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HomeMy WebLinkAboutRecorded doc 2016-267 2016-267 2016-0351307 08/17/2016 08:16 AM Fee: $ 0.00 RECORDING REQUESTED BY: ) Page 1 of 25 ) Recorded in Official Records CITY OF CATHEDRAL CITY ) County of Riverside Peter Aldana Assessor-County Clerk-Recorder AND WHEN RECORDED RETURN TO: ) 'III aligtabilarn II I CITY OF CATHEDRAL CITY ) 68-700 Avenida Lalo Guerrero ) R A Exam: (j 0 Cathedral City,CA 92234 ) Page DA PCOR Misc Long RFD 1st Pg Adtl Pg Cert CC Attn: City Clerk ) 2 APN: ) SIZE NCOR SMFCNCHG : f') �y ( (Space Above for Recorder's Use) Exempt from Recording Fees Per Government Code Section 27383 OPERATING COVENANTS This document, entitled Operating Covenants ("Covenants"), is made by ROBERTA'S LIMITED PARTNERSHIP, a California limited partnership ("Property Owner"), and GL HOD, LLC, a Delaware limited liability company, for Honda of the Desert ("Tenant") as of March 23, 2016, for the benefit of the CITY OF CATHEDRAL CITY, a municipal corporation within the State of California ("City"). Said entities may be individually referred to herein as a "Party" or jointly as the "Parties." 1. Relation to Tax Sharing Agreement. These Covenants are executed by Property Owner/Tenant and recorded in connection with that certain Sales Tax Sharing Agreement (the "Agreement") entered into between the Tenant and City of more or less concurrent date herewith, and is required under the provisions of the Agreement. The Agreement is attached hereto and incorporated herein by reference as Exhibit "A". Defined terms not otherwise defined herein shall have the meaning ascribed in thereto in the Agreement. 2. Covenants Run with the Land. These Covenants shall run with the land legally described in Exhibit "B" attached hereto, and incorporated herein by reference (the "Property"), and shall constitute equitable servitudes thereon, and shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City. The Covenants shall be for the duration as specified in the Agreement, and all sales or long-term leases of the Improved Business shall likewise be governed by the Agreement. 3. Intended Use of Property. Property Owner/Tenant covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any portion thereof, that upon Completion of construction of the Work of Improvement (both as defined in the Agreement), Property Owner/Tenant shall cause the Property to be used as an automobile dealership with integrated parts sales and service center (together, the "Intended Use"), except for such exceptions to such covenant as may be provided under the terms of the 1 ORIGINAL RIV#4834-4805-9950 vl Agreement. Property Owner/Tenant covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any portion thereof, or of the Improved Business that upon Completion of construction of the Work of Improvement, Property Owner/Tenant shall devote the Property to the Intended Use for a period of nine (9) years commencing the day after the issuance by the City of the final Certificate of Occupancy or similar document with respect to the Work of Improvement. No other use of the Property shall occur without the prior written approval of the City, which approval shall be given or withheld at the sole discretion of the City. 4. Maintenance of Property. Property Owner/Tenant covenants and agrees for itself, its successors, its assigns, and every successor in interest to the property, or any part thereof, that Property Owner/Tenant, such successors and such assigns, shall maintain in good condition the improvements on the Property, shall keep the Property free from any accumulation of debris or waste material, shall remove any and all graffiti, shall maintain the property in compliance with all regulations, and shall maintain in a neat, orderly, healthy and good condition any landscaping required by the City during its normal approval processes to be planted on the Property, or placed on the Property by Property Owner/Tenant in its own determination. 5. Non-Discrimination. Property Owner/Tenant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as of those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, or on the basis of domestic partnership status or arrangement, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall Property Owner/Tenant, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Properties. Notwithstanding any provision of this paragraph, none of the cited statutes shall apply to the extent that they deal with housing of any kind. 6. Existing and Future Assessment Districts. The City may review the creation of a landscape and lighting district in the area where the Property is to be located, or, alternatively, the annexation of the Property into an existing City district. Such a district would assist the City in paying for the lighting and landscaping in the area, thus enabling it to install and maintain such amenities to the general benefit of the area and the specific benefit of the Property. Such a district would equitably apportion the costs among the benefited land owners. Property Owner/Tenant covenants and agrees, for itself and its successors and assigns, and on behalf of any and all Tenants, that it will participate in such a district for the life of the RIV#4834-4805-9950 vl i I L district, will vote in favor of its formation, or for annexation into an existing district, as applicable, if a vote is required, will otherwise support and not oppose the formation of the district or the annexation, and will pay when due the assessments apportioned to it. The Property Owner/Tenant agrees to include a similar provision to every lease of any portion of the Property to a another entity such that the entity's obligations are essentially identical to the Property Owner's/Tenant's. Notwithstanding any provision in the Covenants to the contrary, the Property Owner/Tenant shall retain all rights under the district to appeal the amount of the assessment allocated to the Property Owner's/Tenant's property and/or business. 7. Existing and Future Business Improvement Districts. The City may also review the formation of a business improvement district in the area where the Property is to be located. Such a district would provide assistance to all businesses within the district for a variety of purposes, each of which would be designed to generate patronage for such businesses. Such a district would assess business owners in the district on an equitable basis for its share of the costs expended for the mutual benefit of the business in the area. Property Owner/Tenant covenants and agrees, for itself and its successors and assigns, that it will participate in such a district for the life of the district, will vote in favor of its formation if a vote is required, will otherwise support and not oppose the formation of the district and will pay when due the assessments apportioned to it. The Property Owner/Tenant agrees to include a similar provision to every lease of any portion of the Property to an entity such that the entity's obligations are essentially identical to the Property Owner's/Tenant's. Notwithstanding any provision in these Covenants to the contrary, the Property Owner/Tenant shall retain all rights under the district to appeal the amount of the assessment allocated to the Property Owner's/Tenant's property and/or business. 8. Continuation of Certain Covenants. The covenants established against discrimination, those regarding maintenance of the Property, and the covenants related to landscape and lighting or business districts shall remain in effect in perpetuity. The covenants related to the Intended Use shall remain in effect for nine (9) years, calculated as indicated above. 9. City is Express Beneficiary of Covenants. The City is deemed the beneficiary of the terms and provisions of the Agreement and of the covenants running with the land for and in its own rights and for the purposes of protecting the interests of the community. The City shall have the right, if such covenants are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity or such other proper proceedings to enforce the curing of such breaches to which it or any other beneficiary of such covenants may be entitled, including, without limitation, to specific performance, damages and injunctive relief. In addition, at the City's sole discretion, any breach of these covenants shall be deemed a material breach of the Agreement, permitting the City to terminate the Agreement. RIV#4834-4805-9950 vl 3 I AL. WHEREFORE, Property Owner/Tenant, intending to be bound hereby, has executed this document, entitled Operating Covenants, on the date first above-written-. PROPERTY OWNER: TENANT: ROBERTA'S LIMITED PARTNERSHIP GL HOD, LLC a California limited partnership a Delaware limited li- •ility company By: , By: Ai" - Roberta Fnink Sobierajski Br op i President C ' -cutive Officer 4 RIV 114834-4805-9950 v1 te'4 G Ai, ._: a CAUFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT 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 Riverside On A 2V f < ' I 7�IGbefore me,Jeff R. Kallmann, Notary Public, personally appeared 1 e •beiC� C U� 1F:cO, ' S who proved to me on the basis of satisfactory evidence to be the person whose name94 is/a/6 subscribed to the within instrument and acknowledged to me that F /she/t y executed the same in h jher/th r authorized capacity(i s), and that by h /her/th r signature on the instrument the person,or the entity upon behalf of which the person 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. »,_.R.r:',71 [ }g ANN �, ,,,;t•„ Cot,�ra.# 2051768 al ffint 1i�� NOTARY PUBLIC-CALIFORNIA Signature .- .A:. . II V(Seal) V! � -.. .' My COO E PE JANN1B•2B1B DESCRIPTION OF THE ATTACHED DOCUMENT TITLE OF 0 .2. c otrvi CO Q-/C\C-t-zf)t. DATE: L'{ -''L/1- 1 PAGES: (,o CAPACITY CLAIMED BY SIGNER: a STATE OF UTAH ) : ss COUNTY OF SALT LAKE ) On April 28, 2016, before me, the undersigned Notary Public, personally appeared Brett Hopkins, CEO,who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity and that by his signature on the instrument the person,or the entity upon behalf of which the person acted, executed the instrument. I certify under Penalty of Perjury under the laws of the state of Utah that the foregoing paragraph is true and correct. WITNESS my hand and official seal. r I t� Notary E'ubiic ,.... .f / -l✓•19-- LYNETTE D.FOLEY "f �; Commission$696615 My Commission apiros • Notary ublic ! "ie January 13,2020 ` , s '' State of Utah G '" EXHIBIT "A" TO OPERATING COVENANTS SALES TAX SHARING AGREEMENT BETWEEN THE CITY OF CATHEDRAL CITY AND GL HOD, LLC [To be attached for recording only] 5 ORIGINAL RIV#4834-4805-9950 vi Effective Date March 23,2016 SALES TAX SHARING AGREEMENT [GL HOD, LLC FOR HONDA OF THE DESERT] This Sales Tax Sharing Agreement ("Agreement") is entered into by and between the CITY OF CATHEDRAL CITY, a municipal corporation within the State of California ( "City") and GL HOD, LLC, a Delaware limited liability company, doing business as "Honda of the Desert" ( "Owner"), and is dated for reference purposes as of March 23, 2016. Each of the foregoing parties may be referred to hereafter as a "Party," and jointly as the "Parties." RECITALS A. The City Council, in order to incentivize the opening of new retail businesses or the expansion or renovation of existing retail businesses, added Chapter 3.46 to Title 3 of City's Municipal Code to provide for Economic Incentive Payments to qualifying business in an amount equal to a percentage of the Sales Tax Increment, as defined below, received by City and derived from the new, expanded or renovated business (the "Program"). B. By adoption of Resolution No. 2016-12, on March 23, 2016, based on substantial evidence in the record before it, the City Council determined that providing Economic Incentive Payments to Owner would: (i) enhance the quality of the facilities, goods, and services that Owner makes available to the public and City's residents; (ii) provide desirable and attractive shopping experiences for City's residents and its visitors; and (iii) increase sales tax revenue to City. C. Owner owns and operates an Existing Retail Business, as defined below, and commonly known as "Honda of the Desert," and seeks to expand and renovate said Business with assistance from City under the Program. D. Owner represents to City that the Work of Improvement (as defined below) will result in an increase in sales of both new and used automobiles, automobile parts and services and are anticipated to result in Sales Tax Increment (as defined below). E. By adoption of Resolution No. 2016-12, the City Council found the provision of assistance in the form of an Economic Incentive Payment meets all of the requirements set forth in Chapter 3.46 of Title 3 of the Municipal Code and the City Council's desire to assist Owner as provided for under the Program and this Agreement. ORIGINAL RIV#4836-0528-0302 v4 1 OPERATIVE PROVISIONS NOW, THEREFORE, in consideration of the mutual promises and covenants of the Parties set forth herein, and for other good and valuable consideration, the value and receipt of which are hereby acknowledged by the Parties, the Parties agree as set forth hereinafter. SECTION 1. Incorporation of Recitals. The Parties agree that each of the foregoing Recitals is true and correct and incorporate each of the Recitals in this Agreement by reference thereto. SECTION 2. Definitions. The terms used in this Agreement shall be given the meaning expressly defined in this Agreement or where not defined herein then in Chapter 3.46 of Title 3 of City's Municipal Code. a. "Property" shall mean that parcel or parcels of real property upon which Owner operates the Existing Retail Business. The legal description of the Property is attached hereto as Exhibit "A," and is incorporated herein by reference. b. "Existing Retail Business" as defined in Section 3.46.020 of the Municipal Code shall mean the Honda of the Desert automobile dealership located at 68025 Kyle Road in Cathedral City that is owned and operated by Owner and consists of new and used car sales, Honda auto parts sales, and automobile service facilities on the Property. c. "Work of Improvement" shall mean the expansion, remodeling, renovation and improvement of the Existing Retail Business by (i) enlarging the new car showroom by approximately 1,000 square feet; (ii) constructing a new façade with tower element on the north side of the building per Honda corporate imaging; (iii) and adding a new vehicle delivery canopy of approximately 560 square feet to the west side of the building. d. "Improved Business" means the Existing Retail Business as improved by the completed Work of Improvement. e. "Economic Incentive Payment" shall mean payments by City to Owner implementing Sales Tax Sharing as provided for in the Program. For this Agreement the Economic Incentive Payment is an amount equal to fifty percent (50%) of the Sales Tax Increment derived from the Improved Business over a period of nine (9) years, but not to exceed Four Hundred Twenty-Seven Thousand Dollars ($427,000.00) ("Maximum Payment"). In no event shall Owner be entitled to payments from City 2 ORMINAL 'd I RIV#4836-0528-0302 v4 beyond the nine (9) year term, or in excess of the Maximum Payment consistent with the Program. f. "Sales Tax Increment" as defined in Section 3.46.020 of the Municipal Code shall mean, on an annual basis, the difference between the sales tax base and the amount of sales tax actually generated by Owner and received by City from the State Board of Equalization after the Completion Date defined below. For purposes of this Agreement, the Sales Tax Base is Three Hundred Forty-Seven Thousand Dollars ($347,000.00) per tax year. g. "Effective Date" shall mean the date upon which all of the following have occurred: (i) City's City Council has approved the Agreement; (ii) City Manager has executed the Agreement; and (iii) Owner's authorized representatives(s) have executed the Agreement. The Effective Date will be presumed to be March 23, 2016, unless the City's City Clerk has provided for a different date in the top header on the first page of this Agreement, in which case that date shall govern. SECTION 3. Prerequisites for Receipt by Owner of Tax Sharing. The following are conditions precedent to City's obligation to provide the Economic Incentive Payment to Owner: a. Complete Work of Improvement. Owner shall timely undertake all work reasonably necessary to timely complete the Work of Improvement as provided herein: (i) Deadline. Owner agrees to complete the Work of Improvement not later than five (5) months after the Effective Date of this Agreement unless such deadline is extended by operation of Section 9.o by reason of a force majeure event. (ii) Completion Date. Completion of the Work of Improvement shall be deemed to have occurred on the date City issues a Certificate of Occupancy or similar document or where Owner has substantially completed all material improvements and City, in its sole discretion, issues a Temporary Certificate of Occupancy. The date upon which Owner receives the Certificate of Occupancy shall be deemed the "Completion Date." (iii) Improvement Standards. The Work of Improvement shall have been constructed in accordance with all City zoning and building requirements and Owner shall have procured all necessary permits from City and any other local governmental entity having jurisdiction over the Work of Improvement or material aspect thereof. City shall, in addition to its normal requirements and processes, have discretionary ap m ial_of..the 3 ORIGINAL 1 RIV#4836-0528-0302 v4 design of the Work of Improvement, which approval shall not be unreasonably withheld. Owner is solely responsible for undertaking and completing the Work of Improvement and obtaining all necessary permits at its sole cost. (iv) Confirmation of Payments for Work of Improvement. Owner agrees to provide to City documentation reasonably acceptable to City, including without limitation, invoices, lien releases, and other evidences of Owner's actual payment, confirming payments to contractors, subcontractors, and vendors totaling not less than Two Million Four Hundred Ninety-Nine Thousand Eight Hundred Dollars ($2,499,800.00) ("Total Minimum Expense"). If the accepted documentation evidences payments by Owner of less than the Total Minimum Expense, then City shall have the right to recalculate and reduce the Economic Incentive Payment in proportion to the amount by which the actual amount paid is less than the Total Minimum Expense. b. Recordation of Operating Covenants. Owner shall have fully executed, and obtained such other signatures as may be necessary for recording, the Operating Covenants attached hereto and incorporated herein as reference as Exhibit "B", and recorded the document against the Property with the Riverside County Recorder's Office. c. Continued Operation. Owner shall remain in continuous operation during current normal business hours and days for the duration of the nine (9)-year period or until receipt of the Maximum Payment, whichever occurs first. Owner will be considered to be in continuous operation, even if closed on all recognized California and federal holidays, and during times of temporary closure for planned repairs or renovations for which Owner notified City in writing at least thirty (30) days in advance. No closure shall operate to extend the period during which Owner may be entitled to receive the Economic Incentive Payment from City. d. Good Standing. Owner shall otherwise remain in good standing and not in default of its performance of this Agreement and the Operating Covenants. e. Sales Tax Information and Reports. Owner shall timely provide City with accurate monthly sales reports relating to sales and the generation of Sales Tax at the Improved Business in accordance with Section 4.e of the Agreement. SECTION 4. City's Obligation to Make the Economic Incentive Payment a. Obligation of City. City shall be obligated to make Economic Incentive Payments to Owner, at the times and as provided in this Section, provided Owner has liGifikiAL RIV#4836-0528-0302 v4 satisfied the conditions precedent to payment set forth in Section 3 of this Agreement and otherwise remains in good standing and is not in default under this Agreement. b. Sales Tax Sharing Period. Calculation of the Sales Tax Increment shall commence the day after the Completion Date for the Work of Improvement. The period during which City shall receive Sales Tax Increment which forms the basis of the Economic Incentive Payment shall commence on the first day following the Completion Date and shall continue for a period of not to exceed nine (9) years thereafter or until Owner has received the Maximum Payment. In the event that Sales Tax Increment received by City during the nine (9) year period is insufficient to yield the Maximum Payment to Owner, then Owner shall not be entitled to further payments or assistance from City. The Parties acknowledge that sales will continue on the Property during the construction of the Work of Improvement, and agree that said sales shall not constitute any part of the Sales Tax Increment, serve to adjust the Sales Tax Base, or serve as a basis for the Economic Incentive Payments. The `yearly' period for measurement of Sales Tax Increment shall be in accordance with the normal processes of the City. If the Completion Date is on a date other than the first day of the year„ that partial year shall be prorated based upon the number of full months of operation of the Improved Business which occur in the shortened year. If necessary to reach the full nine (9) year term of the Sales Tax Sharing period, the final month or months shall likewise be prorated. c. Making Payment. The Economic Incentive Payment is payable to Owner by City in annual installments within 120 days subsequent to the close of the fiscal year in accordance with the City Finance Department's procedures as they may change from time to time. d. Exclusions from Sales Tax Increment. Sales Tax Increment not actually received by City, for reasons not within City's control, are not subject to sharing under this Agreement unless and until actually received by City. Transactions and Use Tax collected by City is separate from, and excluded from, the Bradley Burns Uniform Local Sales and Use Tax and shall not be included in the calculation of the Economic Incentive Payment e. Sales Tax Information and Reports. The Parties acknowledge that the receipt of information from the State Board of Equalization is often delayed, and that it is often difficult to separate sales receipts for particular items, or from particular businesses from sales tax related to other items sold by a business or from other businesses. Accordingly, Owner agrees to timely provide City with accurate monthly sales reports relating to sales and the generation of Sales Tax at the Improved Business. City may adopt such procedures, audits or required reports as are reasonable or necessary to enable City to accurately calculate the Sales Tax Increment and Economic Incentive Payment. The Sales Tax Increment and the errt of-the 5 ORiGINAL RIV#4836-0528-0302 v4 _�� Economic Incentive Payment installments shall be based on information which is as accurate as can be obtained by the Parties. The Parties agree that past Economic Incentive Payments are subject to adjustment if further information indicates that any payment was inaccurate. SECTION 5. Owner's Payment of Cost of Tax Sharing Report. In accordance with Section 3.46.020 of the Code, Owner has paid to City, as a condition precedent to City's obligations hereunder, the amount of ten thousand dollars ($10,000.00) as and for the cost of the preparation of the Tax Sharing Report. SECTION 6. Operating Covenants. In accordance with Sections 3.46.030 and 3.46.050 of City's Municipal Code, Owner agrees as a condition precedent to City's obligations under this agreement, to record against the Property the Operating Covenants attached hereto as Exhibit "B." Said covenants shall be recorded promptly after the Effective Date, but in no event later than three (3) business days thereafter, shall survive the termination for any reason of this Agreement and shall run with the Property for the periods specified in Exhibit "B." SECTION 7. Indemnification; Release. a. Code Requirements Satisfied. Section 3.46.030 of the Code requires that Owner provide City with an indemnification agreement. The Parties agree that this Section 7 shall satisfy the requirement of that section. b. Survival. The indemnification provided in this section shall survive the termination of, and/or the expiration of the term of, the Agreement for a period of five (5) years from the termination or end of said term. c. Owner agrees to indemnify, defend, and hold City, and its elected officials, officers, employees, agents, and attorneys harmless from and against all liabilities, damages, claims, causes of action, judgments, orders, rulings, costs, expenses and fees, including attorneys' fees (collectively, the "Claims") arising from or related to any act or omission of Owner in performing its obligations hereunder or from any claim, writ, or other action at law or equity challenging this Agreement or the Program by a third party. d. Release. Owner releases City from any Claims arising from any inability of City to legally collect sales tax, share sales tax as provided in this Agreement, or any other act or omission, including any state statute or regulation to which City is subject, which is beyond City's sole control. e. Waiver. Owner waives any right which it might have or accrue at any time during the effective period of any provision of this Agreement, including these 6 ORIGINAL RIV#4836-0528-0302 v4 indemnification provisions, or any of its various exhibits, to pursue any legal or equitable remedy or Claim against City, other than for non-payment of Owner's share of Sales Tax Increment calculated under and otherwise due under the provisions of this Agreement. SECTION 8. Termination of Agreement by City. a. City's Right to Terminate. City shall have the right to terminate its obligations under this Agreement if Owner breaches any promise, obligation, covenant or duty under this Agreement or the Operating Covenants, including, without limitation, the failure of Owner to timely construct the Work of Improvement, the failure of Owner to timely commence operation of the Improved Business the day following the Completion Date, the failure of Owner to record, report and provide accurate sales information to City, the failure of Owner to collect Sales Tax, the failure of Owner to operate the Improved Business continuously during the term of the Agreement, or the failure of Owner to otherwise satisfy the requirements of Chapter 3.46 of title 3 of the Municipal Code. b. Notice of Termination and Cure. In order to terminate this Agreement, City shall first provide notice to Owner, given in accordance with the notice requirements set forth in Section 9 hereof, specifying Owner's breach of the Agreement in reasonable detail and indicating what steps Owner must take to cure the referenced breach. Owner will be afforded ten (10) business days from the date of the notice to cure the specified breach(es). c. If, at the end of the ten (10) day cure period, any correctible breaches have not been corrected, City shall have the right, at its sole option, to deem the Agreement terminated without further notice or action by City. In such case, Owner (or any other person or entity receiving any portion of the Economic Incentive Payments directly from City) shall be obligated to immediately repay all installments of the Economic Incentive Payments made by City, together with interest thereon at the highest rate permitted by law, from the date of the initial payment made by City to Owner. SECTION 9. Miscellaneous Provisions. a. Council Action. All findings and decisions of the City Council taken in connection with the application of Owner to participate in the Program shall be deemed to be reasonable and supported by an adequate and appropriate record. No such findings or decisions shall be subject to challenge or be the subject of any Claim by Owner. Any action taken by City, including, but not limited to, the termination of this Agreement under the provisions hereof, shall be at the sole option of City and in its sole and absolute discretion, unless a different standard is otherwise specifically indicated. 7 NA RIV#4836-0528-0302 v4 Owner acknowledges that City would not have entered into this Agreement in the absence of this covenant by Owner. b. Integration. All exhibits attached to this Agreement are deemed to be incorporated into this Agreement by reference. c. Further Documents. Owner agrees to execute any additional documents, forms, notices, applications or other documents which City reasonably determines to be necessary to carry out the intent of this Agreement and/or the intent and provisions of applicable portions of the Code. d. Partial Invalidity; Severance. The Parties agree that, should any provision, section, paragraph, sentence or word of this Agreement be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of legislation, the remaining provisions, sections, paragraphs, sentences and words of this Agreement shall remain in full force and effect and the Parties agree in good faith to immediately amend this Agreement in such a way as to provide alternative provisions, sections, paragraphs, sentences or words as necessary to carry out the intent of this Agreement and/or the Code. e. Payment of Taxes and Encumbrances. Owner shall keep current and in good standing and pay prior to delinquency all lawful real property taxes, assessments mortgages payments, loan payments, rents, lease payments, liens, and other monetary encumbrances on or against the Improved Business the repayment of which is secured by the Property, at all times during the term of the Operating Covenants. f. Assignments and Transfers. Owner shall not, without prior written approval of City, which approval may be given or withheld at the absolute discretion of City: (i) assign or attempt to assign this Agreement or any right herein; or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of the whole or any part of the Improved Business and/or the Property or the improvements thereon; or (iii) transfer control of Owner through whatever mechanism, including, without limitation, sales of stock, a sale of Owner in toto to any other person or party, or agreements giving voting control to persons not holding an interest in Owner at the date of this Agreement. This prohibition shall not apply to the reasonable grant of limited easements or permits to facilitate the development of the Property. Notwithstanding the foregoing, City agrees that it will consider an assignment of this Agreement in connection with a sale of the Improved Business to a third party, provided that said third party provides City with such financial or other information as City deems necessary in its sole discretion to enable it to adequately evaluate the experience and ability of the third party to operate the Improved Business. All decisions made by City in connection with such an assignment shall be made at City's sole discretion and in its sole judgment, and shall not be subject to challenge. All rights granted to Owner under this 8 INAGMAL RIV#4836-0528-0302 v4 �® Agreement shall automatically terminate upon a sale or long-term lease of the Improved Business or of the Property to a third party, and Owner shall have no remaining rights under this Agreement, notwithstanding any approved assignments. g. Remedies. With respect to any default by the other Party occurring after the Effective Date, whether with regard to a breach during the period of Sales Tax Sharing, the term of the indemnification provided in this Agreement to City by Owner, or the life of the Operating Covenants, the non-breaching Party may institute legal action to cure, correct or remedy any default, providing that such action is not otherwise prohibited or restricted by the provisions of this Agreement, to recover any damages arising from such breach or to obtain any other remedy consistent with the purposes of this Agreement, and further provided that notice is given in accordance with this Agreement. Any legal actions brought concerning this Agreement or Economic Incentive Payments hereunder must be instituted in the Superior Court of the County of Riverside, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. h. Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. Rights are Cumulative; Wavier. Except with respect to any rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party. A waiver of a requirement shall not constitute an ongoing waiver of that requirement in the future. j. Notices. Any and all notices, demands or communications submitted by any Party to the other Party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of City and Owner, as applicable, as designated in Section 9.k hereof. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail as heretofore provided. Any notices to any Party required to be given under this Agreement, or given by a Party for other reasons, shall be sent to: 9 RIV#4836-0528-0302 v4 Owner: GL HOD, LLC 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Attn: Brett Hopkins, CEO City: City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attn: City Manager With a copy to: Burke, Williams, & Sorensen, LLP 1600 Iowa Avenue, Suite 250 Riverside, CA 92507 Attn: Eric S. Vail k. Conflict of Interest. No elected official, officer, employee or agent of City having any conflict of interest, direct or indirect, related to this Agreement and/or the development of the Work of Improvement or the Improved Business shall participate in any decision relating to this Agreement. No Third Party Consideration. Owner warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial or other consultants, accountants, engineers, architects and the like when such fees are considered necessary by Owner. For the purposes of this paragraph, third parties shall include any officer, employee, agent or elected official of City. m. No Personal Liability of Officials. No elected official, official or officer, employee, agent or attorney of City shall be personally liable to Owner, its shareholders or principals, or any successor in interest, or any other party or person whatsoever, in the event of any default or breach by City or for any amount which may become due to Owner or to its successors, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer, employee or attorney. n. Force Majeure. In addition to specific provisions of this Agreement, performance by either Party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of public enemy; epidemics; quarantine restrictions; freight embargoes or lack of transportation; weather-caused delays; inability to secure necessary labor, materials or tools; acts of the other Party other than as permitted or required by the terms of this Agreement; acts or failure to act of any public 10 RIV#4836-0528-0302 v4 14::11'14:41'1 _11 • or governmental agency or entity other than as permitted or required by the terms of this Agreement (except that action or failure to act by City shall not extend the time for City to act unless such extension is otherwise expressly authorized herewith) unless such action or failure to act is the result of a lawsuit or injunction, or any other causes beyond the control or without the fault of the Party claiming an extension of time to perform. Any extension of time for any such cause hereunder shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within thirty (30) calendar days of the commencement of the cause. If notice is not timely given, such extension shall not commence until and if the other Party has actual knowledge of the cause. Times of performance under this Agreement may be extended by mutual agreement in writing by and between City and Owner. o. Inspections. City shall have the right at all reasonable times, and no cost or expense may be imposed with respect thereto by Owner, to inspect the books and records of Owner pertaining to a breach or suspected breach of this Agreement. Matters learned by City in the course of such inspections shall not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights by City hereunder. p. City Administration. The City Manager of City is authorized to sign on his own authority amendments to this Agreement which are of routine or technical nature. q. Independent Review. Each Party represents and warrants the following: they have carefully read this Agreement, and in signing this Agreement are agreeing to be bound by the same, they have received independent legal advice from legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement, and they have freely signed this Agreement and agreed to be bound by it without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or its respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. This Agreement shall be interpreted as though prepared jointly by both Owner and City. r. Prevailing Party. If either Party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes, or is made a party to any action or proceeding brought by a third party with respect to the Agreement, the Program or the participation in either by either Party, then as between Owner (and any successor in interest thereof) and City, the prevailing Party shall be entitled to recover as an element of its costs of suit or resolution of disputes, and not as damages, its reasonable attorneys' fees as fixed by the Court or other forum for resolution of disputes as may be agreed upon by the Parties in such action or 11 MAMMAL RIV#4836-0528-0302 v4 proceeding or in a separate action or proceeding brought to recover such attorneys' fees. s. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. t. Time Frames. Unless otherwise indicated with respect to a requirement, all time frames for performance of an act required or permitted by this Agreement shall be calendar days. Time frames measured in months shall be calculated with reference to the actual number of days in the relevant months. Annual time frames shall mean a period of 365 days. u. Duplicate Originals. This Agreement shall be executed in four (4) duplicate originals each of which is deemed to be an original. This Agreement constitutes the entire understanding and agreement of the Parties. The Parties may sign this Agreement in counterparts. v. Integration. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to all or any part of the subject matter hereof. w. Waivers. All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate representatives of City and/or Owner. Other than minor or technical amendments which the City Manager may approve on his own authority, any amendment to this Agreement must be approved by the City Council of City. [THIS SECTION LEFT INTENTIONALLY BLANK] 12 ORIGINAL RIV#4836-0528-0302 v4 WHEREFORE, the Parties, intending to be bound hereby, have affixed their authorized signatures to this Sales Tax Sharing Agreement. CITY: OWNER: City of Cathedral City GL HOD, LLC a municipal corporation a Delaware limi 'ability company Atit 41 B :Ira By: it%r Y Y• Charles P. McClendon Bre H%• f�►s City Manager Chi:f : ecutive Officer Date: '`,3 2.1.1 Lo Date : `i8/6 Attest: .4■11P11-61"111r-NLA Gary Howell City Clerk Approved as to for • Eric S. Vail, City Attorney Burke, Williams & Sorensen, LLP Approved as to content: By: J,6i 44144- Leisa A. Lukes Economic Development Manager 13 RIV#4836-0528-0302 v4 C STATE OF UTAH ) : ss COUNTY OF SALT LAKE ) On April 1, 2016, before me, the undersigned Notary Public, personally appeared Brett Hopkins,CEO,who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under Penalty of Perjury under the laws of the state of Utah that the foregoing paragraph is true and correct. WITNESS my hand and official seal. y--\ _ -- Notary Public �rjLISA BLAKE Nofory('ut�Cc Sate f IJial� My Commission Exp res on: Octobe r 1 1, 2016 Comm Number: 659927 EXHIBIT "A" To Tax Sharing Agreement [GL HOD, LLC FOR HONDA OF THE DESERT] Legal Description of Leased Property [Legal Description and Map Follow This Cover Sheet] EXHIBIT"A" RIV#4836-0528-0302 v4 EXHIBIT A Leased Premises A portion of the following legal description as more particularly depicted on the attached plat map: PARCEL 1 PARCEL MAP NO.21729,IN THE CITY OF CATHEDRAL CITY, AS PER MAP ON FILE IN BOOK 141, PAGES 60, 61, 62 AND 63 OF PARCEL MAPS, RECORDS OF SAID COUNTY, AND AS AMENDED BY CERTIFICATES OF CORRECTION RECORDED JULY 11, 1988 AS INSTRUMENT NO. 190265 AND AUGUST 24, 1988 AS INSTRUMENT NO. 241092,OFFICIAL RECORDS OF RIVERSIDE COUNTY. 8778627.3 ORIGINAL I �2 1 ,,aa4. ..vQ J hA�aN� , ii 4.col IP oLII '.iLtUtiitIIi%} t ig'oe py} a� y y ° ww 1 Mail t1.YtsltaWp?srglgp �aa Nq�r'h 4t Ic 4.0 JV t°YX N1li3 t Zkli iNi" b '''J � p 4 N ' V, 6 ss 1 WWII riP ,f4 rilpan, �'. 2 .rv, is 7 Sti fi \w L. 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T40 1 a Sgt i�tL�€C1 m 1 EXHIBIT "B" To Tax Sharing Agreement [GL HOD, LLC FOR HONDA OF THE DESERT] Operating Covenants [Duplicate Copy of Operating Covenants Omitted For Recording Purposes Only] ORIGINAL RIV#4836-0528-0302 v4 ---°-'