is any significant or material change, whether
voluntary or involuntary, in membership, ownership, management or control of the Developer
(other than such changes pennitted under Section 3.04 or occasioned by the death or incapacity
of any individual) that has not been approved by the Agency prior to the time of such change, or
the Agency may seek other appropriate relief in the event that at any time following the Close of
Escrow and prior to issuance of the applicable Certificate of Completion such a change in control
of the Developer occurs with respect to the Project; provided, however, that (i) the Agency shall
first notifY the Developer in writing of its intention to tenninate this Agreement or to exercise
any other remedy, and (ii) the Developer shall have twenty (20) calendar days following its
receipt of such written notice to commence and thereafter diligently and continuously proceed
with the cure of the default of the Developer hereunder and submit evidence of the initiation of
satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory
to the Agency, in its reasonable discretion.
Section 1.05. Benefit to Proiect Area. The Agency has detennined that the
development of the Full Development Site in accordance with this Agreement will materially
assist in the elimination of blight and the implementation of the Redevelopment Plan for the
State College Redevelopment Project Area.
ARTICLE II
DISPOSITION OF THE PROPERTY
Section 2.01. Purchase and Sale of the Propertv. Subject to all of the terms,
conditions and provisions of this Agreement and for the consideration of the Purchase Price as
herein set forth, the Agency hereby agrees to sell to the Developer merchantable lien free fee
simple title and the Developer hereby agrees to purchase the following:
all of the right, title and interest of the Agency in the Property as more fully
described in Exhibit "A," including all right, title and interest of the Agency in
and to any land lying in the right-of-way of any existing or proposed highway,
street, road, avenue or alley abutting or adjoining the Property.
The purchase price which the Agency agrees to accept from the Developer and
which the Developer agrees to deliver to the Agency for the Property is the conveyance to
Agency, in exchange for the Property, of the tract currently owned by Developer described on
the attached Exhibit "D" (the "Exchange Tract"). The tenn "Purchase Price" as used in this
Agreement means the Exchange Tract. The fair market value of the Property is $970,000, based
on a current appraisal (the "Property FMV"). The fair market value of the Exchange Tract
exceeds the Property FMV. The Purchase Price shall be delivered to the Agency as provided in
Section 2.02 below.
4838-7503-7441.9
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Section 2.02. Deposit and Pavrnent of Purchase Price.
(a) Within five (5) business days following the execution of this Agreement
by both parties, the Developer shall deliver to the Escrow Holder (as hereinafter defined) the sum
of $1 0,000. This sum upon its receipt by the Escrow Holder is referred to in this Agreement as
the "Deposit". Upon receipt of the Deposit together with a fully executed copy of this
Agreement, the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened as
provided in Section 2.03, and the Escrow Holder shall place the Deposit into an interest-bearing
escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close
of Escrow (as hereinafter defined), the Deposit shall be returned to Developer.
(b) Delivery of Purchase Price. The Developer shall tender to the Escrow
Holder on the Closing Date (as hereinafter defined) a grant deed which shall convey the
Exchange Tract to the EDA (the "Developer Grant Deed") with such Developer Grant Deed
containing such provisions relating to the condition of title and the environmental and physical
conditions of the Exchange Tract to thus allow for the transfer of fee title, or the offer of
dedication, of the Exchange Tract by the Agency to the City for public rights-of-way purposes
as provided below with no further obligations on the part of the Agency.
(i) The conveyance of the Exchange Tract shall be handled through
Escrow in the same manner that the conveyance of the Property by the Agency to the Developer
is handled through Escrow under this Agreement, with the same title exceptions under Section
2.05 to the extent applicable to the Exchange Tract (and approved by the Agency where
approval by the Developer is provided) and with the same respective closing conditions under
Sections 2.06 and 2.07 (with Section 2.06 being applicable to the Developer and Section 2.07
being applicable to the Agency). The form of the Developer Grant Deed shall be substantially
in the form of the Agency Grant Deed (hereinafter defined) with appropriate modifications,
subject to Section 3.01(bb) and to the reasonable approval of the Developer and the Agency.
(ii) The Agency shall have the same inspection and review rights with
respect to the Exchange Tract as the Developer has with respect to the Property under Sections
2.08 and 2.09 below. The Agency may terminate this Agreement by the end of the Due
Diligence Period if, for any reason, it is not satisfied with the condition, title or any other aspect
of the Exchange Tract.
(iii) The disclaimers, release, review right, title objection right and
covenants under Sections 2.12 and 2.13 also shall be applicable to the Exchange Tract, with the
"Developer" meaning "the Agency" and "the Agency" meaning the "Developer".
(iv) The Developer will deliver to the Agency a current survey of the
Exchange Tract, meeting the material requirements for the Survey (hereinafter defined) under
Section 2.14 below.
(v) An additional condition of the Agency's obligation to close under
Section 2.17 shall be the Agency's satisfactory review and approval of the Exchange Tract and
4838-7503-7441.9
4
the performance of the Developer's material obligations under this Agreement with respect to the
Exchange Tract.
(vi) The Developer Grant Deed shall contain the following provisions
(the "Use Provisions"):
A. The Agency (before the City accepts dedication of the
Exchange Tract) and the City (after it accepts dedication of the Exchange Tract) shall use the
Exchange Tract only for the purpose of constructing, operating and maintaining the roadway and
other improvements generally described on the attached Exhibit "G" with such modifications
thereof as the City determines appropriate for the contemplated grade crossing of University
Parkway over the BNSF railroad line, the curb-cut for the street providing access to the Full
Development Site, the provision of a route for utilities to serve the Full Development Site and for
the City Fire Department emergency access to the Full Development Site, and access for all other
public agencies and other public utility companies as determined appropriate by the City and
access for the BNSF Railroad for purposes of access to the BNSF railroad line (the "Exchange
Tract Roadway Improvements").
B. Prior to the completion and opening to public use of the
Exchange Tract Roadway Improvements, the City shall use reasonable efforts to provide access
to the Full Development Site from University Parkway.
C. The Developer and the Agency shall reasonably cooperate
with the City in the precise wording of the above use provisions provided that the substance and
purpose of such provisions is not diminished.
(c) The Deposit (less an amount equal to the customary and reasonable
escrow cancellation charges of the Escrow Holder) shall be returned to the Developer in the
event that:
(i) the Agency terminates this Agreement pursuant to Section
2.02(b)(ii) or the Agency or the Developer terminates this Agreement pursuant to Section
2.03(b); or
(ii) the Developer's conditions precedent to the Close of Escrow
described in Section 2.16(1), (2), (3), (4) or (5) are not satisfied (unless satisfaction has been
waived by the Developer) and this Agreement is terminated by the Developer; or
(iii) the Property or the Exchange Tract is materially damaged prior to
the Close of Escrow, or an action of eminent domain is commenced by a governmental entity with
respect to the Property prior to the Close of Escrow, and the Developer, or the Agency,
respectively, elects to terminate this Agreement pursuant to Section 2.25; or
(iv) Upon the Closing as defined in Section 2.03(c).
4838-7503-7441.9 5
Section 2.03. Opening and Closing of Escrow.
(a) The transfer and sale of the Property and the conveyance of the Exchange
Tract for the Property shall take place through an Escrow (the "Escrow") to be administered by
Land America Title Insurance Company, 1920 Main Street, Suite 1200, Irvine, California 92614,
Attn: Kathleen Huntsman: Escrow Department or such other escrow or title insurance company
mutually agreed upon by the Seller and the Agency (the "Escrow Holder"). The Escrow shall be
deemed open (the "Opening of Escrow") upon the receipt by the Escrow Holder of a fully
executed copy of this Agreement and the Deposit. The Escrow Holder shall promptly confirm to
the parties the escrow number and the title insurance order number assigned to the Escrow.
(b) In the event that the Developer has not delivered its Due Diligence
Approval Certificate to the Agency and the Escrow Holder within one hundred twenty (120)
days from the Opening of Escrow (as such date may be extended pursuant to Section 2.15) for
any reason, then in such event this Agreement shall terminate upon written notice to the Escrow
Holder from either the Agency or the Developer, whereupon the Deposit shall be returned by the
Escrow Holder to the Developer (less an amount equal to the customary and reasonable escrow
cancellation charges payable to the Escrow Holder) without further or separate instruction to the
Escrow Holder, and the parties shall each be relieved and discharged from all further
responsibility or liability under this Agreement.
(c) Provided that the Developer has delivered its Due Diligence Approval
Certificate within the period of time authorized in Section 2.03(b), then the Closing Date of the
Escrow shall occur within sixty (60) calendar days thereafter, subject to the provisions of Section
2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean
and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related
Escrow documents of the parties and the Escrow Holder is in a position to comply with the final
written escrow closing instructions of the parties and cause the Agency Grant Deed for the
Property to be recorded and the policy of insurance for the Property to be delivered to the
Developer.
Section 2.04. Escrow Instructions. This Agreement also constitutes escrow
instructions of the parties to the Escrow Holder. Additionally, the Developer and the Agency
each agree to execute the customary supplemental escrow instructions of the Escrow Holder in
the form provided by the Escrow Holder to its clients in real property escrow transactions
administered by it. In the event of a conflict between the additional terms of such customary
supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement,
this Agreement shall supersede and be controlling. Upon any termination of this Agreement or
cancellation of the Escrow, the Developer shall be solely responsible for the payment of the
escrow cancellation costs of the Escrow Holder, the Escrow Holder shall forthwith return all .
monies (as provided in this Agreement) and documents, less only the Escrow Holder's
customary and reasonable escrow cancellation fees and expenses, as set forth herein.
Section 2.05. Conveyance of Title. On or before 12:00 noon on the business
day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in
the form attached hereto as Exhibit "E" (the "Agency Grant Deed") duly executed and
4838-7503-7441.9
6
acknowledged by the Agency, which Agency Grant Deed shall convey to the Developer all of its
merchantable title to the Property, in a lien free status, including all of the right, title and interest
of the Agency in the Property. The Escrow Holder shall be instructed to record the Agency
Grant Deed in the Official Records of San Bemardino County, California, if and when Escrow
Holder holds the various instruments and funds for the accounts of the parties as set forth herein
and can obtain for the Developer a CLTA owner's standard coverage policy of title insurance
(the "Title Policy") issued by Land America Title Insurance Company, 325 West Hospitality
Lane Suite 100, San Bemardino, California 92408, Attn: Ken Bellerose, or such other title
insurance company mutually agreed upon by the parties (the "Title Company") with liability in
an amount equal to the Purchase Price together with such endorsements to the policy as may be
reasonably requested by the Developer, insuring that the Property with fee title to the Property
vested in the Developer is free and clear of options, rights of first refusal or other purchase
rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances
and subject only to:
(1) non-delinquent real property taxes;
(2) non-monetary title exceptions approved by the Developer pursuant to
Section 2.13 below;
(3) applicable provisions of the parcel map/subdivision map for the Property
as approved by the Developer;
(4) the effect of the Redevelopment Plan for the State College Redevelopment
Proj ect Area;
(5) the effect of any conditions imposed by the City as part of the
development plan approvals for the Project as approved by the Developer;
(6) the provisions of the Agency Grant Deed;
(7) the applicable provisions of this Agreement;
(8) the rights, if any, and to the extent valid, of properties across Interstate
Highway 215, to drain stormwater run-off under said IH-215 onto the
Property; and
(9) such other title exceptions, if any, resulting from documents being
recorded or delivered through Escrow.
Section 2.06. Additional Closing Obligations of Agencv. On or before 12:00
noon on the business day preceding the Closing Date (unless indicated otherwise), the Agency
shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Developer)
copies of the following documents and other items:
4838-7503-7441.9
7
(1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed
by the Agency, in the customary form provided by the Escrow Holder, and
a California Franchise Tax Board Form 590-RE executed by the Agency;
(2) two (2) duplicate original copies of the Closing Statement described in
Section 2.21, duly executed by the Agency;
(3) evidence of the existence, organization and authority of the Agency and of
the authority of persons executing documents on behalf of the Agency
reasonably satisfactory to the Escrow Holder and Title Company; and
(4) any other documents, instruments, funds and records required to be
delivered to the Developer under the terms of this Agreement, which have
not been previously delivered.
Section 2.07. Closing Obligations of Developer. On or before 12:00 noon on
the business day preceding the Closing Date, the Developer shall deliver to the Escrow Holder
copies of the following documents and other items:
(I) an acknowledgment and acceptance of the Agency Grant Deed, duly
executed and acknowledged by the Developer;
(2) two (2) duplicate original copies of the Closing Statement, duly executed
by the Developer;
(3) evidence of the existence, organization and authority of the Developer and
of the authority of persons executing documents on behalf of the
Developer reasonably satisfactory to the Escrow Holder and the Title
Company; and
(4) any other documents, instruments or funds required to be delivered by the
Developer under the terms of this Agreement or as otherwise required by
the Escrow Holder or the Title Company in order to close Escrow, which
have not previously been delivered, including those funds and documents
as required by Section 2.02(b) hereof.
Section 2.08. Inspections and Review.
(a) Due Diligence Items. Within five (5) business days after the execution of
this Agreement, the Agency shall deliver true, correct and complete copies or originals of the
following documents and items (collectively, the "Due Diligence Items") to the Developer:
(1)
copies of all soils, seismic, geologic, drainage, engineering, enviromnental
and similar type reports and surveys (including, but not limited to, any
Property Enviromnental Site Assessments), surveys relating to the
Property if any, in the possession or control of the Agency;
4838.7503-7441.9
8
(2) notices of violations, including, but not limited to, zoning ordinances,
development or building codes affecting the Property within the Agency's
possession or control;
(3) disclosure of any legal matters affecting the use or condition of the
Property within the knowledge of the Agency; and
(4) a copy of the Redevelopment Plan for the State College Redevelopment
Project Area.
(b) Certain Definitions. For the purpose of this Agreement, the terms set forth
below shall have the following meaning:
(i) "environmental laws" means all federal, state, local, or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or
requirements of any govermnent authority regulating, relating to, or imposing
liability of standards of conduct concerning any hazardous substance (as later
defined), or pertaining to occupational health or industrial hygiene (and only to
the extent that the occupational health or industrial hygiene laws, ordinances, or
regulations relate to hazardous substances on, under, or about the Property),
occupational or environmental conditions on, under, or about the Property, as now
or may at any later time be in effect, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation
and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean
Water Act, also known as the Federal Water Pollution Control Act ("FWPCA")
[33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15
USC Section 2601 et seq.]; the Hazardous Materials Transportation Act
("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide,
Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section
7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the
Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining
Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency
Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the
Occupational Safety and Health Act [29 USC Section 655 and 657]; the
California Underground Storage of Hazardous Substances Act [H & S C Section
25280 et seq.]; the California Hazardous Substances Account Act [H & S C
Section 25300 et seq.]; the California Safe Drinking Water and Toxic
Enforcement Act [H & S C Section 25249.5 et seq.] the Porter-Cologne Water
Quality Act [Water Code Section 13000 et seq.] together with any amendments of
or regulations promulgated under the statutes cited above and any other federal,
state, or local law, statute, ordinance, or regulation now in effect or later enacted
that pertains to occupational health or industrial hygiene, and only to the extent
the occupational health or industrial hygiene laws, ordinances, or regulations
relate to hazardous substances on, under, or about the Property, or the regulation
4838-7503-7441.9
9
or protection of the environment, including ambient air, soil, soil vapor,
groundwater, surface water, or land use.
(ii) "hazardous substances" includes without limitation:
those substances included within the definitions of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," or
"pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any
other environmental law; and
those substances listed in the United States Department of Transportation
(DOT) Table [49 CFR 172.101], or by the EPA, or any successor agency, as
hazardous substances [40 CFR Part 302]; and
other substances, materials, and wastes that are or become regulated or
classified as hazardous or toxic under federal, state, or local laws or regulations;
and any material, waste, or substance that is:
(I) a petroleum or refined petroleum product,
(2) asbestos,
(3) polychlorinated biphenyl,
(4) designated as a hazardous substance pursuant to 33 USC Section
1321 orlisted pursuant to 33 USC Section 1317,
(5) a flammable explosive, or
(6) a radioactive material.
Section 2.09. Due Diligence Investigation of the Property Bv the Developer.
(a) Within one hundred twenty (120) calendar days from and after the
Opening of Escrow, and subject to the extensions of time set forth below in Section 2.15, the
Developer shall have the right to examine, inspect and investigate the Property (the "Due
Diligence Period") to determine whether the condition of the Property is acceptable to the
Developer and to obtain such development project approvals from the City for the improvement
of the Project Site as the Developer may require in its sole and absolute discretion.
(b) During the Due Diligence Period, the Agency shall permit the Developer,
its engineers, analysts, contractors and agents to conduct such physical inspections and testing of
the Property as the Buyer deems prudent with respect to the physical condition of the Property,
including the inspection or investigation of soil and subsurface soil geotechnical condition,
drainage, seismic and other geological and topographical matters, and surveys regarding the
potential presence of any hazardous substances, if any.
4838-7503-7441.9
10
(c) Any such investigation work on the Property may be conducted by the
Developer and/or its agents during any normal business hours upon twenty-four (24) hours prior
written notice to the Agency, which notice will include a description of any investigation work or
tests to be conducted by the Developer on the Property. Upon the Agency's request, the
Developer will provide the Agency with copies of any test results.
(d) During the Due Diligence Period, the Developer shall also have the right
to investigate all matters relating to the zoning, use and compliance with other applicable laws,
which relate to the use, development and improvement of the Property. The Developer may
submit an application to the City and any other regulatory agency with jurisdiction for any and
all necessary development project approvals for the improvement of the Project Site. The
Agency hereby consents to the submission of such development project approval applications by
the Developer.
(e) The Agency shall cooperate fully to assist the Developer in completing
such inspections and investigations of the condition of the Property. The Agency shall have the
right, but not the obligation, to accompany the Developer during such investigations and/or
inspections. The Developer shall pay for all costs and expenses associated with the conduct of
all such Due Diligence investigation including the cost of submitting any development project
approval application as relates to the Project to any regulatory jurisdiction.
Section 2.10. Due Diligence Approval Certificate. Within one hundred twenty
(120) calendar days following the Opening of Escrow, the Developer shall complete its
investigation of the Property (subject to the extensions of time set forth in Section 2.15) and
deliver a due diligence approval certificate signed by the Developer (the "Due Diligence
Approval Certificate") to the Escrow Holder which either:
(i) indicates that the Developer accepts the condition of the Property; or
(ii) contains a description of the matters or exceptions relating to the condition
of the Property, which the Developer was not able to accept or resolve to
its satisfaction during the Due Diligence Period.
Section 2.11. Books and Records. As part of the Developer's investigations
during the Due Diligence Period, the Developer shall be afforded full opportunity by the Agency
to examine all books and records, which relate to the Property and are in the possession of the
Agency and/or the Agency's agents or employees, including the reasonable right to make copies
of such books and records. During the Due Diligence Period, the Agency will make sufficient
staff available to assist the Developer with obtaining access to information relating to the
Property, which is in the possession or control of the Agency.
c~
Section 2.12. Condition of the PropertY-Developer's Release. The Developer
acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect
and investigate every aspect of the Property during the Due Diligence Period. The Developer
shall accept the delivery of possession to the Property on the Close of Escrow in an "AS IS,"
"WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and
4838-7503-7441.9
11
represents to the Agency that by a date no later than the end of the Due Diligence Period, the
Developer shall have conducted and completed (or waived the completion) of all of its
independent investigation of the condition of the Property which the Developer may believe to
be indicated. The Developer hereby acknowledges that it shall rely solely upon its own
investigation of the Property and its own review of such information and documentation, as it
deems appropriate for the purpose of accepting the condition and possession of the Property.
The Developer is not relying on any statement or representation by the Agency relating to the
condition of the Property unless such statement or representation is specifically contained in this
Agreement. Without limiting the foregoing, and except as expressly set forth in Section
2.24( a)(1I), the Agency makes no representations or warranties as to whether the Property
presently complies with environmental laws or whether the Property contains any hazardous
substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that
the Agency has provided the Developer with information relating to the condition of the
Property, including information and reports prepared by or on behalf of the City of San
Bernardino, the Agency makes no representation or warranty with respect to the accuracy,
completeness or methodology or content of such reports or information.
Without limiting the above, except to the extent covered by an express
representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of
itself and its successors and assigns, waives and releases the Agency and its successors and
assigns from any and all costs or expenses whatsoever (including, without limitation, attorneys'
fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, arising
from or relating to the physical condition of the Property, the condition of the soils, the
suitability of the soils for the improvement of the Property as proposed, or any law or regulation
applicable thereto, including the presence or alleged presence of harmful or hazardous
substances in, under or about the Property including, without limitation, any claims under or on
account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii)
any other environmental laws.
The Developer expressly waives any rights or benefits available to it with respect
to the foregoing release under any provision of applicable law which generally provides that a
general release does not extend to claims which the creditor does not know of suspect to exist in
his or her favor at the time the release is agreed to, which, if known to such creditor, would
materially affect a settlement. By execution of this Agreement, the Developer acknowledges that
it fully understands the foregoing, and with this understanding, nonetheless elects to and does
assume all risk for claims known or unknown, described in this Section 2.12 without limiting the
generality of the foregoing:
4838-7503-7441.9
12
The undersigned acknowledges that it has been advised by legal counsel and is
familiar with the provisions of Cali fomi a Civil Code Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM, MUST HAVE
MA TERIALL Y AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
The undersigned, being aware of this Code Section, hereby expressly waives any
rights it may have thereunder, as well as under any other statutes or common law principles of
similar effect.
Initials OfDeVelOper:~
Initials of Agency: ~ith respect to the Exchange Tract)
The provisions of this Section 2.12 shall survive the Close of Escrow.
Section 2.13. Review and Approval of Condition of Title bv the Developer.
(a) Within fifteen (15) calendar days following the Opening of Escrow, the
Agency shall cause to be delivered to the Developer a preliminary title report or title
commitment for a CLTA standard coverage policy of title insurance issued by the Title
Company, describing the state of title of the Property, together with copies of all exceptions
specified therein and with all easements plotted, but excluding matters disclosed on a survey (the
"Preliminary Title Report"). The Developer shall notify the Agency in writing of any objections
the Developer may have to the title exceptions contained in the Preliminary Title Report
("Developer's Title Objection Notice") prior to the expiration of the Due Diligence Period. The
Agency shall have a period of five (5) business days after receipt of the Developer's Title
Objection Notice in which to deliver written notice to the Developer ("Agency's Title Notice")
of the Agency's election to either (i) agree to remove the objectionable items prior to the Close
of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the
Agency shall be required to remove all monetary liens and encumbrances created by or as a
result of the Agency's activities. If the Agency notifies the Developer of its election to terminate
Escrow rather than remove the objectionable items, the Developer shall have the right, by written
notice delivered to the Agency within five (5) business days after the Developer's receipt of the
Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in
which event the Agency's election to terminate the Escrow shall be of no effect, and the
Developer shall take title at the Close of Escrow subject to such objectionable title items.
(b) The Agency covenants not to further encumber and not to place any
further liens or encumbrances on the Property, including, but not limited to, covenants,
conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies,
4838-7503-7441.9
13
or other possessory interests without the prior written consent of the Developer which consent
may be withheld by the Developer at the sole discretion of the Developer. Upon the issuance of
any amendment or supplement to the Preliminary Title Report which adds additional exceptions
(including, but not limited to, adding additional exceptions for matters shown on the Survey as
hereinafter defined), the foregoing right of review and approval shall also apply to said
amendment or supplement (provided that the period for the Developer to review such
amendment or supplement shall be the later of the expiration of the Due Diligence Period or ten
(10) calendar days from receipt of the amendment or supplement) and Escrow shall be deemed
extended by the amount of time necessary to allow such review and approval in the time and
manner set forth above.
Section 2.14. Survev. The Developer may at its sole cost and separate expense
obtain a survey of the Property prepared by a land surveyor duly licensed by the State of
California and in compliance with ALTAI ASCM standards ("Survey"). The Survey shall be in a
form acceptable to the Title Company for the deletion of the standard survey exception in the
Title Policy relating to boundaries, without the addition of further exceptions unless the same are
acceptable to the Developer in its sole and absolute discretion. The Developer shall have until
the end of the Due Diligence Period to complete and examine the Survey and to notify Agency in
writing of any objections the Developer has to the Survey ("Developer's Survey Objection
Notice"). The Agency shall have a period of five (5) business days after receipt of the
Developer's Survey Objection Notice in which to deliver written notice to the Developer
("Agency's Survey Notice") of the Agency's election to either (i) agree to remove the
objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the
Agency notifies the Developer of its intention to not remove the objectionable items, the
Developer shall have the right, by written notice delivered to the Agency within five (5) business
days after the Developer's receipt of Agency's Survey Notice, to agree to accept the Property
subject to the objectionable items, in which event, the Agency's election to terminate the Escrow
shall be of no effect, and the Developer shall accept the Property at the Close of Escrow subject
to such objectionable items. Prior to the Closing, the Survey shall be recertified to the Developer
and the Title Company. The Survey will be performed at the Developer's sole cost and expense.
Section 2.15. Extension of Due Diligence Period.
(a) In the event Agency fails to provide to the Developer the documents and
other information required by Sections 2.08 and 2.13 by the date or the dates set forth therein, the
Due Diligence Period for such information shall be extended by one (1) calendar day for each
day of the delay by the Agency to permit the Developer to perform an adequate due diligence
review (but not to exceed a total of one hundred twenty (120) calendar days). The Developer
will use its best efforts to notify Agency of any documents the Agency has failed to deliver to the
Developer within the time periods provided in Sections 2.08 and 2.13.
(b) In the event that the Executive Director makes a finding that the
Developer has undertaken substantial work to complete the due diligence investigation with
respect to the Property, the Executive Director shall, upon the written request of the Developer,
authorize an extension of the Due Diligence Period for up to an additional sixty (60) calendar
days.
4838-7503-7441.9
14
Section 2.16. Develooer's Conditions Precedent to Close Escrow. The
Developer's obligation to complete the purchase of the Property and Close the Escrow shall be
conditioned upon the fulfillment of the following conditions precedent, all of which shall be
satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow:
(1) The Agency shall not have defaulted on any material term of this
Agreement to be performed by the Agency hereunder, and each
representation and warranty made by the Agency in this Agreement shall
remain true and correct. For purposes of this subsection (1) only, a
representation that is limited to the Agency's knowledge or notice shall be
false if the factual matter that is subject to the representation is false,
notwithstanding any lack of knowledge or notice to the Agency;
(2) the Developer's approval of the Preliminary Title Report and the Survey,
if applicable, within the time periods specified in Sections 2.13 and 2.14;
(3) the Developer's approval of the contents of all Due Diligence Items, and
the other investigations of the Property made by the Developer and/or its
designees pursuant to Sections 2.08 and 2.09 herein on or before the
expiration of the Due Diligence Period, or such later date if the Due
Diligence Period is extended pursuant to Section 2.15. The Developer
shall be deemed to have disapproved such Due Diligence Items unless
they are approved on or before 5 :00 p.m. on the day of the Due Diligence
Period, or such later date if the Due Diligence Period is extended pursuant
to Section 2.15 herein;
(4) the Developer has submitted to the Agency a written certification duly
executed by an authorized officer of the Developer stating that the
Developer has either (i) obtained independent sources of third-party
financing or (ii) intends to apply equity funds of the Developer for the
commencement of the development of the Project promptly after the Close
of Escrow (subject to obtaining applicable City approvals), and that such
financing or other equity funds will be in a principal amount and upon
such terms and conditions sufficient to complete the construction of the
Project as described in this Agreement;
(5) the Developer's approval of any notice of change in representation or
warranty given by the Agency pursuant to Section 2.24(a) hereof; and
(6) the Title Company has committed to issue the policy of title insurance, in
favor of the Developer in the form described in Section 2.05.
Section 2.17. The Agency's Conditions Precedent to Close Escrow. The
Agency's obligation to convey the Property to the Developer shall be conditioned upon the
fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in
writing pursuant to Section 2.19) prior to the Close of Escrow:
4838-1503-1441.9
15
(1) the Developer has accepted the condition of the Property and submitted its
Due Diligence Approval Certification to the Escrow Holder on or before
the date set forth in this Agreement;
(2) the Developer has accepted the condition of title of the Property on or
before the date set forth in Section 2.13;
(3) the Developer shall not be in default of any material term of this
Agreement to be performed by the Developer hereunder and each
representation and warranty of the Developer made in this Agreement
shall remain true and correct;
(4) the Developer shall be satisfied (or waive satisfaction) of each of the
conditions precedent set forth in Section 2.16 and the Escrow is in a
condition to close within one hundred and eighty (180) calendar days
following the Opening of Escrow (subject to Section 2.15, if applicable);
and
(5) the Developer shall have executed the documents and made the deposit of
funds as required by Section 2.02(b) hereof in such form as to allow for
the recordation of the Deed of Trust.
Section 2.18. Distribution of Documents and Purchase Price after Closing Date
bv Escrow Holder. The Escrow Holder shall deliver to the Developer within the three (3)
business days following the Closing Date a conformed copy of the Agency Grant Deed, as
recorded and the policy of title insurance issued by the Title Company in favor of the Developer.
The Escrow Holder shall deliver to the Agency within the same period a conformed copy of the
Developer Grant Deed.
Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the
foregoing conditions requires action by the Developer or by the Agency, each party shall use its
diligent efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction
of any of the foregoing conditions requires the approval of a party, such approval shall be in such
party's sole and absolute discretion.
Either party may waive any of the conditions set forth in this Agreement, but any
such waiver shall be effective only if contained in a writing signed by the applicable party and
delivered to the Escrow Holder.
Section 2.20. [RESERVED -- NO TEXT]
Section 2.21. Prorations. Closing Costs. Possession.
(a) Real property taxes for the Property and the Exchange Tract shall be
prorated by the parties to the Closing Date on the basis of a three hundred sixty-five (365) day
year on the basis that the Agency is responsible for (i) all such taxes (if any) for the fiscal year of
the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and
4838-7503-7441.9
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(ii) that portion of such taxes for the Current Tax Period to 11 :59 p.m. on the Closing Date,
whether or not the same shall be payable prior to the Closing Date. The phrase "Current Tax
Period" refers to the fiscal year of the applicable taxing authority in which the Closing occurs.
All tax prorations shall be based upon the latest available tax statement. If the tax statements for
the fiscal tax year during which Escrow closes do not become available until after the Closing
Date, then the rates and assessed values of the previous year, with known changes, shall be used,
and the parties shall re-prorate said taxes outside of Escrow following the Closing Date when
such tax statements become available. The Agency shall be responsible for and shall payor
reimburse the Developer upon demand for any real property taxes on the Property payable
following the Closing Date applicable to any period of time prior to the Closing Date as a result
of any change in the tax assessment by reason of reassessment, changes in use of the Property,
changes in ownership, errors by the Assessor or otherwise. The Developer shall be responsible
for and shall payor reimburse the Agency upon demand for any real property taxes on the
Exchange Tract payable following the Closing Date applicable to any period of time prior to the
Closing Date as a result of any change in the tax assessment by reason of reassessment, changes
in use of the Exchange Tract, changes in ownership, errors by the Assessor or otherwise.
(b) The Developer shall be entitled to exclusive possession of the Property
immediately upon the Close of Escrow. The Agency shall be entitled to exclusive possession of
the Exchange Tract immediately upon the Close of Escrow, subject to the Use Provisions.
(c) The Agency shall pay the cost of the premium for a CLTA owner's
standard coverage policy of title insurance on the Property in the amount of the Purchase Price,
together with all title charges (including endorsements reasonably requested by the Developer to
remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections
2.13 and 2.14 above). The Agency shall pay one-half (\6) of the customary and reasonable
escrow fees, which may be charged by the Escrow Holder in connection with the close of
Escrow. The Developer shall pay the cost of the premium for a CLTA owner's standard
coverage policy of title insurance on the Exchange Tract in the amount of the Exchange Tract
FMV, together with all title charges (including endorsements reasonably requested by the
Agency to remove disapproved items shown on the preliminary title report or survey applicable
to the Exchange Tract pursuant to Sections 2.02(b)(iii) and (iv), 2.13 and 2.14 above).
The Developer shall pay the additional cost of the Survey and requested CLTA
survey policy endorsements (to the extent such endorsements are unrelated to removal of any
disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13
and 2.14 above) the additional premium for an AL T A extended coverage policy (if elected by the
Developer) which exceeds the premium for a CLTA owner's standard coverage policy of title
insurance on the Property, plus the cost of recording the Agency Grant Deed. The Agency shall
be responsible for any such additional costs related to the title policy or survey for the Exchange
Tract. The Developer shall pay any documentary or other transfer taxes payable on account of
the conveyance of the Property to the Developer. The Agency shall pay any documentary or
other transfer taxes due on account of the conveyance of the Exchange Tract to the Agency.
Any other Escrow-related transaction expenses or escrow closing costs incurred
by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the
parties to this Agreement in the manner customary in San Bemardino County, California.
4838-7503-7441.9
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No later than three (3) business days prior to the Closing Date, the Escrow Holder
shall prepare for approval by the Developer and the Agency a closing statement ("Closing
Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow
Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all
liens secured by the Property and prorations made pursuant to this Agreement. The Developer
and the Agency shall assist the Escrow Holder in determining the amount of all prorations.
Section 2.22. Breach of Article II by the Agency: Specific Performance
Remedy of Developer. In the event that the Agency commits a material breach of its obligations
under this Article II prior to the Close of Escrow and fails to transfer the Property to the
Developer as agreed herein, the Developer shall have the right to file an appropriate court action
in the Superior Court, County of San Bernardino, State of California for specific performance to
require the Agency to transfer the Property as agreed herein. The Developer shall not seek any
other damages or remedies against the Agency for any such failure to transfer the Property.
Section 2.23. Breach by the Developer of Article II: Liauidated Damages
Payable by the Developer to the Agency. IN THE EVENT THAT THE DEVELOPER
COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE
II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY
WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND
EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY,
IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES
WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE DEVELOPER, HAVE
AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE
SUM OF $10,000 AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE
AGENCY IN THE EVENT OF SUCH DEFAULT BY THE DEVELOPER AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE
AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR
SUCH DEFAULT BY THE DEVELOPER. WITHOUT LIMITING THE FOREGOING
PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL
RIGHTS WHICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL
CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE
AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE THAT EACH OF
THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND
EACH AGREES TO BE BOUND BY ITS TERMS.
'";ti~ewI0"" ~,y
Section 2.24. Reoresentations and Warranties.
(a) Warranties and Reoresentations by the Agency. The Agency hereby
makes the following representations, covenants and warranties and acknowledges that the
execution of this Agreement by the Developer has been made and the acquisition by the
Developer of the Property will have been made in material reliance by the Developer on such
covenants, representations and warranties:
(I) Warranties True. Each and every undertaking and obligation of the
Agency under this Agreement shall be performed by the Agency timely
4838-7503-744\.9 18
4838-7503-7441.9
(4)
(5)
(6)
when due; and that all representations and warranties of the Agency under
this Agreement and its exhibits shall be true in all material respects at the
Closing as though they were made at the time of Closing.
(2)
Due Organization. The Agency is a community redevelopment agency,
duly formed and operating under the laws of California. The Agency has
the legal power, right and authority to enter into this Agreement and to
execute the instruments and documents referenced herein, and to
consummate the transactions contemplated hereby.
(3)
ReQuisite Action. The Agency has taken all requisite action and obtained
all requisite consents in connection with entering into this Agreement and
the instruments and documents referenced herein and the consummation
of the transactions contemplated hereby, and no consent of any other party
is required.
Enforceabilitv of Agreement. The persons executing any instruments for
or on behalf of the Agency have been authorized to act on behalf of the
Agency and that this Agreement is valid and enforceable against the
Agency in accordance with its terms and each instrument to be executed
by the Agency pursuant hereto or in connection therewith will, when
executed, be valid and enforceable against the Agency in accordance with
its terms. No approval, consent, order or authorization of, or designation
or declaration of any other person, is required in connection with the valid
execution and delivery of and compliance with this Agreement by the
Agency.
Title. Prior to the Closing, the Agency will be the owner of (and the
Developer will acquire hereunder) the entire right, title and interest in the
Property to effectively vest in the Developer good and marketable fee
simple title to the Property, that the Developer will acquire the Property
free and clear of all liens, encumbrances, claims, rights, demands,
easements, leases or other possessory interests, agreements, covenants,
conditions, and restrictions of any kind or character (including, without
limiting the generality of the foregoing, liens or claims for taxes,
mortgages, conditional sales contracts, or other title retention agreement,
deeds of trust, security agreements and pledges and mechanics liens)
except: (i) the matters described in Section 2.05, and (ii) the exceptions to
title approved by the Developer pursuant to Section 2.13.
No Litigation. There are no pending or, to the best of the Agency's
knowledge, threatened claims, actions, allegations or lawsuits of any kind,
whether for personal injury, property damage, property taxes or otherwise,
that could materially and adversely affect the value or use of the Property
or prohibit the sale thereof, nor to the best of the Agency's knowledge, is
there any governmental investigation of any type or nature pending or
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threatened against or relating to the Property or the transactions
contemplated hereby.
(7) Operation and Condition Pending Closing. Between the date of this
Agreement and the Close of Escrow, the Agency will continue to manage,
operate and maintain the Property in the same manner as existed prior to
the execution of this Agreement.
(8) Contracts. There are no contracts or agreements to which the Agency is a
party relating to the operation, maintenance, development, improvement
or ownership of the Property, which will survive the Close of Escrow
except as may be set forth in the Agency Grant Deed.
(9) Develooment of Proiect. Although the Agency makes no representation or
warranty that the Property is suitable for the development or operation of
the Project, the Agency has no present knowledge of any condition of the
Property which would prevent its development in accordance with the
Scope of Development.
(10) Soecial Studies Zone. The Property has been identified in the Initial Study
(the "IS") and the applicable Environmental Impact Report ("EIR") as
undertaken by the Agency in accordance with CEQA for the approval of
this Agreement to be in the immediate vicinity of the presumed location of
the Glen Helen Fault and within approximately one-half mile of the San
Jacinto Fault. However, except as identified in the IS or the EIR, the
Property is not located within a designated earthquake fault zone pursuant
to California Public Resources Code Section 2621.9 and is not located in a
designated area that is particularly susceptible to ground shaking,
liquefaction, landslides or other ground failure during an earthquake
pursuant to California Public Resources Code Section 2694; provided,
however, the Property is in fact located within a City defined liquefaction
. zone together with most other properties as generally located in other
areas of the City. The IS and the EIR as identified above impose certain
mitigation requirements upon any development of the Property which
shall further be the obligation of the Developer to undertake as set forth in
Section 3.0I(aa).
(11) The Agencv's Knowledge. For purposes of this Section 2.24, the terms
"to the best of the Agency's knowledge" or "to the Agency's knowledge"
shall mean the actual knowledge of Executive Director of the Agency.
If the Agency becomes aware of any act or circumstance which would change or
render incorrect, in whole or in part, any representation or warranty made by the Agency under
this Agreement, whether as of the date given or any time thereafter through the Closing Date and
whether or not such representation or warranty was based upon the Agency's knowledge and/or
belief as of a certain date, the Agency will give immediate written notice of such changed fact or
4838-7503-7441.9
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circumstance to the Developer, but such notice shall not release the Agency of its liabilities or
obligations with respect thereto.
All representations and warranties contained in this Section 2.24(a) are true and
correct on the date hereof and on the Closing Date and the Agency's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow.
(b) Warranties and Representations bv the Developer. The Developer hereby
makes the following representations, covenants and warranties and acknowledges that the
execution of this Agreement by the Agency has been made in material reliance by the Agency on
such covenants, representations and warranties:
(I)
(2)
(3)
(5)
(6)
4838-7503-7441.9
Each entity comprising the Developer is a du1y organized and validly
existing California limited partnership. The Developer has the legal right,
power and authority to enter into this Agreement and the instruments and
documents referenced herein and to consummate the transactions
contemplated hereby. The persons executing this Agreement and the
instruments referenced herein on behalf of the Developer hereby represent
and warrant that such persons have the power, right and authority to bind
the Developer.
The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the
instruments and documents referenced herein and the consummation of
the transactions contemplated hereby, and no consent of any other party is
required.
This Agreement is, and all agreements, instruments and documents to be
executed by the Developer pursuant to this Agreement shall be, duly
executed by and are or shall be valid and legally binding upon the
Developer and enforceable in accordance with their respective terms.
Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a
defau1t under any other agreement, document, instrument or other
obligation to which the Developer is a party or by which the Developer
may be bound, or under law, statute, ordinance, rule, governmental
regulation or any writ, injunction, order or decree of any court or
government!!1 body applicable to the Developer or to the Property.
Title. Prior to the Closing, the Developer will be the owner of (and the
Agency will acquire hereunder) the entire right, title and interest in the
Exchange Tract to effectively vest in the Agency good and marketable fee
simple title to the Exchange Tract, that the Agency will acquire the
Exchange Tract free and clear of all liens, encumbrances, claims, rights,
demands, easements, leases or other possessory interests, agreements,
21
covenants, conditions, and restrictions of any kind or character (including,
without limiting the generality of the foregoing, liens or claims for taxes,
mortgages, conditional sales contracts, or other title retention agreement,
deeds of trust, security agreements and pledges and mechanics liens)
except: (i) the matters described in Section 2.05, and (ii) the exceptions to
title approved by the Agency pursuant to Section 2.13.
(7) No Litigation. There are no pending or, to the best of the Developer's
knowledge, threatened claims, actions, allegations or lawsuits of any kind,
whether for personal injury, property damage, property taxes or otherwise,
that could materially and adversely affect the value or use of the Exchange
Tract or prohibit the sale thereof, nor to the best of the Developer's
knowledge, is there any governmental investigation of any type or nature
pending or threatened against or relating to the Exchange Tract or the
transactions contemplated hereby.
(8) Ooeration and Condition Pending Closing. Between the date of this
Agreement and the Close of Escrow, the Developer will continue to
manage, operate and maintain the Exchange Tract in the same manner as
existed prior to the execution of this Agreement.
(9) . Contracts. There are no contracts or agreements to which the Developer is
a party relating to the operation, maintenance, development, improvement
or ownership of the Exchange Tract, which. will survive the Close of
Escrow except as may be set forth in the Developer Grant Deed.
All representations and warranties contained in this Section 2.24(b) are true and
correct on the date hereof and on the Closing Date and the Developer's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Closing.
Section 2.25. Damage. Destruction and Condemnation. Prior to the Agency's
delivery of possession of the Property to the Developer at the Close of Escrow, the risk ofloss or
damage to the Property shall remain upon the Agency. If the Property suffers damages as a
result of any casualty prior to the Close of Escrow, which may materially diminish its value, then
the Agency shall give written notice thereof to the Developer promptly after the occurrence of
the casualty. The Developer can elect to either: (i) accept the Property in its damaged condition
or (ii) the Developer may terminate this Agreement and recover the Deposit as set forth in
Section 2.02. The Developer shall confirm the exercise of its election under subparagraph (i) or
(ii) of the preceding sentence within thirty (30) calendar days after its receipt of notice from the
Agency.
In the event that, prior to the Close of Escrow, any governmental entity shall
commence any actions of eminent domain or similar type proceedings to take any portion of the
Property, the Agency shall give prompt written notice thereof to the Developer, and the
Developer shall have the option either: (i) to elect not to acquire the Property, terminate this
Agreement and recover the Deposit as set forth in Section 2.02; or (ii) the Developer may
4838-7503-7441.9
22
complete the acquisition of the Property under this Agreement, in which case the Developer shall
be entitled to all the proceeds of such taking; provided, however, that the Agency agrees that it
shall not settle or compromise the proceedings before the Close of Escrow without the
Developer's prior written consent, which consent will not be unreasonably withheld or delayed.
The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the
preceding sentence within thirty (30) calendar days after its receipt of notice from the Agency.
The same rights as provided above for the benefit of the Developer shall apply to the
Agency with respect to the Exchange Tract.
ARTICLE III
DEVELOPMENT OF THE PROJECT
Section 3.01. Development of the Proiect bv Developer.
(a) Scope of Development. It is the intent of the parties that promptly
following the Close of the Escrow the Developer shall commence developing the Project, subject
to obtaining applicable City approvals, consisting of the general elements described in the
attached Exhibit "F" (the "Scope of Development"), and use commercially reasonable efforts to
complete the Project as diligently and as reasonably possible thereafter.
(b) The City's zoning ordinance and the City's building requirements will be
applicable to the use and development of the Project. ,The Developer acknowledges that any
change in the plans for development for the Project as set forth in the Scope of Development
shall be subject to the City's zoning ordinance and building requirements. No action by the
Agency or the City with reference to this Agreement or related documents shall be deemed to
constitute a waiver of any City requirements which are applicable to the Project or to the
Developer, any successor in interest of the Developer or any successor in interest pertaining to
the Project, except by modification or variance approved by the City consistent with this
Agreement.
(c) The Scope of Development set forth in Exhibit "F" is hereby approved by
the Agency upon its execution of this Agreement with the Developer having the discretion to
modify the building layouts and footprints and infrastructure locations with appropriate City
approvals. The Project shall be developed and completed substantially in conformance with the
approved Scope of Development and any and all other plans, specifications and similar
development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and between the Developer and the Agency. The Agency
agrees' to approve preliminary and construction plans and preliminary and landscaping plans, if
reasonably consistent with the approved Scope of Development for the Phase I only.
(d) The approval of the Scope of Development by the Agency hereunder shall
not be binding upon the City Councilor the Planning Commission of the City with respect to any
approvals of the Project required by such other bodies. If any revisions of the Scope of
Development as approved by the Agency shall be required by another government official,
agency, department or bureau having jurisdiction over the development of the Project, the
Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or to
obtain approvals of any such revisions which have been made by the Developer and have
4838.7503.744L9
23
thereafter been approved by the Agency. The Agency shall not unreasonably withhold or delay
approval of such revisions.
(e) Notwithstanding any provision to the contrary in this Agreement, the
Developer agrees to accept and comply fully with any and all reasonable conditions of approval
applicable to all permits and other governmental actions affecting the development of the Project
and consistent with this Agreement.
(f) The Developer shall cause landscaping plans in connection with
development of the Project to be prepared by a licensed landscape architect. The Developer shall
prepare and submit to the City for its approval, preliminary and final landscaping plans for the
Project, which are consistent with City Building Code requirements. These plans for the Project
shall be prepared, submitted and approved diligently to accomplish the Developer's commitment
in Section 3.01(a) above.
(g) The Developer shall prepare and submit development plans, construction
drawings and related documents for the development of the Project consistent with the Scope of
Development to the City. The development plans, construction drawings and related documents
shall be in the form of drawings, plans and specifications. Drawings, plans and specifications are
hereby defined as those, which contain sufficient detail necessary to obtain a building permit
from the City.
(h) During the preparation of all drawings and plans in connection with the
development of the Project, the Developer shall provide to the Agency regular progress reports
to advise the Agency of the status of the preparation by the Developer, and the submission of
construction plans and related documents for review by the City. The Developer shall
communicate and consult with the Agency as frequently as is necessary to ensure that any such
plans and related documents submitted by the Developer to the City are being processed in a
timely fashion.
(i) The Agency shall have the right of reasonable architectural review and
approval of building exteriors and design of the structures to be constructed for the Phase I, such
approval not to be unreasonably withheld or delayed. The Agency shall also have the right to
review all plans, drawings and related documents pertinent to the development of the Phase I in
order to ensure that they are consistent with this Agreement and with the Scope of Development,
such approval not to be unreasonably withheld or delayed.
(j) The Developer shall timely submit to the City for its review and approval
any and all plans, drawings and related documents pertinent to the development of the Project as
required by the City. The Agency shall cooperate with and shall assist the Developer in order for
the Developer to obtain the approval of any and all development plans, construction drawings
and related documents submitted by the Developer to the City consistent with this Agreement
within thirty (30) calendar days following the City's receipt of said plans. Any failure by the
City to approve any of such plans or to issue necessary permits for the development of the
Project within said thirty (30) calendar day period shall constitute an enforced delay hereunder,
and the Developer's performance commitment under Section 3.01(a) .shall be extended by that
period of time beyond said thirty (30) calendar day period in which the City approves said plans;
4838-7503-7441.9
24
provided, however, that in the event that the City disapproves of any of such plans, the
Developer shall within thirty (30) calendar days after receipt of such disapproval revise and
resubmit such plans in a manner that addresses the City's requirements and thereafter negotiate
in good faith to obtain the City's approval thereof.
(k) The Agency shall in good faith use its best efforts to cause the City to
approve in a timely fashion, any and all plans, drawings and documents submitted by the
Developer, which are consistent with the Scope of Development.
(I) The Agency shall approve any modified or revised plans, drawings and
related documents for the Phase I as promptly as reasonably possible as long as such plans,
drawings and related documents are generally consistent with the Scope of Development and any
other plans, which have been approved by the Agency. Upon any disapproval of plans, drawings
or related documents, the Agency shall state in writing the reasons for such disapproval. The
Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved
portions of the plans, drawings or related documents in a manner that addresses the reasons for
disapproval and reasonably meets the requirements of the Agency in order to obtain the
Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and
related documents to the Agency as soon as possible after its receipt of the notice of disapproval
and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or
disapprove such revised plans, drawings and related documents in the same manner and within
the same times as provided in this Section for approval or disapproval of plans, drawings and
related documents initially submitted to the Agency.
(m) If the Developer desires to make any change in the construction drawings,
plans and specifications and related documents for the Phase I after their approval by the Agency
and/or the City, or for the remaining Project (after their approval by the City), the Developer
shall submit the proposed change in writing to the Agency and/or the City for approval, as
appropriate. The Agency shall notify the Developer of approval or disapproval thereof in writing
within thirty (30) calendar days after submission to the Agency. This thirty (30) calendar day
period may be extended by mutual consent of the Developer and the Agency. Any such change
shall, in any event, be deemed to be approved by the Agency unless rejected, in whole or in part,
by written notice thereof submitted by the Agency to the Developer, setting forth in detail the
reasons therefor, and such rejection shall be made within said thirty (30) calendar day period
unless extended as permitted herein. The Agency shall use its best efforts to cause the City to
review and approve or disapprove any such change as provided in Section 3.01(k) hereof.
(n) The Developer, upon receipt of a notice of disapproval by the Agency
and/or the City, may revise such portions of the proposed change in construction drawings, plans
and specifications and related documents as are rejected and shall thereafter resubmit such
revisions to the Agency and/or the City for approval in the manner provided in Section 3.01(1)
hereof.
(0) The Developer shall have the right during the course of construction of the
Project to make changes in construction of structures and ''minor field changes" without seeking
the approval of the Agency; provided, however, that such changes do not affect the type of use to
4838-7503-7441.9
25
be conducted within all or any portion of a structure. Said "minor field changes" shall be defined
as those changes from the approved construction drawings, plans and specifications which have
no substantial effect on the improvements and are made in order to expedite the work of
construction in response to field conditions. Nothing contained in this Section shall be deemed
to constitute a waiver of or change in the City's Building Code requirements governing such
"minor field changes" or in any and all approvals by the City otherwise required for such "minor
field changes".
(P) The cost of constructing privately owned components of the Project, in
addition to all off-site public improvements, shall be borne by the Developer which, if any, are
required by the City as a condition of approval for the Project (subject to Section 3.09 below).
The Developer shall comply with all applicable State laws relative to the payment of prevailing
wages with respect to those components of the Project which are public improvements or other
public infrastructure intended to be dedicated to a governmental agency, including the off-site
public improvements, and the Developer shall provide written verification of such compliance to
the Agency upon written request from the Agency to the Developer.
(q) The Developer shall at its expense cause to be prepared, and shall pay any
and all fees pertaining to the review and approval of the development project approvals by the
City, including the cost and preparation of all required construction, planning and other
documents reasonably required by governmental bodies pertinent to the development of the
Project hereunder including, but not limited to, specifications, drawings, plans, maps, permit
applications, land use applications, zoning applications and design review documents.
(r) The Developer shall pay for any and all costs, including but not limited to
the costs of design, construction, relocation, and securing of permits for utility improvements and
connections, which may be required in developing the Project. The Developer shall obtain any
and all necessary approvals prior to the commencement of applicable portions of said
construction, and the Developer shall take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
(s) The Developer shall commence the work of improvements of the Project
within sixty (60) calendar days following the issuance of building permits for the Phase I of the
Project and thereafter shall diligently prosecute such construction to completion. The Developer
shall use commercially reasonable efforts to substantially complete the improvements of the
Project as promptly as reasonably possible following the commencement of the work of
improvements. Any and all performance commitments hereunder shall be extended for any
times attributable to delays, which are not the fault of the performing party and are caused by the
other party, other than periods for review and approval or reasonable disapprovals of plans,
drawings and related documents, specifications or applications for permits as provided in this
Agreement.
(t) During the period of construction of the Project, the Developer shall
submit to the Agency written progress reports when and as reasonably requested by the Agency
but in no event more frequently than every four (4) weeks. The reports shall be in such form and
detail as may reasonably be required by the Agency, and shall include a reasonable number of
4838.7503.7441.9
26
construction photographs taken since the last such report submitted by the Developer. In
addition, the Developer will attend Agency meetings when requested to do so by Agency Staff.
(u) Prior to the commencement of any construction on the Project, the
Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or
appropriate certificates of public indemnity and liability insurance in the amount of One Million
Dollars ($1,000,000.00) combined single limit, naming the Agency and the City as additional
insureds. Said insurance shall cover comprehensive general liability including, but not limited
to, contractual liability; acts of subcontractors; premises-operations; explosion, collapse and
underground hazards, if applicable; broad form property damage, and personal injury including
libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate
proof of comprehensive automobile liability insurance covering owned, non-owned and hired
vehicles, combined single limit in the amount of One Million Dollars ($1,000,000.00) each
occurrence; and proof of workers' compensation insurance. Any and all insurance policies
required hereunder shall be obtained from insurance companies admitted in the State of
California and rated at least B+: XlI in Best's Insurance Guide. All said insurance policies shall
provide that they may not be canceled unless the Agency and the City receive written notice of
cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and
all insurance obtained by the Developer hereunder shall be primary to any and all insurance
which the Agency and/or City may otherwise carry, including self insurance, which for all
purposes of this Agreement shall be separate and apart from the requirements of this Agreement.
Any insurance policies governing the Property as obtained by the Agency shall not be transferred
from the Agency to the Developer. Appropriate insurance means those insurance policies
approved by the Agency Counsel consistent with the foregoing. Any and all insurance required
hereunder shall be maintained and kept in force until the Agency has issued the Certificate of
Completion in connection with the development of the Project.
(v) The Developer for itself and its successors and assigns agrees that in the
construction of the Project, the Developer will not discriminate against any employee or
applicant for employment because of sex, marital status, race, color, religion, creed, national
origin, or ancestry. Notwithstanding the foregoing, the Developer will use commercially
reasonable efforts to offer employment opportunities to local residents and will seek to acquire
goods and services from local vendors.
(w) The Developer shall carry out its construction of the Project in conformity
with all applicable laws, including all applicable state labor standards and requirements.
(x) The Developer shall, at its own expense, secure or shall cause to be
secured, any and all permits, which may be required for such construction, development or work
by the City or any other governmental agency having jurisdiction thereof. The Agency shall
cooperate in good faith with the Developer in the Developer's efforts to obtain from the City or
any other appropriate governmental agency any and all such permits which are applicable to the
development of the Project.
(y) Officers, employees, agents or representatives of the Agency shall have
the right of reasonable access to the Project Site, without the payment of charges or fees, during
normal construction hours during the period of construction of the Project for the purpose of
4838-7503-7441.9
27
verifYing compliance by the Developer within the terms of this Agreement. Such officers,
employees, agents or representatives of the Agency shall be those persons who are so identified
by the Executive Director. Any and all officers, employees, agents or representatives of the
Agency who enter the Project Site pursuant hereto shall identify themselves at the job site office
upon their entrance onto the Project Site and shall at all times be accompanied by a
representative of the Developer while on the Project Site; provided, however, that the Developer
shall make a representative of the Developer available for this purpose at all times during normal
construction hours upon reasonable notice from the Agency. The Agency shall indemnify and
hold the Developer harmless from injury, property damage or liability arising out of the exercise
by the Agency of this right of access, other than injury, property damage or liability relating to
the negligence and/or the wrongful acts or omissions of the Developer or its officers, agents,
representatives or employees.
(z) The Agency shall inspect relevant portions of the construction site prior to
issuing any written statements reflecting adversely on the Developer's compliance with the terms
and conditions of this Agreement pertaining to development of the Project.
(aa) The Developer shall comply with all obligations imposed under State law
in connection with the development of the Project in accordance with the requirements of any
supervisory agency having jurisdiction over the Project. The Developer acknowledges that it is
not the responsibility of the Agency to monitor or enforce any such requirements and the
Developer agrees to hold harmless from, defend and indemnify the Agency against any liability,
cost or claim resulting from the Developer's breach of the requirements of any such supervisory
agency, as such requirements may be amended or interpreted from time to time as applicable to
the Project. Such obligations to be assumed by the Developer include, but are not limited to,
compliance with the mitigation monitoring plan approved by the Agency as part of the
environmental review and approval in connection with the approval of this Agreement by the
governing body of the Agency.
(bb) The Agency acknowledges that the Exchange Tract will be used for the
Exchange Tract Roadway Improvements. The Agency shall offer to dedicate the Exchange Tract
to the City promptly after the Close of Escrow. If the Agency, the City and the Developer agree
that the size or configuration of the Exchange Tract should be modified in order to accommodate
the improvements described in said Exhibit "G", the Developer and the Agency shall reasonably
cooperate to accomplish such modification. This provision shall survive the Close of Escrow.
(cc) The Agency shall grant the waterline easement generally described on the
attached Exhibit "J". Such easement shall be in form reasonably acceptable to the Agency, the
Developer and the City Water Department. Such easement shall be granted at such time as
needed during the progress of the Phase I construction. This provision shall survive the Closing.
Such easement shall be granted both on the Property if required to be so granted prior to the
Close of Escrow and on the Agency owned Shandin Hills Golf Course located immediately south
of the Property. The easement shall be granted to such party as may be directed by the City
Water Department and shall be subject to such approval and review rights afforded to the
operator and management company (the "Golf Course Operator") in accordance with that certain
Lease Agreement, as amended, by and between the Agency and the Golf Course Operator.
4838-7503-7441.9
28
Section 3.02. [RESERVED -- NO TEXT]
Section 3.03. Taxes and Assessments. The Developer shall pay prior to the
delinquency all real property taxes and assessments assessed and levied on or against the
Property subsequent to the Close of Escrow. The Developer shall remove, or shall have
removed, any levy or attachment made on the Property, or shall assure the satisfaction thereof.
Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity
or amounts of any tax assessment, encumbrance or lien, or to limit the remedies available to the
Developer in respect thereto.
Section 3.04. Change in Ownership Management and Control of the Developer-
- Assigmnent and Transfer.
(a) Transfer as used in this Section 3.04, the term "Transfer" means:
(1) Any total or partial sale, assignment or conveyance, or any trust or power,
or any transfer in any other mode or form, by the Developer of more than
a forty-nine percent (49%) interest (or series of such sales, assignments
and the like which in the aggregate exceed a disposition of more than a
forty-nine percent (49%) interest) with respect to its interest in this
Agreement, the Property, or any part thereof or any interest therein or of
the improvements constructed thereon, or any contract or agreement to do
any of the same; or
(2) Any total or partial sale, assignment, conveyance, or transfer in any other
mode or form, of or with respect to any ownership interest of the
Developer (or series of such sales, assignments and the like which in the
aggregate exceeded a disposition of more than a forty-nine percent (49%)
interest); or
(3) Any merger, consolidation, or sale of all or substantially all of the assets
of the Developer in this Agreement or the Property (or series of such sales,
assignments and the like which in the aggregate exceeded a disposition of
more than a 49% interest).
(b) This Agreement is entered into solely for the purpose of facilitating the
development of the Project. The Developer recognizes that the qualifications and identity of the
Developer are of particular concern to the Agency, in view of:
(I)
the importance of the development of the Project to the general welfare of
the community; and
(2)
the fact that a Transfer is for all practical purposes a transfer or disposition
of the responsibilities of the Developer, as applicable, with respect to the
redevelopment of the Project.
4838-7503-7441.9
29
The Developer further recognizes and acknowledges that it is because of the
qualifications and identity of the Developer that the Agency is entering into this Agreement with
the Developer, and, as a consequence, Transfers are permitted only as provided in this
Agreement.
(c) The limitations on a Transfer as set forth in this Section 3.04 shall apply
until such time as the Certificate of Completion for the Project is approved by the Agency and
filed for recordation as provided in Section 3.07. Except as expressly permitted in this
Agreement, the Developer represents and agrees that it has not made nor shall it create or suffer
to be made or created, any Transfer, either voluntarily or by operation of law without the prior
written approval of the Agency until such time as the Certificate of Completion for the Project
has been recorded. Any Transfer made in contravention of this Section 3.04 shall be voidable at
the election of the Agency and shall then be deemed to be a default under this Agreement.
(d) The following types of a Transfer shall be permitted and approved by the
Agency and are referred to herein as a "Permitted Transfer";
(I)
(2)
(3)
(4)
(5)
4838.7503-7441.9
Any Transfer by the Developer creating a security interest in all or part of
the Full Development Site for acquisition of the Property or any financing
for the construction and improvement of the all or part of the Full
Development Site (a "Security Financing Interest");
Any Transfer directly resulting from the foreclosure of a Security
Financing Interest created by the Developer in all or part of the Full
Development Site or the granting of a deed in lieu of foreclosure of a
Security Financing Interest;
Any Transfer of stock or equity of the Developer, which does not change
management, or operational control of the Property or the Project;
Any Transfer of any interest in the Developer, irrespective of the
percentage of ownership: (A) to members of the family (i.e. spouse,
brother, sister, nephew, niece, parent, child and/or issue of any of the
same) of H. R. Perot, Jr.; or (B) to a trust for the benefit of any such
family member; or (C) to any affiliate of or other entity controlled by the
Developer or its partners or members or any of the family of H. R. Perot,
Jr.; or (D) to any other entity in which the Developer or its partners or
members or any of the family of H. R. Perot, Jr. owns a controlling
interest; or (E) any entity in which Developer or any person or entity in
(A), (B), (C) or (D) is a partner or member with lNG, Lion Industrial Trust
or any of their affiliates;
Any Transfer of a development pad within the Full Development Site by
the Developer to a third party transferee if the transferee agrees to perform
the obligations of the Developer applicable to such development pad in
form and substance acceptable to the Agency.
30
(e) Prior to the completion of the Basin improvements, the offer of dedication
of the Basin improvements and the transfer of the Property to the City, no Permitted Transfer of
this Agreement or any interest in the Property or the Project, by the Developer (other than a
Security Financing Interest) shall be effective WIless, at the time of the Permitted Transfer, the
person or entity to which such Transfer is made, expressly assumes the obligations of the
Developer WIder this Agreement and such person or entity also agrees to be subject to the
conditions and restrictions to which the Developer is subject WIder this Agreement. Such an
assumption of obligation shall be evidenced by a written instrument delivered to the Agency in a
recordable form, which is satisfactory to the Agency.
(f) Provided the particular transaction satisfies the applicable provisions of
Section 3.04(d), the Developer is not required to give the Agency advance notice of such a
Permitted Transfer. The Agency may, in its reasonable discretion, approve in writing any other
Transfer as requested by the Developer, provided such proposed transferee can demonstrate
successful and satisfactory experience in the ownership, operation, and management of an
operation similar to the Project. Any such transferee for itself and its successors and assigns, and
for the benefit of the Agency shall expressly assume all of the obligations of the Developer to the
Agency WIder this Agreement. There shall be submitted to the Agency for review all
instruments and other legal documents proposed to effectuate any such other Transfer; and the
approval or disapproval of the Agency shall be provided to the Developer in writing within thirty
(30) calendar days after receipt by the Agency of the Owner's written request, and the Agency
approval of a Transfer and shall not be unreasonably withheld or delayed.
(g) Following the issuance of the Certificate of Completion for the applicable
portion of the Project after taking into aCCOWIt obligations WIdertaken by third party transferees,
as Permitted Transfers, the Developer shall be released by the Agency from any liability WIder
this Agreement which may arise from a default of a successor in interest to the Developer WIder
this Agreement other than a Permitted Transfer for which the applicable obligations were agreed
to be WIdertaken by such third party transferee occurring after the date of such a Transfer, except
with respect to covenants contained in the Agency Grant Deed.
Section 3.05. [RESERVED - NO TEXT]
Section 3.06. Ril!:ht of the Al!ency to Satisfy Other Liens on the Property after
Conveyance of Title. After the conveyance of title to the Property by the Agency to the
Developer and prior to the recordation of the Certificate of Completion (referred to in Section
3.07 of this Agreement), and after the Developer has had a reasonable time to challenge, cure or
satisfy any involWItary liens or encumbrances on the Property, the Agency shall after one
hWIdred twenty (120) calendar days prior written notice to the Developer have the right to satisfy
any such liens or encumbrances; provided, however, that nothing in this Agreement shall require
the Developer to payor make provisions for the payment of any tax, assessment, lien or charge
. so long as the Developer in good faith shall contest the validity or amoWIt thereof, and so long as
such delay in payment shall not subject the Property, or any portion thereof, to forfeiture or sale.
4838-7503-7441.9
31
Section 3.07. Certificate ofComoletion.
(a) Following the written request therefor by the Developer and the
completion of construction of the Basin, the offer of dedication to the City, the Phase I and such
buildings constructed after the Phase I (comprising the remaining Project thereof) on the Full
Development Site (as evidenced by a Certificate of Occupancy issued by the City), excluding
any normal and minor building "punch-list" items to be completed by the Developer, the Agency
shall furnish the Developer with a Certificate of Completion for the Phase I and each other
building in the Project substantially in the form set forth in Exhibit "H" attached hereto (the
"Certificate of Completion").
(b) The Agency shall not unreasonably withhold the issuance of a Certificate
of Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive
determination of satisfactory completion of all of the Developer's obligations under this
Agreement. After the recordation of the Certificate of Completion, any party then owning or
thereafter purchasing, leasing or otherwise acquiring any interest in the Property shall not
(because of such ownership, purchase, lease or acquisition) incur any obligation or liability under
this Agreement, except that such party shall be bound by any covenants contained in the grant
deed or other instrument of transfer which grant deed or other instrument of transfer shall include
the provisions of Section 4.01 through 4.04, inclusive, of this Agreement.
(c) Any Certificate of Completion shall be in such form as to permit it to be
recorded in the Recorder's Office of the County where the Property is located.
(d) If the Agency refuses or fails to furnish a Certificate of Completion after
written request from the Developer, the Agency shall, within fifteen (15) calendar days after the
written request or within three (3) business days after the next regular meeting of the Agency,
whichever date occurs later, provide to the Developer a written statement setting forth the
reasons with respect to the Agency's refusal or failure to furnish a Certificate of Completion.
The statement shall also contain the Agency's opinion of the action the Developer must take to
obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate
unavailability of specific items or materials for construction or landscaping at a price reasonably
acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its
Certificate of Completion upon the posting of a bond or irrevocable letter of credit, reasonably
approved as to form and substance by the Agency Counsel and obtained by the Developer in an
amount representing a fair value of the work not yet completed as reasonably determined by the
Agency. If the Agency shall have failed to provide such written statement within the foregoing
period, the Developer shall be deemed conclusively and without further action of the Agency to
have satisfied the requirements of this Agreement with respect to that portion of the Project on
the Full Development for which the request by the Developer has been made for a Certificate of
Completion (and shall be considered as if a Certificate of Completion had been issued therefore).
(e) A Certificate of Completion shall not constitute evidence of compliance
with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any
insurer of a mortgage securing money loaned to finance the improvements described herein, or
any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of
4838-7503-7441.9
32
completion as referred to in Section 3093 of the California Civil Code, nor shall it act to
terminate the continuing covenants or conditions subsequent contained in the Agency Grant
Deed attached hereto as Exhibit "E". The issuance of a Certificate of Completion by the Agency
pursuant to this Section 3.07 shall not in any manner terminate any of the other obligations or
responsibilities of the Agency which are not specifically stated to terminate as of the date of
issuance of a Certificate of Completion but are intended to remain in full force and effect
pursuant to this Agreement, including, but not limited to, those as set forth in Section 3.08
below.
Section 3.08. Property Tax Assessed Valuation. The development of the Project
within the State College Redevelopment Project Area by the Developer is of special interest and
concern to the Agency. The development of the Project and the Full Development Site in
accordance with this Agreement shall generate a special source of property tax increment
revenues payable to the Agency in accordance with Health and Safety Code Section 33760 to
fund certain redevelopment activities of the Agency and the affordable housing development
programs of the Agency which benefit persons and families oflow and moderate income.
The Developer hereby covenants and agrees that in the event that the Full
Development Site, or any portion thereof, shall be conveyed or transferred or sold by the
Developer, its successors or assigns, to any entity or party, that is partially or wholly exempt
from the payment of ad valorem property taxes pertinent to the Full Development Site, or any
portion thereof (except for a dedication to the City as referenced in Section 4.02 below), .until the
maturity of the Promissory Note (hereinafter defined), the buyer, its heirs or assigns shall agree
in writing (in form and substance reasonably acceptable to the Agency to) pay the Agency a fee
in lieu of payment of such taxes each year in an amount which is determined by the Agency to be
one percent (1.0%) of the full cash value of such Full Development Site, or any portion thereof
conveyed to such buyer (except for a dedication to the City as referenced in Section 4.02 below)
as may be subject to such exemption from payments of ad valorem property taxes. Such
. determination of "full cash value" for such in-lieu payment purposes under this Section 3.08
shall be established by the Agency each year, if necessary, by reference to the ad valorem
property tax valuation principles and practices as generally applicable to a county property tax
assessor under Section 2 of Article XIIIA of the California Constitution together with annual
inflationary factor increases as applied by the Office ofthe County Assessor in each tax year. In
the event that the Agency may hereafter determine that an amount is payable by an owner of all
or any portion of the Full Development Site to the Agency as an in-lieu payment under this
Section 3.08 of the Agreement in any tax year, then such amount shall be paid to the Agency for
that tax year within ninety (90) calendar days following transmittal of notice of invoice for
payment of the in-lieu amount by the Agency to such owner.
Section 3.09. Interchange Improvements: Pledge of Tax Increment Revenues.
(a) The Developer is required pursuant to the EIR as certified by the Agency
at the time of the approval of this Agreement to mitigate certain traffic impacts that will be
incurred upon the full development of the Full Development Site. The Developer hereby agrees
to contribute Three Million Dollars ($3,000,000) to the Agency within thirty (30) calendar days
after written request is received from the Agency seeking such funds for the purpose of funding a
4838.7503.7441.9
33
portion of the costs of improving the interchange of University Parkway and the 1-215 Freeway,
including, without limitation, a flyover on-ramp from the westbound University Parkway to the
southbound 1-215 Freeway (the "Interchange Improvements"). The Agency agrees that it shall
provide the notice to the Developer referred to in the preceding sentence only after the Agency
has received written notification from either the City or the State of California, Department of
Transportation ("Caltrans"), to the effect that such contribution from the Developer is then
required for the undertaking of the Interchange Improvements whether by Caltrans or the City.
The Agency recognizes that based upon the Traffic Impact Analysis (the "TIA") conducted as a
part of the studies included within the EIR, the "fair share" contribution of the Developer for the
Interchange Improvements is equal to One Million Six Hundred Thousand Dollars ($1,600,000)
(the "Developer Fair Share Contribution"); however, the City no longer adheres to the "fair
share" concept and has elected to adopt the DlF (as defined in subsection (b) below) as an
alternative method to determine the traffic related costs to be borne by each development project
within the City. Attached hereto as Exhibit "K" is a letter from the City Engineer confirming the
"fair share" analysis and acknowledging that no additional traffic impact fees will be required for
the development of the Full Development Site except for the construction obligation for certain
off-site street improvements to be located on University Parkway as further specified in said
letter.
(b) The payment of the $3,000,000 amount by the Developer as provided in
subsection (a) above shall be full payment of all amounts due to the City in lieu of the City's
Traffic Nexus Fee pursuant to the City Ordinance approving the Development Impact Fees (the
"DIF") with respect to the development of the Full Development Site. The payment of the
$3,000,000 amount shall not relieve the Developer from implementing the standard City required
adjacent traffic impacts and other similar off-site roadway improvements resulting from the
development of the Full Development Site. As further set forth in the letter from the City
Engineer attached hereto as Exhibit "K", the construction or completion of the Interchange
Improvements shall not be a condition to the granting of any City permits or approvals for the
development of improvements on the Full Development Site.
(c) Those amounts described on the attached Exhibit "L" (the
"Reimbursement Amount") shall be eligible for reimbursement by the Agency to the Developer
from the tax increment revenues generated from the Full Development Site and the development
of the improvements on the Full Development Site during the term of the Redevelopment Plan
plus ten (10) years for which Tax Increment Revenues (as defined in subsection (d) below) may
be received by the Agency within the State College Redevelopment Project Area and in
accordance with the applicable Redevelopment Plan. The parties recognize that said
Redevelopment Plan terminates on April 27, 2011, and the parties further agree that the last date
under this Agreement on which tax increment payments may be remitted by the Agency to the
Developer is April 27, 2021. Any portion of the Reimbursement Amount, and interest thereon if
applicable, shall on or after April 28, 2021, be deemed to be no longer outstanding and payable
by the Agency to the Developer and such remaining principal and interest amounts shall be
forgiven and extinguished for all purposes and the Promissory Note (as hereinafter defined) shall
be considered paid in full as of April 28, 2021, for any amounts remaining unpaid thereunder.
4838-7503-7441.9
34
(d) The Agency hereby pledges to the Developer certain tax increment
revenues of the Agency, with such pledge to be effective on and after the date of the Promissory
Note, attributable to the Redevelopment Plan that are legally available to the Agency in each
fiscal year during the term of such pledge equal to one-half of the Tax Increment Revenues (as
defined below). The dollar amount of one-half of the Tax Increment Revenues to be remitted by
the Agency to the Developer in each fiscal year shall be calculated on the basis of: (A) one
percent (1 %) of general property taxes paid by the Developer for the Full Development Site after
the date of the Certificate of Completion for the Project (exclusive of any override taxes, special
taxes, ad valorem taxes for general obligation bonded indebtedness or other special assessments),
that are actually paid by the Developer and/or the Developer's successor-in-interest to the
ownership of all or any portion of the Full Development Site attributable to the development to
occur on all or any portion of the Full Development Site, less (B) any pass-through amounts that
are required by law to be remitted to affected taxing agencies and County collection charges,
presently estimated at 0.5% for cash flow projection purposes only (the "Pass-through
Payments"), and subordinate to any existing and future tax allocation bonded indebtedness
payable in whole or in part from the tax increment revenues pursuant to the Redevelopment Plan
and the State College Redevelopment Project Area, and deducting therefrom for each fiscal year
of the calculation the amount of the tax increment revenues that were attributable to the Full
Development Site for the fiscal year in which the Developer acquired the fee title to the Full
Development Site (the "Base Year Deductions") less (C) the required deposit to the Agency's
Low and Moderate Income Housing Fund (the "Home Fund Deposit") which is presently twenty
percent (20%) of the gross tax increment revenues (collectively, the "Tax Increment Revenues").
One-half of the Tax Increment Revenues for a fiscal year shall be distributed by the Agency to
the Developer pursuant to the Promissory Note with the other one-half of the Tax Increment
Revenues to be retained by the Agency for any of the purposes as may be permitted pursuant to
the Redevelopment Plan. Within thirty (30) calendar days after the Agency has issued the
Certificate of Completion for the Project pursuant to Section 3.07 hereof, the Agency shall
execute and deliver to the Developer the Agency Tax Increment Revenues Promissory Note (the
"Promissory Note") in the form as attached hereto as Exhibit "I" which provides for certain
additional late payment fees and other remedies that are available to the Developer in the event
of any default by the Agency to remit the timely payments pursuant to such Promissory Note.
The Promissory Note shall bear interest at the rate per annum of five percent (5%) upon the
unpaid principal and interest balance then due and payable thereunder and shall provide for the
payment of the allocable portion of the Tax Increment Revenues to be remitted by the Agency to
the Developer with respect to the property tax payment remitted by the owner or owners of the
Full Development Site to the County as of the initial December 10 or April 10 next succeeding
the date of the Promissory Note. All payments of the Tax Increment Revenues under the
Promissory Note shall first be applied for the payment of (i) any late charges and interest
thereon, (ii) the accrued and unpaid interest upon the principal balance of the Promissory Note,
and (iii) the principal balance of the Promissory Note. The Promissory Note shall be prepared in
final form and executed within thirty (30) calendar days after the Certificate of Completion of
the Project has been issued by the Agency in accordance with Section 3.07 of this Agreement for
the Project. The form of the Promissory Note shall include the exact dollar amount representing
the Reimbursement Amount for those items subject to modification as provided in the attached
Exhibit "L" or items that shall be approved by the City Engineer and accepted by the City
Engineer as public improvements constructed as part of the Project subject to modifications as
4838-7503-7441.9
35
provided in said Exhibit "L". The Developer shall provide the Agency back-up information
including invoices and cancelled checks to demonstrate that the payments for the items listed in
Exhibit "L" have been paid by (or on the behalf of) the Developer and written verification from
the City that each of the items intended to be included within the Reimbursement Amount has
been offered for dedication to the City by the Developer and such items have been duly accepted
by the City as public infrastructure improvements. As of the date of execution of the final form
of the Promissory Note, the Reimbursement Amount and thus the initial principal balance of the
Promissory Note shall be that dollar amount determined in the manner as set forth herein.
Interest shall accrue on the Reimbursement Amount as of the date of the execution and delivery
to the Developer of the Promissory Note. Under no circumstances shall the principal amount of
the Promissory Note be in excess of $3,630,000 at any time and shall be determined in the
manner as provided in Exhibit "L".
(e) The obligation of the Agency to remit payments of the Tax Increment
Revenues in accordance with Section 3.09(d), above, shall commence as of the fiscal year and
the December 10 or April 10 property tax installment next succeeding the date of the Promissory
Note and shall continue thereafter until the earlier of (i) the payment in full of the
Reimbursement Amount pursuant to the terms of the Promissory Note, or (ii) April 27, 2021.
Prior to the date of the issuance of the Certificate of Completion for the Project and the execution
and delivery of the Promissory Note, the Agency shall be entitled to retain all amounts of the Tax
Increment Revenues generated upon the Full Development Site for uses by the Agency in
accordance with the Redevelopment Plan with no obligation to hold, refrain from expending or
remit such amounts pursuant to this Agreement. In the event that any amounts remain due and
payable under the Promissory Note during the 2020-21 fiscal year, it shall be the sole
responsibility and obligation of the Developer to assure that payments are remitted by the
Developer to the County of San Bernardino Tax Collector adequately in advance of the
termination date of the Redevelopment Plan to allow for submittal of all necessary
documentation to the Agency and the processing by the Agency of any final remittance of the
Tax Increment Revenues to be made by the Agency on or before April 27, 2021. Such payments
of the Tax Increment Revenues shall be remitted by the Agency to the Developer within thirty
(30) calendar days after the Developer has provided written documentation reasonably
acceptable to the Agency evidencing that the applicable property taxes on the Full Development
Site as of each December 10 and/or April 10 (or any other delinquency date established by the
County for the payment of supplemental property taxes) have been duly paid in full (i.e. taxing
authority acknowledgments of the taxes having been paid showing the amount of the taxes paid
and the amount of the one percent (1 %) general property tax). The Agency shall within thirty
(30) calendar days after receipt of the documentation required by this Section, remit the
appropriate payment of the Tax Increment Revenues to the Developer due and owing by the
Agency to the Developer in accordance with Section 3.09(d), above, based upon the method of
calculation provided for in Section 3.09(d), above. Any failure of the Agency to dispute in
writing the adequacy of the documentation as submitted by the Developer within the applicable
30-day period of time, shall constitute approval of same by the Agency. The Agency shall be
obligated to provide written notice to the Developer within said 30-day period of time as to any
inadequacy of any documentation provided by the Developer to the Agency. Failure of the
Agency to remit the requested payment of the Tax Increment Revenues in accordance with
Section 3.09(d), above, within ten (10) calendar days after the expiration of the initial thirty-day
4838.7503-7441.9
36
period for review of the documentation as submitted by the Developer, unless notice has been
provided by the Agency to the Developer in the manner as provided above, shall subject the
Agency to a three percent (3%) late charge on the amount owed and interest at the rate of five
percent (5%) per annum calculated on the number of days from the due date of the applicable
payment until such amount has been paid to the Developer.
(f) The parties recognize that the Agency will be contributing to the City an
amount not to exceed an additional $3,000,000 (the "Additional Agency Contribution") for the
completion of the Interchange Improvements by the City. In the event that the City attempts to
impose any traffic mitigation fee upon the Full Development Site or to increase the "fair share"
contribution of the Full Development Site for the Interchange Improvements or in any other
manner attempts to subject the Full Development Site to the DIF or any other traffic impact
mitigation requirements or costs (the "Additional City Exactions"), the Agency agrees to provide
a written statement to the City to the effect that the Additional Agency Contribution shall be
deemed to be used in whole or in part, as necessary, to off-set or be deemed to be applied as a
payment of any of the Additional City Exactions. Nothing contained herein shall prevent the
Agency from applying all or any portion of the Additional Agency Contribution that is not
required for the payment or credit towards any Additional City Exactions to be used in a similar
manner for the payment or credit of DIF or other traffic fees for anyone or more other
development projects within the area encompassed by the Redevelopment Plan. The extent of
the Agency obligation to the Developer pursuant to this subsection (f) shall not exceed
$3,000,000 for any of the Additional City Exactions, and the Developer shall be required to pay
to the City any amounts which are in excess of such dollar figure.
(g) It shall be a condition precedent to each payment of the Tax Increment
Revenues hereunder that as of each such Tax Increment Revenues payment due date there has
been no Transfer, assignment, or sale or other conveyance of the Full Development Site or any
interest in this Agreement which is prohibited by this Agreement. In the event that the
Developer should either (i) Transfer any interest in the Agreement in violation of the Agreement
at any time prior to the issuance of the Certificate of Completion for the Project, or (ii) sell all or
any portion of the Full Development Site to a tax exempt entity without such buyer agreeing to
make the "in-lieu" payments referenced in Section 3.08 of the Agreement during the tel111 of this
Promissory Note, the obligation of the Agency for any further remittances of the Tax Increment
Revenues under this Promissory Note shall immediately cease and terminate as to that portion of
the Full Development Site to which such prohibited Transfer has occurred or such other sale or
conveyance pursuant to item (ii) above has occurred.
(h) The right to receive the. Reimbursement Amount as provided in this
Section 3.09 is personal to the Developer and shall remain the right and property of the
Developer, not passing to any future owner of all or any portion of the Full Development Site.
Notwithstanding, the Developer at any time may assign or pledge such right to receive the
Reimbursement Amount.
(i) This Section 3.09 shall survive the tennination of this Agreement provided
that the Close of Escrow has occurred and the payment pursuant to subsection (b) above has been
remitted by the Developer to the Agency in the manner as specified therein.
4838.7503-7441.9
37
ARTICLE IV
USE OF THE PROJECT AND THE EXCHANGE TRACT
Section 4.01. Uses of the Full DeveloDment Site.
(a) The Developer covenants and agrees for itself, its successors, and assigns
that the portion of the Property that is to be improved as a Basin to accommodate, transmit,
retain or detain storm water shall be used solely for such purposes.
The covenant of this Section 4.01(a) shall run with the land as set forth in the
Agency Grant Deed.
(b) The Developer further covenants and agrees for itself, its successors and
assigns that the Project shall be improved and developed in accordance with the Scope of
Development. The Developer covenants to develop the Project in conformity with all applicable
laws. The covenants of this Section 4.0 I (b) shall be effective until the earlier date on which the
Certificate of Completion is recorded or the fifth (5th) anniversary date of recordation of the
Agency Grant Deed.
(c) It is understood and agreed by the Developer that, except as referenced in
Section 4.02 below, neither the Developer, nor its assigns or successors shall use or otherwise
sell, transfer, convey, assign, lease, leaseback or hypothecate the Project or any portion thereof to
any entity or party, or for any use of the Project, that is partially or wholly exempt from the
payment of real property taxes pertinent to the Project, or any portion thereof, or which would
cause the exemption of the payment of all or any portion of such real property taxes, unless such
grantee agrees to pay the in lieu payments as provided in Section 3.08. The covenant of this
Section 4.01(c) shall run with the land for the term as set forth in the Agency Grant Deed.
Section 4.02. Maintenance of the ProDertv. The Developer covenants and agrees
for itself, its successors, and assigns to maintain the Property consistent with the maintenance
level of similar storm drain areas in the City or as shall be otherwise reasonably required by the
City. The Developer, upon completion of the Basin improvements on the Property and the
applicable portion of the Full Development Site and the construction of the public backbone
stormwater collector system on the Full Development Site, shall offer to dedicate to the City that
portion of the Property and the applicable portion of the Full Development Site on which such
Basin improvements have been constructed, together with such public backbone storm water
collector system, as generally shown on Exhibit "M". In the event that such offer of dedication
is accepted by the City, the Developer shall have no further obligations under this Section 4.02
for the maintenance and ownership thereof. The Developer acknowledges that the City will
require, as a condition to the acceptance of (i) such storm drain area and facilities and (ii) the
Exchange Tract as a public right-of-way for the roadway realignment of the University Parkway
grade separation crossing, that such areas shall be made subject to a landscape maintenance
assessment district for which an assessment lien shall be levied against the Full Development
Site, and the annual payments required for such landscape maintenance assessment district shall
be the obligation of the Developer as the landowner or any successor in interest to the Developer
as the owner of the Project or any portions thereof as provided in resolution creating such
district. It is contemplated that the district will be established as a "default" district with the City
4838-7503-7441.9
38
and the landowner entering into an agreement providing for the City to exercise the landscape
maintenance rights of the district only upon the default of the land owner to maintain in
accordance with the requirements of such agreement.
Section 4.03. Obligation to Refrain from Discrimination. The Developer
covenants and agrees for itself, its successors, its assigns and every successor in interest to the
Property or any part thereof, that there shall be no discrimination against or segregation of any
person, or group of persons, on account of sex, marital status, race, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property; nor shall the Developer, itself or any person claiming under or
through it, establish or pennit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessee or vendees of the Property. The covenant of this Section 4.03 shall run
with the land for the tenn as set forth in the Agency Grant Deed with respect to the Property.
Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The
Developer covenants and agrees that the Developer shall refrain from restricting the sale, lease,
sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part
thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin
of any person. The Agency Grant Deed shall contain provisions that all deeds, leases or
contracts pertaining to the Property shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
(I)
(2)
4838-7503-7441.9
In deeds: "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of, any person or group
of persons on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises herein conveyed, nor
shall the grantee or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessee, or vendees in the premises herein conveyed.
The foregoing covenants shall run with the land".
In leases: "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease
is made and accepted upon and subject to the following conditions: That
there shall be no discrimination against or segregation of any person or
group of persons, on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment of the premises herein leased nor
shall the lessee itself, or any person claiming under or through it, establish
or pennit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use, or occupancy, of
tenants lessees, sublessee, subtenants, or vendees in the premises herein
leased".
39
(3) In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion,
sex, marital status, national origin, or ancestry, in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed or leased, nor shall the transferee or any person claiming under
or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or
vendees of the premises herein transferred."
ARTICLE V
DEFAULTS. REMEDIES AND TERMINATION
Section 5.01. Defaults - General.
(a) In the event that a breach or default may occur prior to the Close of
Escrow, the remedies ofthe parties shall be as set forth in Article II of this Agreement.
(b) If the Developer fails to complete the Project in accordance with this
Agreement, the sole and exclusive remedy of the Agency shall be to not issue the Promissory
Note, in which event the Developer shall have no right to receive any portion of the Tax
Increment Revenues, all of which shall be retained by the Agency free and clear of any claim of
the Developer or its successors or assigns.
(c) From and after the Close of Escrow and subject to the extensions of time
set forth in Section 6.05 hereof, except as provided in Section 5.01(b) above, failure or delay by
either party to perform any term or provision of this Agreement shall constitute a default under
this Agreement; provided, however, that if a party otherwise in default commences to cure,
correct or remedy such default within thirty (30) calendar days after receipt of written notice
specifying such default and shall diligently and continuously prosecute such cure, correction or
remedy to completion (and where any time limits for the completion of such cure, correction or
remedy are specifically set forth in this Agreement, then within said time limits), such party shall
not be deemed to be in default hereunder.
(d) The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Delay in giving such notice
shall not constitute a waiver of any default nor shall it change the time of default.
(e) Any failure or delays by either party in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by either party in asserting any of its rights and remedies shall not deprive
either party of its right to institute and maintain any actions or proceedings, which it may deem
necessary to protect, assert or enforce any such rights or remedies.
4838-7503-7441.9
40
Section 5.02. Legal Actions.
(a) In addition to any other rights or remedies, except as provided in Section
5.0I(b) above, either party may institute legal action to cure, correct, or remedy any default, to
recover damages for any default, or to obtain any other remedy consistent with the purposes of
this Agreement. Such legal actions must be instituted in the Superior Court of the County of San
Bernardino, State of California, in any other appropriate court in that County, or in the Federal
District Court in the Central District of California.
(b) The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
(c) In the event that any legal action is commenced by the Developer against
the Agency, service of process on the Agency shall be made by personal service upon the
Executive Director or Chair of the Agency, or in such other manner as may be provided by law.
(d) In the event that any legal action is commenced by the Agency against the
Developer, service of process on the Developer shall be made by personal service on John
Magness at the address set forth in Section 6.01 below, as an authorized corporate officer of the
Developer (or such other Agent for service of process and at such address as may be specified in
written notice to the Agency), or in such other manner as may be provided by law, and shall be
valid whether made within or without the State of California.
Section 5.03. Rights and Remedies are Cumulative. Except with respect to any
rights and remedies expressly declared to be exclusive in or otherwise restricted by the
provisions of Article II of this Agreement as relates to a default or breach occurring before the
Close of Escrow, the rights and remedies of the parties as set forth in this Article V following the
Close of Escrow are cumulative and the exercise by either party of one or more of such rights or
remedies shall not preclude the exercise by it, at the same or different times, of any other rights
or remedies for the same default or any other default by the other party.
Section 5.04. Damages. If either party defaults with regard to any provision of
this Agreement, the nondefaulting party shall serve written notice of such default upon the
defaulting party. If the defaulting party does not diligently commence to cure such default after
service of the notice of default and promptly complete the cure of such default within a
reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may
otherwise be specified in this Agreement for default), after the service of written notice of such a
default the applicable party shall be deemed to be in default under this Agreement. In the event
that a default relates to a matter arising after the Close of Escrow, except as provided in Section
5.01(b) above, the defaulting party shall be liable to the other party for damages caused by such
default. In the event that a default relates to a matter arising before the Close of Escrow, the
remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of
this Agreement.
Section 5.05. Specific Performance Prior to Close of Escrow. Except as
otherwise provided in Section 2.22 hereof, prior to the Close of Escrow neither party shall have
4838-7503-7441.9
41
or assert the equitable remedy of specific perfonnance in the event of a default or breach, and the
remedies of the parties with respect to such a breach or default prior to the Close of Escrow shall
be limited to the tennination rights and liquidated damage amounts or as set forth in Article II of
this Agreement. Prior and after the Close of Escrow if either party defaults under any of the
provisions of this Agreement, the nondefaulting party shall serve written notice of such default
upon such defaulting party. If the defaulting party does not commence to cure the default and
diligently and continuously proceed with such cure within thirty (30) calendar days after service
of the notice of default, and such default is not cured within a reasonable time thereafter (and
where any time limits for the completion of such cure, correction or remedy are specifically set
forth in this Agreement, then within said time limits), the nondefaulting party, at its option, may
institute an action for specific perfonnance of the tenns of this Agreement, except as otherwise
provided in Section 5.01(b) and Section 5.04 hereof.
Section 5.06. Agencv Rights ofTennination Following Close of Escrow.
(a) Subject to written notice of default which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days
notice to the Developer of the Agency's intent to tenninate this Agreement pursuant to this
Section, the Agency at its option may tenninate the provisions of this Agreement that survive the
Close of Escrow if the Developer in breach of this Agreement assigns or attempts to assign this
Agreement, or any right therein, or attempts to make any total or partial sale, transfer or
conveyance of the whole or any part of the Project or the improvements to be developed thereon
in violation of the tenns of this Agreement, and the Developer does not correct such violation
within thirty (30) calendar days from the date of receipt of such notice.
(b) Subject to written notice of default, which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days
notice to the Developer of the Agency's intent to tenninate this Agreement pursuant to this
Section, the Agency at its option may tenninate this Agreement if the Developer: (a) does not
within the time limits set forth in this Agreement, subject to extensions authorized by this
Agreement due to force majeure or otherwise, submit development plans, construction drawings
and related documents acceptable to the Planning Department and Building Division of the City
for plan check purposes and in order to obtain building pennits for the Project, together with
applicable fees therefore, all prepared to the minimum acceptable standards as required by the
Planning Department and Building Division of the City for commencement of fonnal review of
such documents and as required by this Agreement, or (b) does not carry out its other
responsibilities under this Agreement or in accordance with any modification or variance, precise
plan, design review and other environmental or governmental approvals and such default is not
cured or the Developer does not commence and diligently and continuously proceed with such
cure within thirty (30) calendar days after the date of receipt of written demand therefore from
the Agency.
(c) Subject to written notice of default which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days
notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this
Section, the Agency at its option may terminate this Agreement if upon satisfaction of all
4838-7503-7441.9
42
conditions precedent and concurrent therefore under this Agreement, the Developer does not take
title to the Property under tender of conveyance by the Agency, and such breach is not cured
within thirty (30) calendar days after the date of receipt by the Developer of written demand
therefore from the Agency.
Section 5.07. Ril!ht to Reenter. Reoossess and Revest.
(a) The Agency shall, upon thirty (30) calendar days notice to the Developer
which notice shall specify this Section 5.07, have the right, at its option, to re-enter and take
possession of all or any portion of the Property, together with all improvements thereon, and to
terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after
conveyance of title, the Developer (or its successors in interest) shall:
(1) Fail to commence construction of all or any portion of the Phase I
improvements as required by this Agreement for a period of ninety (90)
calendar days after written notice to proceed from the Agency; provided
that the Developer shall not have obtained an extension or postponement
to which the Developer may be entitled pursuant to Section 6.05 hereof; or
(2) Abandon or substantially suspend construction of all or any portion of the
Basin improvements, for a period of ninety (90) calendar days after
written notice of such abandonment or suspension from the Agency;
provided that the Developer shall not have obtained an extension or
postponement to which the Developer may be entitled to pursuant to
Section 6.05 hereof; or
(3) Assign or attempt to assign this Agreement, or any rights herein, or
transfer, or suffer any involuntary transfer, of the Project or any part
thereof, in violation of this Agreement, and such violation shall not have
been cured within thirty (30) calendar days after the date of receipt of
written notice thereof from the Agency to the Developer.
(b) The thirty (30) calendar day written notice specified in this Section shall
specify that the Agency proposes to take action pursuant to this Section and shall specify which
of the Developer's obligations set forth in Subsections (1) through (3) herein have been
breached. The Agency shall proceed with its remedy set forth herein only in the event that the
Developer continues in default of said obligation(s) for a period of thirty (30) calendar days
following such notice or, upon commencing to cure such default, fails to diligently and
continuously prosecute said cure to satisfactory conclusion.
(c) The right of the Agency to reenter, repossess, terminate and revest shall be
subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit:
Any mortgage, deed of trust or other security interest;
(1)
(2)
Any rights or interests provided in this Agreement for the protection of the
holders of such mortgages, deeds of trust or other security interests;
4838-7503-744\.9
43
(3) Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents applicable to the
Property, the Project, the Project Site or the Full Development Site.
(d) The grant deed to the Property or to any portion thereof conveyed by the
Developer to another party (other than to the City) shall contain appropriate references and
provisions to give effect to the Agency's right, as set forth in this Section under specified
circumstances prior to the recordation of the Certificate of Completion with respect to such
portion, to reenter and take possession of such portion, or any part thereof, with all
improvements thereon, and to terminate and revest in the Agency the estate conveyed to the
Developer.
(e) Upon the revesting in the Agency of title to the Property, or any part
thereof, as provided in this Section, the Agency shall, pursuant to its responsibilities under State
law, use its best efforts to resell the Property, or any part thereof, at fair market value as soon and
in such manner as the Agency shall find feasible and consistent with the objectives of such law,
to a qualified and responsible party or parties (as determined by the Agency) who will assume
the obligations of making or completing the improvements, or such other improvements in their
stead as shall be satisfactory to the Agency and in accordance with the uses specified for the
Property, or any part thereof. Upon such resale of the Property, or any part thereof, the proceeds
thereof shall be applied:
(I)
(2)
4838-7503-7441.9
First, to make any payment made or necessary to be made to discharge or
prevent from attaching or being made any subsequent encumbrances or
liens due to obligations incurred with respect to the making or completion
of the agreed improvements or any part thereof on the Property or any
portion thereof; next to reimburse the Agency on its own behalf or on
behalf of the City for all actual costs and expenses incurred by the Agency
and the City, including but not limited to customary and reasonable fees or
salaries to third party personnel engaged in such action (but excluding the
Agency's or the City's general overhead expense), in connection with the
recapture, management and resale of the Property or any portion thereof;
all taxes, assessments and water and sewer charges paid by the City and/or
the Agency with respect to the Property or any portion thereof; any
amounts otherwise owing to the Agency by the Developer and its
successor transferee; and
Second, to the extent that any and all funds which are proceeds from such
resale are thereafter available, to reimburse the Developer, or its successor
transferee, up to the amount equal to the sum of: (I) the Purchase Price
paid by the Developer for the Property (or allocable to the applicable part
thereof); and (2) the costs incurred for the development of the Property, or
applicable part thereof, or for the construction of the improvements
thereon including, but not limited to, costs of carry, taxes and items set
44
forth in the Developer's cost statement which shall be submitted to and
approved by the Agency.
(3) Any balance remaining after the foregoing application of proceeds shall be
retained by the Agency.
(f) Notwithstanding anything herein to the contrary, all rights of the Agency
to re-enter the Property under this Section 5.07 shall terminate upon the earlier of (i) acceptance
by the City of the offer of dedication and of the Basin from the Developer and the issuance of the
Certificate of Completion for the Basin or (ii) the conveyance to the City of the storm drain
portion of the Property as provided in Section 4.02 above.
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. Notices. Demands and Communications Between the Parties.
(a) Any and all notices, demands or communications submitted by any party
to another party pursuant to or as required by this Agreement shall be proper if in writing and
dispatched by messenger for immediate personal delivery, or by registered or certified United
States mail, postage prepaid, return receipt requested, to the principal office of the Agency and
the Developer, as applicable, as designated in Section 1.03(a) and Section 1.03(b) hereof. Such
written notices, demands and communications may be sent in the same manner to such other
addresses as either party may from time to time designate as provided in this Section. Any such
notice, demand or communication shall be deemed to be received by the addressee, regardless of
whether or when any return receipt is received by the sender or the date set forth on such return
receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2)
calendar days after it is placed in the United States mail as heretofore provided.
(b) In addition to the submission of notices, demands or communications to
the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows:
to the Developer:
HSB 1-215, L.P.
SE 1-215, L.P.
c/o HillwoodlSan Bernardino, LLC
105 North Leland Norton Way, Suite 3
San Bernardino, California 92408
Attn: Michelle Kirk and John Magness
FAX: (909)382-0073
With copy to:
Hillwood Development Company, LLC
5430 LBJ Freeway, Suite 800
Dallas, Texas 75240
Attn: Michele M. Ringnald
FAX: (972) 201-2889
4838-7503-7441.9
45
the Agency:
Redevelopment Agency of the City of
San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
FAX: (909) 663-2294
with copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 Hospitality Lane, Suite 600
San Bernardino, California 92408
Attention: Timothy J. Sabo
FAX: (909) 387-1138
Section 6.02. Conflict of Interest. No member, official or employee of the
Agency having any conflict of interest, direct or indirect, related to this Agreement and the
development of the Project shall participate in any decision relating to this Agreement. The
parties represent and warrant that they do not have knowledge of any such conflict of interest.
Section 6.03. Warranty Against Payment of Consideration for Agreement. The
Developer warrants that it has not paid or given, and will not payor give, any third party any
money or other consideration for obtaining this Agreement. Third parties, for the purposes of
this Section, shall not include persons to whom fees are paid for professional services if rendered
by attorneys, financial consultants, brokers, accountants, engineers, architects and the like when
such fees are considered necessary by the Developer.
Section 6.04. Nonliability of Agency Officials and Emoloyees. No member,
official or employee of the Agency shall be personally liable to the Developer, or any successor
in interest, in the event of any default or breach by the Agency or for any amount which may
become due to the Developer or to its successor, or on any obligations under the terms of this
Agreement, except for gross negligence or willful acts of such member, officer or employee.
Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to
specific provisions of this Agreement, performance by either party hereunder shall not be
deemed to be in default, or considered to be a default, where delays or defaults are due to the
force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires,
casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight
embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor,
materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable
to the fault of the party claiming an extension of time to prepare or acts or failure to act of any
public or goyernmental agency or entity (provided that acts or failure to act of the City or
Agency shall not extend the time for the Agency to act hereunder except for delays associated
with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval
of this Agreement, and the like). An extension of time for any such force majeure cause shall be
for the period of the enforced delay and shall commence to run from the date of occurrence of
the delay; provided, however, that the party which claims the existence of the delay has first
4838-7503-7441.9
46
provided the other party with written notice of the occurrence of the delay within ten (10)
calendar days after the commencement of such occurrence of the delay.
The inability of the Developer to obtain a satisfactory commitment from a
construction lender for the development of the Project or to satisfy any other condition of this
Agreement relating to the development of the Project shall not be deemed to be a force majeure
event or otherwise provide grounds for the assertion of the existence of a delay under this
Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general
economic conditions or changes in the economic assumptions of any of them which may have
provided a basis for entering into this Agreement and which occur at any time after the execution
of this Agreement, are not force majeure events and do not provide any party with grounds for
asserting the existence of a delay in the performance of any covenant or undertaking which may
arise under this Agreement. Each party expressly assumes the risk that changes in general
economic conditions or changes in such economic assumptions relating to the terms and
covenants of this Agreement could impose an inconvenience or hardship on the continued
performance of such party under this Agreement, but that such inconvenience or hardship is not a
force majeure event and does not excuse the performance by such party of its obligations under
this Agreement.
Section 6.06. Inspection of Books and Records. The Agency shall have the right
at all reasonable times at the Agency's cost and expense to inspect the books and records of the
Developer pertaining to the Project and/or the development thereof as necessary for the Agency,
in its reasonable discretion, to enforce its rights under this Agreement; provided, however, that
the Agency shall give the Developer at least twenty-four (24) hours' prior written notice of such
exercise of the right to inspect said books and records. Matters discovered by the Agency shall
not be disclosed to third parties unless required by law or unless otherwise resulting from or
related to the pursuit of any remedies or the assertion of any rights of the Agency hereunder.
The Developer shall also have the right at all reasonable times to inspect the books and records
of the Agency pertaining to the Project and/or the development thereof as pertinent to the
purposes of this Agreement.
Section 6.07. Approvals.
(a) Approvals required of the Agency or the Developer, or any officers,
agents or employees of either the Agency or the Developer, shall not be unreasonably withheld
and approval or disapproval shall be given within a reasonable time.
(b) The Executive Director of the Agency is authorized to sign on his or her
own authority amendments to this Agreement, which are of routine or technical nature, including
minor adjustments to the Schedule of Performance.
Section 6.08. Real Estate Commissions. The Agency shall not be liable for any
other real estate commissions, brokerage fees or finder fees, which may arise from or related to
this Agreement.
4838-7503-7441.9
47
Section 6.09. Indemnification. The Developer agrees to indemnify and hold the
City and the Agency, and their officers, employees and agents, harmless from and against all
damages, judgments, costs, expenses and fees arising from or related to (i) any act or omission of
the Developer in performing its obligations hereunder, (ii) the approval and execution of this
Agreement by the Agency, and (iii) the adoption by the City of the resolution relative to the
Agency approval and execution of this Agreement. The Agency agrees to indemnify and hold
the Developer and its officers, employees and agents, harmless from and against all damages,
judgments, costs, expenses and fees arising from or related to any act or omission of the Agency
in performing its obligations hereunder.
Section 6.10. Release of Developer from Liabilitv. Notwithstanding any
provision herein to the contrary, the Developer shall be relieved of any and all liability for the
obligations of the Developer hereunder with regard to the Project when the Certificate of
Completion for the Project has been issued by the Agency hereunder with respect thereto, other
than any covenants and obligations provided by the grant deed by which the Property is
conveyed to the Developer hereunder.
Section 6.11. Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out of this Agreement, or is made a party to
any action or proceeding brought by the Escrow Agent, then as between the Developer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not
as damages, its reasonable attorneys' fees as fixed by the Court in such action or proceeding or in
a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
expenses of the City Attorney and members of his office in enforcing this Agreement shall be
considered as "attorneys' fees" for purposes of this Section.
Section 6.12. Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors, administrators, legal
representatives, successors and assigns.
Section 6.13. Business Relristration Certificate. The Developer warrants that it
possesses, or shall obtain immediately after the execution and delivery of this Agreement, and
maintain during the period of time which is the longer of (i) the term of this Agreement or (ii) the
period of time that the Note is outstanding and due and payable from the Agency to the
Developer, a business registration certificate pursuant to Title 5 of the City of San Bernardino
Municipal Code, together with any and all other licenses, permits, qualifications, insurance and
approvals of whatever nature that are legally required to be maintained by the Developer to
conduct its business activities within the City.
ARTICLE VII
ENTIRE AGREEMENT, WAIVERS AND AMENDMENT
Section 7.01. Entire Agreement.
(a) This Agreement shall be executed in three (3) duplicate originals each of
which is deemed to be an original. This Agreement includes forty-eight (49) pages (excluding
4838-7503-7441.9
48
the signature pages) and thirteen (13) Exhibits lettered "A" through "M", inclusive, which
constitute the entire understanding and Agreement of the parties.
(b) This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations or previous agreements between the
parties with respect to all or any portion of the Project and the development thereof.
(c) None of the terms, covenants, agreements or conditions set forth in this
Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and
this Agreement shall continue in full force and effect before and after such conveyance until
issuance of the Certificate of Completion for the Project.
(d) All waivers of the provisions of this Agreement and all amendments
hereto must be in writing and signed by the appropriate authorities of the Agency and the
Developer.
ARTICLE VIII
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION
Section 8.01. Execution and Recordation.
(a) In the event that the Developer has not approved, executed and delivered
this Agreement to the Agency within forty-five (45) calendar days after approval hereof by the
governing body of the Agency, then no provision of this Agreement shall be of any force or
effect for any purpose and the Agency shall have no further authorization to execute and deliver
this Agreement thereafter. The date of this Agreement shall be the date when this Agreement
shall have been approved by the Agency.
(b) The Developer and the Agency agree to permit recordation of this
Agreement or a notice of agreement in customary form, concurrently upon the Close of Escrow
in the Office of the County Recorder for the County where the Property is located.
4838-7503-7441.9
49
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the dates set forth below.
AGENCY
Date:
lo/t /2/}Q?
I !
Redevelopment Agency of the City of
8m ',""",00 ~
B~ ~"-~-
Maggie Pac~co
Executive Director
APPROVED AS TO FORM:
C~
Age:Cy un
DEVELOPER
HSB 1-215, L.P.,
a California limited partnership
By: HSB GP, LLC,
a California limited liability company,
Its general partner
By: HGI GP, LLC,
a Texas limited liability company,
its sole member
By: HGI Group, L.P.,
a Texas limited partnership,
its sole member
By: Hillwood Associates, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Company, LLC,
a Texas limited liability company,
its gen artner
By:
Name.
Title:
4838-7503-7441.9
50
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
r
County of San Bernardino
55.
On December 1, 2006, before me, Wasana Chantha, Notary Public, personally appeared
Maggie Pacheco.
I~ -.- - :~:C#~~-~
i~. NoIClfy PublIc - CallfomIa ~
j . San~~c~ ~
My Comm. ExpinN Oct 18. 201
------ ---
Place Natary Seal />bov.
o personally known to me
o proved to me on the basis of satisfactory
evidence
to be the person whose name Is subscribed to
the within Instrument and acknowledged to
me that she executed the same In her
authorized capacity, and that by her signature
on the instrum t the person, or the entity
upon behalf f which the person acted,
executed the nstr ment.
WITNESS m
Ignatur. of Notary Public
Though the Information below Is not required by law. It may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Document
Title or Type of Document: 2006 Disposition and Development Agreement by and between
the Redevelopment Agency of the City of San Bernardino and HSB 1-215 L.P. & SE 1-215 L.P.
Document Date: September 18, 2006
Slgner(s) Other Than Names Above: None.
Capacity(ies) Claimed by Signer
Signer's Name: Maggie Pacheco
o Individual
o Corporation Officer - Title(s):
o Partner - 0 Umlted 0 General
o Attorney In Fact
o Trustee
o Guardian or Conservator
o Other: Executive Director
Number of Pages: 51 with Exhibits A - M
RIGHT THUI1BPRltIT
Of SIGIIER
Top of thumb her.
Signer Is Representing: Redevelopment Agency of the
City of San Bernardino
SE 1-215, L.P.,
a California limited partnership
By: HSB GP, LLC,
a California limited liability company,
Its general partner
By: HGI GP, LLC,
a Texas limited liability company, its sole member
By: HGI Group, L.P.,
a Texas limited partnership, its sole member
By: Hillwood Associates, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Company, LLC,
a Texas limited liability company,
its general er
[All Signatures Must Be Notarized]
4838-7503-7441.9
51
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
State of California )
) SS.
County of San Bernardino )
On
November 29.2006, before me, Marissa L. Johnson. Notary Public, personally appeared
~ personally known to me
o
John M. Magness ,
J@'=='l
I\blary I'ubIc . CaIIIomIa
J___~~~~
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 hislher/their authorized capacity(ies), and
that by hislher/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the
person( s) acted, executed the instrument.
WITNESS my hand and official seal.
lp/]A~"v M. \. JiJIAA1. 'irY1
Signature of Notary Public
* * * * ** * * * * ** * * * * * * * * * * * * OPTIONAL * * * ** * * * * * * * * ** * * * ** * * * * * ** *
Though the information below is not required by law, it may prove valuable to persons relying on this document and
could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Document
Title or Type of Document: Disposition and Development Agreement
Document Date: November 29,2006
Number of Pages: Fifty-one (51) plus attached Exhibits
Signer(s) Other Than Named Above: Maggie Pacheco, Executive Director, Redevelopment of the City of San
Bernardino
Capacity(ies) Claimed by Signer
RIGHT
THUMBPRINT
OF SIGNER
Signer's Name:
o Individual
o Corporate Officer - Title(s):
o Partner --0 Limited 0 General
o Attorney-in-Fact
o Trustee
o Guardian or Conservator
o Other:
Top of thumb here
Signer is Representing:
EXHIBIT "A"
THE PROPERTY
Atl that ponlon or ~.ib.. Jlall<:bD. in the Clt). oC $;III llemanUno
OI\Aty or San uemar~11lot_ StlIte oJ: California.' as per ,~~ flHlQ~:'J '
In lJoolo: 7 of NilPS. .page ~. 'fO.llOHs 0{ sll,id. ~"'~~~- .
"'5t half of Scetu.n 20. ~ 1 NCtrth. ~''4 '~~;;-$In 'II~ .
......Wian. as tlal! 11..",,' Df the GlI,erl_ SJney _ld"1Je '",,~ 'actoSS
said -... and t:llot JlOT1;m of 1.QtO. Tnelll<>. liU. -as ""r plat
recorai 1,a'1loolI P Df MIps, Pa~ Al thtwgl. 43.iN:lu51tl!. records of
said Catatt}', lIOn! ,parUWlmy .describec:l as foU"",:
IlECL\'S[!Q> at the iAteneetion of the !IDr1hellsterly line of tho AtcIliSO<!.
1lIpeb ani ~ta Fe Railro.lllight of l\':Iy vith 'the Southca.t"rl~ U.... ,of
that C<lmoin paIC(l'l ol land ~'eYed to MUllan ZcoUt" (;QQpwl~' 1>)'
I)litclllllll Oee6 tt(:Ordecl October 29. 1l1n, as Torrens Iloc\l:llem t:o. 1141:.
in the !lff!"e of'~ Il!tgi~t4:- of titles of 511idC~ty; thence lobtth
$1"iW~~ &.t, ~l/1llg the Sou~C3$tllrlY lw of n.d, Oinl..... paKeI. a
-dtst~ of UU.GO' feet t<l 1li<> Sout!'Mst.llrly 11M of Intet'staUt KiJ:........r
lS".IIl! $IloO.non, ,"t, Hl*",",y Right of lQly NIp FUll Xli. 9140-\5. ~ '
JoloTth' 26-48'06" lest, alCllll: tile ~...steTI)' line of .aid State ,Uighur
~'of "*to a disu/lCd'oll130;4l1 teet to ~ beS1Milll of lI'~~'
Qitve; tllen::e ~Iy lallllll said'SoutMst'erlrUllC ani .along sa.id
,wrn. _.... ,...."..:o:s.tn-ly lII)i, having a rl!'llus of 6397.00 feet. through
.mcran""lO ef .-%O'llO", . 41stllnC9 of .83.81 (eet; tho_ $ouf.h
58"51"54" 'last. t.adial to p.1d .....-. 8 dlSt_ of' 70.00' r_ ~ .. point
in .. line paral,lei With ..s c11IltIItIt 70.00 feel: Soo&t~ter1y, _UrGd ..t.
rlllht 8I\C1a$. fIIlII "- IiO\IthweStcrJy line of '$li.1A St.at.lli&~ ~,-llht CI, { :
1I'lIy; them:c ~tol'ly 81011& .id IlIlrlllld U. lIiIcl 81<l\lJ:... cvt'ie, .,
concave Sou~...crl1ll1l1l ,llaviDc 8 radiull oNiJ,2MJll feet. frem'" ",
inItial una- b..r~ $ouf.h 31-.,'06" East, th:I'ou(:ha t;""tnlL.~l" of
4"1&'00", . tis~ or 478.52 Tt!et; WJlCO South Zli"U'06" East. along
saW parallel lille, a distllnCe of '30.48 Cect;' thence South 3S"n'OZ"
i(cs:t 1390.71 feet to II point in tile Sorth""stefly'tine ;)( said bllT<>lld
Rieht of Way that .....rs North 3.8..56'506" West 100.00 reet ftlll\ the poillt
ot llfC[~1l1G; $ni:e South 38'$6'$6" !ast 100.00 feet to the point of
_D.~Il\lG. CllIIteintnc: 10.01 IICnos, ...,.... or le$5.
4838-7503-7441.9
Exhibit A
EXHIBIT "B"
FULL DEVELOPMENT SITE
1. The description of the Full Development Site in its present configuration is attached
hereto as Exhibit "B-1".
2. When the parcel map is completed and filed for the property described on the attached
Exhibit "B-1", the "Full Development Site" as used in this Agreement shall mean the site
as reflected on such parcel map excluding the Exchange Tract and the Basin.
4838-7503-7441.9
Exhibit B
.
.
.~
...
c
t;
w
'"
..
III
~
4838-7503-7441.9
EXHIBIT "B". '.
DESCRIP'l1ON OF FULL DEVELOPMENT SITE
. ,~
Exhibit B
f
EXHmIT "B-1"
DESCRIPTION OF FULL DEVELOPMENT SITE
All that celtaln reel property slt1Iitted In the County of SIIn BernardIno, S13te of
Cllflfomla, deSCt1bed lIS follows:
Parnell: (APN~ M66-079..o2)
Ttult portion 01' Sadlon 19, Township 1 Norltl, Range 4 West, Sin Bernardino
Base lII1d t4erfdlen, Ranc:Ilo Muscuplabe unsurveyed, In tl1e Oty of San
Bemerdlno, County 01' San BemardIf1o, stnt 01' Callromlll, desaibed as foIJows:
BegInnIng at a point. said point being the Intersecaon of the l:a&teriy line of said
5ecdon 19 IInd Ule Easl:llr1y IIIlQ llftha right of way of the Atch~h, Topeka and
SiIInl:lI Fe RallwaV as Ct'elll:ed by Deed lxIlf1e SuuUlern Cellfomia RaIlrold
OImpllny recorded .June 2, 1891. in Book 132, P'llge .260 of Oeeds; lIlId
augmented by Deed lxIthe Atthiwn, Topeka lIl1d Santa Fe RmIway Company
recorded Augult 26, 1914. in Book SS4, Peg. 335 of Deeds, SIlIeI pDlnt also beIng
described IS tyfng Nortl1 0" 02' 30" West. 329.19 ftlllt ftum the comer ofTi'ad;
No. 2258, at the Inte!'llllCtlon 01' the C\\fOn Sl:lII2 t1lghwlly and ClIlrt'omlll Avenue
lIS shown on Map cI'"n'act No. 2258. recan:led In Book 3,2, Pages 72 and 77 of
Maps, InclusMl, reClOl"ds of IIlkI County;
Thence alon\! Ule Ea&l:erty line of5ll1d 5ed:Ion 19, North ()lI 02' 30" West, :t603.16
feIIt 1xI a point;
'l'he1lCl!l West 1295.63 feet to 8 point;
Thence South 336.68 teet to e point;
Thence Soudll" 20' 30" E:lIlII:, 653.10 I'ill!!tt more or less, lxI II point on the
cast:f!rly line of lf1e rJVht of way or said AIldtlIOll, TopelQ! and SlIntll Fe RanwilY;
TbenCle lllonllthe Easterly lIne of alilid right of way South 3S" 33' 30" EIIst,
2056.110 feet more or less, to the point of beginning.
ExceptIng tI1erefrom:
All oil, glI$ and other minerals of ~ry bend and d'laracter In, on or under the
above deect1bad lands wItI10ut tIul rlght of eurfaCl! entry or u_, ~ conVlly'ed tD
NorteK Mlnenl No.2, L P.. . ,... Um/t8cI Peltnlll1lhlp in Mineral DeeQ I'eI:Xltded
Ocmber 19. 2004 88 ln8lnlment No. 2004-0159938 ofotndal Record,.
P8rce1 2: {APN: 0266..073-05\
A portion of Lot D. In the City of San Bematdlno, CoW'ItV of San Bermmlno,
state of Cllllbmle, In nac:t No. 1741, recorded In Book 27. Peges 41. 42 lIt1d 43
of MIIIPS, records or san Bernardino County, descrlbed _ follows:
Beginning at the NOrthwest: corner of SQid Lot D;
Thtll'Mle Eest 660 teet lxIa comer cl'sald lot;
Thena: south 34.02.l'eeI:;
PAGl:! 1
Exhibit B-1
File No: 91D09171\
Thenoe South 51" 25' 3(1. West. 604.. gO /\let to a point on the North right of WlIy
line of the Ab:hlson, Topeka and Santa Fe RllMway as aeeted by Deed to the
CIlUfomlll Southern RalilUllld CllmPlIllY RlaIrdedMily Ii, 1885, In Book 41, Page
214 of Deeds; end augmented by Deed tD the Ab:hlson. Topekilllld Santa Fe
Rallwey company I'Ilcotded July 26, 1912 In Book 512, page 124 of Deeds;
Thenoe NorU1 38" 33' 30. West, 300.0 feet .rong said right of way Jlne to the
Southwest oomfl/" of said Lot 0;
Tttenoe Norltt 176.<C6l\!et ID the point of beginning.
excepting therelTom:
AU oU, gllS lInd other minerals of every bend end character In, on or under the
above described lands WIthout the rfght of wrliloe entry or use. as con\le'fl!d ID
Nort8X MineraI lIfo. 2, LP., . Texas Limited Paltnel'llhlp In Mln.al Deed recorded
OctDber 19, 2004 as Instrument No. 2lJ04...Q7S9938 ofOfliclllI Records.
Parcel 3: (APN: 0266-073-10)
A. portion of Muscupillbe Rancho, In the CIty of San Bernardino, County of San
Bernardino, staIie of call1brnla, as per Plat I'IlCDl'ded In Book 7, PIlge 23 of Maps,.
tecords 01' San Bernardino County, lying WIthin the Wut Half of Section 2.0,
Township 1 NorU1, Range 4 West, San Bernardino Base and Mericilln, as said
lines would be extEnded across Rid Rllncho, In the COUnty of San Bernardino,
State 01' Califomlll, and PlIrUc::ulariy desc::r1bed as follows:
Beginning at 1I point In the West line of said Slldion 20, That IS Norltt O. 02' 30.
West, 224.03 feet ft'om II 1 inch Iron pipe marking the West Quarter altner of
said sec::IIon:
Thence South 36" 33' 30. East, 1681.85 feet;
Thence Sauth 51. 26' 30. West, 495.10 feet to a point on the East line of Lot D,
In Trllc:t No. 1741, lIS recomeclln Book 27,I'ages 41, 42l1nd 43 of M_, rewrds
of Sen Bernardino County;
ihenoe North 34.02 h*: to a comer of sald lot;
Thence West 660 feet to the Northwest: corner of said lot;
Thence Nor1tJ 0- 02.' 3(1. West, 158\1.73 feet along the West "fie of lIaid Section
20 ID the point or beginning.
~ng therefrom:
All oil, gas and othElr m1neral$ of every bend and chal'llcter In, on or under the
abCI'Ve desaibecllllnds YIlthout the right or surlilce enby or use, iIIi cooveyed ID
NortIeX Mineral No. 2., L.P., II Texas UInIted Pllrtnership in Mineral Deed reoorded
October 19, 20t)ol. as InstnJment No. 2004-0759938 of OtnClul Rec:ords.
PAGE 2
Exhibit B-1
I'llc N~: 9UJ0917A
Parcel No. 4= ~ APN~ 02fi6-073<44}
A portlon 01 Lot "Ow in Tract 1741, In the Qty of San Bernardino, COUnty of San
BlII11el"dino, Stllbl or Call1bmla, as par Plat thereof recorded In Bllok 27 of Maps,
Peg_ 41, 42 and 42, records of said County, de5Q1bed as !blows:
Commendng at: the NorthWl!!Sl; corner of SlI/d Lot: .0";
Thence Eia&t 660 feet In II comer of HId lat;
Thence SolIth 34.02 feet to the True Polnt of Beginning;
Thence South 51" 28' OS. West 1104.90 feet, being along the Scluth '1:el1y line of
the proplllty amveyed to the OJIllgan zeollbl Company, . COrporation, bV Deed
filed with The Regl"r on NOV8Tlber 5, 1945, liS Document Nul11ber 25521, ttl II
point on the Northell1ll:erty right of way of the Al:et1ison, Topeka Ind Santa Fe
Railroad as creilbild by Deed to the Calltbrnla Southern RaIlroad Compeny
reoorded MlI'f 14, 1865, III Boole 41 of Deeds, Page 274 Ind 1I1.1gmented by Deed
1Xt the A1EhISOl'l, Topeka and Sanl:ll Fe Railway Compeny recorded July 211, 1912,
In Book 512 of 0-15, Page 124;
Thenc:aSouthealtllrly along said right of willy SoUth 380 31' 55. Bast In.61
f8et;
Thence North 510 28' 05. east 383.826 feet ttll! point on the line of said Lot: "D.;
Thence North 354.877 feet to the True Point of Beginning.
SlIvlng and excepting from the lIbove desdibed prop<<ty that portion desdibed
uwllom:
Beginning lit III point on the Northeastel1y flne of the Atdllson, Topekiillllld Santa
Fe R2lnroed ComPllnv's nght otway, which point Is SoUth 38" 31' SS" East
!i77 .61 feet ftom the Intersectron of the Northell&llerlV line of the S11ld right of
way lIOd the NOl'ttIerll1' prolongation of Rancho MUlClJl)fabe Course 38. IIlIIId
CoUI"lll!l 38 being also the West Une of Lot "0" of said Tract 1743.;
Thence North 51" 28' OS" East. 1.75 feet;
Thence NortfI 620 40' O. West 4.28 fe!t;
Thence SoUth 38" 31' 55" East 3.91 fe!t1Xt Point of Beglnnlng.
Parc:el 5: fAPN: m'N;-G73-11)
A portion of Muscupl2lbe Rancho, In the aty of San Bernardino, County of 5an
Bernardino, 5tatll Of CalIfornIa, as per Plat recorded In Book 7, Pilllll 23 of Maps,
I1lQlrdi of San Bemardino County, Iylng within lI1e West Halt of SedlotJ 20,
TOwnshlp 1 North, Range 4 West, san 8emllr4lno Base and Meridian, as Ilnss of
the GoYemment Surwy would be eltb!nded aCJllSS said Rancho In the County of
San Bemardlno, and partlcu1l1rfy descnbed as I'oliows:
Commendng at the point In the West line of said Section 20 that Is North 0" OZ'
30. West., 224.03l'eet from a 1 indllren pipe marking the Wl!8t Qua..... COIl\er
of said sectlon;
PAGe :t
Exhibit B-1
Pile No: 91009171<
Thence Soul:tl 38" 31' 55" East for .55 feet to a point marked by a 2 Inch Iron
pipe, DId point baing 6439.02 feet Norttl ftom SbiUon 38 along I:tle Northerly
COUl'lle 38 of the Rancho Muscuplebe and being the Tlue PoInt: of IlegInnlng;
Thence S\:luth 31.l" 31' 55" East, 1681.30 feet along the Northeaeriy line of the
property conveyed Ixi the Culligan Zelolte Co~V, a Corporation, by Deed tiled
with the Registrar on November 5, 1945' llIl InslTla'llent No. 25521, to the most
Easterly camer of said Pl'<lperty;
Thence South 51" 28' OS" West, 495.10 felII: along the SoutheasterlV line of the
property conveyed by said Deed Doo::ument No. 25521, to a point on I:tle lne of
lDt D. TrIct No. 1741, in Book 27. Pages 41, 42 Ind 42 of Maps;
Thence South 354.877 feet along the line of Slid lDt 0;
Then(:8 North 51" 28' 05" East, 1702.1741'eet;
Thenctl North 38" 31' 5S" west:, 1236.61 f'eet to e point of I1llWj
ThenCl! on a CUl'\/e WIsLwlll, concave to the Soutf1 WIth 8 radllJS Of 557.19 hIet,
throl.lgh In angle of 89" 39' 38" for I dlstanCl! of 871.93 rea;
Thence 011 . CI.I'V'e Westerly conCllVfI to tIJe North wtl:h a radius of 432 feet
thl'Dllllh en angle Of 63" 56' 3]" for a dlstllnee of 466.65 filet W 8 point on the
Northerly proIonptlon of Coutlla 38 of the IW1cho Muscuplabe. which paint lies
Narther1y along aid anne, 6522.75 n.et fi'om Statlon 38 of the Rancho
Muscuplebe;
ThenC8 due South 83.73 feet to tI1e True Point of Seglnnlng.
Excepting thereftom that portion conveyed to the Sblllt of calfi:lmla by Deed
recorded NlMmIber 7, 1958 In Book <1648, Page 440 of OI'lIcIal Records more
fUlly destl1blld as follows:
1hal; portlon of the Rancho Muscuplabe, as per Plat ~ed In Book 7, Page :u
of Maps, records of did County and Iylng WithIn the WIISl: Half of sectlon 20,
Township 1 I\klrth, Klinge '" West" San Bernardino Base end Meridian,
unsurveyed, as the lines of said Section 20 woufd be If llXtencIed lIQ"OSS saId
Rani:ho, described as follows:
Beolnnlng lit II two InchlTon pipe marking the North8il!il: comer of P&la!l 2 of
thDSll! certain pan::els of land as conlleyed to Culligan, Inc., by Deed filed April 9,
1947es Document No. 29265 In Torrens;
Thll/ll:e along the Northustsrly line of said Parcel 2, North 38" 56' 24" West,
1,236.49 reet (1'tCOfd North 380 31' 55" West, 1,238.61 feet);
Thel1Cll along II tanlleOC aJNe, concave SOUlheriV with a radius of 551.19 filet,
thl'Otlgh an angle of 6S" 40' 35", II d1atance of 648.41l11eti
Them::e South 3(;" 03' Eilst, 692.20 feet;
l1'lence IIfont II tangent aJrve, concave South,vesl:.erly wfth lll'lldlus of 6,412 filet
(11lCIlI'd 6,397.00 filet), through IIn angle of go 15' 00., . distance of 1,035.17
feetj
Thence So~ 26' 48' east, 32.41 filet to the SOIIth-':erly line of said Parcel 2,
r:Ilstent along laid Southeasterty line South 51' 03' 32" West (record South 51'
2B' OS" West), 513.55 feet fi'om the point of beginning;
Thenm along sald Southeasterlllllne Nol'lfl 51" 03' 3,2" East, 513.55 filet 00 the
point of beginning.
PAe! 4
Exhibit B-1
File No: gll1Clt17^
Also exc:ep~ng tIlerelTom that portion amveyed to Redevelopm&nt Agency of tile
CIty of San Bernardino, OlIIfomlll by DIllld recorded Marcn 6, 1996, as
Instrument No. 86-059467 of Offtelal Records mQl'e fully desafbed as IQllowlii:
All that pordon of MUSCI.IPlabe Rancho,ln the fie CIty of San Bernardino, county
of San Bemlrdino, state of callftJrnlll, 8S per Plat l1lCOI'ded In Book 7, Page. 23 of
Map$, AICOI'ds of said CDuntV, lying wl\:I1ln the West Hal' of Sed:lon 20, Township
1 North, .Range " West. San e.tnardlno Merldlalt, llS the linea of the Govemment
SlJrvey would be extended 8Ct'QS$ S8IcI Rancho, and that potUan of Lot D, Tl1Ict
1'<10. 1741, liIli per Plat recorded In 8001< 27, Pages 41, lIvough 43 Induslve of
Maps, records of said COunty, more paltlcularty desaibed iIli follows:
Beglnnlng at the intlrsecl:ion of the Nol'l:hu$terlv "ne of the AlX:hlson, Topeka
and Santa Fe RalIn:JilId right 01' Willy with the SOUtheasterlY"fl8 of that certain
PIIl'C1!/ of land c:.onveyec:I to the state of calftlmla by thllt 0Il't.liI1n GrlInt PeecI
lllCOl'ded January 21, 1957 in Book 4135, Page 158 of Official Ral:ords
(emmSOU8ly recordlld Iii, the Soul:healltllrty Hne of that certain pan::el of land
convll'V*lln Culllgll1 ZeoUm CamPlll1V bv Q(I\tdllfm Deed reoorded Oltober 29,
1947 as Torrens DoaJment No. 31412., In the Omce of the Regfsbar of lltles of
Aid COUnty);
ThIlnCle North 510 03' 04" East alDn9 the Southeallteriy line of said Culligan
pal'all, a dlttanal of 1341.00 feet In the Soulhwe&Ilerly Ilnll of Iht:en;tate HlghWillV
IS, lIS shewn on state HIghway RIght of Way Mep Fill No. 914045,
Thertal North 26" 48' 06" West along the Southwestl!lrlv line of said StlIte
Highway Rrllht of WIly, II dl&tanCll Qf 1130.48 fllel: In thlll beginning of a tangent
curve;
ibence Northwesterly along Sllld 50uthwestarly lIne and along old curve,
COI1calle So\lthWlilittlrly and having II radllls of 6.4U teet (record 6397.00 feet),
through a central angle of 4' ;l0' 00", II dklI:ance of 483.81 feet,
ThEnce South 58" 51' 54" Wfit, radial to SIIId auve II dIstance of 70.00 rest to a
polnl: In a line Plll'1I11e1 with and dlllltant 70.00 fe8I: Soutl'wnlstertV, mllBsured at
right IIngle$ from the Southwesterly llI1e of said !ll:aIle HlghwllY Right of way;
Thenc:e SOllthusterlv along Aid parallellllte end 110l1lI II a.ve, SOUl:f1Wftterly
and having a nellls of 6327.00 feet, from an InltfaJ tangll!lt beering Solrth 310
OS' oe' East through II C1lntnllenglQ of 4' ZQ' 00., a dlstance of 478.52 feet;
Thence SOUth 26" 48' 06" East along said IlII'l1IClll1ne, . distance fi' 730.48 teet;
Thence South 38' 21'02" West;, 1390.77 feet to I point in the NorthellStlel1y Iilte
ofsald Rlllroad rtght of Willy that bears Nolth 38.56' $6" West,. 100.00 feet from
the point of beginning;
Thenc:e SOc.Ith 38. 56' 56" East, 100 feet In the point of beglltning.
Also excepting tfleHlf,,,m any portfon thereof lying wlthtn Parnel 2. henlinbefana
desa1h<<1.
El<<:eptlng I:herefrom:
!'AGe S
Exhibit B-1
File No; 91DO!1171\
All oil, ges end other mlllel1lls of every bend and dlaract8r In. on or under U1e
above desa1bed lands lI'Ithout the rfght of surface entry or use, as OOllveyed to
Nortex MineraI NO.2, L.P./ a Texas Umllied Pilrtnershlp In MJnenl Deed rooon:Ied
October 19, 2004 as Instrument No. 2004-0759938 of OffIc:lal Records.
Parmi 6! {APN: D148-.011..()6\
That portion of the Randlo MUS'Cuplllbe, In the CIty of San Bernardino, County of
San Bel'l'lllrdJno, State of CaIIfoM1lIl, as per Plllt ralXlrded In Book 7, Page 2.3 of
/of., of said Cllunty, more particularly described as runOl'f$:
Beglnnlng at the Northwest comer of Pan:eI 2 of the lands of OUlllgan Zeollbi!
COInpanv,abovede&crlbed In Deed "led In theOIflce of the Registn!rofLand
1111. of'llld Cotmty on April 9, 1947, all DoClJment No. 29265;
Thenwalong the bllundary IIl1e of said PiII"cIl 2, along a nontangent CUrve,
axlCllve Northerly WIth a radius of 432 fi!et, from a tangent bearlng South 615'
43'11" East through an angle 0(61" 51' 12.., an arcdlst:ance of466.361\!etto II
1 14 Inch 11'011 pfpe marking a point of reverse CUNe;
Thence along seJd I'l!Vers& curve SoutherlV with a llldlus of 557 .191'eet, trom a
t!lI1gent blMlrfl1g North 51" 25' 37" East: through an angle of 22" S7' 24", an lire
d1S121nce of 223.85 met to II line pantllelll'lth end distant 176.00 feel:
South~y, mlHlsured at right angles fnIm that CII!l'tIIn OIlUrae desa1bed as
hailing a bearing 0( North 3&' 03' 00" west and a length of 600.95 I'l!et In the
third Pllrall IIr lend described In Anal Order of COndemnMlOl'l randerad In Case
No. 90470 In the Superior Court of the st&te of Callfomla In and Ibr the CouIlty
of &In Bernardino, a certltIed <<;QpV of aid Flnel Order hlllllrlll been rec:llI'ded
January 27, 1959ln Book 4715, PBge 8D of OIftelDl Records of said County;
TheJlCB Course A along said panllelllne NorttI 36" 03' 00. West. 144.95 feet;
Thence Cour!'le 8, North 380 35' 40" West, 450.45 feet;
Thence CouI"ll4!l C, North?3' 31' 34" W8llI:, 150.75 I\!let tbthe beginning ora
tangent CUNe, amc:aVll NOl1l1e&$b!oly and hailing II radillli of 2001'eeti
ThenDII Course 0, Nortl'lwestllriy along said curve, through an angle at 540 18'
29", an arc distance or 189.56 l'eet to the Northllrly prolongi!ll:llln of Counie 38, as
shawn on said Plat Df Rancho Mu-.pillbe;
Thence along Aid prolongatlon South 0" 2.3' 36' !:list, 798.06 met to the point of
beginning.
Excepting therel'i"om all minerals, ollc, gases, and other hyd~ by
whatsoever name known that may be within or under the parcel 01' land
here!nllbove de9cr1bed; wlthout, however, the l'fght to drlU, dig Dr mine through
the surface thereof', as l"8Ilef\lec! to the state of Calil'omla by director's Deed
recorded February 17, 1961. In Book S354, Page 493 of Offtcllll Records.
Exc:eptIng therefrom any portion thereof lying within P....cel 2 hereinbefore
descr1bed.
Excapting therefrom:
PAGE Ii
Exhibit B-1
File No: ~10lJg17A
All 011, gas and other ml~s of' every bend and chal'a(:ter In. on 01" under the
above described lands WIthout the right of SUl'Illce entl\' or lI$lI, as conveyed to
Nortex Mineral No. 2,. LP., a Texas Umlbed Pllrtnershlp In Mlrfenll Deed recorded
Ocmber 19, 2004 as Instrument No. 2004-0759938 of amcfa' RlIoords.
Parcel 7: (APN: DlAll-oU-401
Thatportllll'! of Lot 0, Tract No. 1741, In the QtyofSlln Beman/lno, County of
San Bernardino, StatIl of Clllitbrnla, as per Plat recorded In Book 27, Page 41 of
Maps, and that pomon of RIIncho MlISCIIpj;!be, In the Qty of San Bernardino,
County of SIIn Beman/lno, ~ of C11ll1brnlli, illf pet Plat /'lIllXlI'ded In Book 7.
Page 23 of Maps, both records 01' said COUl1ty, described as a whole lIS Ibllows:
Beginning at a 2 Indllton pIpe marfclng the most Westerly comer of thai: certain
parcIl!I of land lIS CDnveyed to the stal:8 of California by Deed recorded January
21, 19S7 In Boolc: 4135, PllIJIl158 of' Omdal RlIoords of said County;
Thence along the SOlltflwellllBrIy line of' ..Id ~be of' California parql of land,
aald SoulfJwesl:8t1y line belng also the Northeuteriy line or the AIlchI8on, Topeka
and Santa Fe RailMly OxnpanV's R1g1lt of Wll'( illf aeeted by Dead m the
c:allfornlll southern flall'Dlld Company recorded May 14, 1885, In Boole 41, Pllge
274 01' Deeds; and augmetUd by Deed to the Atl:hlson, Topeka and Santa Fe
RIIllway Company F1ICOrcled July 26, 1912, In BooIc 512, Page 124 of Deeds;
Sa4ltf! 38" 56' 56" Ea$\: (1"elXlrd South 38" 31' SS" Eest), 1,073.39 feel: tIl the
most: Southllrly corner of said SI:ata of Clllffbmla parcel of land;
TherlCll ii10ng the Souttlea....Jy IIIlIiI of said Stalle of California ~e' of land
North 51. 03' 32" East (record Nortll SlQ 28' 05- !ast), 1,341.27I'eet:i
'11Ience CoUnlfl A North 26> 48" West, 1,097.94 feet m the Nortllweaterfy line 01
said SI:Bt.e of CIllllbmla parcel of IlInd, distant along said Northwe6lc11y 1In& North
51" 03' 32" East (record North 51. 28' OS" East), 1,572.21 faet ft'om the pOint of
beginning;
Thence along said Northwasberly 111'1& South 51" 03' 32" West, 1,Sn.21 feet to
the point or beginning,
ElccepUng therefrom lfIat portion CDnVeyed to Redavelojll11el1t Agency of the Qty
of SIIn Bernardino by Grant Deed recorded Man:l16, 1986 as InSl:n.lment No. 85-
059167 of Oft'k:lel Recon/$, more. fully dl!llCt1bed as follows:
All that portion 01 Mtl$CUpIabe Randlo, In the Cty of San Bernardino, CoQnty of
San Bernan/lno, StalIe of California, as per PllIt recorded In Book 7, Page 23 of
Maps, racords of SlIId eo..rnv, lying WithIn the We&I: Half of Sect:lon 20, Township
1 North, Range 4 WeslO> San Bemal"dlno Metldlan, as tne lines of the Govemment
Survev Would be extended across said Rancho, and lhlIt POrtion of lot 0, Tract
No. 1741, as per Plat racorded In Book 27, PIg.. 41 throogh 43 Induslve of
Maps, records of R1ld County, more partlwlaliy desa1bed as follows:
Beginning at the b ,tel.ae...l:lon of the Northllllllt8tly line of the Atchison, Topelcll
a nd Santa Fe RaIlroad Iignt of way with the Southeasl:l!ltly line or thai: certain
parmi of land CDlWeyed to the Sl:lIl:8 of California by that ClIl'Qlln Grant Deed
PAGE 7
Exhibit B-1
Pile No: 'll10917A
recordecl January 2.1, 1957 [n Book 4U5, Page 158 of Offtcflll Records
(elTOneouslV tecon:led ., the Southeasterly line of that C<<tlIIn plll'tllll of IlII1d
canveyed to CUlligan ZeQlIte Company by Qultdalm Deed recorded October 29,
1947 all Torrens Document No. 31412, In the omce of the R.egllItrar ofT/ties of
AId County);
Thence North 51' 03' 04" east along the Southeasterly line of seid CIllllgllll
Parcel, a dlstimce of 1341.00 feet to lf1e southwesterlV Irne of'Inl:lln;tale HIghway
15, as "'own on State HIgt!way Right of Way Map File No. 914045;
Thence Hartt! 26' 48' 06" West along lfle Salllflw...L..1y Ime ofSlllel State
Hlllhway Right of Way, a distance of 1130.48 feel: to the beginning of a tangent
1Xll'Ve;
Thence NorthweateriV along Sillld Southw4!llbll1y line and along saId aJMl,
concave SOUtIlwesI:erIy end haYing a radius of 6,412 fMt (nICOrd 6397.00 fe.efj,
lf1mugh a centrlll angle of 4" 20' 00", a distZlnce of 483.81 feet:
ThenCll! South 58' 51' 54. West, melial to said aJlVe a dlstanee of 70.00 feet to a
polnt In a line paraPel WIth and dlstllnt 70.00 ftI8l: SOul:hwesl:.er1y, meaU1!d at
rI9tlt lIlngles 1to1ll the southwesl:erIy line of SIIIId State Hlgflway R.lght ofway;
Thence SOf.lthea8tetly along MId PiII'lIIJelIlne and lIlong . a.ltve, Soulf1westarly
and hBYlng a rediUli of 6327.00 feet" l'rom Iln 1nItlllll3ngllllt bearing South 31'
OB' 06" Eiut through 8 centl'IIl angle of 4" 20' 00., a dlstanclI of 478.52 feet:;
Thence South 26" 48' 06" Eallt along silld parallel One, a dlltance of 730.48 feet;
Thence South 38" 21' 02" West. 1390.n feet W I point In lf1e Northeasterly line
of saId RlIl1!'Olld right of WlIY that: bears North Jr 56' 56- West::, 100.00 l'eet ltam
the point of begllvllnlH
Thence South3$" 56' 56- East, lDO feel: to !:he point of beginning.
EXcepting therefi"am;
All all, $las Ind other mlnBl"Ills of eNery bend Bnd dlal'lld:er In, on or under It1e
above desa1bed lands wfthout the light of surface entry or us.., IS conveyed to
HOrtEll( Minerai No.2, LP., a T8lCiIII UmIllld Partl'lershlp In Mlnel'IIl Dead recorded
October 19, 2D04 as Instrument NO. 2004-0759ll3B of Official Records.
PAQI II
Exhibit B-1
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EXHIBIT "D"
EXCHANGE TRACT
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AN lI'lRIlGULAIlty $/WS) IWal. OF tAlYD, _1i'IN SECTION 1~ roIlWS'H/fl I -IH.
RANQli 4 IIIliST, MNll!<<l WBClJFWiE. IN 'TIllE ctr'f OF 8NI ~ COUNTY OF Mill
_1~ $T/ln;OF~NJ_PlAT~RYBOm(l,_"OF~~1N
THriiCJFFlai OF THrii COI.MY~ OF MID GOCIN7Y.lIEllOIlIIIeDMI'llU.ClMS:
_ATTHrii "'~''''''OF1I!E~y UNE OF THE _oOf'.MMVOF
/l1t:ff~ 'JOII9I(A AND&wr.lI'E/iMI.l4IlIIY /7StItI_r~ PfR_~
11_", fH4 IN 800<< IlK _ _ OF ~ IN THrii affloE OF s.Ill) CCUNIY
~ _/lINE /'MR"IEl _AND ~tItIl'I!ET ~y. ~AT_
~ ~ THrii WEBlmlLV ur.. OF DIE I.AJ1D ~1IBIIll:11N mAr CBmUII ~T
FeR ~ AND HIlJHMOlY __ MANn!D m 7Hf! CIIY OF SIW IBWVlllI!lQ. _
DOCUNENT IlEl:lCIlIlDS.o _u.,. ~ 11111 IN BOOK 1'731. _ lI4t. OF ClFJOIQr,Q. ~GA:l6. IN
7Hf! OFFICE OF - COlA'ITV ~ 8AIIl _y I.MIi _ THE C8IlEIlllNE' 01'
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lNIl'HQ;Al.ONG 8AI:l_1BlI.Y I.IHEOF IWLMIlIY, 801IDI:n1'fJIf IW' EAST, ''''-is}' Fl:er,
1'Il6NCI! ItOffflI ot'lXO Zl7"EABT, _Ill' Ff5E1; 'I'Hf!NCE NOfm1wn: 'li"MIST, -1111&7::
l'Hl!1OI::Ii NOffTH H'I/SI'W' wsr. m./IIT I'l!Er, 11tENI;:f:NOR1H ttI' 1I1'5f'EMr; !Ull FEEr;
THENClE NOR1H '11' 22"WIlIEST. UllOFHr.1ffl!NCE /IClIf1I/ $I" n:'tB' IiIOl; 1Il.(Jt1FEET;
~ NOHTIf '11' n: 118' -r. l!OI.4lI I'E'&T TO DIE __ OF II TANIlEN'r CIA'lIE';
~\ti~VANllH4_AIlIIIlIU9OF_tltlFEEr;
IN!i'ICE .NDImIIl!Ilr. V Al.0A0 SND CIIIM!: TfIRO/JGH II Cli'N11ML IINGI.Ii OF ~ Of IW' AN AIlC
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IM5$T. 3I.iIIl'e'rro SND I'M4Ua UIIE:
THENCIii Al.ONll MID fWIIlU.a!ME. THE ~ 11IlO ll!1 OO!!"'_
8OIJT1/<<1' W tJr 6481. !M.1I F1ffEr AND 8OIJT1/ Of' q W6ASJ; iIIUIIl'a:Tro 7Hri _r 01'
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Exhibit D
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4838.7503.7441.9
Exhibit D-I
EXHIBIT "E"
AGENCY GRANT DEED
Exhibit E
)
)
)
)
)
)
)
San Bernardino, California 92408 )
Attention: Michelle Kirk and John Magness)
)
)
)
RECORDING REQUESTED BY AND
AFTER RECORDING MAIL TO:
HSB 1-215, L.P.
SE 1-215, L.P.
c/o HiIlwood/San Bernardino, LLC
105 North Leland Norton Way, Suite 3
Exempt from Recording Fee
pursuant to Gov't Code Section 27383
(Space Above for Recorder's Use)
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged, the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic of the State of California ("Grantor") hereby grants to HSB 1-215, L.P.
("HSB"), a California Limited Partnership, an undivided fifty percent (50%) interest, and to SE
1-215, L.P. ("SE"), a California Limited Partnership (HSB and SE shall collectively be referred
to as "Grantee"), an undivided fifty percent (50%) interest, in and to the real property legally
described in Exhibit "A" and by this reference incorporated herein ("Property").
1. The Property is conveyed subject to that certain 2006 Disposition and
Development Agreement dated as of , 2006 ("Agreement") By and Between
Redevelopment Agency of the City Of San Bernardino and HSB 1-215, L.P., a California
Limited Partnership, and SE 1-215, L.P., a California Limited Partnership. The provisions of the
Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if
set forth at length herein.
2. The Grantee covenants by and for itself, its heirs, executors,
administrators and assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in or on the Property.
All deeds, leases or contracts made relative to the Property shall contain the
following nondiscrimination clauses:
(a) In deeds: "The grantee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
Exhibit E
them, that there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, age, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any
person claiming under or through the grantee, establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, locations, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in or on the land herein conveyed. The foregoing covenants
shall run with the land."
(b) In leases: "The lessee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
them, and this lease is made and accepted upon and subject to the following
conditions:
That there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, age, marital status,
national origin or ancestry in the leasing, subleasing, transferring, use, occupancy,
tenure or enjoyment of the land herein leased, nor shall the lessee itself, or any
person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees
in the land herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, age,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any
person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of
the land."
3. No violation or breach of the covenants, conditions, restrictions,
provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way
impair the lien or charge of any mortgage, deed of trust or other financing or security instrument
permitted by the Agreement; provided, however, that any successor of Grantee to the Property
shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions,
whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's
sale or otherwise.
4. The covenants contained in this Grant Deed against discrimination and
segregation shall remain in effect in perpetuity.
5. The covenants contained in this Grant Deed shall be binding for the
benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of the
ExhibitE
Grantor for the entire period during which such covenants shall be in full force and effect,
without regard to whether the Grantor is or remains an owner of any land or interest herein to
which such covenants relate. The Grantor, in the event of any breach of any such covenants,
shall have the right to exercise all of the rights and remedies, and to maintain any actions at law
or suits in equity or other proper proceedings, to enforce the curing of such breach as provided in
the Agreement or by law. The covenants contained in this Grant Deed shall be for the benefit of
and shall be enforceable only by the Grantor and its successor.
IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument
to be executed on their behalf by their respective officers thereunto duly authorized this _ day
of , 2006.
Grantor:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, a public
body, corporate and politic
By:
Maggie Pacheco
Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Lewis Brisbois Bisgaard & Smith LLP
By:
Agency Counsel
Exhibit E
ACCEPTANCE OF GRANT DEED
THE PROVISIONS OF THIS GRANT DEED ARE HEREBY APPROVED AND
ACCEPTED.
Grantee:
HSB 1-215, L.P.,
a California limited partnership
By: HSB GP, LLC,
a California limited liability company,
Its general partner
By: HGI GP, LLC,
a Texas limited liability company,
its sole member
By: HGI Group, L.P.,
a Texas limited partnership,
its sole member
By: Hillwood Associates, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Company, LLC,
a Texas limited liability company,
its general partner
By:
Name:
Title:
Exhibit E
SE 1-215, L.P.,
a California limited partnership
By: HSB GP, LLC,
a California limited liability company,
Its general partner
By: HGI GP, LLC,
a Texas limited liability company, its sole member
By: HGI Group, L.P.,
a Texas limited partnership, its sole member
By: Hillwood Associates, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Company, LLC,
a Texas lirnited liability company,
its general partner
By:
Name:
Title:
Exhibit E
EXHIBIT "A"
LEGAL DESCRIPTION
All d>a~ .-tiOll1 or "-upi. 1btt<!1r>. in ehe' tlty of $m uem:m1111o
~ty or San 8emll'\llM~_su~e or C!llifornj.l.,~ .....,'l~~..~, .,'
In 11oo1< 7 or MilJIl. ,page u. ~..ds or sllOid-",,;~! ,',. ... '. -'"
104!St half or Sec:tiAn 20. Tco,'lllIh.p 1 Nod". 1llt/lCt-'4 '''1:~ SIn'll ' Ii'
Me....idian. as the ll.r1es of tbll lllN'n....Jtt &n:vc:'I' -.1<1"1100 'extencl4id'at:t<'>$"
$Aid Randlo. and tllDt pont"" of tot D. n-a<t .No, 1741. 'as par plat
recorded 1,II'look n of MJps. 1'J,~ ,41 tbl'OlJlll. 43. .illdusi"" re1:OTd$ of
uid Cwlit)'. IiD'r'IO ,partiaa1lTiy llelIc:rlbed as fol101<$'
IlEGLIiSLlQ;i. at tM iAtersa;tlllll of tlle I'oTtI>e11sterly line of the Atchi$Ql'l.
Thptia ;ud ~ta Fe R&i1t'Cll1d Ri&ht of llo'lIy with the Southcast"rl~ U.... .of
~1\at o;;ettiin ~ol of 1anIl eom'eyecl to Mlipn Zeoli~ll' <:i::qlan~ b}'
Qdlc1411l11lecd n<>>rdedOctobn 1:9. 19n. liS TOl"rens Docunent 1';0. 3Hl:,
111 the office of~ ~&i?'ta". of titles of said, C_C}'; thenat Non:h
$1003'Q.I',' fast, ~1-rmr. the SOil""easterly line' of 'Said CliJligan paR:Cl. a
-.ll$t"""" of 1341.00 ~ <<l die ~terl>" Un" of Interstat.. IUlI-')I;;1r
1$. all $l\GlonQn State Hi~y lU&ht of \fliIf Nap Fil..~. llH04S1 tht;nQ: ,
~'2.I'i.~'06:"lCst~, 'lilll)g the ljiIiutho<esurl)" line ~f ~aid St.te:Hi~Y
Ili&\tt: of *t, a .isUliCd of )130;"8 feet to tilt ~g\nn\1l& (If a'UJlg!!ntc'
aiive; thCuc:t ~rt)' alQllg: said'.5odtIIwesterly'lil1l! ""'" -along ."'14
Qln:e. _-.- ~.....ly lIIl4,lIwins 41"1!'l-'iUS of 6397.00 fe~. tkrwgh
aOlritnl'1IIl&:1o lit '-m'lIO". . distance of 4U.U fen; tM_ $outh
58.51'54" l'est. tl!I4ill1 ~ said ClII"l/e. a 415t_ of 70.00' rGOt to .. point
III a line pannel Nlt.b1lll4 41atUt 70.00 f<HIt swta-sterly. _ure.s ..t
:ri&ht lIIIJ:le!l, tr.. ~er'Jy Une of ' said SUtoll~:r 1l~Il"t al' '
\";1.)'; theJ1I;oSGutllCa$'lOJ'ly' alq s;aid Jl&rllllel UaJe ant:! al<l\l&, a.. qryo~ ,;
_ve S<lUtloo>e.....lf ana ,baviDll a radius of'6JZ7~DO fett. fTOlll'"
inItial ~ bearug $outh 31.08.'116" East. thxoui;I\a "ontTa,t,.."gle of
4"zq'OO". . &~ or 478.52 l'e<<; thonco Swth ZtI.U'II6" &st. along
Said paraUel line, a disUllC\! of 130.48 fMt;' thenc;e SOilth 38.:1'OZ"
....$1: 1390.17 feet to .. point in the Sorth"",Urly'line ;)f sdd .R.ailrl>ll/l
Ript or \tay that I>c.an JIarth 18"S6'li6" West 100.00 feet r..... the poInt
of llI.!Cl:c\1}(G; thoJ1l:e SWth 38".56'56" East 100.00 feet to me point of
JECr.-.'\lII<<i. ~ta1ninJ 10.01 IICres, __ or 1eso.
Exhibit E
EXHIBIT "F"
PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT
The Phase I of the development will consist of mass grading for the entire site, an industrial,
warehouse, and distribution facility on approximately (38) acres with ancillary streets, all wet
and dry utilities, including a storm water detention Basin and other related improvements, as
shown on the attached Exhibit "c" drawing. The balance of the Project will consist of a number
of buildings which when added to the square footage of the Phase I buildings will provide
approximately 2,000,000 square feet of industrial, warehouse and distribution facilities and
landscaping as may be required by the City.
4838-7503-7441.9
Exhibit F
EXHIBIT "G"
STREEET IMPROVEMENT USES OF THE EXCHANGE TRACT
IIPIfOVSIM'N'TIItH3' OF THE EXCHANClE PARCEL
THE: FOt..!.OWlNG PROPOSED IMPROVEMENTS, FOR THE BENEFIT OF DEVEl..OPER'S
PROJECT SITE, W1t.L BE CONSTRUCTED WITHIN THE EXCHANGE PARCEl.. AS
DESCRIBED IN EXHISlT "D" AND SHOWN ON EXHtBlT'D-1~'
INTERiM STREET IMPROVEMENTS PRIOR ro 00NSTRUC110N OF THS UI.. TlMA TE
OVERPASS OONSfSTING OF FORTY (40) FOOT A.a. PAI/f:MENT, AC. BERMS AND
REQUIRED GRADED TRANSITION SLOPSS.
INSTAI..LATlON OF WATER LINE AND DRY UTlUTrSS EXTENDING FROM THE
ULTlMAre PROJECT ENTRY STREET, ACROSS THE: EXCHANGE PARCEL, TO THE
EXJSTrNG UTlUTrES LOOATE'D IN THE RIGHT-OF-WAY FOR UNIVERSITY PARKWAY.
1WENTY-SIX (26) FOOT IMDE FiRE DEPARTMENT EMERGENCY ACCESS ROAD WITH
FENCING AND GATES AS REQUIRED BY THE FIRE DEPARTMeNT.
N,IIS3IllE$ll~-Jmc
L8<t~:_
4838.7503.7441.9
Exhibit G
EXHIBIT "H"
CERTIFICATE OF COMPLETION
WHEN RECORDED, MAIL TO:
(Space Above Line For Use By Recorder)
CERTIFICATE OF COMPLETION
(partial and Full Compliance with Agreement)
I, , the Secretary of the Redevelopment
Agency of the City of San Bernardino (the "Agency") hereby certify as follows:
Section I. The improvements required to be constructed in accordance with that
certain Disposition and Development Agreement (the "Agreement") dated ,2006, by and
between the Agency and HSB 1-215, L.P., a California Limited Partnership, and SE 1-215, L.P., a
California Limited Partnership (collectively, the "Developer"), on Assessor's Parcel Number
0148-011-19 and Assessor's Parcel Number 0266-073-08 (the "Property") more fully described
in Exhibit "A" attached hereto and incorporated herein by this reference [and certain adjacent
property described in the attached Exhibit "B" (the "Full Development Site")], have been
completed in accordance with the provisions of said Agreement. The Agreement or a
memorandum thereof is recorded at of the Official Records of San Bemardino
County, California.
Section 2. This Certificate of Completion shall constitute a conclusive
determination of satisfaction of the agreements and covenants contained in the Agreement with
respect to the obligations of the Developer, and its successors and assigns to construct and
develop the Project (as defined in the Agreement), of the following items:
r excluding any normal and customary tenant improvements and minor
building "punch-list" items, and including any and all buildings and any and all parking,
landscaping and related improvements necessary to support or which meet the requirements
applicable to the Project and its use and occupancy of the Property and the Full Development
Site, whether or not said improvements are on the Property, the Full Development Site or on
other property subject to the Agreement, all as described in the Agreement, and to otherwise
comply with the Developer's obligations under the Agreement with respect to the Property and
the dates for the beginning and completion of construction of improvements thereon under the
Agreement.] The Agreement or any memorandum thereof recorded as referenced above is
released and no longer shall affect, burden or be binding on the Property or the Full
Exhibit H
Development Site or the Developer or its successors and assigns. However, this Certificate of
Completion shall not affect the rights of the Agency to enforce any covenant in the Agency
Grant Deed pursuant to which the Property was conveyed under the Agreement. Said
Agreement is an official record of the Agency and a copy of said Agreement may be inspected in
the office of the Secretary of the Redevelopment Agency of the City of San Bernardino located
at 20 I North "E" Street, Suite 30 I, San Bernardino, California, during regular business hours.
Section 3. The Property to which this Certificate of Completion pertains is more
fully described in Exhibits "A" attached hereto.
DATED AND ISSUED this
day of
,200_.
By:
, Executive Director
Redevelopment Agency
of the City of San Bernardino
Exhibit H
EXHIBIT "I"
PROMISSORY NOTE
4838-7503-7441.9
Exhibit I
AGENCY TAX INCREMENT REVENUES PROMISSORY NOTE
Date:
$
San Bernardino, California
THE UNDERSIGNED, THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic (the "Agency"), promises to pay, and
pledges to HSB 1-215 L.P. ("HSB"), a California Limited Partnership, and to SE 1-215 L.P.
("SE"), a California Limited Partnership (HSB and SE shall collectively be referred to
hereinafter as the "Developer"), or order, or Developer's assignee, the payments of the Tax
Increment Revenues (as that term is defined below) due and owing by the Agency to the
Developer in accordance with and pursuant to the terms, covenants and conditions of this
Agency Tax Increment Revenues Promissory Note (the "Note") and the Agreement (as that term
is defined in this Note), together with interest on the unpaid principal balance thereof, at the
Interest Rate (as that term is defined in this Note), in lawful money of the United States, subject
to the terms, covenants and conditions of the Note. The principal, interest, late charges, fees and
all other amounts due under this Note are payable by the Agency to the Developer at 105 North
Leland Norton Way, Suite 3, San Bernardino, CA 92408, or at such other address as is
designated by the Developer in a notice to the Agency given as provided for in this Note.
1. Defmitions. The initially capitalized terms defined herein shall have the following
meanings where appearing in this Note. Otherwise, any initially capitalized term (not defined
herein) shall have the meaning provided for in the Agreement (as defined below).
1.1 Al!.reement. The "Agreement" shall mean that certain 2006 Disposition and
Development Agreement, dated , 2006, by and between the Agency and the
Developer, and all exhibits attached thereto.
1.2 City. The "City" shall mean the City of San Bernardino.
1.3 County. The "County" shall mean San Bernardino County.
1.4 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.5 Full Development Site. The "Full Development Site" means the property
situated in San Bernardino, San Bernardino County, California as described in the Agreement.
1.6 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first Fiscal Year
following the date that this Note is executed by the Agency.
4838-7503.7441.9
Exhibit I
1.7 Interest Rate. The "Interest Rate" shall mean five percent (5%) per armum and
shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and
conditions of the Note.
1.8 Late Chare.e. The "Late Charge" shall mean three percent (3%) on the payment
due and owing by the Agency to the Developer under this Note (subject to any applicable cure
period(s) in this Note and/or the Agreement).
1.9 Maturity Date. The "Maturity Date" shall mean the first business day following
the date that the outstanding principal balance of this Note, all accrued and unpaid interest, all
late charges, and all other amounts due and owing (collectively, the "Indebtedness") under this
Note are paid in full by the Agency to the Developer, or April 27, 2021, whichever occurs first.
1.10 Principal. The "Principal" shall mean and Noll 00
($ .00), as increased, decreased and adjusted from time to time, which has been
determined in accordance with Section 3.09(d) of the Agreement. Under no circumstances shall
the Principal be in excess of$3,630,000.
1.11. Proiect. The "Project" shall have the meaning provided for in the Ageement.
1.12 ~. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the Maturity Date, subject to the terms,
covenants and conditions of this Note.
2. Interest. Commencing on the date of this Note, Interest shall accrue on the outstanding
Principal of this Note until the Maturity Date. Interest shall be computed based on a 365-day
year and the actual number of days elapsed.
3. Pavment Of Principal. Interest and Late Chare.e.
(a) The Agency hereby pledges to the Developer certain tax increment revenues of
the Agency, with such pledge to be effective on and after the date of the Promissory Note,
attributable to the Redevelopment Plan that are legally available to the Agency in each Fiscal
Year during the term of such pledge equal to one-half of the Tax Increment Revenues (as defined
below). The dollar amount of one-half of the Tax Increment Revenues to be remitted by the
Agency to the Developer in each Fiscal Year shall be calculated on the basis of: (A) one percent
(1 %) of general property taxes paid by the Developer for the Full Development Site after the date
of the Certificate of Completion for the Project, exclusive of any override taxes, special taxes, ad
valorem taxes for general obligation bonded indebtedness or other special assessments, that are
actually paid by the Developer and/or the Developer's successor-in-interest to the ownership of
all or any portion of the Full Development Site attributable to the development to occur on all or
any portion of the Full Development Site, less (B) any pass-through amounts that are required by
law to be remitted to affected taxing agencies and County collection charges, presently estimated
at 0.5% for cash flow projection purposes only ( the "Pass-through Payments"), and subordinate
to any existing and future tax allocation bonded indebtedness payable in whole or in part from
the tax increment revenues pursuant to the Redevelopment Plan and the State College
Redevelopment Project Area, and deducting therefrom for each Fiscal Year of the calculation the
4838-7503-7441.9
Exhibit I
amount of the tax increment revenues that were attributable to the Full Development Site for the
Fiscal Year in which the Developer acquired the fee title to the Full Development Site (the "Base
Year Deductions") less (C) the required deposit to the Agency's Low and Moderate Income
Housing Fund (the "Home Fund Deposit") which is presently twenty percent (20%) of the gross
tax increment revenues (collectively, the "Tax Increment Revenues"). One-half of the Tax
Increment Revenues for a Fiscal Year shall be distributed by the Agency to the Developer
pursuant to the Promissory Note with the other one-half of the Tax Increment Revenues to be
retained by the Agency for any of the purposes as may be permitted pursuant to the
Redevelopment Plan.
(b) All payments of the Tax Increment Revenues shall first be applied for the
payment of (i) any late charges and interest thereon, (ii) accrued and unpaid interest upon the
principal balance ofthe Note, and (iii) the principal balance of the Note.
( c) The obligation of the Agency to remit payments of the Tax Increment Revenues
shall commence as of the Initial Fiscal Year for December 10 property tax installment and shall
continue thereafter until the earlier of (i) the payment in full of the Indebtedness, or (ii) April 27,
2021. In the event that any amounts remain due and payable under the Note during the 2020-21
Fiscal Year, it shall be the sole responsibility and obligation of the Developer to assure that
payments are remitted by the Developer to the County of San Bernardino Tax Collector
adequately in advance of the termination date of the Redevelopment Plan to allow for submittal
of all necessary documentation to the Agency and the processing by the Agency of any final
remittance of the Tax Increment Revenues to be made by the Agency on or before April 27,
2021.
(d) Such payments of the Tax Increment Revenues shall be remitted by the Agency to
the Developer within thirty (30) calendar days after the Developer has provided written
documentation reasonably acceptable to the Agency evidencing that the applicable property
taxes on the Full Development Site as of each December 10 and/or April 10 (or any other
delinquency date established by the County for the payment of supplemental property taxes)
have been du1y paid in full (i.e. taxing authority acknowledgements of the taxes having been paid
and the amount of the one percent (1%) general property tax). The Agency shall within thirty
(30) calendar days after receipt of the documentation required by this Section, remit the
appropriate payment of the Tax Increment Revenues based upon the method of calculation
thereof to the Developer. Any failure of the Agency to dispute in writing the adequacy of the
documentation as submitted by the Developer within the applicable 30-day period of time, shall
constitute approval of same by the Agency. The Agency shall be obligated to provide written
notice to the Developer within said 30-day period of time as to any inadequacy of any
documentation provided by the Developer to the Agency. Failure of the Agency to remit the
requested payment of the Tax Increment Revenues within ten (10) calendar days after the
expiration of the initial thirty (30)-day period for review of the documentation as submitted by
the Developer, unless notice has been provided by the Agency to the Developer in the manner as
provided above, shall subject the Agency to a three percent (3%) late charge on the amount owed
and interest at the rate of five percent (5%) per annum calculated on the number of days from the
due date of the applicable payment until such amount has been paid to the Developer.
4838-7503-7441.9
Exhibit I
(e) It shall be a condition precedent to each payment of the Tax Increment Revenues
hereunder that as of each such Tax Increment Revenues payment due date there has been no
Transfer, assignment, or sale or other conveyance of the Full Development Site or any interest in
the Agreement which is prohibited by the Agreement. In the event that the Developer should
either (i) Transfer any interest in the Agreement in violation of this Agreement at any time prior
to the issuance of a Certificate of Completion for the Project, or (ii) sell all or any portion of the
Full Development Site to a tax exempt entity without such buyer agreeing to make the "in-lieu"
payments referenced in Section 3.08 of the Agreement during the term of this Note, the
obligation of the Agency for any further remittances of the Tax Increment Revenues under this
Note shall immediately cease and terminate as to that portion of the Full Development Site to
which such prohibited Transfer or other sale or conveyance pursuant to item (ii) has occurred.
(f) The right to receive the Indebtedness as provided in this Note is personal to the
Developer and shall remain the right and property of the Developer, not passing to any future
owner of all or any portion of the Full Development Site. Notwithstanding, the Developer at any
time may assign or pledge such right to receive the Indebtedness.
(g) The Developer shall have all rights and remedies against the Agency pursuant to
the laws of the State of California and as further set forth in the Agreement and in this Note. In
the event of any failure by the Agency to remit the timely payments of the Tax Increment
Revenues, the Agency shall be deemed to be a default hereof for which the Developer shall be
entitled, after delivery of notice or otherwise as set forth in this Note, to be reimbursed for all
costs and expenses of the collection of any dollar amount that is then due and payable by the
Agency to the Developer from the Tax Increment Revenues.
4. Prepavment. This Note may be prepaid by the Agency, at any time, in whole or in part,
without premium or penalty, as long as any principal prepayment is accompanied by a payment
of interest accrued to the date of prepayment on the amount prepaid, and any and all late charges
or other amounts then owed by the Agency hereunder.
5. Application of Pavments. Each payment under this Note shall be credited first to: (i)
any late charges and interest thereon, (ii) all accrued and unpaid interest, and then to (iii)
Principal then due and payable under this Note.
6. Developer Forlrlveness of Indebtedness. Except for one (1) or more prior Tax
Increment Payments due and owing by the Agency to the Developer under this Note, the
outstanding Principal, all accrued and unpaid interest, late charges and attorneys fees and costs
due and owing under the Note on and after April 28, 2021 shall be forever forgiven by the
Developer, and the Agency shall have no further obligation or liability under the terms,
covenants and conditions of this Note.
7. Condition Precedent. The Agency shall have no duty or obligation to execute, deliver
or perform under this Note until all conditions precedent provided for in this Note and the
Agreement have been fully performed and satisfied by or for the Developer (or have been
expressly waived in writing by the Agency).
4838-7503-7441.9
Exhibit I
8. Notice. Any notice required to be provided in this Note shall be given in writing and
shall be sent (i) for personal delivery by a delivery service that provides a record of the date of
delivery, the individual to whom delivery was made, and the address where delivery was made;
(ii) by first-class certified United States mail, postage prepaid, return receipt requested; or (iii) by
a nationally recognized overnight courier service, marked for next day business delivery. All
notices shall be addressed to the party to whom such notice is to be given at the address stated
below or to such other address as a party may designate by written notice to the other. All
notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of delivery; (c)
if sent by certified mail, the second day on which regular United States mail delivery service is
provided after the day of mailing or, if sent by overnight delivery service, on the next day on
which such service makes next-business day deliveries after the day of sending. The address for
the Agency and for the Developer shall be as follows, subject to any written notice of a change
of address by one party to the other:
Address For the Agency:
With a copy to:
Address For the Developer:
With copy to:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
Fax: (909) 888-9413
Lewis Brisbois Bisgaard & Smith LLP
650 Hospitality Lane, Suite 600
San Bernardino, California 92408
Attention: Timothy J. Sabo
Fax: (909) 387-1138
HSB 1-215, L.P.
SE 1-215, L.P.
c/o Hillwood/San Bernardino, LLC
105 North Leland Norton Way, Suite 3
San Bernardino, California 92408
Attention: Michelle Kirk
John Magness
Fax: (909) 382-0073
Hillwood Development Company, LLC
5430 LBJ Freeway, Suite 800
Dallas, Texas 75240
Attn: Michele M. Ringnald
Fax: (972) 201-2889
9. Default. Subject to Section 7 of this Note, and any applicable cure period(s) provided for
in this Note and/or inthe Agreement, a default shall occur whenever the Agency (a) fails to pay
to the Developer any sum due under this Note when it becomes due and payable, or (b) breaches
any other covenant, promise or obligation in this Note, the Agreement or any otherinstrument,
document and/or agreement, now or hereafter, evidencing, securing, guaranteeing,
4838-7503-7441.9
Exhibit I
hypothecating, relating to, or in connection with, the transaction contemplated in the Agreement
and/or this Note (collectively, a "Default"). Upon the occurrence of a Default, the Developer
may, at its option, declare this Note (including, without limitation, all principal, all accrued and
unpaid interest, late charges, attorneys' fees and costs) to be immediately due and payable,
regardless of the Maturity Date, subject to the cure periods provided for in this Note and/or the
Agreement (collectively, the "Default Payment Amount"), and the Agency shall immediately
pay to the Developer the Default Payment Amount.
10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any real or
personal property of any nature whatsoever.
11. Modification. This Note may not be modified, amended, waived or extended, changed,
discharged or terminated orally or by any act on the part of the Agency or of the Developer, but
only by an agreement in writing signed by the Agency and the Developer; provided, however,
the Principal shall be increased in accordance with Section 3.09(d) of the Agreement but shall
never be in excess of$3,630,000.
12. Headin2s. The headings of this Note are for purposes of reference only and shall not
limit or otherwise affect the meaning thereof.
13. Interpretation. Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the identity of the person or entity may in the context
require.
14. Governin2 Law. This Note shall be governed by and construed in accordance with the
laws of the State of California.
15. Judicial Proceedin2s and Attornevs' Fees. If either party hereto files any action or
brings any action or proceeding against the other arising out of this Note, then as between the
Developer and the Agency, the prevailing party shall be entitled to recover as an element of its
costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such
action or proceeding or in a separate action or proceeding brought to recover such attorneys'
fees. The costs, salary and expenses of the City Attorney for the City and members of his office
in enforcing this Note shall be considered as "attorneys' fees" for purposes of this Section. Any
such action or proceeding must be commenced in the Superior Court for the County of San
Bernardino, San Bernardino District, State of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Developer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assi2nment. This Note may be assigned by the Developer (subject to the provisions of
Section 3(e) and 3(f) of this Note) and by the Agency (but no such assignment shall relieve the
Agency from any of its obligations or liabilities hereunder). The terms, covenants and conditions
of this Note shall be binding upon, and inure to the benefit of, the successors and assigns of the
Developer (subject to the provisions of Section 3(e) and 3(f) of this Note) and of the Agency.
4838-7503-7441.9
Exhibit I
IN WITNESS WHEREOF, the Agency has executed this Agency Tax Increment
Revenues Promissory Note as of the date first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino
By:
Maggie Pacheco, Executive Director
4838-7503-7441.9
Exhibit I
EXHIBIT "J"
WATER LINE EASEMENT
The City requires that the Full Development Site has secondary access to public water from the
City Water Department public water main located on the Shandon Hills Golf Course south of the
Property. The attached Exhibit "J-l" shows the general location of the existing water main and
the proposed water line from the Full Development Site attaching into such public water main.
The precise location of such new water line and the precise area of the easement and any
temporary construction easement will be determined by the Developer, the Agency and the City
Water Department. Such easement shall be subject to all rights of review and approval as may
be granted to the Golf Course Operator pursuant to the Lease Agreement as further described in
Section 3.01(cc) of the Agreement.
4838-7503-7441.9
Exhibit J
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WATER LINE EASEMENT
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4838"7503"7441.9
ExhibitJ-l
. ...:51
lEI
EXHIBIT "K"
DEVELOPMENT SERVICES DEPARTMENT
300 North "0" Street - San Bernardino - CA 92418-0001
Planning & Building 909.384.5057 - Fax: 909.384.5080
Public WorkslEngineering 909.384.5111- Fax: 909.384.5155
www.sbcity.org
..
November 28, 2006
Maggie Pacheco, Executive Director
City of San Bernardino
Economic Development Agency
20 I North "E" Street, Ste. 301
San Bernardino, CA92401
John Magness, Vice President
Hillwood/San Bernardino, LLC
105 N. Leland Norton Way, Ste. 3
San Bernardino, CA 92408
RE: Hillwood's Culligan Site Impact Fees
Dear Ms. Pacheco and Mr. Magness:
This is to confirm with you certain traffic impact fees that are payable to the City of San
Bernardino based upon the Environmental Impact Report (EIR) and Traffic Impact Analysis
(TIA) prepared by the Economic Development Agency (EDA) of the City of San Bernardino for
the proposed Hillwood project on the former Culligan site in the State College Redevelopment
Project Area in north San Bernardino, the general location of which is. shown on the attached
Exhibit "A" (the "Property").
As you are aware, the City has now adopted a Development Impact Fee (DIF) ordinance to
replace the need for future TIA's for new development projects that would otherwise have met
the threshold requirement to conduct such a TIA. The EDA has negotiated a provision with
Hillwood for the payment of$3 million by Hillwood towards the anticipated shortfall for the full
funding of the proposed University Parkway Interchange Improvements for the southbound 1-
215 on-ramp. This $3 million represents an amount that is in exces.s of any "fair share"
contribution identified in the EIR and the accompanying TIA and is greater than the amount that
otherwise would have been paid by Hillwood to the City pursuant to the DIF ordinance. I
understand that the EDA has presently budgeted in the 2006-2007 Annual Budget to fund a not-
to-exceed $3 million amount of the Interchange Improvements through EDA funds, which may
include proceeds of EDA tax allocation bond proceeds subject to subsequent actions by the
Mayor and Common Council and the Community Developer Commission. The additional $3
million amount (a total of $6 million) is intended to fund further costs of the Interchange
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Letter to Maggie Pacheco of ED A & John Magness of Hill wood
RE: Hillwood's Culligan Site Impact Fees
November 28, 2006 .
Page 2 on
Improvements that benefit the State College Project Area. And, assuming that Hillwood remits
the required repayment when requested by the EDA, the EDA may apply this second $3 million
amount for any excess development fees that may be due and payable by any development
benefited by the Interchange Improvements.
In addition to the above-mentioned payment, Hillwood will also have the performance obligation
to undertake and complete the following off-site public roadway improvements both adjacent to
the Property and in the general vicinity of the Property, in addition to typical storm drainage and
retention basin improvements, water and sewer and other necessary utility installations:
. Curb cuts and driveway returns, sidewalk and curb and gutter adjacent to the Property.
. Landscaping and street lights adjacent to the Property.
. A traffic signal at the main entrance to the Property from University Parkway.
. All on-site circulation, fire-access route, utilities and storm drain system from University
Parkway through the Property to the basin located south of the Property.
Therefore, the City will not charge Hillwood for any traffic mitigation fees before or after the
payment of the $3 million by Hillwood provided that Hillwood makes such payment when
requested by the EDA, and upon such payment, the Development Services Department will
deem all traffic mitigation fees to have been paid for the proposed development of the Property
which will be used primarily for industrial, warehouse or distribution facilities estimated to
consist of up to approximately 2,000,000 square feet of ground floor building space.
S?/il ~
Mark A. Lancaster, RCE
Deputy Director/City Engineer
MAL:op
cc: Fred Wilson, City Manager
Valerie C. Ross, Director
Mike Trout, EDA Project Manager
EXHIBIT "K"
Letter to Maggie Pacheco of ED A & Jolm Magness of Hill wood
RE: Hillwood's Culligan Site Impact Fees
November 28, 2006
Page 3 oD
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EXHIBIT "L"
REIMBURSEMENT AMOUNT
A. Upon completion of the Project in accordance with the Agreement, the original principal
amount of the Promissory Note shall be the sum of the following:
1. $970,000 (the Property FMV; the Property to be dedicated to the City subject to
acceptance in an improved condition by the City Engineer).
2. $1,400,000 (the excess of the Developer's $3,000,000 payment under Section
3.09(a) which exceeds the Developer Fair Share Contribution).
3. Actual costs of constructing and installing the Basin improvements on the
Property, construction of inlet and outflow structures and earth import and export and grading
within the ultimate Basin configuration, the storm water detention Basin improvements on the
Property and the construction of the storm water collection system on the Full Development Site
and the Exchange Tract in an amount not to exceed $1,260,000, with the highest principal
amount of the Promissory Note not to exceed $3,630,000; (actual costs subject to verification by
the Agency; system and improvements to be dedicated to the City subject to acceptance by the
City Engineer).
B. As further provided in Section 3.09(d) of the Agreement, the Developer shall provide the
Agency with back-up information including invoices and cancelled checks to demonstrate that
the payments for the items listed in Section A above have been paid by or on behalf of the
Developer. As of the date of execution of the Promissory Note, the Reimbursement Amount and
thus the initial principal balance of the Promissory Note shall be that dollar amount determined
in the manner as set forth in Section A of this Exhibit "L". Interest shall accrue on the
Reimbursement Amount as of the date of the execution and delivery to the Developer of the
Promissory Note. Only those portions of the above set forth public improvement items listed in
Section A which are offered for dedication to the City and accepted by the City by and through
the City Engineer after the date of the Promissory Note shall qualify for inclusion within the
Reimbursement Amount, increasing the principal amount of the Promissory Note, subject to
approval of all such additional costs and the acceptance of the offer of dedication by the City
Engineer; provided, however, the principal amount of the Promissory Note shall never exceed
$3,630,000.
4838-7503-7441.9
Exhibit L
EXHIBIT "M"
DETENTION BASIN
4838-7503-7441.9
Exhibit M
SCALE: ,.. 300'
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PORTION OF THE:
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CONWN$: 31,517 SO, n: :t
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INDICATES DETENTION BASIN _
CONTAINS: SJO,855 Sf). n: :t
INDICATES PORTION OF THE:
PROPER1Y THAT BEr:OI/CS _T ~
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REG. EXP. .tUNC JO. 2008
4838.7503-744\.9
Exhibit M