HomeMy WebLinkAboutContract 1560 ORG1NAL
PROPERTY TRANSFER AGREEMENT
AND
ESCROW INSTRUCTIONS
This Property Transfer Agreement and Escrow Instructions (the "Agreement") is entered into by
and among the CITY OF CATHEDRAL CITY SOLELY IN ITS ROLE AS THE SUCCESSOR HOUSING AGENCY TO
THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY, a California municipal
corporation (the "City" or"Seller"), and THERMAL LAND, LLC, a California Corporation (the "Developer"
or "Buyer"). Collectively, said parties may be referred to herein as the "Parties," or individually as a
"Party." This Agreement bears, for record purposes only, the date of t 2t , 2013
(the "Record Date"). Q"
RECITALS
WHEREAS, Seller is the fee simple owner of those parcels of real property (APN 687-196-001
through 006, and 687-198-001 through 006) located in the City of Cathedral City, California, more
commonly known as the Southeast Corner of East Palm Canyon Drive and West Buddy Rogers Avenue,
Cathedral City, California, 92234, and as more particularly described in Exhibit "A",.attached hereto and
incorporated herein by this reference (the "Property"); and
WHEREAS, Seller finds that the Property is key development property in the City, which is
important to the City's growth, population distribution, and traffic patterns; and
WHEREAS,Seller finds and Buyer recognizes that it would not sell the Property to any person or
entity that was not going to use the Property to further the City's plans and goals, or which would
negatively affect the City's growth, population distribution, and traffic patterns; and
WHEREAS, Seller now desires to sell to Buyer and Buyer desires to purchase from Seller, the
Property on the terms and conditions set forth herein.
NOW, THEREFORE, THE PARTIES AGREE TO BE BOUND BY THE PROMISES, COVENANTS AND
OBLIGATIONS CONTAINED IN THIS AGREEMENT, EACH OF THEM ACKNOWLEDGING THE SUFFICIENCY
OF THE CONSIDERATION GIVEN TO IT.
TERMS AND CONDITIONS.
Section 1. Incorporation of Recitals, Exhibits.
Each of the Recitals set forth above is incorporated in this Agreement, and the Parties each
acknowledge and agree to the truth and accuracy thereof. Each of the Exhibits attached hereto is
included herein by reference.
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Section 2. Purchase and Sale.
Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller
for an amount equal to FOUR HUNDRED AND FIFTY THOUSAND DOLLARS ($450,000.00) (the "Purchase
Price") and upon all of the terms and conditions set forth in this Agreement, in order to develop a Sixty-
Nine (69) unit apartment building, which includes five (5) ground floor retail units, with a total rentable
area of Eighty-Seven Thousand Nine Hundred Ninety Five (87,995)square feet(the "Project"). Purchase
Price proceeds shall be allocated as follows: Three Hundred Thousand Dollars ($300,000.00) for the
Property, and One Hundred Fifty Thousand Dollars ($150,000.00) to pay off any and all assessments for
sewer services which are related to the Property's inclusion in the Cove Improvement District. The
Purchase Price shall be tendered by Buyer to Seller at the Close of Escrow(as defined in Section 5.12).
Section 3. Title and Title Insurance.
Seller shall convey, by grant deed,good and marketable fee simple title to the Property to Buyer
at the Close of Escrow, free of any other monetary or other interests or encumbrances affecting the
condition of title except as otherwise permitted in Section 4.1 below. A condition to the Close of Escrow
is Buyer's ability to secure, at its own cost, an Owner's CLTA Standard Coverage Policy of Title Insurance
(the "Policy") in a policy amount equal to the Purchase Price, issued by First American Title Company of
Los Angeles (the "Title Company"), showing title vested in Buyer in the condition required by this
Agreement.
Section 4. Conditions of Purchase.
Buyer's obligation to perform under this Agreement and to purchase the Property shall be
subject to the satisfaction of the conditions set forth in Section 3 above and this Section 4. Close of
Escrow, and Seller's obligation to perform under this Agreement and to sell the Property shall be subject
to the satisfaction of the conditions set forth in this Section 4 and Section 5 below. In the event any of
these conditions are not satisfied within the specified time limit(s), if any, Buyer or Seller may, at its sole
option and discretion, and if such Party was not responsible for satisfying the said condition, either
waive such condition(s) or terminate this Agreement.
4.1 Approval of Title to the Property. Title to the Property shall be in the condition required by
this Agreement as of Close of Escrow. At Close of Escrow, the Policy shall show as exceptions only the
following: (i) the standard printed exceptions set forth in the title policy; (ii) general and special real
property taxes and assessments, if any, for the current fiscal year, a lien not yet due and payable; and
(iii)any other exception consented to in writing by Buyer.
Upon the Opening of Escrow (as defined in Section 5.2), Buyer shall, at its sole cost and
expense, if any, cause the Title Company to provide Buyer with a preliminary title report or update the
existing preliminary title report (the "PTR"), if applicable, together with complete and legible copies of
all instruments referred to in the PTR as conditions or exceptions to title. In the event that Buyer, within
ten (10) business days following receipt of the PTR, objects in writing to any exceptions disclosed
therein,Seller must either: (i) cause the removal of said exceptions on or before the Cloc of ycrrnw; oG
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(ii) notify Buyer within ten (10) business days of receipt of Buyer's objections, of its inability or
unwillingness to remove the condition. In the event Seller is unable or unwilling to cause any such title
discrepancy to be removed on or before the Close of Escrow, Buyer shall have the right to terminate this
Agreement. Upon such termination, the Parties shall be relieved of any and all obligations under this
Agreement without cost or penalty.
4.2 Buyer's Development Obligations. The transfer of Property provided for in this
Agreement is conditioned on the requirements, to which Buyer hereby agrees,that Buyer is responsible
for conducting all of the following with respect to the Property: land survey, boundary survey,
topographic survey, land clearance, grading, any and all necessary demolition, the filling of any
preexisting septic tanks and cesspools which may have been missed during City demolition in
accordance with City standards and any other applicable law, all expenses of street vacations, and
relocation or abandonment of existing utilities in the street to be vacated, including for payment to
utilities companies for all engineering studies, abandonments, relocations, undergrounding, processing
quitclaims of easements, and the costs for all necessary, related alterations, reconstructions, or new
construction or replacement of any public facilities affected by Buyer's development, including, but not
limited to, curbs, gutters, sidewalks, landscaping, irrigation, street lighting, storm drains, catch basins,
driveways, water and electrical meters, traffic signals, signal controllers, interconnection facilities, and
for all related title work and title reports. Buyer is solely responsible for all costs related to its
development obligations.
4.3 Obligations by Operation of Law. Buyer will be responsible for paying any and all
applicable fees, assessments, taxes and/or charges on the Property, including but not limited to special
taxes relating to the Property's inclusion in a community facilities district (collectively, "Applicable
Charges"). Buyer shall be responsible for any and all Applicable Charges on the Property commencing
on the Effective Date. Buyer's obligation to pay assessments for sewer services related to the Property's
inclusion in the Cove Improvement District shall be immediately discharged upon Buyer's payment of
the full Purchase Price to Seller, pursuant to and as provided for in Section 2 hereinabove.
Section 5. Escrow Provisions and Instructions.
5.1 Escrow Agent. The Parties agree to establish an escrow(the"Escrow"),for the purposes
of implementing this Agreement, at First American Title (the "Escrow Agent"). The Escrow shall be
opened by the City immediately after the Effective Date, as that term is defined hereafter at Section
18.20.
5.2 Opening of Escrow.
5.2.1 Delivery of Documents. Within three (3) City-business days after the Effective
Date of this Agreement, Buyer shall deposit with the Escrow Agent one fully executed counterpart of
this Agreement, which shall constitute the Escrow instructions (the "Escrow Instructions") and the
Deposit, as defined below in Section 5.2.2. The date of delivery to Escrow Agent of such fully executed
counterpart shall be deemed the opening of escrow ("Opening of Escrow"), and Escrow Agent shall
notify Buyer and Seller in writing of the Opening of Escrow date,the date set fo - .,
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acceptance of the Escrow Instructions. The Escrow Agent is hereby empowered to act under this
Agreement upon indicating its acceptance of this Section in writing, delivered to the Parties within five
(5) calendar days after the establishment of the Escrow, and shall thereafter carry out its duties as the
Escrow Agent hereunder.
5.2.2 Deposit. Simultaneously with the Opening of Escrow, Buyer shall deposit with the
Escrow Agent the sum of Fifteen Thousand Dollars ($15,000) (the "Deposit"). If, for any reason, Buyer
fails to close the Escrow and Seller is in a position to close Escrow in accordance with this Agreement,
then Seller may declare a material default in this Agreement by Buyer, after notice and an opportunity
to cure as set forth in Sections 13.1 and 13.2 hereof. Upon Seller's declaration of default, the Escrow
Agent shall pay to Seller the full amount of the Deposit. When Escrow closes, the Deposit will be
credited towards Buyer's obligations.
5.3 Additional Documents. Each Party shall deliver to the Escrow Agent any additional
Escrow instructions or documents necessary' for the conveyance of title as applicable or implementation
of any other provision of this Agreement or other obligations of said Party hereunder, including, as
applicable, any funds owed by that Party under this Agreement. The Parties will act in good faith to
attempt to have all necessary documents, consents, approvals, or other required documents delivered
to the Escrow Agent. However, in no event shall said additional Escrow instructions or other documents
increase the rights of one Party against the other Party hereto or modify the terms and conditions of this
Agreement.
5.4 Service Contracts. Within three (3) City-business days of the Opening of Escrow, Seller
shall deliver to Buyer copies of all contracts, service agreements, maintenance agreements and similar
documents and records detailing and evidencing any and all management and other services including
without limitation, landscaping, and property management associated with the Property (collectively,
"Service Contracts"). Concurrently with the Close of Escrow, Seller shall terminate the Service Contracts
unless otherwise requested in writing by Buyer. Following the execution of this Agreement by both
parties, Seller shall not renew, alter, amend or modify any existing Service Contracts or enter into any
new Service Contracts without the express written consent of Buyer which may be withheld by Buyer, in
its sole discretion.
5.5 Preliminary Title Reports. The Escrow Agent shall cause PTRs, as required under Section
4 of this Agreement,to be prepared and issued by First American Title and shall provide both the Buyer
and Seller with copies thereof along with legible copies of all reported title exceptions, within ten (10)
days of the Opening of Escrow.
5.6 Funds. All funds received in the Escrow, including without limitation the Deposit, shall
be deposited by the Escrow Agent in an insured account with any state or national bank doing business
in the State of California, and such funds may be combined with other escrow funds of the Escrow
Agent. Such funds shall draw the highest reasonable rate of interest and such interest shall accrue to
the Party of this Agreement who shall have made the deposit thereof with the Escrow Agent.
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5.7 Notices. All communications from the Escrow Agent to any of the Parties shall be
directed to the respective Parties at the addresses set forth in Section 14, unless any Party requests in
writing, served on the Escrow Agent and all other Parties, that communications and notices be
forwarded to a different person or place.
5.8 Closing Statement. Not less than five (5) business days prior to the Close of Escrow,the
Escrow Agent shall provide each Party with a pro forma closing statement, showing any funds owed by
or any credits to that Party, based on allocations as are normal in the County of Riverside, unless
otherwise provided by this Agreement. Ad valorem property taxes will be apportioned to the transferee
and the transferor in each transaction, based on the Closing Date. The Escrow Agent shall provide
copies of each Party's closing statement to each of the other Parties at the same time.
5.9 Delivery of Documents and Funds. Seller shall deliver the grant deed and any additional
documents required from Seller within five (5) business days of written demand from Escrow Agent,and
Buyer shall deliver the Purchase Price and any additional funds required to close Escrow to Escrow Agent
at least three (3) business days prior to the Close of Escrow.
5.10 Conditions to Close of Escrow. The following are conditions to Close of Escrow,and may
only be waived by Seller in its sole and absolute discretion.
5.10.1 Proof of Lawful Standing. Prior to and as a condition to the Close of Escrow,
Developer shall provide to Seller satisfactory evidence of the legal formation and existence of
Developer and the good standing of Developer with the State of California, to hold title to the
Property and to develop the Project.
5.10.2 Proof of Financing. Prior to and as.a condition to the Close of Escrow, the
Developer shall provide evidence satisfactory to the City that it possesses said funds, or loan(s),
sufficient to purchase the Property and develop the Project as approved by the City. If
Developer utilizes its own funds to purchase the Property and/or for the construction costs of
the Project, those funds shall be deposited in a construction management account, as provided
below with respect to lender funds used for construction costs. If Developer finances the
acquisition of the Property and/or construction costs of the Project with a third party lender,the
total amount financed less any upfront loan fees due to said lender shall be deposited in a
construction fund management account with a third party experienced in managing such
accounts. The terms of the management account agreement are subject to Seller's prior
approval. Developer shall have obtained loans sufficient to pay the Purchase Price of the
Property and the costs of construction of the entirety of the Project, as approved and permitted
by the City, including any conditions of approval. The terms of the construction loan, the loan
documents, and the identity of the lender, are subject to the reasonable approval of the City, in
order that the City may ensure that the lender is reputable and has the wherewithal to lend and
to ensure that the loan document provisions are consistent with this Agreement. The City may
not unreasonably withhold said approvals.
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5.10.3 Approval of Use and Design. Prior to and as a condition to the Close of Escrow,
Developer shall have obtained the City's approval of Developer's use of the Property and design
of the Project, including all interior and exterior Project design elements. The City shall have
sole and full discretion to make said approvals for use and design, and to require any conditions
of approval. The Parties agree and acknowledge that the City's rights under this section are
separate from and in addition to its normal development approval processes, and that such
rights are not ministerial in nature.
5.10.4 Confirmation of Entitlements. Prior to and as a condition to the Close of
Escrow, Developer shall have obtained all requisite entitlements for the Project, including
grading, building and construction permits which will be issued upon Developer's payment of
requisite fees, posting of security and similar items in accordance with the terms of this
Agreement and the City's normal processes.
5.11 Closing. When the Escrow Agent is in a position to Close the Escrow, it shall do the
following in the order listed:
(1) Record the Redevelopment Covenants.
(2) Record the Grant Deed from the City to the Buyer of title to the Property, including
the Redevelopment Covenants.
(3) Issue the final title Policy called for under this Agreement to the Parties entitled
thereto. The Buyer may obtain an ALTA title policy in lieu of the CLTA standard title
policy, but the price increase for an ALTA policy shall be the sole cost of the Buyer,
notwithstanding any other language in this Agreement to the contrary.
(4) Pay to the Party entitled thereto any funds held by the Escrow Agent which are now
due to said Party, if applicable. The funds for construction of the Project will be
forwarded by the Escrow Agent to the agreed upon third party construction
management company as provided in Section 5.10.2.
(5) Provide each Party with a final closing statement, and provide each other Party with
a copy of said closing statement.
(6) Provide each Party with a complete set of all documents recorded with the County
Recorder.
5.12 Closing Date. Escrow shall close (as evidenced by the recordation of the grant deed in
the Official Records of Riverside County, California), as soon as the conditions to Close of Escrow have
been met or waived, but in any event, not later than February 28, 2014 (the "Close of Escrow" or
"Closing Date").
5.13 Escrow and Sales.Costs. Buyer shall pay all costs and expenses incurred in connection
with closing Escrow, including, without limitation, any fees or premiums relating to obtaining the PTR or
6 ORIGINAL
issuing the final title insurance policy, the escrow fee, recording costs and fees; provided, however,that
Seller shall pay all county and city documentary transfer taxes, if any. Escrow Agent shall notify Buyer
and Seller of the costs to be borne by each at least five (5) business days prior to the Close of Escrow
5.14 Prorations. Current real property taxes, bond and other assessments, fees and monthly
charges for Service Contracts (as defined in Section 5.4), shall be prorated at the Close of Escrow on the
basis of a thirty(30)day calendar month.
5.15 Possession. Seller shall deliver possession of the Property to Buyer upon the Close of
Escrow unless otherwise agreed by the parties.
5.16 Schedule of Obligations. Exhibit "F", attached hereto and incorporated herein by
reference, provides a schedule of the various obligations set forth herein, with the responsible parties
and deadlines there for. If there is any inconsistency between Exhibit "F" and this Agreement, this
Agreement shall be controlling.
Section 6. City Covenants.
6.1 Obligation to Impose Covenants. The Parties recognize that as its role as the Successor
Housing Agency to the Former Redevelopment Agency of the City of Cathedral City, the City has an
obligation, in connection with transfers of housing land previously owned by the Redevelopment
Agency, to impose certain redevelopment covenants on such land, which include but are not limited to
affordability covenants relating to the housing portion of the Project(the "Redevelopment Covenants").
6.2 Redevelopment Covenants. Said Redevelopment Covenants, attached hereto as Exhibit
"B", and incorporated herein by reference, will restrict the Property and be contained in any grant deed
to be given by City hereunder. The City, both as the Successor Housing Agency to the Former
Redevelopment Agency and as a City, shall be the beneficiary of each and every such covenant, and
may, but is not required to, independently seek enforcement thereof. It should be noted that the Buyer
has the same obligation with respect to any land previously transferred to it by the Redevelopment
Agency or Successor Housing Agency to the Former Redevelopment Agency.
6.3 Covenants to be Included in Grant Deed. Attached as Exhibit "C" hereto is a copy of the
grant deed ("Grant Deed") which shall be utilized in transferring ownership of the Property, and which
includes the language of the Redevelopment Covenants.
Section 7. Buyer's Covenants
7.1 Redevelopment Covenants. Buyer agrees to abide by the Redevelopment Covenants
described in Section 6 hereinabove and which are attached.hereto as Exhibit "B", and which are set
forth in the Grant Deed attached hereto as Exhibit "C", including the affordability covenants included
therein, relating to affordability requirements for the housing aspect of the Project.
7.2 Covenants Relating to Use and Design. Separate and apart from the City's regular
process for all property and building related permits and approvals, the Parties hereby agree that the
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City shall have the additional discretionary right to approve: (1) Buyer's use of the Property, which said
use is proposed to be a mixed use development, with sixty-nine (69) apartment units, and five (5)
ground floor retail units; and (2) Buyer's design of the Project on the Property, including all interior and
exterior elements. Said approvals shall be within the City's sole discretion. Buyer shall obtain said
approvals from the City prior to the Close of Escrow.
7.3 Covenant on Construction. Buyer shall commence construction immediately after Close
of Escrow and vigorously undertake to complete all Project construction and develop the Property, as
approved and accepted by the City, by the deadline set forth in Section 10 ("Construction Covenant").
This Construction Covenant shall be a covenant running with the land, and shall not be released until a
Notice of Completion has been issued by the City for the Project.
Section 8. All Property Sold"As Is."
8.1 "As Is" Condition. Each parcel of land, or portion thereof, transferred under the
provisions of this Agreement is transferred to the transferee in an "as is" condition, which shall mean
that the transferor is not responsible to the transferee for any hidden or latent defects in the subject
property.
8.2 No Known Hidden Defects. By its execution of this Agreement, each Party is
representing to each other Party that it is not aware of any hidden or latent defect in or of the property
or properties which it is transferring under the terms of this Agreement, other than any such defects as
may have been disclosed to the transferee in writing delivered to the transferee not less than ten (10)
business days prior to the Close of Escrow.
8.3 Risk of Defects. Each Party hereto expressly assumes the risk that the property, if any,
which is transferred to it under the terms of this Agreement may contain or have defects or conditions
which might prevent the intended use of said property, or cause unexpected expense in connection with
preparing said land for the intended use.
8.4 Release. Each Party hereto hereby releases each and every other Party hereto from any
claim for any condition of the property or properties transferred to it under this Agreement. To that
end, each Party, and its officials, employees and agents shall be held harmless for all claims, demands,
causes of action, penalties, expenses and liability of whatsoever kind or nature which may arise out of,
because of, concerning, or incident to the condition of the property or properties conveyed to it under
this Agreement, including all court actions, costs and expenses and attorneys' fees relative to any Party
being made a party in any action, suit, arbitration or mediation initiated by the Party to whom the
subject property was conveyed and/or any third party for any alleged condition of the property or
properties conveyed to that Party.
Section 9. Prohibition Against Transfers.
The Parties agree that no Party shall sell, transfer, convey, lease, leaseback or assign the whole
or any part of the Property or any partial or whole interest therein which is the subject of this
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Agreement, or of any improvements thereon, until after the issuance by Seller of the Notice of
Completion, as described in Section 17 below. In the event of an unauthorized transfer or conveyance,
the transferee in connection therewith shall become fully liable for each and every obligation of the
transferor, and the transferor shall not be relieved of any obligation or liability under this Agreement.
This prohibition shall not apply to the reasonable grant of limited easements or permits to facilitate the
development of the Property. Furthermore, no Party to this Agreement, without prior written approval
by the City, or except as permitted by this Agreement, shall assign or attempt to assign this Agreement
or any right herein to any third party, nor shall Buyer transfer any ownership interest of Buyer to a third
party until the City has issued the Notice of Completion. The addition of any new member(s) to the
Buyer's business entity (a Limited Liability Company) shall not be considered a transfer for purposes of
this Section, provided that the member(s) of the business entity as of the Effective Date shall remain
member(s).
Section 10. Deadline for Project Completion;Liquidated Damages.
Developer shall complete all Project construction and Property development, as approved and
accepted by the City, by February 28, 2015 ("Deadline"). The Parties agree that if Developer fails to
timely complete all Project construction and Property development, as approved by the City, by this
Deadline, or any extension thereof approved by Seller in its absolute discretion,the City will be harmed
and suffer damages, and that the precise amount of the City's actual damages is difficult or incapable of
precise estimation. Therefore, if Developer fails to complete the work by the Deadline, the City may
elect to (i) require the Buyer to pay the Seller$450,000.00 (Four Hundred Fifty Thousand Dollars)as and
for liquidated damages, or, alternatively, (ii) cause a reversion of the title to the Property and the
Project, or such portion of the Project which is completed as of the Deadline. The parties agree that the
liquidated damages amount, in alternative (i), represents a fair and reasonable estimate of the costs
that Seller will incur by reason of late Project completion and Property development, and of Seller's
inability or delay in causing the development on the Property which furthers the City's plans and goals.
Under alternative (ii), in the event the Project is not completed by the Deadline, and Developer displays
a clear intention to not complete construction, or is otherwise unable to complete construction, the
Property will revert to the City without cost to the City of any kind or for any reason, including but not
limited to, improvements to the Property and/or any construction of the Project. In such event, Seller
shall have the right upon ten (10) business days' notice of default, as provided in Section 13,and Buyer's
failure to cure, to record its Notice of Revesting, a copy of which is attached hereto as Exhibit "D". The
recording of the Notice of Revesting shall conclusively establish (i) that Buyer has no further interest in
the Property or the Project; (ii) that Seller has clear title to the Property and the Project, including plans
and specifications; (iii) that no third party shall have any liability to Buyer for relying upon the recorded
Notice; and (iv) that no lien recorded against the Property in furtherance of this Agreement shall be
affected as to its rights or priority. If for any reason the Notice of Revesting process proves ineffective,
Seller may utilize any other legal method to reacquire title to the Property and the Project. However, if
Developer fails to meet the construction Deadline, but appears to be making a good faith effort to
complete construction within a reasonable timeframe after the Deadline,said good faith and reasonable
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timeframe to be determined at the City's sole discretion, then the City may choose to not seek the
liquidated damages or record the Notice of Revesting,as authorized by this Section.
Section 11. City's Ministerial Duty to Issue Certificate of Occupancy.
If the City refuses to issue a certificate of occupancy, for any reason permitted under the
statutes, ordinances, or regulations pertaining to certificates of occupancy, such refusal shall, at the
City's sole option, be considered a material breach of this Agreement.
Section 12. Effect of City Participation.
The City's participation in this Agreement is solely for the specific provisions contained herein,
and shall not in any way or in any event be interpreted to mean that the City approves any land use,
development or other treatment of any property affected hereby. All of the City's regular processes
apply to any such uses and no approval by the City or any of its subordinate departments, commissions
or agencies shall be implied as a result of this Agreement.
Section 13. Defaults.
13.1 Notice of Default. Except where a different provision appears in this Agreement with
respect to time frames for curing defaults or removing title items, in which case such other provision
shall govern, if the Escrow fails to close by February 28, 2014, Buyer fails to complete the Project by
February 28, 2015, or there is any other material breach of this Agreement, as a result of any action or
failure to act by any Party hereto, the non-defaulting Party may serve a notice of default upon the
defaulting Party identifying the act or omission which has caused the default, and permitting ten (10)
days after receipt of the notice to cure each and every default identified in the notice. Notices shall be
served as provided in Section 14 hereof. A notice of default given under any other section shall be
sufficient if said notice is given in accordance with this Section 13, provided that it grants the defaulting
Party at least ten (10) days to cure.
13.2 Curing Default; Remedies. Any Party which fails to cure a default or defaults within the
ten (10) day period specified in any notice of default shall be deemed to be in default of a material
provision of this Agreement, except that if the breach reasonably requires more than ten (10) days to
cure,the defaulting Party shall not be in default if it immediately commences actions to cure the default,
in good faith and continues to execute actions to cure without delay until said default is cured. Where
Buyer is the defaulting party, City shall have the sole discretion to determine whether the breach
reasonably requires more than ten (10) days to cure, and whether Buyer's actions to cure are made in
good faith. Any time extension afforded to cure shall not exceed sixty (60) days unless written consent
to a longer period is given by the other Party, in its sole discretion, or a longer period is provided by
another provision of this Agreement. Thereafter, any non-defaulting Party may bring any action under
law or equity to compel the defaulting Party to perform its obligations under this Agreement, it being
recognized by all of the Parties hereto that damages will not adequately compensate the other Parties
for the failure of a defaulting Party to honor its obligations hereunder, and that only the transfers
required under the Agreement can compensate the other Parties as contemplated by the Agreement. If
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ORIGINAL
Seller is the non-defaulting Party, it may exercise its right to cause reversion of title to the Property and
the Project, or to be paid the liquidated damages as provided in Section 10 above, or it may bring an
action to compel performance by Buyer. A decision by Seller to bring such an action does not invalidate
Seller's rights to seek its liquidated damages or alternatively cause title reversion in the future if
performance by Buyer does not occur, or if Seller elects to abandon its legal action in favor of its other
remedies.
13.3 Costs and Attorneys' Fees. In the event that an action or suit is brought by any Party
against a defaulting Party, the prevailing Party shall be entitled to recover its full attorneys' fees and
costs of suit,together with any other compensatory damages which accrued because of the delay in the
defaulting Party's performance.
13.4 Asserting Rights and Remedies. Any failure or delays by any Party in asserting any of its
rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by any Party in asserting any of its rights and remedies shall not deprive said Party of
its right to the remedies provided in this Agreement.
Section 14. Notice Provisions.
14.1 Giving Notice. Any and all notices, demands or communications submitted by either
Party to the other Party pursuant to or as required by this Agreement shall be proper if in writing and
dispatched by messenger for immediate personal delivery, or by registered or certified United States
mail, postage prepaid, return receipt requested,to the location designated below. Such written notices,
demands and communications may be sent in the same manner to such other addresses as either Party
may from time to time designate as provided in this Section. Any such notice, demand or
communication shall be deemed to be received by the addressee, regardless of whether or when any
return receipt is received by the sender or the date set forth on such return receipt, on the day that it is
dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in
the United States mail as heretofore provided.
14.2 Where to Give Notice. All notices, demands or communications to a Party shall be sent
to:
(to Developer) Thermal Land, LLC
78265 Country Club Drive
Bermuda Dunes,CA 92203
Attn: Mr. Charlie Knickerbocker
(to City ) City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attn: City Manager
(with a copy to) Green, de Bortnowsky&Quintanilla, LLP
R
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23801 Calabasas Rd.,Ste. 1015
Calabasas,CA 91302
Attn: Charles R.Green
Section 15. Indemnification;Release.
15.1 Indemnification Period. The indemnifications provided in this section shall survive the
termination for any reason of the term of this Agreement for a period of five (5) years from the end of
said term.
15.2 Indemnification. The Parties each agree to indemnify and hold each other Party, and its
elected officials, members, shareholders, equity owners, officers, employees, agents, and attorneys
harmless from and against all actions, claims, damages,judgments, orders, rulings, costs, expenses and
fees (collectively, the "Claims") arising from or related to any act or omission of the Party who failed to
perform or committed the act which is the source of the Claims.
Section 16. Termination of Agreement.
The Parties shall have the right to terminate their obligations under this Agreement if any of the
other Parties breaches any promise, obligation, covenant or duty under this Agreement or of its exhibits,
after notice thereof given in accordance with the notice requirements set forth in this Agreement
pertaining to that default. Said notice shall indicate the reason that the non-defaulting Party or Parties
has or have declared a termination of the Agreement, and shall indicate, if applicable, what steps must
be taken to cure the referenced breach of the Agreement or of any attachment hereto. If, at the end of
the notice period, all breaches have not been corrected,the non-defaulting Party shall have the right, at
its sole option, to deem the Agreement terminated without further notice or action by said non-
defaulting Party. This provision is subordinate to any other provision of this Agreement which provides
for specific cure periods or notice periods for specific breaches. Termination of this Agreement does not
terminate any Parties' rights against the other Party for a material breach of this Agreement, or any
rights to indemnification.
Section 17. Notice of Completion.
When Buyer has fully performed its obligations under this Agreement and has completed the
Project to the satisfaction of the City, the City will record a Notice of Completion. The Notice of
Completion is not a Certificate of Occupancy, and shall only mean that Buyer has completed its
obligations hereunder, and that thereafter the remedies, including but not limited to the power of title
reversion provided to Seller under this Agreement, are conclusively and irrevocably terminated,and that
no party taking any interest in the Property or the Project can have its rights affected or disturbed by
such remedies, save and except for the indemnification obligations under Section 15. A copy of the
Notice of Completion is attached hereto as Exhibit"E".
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Section 18. Miscellaneous Provisions.
18.1 Termination Discretion. Any action taken by a Party, including, but not limited to, the
termination of this Agreement under the provisions hereof, shall be at the sole option of said Party and
in its sole and absolute discretion, unless a different standard is otherwise specifically indicated. Each
Party acknowledges that each other Party would not have entered into this Agreement in the absence of
these covenants.
18.2 Additional Documents. The Parties each agree to execute any additional documents,
forms, notices, applications or other documents which City or Escrow Agent reasonably determines to
be necessary to carry out the intent of this Agreement.
18.3 Severability. The Parties agree that, should any provision, section, paragraph, sentence
or word of this Agreement be rendered or declared invalid by any final court action in a court of
competent jurisdiction or by reason of legislation, the remaining provisions, sections, paragraphs,
sentences and words of this Agreement shall remain in full force and effect and the Parties agree in
good faith to immediately amend this Agreement in such a way as to provide alternative provisions,
sections, paragraphs,sentences or words as to carry out the intent of this Agreement.
18.4 No Transfers or Assignments. None of the Parties shall, prior to the end of the term of
this Agreement, without prior written approval of each of the other Parties, which approval may be
given or withheld at the absolute discretion of the said Party, (i) assign or attempt to assign this
Agreement or any right herein or (ii) make any total or partial sale, transfer, conveyance, lease,
leaseback, or assignment of the whole or any part of the property which is the subject of this
Agreement. The addition of any new member(s) to the Buyer's business entity (a Limited Liability
Company)shall not be considered a transfer for purposes of this Section.
18.5 Venue. Any legal action must be instituted in the Superior Court of the County of
Riverside, State of California, in any other appropriate court in that County, or in the Federal District
Court in the Central District of California.
18.6 Governing Law. The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
18.7 Cumulative Remedies. Except with respect to any rights and remedies expressly
declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and
the exercise by any 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 any defaulting Party. A waiver of a requirement shall not constitute an ongoing waiver of that
requirement in the future.Any waiver of a right must be in writing to be enforceable.
18.8 Recusal for Conflict of Interest. No elected official, officer, employee or agent of the
City having any conflict of interest, direct or indirect, related to this Agreement and/or the acquisition
and improvement of the subject properties shall participate in any decision relating to this Agreement.
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18.9 No Consideration to any Third Party. Each of the Parties warrants that it has not paid or
given, and will not pay or give, any third party any money or other consideration for obtaining this
Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are
paid for professional services if rendered by attorneys, financial or other consultants, accountants,
engineers, architects and the like when such fees are considered necessary by the Party. For the
purposes of this paragraph, third parties shall include any elected official, officer, employee or agent of
the City.
18.10 No Personal Liability. No elected official, official or officer, employee, agent or attorney
of any Party shall be personally liable to the any other Party, its members or principals, or any successor
in interest, or any other party or person whatsoever, in the event of any default or breach by said Party
for any amount which may become due to another Party or Parties or to its successors, or on any
obligations under the terms of this Agreement, except for gross negligence or willful acts of such
member, officer, employee or attorney, unless said person has entered into an express written
agreement to be liable.
18.11 Force Maieure. In addition to specific provisions of this Agreement, performance by
either Party hereunder shall not be deemed to be in default where delays or defaults are due to war;
insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of public
enemy; epidemics; quarantine restrictions;freight embargoes or lack of transportation; weather-caused
delays; inability to secure necessary labor, materials or tools; acts of the other Party other than as
permitted or required by the terms of this Agreement; acts or failure to act of any public or
governmental agency or entity other than as permitted or required by the terms of this Agreement
(except that action or failure to act by the City shall not extend the time for the City to act unless such
extension is otherwise expressly authorized herewith) unless such action or failure to act is the result of
a lawsuit or injunction, or any other causes beyond the control or without the fault of the Party claiming
an extension of time to perform. Any extension of time for any such cause hereunder shall be for the
period of the enforced delay and shall commence to run from the time of the commencement of the
cause, if notice by the Party claiming such extension is sent to the other Parties within thirty (30)
calendar days of the commencement of the cause. Notwithstanding any language to the contrary, the
Party claiming the extension shall not have more than thirty (30) business days after the period of the
enforced delay to complete its required acts. Times of performance under this Agreement may also be
extended by mutual agreement in writing by and between the Parties.
18.12 Amendments by City Manager. The City Manager of the City is authorized to sign on his
own authority amendments to this Agreement which are of routine or technical nature, including
extensions of time deadlines, except that the cumulative total of extensions granted by the City
Manager shall not exceed six(6) months.
18.13 Independent Legal Advice. Each Party represents and warrants the following:they have
carefully read this Agreement, and in signing this Agreement and agreeing to be bound by the same,
they have received independent legal advice from legal counsel as to the matters set forth in this
Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this
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Agreement, and they have freely signed this Agreement and agreed to be bound by it without any
reliance upon any agreement, promise,statement or representation by or on behalf of the other Parties,
or its respective agents, employees,or attorneys, except as specifically set forth in this Agreement, and
without duress or coercion, whether economic or otherwise. This Agreement shall be interpreted as
though prepared jointly and severally by all of the Parties.
18.14 Costs and Attorneys' Fees. If any Party hereto files any action or brings any action or
proceeding against the other arising out of this Agreement, seeks the resolution of disputes, or is made
a party to any action or proceeding brought by a third party with respect to the Agreement,the Program
or the participation in either by either Party,then as between the Parties,the prevailing Party or Parties
shall be entitled to recover as an element of its costs of suit or resolution of disputes, and not as
damages, its reasonable attorneys'fees as fixed by the Court or other forum for resolution of disputes as
may be agreed upon by the Parties in such action or proceeding or in a separate action or proceeding
brought to recover such attorneys'fees.
18.15 Successors. This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective heirs, executors, administrators, legal representatives, successors and
assigns.
18.16 Time Frames. Unless otherwise indicated with respect to a requirement, all time frames
for performance of an act required or permitted by this Agreement shall be calendar days.Time frames
measured in months shall be calculated with reference to the actual number of days in the relevant
months. Annual time frames shall mean a period of 365 days.
18.17 Counterparts. This Agreement shall be executed in four (4) duplicate originals each of
which is deemed to be an original. This Agreement constitutes the entire understanding and agreement
of the Parties. The Parties may sign this Agreement in counterparts. Faxed or electronically submitted
signature pages shall bind a Party as if the other Party had received original signatures.
18.18 Integration. This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto,and supersedes all negotiations or previous agreements between the Parties
with respect to all or any part of the subject matter hereof.
18.19 Waivers; Amendments. All waivers of the provisions of this Agreement and all
amendments hereto must be in writing and signed by the appropriate representatives of the Party
making the waiver. Other than minor or technical amendments permitted under Section 18.12, which
the City Manager may approve on his own authority, any amendment to this Agreement must be
approved by the City Council of the City.
18.20 Effective Date. The "Effective Date" of this Agreement is the date upon which it is both
approved by the City Council of the City and executed by each of the Parties set forth below, whichever
occurs later.
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[SIGNATURES APPEAR ON FOLLOWING PAGE]
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WHEREFORE,the Parties, intending to be bound hereby, have affixed their authorized
signatures to this Property Transfer Agreement with Escrow Instructions.
CITY: DEVELOPER:
CITY OF CATHEDRAL CITY, THERMAL LAND, LLC
A municipal corporation a California Limited Liability Company
A
By: J-i' Date. j ,2013 :y, Date:YC22013
City Manager Charlie Knickerbocker
Attest )7.,ww-
Josef eza
Deputy City Clerk
Approved as to content:
/
Vt4IL
Leisa ukes
City Representative
Approved as to form:
GREEN de BORTNOWSKY&QUINTANILLA, LLP
City Attorney
Charles R.Green
OATH\0025-58\DOC\2908.15 PROPERTY TRANSFER AGREEMENT 8-5-13 clean
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EXHIBIT"A"TO PROPERTY TRANSFER AGREEMENT
LEGAL DESCRIPTION OF PROPERTY
In the City of Cathedral City, County of Riverside, State of California:
Lots 127 through 131, inclusive, together with Lots 142 through 147, inclusive of Cathedral City,
as per map filed in Book 13, at Pages 24 through 26, inclusive, of Maps, Records of said
Riverside County.
Together with any underlying fee interest in that portion of Grove Street, shown as Lot "II" on
said Containing 1.722 acres gross, or 1.998 acres gross including the abutting portion of Grove
Street.
(Assessor Parcels 687-196-001 through 006, and 687-198-001 through 006)
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