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HomeMy WebLinkAboutRecorded doc 2015-128 2015-127 (2) - copy z �2 J 2015-0422082 20 09/23/2015 08:19 AM NO FEE DOCUMENT ***Customer Copy Label*** The paper to which this label is affixed RECORDING REQUESTED BY: has not been compared with the filedlrecorded document Peter Aldana County Of Riverside ssessor-County Clerk-Recorder WHEN RECORDED, MAIL TO: City of Cathedral City R A Exam: Attn: City Manager Page DA PCOR Misc Long RFD 1st Pg Adtl Pg Cert CC 68-700 Avenida Lalo Guerrero Cathedral City, California 92234 SIZE NCOR SMF NCHG T: PURCHASE AND PERFORMANCE AGREEMENT This Purchase and Performance Agreement (the "Agreement")is entered into effective this 2nd day of June, 2015 (the "Effective Date"), by and between the CITY OF CATHEDRAL CITY, a municipal corporation organized and existing under the laws of the State of California (the "City"), and VERANO RECOVERY, LLC, a California limited liability company (the "Developer"). Any reference hereafter to "Developer" shall also be deemed to include any successors to or assigns of Verano Recovery, LLC. The City and the Developer are sometimes individually referred to herein as a "Party" or jointly referred to herein as the "Parties." This Agreement bears, for record purposes only,the date of June 2, 2015 (the "Record Date"). RECITALS A. The Developer currently owns that certain real property in the City of Cathedral City, County of Riverside,State of California, more particularly described on Exhibit"A"-"Developer Property Description" attached hereto and incorporated by this reference and as further defined herein below (the "Developer Property"). The Developer Property is located in close proximity to the intersection of Landau and Vista Chino. B. The City owns the properties foreclosed upon and acquired by the City, some of which are located in Tract 28639-1, and the balance of which are located outside of Tract 28639-1 but inside the Specific Plan 97-55 adopted Ordinance No. 471 ("Specific Plan" and as further defined below), all of which is located in the City of Cathedral City, County of Riverside, State of California (the "City Property"). The City acquired properties are legally described in Exhibit "H" —"City Acquired Properties" attached hereto and incorporated by this reference. C. The City desires to sell to the Developer, and the Developer desires to purchase from the City,the City Property to develop residential single family homes (the "Project"),with the necessary infrastructure and amenities, in accordance with the Project approvals and amended 1 c@y plans. The City would not sell the City Property without all of the obligations of Developer under this Agreement. Together,the Developer Property and the City Property shall be combined for the development of the Project and be known as the Project Property(the "Project Property"). D. The Project Property will be developed with necessary infrastructure and amenities such that the lots may be legally developed by Developer, or by merchant builders who purchase lots from Developer,for the Project. E. On January 14, 1998, the City adopted Ordinance No. 471 approving Specific Plan 97-55, dated December 5, 1997, establishing land use and development standards for approximately 303 acres in the Rio Vista Village, Environmental Assessment 97-558, a Negative Declaration and a Notice of Determination filed on January 22, 1998, Tentative Tract Map 28639 ("TTM 28639"), and related conditions of approval affecting the Project Property. On that same date,the City adopted Resolution 98-3 which approved General Plan Amendment 97-67,and the City approved Resolution 98-4, approving TTM 28639. Ordinance 471 was subsequently amended by action of the City by Ordinance No. 556, in November of 2001 (collectively, the "Prior Approvals"). F. In conjunction with the Prior Approvals, the City Council approved the Negative Declaration and a Notice of Determination filed on January 22, 1998, and adopted applicable legally required findings. The Mayor and City Council certified that the Negative Declaration was legally adequate, and that it satisfied the requirements of the California Environmental Quality Act ("CEQA;" California Public Resources Code Section 21000 et seq.),the CEQA Guidelines (California Code of Regulations Section 15000 et seq.),and applicable ordinances and regulations of the City. G. On June 20, 2002, articles of incorporation for the Rio Vista Village Community Association ("Homeowners Association" or "HOA") were filed with the Secretary of State of California. H. On August 29, 2002, a Declaration of Covenants, Conditions, Restrictions and Reservation of Easements for Rio Vista Village Community Association was recorded as Document No. 2002-482548 in the Official Records of the County of Riverside, California ("Master Declaration"). 1. The Specific Plan, the tentative map for TTM 28639, and the boundary map for Community Facilities District (CFD) 2000-1 include 303 acres as generally depicted Exhibit "B"- "Project Property", attached hereto and incorporated by this reference. Tract 28639-1 was the first increment of TTM 28639 to be recorded. Subsequent maps were intended to subdivide the remainder parcel as well as several of the larger lots in TTM 28639. J. Although certain streets and other improvements were completed in Rio Vista Village, many improvements contemplated by the Specific Plan and the TIM 28639 have not been 2 completed (and not by way of limitation, include the Club House, streets, alleys, curbs, gutters, sidewalks, streetlights, backbone infrastructure, water and drainage improvements, and "dry utilities"); repairs on certain streets are necessary; the fence along the perimeter of the Specific Plan is in a state of disrepair; and blown sand has accumulated on the Project Property located in the Specific Plan. K. In 2014 and 2015,the Developer held several meetings with the City Manager and members of City Staff, as well as outside consultants representing both the City and the Developer, and outlined a proposal wherein Developer, or its successors or assigns, would complete the development of the Project,which is a portion of the Project Property covered by the Specific Plan, in a manner substantially consistent with the terms of the Specific Plan and related entitlements. L. The Specific Plan and any other discretionary land use approvals relating to the Project (including the Prior Approvals, to the extent not expired and not inconsistent) are incorporated herein by this reference, and collectively comprise the "Project Approvals." Any and all Maps and other future discretionary land use approvals relating to the Project shall become part of the Project Approvals upon receiving approval from the City. M. In conjunction with this Agreement,the Developer may(in the Developer's sole and absolute discretion)negotiate one or more agreements with the Homeowners Association (collectively the "HOA Agreement"),that provide for joint cooperation on the development and maintenance of certain landscape parkways and detention basins, parks,streets and alleyways, and adjoining landscaped areas,joint cooperation on the Letter of Map Revision (commonly referred to as a"LOMR")for the entire Project issued by the Federal Emergency Management Agency(commonly known as"FEMA"), architectural review and annexation of future phases,and processing of matters under the jurisdiction of the California Bureau of Real Estate,and, upon the occurrence of specified events,the Developer's conveyance to the Homeowners Association of certain real property(e.g.,commonly known as the circle park,alleys, retention basins,and the Club House). However, nothing in this Agreement obligates the Developer to enter into an HOA Agreement with the Homeowners Association. The Developer shall cause the construction of the improvements contemplated to be covered by the HOA Agreement, as generally described in Recital M hereto,with or without successfully obtaining the HOA Agreement with the Homeowners Association prior to the first anniversary of the Effective Date. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and mutual obligations contained in this Agreement, and in reliance on the representations and warranties set forth herein,the City and the Developer agree as follows: 1. RECITALS The recitals are true and correct and are hereby incorporated herein. 2. DEFINITIONS 3 • The following terms and their derivatives have the meanings set forth below wherever used in this Agreement, attached exhibits, or documents incorporated into this Agreement by reference: 2.1. Approved Plans. The term "Approved Plans" means the grading, building, plumbing, electrical, and other improvement plans already approved or to be approved by the City for the residences and other improvements to be constructed on the Project Property,as the same may be amended from time to time with the City's approval. 2.1.1. Prior Approvals. The term "Prior Approvals" means Specific Plan 97-55, General Plan Amendment 97-67, a Negative Declaration and a Notice of Determination filed on January 22, 1998,Tentative Tract Map 28639, and related conditions of approval affecting the Project Property that were adopted by City Ordinance No.471 on January 14, 1998. 2.1.2. Project Approvals. The term "Project Approvals" means the approvals identified in Recitals E and F, inclusive, of this Agreement, and any Maps and other discretionary land use approvals relating to the Project to the extent not expired and not inconsistent, and any and all maps and other discretionary land use approvals relating to the Project already approved or approved in the future by the City. 2.2. CFD 2000-1. The term "CFD 2000-1" means Community Facilities District No. 2000-1 of the City. CFD 2000-1 and the Specific Plan are coextensive, having the same boundaries. 2.3. City. The term "City" means the City of Cathedral City, a municipal corporation organized and existing under the laws of the State of California. Any reference hereafter to "City" shall also be deemed to include any departments,successors or assigns of the City of Cathedral City. 2.4. City Laws. The term "City Laws" means all City resolutions, codes, rules, regulations, and official policies, including but not limited to the City's General Plan, ordinances, resolutions,codes, rules, regulations, and official policies governing all aspects of this Agreement, including those governing land use, density, development standards, construction, and the like. 2.5. City Property. The term "City Property" means that certain real property, together with any improvements thereon, located in the City described and/or depicted on Exhibit "H"—"City Acquired Properties" attached hereto. 2.6. Club House. The term "Club House" means the club house buildings and related 4 improvements as shown as Phase 1 and 2 on Exhibit "C"—"Club House Phasing", attached hereto and incorporated by this reference,on the Club House Parcel. 2.7. Club House Parcel. The term "Club House Parcel" means Lot 294 of Tract No. 28639-1. 2.8. CVWD. The term "CVWD" means the Coachella Valley Water District. Any reference hereafter to "CVWD"shall also be deemed to include any successors or assigns of the Coachella Valley Water District. 2.9. CVWD Development Agreement. The term "CVWD Development Agreement" means the Domestic Water and Sanitation System Installation Special Agreement,dated November 12, 2002, and recorded as Document No. 2003-014704 of the Riverside County Records, between Rio Vista Land, LP, and the Coachella Valley Water District, as the same may be amended from time to time. 2.10. Days. The term "days" shall mean calendar days. Unless otherwise indicated, 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. 2.11. Dedicated Streets. The term "Dedicated Streets"shall mean those streets and alleys dedicated to the City, located within TTM 28639,whether or not completed. 2.12. Design Guidelines. The term "Design Guidelines"shall mean the Rio Vista Village Community Character Guidelines approved on April 18, 2001. 2.13. Development Impact Fees. The term "Development Impact Fees" means any fees or other monetary exactions which are established or contemplated under City ordinances or resolutions which are intended to defray the costs of public facilities or other amenities related to the Project. The Development Impact Fees do not include fees charged by the City for processing applications for City actions or approvals. 2.14. Developer. The term "Developer" means Verano Recovery, LLC, a California limited liability company. Any reference hereafter to "Developer" shall also be deemed to include property owned by Los Portales Recovery, LLC,Sol Recovery, LLC,Cassia at Rio Vista Recovery, LLC, Portales Recovery, LLC, as well as their successors and assigns and any successors to or assigns of Verano Recovery, LLC. 2.15. Developer Property. The term "Developer Property" means that certain real property,together with any improvements thereon, located in the City described and/or 5 depicted on Exhibit"A"-"Developer Property Description" attached hereto. 2.16. Effective Date. The term "Effective Date" of this Agreement is the date as first written above. 2.17. HOA Agreement. The term "HOA Agreement," as herein referenced in Recital M of this Agreement, means the one or more homeowners association agreement(s)the Developer (in the Developer's sole and absolute discretion) may negotiate and enter into with the current Homeowners Association, Rio Vista Village Community Association, concerning the development of the Project. 2.18. Homeowners Association. The term "Homeowners Association" or"HOA" means the Rio Vista Village Community Association, a California nonprofit corporation formed pursuant to the Nonprofit Mutual Benefit Corporation Law. Any reference hereafter to "Homeowners Association" shall also be deemed to include any successors or assigns of the Rio Vista Village Community Association. 2.19. Map; Map Act. The terms "map" or"maps," "tentative map" or"tentative maps,"whether capitalized or lower case,shall, unless specifically designated to the contrary, mean and refer to tentative subdivision maps,final subdivision maps,and tentative parcel maps and final parcel maps, all as defined in, and regulated by, California Government Code Sections 66410 et seq. (collectively,the "Subdivision Map Act" or the "Map Act"). 2.20. Master Declaration. The term "Master Declaration" means the Declaration of Covenants, Conditions, Restrictions and Reservation of Easements for Rio Vista Village recorded on August 29, 2002, as Document No. 2002-482548, in the Official Records of the County of Riverside, California, as the same may be amended from time to time in accordance with the provisions of such declaration and applicable law. 2.21. Phase. The term "Phase" or"Phases" shall refer to the phase or phases of development proposed by the Developer and set forth in Exhibit "F"—"Proposed Construction Phasing", attached hereto and incorporated by this reference; provided, however,that the Club House Phasing described in Exhibit "C"—"Club House Phasing"shall be referred to as "Clubhouse Phasing." 2.22. Proiect. The term "Project" means the residential community to be constructed on the 303 acres generally depicted on Exhibit"B"-"Project Property" attached hereto,which includes the Project Property. 2.23. Proiect Property. The term "Project Property" means that certain real property, together with any improvements thereon, located in the City described and/or depicted on Exhibit "B"- "Project Property" attached hereto. 6 2.24. PSRV Properties. The term "PSRV Properties" means the properties foreclosed upon by the City, and acquired by the City, located in TTM 28639 and Tract 28639-1,and inside the Specific Plan,which are to be transferred to the Developer. The PSRV Properties are also referred to as the "City Property" and are legally described in Exhibit"H"—"City Acquired Properties" attached hereto. 2.25. Public Streets. The term "Public Streets" shall mean the streets and alleys dedicated to the City by TTM 28639 or Tract 28639-1, or to be dedicated to the City,which are or will be, once constructed, located in the Tracts,together with the streets and alleys to be constructed in the balance of the Project. 2.26. RVVA Properties. The term "RVVA Properties" are Lots QQ, 279, 280, 282, 283, 284 and 285, owned by the entity Rio Vista Village Associates, LLC("RVVA"), as located in Tract 28639-1. 2.27. Specific Plan. The term "Specific Plan" means Specific Plan 97-55 which was approved by Ordinance No.471 adopted by the City on January 14, 1998, as the same may be amended from time to time. The Specific Plan and CFD 2000-1 are coextensive, having the same boundaries. 2.28. Tract;Tracts;Tract No. 28639-1;Tract 32559;Tract Property. The terms shall mean Tract No. 28639-1, comprised of 193.6 subdivided acres excluding the remainder parcel, in the City of Cathedral City, California, as recorded in Book 300, Pages 53 through 66, inclusive, or Tract 28559, comprised of 12.367 acres, in the City of Cathedral City, California, as recorded in Book 390, Pages 37 through 41, inclusive,of Maps, in the Office of the County Recorder of Riverside County, California. 2.29. Vested Provisions. The term "Vested Provisions" means the provisions of the Specific Plan,the terms and provisions in the other Project Approvals, and the City Laws,all as in effect as of the Effective Date. 3. DEVELOPER'S OBLIGATIONS 3.1. Phase 1:Actions To Be Taken By End Of First Year. Prior to the first anniversary of the Effective Date,the Developer shall cause all of the following actions to be taken: 3.1.1. Monuments. The final monuments in the Specific Plan area, as shown on the recorded maps of Tract No. 28639-1,Tract No. 32559 and Parcel Map 34148,have not been completely set,or are in some cases missing. The Developer will complete the setting of the monuments and the replacement of any missing monuments, so that all monuments are complete. The Parties recognize that this is a priority so that future builders and owners can reliably locate the lots. 7 3.1.2. Public Streets Improvements. Prior to the City's acceptance of the public streets,the Developer shall cause the public streets on Lots A through Z, inclusive, and Lots Al through A5, inclusive, of Tract No. 28639-1 (as generally described in Exhibit "D" —"Streets to be Dedicated to the City" and Exhibit"E"-"Depiction Of Streets To Be Dedicated To City With Maintenance Obligations", attached hereto and incorporated by this reference), to be constructed and/or slurry sealed to City standards, cause all damage to the constructed public street curbs in excess of normal wear-and-tear damage to be repaired,cause all cracks in the constructed public street sidewalks that present safety concerns to be repaired, cause all damage to the constructed public street cross-gutters in excess of normal wear-and-tear damage to be repaired, cause all disabled persons ramps on the constructed public streets to be modified to comply with current City standards, and cause all erected regulatory and directional signage for the public streets to be upgraded to meet the City's current standards for heights and locations of such signage. 3.1.2.a. Upon completion of the improvements as identified herein and the City's acceptance of said improvements,the Developer shall deed to the City in fee simple title the public streets and alleys in the Project. The City shall then convey the maintenance responsibilities including, but not limited to,the alleys, raised landscape medians, sidewalks, pedestrian ramps, parkways,street lights, and in-pavement trees and tree wells,to the Developer or City-approved designee by appropriate document. If said designee is the Homeowners Association,then conveyance of maintenance responsibilities will be through an amendment to the Master Declaration or other appropriate document. 3.1.2.b. The above-noted maintenance responsibilities are notwithstanding City Municipal Code Section 14.12.010, Duty to Maintain, regarding adjacent property owners' responsibility for repairing and maintaining public improvements. 3.1.3. Alley Improvements. All constructed and completed alleys on Lots AA through EE, inclusive, Lots LL through PP, inclusive, Lot GG, and a portion of Lot FF in the Project shall be deeded and maintained as noted in 3.1.2 above. 3.1.4. Construction Improvements for the Completed Construction Area. The Developer shall cause the following missing improvements within the completed construction area as depicted on Exhibit "F" —"Proposed Construction Phasing", attached hereto,to be completed within the first anniversary year (Phase A) in accordance with the Approved Plans and City standards: (a) Missing sidewalks; 8 (b) Final pavement cap and fog seal; (c) Missing curbs and gutters; (d) Missing backbone street infrastructure for Rio Vista Drive, Rio Rosalia Drive, Rio Oso Road, Rio Felicia, Rio Madre Drive, Rio Largo Drive, and Avenida Quintana Drive; (e) Water and sewer improvements; (f) Drainage improvements; (g) Signage and striping(including adjustment to current existing signs to meet current codes and standards); (h) Missing Street lights within the Completed Construction Area, as defined in Exhibit"F"-"Proposed Construction Phasing" attached hereto;and (i) Parkway landscaping and irrigation. 3.1.5. Sand Removal. The Developer shall cause the blown sand that has accumulated in the public spaces within the Project Area boundaries as of the Effective Date to be removed and properly disposed of in accordance with all applicable laws.The Developer shall remove and properly dispose of the blown sand that is within the public spaces of the Project Property for the term of this Agreement. In addition, in order to deter the formation of sand dunes,the Developer shall cause all existing chain link green fabrics and wooden snow fences in the Project Area to be removed and replaced with a sand deterrent acceptable to the City. 3.1.6. Perimeter Fence. In order to deter trespassing and the illegal dumping of trash and other debris on the Project Property,the Developer shall cause the chain link fence around the perimeter of the Project Property to be repaired and maintained to the satisfaction of the City for the term of this Agreement. 3.1.7. Club House Improvements. The Developer shall cause the repair and renovation to the Club House, including,without limitation, repair and renovation to the exterior walls of all three buildings;the hardscape and walkway improvements;the landscaping and irrigation improvements; and Pool No. 1. The Developer shall remodel and restore and/or complete in accordance with the Approved Plans to a condition acceptable to the City,the interiors of the restroom shower facilities and the middle office building in "Phase 1 Remodeling" as depicted on Exhibit"C"—"Club House Phasing" attached hereto. Such remodeling and restoration activities shall include, 9 without limitation, electrical work to the Club House buildings and facilities and re- painting the exterior of the Club House buildings. The North and South interiors of Community Rooms shall be completed subsequently as home building warrants and may extend into Phase B of the Project. Upon completion of the Club House Improvements to the satisfaction of the City,the City will issue the Developer a Certificate of Occupancy, limited to the remodeled and rehabilitated areas,for the Club House. 3.2. Phase 2: Actions To Be Taken By End Of Fifth Year. Prior to the fifth (5th) anniversary of the Effective Date,the Developer shall cause the following actions to be taken: 3.2.1. Remaining Club House Improvements. The Developer shall cause the remainder of the Club House improvements not completed in Phase 1- Remodeling, including, but not limited,the North and South interiors of Community Rooms and other such remaining improvements in "Phase 2 Remainder" as depicted in Exhibit "C"- "Clubhouse Phasing" attached hereto, to be completed in accordance with the Approved Plans to a condition reasonably acceptable to the City prior to the fifth (5th) anniversary of the Effective Date. The City shall grant no Certificate of Occupancy or Certificate of Completion to Developer until the Club House improvements are complete to a condition reasonably acceptable to the City except as referenced in Section 3.1.7. for the work completed within Phase 1 Remodeling. 3.2.2. Backbone Street Infrastructure. The Developer shall cause the sidewalks, pavement and fog seal, curbs and gutters, water and sewer improvements, drainage improvements, signage and striping, street lights, parkway landscaping and irrigation systems, and other backbone street infrastructure for the PSRV parcels to be completed and maintained in accordance with the public streets and alleys, as depicted on Exhibit "F"- "Proposed Construction Phasing" attached hereto. Notwithstanding the foregoing, in the event the Developer is unable to complete the backbone street infrastructure improvements for Phase 3, as depicted on Exhibit "F"- "Proposed Construction Phasing" attached hereto, by the fifth (5th) anniversary of the Effective Date,the date by which such improvements shall be completed and the term of this Agreement shall be extended for three (3) additional years,as described below,without any modification of the other terms and provisions of this Agreement. During the three (3)year extension,the Development Impact Fees will be those normally charged by the City as of the commencement of the three (3)year extension. 3.2.3. CVWD Improvements. The Developer shall cause all CVWD water improvements for the Project Property to be completed in accordance with the timeline and milestones set forth in the CVWD Development Agreement, and through the sales of second tranche of bonds or a new bond issuance if possible. It is expressly agreed herein that no Certificate of Occupancy or Certificate of Completion will be issued for any 10 residence or unit for which CVWD will not issue a "will serve"letter. 3.3. Taxes and Assessments. Ad valorem taxes and assessments, if any, on the Project Property and taxes upon this Agreement or any rights hereunder levied, assessed or imposed, whether delinquent or prospective, as to any following the Close of Escrow, shall be borne by Developer. 3.4. Developer's General Obligations. The Parties agree that the intent of this Agreement is to allow and require the Developer to improve the Project to a condition such that subdivided property within the Project can be transferred to merchant builders, all to the end goal of permitting the completion of the development originally contemplated by the Prior Approvals. The Developer believes that the tasks assumed by it, when taken with the City's Obligations as described in Section 4. below, will be sufficient to accomplish the general obligations identified herein. The Developer agrees that to the extent that issues arise which were not contemplated by this Agreement but which are required to enable the Developer to meet its general obligation, it will be solely responsible for resolving said issues at its sole cost and expense. Other than as to such actions as are heretofore described, this Agreement does not obligate the Developer, or its successor(s) or assign(s)to take any further obligations with respect to the Project or the Project Property, other than those which are necessary to complete the Developer's express obligations and meet its general obligations. 4. CITY'S OBLIGATIONS 4.1. Obligations of City Generally. The Parties acknowledge and agree that Developer's agreement to perform and abide by its covenants and obligations in this Agreement is a material consideration for City's agreement to perform and abide by the covenants and obligations of City and for City's agreement to sell Developer the City Property,as set forth herein. 4.2. Protection of Vested Rights. To the maximum extent permitted by law, City shall take any and all actions as may be necessary or appropriate to ensure that the rights provided by this Agreement are vested, applicable to the Project, and may be exercised by the Developer and/or its successors in interest and binding on the City. Any city laws on other actions will not apply to the Project to the extent provided herein. The City agrees to make best efforts to preserve the provisions and intent of the Project Approvals and this Agreement, including: (i) to • preserve current entitlement per the approved Specific Plan; (ii) to guarantee density to a maximum of 1,362 units; (ii) to not be subject to any moratorium declared under the City's discretion; and (iii) to not be subject to CFD 2006-1 (Improvement Districts for Police, Fire, Paramedics and Parks). 4.3. Development Impact Fees. During the five (5) year period commencing on the Effective Date and ending on the fifth (5th) anniversary of the Effective Date,the City shall freeze the rate of the Development Impact Fee schedule, commencing on the Effective Date, and shall 11 not increase the rate of any of the Development Impact Fees controlled by the City, described on Exhibit "G"- "Schedule of Development Impact Fees", attached hereto and incorporated by this reference, nor require the payment of any Development Impact Fees controlled by the City other than those shown on Exhibit "G"- "Schedule of Development Impact Fees" hereto in connection with the development and construction of improvements in the Project. The freeze of the rate of the Development Impact Fees shall not apply to any extension of time under this Agreement; and the Development Impact Fees shall return to the regular rate controlled by the City upon the fifth (5th) anniversary of the Effective Date. Nothing contained in this Agreement shall be deemed in any way to restrict the inherent powers of the City or to prevent an increase in development fees applicable to projects other than the Project. The applicable pro rata share of any Development Impact Fees shall be paid by the Developer, or if applicable, by the merchant builder,to the City at the time of the issuance of a building permit for the construction of a structure within the Project. In computing the amount of any Development Impact Fees due under the Quimby Act or any other law requiring the payment of Development Impact Fees for parkland or recreational facilities, the City shall credit the Developer for the parks and recreational improvements in the Project in accordance with Section 9.106.120 of the Cathedral City Municipal Code. 4.4. Financing Plan; Acquisition of PSRV Properties. The City shall generally cooperate with and support the Developer's efforts to refinance the CFD 2000-1 described on Exhibit "I"- "Public Facilities Financing Mechanism", attached hereto and incorporated by this reference, to the extent that such Financing Plan is not in violation of any law or regulation of any governmental entity having jurisdiction with respect thereto and is not in conflict with any fiduciary obligation of the City, to obtain additional bond issuance under the CFD 2000-1 or to support the creation of a new CFD to handle additional infrastructure improvements needed for the balance of the build-out of the Project. Without any limitation of the foregoing,the City shall also generally cooperate with and support the Developer's efforts to implement those portions of the Financing Plan requiring: (a)the CFD 2000-1 to sell and convey the PSRV Properties; and (b)the CFD 2000-1 to waive any and all penalties, administrative and collection fees, and interest that may be owed to CFD 2000-1 as a result of the non-payment of any assessments for the PSRV Properties and the properties described on Exhibit"J"-"Cassia,Sol &Verano Delinquent CFD 2000- 1",attached hereto and incorporated by this reference. In addition,if requested by the Developer by written application and if the request is valid under any and all applicable laws or regulations and if the City reasonably determines that doing so will not cause serious negative impacts to the City's credit rating, the City, upon receipt of payment from Developer for costs, shall initiate proceedings for the establishment of one or more new public facilities districts, community facilities districts, landscape maintenance districts or other similar financing mechanisms in accordance with the Financial Plan set forth in Exhibit "I"- "Public Facilities Financing Mechanism" attached hereto. The City's obligations in this regard shall be subject to and consistent with the City's ordinances and policies, regarding use of public financing, as well as any applicable provisions of state or federal law. 12 The Parties acknowledge that the issuance of bonds in connection with the financing plan is contingent upon market conditions over which neither Party has any control. The City agrees to use reasonable efforts to accomplish the financing plan, but the Developer recognizes that the City will not authorize any plan that in the opinion of the City Council is ill-considered, unfair, excessively expensive or otherwise a violation of the City's obligations to its current and future residents, and that the City cannot waive or contract away those obligations. 4.5. Maintenance of Properties. The City will use its best efforts to have the RWA Properties maintained per City Municipal Code as described in Section 2.26 included herein. 4.6. Flood Hazard Map Revisions. The City shall generally cooperate with and support the Developer's efforts in filing a Letter of Map Revision ("LOMR") to obtain modifications to the flood hazard maps maintained by the Federal Emergency Management Agency (FEMA) that are applicable to the Project Property. 4.7. CVWD Development Agreement. The City shall, to the extent not in violation of any existing City obligation, generally cooperate with and support the Developer's efforts to: (i) obtain modifications to the CVWD Development Agreement; (ii) use CFD Bond proceeds to support the offsite infrastructure; i.e. Reservoir, pipelines, access road easements, etc.; (iii) negotiate the Domestic Water and Sanitation System Installation Special Agreement, dated November 12, 2002,if necessary, between CVWD and Rio Vista Land Company,and the revision of the Domestic Water and Sanitation System Installation Special Agreement, dated October 27, 2003,from Steve Robbins of CVWD to Lynn Burnett with a revised "Appendix A". 4.8. Road Easement to Offsite Reservoir Site. The City shall make its best effort to assist the Developer in the perfection of the existing Road Easements over the real properties as described in the Easement Documents, Instrument Nos. 20498, 20499, 20500 and 20501 recorded February 3, 1982(copies of which are included in Exhibit"1"—"Road Easement to Offsite Reservoir Site" attached hereto and incorporated by this reference) and to cooperate with the Developer with the construction of said road to a standard that minimally satisfies CVWD requirements. Responsibilities for construction and maintenance of said roadway have yet to be determined and the City and the Developer acknowledge same. The Parties hereby agree that the City shall not be responsible for maintenance of said roadway until the public roadway is fully improved, curb to curb. 4.9. Acceptance of Subsequent Subdivisions. Notwithstanding any language in this Agreement to the contrary, all future subdivisions within the Specific Plan will require the submission of tentative maps,will go through the normal subdivision process in order to subdivide property within the Specific Plan, and nothing herein shall preclude or inhibit the City's requirement of subdivision improvement agreements with each map, and the ability to require standard improvement securities to guarantee completion of improvements within specified time periods. However,future subdivision projects shall receive expedited processing if requested and 13 available. Property Owner shall be responsible for any cost associated with expedited processing. 4.10. Indemnity Agreement. The City agrees to indemnify First American Title Insurance in accordance to the terms and provisions set forth in Exhibit "K"- "Indemnity Agreement", attached hereto and incorporated by this reference. 4.11. CFD 2000-1 Taxes, Penalties, Fees, Assessments and Interest. The City will insure that all CFD related Taxes, Penalties, Fees, Assessments and Interest will be current for all parcels listed on Exhibit "H"- "City Acquired Properties" and Exhibit "J" "Cassia, Sol &Verano Delinquent CFD 2000-1", attached hereto, as of the close of escrow upon the payment made pursuant to Section 7. The City and their CFD consultant will work together to ensure that the Assigned CFD Taxes for the tax year 2015/2016 will be calculated according to the formula required within the bond offering documents based upon the reserve account considered fully funded and their being no delinquencies for undeveloped properties within the CFD. 5. PROJECT DEVELOPMENT REQUIREMENTS 5.1. Standard of Development. The Project shall be developed in accordance with the Project Approvals and this Agreement. Except as specifically provided herein, during the Term of this Agreement (see Sections 6.1. and 6.2.), the permitted uses within the Project, the density and intensity of use, maximum height and size of buildings, other zoning standards, the Y g requirements for reservation or dedication of land for public purposes, the mitigation requirements and all other terms and conditions of development of the Project shall be those set forth in the Project Approvals. 5.2. New City Laws. City Laws which are enacted, adopted, or imposed by initiative or referendum after the Effective Date may be applicable to the Project and the Project Property, but only to the extent that: (a) such new City Laws are not inconsistent with and do not conflict with the Applicable City Laws and the Project Approvals; (b) do not diminish any of the Developer's rights under this Agreement or increase any of the Developer's obligations under this Agreement; and (c) are not inconsistent with and do not conflict with any of the terms of conditions of this Agreement. Developer reserves the right to challenge in court any City Laws that would conflict with the Applicable City Laws or any portion of this Agreement or adversely impact the development rights provided in this Agreement. 5.3. Tentative Maps, Permits and Other Approvals. In accordance with the provisions of Government Code Section 66452.6, all tentative maps, and all permits and other approvals, shall be extended,from time to time in accordance with state and local law, pursuant to application by the Developer,consistent with the term of this Agreement. The number of phased final maps that may be filed shall be determined by the City's Subdivision Map Act, is subject to appeal to the Mayor and City Council, at the time of approval or conditional approval of a tentative map. Such tentative and final maps shall comply with State and Federal laws. The Vested Provisions may be 14 modified only by the City as it determines to address a compelling public necessity regarding health and safety that cannot reasonably be addressed by other means, or as otherwise provided in this Agreement. The life of the Tentative Tract Map shall follow State allowances. A substantial conformance process would allow changes to comply with current design standards,water quality issues or similar changes, or modifications to the Project to transfer density may be made by staff determination,appealable to the Planning Commission at a public hearing. 5.4. Timing of Development. The Parties acknowledge that development of the Project will be affected by numerous factors outside the control of the Developer (e.g., general economic conditions, interest rates and market demand, etc.). Developer agrees to use best efforts to develop the Project in such order and at such rate and times as stated herein. Nevertheless, the Parties hereby acknowledge and agree that the Developer may develop the Project in such order and at such rate and times as are appropriate within the Developer's business judgment,subject to compliance by the Developer with the Project Approvals and such other conditions and requirements imposed by the City and not in conflict with this Agreement. 6. TERM OF AGREEMENT 6.1. Initial Term. The initial term of this Agreement shall be five (5)years,commencing on the Effective Date of this Agreement, and shall be subject to the extensions set forth in Section 6.2. below. 6.2. Extensions of Initial Term. As set forth in Section 3.2.2. of this Agreement, in the event the Developer is unable to complete the backbone street infrastructure improvements, as depicted on Exhibit "F"- "Proposed Construction Phasing" attached hereto, by the fifth (5th) anniversary of the Effective Date, the date by which such improvements shall be completed and the term of this Agreement shall be extended for three (3) additional years, without any modification of the other terms and provisions of this Agreement (excluding the provisions relating to Development Impact Fees as set forth in Section 4.3.). The City and the Developer may,but are not obligated to, agree in writing to further extensions of the term of this Agreement that may be appropriate in connection with the development and construction of improvements on the Project Property and are permitted by law. 6.3. Reimbursement for Oversize Public Improvements. Public facility improvements that are currently considered are offsite-roads and water infrastructure. This includes oversizing of improvements to provide more capacity than the Project's needs require. Such improvements would be subject to reimbursement per Section 14.32 of the Cathedral City Municipal Code unless reimbursement is provided by another jurisdiction for that portion that is oversized. Only land outside the ownership of the Project Property shall pay the reimbursement as part of improvements subject to this provision. 6.4. Compliance with Laws. The Project will comply with all applicable laws,ordinances, 15 rules and regulations of federal, state and local governments and agencies having jurisdiction over either the Developer or the Project Property and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency. All permits, consents, permissions and licenses required by any federal, state or local government or agency to which the Developer or the Project Property is subject, which may be necessary in relation to this Agreement or the acquisition, development, construction, or ownership of the Project, at,or prior to,the commencement of construction have been obtained, and none of such consents, permissions and licenses are subject to appeal or to conditions which have not been met. 6.5. Amendment of Agreement. 6.5.1. Formal Amendment. This Agreement, including the term hereof, may be amended from time to time by mutual consent of the Parties. Consent by the City shall mean an affirmative vote of the City Council. 6.5.2. Clarification. The foregoing notwithstanding, the Parties and further development of the Project may that refinements a p � y demonstrate that changes are appropriate with respect to the details and performance of the Parties under this Agreement. If and when the Parties find that changes or adjustments are necessary or appropriate, which changes do not necessitate a formal amendment of the Agreement as determined by City in the exercise of its discretion, they shall, unless otherwise required herein or by law, effectuate the changes or adjustments as follows: 6.5.2.a. Community Development Director Authority. Subject to appeal permitted by the Municipal Code, the Community Development Director shall have the authority over the following requests for change or modification: (i) Approval of minor site plan revisions; (ii) Changes in Project infrastructures; (iii) Product types; (iv) Annual review and approval of the Mitigation Monitoring and Reporting Program; (v) Minor revisions to Design Guidelines; (vi) Density transfer between Planning Areas without 16 exceeding to top number of units allowed by the approved Specific Plan. 6.5.2.b. Planning Commission Authority. Subject to appeal permitted by the Municipal Code, the Planning Commission shall have the authority over following requests for change or modification: (i) Change in total number of proposed Units; (ii) Approval of major site plan revisions; (iii) Major revisions to Design Guidelines; and (iv) Minor revisions to land use when uses could be considered accessory to approved uses; and (v) Increase/decrease in number of lots. 6.5.2.c. City Council Authority. Subject to a pp eal permitted by the Municipal Code, the City Council shall have the authority over the following requests for change or modification: (i) Alteration of the permitted uses of the Project Property; (ii) Increase in the intensity of use or the number of lots; (iii) Deletion of a requirement for the reservation or dedication of land for public purposes except for minor boundary adjustments approved by the Community Development Director;and (iv) Extension of the Term 7. PURCHASE PRICE;TERMS OF PAYMENT 7.1. Purchase Price. The Initial Payment and the Second Payment, together, shall result in a total purchase price of Two Million One Hundred Seven Thousand Seven Hundred Sixty-One Dollars ($2,107,761)for the City Property. 7.2. Initial Payment. The Developer shall pay, on or before July 15, 2015, One Million Five Hundred Thousand Dollars ($1,500,000) in cash, which amount is sufficient to restore in full the CFD Reserve Account. 17 7.3. Second Payment. The Second Payment of Six Hundred Seven Thousand Seven Hundred Sixty-One Dollars ($607,761) in the form of a Promissory Note secured by a Deed of Trust against the four (4) PSRV parcels (677-050-031-9, 677-050-032-0, 677-050-033-1, and 677-050-034-2). The Second Payment shall bear no interest if paid as agreed and shall be due and payable by the Developer to the City on or before June 25, 2016. 8. ESCROW 8.1. Title Company. The City and the Developer agree to establish an escrow for the purchase and sale of the City Property at First American Title Insurance ("Title Company"); located at 72-690 Fred Waring Drive, Palm Desert, CA, 92260; Attention: Sharon Elkins; (the "Escrow Agent"). The escrow shall be opened with the Escrow Agent within ten (10) days from the Effective Date of this Agreement. 8.2. Escrow Agent Duties. The City and the Developer shall provide and execute such additional escrow instructions consistent with this Agreement as shall be necessary or required by the Escrow Agent. The Escrow Agent is hereby empowered to act under this Agreement, and, upon indicating its acceptance of this Section in writing, delivered to the City and the Developer, within five (5) calendar days after the establishment of the escrow, shall carry out its duties as the Escrow Agent hereunder. 8.3. Delivery of Documents. The City and the Developer shall deliver to the Escrow Agent all documents necessary for the conveyance of title to the City Property, to the extent provided in this Agreement, in conformity with,within the times, and in the manner provided in this Agreement. 8.3.1. Delivery by City. The City shall timely and properly execute, acknowledge and deliver to the Escrow Agent the Grant Deed conveying to the Developer title to the City Property in accordance with the requirements of this Agreement. 8.3.2. Delivery by Developer. The Developer shall timely provide to the City the Promissory Note and Deed of Trust, which shall be validly approved by resolution of Board of Directors. The Board of Directors shall also provide to the City a resolution approving this Agreement, including all transactions contemplated herein. 8.4. Escrow Fees. The City and the Developer shall each bear responsibility for certain costs and fees relating to the escrow determined in compliance with local practice escrow fees and costs, the City shall pay any applicable County and City Documentary Transfer Fees, if not otherwise exempt, and the Parties shall remit all such amounts due by them under the terms of this Agreement to the Escrow Holder not less than three (3) business days before the scheduled Close of Escrow(as defined below). 18 8.5. Preliminary Title Report. The Escrow Agent shall cause a Preliminary Title Report to be prepared and issued by First American Title and shall promptly provide the City and the Developer with copies thereof along with legible copies of all reported title exceptions.The City and the Developer must approve the Preliminary Title Report in writing as a condition precedent to Close of Escrow. Developer shall deliver the Purchase Price to the Escrow Agent in accordance with the Escrow Agent's usual requirements. 8.6. Escrow Funds. All funds received in escrow 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 to this Agreement who shall have made the deposit thereof with the Escrow Agent. 8.7. Escrow Agent Communications. All communications from the Escrow Agent to the City and the Developer shall be directed to the respective Parties at the addresses set forth in Section 9.8. of this Agreement for notices, demands and communications between the City and the Developer. 8.8. Close of Escrow. Close of Escrow shall occur on or before July 15, 2015 (the "Escrow Closing Date"). If for any reason the Close of Escrow has not occurred on or before the Escrow Closing Date, then any Party not then in default of this Agreement may cancel the Escrow and terminate this Agreement without liability to the other Party or any other Person for such cancellation and termination, by delivering written notice of termination to both the other Party and the Escrow Agent. Without limiting the right of either Party to cancel the Escrow and terminate this Agreement, pursuant to the preceding sentence, if the Escrow does not close on or before the Escrow Closing Date, and neither Party has exercised its contractual right to cancel the Escrow and terminate this Agreement before such time, then the Escrow shall close as soon as reasonably possible following the first date on which the Escrow Holder is in a position to close the Escrow, pursuant to the terms and conditions of this Agreement. 9. GENERAL PROVISIONS 9.1. Conflicts of interest. The Developer and City each warrants and represents,to the best of its present knowledge, that no public official of the City who has been involved in the making of this Agreement, or who is a member of a City board or commission which has been involved in the making of this Agreement,has or will receive a direct or indirect financial interest in this Agreement or the Project in violation of the rules contained in California Government Code Section 1090, et seq., pertaining to conflicts of interest in public contracting. The Developer and the City shall each exercise due diligence to ensure that no such official will receive such an interest. The Developer and City each further warrants and represents, to the best of its present 19 knowledge and excepting any written disclosures as to these matters already made to the other Party,that (1) no public official of the City who has participated in decision-making concerning this Agreement or the Project or has used his or her official position to influence decisions regarding this Agreement or the Project, has an economic interest in the Developer or the Project, and (2) neither the Project nor this Agreement will have a direct or indirect financial effect on said official, the official's spouse or dependent children, or any of the official's economic interests. The Developer and City each agree to promptly disclose to the other Party in writing any information it may receive concerning any such potential conflict of interest. The Developer's attention is directed to the conflict of interest rules applicable to governmental decision-making contained in the Political Reform Act(California Government Code Section 87100, et seq.) and its implementing regulations(California Code of Regulations,Title 2,Section 18700,et seq.). 9.2. Nonliability. No member,official,employee,or agent of the City or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Developer or successor under the terms of this Agreement. 9.3. Developer's Warranties and Representations. The Developer represents and warrants to the City that: (a)the Developer is duly organized,validly existing and in good standing under the laws of the State of California; (b) the Developer is the true and correct owner of the Developer Property described on Exhibit"A"-"Property Legal Description" attached hereto;(c)the Developer has full right, power and lawful authority to enter into and perform the obligations of the Developer under this Agreement; and (d) the execution, performance and delivery of this Agreement by the Developer has been fully authorized by all requisite actions on the part of the Developer. 9.4. City's Warranties and Representations. The City warrants and represents to the Developer that: (a)the City is a municipal corporation organized and existing under the laws of the State of California; (b)the City has full right, power and lawful authority to enter into and perform the obligations of the City under this Agreement, and (c)the execution, performance and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of the City. 9.5. Amendments. Any amendment to this Agreement must be in writing, approved by a majority vote of the City Council, and must be executed by both the City and the Developer or the Developer's successor in interest. 9.6. Time. Time is of the essence in the performance of this Agreement. 9.7. Delay. Performance by either Party under this Agreement shall not be deemed to be in default where delays or default are due to war, acts of terrorism, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, unusually severe 20 weather, acts or failure to act of any public or governmental agency or entity with respect to Project permitting (provided that acts or failure to act of the City shall not extend the time for the City to act hereunder), or any other causes beyond the control or without the fault of the Party claiming an extension of time to perform; provided, however, that a Party's lack of funds or financing shall not be deemed to be a cause beyond the control of such Party. An extension of time for any such cause 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 Party within thirty days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the City and the Developer. 9.8. Notices, demands and communications. Notices, demands and communications under this Agreement shall be given in writing by any commercially accepted means to the principal offices of a party as follows,or if any such office is relocated,to the new address specified by the relocated Party: To City: City of Cathedral City Attn:City Manager City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, California 92234 With a copy to: Green de Bortnowsky, LLP Attn: Charles Green,City Attorney 23801 Calabasas Road,Suite 1015 I Calabasas, California 91302 Facsimile: (818)704-4729 To Developer: Verano Recovery, LLC c/o Inland Communities Corp. Attn:Jim Ahmad, President 6430 W Sunset Boulevard,Suite 460 Los Angeles,CA 90028 Facsimile: (323)874-8800 With a copy to: Gallagher&Moore Attn: Frederick C. Moore, Esq. 2 Park Plaza,Suite 680 Irvine, CA 92614 Facsimile: (949)955-2875 If mailed,the written notice shall be deemed received and shall be effective three(3) 21 business days after deposit in the United States mail in the State of California or upon actual receipt by the addressee if earlier. 9.9. Covenants Run With The Land. All of the terms, provisions, covenants, and obligations contained in this Agreement shall be binding upon the Parties and their respective heirs, successors and assigns, and all other persons or entities acquiring all or any portion of the Project Property, or any interest therein,whether by operation of law or in any manner whatsoever, and the rights thereof shall inure to the benefit of such Parties and their respective heirs, successors and assigns. The Parties intend that the covenants contained in this Agreement shall constitute covenants running with the land and shall bind the Project Property and every person having an interest in the Project Property during the term of this Agreement. The Developer agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Project Property. 9.10. No Damages Relief Against City. The Parties acknowledge that City would not have entered into this Agreement had City been exposed to damage claims from the Developer for any breach of this Agreement. As such,the Parties agree that in no event shall the Developer be entitled to recover damages against City for the breach of this Agreement. 9.11. Violations. 9.11.1. Violation by the Developer. The Developer shall be deemed in violation of the terms of this Agreement if a finding and determination is made by the City Manager, upon the basis of substantial evidence, however received,that the Developer has not complied with one or more of the material terms or conditions of this Agreement, or if, at the end of the Term, as extended, if applicable,the Developer has not met its general obligations as set forth in Section 3. hereof. A default on the part of an assignee after an assignment pursuant to Section 9.15., below, of this Agreement shall not constitute a violation of this Agreement by the Developer. 9.11.2. Violation by City. 9.11.2.a. The City shall be deemed in violation of the terms of this Agreement upon failure of the City to carry out any of its obligations hereunder, except that, notwithstanding any language or provision to the contrary in this Agreement,the City shall not be required to take any action or omit to take any action which is illegal and/or outside its powers and jurisdiction, and a refusal to take such action or to omit to take such action cannot constitute a breach of this Agreement by the City. 22 9.11.2.b. If the Developer believes the City to be in violation of this Agreement,the Developer promptly shall notify the City, in writing,through its City Manager, with a copy to the City Attorney,to that effect, setting forth the grounds upon which a violation is claimed,facts in support of such grounds,and the means through which such violation may be cured. The City shall have thirty (30) calendar days following the date of receipt of the notice within which to take action to deny the claim,cure the violation or undertake substantial action toward the cure. If the City fails to cure the noticed alleged violation within the time provided,the Developer may pursue such remedies which are legally afforded to it which are not in violation of this Agreement. 9.11.2.c. If the action of the City is unsatisfactory to the Developer,the Developer may make an appeal to the City Council, provided that, within ten (10) days following the date of receipt of the notice of denial of the claim, or within ten (10) days following the date of expiration of the cure period described in the preceding paragraph, whichever occurs first,the Developer files with the City Clerk a notice of appeal to the City Council. The City Council thereafter shall consider this matter on the agenda of its next regularly scheduled meeting,which shall be an open meeting but not a public hearing, at which the Developer and City staff may present information regarding the alleged violation. Based upon the information presented by the Developer and/or City staff,the City Council shall make a determination as to whether the City is in violation of this Agreement, as alleged by the Developer. 9.11.3. Enforcement of Agreement. Subject to the prior exhaustion of all administrative remedies set forth in Sections 9.11.1. and 9.11.2. above, each party hereby waives all rights save for the right of specific performance or other equitable remedy against the other hereunder and otherwise specifically set forth herein. This specifically constitutes an expression of the intent of the Developer, its heirs,successors and assigns,joint venturers and all others bound hereby, and the City to be a waiver of any alleged Constitutional violations that may be waived by the Parties and, as specified in Section 9.14., below, a waiver of any and all contractual damages of whatever source or type. Any such equitable action or proceeding shall be brought in the Superior Court of Riverside County,State of California,or in an appropriate federal court. 9.12. Attorneys'fees. In the event any legal action is commenced to interpret or to enforce the terms of this Agreement as a result of any breach of this Agreement,the party prevailing in any such action shall be entitled to recover against the party not prevailing all reasonable attorneys'fees and costs incurred in the action. 9.13. Developer Default. No building permit shall be issued or building permit application accepted for any structure on the Project Property with the exception of any 23 structure to be constructed by a merchant builder who acquired the Project Property on which such structure is located from Developer, and who is otherwise in compliance with all requirements for the issuance of said permit, after the Developer is determined by City to be in default of the terms and conditions of this Agreement in accordance with Section 9.11.1., above, of this Agreement, and until such default thereafter is cured by the Developer or is waived by the City. 9.14. Waiver. All waivers of any rights, duties or obligations under this Agreement must be in writing to be effective or binding upon the waiving party, and no waiver shall be implied from any omission by a Party to take any action with respect to any event of default. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party shall not constitute waiver of such party's right to demand strict compliance by such other Party in the future. No express written waiver of any event of default shall affect any other event of default or cover any other period of time specified in such express waiver. 9.15. Developer's Right to Assign or Transfer. The Developer may not assign or transfer any of its rights or interests under this Agreement without the express written consent of the City. The City hereby expressly consents that the Developer may assign its rights and obligations under this Agreement to any other person or entity("Assignee"), at any time during the term of this Agreement, on the terms and conditions set forth in this Section (including all subsections hereof). 9.15.1. Restrictions. Any assignment of the Developer's rights or obligations under this Agreement must meet the following requirements: (i)The assignment(a) must occur in connection with sale, hypothecation or other transfer of a legal or equitable interest in the Project Property or a portion thereof, including any foreclosure of a mortgage or deed of trust or a deed in lieu of foreclosure, or in connection with formation of a new entity which is the assignee and in which the Developer is a partner, member or other form of co-owner,or(b) must result from the formation, by the Developer, of a new legal entity, in which the Developer has an interest,which will own all or a portion of the Project Property; and (ii)the assignee must demonstrate the following,to the reasonable satisfaction of the City Manager: (a)the ability to perform or secure any public improvement obligations required by the City in connection with the Project phase or other interest being transferred, as identified in the conditions of approval of the applicable subdivision map or elsewhere in the Project Approvals; (b) the financial capabilities to meet the obligations of this Agreement as they relate to that portion of the Project assigned to Assignee; and (c) its expertise in managing projects similar in size to the Project phase or other interest being assigned. The City shall give the Developer written notice of its satisfaction or dissatisfaction with the proposed Assignee within thirty (30) calendar days of receipt by the City of the information the City requires pursuant to this Section. If it fails to do so,the Developer may give written 24 notice to the City of its failure to respond, indicating that the City must do so within thirty (30) days of the receipt by the City of the Developer's notice or the City's approval will be deemed to have been given. The City's failure to timely communicate to the Developer its approval or disapproval within said ten (10) days period shall result in City being deemed to have approved the proposed assignment. The City shall,to the extent permitted by law,treat all such information as confidential and proprietary,to be made available solely to City officials and staff required to review it in order to carry out the purposes of this paragraph. If the Developer assigns less than its full interest in the Project or the Project Property,this Agreement shall be binding on the Assignee and on the Developer,to the extent of the interest of each. 9.15.2. Notice Requirement. The Developer shall give the City prior written notice of any such assignment, including a copy of all documents executed by the Developer and the Assignee in connection with the assignment, and the Assignee shall provide the City with notice acknowledging its acceptance of its obligations hereunder as a successor in interest to the Developer. Upon such assignment,the acceptance thereof by the Assignee and provision of the required notices to the City by both the Developer and the Assignee,the Developer shall be relieved of its rights and obligations hereunder to the extent that such rights and obligations have been specifically transferred to and accepted by the Assignee. 9.15.3. Compliance With Project Approvals. Each Assignee acquiring all or any portion of the Project Property, and thus becoming an Assignee of the rights and obligations in this Agreement to the extent of such property acquisition,shall be entitled to each and all of the rights, and be subject to each and all of the conditions and obligations,set forth in, and established by,the Project Approvals. The Assignee takes any such rights, obligations, entitlements or approvals as it finds them as of the date of the Assignment, and the Assignment in and of itself shall not cure any default,or any condition which with notice and an opportunity to cure might become a default,nor shall it act to extend any time for compliance by the Developer or Assignee. Subsequent to an Assignment under this Section, all references in this Agreement to the "Developer"shall mean and refer, instead,to the Assignee as such references pertain to a portion of the Project acquired by the Assignee. 9.15.4. Effect of Assignment; Effect of Default. Upon Assignment and approval of that Assignment as provided in Section,such Assignee shall be entitled to all of the rights and be subject to all of the obligations as set forth in this Agreement, as such rights and obligations apply specifically, either wholly or pro-rata,to that portion of the Project to which Assignee has acquired an interest as the result of such Assignment. Such rights and obligations shall include, by way of example only,the obligations concerning Development Impact Fees and the rights concerning waivers and refunds, each and all as they apply to that portion of the Project so assigned. Any default by the 25 Developer in the terms or conditions of this Agreement or in the Project Approvals, existing at the time of assignment of any of its rights and obligations hereunder,shall remain the obligation of the Developer, unless the Assignee expressly accepts such obligation and the City expressly approves the assignment of such obligation. Any default by the Assignee in the terms or conditions of this Agreement or in the Project Approvals, occurring after the time of assignment of any rights and obligations of the Developer to the Assignee,shall be solely the responsibility of that Assignee, and shall not be deemed to be a default by either the Developer or any other Assignee and shall not affect the rights occurring to any other portion of the Project Property pursuant to this Agreement or the Project Approvals. 9.16. Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California. 9.17. Cooperation In The Event Of Legal Challenge. In the event of any legal or equitable action or other proceeding instituted by any third party(including a governmental entity or official) challenging the validity of any provision of this Agreement or any potential subsequent development approvals,should any be obtained,the parties hereby agree to cooperate in defending such action or proceeding. 9.18. Hold Harmless Agreement. The Developer hereby agrees to and shall defend, save and hold City and its elected and appointed boards, commissions, officers, agents and employees harmless from any and all claims, costs and liability for any damages, personal injury or death,which may arise, directly or indirectly,from the Developer's or the Developer's contractors'subcontractors', agents' or employees'operations under this Agreement,whether such operations be by the Developer or by any of the Developer's contractors, subcontractors, agents or employees. 9.19. Indemnification. The Developer shall defend, indemnify and hold harmless City and its agents,officers and employees against and from any and all liabilities, demands,claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorneys'fees),which any or all of them may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following: (a)this Agreement; (b) any environmental impact report prepared in connection with the City's adoption of the Project that is the subject of this Agreement; and (c)the proceedings undertaken in connection with the City's adoption or approval of any of the above. 9.20. Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid,void or unenforceable,the remaining provisions of this Agreement shall continue in full force and effect, unless enforcement of this Agreement as so invalidated would be unreasonable or grossly inequitable under the 26 circumstances or would frustrate the purposes of this Agreement. 9.21. Mortgagee Protection. The Parties hereto agree that this Agreement shall not prevent or limit the Developer, in any manner, at the Developer's sole discretion,from encumbering the Project Property or any portion thereof or any improvements thereon by any mortgage, deed of trust or other security device. The City acknowledges that the lender(s) providing such financing may require certain Agreement interpretations and modifications and agrees, upon request,from time to time,to meet with the Developer and representatives of such lender(s)to negotiate in good faith any such request for interpretation or modification. The City will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with the intent and purposes of this Agreement. Any mortgagee of a mortgage or a beneficiary of a deed of trust or any successor or assign thereof, including without limitation the purchaser at a judicial or non-judicial foreclosure sale or a person or entity who obtains title by deed-in-lieu of foreclosure ("Mortgagee")on the Project Property shall be entitled to the following rights and privileges. 9.21.1. Mortgage Not Rendered Invalid. Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any mortgage or deed of trust on the Project Property made in good faith and for value. No Mortgagee shall have an obligation or duty under this Agreement to perform the Developer's obligations, or to guarantee such performance, prior to taking title to all or a portion of the Project Property; provided, however that a Mortgagee shall not be entitled to a building permit unless the Mortgagee satisfies all of the requirements under this Agreement,the Applicable Rules and any future Project Approvals granted by the City. The above notwithstanding,the Mortgagee shall be on notice of and shall act in compliance with the requirement for a Homeowners Association and Master Declaration described herein. 9.21.2. Request for Notice to Mortgagee. The Mortgagee of any mortgage or deed of trust encumbering the Project Property,or any part thereof,who has submitted a request in writing to the City in the manner specified herein for giving notices,shall be entitled to receive a copy of any Notice of Default delivered to the Developer. Failure of the City to provide notice to the Mortgagee as provided here shall not constitute a limitation on the City's ability to proceed against the Developer for a cure. 9.21.3. Mortgagee's Time to Cure. The City shall provide a copy of any Notice of Default to the Mortgagee within ten (10) calendar days of sending the Notice of Default to the Developer. The Mortgagee shall have the right, but not the obligation,to cure the default for a period of thirty(30) days after receipt of such Notice of Default. Notwithstanding the foregoing, if such default shall be a default which can only be remedied by such Mortgagee obtaining possession of the Project Property,or any 27 portion thereof, and such Mortgagee actively seeks to obtain possession,and continues that effort in a diligent and continuous manner,such Mortgagee shall have until thirty (30) days after the date of obtaining such possession to cure or, if such default cannot reasonably be cured within such period,to commence to cure such default, and thereafter diligently prosecute such cure to completion. 9.21.4. Cure Rights. Any Mortgagee who takes title to all of the Project Property, or any part thereof, pursuant to foreclosure of the mortgage or deed of trust,or a deed in lieu of foreclosure,shall succeed to the rights and obligations of the Developer under this Agreement as to the Project Property or portion thereof so acquired. Such Mortgagee shall not be liable for defaults or monetary obligations of the Developer arising prior to acquisition of title to the Project Property by such Mortgagee, except that, any such Mortgagee shall not be entitled to a building permit or occupancy certificate until all delinquent and current fees and other monetary obligations due under this Agreement for the Project Property,or portion thereof acquired by such Mortgagee, have been paid to City and until all conditions, including installation of infrastructure and other improvements, have been complied with. Notwithstanding the foregoing,the Parties acknowledge that the City has duties to the bond holders under the bond documents which funded the assessment district and nothing contained in this Agreement shall require the City to violates its contractual responsibilities under the bond documents. 9.22. Relationship of Parties. The relationship of the Developer and the City for this Project is that of independent contractors and shall not be construed as a joint venture,equity venture, partnership, or any other relationship. 9.23. City approvals. Whenever a reference is made herein to an action or approval to be undertaken by the City,the City Manager or his or her designee is authorized to act on behalf of the City and/or to sign on his/her own authority amendments to this Agreement which are of routine or technical nature, unless specifically provided otherwise or unless the rules and regulations of the City or other applicable law, rule or regulation, prohibit the City Manager from acting unilaterally in such matters. The approval of a party of any documentation or submissions herein called for shall not be unreasonably withheld,delayed or conditioned. Notwithstanding any language in this Agreement to the contrary,the City Council must approve any extension of the term of this Agreement, any determination of a breach by the Developer or an assignee of the Developer. 9.24. Execution of other documentation. The City and the Developer agree to execute any further documentation that may be necessary to carry out the intent and obligations under this Agreement, provided said documentation does not conflict with this Agreement. 9.25. Estoppel certificates. Either Party to this Agreement shall provide an estoppel 28 certificate to the other as requested from time to time stating, if factually correct,that this Agreement has not been modified, or, if modified,stating the nature of such modification,and certifying that this Agreement,as modified, is in full force and effect. This estoppel certificate may be executed and approved by the City Manager; and approved as to form by the City Attorney. 9.26. Integration. This Agreement constitutes the entire understanding and agreement of the parties with respect to the transaction contemplated by this Agreement. 9.27. Execution and counterparts. This Agreement is executed in duplicate originals, each of which is deemed to be an original. This Agreement may be signed in multiple counterparts,which,when signed by all parties,shall constitute a binding agreement. 9.28. Waiver. No waiver of any right by itself or failure to declare a default when one exists shall constitute a waiver of such right or such default. l 9.29. Exhibits. The following Exhibits are attached to this Agreement and are hereby incorporated into this Agreement by reference: Exhibit A: Developer Property Description Exhibit B: Project Property Exhibit C: Club House Phasing Exhibit D: Streets To Be Dedicated To City Exhibit E: Depiction Of Streets To Be Dedicated To City With Maintenance Obligations Exhibit F: Proposed Construction Phasing Exhibit G: Schedule of Development Impact Fees Exhibit H: City Acquired Properties Exhibit I: Public Facilities Financing Mechanism Exhibit J: Cassia,Sol&Verano Delinquent CFD 2000-1 Exhibit K: Indemnity Agreement Exhibit L: Road Easement to Offsite Reservoir Site 9.30. Recordation of Agreement. The City Clerk shall record a copy of this Agreement with the County Recorder's Office for Riverside County,California. [SIGNATURE BLOCKS ON NEXT PAGE] 29 IN WITNESS WHEREOF,the undersigned parties have executed this Agreement effective as of the date first above written. "DEVELOPER" "CITY" VERANO RECOVERY, LLC CITY OF CATHEDRAL CITY, a California limited liability a municipal corporation company By: INLAND COMMUNITIES CORP., a California corporation, its Managing Member t By: _OAK_ By: Jamal A. Ah ` .. Stan Henry President Mayor APPROVED AS TO FORM. 4 hi ,4 , rP, Charles Green, City Attorney ATTEST: W Gary F. Howell, City Clerk P:\APPS\WPDATA\CATH\0046-57 Verano Development Agreement-001.14 Purchase and Performance Agreement (KAP revise 5-26-15).docx 30 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California County of IA)VI/S i t ) • On}c(,ICJt.(CA- )2 12D15 before me,Tl��it('t'x,,12• �--�t �1;��2 I�)ll�zt V\4 (ls7l CG Date Here Insert Name and Title of the Officer personally appeared daMi11� /�h'Yl(Aci Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the persona''whose name('` is/ar,4 subs ribed to the within instrument and acknowledged to me that he/sh(e/they executed the same in his/hbr/thbir authorized capacity(44,and that by his/hierf/tl)ir signatureWon the instrument the persorl(s?f, or the entity upon behalf of which the person(0 acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. TRACEY R.MARTINEZ WITNESS my hand and official seal. \ Commission*2104537 , Notary Public-California z Riverside County Signature\J 6-'t--V' My Comm.Ex fires 21,2019 Sig ture of Notary Publ Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document �t � Title or Type of Document:PtA -t f C �PP(f1tMct✓ee ocumen Date:c it l l'k° Z t 2015 Number of Pages: 4(p Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑Corporate Officer — Title(s): ❑Corporate Officer — Titl: ): ❑ Partner — ❑ Limited ❑General ❑ Partner — ❑ Limited • General ❑ Individual ❑Attorney in Fact ❑ Individual ❑ • orney in Fact ❑Trustee ❑Guardian or Conservator ❑Trustee • uardian or Conservator c Other: 11-rta51(kG(('tF" ❑ Other: S' ner Is Representing: )fl(A l d Signer Is Repres•nting: ��rnrnl�tnt�ti�5 Crw)/p titfiaV-1 L-'u:�5'ui.\u�i'ui'<i'.�✓'y�Li.�"✓.:'uCu i'L'u'u' ' ''L'+�'ei u.•er<�4:!'.,�uti.'ri.'u'eii.�i.:�L�-e�Ae+ c-4'u:-u_'ui'u:'ei<�5'u+��.6W'ei6. ©2014 National Notary Association •www.NationalNotary.org • 1-800-US NOTARY(1-800-876-6827) Item#5907 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBITS"A"THROUGH "L" (to be attached) 31 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"A" DEVELOPER PROPERTY DESCRIPTION (to be attached) �2 EXHIBIT "A" DEVELOPER PROPERTY DESCRIPTION That certain real property,together with the improvements thereon, located in the City of Cathedral City, County of Riverside, State of California,more particularly described as follows: Lots 9 through 16, inclusive, 57 through 60,inclusive, 64, 72, 145 through 217, inclusive,238 through 261, inclusive, 270,275 through 277, inclusive, 289, 291, 293, 294 Lettered Lots A through Z, inclusive,AA through KK, inclusive,NN, PP Al, A2, A4 and A5 of Tract No. 28639-1 in the City of Cathedral City, California, as shown by Map on file in Book 300, Pages 53 through 66, inclusive, of Maps,Records of Riverside County California. Lots 1 through 71, inclusive, of Tract No. 32559 in the City of Cathedral City, California, as shown by Map on file in.Book 390, Pages 37 through 41, inclusive, of Maps,Records of Riverside County California. PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"B" PROJECT PROPERTY (located on file in the City Clerk's Office of the City of Cathedral City, California) 34 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"C" CLUB HOUSE PHASING (located on file in the City Clerk's Office of the City of Cathedral City, California) S5 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"D" STREETS TO BE DEDICATED TO CITY (to be attached) 34 EXHIBIT "D" STREETS TO BE DEDICATED TO CITY Lots A through Z and Al through A5 of Tract No. 28639-1, AS SHOWN BY MAP ON FILE IN BOOK 300, PAGE 53 THROUGH 66 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CAUFORNIA Said streets and limits of maintenance responsibilities are shown on the attached Exhibit "E" - Depiction of Streets to Be Dedicated and Maintenance Obligations, pages 1 through 4 of 4 which is made a part of this exhibit "D". �7 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"E" DEPICTION OF STREETS TO BE DEDICATED WITH MAINTENANCE OBLIGATIONS (located on file in the City Clerk's Office of the City of Cathedral City, California) 3b PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"F" PROPOSED CONSTRUCTION PHASING (located on file in the City Clerk's Office of the City of Cathedral City, California) Sci PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"G" SCHEDULE OF DEVELOPMENT IMPACT FEES (to be attached) • EXHIBIT "G" SCHEDULE OF DEVELOPMENT IMPACT FEES 1. Fire and Police Facilities and Equipment Fund and Traffic Signalization Fund: As per fee schedule in Section 3.17.020 of the Cathedral City Municipal Code, as adopted by City Ordinance 21, as it existed at the effective date of this Agreement. 2. Master Underground Plan (MUP) fee: As per Chapter 8.30 of the Cathedral City Municipal Code and City Council Resolution 90-94, adopted October 3, 1990, as they existed at the effective date of this Agreement. 3. Development Impact fee: As per City Council Resolution 2006-1, adopted January 25, 2006, as it existed at the effective date of this Agreement. Al PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"H" CITY ACQUIRED PROPERTIES (located on file in the City Clerk's Office of the City of Cathedral City, California) 42- PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"I" PUBLIC FACILITIES FINANCING MECHANISM (located on file in the City Clerk's Office of the City of Cathedral City, California) q-3 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) EXHIBIT"J" CASSIA, SOL&VERANO DELINQUENT CFD 2000-1 (located on file in the City Clerk's Office of the City of Cathedral City, California) 44 PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) Exhibit "K" INDEMNITY AGREEMENT (located on file in the City Clerk's Office of the City of Cathedral City, California) PURCHASE AND PERFORMANCE AGREEMENT (Verano Recovery, LLC-Cathedral City) Exhibit"L" ROAD EASEMENT TO OFFSITE RESERVOIR SITE (located on file in the City Clerk's Office of the City of Cathedral City, California) 46