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MUTUAL RELEASE AND TERMINATION AGREEM OPJGI1\ty�,
This Mutual Release and Termination Agreement ("Agreement") is reference dated as of
the 9th day of December, 2015, and is entered into between: (1) THE CITY OF CATHEDRAL
CITY ("City"), in its capacity under Health and Safety Code Section 34176 as the successor to
the housing assets and functions of THE REDEVELOPMENT AGENCY OF THE CITY OF
CATHEDRAL CITY ("Agency"), and (2) SOUTHERN CALIFORNIA HOUSING
DEVELOPMENT CORPORATION OF THE INLAND EMPIRE, a California non-profit public
benefit corporation ("Developer"). Hereinafter, City and Developer are sometimes referred to
individually as a"Party" and collectively as the "Parties".
RECITALS
This Agreement is entered into with reference to the following recitals of facts
("Recitals") that the Parties believe to be true as of the Effective Date (as hereinafter defined)
and which form the factual basis for their entry into this Agreement:
A. Agency and Developer entered into that certain "Disposition and Development
Agreement" ("DDA") dated September 26, 2007, as amended by that certain "First Amendment
to Disposition and Development Agreement" dated as of August 11, 2010 (the DDA, as so
amended, the "Original DDA"). Agency and Developer also entered into that certain "Amended
and Restated Promissory Note" dated August 11, 2010 ("First Amended Note", and,
collectively with the Original DDA and all of its ancillary and implementing agreements, the
"DDA Agreements"). Agency's rights and obligations under the DDA Agreements are low and
moderate income housing-related rights and obligations.
B. In accord with Assembly Bill 26X1, Assembly Bill 1484, and subsequent
implementing legislation, the Agency was dissolved on February 1, 2012. In accord with Health
and Safety Code Section 34176, City elected to assume Agency's low and moderate income
housing-related assets and functions, including those under the DDA Agreements.
C. Agency and Developer entered into the DDA Agreements for the purpose of
causing the development by Developer of certain Agency-owned unimproved real property
("DDA Property") as an affordable housing project ("Project"), as more fully described in the
DDA Agreements.
D. In accordance with the DDA Agreements, Agency advanced to Developer the
sum of Two Hundred and Eighty Thousand Dollars ($280,000) ("Pre-Development Expenses
Loan") to assist Developer with certain Project pre-development costs and feasibility studies.
Developer's obligations with respect to repayment of the Pre-Development Expenses Loan are
set out in the DDA Agreements.
E. The Parties have determined that the Project is no longer feasible and the Parties
desire to terminate the DDA Agreements and release the Parties from their obligations under the
DDA Agreements, except for those obligations set forth in this Agreement.
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C1002-007--1974336 1
F. In connection with the termination of the DDA Agreements and as material
consideration to City for its entry into this Agreement, the Parties have agreed to amend and
restate their rights and obligations with respect to the Pre-Development Expenses Loan as set
forth in the Second Amended Note (hereinafter defined).
OPERATIVE PROVISIONS
1. Effective Date. This Agreement is dated as of December 9, 2015 for reference
purposes only. This Agreement will not become effective or binding upon the Parties until the
date ("Effective Date") on which all of the following are true:
a. This Agreement, the Second Amended Note, the Release Deed, and all
other documents required to effectuate this Agreement have been approved and executed by the
appropriate authorized officers of Developer and delivered to City;
b. Following all legally required notices and hearings, this Agreement has
been approved by the City Council on behalf of City; and
c. This Agreement is executed by the authorized officers of City and
delivered to Developer.
2. Termination of Agreement. As of the Effective Date of this Agreement, and
except to the extent otherwise expressly provided in this Agreement, the DDA Agreements will
terminate in their entirety and all rights, obligations and liabilities of City and Developer
thereunder will be discharged and released in their entirety; provided, however, that all defense
and indemnity obligations arising under the DDA Agreements will continue in full force and
effect, but only as to those matters accruing and facts occurring prior to the Effective Date of this
Agreement. Subject to the preceding provisos, as of the Effective Date of this Agreement, the
rights, obligations and liabilities of City and Developer as set forth in the DDA Agreements will
be, instead, those rights, obligations, and liabilities set forth in this Agreement and the ancillary
agreements and exhibits attached hereto.
3. Second Amended Note. In substitution of Developer's obligations under the First
Amended Note with respect to the Pre-Development Expenses Loan, Developer and National
Community Renaissance of California (a Developer-related entity) will, as a condition to the
effectiveness of this Agreement, execute and deliver the "Second Amended and Restated Note"
in substantially the form attached as Exhibit A ("Second Amended Note").
4. Release of Recorded Documents. Developer will promptly execute, acknowledge
and record any document required to release the DDA Agreements and any other recorded
document related to the DDA Property or the Project. In furtherance of that obligation,
Developer will, as a condition to the effectiveness of this Agreement, execute, acknowledge, and
deliver a quitclaim deed to the DDA Property in the form attached as Exhibit B ("Release
Deed").
5. Project Documents. Within three (3) days after the Effective Date, Developer will
deliver to City legible, complete copies of all documents in Developer's (or its agents' and
consultants') possession or control related to the physical condition of the Project, including,
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C 1002-007--1974336 1
without limitation, any Phase I Environmental Site Assessments, any Phase II subsurface soil
reports or groundwater reports, any geotechnical reports, any survey, and any other documents
describing or analyzing the physical elements or qualities of the DDA Property or the Project.
These documents will be tendered without representation or warranty as to their accuracy or
completeness and subject to any rights or restrictions imposed by the party that created such
document.
6. Mutual Release. As of the Effective Date of this Agreement, and except as
otherwise provided by this Agreement, each Party, on behalf of itself and its respective officers,
officials, agents, employees, directors, members, representatives, insurers, agents, subsidiaries,
related boards, agencies, successors and assigns, will be deemed to have immediately released,
acquitted and forever discharged the other Party and the other Party's respective officers,
officials, agents, employees, directors, members, representatives, insurers, agents, heirs,
successors and assigns (collectively, "Related Parties"), from any and all claims, demands,
causes of action, obligations, damages, costs and liabilities of any nature whatsoever, whether
known or unknown, suspected or claimed, liquidated, contingent, or otherwise, which any of
them ever had, may now have, or may after the date of this Agreement have against each other
arising out of or related to the DDA Agreements (collectively, "Released Claims"). The
Released Claims do not include any claims arising from the breach of this Agreement or any of
its ancillary agreements and exhibits.
7. Waiver of Civil Code Section 1542. In connection with the releases set forth in
Section 6 above, City and Developer acknowledge that they have had the opportunity to consult
with legal counsel concerning the provisions of California Civil Code Section 1542 and, based
on those consultations, each of them expressly waive the provisions of Civil Code Section 1542,
which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
City and Developer specifically waive any and all rights and benefits under Section 1542 and all
other state or federal laws or decisional authority of similar impact as they relate to the Released
Claims and acknowledge that this Agreement would not have been entered into without such
waiver.
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City's Developer's
Initials Initials
8. Notices. All notices pursuant to this Agreement will be sent by either:
(a) personal delivery, (b) a reputable overnight courier which keeps receipts of delivery (such as
UPS or Federal Express), or (c) through the facilities of the United States Postal Service, postage
prepaid, certified or registered mail, return receipt requested. Any such notice will be effective
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CI002-007--1974336 1
upon delivery or rejection. Notices to the respective Parties will be sent to the following
addresses unless written notice of a change of address has been previously given pursuant hereto:
If to City: If to Developer:
The City of Cathedral City Southern California Housing Development
Attn: City Manager Corporation of the Inland Empire
68-700 Avenida Lalo Guerrero Attn: Executive Director
Cathedral City, CA 92234 9421 Haven Avenue
Rancho Cucamonga, CA 91730
With a Copy to: With a Copy to:
Green de Bortnowsky, LLP Edward A. Hopson
Attn: Charles Green, City Attorney 655 A North Mountain Avenue
41-750 Rancho Law Palmas, Suite P-1 Upland, CA 91786
Rancho Mirage, CA 92270
9. Miscellaneous Provisions.
a. Each of the signatories to this Agreement warrants and represents that he
or she is competent and authorized to enter into this Agreement on behalf of the Party for whom
he or she purports to sign.
b. Each Party warrants and represents that it: (i) has not sold, transferred,
conveyed, assigned, hypothecated and/or subrogated any Released Claim, and (ii) there are no
other persons or entities holding any right or interest in that Party's Released Claims.
c. Except as otherwise provided in this Agreement, the Parties acknowledge
and agree that each of them, as between them, will bear their own costs, expenses and attorneys'
fees arising out of and/or connected with the negotiation, drafting and execution of this
Agreement and all matters arising out of or connected therewith.
d. This Agreement is the product of negotiation and preparation by and
among the Parties and their respective attorneys. Neither this Agreement nor any provision of it
may be deemed prepared or drafted by one Party or another, or its attorneys, and may not be
construed more strongly against any Party.
e. This Agreement will be interpreted in accordance with and governed in all
respects by the procedural and substantive laws of the State of California, without regard to its
conflicts of laws principles.
f. This Agreement is binding upon and will inure to the benefit of the Parties
and their respective heirs, successors, and assigns.
g. If any provision or any part of any provision of this Agreement is for any
reason held to be invalid, unenforceable or contrary to any public policy, law, statute and/or
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C1002-007--1974336 1
ordinance, then the remainder of this Agreement will not be affected and will remain valid and
fully enforceable.
h. This Agreement may be executed in counterparts, and all so executed will
constitute an agreement which will be binding upon the Parties, notwithstanding that the
signatures of all Parties' designated representatives do not appear on the same page.
i. The Parties will execute and deliver any document which is reasonably
necessary to achieve the goals and purposes of this Agreement.
j. This Agreement, including all of its exhibits, constitutes the entire
understanding between the Parties with regard to the matters herein set forth. There are no
representations, warranties, agreements, arrangements, undertakings, oral or written, between or
among the Parties relating to the subject matter of this Agreement which are not fully expressed
in this Agreement. This Agreement will be interpreted according to its own terms, as defined in
this Agreement or otherwise according to their ordinary meaning, without reference to parol
evidence. This Agreement is a fully integrated agreement.
k. If any Party files any action or brings any action or proceeding against the
other arising out of this Agreement, or is made a party to any action or proceeding brought by a
third party, then as between Developer and City, the prevailing Party will be entitled to recover
as an element of its costs of suit, and not as damages, its actual costs of suit, expert fees,
consultant costs, and reasonable attorneys' fees as fixed by the court in the action or proceeding
or in a separate action or proceeding brought to recover those fees and costs. For this purpose,
the words "reasonable attorneys' fees" mean and include, in the case of City, the fully burdened
salaries and expenses of the private lawyers employed by City (allocated on an hourly basis) who
may provide legal services to City in connection with the representation of City in that action or
proceeding.
[Signatures on Following Pages]
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C1002-007--1974336 1
SIGNATURE PAGE
TO
MUTUAL RELEASE AND TERMINATION AGREEMENT
AGENCY:
THE CITY OF CATHEDRAL CITY, in its capacity
under Health and Safety Code Section 34176 as the
successor to the housing assets and functions of
THE REDEVELOPMENT AGENCY OF THE
CITY OF CATHEDRAL CITY
By. / • ✓�
Name: elAsAt4 /t /n eek.,.e..J
Title: eirt, ma10 441 -
Date: /a—IO—G$
ATTEST:
By: L . . _ j2- IA.: '_
City Cle A •
APPROVED AS TO LEGAL "I RM:
B : . .
. s ecia ounsel
6
C1002-007--1974336 1
SIGNATURE PAGE
TO
MUTUAL RELEASE AND TERMINATION AGREEMENT
DEVELOPER:
SOUTHERN CALIFORNIA HOUSING
DEVELOPMENT CORPORATION OF THE
INLAND EMPIRE, a California non-profit public
benefit corporation
By: 7it.144,n/4Name: Iracy as
Title: Chi f Financial Officer
Date: /1(30/ir--
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C1002-007--1974336 1
COpy
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EXHIBIT A
SECOND AMENDED AND RESTATED NOTE ("NOTE") l� 17���
One Hundred Thousand Dollars Cathedral City, California
($100,000) December 9, 2015 ("Effective Date")
FOR VALUE RECEIVED, the undersigned Southern California Housing Development
Corporation of the Inland Empire, a California non-profit public benefit corporation, and
National Community Renaissance of California, a California non-profit public benefit
corporation (collectively as joint obligors, "Borrower") hereby promises to pay to the order of
Cathedral City, a California municipal corporation and general law city ("Holder"), in its
capacity under Health & Safety Code section 34176 as the successor to the housing assets and
functions of the Redevelopment Agency of the City of Cathedral City, the principal amount of
One Hundred Thousand Dollars ($100,000) ("Principal"), subject to the terms and conditions of
this Note. Periodic payments are not required under this Note. The Principal will not accrue
interest until the Maturity Date (defined below). If the Principal is not fully repaid (or credited
as provided in Section 4 of this Note) on or before the Maturity Date, any unpaid/uncredited
amount of the Principal will be immediately due and payable in cash and will begin to accrue
interest on the Maturity Date at the rate of ten percent (10%) per annum, compounded annually,
and will continue to accrue interest at that rate until all outstanding amounts of Principal and
accrued interest are paid in full.
1. Termination Agreement. This Note is given in accord with that certain "Mutual
Release and Termination Agreement" ("Termination Agreement") of even date herewith,
executed by Borrower and Holder.
2. Maturity Date. The entirety of the Principal that is not previously credited in
accord with Section 4 below is due and payable no later than the third (3`d) anniversary of the
Effective Date of this Note ("Maturity Date").
3. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder, which may be given or withheld in
Holder's sole and absolute discretion.
4. Principal Forgiveness. Holder will forgive and discharge the entirety of the
Principal if on or before the Maturity Date Borrower actually pays no less than One Hundred
Thousand Dollars ($100,000) of"Qualified Funds" (as defined in the attached Schedule 1) to
unaffiliated, unrelated third parties for "Qualified Capital Projects" (as defined in the attached
Schedule 1) that are completed prior to the Maturity Date upon that certain low and moderate
income housing project located in the City of Cathedral City and commonly known as
"Cathedral Palms." Borrower acknowledges that (a) no less than One Hundred Thousand
Dollars ($100,000) must be expended and that no partial credit will be given if total expenditures
are less than One Hundred Thousand Dollars ($100,000), and (b) the Qualified Capital Projects
must be completed and that no partial credit will be given for Qualified Capital Projects that are
not completed prior to the Maturity Date.
Exhibit A—Page 1
C1002-007-1974336.1
5. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment becoming due hereunder may be
extended by Holder from time to time, and that Holder may accept security or release any
security for this Note, all without in any way affecting the liability of Borrower.
(b) No extension of time for payment of this Note or any installment hereof
made by agreement of Holder with Borrower or any person now or hereafter liable for payment
of this Note will operate to release, discharge, modify, change or affect the original liability of
Borrower under this Note, either in whole or in part.
(c) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
6. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Termination Agreement or to those other addresses as Holder and
Borrower may from time to time designate in writing.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of this Note, regardless of whether suit is
filed to seek enforcement.
(c) This Note is governed by and is to be construed in accordance with the
procedural and substantive laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed,time being of the essence.
(e) This Note may not be modified except upon the written consent of Holder
and Borrower.
Exhibit A—Page 2
C1002-007--1974336.1
(f) The liabilities and obligations of Borrower under this Note are the joint
and several liabilities and obligations of each entity constituting Borrower, as defined in the
opening paragraph of this Note.
BORROWER:
SOUTHERN CALIFORNIA HOUSING NATIONAL COMMUNITY RENAISSANCE
DEVELOPMENT CORPORATION OF THE OF CALIFORNIA, a California non-profit
INLAND EMPIRE, a California non-profit public benefit corporation
public benefit corporation
By: ( A By:
TrAC V mac. Name: Tracy om
Title: Chief Financial Officer Title: Chief Financial Officer
Date: //09//T Date: ///j9//
Exhibit A—Page 3
C1002-007—1974336.1
SCHEDULE 1
A. For purposes of Section 4 of the Note to which this Schedule 1 is attached, the term
"Qualified Capital Projects" means and is limited to any one or more of the following
capital improvements (each, a "Qualified Capital Project") that are completed prior to
the Maturity Date upon the low and moderate income housing project located in the City
of Cathedral City and commonly known as "Cathedral Palms":
1. Window replacement for energy efficiency in as many units as possible and/or:
2. Any other capital improvement that Borrower has proposed in writing to Holder
and that Holder has approved in writing (in its sole but reasonably exercised
discretion) prior to the time that Borrower commences work upon the capital
improvement.
B. For purposes of Section 4 of the Note to which this Schedule 1 is attached, the term
"Qualified Funds" means and is limited to any source of funds available to Borrower
that may be legally expended on Qualified Capital Projects, except: (i) funds provided to
Borrower (or to any subsidiary, affiliate or related entity) by Holder or any related,
subsidiary, predecessor, or successor entity to Holder, (ii) funds that not paid to
unrelated, unaffiliated third parties prior to the Maturity Date, and (iii) funds from the
Cathedral Palms' capital replacement reserve account. Qualified Funds include funds
that represent income attributable to the operations of Cathedral Palms, but only after all
of Cathedral Palms' reserve accounts are fully funded in the minimum amounts required
by law or by any agreement to which Cathedral Palms is subject, whichever is greater,
including, without implied limitation, the capital replacement reserve account in the
amount of no less than Three Hundred Dollars ($300)per unit per year.
Exhibit A—Page 4
C1002-007--1974336.1
EXHIBIT B
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RECORDING REQUESTED BY D \
WHEN RECORDED RETURN TO: Q Y91
i_ DO i -N i e. LAO 4<!
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APN(s): (077—y1 609a1{d 677-33/-003
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION,receipt of which is hereby acknowledged,
SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION OF THE
INLAND EMPIRE, a California non-profit public benefit corporation ("Grantor"),
hereby remises, releases and forever quitclaims to
THE CITY OF CATHEDRAL CITY, in its capacity under Health and Safety Code Section
34176 as the successor to the housing assets and functions of THE REDEVELOPMENT
AGENCY OF THE CITY OF CATHEDRAL CITY,
all of Grantor's right, title and interest in and to that certain real property located in the City of
Cathedral City, County of Riverside, State of California, more fully described in Exhibit "A"
attached hereto and incorporated herein by this reference ("Property").
SOUTHERN CALIFORNIA HOUSING
DEVELOPMENT CORPORATION OF THE
INLAND EMPIRE, a California non-profit
public benefit corporation
By:
Name: o , a,.,u
Title: ChiefFinanoial
Date: /0 9 1/r -
Exhibit B—Page 1
C 1002-007--1974336.1
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 CAI�FORN��x�
COUNTY OF - �i i a-Q )
On [210(120(S. before me, 060-j-2 ./ f Ca K l(insert name and title of the office
personally appeared 1-r--.. L f 40 At . ,
who proved to me on the basis of'atisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
mow, GABRIELA M.HOFFMAN
Signature ' (Seal) �� Commission 2055787 Z
,�
2 ,�,� Notary Public California-
�'V`!�` San Bernardino County
j_ 2::_ 1 Comm.Exeires Jan 24_2018
Exhibit B—Page 2
C 1002-007--1974336.1
EXHIBIT "A"
•
LEGAL DESCRIPTION AGENCY PROPERTIES
Two parcels located in the City of Cathedral City, in the County of
Riverside, State of California, and described as follows:
Lot "A" of Tract 26698-1, in the County of Riverside; State of
California, as shown by Map on file in Book 242, Pages 14 through
17 . of Maps, records of Riverside County, California, Assessor' s
Parcel Number: 677-410-009.
Lot 239 of Palm Springs Country Club Estates, as per map recorded
in Book 22, Pages 40 through 44 of Maps, in the Office of the
County Recorder of Riverside County, Assessor' s Parcel Number:
677-331-003,
Address: 30638 San Diego Drive in Cathedral City, California.