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HomeMy WebLinkAboutOB-140RESOLUTION NO. OB- 140 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTION OF A PURCHASE AND SALE AGREEMENT FOR PROPERTY LOCATED AT 42-455 WASHINGTON STREET, PALM DESERT, CA (APN 637-071-004) PROPERTY 13 OF THE LONG RANGE PROPERTY MANAGEMENT PLAN WITH LUMAR, LP. RECITALS: A. Pursuant to AB X1 26 (enacted in June 2011), as modified by the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), the Palm Desert Redevelopment Agency (the "Former Agency") was dissolved as of February 1, 2012 and the Successor Agency was established, and the Oversight Board to the Successor Agency (the "Oversight Board") was constituted. B. AB 1484 (enacted June 2012) amended and supplemented AB X1 26 (AB X1 26 and AB 1484, together, being referred to below as the "Dissolution Act"). C. Pursuant to the Dissolution Act, the Successor Agency is tasked with winding down the affairs of the Former Agency. D. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), all real properties of the Former Agency transferred to the control of the Successor Agency by operation of law. E. On May 5, 2014, the Oversight Board adopted Resolution No. OB-073, approving a Long -Range Property Management Plan (the "LRPMP") which addresses the disposition of the real properties owned by the Successor Agency. F. As indicated in the DOF's letter dated June 2, 2014, the DOF has approved the LRPMP. G. Pursuant to HSC Section 34191.3, the DOF-approved LRPMP shall govern, and supersede all other provisions of the Dissolution Act relating to, the disposition and use of the real property assets of the Former Agency. H. Pursuant to the approved LRPMP, the Oversight Board authorizes the execution of a Purchase and Sale Agreement (see Exhibit A) with LuMar, LP for Property 13 of the LRPMP (APN 637-071-004) in the amount of $650,000.00 (fair market value). I. In accordance with the terms of California Health and Safety Code Section 34191.5(c)(2)(B), the proceeds of this property sale will distributed as property taxes to the affected taxing entities. J. The Oversight Board is adopting this Resolution to direct the execution of the Purchase and Sale Agreement (see Exhibit A) with LuMar, LP for fair market value as directed by the approved LRPMP. -1- RESOLUTION NO. OB - 140 K. Notice of the proposed action presented in this Resolution was posted on the Successor Agency's website (being a page on the City's website) and at three public places: beginning on January 13 , 2016. NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals, and each of them, are true and correct. Section 2. The Oversight Board hereby authorizes and directs the Successor Agency to complete the execution of the Purchase and Sale Agreement (see Exhibit A) with Family Development for fair market value as directed by the approved LRPMP. The Executive Director of the Successor Agency is hereby authorized to execute the Purchase and Sale Agreement to complete the disposition of the property. Section 3. The members of the Oversight Board and officers and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution. Section 4. This Resolution shall become effective in accordance with HSC Section 34181(f). AYES: APPROVED and ADOPTED this 25THday of JANUARY , 2016. JONATHAN, PACK, RODRIGUEZ, and SPIEGEL NOES: NONE ABSENT: BUCK and KINNAMON ABSTAIN: NONE 0 ATTEST: AlrIAPO AAP' RAC L D. LASSEN, ' RETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ERT A. SPIED l RESOLUTION NO. OB 140 EXHIBIT A OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY PURCHASE AND SALE AGREEMENT FOR PROPERTY LOCATED AT 42-455 WASHINGTON STREET, PALM DESERT, CA (APN 637-071-004) PROPERTY 13 OF THE LONG RANGE ROPERTY MANAGEMENT PLAN WITH THE CITY OF PALM DESERT -3- RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 AGREEMENT OF PURCHASE AND SALE AND ESCROW INSTRUCTIONS Foresite Escrow ("Escrow") 41-995 Boardwalk, Ste G-2 Palm Desert, CA 92211 Attention: Esther Lopez, Escrow Officer ("Escrow Holder") Escrow No: THIS AGREEMENT OF PURCHASE AND SALE AND ESCROW INSTRUCTIONS ("Agreement") is dated for reference purposes as of this 25th day of January, 2016, by and between the SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, a public entity ("Seller"), and LUMAR, LP, a California limited partnership ("Buyer"). This Agreement is made with reference to the following facts, which are intended to be part of the substance of the agreement between the parties: RECITALS A. Seller owns that certain real property and improvements located at 42-455 Washington Street, Palm Desert, California, which is more particularly described in Exhibit "A" attached to this Agreement and incorporated herein by this reference and which can be described as APN 637-071-002 (the "Property"). Reference herein to the Property includes all of Seller's right, title and interest in and to any and all improvements, fixtures, rights -of -way, utility rights, easements and other appurtenant interests, entitlements, claims or other privileges or benefits in any way connected with the Property, excepting any public rights of way or public easements. B. Buyer is interested in developing the Property with the construction of approximately 13,300 square feet, or greater, of primarily casual dining and retail uses, common outdoor dining areas with applicable landscaping and parking amenities (the "Project"), subject to the necessary land use approvals, authorizations and entitlements to be submitted and processed by Buyer for approval by the City of Palm Desert (the "City") (all such approvals, authorizations and entitlements of a discretionary nature, that are in form and substance acceptable to Buyer in its sole and absolute discretion being referred to herein as the "Project Entitlements"). C. On May 28, 2015, Seller entered into an Exclusive Right to Negotiate Agreement (the "ENA") for the purchase of the Property and development of the Project by the Buyer. D. Pursuant to the ENA, Buyer desires to acquire the Property and develop, construct and operate thereon the Project, and Seller desires to sell the Property to Buyer pursuant to the terms and conditions set forth in this Agreement. THE PARTIES AGREE AS FOLLOWS: 72500.00000\22200185.2 1 CONTRACT NO. SA34980 RESOLUTION NO. OB — 140 1. Effective Date. The "Effective Date" of this Agreement shall be the date the Seller delivers an executed copy of this Agreement to Buyer. 2. Purchase and Sale of Property. Upon the terms and conditions described below, Buyer agrees to purchase and Seller agrees to sell and convey the Property to Buyer. 3. Purchase Price. 3.1 Purchase Price. The purchase price for the Property will be an amount equal to Six Hundred Fifty Thousand Dollars ($650,000.00) ("Purchase Price"), provided that such Purchase Price shall be subject to adjustment as provided in Section 3.2. The purchase price shall be paid in cash, and this Agreement is not subject to any financing contingency. 4. Payment of Purchase Price. Buyer will pay the Purchase Price to Seller through Escrow as follows: 4.1 Deposit. Within five (5) business days following the Effective Date of this Agreement, Buyer will deposit with Escrow Holder the sum of Fifty Thousand Dollars ($50,000.00) ("Deposit") in immediately available funds; provided that Twenty Five Thousand Dollars ($25,000.00) of such deposit shall consist of a transfer of the deposit previously made pursuant to the terms of the ENA. Escrow Holder will place the Deposit in an interest bearing account, with interest to accrue for the benefit of Buyer. All references herein to the "Deposit" will include interest accrued thereon. In the event the Buyer fails to deliver the Deposit to the Escrow Holder within the time period specified herein, this Agreement will be null and void. 4.2 Balance of Purchase Price. Not later than one (1) business day prior to Closing, Buyer shall deposit with Escrow Holder in immediately available funds the balance of the Purchase Price, together with such other amounts as may be required in order to pay Buyer's share of closing costs and prorations. 4.3 Application of Denosit. The Deposit is nonrefundable except as otherwise expressly provided in this Agreement. Upon Close of Escrow (defined below), the Deposit will be credited against the Purchase Price. Notwithstanding anything in this Agreement to the contrary, the first $100.00 of the Deposit shall be nonrefundable to Buyer under any and all circumstances and shall constitute independent consideration payable to Seller for Seller's agreement to sell the Property to Buyer pursuant to the terms of this Agreement. 5. Title. 5.1 Preliminary Title Report. Upon execution of this Agreement by both parties, Buyer is deemed to have approved all exceptions to title (the "Permitted Exceptions") as set forth in the preliminary title report for the Property prepared by Lawyers Title Company (through its Riverside. California office — "Title Company") dated May 21, 2015, Order No. 615681082 (the "Title Report"). In the event that any additional exceptions to title not caused or created by Buyer and not reflected in the Title Report are reported by the Title Company prior to the Close of Escrow (each an "Additional Exception"), Seller shall use commercially reasonable efforts to remove any such Additional Exception so it no longer affects title to the Property or to otherwise address and cure such Additional Exception in a manner reasonably 72500.00000\22200185.2 2 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 acceptable to Buyer ("Cure"), but in no event or circumstance shall Buyer be obligated to accept the Property at the Close of Escrow subject to any such Additional Exceptions that have not been removed from the title records or otherwise Cured in accordance herewith. Any Additional Exceptions that are Cured in accordance herewith shall thereafter be deemed Permitted Exceptions. 5.2 Title Policy. At Close of Escrow, Seller will convey good and marketable title to the Property to Buyer, subject only to the Permitted Exceptions, as evidenced by a CLTA Standard Form Owners Policy of Title Insurance, or at Buyer's election and additional expense, an ALTA Extended Owner's Policy of Title Insurance, issued by the Title Company in an amount equal to the Purchase Price, and containing such endorsements (the "Endorsements") as Buyer may, at Buyer's expense, reasonably require ("Title Policy"). 6. Due Diligence Inspections/Entry upon the Property. Prior to Buyer's execution of this Agreement, Buyer has been given an opportunity to inspect the Property. Notwithstanding the foregoing, Buyer shall have the right, in its sole and absolute discretion, but shall not be required, to further inspect and conduct tests and surveys on and with respect to the Property, and Seller shall provide Buyer reasonable access to the Property for such inspections, tests and surveys. Said foregoing inspection and testing may include, but shall not be limited to, soil borings, soil and water sampling, soil compaction assessment, environmental assessment and similar or related physical or invasive testing. Seller shall permit Buyer, its employees or agents, a license for access over and through the property for the purposes of conducting the foregoing tests, inspections, or surveys, provided Buyer shall hold Seller and the City harmless from any liability, damage or expense which either may incur by reason thereof. Any inspection or testing shall be at Buyer's sole cost and be done with reasonable notice to Seller and with Seller's reasonable concurrence. Such inspection and testing shall be conducted at a reasonable time and in a reasonable manner. Buyer shall be responsible for any personal injury or property damage resulting from its negligence, gross negligence, or willful misconduct in connection with Buyer's inspection and testing of the Property, provided that in no event shall Buyer, or its licensed agents, have responsibility or liability under this Agreement for legally required disclosure or any pre-existing conditions affecting the Property (including the discovery or existence of hazardous substances in, on or about the Property and associated groundwater). Prior to any on - site inspections, Developer shall provide Seller a current certificate of insurance for commercial general liability coverage in an amount not less than $1,000,000 that names Seller and the City as primary beneficiaries or as additional insureds. In the event that the Close of Escrow does not occur for any reason other than a default by Seller hereunder, Buyer shall restore any damage caused to the Property in connection with any Buyer inspections and testing. 7. As Is Acceptance of Property. Buyer acknowledges that prior to Close of Escrow, it will have had the opportunity to conduct such tests and evaluations as it deems reasonably necessary in order to investigate the condition of the Property, including its environmental status. Buyer acknowledges that it is acquiring the Property in its "as is" condition with no warranty or representation from Seller regarding the physical condition of the Property, its environmental condition or its suitability for Buyer's intended purposes except as may be contained in this Agreement. Buyer acknowledges that it is acquiring the Property based solely in reliance on its own inspections and examination and its own evaluation of the Property, except that Buyer shall have the right to rely upon the truth and accuracy of any Seller representations or warranties 72500.00000\22200185 2 3 CONTRACT NO. SA34980 RESOLUTION NO. OB - 140 contained in this Agreement. Buyer agrees that no representations, statements or warranties have at any time been made by Seller or its agents regarding the physical condition of the Property except as may be contained in this Agreement. Buyer acknowledges that there may be conditions affecting the Property unknown to Buyer that may adversely affect its value or use for Buyer's intended purposes. Buyer nevertheless waives any rights or recourse it may have with respect to such unknown conditions and any damage, loss, costs or expense related thereto, including rights accruing under California Civil Code § 1542, which provides: "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." Buyer acknowledges that it has either consulted with or had an opportunity to consult with legal counsel regarding the above waiver. The provisions of this Section 7 will survive Close of Escrow. Buyer Initials 8. Application for Project Entitlements. Borrower shall submit an application for Project Entitlements to the City for the Project within three months of the later of (i) the execution of this Agreement or (ii) the approval of this Agreement by the California Department of Finance. 9. Escrow. 9.1 Escrow Instructions. This Agreement shall constitute instructions of Buyer and Seller to Escrow Holder. The parties agree to execute such additional pro forma instructions as Escrow Holder may reasonably require, however, in the event of a conflict, the terms and provisions of this Agreement shall govern. 9.2 Opening of Escrow. Upon execution of this Agreement, Buyer and Seller shall cause an escrow to be opened with Escrow Holder by depositing with Escrow Holder a fully executed copy of this Agreement. Escrow shall be deemed opened as of the date this fully executed Agreement is deposited with Escrow Holder ("Escrow Opening"). 9.3 Close of Escrow: Closing Date. "Close of Escrow" shall mean the date on which the Grant Deed conveying title from Seller to Buyer is recorded in the Official Records of the County Recorder of Riverside County, California. The form of the Grant Deed will be as set forth in Exhibit B attached hereto. Provided that this Agreement is not earlier terminated pursuant to the terms and provisions hereof, and provided that all of the conditions precedent to the Close of Escrow set forth in this Agreement have been approved or waived as herein provided, Escrow shall close on or before the thirtieth (30th) day after Final Approval of the Project Entitlements ("Final Approval" means, with respect to the Project Entitlements, that they have been obtained beyond any challenge or appeal period with no challenge or appeal then pending and with all City requirements regarding the issuance of such Project Entitlements fully 72500.00000\22200185.2 4 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 satisfied), but in no event later than six months following the submission by Buyer of its application for Project Entitlements ("Closing Date"), subject to any extension of the Closing Date to allow additional time to obtain Project Entitlements, as may be mutually agreed upon in writing by both parties. Seller may terminate this Agreement pursuant to Section 10.2 hereof if Seller has performed its obligations hereunder, and failure to close Escrow results from a material default by Buyer, in which case the Deposit shall be delivered to Seller as liquidated damages. Buyer may terminate this Agreement pursuant to Section 10.1 hereof if Buyer has performed its obligations hereunder, and failure to close Escrow results from a material default by Seller, in which case the Deposit shall be returned to Buyer. By causing the Close of Escrow to occur, Escrow Holder shall be deemed to have irrevocably committed to cause the Title Company to issue the Title Policy to Buyer (or to have confirmed that Title Company is irrevocably committed to issue the Title Policy to Buyer) upon payment of the applicable premium. If the County Recorder of Riverside County, California is closed on the last day for closing Escrow, then the parties agree that Escrow Holder shall have until the next day the Recorder is open to record the Grant Deed and close Escrow. 9.4 Documents and Funds from Buyer. Not later than one (1) business day prior to the Closing Date, Buyer will deliver or will assure that the following documents and funds have been delivered to Escrow Holder: (a) Purchase Price. The Purchase Price, as described in Section 3 above. (b) Preliminary Change of Ownership Statement. A Preliminary Change of Ownership Statement or in lieu thereof, the appropriate fee, to be provided to the Recorder's office at Close of Escrow. (c) Other Sums and Documents. All other sums and documents required by Escrow Holder according to this Agreement to carry out and close the Escrow. 9.5 Documents and Funds from Seller. Not later than one (1) business day prior to the Closing Date, Seller will deliver or will assure that the following documents and funds have been delivered to Escrow Holder: (a) Grant Deed. A fully executed and acknowledged Grant Deed conveying the Property to Buyer, or Buyer's nominees or assigns, in fee simple subject only to the Permitted Exceptions. (b) FIRPTA Affidavit. An original affidavit, using Escrow Holder's standard forms, certifying that Seller and this transaction are not subject to the withholding requirements of the Foreign Investment in Real Property Tax Act and equivalent California legislation. (c) Other Sums and Documents. All other documents and sums required by Escrow Holder according to this Agreement to carry out the Escrow and to issue the Title Policy to Buyer in the form required by Buyer. 72500 00000\22200185.2 5 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 9.6 Conditions to the Close of Escrow. Close of Escrow shall not take place unless and until: (a) Seller's Obligation. Seller's obligation to sell the Property to Buyer is contingent on the following: (i) Buyer shall have delivered the Purchase Price, less any credits described in this Agreement, for the Property. (ii) The Seller's Oversight Board has approved this Agreement and/or the sale of the Property, and the California Department of Finance has approved this Agreement and/or the sale of the Property. (iii) On and as of the Close of Escrow, all of the representations and warranties of Buyer set forth in this Agreement shall be true and correct in all material respects. (iv) The Buyer shall have received Final Approval of the Project Entitlements, including plan approvals and permits, and there shall be no moratorium or similar development related restriction that would preclude or materially restrict or delay Buyer's intended development and construction of the Project. (v) Buyer shall have timely performed all other obligations of Buyer under this Agreement. In the event that any of the foregoing conditions have not occurred or been satisfied or waived by the Closing Date, or any agreed upon extension of such Closing Date as provided herein, Seller shall be entitled to terminate this Agreement and, subject to the provisions of Section 9.9 below, any funds deposited, including the Deposit by Buyer and any interest thereon will be returned to Buyer. (b) Buyer's Obligation. Buyer's obligation to purchase the Property is contingent on the following: (i) The Property shall be in substantially the same physical condition that existed as of the date of this Agreement. (ii) The Seller's Oversight Board has approved this Agreement and/or the sale of the Property, and the California Department of Finance has approved this Agreement and/or the sale of the Property. (iii) The Buyer shall have received Final Approval of the Project Entitlements, including plan approvals and permits, and there shall be no moratorium or similar development 72500.00000\22200185.2 6 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 related restriction that would preclude or materially restrict or delay Buyer's intended development and construction of the Project. (iv) Title Company shall be irrevocably committed to issue the Title Policy to Buyer at the Close of Escrow in accordance with the terms of Section 5.2 hereof, subject only to the payment of any applicable premiums. (v) Seller shall have performed all of its other obligations under this Agreement. In the event that any of the foregoing conditions have not occurred or been satisfied or waived by the Closing Date, or any agreed upon extension of such Closing Date as provided herein, Buyer shall be entitled to terminate this Agreement and, subject to the provisions of Section 9.9 below, any funds deposited by Buyer, including the Deposit, and any interest thereon will be returned to Buyer. (c) Delivery of Sums and Documents. Both parties have deposited with Escrow Holder all sums and documents required by this Agreement. 9.7 Closing Procedure. Upon receipt of all funds and instruments described in this Section 8, and upon satisfaction or waiver of all contingencies and conditions set forth in this Agreement, Escrow Holder shall: (a) Record the Grant Deed. Record the Grant Deed in the Official Records of Riverside County, California. (b) Title Policy. Cause the Title Policy to be issued. (c) Purchase Price. Deliver the Purchase Price to Seller, less any costs and expenses shown on the closing statements approved by Seller and Buyer, which costs and expenses shall be disbursed as instructed by Seller and Buyer in escrow instructions delivered to Escrow Holder prior to the Closing Date. 9.8 Electronic/Counterpart Documents. In the event Buyer or Seller utilizes "facsimile" or other electronically transmitted signed documents, then except as otherwise set forth below with respect to recorded documents, the parties hereby agree to accept and instruct Escrow Holder to rely upon such documents as if they bore original signatures. Buyer and Seller hereby agree, if requested by Escrow Holder, to provide to Escrow Holder within seventy-two (72) hours after transmission, such documents bearing the original signatures. Buyer and Seller further acknowledge and agree that electronically transmitted documents bearing non -original signatures will not be accepted for recording and that the parties will timely provide originally executed documents to Escrow Holder for such purpose. Escrow Holder is authorized to utilize documents which have been signed by Buyer and Seller in counterparts. 9.9 Costs of Escrow. Buyer will pay one-half of Escrow Holder's fee, and any additional costs and charges customarily charged to buyers in accordance with common 72500.00000\22200185.2 7 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 escrow practices in Riverside County. Seller shall pay one-half of Escrow Holder's fee, the costs and expenses associated with the Title Policy as described in Section 4, and any additional costs and charges customarily charged to sellers in accordance with common escrow practices in Riverside County. 9.10 Property Taxes and Assessments. Under Seller's ownership, the Property has not been subject to real property taxes or assessments. At the Close of Escrow, Buyer will become liable for all real property taxes and assessments (including any supplemental assessments) allocable to the Property for the period commencing after the Close of Escrow. 9.11 Brokers' Commissions. Neither party has had any contact or dealings regarding the Property, or any communication in connection with the subject matter of this transaction, through any real estate broker or other person who can claim a right to a commission or finder's fee in connection with the sale contemplated herein, except for R.D. McCumsey as broker for the Buyer, whose commission in an amount equal to one percent (1%) of the Purchase Price shall be paid by Seller at the Close of Escrow, and any amount in excess thereof, if any, shall be paid by the Buyer. If any other broker or finder perfects a claim for a commission or finder's fee based upon any such contact, dealings or communication, then the party through whom such person makes its claim shall indemnify, hold harmless and defend the other party (the "Indemnified Party") from any and all costs, damages, claims, liabilities, losses, or expenses, (including without limitation, reasonable attorneys' fees and disbursements) incurred by the Indemnified Party in defending against the claim. The provisions of this Section shall survive termination of this Agreement and the Close of Escrow. 9.12 Possession. Possession of the Property shall be surrendered to Buyer at the Close of Escrow vacant, subject only to the Permitted Exceptions. 9.13 Report to IRS. After Close of Escrow and prior to the last date on which such report is required to be filed with Internal Revenue Service ("IRS"), and if such report is required pursuant to Section 6045(e) of the Internal Revenue Code, Escrow Holder shall report the gross proceeds of the purchase and sale of the Property to the IRS on Form 1099-B, W-9 or such other form(s) as may be specified by the IRS pursuant to said Section 6045(e). Concurrently with such filing, Escrow Holder shall deliver a copy thereof to Buyer and Seller. 10. Remedies for Default. 10.1 Seller Default. If Seller defaults under this Agreement prior to the Close of Escrow, Buyer may, at its option, terminate this Agreement (in which case the Deposit will be returned by Escrow Holder to Buyer) or initiate an action for specific performance of this Agreement. 10.2 Buyer Default. IF BUYER DEFAULTS IN ITS OBLIGATION TO CLOSE THE PURCHASE OF THE PROPERTY, SELLER MAY TERMINATE THIS AGREEMENT, IN WHICH EVENT SELLER SHALL RETAIN THE DEPOSIT AS FULL, AGREED AND LIQUIDATED DAMAGES, AND SELLER'S RETENTION OF THE DEPOSIT IS SELLER'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO SUCH BUYER DEFAULT. THE PARTIES HERETO EXPRESSLY AGREE AND 72500.00000\22200185.2 8 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 ACKNOWLEDGE THAT IN THE EVENT OF A DEFAULT BY BUYER IN ITS OBLIGATION TO CLOSE THE PURCHASE OF THE PROPERTY, SELLER'S ACTUAL DAMAGES WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN, THAT THE AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES' REASONABLE ESTIMATE OF SUCH DAMAGES, AND THAT SUCH AMOUNT IS NOT UNREASONABLE UNDER THE CIRCUMSTANCES EXISTING AT THE TIME THIS AGREEMENT WAS MADE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING: (1) SELLER WILL INCUR ADMINISTRATIVE COSTS IN THE NEGOTIATION AND REVIEW OF THIS AGREEMENT AND OTHER DOCUMENTS RELATING TO THIS TRANSACTION, AND WILL INCUR DAMAGES BY WITHDRAWING THE PROPERTY FROM THE OPEN MARKET; (2) CERTAIN COSTS AND OTHER DAMAGES IN AN AMOUNT SUBSTANTIALLY IN EXCESS OF THE DEPOSIT MAY BE INCURRED BY SELLER IF THE SALE OF THE PROPERTY CONTEMPLATED HEREBY IS NOT COMPLETED; AND (3) SELLER IS ENTERING INTO THIS AGREEMENT WITH BUYER IN RELIANCE UPON BUYER'S COMMITMENT TO PURCHASE THE PROPERTY FROM SELLER. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 10.2, THIS LIQUIDATED DAMAGES PROVISION IS NOT INTENDED AND SHALL NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY BUYER'S INDEMNITY, RESTORATION OR CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT. SELLER'S INITIALS: BUYER'S INITIALS: 11. Notices. Any and all notices required or permitted to be given hereunder shall be in writing and shall be (i) personally delivered, or (ii) sent by recognized overnight delivery service, mailed by certified or registered mail, return receipt requested, postage prepaid. Any such notice or communication shall be effective when received by the addressee or upon refusal of such delivery to the parties at the addresses indicated below: To Seller: With copy to: Successor Agency to the Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, CA 92260 Attn: Executive Director Facsimile: 760-341-6372 Best Best & Krieger LLP 74-760 Highway 111, Suite 200 Indian Wells, CA 92210 Facsimile: 760-340-6698 Attn: Robert Hargreaves 72500.00000\22200185.2 9 RESOLUTION NO. OB - 140 To Buyer: With copy to: CONTRACT NO. SA34980 LuMar, LP c/o Lundin Development Company 16400 Pacific Coast Highway Huntington Beach, CA 92649 Attn: Herb Lundin and Michael Lundin Facsimile: (562)592-6050 Marinita Development Co. Inc. 3835 Birch Street Newport Beach, CA 92660 Attn: Scott Fawcett Facsimile: (949)756-8436 Any party may change its address by a notice given to the other party in the manner set forth above. 12. Seller Representations and Warranties. As of the date of this Agreement and through and including the date that the Close of Escrow occurs, Seller hereby represents, warrants and covenants to Buyer as follows: (a) Seller has the right, power and authority to enter into this Agreement, to fulfill its obligations hereunder and to acquire the Property in accordance with the terms hereof, having previously obtained any and all consents and approvals required in connection therewith (except, to the extent not yet obtained, the approval of Seller's Oversight Board and the California Department of Finance), and Seller entering into this Agreement, fulfilling its obligations hereunder and acquiring the Property in accordance with the terms hereof will not violate any existing permit, approval, contract, agreement, law, obligation, restriction, requirement, writ, injunction or judicial order to which Seller is bound. (b) There are no actions, suits, litigation or judicial proceedings in any court, tribunal or dispute resolution forum pending or, to Seller's knowledge, threatened, affecting the right, power or authority of Seller to enter into this Agreement, to fulfill its obligations hereunder and to acquire the Property in accordance with the terms hereof, or which question the validity or enforceability of this Agreement or of any action taken by Seller in accordance with this Agreement. (c) The individual(s) executing this Agreement and the documents contemplated herein on behalf of Seller have the legal right, power and authority to bind Seller to the terms and conditions hereof or thereof, and this Agreement and the documents contemplated to be executed and delivered herein are or will be upon full execution and delivery valid, legal and binding obligations of Seller, enforceable against Seller in accordance with their terms, subject to the effect of applicable bankruptcy, insolvency, reorganization, or other similar laws affecting the rights of creditors generally. 72500.00000\22200185 2 10 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 13. Buyer Representations and Warranties. As of the date of this Agreement and through and including the date that the Close of Escrow occurs, Buyer hereby represents, warrants and covenants to Seller as follows: (a) Buyer has the right, power and authority to enter into this Agreement, to fulfill its obligations hereunder and to acquire the Property in accordance with the terms hereof, having previously obtained any and all consents and approvals required in connection therewith, and Buyer entering into this Agreement, fulfilling its obligations hereunder and acquiring the Property in accordance with the terms hereof will not violate any existing permit, approval, contract, agreement, law, obligation, restriction, requirement, writ, injunction or judicial order to which Buyer is bound. (b) There are no actions, suits, litigation or judicial proceedings in any court, tribunal or dispute resolution forum pending or, to Buyer's knowledge, threatened, affecting the right, power or authority of Buyer to enter into this Agreement, to fulfill its obligations hereunder and to acquire the Property in accordance with the terms hereof, or which question the validity or enforceability of this Agreement or of any action taken by Buyer in accordance with this Agreement. (c) The individual(s) executing this Agreement and the documents contemplated herein on behalf of Buyer have the legal right, power and authority to bind Buyer to the terms and conditions hereof or thereof, and this Agreement and the documents contemplated to be executed and delivered herein are or will be upon full execution and delivery valid, legal and binding obligations of Buyer, enforceable against Buyer in accordance with their terms, subject to the effect of applicable bankruptcy, insolvency, reorganization, or other similar laws affecting the rights of creditors generally. (d) Buyer is not a, and is not acting directly or indirectly for or on behalf of any, person, group, entity or nation named by any Executive Order of the United States Treasury Department as a terrorist, "Specifically Designated National and Blocked Persons," or other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control and Buyer is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly, on behalf of any such person, group, entity, or nation. The breach of a representation or warranty of a party hereunder shall be addressed and resolved pursuant to the terms of Section 9.6 or Article 10, as applicable. 14. Miscellaneous. 14.1 Integration. This Agreement supersedes all prior agreements and understandings between the parties relating to the subject matter hereof. Neither of the parties has relied upon any oral or written representation or oral or written information given to it by any representative of the other party. 14.2 Binding Effect. This Agreement shall bind and inure to the benefit of the parties, their respective heirs, successors and assigns. 72500.00000\22200185.2 11 RESOLUTION NO. OB - 140 CONTRACT NO. SA3498O 14.3 Amendment/Modification. No change or modification of the terms or provisions of this Agreement shall be deemed valid unless in writing and signed by both parties. 14.4 Governing Law/Venue. This Agreement shall be construed, interpreted and applied in accordance with the laws of the State of California. Any litigation or arbitration regarding the Property or this Agreement will be brought in Riverside County Superior Court or conducted in Riverside County. 14.5 Business Days. Reference herein to "business days" means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or in the City of Palm Desert. 14.6 Waiver. No waiver of any breach or default shall be construed as a continuing waiver of any provision or as a waiver of any other or subsequent breach of any provision contained in this Agreement. 14.7 Attorneys' Fees. In the event of any action or proceeding to enforce or construe any of the provisions of this Agreement, the prevailing party in any such action or proceeding shall be entitled to reasonable attorneys' fees and costs. 14.8 Assignability. Any assignment of Buyer's rights under this Agreement shall require the prior written consent of Seller, which Seller may grant or withhold in its sole discretion. Notwithstanding the previous sentence, Buyer may transfer its rights under this Agreement to an entity controlled by the Buyer or a majority of the principals of Buyer without approval of the Seller. Except as expressly provided herein, any purported transfer of this Agreement, voluntarily or by operation of law, shall be null and void and shall confer no rights whatsoever upon any purported assignee or transferee, unless otherwise approved in writing by Seller pursuant to this Section 14.8. 14.9 Time of the Essence. Time is of the essence of this Agreement. 14.10 Escrow Holder. Escrow Holder shall conduct the Close of Escrow in accordance with the terms and provisions of the escrow instructions to be given to Escrow Holder by the parties in a form consistent with this Agreement. To the extent of any conflict or inconsistency between the terms and provisions of this Agreement and the escrow instructions, the terms of this Agreement shall control. 14.11 Exhibits. All Exhibits which are referred to herein and which are attached hereto or bound separately and initialed by the parties are expressly made and constitute a part of this Agreement. 14.12 Counterparts. This Agreement may be executed in counterparts and when so executed by the parties, shall become binding upon them and each such counterpart will be an original document. 14.13 Severability. If one or more of the provisions of this Agreement, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other 72500.00000\22200185 2 12 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 respect and of the remainder of this Agreement shall not be in any way impaired or affected thereby, it being intended by the parties that all other rights, privileges and obligations under this Agreement shall be valid and enforceable to the fullest extent permitted by law. Notwithstanding the foregoing, this provision shall not apply in the event that a court of competent jurisdiction determines that the application hereof would materially and adversely affect a party hereto or the rights and interests of such party under this Agreement and would not be consistent with the perceived intent of the parties as otherwise reflected in this Agreement. 14.14 Further Assurances. Upon the Close of Escrow, and from time to time thereafter, and as an obligation surviving the Close of Escrow, Seller and Buyer agree that they shall, at the request of the other make, execute and deliver or obtain and deliver all such affidavits, deeds, certificates, and other instruments and documents, and shall do or cause to be done all such acts or things, which either party may reasonably require in order to complete the consummation of the transactions contemplated by this Agreement, provided that the party to whom any such request is made is not subjected to any additional cost, expense or liability, or any increase in duties or obligations or any reduction or impairment of rights and interests in any material way in connection therewith. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOLLOWS 72500.00000\22200185.2 13 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 SELLER: SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By: Name: Its: BUYER: LUMAR, LP, a California limited partnership By: Name: Its: 72500 00000\22200185.2 14 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 CONSENT AND ACKNOWLEDGMENT OF ESCROW HOLDER Escrow Holder hereby agrees to (i) accept the foregoing Agreement, (ii) act as the Escrow Holder under said Agreement and (iii) be bound by said Agreement in the performance of its duties as Escrow Holder. Escrow Holder acknowledges receipt on the date hereof of originals or counterparts of the foregoing Agreement fully executed by Seller and Buyer. Escrow Holder advises the parties that the date of the Opening of Escrow is , 2016. Dated: , 2016 FORESITE ESCROW By: Its: Escrow Officer 72 500.00000\22200185 2 15 RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY All that certain real property situated in the County of Riverside, State of California, described as follows: Parcel 2 of Parcel Map No. 36363, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 237, Pages 91 through 93 of Parcel maps, in the Office of the County Recorder of said County. Assessor's Parcel No: 637-071-004 Exhibit A 72500.00000\22 200185.2 RESOLUTION NO. OB — 140 CONTRACT NO. SA3498O EXHIBIT B GRANT DEED [See Attached] 72500 00000\22200 185.2 RESOLUTION NO. OB — 140 CONTRACT NO. SA34980 EXHIBIT "B" Form of Grant Deed RECORDING REQUESTED BY: SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY c/o CITY OF PALM DESERT 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: City Clerk WHEN RECORDED RETURN TO: LuMar, LP c/o Lundin Development Company 16400 Pacific Coast Highway I luntington Beach, CA 92649 Exempt from Recording Fees Pursuant to G C. 6103 APN: 637-071-004 Above Space for Recorder's Use Documentary transfer tax is $ GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, a public entity ("Grantor"), hereby grants to LUMAR, LP, a California limited partnership ("Grantee"), the following described real property (the "Property") situated in the City of Palm Desert, County of Riverside, State of California: See Exhibit A attached hereto. AND excepting any public rights of way or public easements. IN WITNESS WHEREOF, Grantor has caused its name to be affixed hereto and this instrument to be executed by its duly authorized officer. DATED: 2016 GRANTOR: SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By: Name: John M. Wohlmuth Its: Executive Director RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 EXHIBIT "B" Form of Grant Deed ACKNOWLEDGEMENT 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 ) On before me, Notary Public, personally appeared 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/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. Signature (Seal) RESOLUTION NO. OB - 140 CONTRACT NO. SA34980 EXHIBIT "B" Form of Grant Deed EXHIBIT A LEGAL DESCRIPTION OF PROPERTY All that certain real property situated in the County of Riverside, State of California, described as follows: Parcel 2 of Parcel Map No. 36363, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 237, Pages 91 through 93 of Parcel maps, in the Office of the County Recorder of said County. Assessor's Parcel No: 637-071-004 RESOLUTION NO. OB - 140 [THIS PAGE LEFT INTENTIONALLY BLANK.]