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HomeMy WebLinkAboutS1- Administrator's Office CI'T'Y OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator Subject: Authorize approval of Amendment to Settlement Dept: Administrator's Office Agreement and Purchase and Sale Agreement - AD 995 - Date: September 30, 19971NAL Feldkamp/Newbury. Synopsis of Previous Council Action: Aug. 18, 1997 Staff instructed to develop an amended settlement agreement with Irving Feldkamp and Ruth Newbury for Mello-Roos Community Facilities District (AD 995). SEP 'i U 199/ Recommended Motion: Adopt resolution. Signature Contact person: Fred Wilson, City Administrator Phone Supporting data attached: Yes Ward: 5 FUNDING REQUIREMENTS: Amount: Source:(Acct. No.) (Acct. Description) Finance: Council Notes: Res 97- �' O lo �&� Agenda Item No. `J/ MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AGENDA October 6, 1997 STAFF REPORT TO: Mayor and Common Council FROM: Fred Wilson DATE : September 30, 1997 RE : AD 995 Feldkamp Parcels & SB Five Parcels BACKGROUND On August 18, 1997 , the Mayor and Common Council adopted a motion approving the continued negotiations with Dr. Irving Feldkamp and Ruth Newbury (the `Owners") for the settlement of past due special taxes for the Feldkamp\Newbury Property within Assessment District No. 995 (the "District") and the sale of the SB Five Parcels owned by the City (collectively the "Property") . City Staff and the Owners have negotiated the following, subject to the approval of the Mayor and Common Council : 1 . The maximum amount of delinquent special tax, interest, penalties and costs due to the City with respect to the Property for the period from Fiscal Year 1991-92 to Fiscal Year 97- 98 shall be $822, 493 . 88 ($10, 822 . 29 per lot for the 76 lots) (the "Debt") . This figure was negotiated between the City and the Owners . It does not include the annual levy for fiscal years 1995/96 and 1996/97 or certain penalties and interest payments . Furthermore, it does not include the 1997/98 assessments for the SB Five Parcels . 2 . The Debt shall be paid by Owners from two (2) sources : (1) Owners shall make semi-annual installments of $32, 300 . 00 commencing on June 1, 1998, and thereafter on each December 1 and June 1 until paid in full; and (2) Owners shall be required to pay a fee equal to $10, 822 . 29 per home due and payable upon final inspection and clearance of utilities whether or not the home is sold. Owners shall not be required to pay the $10, 822 .29 fee for four (4) model homes until the earlier of (i) the sale of such home or (ii) two (2) years from the date of construction. 3 . With the consent of the City, the Owners may enter into a construction contract or sell all of the Property to a licensed contractor who meets certain building criteria. 4 . The Owners shall not be required to pay any Verdemont Infrastructure Fees on the Property. 5 . The Owners shall not be required to pay any storm drain construction fees or sewer plant capacity fees to the City. On behalf of the Owners, the City shall pay no more than $300, 000 to the State of California for the construction of the improvement of Bailey Creek between Walnut Avenue and the debris basin. The Owners shall pay $75, 000 towards said construction. The City Staff shall use its best efforts to negotiate with the State to cap the amount due for said construction at $375, 000 . 6 . The Owners shall receive, if available, MAP funds from the EDA in the following amounts : 1998/99 - $50, 000; 1999/2000 - $100, 000; 2000/01 - $50, 000 . 7 . All special taxes levied after the 1997-98 Fiscal Year shall be paid by the Owners at the times, in the manner and as provided in the Notice of Levy and related documents . 8 . The Owners shall pay $8, 500 to the City as compensation for a portion of the attorneys fees incurred by the City for the negotiation of the settlement . 9 . The following shall constitute events of default by the Owners : (i) Failure to remit any payment to the City within forty five (45) days of its due date; (ii) Failure to pay the State as provided in Section 5 above; (iii) Failure to file the final Map for Tract No. 14193 prior to February 1, 1998; or (iv) Failure to commence construction of the number of homes funded for Phase I by the construction lender within ten (10) months of recordation of the final Tract Map No. 14193, but in no event later than ten (10) months after February 1, 1998 . 10 . Upon the happening of an event of default Owners shall immediately execute a quitclaim deed to the Property to the City. 11 . The Owners shall purchase Parcel 2 from the City for $430, 000, as follows : The Owners shall pay a down payment of $43, 000; and shall pay $154, 427 . 15 upon the sale of each lot . The amount due per lot shall equal $3, 676 . 84 for each of the 42 lots . This amount is included in the $822, 493, 88 set forth in item 1 above . The remainder of $232, 572 . 85 shall be deemed to be paid by the Owners upon development of street improvements by the Owners on Ohio, Olive and Walnut Avenues . 12 . The City shall apply the down payment to pay delinquent County property taxes and delinquent assessments for Assessment District No . 987 owed for the SB Five Parcels . RECOMMENDATION Staff recommends adoption of the following resolution approving the forms of Amendment to the Settlement Agreement and the Purchase and Sale Agreement for the purchase of the SB Five Parcels and directing staff to complete the transaction on behalf of the City. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO APPROVING THAT CERTAIN AMENDMENT TO SETTLEMENT AGREEMENT AND THAT CERTAIN PURCHASE AND SALE AGREEMENT AND DIRECTING EXECUTION THEREOF SBEO\0121\DOC\264 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as of the day of October, 1997, by and between Irving M. Feldkamp III and Ruth Newbury, as individuals ("Buyers") and City of San Bernardino, a municipal corporation and charter city ("Seller") . W I T N E S S E T H WHEREAS, the Buyers are individuals who reside in the City of , County of San Bernardino; and WHEREAS, the Seller is a municipal corporation and charter city, crganized and validly existing under the laws of the State of California; and WHEREAS, Seller owns certain property totaling 10 . 4 acres located in the City of San Bernardino, County of San Bernardino, California, more particularly described in Section 1 . 01 hereof (the "Property") ; and WHEREAS, the Seller and Buyers have duly approved the transactions contemplated by this Agreement and in order to set forth the terms and conditions of such purchase and sale, the Buyers and Seller desire to enter into this Agreement. WHEREAS, Seller and Buyers are simultaneously entering into an Amendment to Mutual Release and Settlement Agreement the execution of which is a condition precedent to the effectiveness of this Agreement . NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows : ARTICLE I PURCHASE AND SALE Section 1 . 01 . Purchase and Sale . Subject to the terms and conditions of this Agreement, Seller hereby agrees to sell, and convey to the Buyers, and the Buyers hereby agree to purchase from Seller, all of Seller' s right, title and interest in and to the following described property (collectively, the "Property") : -1- All mineral rights, non-public water rights, tenements, hereditaments, easements, rights-of-way and appurtenances, riparian rights and drainage rights in connection with the beneficial use and enjoyment of the vacant real property described in Exhibit "A" hereto and Seller' s rights in and to streets, alleys, public ways, areas, easements, common or greenbelt areas (collectively, "Appurtenances") in, on or adjacent thereto. ARTICLE II PURCHASE PRICE Section 2 . 01 . Purchase Price . The purchase price (the "Purchase Price") for the Property shall be Four Hundred Thirty Thousand Dollars ($430, 000) , and shall be paid by the Buyers to Seller, as follows : a . Deposit . Buyers have deposited with the Seller Buyers ' check in the amount of Forty Three Thousand Dollars ($43, 000) (the "Deposit") . Seller shall deliver said deposit to First American Title Insurance Company (the "Escrow Agent") within three (3) days after executing this Agreement . The Deposit is to be invested by the Escrow Agent in an interest-bearing account for the benefit of the Buyers . b. Remaining Payments . The remaining consideration of Three Hundred Eighty Seven Thousand Dollars ($387, 000) shall be paid as follows : One Hundred Fifty Four Thousand, Four Hundred Twenty Seven Dollars and Fifteen Cents ($154, 427 . 15) of the purchase price shall be paid upon the sale of each lot to an individual purchaser as set forth in Section 2 of the Amendment . The remainder of Two Hundred Thirty Two Thousand, Five Hundred Seventy Two Dollars and Eighty Five Cents ($232, 572 . 85) shall be deemed to be paid by Buyers upon development of street improvements (including, but not limited to curbs, gutters, sidewalks, fill-in street paving and lighting) by Buyers on Ohio, Olive and Walnut Avenues . ARTICLE III TITLE INSURANCE Section 3 . 01 . Seller' s Obligation to Provide Title Insurance . Seller has delivered, and Buyers have approved a preliminary title report for an owner' s title policy issued by First American Title Insurance Company, together with legible copies of all restrictive covenants, easements and other items listed as title exceptions therein (each a "Title Defect") . The -2- title policy to be issued to the Buyers pursuant to this section shall be a CLTA policy and shall ensure fee simple title to the Buyers in the amount of the Purchase Price, subject only to the exceptions shown therein as set forth in Exhibit "D") hereof (the "Permitted Exceptions") to which the Buyers have agreed in writing. ARTICLE IV CLOSING Section 4 . 01 . Closing Through Escrow. Subject to the provisions of this Agreement, the Buyers and Seller shall consummate and close the purchase and sale of the Property contemplated by this Agreement when all of the conditions of closing for the benefit of the parties hereto have been satisfied or waived, but in no event later than five (5) business days after the execution of this Agreement, or at such other time as the parties hereto may agree upon in writing (the "Closing") . Subject to the provisions of this Agreement relating to the extension of the Closing, if the Closing does not occur as a result of the failure of a condition, then the party hereto for whose benefit the condition exists may terminate this Agreement, in which event the parties hereto shall have no further rights or obligations pursuant to this Agreement and the Escrow Agent shall return to the Buyers the Deposit and any other funds placed in the escrow by the Buyers . The parties hereto agree to be bound by the Escrow Agent ' s supplemental instructions which are attached to this Agreement as Exhibit "B" and also agree to be bound by any other escrow instructions or escrow agreement required by the Escrow Agent to perform escrow and title services customarily performed within San Bernardino County, California. The Buyers and Seller agree to provide the Escrow Agent with executed copies of any such escrow instructions or escrow agreement within two (2) days after receipt thereof from the Escrow Agent. Any escrow instructions or escrow agreement executed by the parties hereto shall be in accordance with the terms and provisions of this Agreement, and any conflict between such escrow instructions or escrow agreement and this Agreement shall be resolved in favor of this Agreement. The parties hereto agree that the condition precedent to the effectiveness of this Agreement is the execution by both parties of an Amendment to the Mutual Release and Settlement Agreement between the parties . Section 4 . 02 . Seller ' s Obligations at Closing. At Closing, Seller shall do the following and shall deliver the same, as applicable, to the Escrow Agent : -3- a . Deed. Execute and deliver a grant deed in substantially the form attached to this Agreement as Exhibit "C", conveying the Property to the Buyers, subject to no exceptions other than the Permitted Exceptions . b. Title Policy. Provide an owner' s title policy in CLTA standard form, naming the Buyers as the insured in the amount of the Purchase Price, insuring that the Buyers own fee simple title to the Property, subject only to the Permitted Exceptions . (The Buyers, at their option, may elect to cause the title company to endorse the owner' s title policy in any manner the Buyers deem appropriate, at the Buyers ' sole expense. Further, the Buyers, at their sole election, may require that the title policy be in an ALTA standard form, in which case the Buyers shall be responsible for the amount by which the cost for such ALTA policy exceeds the cost for a CLTA policy) . C . Foreian Person. Execute and deliver an affidavit of Seller in the form described by Treasury Regulation Section 1 . 1445- 2 certifying that Seller is not a "foreign person" as defined in the Federal Foreign Investment in Real Property Tax Act of 1980, and the 1984 Tax Reform Act, as amended. d. Evidence of Authority. Provide to Escrow Agent a copy of the duly adopted Resolution of the Mayor and Common Council of the Seller, authorizing the execution, delivery and performance by the Seller of this Agreement and the documents required hereby. e . Taxes . Pay or cause the payment by Escrow Agent of delinquent County of San Bernardino ad valorem property taxes and Assessment District 987 assessments on the Property up to Forty Three Thousand Dollars ($43, 000) . f. Mutual Release . Execute and deliver the Amendment to Mutual Release and Settlement Agreement (the "Amendment") . Section 4 . 03 . The Buyers ' Obliaation at Closing. At Closing, the Buyers shall execute and deliver the Amendment to the Escrow Agent (duly executed and acknowledged by the Buyers) for recording in the San Bernardino County records against all parcels described therein. Section 4 . 04 . Closing Costs . Seller shall pay the following closing costs : one half of the fees and costs due to the Escrow Agent for services rendered as escrow agent; all premiums and charges related to the issuance of the owners title policy, except as provided in Section 5 . 02 (b) above, and all abstract and -4- title examination and other costs related to the issuance of the title policy. The Buyers shall pay the following closing costs : the Buyers ' attorneys fees and costs, one half of the fees and costs due to the Escrow Agent for services rendered as escrow agent, and any changes relating to the issuance of an ALTA title policy, if any, pursuant to Section 4 . 02 (b) above. Any additional fees and charges shall be divided between the Buyers and Seller in accordance with the customary practice in the County of San Bernardino, California. Section 4 . 05 . Delivery of Possession. Subject to the provisions of this Agreement relating to the Closing occurring no later than , as that date may be extended as provided herein, upon the satisfaction by Seller of all of Seller ' s obligations as set forth hereinabove, and upon the satisfaction by the Buyers of all of their obligations as set forth hereinabove, and upon the satisfaction of any and all other conditions precedent to this Agreement, if any, the Escrow Agent shall distribute to the Buyers and Seller the items and documents described in this Article IV, respectively, and the purchase and sale transaction contemplated in this Agreement shall be finally consummated. Delivery of possession of the Property to the Buyers shall be made at Closing. ARTICLE V RISK OF LOSS Section 5 . 01 . Casualty. Seller assumes all risks and liability for damage to or injury occurring to the Property by fire, storm, accident, or any other casualty or cause until the Closing has been consummated. If the Property, or any substantial portion thereof, suffers any damage prior to the Closing from fire or other casualty, Seller shall serve written notice thereof on the Buyers within two (2) days of the occurrence of the event causing such damage, upon which the Buyers may either (a) terminate this Agreement by delivering written notice to Seller of such termination within three (3) days after Seller notifies the Buyers of the casualty, or (b) consummate the Closing, in which later event Seller shall deliver to the Buyers, at closing, any insurance proceeds actually received by Seller in respect to such casualty or assign to the Buyers, at Closing, all of Seller' s right, title and interest in any claim to proceeds of any insurance covering such damage, provided that in no event shall the Buyers be entitled to receive payment or assignment of insurance proceeds in an amount greater than the Purchase Price . If the Buyers ' fail to timely -5- deliver to Seller written notice of termination of this Agreement as described in (a) above, then the Buyers shall be deemed to have elected to proceed in accordance with (b) above. Section 5 . 02 . Disposition of Deposit. If the Buyers elect to terminate this Agreement pursuant to Section 5 . 01 (a) above, then contemporaneously with such termination the Escrow Agent shall immediately return the Deposit, together with all interest accrued thereon, to the Buyers, and upon the Buyers ' receipt thereof, except as may be expressly otherwise provided herein and in the Amendment, neither party hereto shall have any further rights against or obligations to the other under this Agreement . ARTICLE VI DEFAULT AND REMEDIES Section 6 . 01 . Default and Remedies . a. Buyers Default . If the Buyers refuse or fail to consummate the purchase of the Property pursuant to this Agreement for any reason other than termination hereof pursuant to a right granted hereunder to do so, or breach by Seller of his agreements hereunder, then Seller as his sole and exclusive remedy shall have the right to terminate this Agreement by giving the Buyers written notice thereof, in which event neither party hereto shall have any further rights, duties or obligations hereunder except as may be otherwise provided herein and in the Amendment or original Mutual Release and Settlement Agreement (as defined in the Amendment) . b. Seller Default . If Seller fails to perform any of his obligations hereunder, either prior to or at Closing, the Buyers may terminate this Agreement by notifying Seller thereof, at which time the Deposit, together with all interest earned thereon, shall be returned to the Buyers . The Buyers shall have such other remedies as may be available to it under law or equity, including specific performance of this Agreement . Section 6 . 02 . Fees and Expenses . If either party hereto brings suit to enforce this Agreement, then the prevailing party shall be entitled to recover from the other party reasonable attorneys fees and costs incurred by the prevailing party and to receive an award therefor from a court of competent jurisdiction. -6- ARTICLE VII MISCELLANEOUS PROVISIONS Section 7 . 01 . Notices . All notices, demands or requests required or permitted to be given pursuant to this Agreement shall be in writing. If not otherwise provided hereunder, all notices, demands or requests to be sent to any party hereto shall be deemed to have been properly given or served by delivering the same personally to each party, by sending the same through a nationally recognized overnight courier service, or by depositing the same in the United States mail, addressed to such party, postage prepaid, and registered or certified with return receipt requested, at the following addresses : As to the Buyers : Irving M. Feldkamp III [address; Ruth Newbury [address] With a copy to: Naomi Silvergleid, Esq. Singer & Silvergleid 3750 University Avenue, Suite 550 Riverside, CA 92501 As to Seller: City of San Bernardino 300 North "D" Street, 6th Floor San Bernardino, CA 92418 Attn: City Administrator With a copy to: SABO & GREEN, A Professional Corporation 23801 Calabasas Rd. , Suite 1015 Calabasas, CA 91302-1595 Attn: Alexis G. Crump, Esq. As to Escrow Agent: First American Title Insurance Company 323 Court Street San Bernardino, CA 92401 All notices, demands and requests shall be effective when personally delivered to the addressee or received by overnight courier, or by the United States mail in accordance with the foregoing. Section 7 . 03 . Binding Effect. This Agreement shall bind and inure to the benefit of the parties hereto and their respective -7- heirs, executors, administrators, legal representatives, successors and assigns . Section 7 . 04 . Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one agreement, binding on all parties hereto. Section 7 . 05 . Merger of Agreement. Unless otherwise specified in this Agreement, all the terms and conditions of this Agreement shall not survive the Closing and shall be merged into the Grant Deed from Seller to the Buyers . Section 7 . 06 . Severabiiity. If all or any portion of any of the provisions of this Agreement shall be declared invalid, illegal or unenforceable by laws applicable thereto, then the performance of said offending provision or provisions shall be excused by the parties hereto, and such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement . Section 7 . 07 . Captions . The titles or captions of the provisions of this Agreement are merely for convenience of reference and are not representations of matters included or excluded from such provisions . Section 7 . 08 . Time; Entire Agreement . Time is of the essence of this Agreement. The parties hereto expressly acknowledge and agree that, with regard to the subject matter of this Agreement except as provided in the Amendment, and the transactions contemplated herein, (a) there are no oral agreements between the parties hereto, and except as provided in the Amendment, (b) this Agreement, including the defined terms and all exhibits and addenda, if any, attached hereto, embodies the final and complete agreement between the parties and supersedes all prior and contemporaneous negotiations, offers, proposals, agreements, commitments, promises, acts, conduct, course of dealing, representations, statements, assurances and understandings, whether oral or written and may not be varied or contradicted by evidence of any such prior or contemporaneous matter or by evidence of any subsequent oral agreement of the parties hereto. Section 7 . 09 . No Modifications Except in Writing. No modification or amendment of this Agreement shall be binding unless set forth in writing and signed by the party or parties to be bound by such modification or amendment. -8- Section 7 . 10 . Further Assurances . In addition to the acts and deeds recited herein and contemplated to be performed, executed and/or delivered by either Seller or the Buyers, Seller and the Buyers shall perform, execute and/or deliver of cause to be performed, executed and/or delivered at the Closing, or if necessary, after the Closing, any and all further acts, deeds and assurances as may, from time to time, be reasonably required to consummate the transactions contemplated in this Agreement. Section 7 . 11 . No Existing Leases . Seller hereby warrants that, upon Closing there will be no oral or written leases affecting the Property, and hereby covenants to, and shall, deliver to the Buyers at Closing, exclusive possession of the Property, free and clear of all tenants and/or other occupants and rights of any such parties . Section 7 . 12 . Calendar Days . Unless otherwise specified, all references to days in this Agreement shall be deemed to be references to calendar days . -9- IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement to become effective as of the Effective Date. "BUYER" Irving M. Feldkamp III, an individual "BUYER" Ruth Newbury, an individual SELLER" CITY OF SAN BERNARDINO, a municipal corporation and charter city By: Tom Minor, Mayor SBEO\0121\DOC\263 9\30\97 200 cg -10- EXHIBIT "A" LEGAL DESCRIPTION EXHIBIT "B" SUPPLEMENTAL ESCROW INSTRUCTIONS EXHIBIT "C" GRANT DEED EXHIBIT "D" PERMITTED EXCEPTIONS RECORDING REQUESTED BY: CITY OF SAN BERNARDINO WHEN RECORDED RETURN TO: SABO & GREEN, A PROFESSIONAL CORPORATION 23801 CALABASAS ROAD, SUITE 1015 CALABASAS, CALIFORNIA 91302 Recordation Fee Not Applicable Pursuant to Government Code Section 6103 (Space Above For Recorder's Use Only) FIRST AMENDMENT TO MUTUAL RELEASE AND SETTLEMENT AGREEMENT SBEO\0121\DOC\256.5 9\26\97 930 cg FIRST AMENDMENT TO MUTUAL RELEASE AND SETTLEMENT AGREEMENT This First Amendment to Mutual Release and Settlement Agreement (this "Amendment") is entered into this day of October, 1997, by and between the CITY OF SAN BERNARDINO, a California municipal corporation ("City") and Ruth Newbury and Irving M. Feldkamp III (jointly referred to herein as "Developers") . The City and the Developers are collectively referred to as the "Parties" . Unless otherwise defined herein, capitalized terms shall have the meanings given in the Original Settlement Agreement (as defined in Section 1 . 3 hereof) . 1. RECITALS 1 . 1. On June 18 , 1990, the City created Community Facilities District No. 995 ( "District") pursuant to the Mello-Roos Community Facilities Act of 1982, codified at Government Code Section 53311 et . sea. ("Act") . Pursuant to the Act, in December, 1990, the City issued $7, 440, 000 Special Tax Bonds ("Bonds") , which were secured by the special taxes authorized to be levied against all parcels within the District . The Bonds were then refunded with the $3, 315, 000 Community Facilities District No. 995 of the City of San Bernardino (Verdemont Area) Special Tax Refunding Bonds (the "Refunding Bonds") . 1 .2 . The Developers own or have an interest in unimproved property located within the District as more fully described in Exhibit "A" attached hereto ("Property") . On or about January 14, 1994, the City commenced an action for judicial foreclosure of special tax liens in the Superior Court of the State of California for the County of San Bernardino, against certain named defendants therein, including Developers, bearing Case No. SCV09593 ("Action") . 1 .3. The Parties desired to resolve their differences and to avoid the expense and inconvenience of any future litigation, including without limitation, litigation of the Action, and thus entered into a Mutual Release and Settlement Agreement dated as of August 29, 1994 (the "Original Settlement Agreement"r under which the Developers agreed to make payments to the City for delinquent special taxes, school fees, interest, penalties and costs thereon as provided in said Original Settlement Agreement . 1 1. 4. The Parties now desire to amend the Original Settlement Agreement as herein provided in order to modify the terms of payment, amounts due to the City and to add certain other terms and conditions as herein set forth. 1.5. At the time of execution of the Original Settlement Agreement, Developers owned that certain property described as Parcel 1 of Exhibit "A" ("Parcel 1") . Pursuant to a Purchase and Sale Agreement and Joint Escrow Instructions (the "Purchase and Sale Agreement") , which shall be executed simultaneously herewith, the Developers have agreed to purchase from the City property described as Parcel 2 of Exhibit "A" ("Parcel 2") . 1 . 6. This Amendment shall be recorded against all Property contained in Exhibit "A" and shall be recorded after the recordation of the Grant Deed attached to the Purchase and Sale Agreement . 1 . 7 . In consideration of the covenants, conditions and promises herein contained, the Parties agree as set forth. 2 . SETTLEMENT TERMS AND CONDITIONS 2 . 1. (a) The Parties hereto agree that the maximum amount of delinquent special tax, interest, penalties and costs due to the City with respect to the Property for the period from Fiscal Year 1991-92 to Fiscal Year 97-98 shall be Eight Hundred Twenty Two Thousand, Four Hundred Ninety Three Dollars and Eighty Eight Cents ($822, 493 . 88) (the "Debt") . This amount represents $10, 822 . 29 per lot for the 76 lots existing on the Property (the "Home Release Payment") . This amount shall be paid by Developers from two (2) sources : (1) Developers shall make semi-annual installments of $32, 300 . 00 . The first payment shall be due on June 1, 1998, and thereafter payments shall be due on December 1 and June 1 of each year until paid in full; and (2) Developers shall be required to pay a fee equal to $10, 822 . 29 per home due and payable upon final inspection and clearance of utilities prior to authorizing occupancy for each lot whether or not the home is sold. Notwithstanding the foregoing, Developer shall not be required to pay the $10, 822 .29 fee for four (4) model homes until the earlier of (i) the sale of such home or (ii) two (2) years from the date of construction. 2 The payments to be made by the Developer pursuant to subsections (1) and (2) above shall be timely made until payment of the Debt in full . The payments made P ursuant to subsection (1 ) hereof shall be credited in inverse order to the payments otherwise required to be made under subsection (2) hereof commencing with the 76th lot . All payments made hereunder shall be delivered or sent by mail to the Finance Department of the City. (b) Late charges shall accrue in the event the payment required hereunder is not paid within thirty (30) days of its due date and shall bear interest at the rate of ten percent (10%) per annum until paid. (c) Developers may not sell all or any portion of the Property unless and until they have remitted the Home Release Payment of $10, 822 .29 per lot as provided in Section 2 . 1 (a) (2) hereof. Upon payment of said Home Release Payment, the City shall execute a notice of satisfaction of lien which shall be recorded to release the lot from this Amendment and the Original Settlement Agreement . Notwithstanding the above, with the consent of the City, which consent shall not be unreasonably withheld, the Developers may sell all of the 76 Lots to a licensed contractor which (i) meets the requirements of Section 2 .2 hereof; and (ii) assumes all of the duties and obligations under this Agreement . 2 .2. Any construction contract executed by Developers for construction on the Property shall be entered with a licensed contractor who between the period of January 1994 through September 1997 (i) has constructed, or is scheduled to construct, at least 100 single family housing units, (ii) has developed at least 100 parcels of real property or (iii) has achieved any combination of (i) and (ii) totaling 100 . 2 .3. A portion of the fees due to the San Bernardino City Unified School District (the "School District") have been included in the calculation of the $10, 822 . 29 Home Release Payment . The City shall not require the Developers to pay additional school fees to the extent that the school fees included in the calculation of the Debt are sufficient to compensate the School District for all school fees . The Developers shall have the sole responsibility to obtain any and all consents or other waivers as may be required by the School District acknowledging that the Mello-Roos fees set forth herein are the only school fees applicable to the Property. 2 .4 . In addition to being within the District, the Property is also subject to Verdemont Infrastructure Fees ("VI 3 Fees") . The Developers shall not be required to pay any VI Fees on the Property. 2 .5. The Developers shall not be required to pay any storm drain construction fees or sewer plant capacity fees to the City in connection with development of the Property. On behalf of the Developers, the City shall pay Three Hundred Thousand Dollars ($300, 000) to the State of California Department of Water Resources ("State") for the construction of the improvement of Bailey Creek between Walnut Avenue and the debris basin. The Developers shall pay Seventy Five Thousand Dollars ($75, 000) towards said construction. The City Staff shall use its best efforts to negotiate with the State to cap the amount due for said construction at Three Hundred Seventy Five Thousand Dollars ($375, 000) . However, in no event shall the City be required to pay more than Three Hundred Thousand Dollars ($300, 000) hereunder. Except as expressly provided herein, nothing contained in this Section 2 . 5 or the preceding Section 2 . 4 shall waive any other City fees applicable to the Developers, including but not limited to, City Water Department fees, City Public Works fees, Parks and Recreation fees, building permits, inspection fees or other exactions, and fees of any other government agency. Developers shall be responsible for any and all other street improvements not specifically mentioned herein. 2 . 6. The Developers have requested down payment assistance be made available to their buyers from the Mortgage Assistance Program ("MAP") of the Redevelopment Agency of the City of San Bernardino ("Agency") . The City hereby confirms that it has entered into a letter agreement in the form attached hereto as Exhibit "B" with the Agency directing the Agency to use its best efforts to provide MAP assistance on a first come first serve basis to all of the Developers ' buyers who qualify for MAP assistance. Under the MAP, the buyers shall receive no more than the following amounts in the following years : 1998/99 - $50, 000; 1999/2000 - $100, 000; 2000/01 - $50, 000 . In the event the foregoing amounts are not used by Developers ' buyers in the years granted, said amounts shall not be carried forward and thus shall not be available to the Developers ' buyers in any subsequent year. The foregoing grants shall be subject to all of the terms, conditions and qualifying criteria as may be specified in the MAP as such terms, conditions and criteria exist at such time and consistent with the requirements imposed by the funding source and other discretionary criteria as may be established by the Agency. Developers shall not receive any waivers of terms in connection with this Amendment . 4 2 .7. All special assessments levied after the 1997-98 Fiscal Year shall be paid by the Developers at the times, in the manner and as provided in the Notice of Levy and related documents . 2 . 8 The Developers shall pay Eight Thousand Five Hundred Dollars ($8, 500) to City as compensation for certain attorneys fees incurred by City for the negotiation of this Amendment. 3. EVENTS OF DEFAULT AND REMEDIES • INDEMNIFICATION 3. 1 . The following shall constitute events of default by the Developers under this Amendment : (i) Failure to remit any payment to the City pursuant to Section 2 . 1 hereof within forty five (45) days of its due date; (ii) Failure to pay the State as provided in Section 2 . 5 hereof; (iii) Failure to file the final Map for Tract No. 14193 on or before October 9, 1997, or if the final expiration date for recordation of the final Map for Tract No. 14193 is extended, failure to file said Map prior to February 1, 1998; or (iv) Failure to commence construction of the number of homes funded for Phase I by the construction lender within ten (10) months of recordation of the final Tract Map No. 14193, but in no event later than ten (10) months after February 1, 1998 . Upon the happening of an event of default, Developers shall immediately, upon written request of the City, execute a quitclaim deed to the Property, and deliver said quitclaim deed and the Property to the City. Upon delivery to the City and recordation of a quitclaim deed to the Property, the City shall release Developers from any and all obligations arising from the Debt or any other assessments or Special Taxes assessed against the Property. 3.2 . In the event the Developers fail to execute a quitclaim deed and deliver the Property to the City as provided in 3 . 1 above, the City may enter the Stipulation for Entry of Judgment ("Stipulation") (a copy of which is attached hereto as Exhibit "C" and is incorporated herein by this reference) , and the City may cause entry of the Judgment (in the form attached hereto as Exhibit "D" and incorporated herein by this reference) against Developers . 5 v Notwithstanding Code of Civil Procedure Section 583.310 and any applicable statute of limitations, the City shall have the right to cause entry of judgment in the form attached to the Original Settlement Agreement as Exhibit "D" without penalty should this Amendment not be consummated. The Parties expressly agree to waive Code of Civil Procedure Section 583 . 310 and any applicable statute of limitations to the extent necessary to allow the City to cause entry of Judgment in the Action in the event the settlement contemplated within this Amendment is not consummated. 3 .3. Developers shall not be in default under subsections (iii) or (iv) of Section 3 . 1 in the event that such default is the result of unlawful or unreasonable actions by the City. "Unreasonable actions" shall not include any discretionary action, taken by the City in its standard process of approving the final Tract Map No. 14193 for the Property or other discretionary approval of the City in connection with completion of the homes on the Property. 4. PURCHASE OF PARCEL 2 4 . 1. The Developers shall purchase Parcel 2 from the City for a total consideration of Four Hundred Thirty Thousand Dollars ($430, 000) , as follows : One Hundred Ninety Seven Thousand, Four Hundred Twenty Seven Dollars and Fifteen Cents ($197, 427 . 15) of the purchase price shall be paid upon the sale of each lot to an individual purchaser as set forth in Section 2 hereof. The amount due per lot shall equal Four Thousand Dollars and Sixty Five Cents ($4, 700 . 65) for each of the 76 lots for a total of ($197, 427 . 15/42 lots) . This amount is included in the Eight Hundred Twenty Two Four Hundred Ninety Three Thousand Dollars and Eighty Eight Cents ($822, 493, 88) set forth in Section 2 . 1 hereof. The remainder of Two Hundred Thirty Two Thousand, Five Hundred Seventy Two Dollars and Eighty Five Cents ($232, 572 . 85) shall be deemed to be paid by the Developers upon development of street improvements (including but not limited to curbs, gutters, sidewalks, fill-in street paving and lighting) by the Developers on Ohio, Olive and Walnut Avenues . The Parties shall enter into a purchase and sale agreement in the form attached hereto as Exhibit "E", which shall reflect the terms and conditions set forth in this Section 4 . 4 .2 . The Developers shall pay a down payment of Forty Three Thousand Dollars ($43, 000) towards the purchase of Parcel 2 . The City shall apply said down payment to pay delinquent County property taxes and delinquent assessments for Assessment District No.. 987 owed for Parcel 2 at closing. The City shall provide a credit of said Forty Three Thousand Dollars ($43, 000) towards the 6 purchase price of Parcel 2 as described in Section 4 . 1 above. To the extent that the total delinquent County property tax and assessments for Assessment District 987 exceed Forty Three Thousand Dollars ($43, 000) , the City shall not be responsible for the payment of additional amounts . 6. REVISION TO TRACT MAP The parties hereto agree that the final Tract Map No. 14193 shall be amended as necessary to conform to the terms of this Amendment . w 7 . MISCELLANEOUS PROVISIONS a 7 .1. Except as otherwise provided herein and with respect r to Sections 2 . 1, 2 . 2, 2 . 3, 2 . 4, 2 . 6, 2 . 7, 2 . 8 and 2 . 10 of the Original Settlement Agreement which provisions are hereby superseded, this Amendment hereby restates and affirms the Original ' Settlement Agreement and said Original Settlement Agreement remains in full force and effect . This Amendment, read in conjunction with the Original Settlement Agreement, contains the entire understanding of the Parties with respect to the subject matter hereof, and no modification or waiver of any of the provisions 3 hereof shall be valid unless in writing and executed by the Parties to be bound. a 7 .2 . This Amendment shall be governed in accordance with the laws of the State of California. Any action brought to enforce or interpret this Amendment, or any part thereof, shall be brought in the State of California, in the County of San Bernardino. 7 . 3. Each Party hereto certifies that he, she or it has ' read all of this Amendment and fully understands all of the same. 7 .4. This Amendment shall be recorded in the appropriate real property records of San Bernardino County, California and shall constitute a lien on the Property described in Exhibit "A" ' for the amounts set forth in this Amendment . 7 .5. The effective date of the Amendment shall be deemed to be the date of recording hereof. 4 7. 6. This Amendment has been duly ratified, accepted and consented to by the City, through the action of its Mayor and Common Council . The representatives signing this Amendment on behalf of the City expressly represent that he, she or they do so with the full authority and consent of the City. 7 7.7. This Amendment has been duly ratified, accepted and consented to by each of the Developers, through action of their respective authorized representatives. The representatives signing this Amendment on behalf of the Developers expressly rbpresent that he, she or they do so with the full authority and consent of the Developers . 8 i a [PLEASE NOTE THAT SIGNATURES OF ALL PARTIES TO THIS AMENDMENT MUST BE NOTARIZED] DATED: October 1997 CITY OF SAN BERNARDINO, a California municipal corporation By: APPROVED AS TO FORM AND CONTENT : DATED: October 1997 SABO & GREEN, A Professional Corporation By: Attorneys for the City of San Bernardino DEVELOPER By: Irving M. Feldkamp III By: Ruth Newbury 9 i I EXHIBIT "A" [DESCRIPTION OF PROPERTY] `i EXHIBIT "B" [FORM LETTER AGREEMENT WITH CITY] [City of San Bernardino Letterhead] Redevelopment Agency of the City of San Bernardino 201 North "E" Street, 3rd Floor San Bernardino, CA 92401 Re: Mortgage Assistance for Feldkamp Properties Dear Mr. Steinhaus : By this letter the City of San Bernardino ("City") and the Redevelopment Agency of the City of San Bernardino ( "Agency") hereby agree that pursuant to the First Amendment to Mutual Release and Settlement Agreement between the City and Irving M. Feldkamp III and Ruth Newbury ("Developers") dated September 1997, the Agency shall use its best efforts to provide mortgage assistance to all buyers of the subject lots who qualify for the Agency' s Mortgage Assistance Program ( "MAP") . However, MAP funds will be available on a first come first serve basis . Under the MAP, the Developer' s buyers will receive assistance, if available, of no more than the following amounts in the following years : 1998/99 - $50, 000; 1999/2000 - $100, 000; 2000/01 - $50, 000 . These amounts shall not be carried over to subsequent years . Very truly yours, CITY OF SAN BERNARDINO By: Tom Minor, Mayor AGREED AND ACCEPTED: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Timothy C. Steinhaus, Agency Administrator 1 EXHIBIT "C" [STIPULATION] 6 s k v E 4 I f I EXHIBIT "D" [JUDGMENT] title examination and other costs related to the issuance of the title policy. ' The Buyers shall pay the following closing- costs : the Buyers ' attorneys fees and costs, one half of the fees and costs due to the Escrow Agent for services rendered as escrow agent, and any changes relating to the issuance of an ALTA title policy, if F any, pursuant to Section 4 . 02 (b) above. Any additional fees and charges shall be divided between the Buyers and Seller in accordance with the customary practice in the County of San Bernardino, California . Section 4 . 05 . Delivery of Possession. Subject to the provisions of this Agreement relating to the Closing occurring no later than , as that date may be extended as provided herein, upon the satisfaction by Seller of all of Seller' s obligations as set forth hereinabove, and upon the satisfaction by the Buyers of all of their obligations as set forth hereinabove, and upon the satisfaction of any and all other conditions precedent to this Agreement, if any, the Escrow Agent shall distribute to the Buyers and Seller the items and documents described in this Article IV, respectively, and the purchase and sale transaction contemplated in this Agreement shall be finally consummated. Delivery of possession of the Property to the Buyers shall be made at Closing. ARTICLE V RISK OF LOSS Section 5 . 01 . Casualty. Seller assumes all risks and liability for damage to or injury occurring to the Property by fire, storm, accident, or any other casualty or cause until the Closing has been consummated. If the Property, or any substantial portion thereof, suffers any damage prior to the Closing from fire or other casualty, Seller shall serve written notice thereof on the Buyers within two (2) days of the occurrence of the event causing such damage, upon which the Buyers may either (a) terminate this Agreement by delivering written notice to Seller of such termination within three (3) days after Seller notifies the Buyers of the casualty, or (b) consummate the Closing, in which later event Seller shall deliver to the Buyers, at closing, any insurance proceeds actually received by Seller in respect to such casualty or assign to the Buyers, at Closing, all of Seller' s right, title and interest in any claim to proceeds of any insurance covering such damage, provided that in no event shall the Buyers be entitled to receive payment or assignment of insurance proceeds in an amount greater than the Purchase Price . If the Buyers ' fail to timely -5- deliver to Seller written notice of termination of this Agreement as described in (a) above, then the Buyers shall be deemed to have elected to proceed in accordance with (b) above . Section 5 . 02 . _Disposition of Deposit . If the Buyers elect to terminate this Agreement pursuant to Section 5 . 01 (a) above, then contemporaneously with such termination the Escrow Agent shall immediately return the Deposit, together with all interest accrued thereon, to the Buyers, and upon the Buyers ' receipt thereof, except as may be expressly otherwise provided herein and in the Amendment, neither party hereto shall have any further rights against or obligations to the other under this Agreement . ARTICLE VI DEFAULT AND REMEDIES Section 6. 01 . Default and Remedies . a. Buyers Default . If the Buyers refuse or fail to consummate the purchase of the Property pursuant to this Agreement for any reason other than termination hereof pursuant to a right granted hereunder to do so, or breach by Seller of his agreements hereunder, then Seller as his sole and exclusive remedy shall have the right to terminate this Agreement by giving the Buyers written notice thereof, in which event neither party hereto shall have any further rights, duties or obligations hereunder except as may be otherwise provided herein and in the Amendment or original Mutual Release and Settlement Agreement (as defined in the Amendment) . b. Seller Default . If Seller fails to perform any of his obligations hereunder, either prior to or at Closing, the Buyers may terminate this Agreement by notifying Seller thereof, at which time the Deposit, together with all interest earned thereon, shall be returned to the Buyers . The Buyers shall have such other remedies as may be available to it under law or equity, including specific performance of this Agreement . Section 6. 02 . Fees and Expenses . If either party hereto brings suit to enforce this Agreement, then the prevailing party shall be entitled to recover from the other party reasonable attorneys fees and costs incurred by the prevailing party and to receive an award therefor from a court of competent jurisdiction. -6- ARTICLE VII MISCELLANEOUS PROVISIONS Section 7 . 01 . Notices . All notices, demands or requests required or permitted to be given pursuant to this Agreement shall be in writing. If not otherwise provided hereunder, all notices, demands or requests to be sent to any party hereto shall be deemed to have been properly given or served by delivering the same personally to each party, by sending the same through a nationally recognized overnight courier service, or by depositing the same in the United States mail, addressed to such party, postage prepaid, and registered or certified with return receipt requested, at the following addresses : As to the Buyers : Irving M. Feldkamp III [address] Ruth Newbury [address] With a copy to: Naomi Silvergleid, Esq. Singer & Silvergleid 3750 University Avenue, Suite 550 Riverside, CA 92501 As to Seller: City of San Bernardino 300 North "D" Street, 6th Floor San Bernardino, CA 92418 Attn: City Administrator With a copy to: SABO & GREEN, A Professional Corporation 23801 Calabasas Rd. , Suite 1015 Calabasas, CA 91302-1595 Attn: Alexis G. Crump, Esq. As to Escrow Agent : First American Title Insurance Company 323 Court Street San Bernardino, CA 92401 a All notices, demands and requests shall be effective when personally delivered to the addressee or received by overnight courier, or by the United States mail in accordance with the foregoing. Section 7 . 03 . Binding Effect. This Agreement shall bind and inure to the benefit of the parties hereto and their respective -7- heirs, executors, administrators, legal representatives, successors and assigns . Section 7 . 04 . Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one agreement, binding on all parties hereto. Section 7 . 05 . Meraer of Agreement. Unless otherwise specified in this Agreement, all the terms and conditions of this Agreement shall not survive the Closing and shall be merged into the Grant Deed from Seller to the Buyers . Section 7 . 06 . Severability. If all or any portion of any of the provisions of this Agreement shall be declared invalid, illegal or unenforceable by laws applicable thereto, then the performance of said offending provision or provisions shall be excused by the parties hereto, and such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement . Section 7 . 07 . Captions . The titles or captions of the provisions of this Agreement are merely for convenience of reference and are not representations of matters included or excluded from such provisions . Section 7 . 08 . Time; Entire Agreement . Time is of the essence of this Agreement . The parties hereto expressly acknowledge and agree that, with regard to the subject matter of this Agreement except as provided in the Amendment, and the transactions contemplated herein, (a) there are no oral agreements between the parties hereto, and except as provided in the Amendment, (b) this Agreement, including the defined terms and all exhibits and addenda, if any, attached hereto, embodies the final and complete agreement between the parties and supersedes all prior and contemporaneous negotiations, offers, proposals, agreements, commitments, promises, acts, conduct, course of dealing, representations, statements, assurances and understandings, whether oral or written and may not be varied or contradicted by evidence of any such prior or contemporaneous matter or by evidence of any subsequent oral agreement of the parties hereto. Section 7 . 09 . No Modifications Except in Writing. No modification or amendment of this Agreement shall be binding unless set forth in writing and signed by the party or parties to be bound by such modification or amendment. -8- Section 7 . 10 . Further Assurances . In addition to the acts and deeds recited herein and contemplated to be performed, executed and/or delivered by either Seller or the Buyers, Seller and the Buyers shall perform, execute and/or deliver or cause to be performed, executed and/or delivered at the Closing, or if necessary, after the Closing, any and all further acts, deeds and assurances as may, from time to time, be reasonably required to consummate the transactions contemplated in this Agreement. Section 7 . 11 . No Existing Leases . Seller hereby warrants that, upon Closing there will be no oral or written leases affecting the Property, and hereby covenants to, and shall, deliver to the Buyers at Closing, exclusive possession of the Property, free and clear of all tenants and/or other occupants and rights of any such parties . Section 7 . 12 . Calendar Days . Unless otherwise specified, all references to days in this Agreement shall be deemed to be references to calendar days . -9- I B f IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement to become effective as of the Effective Date. "BUYER" Irving M. Feldkamp III, an individual "BUYER" Ruth Newbury, an indi Tidual SELLER" CITY OF SAN BERNARDINO, a municipal corporation and charter city By: Tom Minor, Mayor SBEO\0121\DOC\263 9\30\97 200 cg -10- EXHIBIT "A" LEGAL DESCRIPTION w L I 3 - EXHIBIT "B" SUPPLEMENTAL ESCROW INSTRUCTIONS f I i I I i i I i i i a �4 LA 3 9; c 'V3 EXHIBIT "C" GRANT DEED i i �I EXHIBIT "D" PERMITTED EXCEPTIONS i E V �a RECORDING REQUESTED BY: CITY OF SAN BERNARDINO WHEN RECORDED RETURN TO: SABO & GREEN, A PROFESSIONAL CORPORATION 23801 CALABASAS ROAD, SUITE 1015 CALABASAS, CALIFORNIA 91302 Recordation Fee Not Applicable Pursuant to Government Code Section 6103 (Space Above For Recorder's Use Only) FIRST AMENDMENT TO MUTUAL RELEASE AND SETTLEMENT AGREEMENT SBEO\0121\DOC\256.5 9\26\97 930 cg FIRST AMENDMENT TO MUTUAL RELEASE AND SETTLEMENT AGREEMENT This First Amendment to Mutual Release and Settlement Agreement (this "Amendment") is entered into this day of October, 1997, by and between the CITY OF SAN BERNARDINO, a California municipal corporation ("City") and Ruth Newbury and Irving M. Feldkamp III (jointly referred to herein as "Developers") . The City and the Developers are collectively referred to as the "Parties" . Unless otherwise defined herein, capitalized terms shall have the meanings given in the Original Settlement Agreement (as defined in Section 1 . 3 hereof) . 9 1 . RECITALS 1 . 1 . On June 18, 1990, the City created Community Facilities District No. 995 ("District") pursuant to the Mello-Roos Community Facilities Act of 1982, codified at Government Code Section 53311 et. sea. ("Act") . Pursuant to the Act, in December, 1990, the City issued $7, 440, 000 Special Tax Bonds ("Bonds") , which were secured by the special taxes authorized to be levied against all parcels within the District . The Bonds were then refunded with the $3, 315, 000 Community Facilities District No. 995 of the City of San Bernardino (Verdemont Area) Special Tax Refunding Bonds (the s "Refunding Bonds") . 1 .2 . The Developers own or have an interest in unimproved property located within the District as more fully described in Exhibit "A" attached hereto ("Property") . On or about January 14, 1994, the City commenced an action for judicial foreclosure of special tax liens in the Superior Court of the State of California for the County of San Bernardino, against certain named defendants therein, including Developers, bearing Case No. SCV09593 ("Action") . 1 . 3. The Parties desired to resolve their differences and to avoid the expense and inconvenience of any future litigation, including without limitation, litigation of the Action, and thus entered into a Mutual Release and Settlement Agreement dated as of August 29, 1994 (the "Original Settlement Agreement") under which the Developers agreed to make payments to the City for delinquent special taxes, school fees, interest, penalties and costs thereon as provided in said Original Settlement Agreement . 1 1.4 . The Parties now desire to amend the Original Settlement Agreement as herein provided in order to modify the terms of payment, amounts due to the City and to add certain other terms and conditions as herein set forth. 1 .5. At the time of execution of the Original Settlement Agreement, Developers owned that certain property described as Parcel 1 of Exhibit "A" ("Parcel 1") . Pursuant to a Purchase and Sale Agreement and Joint Escrow Instructions (the "Purchase and Sale Agreement") , which shall be executed simultaneously herewith, the Developers have agreed to purchase from the City property described as Parcel 2 of Exhibit "A" ("Parcel 2") . 1 . 6. This Amendment shall be recorded against all Property contained in Exhibit "A" and shall be recorded after the recordation of the Grant Deed attached to the Purchase and Sale Agreement . 1 . 7 . In consideration of the covenants, conditions and promises herein contained, the Parties agree as set forth. 2 . SETTLEMENT TERMS AND CONDITIONS 2 . 1 . (a) The Parties hereto agree that the maximum amount of delinquent special tax, interest, penalties and costs due to the City with respect to the Property for the period from Fiscal Year 1991-92 to Fiscal Year 97-98 shall be Eight Hundred Twenty Two Thousand, Four Hundred Ninety Three Dollars and Eighty Eight Cents ($822, 493 . 88) (the "Debt") . This amount represents $10, 822 . 29 per lot for the 76 lots existing on the Property (the "Home Release Payment") . This amount shall be paid by Developers from two (2) sources : (1) Developers shall make semi-annual installments of $32, 300 . 00 . The first payment shall be due on June 1, 1998, and thereafter payments shall be due on December 1 and June 1 of each year until paid in full; and (2) Developers shall be required to pay a fee equal to $10, 822 . 29 per home due and payable upon final inspection and clearance of utilities prior to authorizing occupancy .for each lot whether or not the home is sold. Notwithstanding the foregoing, Developer shall not be required to pay the $10, 822 . 29 fee for four (4) model homes until the earlier of (i) the sale of such home or (ii) two (2) years from the date of construction. 2 The payments to be made by the Developer pursuant to subsections (1) and (2) above shall be timely made until payment of the Debt in full . The payments made pursuant to subsection (1) hereof shall be credited in inverse order to the payments otherwise required to be made under subsection (2) hereof commencing with the 76th lot . All payments made hereunder shall be delivered or sent by mail to the Finance Department of the City. (b) Late charges shall accrue in the event the payment required hereunder is not paid within thirty (30) days of its due date and shall bear interest at the rate of ten percent (10%) per annum until paid. (c) Developers may not sell all or any portion of the Property unless and until they have remitted the Home Release Payment of $10, 822 .29 per lot as provided in Section 2 . 1 (a) (2) hereof. Upon payment of said Home Release Payment, the City shall execute a notice of satisfaction of lien which shall be recorded to release the lot from this Amendment and the Original Settlement Agreement . Notwithstanding the above, with the consent of the City, which consent shall not be unreasonably withheld, the Developers may sell all of the 76 Lots to a licensed contractor which (i) meets the requirements of Section 2 .2 hereof; and (ii) assumes all of the duties and obligations under this Agreement . 2 .2 . Any construction contract executed by Developers for construction on the Property shall be entered with a licensed contractor who between the period of January 1994 through September 1997 (i) has constructed, or is scheduled to construct, at least 100 single family housing units, (ii) has developed at least 100 parcels of real property or (iii) has achieved any combination of (i) and (ii) totaling 100 . 2 .3. A portion of the fees due to the San Bernardino City Unified School District (the "School District") have been included in the calculation of the $10, 822 .29 Home Release Payment . The City shall not require the Developers to pay additional school fees to the extent that the school fees included in the calculation of the Debt are sufficient to compensate the School District for all school fees . The Developers shall have the sole responsibility to obtain any and all consents or other waivers as may be required by the School District acknowledging that the Mello-Roos fees set forth herein are the only school fees applicable to the Property. 2 . 4 . In addition to being within the District, the Property is also subject to Verdemont Infrastructure Fees ( "VI 3 Fees") . The Developers shall not be required to pay any VI Fees on the Property. 2 .5. The Developers shall not be required to pay any storm drain construction fees or sewer plant capacity fees to the City in connection with development of the Property. On behalf of the Developers, the City shall pay Three Hundred Thousand Dollars ($300, 000) to the State of California Department of Water Resources ("State") for the construction of the improvement of Bailey Creek between Walnut Avenue and the debris basin. The Developers shall pay Seventy Five Thousand Dollars ($75, 000) towards said construction . The City Staff shall use its best efforts to negotiate with the State to cap the amount due for said construction at Three Hundred Seventy Five Thousand Dollars ($375, 000) . However, in no event shall the City be required to pay more than Three Hundred Thousand Dollars ($300, 000) hereunder. Except as expressly provided herein, nothing contained in this Section 2 . 5 or the preceding Section 2 . 4 shall waive any other City fees applicable to the Developers, including but not limited to, City Water Department fees, City Public Works fees, Parks and Recreation fees, building permits, inspection fees or other exactions, and fees of any other government agency. Developers shall be responsible for any and all other street improvements not specifically mentioned herein. 2 . 6. The Developers have requested down payment assistance be made available to their buyers from the Mortgage Assistance Program ("MAP") of the Redevelopment Agency of the City of San Bernardino ("Agency") . The City hereby confirms that it has entered into a letter agreement in the form attached hereto as Exhibit "B" with the Agency directing the Agency to use its best efforts to provide MAP assistance on a first come first serve basis to all of the Developers ' buyers who qualify for MAP assistance . Under the MAP, the buyers shall receive no more than the following amounts in the following years : 1998/99 - $50, 000; 1999/2000 - $100, 000; 2000/01 - $50, 000 . In the event the foregoing amounts are not used by Developers ' buyers in the years granted, said amounts shall not be carried forward and thus shall not be available to the Developers ' buyers in any subsequent year . The foregoing grants shall be subject to all of the terms, conditions and qualifying criteria as may be specified in the MAP as such terms, conditions and criteria exist at such time and consistent with the requirements imposed by the funding source and other discretionary criteria as may be established by the Agency. Developers shall not receive any waivers of terms in connection with this Amendment . 4 2 .7. All special assessments levied after the 1997-98 Fiscal Year shall be paid by the Developers at the times, in the manner and as provided in the Notice of Levy and related documents . 2 . 8 The Developers shall pay Eight Thousand Five Hundred Dollars ($8, 500) to City as compensation for certain attorneys fees incurred by City for the negotiation of this Amendment. 3 . EVENTS OF DEFAULT AND REMEDIES; INDEMNIFICATION 3 . 1. The following shall constitute events of default by the Developers under this Amendment : I (i) Failure to remit any payment to the City pursuant to Section 2 . 1 hereof within forty five (45) days of its due date; (ii) Failure to pay the State as provided in Section 2 . 5 hereof; (iii) Failure to file the final Map for Tract No. 14193 on or before October 9, 1997, or if the final expiration date for recordation of the final Map for Tract No. 14193 is extended, failure to file said Map prior to February 1, 1998; or (iv) Failure to commence construction of the number of homes funded for Phase I by the construction lender within ten (10) months of recordation of the final Tract Map No. 14193, but in no event later than ten (10) months after February 1, 1998 . Upon the happening of an event of default, Developers shall immediately, upon written request of the City, execute a quitclaim deed to the Property, and deliver said quitclaim deed and the Property to the City. Upon delivery to the City and recordation of a quitclaim deed to the Property, the City shall f release Developers from any and all obligations arising from the Debt or any other assessments or Special Taxes assessed against the Property. ' 3.2 . In the event the Developers fail to execute a quitclaim deed and deliver the Property to the City as provided in ® 3 . 1 above, the City may enter the Stipulation for Entry of Judgment ("Stipulation") (a copy of which is attached hereto as Exhibit "C" and is incorporated herein by this reference) , and the City may cause entry of the Judgment (in the form attached hereto as Exhibit "D" and incorporated herein by this reference) against Developers . 5 Notwithstanding Code of Civil Procedure Section 583 . 310 and any applicable statute of limitations, the City shall have the right to cause entry of judgment in the form attached to the Original Settlement Agreement as Exhibit "D" without penalty should this Amendment not be consummated. The Parties expressly agree to waive Code of Civil Procedure Section 583 . 310 and any applicable statute of limitations to the extent necessary to allow the City to cause entry of Judgment in the Action in the event the settlement contemplated within this Amendment is not consummated. 3. 3. Developers shall not be in default under subsections (iii) or (iv) of Section 3. 1 in the event that such default is the result of unlawful or unreasonable actions by the City. "Unreasonable actions" shall not include any discretionary action, taken by the City in its standard process of approving the final Tract Map No. 14193 for the Property or other discretionary approval of the City in connection with completion of the comes on the Property. 4 . PURCHASE OF PARCEL 2 4 . 1. The Developers shall purchase Parcel 2 from the City for a total consideration of Four Hundred Thirty Thousand Dollars ($430, 000) , as follows : One Hundred Ninety Seven Thousand, Four Hundred Twenty Seven Dollars and Fifteen Cents ($197, 427 . 15) of the purchase price shall be paid upon the sale of each lot to an individual purchaser as set forth in Section 2 hereof. The amount due per lot shall equal Four Thousand Dollars and Sixty Five Cents ($4, 700 . 65) for each of the 76 lots for a total of ($197, 427 . 15/42 lots) . This amount is included in the Eight Hundred Twenty Two Four Hundred Ninety Three Thousand Dollars and Eighty Eight Cents ($822, 493, 88) set forth in Section 2 . 1 hereof . The remainder of Two Hundred Thirty Two Thousand, Five Hundred Seventy Two Dollars and Eighty Five Cents ($232, 572 . 85) shall be deemed to be paid by the Developers upon development of street improvements (including but not limited to curbs, gutters, sidewalks, fill-in street paving and lighting) by the Developers on Ohio, Olive and Walnut Avenues . The Parties shall enter into a purchase and sale agreement in the form attached hereto as Exhibit "E", which shall reflect the terms and conditions set forth in this Section 4 . 4 .2 . The Developers shall pay a down payment of Forty Three Thousand Dollars ($43, 000) towards the purchase of Parcel 2 . The City shall apply said down payment to pay delinquent County property taxes and delinquent assessments for Assessment District No. 987 owed for Parcel 2 at closing. The City shall provide a credit of said Forty Three Thousand Dollars ($43, 000) towards the 6 purchase price of Parcel 2 as described in Section 4 . 1 above. To the extent that the total delinquent County property tax and assessments for Assessment District 987 exceed Forty Three Thousand Dollars ($43, 000) , the City shall not be responsible for the payment of additional amounts . 6. REVISION TO TRACT MAP The parties hereto agree that the final Tract Map No. 14193 shall be amended as necessary to conform to the terms of this Amendment . 7 . MISCELLANEOUS PROVISIONS 7 . 1. Except as otherwise provided herein and with respect to Sections 2 . 1, 2 .2, 2 . 3, 2 . 4, 2 . 6, 2 . 7, 2 . 8 and 2 . 10 of the Original Settlement Agreement which provisions are hereby superseded, this Amendment hereby restates and affirms the Original Settlement Agreement and said Original Settlement Agreement remains in full force and effect. This Amendment, read in conjunction with the Original Settlement Agreement, contains the entire understanding of the Parties with respect to the subject matter hereof, and no modification or waiver of any of the. provisions hereof shall be valid unless in writing and executed by the Parties to be bound. 7 .2 . This Amendment shall be governed in accordance with the laws of the State of California. Any action brought to enforce or interpret this Amendment, or any part thereof, shall be brought in the State of California, in the County of San Bernardino . 7 . 3 . Each Party hereto certifies that he, she or it has read all of this Amendment and fully understands all of the same. 7 .4 . This Amendment shall be recorded in the appropriate real property records of San Bernardino County, California and shall constitute a lien on the Property described in Exhibit "A" for the amounts set forth in this Amendment . 7 .5. The effective date of the Amendment shall be deemed to be the date of recording hereof. 7 . 6. This Amendment has been duly ratified, accepted and consented to by the City, through the action of its Mayor and Common Council . The representatives signing this Amendment on behalf of the City expressly represent that he, she or they do so with the full authority and consent of the City. 7 7.7. This Amendment has been duly ratified, accepted and consented to by each of the Developers, through action of their respective authorized representatives. The representatives signing this Amendment on behalf of the Developers expressly represent that he, she or they do so with the full authority and consent of the Developers . 8 [PLEASE NOTE THAT SIGNATURES OF ALL PARTIES TO THIS AMENDMENT MUST BE NOTARIZED] DATED: October 1997 CITY OF SAN BERNARDINO, a California municipal corporation By APPROVED AS TO FORM AND CONTENT : DATED: October , 1997 SABO & GREEN, A Professional Corporation By: Attorneys for ' the City of San Bernardino DEVELOPER By: Irving M. Feldkamp III i By: Ruth Newbury i i t 9 EXHIBIT "A" [DESCRIPTION OF PROPERTY] EXHIBIT "B" [FORM LETTER AGREEMENT WITH CITY] [City of San Bernardino Letterhead] Redevelopment Agency of the City of San Bernardino 201 North "E" Street, 3rd Floor San Bernardino, CA 92401 Re : Mortgage Assistance for Feldkamp Properties Dear Mr . Steinhaus : By this letter the City of San Bernardino ("City") and the Redevelopment Agency of the City of San Bernardino ("Agency") hereby agree that pursuant to the First Amendment to Mutual Release and Settlement Agreement between the City and Irving M. Feldkamp III and Ruth Newbury ("Developers") dated September _, 1997, the Agency shall use its best efforts to provide mortgage assistance to all buyers of the subject lots who qualify for the Agency' s Mortgage Assistance Program ("MAP") . However, MAP funds will be available on a first come first serve basis . Under the MAP, the Developer ' s buyers will receive assistance, if available, of no more than the following amounts in the following years : 1998/99 - $50, 000; 1999/2000 - $100, 000; 2000/01 - $50, 000 . These amounts shall not be carried over to subsequent years . Very truly yours, CITY OF SAN BERNARDINO By: Tom Minor, Mayor AGREED AND ACCEPTED: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Timothy C. Steinhaus, Agency Administrator EXHIBIT "C" [STIPULATION] EXHIBIT "D" [JUDGMENT] EXHIBIT "A" THE NORTHWESTERLY 1/4 OF BLOCK 55 OF THE LANDS OF IRVINGTON LAND AND WATER COMPANY, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 3 OF MAPS, PAGE 9, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID BLOCK 55, LOCATED MIDWAY BETWEEN THE NORTHEASTERLY CORNER AND THE NORTH-WESTERLY CORNER OF SAID BLOCK; THENCE WESTERLY ALONG THE NORTHERLY LINE OF SAID BLOCK 55 TO THE NORTHWESTERLY CORNER THEREOF; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID BLOCK 55 TO A POINT MIDWAY BETWEEN THE NORTHWESTERLY CORNER AND THE SOUTHWESTERLY CORNER OF SAID BLOCK 55; THENCE AT RIGHT ANGLES EASTERLY ALONG THE EASTERLY AND WESTERLY CENTER LINES OF SAID BLOCK 55 TO A POINT MIDWAY BETWEEN THE EASTERLY AND WESTERLY LINES OF SAID BLOCK; THENCE NORTHERLY ALONG THE NORTHERLY AND SOUTHERLY CENTER LINES OF SAID BLOCK 55 TO THE POINT OF BEGINNING. SAID TRACT OF LAND CONSISTING OF LOT 2 AND PORTIONS OF LOTS 1 AND 3 OF SAID BLOCK 55. 5 - � REQUESTED BY AND WHEN RECORDED MAIL TO: t Irving M. Feldkamp, III P.O. Box 6649 San Bernardino, CA 92412 APN:261-082-01 SPACE ABOVE FOR RECORDER'S USE GRANT DEED FOR A VALUABLE CONSIDERATION,receipt of which is hereby acknowledged, The CITY OF SAN BERNARDINO, a municipal corporation, hereby grants to IRVING M. FELDKAMP,III, an individual and RUTH NEWBURY,an individual,the real property in the City of San Bernardino, County of San Bernardino, State of California, described as follows: LEGAL DESCRIPTION ATTACHED AS EXHIBIT "A" CITY OF SAN BERNARDINO, a municipal corporation By: TOM MINOR,Mayor ACKNOWLEDGEMENT OF GRANTOR(S): STATE OF CALIFORNIA ) )S.S. COUNTY OF ) On before me, ,personally appeared personally known to me(or proved to me on the basis of satisfactory evidence)to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the person(s),or the entity on behalf of which person(s)acted,executed the instrument. WITNESS my hand and official seal. Signature EXHIBIT "C" f EXHIBIT "A" THE NORTHWESTERLY 1/4 OF BLOCK 55 OF THE LANDS OF IRVINGTON LAND AND WATER COMPANY, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 3 OF MAPS, PAGE 9, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID BLOCK 55, LOCATED MIDWAY BETWEEN THE NORTHEASTERLY CORNER AND THE NORTH-WESTERLY CORNER OF SAID BLOCK; THENCE WESTERLY ALONG THE NORTHERLY LINE OF SAID BLOCK 55 TO THE NORTHWESTERLY CORNER THEREOF; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID BLOCK 55 TO A POINT MIDWAY BETWEEN THE NORTHWESTERLY CORNER AND T14E SOUTHWESTERLY CORNER OF SAID BLOCK 55; THENCE AT RIGHT ANGLES EASTERLY ALONG THE EASTERLY AND WESTERLY CENTER LINES OF SAID BLOCK 55 TO A POINT MIDWAY BETWEEN THE EASTERLY AND WESTERLY LINES OF SAID BLOCK; THENCE NORTHERLY ALONG THE NORTHERLY AND SOUTHERLY CENTER LINES OF SAID BLOCK 55 TO THE POINT OF BEGINNING. SAID TRACT OF LAND CONSISTING OF LOT 2 AND PORTIONS OF LOTS 1 AND 3 OF SAID BLOCK 55. EXHMIT "A" THE NORTHWESTERLY 1/4 OF BLOCK 55 OF THE LANDS OF IRVINGTON LAND AND WATER COMPANY, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 3 OF MAPS, PAGE 9, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID BLOCK 55, LOCATED MIDWAY BETWEEN THE NORTHEASTERLY CORNER AND THE NORTH-WESTERLY CORNER OF SAID BLOCK; THENCE WESTERLY ALONG THE NORTHERLY LINE OF SAID BLOCK 55 TO THE NORTHWESTERLY CORNER THEREOF; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID BLOCK 55 TO A POINT MIDWAY BETWEEN THE NORTHWESTERLY CORNER AND THE SOUTHWESTERLY CORNER OF SAID BLOCK 55; THENCE AT RIGHT ANGLES EASTERLY ALONG THE EASTERLY AND WESTERLY CENTER LINES OF SAID BLOCK 55 TO A POINT MIDWAY BETWEEN THE EASTERLY AND WESTERLY LINES OF SAID BLOCK; THENCE NORTHERLY ALONG THE NORTHERLY AND SOUTHERLY CENTER LINES OF SAID BLOCK 55 TO THE POINT OF BEGINNING. SAID TRACT OF LAND CONSISTING OF LOT 2 AND PORTIONS OF LOTS 1 AND 3 OF SAID BLOCK 55. S - �