Loading...
HomeMy WebLinkAboutContract 1578 t. - } c SALES TAX SHARING AGREEMENT [DATE PALM PETROLEUM, INC.] This Sales Tax Sharing Agreement ("Agreement") is entered into by and between the CITY OF CATHEDRAL CITY, a municipal corporation of the State of California (the "City") and DATE PALM PETROLEUM, INC., a California corporation (the "Owner"), and is dated for reference purposes as of February Lle' , 2014. Each of the foregoing parties may be referred to hereafter as a "Party," and jointly as the "Parties." RECITALS WHEREAS, the general welfare and material well-being of the residents of the City depend in large measure upon the facilities, goods, and services that retail businesses make available to the public and the City's residents, which, in turn, generate tax revenues to the City to help pay for necessary services to the City's residents and such retail services; and WHEREAS, the opening, operation, and expansion of new and existing retail businesses within the City (i) will attract both local and regional shoppers, (ii) will likely generate increased sales tax revenues to the City, and (iii) will enhance the quality of facilities, goods and services available to the public and the City's residents; and WHEREAS, the City wishes to induce and encourage the opening, operation, and expansion of new and existing retail businesses, thereby assisting the City in achieving its goals related to the development of said businesses and creating new sources of sales tax revenue for the City's general fund which supports the public services that the City provides to its residents and to said businesses; and WHEREAS, the City desires to incentivize retail business development and improvement in the City by sharing a portion of the increased sales tax revenues generated by new and expanding businesses; and WHEREAS, the State of California's adoption of ABx1 26 and AB 1484 and the resulting elimination of redevelopment agencies and forms of assistance which could be provided by redevelopment agencies has created the necessity for the City to provide said incentive; and WHEREAS, the City Council, in order to incentivize the opening of new retail businesses and expansion of existing retail businesses, added Chapter 3.46 to Title 3 of the City's Municipal Code to provide for partial rebates of incremental sales tax to qualifying new and existing businesses (the "Program"); and 1 ORIGINAL L t WHEREAS, the Owner owns an Existing Retail Business, as defined in the Program, and seeks to expand and renovate said Business with assistance from the Program; and WHEREAS, after a duly noticed public hearing as required by the Program, and the consideration by the City Council of the Tax Sharing Report prepared in accordance with the Program, and consideration of such other matters as may have been presented during said public hearing, the City Council found the Existing Retail Business to be an Approved Business with which the City would enter into a Sales Tax Sharing Agreement. TERMS AND CONDITIONS NOW, THEREFORE, in consideration of the mutual promises and covenants of the Parties set forth herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged by the Parties, the Parties agree as set forth hereinafter. Section 1. Incorporation of Recitals; Definitions. 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. The defined terms used in this Agreement which are not otherwise defined herein shall have the meaning ascribed to such terms in the Program. Section 2. Findings. a. The City finds that the Owner has met and satisfied the Participation Requirements set forth in Section 3.46.030 of the Municipal Code (the "Code"), and is an Approved Business for the purposes of the Program. b. The City finds that the Owner's anticipated renovations and improvement of the real property where its convenience store and fuel station is located (the "Property"), and the assistance to the Owner for such renovation and improvement is substantially likely to generate new sales tax revenues not previously generated by the Existing Retail Business, and that entering into this Agreement for the sharing of the Sales Tax Increment is in the best interests of the City and its residents within the meaning of the Program. The legal description of the Property is attached hereto as Exhibit "A," and is incorporated herein by reference. c. The City finds the benefit to the City of Sales Tax Sharing of the Sales Tax Increment, calculated using a Sales Tax Base of Ninety Thousand Dollars ($90,000.00) per tax year and using a Sales Tax Sharing percentage of forty percent (40%) of Sales Tax Increment (over the Sales Tax Base) for a period of six (6) years is consistent with the intent and purpose of the Program. 2 ORIGINAL Section 3. Prerequisites for Receipt by Owner of Tax Sharing. The following are conditions precedent to the City's obligation to share Sales Tax Increment with the Owner: a. The Existing Retail Business is an Arco AMPM located on Date Palm Drive immediately south of Interstate 10, and consists of a convenience store, a fuel station canopy and four (4) fuel pump dispensers. The Owner is obligated to remodel and expand the Existing Retail Business by (i) reconstructing and expanding the convenience store and including an integrated fast food restaurant, (ii) adding a new car wash, (iii) expanding the fuel dispensers to eight (8) fuel pumps, (iv) constructing a new fuel canopy over the eight fuel pumps, and constructing two (2) electric fueling stations with dedicated parking spaces. The work of improvement as described in the second sentence of this section shall be referred to herein as the "Work of Improvement." The Existing Retail Business once improved with the Work of Improvement shall be referred to herein as the "Improved Business." The Owner anticipates, and has so represented to the City, that the Work of Improvement will result in an increase in sales of both fuel and the items sold in the convenience store, and will result in Sales Tax Increment. The completion of the Work of Improvement is a condition precedent to Sales Tax Sharing. The Owner agrees to complete construction of the Work of Improvement, and to obtain all necessary permits or other rights ("Entitlements") as necessary for completion of the Work of Improvement, and to complete the Work of Improvement not later than twelve (12) months after the day that the signatures of authorized representatives of both the City and the Owner have been affixed to this Agreement (the "Effective Date"). "Completion of the Work of Improvement shall be deemed to have occurred on the date the City issues a Certificate of Occupancy or similar document. The City shall issue a Certificate of Occupancy in accordance with its normal procedures. The Work of Improvement shall have been constructed in accordance with all City building and permit requirements, including, without limitation, the issuance of a final Certificate of Occupancy, and in accordance with the requirements of any other governmental agency having jurisdiction over any aspect of the development and construction of the Improved Business. b. The City shall, in addition to its normal requirements and processes, have discretionary approval of the design of the Work of Improvement, which approval shall not be unreasonably withheld. Section 4. Terms Related to Calculation of Tax Sharing. a. The Sales Tax Base has been determined and agreed to be Ninety Thousand Dollars ($90,000.00) per tax year, and Sales Tax Increment shall be determined with reference to said Sales Tax Base. ORIGINAL 3 b. The six (6) year term of the Sales Tax Sharing period shall commence upon issuance of the final Certificate of Occupancy for the Work of Improvement. The Parties acknowledge that sales may or will continue on the Property during the construction of the Work of Improvement, but said sales shall not relate to the agreement between the Parties as set forth in this Agreement. The `yearly' period for measurement of Sales Tax Increment shall be in accordance with the normal processes of the City's Finance Department. If the Improved Business opens on a date other than the first day of the year prescribed by the Finance Department, 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 six (6) year term of the Sales Tax Sharing period, the final month or months shall likewise be prorated. c. The Parties agree that the Sales Tax Sharing payable to the Owner shall be forty percent (40%) of the Sales Tax Increment generated by the Improved Business on the Property and actually received by the City, commencing upon issuance of the final Certificate of Occupancy, payable for a total of six (6) years, payable 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. Sales Tax Increment not actually received by the City, for reasons not within the City's control, are not subject to sharing under this Agreement unless and until actually received by the City. d. 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, the Owner agrees to provide the City's Finance Department with accurate monthly sales reports relating to sales and the generation of sales tax at the Improved Business. The City's Finance Department may adopt such procedures, audits or required reports as are reasonable or necessary to enable the Finance Department to accurately calculate the Owner's share of Sales Tax Increment. The annual payment of the Owner's share of the Sales Tax Increment shall be based on information which is as accurate as can be obtained by the Parties. The Parties agree that past payments of the Owner's share of the Sales Tax Increment 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, the Owner has paid to the City, as a condition precedent to the City's obligations hereunder, the amount of Seven Thousand Five Hundred Dollars ($7,500.00) as and for the cost of the preparation of the Tax Sharing Report. ORIGINAL 4 Section 6. Operating Covenants. In accordance with Sections 3.46.030 and 3.46.050 of the Code, the Owner agrees as a condition precedent to the City's obligations under this agreement, to record against the Property the Operating Covenants attached hereto as Exhibit "B." Said covenants shall be recorded immediately after the Effective Date, 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. Section 3.46.030 of the Code requires that the Owner provide the City with an indemnification agreement. The Parties agree that this Section 7 shall satisfy the requirement of that section. b. The indemnification provided in this section shall survive the termination of the term of the Sales Tax Sharing for a period of five (5) years from the end of said term. c. The Owner agrees to indemnify and hold the City, and its elected officials, officers, employees, agents, and attorneys harmless from and against all damages, judgments, orders, rulings, costs, expenses and fees (collectively, the "Claims") arising from or related to any act or omission of the Owner in performing its obligations hereunder. d. The Owner releases the City from any Claims arising from any inability of the City to legally collect sales tax, share sales tax, or any other act or omission, including any state statute or regulation to which the City is subject, which is beyond the City's sole control. e. The 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 indemnification provisions, or any of its various exhibits, to pursue any legal or equitable remedy or Claim against the City, other than for non-payment of the 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. The City shall have the right to terminate its obligations under this Agreement if the Owner breaches any promise, obligation, covenant or duty under this Agreement or any of its various exhibits, including, without limitation, the failure of Owner to construct the Work of Improvement and timely commence operation of the Improved Business as soon as the Work of Improvement is concluded as defined herein, or the failure to provide accurate sales information, all in ac ance--wittrthis 5 ORIGINAL f Agreement. In order to terminate this Agreement, the City shall first provide ten (10) days' notice to the Owner, given in accordance with the notice requirements set forth in Section 9 hereof. Said notice shall indicate the reason that City has declared a termination of the Agreement, and shall indicate, if applicable, what steps must be taken to cure the referenced breach of the Agreement or of any attachment hereto. If, at the end of the ten (10) day notice period, any correctible breaches have not been corrected, the City shall have the right, at its sole option, to deem the Agreement terminated without further notice or action by the City. In such case, the Owner (or any other person or entity receiving any portion of the Sales Tax Sharing directly from the City) shall be obligated to immediately repay the full amount of all Sales Tax Sharing proceeds paid out by the City, together with interest thereon at the highest rate permitted by law, from the date of the initial payment made by the City to the Owner. Section 9. Miscellaneous Provisions. a. All findings and decisions of the City Council taken in connection with the application of the 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 the Owner. Any action taken by the City, including, but not limited to, the termination of this Agreement under the provisions hereof, shall be at the sole option of the City and in its sole and absolute discretion, unless a different standard is otherwise specifically indicated. The Owner acknowledges that City would not have entered into this Agreement in the absence of this covenant by the Owner. b. All exhibits attached to this Agreement are deemed to be incorporated into this Agreement by reference. c. The Owner agrees to execute any additional documents, forms, notices, applications or other documents which the 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. 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. 6 ORIGI�IA� e. The Owner shall pay prior to delinquency all real property taxes and assessments assessed and levied on or against the Improved Business and all sums due under any mortgage or loan, the repayment of which is secured by the Property, at all times during the term of the Operating Covenants. f. The Owner shall not, without prior written approval of the City, which approval may be given or withheld at the absolute discretion of the 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 control of the Owner through whatever mechanism, including, without limitation, sales of stock, a sale of the Owner in toto to any other person or party, or agreements giving voting control to persons not holding an interest in the 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, the 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 the City with such financial or other information as the 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 the City in connection with such an assignment shall be made at the City's sole discretion and in its sole judgment, and shall not be subject to challenge. All rights granted to the Owner under this Agreement shall automatically terminate upon a sale or long-term lease of the Improved Business or of the Property to a third party, and the Owner shall have no remaining rights under this agreement. g. 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 the City by the 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 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 payments of Sales Tax Sharing 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. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7 i. 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. 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 the City and Developer, as applicable, as designated in Section 1.03(a) and Section 1.03(b) 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. k. Any notices to any Party required to be given under this Agreement, or given by a Party for other reasons, shall be sent to: Owner: Nachhattar S. Chandi President Date Palm Petroleum, Inc. Office: 90480 66th Ave, Mecca, CA 92254 Mail: P.O. Box 2817, Indio, CA 92202 City: City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attn: City Manager With a copy to: Green, de Bortnowsky & Quintanilla, LLP 23801 Calabasas Rd., Ste. 1015 Calabasas, CA 91302 Attn: Charles R. Green No elected official, officer, employee or agent of the City having any conflict of interest, direct or indirect, related to this Agreement and/or the development of the Work of Improvement or the Improved Business shall participate in any decision relating to this Agreement. 8 JIGAL m. The 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 the Owner. For the purposes of this paragraph, third parties shall include any officer, employee, agent or elected official of the City. n. No elected official, official or officer, employee, agent or attorney of the City shall be personally liable to the 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 the City or for any amount which may become due to the 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. o. In addition to specific provisions of this Agreement, performance by either Party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of public enemy; epidemics; quarantine restrictions; freight embargoes or lack of transportation; weather-caused delays; inability to secure necessary labor, materials or tools; acts of the other Party other than as permitted or required by the terms of this Agreement; acts or failure to act of any public or governmental agency or entity other than as permitted or required by the terms of this Agreement (except that action or failure to act by the City shall not extend the time for the City to act unless such extension is otherwise expressly authorized herewith) unless such action or failure to act is the result of a lawsuit or injunction, or any other causes beyond the control or without the fault of the Party claiming an extension of time to perform. Any extension of time for any such cause hereunder shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other 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 the City and the Owner. p. The City shall have the right at all reasonable times, and no cost or expense may be imposed with respect thereto by the Owner, to inspect the books and records of the Owner pertaining to a breach or suspected breach of this Agreement. Matters learned by the 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 the City hereunder. 9 I_ ORIGINAL q. The City Manager of the City is authorized to sign on his own authority amendments to this Agreement which are of routine or technical nature. r. Each Party represents and warrants the following: they have carefully read this Agreement, and in signing this Agreement and agreeing to be bound by the same, they have received independent legal advice from legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this 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 the Owner and the City. s. 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 the Owner (and any successor in interest thereof) and the 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 proceeding or in a separate action or proceeding brought to recover such attorneys' fees. t. 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. u. 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. v. 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. w. 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. 10 I roRiNAL x. All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate representatives of the City and/or the 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 the City. 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 Date Palm Petroleum, Inc. a municipal corporation a Califon'. c. 'oration i t 3 f , 2014 B ` Date :O.05, 2014 Roderick J. Wood Nachhattar S. Chandi City Manager President Attest: B o ', � . ' B : Date:aw,, 2014 owell Susana Chandi City Clerk Secretary Approved as to form: Green, de Bortnowsky & Quintanilla, LLP City Attorney Charles R. Green Approved as o c. tent: Le'sa A. Lu es Business Development Manager CATH\0046-56\DOC\1-5 CRG rev 2-26-14 2\26\14 1140 LAW 11 ORIGINAL EXHIBIT "A" To Tax Sharing Agreement [Date Palm Petroleum, Inc.] Legal Description of Property [Legal Description Follows This Cover Sheet] EXHIBIT"A" ORIGINAL EXHIBIT "A" To Tax Sharing Agreement [Date Palm Petroleum, Inc.] Legal Description of Property THAT PORTION OF PARCELS 1 AND 2 OF PARCEL MAP NO. 22770, IN THE CITY OF CATHEDRAL CITY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP RECORDED IN BOOK 149, PAGES 62 AND 63 OF PARCEL MAPS, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, SAID LAND IS SHOWN AS LOT "A" IN THE CERTIFICATE OF COMPLIANCE RECORDED ON DECEMBER 19, 1995 AS INSTRUMENT NO. 420807 OF OFFICIAL RECORDS OF SAID COUNTY RECORDER. TOGETHER WITH THAT PORTION OF PARCEL 2 OF THAT CERTAIN CERTIFICATE OF COMPLIANCE RECORDED ON FEBRUARY 13,2001 AS INSTRUMENT NO.57791, OFFICIAL RECORDS OF SAID COUNTY RECORDER LYING WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE ALONG THE NORTH LINE OF SAID PARCEL 2 OF SAID CERTIFICATE OF COMPLIANCE NORTH 89'38'25" EAST 131.14 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID NORTH LINE AT RIGHT ANGLES SOUTH 00'21' 35" EAST 319.94 FEET TO THE SOUTH LINE OF SAID PARCEL 2. APN: 670-030-001; 670-030-028-6; 670-030-030-7 EXHIBIT"A-1" EXHIBIT "B" To Tax Sharing Agreement [Date Palm Petroleum, Inc.] Operating Covenants [Operating Covenants Follow This Cover Sheet] EXHIBIT"B" !NAL DOC # 2014-0098607 03/18/2014 08:10A Fee:NC RECORDING REQUESTED BY: ) Page 1 of 8 Recorded in Official Records County of Riverside CITY OF CATHEDRAL CITY ) Larry W. Ward Assessor, County Clerk & Recorder ) AND WHEN RECORDED RETURN TO: ) 11II IIDII III IIII I IIII IIIIII 111W IIIII IIII IIII CITY OF CATHEDRAL CITY ) 68-700 Avenida La to Guerrero ) S R U PAGE SIZE DA MISC LONG RFD COPY Cathedral City,CA 92234 ) , 5 Attn: City Clerk 'l f,, D�r, ) M A L 465 426 PCOR NCOR SMF�ICHG _E [DID- D30-ta niCNcS cc IT: CTY UNI Oiv 7 (Space Above for Recorder's Use) 0 Exempt from Recording Fees Per Government Code Section 27383 809 OPERATING COVENANTS This document, entitled Operating Covenants ("Covenants") is made by DATE PALM PETROLEUM, INC., a California corporation ("Owner"), as of 2n,,cnv\+ 21.p , 2014, for the benefit of the CITY OF CATHEDRAL CITY, a municipal corporation of the State of California ("City"). Said entities may be individually referred to herein as a "Party" or jointly as the "Parties." 1. These Covenants are executed by Owner and recorded in connection with that certain Sales Tax Sharing Agreement (the "Agreement") entered into between the Parties of more or less concurrent date herewith, and is required under the provisions of the Agreement. 2. These Covenants shall run with the land legally described in Exhibit "A" 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. Defined terms not otherwise defined herein shall have the meaning ascribed thereto in the Agreement. 3. Owner 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, Owner shall cause the Property to be used as a convenience store (with integrated fast food restaurant), fuel station and car wash (together, the "Intended Use"), except for such exceptions to such covenant as may be provided under the terms of the Agreement. Owner 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 EXHIBIT"B-1" ORIGINAL r that upon completion of construction of the Work of Improvement, Owner shall devote the Property to the Intended Use for a period of ten (10) years commencing on 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. Owner covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any part thereof, that Owner, 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 Owner in its own determination. 5. Owner 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 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 Owner, 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. 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. Owner 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 district, will vote in favor of its formation, or for EXHIBIT"B-2" ORIGINAL IVIII)I1 11 III 11 IIIII�(IIIIIIVIIIIIIVIIIII1 I11 © ,08 ze099 en 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 Owner agrees to include a similar provision to every lease of any portion of the Property to a Tenant such that the Tenant's obligations are essentially identical to the Owner's. Notwithstanding any provision in these Covenants to the contrary, the Owner shall retain all rights under the district to appeal the amount of the assessment allocated to the Owner's property and/or business. 7. 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 businesses in the area. Owner 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 Owner agrees to include a similar provision to every lease of any portion of the Property to a Tenant such that the Tenant's obligations are essentially identical to the Owner's. Notwithstanding any provision in these Covenants to the contrary, the Owner shall retain all rights under the district to appeal the amount of the assessment allocated to the Owner's property and/or business. 8. 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 ten (10) years, calculated as indicated above. 9. The City is deemed the beneficiary of the terms and provisions of this 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. EXHIBIT"B 3" [-ORIGINAL 111011111Hoilmilmull 03 P 81301A118010R I" WHEREFORE, Owner, intending to be bound hereby, has executed this document, entitled Operating Covenants, on the date first above-written. OWNER: DATE PALM PETROLEUM, INC., a California corporation By:Y A" Nachhattar S. Chandi President By: • Susana andi Secretary ORIGINAL EXHIBIT"B-4" 110111111110 1111111111 VIII 1I1I I11I 63/18/2014 20141098607 4 of 8 EXHIBIT "A" TO OPERATING COVENANTS LEGAL DESCRIPTION OF LAND AFFECTED BY OPERATING COVENANTS The legal description of the Property affected by the Operating Covenants appears following this cover sheet EXHIBIT"B-5" r�-- ORIGINAL I 50 R EXHIBIT "A" TO OPERATING COVENANTS LEGAL DESCRIPTION OF LAND AFFECTED BY OPERATING COVENANTS THAT PORTION OF PARCELS 1 AND 2 OF PARCEL MAP NO. 22770, IN THE CITY OF CATHEDRAL CITY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP RECORDED IN BOOK 149, PAGES 62 AND 63 OF PARCEL MAPS, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, SAID LAND IS SHOWN AS LOT "A" IN THE CERTIFICATE OF COMPLIANCE RECORDED ON DECEMBER 19, 1995 AS INSTRUMENT NO. 420807 OF OFFICIAL RECORDS OF SAID COUNTY RECORDER. TOGETHER WITH THAT PORTION OF PARCEL 2 OF THAT CERTAIN CERTIFICATE OF COMPLIANCE RECORDED ON FEBRUARY 13,2001 AS INSTRUMENT NO.57791, OFFICIAL RECORDS OF SAID COUNTY RECORDER LYING WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE ALONG THE NORTH LINE OF SAID PARCEL 2 OF SAID CERTIFICATE OF COMPLIANCE NORTH 89'38'25" EAST 131.14 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID NORTH LINE AT RIGHT ANGLES SOUTH 00'21' 35" EAST 319.94 FEET TO THE SOUTH LINE OF SAID PARCEL 2. APN: 670-030-001; 670-030-028-6; 670-030-030-7 EXHIBIT"B-6" ORIGINAL 11111111 III IIII liI IIIIIII IIII)III VIII IIII IIII 93' 8 6g AgQ8�19R • ALL CAPACITY ACKNOWLEDGMENT State of e, L/f() (J/g ', ) County of R/ / $/DE ) , • On Q —/'� , before me, /ill/ i `_ $ i is D✓% At!JL/c> Date ,Here In�rt Name,anyd T,i�/of he Officer personally appeared 0f 19,9771941 Name(s)of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/.lac/they executed the same in his/her/their authorized capacity(ies), and that by hislherAlaiii.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. MARIA TERESA GARCIA WITNESS my hand and official seal. Commission# 199888 Notary Public-California z 77,1 Riverside County My Comm. Expires Jan 1, 2015 A/1(11 Signature C Place Notary Seal Above EXHIBIT"B-7" 1101111111111111111111111111111111111101110111111111 G1 2- of ep ALL CAPACITY ACKNOWLEDGMENT State of Aie/(,71?1/1/17- County of 1e wei ,J /De On Q3Q� , before me, f/i"I f • Aeer Date H�y)27IV sli N me and tle of the Officer # /�j/ j i personally appeared SAO 5A 1/1 A ( ' LI/ (/c�G� Name(s)of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that die/she/ ey executed the same in diis/her//geir authorized capacity s) 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. MARIA TERESA GARCIA I certify under PENALTY OF PERJURY under the laws of LT. Commission# 1919888 the State of California that the fore oin�,� g g paragraph is true Notary Public-California Z and correct. Riverside County My Comm. Expires Jan 1,2015 WITNESS my hand and official seal. Signature / 41a,L(a Juva 2uaa Place Notary Seal Above EXHIBIT"B-$" 1111 IIIIIII III IIII IIIIII IIIIIII VIII III VIII IIII IIII 93,1161 i07388s teri