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HomeMy WebLinkAboutR28- Economic Development Agency ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ORIGINAL FROM: Emil A. Marzullo SUBJECT: Waterman Holdings, LLC -Defense, Indemnification Interim Executive Director and Hold Harmless Agreement and Easement, Maintenance and Operation Agreement (Central City East Redevelopment Project Area) DATE: August 31,2009 -------------------------------- --- --- Synomsis of Previous Commission/Council/Committee Action(s): On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the Community Development Commission of the City of San Bernardino(the"Commission") consider a disposition and development agreement with Waterman Holdings, LLC,for approval. On December 6, 2004, the Commission adopted Resolution No. CDC/200449 approving the sale of certain real property by the Agency to Waterman Holdings, LLC, and authorized the Executive Director to execute the Disposition and Development Agreement between the Agency and Waterman Holdings, LLC,and the Mayor and Common Council of the City of San Bernardino simultaneously adopted Resolution No. 2004-386 approving the sale of certain real property (4t" and Waterman Avenue - APN: 0135-191-11)within the Central City East Redevelopment Project Area("Project Area"). Synopsis Continued to Next Paae.... Recommended Motion(s): ----------------------------------------------------------------------------------------------------------------------------------------------------------------- Mayor and Common Council A. Resolution of the Mayor and Common Council of the City of San Bernardino approving a Defense, Indemnification and Hold Harmless Agreement by and between the City of San Bernardino and Waterman Holdings, LLC, concerning real property (4th and Waterman Avenue - APN: 0135-191-17) (Central City East Redevelopment Project Area) B. Resolution of the Mayor and Common Council of the City of San Bernardino approving an Easement, Maintenance and Operation Agreement by and between the City of San Bernardino and Waterman Holdings, LLC, concerning real property (4tb Street and Waterman Avenue - APN: 0135-191-17) (Central City East Redevelopment Project Area) Contact Person(s): Mike Trout Phone: (909)663-1044 Central City East Project Area(s) Redevelopment Project Area Ward(s): Pt Supporting Data Attached: El Staff Report El Resolution(s) 0 Amendment(s)/Agreement(s) ❑Map(s) ❑ Letters FUNDING REQUIREMENTS Amount: $ N/A Source: N/A Budget Authority: N/A C SIGNATURE: Fiscal Review: Emil A.Marzullo, Interim Executive Director Rus eJes s,Inte ' Administrative Services D' for Commission/Council Notes: - -------------------------------------------------------------------------------- P\Agenda\Comm D,Comminm\CDC2009\09-08-09Wateman Holdings,LLC-DIM&EMOAg uSR(Cont'd).doe COMMISSION MEETING AGENDA Meeting Date: 09/08/2009 Agenda Item Numbers (Z2$ Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 2 Synopsis of Previous Commission/Council/Committee Action(s): On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the Commission consider the action of June 20, 2005. On June 20, 2005, the Commission adopted Resolution No. CDC/2005-19 approving Amendment No. 1 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive Director to execute Amendment No. 1. On June 19, 2006, the Commission adopted Resolution No. CDC/2006-20 approving Amendment No. 2 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive Director to execute Amendment No. 2. On November 8, 2007, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend that the Commission consider the action of Amendment No. 3. On July 21, 2008, the Commission adopted Resolution No. CDC/2008-26 approving Amendment No. 3 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Interim Executive Director to execute Amendment No. 3. On October 9, 2008, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend that the Council and the Commission consider the action of Amendment No. 4. On November 3, 2008, the Commission discussed Amendment No. 4 and the sale of the Flood Control Channel Property to Waterman Holdings, LLC, deciding to continue discussion of Amendment No. 4 and the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC to November 17, 2008. On November 17, 2008, the Commission continued discussion of Amendment No. 4 and the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC, to December 15, 2008. On December 15, 2008, the Commission adopted Resolution No. CDC/2008-46 approving Amendment No. 4 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC concerning the sale of the Flood Control Channel Property to Waterman Holdings, LLC, authorized the Interim Executive Director to execute Amendment No. 4 and the Mayor and Common Council of the City of San Bernardino simultaneously adopted Resolution No. 2008-459 approving the sale of the Flood Control Channel Property. On August 3, 2009,the Commission continued the item to August 17, 2009. On August 17, 2009,the Commission continued the item to September 8, 2009. RWgendwTomm Dev Commusbn)CDC 2009\09 4)8-09 Wata nHoWiMs,LLC-DIM&EMO Agrmts SR(Cont'd).doc COMMISSION MEETING AGENDA Meeting Date: 09/08/2009 Agenda Item Number: -" ECONOMIC DEVELOPMENT AGENCY STAFF REPORT WATERMAN HOLDINGS,LLC— DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT AND EASEMENT, MAINTENANCE AND OPERATION AGREEMENT (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) BACKGROUND: On December 6, 2004, the Mayor and Common Council of the City of San Bernardino (the "Council') and Community Development Commission of the City of San Bernardino (the "Commission") approved the sale of approximately 3.9 acres of land owned by the Redevelopment Agency of the City of San Bernardino (the "Agency") located at the southwest corner of 4`s Street and Waterman Avenue (APN: 0135-191-11) (the "Property") pursuant to a 2004 Disposition and Development Agreement (the "DDA") by and between the Agency and Waterman Holdings, LLC (the `Buyer/Developer"). Waterman Holdings, LLC is a single asset LLC created solely for the ownership of the Property and for the development of the project for the County of San Bernardino. The principals of Waterman Holdings, LLC are as follows: Ran Torkan (50%) and Emanuel Separzadeh, Jacob Separzadeh, John Separzadeh, Michael Separzadeh, Mouris Separzadeh and Yafa Azizzadeh (50%). The sole managing member of Waterman Holdings, LLC is Jian Torkan and has unilateral authority to act on its behalf The other parties to Waterman Holdings, LLC are silent investor parties. The DDA, as approved, required for the Buyer/Developer to construct a minimum of 16,864 square feet of office space for the County Preschool Services Department(the "PSD") on the most westerly 2 acres of the Property ("Phase I") with an option to construct an additional building for another County Department on the remaining 1.6 acres on the easterly portion of the Property ("Phase Il'). During the interim period until the option on the Phase II site was exercised, the DDA required the Agency to install and maintain perimeter fencing, landscaping and an irrigation system for the Phase II site. The Agency would sell the Phase I Property for the fair market value and the Buyer/Developer would have the option to purchase the Phase II Property at a later date. The Agency pledged 60% of the tax increment that the completed Project would generate over a period of ten years to off-set the below market rental rate that the County required of the Buyer/Developer. On May 17, 2005, the San Bernardino County Board of Supervisors approved a ten-year lease with the Buyer/Developer to construct 17,000 square feet of office space for the PSD. On June 20, 2005, the Commission approved Amendment No. 1 to the DDA, whereby the location of Phase I and Phase II were redefined. As a result, the Phase I project was then to be located at the southwest corner of 4w Street and Waterman Avenue. In the interim, two items arose that would necessitate a change to the original DDA; first, it was determined that the pledge of tax increment to the Buyer/Developer needed to be restructured because the last date to incur tax increment debt payable from direct pledge of tax increment revenues in the Project Area was January 1, 2004. Second, the County needed a larger building constructed for a different County Department and consequently, the Buyer/Developer would now require both the Phase I and Phase II sites (APN: 0135-191-11) (the "Agency Property") be combined as a single site. ------------—----------------------------—---------------------- ------------------------------------------------------------ P:\Agendas\Comm Dev Commission\CDC 200MMM9 Waterman Holdings,LLC-DIM&EMD AWmts SR(Cmnfd).dm[ COMMISSION MEETING AGENDA Meeting Date: 09/08/20009/0 Agenda Item Number: / T Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 2 The Buyer/Developer will purchase the Agency Property for $512,424, which is equal to the fair market value of the Agency Property based upon the final surveyed square footage. Escrow has been opened under the terms of the original DDA and the Buyer/Developer has deposited the sum of $20,000 into escrow and the balance of$492,424 will be paid upon the closing of the escrow. Per Amendment No. 2, the Agency will pledge to the Buyer/Developer from general Agency revenues under a Promissory Note and not as a pledge of tax increment revenues, an amount equal to 60% of the 1% tax revenues generated by the proposed Project (estimated development cost is $6 million) for a period of ten years. As per the original DDA, the 60% pledge was authorized by the Commission in an effort to off-set or compensate the Buyer/Developer for the below market rate per the ten-year lease with the County. The Agency's payment obligation will commence upon presentation of a cancelled check by the Buyer/Developer and as of the fiscal year following completion of the Project by the Buyer/Developer and said payment will be paid after each December 10`h and April 10`h tax payment. On June 19, 2006, the Commission approved Amendment No. 2 to the DDA, whereby the Buyer/Developer will develop on the Agency Property, a 2-story building containing a minimum of 45,000 square feet of office space, to include parking and landscaping, and to lease to the County Transitional Assistance Department ("TAD") (the "Project"). TAD provides jobs and employment services to residents and job training programs. Additionally, in Amendment No. 2, the Agency pledged to reimburse the Buyer/Developer an amount equal to 60% of the 1% of new property taxes generated by the Project for a period of ten years from the general revenues of the Agency. On July 21, 2008, the Commission approved Amendment No. 3 to the DDA, wherein the Agency would reimburse the Buyer/Developer an amount not to exceed $399,500 for the actual costs for the required Off-Site Improvements. This reimbursement would be paid from the sale proceeds of the Agency Property 30 days following the completion of the Project as evidenced by a Certificate of Occupancy issued by the City of San Bernardino (the "City") and verification that the Off-Site Improvements have been constructed by the Buyer/Developer and accepted by the City. The cost reimbursements to the Buyer/Developer would not exceed the lesser of the actual cost paid for the Off-Site Improvements or $399,500 utilizing prevailing wage rates. All other terms and conditions of the DDA, as amended by Amendments No. 1 and No. 2, would remain unchanged. On November 3, 2008, the Commission met to consider the approval of Amendment No. 4 for the sale of the Flood Control Channel Property to the Buyer/Developer. At the meeting, there was discussion and concern about the plans and necessary assurances that the Buyer/Developer would obtain any and all approval/permits from any federal, state and/or local agency prior to construction of the one-story parking structure over the Flood Control Channel Property. The decision of the Commission was to continue the approval of Amendment No. 4 and the sale of the Flood Control Channel Property to November 17, 2008, to allow Agency Staff time to make the necessary revisions to Amendment No. 4. On November 17, 2008, the Commission continued the approval of Amendment No.4 and the sale of the Flood Control Channel Property to December 15, 2008. ---------—----------------—-----—-----------------——-----------—------------------————---------------------------------------------------------------------- P\Agendas\Comm Dev Commission\CDC20g OS-09Watetman Holdings,LLC-DIHH&EMOAg USR(Confd)doc COMMISSION MEETING AGENDA Meeting Date: 09/08/2009 Agenda Item Number: AV I Economic Development Agency Staff Report Waterman Holdings, LLC-Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 3 On December 15, 2008, the Commission approved Amendment No. 4 to the DDA, which outlined certain conditions that the Buyer/Developer was required to meet prior to the transfer of the Flood Control Channel Property from the Agency to the Buyer/Developer. Additionally the Council approved the sale of the Flood Control Channel Property to the Buyer/Developer. CURRENT ISSUE: Item No. 20 of Amendment No. 4 added Section 2.15 to the DDA in connection with the Flood Control Channel Property. Section 2.15 placed several requirements on the Buyer/Developer that needed to be accomplished before escrow for the Flood Control Channel Property could be closed. To date, the Buyer/Developer has met all the requirements except for two items. Those two remaining items, which the Buyer/Developer is required to execute, is a "Defense, Indemnification and Hold Harmless Agreement" and an "Easement, Maintenance and Operation Agreement" with the City. Additionally, Section 2.15 requires that both of these agreements, by and between the Buyer/Developer and the City,be approved by the Council at a public meeting. ENVIRONMENTAL IMPACT: The proposed new project description has been reviewed under the California Environmental Quality Act ("CEQA") and it has been determined that the project qualifies for a Categorical Exemption, Class 32 (Guidelines Section 15332). FISCAL IMPACT: The Agency will receive $36,000 from the Buyer/Developer for the sale of the Flood Control Channel Property. RECOMMENDATION: That the Mayor and Common Council adopt the attached Resolutions. Emil A. Marzullo, Interim Executive Director --------------------------- -------------------------------------------------------------------------------------------------------- P\Agendas\Comm Dev Commiabn\CDC 2009\09 48-09 Wideman Holdings,LLC-D1FHi&EMO Agrmrs SR(Confd).doc COMMISSION MEETING AGENDA Meeting Date: 09/08/2009 Agenda Item Number: I RESOLUTION NO. COPY 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 3 OF SAN BERNARDINO APPROVING A DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT BY AND BETWEEN THE CITY OF 4 SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING REAL PROPERTY (4TH STREET AND WATERMAN AVENUE —APN: 0135- 5 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 6 7 WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter 8 city, duly organized and existing pursuant to the provisions of the constitution of the State of 9 California; and 10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a i 11 public body, corporate and politic existing under the laws of the State of California, Health and I 12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and j 13 underutilized land; and ! 14 WHEREAS, on December 15, 2008, the Community Development Commission of the City 15 of San Bernardino (the "Commission") adopted Resolution No. CDC/2008-46 approving 16 Amendment No. 4 (the "Amendment") to the 2004 Disposition and Development Agreement (the 17 "DDA") between the Agency and Waterman Holdings, LLC (the "Buyer" or Developer"), 18 concerning the transfer of certain real property, APN: 0135-191-17 (the "Flood Control Channel 19 Property"); and 20 WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San 21 Bernardino (the "Council") adopted Resolution No. 2008-459 approving the sale of the Flood 22 Control Channel Property to the Buyer; and 23 WHEREAS, the Flood Control Channel Property is located south of the southwest corner of 24 4d' Street and Waterman Avenue within the Central City East Redevelopment Project Area; and 25 WHEREAS, the Amendment provides for the development of the Flood Control Channel 26 Property by the Developer so that it may be used as a parking lot in furtherance of the office project 27 identified in the DDA, as amended; and 28 P:UgenduV MlusionsU iutuns�200n S-N Wmv n Holdings,LLC-DIM Ag mment MCC Reno A(Coned)duc 3 1 WHEREAS, the Amendment added Section 2.15 to the DDA which outlined certain 2 requirements that the Buyer needed to accomplish in order to close escrow for the transfer of the 3 Flood Control Channel Property to the Buyer; and 4 WHEREAS, Section 2.15 requires that the Buyer execute a Defense, Indemnification and 5 Hold Harmless Agreement (the "Hold Harmless Agreement') with the City and that the Council 6 approve the Hold Harmless Agreement between the City and the Buyer in a public meeting. 7 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 8 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 9 FOLLOWS: 10 Section 1. The Council finds and determines that the facts and circumstances set forth in 11 the Recitals hereof are true and correct in all respects. 12 Section 2. The Council hereby approves the Hold Harmless Agreement, attached as 13 Exhibit"A",by and between the City of San Bernardino and Waterman Holdings, LLC. 14 Section 3. This Resolution shall take effect upon its adoption and execution in the 15 manner as required by the City Charter. 16 17 18 19 20 21 22 23 24 25 26 27 28 2 P Wgenda%mlutiunsV wLtimut2009W9-0 Wetermen Holdings.LLC-DIHH Agrttment MCC Reso A(Com'C).&c 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 2 OF SAN BERNARDINO APPROVING A DEFENSE, INDEMNIFICATION 3 AND HOLD HARMLESS AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING 4 REAL PROPERTY (4TH STREET AND WATERMAN AVENUE — APN: 0135- 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting 8 thereof, held on the day of 2009, by the following vote to wit: 9 Council Members: Ayes Nays Abstain Absent 10 ESTRADA 11 BAXTER 12 BRINKER 13 SHORETT 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 18 Rachel G. Clark, City Clerk 19 20 The foregoing Resolution is hereby approved this day of 2009. 21 22 Patrick J. Morris, Mayor 23 City of San Bernardino 24 Approved as to Form: 25 26 By: lames F. Penman, City Attorney 27 28 3 P gwrn U=LtnnNMIUIMSU009\0948-09 Wwwa Holdings.LLC-DIHH A�,mt MCC Rem A(Cont'd).doc 1 EXHIBIT A Defense, Indemnification and Hold Harmless Agreement 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 P Wgan Holdings,LLC DIM Al . MCC Rao A(CO11d).&I RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino 300 North"D" Street, 6a' Floor San Bernardino, CA 92418 Attn.: City Attorney (Space Above For Recorder's Use) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES 2009 DEFENSE,INDEMNIFICATION AND HOLD HARMLESS AGREEMENT: COVENANT RUNNING WITH THE LAND BY AND BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS,LLC This 2009 DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT (this "Agreement") is made and entered into as of September 8, 2009, by and between the City of San Bernardino, a charter city (the "City"), and Waterman Holdings, LLC, a California limited liability company (the `Buyer"). In this Agreement, the City or the Buyer may singularly be referred to as a "Party" and may collectively be referred to as the "Parties." RECITALS WHEREAS, on December 6, 2004, the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and the Buyer executed and entered into a Disposition and Development Agreement (the "DDA") with the Buyer for the construction of structures, in two (2) phases,to be occupied by the County of San Bernardino (the "County"); and WHEREAS, pursuant to the DDA, the Buyer was to acquire from the Agency approximately 3.7 acres (the "Agency Property") located at the southwest comer of 4`s Street and Waterman Avenue, for development of the structures to be occupied by the County(the "County Structures"); and WHEREAS, on June 20, 2005, the Agency and the Buyer executed and entered into the Amendment No. 1 to the DDA (the "First Amendment"). The First Amendment, without limitation, provided for the transposition of the Phase I project and the Phase II project; and 1 P V gendasVApe AmN=n%�Scnda Au.ch m pn a Amd.,=u grmu-AmW 3W9109 S8 Warcrman HoWinpa-DIHH Ag menx d" WHEREAS, on June 19, 2006, the Agency and the Buyer executed and entered into the Amendment No. 2 to the DDA (the "Second Amendment"). Pursuant to the Second Amendment the Buyer acquired from the Agency a right of first refusal to purchase the Flood Control Channel Property as defined in the Second Amendment; and WHEREAS, on July 21, 2008, the Agency and the Buyer executed and entered into the Amendment No. 3 to the DDA (the "Third Amendment"). Pursuant to the Third Amendment, the Agency agreed, without limitation, to reimburse the Buyer for the off-site improvement costs that the Buyer incurred in connection with the construction and the development of the Project in an amount not to exceed$399,500; and WHEREAS, on December 15, 2008, the Agency and the Buyer executed and entered into the Amendment No. 4 to the DDA (the "Fourth Amendment"). Pursuant to the Fourth Amendment, the Buyer agreed, without limitation: (i) to purchase the Flood Control Channel Property from the Agency; and (ii) to construct and to develop, without limitation, a single floor structure above the Flood Control Channel Property to provide additional parking spaces for the building constructed by the Buyer on the Agency Property(the "Flood Control Channel Property Improvements"); and WHEREAS, the Buyer has commenced construction of the Flood Control Channel Property Improvements; and WHEREAS, the Flood Control Channel Property is part of the Warm Creek and is presently subject to flows occurring in and across the historical and modified course thereof, from whatever source, whether naturally occurring or otherwise, whether consistent with historical flows or otherwise; and WHEREAS, the Agency and the Buyer have opened an escrow to facilitate the transfer of the Flood Control Channel Property to the Buyer; and WHEREAS, the Buyer, without limitation, must execute this Agreement as one (1) of the conditions precedent provided for in Section 2.15(vi) of the Fourth Amendment that must be satisfied by the Buyer in order to close the escrow for the purchase by the Buyer and for the sale by the Agency of the Flood Control Channel Property and of the Flood Control Channel Property Improvements. NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS OF THIS AGREEMENT, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND THE CITY, ON BEHALF OF ITSELF, AND ITS SUCCESSORS AND ASSIGNS,DO HEREBY AGREE AS FOLLOWS: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections of this Agreement, the following capitalized terms shall have the meanings as set for below: 2 P.V,g nd s\Agenda Amchmen9\A4F l-Am.M 3009 8-0 W.t.m Hoki,,-DIHH A,rcemem.&, "Agency" shall mean the Redevelopment Agency of the City of San Bernardino, in the County of San Bernardino, State of California. "City" shall mean the City of San Bernardino, in the County of San Bernardino, State of California. "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2004 Disposition and Development Agreement, dated December 6, 2004, as executed and delivered by and between the Agency and the Buyer. "DDA Agreement" shall mean the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and further amended by the Fourth Amendment. "First Amendment" shall mean the Amendment No. 1 to the DDA, dated June 30, 2005, as executed and delivered by and between the Agency and the Buyer. "Flood Control Channel" shall mean those properties within the banks of the Warm Creek Channel. "Flood Control Channel Property" shall mean that portion of the Flood Control Channel located within and comprising the Flood Control Channel Property, as set forth in Exhibit "A" attached hereto and by this reference made a part hereof and shall not include any other contiguous portions of the Flood Control Channel not illustrated on said Exhibit "A". "Flood Control Channel Property Improvements" shall mean the improvements to the Flood Control Channel Property as described in Exhibit aB", attached hereto and by this reference made a part hereof. "Fourth Amendment" shall mean the Amendment No. 4 to the DDA, dated December 15, 2008, as executed and delivered by and between the Agency and the Buyer. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits and/or approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Environmental Quality Act ("CEQA"), National Environmental Protection Act ("NEPA"), all applicable Environmental Laws and all applicable Laws pertaining to flooding, to flood prevention and mitigation, to flood control channels and/or to the maintenance and repair of flood control channels. "Second Amendment" shall mean the Amendment No. 2 to the DDA, dated June 19, 2006, as executed and delivered by and between the Agency and the Buyer. "Third Amendment" shall mean the Amendment No. 3 to the DDA, dated July 21, 2008, as executed and delivered by and between the Agency and the Buyer. 3 P At,.6.uU,Ma AttachmentMgrmts-AmeM 2W9 -0849 Walcmnan HOWings-DIHH Agmement dm Section 3. Defend, Indemnify and Hold Harmless. The Buyer agrees to defend in any administrative, civil, criminal, or other proceedings, indemnify, save and hold harmless the City, the Agency and all elected officials, appointed officers, employees and staff, volunteers, agents, representatives, contractors, subcontractors and/or consultants of the City and of the Agency from all liabilities, losses and damages that may be suffered from the acts or omissions of the Buyer and/or by the agents, representatives, employees, contractors, subcontractors, consultants, successors, invitees, and/or assigns of the Buyer, and/or as the result of the use of the Flood Control Channel Property and/or the Flood Control Channel Property Improvements in the manner contemplated by the DDA as amended. This indemnity agreement in all its terms extends, by means of explication and not of limitation, the injury or loss of life and/or property damage from water flows, flood waters and debris flows and debris blockages that cause flooding or water damages to any real or personal property or result in any liability damages, injury or loss of life. The Buyer shall procure and maintain in effect at all times general liability insurance in the combined/single amount of$3,000,000, at its sole cost and expense, and shall name and designate the City and the Agency as "additional insureds" on the general liability insurance policy. The limits of the policy shall not be a limit on the liability of the Buyer under this section. Section 4. Term of Agreement. The term of this Agreement shall commence on the date the Buyer first acquires the Flood Control Channel Property and shall survive the termination of the DDA Agreement and shall be a covenant that runs with the land of the Flood Control Channel Property and/or with the Flood Control Channel Improvements and shall be binding on all successors and assignees of the Buyer's. The Buyer, and each successive owner of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements shall have liability hereunder only to the extent such liability arises from events or circumstances existing or occurring during its v period of ownership of the Flood Control Channel Property and/or the Flood Control Channel Improvements. Section 5. Representations and Warranties of the Buyer. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement and the Buyer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Buyer is a party, or under any federal, state, municipal or local laws, statutes, ordinances, rules, governmental regulations or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer, to the Flood Control Channel Property and/or to the Flood Control Channel Property Improvements, now or hereafter in effect and as may be amended from time-to-time. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. 4 P UgendasUgnWa AnachmentsUgeMa Atuchmcnls\Agmtda A.a hmenuUgrmts-AmeM 2000\09-OM9 Waterman Holdings-DIHH Ag Mnl don (e) The Buyer is not in default under the DDA Agreement and shall perform the terms, covenants and conditions of the DDA Agreement. Section 6. Covenants RunninE With the Land The Parties hereby expressly agree as follows: This Defense, Indemnification and Hold Harmless Agreement shall constitute a Covenant running with the land. (a) The land affected by these covenants includes the Flood Control Channel Property and of the Flood Control Channel Property Improvements as described herein and the public lands of the. City of San Bernardino and all property owned by the Agency in proximity to such Flood Control Channel Property and Flood Control Channel Property Improvements. (b) Each successive owner of the Flood Control Channel Property and/or the Flood Control Channel Property Improvements are bound hereby for the benefit of the land owned by, granted by, or granted to the City of San Bernardino and the Agency described in Section 6(a) above. (c) Each covenant relates to the use, repair maintenance, or improvement of the Flood Control Channel Property and Flood Control Channel Property Improvements, the public lands of the City of San Bernardino and all property owned by the Agency in proximity to such Flood Control Channel Property and Flood Control Channel Property Improvements, or some part thereof. © (d) This instrument shall be recorded in the offices of the County Recorder of the County of San Bernardino. Section 7. Events of Default. (a) An event of default shall occur under this Agreement whenever: (i) any Parry fails to timely pay any amount due and owing under this Agreement and/or the DDA Agreement, (ii) any Party fails to perform any term, covenant or condition in this Agreement, (iii) the occurrence of a default under the DDA Agreement, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA Agreement is or becomes false and untrue, or (v) any Party files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, any Party is or becomes insolvent, any Party assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of any Party and such appointment is not discharged within sixty (60) calendar days thereafter. Upon the occurrence of an event of default, neither Party shall be under any further obligation under this Agreement, and the rights of the Parties hereunder shall be released and discharged; provided, however, that if the Party who is otherwise claimed to be in default by the other Party commences to cure, to correct or to remedy the alleged default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently complete such cure, correction or remedy, such Party shall not be deemed to be in default hereunder. 5 P\Agendu\Agenda A.,,hoxiolACeMa MUChmmn\Agvsda ARachme Ks\ ,,.M-Amend 3009\09 4)849 Winn so Holdings-DIHH Agtcemem dm (b) The Party which may claim that a default has occurred shall give written notice of default to the Parry in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice as specified herein. (c) Any failure or delay by a 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 rights or remedies associated with a default. The rights and remedies of the Parties 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. (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice or a lesser time as may be required by law, as provided above, a "breach" shall be deemed to have occurred. In the event of a breach, the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement and the continuing covenants established hereunder, at law and in equity. Section 8. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. (b) Attorney's Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement shall be considered "reasonable attorneys' fees" for purposes of this Section and are to be calculated at prevailing market rates in the local community for comparable services. (c) Authority. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement,the Parties shall comply with and conform to all applicable Laws. 6 P%AU do\A,Ma Am h.,nu\A,eM.Annh.m A,.d.A.nh.,.U\ ,1.11-Amend 3009\0408-09 Wnnman Hoki,¢ -DIM Agreement d. (f) Conflicts of Interest, No Individual Liability. No official or employee of the City and/or of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City and/or of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City and/or of the Agency shall be personally liable in the event of a breach of this Agreement by the City. (g) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. (i) Entire Agreement. This Agreement constitutes the entire agreement between the Parties. This Agreement supersedes all prior negotiations, discussions, and agreements between the Parties concerning the subject matters covered herein. The Parties intend this Agreement to be the final expression of their agreement with respect to the subjects covered herein and a complete and exclusive statement of such terms. 0) Estoppel Certificate. The City agrees to, within twenty (20) calendar days following any written notice from the Buyer, deliver to any potential purchaser or lender a commercially- '"'' reasonable estoppel certificate certifying: (i) whether, to the City's knowledge, there are any then- current claims or defaults under this Agreement, and (ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. (k) Governing Law. This Agreement shall be governed by the laws of the State of California. (1) Headings. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (m) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (n) Necessary Actions. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to cant' out the purposes of this Agreement. (o) Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served 7 P Ugcnda,\Agenda AnachmenuUgcnda Aruchmrnu\Agendr Auachmenu\ grmu-AmcW 3009\09.08-09 WUe n H Wing,-DIHH Aureemem doe by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the 3rd business day after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Buyer: Waterman Holdings, LLC Attention: Jian Torkan 4221 Wilshire Boulevard, Suite 240 Los Angeles, California 90010 To the City: City of San Bernardino Attention: City Attome 300 North"D" Street, 6 Floor San Bernardino, California 92418 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North"E" Street, Suite 301 San Bernardino, California 92401 (p) Partial Invalidity. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (q) Representation and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. (r) Severabilitv. Each and every Section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof to certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (s) Successors and Assigns. This Agreement shall constitute covenants running with the Flood Control Channel Property and the Flood Control Channel Property Improvements and shall be binding on all successors and assigns of the Buyer. The Buyer, and each successive owner of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements shall have liability hereunder only to the extent such liability arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements. (This Agreement may not be assigned by the Buyer except to a person or entity who is concurrently acquiring the Buyer's ownership of the Agency Property, and the Agency Property Improvements, and the Flood Control Channel Property, and the Flood Control Channel Property Improvements. The City may assign and delegate its rights, title, interest and �✓ obligation in, to and under this Agreement without obtaining the prior consent of the Buyer.) 8 P'.WgeMO\AgeMa Avachmema\Agenda AtneA 1e 4enda Anuhmenu\Agrmu-Amend 20MA0 S-0 Waterman Holdings-DIHH Agreement&c (t) Third Party Beneficiaries. Except for the Agency, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to enforce this Agreement in the event the City does not enforce the payment or non-payment obligations of the Buyer under this Agreement. (u) Time is of the Essence. Time is of the essence in this Agreement. (v) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance or enforce one or more of the remedies provided in the Agreement shall not be deemed to be a waiver of that remedy. `. 9 P:UMendas\AgeMa Amchments\Agenda AnachmmuUgeWd Anech.m, grtmu-Amend 2009\09-09-09 W.t v n Holdings-DIHH Agl em nl doc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Morris, Mayor Approved as to Form: By: &r= J s F. Penman, City Attorney Date: BUYER Waterman Holdings, LLC a California limited liability company By:_ Jian Torkan Title: 10 P 9Agend NAgrnda Ana6mentsWgenda Atwhmemsl pg aAn,h.eMu ,Ima-A..W 3009109-0g-09 W.I nH.Wings-DIHH Agrcemens.dnc State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 11 P V pendasUgenda Atuchmenu\Agenda Attachmenu\Agcnda Anachmenu\Agcmu-AmeM 3009\09-08-9 Waterman Holdings-DIHH Ag..m n,d. EXHIBIT"A" Legal Description of the Flood Control Channel Property APN: 0135-191-17 PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTWEST CORNER OF SAID PARCEL 1, SAID POINT ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9; THENCE NORTH 00 007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID PARCEL 1; THENCE LEAVING SAID WEST LINE SOUTH 89°56'51" EAST 275.19; THENCE SOUTH 86024'16" EAST 260.00 FEET TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9; THENCE SOUTH 89 059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE POINT OF BEGINNING. 12 P Ugoods, s,.daAnachrnmuU,nda Au¢hm.sWganda AnachmcrosUnrims-Amend 2009sA9-Og-M Wzl nan Holdings-DIHH Agmemem doe EXHIBIT"B" Flood Control Channel Property Improvements The Improvements of the Flood Control Channel Property shall consist of a single floor structure built above the Flood Control Channel Property to provide additional parking spaces for the 2- story, 45,000 square foot building. The construction, landscaping, etc., of the single floor parking structure shall comply with the City's Development Code and requirements from any federal and/or state governmental agency, concerning improvements to and/or near the Flood Control Channel Property,that may be imposed on the Developer. 13 P Wgendae\A¢eWa Anachmenu\Agende AnaohmenuVegenda Anechmenu\Agrmn-Amend ID0 OMg-W WM..Holdings-DIHH Ag ..e ,doc 1 RESOLUTION NO. COPI 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 3 OF SAN BERNARDINO APPROVING AN EASEMENT, MAINTENANCE AND OPERATION AGREEMENT BY AND BETWEEN THE CITY OF SAN 4 BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING REAL PROPERTY (4T" STREET AND WATERMAN AVENUE — APN: 0135- 5 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 6 7 WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter 8 city, duly organized and existing pursuant to the provisions of the constitution of the State of 9 Califomia; and 10 WHEREAS, the Redevelopment Agency of the City of San Bemardino (the "Agency") is a 11 public body, corporate and politic existing under the laws of the State of California, Health and 12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and 13 underutilized land; and 14 WHEREAS, on December 15, 2008, the Community Development Commission of the City 15 of San Bemardino (the "Commission") adopted Resolution No. CDC/2008-46 approving 16 Amendment No. 4 (the "Amendment") to the 2004 Disposition and Development Agreement (the 17 "DDA") between the Agency and Waterman Holdings, LLC (the "Buyer" or Developer"), 18 conceming the transfer of certain real property, APN: 0135-191-17 (the "Flood Control Channel 19 Property"); and 20 WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San 21 Bemardino (the "Council') adopted Resolution No. 2008-459 approving the sale of the Flood 22 Control Channel Property to the Buyer; and 23 WHEREAS, the Flood Control Channel Property is located south of the southwest corner of 24 0 Street and Waterman Avenue within the Central City East Redevelopment Project Area and is 25 presently an unimproved vacant lot; and 26 WHEREAS, the Amendment provides for the development of the Flood Control Channel 27 Property by the Developer so that it may be used as a parking lot in furtherance of the office project 28 identified in the DDA, as amended; and 1 P.fteMasVlnolusionsNewYnuiu\2W VM48-09 Wasemun Habinyc,LLC.EMO Ayneemcm MCC Rao B(Coma)da< i WHEREAS, the Amendment added Section 2.15 to the DDA which outlined certain 2 requirements that the Buyer needed to accomplish in order to close escrow for the transfer of the 3 Flood Control Channel Property to the Buyer; and 4 WHEREAS, Section 2.15 requires that the Buyer execute a Easement, Maintenance and 5 Operation Agreement (the "EMO Agreement") with the City and that the Council approve the EMO 6 Agreement between the City and the Buyer in a public meeting. 7 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 8 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 9 FOLLOWS: 10 Section 1. The Council finds and determines that the facts and circumstances set forth in 11 the Recitals hereof are true and correct in all respects. 12 Section 2. The Council hereby approves the EMO Agreement, attached as Exhibit "A", 13 by and between the City of San Bernardino and Waterman Holdings, LLC. 14 Section 3. This Resolution shall take effect upon its adoption and execution in the 15 manner as required by the City Charter. 16 17 18 19 20 21 22 23 24 25 26 C27 28 2 P Wa.r Holdings,LLC-EMO Agmment MCC RM B(Coni'E).doc 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 2 OF SAN BERNARDINO APPROVING AN EASEMENT, MAINTENANCE 3 AND OPERATION AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING 4 REAL PROPERTY (4T" STREET AND WATERMAN AVENUE—APN: 0135- 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting 8 thereof, held on the day of 2009, by the following vote to wit: 9 Council Members: Ayes Nays Abstain Absent 10 ESTRADA 11 BAXTER 12 BRINKER 13 SHORETT 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 18 Rachel G. Clark, City Clerk 19 20 The foregoing Resolution is hereby approved this day of 2009. 21 22 23 Patrick J. Morris, Mayor City of San Bernardino 24 25 Approved as to Form: 26 By. 27 James F. Penman, City Attorney 28 3 P tAgendm\Rmlminm\Pm kitions�W9tW498 Wetermnn Holdings,LLC-EMO Agreemem MCC Reo B(Cont'd)doc 1 EXHIBIT A Easement, Maintenance and Operation Agreement 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 P WWndu\Raa tvnsUtesoWSions�20M�0 g-0 Wuernun HoWinp.LLC-EMO Agrmmem MCC Ruo B(Coni'd).doc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino 300 North"D" Street,6h Floor San Bernardino, CA 92418 Attn.: City Attorney (Space Above Line Reserved For Use By Recorder) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES 2009 EASEMENT,MAINTENANCE AND OPERATION AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS,LLC THIS 2009 EASEMENT, MAINTENANCE AND OPERATION AGREEMENT (this "Agreement") is dated as of September 8, 2009 (the "Effective Date"), by and between the City of San Bernardino, a charter city (the "City"), and Waterman Holdings, LLC, a California limited liability company (the `Buyer"). In this Agreement,the City or the Buyer may singularly be referred to as a"Party" and may collectively be referred to as the "Parties." RECITALS A. The Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and the Buyer executed that certain 2004 Disposition and Development Agreement, dated December 6, 2004 (the "DDA"), for the purchase and sale of certain real property, as defined therein, owned by the Agency and located in the City of San Bernardino, in the County of San Bernardino (the "County") and in the State of California (the "State"). The Agency and the Buyer executed that certain Amendment No. 1 to the DDA, dated June 20, 2005 (the "First Amendment"). The Agency and the Buyer executed that certain Amendment No. 2 to the DDA, dated June 19, 2006 (the "Second Amendment'). The Agency and the Buyer executed that certain Amendment No. 3 to the DDA, dated July 21, 2008 (the "Third Amendment'). The Agency and the Buyer executed that certain Amendment No. 4 to the DDA, dated December 15, 2008 (the "Fourth Amendment'). For purposes of this Agreement, the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and as further amended by the Fourth Amendment shall collectively be referred to as the "DDA Agreement." 1 P Ugendas� pnda AnchmenuWgenda AM MwuWpe Art me.mUy -AmeM 2009W9-0919 Wnemun Holdings-EMO Agreemem.DOC B The Buyer has constructed, developed, installed and/or completed, and/or has agreed to construct, to develop, to install and to complete the improvements (collectively, the "Agency Property Improvements") in connection with the Agency Property (as defined in the Fourth Amendment) and the improvements (collectively, the "Flood Control Channel Property Improvements") in connection with the Flood Control Channel Property (as defined in the Fourth Amendment), in accordance with and pursuant to the DDA Agreement. C. Pursuant to the DDA Agreement, the Buyer has agreed, without limitation, to maintain the Flood Control Channel Property (as defined below) and the Flood Control Channel Property Improvements in favor of the City, as provided for and in accordance with the terms, covenants and conditions of this Agreement; the Parties recognize that the Flood Control Channel is a part of larger flood control system that is maintained primarily by the County of San Bernardino Flood Control District and that the standards of maintenance employed by the County of San Bernardino Flood Control District shall apply to the maintenance by the Buyer of the Flood Control Channel Property pursuant to this Agreement. D. The legal description of the Flood Control Channel Property is attached hereto and incorporated herein by this reference as Exhibit"A". E. As one of the conditions precedent to the closing of the purchase and sale by the Agency, as seller, and by the Buyer, as buyer, of the Flood Control Channel Property in Section 2.15 of the DDA Agreement, the Buyer agreed to execute, to deliver, to perform and to observe the terms, covenants and conditions of this Agreement. F. The Buyer and the City are willing to execute, to deliver, to perform and to observe the terms, covenants and conditions of this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND THE CITY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AGREE TO THE FOLLOWING: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections in this Agreement, the following capitalized terms shall have the meanings as set forth below: "CEQA" shall mean the California Environmental Quality Act, as amended from time-to-time. "City" shall mean the City of San Bernardino, in the County of San Bernardino, State of California. 2 P VAgendas\Agenda AtuchmemsWgenda Anachments\Ageoda Anachments\Ammts-Amend 2(0 AOMS-0 Watmnan Holdings-EAIO Agmement DOC "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2004 Disposition and Development Agreement, dated December 6, 2004, as executed and delivered by and between the Agency and the Buyer. "DDA Agreement" shall mean the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and shall further be amended by the Fourth Amendment. "Easement" shall mean an easement from the Buyer to the City to, over, in, above, under, beneath, through, from or across the Agency Property, the Agency Property Improvements, the Flood Control Channel Property and/or the Flood Control Channel Property Improvements to the extent reasonably necessary to enable the City to exercise its rights and remedies under this Agreement, including, without limitation, the following: (i) the right, subject to the terms of this Agreement, to access, to enter, to inspect, to repair and/or to maintain the Flood Control Channel Property and/or the Flood Control Channel Property Improvements pursuant to this Agreement and in compliance with all applicable laws, (ii) the right, subject to the terms of this Agreement, to access, to enter, to inspect, to repair and/or to maintain the Flood Control Channel Property and/or the Flood Control Channel Property Improvements to assure the free flow of water, to remove all debris and debris blockages from, to prevent and to mitigate against flooding, and to prevent and to mitigate against injury or loss of life and/or of property damage from water flows, from flood water and from debris flow and debris blockages that cause or could cause flooding or water damage to, the Agency Property, the Agency Property Improvements, the Flood Control Channel Property, the Flood Control Channel Property Improvements and/or to any other real or personal property. "Effective Date" shall mean the date that this Agreement is executed by and between the City and the Buyer, as provided for in the preamble of this Agreement. "Environmental Laws" shall mean the "Environmental Laws" as defined in the DDA Agreement, as amended from time-to-time. "First Amendment" shall mean the Amendment No. 1 to the DDA, dated June 20, 2005, as executed and delivered by and between the Agency and the Buyer. "Flood Control Channel" shall mean those properties within the banks of the Warm Creek Channel. "Flood Control Channel Property" shall mean that portion of the Flood Control Channel located within and comprising the Flood Control Channel Property, as set forth in Exhibit "A" attached hereto and by this reference made a part hereof and shall not include any other contiguous portions of the Flood Control Channel not illustrated on said Exhibit"A". "Flood Control Channel Property Improvements" shall mean the improvements to the Flood Control Channel Property, as described in Exhibit `B" attached hereto and by this reference made a part hereof. 3 P.\Aeemdas\Agenda AnachmermU_veMa Amummenu\Agenda As"chmcm¢Ugrmss-Amend 2(MO-08 49 Waterman Holdings-EMO Agreemem.DOC "Fourth Amendment" shall mean the Amendment No. 4 to the DDA, dated December 15, 2008, as executed and delivered by and between the Agency and the Buyer. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits, approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Environmental Quality Act ("CEQA"), National Environmental Protection Act ("NEPA"), all applicable Environmental Laws and all applicable Laws pertaining to flooding, to flood prevention and mitigation, to flood control channels and/or to the maintenance and repair of flood control channels. "NEPA" shall mean the National Environmental Protection Act, as amended from time-to-time. "Official Records" shall mean the official records of the county recorder's office for the County of San Berardino, State of California. "Second Amendment" shall mean the Second Amendment to the DDA, dated June 19, 2006, to the DDA, as executed and delivered by and between the Agency and the Buyer. "State"shall mean the State of California. "Third Amendment" shall mean the Amendment No. 3 to the DDA, dated July 21, 2008, as executed and delivered by and between the Agency and the Buyer. Section 3. Maintenance by the Buyer of the Flood Control Channel Property and the Flood Control Channel Property Improvements. Upon the execution and the delivery by the Parties of this Agreement, the Buyer, for itself, its successors and assigns, hereby covenants and agrees that: (a) The City shall have the right, but not the obligation, to enter the Flood Control Channel Property and/or the Flood Control Channel Property Improvements to conduct, or to cause to be conducted, such tests, studies, assessments and/or observations, without limitation, for the following reasons: (i) to determine and to assess that the Flood Control Channel Property and/or the Flood Control Channel Property Improvements are in compliance with this Agreement and all applicable Laws, including, without limitation, (1) compliance with all mitigation measures imposed under applicable Laws consistent with the CEQA, with the NEPA and the Environmental Laws, and (2) all permits and approvals, as amended, supplemented and/or required from time-to- time, as issued by any and all federal, state, municipal or local governmental agencies having jurisdiction over the Flood Control Channel Property and/or over the Flood Control Channel Property Improvements, including, without limitation, the United States Corps of Engineers, and(ii) to determine and to assess whether any debris or debris blockages exist or may exist, whether flooding or any flooding conditions exist or may exist, and/or whether any blockage of the free flow of water exists or may exist, at the Flood Control Channel Property and/or at the Flood Control Channel Property Improvements, and (iii) to determine and to assess whether loss of life or injury, or damage to real or personal property, has occurred or will occur, including,without limitation, any damage or loss to the Agency Property, to the Agency Property Improvements, to the Flood Control 4 P UgaMcsWgcndc Atlh.lwlAlM.Al.&..uUgada AnarlimcrosV.¢rmis-Amrnd 200909-06-09 Wve .n Holdings-EMO A,rte ,c,DOC Channel Property, to the Flood Control Channel Property Improvements and/or to any other real or personal property. (b) (1) The Parties mutually understand and agree that from and after the Effective Date, the Buyer shall maintain the Flood Control Channel Property and/or the Flood Control Channel Property Improvements (including all now or hereafter existing improvements, paving, walkways, landscaping, exterior signage, ornamentation and flood control channel) in good repair, neat, clean and orderly condition, free from all adverse conditions described in clauses (ii) and (iii) of paragraph 3(a) above and in compliance with all applicable Laws and with this Agreement (the "Maintenance Standard"). (2) In the event the City Manager, or his or her designee, determines that the Developer is not maintaining the Flood Control Channel Property and/or the Flood Control Channel Property Improvements in compliance with the Maintenance Standard (the "Maintenance Deficiency"), the City shall notify the Buyer in writing of the Maintenance Deficiency. The City shall give the Buyer thirty (30) calendar days from receipt of such notice to cure or commence to cure the Maintenance Deficiency as identified in the notice. If the Buyer shall commence to cure but shall not have completed the cure within the thirty (30) calendar days, the Buyer shall within such thirty(30) calendar days provide the City with a written schedule for completion. The schedule must be approved by the City in writing for the Buyer to avoid violation under this section. In the event the Buyer fails to cure the Maintenance Deficiency within the thirty (30) calendar days or the time otherwise agreed to by the City in writing, the City shall have the right, but not the obligation, to enter the Agency Property, the Agency Property Improvements, the Flood Control Channel © Property and/or the Flood Control Channel Property Improvements and to perform all acts deemed necessary by the City consistent with County of San Bernardino Flood Control District maintenance standards to cure the Maintenance Deficiency, or to take other action at law or in equity which the City may have a good faith belief it has a right to exercise to accomplish the abatement of the Maintenance Deficiency. (3) Failure of the Buyer to cure the Maintenance Deficiency shall in addition to all other remedies available to the City, constitute a nuisance and a violation of the parking conditions for occupancy of the Agency Property Improvement. The City may commence an action against the Buyer, its successors, or assigns in abatement of the nuisance. Such abatement action shall include recovery of all direct and incidental costs of abatement of the nuisance, assessment of penalties, and further remedial action up to and including revocation of the occupancy permit for the Agency Property Improvements. (c) In addition to the maintenance obligations provided for in Section 3(b), the Buyer shall maintain the Flood Control Channel Property and/or the Flood Control Channel Property Improvements in conformance with standards as shall be set by the City Engineer or equivalent (the "City Engineer") for the City, from time-to-time consistent with County of San Bernardino Flood Control District maintenance standards (the "City Engineer Maintenance Requirements") after the Effective Date of this Agreement. The City shall notify the Buyer in writing of the City Engineer Maintenance Requirements that the Buyer is obligated to perform and complete, at its sole cost and expense, and shall give the Buyer thirty (30) calendar days from receipt of such notice to perform, to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements as identified in the notice. In the event the Buyer fails to 5 P\AgendasAgenda AuachmentiAcnda Auachmanu\A,eW.Anachmena:lAgrmu-AmeM 3W' S-MWaraman Holdings-EMOAgrmmem.DOC perform, to repair, to remediate, or to cure and/or to complete the City Engineer Maintenance Requirements within the time allowed, the City shall have the right, but not the obligation, to enter Agency Property, the Agency Property Improvements, the Flood Control Channel Property and/or the Flood Control Channel Property Improvements and to perform all acts necessary to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements, or to take other action at which the City in the sole exercise of its discretion consistent with County of San Bernardino Flood Control District maintenance standards may then determine to take to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements. The City may take all such actions against the Buyer for failure to timely implement the City Engineer Maintenance Requirements as for a failure under Section 3(b) above. The City Engineer Maintenance Requirements may, without limitation, require the Buyer to repair and/or to maintain the Flood Control Channel Property and/or the Flood Control Channel Property Improvements at a level of performance greater than the Maintenance Standard, at the sole cost and expense of the Buyer. (d) Graffiti, as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of a structure or improvement on the Flood Control Channel Property and/or on the Flood Control Channel Property Improvements which is visible from any public right-of-way adjacent or contiguous to the Flood Control Channel Property and/or to the Flood Control Channel Property Improvements, shall be removed by the Buyer by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within seventy-two (72) hours following the time of such application, the City shall have the right, but not the obligation, to enter the Flood Control Channel Property and/or the Flood Control Channel Property Improvements and to remove the graffiti without notice to the Buyer. The Buyer shall be subject to abatement and recovery of costs as authorized under San Bernardino Municipal Code Chapter 8.69. (e) From and after the Effective Date, the provisions of this Section 3(a), Section 3(b), Section 3(c), Section 3(d) and Section 3(e) shall be covenants running with the land in perpetuity, and shall be enforceable by the City. Nothing in the foregoing provisions of Section 3(a), Section 3(b), Section 3(c), Section 3(d) and this Section 3(e) shall be deemed to preclude the Buyer from making any alteration, addition, or other change to any structure or improvement or landscaping on the Flood Control Channel Property and/or in connection with the Flood Control Channel Property Improvements provided that any such changes comply with applicable Laws, including, without limitation, all zoning and building regulations of the City. Section 4. Easement. The Buyer hereby grants the Easement to the City. From and after the Effective Date, the Easement shall run with the land in perpetuity. Section 5. . Representations and Warranties of the Buyer. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: 6 P AgendasAgen&Attaehmewt geMa AttachmmtsM,Ma Anachmen[Mgrmts.AmeM 100TH &A Wate nHa Winga-EMO Agreement.DOC (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement, and the Buyer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Buyer is a party, or under any federal, state, municipal or local laws, statutes, ordinances, rules, governmental regulations or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer, the Flood Control Channel Property and/or the Flood Control Channel Property Improvements, now or hereafter in effect, and as may be amended from time-to-time. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. (e) The Buyer is not in default under the DDA Agreement and shall perform the terms, covenants and conditions of the DDA Agreement. Section 6. Events of Default. (a) Any event of default shall occur under this Agreement whenever: (i) any Party fails to timely pay any amount due and owing under this Agreement and/or the DDA Agreement, (ii) any Party fails to perform any term, covenant or condition in this Agreement, (iii) the occurrence of a default under the DDA Agreement, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA Agreement is or becomes false and untrue, or (v) the Buyer files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, the Buyer is or becomes insolvent, the Buyer assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of the Buyer and such appointment is not discharged within sixty(60) calendar days thereafter. (b) The Party which may claim that a default has occurred shall give written notice of default to the Party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice. (c) Any failure or delay by a 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 rights or remedies associated with a default. The rights and remedies of the Parties 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. 7 P Agendas\Agenda AnachmentsUeenda Attachmmts\Ay.M MaNmenssUyrmwAmeM 2009\09-08-09 Wasman H91di,,-EMO Agrte.m DOC (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice, as provided above, a"breach" shall be deemed to have occurred. In the event of a breach, the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement, at law and in equity. (e) Emergency — The in default Party shall have a lesser time to cure when failure to cure creates an imminent threat to the health, safety, or welfare of persons located on or off the Flood Control Channel Property and/or the Flood Control Channel Improvements. The threat shall be as determined by officials of the City in the exercise of their discretion in any such emergency situation. Upon a finding of such threat, Buyer may be required to take immediate action, including the destruction and removal of the Flood Control Channel Property Improvements without compensation to cure the condition giving rise to the emergency. Section 7. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. (b) Attorneys' Fees and Costs. In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The value of the work of the City Attorney and members of his office in enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the purposes of this paragraph. The fees for the work City Attorney and members of his office shall be calculated at prevailing market rates in the local community for comparable services. (c) Authority. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement, the Parties shall comply with and conform to all applicable Laws. 8 P-Wgendas\Agenda AsuchmenuW,.dn Asuchmems\AgeMa Auachmenu\Agrmu-Amend 2W9 48419 Wescmun Holdings-EMO AgreementDOC (f) Conflicts of Interest; No Individual Liability. No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City shall be personally liable in the event of a breach of this Agreement by the City. (g) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. (i) Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any and all prior oral or written agreement, understanding or representation relating to the subject matter of this Agreement. 0) Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California. (k) Headings. The paragraph headings used in this Agreement are intended for �.. convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (1) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law Hiles. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (m) Necessary Actions, Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (n) Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the third (3`d) business day after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: 9 P\Agenda\Agenda AOxhmcn¢\AgceWe Anachments\AgeMa Attachments grmts-Amend 2009\09.08-09 Wal m n Ho Wings-EMO Aereement DO To the Buyer: Waterman Holdings, LLC Attention: Ran Torkan 4221 Wilshire Boulevard, Suite 240 Los Angeles, California 90010 To the City: City of San Bernardino Attention: City Attorney 300 North"D" Street, 6th Floor San Bernardino, California 92418 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North"E" Street, Suite 301 San Bernardino, California 92401 (o) Partial Invalidity. If, after the date of execution of this Agreement, any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable. (p) Representations and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. (q) Successors and Assigns. This Agreement shall constitute covenants running with the land and shall be binding on all successors and assigns of the Buyer. The Buyer and each successive owner of the Flood Control Channel Property and the Flood Control Channel Property Improvements shall have liability hereunder only to the extent same arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property and of the Flood Control Channel Property Improvements. This Agreement may not be assigned by the Buyer except to a person or entity who is concurrently acquiring Buyer's ownership of the Agency Property, of the Agency Property Improvements, of the Flood Control Channel Property and of the Flood Control Channel Property Improvements. The City may assign and delegate its rights, title, interest and obligations in, to and under this Agreement without obtaining the prior consent of the Buyer. (r) Third Party Beneficiaries. Except for the Agency, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to enforce this Agreement in the event the City does not enforce the payment obligations or non- payment obligations of the Buyer under this Agreement. (s) Time is of the Essence. Time is of the essence in this Agreement. (t) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision pof this Agreement and forbearance to enforce one or more of the remedies provided in this Agreement shall not be deemed to be a waiver of that remedy. P Agenda gcnda Anachmena\Aaenda Aaachmena\Agenda Anachmems\Ay m¢-Amcnd 1909\99 4609 Wasesman Holdings-EMO ASs nt.DOC (u) Estoppel Certificate. The City agrees to, within twenty (20) calendar days following any written request from the Buyer, deliver to any potential purchaser or lender a commercially reasonable estoppel certificate certifying: (i) whether, to the City's knowledge, there are any then current claims or defaults under this Agreement, and (ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. IN WITNESS WHEREOF, the City and the Buyer have executed this Agreement on the date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: City Attorney BUYER Waterman Holdings, LLC, a California limited liability company Dated: By: Name: Title: 0 11 P:YlpW.d yenda Anachm,n Agenda Au.hments 111 a 201 M9 8-0 Watem n Holdings-EMO Agreement DOC State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity, upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) '61` State of Califomia ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity, upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 12 P\A,cM.,sA,e da Annh.,mwA rnda Auachmenu\Agenda AnmhmmuMgrmts-AmeM 2lg»W &-0 Wxt r m HoWings-EMO Ag mment.DO(' EXHIBIT "A" Legal Description of the Flood Control Channel Property APN: 0135-191-17 PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9; THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID PARCEL 1; THENCE LEAVING SAID WEST LINE SOUTH 89°56'51"EAST 275.19; THENCE SOUTH 86 024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9; THENCE SOUTH 89°59'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE POINT OF BEGINNING. 13 P Wgendas\Agcnda Auachmcn¢\Agenda Anachmena\AgeMa AMc menuWgemb-Amend 3009\09-OM9 Watem n Holdings-EMO Agrtement.DOC EXHIBIT aB" Flood Control Channel Property Improvements The Improvement of the Flood Control Channel Property shall consist of a single floor structure built above that portion of the Flood Control Channel located on and within the Flood Control Channel Property to provide additional parking spaces for the 2-story, 45,000 square foot building as constructed adjacent to the Food Control Channel Property. The construction, landscaping, etc., of the single floor parking structure shall comply with the City's Development Code and requirements from any federal and/or state governmental agency, concerning improvements to and/or near the Flood Control Channel land, that may be imposed on the Developer. 14 P V gendu9 gcnda Ana&memsV Senda A=hments\Agenda Attshments\Agm -AmeM 2009\09-08-09 Waterman Holdings-EMO Agrament.DOC ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO C FROM: Emil A.Marzullo SUBJECT: Waterman Holdings, LLC—Defense, Indemnification Interim Executive Director and Hold Harmless Agreement and Easement, Maintenance and Operation Agreement (Central City DATE: July 21,2009 East Redevelopment Project Area) — ----------- ---------------------------- ------- — Svnoosis of Previous Commission/Council/Committee Action(s): On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the Community Development Commission of the City of San Bernardino(the"Commission") consider a disposition and development agreement with Waterman Holdings,LLC,for approval. On December 6, 2004, the Commission adopted Resolution No. CDC/200449.approving the sale of certain real property by the Agency to Waterman Holdings, LLC, and authorized the Executive Director to execute the Disposition and Development Agreement between the Agency and Waterman Holdings, LCC,and the Mayor and Common Council of the City of San Bernardino simultaneously adopted Resolution No. 2004-386 approving the sale of certain real property (4a' and Waterman Avenue—APN: 0135-191-11)within the Central City East Redevelopment Project Area("Project Area"). Svnousis Continued to Next Paee.... Recommended Motion(s): -- Mayor and Common Council A. Resolution of the Mayor and Common Council of the City of San Bernardino approving a Defense,Indemnification and Hold Harmless Agreement by and between the City of San Bernardino and Waterman Holdings, LLC, concerning real property (4th and Waterman Avenue — APN: 0135-191-17) (Central City East Redevelopment C Project Area) B. Resolution of the ayor and Common Council of the City of San Bernardino approving an Easement, Maintenance and Operation A eement by and between the City of San Bernardino and Waterman Holdings, LLC, concerning real property (4 Street and Waterman Avenue — APN: 0135-191-17) (Central City East Redevelopment Project Area) Contact Person(s): Mike Trout Phone: (909)663-1044 Project Area(s) Central City East Ward(s): in Supporting Data Attach 10 Staff Report 10 Resolution(s)10 Amendment(s)/Agreement(s) ❑Map(s)❑ Letters FUNDING REQUIRE ENTS Amount: $ N/A Source: N/A Budget Authority: N/A SIGNATURE: Fiscal Review: �n Emi A. Interim Executive Director S�ss DeJesuskkntelim Administrative Services Director Commission/Co ncil Notes: � 1 PAAgmdn%Com DevCon ismonTMC2W9 "3- Watt Holdings LLC-DDm @EMOAge SKdw COMMISSION MEETING AGENDA Meeting Date: C)pr/py Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, ( � Easement, Maintenance and Operation Agreement `�•• Page 2 ----------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the Commission consider the action of June 20, 2005. On June 20, 2005, the Commission adopted Resolution No. CDC/2005-19 approving Amendment No. 1 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive Director to execute Amendment No. 1. On June 19, 2006, the Commission adopted Resolution No. CDC/2006-20 approving Amendment No. 2 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive Director to execute Amendment No. 2. On November 8, 2007, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend that the Commission consider the action of Amendment No. 3. QOn July 21,2008,the Commission adopted Resolution No. CDC/2008-26 approving Amendment No. 3 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Interim Executive Director to execute Amendment No. 3. On October 9, 2008, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend that the Council and the Commission consider the action of Amendment No. 4. On November 3, 2008, the Commission discussed Amendment No. 4 and the sale of the Flood Control Channel Property to Waterman Holdings, LLC, deciding to continue discussion of Amendment No. 4 and the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC to November 17, 2008. On November 17, 2008, the Commission continued discussion of Amendment No. 4 and the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC, to December 15, 2008. On December 15, 2008, the Commission adopted Resolution No. CDC/2008-46 approving Amendment No. 4 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC concerning the sale of the Flood Control Channel Property to Waterman Holdings, LLC, authorized the Interim Executive Director to execute Amendment No. 4 and the Mayor and Common Council of the City of San Bernardino simultaneously adopted Resolution No. 2008-459 approving the sale of the Flood Control Channel Property. PMVndulCo=Dev Cononission\CDC 200908.0349 Walamao Holdings.LLC-DM k EMO Agm4 SR.doe COMMISSION MEETING AGENDA Meeting Date: 08103/2009 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT WATERMAN HOLDINGS,LLC— DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT AND EASEMENT,MAINTENANCE AND OPERATION AGREEMENT (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) BACKGROUND: On December 6, 2004, the Mayor and Common Council of the City of San Bernardino (the "Council") and Community Development Commission of the City of San Bernardino (the "Commission") approved the sale of approximately 3.9 acres of land owned by the Redevelopment Agency of the City of San Bern (the "Agency") located at the southwest th azdino e corner of 4 Street and Waterman Avenue APN• ( ( 0135-191-11) (the "Property") pursuant to a 2004 Disposition and Development Agreement (the "DDA") by and between the Agency and Waterman Holdings, LLC (the `Buyer/Developer"). Waterman Holdings, LLC is a single asset LLC created solely for the ownership of the Property and for the development of the project for the County of San Bernardino. The principals of Waterman Holdings, LLC are as follows: Jian Torkan (50%) and Emanuel Separzadeh, Jacob Sepazzadeh, John Sepazzadeh, Michael Sepazzadeh, Mouris Sepazzadeh and Yafa Azizzadeh (50%). The sole managing member of Waterman Holdings, LLC is Jian Torkan and has unilateral authority to act on its behalf. The other © parties to Waterman Holdings, LLC are silent investor parties. The DDA, as approved, required for the Buyer/Developer to construct a minimum of 16,864 square feet of office space for the County Preschool Services Department(the"PSD") on the most westerly 2 acres of the Property ("Phase I") with an option to construct an additional building for another County Department on the remaining 1.6 acres on the easterly portion of the Property ("Phase II"). During the interim period until the option on the Phase II site was exercised, the DDA required the Agency to install and maintain perimeter fencing, landscaping and an irrigation system for the Phase II site. The Agency would sell the Phase I Property for the fair market value and the Buyer/Developer would have the option to purchase the Phase II Property at a later date. The Agency pledged 60% of the tax increment that the completed Project would generate over a period of ten years to off-set the below market rental rate that the County required of the Buyer/Developer. On May 17, 2005, the San Bernardino County Board of Supervisors approved a ten-year lease with the Buyer/Developer to construct 17,000 square feet of office space for the PSD. On June 20, 2005, the Commission approved Amendment No. 1 to the DDA, whereby the location of Phase I and Phase II were redefined. As a result, the Phase I project was then to be located at the southwest comer of 4a' Street and Waterman Avenue. In the interim, two items arose that would necessitate a change to the original DDA; first, it was determined that the pledge of tax increment to the Buyer/Developer needed to be restructured because the Olast date to incur tax increment debt payable from direct pledge of tax increment revenues in the Project Area was January 1, 2004. Second, the County needed a larger building constructed for a different NAgendu\Co Dev Co=iWonCDC]l 843-0 Wnle Holdings,LLC-DM&F OAgmh Skdoc COMMISSION MEETING AGENDA Meeting Date: 08/03/2009 Economic Development Agency Staff Report Waterman Holdings, LLC–Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 2 County Department and consequently, the Buyer/Developer would now require both the Phase I and Phase II sites (APN: 0135-191-11) (the"Agency Property")be combined as a single site. The Buyer/Developer will purchase the Agency Property for $512,424, which is equal to the fair market value of the Agency Property based upon the final surveyed square footage. Escrow has been opened under the terms of the original DDA and the Buyer/Developer has deposited the sum of $20,000 into escrow and the balance of$492,424 will be paid upon the closing of the escrow. Per Amendment No. 2, the Agency will pledge to the Buyer/Developer from general Agency revenues under a Promissory Note and not as a pledge of tax increment revenues, an amount equal to 60% of the 1% tax revenues generated by the proposed Project (estimated development cost is $6 million) for a period of ten years. As per the original DDA, the 60% pledge was authorized by the Commission in an effort to off-set or compensate the Buyer/Developer for the below market rate per the ten-year lease with the County. The Agency's payment obligation will commence upon presentation of a cancelled check by the Buyer/Developer and as of the fiscal year following completion of the Project by the Buyer/Developer and said payment will be paid after each December 10`h and April 10`s tax payment. On June 19, 2006, the Commission approved Amendment No. 2 to the DDA, whereby the Buyer/Developer will develop on the Agency Property, a 2-story building containing a minimum of 45,000 square feet of office space, to include parking and landscaping, and to lease to the County Transitional Assistance Department ("TAD") (the "Project"). TAD provides jobs and employment Oservices to residents and job training programs. Additionally, in Amendment No. 2, the Agency pledged to reimburse the Buyer/Developer an amount equal to 60% of the 1% of new property taxes generated by the Project for a period of ten years from the general revenues of the Agency. On July 21, 2008, the Commission approved Amendment No. 3 to the DDA, wherein the Agency would reimburse the Buyer/Developer an amount not to exceed $399,500 for the actual costs for the required Oft Site Improvements. This reimbursement would be paid from the sale proceeds of the Agency Property 30 days following the completion of the Project as evidenced by a Certificate of Occupancy issued by the City of San Bernardino (the "City") and verification that the Ofd Site Improvements have been constructed by the Buyer/Developer and accepted by the City. The cost reimbursements to the Buyer/Developer would not exceed the lesser of the actual cost paid for the Off-Site Improvements or $399,500 utilizing prevailing wage rates. All other terms and conditions of the DDA, as amended by Amendments No. 1 and No. 2,would remain unchanged. On November 3, 2008, the Commission met to consider the approval of Amendment No. 4 for the sale of the Flood Control Channel Property to the Buyer/Developer. At the meeting, there was discussion and concern about the plans and necessary assurances that the Buyer/Developer would obtain any and all approval/permits from any federal, state and/or local agency prior to construction of the one-story parking structure over the Flood Control Channel Property. The decision of the Commission was to continue the approval of Amendment No. 4 and the sale of the Flood Control Channel Property to November 17, 2008, to allow Agency Staff time to make the necessary revisions to Amendment No. 4. ------------- --------- -- — P:\AgcMes\COmmDvCOmmission\CDC20DKM3-0 Wge HoWingsUC-DIHH&EMOApmtsSRAOC COMMISSION MEETING AGENDA Meeting Date: 08/03/2009 Agenda Item Number: i i I, II Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, ® Easement, Maintenance and Operation Agreement Page 3 On November 17, 2008, the Commission continued the approval of Amendment No.4 and the sale of the Flood Control Channel Property to December 15,2008. On December 15, 2008, the Commission approved Amendment No. 4 to the DDA, which outlined certain conditions that the Buyer/Developer was required to meet prior to the transfer of the Flood Control Channel Property from the Agency to the Buyer/Developer. Additionally the Council approved the sale of the Flood Control Channel Property to the Buyer/Developer. CURRENT ISSUE: Item No. 20 of Amendment No. 4 added Section 2.15 to the DDA in connection with the Flood Control Channel Property. Section 2.15 placed several requirements on the Buyer/Developer that needed to be accomplished before escrow for the Flood Control Channel Property could be closed. To date, the Buyer/Developer has met all the requirements except for two items. Those two remaining items, which the Buyer/Developer is required to execute, is a "Defense, Indemnification and Hold Harmless Agreement" and an "Easement, Maintenance and Operation Agreement"with the City. Additionally, Section 2.15 requires that both of these agreements, by and between the Buyer/Developer and the City, be approved by the Council at a public meeting. DENVIRONMENTAL IMPACT: The proposed new project description has been reviewed under the California Environmental Quality Act ("CEQA") and it has been determined that the project qualifies for a Categorical Exemption, Class 32 (Guidelines Section 15332). FISCAL IMPACT: The Agency will receive $36,000 from the Buyer/Developer for the sale of the Flood Control Channel Property. RECOMMENDATION: That the Mayor and Common Council adopt the attached Resolutions. OEmil A. Marzullo,Interim Executive Director PVgeMas\Comm De Commission\CDC 20 8-03-0 Wate Holding LLC-DDDI&EMD Armb SBAm COMMISSION MEETING AGENDA Meeting Date: 08/03/2009 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 3 OF SAN BERNARDINO APPROVING A DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT BETWEEN THE CITY OF SAN 4 BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING REAL PROPERTY (4m STREET AND WATERMAN AVENUE—APN: 0135- 5 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 6 7 WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter 8 city, duly organized and existing pursuant to the provisions of the constitution of the State of 9 California; and 10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a 11 public body, corporate and politic existing under the laws of the State of California, Health and 12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and 13 underutilized land; and © 14 WHEREAS, on December 15, 2008, the Community Development Commission of the City 15 of San Bernardino (the "Commission") adopted Resolution No. CDC/2008-46 approving 16 Amendment No. 4 (the "Amendment') to the 2004 Disposition and Development Agreement (the 17 "DDA") between the Agency and Waterman Holdings, LLC (the "Buyer" or Developer"), 18 concerning the transfer of certain real property, APN: 0135-191-17 (the "Flood Control Channel 19 Property"); and 20 WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San 21 Bernardino (the "Council') adopted Resolution No. 2008-459 approving the sale of the Flood 22 Control Channel Property to the Buyer; and 23 WHEREAS, the Flood Control Channel Property is located south of the southwest corner of 24 4`h Street and Waterman Avenue within the Central City East Redevelopment Project Area and is 25 presently an unimproved vacant lot; and 26 WHEREAS, the Amendment provides for the development of the Flood Control Channel 27 Property by the Developer so that it may be used as a parking lot in furtherance of the office project 28 identified in the DDA, as amended; and 1 P Ugendas\ResoWtionsVtesolutions @009\O8-OS-09 Waterman Huldivg4 LLC-DUM Apsemmvt MCC Pp Adw I WHEREAS, the Amendment added Section 2.15 to the DDA which outlined certain O2 requirements that the Buyer needed to accomplish in order to close escrow for the transfer of the 3 Flood Control Channel Property to the Buyer; and 4 WHEREAS, Section 2.15 requires that the Buyer execute a Defense, Indemnification and 5 Hold Harmless Agreement (the "Hold Harmless Agreement') with the City and that the Council 6 approve the Hold Harmless Agreement between the City and the Buyer in a public meeting. 7 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 8 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 9 FOLLOWS: 10 Section 1. The Council finds and determines that the facts and circumstances set forth in 11 the Recitals hereof are true and correct in all respects. 12 Section 2. The Council hereby approves the Defense, Indemnification and Hold 13 Harmless Agreement, attached as Exhibit "A", by and between the City of San Bernardino and O14 Waterman Holdings,LLC. 15 Section 3. This Resolution shall take effect upon its adoption and execution in the 16 manner as required by the City Charter. 17 18 19 20 21 22 23 24 25 26 027 28 2 P-Uamdea\Rmahnioeau lmions\20D A 3-09 Wge m Holdings,LLC-DH Ag�MCC Rno A.d. i RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING A DEFENSE, INDEMNIFICATION 2 AND HOLD HARMLESS AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING 3 REAL PROPERTY (4TH STREET AND WATERMAN AVENUE —APN: 0135- 4 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting 8 thereof,held on the day of 2009, by the following vote to wit: Council Members: Aves Nays Abstain Absent 9 ESTRADA _ 10 BAXTER _ 11 BRINKER 12 SHORETT _ 13 KELLEY _ O14 JOHNSON _ 15 MC CAMMACK 16 17 18 Rachel G. Clark, City Clerk 19 The foregoing Resolution is hereby approved this day of 2009. 20 21 22 Patrick J. Morris, Mayor City of San Bernardino 23 Approved as to Form: 24 25 By: �ivhA 26 ames F. Penman, City Attorney 10 27 28 3 P:Ugendu\l lutions\RcwMom\20ONS0 3-M Wrtetnun HAdings,LLC-DD Agree MCC Rew Ada 1 EXHIBIT A 2 Defense, Indemnification and Hold Harmless Agreement 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 P V gend sV mlutionsV esolutionsU 0\08-03-09 Waterman Holdings,UC-DH Ageemem MCC Reno A.doe I RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino 300 North"D" Street, 6a'Floor San Bernardino, CA 92418 Atm.: City Attorney (Space Above For Recorder's Use) 1 2009 DEFENSE,INDEMNIFICATION AND HOLD HARMLESS AGREEMENT: COVENANT RUNNING WITH THE LAND i ( BY AND BETWEEN i THE CITY OF SAN BERNARDINO oAND j WATERMAN HOLDINGS,LLC i This 2009 DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT i (this "Agreement") is made and entered into as of August 3, 2009, by and between the City of 1 San Bernardino, a charter city (the "City"), and Waterman Holdings, LLC, a California limited r liability company (the "Buyer"). In this Agreement, the City or the Buyer may singularly be referred to as a"Party" and may collectively be referred to as the "Parties." i RECITALS WHEREAS, on December 6, 2004, the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and the Buyer executed and entered into a Disposition and Development Agreement (the "DDA") with the Buyer for the construction of structures, in two (2) phases, to be occupied by the County of San Bernardino (the"County"); and WHEREAS, pursuant to the DDA, the Buyer was to acquire from the Agency approximately 3.7 acres (the "Agency Property") located at the southwest comer of 4a' Street and Waterman Avenue, for development of the structures to be occupied by the County (the "County v Structures"); and 1 PAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agmts-Amend 2009\08-03-09 41°&Wateman—DIHH Agimt.doc WHEREAS, on June 20, 2005, the Agency and the Buyer executed and entered into the Amendment No. 1 to the DDA (the "First Amendment"). The First Amendment, without limitation, provided for the transposition of the Phase I project and the Phase II project; and WHEREAS, on June 19, 2006, the Agency and the Buyer executed and entered into the Amendment No. 2 to the DDA(the "Second Amendment"). Pursuant to the Second Amendment the Buyer acquired from the Agency a right of first refusal to purchase the Flood Control Channel Property as defined in the Second Amendment; and WHEREAS, on July 21, 2008, the Agency and the Buyer executed and entered into the Amendment No. 3 to the DDA (the "Third Amendment"). Pursuant to the Third Amendment, the Agency agreed, without limitation,to reimburse the Buyer for the off-site improvement costs that the Buyer incurred in connection with the construction and the development of the Project in an amount not to exceed$399,500; and WHEREAS, on December 15, 2008,the Agency and the Buyer executed and entered into the Amendment No. 4 to the DDA (the "Fourth Amendment"). Pursuant to the Fourth Amendment, the Buyer agreed, without limitation: (i) to purchase the Flood Control Channel Property from the Agency; and (ii) to construct and to develop, without limitation, a single floor structure above the Flood Control Channel Property to provide additional parking spaces for the building constructed by the Buyer on the Agency Property (the "Flood Control Channel Property Improvements"); and WHEREAS, the Buyer has commenced construction of the Flood Control Channel Property Improvements; and WHEREAS, the Flood Control Channel Property is part of the Warm Creek and is presently subject to flows occurring in and across the historical and modified course thereof, from whatever source, whether naturally occurring or otherwise, whether consistent with historical flows or otherwise; and WHEREAS,the Agency and the Buyer have opened an escrow to facilitate the transfer of the Flood Control Channel Property to the Buyer; and WHEREAS, the Buyer, without limitation, must execute this Agreement as one (1) of the conditions precedent provided for in Section 2.15(vi) of the Fourth Amendment that must be satisfied by the Buyer in order to close the escrow for the purchase by the Buyer and for the sale by the Agency of the Flood Control Channel Property and of the Flood Control Channel Property Improvements. NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS OF THIS AGREEMENT, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND 2 P:Agenda\Agenda AttachmentMgenda Attachments\Agenda AttachmentMgrmts-Amend 2009\08-03-09 41°&Waterman—DQiH Agrmt.dm THE CITY, ON BEHALF OF ITSELF, AND ITS SUCCESSORS AND ASSIGNS, DO HEREBY AGREE AS FOLLOWS: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections of this Agreement, the following capitalized terms shall have the meanings as set for below: "Agency" shall mean the Redevelopment Agency of the City of San Bernardino, in the County of San Bernardino, State of California. "City" shall mean the City of San Bernardino, in the County of San Bernardino, State of California. "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2004 Disposition and Development Agreement, dated December 6, 2004, as executed and delivered by and between the Agency and the Buyer. "DDA Agreement'' shall mean the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and further amended by the Fourth Amendment. "First Amendment" shall mean the Amendment No. 1 to the DDA, dated June 30, 2005, as executed and delivered by and between the Agency and the Buyer. "Flood Control Channel" shall mean property within the banks of the Warm Creek including the Flood Control Channel Property Improvements. "Flood Control Channel Property" shall mean the Flood Control Channel Property as described in Exhibit"A", attached hereto and made a part hereof. "Flood Control Channel Property Improvements" shall mean the improvements to the Flood Control Channel Property as described in Exhibit `B", attached hereto and by this reference made a part hereof. "Fourth Amendment'' shall mean the Amendment No. 4 to the DDA, dated December 15, 2008, as executed and delivered by and between the Agency and the Buyer. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits and/or approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Environmental Quality Act ("CEQA"), National Environmental Protection Act ("NEPA"), all 3 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Wat=w—D1H H Agnntdoc applicable Environmental Laws and all applicable Laws pertaining to flooding, to flood prevention and mitigation, to flood control channels and/or to the maintenance and repair of flood control channels. "Second Amendment" shall mean the Amendment No. 2 to the DDA, dated June 19, 2006, as executed and delivered by and between the Agency and the Buyer. "Third Amendment" shall mean the Amendment No. 3 to the DDA, dated July 21, 2008, as executed and delivered by and between the Agency and the Buyer. Section 3. Defend. Indemnify and Hold Harmless. The Buyer agrees to defend in any administrative, civil, criminal, or other proceedings, indemnify, save and hold harmless the City, the Agency and all elected officials, appointed officers, employees and staff, volunteers, agents, representatives, contractors, subcontractors and/or consultants of the City and of the Agency from all liabilities, losses and damages that may be suffered from the acts or omissions of the Buyer and/or by the agents, representatives, employees, contractors, subcontractors, consultants, successors, invitees, and/or assigns of the Buyer, and/or as the result of the use of the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements in the manner contemplated by the DDA as amended. This indemnity agreement in all its terms extends, by means of explication and not of limitation,to the injury or loss of life and/or property damage from water flows, flood waters and debris flows and debris blockages that cause flooding or water damages to any real or personal property or result in any liability, damages, injury or loss of life. The Buyer shall procure and maintain in effect at all times general liability insurance in the combined/single amount of$3,000,000, at its sole cost and expense, and shall name and designate the City and the Agency as "additional insureds" on the general liability insurance policy. The limits of the policy shall not be a limit on the liability of the Buyer under this section. Section 4. Term of Agreement. The term of this Agreement shall commence on the date the Buyer first acquires the Flood Control Channel Property and shall survive the termination of the DDA Agreement and shall be a covenant that runs with the land of the Flood Control Channel Property and/or with the Flood Control Channel and/or with the Flood Control Channel Improvements and shall be binding on all successors and assignees of the Buyer's. The Buyer, and each successive owner of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements shall have liability hereunder only to the extent such liability arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property and/or the Flood Control Channel Improvements. Section 5. Representations and Warranties of the Buyer. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement and the Buyer has 4 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\0"3-09 4"&Waterman—DIHH Agmt.doc taken all requisite action and obtained all requisite consents in connection with entering into this ' Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Buyer is a parry, or under any federal, state, municipal or local laws, statutes, ordinances, rules, governmental regulations or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer, to the Flood Control Channel Property and/or to the Flood Control Channel Property Improvements, now or hereafter in effect and as may be amended from time- to-time. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. (e) The Buyer is not in default under the DDA Agreement and shall perform the terms, covenants and conditions of the DDA Agreement. Section 6. Covenants Running With the Land The Parties hereby expressly agree as follows: This Defense, Indemnification and Hold Harmless Agreement shall constitute a Covenant running with the land. (a) The land affected by these covenants includes the Flood Control Channel Property and of the Flood Control Channel Property Improvements as described herein and the public lands of the City of San Bernardino and all property owned by the Agency in proximity to such Flood Control Channel Property and Flood Control Channel Property Improvements. (b) Each successive owner of the Flood Control Channel Property and/or the Flood Control Channel Property Improvements are bound hereby for the benefit of the land owned by, granted by, or granted to the City of San Bernardino and the Agency described in Section 6(a) above. (c) Each covenant related to the use, maintenance, or improvement of the Flood Control Channel Property and Flood Control Channel Property Improvements, the public lands of the City of San Bernardino and all property owned by the Agency in proximity to such Flood Control Channel Property and Flood Control Channel Property Improvements, or some part thereof. (d) This instrument shall be recorded in the offices of the County Recorder of the OCounty of San Bernardino. 5 P:Agenda\Agenda Atmchments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\OM3-09 0&Waterman—DIHH Agrmt.doc Section 7. Events of Default. (a) An event of default shall occur under this Agreement whenever: (i) any Party fails to timely pay any amount due and owing under this Agreement and/or the DDA Agreement, (ii) any Parry fails to perform any term, covenant or condition in this Agreement, (iii)the occurrence of a default under the DDA Agreement, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA Agreement is or becomes false and untrue, or (v) any Party files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, any Party is or becomes insolvent, any Party assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of any Party and such appointment is not discharged within sixty (60) calendar days thereafter. Upon the occurrence of an event of default, neither Party shall be under any further obligation under this Agreement, and the rights of the Parties hereunder shall be released and discharged; provided, however, that if the Party who is otherwise claimed to be in default by the other Party commences to cure, to correct or to remedy the alleged default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently complete such cure, correction or remedy, such Party shall not be deemed to be in default hereunder. (b) The Party which may claim that a default has occurred shall give written notice of default to the Party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice as specified herein. (c) Any failure or delay by a 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 rights or remedies associated with a default. The rights and remedies of the Parties 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. (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice or a lesser time as may be required by law, as provided above, a"breach" shall be deemed to have occurred. In the event of a breach,the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement and the continuing covenants established hereunder, at law and in equity. Section 8. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. 6 P:A.endaWgenda Attachments\Agenda Attachments\Agenda Attachmcnts\Agmts-Amend 2009\08-03-09 0&Waterman—DIHH Agmt.doc (b) Attorney's Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. The value of the work of the City Attorney and members of his office shall be considered "attorneys' fees" for the purposes of this paragraph. The fees for the work of the City Attorney and members of his office shall be calculated at the prevailing market rates in the local community for comparable services. (c) Authority. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement,the Parties shall comply with and conform to all applicable Laws. (f) Conflicts of Interest No Individual Liability. No official or employee of the City and/or of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City and/or of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City and/or of the Agency shall be personally liable in the event of a breach of this Agreement by the City. (g) Counteparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. (i) Entire Agreement. This Agreement constitutes the entire agreement between the Parties. This Agreement supersedes all prior negotiations, discussions, and agreements between the Parties concerning the subject matters covered herein. The Parties intend this Agreement to be the final expression of their agreement with respect to the subjects covered herein and a complete and exclusive statement of such terms. 7 P:AgendMgenda Attachments\Agenda Attachments�Agenda Attachments\Agrmts-Amend 2009\Og-03-09 4"&W atemm—DIHH Agrmt.dw (j) Estoppel Certificate. The City agrees to, within twenty (20) calendar days following any written notice from the Buyer, deliver to any potential purchaser or lender a commercially-reasonable estoppel certificate certifying: (i) whether, to the City's knowledge, there are any then-current claims or defaults under this Agreement, and(ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. (k) Governing Law. This Agreement shall be governed by the laws of the State of California. (1) Headings. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (m) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (n) Necessary Actions. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. !� (o) Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or(iii) on the 3`d business day after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Buyer: Waterman Holdings, LLC Attention: Ran Torkan 4221 Wilshire Boulevard, Suite 240 Los Angeles, California 90010 To the City: City of San Bernardino Attention: City Attorney 300 North"D" Street, 6 Floor San Bernardino, California 92418 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North"E" Street, Suite 301 San Bernardino, California 92401 8 P:AgendaWgenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 41°&Waterman—DIHI I Agrmt.doc ``•' (p) Partial Invalidity. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (q) Representation and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery,performance, expiration or termination of this Agreement. (r) Severability. Each and every Section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof to certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (s) Successors and Assigns. This Agreement shall constitute covenants running with the Flood Control Channel Property and the Flood Control Channel Property Improvements and shall be binding on all successors and assigns of the Buyer. The Buyer, and each successive owner of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements shall have liability hereunder only to the extent such liability arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel �•r� Property and/or of the Flood Control Channel Property Improvements. (This Agreement may not be assigned by the Buyer except to a person or entity who is concurrently acquiring the Buyer's ownership of the Agency Property, and the Agency Property Improvements, and the Flood Control Channel Property, and the Flood Control Channel Property Improvements. The City may assign and delegate its rights, title, interest and obligation in, to and under this Agreement without obtaining the prior consent of the Buyer.) (t) Third Party Beneficiaries. Except for the Agency,this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to enforce this Agreement in the event the City does not enforce the payment or non-payment obligations of the Buyer under this Agreement. (u) Time is of the Essence. Time is of the essence in this Agreement. (v) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance or enforce one or more of the remedies provided in the Agreement shall not be deemed to be a waiver of that remedy. O 9 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4ih&Waterman—DIHH Agmt.doc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Morris,Mayor Approved as to Form: By: J es F. Penman, City Attorney ODate: BUYER Waterman Holdings, LLC a California limited liability company By: Ran Torkan Title: 0 10 P:Agenda\Agenda AttachmentsWBenda Attachments\Agenda Attachments\Agtmts-Amend 2009\08-03-094' &Waterman—DIM Agrm.doc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Morris, Mayor Approved as to Form: By: James F. Penman, City Attorney Date: BUYER Waterman Holdings, LLC a California limited liability company By: Jian Torkan Title: 10 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2009\01-03-09 0 11 Waterman—DUIH Agrmtdoc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Morris, Mayor Approved as to Form: By. James F. Penman, City Attorney Date: BUYER Waterman Holdings, LLC a California limited liability company By: Jian Torkan Title: 10 P:Agenda\Agenda AanhmentsWgenda Attachments\Agenda AttachmentsWgrmts-Amend 2009\08-03-09 0&Wat=m—DIHH AgrmtAm State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) O State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 11 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agcmts-Amend 2009\08-03-09 4'&Waterman—DIHH Agrmt.doc i EXHIBIT"A" Legal Description of the Flood Control Channel Property APN: 0135-191-17 PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTWEST CORNER OF SAID PARCEL 1, SAID POINT ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9; THENCE NORTH 00 007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID PARCEL 1; THENCE LEAVING SAID WEST LINE SOUTH 89°56'51"EAST 275.19; O THENCE SOUTH 86024'16" EAST 260.00 FEET TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9; THENCE SOUTH 89 059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE POINT OF BEGINNING. 12 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda AttachmentsWgmts-Amend 2009108-03-09 0&Waterman—DHM Agrm.doc EXHIBIT`B" Flood Control Channel Property Improvements The Improvements of the Flood Control Channel Property shall consist of a single floor structure built above the Flood Control Channel Property to provide additional parking spaces for the 2- story, 45,000 square foot building. The construction, landscaping, etc., of the single floor parking structure shall comply with the City's Development Code and requirements from any federal and/or state governmental agency, concerning improvements to and/or near flood control channel land,that may be imposed on the Developer. 13 PAgenda\Agenda Attachmencs\Agenda Attachments\Agenda AttachmentsAgrmts-Amend 2009\08-03-09 4"&Waterman—DIHH Agrmt.doc I RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 3 OF SAN BERNARDINO APPROVING AN EASEMENT, MAINTENANCE AND OPERATION AGREEMENT BETWEEN THE CITY OF SAN 4 BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING REAL PROPERTY (4TH STREET AND WATERMAN AVENUE —APN: 0135- 5 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 6 7 WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter 8 city, duly organized and existing pursuant to the provisions of the constitution of the State of 9 California; and 10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a 11 public body, corporate and politic existing under the laws of the State of California, Health and 12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and 13 underutilized land; and 14 WHEREAS, on December 15, 2008, the Community Development Commission of the City 15 of San Bernardino (the "Commission") adopted Resolution No. CDC/2008-46 approving 16 Amendment No. 4 (the "Amendment") to the 2004 Disposition and Development Agreement (the 17 "DDA") between the Agency and Waterman Holdings, LLC (the "Buyer" or Developer"), 18 concerning the transfer of certain real property, APN: 0135-191-17 (the "Flood Control Channel 19 Property"); and 20 WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San 21 Bernardino (the "Council") adopted Resolution No. 2008-459 approving the sale of the Flood 22 Control Channel Property to the Buyer; and 23 WHEREAS, the Flood Control Channel Property is located south of the southwest corner of 24 0 Street and Waterman Avenue within the Central City East Redevelopment Project Area and is 25 presently an unimproved vacant lot; and 26 WHEREAS, the Amendment provides for the development of the Flood Control Channel O27 Property by the Developer so that it may be used as a parking lot in furtherance of the office project 28 identified in the DDA, as amended; and 1 P:WgeeduVtemlu tioeMealutioes\2009`09-03-09 WLLamen Holdings,LLC-EMO Agrtsmea MCC Rao B.doc 1 WHEREAS, the Amendment added Section 2.15 to the DDA which outlined certain 2 requirements that the Buyer needed to accomplish in order to close escrow for the transfer of the 3 Flood Control Channel Property to the Buyer; and 4 WHEREAS, Section 2.15 requires that the Buyer execute a Easement, Maintenance and 5 Operation Agreement (the "EMO Agreement") with the City and that the Council approve the EMO 6 Agreement between the City and the Buyer in a public meeting. 7 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 8 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 9 FOLLOWS: 10 Section 1. The Council finds and determines that the facts and circumstances set forth in 11 the Recitals hereof are true and correct in all respects. 12 Section 2. The Council hereby approves the Easement, Maintenance and Operation 13 Agreement, attached as Exhibit "A", by and between the City of San Bernardino and Waterman 14 Holdings,LLC. /+ 15 Section 3. This Resolution shall take effect upon its adoption and execution in the 16 manner as required by the City Charter. 17 18 19 20 21 22 23 24 25 26 27 28 2 P:WgendasUtesoWrionsVtesolutions`.2009\Og-03-09 W..r Holdings,LLC-E O Agreement MCC Belo B.dac i O I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING AN EASEMENT, MAINTENANCE 2 AND OPERATION AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING 3 REAL PROPERTY (4TH STREET AND WATERMAN AVENUE—APN: 0135- 4 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting 8 thereof,held on the day of 2009, by the following vote to wit: 9 Council Members: Ayes Nays Abstain Absent 10 ESTRADA BAXTER 11 BRINKER _ 12 SHORETT _ 13 KELLEY _ C14 JOHNSON 15 MC CAMMACK _ 16 3 17 18 Rachel G. Clark, City Clerk 19 The foregoing Resolution is hereby approved this day of 2009. 20 21 22 Patrick J. Morris, Mayor City of San Bernardino 23 Approved as to Form: 24 25 By: 26 mes F. Penman, City Attorney 27 28 3 P.\ gendasV mlutionsVesolutions\2W9\08-03-0 9 Wamrman Holdings,LLC-EMU Ag<ament MCC Rem Bdm 1 EXHIBIT A Easement, Maintenance and Operation Agreement 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 P:\AgeudasV esolutions'Jtesolutions2W\08-01-09 Waterman Holdings.LLC-EMO Agreement MCC Reso B doc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino 300 North"D" Street, 6t°Floor San Bernardino, CA 92418 Attn.: City Attorney (Space Above Line Reserved For Use By Recorder) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES 2009 EASEMENT, MAINTENANCE AND OPERATION AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO OAND WATERMAN HOLDINGS, LLC THIS 2009 EASEMENT, MAINTENANCE AND OPERATION AGREEMENT (this "Agreement") is dated as of August 3, 2009 (the "Effective Date"), by and between the City of San Bernardino, a charter city (the "City"), and Waterman Holdings, LLC, a California limited liability company(the`Buyer"). In this Agreement,the City or the Buyer may singularly be referred to as a"Party" and may collectively be referred to as the"Parties." RECITALS A. The Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and the Buyer executed that certain 2004 Disposition and Development Agreement, dated December 6, 2004 (the "DDA"), for the purchase and sale of certain real property, as defined therein, owned by the Agency and located in the City of San Bernardino, in the County of San Bernardino (the "County") and in the State of California (the "State"). The Agency and the Buyer executed that certain Amendment No. 1 to the DDA, dated June 20, 2005 (the "First Amendment"). The Agency and the Buyer executed that certain Amendment No. 2 to the DDA, dated June 19, 2006 (the "Second Amendment"). The Agency and the Buyer executed that certain Amendment No. 3 to the DDA, dated July 21, 2008 (the "Third Amendment"). The Agency and the Buyer executed that certain Amendment No. 4 to the DDA, dated December 15, 2008 (the "Fourth Amendment"). For purposes of this Agreement, the DDA, as amended by the First Amendment, as further amended by the Second Amendment, 1 P:\Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03.09 0&Waterman-EMO Agrmt.doc as further amended by the Third Amendment and as further amended by the Fourth Amendment shall collectively be referred to as the"DDA Agreement." B The Buyer has constructed, developed, installed and/or completed, and/or has agreed to construct, to develop, to install and to complete the improvements (collectively, the "Agency Property Improvements") in connection with the Agency Property (as defined in the Fourth Amendment) and the improvements (collectively, the "Flood Control Channel Property Improvements") in connection with the Flood Control Channel Property (as defined in the Fourth Amendment), in accordance with and pursuant to the DDA Agreement. C. Pursuant to the DDA Agreement, the Buyer has agreed, without limitation, to maintain the Flood Control Channel Property, the Flood Control Channel (as defined below) and the Flood Control Channel Property Improvements in favor of the City, as provided for and in accordance with the terns, covenants and conditions of this Agreement. D. The legal description of the Flood Control Channel Property is attached hereto and incorporated herein by this reference as Exhibit"A". E. As one of the conditions precedent to the closing of the purchase and sale by the Agency, as seller, and by the Buyer, as buyer, of the Flood Control Channel Property in Section 2.15 of the DDA Agreement, the Buyer agreed to execute, to deliver, to perform and to observe the terms, covenants and conditions of this Agreement. F. The Buyer and the City are willing to execute, to deliver, to perform and to observe the terms, covenants and conditions of this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND THE CITY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS,AGREE TO THE FOLLOWING: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections in this Agreement, the following capitalized terms shall have the meanings as set forth below: "CEQA" shall mean the California Environmental Quality Act, as amended from time-to-time. 2 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda AttachmentsWgtmts-Amend 2009\08-03-09 4' &.Waterman-EMO Agrmt.doc i "City" shall mean the City of San Bernardino, in the County of San Bernardino, State of California. "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2004 Disposition and Development Agreement, dated December 6, 2004, as executed and delivered by and between the Agency and the Buyer. "DDA Agreement'' shall mean the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and shall further be amended by the Fourth Amendment. "Easement" shall mean an easement from the Buyer to the City to, over, in above, under, beneath, through, from or across the Agency Property, the Agency Property Improvements, the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements to the extent reasonably necessary to enable the City to exercise its rights and remedies under this Agreement, including, without limitation, the following: (i) the right, subject to the terms of this Agreement, to access, to enter, to inspect, to repair and/or to maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements pursuant to this Agreement and in compliance with all applicable laws, (ii) the right, subject to the terms of this Agreement, to access, to enter, to inspect, to repair and/or to maintain the Flood Control Channel Property, the C Flood Control Channel and/or the Flood Control Channel Property Improvements to assure the free flow of water, to remove all debris and debris blockages from, to prevent and to mitigate against flooding, and to prevent and to mitigate against injury or loss of life and/or of property damage from water flows, from flood water and from debris flow and debris blockages that cause or could cause flooding or water damage to, the Agency Property, the Agency Property Improvements, the Flood Control Channel Property, the Flood Control Channel, the Flood Control Channel Property Improvements and/or to any other real or personal property. "Effective Date" shall mean the date that this Agreement is executed by and between the City and the Buyer, as provided for in the preamble of this Agreement. "Environmental Laws" shall mean the "Environmental Laws" as defined in the DDA Agreement, as amended from time-to-time. "First Amendment'' shall mean the Amendment No. 1 to the DDA, dated June 20, 2005, as executed and delivered by and between the Agency and the Buyer. I "Flood Control Channel" shall mean the property within the banks of Warm Creek including the Flood Control Channel Property. "Flood Control Channel Property" shall mean the Flood Control Channel Property, as set forth in Exhibit A attached hereto and by this reference made a part hereof. C 3 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4'&Waterman-EMO Agnnt.doc "Flood Control Channel Property Improvements" shall mean the improvements to the Flood Control Channel Property, as described in Exhibit B attached hereto and by this reference made a part hereof. "Fourth Amendment" shall mean the Amendment No. 4 to the DDA, dated December 15, 2008, as executed and delivered by and between the Agency and the Buyer. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits, approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Environmental Quality Act ("CEQA"), National Environmental Protection Act ("NEPA"), all applicable Environmental Laws and all applicable Laws pertaining to flooding, to flood prevention and mitigation, to flood control channels and/or to the maintenance and repair of flood control channels. "NEPA" shall mean the National Environmental Protection Act, as amended from j time-to-time. "Official Records" shall mean the official records of the county recorder's office ] for the County of San Bernardino, State of California. 1 "Second Amendment" shall mean the Second Amendment to the DDA, dated June 19, 2006, to the DDA, as executed and delivered by and between the Agency and the Buyer. "State" shall mean the State of California. "Third Amendment" shall mean the Amendment No. 3 to the DDA, dated July 21, 2008, as executed and delivered by and between the Agency and the Buyer. Section 3. Maintenance by the Buyer of the Flood Control Channel Property, of the Flood Control Channel and of the Flood Control Channel Property Improvements. Upon the execution and the delivery by the Parties of this Agreement, the Buyer, for itself, its successors and assigns, hereby covenants and agrees that: (a) The City shall have the right, but not the obligation, to enter the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements to conduct, or to cause to be conducted, such tests, studies, assessments and/or observations, without limitation, for the following reasons: (i) to determine and to assess that the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements are in compliance with this Agreement and all applicable Laws, including, without limitation, (1) compliance with all mitigation measures imposed under applicable Laws consistent with the CEQA, with the NEPA and the Environmental Laws, and (2) all permits and approvals, as amended, supplemented and/or required from time-to-time, as issued by any and all federal, state, municipal or local governmental agencies having jurisdiction over the Flood Control Channel Property, over the Flood Control Channel and/or over the Flood 4 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agmts-Amend 2009\08-03-09 4'&Waterman-EMO Agrnt.doc Control Channel Property Improvements, including, without limitation, the United States Corps of Engineers, and (ii)to determine and to assess whether any debris or debris blockages exist or may exist, whether flooding or any flooding conditions exist or may exist, and/or whether any blockage of the free flow of water exists or may exist, at the Flood Control Channel Property, at the Flood Control Channel and/or at the Flood Control Channel Property Improvements, and(iii) to determine and to assess whether loss of life or injury, or damage to real or personal property, has occurred or will occur, including, without limitation, any damage or loss to the Agency Property, to the Agency Property Improvements, to the Flood Control Channel Property, to the Flood Control Channel, to the Flood Control Channel Property Improvements and/or to any other real or personal property. (b) (1) The Parties mutually understand and agree that from and after the Effective Date, the Buyer shall maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements (including all now or hereafter existing improvements, paving, walkways, landscaping, exterior signage, ornamentation and flood control channel) in good repair, neat, clean and orderly condition, free from all adverse conditions described in clauses (ii) and (iii) of paragraph 3(a) above and in compliance with all applicable Laws and with this Agreement(the"Maintenance Standard"). (2) In the event the City Manager, or his or her designee, determines that the Developer is not maintaining the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements in compliance with the Maintenance Standard (the "Maintenance Deficiency"), the City shall notify the Buyer in writing of the Maintenance Deficiency. The City shall give the Buyer thirty (30) calendar days from receipt of such notice to cure or commence to cure the Maintenance Deficiency as identified in the notice. If the Buyer shall commence to cure but shall not have completed the cure within the thirty (30) calendar days, the Buyer shall within such thirty (30) calendar days provide the City with a written schedule for completion. The schedule must be approved by the City in writing for the Buyer to avoid violation under this section. In the event the Buyer fails to cure the Maintenance Deficiency within the thirty (30) calendar days or the time otherwise agreed to by the City in writing, the City shall have the right, but not the obligation, to enter the Agency Property, the Agency Property Improvements, the Flood Control Channel Property,the Flood Control Channel and/or the Flood Control Channel Property Improvements and to perform all acts deemed necessary by the City in the exercise of its sole discretion to cure the Maintenance Deficiency, or to take other action at law or in equity which the City may have a good faith belief it has a right to exercise to accomplish the abatement of the Maintenance Deficiency. (3) Failure of the Buyer to cure the Maintenance Deficiency shall in addition to all other remedies available to the City, constitute a nuisance and a violation of the parking conditions for occupancy of the Agency Property Improvement. The City may commence an action against the Buyer, its successors, or assigns in abatement of the nuisance. Such abatement action shall include recovery of all direct and incidental costs of abatement of the nuisance, assessment of penalties, and further remedial action up to and including revocation of the occupancy permit for the Agency Property Improvements. 5 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman-EMO Agrnt.doc (c) In addition to the maintenance obligations provided for in Section 3(b),the Buyer shall maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements in conformance with standards as shall be set by the City Engineer or equivalent (the "City Engineer") for the City, from time-to-time (the "City Engineer Maintenance Requirements") after the Effective Date of this Agreement. The City shall notify the Buyer in writing of the City Engineer Maintenance Requirements that the Buyer is obligated to perform and complete, at its sole cost and expense, and shall give the Buyer thirty (30) calendar days from receipt of such notice to perform, to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements as identified in the notice. In the event the Buyer fails to perform, to repair, to remediate, or to cure and/or to complete the City Engineer Maintenance Requirements within the time allowed, the City shall have the right, but not the obligation, to enter Agency Property, the Agency Property Improvements, the Flood Control Channel Property,the Flood Control Channel and/or the Flood Control Channel Property Improvements and to perform all acts necessary to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements, or to take other action at which the City in the sole exercise of its discretion may then determine to take to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements. The City may take all such actions against the Buyer for failure to timely implement the City Engineer Maintenance Requirements as for a failure under Section 3(b) above. The City Engineer Maintenance Requirements may, without limitation, require the Buyer to repair and/or to maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements at a level of performance greater than the Maintenance Standard, at the sole cost and expense of the Buyer. (d) Graffiti, as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of a structure or improvement on the Flood Control Channel Property, on the Flood Control Channel and/or on the Flood Control Channel Property Improvements which is visible from any public right-of-way adjacent or contiguous to the Flood Control Channel Property, to the Flood Control Channel and/or to the Flood Control Channel Property Improvements, shall be removed by the Buyer by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within seventy-two (72) hours following the time of such application,the City shall have the right, but not the obligation, to enter the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements and to remove the graffiti without notice to the Buyer. The Buyer shall be subject to abatement and recovery of costs as authorized under San Bernardino Municipal Code Chapter 8.69. (e) From and after the Effective Date, the provisions of this Section 3(a), Section 3(b), Section 3(c), Section 3(d) and Section 3(e) shall be covenants running with the land in perpetuity, and shall be enforceable by the City. Nothing in the foregoing provisions of Section 3(a), Section 3(b), Section 3(c), Section 3(d) and this Section 3(e) shall be deemed to preclude the Buyer from making any alteration, addition, or other change to any structure or © improvement or landscaping on the Flood Control Channel Property, on the Flood Control Channel and/or in connection with the Flood Control Channel Property Improvements provided 6 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman-EMO Agrmt.dm that any such changes comply with applicable Laws, including, without limitation, all zoning and building regulations of the City. Section 4. Easement. The Buyer hereby grants the Easement to the City. From and after the Effective Date,the Easement shall run with the land in perpetuity. Section 5. Representations and Warranties of the Buyer. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement, and the Buyer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Buyer is a party, or under any federal, state, municipal or local laws, statutes, ordinances, rules, governmental regulations or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer, the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements, now or hereafter in effect,and as may be amended from time-to-time. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. (e) The Buyer is not in default under the DDA Agreement and shall perform the terms, covenants and conditions of the DDA Agreement. Section 6. Events of Default. (a) Any event of default shall occur under this Agreement whenever: (i) any Party fails to timely pay any amount due and owing under this Agreement and/or the DDA Agreement, (ii) any Party fails to perform any term, covenant or condition in this Agreement, (iii) the occurrence of a default under the DDA Agreement, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA Agreement is or becomes false and untrue, or (v) the Buyer files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, the Buyer is or becomes insolvent, the Buyer assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of the Buyer and such appointment is not discharged within sixty (60) calendar © days thereafter. 7 NAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman-EMO Agrmt.dm (b) The Party which may claim that a default has occurred shall give written notice of default to the Party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice. (c) Any failure or delay by a 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 rights or remedies associated with a default. The rights and remedies of the Parties are cumulative and the exercise by either Parry 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. (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice, as provided above, a "breach" shall be deemed to have occurred. In the event of a breach, the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement, at law and in equity. (e) Emergency — The in default Party shall have a lesser time to cure when failure to cure creates an imminent threat to the health, safety, or welfare of persons located on or off the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Improvements. The threat shall be as determined by officials of the City in the exercise of their discretion. Upon a finding of such threat, Buyer may be required to take immediate action, including the destruction and removal of the Flood Control Channel Property Improvements without compensation to cure the condition giving rise to the emergency. Section 7. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. (b) Attorneys' Fees and Costs. In the event that litigation is brought by any party in connection with this Agreement,the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The value of the work of the City Attorney and members of his office in enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the purposes of this paragraph. The fees for the work City Attorney and members of his office shall be calculated at prevailing market rates in the local community for comparable services. 8 PAAgenda\Agenda Attachmmts\Agcnda Attachments\Agenda Attachments\Agrnts-Amend 2009\08-03-09 0&Waterman-EMO Agmtdm (c) Authori Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement, the Parties shall comply with and conform to all applicable Laws. (f) Conflicts of Interest; No Individual Liability. No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City shall be personally liable in the event of a breach of this Agreement by the City. (g) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. (i) Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any and all prior oral or written agreement, understanding or representation relating to the subject matter of this Agreement. 0) Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California. (k) Headings. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (1) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law 9 PAAgenda\Agenda AttachmmtMgenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman-EMO Agnntdoc rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (m) Necessary Actions. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (n) Notices. All notices, requests, demands or other'communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the third (3`d) business day after mailing if mailed to the Parry to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Buyer: Waterman Holdings, LLC Attention: Jian Torkan 4221 Wilshire Boulevard, Suite 240 Los Angeles, California 90010 © To the City: City of San Bernardino Attention: City Attorney 300 North"D" Street, 6th Floor San Bernardino, California 92418 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North"E" Street, Suite 301 San Bernardino, California 92401 (o) Partial Invalidity. If, after the date of execution of this Agreement, any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable. (p) Representations and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. (q) Successors and Assigns. This Agreement shall constitute covenants running with the land and shall be binding on all successors and assigns of the Buyer. The Buyer © and each successive owner of the Flood Control Channel Property, the Flood Control Channel and the Flood Control Channel Property Improvements shall have liability hereunder only to the 10 PAAgenda\Agenda AttachmenMAgenda Attachments\Agenda Attachments\Agtmts-Amend 2009\08-03-09 0&Waterman-EMO Agrmt.doc I Oextent same arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property, of the Flood Control Channel and of the Flood 1 Control Channel Property Improvements. This Agreement may not be assigned by the Buyer I except to a person or entity who is concurrently acquiring Buyer's ownership of the Agency j Property, of the Agency Property Improvements, of the Flood Control Channel Property, of the i Flood Control Channel and of the Flood Control Channel Property Improvements. The City may assign and delegate its rights, title, interest and obligations in, to and under this Agreement 3 without obtaining the prior consent of the Buyer. I J (r) Third Party Beneficiaries. Except for the Agency, this Agreement shall I not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to J enforce this Agreement in the event the City does not enforce the payment obligations or non- payment obligations of the Buyer under this Agreement. (s) Time is of the Essence. Time is of the essence in this Agreement. 3 (t) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance to enforce one or more of the remedies provided in this Agreement shall not be deemed to be a waiver of that remedy. (u) Estoppel Certificate. The City agrees to, within twenty (20) calendar days following any written request from the Buyer, deliver to any potential purchaser or lender a commercially reasonable estoppel certificate certifying: (i) whether, to the City's knowledge, there are any then current claims or defaults under this Agreement, and(ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. 11 PAAgmda\Agmda Attachmmts\Agmda Attachmmts\Agenda Attachments\Agrmts-Amend 2009\08-03-09 41°&Waterman-EMO Agmttdoc CIN WITNESS WHEREOF,the City and the Buyer have executed this Agreement on the date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: City Attorney BUYER ® Waterman Holdings, LLC, a California limited liability company Dated: By: Name: Title: O 12 P:\Agmda\AgendaAttachmmts\Agcnda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4'&Waterman-EMO Agrrm.dm IN WITNESS WHEREOF,the City and the Buyer have executed this Agreement on the r date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: City Attorney BUYER Waterman Holdings, LLC, a California limited liability company Dated: By: Name: Title: 12 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman-EMO Agrmt.doc IN WITNESS WHEREOF,the City and the Buyer have executed this Agreement on the date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: City Attorney BUYER Waterman Holdings, LLC, O a California limited liability company Dated: By: Name: Title: 12 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agmts-Amend 2009\08.03-09 0&Waterman-EMO Agrmtdoc i t i © State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity, upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity,upon behalf of which the person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 13 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda AttachmentAAgnnts-Amend 2009\08-03-09 41°&Waterman-EMO Agrmt.doc OEXHIBIT"A" Legal Description of the Flood Channel Property APN: 0135-191-17 PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9; THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID PARCEL l; © THENCE LEAVING SAID WEST LINE SOUTH 89°56'51" EAST 275.19; THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9; THENCE SOUTH 89 059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE POINT OF BEGINNING. 14 P:\Agmda\AgcndaAttachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman-EMO Agrmtdoc EXMBIT`B" Flood Control Channel Property Improvements The Improvement of the Flood Control Channel Property shall consist of a single floor structure built above the Flood Control Channel Property to provide additional parking spaces for the 2- story, 45,000 square foot building. The construction, landscaping, etc., of the single floor parking structure shall comply with the City's Development Code and requirements from any federal and/or state governmental agency, concerning improvements to and/or near flood control channel land,that may be imposed on the Developer. 15 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agimts-Amend 2009\08-03-09 4'"&Water man-EMO Agimt.doc ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Emil A.Marzullo SUBJECT: Waterman Holdings, LLC–Defense, Indemnification Interim Executive Director and Hold Harmless Agreement and Easement, Maintenance and Operation Agreement(Central City East Redevelopment Project Area) DATE: July 21,2009 -- — ------------------------------------------------------------------------- Svnonsis of Previous Commission/Council/Committee Action(s): On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the Community Development Commission of the City of San Bernardino (the"Commission") consider a disposition and development agreement with Waterman Holdings,LLC,for approval. On December 6, 2004, the Commission adopted Resolution No. CDC/200449 approving the sale of certain real property by the Agency to Waterman Holdings, LLC, and authorized the Executive Director to execute the Disposition and Development Agreement between the Agency and Waterman Holdings,LLC,and the Mayor and Common Council of the City of San Bernardino simultaneously adopted Resolution No. 2004-386 approving the sale of certain real property (4s' and Waterman Avenue–APN: 0135-191-11)within the Central City East Redevelopment Project Area("Project Area"). Synopsis Continued to Next Paee.... Recommended Motion(s): Ma or and Comm Council A. Resolution of the Mayor and Common Council of the of San Bernardino approving a Defense, Indemnification and Hold Harmless Agreement by and between Xe City of San Bernardino and Waterman Holdings, LLC, concerning real property (4th and Waterman APN: 0135-191-17) (Central City East Redevelopment Project Area) B. Resolution of the Mayor and Common until of the City of San Bernardino approving an Easement,Maintenance and Operation Agreement by and be een the City of San Bernardino and Waterman Holdings, LLC, concerning real property (4° Street and Waterman Avenue – APN: 0135-191-17) (Central City East Redevelopment Project Area) / --— Contact Person(s): Mike rout Phone: (909)663-1044 ProjectArea(s) Cen City East Ward(s): la` Supporting Data Attached: D ff Report Z Resolution(s)10 Amendment(s)/Agreement(s)❑Map(s)❑Letters FUNDING REQUIREMENTS ount: $ N/A Source: N/A J Budget Authority: N/A SIGNATURE: Fiscal Review: – Emil A. ,Interim Executive Director Oss DeJesus, t 'm Administrative Services Director _ Commission/Council Notes: _ ' /iiJ Gip .2avi PAAgmdas\Comm De Commission\CDC 2009\08-0349 Waterman Holdings,LLC-DHHH&1h40 Agrmts Skdoc COMMISSION MEETING AGENDA Meeting Date: 08/03/2009 Agenda Item Number: Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 2 Synopsis of Previous Commission/Council/Committee Action(s): On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the Commission consider the action of June 20, 2005. On June 20, 2005, the Commission adopted Resolution No. CDC/2005-19 approving Amendment No. 1 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive Director to execute Amendment No. 1. On June 19, 2006, the Commission adopted Resolution No. CDC/2006-20 approving Amendment No. 2 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive Director to execute Amendment No. 2. On November 8, 2007, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend that the Commission consider the action of Amendment No. 3. On July 21, 2008,the Commission adopted Resolution No. CDC/2008-26 approving Amendment No. 3 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Interim Executive Director to execute Amendment No. 3. On October 9, 2008, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend that the Council and the Commission consider the action of Amendment No. 4. On November 3, 2008, the Commission discussed Amendment No. 4 and the sale of the Flood Control Channel Property to Waterman Holdings, LLC, deciding to continue discussion of Amendment No. 4 and the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC to November 17, 2008. On November 17, 2008, the Commission continued discussion of Amendment No. 4 and the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC, to December 15, 2008. On December 15, 2008, the Commission adopted Resolution No. CDC/2008-46 approving Amendment No. 4 to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC concerning the sale of the Flood Control Channel Property to Waterman Holdings, LLC, authorized the Interim Executive Director to execute Amendment No. 4 and the Mayor and Common Council of the City of San Bernardino simultaneously adopted Resolution No. 2008-459 approving the sale of the Flood Control Channel Property. P:Ngendee\Comm Dev Commimion\CDC 2009\08-03-W Wate Holdings,LLC-DUM&E OAgms SAdm COMMISSION MEETING AGENDA Meeting Date: 08/003//20009 Agenda Item Number: R3� ECONOMIC DEVELOPMENT AGENCY STAFF REPORT WATERMAN HOLDINGS,LLC— DEFENSE,INDEMNIFICATION AND HOLD HARMLESS AGREEMENT AND EASEMENT,MAINTENANCE AND OPERATION AGREEMENT (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) BACKGROUND: On December 6, 2004, the Mayor and Common Council of the City of San Bernardino (the "Council") and Community Development Commission of the City of San Bernardino (the "Commission") approved the sale of approximately 3.9 acres of land owned by the Redevelopment Agency of the City of San Bernardino (the "Agency") located at the southwest corner of 4`h Street and Waterman Avenue (APN: 0135-191-11) (the "Property") pursuant to a 2004 Disposition and Development Agreement (the "DDA") by and between the Agency and Waterman Holdings, LLC (the `Buyer/Developer"). Waterman Holdings, LLC is a single asset LLC created solely for the ownership of the Property and for the development of the project for the County of San Bernardino. The principals of Waterman Holdings, LLC are as follows: Jian Torkan (50%) and Emanuel Separzadeh, Jacob Separzadeh, John Separzadeh, Michael Separzadeh, Mouris Separzadeh and Yafa Azizzadeh (50%). The sole managing member of Waterman Holdings, LLC is Jian Torkan and has unilateral authority to act on its behalf. The other parties to Waterman Holdings, LLC are silent investor parties. The DDA, as approved, required for the Buyer/Developer to construct a minimum of 16,864 square feet of office space for the County Preschool Services Department (the"PSD") on the most westerly 2 acres of ! the Property("Phase P') with an option to construct an additional building for another County Department on the remaining 1.6 acres on the easterly portion of the Property ("Phase II"). During the interim period until the option on the Phase II site was exercised, the DDA required the Agency to install and maintain i perimeter fencing, landscaping and an irrigation system for the Phase II site. The Agency would sell the Phase I Property for the fair market value and the Buyer/Developer would have the option to purchase the Phase II Property at a later date. The Agency pledged 60% of the tax increment that the completed Project would generate over a period of ten years to off-set the below market rental rate that the County ' required of the Buyer/Developer. On May 17, 2005, the San Bernardino County Board of Supervisors approved a ten-year lease with the i Buyer/Developer to construct 17,000 square feet of office space for the PSD. On June 20, 2005, the Commission approved Amendment No. 1 to the DDA, whereby the location of Phase I and Phase II were redefined. As a result, the Phase I project was then to be located at the southwest corner of 4a' Street and Waterman Avenue. In the interim, two items arose that would necessitate a change to the original DDA; first, it was determined that the pledge of tax increment to the Buyer/Developer needed to be restructured because the last date to incur tax increment debt payable from direct pledge of tax increment revenues in the Project Area was January 1, 2004. Second, the County needed a larger building constructed for a different 1 PAV.&\ .De Com uion\CDC2M\0M3.WWae Holdi,,LLC-DD4i&EMOAg uMd. COMMISSION MEETING AGENDA Meeting Date: 0/8/03/2009 A Avenda item NHm her: 0 Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 2 County Department and consequently, the Buyer/Developer would now require both the Phase I and Phase II sites (APN: 0135-191-11) (the "Agency Property")be combined as a single site. The Buyer/Developer will purchase the Agency Property for $512,424, which is equal to the fair market value of the Agency Property based upon the final surveyed square footage. Escrow has been opened under the terms of the original DDA and the Buyer/Developer has deposited the sum of $20,000 into escrow and the balance of$492,424 will be paid upon the closing of the escrow. Per Amendment No. 2, the Agency will pledge to the Buyer/Developer from general Agency revenues under a Promissory Note and not as a pledge of tax increment revenues, an amount equal to 60% of the 1% tax revenues generated by the proposed Project (estimated development cost is $6 million) for a period of ten years. As per the original DDA, the 60% pledge was authorized by the Commission in an effort to off-set or compensate the Buyer/Developer for the below market rate per the ten-year lease with the County. The Agency's payment obligation will commence upon presentation of a cancelled check by the Buyer/Developer and as of the fiscal year following completion of the Project by the Buyer/Developer and said payment will be paid after each December l0a' and April 10`s tax payment. On June 19, 2006, the Commission approved Amendment No. 2 to the DDA, whereby the Buyer/Developer will develop on the Agency Property, a 2-story building containing a minimum of 45,000 square feet of office space, to include parking and landscaping, and to lease to the County Transitional Assistance Department ("TAD") (the "Project"). TAD provides jobs and employment services to residents and job training programs. Additionally, in Amendment No. 2, the Agency pledged to reimburse the Buyer/Developer an amount equal to 60% of the 1% of new property taxes generated by the Project for a period of ten years from the general revenues of the Agency. On July 21, 2008, the Commission approved Amendment No. 3 to the DDA, wherein the Agency would reimburse the Buyer/Developer an amount not to exceed $399,500 for the actual costs for the required Off-Site Improvements. This reimbursement would be paid from the sale proceeds of the Agency Property 30 days following the completion of the Project as evidenced by a Certificate of Occupancy issued by the City of San Bernardino (the "City") and verification that the Off-Site Improvements have been constructed by the Buyer/Developer and accepted by the City. The cost reimbursements to the Buyer/Developer would not exceed the lesser of the actual cost paid for the Off-Site Improvements or $399,500 utilizing prevailing wage rates. All other terms and conditions of the DDA, as amended by Amendments No. 1 and No. 2, would remain unchanged. On November 3, 2008, the Commission met to consider the approval of Amendment No. 4 for the sale of the Flood Control Channel Property to the Buyer/Developer. At the meeting, there was discussion and concern about the plans and necessary assurances that the Buyer/Developer would obtain any and all approval/permits from any federal, state and/or local agency prior to construction of the one-story parking structure over the Flood Control Channel Property. The decision of the Commission was to continue the approval of Amendment No. 4 and the sale of the Flood Control Channel Property to November 17, 2008, to allow Agency Staff time to make the necessary revisions to Amendment No. 4. P:Upndas\CommD Commissan\CDC 2009\08 03-09 Wal�Holdings,LLC-DIHH @EMO A,n SKdm COMMISSION MEETING AGENDA Meeting Date: 08/03/2009 Agenda Item Number: �� Economic Development Agency Staff Report Waterman Holdings, LLC—Defense, Indemnification and Hold Harmless Agreement, Easement, Maintenance and Operation Agreement Page 3 On November 17, 2008, the Commission continued the approval of Amendment No.4 and the sale of the Flood Control Channel Property to December 15, 2008. On December 15, 2008, the Commission approved Amendment No. 4 to the DDA, which outlined certain conditions that the Buyer/Developer was required to meet prior to the transfer of the Flood Control Channel Property from the Agency to the Buyer/Developer. Additionally the Council approved the sale of the Flood Control Channel Property to the Buyer/Developer. CURRENT ISSUE: Item No. 20 of Amendment No. 4 added Section 2.15 to the DDA in connection with the Flood Control Channel Property. Section 2.15 placed several requirements on the Buyer/Developer that needed to be accomplished before escrow for the Flood Control Channel Property could be closed. To date, the Buyer/Developer has met all the requirements except for two items. Those two remaining items, which the Buyer/Developer is required to execute, is a "Defense, Indemnification and Hold Harmless Agreement" and an"Easement,Maintenance and Operation Agreement"with the City. Additionally, Section 2.15 requires that both of these agreements, by and between the Buyer/Developer and the City, be approved by the Council at a public meeting. ENVIRONMENTAL IMPACT: The proposed new project description has been reviewed under the California Environmental Quality Act ("CEQA") and it has been determined that the project qualifies for a Categorical Exemption, Class 32 (Guidelines Section 15332). FISCAL IMPACT: The Agency will receive $36,000 from the Buyer/Developer for the sale of the Flood Control Channel Property. RECOMMENDATION: That the Mayor and Common Council adopt the attached Resolutions. Emil A. Marzullo,Interim Executive Director P:� gu To=Dv Co=issionTDC 2009\08-03-09 Warm HoldingsUC-DH &EOAgmu SR.do COMMISSION MEETING AGENDA Meeting Date: 08/03/2009 Anenda Item Number: I RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 3 OF SAN BERNARDINO APPROVING A DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT BETWEEN THE CITY OF SAN 4 BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING REAL PROPERTY (4"' STREET AND WATERMAN AVENUE —APN: 0135- 5 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 6 7 WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter 8 city, duly organized and existing pursuant to the provisions of the constitution of the State of 9 California; and 10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a 11 public body, corporate and politic existing under the laws of the State of California, Health and 12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and 13 underutilized land; and 14 WHEREAS, on December 15, 2008, the Community Development Commission of the City 15 of San Bernardino (the "Commission") adopted Resolution No. CDC/2008-46 approving 16 Amendment No. 4 (the "Amendment") to the 2004 Disposition and Development Agreement (the 17 "DDA") between the Agency and Waterman Holdings, LLC (the "Buyer" or Developer"), 18 concerning the transfer of certain real property, APN: 0135-191-17 (the "Flood Control Channel 19 Property"); and 20 WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San 21 Bernardino (the "Council") adopted Resolution No. 2008-459 approving the sale of the Flood 22 Control Channel Property to the Buyer; and 23 WHEREAS, the Flood Control Channel Property is located south of the southwest corner of 24 4t' Street and Waterman Avenue within the Central City East Redevelopment Project Area and is 25 presently an unimproved vacant lot; and 26 WHEREAS, the Amendment provides for the development of the Flood Control Channel 27 Property by the Developer so that it may be used as a parking lot in furtherance of the office project 28 identified in the DDA, as amended; and 1 o\AOnndae\xesnLrtiima\0.eanlininnc\2009\0&03-09 Wtleniun Hvldiv¢s LLC-DIHH Ameemem MCC Reno Adoc 1 WHEREAS, the Amendment added Section 2.15 to the DDA which outlined certain 2 requirements that the Buyer needed to accomplish in order to close escrow for the transfer of the 3 Flood Control Channel Property to the Buyer; and 4 WHEREAS, Section 2.15 requires that the Buyer execute a Defense, Indemnification and 5 Hold Harmless Agreement (the "Hold Harmless Agreement") with the City and that the Council 6 approve the Hold Harmless Agreement between the City and the Buyer in a public meeting. 7 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 8 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 9 FOLLOWS: 10 Section 1. The Council finds and determines that the facts and circumstances set forth in 11 the Recitals hereof are true and correct in all respects. 12 Section 2. The Council hereby approves the Defense, Indemnification and Hold 13 Harmless Agreement, attached as Exhibit "A", by and between the City of San Bernardino and 14 Waterman Holdings,LLC. 15 Section 3. This Resolution shall take effect upon its adoption and execution in the 16 manner as required by the City Charter. 17 18 19 20 21 22 23 24 25 26 27 28 2 P W aides\Rmlutions lR mlutions\2 9 8-03A Wa..Holding&LLC-DM Apure MCC Raw A.doe 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING A DEFENSE, INDEMNIFICATION 2 AND HOLD HARMLESS AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING 3 REAL PROPERTY (4TH STREET AND WATERMAN AVENUE–APN: 0135- 4 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting 8 thereof,held on the day of 2009,by the following vote to wit: Council Members: Ayes Nays Abstain Absent 9 10 ESTRADA BAXTER 11 BRINKER 12 — SHORETT _ 13 KELLEY 14 JOHNSON _ 15 MC CAMMACK 16 17 18 Rachel G. Clark, City Clerk 19 The foregoing Resolution is hereby approved this day of 12009. 20 21 22 Patrick J. Moms, Mayor City of San Bernardino 23 Approved as to Form: 24 25 By: tivy 26 ames F. Penman, City Attorney 27 28 3 P:V eMes\ResohnioneuteeoWions200908-03-09 Waernun H.Idin.,.LLC-DH Ameement MCC Rao Adm 1 EXHIBIT A Defense,Indemnification and Hold Harmless Agreement 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 v\e nnM na\R.anL nlnnd R.�nlutin nc\o009\OA.Ol Jl9 Wntrmwn Hnldlnuc I IC-DIHH A✓ .....MCC R—Adnc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino 300 North"D" Street, 6h Floor San Bernardino, CA 92418 Attn.: City Attorney (Space Above For Recorder's Use) 2009 DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT: COVENANT RUNNING WITH THE LAND BY AND BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS,LLC This 2009 DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT (this "Agreement") is made and entered into as of August 3, 2009, by and between the City of San Bernardino, a charter city (the "City"), and Waterman Holdings, LLC, a California limited liability company (the "Buyer"). In this Agreement, the City or the Buyer may singularly be referred to as a"Party" and may collectively be referred to as the "Parties." RECITALS WHEREAS, on December 6, 2004, the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and the Buyer executed and entered into a Disposition and Development Agreement (the "DDA") with the Buyer for the construction of structures, in two (2) phases, to be occupied by the County of San Bernardino (the"County"); and WHEREAS, pursuant to the DDA, the Buyer was to acquire from the Agency approximately 3.7 acres (the"Agency Property") located at the southwest corner of 0 Street and Waterman Avenue, for development of the structures to be occupied by the County (the "County Structures"); and 1 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman—DMH Agrmt.doc WHEREAS, on June 20, 2005, the Agency and the Buyer executed and entered into the Amendment No. 1 to the DDA (the "First Amendment"). The First Amendment, without limitation, provided for the transposition of the Phase I project and the Phase II project; and WHEREAS, on June 19, 2006, the Agency and the Buyer executed and entered into the Amendment No. 2 to the DDA(the "Second Amendment"). Pursuant to the Second Amendment the Buyer acquired from the Agency a right of first refusal to purchase the Flood Control Channel Property as defined in the Second Amendment; and WHEREAS, on July 21, 2008, the Agency and the Buyer executed and entered into the Amendment No. 3 to the DDA (the "Third Amendment"). Pursuant to the Third Amendment, the Agency agreed, without limitation, to reimburse the Buyer for the off-site improvement costs that the Buyer incurred in connection with the construction and the development of the Project in an amount not to exceed $399,500; and WHEREAS, on December 15, 2008,the Agency and the Buyer executed and entered into the Amendment No. 4 to the DDA (the "Fourth Amendment"). Pursuant to the Fourth Amendment, the Buyer agreed, without limitation: (i) to purchase the Flood Control Channel Property from the Agency; and (ii) to construct and to develop, without limitation, a single floor structure above the Flood Control Channel Property to provide additional parking spaces for the building constructed by the Buyer on the Agency Property (the "Flood Control Channel Property Improvements"); and WHEREAS, the Buyer has commenced construction of the Flood Control Channel Property Improvements; and WHEREAS, the Flood Control Channel Property is part of the Warm Creek and is presently subject to flows occurring in and across the historical and modified course thereof, from whatever source, whether naturally occurring or otherwise, whether consistent with historical flows or otherwise; and WHEREAS,the Agency and the Buyer have opened an escrow to facilitate the transfer of the Flood Control Channel Property to the Buyer; and WHEREAS, the Buyer, without limitation, must execute this Agreement as one (1) of the conditions precedent provided for in Section 2.15(vi) of the Fourth Amendment that must be satisfied by the Buyer in order to close the escrow for the purchase by the Buyer and for the sale by the Agency of the Flood Control Channel Property and of the Flood Control Channel Property Improvements. NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS OF THIS AGREEMENT, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND 2 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4*&Waterman—DH-1H Agrmt.dm i THE CITY, ON BEHALF OF ITSELF, AND ITS SUCCESSORS AND ASSIGNS, DO HEREBY AGREE AS FOLLOWS: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections of this Agreement, the following capitalized terms shall have the meanings as set for below: "Agency" shall mean the Redevelopment Agency of the City of San Bernardino, in the County of San Bernardino, State of California. "City" shall mean the City of San Bernardino, in the County of San Bernardino, State of California. "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2004 Disposition and Development Agreement, dated December 6, 2004, as executed and delivered by and between the Agency and the Buyer. "DDA Agreement" shall mean the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and further amended by the Fourth Amendment. "First Amendment" shall mean the Amendment No. 1 to the DDA, dated June 30, 2005, as executed and delivered by and between the Agency and the Buyer. "Flood Control Channel" shall mean property within the banks of the Warm Creek including the Flood Control Channel Property Improvements. "Flood Control Channel Property" shall mean the Flood Control Channel Property as described in Exhibit"A", attached hereto and made a part hereof. "Flood Control Channel Property Improvements" shall mean the improvements to the Flood Control Channel Property as described in Exhibit `B", attached hereto and by this reference made a part hereof. "Fourth Amendment'' shall mean the Amendment No. 4 to the DDA, dated December 15, 2008, as executed and delivered by and between the Agency and the Buyer. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits and/or approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Environmental Quality Act ("CEQA"), National Environmental Protection Act ("NEPA"), all 3 P:Agenda\Agenda AttachmentMgenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4"&Waterman—DIM Agrmt.doc applicable Environmental Laws and all applicable Laws pertaining to flooding, to flood prevention and mitigation, to flood control channels and/or to the maintenance and repair of flood control channels. "Second Amendment" shall mean the Amendment No. 2 to the DDA, dated June 19, 2006, as executed and delivered by and between the Agency and the Buyer. "Third Amendment" shall mean the Amendment No. 3 to the DDA, dated July 21, 2008, as executed and delivered by and between the Agency and the Buyer. Section 3. Defend, Indemnify and Hold Harmless. The Buyer agrees to defend in any administrative, civil, criminal, or other proceedings, indemnify, save and hold harmless the City, the Agency and all elected officials, appointed officers, employees and staff, volunteers, agents, representatives, contractors, subcontractors and/or consultants of the City and of the Agency from all liabilities, losses and damages that may be suffered from the acts or omissions of the Buyer and/or by the agents, representatives, employees, contractors, subcontractors, consultants, successors, invitees, and/or assigns of the Buyer, and/or as the result of the use of the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements in the manner contemplated by the DDA as amended. This indemnity agreement in all its terms extends, by means of explication and not of limitation,to the injury or loss of life and/or property damage from water flows, flood waters and debris flows and debris blockages that cause flooding or water damages to any real or personal property or result in any liability, damages, injury or loss of life. The Buyer shall procure and maintain in effect at all times general liability insurance in the combined/single amount of$3,000,000, at its sole cost and expense, and shall name and designate the City and the Agency as "additional insureds" on the general liability insurance policy. The limits of the policy shall not be a limit on the liability of the Buyer under this section. Section 4. Term of Agreement. The term of this Agreement shall commence on the date the Buyer first acquires the Flood Control Channel Property and shall survive the termination of the DDA Agreement and shall be a covenant that runs with the land of the Flood Control Channel Property and/or with the Flood Control Channel and/or with the Flood Control Channel Improvements and shall be binding on all successors and assignees of the Buyer's. The Buyer, and each successive owner of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements shall have liability hereunder only to the extent such liability arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property and/or the Flood Control Channel Improvements. Section 5. Representations and Warranties of the Buyer. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement and the Buyer has 4 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4"&Waterman—DIHH Agrmt.doc taken all requisite action and obtained all requisite consents in connection with entering into this Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other a greement, document, instrument or other obligation to which the Buyer is a party, or under any federal, state, municipal or local laws, statutes, ordinances, riles, governmental regulations or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer, to the Flood Control Channel Property and/or to the Flood Control Channel Property Improvements, now or hereafter in effect and as may be amended from time- to-time. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. (e) The Buyer is not in default under the DDA Agreement and shall perform the terms, covenants and conditions of the DDA Agreement. Section 6. Covenants Running With the Land The Parties hereby expressly agree as follows: This Defense, Indemnification and Hold Harmless Agreement shall constitute a Covenant running with the land. (a) The land affected by these covenants includes the Flood Control Channel Property and of the Flood Control Channel Property Improvements as described herein and the public lands of the City of San Bernardino and all property owned by the Agency in proximity to such Flood Control Channel Property and Flood Control Channel Property Improvements. (b) Each successive owner of the Flood Control Channel Property and/or the Flood Control Channel Property Improvements are bound hereby for the benefit of the land owned by, granted by, or granted to the City of San Bernardino and the Agency described in Section 6(a) above. (c) Each covenant related to the use, maintenance, or improvement of the Flood Control Channel Property and Flood Control Channel Property Improvements, the public lands of the City of San Bernardino and all property owned by the Agency in proximity to such Flood Control Channel Property and Flood Control Channel Property Improvements, or some part thereof. (d) This instrument shall be recorded in the offices of the County Recorder of the County of San Bernardino. 5 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agtmts-Amend 2009\08.03-09 0&Waterman—DIHH Agrmt.doc Section 7. Events of Default. (a) An event of default shall occur under this Agreement whenever: (i) any Party fails to timely pay any amount due and owing under this Agreement and/or the DDA Agreement, (ii) any Party fails to perform any term, covenant or condition in this Agreement, (iii)the occurrence of a default under the DDA Agreement, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA Agreement is or becomes false and untrue, or (v) any Party files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, any Party is or becomes insolvent, any Party assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of any Party and such appointment is not discharged within sixty (60) calendar days thereafter. Upon the occurrence of an event of default, neither Party shall be under any further obligation under this Agreement, and the rights of the Parties hereunder shall be released and discharged; provided, however, that if the Party who is otherwise claimed to be in default by the other Party commences to cure, to correct or to remedy the alleged default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently complete such cure, correction or remedy, such Party shall not be deemed to be in default hereunder. (b) The Party which may claim that a default has occurred shall give written notice of default to the Party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice as specified herein. (c) Any failure or delay by a 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 rights or remedies associated with a default. The rights and remedies of the Parties 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. (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice or a lesser time as may be required by law, as provided above, a"breach" shall be deemed to have occurred. In the event of a breach, the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement and the continuing covenants established hereunder, at law and in equity. Section 8. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. 6 P:Agenda\.Sgenda Attachments\Agenda Attaehments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman—DM Agrmt.dm © (b) Attorney's Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. The value of the work of the City Attorney and members of his office shall be considered "attorneys' fees" for the purposes of this paragraph. The fees for the work of the City Attorney and members of his office shall be calculated at the prevailing market rates in the local community for comparable services. (c) Authority. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement,the Parties shall comply with and conform to all applicable Laws. O (f) Conflicts of Interest No Individual Liability. No official or employee of the City and/or of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City and/or of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City and/or of the Agency shall be personally liable in the event of a breach of this Agreement by the City. (g) Counterparts. This Agreement may be executed in one or more counterparts,each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. (i) Entire Agreement. This Agreement constitutes the entire agreement between the Parties. This Agreement supersedes all prior negotiations, discussions, and agreements between the Parties concerning the subject matters covered herein. The Parties intend this Agreement to be the final expression of their agreement with respect to the subjects covered herein and a complete and exclusive statement of such terms. �.r 7 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agmts-Amend 2009\08-03-09 4"'&Waterman—DIHH Agrmtdoc 0) Estoppel Certificate. The City agrees to, within twenty (20) calendar days following any written notice from the Buyer, deliver to any potential purchaser or lender a commercially-reasonable estoppel certificate certifying: (i) whether, to the City's knowledge, there are any then-current claims or defaults under this Agreement, and (ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. (k) Governing Law. This Agreement shall be governed by the laws of the State of California. (1) Headings. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (m) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (n) Necessary Actions. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (o) Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the 3rd business day after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Buyer: Waterman Holdings, LLC Attention: Ran Torkan 4221 Wilshire Boulevard, Suite 240 Los Angeles, California 90010 To the City: City of San Bernardino Attention: City Attorney 300 North"D" Street, 6 Floor San Bernardino, California 92418 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North"E" Street, Suite 301 San Bernardino, California 92401 8 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2009\08-03-09 0&watennan—DEEM Agrmt.doc (p) Partial Invalidity. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (q) Representation and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery,performance, expiration or termination of this Agreement. (r) Severabilitv. Each and every Section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof to certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (s) Successors and Assigns. This Agreement shall constitute covenants running with the Flood Control Channel Property and the Flood Control Channel Property Improvements and shall be binding on all successors and assigns of the Buyer. The Buyer, and each successive owner of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements shall have liability hereunder only to the extent such liability arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property and/or of the Flood Control Channel Property Improvements. (This Agreement may not be assigned by the Buyer except to a person or entity who is concurrently acquiring the Buyer's ownership of the Agency Property, and the Agency Property Improvements, and the Flood Control Channel Property, and the Flood Control Channel Property Improvements. The City may assign and delegate its rights, title, interest and obligation in, to and under this Agreement without obtaining the prior consent of the Buyer.) (t) Third Party Beneficiaries. Except for the Agency, this Agreement shall not create any right or interest in any non-Parry or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to enforce this Agreement in the event the City does not enforce the payment or non-payment obligations of the Buyer under this Agreement. (u) Time is of the Essence. Time is of the essence in this Agreement. (v) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance or enforce one or more of the remedies provided in the Agreement shall not be deemed to be a waiver of that remedy. 9 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4'&Waterman—DIM Agrmt.doc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Morris,Mayor Approved as to Form: By: r, F. Penman, City Attorney Date: BUYER Waterman Holdings, LLC a California limited liability company By: Ran Torkan Title: 10 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4*&Waterman—DEH Agrmt.doc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Moms,Mayor Approved as to Form: By: James F. Penman, City Attorney Date: BUYER Waterman Holdings, LLC a California limited liability company By: Jian Torkan Title: 10 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman—DDiH Agrmt.doc IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. Date: CITY City of San Bernardino, a charter city By: Patrick J. Morris,Mayor Approved as to Form: By: James F. Penman, City Attorney Date: BUYER Waterman Holdings, LLC a California limited liability company By: Ran Torkan Title: 10 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman—D1HH Agrmt.do State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 11 P:Agenda\Agenda Attachments\Agenda AttachmmMAgenda Attachmemts\Agrnts-Amend 2009\08-03-09 0&Waterman—DIHH Agtmt.doc EXHIBIT"A" Legal Description of the Flood Control Channel Property APN: 0135-191-17 PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTWEST CORNER OF SAID PARCEL 1, SAID POINT ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9; THENCE NORTH 00 007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID PARCEL 1; THENCE LEAVING SAID WEST LINE SOUTH 89 056'51" EAST 275.19; THENCE SOUTH 86 024'16" EAST 260.00 FEET TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9; THENCE SOUTH 89 059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE POINT OF BEGINNING. 12 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 41°&Waterman—D W H Agrmtdoc EXHIBIT`B" Flood Control Channel Property Improvements The Improvements of the Flood Control Channel Property shall consist of a single floor structure built above the Flood Control Channel Property to provide additional parking spaces for the 2- story, 45,000 square foot building. The construction, landscaping, etc., of the single floor parking structure shall comply with the City's Development Code and requirements from any federal and/or state governmental agency, concerning improvements to and/or near flood control channel land,that may be imposed on the Developer. 13 P:Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman—D4{H Agumt.doc i I RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY 3 OF SAN BERNARDINO APPROVING AN EASEMENT, MAINTENANCE AND OPERATION AGREEMENT BETWEEN THE CITY OF SAN 4 BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING REAL PROPERTY (4TH STREET AND WATERMAN AVENUE—APN: 0135- 5 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 6 7 WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter g city, duly organized and existing pursuant to the provisions of the constitution of the State of 9 California; and 10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a 11 public body, corporate and politic existing under the laws of the State of California, Health and 12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and 13 underutilized land; and 14 WHEREAS, on December 15, 2008, the Community Development Commission of the City 15 of San Bernardino (the "Commission") adopted Resolution No. CDC/2008-46 approving 16 Amendment No. 4 (the "Amendment') to the 2004 Disposition and Development Agreement (the 17 "DDA") between the Agency and Waterman Holdings, LLC (the "Buyer" or Developer"), 18 concerning the transfer of certain real property, APN: 0135-191-17 (the "Flood Control Channel 19 Property"); and 20 WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San 21 Bernardino (the "Council') adopted Resolution No. 2008-459 approving the sale of the Flood i 22 Control Channel Property to the Buyer; and 23 WHEREAS, the Flood Control Channel Property is located south of the southwest corner of 24 4s' Street and Waterman Avenue within the Central City East Redevelopment Project Area and is 25 presently an unimproved vacant lot; and i I 26 WHEREAS, the Amendment provides for the development of the Flood Control Channel 27 Property by the Developer so that it may be used as a parking lot in furtherance of the office project 28 identified in the DDA, as amended; and 1 P HOIdiw,LLC-EMO Aw.. MCC Re.B.d. 1 WHEREAS, the Amendment added Section 2.15 to the DDA which outlined certain 2 requirements that the Buyer needed to accomplish in order to close escrow for the transfer of the 3 Flood Control Channel Property to the Buyer; and 4 WHEREAS, Section 2.15 requires that the Buyer execute a Easement, Maintenance and 5 Operation Agreement (the "EMO Agreement") with the City and that the Council approve the EMO 6 Agreement between the City and the Buyer in a public meeting. 7 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 8 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 9 FOLLOWS: 10 Section 1. The Council finds and determines that the facts and circumstances set forth in 11 the Recitals hereof are true and correct in all respects. 12 Section 2. The Council hereby approves the Easement, Maintenance and Operation 13 Agreement, attached as Exhibit "A", by and between the City of San Bernardino and Waterman 14 Holdings,LLC. 15 Section 3. This Resolution shall take effect upon its adoption and execution in the 16 manner as required by the City Charter. 17 18 19 20 21 22 23 24 25 26 27 28 2 P:Upendas\t lwions\RewlwionsV0 0"3-0 WYernun Holdings UC-EMO Am mmt MCC Rew B.dm I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING AN EASEMENT, MAINTENANCE 2 AND OPERATION AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS, LLC, CONCERNING 3 REAL PROPERTY (4TH STREET AND WATERMAN AVENUE—APN: 0135- 4 191-17) (CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA) 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 7 Common Council of the City of San Bernardino at a meeting 8 thereof, held on the day of 2009,by the following vote to wit: Council Members: Ayes Nays Abstain Absent 9 ESTRADA _ 10 BAXTER 11 BRINKER 12 SHORETT 13 KELLEY _ 14 JOHNSON _ 15 MC CAMMACK 16 17 18 Rachel G. Clark, City Clerk 19 The foregoing Resolution is hereby approved this day of 2009. 20 21 22 Patrick J. Morris, Mayor City of San Bernardino 23 Approved as to Form: 24 25 By: � 26 J es F. Penman, City Attorney 27 28 3 P Nnendasat a[utionsaesolutions�0 M8-03-09 Waterman Holdin¢a LLC-EMO Am .m MCC Rem B.d. 1 EXHIBIT A Easement, Maintenance and Operation Agreement 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 P'\AaenAnz\ReznL�tinnz\Re�nlofion.c @009\08 03-09 Waterman Hold'mes LLC-EMO Aereemem MCC Resa B doe RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino 300 North"D" Street, 6h Floor San Bernardino, CA 92418 Attn.: City Attorney (Space Above Line Reserved For Use By Recorder) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES 2009 EASEMENT,MAINTENANCE AND OPERATION AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND WATERMAN HOLDINGS,LLC THIS 2009 EASEMENT, MAINTENANCE AND OPERATION AGREEMENT (this"Agreement') is dated as of August 3, 2009 (the"Effective Date"), by and between the City of San Bernardino, a charter city (the "City"), and Waterman Holdings, LLC, a California limited liability company(the"Buyer"). In this Agreement,the City or the Buyer may singularly be referred to as a"Party" and may collectively be referred to as the"Parties." RECITALS A. The Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and the Buyer executed that certain 2004 Disposition and Development Agreement, dated December 6, 2004 (the "DDA"), for the purchase and sale of certain real property, as defined therein, owned by the Agency and located in the City of San Bernardino, in the County of San Bernardino (the "County") and in the State of California (the "State"). The Agency and the Buyer executed that certain Amendment No. 1 to the DDA, dated June 20, 2005 (the "First Amendment'). The Agency and the Buyer executed that certain Amendment No. 2 to the DDA, dated June 19, 2006 (the "Second Amendment'). The Agency and the Buyer executed that certain Amendment No. 3 to the DDA, dated July 21, 2008 (the "Third Amendment'). The Agency and the Buyer executed that certain Amendment No. 4 to the DDA, dated December 15, 2008 (the "Fourth Amendment'). For purposes of this Agreement, the DDA, as amended by the First Amendment, as further amended by the Second Amendment, 1 NAgenda\Agenda Attachments\Agenda Attachments\Agenda AttachmentsWgrmts-Amend 2009\08.03.09 4'&Waterman-EMO Agrmt.doc as further amended by the Third Amendment and as further amended by the Fourth Amendment shall collectively be referred to as the "DDA Agreement." B The Buyer has constructed, developed, installed and/or completed, and/or has agreed to construct, to develop, to install and to complete the improvements (collectively, the "Agency Property Improvements") in connection with the Agency Property (as defined in the Fourth Amendment) and the improvements (collectively, the "Flood Control Channel Property Improvements") in connection with the Flood Control Channel Property (as defined in the Fourth Amendment), in accordance with and pursuant to the DDA Agreement. C. Pursuant to the DDA Agreement, the Buyer has agreed, without limitation, to maintain the Flood Control Channel Property, the Flood Control Channel (as defined below) and the Flood Control Channel Property Improvements in favor of the City, as provided for and in accordance with the terms, covenants and conditions of this Agreement. D. The legal description of the Flood Control Channel Property is attached hereto and incorporated herein by this reference as Exhibit"A". E. As one of the conditions precedent to the closing of the purchase and sale by the Agency, as seller, and by the Buyer, as buyer, of the Flood Control Channel Property in Section 2.15 of the DDA Agreement, the Buyer agreed to execute, to deliver, to perform and to observe the terms, covenants and conditions of this Agreement. F. The Buyer and the City are willing to execute, to deliver, to perform and to observe the terms, covenants and conditions of this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND THE CITY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS,AGREE TO THE FOLLOWING: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections in this Agreement, the following capitalized terms shall have the meanings as set forth below: "CEQA" shall mean the California Environmental Quality Act, as amended from time-to-time. 2 PAAgenda\Agenda AttachmenWAgenda Attachments\Agenda AttachmentsWgrmts-Amend 2009\08-03-09 0&Waterman-EMO Agrmt.doc i i 3 "City" shall mean the City of San Bernardino, in the County of San Bernardino, State of California. "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2004 Disposition and Development Agreement, dated December 6, 2004, as executed and delivered by and between the Agency and the Buyer. "DDA Agreement'' shall mean the DDA, as amended by the First Amendment, as further amended by the Second Amendment, as further amended by the Third Amendment and shall further be amended by the Fourth Amendment. "Easement" shall mean an easement from the Buyer to the City to, over, in, above, under, beneath, through, from or across the Agency Property, the Agency Property Improvements, the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements to the extent reasonably necessary to enable the City to exercise its rights and remedies under this Agreement, including, without limitation, the following: (i) the right, subject to the terms of this Agreement, to access, to enter, to inspect, to repair and/or to maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements pursuant to this Agreement and in compliance with all applicable laws, (ii) the right, subject to the terms of this Agreement, to access, to enter, to inspect, to repair and/or to maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements to assure the free flow of water, to remove all debris and debris blockages from, to prevent and to mitigate against flooding, and to prevent and to mitigate against injury or loss of life and/or of property damage from water flows, from flood water and from debris flow and debris blockages that cause or could cause flooding or water damage to, the Agency Property, the Agency Property Improvements, the Flood Control Channel Property, the Flood Control Channel, the Flood Control Channel Property Improvements and/or to any other real or personal property. "Effective Date" shall mean the date that this Agreement is executed by and between the City and the Buyer, as provided for in the preamble of this Agreement. "Environmental Laws" shall mean the "Environmental Laws" as defined in the DDA Agreement, as amended from time-to-time. "First Amendment" shall mean the Amendment No. 1 to the DDA, dated June 20, 2005, as executed and delivered by and between the Agency and the Buyer. "Flood Control Channel" shall mean the property within the banks of Warm Creek including the Flood Control Channel Property. "Flood Control Channel Property" shall mean the Flood Control Channel Property, as set forth in Exhibit A attached hereto and by this reference made a part hereof. 3 P:\Agenda\AgendaAttachmcnts\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 0&Waterman-EMO Agmt.doc "Flood Control Channel Property Improvements" shall mean the improvements to the Flood Control Channel Property, as described in Exhibit B attached hereto and by this reference made a part hereof. "Fourth Amendment" shall mean the Amendment No. 4 to the DDA, dated December 15, 2008, as executed and delivered by and between the Agency and the Buyer. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits, approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Environmental Quality Act ("CEQA"), National Environmental Protection Act ("NEPA"), all applicable Environmental Laws and all applicable Laws pertaining to flooding, to flood prevention and mitigation, to flood control channels and/or to the maintenance and repair of flood control channels. "NEPA" shall mean the National Environmental Protection Act, as amended from time-to-time. "Official Records" shall mean the official records of the county recorder's office for the County of San Bernardino, State of California. "Second Amendment" shall mean the Second Amendment to the DDA, dated III June 19, 2006, to the DDA, as executed and delivered by and between the Agency and the Buyer. "State" shall mean the State of California. "Third Amendment" shall mean the Amendment No. 3 to the DDA, dated July 21, 2008, as executed and delivered by and between the Agency and the Buyer. Section 3. Maintenance by the Buyer of the Flood Control Channel Property, of the Flood Control Channel and of the Flood Control Channel Property Improvements. Upon the execution and the delivery by the Parties of this Agreement, the Buyer, for itself, its successors and assigns, hereby covenants and agrees that: (a) The City shall have the right, but not the obligation, to enter the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements to conduct, or to cause to be conducted, such tests, studies, assessments and/or observations, without limitation, for the following reasons: (i) to determine and to assess that the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements are in compliance with this Agreement and all applicable Laws, including, without limitation, (1) compliance with all mitigation measures imposed under applicable Laws consistent with the CEQA, with the NEPA and the Environmental Laws, and (2) all permits and approvals, as amended, supplemented and/or required from time-to-time, as issued by any and all federal, state, municipal or local governmental agencies having jurisdiction over the Flood Control Channel Property, over the Flood Control Channel and/or over the Flood 4 PAAgenda\Agenda Attachments\Agenda Attnhmmts\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4'&Waterman-EMO Agrmt.doc Control Channel Property Improvements, including, without limitation, the United States Corps of Engineers, and (ii) to determine and to assess whether any debris or debris blockages exist or may exist, whether flooding or any flooding conditions exist or may exist, and/or whether any blockage of the free flow of water exists or may exist, at the Flood Control Channel Property, at the Flood Control Channel and/or at the Flood Control Channel Property Improvements, and (iii) to determine and to assess whether loss of life or injury, or damage to real or personal property, has occurred or will occur, including, without limitation, any damage or loss to the Agency Property, to the Agency Property Improvements, to the Flood Control Channel Property, to the Flood Control Channel,to the Flood Control Channel Property Improvements and/or to any other real or personal property. (b) (1) The Parties mutually understand and agree that from and after the Effective Date, the Buyer shall maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements (including all now or hereafter existing improvements, paving, walkways, landscaping, exterior signage, ornamentation and flood control channel) in good repair, neat, clean and orderly condition, free from all adverse conditions described in clauses (ii) and (iii) of paragraph 3(a) above and in compliance with all applicable Laws and with this Agreement(the "Maintenance Standard"). (2) In the event the City Manager, or his or her designee, determines that the Developer is not maintaining the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements in compliance with the Maintenance Standard (the "Maintenance Deficiency"), the City shall notify the Buyer in writing of the Maintenance Deficiency. The City shall give the Buyer thirty (30) calendar days from receipt of such notice to cure or commence to cure the Maintenance Deficiency as identified in the notice. If the Buyer shall commence to cure but shall not have completed the cure within the thirty (30) calendar days, the Buyer shall within such thirty (30) calendar days provide the City with a written schedule for completion. The schedule must be approved by the City in writing for the Buyer to avoid violation under this section. In the event the Buyer fails to cure the Maintenance Deficiency within the thirty (30) calendar days or the time otherwise agreed to by the City in writing, the City shall have the right, but not the obligation, to enter the Agency Property, the Agency Property Improvements,the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements and to perform all acts deemed necessary by the City in the exercise of its sole discretion to cure the Maintenance Deficiency, or to take other action at law or in equity which the City may have a good faith belief it has a right to exercise to accomplish the abatement of the Maintenance Deficiency. (3) Failure of the Buyer to cure the Maintenance Deficiency shall in addition to all other remedies available to the City, constitute a nuisance and a violation of the parking conditions for occupancy of the Agency Property Improvement. The City may commence an action against the Buyer, its successors, or assigns in abatement of the nuisance. Such abatement action shall include recovery of all direct and incidental costs of abatement of the nuisance, assessment of penalties, and further remedial action up to and including revocation of the occupancy permit for the Agency Property Improvements. 5 PAAgenda\Agenda Attachments\Agenda AttachmentsWgenda Attachments\Agrnts-Amend 2009\08-03-09 4'&Waterman-EMO Agrmt.doc I (c) In addition to the maintenance obligations provided for in Section 3(b),the Buyer shall maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements in conformance with standards as shall be set by the City Engineer or equivalent (the "City Engineer") for the City, from time-to-time (the "City Engineer Maintenance Requirements") after the Effective Date of this Agreement. The City shall notify the Buyer in writing of the City Engineer Maintenance Requirements that the Buyer is obligated to perform and complete, at its sole cost and expense, and shall give the Buyer thirty (30) calendar days from receipt of such notice to perform, to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements as identified in the notice. In the event the Buyer fails to perform, to repair, to remediate, or to cure and/or to complete the City Engineer Maintenance Requirements within the time allowed, the City shall have the right, but not the obligation, to enter Agency Property, the Agency Property Improvements, the Flood Control Channel Property,the Flood Control Channel and/or the Flood Control Channel Property Improvements and to perform all acts necessary to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements, or to take other action at which the City in the sole exercise of its discretion may then determine to take to repair, to remediate, to cure and/or to complete the City Engineer Maintenance Requirements. The City may take all such actions against the Buyer for failure to timely implement the City Engineer Maintenance Requirements as for a failure under Section 3(b) above. The City Engineer Maintenance Requirements may, without limitation, require the Buyer to repair and/or to maintain the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements at a level of performance greater than the Maintenance Standard, at the sole cost and expense of the Buyer. (d) Graffiti, as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of a structure or improvement on the Flood Control Channel Property, on the Flood Control Channel and/or on the Flood Control Channel Property Improvements which is visible from any public right-of-way adjacent or contiguous to the Flood Control Channel Property, to the Flood Control Channel and/or to the Flood Control Channel Property Improvements, shall be removed by the Buyer by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within seventy-two (72) hours following the time of such application,the City shall have the right, but not the obligation, to enter the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements and to remove the graffiti without notice to the Buyer. The Buyer shall be subject to abatement and recovery of costs as authorized under San Bernardino Municipal Code Chapter 8.69. (e) From and after the Effective Date, the provisions of this Section 3(a), Section 3(b), Section 3(c), Section 3(d) and Section 3(e) shall be covenants running with the land in perpetuity, and shall be enforceable by the City. Nothing in the foregoing provisions of Section 3(a), Section 3(b), Section 3(c), Section 3(d) and this Section 3(e) shall be deemed to preclude the Buyer from making any alteration, addition, or other change to any structure or improvement or landscaping on the Flood Control Channel Property, on the Flood Control Channel and/or in connection with the Flood Control Channel Property Improvements provided 6 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 40&Waterman-EMO Agrmt.doc that any such changes comply with applicable Laws, including, without limitation, all zoning and building regulations of the City. Section 4. Easement. The Buyer hereby grants the Easement to the City. From and after the Effective Date,the Easement shall run with the land in perpetuity. Section 5. Representations and Warranties of the Buyer. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement, and the Buyer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Buyer is a parry, or under any federal, state, municipal or local laws, statutes, ordinances, rules, governmental regulations or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer, the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Property Improvements, now or hereafter in effect, and as may be amended from time-to-time. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. (e) The Buyer is not in default under the DDA Agreement and shall perform the terms, covenants and conditions of the DDA Agreement. Section 6. Events of Default. (a) Any event of default shall occur under this Agreement whenever: (i) any Party fails to timely pay any amount due and owing under this Agreement and/or the DDA Agreement, (ii) any Party fails to perform any term, covenant or condition in this Agreement, (iii) the occurrence of a default under the DDA Agreement, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA Agreement is or becomes false and untrue, or (v) the Buyer files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, the Buyer is or becomes insolvent, the Buyer assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of the Buyer and such appointment is not discharged within sixty (60) calendar days thereafter. 7 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachmems\Agnnts-Amend 2009\08-03-09 0&Waterman-EMO Agrmt.doc (b) The Party which may claim that a default has occurred shall give written notice of default to the Party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice. (c) Any failure or delay by a 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 rights or remedies' associated with a default. The rights and remedies of the Parties 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. (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice, as provided above, a "breach" shall be deemed to have occurred. In the event of a breach, the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement, at law and in equity. (e) Emergency — The in default Party shall have a lesser time to cure when failure to cure creates an imminent threat to the health, safety, or welfare of persons located on or off the Flood Control Channel Property, the Flood Control Channel and/or the Flood Control Channel Improvements. The threat shall be as determined by officials of the City in the exercise of their discretion. Upon a finding of such threat, Buyer may be required to take immediate action, including the destruction and removal of the Flood Control Channel Property Improvements without compensation to cure the condition giving rise to the emergency. Section 7. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. (b) Attorneys' Fees and Costs. In the event that litigation is brought by any party in connection with this Agreement,the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The value of the work of the City Attorney and members of his office in enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the purposes of this paragraph. The fees for the work City Attorney and members of his office shall be calculated at prevailing market rates in the local community for comparable services. 8 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4'&Waterman-EMO Agrtnt.doc (c) Authori Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement,the Parties shall comply with and conform to all applicable Laws. (f) Conflicts of Interest, No Individual Liabilitv. No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City shall be personally liable in the event of a breach of this Agreement by the City. (g) Counterpart s. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. (i) Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any and all prior oral or written agreement, understanding or representation relating to the subject matter of this Agreement. 0) Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California. (k) Headings. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (1) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law 9 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrms-Amend 2009\08-03-09 0&Waterman-EMO Agrmt.do rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (m) Necessary Actions. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (n) Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the third (3`d) business day after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified,postage prepaid, addressed as follows: To the Buyer: Waterman Holdings, LLC Attention: Ban Torkan 4221 Wilshire Boulevard, Suite 240 Los Angeles, California 90010 To the City: City of San Bernardino Attention: City Attorney 300 North"D" Street, 6th Floor San Bernardino, California 92418 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North"E" Street, Suite 301 San Bernardino, California 92401 (o) Partial Invalidity. If, after the date of execution of this Agreement, any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable. (p) Representations and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. (q) Successors and Assigns. This Agreement shall constitute covenants running with the land and shall be binding on all successors and assigns of the Buyer. The Buyer and each successive owner of the Flood Control Channel Property, the Flood Control Channel and the Flood Control Channel Property Improvements shall have liability hereunder only to the 10 R1Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman-EMO Agrmt.doc extent same arises from events or circumstances existing or occurring during its period of ownership of the Flood Control Channel Property, of the Flood Control Channel and of the Flood Control Channel Property Improvements. This Agreement may not be assigned by the Buyer except to a person or entity who is concurrently acquiring Buyer's ownership of the Agency Property, of the Agency Property Improvements, of the Flood Control Channel Property, of the Flood Control Channel and of the Flood Control Channel Property Improvements. The City may assign and delegate its rights, title, interest and obligations in, to and under this Agreement without obtaining the prior consent of the Buyer. (r) Third Party Beneficiaries. Except for the Agency, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to enforce this Agreement in the event the City does not enforce the payment obligations or non- payment obligations of the Buyer under this Agreement. (s) Time is of the Essence. Time is of the essence in this Agreement. (t) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance to enforce one or more of the remedies provided in this Agreement shall not be deemed to be a waiver of that remedy. (u) Estoppel Certificate. The City agrees to, within twenty (20) calendar days following any written request from the Buyer, deliver to any potential purchaser or lender a commercially reasonable estoppel certificate certifying: (i) whether, to the City's knowledge, there are any then current claims or defaults under this Agreement, and (ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. 11 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 41h&Watemtan-EMO Agrmt.doc 1 IN WITNESS WHEREOF,the City and the Buyer have executed this Agreement on the date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: 2� City Attorney BUYER Waterman Holdings, LLC, a California limited liability company Dated: By: Name: Title: 12 P1Agenda\Ageada Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman-EMO Agrmt.doc IN WITNESS WHEREOF, the City and the Buyer have executed this Agreement on the date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: City Attorney BUYER Waterman Holdings, LLC, a California limited liability company Dated: By: Name: Title: 12 P:\Agenda\AgendaAttachments\Agenda Attachments\Agenda AttachmentsW grmts-Amend 20090-03-09 0&Waterman-EMO Agrrmt.doc IN WITNESS WHEREOF,the City and the Buyer have executed this Agreement on the date set forth above. CITY City of San Bernardino, a charter city Date: By: Name: Its: Approved as to Form: By: City Attorney BUYER Waterman Holdings, LLC, a California limited liability company Dated: By: Name: Title: 12 P:\Agenda\AgendaAuachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman-EMO Agvnt.doc State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity,upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California ) County of San Bernardino ) On before me personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity, upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 13 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4'&Watem m-EMO Agmrt.dm EXHIBIT A Legal Description of the Flood Channel Property APN: 0135-191-17 PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9; THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID PARCEL 1; THENCE LEAVING SAID WEST LINE SOUTH 89°56'51"EAST 275.19; THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9; THENCE SOUTH 89 059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE POINT OF BEGINNING. 14 PAAgenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 e&Waterman-EMO Agrmtdoc EXHIBIT`B" Flood Control Channel Property Improvements The Improvement of the Flood Control Channel Property shall consist of a single floor structure built above the Flood Control Channel Property to provide additional parking spaces for the 2- story, 45,000 square foot building. The construction, landscaping, etc., of the single floor parking structure shall comply with the City's Development Code and requirements from any federal and/or state governmental agency, concerning improvements to and/or near flood control channel land, that may be imposed on the Developer. 15 PA\Agenda\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\08-03-09 4"&Waterman-EMO Agr t.doc