HomeMy WebLinkAboutCostco Wholesale Corporation with COU 2015-01-21 --:01
L� C,L
IMPROVEMENT AGREEMENT
By and Between
THE CITY OF UKIAH,
a municipal corporation
and
COSTCO WHOLESALE CORPORATION,
a Washington corporation
USW 804510561.13
11/14/14
TABLE OF CONTENTS
Page
100 . SUBJECT OF AGREEMENT, , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
101 . Purpose of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
102 . The Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l
103 . Parties to This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
103 . 1 City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
103 . 2 Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
104 . Rights not Granted under Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 . 11 . 6 2
200 , DISPOSITION OF THE SITE . . I I I I I . . . . 2
201 . Sale and Purchase . , I I I I . . I I I I I I . . . . . . . . . . . . . . . . 2
201 . 1 Conditions of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
201 . 2 Finality of Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
201 . 3 Costco Discretion and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
201 . 4 City Confirmations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
201 . 5 Closing Notice, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
202 . City ' s Reserved Discretion . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
300 . DEVELOPMENT OF THE SITE' . . , , , , , , , . . . 5
301 . Development of the Site by Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
301 . 1 Scope of Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
301 . 2 City Approval of Plans, Drawings and Related Documents . . . . . . . . . . . . . . . . . . . . . . . 5
301 . 3 Cost of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
301 .4 Construction Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
301 . 5 Bodily Injury, Property Damage and Workers' Compensation
Insurance , . . 1 . 11 1 1 . 11 , 1660 , . . . . 90 * 004 6
301 . 6 City and Other Governmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
301 . 7 Rights of Access . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
301 . 8 Local, State and Federal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
301 . 9 Antidiscrimination During Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
302 . Responsibilities of City; Financing Mechanism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
302 . 1 Construction of City Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
302 . 2 Contract for Construction of City Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
302 . 3 Financing Mechanism, , . . . . I ' ll . . . . . . . . . . . . . . . . . . . . . .
303 . Taxes, Assessments, Encumbrances and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
304 . Prohibition Against Transfer of Site, the Buildings or Structures Thereon
and Assignment of Agreement , . I I I I I . I . I I I I . I . I I I I . . I I I I 1 1 6 1 . . I I I I I I I I I I I I . . . . . . . . . . . . . . . 1
304 . 1 Transfer Prior to Certificate of Occupancy , . . , . , , , , , . . . . 1
304 . 2 Transfer to Affiliate , , I I I . . I I I I I . I . I I I I . I I . I I . I I I I I I . I I I I I I I 1 1
304 . 3 Continuing Obligation , , I I I . . I I I . . I I I . . . I I I I . . . I I I . . . . . . 4 1 1 1 1 . 9 4 0 * & 0 , . . 0 * , . . . . . . . . . . . . . . . . . . . 1 1
305 . Security Financing; Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
305 . 1 No Encumbrances Except Mortgages, Deeds of Trust, Sales and
Lease-Backs or Other Financing for Development , I I I I . I . . I . I I . . 4 4 . 9 a , . 9 . a I a 0 & . . . . . . 11
305 . 2 Holder Not Obligated to Construct Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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TABLE OF CONTENTS
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Page
305 . 3 Notice of Default to Mortgage, Deed of Trust or Other Security
Interest Holders ; Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
305 . 4 Failure of Holder to Complete Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
305 . 5 Right of City to Cure Mortgage, Deed of Trust or Other Security
InterestDefault . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
306 . Right of City to Satisfy Other Liens on the Site After Title Passes . . . . . . . . . . . . . . . . . . . . . . 13
400 . USE OF THE SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
401 . Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
402 . Obligation to Refrain From Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
403 . Effect and Duration of Covenants . . . . . . I I I 1 4 1 1 1 1 1 . . I I I I I I . I I I 1 1 6 . . I I I I I . I I I I I I . I I I . 1 0 6 a a 0 a a q 0 6 * 0 14
404 . Rights of Access - Public Improvements and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
500 . DEFAULTS , REMEDIES AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
501 . Defaults - General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
502 . Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
502 . 1 Institution of Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
502 .2 Applicable Law; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
502 . 3 Acceptance of Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
503 . Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
504 . Remedies Generally . , I I I W I I I I I . . I I I I I I I I I I I I . I . I I I I I I I I I I . . . . . . . . . . . . . 6 . . . . . . . 6 . . . . . . . . . . . . . 6 o 1 o s 9 o o a 1 5
505 . Remedies and Rights of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
505 . 1 Remedies Available to Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
505 . 2 Remedies Available to City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
600 . GENERAL PROVISIONS , I . I 1 1 6 . . I I I I I I . I I I I . I I I I I I . . . . . . . . . . . . . . . . a 0 & . . . . 0 . . . . . . . . . . . . . . . so . . . . so . . . 18
601 . Notices, Demands and Communications Between the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
602 . Conflicts of Interest . , , , , . . , , , . . . I 1 . , , , 14 . 940 84 . . 0 . 094 0 . . . . . 18
603 . Nonliability of City Officials and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
604 . Enforced Delay: Extension of Times of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
605 . Inspection of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
606 . Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
607 . Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
608 . Successors Bound , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a . . Pe * . . . moist . . . . . . . . 20
609 . Severability ,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
610 . Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
611 . Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
612 . Party ' s Approval Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
613 . Computation of Time . . , . . . . . . . . . 6 . . . 1 6 1 . I I I I I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
614 . Survival of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
615 . Prevailing Wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
700 . SPECIAL PROVISIONS , . . . . . . . . . . . . . . . . . . . . . . . . sit . . . . . . so . . . . . . . . . . . . . . . . . . . . . . . 21
701 . Development Restrictions , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
702 . Amendments to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
800 , ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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TABLE OF CONTENTS
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900 , TIME FOR ACCEPTANCE OF AGREEMENT BY CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1000 . COUNTERPARTS ; FACSIMILE SIGNATURES . . . . . . . . o . . . . . . . . . . . . . . . . . . . . . . . . . . o . . .
Attachments
Attachment No . 1 Real Estate Purchase and Sale Agreement
Attachment No . 2 Map of the Site
Attachment No . 2 . 1 Map of Lot 3
Attachment No . 3 Legal Description of the Site
Attachment No . 3 . 1 Legal Description of Lot 3
Attachment No . 4 Schedule of Performance
Attachment No . 5 Scope of Development
Attachment No . 6 Exclusive Use Covenant
Attachment No . 7 Form of Memorandum of Agreement
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AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of the '�I ST day of
2015 (the "Effective Date"), by and between the City of Ukiah, a general law municipA
corporation ("City"), and Costco Wholesale Corporation, a Washington corporation ("Costco").
City and Costco agree as follows:
100. SUBJECT OF AGREEMENT
101. Purpose of This Agreement City, Costco and the Redevelopment Agency of the
City of Ukiah(the "RDA") entered into that certain Exclusive Negotiating Agreement(the
"ENA") dated January 20,2011, in contemplation of the possible sale of the Site by the RDA to
Costco. The RDA has since been dissolved, as required by California law, and a Successor
Agency established pursuant to Health and Safety Code Section 34173 ("Successor Agency")
has acceded to certain rights and obligations of the RDA, including ownership of certain real
property in the City of Ukiah(the "Site") and another parcel known as Lot 3. In accordance with
the ENA, City, Successor Agency and Costco entered into that certain Agreement dated
December 19, 2013 (the "Tripartite Agreement"), subject to approval by the Successor
Agency's Oversight Board and the California Department of Finance. The Department of
Finance did not approve the Tripartite Agreement, at least in part, because it could not confirm
that the obligation of the Successor Agency was limited to conveying the Site. To clarify the
respective obligations of City and Successor Agency,the parties are bifurcating the Tripartite
Agreement into this Agreement between Costco and City and a separate Real Estate Purchase
and Sales Agreement of even date herewith between Successor Agency and Costco ("Purchase
Agreement"),pursuant to which Successor Agency agrees to sell and Costco agrees to buy the
Site and Lot 3, subject to the terms and conditions stated therein. A true and correct copy of the
Purchase Agreement is attached hereto as Attachment 1. The purpose of this Agreement is to
memorialize the terms under which the City agrees to construct certain infrastructure
improvements and Costco agrees to develop the Site for a Costco Wholesale Store and related
facilities and to donate Lot 3 to the City for use as a park as further provided in Section 402. This
Agreement and the Purchase Agreement are in furtherance of the objectives of the ENA.This
Agreement and the Purchase Agreement will replace and supersede the ENA and the Tripartite
Agreement, upon (a) approval and execution hereof by City and Costco, (b) concurrent approval
and execution of the Purchase Agreement by Successor Agency and Costco, and(c) approval of
the Purchase Agreement by the Oversight Board and the Department of Finance. Capitalized
terms not defined in this Agreement but defined in the Purchase Agreement shall have the
meanings ascribed to them in the Purchase Agreement.
102. The Site The Site is that area shown on the Map (Attachment No. 2) and is more
particularly described in the Legal Description of the Site(Attachment No. 3).
102.5 Lot 3. Lot 3 is that area shown on the Map (Attachment 2.1) and is more
particularly described in the Legal Description of Lot 3 (Attachment No. 3.1.)
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103. Parties to This Agreement
103 . 1 City The office of City is located at 300 Seminary Avenue, Ukiah,
California 95482 . City' s fax number is 707-463 -6204, Attn : City Manager. " City" as used in
this Agreement, includes City and any assignee of or successor to its rights, powers and
responsibilities with respect to the Site.
103 .2 Costco The principal office of Costco is located at 999 Lake Drive,
Issaquah, Washington 98027 . Costco ' s fax number is 425 -313 - 8114, Attn: Seth S . Katz.
Wherever the term " Costco " is used herein, such term shall include any permitted nominee,
assignee or successor in interest as herein provided.
104. Rights not Granted under Agreement. This Agreement is not, and shall not be
construed to be, a statutory development agreement under Government Code Section 65864 et
seq. , or a disposition and development agreement under Health and Safety Code Section 33000
et seq. This Agreement is not, and shall not be construed to be, an approval of or an agreement to
issue permits or a granting of any right or entitlement by City concerning any project,
development, or construction by Costco in City. This Agreement does not and shall not be
construed to exempt Costco in any way from the requirement to obtain permits and/or other
discretionary or non-discretionary approvals, including, without limitation, an amendment of
City ' s General Plan to modify the Site ' s zoning designation, as may be necessary for the
development of the Site, and does not limit the City ' s exercise of its discretion in granting or
denying any such permit or other land use approval . Likewise, this Agreement does not exempt
Costco from compliance with the California Environmental Quality Act; City makes no
representations or warranties as to the certification of any Environmental Impact Report that may
be required for the development of the Site. This Agreement does not, and shall not be construed
to, exempt from the application and/or exercise of City ' s power of eminent domain or its police
power, including, but not limited to, the regulation of land uses and the taking of any actions
necessary to protect the health, safety and welfare of its citizenry.
200. DISPOSITION OF THE SITE
201 . Sale and Purchase The sale and purchase of the Site and Lot 3 are subject to the
Purchase Agreement. Costco ' s obligation to close escrow under the Purchase Agreement is
subject to conditions for Costco ' s benefit contained in the Purchase Agreement, including the
conditions that also apply to Costco ' s obligations under this Agreement and are subject to the
fulfillment or waiver, in Costco ' s sole and absolute discretion and shall continue as conditions
until Closing under the Purchase Agreement.
201 . 1 Conditions of this Agreement. These conditions include the following :
a. There shall have been no material adverse change to the physical
or title conditions of the Site, and the Site and its title remain in substantially the condition
approved by Costco prior to its execution of this Agreement;
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b. Costco shall have received approval for construction plans and
design development drawings for the improvements on the Site and notice that the building
permit(s) necessary for development of the Site may be issued, subject only to applicable fees ;
C. Costco shall have obtained or received all approvals required under
the California Environmental Quality Act ("CEQA") and any and all other governmental
entitlements and approvals required for the development, construction and operation of the Site
as a Costco warehouse store, all conditions of which entitlements and approvals and all
requirements for on-site and off-site improvements or services, in-lieu fees or payments,
dedication or reservation requirements, water rights acquisition costs, local improvement district
costs, connection charges, assessments, mitigation fees, impact fees, permit fees and any other
similar requirements, fees or charges imposed by any governmental entity or utility service
provider in connection % with the approvals shall be subject to Costco ' s approval in its sole and
absolute discretion;
d. Costco shall have obtained a commitment for an ALTA policy of
title insurance acceptable to Costco in the full amount of the Purchase Price ;
e . Successor Agency shall not be in material default under any other
provision of the Agreement beyond any applicable cure period, and without limiting the
generality of the foregoing, shall have obtained or received all approvals required under CEQA
and any and all other governmental entitlements and approvals required for the consummation of
the purchase and sale contemplated by this Agreement;
f. City shall not be in material default under any other provision of
this Agreement beyond any applicable cure period, and without limiting the generality of the
foregoing, Costco shall be satisfied with status of performance and conditions under this
Agreement;
g . Successor Agency shall have obtained final confirmation, to the
reasonable satisfaction of Costco , that Successor Agency has all necessary approvals from the
Oversight Board and the State Department of Finance to convey the Site to Costco as
contemplated by this Agreement;
h. Costco shall have received and approved all items and
documentation provided in this Agreement to be delivered to Costco, including, without
limitation, copies of the City Work Approvals and the Financing Mechanism;
i . The representations and warranties of City contained in this
Agreement shall be true and correct in all material respects as of the Closing;
j . Subject to Section 604, no litigation, referendum, moratorium,
statute, order, regulation, ordinance, legislation, judgment, ruling or decree shall have been
enacted, adopted, issued or entered, or shall be pending or in effect, that could adversely affect
the Site or Costco ' s ability to develop, construct, open and operate its intended project in
accordance with Costco ' s schedule; and
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k. The Site shall have been established as a single, legally subdivided
lot, separate and apart from any other real property, which condition may not be waived, and as a
separate tax parcel .
201 .2 Finality of Approvals . For purposes of this Agreement, including,
without limitation, this Section 201 , approvals shall not be deemed to have been "obtained " or
"issued" until the period of time (if any) to contest or appeal any such issuance has passed
without the filing of a contest or appeal or, if a contest or appeal has been filed, after the issuance
of a final and non-appealable order, decision or judgment (a "Final Judgment") confirming the
issuance of the relevant approvals without substantial modifications or conditions that are
unacceptable to the benefited party. It is understood that neither Costco nor City shall have the
right to terminate this Agreement based on the failure to obtain a Final Judgment required for
Close of Escrow until available judicial remedies have been exhausted or the parties both agree
that further appeals are not warranted.
201 .3 Costco Discretion and Remedies . Without limiting its other remedies
under this Agreement but subject to Sections 201 .2 and 604, Costco, in its sole and absolute
discretion, may waive any of the foregoing conditions other than g. and k. that Costco determines
are not satisfied to Costco ' s satisfaction (or will not be timely so satisfied), or upon such
determination Costco may terminate this Agreement. Furthermore, if the Purchase Agreement is
terminated for any reason whatsoever, Costco shall have the right to proceed with this
Agreement or to terminate this Agreement at any time after such termination. Termination of this
Agreement by Costco shall be effective upon delivery of a notice of termination from Costco to
City and Escrow Agent.
201 .4 City Confirmations . The conditions of this Section 201 , action by the
City pursuant to this Agreement and subsections b, c and k require action by the City in the
exercise of its police power to regulate land use within its jurisdictional boundaries, including
approval of a zoning change to permit general retail uses on the Site, issuance of a Site
Development Permit under the City' s zoning ordinance, and certification of environmental
documents required by the California Environmental Quality Act ("CEQA") . The City agrees to
furnish to Costco , Successor Agency and the Escrow Agent identified in Section 202 of the
Purchase Agreement timely evidence that these conditions have been satisfied, including the
deposit into escrow of an executed Exclusive Use Agreement in the form attached as Attachment
6 hereto, the recordation and delivery of which is conditioned only upon Closing under the
Purchase Agreement.
201 .5 Closing Notice. The conditions to Costco ' s obligation to consummate the
transaction set forth in this Agreement is subject to Costco ' s satisfaction with or waiver of the
conditions within the time period specified in the Schedule of Performance (Attachment No . 4
hereto) , subject to Section 604 . When all the conditions have been satisfied or waived, Costco
shall so notify the City in writing (the "Closing Notice") ; provided, however that any of the
conditions that have not been expressly waived by Costco shall continue as conditions until
Closing under the Purchase Agreement (the "Continuing Conditions"), and there shall have
been no material adverse change with respect thereto prior to Closing.
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202. City ' s Reserved Discretion . Nothing in this Agreement or in the Purchase
Agreement shall be deemed to affect or limit in any way the City' s discretion in the exercise of
its local police power, either in acting on applications by Costco for land use approvals required
under either the Purchase Agreement or this Agreement, or the City ' s discretion to change
general plan, zoning or any other land use regulations in the City in the future which may affect
the Site . The parties do not intend this Agreement to provide vested rights to Costco pursuant to
Title 7, Division 1 , Chapter 4, Article 2 . 5 of the Government Code (commencing with section
65864) . The parties acknowledge, however, that if Costco obtains building permits for the
development of its store on the Site and expends substantial sums in reliance on those permits, it
can obtain a vested right to complete construction and occupy and use the improvements in
accordance with land use regulations in effect when its rights vest.
300. DEVELOPMENT OF THE SITE.
301 . Development of the Site by Costco
301 . 1 Scope of Development Upon Closing pursuant to the Purchase
Agreement, Costco shall develop the Site in accordance with the Scope of Development
(Attachment No . 3 ) and a Site Development Permit issued by the City. Upon completion of
development in accordance with the Scope of Development and City' s generally-applicable
requirements, City shall issue a final inspection notice or certificate of occupancy for the Site
(the "Certificate of Occupancy") .
301 .2 City Approval of Plans , Drawings and Related Documents City
heretofore has reviewed and approved Costco ' s architectural and landscaping plans and
specifications for development of the Site . If Costco desires to make any substantial change to
those plans and specifications , Costco shall submit the proposed change to City for its approval .
If the construction plans, as modified by the proposed change, conform to the requirements of
Section 301 . 1 of this Agreement, the approvals previously granted by City under this
Section 301 . 2 and the Scope of Development (Attachment No . 3 ), and subject to Section 202
hereof, City shall process the proposed change in accordance with its standard procedures for
approval of minor applications over the counter or by the Zoning Administrator.
301 .3 Cost of Construction The cost of developing the Site and constructing all
improvements thereon shall be borne by Costco, except for work expressly set forth in this
Agreement to be performed or paid for by City or others . City and Costco shall each pay the
costs necessary to administer and carry out their respective responsibilities and obligations under
this Agreement.
301 .4 Construction Schedule Costco shall begin and complete all construction
and development of the Site within the times specified in the Schedule of Performance
(Attachment No . 4) or such reasonable extension of said dates as may be granted by City or as
provided in Section 604 of this Agreement. The Schedule of Performance is subject to revision
from time to time as mutually agreed upon in writing between Costco and the City Manager on
behalf of City. During the period of construction, but not more frequently than once a month,
Costco shall submit to City a written progress report of the construction when and as requested
by City. The report shall be in such form and detail as may reasonably be required by City and
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shall include a reasonable number of construction photographs taken since the last report
submitted by Costco .
301 . 5 Bodily Injury, Property Damage and Workers ' Compensation
Insurance Prior to the commencement of construction on the Site or any portion thereof, Costco
or any contractor or other person or entity acting on behalf of or under the direction of Costco (a
"Costco Representative") , shall furnish or cause to be furnished to City duplicate originals or
appropriate certificates of bodily injury and property damage insurance policies in the amount of
at least ONE MILLION DOLLARS ($ 1 ,000,000) for any person, FIVE MILLION DOLLARS
($ 5 ,000, 000) for any occurrence and FIVE HUNDRED THOUSAND DOLLARS ($ 500,000)
property damage, naming City as an additional insured. If a Costco Representative provides a
certificate of insurance (and any policy endorsement that may be required to effect coverage of
City as an additional insured) in satisfaction of the insurance requirements of this Section 301 . 5 ,
then insurance Costco may carry shall be in addition to and secondary and non-contributing to
any coverage provided by the Costco Representative. Costco or a Costco Representative shall
also furnish or cause to be furnished to City evidence satisfactory to City that any contractor with
whom it has contracted for the performance of work on the Site carries workers' compensation
insurance as required by law. The obligations set forth in this Section 301 . 5 shall remain in
effect only until issuance of the Certificate of Occupancy. In satisfaction of the foregoing,
Costco maintains insurance meeting the minimum standards set forth in Costco ' s current
Memorandum of Insurance as posted at www, marsh.com/moi?client=0847 . Said memorandum
and any substitutes or replacements thereof also shall cover City as an additional insured, but
shall be secondary and non-contributing to any coverage provided by a Costco Representative ,
301 .6 City and Other Governmental Permits Before commencement of
construction or development of any buildings, structures or other work of improvement upon the
Site, Costco shall, at its own expense, secure or cause to be secured any and all permits that may
be required by City or any other governmental entity affected by such construction, development
or work.
301 .7 Rights of Access For the purposes of assuring compliance with this
Agreement, representatives of City shall have the reasonable right of access to the Site during the
period of construction, without charges or fees, during normal construction hours, and upon at
least one business day advance notice to Costco, for the purposes of this Agreement, including,
but not limited to , the inspection of the work being performed in constructing the improvements .
Such representatives of City shall be those who are so identified in writing by the City Manager
of City. Representatives of Costco shall be entitled to accompany City representatives at the
times that City exercises this right of access . City shall indemnify Costco and hold it harmless
from any damage caused or liability arising out of this right to access . This is in addition to the
City ' s normal requirements for inspecting work performed pursuant to a Building Permit,
including inspections by the City ' s Building Official .
301 .8 Local, State and Federal Laws Costco shall carry out the construction of
the improvements in conformity with all applicable laws, including all applicable federal and
state labor standards .
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301 .9 Antidiscrimination During Construction Costco, for itself and its
successors and assigns, agrees that in the construction of the improvements provided for in this
Agreement, Costco will not discriminate against any employee or applicant for employment
because of race, color, creed, religion, sex, marital status, ancestry or national origin.
302. Responsibilities of City ; Financing Mechanism,
302. 1 Construction of City Work. A condition to Costco ' s acquisition of the
Site pursuant to the Purchase Agreement is that City obtain and/or receive all approvals required
under CEQA and any and all other governmental entitlements and approvals (collectively, the
"City Work Approvals") required for the development, construction and operation of certain
improvements (the "City Work") and commit to undertake the City Work pursuant to this
Agreement and in accordance with the Scope of Development (Attachment No . 5) or as revised
with the approval of all governmental entities having approval rights over those revisions .
Costco acknowledges that in addition to discretion reserved by City elsewhere in this Agreement,
including, without limitation, Sections 104 and 202 hereof, City expressly retains and reserves all
discretion to (i) modify the City Work as it determines, in its sole discretion, may be necessary to
comply with the CEQA, (ii) select other feasible alternatives to the City Work to avoid
significant environmental impacts, (iii) balance the benefits of the City Work against any
significant environmental impacts prior to taking final action if such significant impacts cannot
otherwise be avoided, and/or (iv) determine not to proceed with the City Work. Similarly, City
acknowledges that Costco reserves the discretion to terminate this Agreement and the Purchase
Agreement if any aspects of the proposed City Work as finally entitled and approved are not
acceptable to Costco, including, without limitation, revisions to the design thereof or, except to
the extent funds from the generally-applicable Airport Industrial Park Capital Improvement Fees
may be used, if the City Work may require any expense to Costco or assessment or claim against
the Site . If City exercises its discretion to obtain or receive the City Work Approvals and intends
to undertake the City Work, or if City determines not to proceed with the City Work, City shall
give written Notice thereof to Costco . If the Notice states that City has obtained the City Work
Approvals and intends to undertake the City Work, the Notice shall be accompanied by complete
and accurate copies of the City Work Approvals, including, without limitation, the plans for the
City Work. Costco shall have the time specified in the Schedule of Performance of this
Agreement (Attachment No . 4) to review the materials so provided by City and to approve the
materials, such approval not to be unreasonably withheld, to raise issues therewith, or to
terminate this Agreement; provided, however, that notwithstanding Section 612 hereof, if Costco
raises issues with the materials, it shall set forth the reasons for those issues . If Costco fails to
respond within such time, then, subject to Section 612 hereof, it shall be deemed to have
disapproved the materials and this Agreement shall be deemed terminated . If Costco approves
the materials or if Costco and City are able to address any issues raised by Costco to Costco ' s
reasonable satisfaction, then subject to satisfaction or waiver of the remaining conditions of
Section 201 . 1 hereof, City shall perform the City Work within the times specified in the
Schedule of Performance .
302 .2 Contract for Construction of City Work. The contract for the
construction of the City Work will consist of the City ' s standard construction contract, project
specifications including the project specific special provisions, an encroachment permit from the
California Department of Transportation ("Cal Trans") for work within the Cal Trans right of
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way, and the project plans (collectively, the "Construction Contract") and will be developed in
accordance with the California Public Contract Code . The Construction Contract will include,
without limitation, the provisions covering the following :
a. Subcontract Requirements . Prime contractor to ensure
subcontractors and suppliers will comply with the Construction Contract.
b . Working Day Requirements . The Construction Contract will
include an allocation of working days for completion of the City Work including, but not
necessarily limited to, working day allocations for milestones within the work. Additional days
will be managed by the City in cooperation with Costco . The working day allocations included
in the notice inviting bids, request for qualifications and request for proposals (collectively, the
"Bid Package") will be agreed to by the City and Costco prior to Costco recommending
approval and the City approving and issuing the Bid Package .
C, Liquidated Damages . The Construction Contract will include
assessment of liquidated damages of Ten Thousand Dollars ($ 10,000 . 00) per day, or as otherwise
mutually approved by Costco and City, should the Contractor not complete the City Work or
milestone segments thereof within the allocated working days . The Construction Contract shall
include disclosure to the contractor that unexcused delays in the work may result in damages not
only to City but also to Costco whose on-site work must be coordinated with contractor' s
performance of the City Work and whose certificate of occupancy for the Site cannot be issued
until the City Work is completed .
d. Contract Retention. The City will retain 5 percent of each progress
payment to the contractor in accordance with the Public Contract Code of the State of California
and the Construction Contract.
302 .3 Financing Mechanism . Without limiting the generality of Section 302 . 1 ,
in addition to the City Work Approvals, City shall seek funding required to construct the City
Work. City shall use commercially reasonable best efforts to obtain such funding from grants
and other sources that do not need to be repaid. City may borrow and be obligated to repay all or
part of the funds required to construct the City Work (the obligation for such borrowing and
repayment being referred to herein as the "Financing Mechanism") . While the City Work is for
the benefit of the Site and surrounding areas of the City of Ukiah, the parties acknowledge that
City ' s ability to repay under the Financing Mechanism would rely in part on economic benefits
to City generated by the development and operation of Costco ' s business at the Site.
Accordingly, subject to Section 604 , including, without limitation, any time adjustments that
may be agreed upon among the parties, the parties hereby agree as follows : If, after giving both
its Financing Approval Notice (as defined below) and its Closing Notice, Costco, due to no fault
of City or Successor Agency, fails to purchase the Site, to develop the Site, to open its business
at the Site within the time specified in the Schedule of Performance, or to operate its business at
the Site for at least twenty (20) years after issuance of the Certificate of Occupancy, then under
any of those circumstances Costco shall make annual payments to City (the "Costco Financing
Obligation") in an amount equal to the original principal under the Financing Mechanism at the
stated interest rate amortized over a twenty (20) year term, with the first such payment to be
made within three hundred sixty-five (365) days after the triggering event and continuing
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through the twentieth (201h) year after which Costco was scheduled to open for business at the
Site; provided, however, for any part of the twenty (20) years during which such payments
otherwise would be due hereunder, the Costco Financing Obligation shall be mitigated and no
payment or reduced payment shall be due from Costco, as follows (the "Mitigation") :
a. the payment shall be fully mitigated if the City is legally able to
pre-pay or make payments on the amount financed using the Financing Mechanism, from ( 1 ) any
grant received by the City to pay all or any portion of the cost of the City Work or (2) all or any
portion of the 2011 Series A Tax Allocation Bonds issued by its former redevelopment agency as
a result of a decision by the Department of Finance or a court judgment; or
b , the payment shall be partially or fully mitigated if the Site or any
part thereof is occupied by one or more retail users, the payments that would be due from Costco
for such year and any ensuing years shall be offset by an amount equal to a cumulative one
percent ( 1 %) of the sales taxes (or such other percentage of the Bradley-Burns Uniform Local
Sales and Use Tax allocated to cities under Revenue and Taxation Code section 7202(h) or any
additional or successor provisions of state law) generated from the Site on an annual basis, on an
all-first-dollars-received basis irrespective of other purposes to which City may commit its sales
tax revenues .
Costco may elect at any time and from time to time, in its sole and absolute
discretion and without waiving the Mitigation, to pre-pay any or all of the annual payments for
which it is responsible by paying to City the present value at the time of pre-payment of the
payments that are being pre-paid, at the following rates : ( 1 ) if the Financing Mechanism includes
a right to pre-pay principal without penalty, the amount of the prepayment shall be the amount of
principal Costco elects to prepay; (2) if the Financing Mechanism includes a right to pre-pay,
subject to a penalty, the amount of the prepayment shall be the amount of principal Costco elects
to prepay plus the penalty; and (3 ) if prepayments are not permitted by the terms of the
Financing Mechanism, the amount of prepayment shall be the amount of the principal Costco
elects to prepay, reduced by a discount rate equal to the lesser of the yield on the City ' s
investment of surplus funds or the interest rate on the Financing Mechanism as of the date of pre-
payment ("Present Value") .
302.3. 1 Costco Onlv Examples : (a) if Costco failed to open within the
scheduled time, opened five (5) years later and remained open for at least fifteen ( 15) more
years, Costco would make the annual amortized payments during those five (5) years, but not
thereafter; (b) if Costco did not open within twenty (20) years after the scheduled opening time,
Costco would make the annual amortized payments for twenty (20) years ; (c) if Costco opened
within the scheduled time but permanently closed after five (5) years, Costco would make the
annual amortized payments for the remaining fifteen ( 15) years after its closure .
302.3 .2 Other Retailer Examples : If Costco operated from the Site for
the first five (5) years, and then transferred the Site to one or more other retailers who generated
sufficient sales taxes to service the debt on the Financing Mechanism for the next fifteen ( 15)
years, no payments would be due from Costco . If in year five (5) Costco instead transferred to
one or more retailers whose one percent ( 1 %) of sales tax in a given year equaled one-half the
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debt service on the Financing Mechanism, then Costco would pay to City the remaining one-half
of the debt service for that year.
302.3.3 CDBG Funding. Provided that Costco shall incur no financial
liability or other liability if it fails to create any specified or minimum number of qualifying new
jobs, Costco agrees to consider cooperating with the City in a commercially reasonable manner
consistent with its internal hiring policies in order to assist in qualifying the City for a
Community Development Block Grant ("CDBG") for public facilities that will help fund the
City Work required by Section 302 . 1 of this Agreement by creating new jobs in its Ukiah store
that primarily benefit low- and moderate-income persons (generally defined as a member of a
family having an income equal to or less than the Section 8 low income limit established by
HUD) . Such cooperation may include Costco entering an additional agreement or agreements
with the City or third parties, on terms acceptable to Costco and consistent with the foregoing
requirements, if necessary for the City to qualify for the CDBG.
302.3.4 Financing Approval Notice. City shall provide to Costco copies
of the documentation for the Financing Mechanism, if any, and evidence of all other sources and
uses of funds for the City Work for approval by Costco as a condition to Costco ' s issuance of its
approval of City' s ability to perform and complete the City Work on terms acceptable to Costco .
Costco shall provide written notice to City (with copies to Successor Agency and Escrow Agent)
of its approval or waiver of the condition of the financial plan for the City Work (the "Financing
Approval Notice") within ten ( 10) business days after City delivers a complete set of such
documentation and evidence to Costco . Such waiver or approval shall not be unreasonably
withheld or delayed; provided, however, any of the Costco conditions of Section 201 . 1 hereof
that have not been expressly waived by Costco (in its sole and absolute discretion except as
otherwise provided therein) shall continue as a Continuing Conditions to Costco ' s obligations
under the Purchase Agreement and under this Agreement, including, without limitation, with
respect to any obligation to make payments under the Financing Mechanism. Costco ' s remedies
under this Agreement for failure of any of these conditions shall be as provided in Section 505 . 1
hereof.
303 . Taxes, Assessments , Encumbrances and Liens Costco shall pay when due all
real estate taxes and assessments assessed and levied on the Site for any period subsequent to
conveyance of title to or delivery of possession of the Site . Prior to issuance of the Certificate of
Occupancy, Costco shall not place or allow to be placed on the Site any mortgage, trust deed,
lien or other monetary encumbrance unauthorized by this Agreement. Costco shall remove or
have removed any levy or attachment made on the Site (or any portion thereof), or shall assure
the satisfaction thereof, within a reasonable time, but in any event prior to a sale thereunder.
Nothing herein contained shall be deemed to prohibit Costco from contesting the validity or
amounts of any tax, assessment, encumbrance or lien, to limit the remedies available to Costco in
respect thereto , or to prevent Costco from placing utility and other easements on the Site
consistent with the Scope of Development.
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304. Prohibition Against Transfer of Site, the Buildings or Structures Thereon
and Assignment of Agreement
304. 1 Transfer Prior to Certificate of Occupancy . After conveyance of title
to Costco and prior to issuance of the Certificate of Occupancy, Costco shall not, except as
expressly permitted by this Agreement, sell, transfer, convey, assign, lease, dispose of or further
encumber or agree to sell, assign, transfer, dispose of or further encumber or suffer to exist any
other lien against the whole or any part of the Site or the buildings or improvements thereon, or
any interest therein (each, a "Transfer"), without the prior written approval of City, which
approval shall not be unreasonably withheld, conditioned, delayed or denied. This prohibition
shall not apply subsequent to issuance of the Certificate of Occupancy. This prohibition shall not
be deemed to prevent the granting of easements or permits to facilitate the development of the
Site or to prohibit or restrict the leasing of any part or parts of a building or structure when said
improvements are completed; provided, however, Costco is a publicly-traded company and any
change in ownership of Costco ' s publicly-traded capital stock shall not constitute a Transfer
precluded by the foregoing restrictions . Costco agrees upon its acquisition of the Site to record a
memorandum in the form of the Memorandum of Agreement attached hereto as Attachment No .
7 (the "Memorandum of Agreement") to give public notice of the foregoing restriction on
Transfer.
304.2 Transfer to Affiliate. Notwithstanding Section 304 . 1 or any other
provision in this Agreement to the contrary, but subject to Section 304 . 3 , Costco shall be entitled
to assign Costco ' s interest under this Agreement and in the Site and improvements after
conveyance of title to Costco, without City' s consent, to (i) a subsidiary, affiliate or parent of
Costco or any other entity which controls , is controlled by or is under common control with
Costco, provided Costco shall not be released from its obligations or liabilities hereunder; (ii) a
successor of Costco as a result of a merger or consolidation; or (iii) a limited liability company
the members of which include a majority composed of Costco and/or entities controlled by,
controlling or under common control with, Costco .
304.3 Continuing Obligation . In the absence of specific written agreement by
City, (i) no Transfer shall be deemed to relieve Costco or any other party from any obligations
under this Agreement until completion of development as evidenced by issuance of the
Certificate of Occupancy, and (ii) in the event of any Transfer or any election by Costco not to
develop the Site or not to operate from the Site, which election is made after Costco delivers both
its Financing Approval Notice and its Closing Notice, and subject to the Continuing Conditions,
Costco shall remain obligated for the Costco Financing Obligation.
305, Security Financing; Rights of Holders
305. 1 No Encumbrances Except Mortgages , Deeds of Trust, Sales and
Lease-Backs or Other Financing for Development Notwithstanding Sections 303 and 304 of
this Agreement, mortgages, deeds of trust, sales and lease-backs or any other form of
conveyance required for any reasonable method of financing are permitted before issuance of the
Certificate of Occupancy, but only for the purpose of securing loans of funds to be used for
financing the acquisition of the Site, the construction of improvements on the Site and any other
expenditures necessary and appropriate to develop the Site under this Agreement. Costco shall
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notify City in advance of any mortgage, deed of trust, sale and lease-back or other form of
conveyance for financing if Costco proposes to enter into the same before issuance of the
Certificate of Occupancy. Costco shall not enter into any such conveyance for financing without
the prior written approval of City (unless such lender shall be one of the ten ( 10) largest banking
institutions doing business in the State of California, or one of the ten ( 10) largest insurance
lending institutions in the United States qualified to do business in the State of California), which
approval City agrees to give if any such conveyance is given to a responsible financial or lending
institution or other acceptable person or entity. Such lender shall be deemed approved unless
rejected in writing by City within ten ( 10) days after Costco has furnished City with information
reasonably requested by City to evaluate the proposed financing. In any event, Costco shall
promptly notify City of any mortgage, deed of trust, sale and lease-back or other financing
conveyance, encumbrance or lien that has been created or attached thereto prior to completion of
the construction of the improvements on the Site whether by voluntary act of Costco or
otherwise. The words "mortgage" and "deed of trust, " as used herein, include all other
appropriate modes of financing real estate acquisition, construction and land development.
305.2 Holder Not Obligated to Construct Improvements The holder of any
mortgage, deed of trust or other security interest authorized by this Agreement shall in no way be
obligated by the provisions of this Agreement to construct or complete the improvements or to
guarantee such construction or completion, nor shall any covenant or any other provision in the
Grant Deed for the Site be construed so to obligate such holder. Nothing in this Agreement shall
be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to
construct any improvements thereon other than those uses or improvements provided for or
authorized by this Agreement.
305.3 _Notice of Default to Mortgage, Deed of Trust or Other Security
Interest Holders ; Right to Cure Whenever City shall deliver any notice or demand to Costco
with respect to any breach or default by Costco in completion of construction of the
improvements, City shall at the same time deliver a copy of such notice or demand to each
holder of record of any mortgage, deed of trust or other security interest authorized by this
Agreement who has previously made a written request to City therefor and provided an address
for receiving such notices . Each such holder shall (insofar as the rights of City are concerned)
have the right, at its option, within ninety (90) days after the receipt of the notice, to cure or
remedy or commence to cure or remedy any such default and to add the cost thereof to the
security interest debt and the lien on its security interest. In the event there is more than one such
holder, the right to cure or remedy a breach or default of Costco under this Section 305 . 3 shall be
exercised by the holder first in priority or as the holders may otherwise agree among themselves,
but there shall be only one exercise of such right to cure and remedy a breach or default of
Costco under this Section 305 . 3 . Nothing contained in this Agreement shall be deemed to permit
or authorize such holder to undertake or continue the construction or completion of the
improvements (beyond the extent necessary to conserve or protect the improvements or
construction already made) without first having expressly assumed Costco's obligations to City
by written agreement satisfactory to City. The holder in that event must agree to complete, in the
manner provided in this Agreement, the improvements to which the lien or title of such holder
relates and submit evidence satisfactory to City that it has the qualifications and financial
responsibility necessary to perform such obligations . Any such holder properly completing such
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improvements shall be entitled, upon written request made to City, to a certificate of occupancy
from City.
305.4 Failure of Holder to Complete Improvements In any case where, six
(6) months after default by Costco in completion of construction of improvements under this
Agreement, the holder of any mortgage, deed of trust or other security interest creating a lien or
encumbrance upon the Site has not exercised the option to construct, or if it has exercised the
option and has not proceeded diligently with construction, City may purchase the mortgage, deed
of trust or other security interest by payment to the holder of the amount of the unpaid debt, plus
any accrued and unpaid interest. If the ownership of the Site has vested in the holder, City, if it
so desires, shall be entitled to a conveyance of the Site from the holder to City upon payment to
the holder of an amount equal to the sum of the following :
a. The unpaid mortgage, deed of trust or other security interest debt at
the time title became vested in the holder (less all appropriate credits, including those resulting
from collection and application of rentals and other income received during foreclosure
proceedings) ;
b . All expenses with respect to foreclosure;
C , The net expenses, if any (exclusive of general overhead), incurred
by the holder as a direct result of the subsequent management of the Site;
d. The costs of any authorized improvements made by such holder;
and
e. An amount equivalent to the interest that would have accrued on
the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust
debt and such debt had continued in existence to the date of payment by City.
305. 5 Right of City to Cure Mortgage, Deed of Trust or Other Security
Interest Default In the event of a default or breach by Costco of a mortgage, deed of trust or
other security interest with respect to the Site prior to the completion of development, and the
holder has not exercised its option to complete the development, City may cure the default prior
to completion of any foreclosure. In such event, City shall be entitled to reimbursement from
Costco of all costs and expenses incurred by City in curing the default. City shall also be entitled
to a lien upon the Site to the extent of such costs and disbursements . Any such lien shall be
subject to mortgages, deeds of trust or other security interests executed for the sole purpose of
obtaining funds to purchase and develop the Site as authorized herein.
306. Right of City to Satisfy Other Liens on the Site After Title Passes After the
conveyance of title and prior to issuance of the Certificate of Occupancy, and after Costco has
had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Site, City
shall have the right to satisfy any such liens or encumbrances, provided, however, that nothing in
this Agreement shall require Costco to pay or make provision for the payment of any tax,
assessment, lien or charge so long as Costco in good faith shall contest the validity or amount
thereof, and so long as such delay in payment shall not subject the Site to forfeiture or sale.
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400. USE OF THE SITE AND LOT 3
401 . Uses of Site Costco covenants and agrees for itself, its successors, its assigns and
every successor in interest that until issuance of the Certificate of Occupancy, Costco and its
successors and assignees shall devote the Site to the uses specified in development restrictions of
record and applicable conditions of approval, the Grant Deed and this Agreement.
402. Use of Lot 3 . City shall amend Ukiah City Code Section 1965 to list Lot 3 as a
City Park which is not open to public use or any change to its natural condition, until a
management plan is adopted that provides adequate protection for the adjacent wetlands area, as
designated by the Army Corp of Engineers .
403. Obligation to Refrain From Discrimination . Costco covenants by and for itself
and any successors in interest that there shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry
or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Site, nor shall Costco 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
Site. The foregoing covenants shall run with the land.
404. Effect and Duration of Covenants Except as otherwise provided, the covenants
contained in this Agreement and the Grant Deed and the Memorandum of Agreement shall
remain in effect as provided herein and in the Grant Deed and the Memorandum of Agreement.
The covenants against discrimination shall remain in effect in perpetuity. The covenants
established in this Agreement and the Grant Deed shall, without regard to technical classification
and designation, be binding for the benefit and in favor of City, its successors and assigns, and
any successor in interest to the Site or any part thereof.
405. Rights of Access — Public Improvements and Facilities City, for itself and
other public agencies, at their sole risk and expense, reserves the right to enter the Site or any
part thereof at all reasonable times and with as little interference as possible for the purposes of
construction, reconstruction, maintenance, repair or service of any public improvements or
public facilities located on the Site . Any such entry shall be made only after reasonable notice to
Costco, and City shall indemnify and hold Costco harmless from any claims or liabilities
pertaining to any entry, except to the extent caused by the negligence of Costco . Any damage or
injury to the Site resulting from such entry shall be promptly repaired at the sole expense of the
public agency responsible for the entry.
500. DEFAULTS, REMEDIES AND TERMINATION
501 . Defaults — General Subject to the extensions of time set forth in Section 604,
failure or delay by either party to perform any term or provision of this Agreement constitutes a
default under this Agreement. The party who so fails or delays must immediately commence to
cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy
with reasonable diligence and during any period of curing shall not be in default. The injured
party shall give written notice of default to the party in default specifying the default complained
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of by the injured party. Except as required to protect against further damages and except as
otherwise expressly provided in Section 505 of this Agreement, the injured party may not
institute proceedings or exercise any other remedies against the party in default until ninety (90)
days after giving such notice or, in the case of an asserted default by City or City' s contractor(s)
in the construction of the City Work, within ten ( 10) business days after giving of such notice.
Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it
change the time of default. Except as otherwise expressly provided in this Agreement, any
failure or delay by either party in asserting any of its rights or remedies as to any default shall not
operate as a waiver of any default or of any such rights or remedies or deprive such party of its
right to institute and maintain any actions or proceedings that it may deem necessary to protect,
assert or enforce any such rights or remedies .
502 . Legal Actions
502. 1 Institution of Legal Actions In addition to any other rights or remedies,
but subject to any limitations set forth herein, either party may institute legal action to cure,
correct or remedy any default, or recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Such legal actions must be instituted in the
Superior Court of the County of Mendocino, State of California, all parties consenting to the
jurisdiction and venue of such courts and to the state appellate courts .
502.2 Applicable Law ; Interpretation The laws of the State of California shall
govern the interpretation and enforcement of this Agreement. This Agreement has been
negotiated at arm's length and between persons sophisticated and knowledgeable in the matters
dealt with herein. In addition, each party has been represented by experienced and
knowledgeable legal counsel . Accordingly, any rule of law (including California Civil Code
Section 1654) or legal decision that would require interpretation of any ambiguities in this
Agreement against the party that has drafted it is not applicable and is waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to give effect to the purposes of the
parties and this Agreement.
502.3 Acceptance of Service of Process In the event that any legal action is
commenced by Costco against City, service of process shall be made by personal service upon
the Ukiah City Clerk or in such other manner as may be provided by law. In the event that any
legal action is commenced by City against Costco, service of process on Costco shall be made by
service upon CT Corporation System, 818 West Seventh Street, Los Angeles, CA 90017, or any
successor Agent for Service of Process as filed with the California Secretary of State .
503. Rights and Remedies are Cumulative Except as otherwise expressly stated in
this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any
party of one or more of such rights or remedies shall not preclude the exercise by it, at the same
time or different times, of any other rights or remedies for the same default or any other default
by the other party.
504. Remedies Generally If Costco or City defaults with regard to any of the
provisions of this Agreement, the non-defaulting party shall serve written notice of such default
upon the defaulting party. If a default by City is not cured within the applicable time period
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specified in Section 501 as extended pursuant to Section 604, Costco shall have the remedies
provided in Section 505 . 1 , the choice of which then-applicable remedies may be made in
Costco ' s sole and absolute discretion. If a default by Costco is not cured within the applicable
time period specified in Section 501 as extended pursuant to Section 604, City shall have the
then-applicable remedies provided in Section 505 . 2 , the choice of which then-applicable
remedies may be made in City' s sole and absolute discretion.
505. Remedies and Rights of Termination
505. 1 Remedies Available to Costco . In the event that at any time during the
term of this Agreement City is in breach or default with respect to any obligation of City under
this Agreement, and if any default or failure referred to in this Section 505 . 1 shall not be cured
within the applicable time period after the date of written demand by Costco or such longer
period of time as reasonably may be necessary for the particular cure, then Costco, at its option,
may (i) seek specific performance of this Agreement, including attorneys ' fees and costs incurred
in pursuing specific performance ; (ii) cure the default on behalf of defaulting party and obtain
reimbursement from the defaulting party of costs and expenses incurred in connection with such
cure, including, without limitation, attorneys ' fees ; or (iii) terminate this Agreement by written
notice of termination to City, and any rights with respect to Costco against City or any assignee
or transferee in, to or under this Agreement, pertaining to this Agreement, or arising out of this
Agreement, shall terminate . Costco shall be entitled to reimbursement of out-of-pocket expenses
incurred in pursuit of this transaction ("Costco ' s Actual Damages") but not for consequential
damages and, except for Costco ' s Actual Damages, neither City nor Costco shall have any
further rights against or liability to the other under this Agreement, including, without limitation,
with respect to the Costco Financing Obligation; provided, however, that if the City is prevented
from performing any of its obligations under this Agreement by a decision of another
government agency or court, Costco ' s exclusive remedy is termination of the Agreement or a
demand that the City exhaust any available administrative or judicial remedies to challenge that
decision. Costco shall be entitled to Costco ' s Actual Damages only if the City fails or refuses to
fully exhaust such administrative and judicial remedies . Furthermore, if at any time Successor
Agency is in breach or default with respect to any obligation of Successor Agency under the
Purchase Agreement, and if any such default or failure of Successor Agency shall not be cured in
accordance with the terms of the Purchase Agreement, and Costco terminates the Purchase
Agreement, then Costco also may terminate this Agreement and receive reimbursement of
Costco ' s Actual Damages from City, irrespective of whether there has been any breach or default
by City hereunder; provided, however, that if Successor Agency is prevented from performing
any of its obligations under the Purchase Agreement by a decision of another government agency
(not including City) or court, Costco ' s exclusive remedy is termination of the Purchase
Agreement or a demand that Successor Agency exhaust any available administrative or judicial
remedies to challenge that decision. Costco shall be entitled to recover from City Costco ' s
Actual Damages only if Successor Agency fails or refuses to fully exhaust such administrative
and judicial remedies or if Costco terminates this Agreement at any time after having allowed
Successor Agency a full year after the preventing decision to exhaust such remedies .
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505.2 Remedy Available to City.
505.2. 1 Purchase Option. Without limiting or modifying City ' s rights
with respect to the Costco Financing Obligation except as expressly provided in Paragraph 5 of
Section 505 . 2 . 2 hereof, if after conveyance of title to the Site and prior to issuance of the
Certificate of Occupancy, Costco shall :
1 . Fail to commence construction of approved improvements
on the Site by the time specified in Attachment No . 4, for any reason whatsoever, subject to
extension pursuant to Section 604 of this Agreement (for purposes of this provision, Costco shall
be deemed to " commence construction" when and only when Costco has commenced rough
grading on the Site pursuant to a permit issued by City for the construction of the improvements
provided for herein) ; or
2 . Once construction has been commenced in accordance with
subparagraph 1 above, abandon or substantially suspend construction of the improvements
through completion where such abandonment or suspension has not been cured by a resumption
of work within ninety (90) days after written notice of such abandonment or suspension from
City, subject to extension pursuant to Section 604 of this Agreement; or
3 . Violate the restrictions on transfer set forth in Section 304
of this Agreement.
Then City, at its option from and after Closing, in its exclusive and unfettered
discretion, shall have the right, but not the obligation, as City ' s sole and exclusive remedy, to
purchase the Site with all improvements thereon. The right and option to purchase the Site shall
be subordinate and subject to and be limited by and shall not defeat, render invalid or limit (i)
any mortgage, deed of trust or other security instrument permitted by this Agreement; (ii) any
rights or interests provided in this Agreement for the protection of the holder of such mortgages,
deeds of trust or other security instruments ; or (iii) any utility or other easements or permits
granted by Costco to facilitate the development of the Site in accordance with the Scope of
Development.
505.2.2 Exercise of Purchase Option. To exercise its right to purchase,
enter and take possession with respect to the Site, City shall pay to Costco in cash an amount
equal to :
1 . The cash Purchase Price for the Site paid by Costco
pursuant to the Purchase Agreement; plus
2 . The costs actually incurred by Costco for on-site labor and
materials for the construction of the improvements existing on the Site at the time of City' s
purchase, entry and possession, exclusive of amounts financed; less
3 . Any gains or income withdrawn or made by Costco from
the Site or the improvements thereon ; less
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4 . The amount of liens on the Site, and any unpaid
assessments against the Site ; and less
5 . The present value of the Costco Financing Obligation, if
any, subject to future Mitigation resulting from subsequent uses of the Site as provided in
Section 302 . 3 .
The foregoing purchase option shall be included in the Memorandum of
Agreement (Attachment No . 7) .
600, GENERAL PROVISIONS
601 , Notices, Demands and Communications Between the Parties All notices,
demands, consents, approvals and other communications (each, a "Notice") which are required
or desired to be given by either party to the other under this Agreement shall be in writing and
shall be (a) hand delivered, (b) sent by U. S . registered or certified mail, postage prepaid, return
receipt requested, (c) sent by reputable overnight courier service, or (d) transmitted by facsimile
machine (with a printed copy to follow by one of the other methods prescribe in clauses (a)
through (c) of this Section 601 , including a copy of the transmission sheet indicating successful
transmission of the Notice by facsimile machine), addressed to the appropriate party at its
address set forth in Section 103 hereof, or at such other address as such party shall have last
designated by Notice to the other. Notices shall be deemed given when delivered. Until notified
otherwise, Notices to City shall be addressed to the attention of the City Manager. Until notified
otherwise, Notices to Costco shall be addressed to the attention of Seth S . Katz, Corporate
Counsel . Rejection or other refusal by the addressee to accept a Notice or the inability to deliver
the Notice because of a changed address of which no Notice was given shall be deemed to be
receipt of the Notice sent. Notices sent by counsel for Costco or City, respectively, shall be
deemed Notice given by the party provided that the Notice is delivered to the party pursuant to
the foregoing; Notice given only to counsel for a party shall not be deemed Notice given to that
party.
602. Conflicts of Interest No member, official or employee of City shall have any
personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to this Agreement that affects his or her personal
interests or the interests of any corporation, partnership or association in which he or she is
directly or indirectly interested. Except as provided in Section 503 of the Purchase Agreement
with respect to Costco ' s acquisition of the Site, each party warrants that it has not paid or given,
and will not pay or give, any third person any money or other consideration for obtaining this
Agreement.
603. Nonliability of City Officials and Employees No member, official or employee
of City shall be personally liable to Costco in the event of any default or breach by City for any
amount that may become due to Costco or on any obligations under the terms of this Agreement.
604. Enforced Delay : Extension of Times of Performance In addition to the
specific provisions of this Agreement, performance by any party hereunder shall not be deemed
to be in default where delays or defaults are due to war; act of terrorism; insurrection; strikes ;
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lock-outs ; riots; floods ; earthquakes ; fires ; casualties ; acts of God; acts of the public enemy;
epidemics ; quarantine restrictions; freight embargoes ; lack of transportation; governmental
restrictions or priority; litigation, including legal challenges to governmental approvals by City
or any other governmental approvals required for full performance of this Agreement; unusually
severe weather; inability to secure necessary labor, materials or tools; delays of any contractor,
subcontractor or supplier; acts of another party; acts or the failure to act of any public or
governmental agency or entity (except that acts or the failure to act of City shall not excuse
performance by City) ; or any other causes beyond the control or without the fault of the party
claiming an extension of time to perform. An extension of time for any such cause shall only be
for the period of the enforced delay, which period shall commence to run from the time of the
commencement of the cause . If, however, notice by the party claiming such extension is sent to
the other parties more than thirty (30) days after the commencement of the cause and the other
party did not know of the cause of the enforced delay prior to such notice, the period shall
commence to run only thirty (30) days prior to the giving of such notice . If the enforced delay
results from litigation, the period of the enforced delay shall be deemed to continue until there is
a Final Judgment or the parties agree that further litigation is not warranted. In the case of
litigation challenging compliance with CEQA, where defects in an environmental document can
be cured by supplement or addendum thereto , the period of enforced delay shall include the time
required to cure the defects and for any judicial review thereof, unless the parties otherwise agree
in writing. Times of performance under this Agreement may also be extended in writing by
City and Costco, and the City Manager shall have authority to make or to agree to such
extensions without further consideration thereof or action thereon by City. If the enforced delays
pursuant to this Section 604 cause performance in accordance with the Schedule of Performance
to be unfeasible, the parties shall meet and confer to revise the times specified in the Schedule of
Performance and the authority of the City Manager/Executive Director pursuant to the foregoing
sentence shall include approval of such a revised Schedule of Performance .
605. Inspection of Books and Records City has the right, upon not less than three (3 )
business days ' notice, at all reasonable times, to inspect the books and records of Costco
pertaining to the Site as pertinent to the purposes of this Agreement. Costco also has the right,
upon not less than three (3) days ' notice, at all reasonable times, to inspect the books and records
of City pertaining to the Site as pertinent to the purposes of this Agreement.
606. Plans Where Costco does not proceed with the purchase and development of the
Site, and when this Agreement is terminated pursuant to Section 505 . 2 hereof for any reason,
Costco shall deliver to City any and all plans for the Site, and City or any other person or entity
designated by City shall be free to use such plans, including plans previously delivered to City,
for any reason whatsoever without cost or liability therefor to Costco or any other person.
607. Attorneys ' Fees Should any action be brought arising out of this Agreement
including, without limitation, any action for declaratory or injunctive relief, the prevailing party
shall be entitled to reasonable attorneys' fees and costs and expenses of investigation incurred,
including those incurred in appellate proceedings or in any action or participation in, or in
connection with, any case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code or
any successor statutes, and any judgment or decree rendered in any such actions or proceedings
shall include an award thereof.
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608. Successors Bound Subject to the restrictions on assignment contained in Section
304 hereof, the provisions of this Agreement shall extend to, bind and inure to the benefit of the
parties to this Agreement and their respective personal representatives, heirs, successors and
assigns .
609. Severability If any term or provision of this Agreement shall, to any extent, be
held invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be
affected thereby, but each remaining term and provision shall be valid and enforced to the fullest
extent permitted by law.
610. Captions The captions of this Agreement are inserted solely for convenience of
reference only and do not define, describe or limit the scope or intent of this Agreement or any
term hereof.
611 . Construction City and Costco acknowledge that each party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement (including the attachments and exhibits hereto) or any
amendments hereto, and the same shall be construed neither for nor against City or Costco , but
shall be given a reasonable interpretation in accordance with the plain meaning of its terms and
the intent of the parties .
612. Party' s Approval Rights Whenever in this Agreement a party is deemed to
disapprove of a particular matter, or a condition is deemed not to be satisfied by reason of the
party' s failure to approve of the same or to acknowledge that the same is satisfied, the other
parties shall have no right to conclusively deem the party to have disapproved of such matter or
to deem such condition not satisfied, unless and until the party or parties seeking to deem the
matter disapproved ("the deeming party") gives written notice to the party who is deemed to
have disapproved ("the disapproving party") that deeming party intends to deem such matter
disapproved or to deem such condition not satisfied, as of the date which is five (5) days after the
disapproving party receives such notice . If disapproving party fails to approve of or waive the
matter in question or fails to acknowledge that the condition in question is satisfied, as the case
may be, within such five (5) day period, the matter or condition in question shall thereafter be
conclusively deemed to be disapproved or not satisfied.
613. Computation of Time If the time for performance of any provision of this
Agreement ends on a Saturday, Sunday or federal, state or legal holiday in the Governing
Jurisdiction, then such date shall automatically be extended until 5 : 00 p .m . on the next day which
is not a Saturday, Sunday or federal, state or legal holiday in the Governing Jurisdiction.
614. Survival of Terms . The terms and provisions of this Agreement shall survive the
Closing and shall remain in full force and effect thereafter unless otherwise specifically provided
in this Agreement.
615. Prevailing Wage. City has not, and to City ' s knowledge neither Successor
Agency nor any other person or entity has taken any action in regards to the Site that would
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make Costco ' s intended project subject to the prevailing wage requirements codified in
California Labor Code section 1720, et seq.
700. SPECIAL PROVISIONS
701 , Development Restrictions Notwithstanding provisions for modification or
amendment of instruments of record to which Costco has agreed its title to the Site may be
subject, any such modification or amendment that changes the uses or development permitted on
the Site or changes the restrictions or controls that apply to the Site or otherwise affects the use
of the Site shall require the prior written consent of Costco .
702. Amendments to this Agreement Costco and City agree to mutually consider
reasonable requests for amendments to this Agreement that may be made by any of the parties
hereto, lending institutions or bond counsel or financial consultants to City, provided such
requests are consistent with this Agreement and would not substantially alter the basic business
terms included herein.
800. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
This Agreement is executed in four (4) duplicate originals, each of which is deemed to be
an original. This Agreement comprises pages 1 through 20 , inclusive, Acknowledgments and
Attachment Nos . 1 through 7, attached hereto and incorporated herein by reference, all of which
constitute the entire understanding and agreement of the parties . 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. All waivers of the provisions of this Agreement must be in writing and
signed by the appropriate authorities of City and Costco , and all amendments hereto must be in
writing and signed by the appropriate authorities of City and Costco .
900. TIME FOR ACCEPTANCE OF AGREEMENT BY CITY
This Agreement, when executed by Costco and delivered to City, must be authorized,
executed and delivered by City within twenty (20) days after the date of signature by Costco or
this Agreement shall be void, except to the extent that Costco shall consent in writing to further
extensions of time for the authorization, execution and delivery of this Agreement. The effective
date of this Agreement shall be the date when both this Agreement has been signed by City and
the Purchase Agreement has been signed by Successor Agency.
[SIGNATURES ON NEXT PAGE(S)]
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1000. COUNTERPARTS; FACSIMILE SIGNATURES
This Agreement may be executed in more than one counterpart, each of which shall be
deemed an original, and all of which together shall constitute one and the same instrument.
Facsimile or other electronically transmitted signatures on this Agreement shall constitute
originals signatures of the parties.
201 S CITY OF UKIAH,
a municipal corporation
By: �� eL'�
Chambers, City Manager
AT ST:
B
Kristine Lawler, City Clerk
, 201_ COSTCO WH SAL O TION,
a Washin pot
t
By:
is d j. Onv
Title: SVPIAsst. Secretary
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II
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 WASHINGTON )
)
COUNTY OF KING )
On 015 before me, I I(�ir,�/�(' Notary
Pub ji , e rsonall �apeared who roved to me on the
p p p
basis of satisfa ory evidence to be the person ) 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 I&W%stM(AvQate of California that the
foregoing paragraph is true and correct. r`-Noe G• PA q fill/
WITNESS my hand and official seal. � �0T4,#'�S�•�O- We
s�m c F
1������������
Notary PUP lic
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 )
COUNTY OF )
On pL oZ , 2015,before me, �VI��71 ,�fiU�✓I`t��' _, a Notary
Public, personally Appeared q,t 14 V CGLlli who proved to me on the
basis of satisfactory evidence to be the person&whose name0 o&are subscribe to the within
instrument, and acknowledged to me that he hey executed the same in his�e their
authorized capacity( ), and that by his their signature on the instrument the persor>Q, 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.
KRISTINE ROBIN LAWLER
COMM. #1998485 z
z Notary Public-California X
Z Mendocino County
Comm.Eores Nov. 11,2016
tary Public
ATTACHMENT 1
REAL ESTATE SALES AND PURCHASE AGREEMENT
2
REAL ESTATE PURCHASE AND SALES AGREEMENT
By and Between
SUCCESSOR AGENCY,
apolitical subdivision of the State of California and
the successor to the former Ukiah Redevelopment Agency
and
COSTCO WHOLESALE CORPORATION,
a Washington corporation
3
TABLE OF CONTENTS
Page
100 , SUBJECT OF AGREEMENT ,
101 . Purpose of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
102 . The Site . , 1 0 1 1 6 1 1 1 . I I I I I I 1 0 . I I . I I . . I 1 0 1 . . I I I I I I I I I I 1 1 1 6 . . . 0 1 . . I I I I I l
103 . Parties to This Agreement . . , , , . . . . . . . . . . . . . . . . .
103 . 1 Successor Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
103 . 2 Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
104 . Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . 1
200 . DISPOSITION OF THE SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
201 . Sale and Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
202 . Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
203 . Conveyance of Title and Delivery of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
204 . Form of Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
205 . Conditions Precedent to Conveyance , , , . . . . . . o . . . . . . . . . o - o . . . . . . . . . . . . . oo . . . . . . . . . 1111 , 1 5
205 . 1 Conditions for Benefit of Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
205 . 2 Conditions for the Benefit of Successor Agency. . . . . , , . , , . , . , , , . , , . . . . . 7
206 . Condition of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
206 . 1 Title Commitment and Title Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
206 . 2 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . 7
206 . 3 Review of Title Commitment and Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 004 . 0 . . . . . . . . . . . 8
206 . 4 Successor Agency' s Right to Cure Title Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
206 . 5 Monetary Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
206 . 6 Title Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
207 . Time for and Place of Delivery of Deed and Closing Documents 9
208 . Payment of the Purchase Price and Recordation of Deed , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
209 . Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
210 . Taxes and Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
211 . Conveyance Free of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2 12 . Inspections ; Indemnities . , I I 1 0 1 1 1 1 0 . I . . I . 0 . I . I I I I I . . 1 0 1 1
212 . 1 Inspections , I 1 0 1 1 . . . 0 . . . . . . . . . . . . . . . . . . . . . 6 0 . 0 . . . . . . . . . . . .
2122 Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2130 Condition of the Site . . I I 1 0 . . . . . I I I I 1 0 1 1 0 0 1 1 1 1 1 . 0 . . . 0 . . . I . I I I 1 0 0 1 1 1 1 * 0 , & a a 6 l l
214 . Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
214 . 1 Successor Agency ' s Representations, Warranties and Covenants , , . . . . o , . o , . 12
214 .2 Costco ' s Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
214 . 3 Survival , , , , , , , , , , , , . . . . . . a 0 6 a - o . . . . . . . . . . . . . . . . . o . . . . . . . . . 4 o . * , 9 * o , o * o . o o , 1 6
215 . Closing Date Extension , . I I I . I I 1 1 6 1 . . . . . . . . . . . 0 . . . . 1 0 1 . I I . . . 0 - o . . . . o . . . . . . . 6 . . . 6 , , o o . . . . . . . . . . . . . . . . . . . 1 7
216 . Post-Closing Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
300 . DEFAULTS , REMEDIES AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
301 . Defaults - General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
302 . Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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TABLE OF CONTENTS
(continued)
Page
302 . 1 Institution of Legal Actions . . , , , . . . . I ' ll . . . . . . . . . . . . . . . . . . . . . . . . . 18
302 . 2 Applicable Law; Interpretation . . , . . , , , , , , , , , . . . 9 Goa * . . . . . 18
302 . 3 Acceptance of Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
303 . Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
304 . Remedies Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
305 . Remedies and Rights of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
305 . 1 Remedies Available to Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
305 . 2 Remedies Available to Successor Agency . , , , , , , , , , , , . . . I . . . I I I I # 0 a 6 , * 9 . 0 0 9 0 19
305 . 3 Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
400 , GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
401 . Notices, Demands and Communications Between the Parties , 1 4 1 1 . I I I I I I I I . 0 6 20
402 . Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09 . 00 . . . . . . . . . . . . . . . . . . . . . . . . . . 21
403 . Nonliability of Successor Agency Officials and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
404 . Enforced Delay : Extension of Times of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
405 . Inspection of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
406 . Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
407 . Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
408 . Successors Bound , , , , , . . . . . . . . . . . . . . . . OR , * . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
409 . Severability .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
410 . Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 00 . 16 . . . . . . . . . . . 22
411 . Construction. . I I I I I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . @ - * , * a . . . 19 . 22
412 . Party ' s Approval Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
413 . Computation of Time, , 1 1 . 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 - - * a , a a - a a a @ , , 4 23
414 . Survival of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
500 . SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
501 . Amendments to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
502 . Brokers' Commissions . . I I I I I I I I . . I . . . . . . . . . . . . . . . . . @ . a . * . . . * , too , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
600 , ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
700 . TIME FOR ACCEPTANCE OF AGREEMENT BY SUCCESSOR AGENCY, . . . . . . . . . . . . . 25
800 . COUNTERPARTS ; FACSIMILE SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Attachments
Attachment No . 1 Map of the Site
Attachment No . 2 Legal Description of the Site
Attachment No . 3 Schedule of Performance
Attachment No . 4 Form of Grant Deed
Attachment No . 5 Environmental Disclosures
Attachment No . 6 Legal Description of Lot 3
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AGREEMENT
THIS AGREEMENT is entered into as of the day of , 201 _ (the "Effective
Date"), by and between the Successor Agency to the former Redevelopment Agency for the City
of Ukiah, a public body, corporate and politic, organized and existing under Health and Safety
Code § 34173 ("Successor Agency"), and Costco Wholesale Corporation, a Washington
corporation ("Costco ") . Successor Agency and Costco agree as follows :
100. SUBJECT OF AGREEMENT
101 . Purpose of This Agreement The purpose of this Agreement is to effectuate the
conveyance from Successor Agency to Costco of certain real property owned by Successor
Agency in the City of Ukiah (the " Site"). The City of Ukiah, a general law municipal
corporation ("City"), Costco and the Redevelopment Agency of the City of Ukiah (the "RDA")
entered into that certain Exclusive Negotiating Agreement (the "ENA") dated January 20, 2011 ,
in contemplation of the possible sale of the Site by the RDA to Costco . The RDA has since been
dissolved, as required by California law, and Successor Agency has succeeded to certain rights
and obligations of the RDA, including ownership of the Site . This Agreement is in furtherance
of the objectives of the ENA, and upon its approval and execution by Successor Agency and
Costco , this Agreement will replace and supersede the Successor Agency' s obligations under the
ENA.
102. The Site The Site is that area within a portion of the Airport Industrial Park
known as the Redwood Business Park shown on the Map (Attachment No . 1 ) and is more
particularly described in the Legal Description of the Site (Attachment No . 2) ,
103 . Parties to This Agreement
103. 1 Successor Agency The office of Successor Agency is located at 300
Seminary Avenue, Ukiah, California 95482 . Successor Agency ' s fax number is 707-463 -6204,
Attn : Executive Director . "Successor Agency" as used in this Agreement, includes Successor
Agency and any assignee of or successor to its rights, powers and responsibilities with respect to
the Site.
103.2 Costco The principal office of Costco is located at 999 Lake Drive,
Issaquah, Washington 98027 . Costco ' s fax number is 425 -313 - 8114 , Attn : Seth S . Katz.
Wherever the term " Costco " is used herein, such term shall include any permitted nominee,
assignee or successor in interest as herein provided.
104. Deposit Pursuant to the ENA, Costco previously has delivered to First American
Title Insurance Company a deposit in the amount of FIFTY THOUSAND DOLLARS ($50,000)
(the " Deposit"), which Deposit shall continue as security for the performance of the obligations
of Costco under this Agreement to be performed prior to the return of the Deposit to Costco or its
application to the Purchase Price (defined in Section 201 hereof) or its retention by Successor
Agency. Any interest earned on the Deposit shall become part of the Deposit. Upon termination
of this Agreement by Successor Agency as provided in Section 305 . 2 hereof, the Deposit
(including all interest paid thereon) shall be retained by Successor Agency as liquidated damages
as provided therein. Upon termination of this Agreement by Costco as provided in Section 305 . 1
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hereof, the Deposit (including all interest paid thereon) shall be returned to Costco as provided
therein. If this Agreement shall not have been theretofore cancelled or terminated, or the Deposit
shall not have been returned to Costco, the Deposit shall be applied to the Purchase Price (as
defined in Section 201 hereof) at Closing (as defined in Section 202 hereof) .
200. DISPOSITION OF THE SITE
201 . Sale and Purchase In accordance with and subject to all the terms, covenants
and conditions of this Agreement, Successor Agency agrees to sell, and Costco agrees to
purchase for development, the Site for the sum of Site for the sum of TWO MILLION ONE
HUNDRED SEVENTY-FIVE THOUSAND EIGHT HUNDRED FIFTY-TWO DOLLARS
($2, 175 , 852 . 00) (the " Purchase Price") . Costco acknowledges and understands that the Site
will be conveyed to Costco for purposes of development pursuant to this Agreement and not for
speculation in undeveloped land.
202. Escrow Costco heretofore has opened an escrow with the Seattle National
Commercial Services Office of First American Title Insurance Company ("Title Company")
who shall coordinate the escrow with Redwood Empire Title Company (the "Escrow Agent" ) .
This Agreement constitutes the joint escrow instructions of Successor Agency and Costco, and a
duplicate copy of this Agreement shall be delivered to the Title Company and the Escrow Agent
promptly following the Effective Date . Successor Agency and Costco shall provide such
additional escrow instructions as shall be necessary and consistent with this Agreement. The
Escrow Agent hereby is empowered to act under this Agreement and, upon indicating its
acceptance of the provisions of this Section 202 in writing, delivered to Successor Agency and to
Costco within five (5) days after the opening of the escrow, shall carry out its duties as Escrow
Agent hereunder. Costco shall deposit with the Escrow Agent the Purchase Price for the Site in
accordance with the provisions of Section 208 of this Agreement. Costco shall also pay in
escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow
Agent has notified Costco of the amount of such fees, charges and costs, but not earlier than ten
( 10) days prior to the scheduled time for the close of escrow ("Closing" or the "Closing Date") :
5 . One-half ( 1 /2) of the escrow fee; and
6 . The portion of the premium for the title insurance policy or special endorsements
to be paid by Costco as set forth in Section 209 of this Agreement.
Successor Agency shall timely and properly execute, acknowledge and deliver a deed
conveying to Costco title to the Site in accordance with the requirements of Section 204 of this
Agreement, together with an estoppel certificate certifying that Costco has completed all acts
(except deposit of the Purchase Price) necessary to entitle Costco to such conveyance, if such be
the fact. Successor Agency shall pay in escrow to the Escrow Agent, or have charged against
sales proceeds otherwise disbursable to Successor Agency, the following fees, charges and costs
promptly after the Escrow Agent has notified Successor Agency of the amount of such fees ,
charges and costs, but not earlier than ten ( 10) days prior to the scheduled time for the Closing :
1 . Costs necessary to place the title to the Site in the condition for conveyance
required by the provisions of this Agreement;
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2 . One-half ( 1 /2) of the escrow fee;
3 . Cost of drawing the deed;
4 . Recording fees ;
5 . Notary fees ;
6 . The premium for an A. L. T.A. standard title insurance owners policy to be paid by
Successor Agency as set forth in Section 209 of this Agreement, and the premiums for any
endorsements acceptable to Costco and requested by Successor Agency to insure over title
exceptions Successor Agency otherwise is required to remove from title to the Site;
7 . Ad valorem taxes, if any, upon the Site for any time prior to conveyance of title;
and
8 . Any state, county or city documentary transfer tax .
Following delivery of a deed to the Escrow Agent by Successor Agency pursuant to
Section 207 of this Agreement and the deposit by Costco with the Escrow Agent of the Purchase
Price and any other closing funds required from Costco , the Escrow Agent shall record such deed
when title can be vested in Costco in accordance with the terms and provisions of this
Agreement. The Escrow Agent shall buy, affix and cancel any transfer stamps required by law
and pay any transfer tax required by law. Any insurance policies governing the Site are not to be
transferred .
The Escrow Agent is authorized to :
1 . Pay and charge Successor Agency and Costco , respectively, for any fees, charges
and costs payable under this Section 202 . Before such payments are made, the Escrow Agent
shall provide Successor Agency and Costco with settlement statements itemizing all fees,
charges and costs necessary to clear title and close the escrow, which shall be subject to their
respective approval prior to and as a condition to Closing;
2 . Disburse funds and deliver the deed and other documents to the parties entitled
thereto when the conditions of this escrow have been fulfilled by Successor Agency and Costco ;
and
3 . Record any instruments delivered through this escrow, if necessary or proper, to
vest title in Costco in accordance with the terms and provisions of this Agreement.
All funds received in this escrow shall be deposited by the Escrow Agent with other
escrow funds of the Escrow Agent in an interest-bearing general escrow account or accounts
with any state or national bank doing business . Such funds may be transferred to any other such
general escrow account or accounts . All disbursements shall be made by check of the Escrow
Agent. All adjustments shall be made on the basis of a thirty (30) day month.
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li
If this escrow is not in condition to close before the Closing Date established in
Section 203 of this Agreement, either party who then shall have fully performed the acts to be
performed prior to the Closing Date may, in writing, terminate this Agreement in the manner set
forth in Section 305 . 1 or 305 . 2 hereof, as the case may be, and demand the return of its monies,
papers or documents . Thereupon all obligations and liabilities of the parties under this
Agreement shall cease and terminate in the manner set forth in Section 305 . 1 or 305 .2 hereof, as
the case may be. If neither Successor Agency nor Costco shall have fully performed the acts to
be performed before the time for conveyance established in Section 203 , no termination or
demand for return shall be recognized until ten ( 10) days after the Escrow Agent shall have
mailed copies of such demand to the other party or parties at the address of its or their principal
place or places of business . If any objections are raised within the ten ( 10) day period, the
Escrow Agent is authorized to hold all monies, papers and documents with respect to the Site
until instructed in writing by both Successor Agency and Costco or upon failure thereof by a
court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon
as possible . Nothing in this Section 202 shall be construed to impair or affect the rights or
obligations of Successor Agency or Costco to specific performance.
Any amendment of these escrow instructions shall be in writing and signed by both
Successor Agency and Costco . At the time of any amendment, the Escrow Agent shall agree to
carry out its duties as Escrow Agent under such amendment. All communications from the
Escrow Agent to Successor Agency or Costco shall be directed to the addresses and in the
manner established in Section 401 of this Agreement for notices, demands and communications
between Successor Agency and Costco .
The liability of the Escrow Agent under this Agreement is limited to performance of the
obligations imposed upon it under Sections 202 to 209, both inclusive, of this Agreement.
Except as provided in Section 502 hereof, (a) neither Successor Agency nor Costco shall be
liable for any real estate commissions or brokerage fees that may arise therefrom, and (b)
Successor Agency and Costco each represent that neither has engaged any broker, agent or finder
in connection with this transaction.
203. Conveyance of Title and Delivery of Possession Provided that Costco is not in
default under this Agreement and all conditions precedent to such conveyance have occurred,
and subject to any extensions of time pursuant to this Agreement, the Closing Date for
conveyance to Costco of title to the Site shall be completed within the time period specified in
the Schedule of Performance (Attachment No . 3 ) . Successor Agency and Costco agree to
perform all acts necessary to conveyance of title in sufficient time for title to be conveyed in
accordance with the foregoing provisions . Possession shall be delivered to Costco concurrently
with the conveyance of title, except that limited access may be permitted before conveyance of
title as permitted in Section 213 of this Agreement. Costco shall accept title and possession upon
conveyance of title .
204. Form of Deed Successor Agency shall convey to Costco title to the Site in the
condition provided in Section 206 of this Agreement by a grant deed (the "Grant Deed") in
substantially the form set forth in Attachment No . 4 .
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I
205. Conditions Precedent to Conveyance
205. 1 Conditions for Benefit of Costco The obligation of Costco to close the
transaction set forth in this Agreement is subject to the fulfillment or waiver, in Costco ' s sole
and absolute discretion, of the following conditions on or prior to the Closing Date, each of
which shall continue as a condition until Costco notifies Successor Agency in writing (with
copies to Escrow Agent and City), within the time period specified in the Schedule of
Performance (Attachment No . 3 ), that all such conditions have been satisfied or waived (the
"Purchase Notice") . However, any condition that Costco has deemed to be satisfied but has not
expressly waived in writing shall continue as conditions until Closing ("Continuing
Conditions "), and there shall have been no material adverse change to any of the other
conditions prior to Closing.
a. There shall have been no material adverse change to the physical
or title conditions of the Site, and the Site and its title remain in substantially the condition
approved by Costco prior to its execution of this Agreement;
b . Costco has received approval for construction plans and design
development drawings for the improvements on the Site and notice that the building permit(s)
necessary for development of the Site may be issued, subject only to applicable fees ;
C . Costco has obtained or received all approvals required under the
California Environmental Quality Act ("CEQA") and any and all other governmental
entitlements and approvals required for the development, construction and operation of the Site
as a Costco warehouse store, all conditions of which entitlements and approvals and all
requirements for on-site and off-site improvements or services, in-lieu fees or payments,
dedication or reservation requirements, water rights acquisition costs, local improvement district
costs, connection charges, assessments, mitigation fees, impact fees, permit fees and any other
similar requirements, fees or charges imposed by any governmental entity or utility service
provider in connection with the approvals shall be subject to Costco ' s approval in its sole and
absolute discretion;
d. Costco has obtained a commitment for an ALTA policy of title
insurance acceptable to Costco in the full amount of the Purchase Price;
e . Successor Agency is not in material default under any other
provision of this Agreement beyond any applicable cure period, and without limiting the
generality of the foregoing, has obtained or received all approvals required under CEQA and any
and all other governmental entitlements and approvals required for the consummation of the
purchase and sale contemplated by this Agreement;
f. Costco has notified Successor Agency in writing (the "Going-
Forward Notice") that it has determined that it is satisfied with the form of all documentation
and the status of performance and conditions under that certain Agreement for Construction of
Improvements, entered into between Costco and City, effective concurrently with the Effective
Date hereof (the "Improvement Agreement") ; and the Going-Forward Notice may be prior to
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or concurrent with the Purchase Notice and, if concurrent, may be included in the Purchase
Notice;
g. Successor Agency shall have obtained final confirmation, to the
reasonable satisfaction of Costco, that Successor Agency has all necessary approvals from the
Oversight Board and the State Department of Finance to convey the Site to Costco as
contemplated by this Agreement;
h. Costco shall have received and approved all items and
documentation provided in this Agreement to be delivered to Costco ;
i . The representations and warranties of Successor Agency contained
in this Agreement shall be true and correct in all material respects as of the Closing;
j . Subject to Section 404, no litigation, referendum, moratorium,
statute, order, regulation, ordinance, legislation, judgment, ruling or decree shall have been
enacted, adopted, issued or entered, or shall be pending or in effect, that could adversely affect
the Site or Costco ' s ability to develop, construct, open and operate its intended project in
accordance with Costco ' s schedule ; and
k. The Site shall have been established as a single, legally subdivided
lot, separate and apart from any other real property, which condition may not be waived, and as a
separate tax parcel .
For purposes of this Agreement, including, without limitation, Sections
205 . 1 and 205 .2 hereof, approvals shall not be deemed to have been " obtained" or "issued" until
the period of time (if any) to contest or appeal any such issuance has passed without the filing of
a contest or appeal or, if a contest or appeal has been filed, after the issuance of a final and non-
appealable order, decision or judgment (a "Final Judgment") confirming the issuance of the
relevant approvals without substantial modifications or conditions that are unacceptable to the
benefited party.
Without limiting its other remedies under this Agreement, Costco, in its
sole and absolute discretion, may waive any of the foregoing conditions other than g. and k. that
Costco determines are not satisfied to Costco ' s satisfaction (or will not be timely so satisfied), or
upon such determination Costco may terminate this Agreement. Furthermore, if the
Improvement Agreement is terminated for any reason whatsoever, Costco shall have the right to
proceed with this Agreement or to terminate this Agreement at any time after such termination.
Termination of this Agreement by Costco shall be effective upon delivery of a notice of
termination from Costco to Successor Agency and Escrow Agent, and upon delivery of such
termination notice, the Deposit shall be returned to Costco .
. It is understood that neither Costco nor Successor Agency shall have the
right to terminate this Agreement based on the failure to obtain a Final Judgment required for
Close of Escrow until available judicial remedies have been exhausted through the trial court
level, unless parties both agree that judicial action is not warranted . Costco unilaterally may
determine not to pursue any appeal beyond the trial court level .
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205.2 Conditions for the Benefit of Successor Agency. The following are
Successor Agency' s conditions to conveyance of the Site :
a. There has been no material adverse change in the financial
condition of Costco such that Costco no longer would have the necessary equity capital for
acquisition and development of the Site for Costco ' s intended project;
b . Successor Agency shall have obtained final confirmation that
Successor Agency has all necessary approvals from the Oversight Board and State Department
of Finance to convey the Site to Costco as contemplated by this Agreement; and
C , The Site shall have been established as a single, legally subdivided
lot, separate and apart from any other real property, which condition may not be waived .
206. Condition of Title Successor Agency shall convey to Costco fee simple title to
the Site free and clear of all recorded liens, encumbrances, assessments, leases and taxes except
as have been approved or waived by Costco , as follows :
206. 1 Title Commitment and Title Policy By the time specified in the
Schedule of Performance, Costco shall obtain, at Successor Agency ' s expense, a current title
commitment (the " Title Commitment ") for an owner' s extended coverage policy of title
insurance, on the American Land Title Association ("ALTA") Form 1402 . 06 ALTA Owner' s
Policy (6- 17-06) (the "Title Policy" ), to be issued by Title Company at its then current standard
rates without any special premium, in an aggregate amount of not less than the Purchase Price, with
copies of all exceptions and encumbrances to title shown therein, committing Title Company to
issue such Title Policy to Costco . Costco shall deliver a copy of the Title Commitment to
Successor Agency. Costco ' s obligation to consummate the purchase and sale herein contemplated
shall be subject to and conditional upon Costco ' s receipt at the Closing of the Title Policy, together
with such endorsements thereto as Costco shall reasonably request, including, without limitation,
survey, access, separate tax parcel, subdivision, owner' s comprehensive and contiguity
endorsements (or of Title Company' s irrevocable commitment to issue the Title Policy with
requested endorsements), subject only to those exceptions expressly approved in writing by Costco,
if any, or otherwise expressly deemed to be approved by Costco hereunder, if any (collectively, the
"Permitted Exceptions"). The Title Policy shall insure Costco that, upon consummation of the
purchase and sale herein contemplated, Costco will be vested with good, fee simple, marketable and
insurable title to the Site, subject only to the Permitted Exceptions, and Successor Agency
covenants to convey such title to Costco at the Closing. Successor Agency agrees to furnish Title
Company with such customary affidavits and indemnities as may be required by Title Company in
order to issue the Title Policy as aforesaid, without any exception for unfiled and unrecorded
materialmen' s and mechanics ' liens and parties in possession.
206.2 Survey By the time specified in the Schedule of Performance, Costco
shall obtain, at Costco ' s expense, an ALTA survey of the Site, dated no earlier than thirty (30)
days prior to the date of delivery to Costco (the " Survey ") , certified to Costco and Title
Company, prepared by a surveyor licensed in the state where the Site is located who is selected
by Costco ( " Surveyor" ) . The Survey shall be in form and substance sufficient to permit Title
Company to issue the Title Policy with only such exceptions as may have been approved by
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Costco as Permitted Exceptions) . Costco may, at Costco ' s expense, cause the Survey to be
updated (the "Updated Survey") no earlier than thirty (30) days prior to the Closing, which
Updated Survey also shall be in form and substance sufficient to permit Title Company to issue
the Title Policy without boundary, encroachment or survey exceptions (except to the extent that
the same have been approved by Costco as Permitted Exceptions), and to delete from the Title
Policy the standard exceptions as to unrecorded easements, visible and apparent easements and
other matters which would be disclosed by an inspection of the Site.
206.3 Review of Title Commitment and Survey Costco shall have until 5 : 00
p .m. local time in the Governing Jurisdiction on the date that is the end of the time period
specified in the Schedule of Performance (the "Title Inspection Period") to review and
comment on the exceptions and matters contained in or disclosed by the Title Commitment and
Survey. Costco shall be entitled, in its sole and absolute discretion, to terminate this Agreement
if Costco objects to any of the matters disclosed by the Title Commitment or Survey (each, an
"Objection" and collectively, the "Objections ") . In addition, Costco shall be entitled, in its sole
and absolute discretion, to condition its acquisition of the Site upon Successor Agency' s release,
discharge or removal of each Objection prior to the Closing Date, and the deletion of each
Objection from the Title Policy to be issued at the Closing . Prior to the expiration of the Title
Inspection Period, Costco shall provide written notice to Successor Agency (the "Objection
Notice") of each Objection which Costco requires to be released, discharged or removed prior to
the Closing Date . Any matters revealed by the Title Commitment and/or Survey to which
Costco does not object before the end of the Title Inspection Period shall be deemed to be
Permitted Exceptions . Following Costco ' s initial title examination, Costco shall have until the
Closing Date to reexamine title to the Site and to give Successor Agency notice of any additional
Objections (other than the Permitted Exceptions previously approved by Costco) disclosed by such
reexamination and which were not filed and indexed of record as of the date of the initial
examination or not otherwise reflected in the Title Commitment. In addition, Costco shall have the
right to object, in the same manner set forth herein, to any matter shown on the Updated Survey
not previously shown on the preliminary Survey or approved as a Permitted Exception by
Costco .
206.4 Successor Agency ' s Right to Cure Title Objections If Costco raises any
Objections in accordance with the procedures of Section 206 . 3 of this Agreement, then
Successor Agency shall have ten ( 10) days after the receipt of the Objection Notice to give
Costco written notice either that (i) Successor Agency shall remove any Objections prior to the
Closing at no cost to Costco , and Successor Agency shall promptly provide Costco with
evidence satisfactory to Costco of Successor Agency' s ability to so remove such Objections ; or
(ii) Successor Agency elects not to cause such Objections to be removed . If Successor Agency
fails to respond to the Objection Notice, Successor Agency shall be deemed to have agreed to
cause all of the Objections set forth in the Objection Notice to be removed on or before the
Closing Date. If Successor Agency gives Costco notice under clause (ii), then Costco may either
waive those Objections which Successor Agency has elected not to remove, in which event the
waived Objections shall be deemed to be Permitted Exceptions and this Agreement shall
continue in full force and effect, or terminate this Agreement by notice delivered to Successor
Agency and Escrow Agent on or before the Closing Date. If, by the Closing Date, Costco fails
to respond to Successor Agency ' s election to proceed under clause (ii), then Costco shall be
deemed to have terminated this Agreement, and the Deposit shall be returned to Costco .
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206. 5 Monetary Encumbrances The phrase "Monetary Encumbrances " as
used herein means encumbrances or defects to title which by their terms require the payment of
money (in an ascertainable amount), whether in installments or at a fixed time or otherwise,
including, without limitation, mortgages, deeds of trust, mechanic ' s or materialmen' s liens, and
liens associated with public improvement districts and special assessments . Notwithstanding
anything herein to the contrary, Successor Agency shall not have the right under Section 206 .4 to
elect not to cure any Monetary Encumbrances affecting title to the Site . Successor Agency
covenants to remove all Monetary Encumbrances prior to or at the Closing .
206.6 Title Fees In the event this Agreement is terminated pursuant to this
Section 206 or any other provision of this Agreement other than by reason of a default by any
party under this Agreement, any cancellation fee or other costs of Title Company shall be borne
in equal shares by the parties . In the event this Agreement is terminated pursuant to this Section
206 or any other provision of this Agreement by reason of a default by any party under this
Agreement, any cancellation fee or other costs of Title Company shall be borne by the defaulting
party.
207. Time for and Place of Delivery of Deed and Closing Documents Subject to
any mutually agreed upon extensions of time and to the provisions of Sections 215 and 404,
Successor Agency shall deposit with the Escrow Agent by the time or times specified in the
Schedule of Performance the following :
a. Grant Deed . The Grant Deed conveying to Costco fee title to the Site
subject to no encumbrances or defects except for the lien of real property taxes for the current
year prorated to the Closing Date and the Permitted Exceptions .
b . FIRPTA Certificate . A certificate of nonforeign status and of partnership
or California residency/permanent place of business status in form required by federal income
tax regulations and the California Revenue and Taxation Code and reasonably acceptable to
Costco . In the event Successor Agency does not deliver such certificate to Costco at the Closing
or does not otherwise sufficiently evidence Successor Agency ' s exemption from withholding
requirements, Costco may withhold such amounts as may be required under applicable law in
order for Costco to avoid any liability for Successor Agency' s tax obligations .
C , Authority Documents . Certificates, duly adopted resolutions, incumbency
certificates, good standing certificates and other evidence satisfactory to Title Company of the
authorization of the sale of the Site to Costco and of the authority of the person(s) executing and
delivering documents at the Closing on behalf of Successor Agency .
d. Successor Agency ' s Certificate . A certificate certifying that each and
every warranty and representation made by Successor Agency in this Agreement is true and
correct in all material respects as of the Closing as if made by Successor Agency at such time,
except as shall have been disclosed to and waived by Costco in writing.
e. Owner' s Affidavit. An affidavit in form satisfactory to Title Company for
the issuance of the Title Policy without exception for mechanics ' , materialmen' s or other
statutory liens, parties in possession and other standard title exceptions .
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f. Closing Statement. A closing statement setting forth in reasonable detail
the financial transaction contemplated by this Agreement, including, without limitation, the
Purchase Price, all prorations, the allocation of costs specified herein and the source, application
and disbursement of all funds (the "Closing Statement") .
g. Additional Documents . Copies of all other surveys, plans and
specifications, permits and approvals and other similar documents which pertain to the Site
and/or the approvals and entitlements for the Site which may be in the possession of Successor
Agency or under its control .
h. Miscellaneous . Such other items, documents, affidavits, real property
transfer tax returns, legal opinions, instruments and certificates as Costco reasonably requires or
as may be necessary or desirable to consummate the sale of the Site and to induce Title Company
to issue the Title Policy, including, if applicable, documentation to effectuate Costco ' s 1031
exchange.
208. Payment of the Purchase Price and Recordation of Deed Within the time
specified in the Schedule of Performance, Costco shall deposit the Purchase Price for the Site
and other sums required hereunder with the Escrow Agent prior to the date for conveyance
thereof, provided that the Escrow Agent shall have notified Costco in writing that Successor
Agency has deposited with Escrow Agent all of the closing documents to be deposited by
Successor Agency pursuant to Section 207, including, without limitation, the Grant Deed,
properly executed and acknowledged by Successor Agency, and that title is in condition to be
conveyed in conformity with the provisions of Section 206 of this Agreement. Upon the
Closing, the Escrow Agent shall file the Grant Deed for recordation among the land records in
the Office of the County Recorder of Mendocino County, shall deliver the Purchase Price and
other required sums to Successor Agency and shall deliver to Costco a title insurance policy
insuring title in conformity with Section 209 of this Agreement.
2090 Title Insurance Costco shall obtain and deliver the Survey to Title Company and
Escrow Agent so as to permit Title Company to issue the title policy to Costco in accordance
with this Section 209, without the inclusion of a survey exception. Concurrently with
recordation of the Grant Deed, Escrow Agent shall provide and deliver to Costco a title insurance
policy issued by the Title Company insuring that title is vested in Costco in the condition
required by Section 206 of this Agreement. The Title Company shall provide Successor Agency
with a copy of the title insurance policy, and the title insurance policy shall be in the amount of
the Purchase Price of the Site . Successor Agency shall pay for that portion of the title insurance
premium attributable to an A . L.T.A. standard owners form policy of title insurance in the amount
of the Purchase Price of the Site and for any endorsements acceptable to Costco to remove or
insure over exceptions that are not Permitted Exceptions . Costco shall pay for all other
premiums for title insurance coverage or special endorsements .
210 . Taxes and Assessments Ad valorem taxes and assessments on the Site, if any,
and taxes upon this Agreement or any rights hereunder, levied, assessed or imposed for any
period commencing prior to conveyance of title shall be borne by Successor Agency. All such
ad valorem taxes and assessments levied or imposed for any period commencing after closing of
the escrow and approved by Costco as Permitted Exceptions shall be paid by Costco . Any
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assessments of record against the Site but not included among the Permitted Exceptions shall be
paid in full by Successor Agency on or before Closing.
211 . Conveyance Free of Possession The Site shall be conveyed free of any
possession or right of possession by any person except that of Costco and the easements of
record.
212. Inspections ; Indemnities .
212. 1 Inspections . Costco has conducted a Phase I Environmental Study and
Soils Analysis of the Site and is satisfied with the condition of the Site as of the date Costco has
executed this Agreement. Costco agrees it will rely solely on its own investigation of the Site in
its current physical condition, and, except as in this Agreement otherwise specifically provided,
with no warranties, express or implied, as to the physical condition thereof, the presence or
absence of any latent or patent condition thereon or therein, including, without limitation, any
Hazardous Materials (as defined herein) thereon or therein and any other matters affecting the
Site.
212.2 Indemnities
a. Indemnification by Costco . Costco indemnifies and agrees to
defend and hold harmless Successor Agency and its successors and assigns from and against any
and all claims, expenses, costs, damages, losses and liabilities (including reasonable attorneys '
fees) that may at any time be asserted against or suffered by Successor Agency and/or its
successors and/or assigns as a result of, on account of or arising from any obligation, claim, suit,
liability, contract, agreement, debt, encumbrance, or environmental or physical condition of the
Site, first created, arising or accruing after the Closing Date relating to the Site or its operations,
except to the extent that such liability arises by, through or under Successor Agency .
b . Indemnification by Successor Agency, Except as provided in
Section 212 . 1 , Successor Agency indemnifies and agrees to defend and hold harmless Costco
and its successors and assigns from and against any and all claims, expenses, costs, damages,
losses and liabilities (including reasonable attorneys ' fees) that may at any time be asserted
against or suffered by Costco (and/or its successors and/or assigns) or the Site, or any part
thereof, whether before or after the Closing Date, as a result of, on account of or arising from (i)
any breach of any covenant, representation, warranty or agreement on the part of Successor
Agency to Costco made herein or in any instrument or document delivered pursuant to this
Agreement, and/or (ii) any obligation, claim, suit, liability, contract, agreement, debt,
encumbrance, or environmental or physical condition of the Site, created, arising or accruing on
or prior to the Closing Date, regardless of when asserted, relating to the Site or its operations
(including, without limitation, any and all liabilities, including penalties, for federal or state
income taxes or other taxes, which are not assumed by Costco in writing), except to the extent
that such liability arises by, through or under Costco .
213. Condition of the Site Except as may be otherwise specifically provided in this
Agreement, the Site shall be conveyed from Successor Agency to Costco in an " as is " condition.
Successor Agency shall not be responsible for any items of site work. Costco heretofore has
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inspected and approved, and between the date of this Agreement and the date of recordation of
the Grant Deed may continue, at Costco's sole expense, to inspect for any material adverse
changes subsequent to such approval, the soil conditions of the Site and the suitability of such
soil conditions for the improvements to be constructed by Costco . During the term of this
Agreement prior to the conveyance of the Site to Costco , representatives of Costco shall have (i)
access to all data and information on the Site available to Successor Agency, but without
warranty or representation by Successor Agency as to the completeness, correctness or validity
of such data and information, and (ii) the right of access to the Site at all reasonable times for the
purpose of obtaining data and making surveys and tests necessary to carry out this Agreement.
Costco shall indemnify, defend and hold Successor Agency harmless from any injury, liability,
cost or damages arising out of any activity pursuant to this section. Notwithstanding the
foregoing hold harmless agreement, Costco shall have no liability to Successor Agency or to any
other person or entity by reason of, nor shall Costco have any duty to indemnify, defend or hold
any person or entity harmless from or against, any liens, claims, losses or liabilities (collectively,
"Costs"), including, without limitation, any claim for diminution in value of the Site or for
environmental remediation or clean-up costs, arising out of or in connection with the mere fact of
having discovered and/or reported (as may be required by law) any adverse physical condition,
title condition, environmental condition or other defect with respect to the Site. Any claim for
indemnification under this Section 213 must be made within one ( 1 ) year after the date of
Closing or termination of this Agreement. Any preliminary work undertaken on the Site by
Costco prior to conveyance of title thereto shall be done only after written consent of Successor
Agency and at the sole expense of Costco and in compliance with all required permits and other
legal requirements . Copies of data, surveys and tests obtained or made by Costco on the Site
shall be filed with Successor Agency. Any preliminary work by Costco shall be undertaken only
after securing any necessary permits from the appropriate governmental agencies .
214. Representations , Warranties and Covenants
214. 1 Successor Agency ' s Representations, Warranties and Covenants .
Successor Agency represents, warrants and covenants to Costco :
(i) Power and Authority . Successor Agency is a public body,
corporate and politic, organized and existing under Health and Safety Code § 34173 , and is a
separate legal entity from the City or any other subdivision of the State, and the successor to the
RDA. Subject to Oversight Board and Department of Finance approvals, Successor Agency has
the authority and power to enter into this Agreement and has , or by the end of the time period
specified in the Schedule of Performance shall have, all necessary power and authority to
consummate the transaction provided for herein . This Agreement and all other documents
executed and delivered by Successor Agency constitute legal, valid, binding and enforceable
obligations of Successor Agency, and there are no claims or defenses, personal or otherwise, or
offsets whatsoever to the enforceability or validity of this Agreement. The persons executing
this Agreement on behalf of Successor Agency have been duly authorized to do so .
(ii) No Violations or Actions . The execution, delivery and
performance by Successor Agency of its obligations under this Agreement will not conflict with
or result in a breach of any law, governmental rule, regulation, judgment, decree or order by
which Successor Agency or the Site is bound, or any contract to which Successor Agency is a
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party or by which Successor Agency or the Site is bound . There is no action, suit, proceeding or
investigation pending, or, to the knowledge of Successor Agency that may be threatened, before
any agency, court or other governmental authority which relates to the Site or the use thereof,
except for legal challenges under CEQA, City ' s zoning ordinances or General Plan, state law
pertaining to zoning and land use approvals or Division 24 , Part 1 . 85 of the Health and Safety
Code that have been or may be filed to challenge approval of the entitlements required by Costco
to fully perform under this Agreement, which are subject to Sections 205 . 1 .
(iii) Condemnation; Moratorium. There are no condemnation or
eminent domain proceedings pending, or to Successor Agency' s knowledge threatened or
contemplated, against the Site or any part thereof, and Successor Agency has not received any
notice, oral or written, of the desire of any public authority or other entity to take or use the Site
or any part thereof. Successor Agency shall give Costco prompt written notice of any actual, or
if known to Successor Agency any threatened or contemplated, condemnation or eminent
domain proceeding against any part of the Site . No moratorium, statute, order, regulation,
ordinance, legislation, judgment, ruling or decree of any court or governmental agency has been
enacted, adopted, issued, entered or is pending or in effect that could materially and adversely
affect the Site and/or Costco ' s ability to develop, open and operate its intended project.
(iv) Compliance . Upon the Closing, the Site will comply with all
applicable governmental requirements in respect of the use, occupation and construction thereof,
including, without limitation, environmental, zoning, platting and other land use requirements,
and Successor Agency has received no notice of and has no knowledge of any violations or
investigations relating thereto . There is no default or breach by Successor Agency under any
covenant, condition, restriction, right-of-way or easement which may affect the Site or any
portion thereof.
(v) Zoning and Use . No part of the Site is subject to any building or
use restriction which will restrict or prevent the contemplated use of the Site for Costco ' s
intended project. The Site is currently zoned PD — Airport Industrial Park/ Industrial / Auto
Commercial and Light Manufacturing / Mixed-Use and upon the Closing will be zoned Retail
Commercial . The Site is not located in any conservation or historic district. No buildings or
other improvements of any kind encroach on the Site.
(vi) Utilities . Gas, electric power, sanitary and storm sewer, telephone
and water service and facilities and all other utilities necessary for Costco ' s intended
development, use and operation of the Site are, or by the Closing will be, available to and
servicing the Site in quantities satisfactory to service the Site for the intended use . Costco may
connect with all such utilities by the payment of normal tap-on or connection fees . No condition
exists which would result in discontinuation of necessary sewer, water, electric, gas, telephone or
other utilities .
(vii) Work. No work has been performed or is in progress at, and no
materials have been furnished to, the Site which have not been paid for or will not be paid for in
full by prior to the Closing Date .
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(viii) Assessments . No special or general assessments have been levied,
other than as shown in the Title Commitment, or to the knowledge of Successor Agency are
threatened, against all or any part of the Site.
(ix) Access and Street Dedication. The streets, roads, highways and
avenues in front of or adjoining any part of the Site have been dedicated to and accepted by the
proper governmental authority and such governmental authority has the responsibility to
maintain such streets, roads, highways or avenues . The right of ingress and egress from the
public roadways to and from the Site is not restricted or limited in any manner. No condition
exists which would result in the termination or impairment of access to the Site .
(x) Leases ; Contracts ; Agreements ; Obligations . There are no leases
affecting any part of the Site. There are no management agreements, service contracts or other
agreements affecting the Site or the operation or maintenance thereof which will be binding upon
Costco after the Closing. There are no other obligations in connection with the Site, including,
without limitation, easements, declarations, use restrictions or other similar agreements, which
will be binding upon Costco after the Closing, except for those matters which have been
approved by Costco as Permitted Exceptions .
(xi) Foreign Person or Entity. Successor Agency is not a foreign
person, nonresident alien, foreign corporation, foreign partnership, foreign trust or foreign estate,
as those terms are defined in the Internal Revenue Code and the Income Tax Regulations
promulgated thereunder. Successor Agency is either (A) a partnership as determined in
accordance with Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code, (B) a
resident of California, or (C) a corporation with a permanent place of business in California.
(xii) Bankruptcy Matters . Successor Agency has not made a general
assignment for the benefit of creditors, filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by its creditors, suffered the appointment of a receiver to take
possession of substantially all of its assets, suffered the attachment or other judicial seizure of
substantially all of its assets, admitted its inability to pay its debts as they come due or made an
offer of settlement, extension or compromise to its creditors generally .
(xiii) Marketable Title . Successor Agency has, as of the Effective Date,
good, marketable and indefeasible title to the Site . Without in any way limiting the generality of
the foregoing representation, Successor Agency further represents and warrants to Costco that
(A) no understanding, agreement (either express or implied) or reasonable expectancy of
agreement with respect to sale, lease or other transfer of the Site exists between Successor
Agency and any third party, and (B ) Successor Agency is in no way restricted from negotiating
and entering into this Agreement with Costco and selling the Site to Costco .
(xiv) Prevailing Wage . To the best of its knowledge, no person or entity
has taken any action in regards to the Site that would make Costco ' s intended project subject to
the prevailing wage requirements codified in California Labor Code section 1720, et seq.
(xv) Hazardous Substances . Successor Agency warrants and represents
that, to the extent of its knowledge without any independent investigation:
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Hazardous Substance ; (I) the Site does not contain, and has not contained, any
(II) neither Successor Agency nor any prior owner, user or
occupant of the Site, has conducted or authorized the generation, transportation, storage,
treatment or disposal at or near or from the Site of any Hazardous Substance;
(III) there is no pending or threatened, litigation or proceeding
before any court or any governmental or administrative agency in which any person or entity
alleges the presence, release, threat of release, placement on, in or from the Site or any adjacent
property, or the generation, transportation, storage, treatment or disposal at the Site or any
adjacent property of any Hazardous Substance;
(IV) Successor Agency has received no notice of, or has no
actual or constructive knowledge that, any governmental authority or employee or agent thereof
is investigating, has determined or threatens to determine the presence of, release or threat of
release or placement on, in or from the Site or any adjacent property, or the generation,
transportation, storage, treatment or disposal at the Site or any adjacent property, of any
Hazardous Substance ;
(V) there are no actions, communications or agreements
between Successor Agency and any governmental authority or agency (federal, state or local) or
any private entity relating in any way to the remediation, presence, release, threat of release or
placement on, in or from the Site, or the generation, transportation, storage, treatment or disposal
of any Hazardous Substance at or from the Site;
(VI) the Site has been operated in compliance with all
Environmental Laws, all necessary permits under the Environmental Laws have been obtained
for the operations on the Site and no liability under any Environmental Laws has been incurred
with respect to the Site; and
(VII) there are no underground storage tanks located on the Site
and no underground storage tanks have been removed from the Site.
For purposes of this Agreement, the following terms shall have the
following meanings :
(I) "Environmental Laws" means all federal, state and local
environmental, hazardous waste or substance, health and/or safety laws, rules, statutes,
directives, binding written interpretations, binding written policies, ordinances and regulations or
common law doctrines issued by any governmental authorities and in effect as of the Effective
Date with respect to or which otherwise pertain to or affect the Site or any portion thereof, the
use, ownership, occupancy or operation of the Site or any portion thereof, or Purchaser, as same
have been amended, modified or supplemented from time to time prior to the date of the Closing,
including, without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U . S . C . § 9601 et seq.) , the Hazardous Substances Transportation Act
(49 U . S . C . § 1802 et seq. ), the Resource Conservation and Recovery Act (42 U . S . C . § 6901 et
seq. ), as amended by the Hazardous and Solid Wastes Amendments of 1984, the Water Pollution
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Control Act (33 U . S . C . § 1251 et seq. ), the Safe Drinking Water Act (42 U. S . C . § 300f et seq.),
the Clean Air Act (42 U. S . C . § 7401 et seq.), the Solid Waste Disposal Act (42 U . S . C . § 6901 et
seq.) , the Toxic Substances Control Act ( 15 U . S . C . § 2601 et seq .), the Emergency Planning and
Community Right-to-Know Act of 1986 (42 U. S . C . § 11001 et seq.), the Radon and Indoor Air
Quality Research Act (42 U . S . C . § 7401 note, et seq.), the Superfund Amendment
Reauthorization Act of 1986 (42 U . S . C . § 9601 et seq. ), the National Environmental Policy Act
(42 U. S . C . § 4321 et seq. ), the Clean Water Act (33 U . S . C . § 1321 et seq.), and the Occupational
Safety and Health Act (29 U. S . C . § 651 et seq .), comparable state and local laws, and any and all
rules and regulations which have become effective prior to the date of the Closing under any and
all of the aforementioned laws .
(II) "Hazardous Substances " means all ( 1 ) electromagnetic
waves, urea formaldehyde foam insulation and transformers or other equipment that contains
dielectric fluid containing polychlorinated biphenyls, (2) any solid, liquid, gaseous or thermal
contaminant, including, without limitation, smoke, vapor, soot, fumes, acids, alkalis, chemicals,
waste, petroleum products or byproducts or fractions thereof, asbestos, asbestos containing
materials, radioactive materials, PCBs, phosphates, lead or other heavy metals, chlorine, mold,
radon gas and any indoor air contaminant, (3 ) any solid or liquid wastes (including hazardous
wastes), hazardous air pollutants, hazardous substances, hazardous chemical substances and
mixtures, toxic substances, pollutants and contaminants, as such terms are defined in any
Environmental Law, and (4) any other chemical, material or substance, the use or presence of
which, or exposure to the use or presence of which, is prohibited, limited or regulated by any
Environmental Laws .
(xvi) Misrepresentation and Adverse Facts . Successor Agency has not
knowingly failed to disclose any fact that is material to the transaction contemplated in this
Agreement that is known by it.
214.2 Costco ' s Representations, Warranties and Covenants . Costco
represents, warrants and covenants to Successor Agency :
(i) Power and Authority. Costco is a corporation in good standing,
duly formed and validly existing under the laws of the State of Washington. Costco has the
authority and power to enter into this Agreement and to consummate the transaction provided for
herein. This Agreement and all other documents executed and delivered by Costco constitute
legal, valid, binding and enforceable obligations of Costco, and there are no claims or defenses,
personal or otherwise, or offsets whatsoever to the enforceability or validity of this Agreement.
The person executing this Agreement on behalf of Costco has been duly authorized to do so .
(ii) No Violations or Actions . The execution, delivery and
performance by Costco of its obligations under this Agreement will not conflict with or result in
a breach of any law, governmental rule, regulation, judgment, decree or order by which Costco is
bound, or any contract to which Costco is a party or by which Costco is bound, or Costco ' s
certificate of incorporation or bylaws .
214.3 Survival . All of the representations, warranties and covenants of
Successor Agency and Costco contained in this Agreement shall be true and correct as of the
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e '
Effective Date and shall, as a condition to Closing, be true and correct in all material respects as
of the Closing Date . The parties ' rights to enforce such representations, warranties and
covenants shall survive the Closing and such rights to enforce shall not be merged into any
documents delivered at the Closing. It is expressly agreed and understood that no examination or
investigation of the Site by or on behalf of Costco prior to the Closing shall in any way modify,
affect or diminish Successor Agency ' s obligations under the representations, warranties,
covenants and agreements contained in this Agreement.
215. Closing Date Extension . Notwithstanding any provision of this Agreement to
the contrary, in the event that Costco is prepared to close this transaction pursuant to the terms of
this Agreement, and if Successor Agency has not fully performed its obligations hereunder, then
Costco , in its sole and absolute discretion, and in addition to all other rights and remedies it may
have, may, from time to time, notify Successor Agency that Costco extends the Closing Date to
such date or dates as Costco may elect to provide Successor with the additional time necessary
for Successor Agency to fully perform its obligations hereunder. In such event, all conditions to
Closing, including, without limitation, the Continuing Conditions, shall continue as conditions
unless expressly waived in writing by Costco, and Costco may defer making Costco ' s Closing
deliveries (including deposit of the balance of the Purchase Price) pending Successor Agency' s
performance. Successor Agency ' s failure to fully perform by such extended Closing Date(s)
shall constitute a default by Successor Agency under this Agreement.
216. Post-Closing Adjustments . The parties assume there will be no taxes, costs,
expenses or income attributable to the Site to be prorated between them at Closing. To the extent
this assumption may be incorrect and pre-Closing income or expense items with respect to the
Site are received after Closing, Costco and Successor will, upon a proper accounting, pay to the
other such amounts as may be necessary such that Successor Agency will pay all expenses of the
Site for the period on and prior to the Closing Date and all other expenses to be paid by
Successor Agency pursuant to this Agreement, and Costco will pay all expenses of the Site for
the period after the Closing Date and all other expenses to be paid by Costco pursuant to this
Agreement. If either party receives any bill or invoice which relates to the period or to an
expense for which the other party is responsible, the receiving party will refer such bill to the
responsible party and the responsible party agrees to pay, promptly upon receipt, such portion of
the bill or invoice as relates to the period or expense for which it is responsible . If the
responsible party does not pay such bill in a timely manner, the receiving party may, at its
option, pay such bill or invoice and the responsible party shall become liable to the receiving
party for the full amount of such payment, together with interest at the rate of two percent (2%)
per annum in excess of the Prime Rate . The "Prime Rate" shall be the rate announced as such
from time to time by Bank of America, N . A. or its successor. If there shall be no such
announced rate of such bank or its successor, then the Prime Rate shall be such equivalent rate as
is charged from time to time by major money-center banks .
300. DEFAULTS , REMEDIES AND TERMINATION
301 . Defaults — General Subject to the extensions of time set forth in Section 404,
failure or delay by either party to perform any term or provision of this Agreement constitutes a
default under this Agreement. The party who so fails or delays must immediately commence to
cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy
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with reasonable diligence and during any period of curing shall not be in default. The injured
party shall give written notice of default to the party in default specifying the default complained
of by the injured party. Except as required to protect against further damages and except as
otherwise expressly provided in Section 305 of this Agreement, the injured party may not
institute proceedings or exercise any other remedies against the party in default until ninety (90)
days after giving such notice . Failure or delay in giving such notice shall not constitute a waiver
of any default nor shall it change the time of default. Except as otherwise expressly provided in
this Agreement, any failure or delay by either party in asserting any of its rights or remedies as to
any default shall not operate as a waiver of any default or of any such rights or remedies or
deprive such party of its right to institute and maintain any actions or proceedings that it may
deem necessary to protect, assert or enforce any such rights or remedies .
302. Legal Actions
302. 1 Institution of Legal Actions In addition to any other rights or remedies,
but subject to any limitations set forth herein, either party may institute legal action to cure,
correct or remedy any default, or recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Such legal actions must be instituted in the
Superior Court of the County of Mendocino, State of California, all parties consenting to the
jurisdiction and venue of such courts and to the state appellate courts .
302.2 Applicable Law ; Interpretation The laws of the State of California shall
govern the interpretation and enforcement of this Agreement. This Agreement has been
negotiated at arm's length and between persons sophisticated and knowledgeable in the matters
dealt with herein. In addition, each party has been represented by experienced and
knowledgeable legal counsel . Accordingly, any rule of law (including California Civil Code
Section 1654) or legal decision that would require interpretation of any ambiguities in this
Agreement against the party that has drafted it is not applicable and is waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to give effect to the purposes of the
parties and this Agreement.
302.3 Acceptance of Service of Process In the event that any legal action is
commenced by Costco against Successor Agency, service of process shall be made by personal
service upon the Ukiah City Clerk or in such other manner as may be provided by law. In the
event that any legal action is commenced by Successor Agency against Costco , service of
process on Costco shall be made by service upon CT Corporation System, 818 West Seventh
Street, Los Angeles, CA 90017, or any successor Agent for Service of Process as filed with the
California Secretary of State.
303. Rights and Remedies are Cumulative Except as otherwise expressly stated in
this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any
party of one or more of such rights or remedies shall not preclude the exercise by it, at the same
time or different times, of any other rights or remedies for the same default or any other default
by the other party.
304. Remedies Generally If Costco or Successor Agency defaults with regard to any
of the provisions of this Agreement, the non-defaulting party shall serve written notice of such
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default upon the defaulting party. If a default by Successor Agency is not cured within the
applicable time period specified in Section 301 as extended pursuant to Section 404 , Costco shall
have the remedies provided in Section 305 . 1 , the choice of which then-applicable remedies may
be made in Costco ' s sole and absolute discretion. If a default by Costco is not cured within the
applicable time period specified in Section 301 as extended pursuant to Section 404, Successor
Agency shall have the then-applicable remedies provided in Sections 305 . 2 , the choice of which
then-applicable remedies may be made in Successor Agency' s sole and absolute discretion .
305. Remedies and Rights of Termination
305. 1 Remedies Available to Costco . In the event that at any time Successor
Agency is in breach or default with respect to any other obligation of Successor Agency under
this Agreement, including, without limitation, Successor Agency tendering conveyance of the
Site or possession thereof in the manner and condition and by the date provided in this
Agreement subject to extension under Section 404 ; and if any default or failure referred to in this
Section 305 . 1 shall not be cured within the applicable time period after the date of written
demand by Costco or such longer period of time as reasonably may be necessary for the
particular cure, then Costco, at its option, may (i) seek specific performance of this Agreement,
including attorneys ' fees and costs incurred in pursuing specific performance ; (ii) cure the
default on behalf of defaulting party and obtain reimbursement from the defaulting party of costs
and expenses incurred in connection with such cure, including, without limitation, attorneys '
fees ; or (iii) terminate this Agreement by written notice of termination to Successor Agency, and
any rights with respect to Costco against Successor Agency or any assignee or transferee in, to or
under this Agreement, pertaining to this Agreement, or arising out of this Agreement, shall
terminate. Upon such termination, the Deposit shall be returned to Costco as provided in
Section 104, and subject to an extension of time under Section 404, Costco shall be entitled to
reimbursement of out-of-pocket expenses incurred in pursuit of this transaction ("Costco ' s
Actual Damages") but not for consequential damages and, except for Costco ' s Actual Damages,
neither Successor Agency nor Costco shall have any further rights against or liability to the other
under this Agreement; provided, however, that if Successor Agency is prevented from
performing any of its obligations under Section 205 . 1 by a decision of another government
agency or court, Costco ' s exclusive remedy is termination of the Agreement or a demand that
Successor Agency exhaust any available administrative or judicial remedies to challenge that
decision. Costco shall be entitled to Costco ' s Actual Damages only if Successor Agency fails or
refuses to fully exhaust such administrative and judicial remedies .
305 .2 Remedies Available to Successor Agency. In the event that (a) Costco
fails to maintain the amount of the Deposit as required by Section 104 of this Agreement; (b)
Costco transfers or assigns or attempts to transfer or assign this Agreement or any rights herein
or in the Site or the buildings or improvements thereon in violation of this Agreement; or (c)
Costco is in breach or default with respect to any other obligation of Costco under this
Agreement as extended by Section 404 ; and if any default or failure referred to in this
Section 305 . 2 shall not be cured within ninety (90) days after the date of written demand by
Successor Agency or such longer period of time as reasonably may be necessary for the
particular cure, then Successor Agency may terminate this Agreement.
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305.3 Liquidated Damages . IN THE EVENT OF TERMINATION UNDER
SECTION 305 .2, THE DEPOSIT SHALL BE RETAINED BY SUCCESSOR AGENCY AS
LIQUIDATED DAMAGES AND AS ITS PROPERTY WITHOUT ANY DEDUCTION,
OFFSET OR RECOUPMENT WHATSOEVER, SUCCESSOR AGENCY WAIVING ALL
OTHER RIGHTS AND REMEDIES, EXCEPT AS OTHERWISE IN THIS AGREEMENT
EXPRESSLY PROVIDED . IF COSTCO SHOULD DEFAULT UPON ITS OBLIGATIONS ,
MAKING IT NECESSARY FOR SUCCESSOR AGENCY TO TERMINATE THIS
AGREEMENT AND TO PROCURE ANOTHER PARTY OR PARTIES TO PURCHASE THE
SITE, THEN THE DAMAGES SUFFERED BY REASON THEREOF WOULD BE
UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS
THE CONSIDERATION THAT SUCH PARTY WOULD PAY FOR THE SITE ; THE
EXPENSES OF CONTINUING THE OWNERSHIP AND CONTROL OF THE SITE; OF
INTERESTING PARTIES AND NEGOTIATING WITH SUCH PARTIES , RESULTING IN
ADDITIONAL IMMEASURABLE DAMAGE AND LOSS TO SUCCESSOR AGENCY. IT
IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH
DAMAGES TO SUCCESSOR AGENCY, BUT THE PARTIES ARE OF THE OPINION,
UPON THE BASIS OF ALL INFORMATION AVAILABLE TO THEM, THAT SUCH
DAMAGES WOULD APPROXIMATELY EQUAL THE AMOUNT OF THE DEPOSIT
HELD BY ESCROW AGENT AT THE TIME OF THE DEFAULT OF COSTCO, AND THE
AMOUNT OF SUCH DEPOSIT SHALL BE PAID TO SUCCESSOR AGENCY UPON ANY
SUCH OCCURRENCE AS THE TOTAL OF ALL LIQUIDATED DAMAGES FOR ANY
AND ALL SUCH DEFAULTS AND NOT AS A PENALTY, IN THE EVENT THAT THIS
PARAGRAPH SHOULD BE HELD TO BE VOID FOR ANY REASON OTHER THAN
PURSUANT TO AN ACTION BY SUCCESSOR AGENCY, SUCCESSOR AGENCY SHALL
BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY
LAW. COSTCO AND SUCCESSOR AGENCY SPECIFICALLY ACKNOWLEDGE THIS
LIQUIDATED DAMAGES PROVISION BY THEIR SIGNATURES HERE :
By :
By :
By :
400. GENERAL PROVISIONS
401 . Notices, Demands and Communications Between the Parties All notices,
demands, consents, approvals and other communications (each, a "Notice") which are required
or desired to be given by either party to the other under this Agreement shall be in writing and
shall be (a) hand delivered, (b) sent by U . S . registered or certified mail, postage prepaid, return
receipt requested, (c) sent by reputable overnight courier service, or (d) transmitted by facsimile
machine (with a printed copy to follow by one of the other methods prescribed in clauses (a)
through (c) of this Section 401 , including a copy of the transmission sheet indicating successful
transmission of the Notice by facsimile machine), addressed to the appropriate party at its
address set forth in Section 103 hereof, or at such other address as such party shall have last
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designated by Notice to the other. Notices shall be deemed given when delivered. Until notified
otherwise, Notices to Successor Agency shall be addressed to the attention of the Executive
Director. Until notified otherwise, Notices to Costco shall be addressed to the attention of Seth
S . Katz, Corporate Counsel. Rejection or other refusal by the addressee to accept a Notice or the
inability to deliver the Notice because of a changed address of which no Notice was given shall
be deemed to be receipt of the Notice sent. Notices sent by counsel for Costco or Successor
Agency, respectively, shall be deemed Notice given by the party provided that the Notice is
delivered to the party pursuant to the foregoing; Notice given only to counsel for a party shall not
be deemed Notice given to that party.
402. Conflicts of Interest No member, official or employee of Successor Agency
shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member,
official or employee participate in any decision relating to this Agreement that affects his or her
personal interests or the interests of any corporation, partnership or association in which he or
she is directly or indirectly interested. Except as provided in Section 502, each party warrants
that it has not paid or given, and will not pay or give, any third person any money or other
consideration for obtaining this Agreement.
403. Nonliability of Successor Agency Officials and Employees No member,
official or employee of Successor Agency shall be personally liable to Costco in the event of any
default or breach by Successor Agency or for any amount that may become due to Costco or on
any obligations under the terms of this Agreement.
404. Enforced Delay : Extension of Times of Performance In addition to the
specific provisions of this Agreement, performance by any party hereunder shall not be deemed
to be in default where delays or defaults are due to war; act of terrorism ; insurrection; strikes ;
lock-outs ; riots ; floods; earthquakes ; fires ; casualties ; acts of God; acts of the public enemy;
epidemics ; quarantine restrictions; freight embargoes ; lack of transportation; governmental
restrictions or priority; litigation, including legal challenges to governmental approvals by
Successor Agency, the California Department of Finance, the City of Ukiah or other
governmental agencies; unusually severe weather; inability to secure necessary labor, materials
or tools ; delays of any contractor, subcontractor or supplier; acts of another party; acts or the
failure to act of any public or governmental agency or entity (except that acts or the failure to act
of Successor Agency or City shall not excuse performance by Successor Agency) ; or any other
causes beyond the control or without the fault of the party claiming an extension of time to
perform. An extension of time for any such cause shall only be for the period of the enforced
delay, which period shall commence to run from the time of the commencement of the cause. If,
however, notice by the party claiming such extension is sent to the other parties more than thirty
(30) days after the commencement of the cause and the other parties did not know of the cause of
the enforced delay prior to such notice, the period shall commence to run only thirty (30) days
prior to the giving of such notice. Subject to Section 415 below: (i) if the enforced delay results
from litigation, the period of the enforced delay shall be deemed to continue until there is a Final
Judgment or the parties agree that further litigation is not warranted; and (ii) in the case of
litigation challenging compliance with CEQA, where defects in an environmental document can
be cured by supplement or addendum thereto, the period of enforced delay shall include the time
required to cure the defects and any judicial review thereof, unless the parties otherwise agree in
writing. Times of performance under this Agreement may also be extended in writing by
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Successor Agency and Costco, and the Executive Director shall have authority to make or to
agree to such extensions without further consideration thereof or action thereon by Successor
Agency. If the enforced delays pursuant to this Section 404 cause performance in accordance
with the Schedule of Performance to be unfeasible, the parties shall meet and confer to revise the
times specified in the Schedule of Performance and the authority of the Executive Director
pursuant to the foregoing sentence shall include approval of such a revised Schedule of
Performance .
405. Inspection of Books and Records Successor Agency has the right, upon not less
than three (3 ) business days ' notice, at all reasonable times, to inspect the books and records of
Costco pertaining to the Site as pertinent to the purposes of this Agreement. Costco also has the
right, upon not less than three (3) days ' notice, at all reasonable times, to inspect the books and
records of Successor Agency pertaining to the Site as pertinent to the purposes of this
Agreement.
406. Plans Where Costco does not proceed with the purchase and development of the
Site, and when this Agreement is terminated pursuant to Section 305 .2 hereof for any reason,
Costco shall deliver to Successor Agency any and all plans for the Site, and Successor Agency or
any other person or entity designated by Successor Agency shall be free to use such plans,
including plans previously delivered to Successor Agency, for any reason whatsoever without
cost or liability therefor to Costco or any other person.
407. Attorneys ' Fees Should any action be brought arising out of this Agreement
including, without limitation, any action for declaratory or injunctive relief, the prevailing party
shall be entitled to reasonable attorneys' fees and costs and expenses of investigation incurred,
including those incurred in appellate proceedings or in any action or participation in, or in
connection with, any case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code or
any successor statutes, and any judgment or decree rendered in any such actions or proceedings
shall include an award thereof.
408. Successors Bound Subject to the restrictions on assignment contained in Section
304 hereof, the provisions of this Agreement shall extend to , bind and inure to the benefit of the
parties to this Agreement and their respective personal representatives, heirs, successors and
assigns .
409. Severability If any term or provision of this Agreement shall , to any extent, be
held invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be
affected thereby, but each remaining term and provision shall be valid and enforced to the fullest
extent permitted by law.
410. Captions The captions of this Agreement are inserted solely for convenience of
reference only and do not define, describe or limit the scope or intent of this Agreement or any
term hereof.
411 . Construction Successor Agency and Costco acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall not be employed in
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the interpretation of this Agreement (including the attachments and exhibits hereto) or any
amendments hereto , and the same shall be construed neither for nor against Successor Agency or
Costco, but shall be given a reasonable interpretation in accordance with the plain meaning of its
terms and the intent of the parties .
412. Party 's Approval Rights Whenever in this Agreement a party is deemed to
disapprove of a particular matter, or a condition is deemed not to be satisfied by reason of the
party ' s failure to approve of the same or to acknowledge that the same is satisfied, the other
parties shall have no right to conclusively deem the party to have disapproved of such matter or
to deem such condition not satisfied, unless and until the party or parties seeking to deem the
matter disapproved ("the deeming party") gives written notice to the party who is deemed to
have disapproved ("the disapproving party") that deeming party intends to deem such matter
disapproved or to deem such condition not satisfied, as of the date which is five (5 ) days after the
disapproving party receives such notice . If disapproving party fails to approve of or waive the
matter in question or fails to acknowledge that the condition in question is satisfied, as the case
may be, within such five (5 ) day period, the matter or condition in question shall thereafter be
conclusively deemed to be disapproved or not satisfied.
413. Computation of Time If the time for performance of any provision of this
Agreement ends on a Saturday, Sunday or federal, state or legal holiday in the Governing
Jurisdiction, then such date shall automatically be extended until 5 : 00 p .m . on the next day which
is not a Saturday, Sunday or federal, state or legal holiday in the Governing Jurisdiction.
414. Survival of Terms . The terms and provisions of this Agreement shall survive the
Closing and shall remain in full force and effect thereafter unless otherwise specifically provided
in this Agreement.
415. Assignment. This Agreement shall not be assigned by either party without the
prior written approval of the other party; provided, however, that if Costco will operate the
wholesale warehouse store contemplated by the Improvement Agreement through an affiliate or
subsidiary, it may assign this Agreement to that affiliate or subsidiary on condition that effective
as of Closing under this Agreement the affiliate or subsidiary assumes Costco ' s obligations
under the Improvement Agreement,
500, SPECIAL PROVISIONS
501 . Amendments to this Agreement Costco and Successor Agency agree to
mutually consider reasonable requests for amendments to this Agreement that may be made by
any of the parties hereto , provided such requests are consistent with this Agreement and would
not substantially alter the basic business terms included herein.
502. Brokers ' Commissions Successor Agency shall be responsible for paying a
broker's commission in the amount of THREE HUNDRED THOUSAND DOLLARS
($300, 000) , to be paid at Closing, in equal shares to NWAP II, Inc . , and The Voit Corporation
(Jason Gallelli) . Successor Agency also shall pay a broker's commission in the amount of Three
Percent (3 %) of the Purchase Price, to be paid at the Closing, to Realty World Seltzer Realty,
Successor Agency and Costco each represent to the other that it has engaged no other broker in
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connection with the transaction ' set forth in this Agreement to whom a commission is or would be
payable.
503. Purchase of Lot 3 . In accordance with and subject to the provisions of this Section
503 , Successor Agency agrees to sell, and Costco agrees to purchase Lot 3 for the sum of ONE
HUNDRED TWENTY-ONE THOUSAND NINE HUNDRED SIXTY EIGHT DOLLARS
($ 121 , 968) . Lot 3 is shown on the Map ("Lot 3") and more particularly described in the Legal
Description of Lot 3 (Attachment No . 6),
503. 1 Disposition in Accordance with Improvement Agreement. Costco shall not
alter Lot 3 from its condition on the Effective Date and shall dispose of Lot 3 in accordance with the
Improvement Agreement.
503.2 Terms of Purchase. The terms and conditions of purchase and sale of Lot 3
shall be comparable to the terms and conditions of purchase and sale for the Site under this Purchase
Agreement, except that:
(a) The following shall not apply: Costco ' s conditions at Section 205 , 1 (b),
(c) and (f); Costco ' s acknowledgement of inspections at Section 212. 1 ; Successor Agency' s
representations at Sections 214 . 1 (v) (Zoning and Use) and (vi) (Utilities) ; and
(b) In lieu of times provided under the Schedule of Performance and subject
to Section 404 and extension as provided in this Purchase Agreement, the following times shall
apply:
(i) Opening of Lot 3 Escrow and deposit of Deposit: Within five (5)
business days after of approval of this Agreement by Department of Finance;
(ii) Title, Survey and Inspection Period for Costco to determine all
aspects of Lot 3 are acceptable to Costco in its sole and absolute discretion: Within thirty (30) days
after opening of Lot 3 Escrow;
(iii) Satisfaction of applicable conditions of Sections 205 . 1 and
205 .2 : Within thirty(30) days after opening of Lot 3 Escrow;
(iv) Deposit into Escrow of Grant Deed, Purchase Price and other
funds and documents necessary for Closing : at same time as for the Site (Costco shall not purchase
Lot 3 except concurrently with and conditioned upon its closing on the purchase of the Site) ; and
(v) Closing : Next business day after deposit of all funds and
documents necessary for Closing.
600. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
This Agreement is executed in four (4) duplicate originals, each of which is deemed to be
an original . This Agreement comprises pages I through 26, inclusive, Acknowledgments and
Attachment Nos . 1 through 5 , attached hereto and incorporated herein by reference, all of which
24
USW 804510810. 12
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constitute the entire understanding and agreement of the parties . 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. All waivers of the provisions of this Agreement must be in writing and
signed by the appropriate authorities of Successor Agency and Costco, and all amendments
hereto must be in writing and signed by the appropriate authorities of Successor Agency and
Costco .
700. TIME FOR ACCEPTANCE OF AGREEMENT BY SUCCESSOR AGENCY
This Agreement, when executed by Costco and delivered to Successor Agency, must be
authorized, executed and delivered by Successor Agency within twenty (20) days after the date
of signature by Costco or this Agreement shall be void, except to the extent that Costco shall
consent in writing to further extensions of time for the authorization, execution and delivery of
this Agreement. The effective date of this Agreement shall be the date when both this
Agreement has been signed by Successor Agency.
[ SIGNATURES ON NEXT PAGE(S)]
25
USW 804510810. 12
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800. COUNTERPARTS ; FACSIMILE SIGNATURES
This Agreement may be executed in more than one counterpart, each of which shall be
deemed an original , and all of which together shall constitute one and the same instrument.
Facsimile or other electronically transmitted signatures on this Agreement shall constitute
originals signatures of the parties .
201 _
CITY OF UKIAH SUCCESSOR AGENCY
By:
Jane Chambers, Executive Director
201 _ COSTCO WHOLESALE CORPORATION,
a Washington corporation
By:
Title :
26
US W 804510810. 12
11/12/14
ACKNOWLEDGMENTS
US W 804510810. 12
11/12/14 Acknowledgments
ATTACHMENT NO , 1
MAP OF THE SITE
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USW 804510810. 12
11/12/14
ATTACHMENT NO , 2
LEGAL DESCRIPTION OF THE SITE
LANDS OF CITY OF UKIAH , SUCCESSOR AGENCY FOR DISSOLVED UKIAH
REDEVELOPMENT AGENCY, A PUBLIC BODY
LOT 1
REAL PROPERTY SITUATE IN THE CITY OF UKIAH , COUNTY OF MENDOCINO , STATE OF
CALIFORNIA, DESCRIBED AS FOLLOWS :
BEING ALL OF LOTS G1 , G21 G31 F8 & F10 AND A PORTION OF LOT F11 AS SAID LOTS ARE
SHOWN ON THAT PARCEL MAP M . S . 97-07 RECORDED JULY 28 , 1997 IN MAP CASE 2 , DRAWER
64 AT PAGES 21 & 22 , OFFICIAL RECORDS OF MENDOCINO COUNTY, TOGETHER WITH A
PORTION OF PARCEL 1 AS SHOWN ON THAT PARCEL MAP M . S . 04-51 RECORDED OCTOBER 2 ,
2006 IN MAPS , DRAWER 74 AT PAGES 4 THROUGH 6 , OFFICIAL RECORDS OF MENDOCINO
COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHWEST CORNER OF SAID LOT F8 , ALSO BEING A POINT ON THE
EASTERLY RIGHT OF WAY FOR AIRPORT PARK BOULEVARD AS SHOWN ON SAID PARCEL MAP
M . S . 97-07 ;
THENCE ALONG THE NORTHERLY LINE OF SAID LOTS F8 & G3 , NORTH 84 040122 " EAST A
DISTANCE OF 585 . 28 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY FOR U . S . HIGHWAY
1011 SAID POINT ALSO BEING THE NORTHEAST CORNER OF LOT G3 , AS SAID HIGHWAY AND
LOT ARE SHOWN ON SAID PARCEL MAP M . S . 97-07 ;
THENCE ALONG THE EASTERLY LINES OF SAID LOTS G3 , G21 G1 AND SAID PARCEL 1 , ALSO
BEING THE WESTERLY RIGHT OF WAY OF SAID HIGHWAY, THE FOLLOWING FIVE (5) COURSES :
1 ) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 327 . 57 FEET;
2) THENCE SOUTH 05 021 '28" EAST A DISTANCE OF 100 . 13 FEET;
3) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 400 . 04 FEET;
4) THENCE SOUTH 00 038' 06" WEST A DISTANCE OF 100 . 19 FEET;
5) THENCE SOUTH 02 029' 15" EAST A DISTANCE OF 530 . 19 FEET;
THENCE LEAVING SAID EASTERLY LINES AND SAID WESTERLY RIGHT OF WAY, SOUTH
84 040'22" WEST A DISTANCE OF 103 . 48 FEET;
THENCE NORTH 31 037' 13" WEST A DISTANCE OF 249 .94 FEET ;
THENCE SOUTH 84 040 '22 " WEST A DISTANCE OF 38 . 33 FEET;
THENCE NORTH 32 045'47" WEST A DISTANCE OF 331 .26 FEET ;
THENCE SOUTH 84 040'22" WEST A DISTANCE OF 102 . 89 FEET TO A POINT ON THE WESTERLY
LINE OF SAID LOT F11 , SAID POINT ALSO BEING ON THE EASTERLY RIGHT OF WAY OF SAID
AIRPORT PARK BOULEVARD ;
THENCE ALONG THE WESTERLY LINES OF SAID LOTS F11 , F10 & F8 , ALSO BEING SAID
EASTERLY RIGHT OF WAY, NORTH 05 036 '44" WEST A DISTANCE OF 937 . 97 FEET TO THE POINT
OF BEGINNING . CONTAINING 15 . 2989 ACRES OF LAND , MORE OR LESS .
USW 804510810. 12
11/12/14
ATTACHMENT NO , 3
SCHEDULE OF PERFORMANCE
ACTION DATE
10 Execution and Delivery of Agreement Not later than Successor Agency meeting to
by Costco . Costco shall execute and consider approval of this Agreement.
deliver this Agreement to Successor
Agency.
2 . Execution of Agreement by Successor Within twenty (20) days execution of
Ate. If so authorized, Successor Agreement by Costco .
Agency shall execute, date ("Effective
Date") and deliver this Agreement to
Costco . (Section 700) .
3 . Approval of Agreement by Oversight January 31 , 2014
Board. Oversight Board shall hold a
public hearing pursuant to Health and
Safety Code Section 341 S 1 (f) . .
(Section 7001
4. Opening of Escrow. Costco shall open Completed.
an escrow for conveyance of the Site to
Costco (Section 202), and deposit the
Deposit therein. (Section 104) .
5 . Title Commitment. Costco shall obtain Completed .
the Title Commitment from the Title
Company (Section 206 . 1 ) .
6 , Survey . Costco shall obtain an ALTA Within thirty (30) days after Effective Date .
Survey of the Site (Section 206 . 2) .
US W 804510810. 12
11/12/14
ACTION DATE
7 . Title Inspection Period. Costco shall Within sixty (60) days after Effective Date .
inspect the Title Commitment and
Survey and notify Successor Agency of
any Title Objections . (Section 206 . 3 ) .
8 , Long Range Property Management Within sixty (60) day after Effective Date .
Plan Approval . Successor Agency
shall deliver evidence of Oversight
Board, Dept. of Finance and any other
approvals necessary for Successor
Agency to convey Site to Costco .
(Sections 205 . 1h and 214 . 1 (i)) .
9 . Going-Forward Notice. All of Within ten ( 10) days after satisfaction or
Costco ' s conditions to Closing under waiver of all conditions under Improvement
the Improvement Agreement shall be Agreement.
satisfied or waived, subject to
Continuing Conditions . (Section
205 . 10
10 , Purchase Notice . All of Costco ' s Within ten ( 10) days after satisfaction or
conditions to Closing shall be satisfied waiver of all conditions under this Agreement.
or waived, subject to Continuing
Conditions . (Section 205 . 1 ) .
11 . Deposit of Grant Deed . Successor Within ten ( 10) days after Purchase Notice.
Agency shall deposit the Grant Deed,
subdivision documents, and other
required documents into escrow.
(Section 207) .
12 . Deposit of Purchase Price and Other Within ten ( 10) days after Purchase Notice.
Required Sums . Costco shall deposit
the Purchase Price and other required
sums and documents into escrow.
(Section 208) .
11/12/14 2
ACTION DATE
13 . Closin . Escrow shall close . (Sections Next business day after deposits pursuant to
208 and 215) . Action Item # 12 .
11/12/14 3
ATTACHMENT NO . 4
FORM OF GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO :
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027-5367
Attn : Property Management/Legal Department
APN :
GRANT DEED
For valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the SUCCESSOR AGENCY, a political subdivision of the State of California, in
its capacity as the Successor Agency to the Redevelopment Agency of the City of Ukiah (herein
called " Grantor" ), hereby grants to COSTCO WHOLESALE CORPORATION, a Washington
corporation (herein called "Grantee "), the real property (the " Site" ) legally described in the
document attached hereto , labeled Exhibit A, and incorporated herein by this reference.
1 . The Site is conveyed subject to instruments of record.
2 . The Grantee covenants by and for itself and any successors in interest that there
shall be no discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Grantee 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 in the Site .
All deeds, leases or contracts made relative to the Site, the improvements thereon or any
part thereof shall contain or be subject to substantially the following nondiscrimination clauses :
a. In deeds : " The grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein
conveyed, nor shall the grantee, or any person claiming under or through him or her, 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 in the premises herein conveyed. The foregoing covenants shall run with the land . "
b . In leases : "The lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators and assigns, and all persons claiming under or through him
USW 804510810. 12
11/12/14
or her, and this lease is made and accepted upon and subject to the following conditions : That
there shall be no discrimination against or segregation of any person or group of persons on
account of race, color, creed, religion, sex, marital status, national origin or ancestry in the
leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein
leased, nor shall the lessee himself or herself, or any person claiming under or through him or
her, 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, sublessees,
subtenants or vendees in the premises herein leased. "
C, In contracts : "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming
under or through him or her, 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, sublessees, subtenants or vendees in the premises . "
3 . No violation or breach of the covenants, conditions, restrictions, provisions or
limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the
lien or charge of any mortgage, deed of trust or other financing or security instrument permitted
by this Agreement, provided, however, that any successor of Grantee to the Site shall be bound
by such remaining covenants, conditions, restrictions, limitations and provisions, whether such
successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or
otherwise .
4 . The covenants against discrimination contained in this Grant Deed shall remain in
perpetuity, shall be binding for the benefit of the Grantor, its successors and assigns, and any
successor in interest to the Site or any part thereof, and shall run in favor of the Grantor and such
aforementioned parties for the entire period during which such covenants shall be in force and
effect, without regard to whether the Grantor is or remains an owner of any land or interest
therein to which such covenants relate . The Grantor and such aforementioned parties, in the
event of any breach of any such covenants, shall have the right to exercise all of the rights and
remedies and to maintain any actions at law or suits in equity or other proper proceedings to
enforce the curing of such breach . The covenants contained in this Grant Deed shall be for the
benefit of and shall be enforceable only by the Grantor, its successors and such aforementioned
parties .
USW 804510810. ( 2
11/12/14 2
IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be
executed on their behalf by their respective officers thereunto duly authorized this
day of , 201 _1
CITY OF UKIAH SUCCESSOR AGENCY,
a municipal corporation
By :
Executive Director
By :
Secretary
" GRANTOR"
" GRANTOR"
Counsel for Grantor
The provisions of this Grant Deed are hereby approved and accepted.
COSTCO WHOLESALE CORPORATION,
a Washington corporation
By:
Title :
"GRANTEE "
USW 804510810. 12
11/12/14 3
ACKNOWLEDGMENTS
US W 804510810. 12
11/12/14 Acknowledgements
EXHIBIT A
LEGAL DESCRIPTION OF THE SITE
LANDS OF CITY OF UKIAH , SUCCESSOR AGENCY FOR DISSOLVED UKIAH
REDEVELOPMENT AGENCY, A PUBLIC BODY
LOT 1
REAL PROPERTY SITUATE IN THE CITY OF UKIAH , COUNTY OF MENDOCINO , STATE OF CALIFORNIA,
DESCRIBED AS FOLLOWS :
BEING ALL OF LOTS G1 , G21 G31 F8 & F10 AND A PORTION OF LOT F11 AS SAID LOTS ARE SHOWN ON
THAT PARCEL MAP M . S . 97-07 RECORDED JULY 28 , 1997 IN MAP CASE 2 , DRAWER 64 AT PAGES 21 &
22 , OFFICIAL RECORDS OF MENDOCINO COUNTY, TOGETHER WITH A PORTION OF PARCEL 1 AS
SHOWN ON THAT PARCEL MAP M . S . 04-51 RECORDED OCTOBER 2 , 2006 IN MAPS , DRAWER 74 AT
PAGES 4 THROUGH 6 , OFFICIAL RECORDS OF MENDOCINO COUNTY, MORE PARTICULARLY
DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHWEST CORNER OF SAID LOT F8 , ALSO BEING A POINT ON THE EASTERLY
RIGHT OF WAY FOR AIRPORT PARK BOULEVARD AS SHOWN ON SAID PARCEL MAP M . S . 97-07;
THENCE ALONG THE NORTHERLY LINE OF SAID LOTS F8 & G3 , NORTH 84 040'22" EAST A DISTANCE OF
585 . 28 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY FOR U . S. HIGHWAY 101 , SAID POINT ALSO
BEING THE NORTHEAST CORNER OF LOT G3 , AS SAID HIGHWAY AND LOT ARE SHOWN ON SAID
PARCEL MAP M . S . 97-07 ;
THENCE ALONG THE EASTERLY LINES OF SAID LOTS G3 , G21 G1 AND SAID PARCEL 1 , ALSO BEING
THE WESTERLY RIGHT OF WAY OF SAID HIGHWAY, THE FOLLOWING FIVE (5) COURSES :
1 ) THENCE SOUTH 02 029 '45" EAST DISTANCE OF 327 . 57 FEET;
2) THENCE SOUTH 05 021 '28" EAST A DISTANCE OF 100 . 13 FEET;
3) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 400 . 04 FEET;
4) THENCE SOUTH 00 038 ' 06" WEST A DISTANCE OF 100 . 19 FEET;
5) THENCE SOUTH 02 029' 15" EAST A DISTANCE OF 530 . 19 FEET;
THENCE LEAVING SAID EASTERLY LINES AND SAID WESTERLY RIGHT OF WAY, SOUTH 84 040'22 " WEST
A DISTANCE OF 103 . 48 FEET;
THENCE NORTH 31 037' 13 " WEST A DISTANCE OF 249 . 94 FEET ;
THENCE SOUTH 84 040 '22 " WEST A DISTANCE OF 38 . 33 FEET;
THENCE NORTH 32 045 '47 " WEST A DISTANCE OF 331 . 26 FEET;
THENCE SOUTH 84 040'22 " WEST A DISTANCE OF 102 . 89 FEET TO A POINT ON THE WESTERLY LINE OF
SAID LOT F11 , SAID POINT ALSO BEING ON THE EASTERLY RIGHT OF WAY OF SAID AIRPORT PARK
BOULEVARD ;
THENCE ALONG THE WESTERLY LINES OF SAID LOTS F11 , F10 & F8 , ALSO BEING SAID EASTERLY
RIGHT OF WAY, NORTH 05 036'44" WEST A DISTANCE OF 937 . 97 FEET TO THE POINT OF BEGINNING .
CONTAINING 15 . 2989 ACRES OF LAND , MORE OR LESS .
USW 804510810. 12
11/12/14 Exhibit A
ATTACHMENT NO , 5
SUCCESSOR AGENCY ENVIRONMENTAL DISCLOSURES
The disclosures are contained in the Phase I Environmental Assessment prepared for the former
Ukiah Redevelopment Agency on July 31 , 2009 , by AES Due Diligence, Inc. , previously
furnished to Costco and available for review at https :\\cityofuikkiah. com/s/ekbt550nktszgjme9u.
US W 804510810. 12
11/12/14
ATTACHMENT NO. 6
LEGAL DESCRIPTION OF LOT 3
LANDS OF CITY OF UKIAH , SUCCESSOR AGENCY FOR DISSOLVED UKIAH
REDEVELOPMENT AGENCY, A PUBLIC BODY
LOT 3
REAL PROPERTY SITUATE IN THE CITY OF UKIAH , COUNTY OF MENDOCINO, STATE OF CALIFORNIA,
DESCRIBED AS FOLLOWS:
BEING A PORTION OF PARCEL 1 AS SHOWN ON THAT PARCEL MAP M . S . 04- 51 RECORDED
OCTOBER 2 , 2006 IN MAPS , DRAWER 74 AT PAGES 4 THROUGH 6 , OFFICIAL RECORDS OF
MENDOCINO COUNTY , MORE PARTICULARLY DESCRIBED AS FOLLOWS :
BEGINNING AT A POINT ON THE WESTERLY LINE OF SAID PARCEL 1 , SAID POINT BEING THE
SOUTHERLY TERMINUS OF THE COURSE SHOWN AS NORTH 07 031149 " WEST , 316 . 07 FEET ON
SAID PARCEL MAP M . S . 04= 51 ;
THENCE ALONG SAID WESTERLY LINE, NORTH 07 031 '49" WEST A DISTANCE OF 166.00 FEET; THENCE NORTH
75 004'25" EAST A DISTANCE OF 62.00 FEET; THENCE SOUTH 68°33'19" EAST A DISTANCE OF 49.00 FEET;
THENCE SOUTH 28 010'29" EAST A DISTANCE OF 115.00 FEET; THENCE SOUTH 67 015'27" EAST A DISTANCE OF
75.00 FEET ;
THENCE SOUTH 30 005 ' 23 " EAST A DISTANCE OF 119 . 00 FEET TO A POINT ON THE SOUTHERLY
BOUNDARY OF SAID PARCEL 1 , SAID POINT ALSO BEING THE BEGINNING OF A NON - TANGENT
CURVE TO THE LEFT , THE CENTER OF WHICH BEARS SOUTH 25 004' 17 " WEST ;
THENCE ALONG SAID SOUTHERLY BOUNDARY THE FOLLOWING FIVE ( 5 ) COURSES :
1 ) THENCE ALONG THE ARC OF SAID CURVE HAVING A RADIUS OF 314 . 00 FEET , THROUGH A
CENTRAL ANGLE OF 27 011 ' 17 " FOR AN ARC LENGTH OF 149 . 00 FEET TO A POINT OF REVERSE
CURVATURE ;
2 ) THENCE ALONG THE ARC OF A CURVE TO THE RIGHT , HAVING A RADIUS OF 100 . 00 FEET ,
THROUGH A CENTRAL ANGLE OF 23 014' 32 " FOR AN ARC LENGTH OF 40 . 57 FEET TO A POINT
OF REVERSE CURVATURE ;
3 ) THENCE ALONG THE ARC OF A CURVE TO THE LEFT , HAVING A RADIUS OF 100 . 00 FEET ,
THROUGH A CENTRAL ANGLE OF 27 003 ' 26 " FOR AN ARC LENGTH OF 47 . 22 FEET ;
4 ) THENCE NORTH 05 055 ' 53 " WEST A DISTANCE OF 33 . 00 FEET ;
5 ) THENCE SOUTH 82 028 ' 11 " WEST A DISTANCE OF 33 . 00 FEET TO THE POINT OF BEGINNING ,
ALL AS SHOWN ON PAGE 3 OF 3 ON THE ATTACHED PLAT MADE A PART HEREOF AND
CONTAINING 0 . 7963 ACRES OF LAND , MORE OR LESS ,
RICHARD J . HICKENBOTTOM, PLS 8654 DATE
LICENSE EXPIRES : 12/31113
USW 804510561 . 13
USW 804835500. 1
USW 804510810. 12
1ll1V21114
ATTACHMENT NO , 2
MAP OF THE SITE
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US W 804510561 . 13
11/14/2014
ATTACHMENT NO , 2 . 1
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USW 8045 1 08 10. 12 2
ATTACHMENT NO , 3
LEGAL DESCRIPTION OF THE SITE
LANDS OF CITY OF UKIAH , SUCCESSOR AGENCY FOR DISSOLVED UKIAH
REDEVELOPMENT AGENCY, A PUBLIC BODY
LOT 1
REAL PROPERTY SITUATE IN THE CITY OF UKIAH , COUNTY OF MENDOCINO , STATE OF
CALIFORNIA, DESCRIBED AS FOLLOWS :
BEING ALL OF LOTS G1 , G21 G31 F8 & F10 AND A PORTION OF LOT F11 AS SAID LOTS ARE
SHOWN ON THAT PARCEL MAP M . S . 97-07 RECORDED JULY 28 , 1997 IN MAP CASE 2 , DRAWER
64 AT PAGES 21 & 22 , OFFICIAL RECORDS OF MENDOCINO COUNTY, TOGETHER WITH A
PORTION OF PARCEL 1 AS SHOWN ON THAT PARCEL MAP M . S . 04-51 RECORDED OCTOBER 2 ,
2006 IN MAPS , DRAWER 74 AT PAGES 4 THROUGH 6, OFFICIAL RECORDS OF MENDOCINO
COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHWEST CORNER OF SAID LOT F8 , ALSO BEING A POINT ON THE
EASTERLY RIGHT OF WAY FOR AIRPORT PARK BOULEVARD AS SHOWN ON SAID PARCEL MAP
M . S . 97-07 ;
THENCE ALONG THE NORTHERLY LINE OF SAID LOTS F8 & G3 , NORTH 84 040'22" EAST A
DISTANCE OF 585 . 28 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY FOR U . S . HIGHWAY
101 , SAID POINT ALSO BEING THE NORTHEAST CORNER OF LOT G3 , AS SAID HIGHWAY AND
LOT ARE SHOWN ON SAID PARCEL MAP M . S . 97-07;
THENCE ALONG THE EASTERLY LINES OF SAID LOTS G3 , G21 G1 AND SAID PARCEL 1 , ALSO
BEING THE WESTERLY RIGHT OF WAY OF SAID HIGHWAY, THE FOLLOWING FIVE (5) COURSES :
1 ) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 327 . 57 FEET;
2) THENCE SOUTH 05 021 ' 28" EAST A DISTANCE OF 100 . 13 FEET;
3) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 400 . 04 FEET;
4) THENCE SOUTH 00 038' 06" WEST A DISTANCE OF 100. 19 FEET;
5) THENCE SOUTH 02 029 ' 15" EAST A DISTANCE OF 530 . 19 FEET;
THENCE LEAVING SAID EASTERLY LINES AND SAID WESTERLY RIGHT OF WAY, SOUTH
84 040'22" WEST A DISTANCE OF 103 . 48 FEET;
THENCE NORTH 31 037' 13 " WEST A DISTANCE OF 249. 94 FEET;
THENCE SOUTH 84 040 '22" WEST A DISTANCE OF 38 . 33 FEET ;
THENCE NORTH 32 045'47" WEST A DISTANCE OF 331 .26 FEET ;
THENCE SOUTH 84 040 '22 " WEST A DISTANCE OF 102 . 89 FEET TO A POINT ON THE WESTERLY
LINE OF SAID LOT F11 , SAID POINT ALSO BEING ON THE EASTERLY RIGHT OF WAY OF SAID
AIRPORT PARK BOULEVARD ;
THENCE ALONG THE WESTERLY LINES OF SAID LOTS F11 , F10 & F8 , ALSO BEING SAID
EASTERLY RIGHT OF WAY, NORTH 05 036 '44" WEST A DISTANCE OF 937 . 97 FEET TO THE POINT
OF BEGINNING .
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ALL AS SHOWN ON PAGE 2 OF 3 OF THE ATTACHED PLAT MADE A PART HEREOF AND
CONTAINING 15 . 2989 ACRES OF LAND , MORE OR LESS .
RICHARD J . HICKENBOTTOM , PLS 8654 DATE
LICENSE EXPIRES : 12/31 / 13
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ATTACHMENT NO , 3 . 1
LEGAL DESCRIPTION OF LOT 3
LANDS OF CITY OF UKIAH , SUCCESSOR AGENCY FOR DISSOLVED UKIAH
REDEVELOPMENT AGENCY, A PUBLIC BODY
LOT 3
REAL PROPERTY SITUATE IN THE CITY OF UKIAH , COUNTY OF MENDOCINO , STATE OF
CALIFORNIA, DESCRIBED AS FOLLOWS :
BEING A PORTION OF PARCEL 1 AS SHOWN ON THAT PARCEL MAP M . S . 04-51 RECORDED
OCTOBER 2 , 2006 IN MAPS, DRAWER 74 AT PAGES 4 THROUGH 6 , OFFICIAL RECORDS_ OF
MENDOCINO COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS :
BEGINNING AT A POINT ON THE WESTERLY LINE OF SAID PARCEL 1 , SAID POINT BEING THE
SOUTHERLY TERMINUS OF THE COURSE SHOWN AS NORTH 07 031 '49" WEST, 316 . 07 FEET ON
SAID PARCEL MAP M . S . 04-51 ;
THENCE ALONG SAID WESTERLY LINE , NORTH 07 031 '49" WEST A DISTANCE OF 166 . 00 FEET;
THENCE NORTH 75 004'25" EAST A DISTANCE OF 62 . 00 FEET;
THENCE SOUTH 68 033' 19" EAST A DISTANCE OF 49 . 00 FEET;
THENCE SOUTH 28 010'29" EAST A DISTANCE OF 115 . 00 FEET;
THENCE SOUTH 67 015 '27" EAST A DISTANCE OF 75 . 00 FEET;
THENCE SOUTH 30 005'23" EAST A DISTANCE OF 119 . 00 FEET TO A POINT ON THE SOUTHERLY
BOUNDARY OF SAID PARCEL 1 , SAID POINT ALSO BEING THE BEGINNING OF A NON-TANGENT
CURVE TO THE LEFT, THE CENTER OF WHICH BEARS SOUTH 25 004 ' 17" WEST ;
THENCE ALONG SAID SOUTHERLY BOUNDARY THE FOLLOWING FIVE (5) COURSES :
1 ) THENCE ALONG THE ARC OF SAID CURVE HAVING A RADIUS OF 314 . 00 FEET, THROUGH A
CENTRAL ANGLE OF 27 011 ' 17" FOR AN ARC LENGTH OF 149 . 00 FEET TO A POINT OF REVERSE
CURVATURE ;
2) THENCE ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A RADIUS OF 100 . 00 FEET,
THROUGH A CENTRAL ANGLE OF 23 014 '32" FOR AN ARC LENGTH OF 40 . 57 FEET TO A POINT OF
REVERSE CURVATURE ;
3) THENCE ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A RADIUS OF 100 . 00 FEET,
THROUGH A CENTRAL ANGLE OF 27 003 '26" FOR AN ARC LENGTH OF 47 . 22 FEET;
4) THENCE NORTH 05 055 ' 53" WEST A DISTANCE OF 33 . 00 FEET;
5) THENCE SOUTH 82 °28' 11 " WEST A DISTANCE OF 33 . 00 FEET TO THE POINT OF BEGINNING .
ALL AS SHOWN ON PAGE 3 OF 3 ON THE ATTACHED PLAT MADE A PART HEREOF AND
CONTAINING 0 . 7963 ACRES OF LAND , MORE OR LESS .
RICHARD J . HICKENBOTTOM , PLS 8654 DATE
LICENSE EXPIRES : 12/31 / 13
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ATTACHMENT NO . 4
SCHEDULE OF PERFORMANCE
ACTION DATE
1 . Execution and Delivery of Agreement Not later than City Council meeting to
by Costco . Costco shall execute and consider approval of this Agreement.
deliver this Agreement to City.
2 . Approval of Agreement by CitX. City December 31 , 2014
Council shall hold a public hearing to
authorize execution of this Agreement
by City. (Section 900) .
3 . Execution of Agreement by City. If so Within twenty (20) days after execution of
authorized, City shall execute, date Agreement by Costco and concurrently with
("Effective Date") and deliver this execution of Purchase Agreement.
Agreement to Costco . (Section 900) .
4 . Engineering Plans for City Work. City Within thirty (30) days after Effective Date .
shall coordinate with Costco and
prepare plans for City Work. (Section
302 . 1 ) .
5 , Approvals Final . Long Range Property Within thirty (30) days after resolution of
Management Plan including the litigation.
Purchase Agreement is approved,
litigation is resolved, all Costco
Approvals and City Work Approvals
become final (other than Financing
Mechanism) , and Costco approves
same ("Final Approval Date") .
(Sections 201 . 1 and 302 . 1 ) .
6 . City Financing . City shall deliver to Within thirty (30) days after Final Approval
Costco all documents evidencing Date .
financial ability to perform City Work.
(Section 302 . 3 ) .
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ACTION DATE
7, Costco Approval of City Financing. Within ten ( 10) business days after City
Costco shall review and approve, delivers to Costco evidence of City' s financial
subject to Closing, any conditions of ability to perform City Work.
the Financing Mechanism and issue
Financing Approval Notice . (Section
302 . 3 ) .
8 , Building Permit Submittal . Costco Within sixty (60) days after Final Approval
shall submit final plans for building Date .
permit. (Section 301 . 2) .
9 . Costco Permits . Costco shall obtain Within one hundred twenty ( 120) days after
necessary governmental permits Final Approval Date .
(Building, County Health, Caltrans,
Dept. of Fish & Game, RWQCB, etc. ) .
(Sections 201 . 1 and 301 . 2) .
10 . Bid on City Work. City shall advertise Upon Costco ' s issuance of Financing
for bids for construction of City Work. Approval Notice .
(Section 302) .
11 . Opening of Bids on City Work. City Upon conclusion of Bid Period.
shall have opened bids and determined
that a bid is acceptable within the
approved financing plan. (Section 302) .
12 . Costco Delivers Closing Notice. Within ten ( 10) days after satisfaction or
Costco shall deliver Closing Notice waiver of all conditions and concurrently with
upon satisfaction or waiver of delivery of Purchase Notice under the
conditions to Closing, subject to Purchase Agreement (and may be concurrent
Continuing Conditions . (Section with Going-Forward Notice under the
201 . 1 ) . Purchase Agreement) .
13 . Closing of Escrow. Costco and Within eleven ( 11 ) business days after
Successor Agency shall make all delivery of Closing Notice and Purchase
deposits and proceed to Closing . Notice .
(Sections 207 and 208 of Purchase
Agreement) .
14 , Access Financing . City shall arrange Upon Closing.
draw schedule for Financing
Mechanism. (Section 302 . 3 ) .
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ACTION DATE
15 . Award of Contract. City shall award Upon Closing .
contract for construction of City Work.
(Section 302) .
16 . Commencement of Construction of Within five (5) business days after award of
City Work. City shall commence the construction contract,
work specified in this Agreement and
the Scope of Development (Attachment
No . 4) to be performed by City.
(Section 302) .
17 . Commencement of Construction of Within ninety (90) days after Closing.
Costco Project. Costco shall
commence construction of the
improvements to be constructed on the
Site . (Section 301 .4) .
18 , City' s Completion of City ork. City Within one hundred forty ( 140) days after
shall complete the work specified in City commences the work.
this Agreement and the Scope of
Development (Attachment No . 4) to be
performed by City. (Section 302 . 1 ) .
19 . Completion of Construction of the Within 12 months after commencement
Costco Project. Costco shall complete thereof by Costco .
construction of the improvements to be
constructed on the Site . (Section
301 . 4) .
20 . Issuance of Certificate of Occupancy . Promptly after substantial completion of all
City shall furnish Costco with a construction required to be completed by
Certificate of Occupancy . (Section Costco on the Site .
301 . 1 ) ,
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ATTACHMENT NO , 5
SCOPE OF DEVELOPMENT
I . PRIVATE DEVELOPMENT
A . General
Costco agrees that the Site shall be developed and improved in accordance with the
provisions of this Agreement and the plans, drawings and related documents approved by City
pursuant hereto . Costco and its supervising architect, engineer and contractor shall work with
City staff to coordinate the overall design, architecture and color of the improvements on the
Site .
B . The Project
Costco shall construct, or cause to be constructed, on the Site a Costco membership
warehouse retail store of approximately one hundred forty-eight thousand ( 148 ,000) square feet,
as well as a vehicle fueling station of up to twenty (20) fueling positions (the "Project") .
C . Architecture and Desijzn
The Project shall be of high architectural quality, shall be well landscaped and shall be
effectively and aesthetically designed. The shape, scale of volume, exterior design and exterior
finish of the building must be consonant with, visually related to , physically related to and an
enhancement of adjacent buildings within the Redwood Business Park. Costco's plans submitted
to City shall describe in detail the architectural character intended for the Project.
D . Landscaping
Landscaping shall embellish all open spaces upon the Site to integrate the Project with
adjacent sites within the Redwood Business Park and comply with the Site Development Permit
issued by the City. Landscaping includes such materials as paving, trees, shrubs and other plant
materials, landscape containers, plaza furniture, top soil preparation, automatic irrigation and
landscape and pedestrian lighting . Landscaping shall carry out the objectives and principles of
City's desire to accomplish a high quality aesthetic environment.
E . Signs
All signs on the exterior of the buildings are of special concern to City and must be
approved by City in accordance with its Sign Ordinance and applicable City sign standards any
variances therefrom that may be approved (which approval shall not be unreasonably withheld) .
F . Screening
Trash areas shall be screened on at least three (3 ) sides and have movable doors or other
devices to obscure such areas from view. All fire standpipes and such other fire related
mechanical devices shall be screened with plant materials . Rooftop equipment shall be
USW 804510561 . 13
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reasonably hidden so as to mitigate views from principal elevations surrounding the
development.
G . Applicable Codes
The Project shall be constructed in accordance with the California Building Standards
and related Codes (with City modifications) and the Ukiah City Code.
II . SITE CLEARANCE AND PREPARATION
Costco shall perform, or cause to be performed, at its sole cost and expense, the following
work :
A. On-Site Demolition and Clearance
1 . On the Site, demolish or salvage, clear, grub and remove (as may be
needed and called for in the approved plans) all on-site buildings, pavements, walks, curbs,
gutters and other improvements ; and
2 . Remove, plug and/or crush in place utilities, such as storm sewers,
sanitary sewers, water systems, electrical overhead and underground systems and telephone and
gas systems located on the Site, as may be required following any necessary relocation of the
utilities.
B . Compaction, Finish Grading and Site Work
Costco shall compact, finish grade and do such site preparation as is necessary for the
construction of the Project on the Site.
III . PUBLIC IMPROVEMENTS
City shall perform, or cause to be performed, the work required as a condition for Costco
to obtain its Certificate of Occupancy as depicted on either of the attached depictions of the City
Work,
USW 804510561 . 13
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USW 804510561 . 13
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ATTACHMENT NO , 6
EXCUSIVE USE COVENANT
Neither City, nor any subsidiary, affiliate, parent or other entity that controls, is controlled by, or
is under common control with City (collectively " City's Entities ") shall, directly or indirectly,
with respect to all or any portion of any property currently or in the future owned by City or any
of City's Entities within ten ( 10) miles in all direction from the exterior boundaries of the Site
(the " Restricted Property") , (i) sell, lease or otherwise transfer all or any portion of the Restricted
Property to, or for use as, a wholesale or retail general merchandise facility that has a
merchandising concept based upon a relatively limited number of stock keeping units in a large
number of product categories (the " Merchandising Concept"), (ii) sell, lease or otherwise transfer
all or any portion of the Restricted Property for use as a grocery store or supermarket that
primarily sells food products in bulk quantities (a " Wholesale Grocer"), or (iii) sell, lease or
otherwise transfer all or any portion of the Restricted Property to any party to support a facility
operating either under the Merchandising Concept or as a Wholesale Grocer (i . e. , for parking or
other necessary improvements for such a facility ; or (iv) sell, lease or otherwise transfer all or
any portion of the Restricted Property to any party for use as a " Wal-Mart" store or " Wal-Mart
Supercenter" or any other store operated under the " Wal-Mart" brand; provided, however, that in
no event shall any of the foregoing prohibitions prohibit the Restricted Property from being used
for or as a Costco Wholesale warehouse club or any other facility then operated by Costco or by
any successor to Costco (collectively, a " Costco Facility" ) . The foregoing prohibitions include,
but shall not be limited to : (a) any business that operates as a warehouse club (other than a
Costco Facility), (b) any business operated under the tradenames of Sam's, BJ ' s, Jetro, Price
Smart or Smart and Final, and (c) any business (other than a Costco Facility) similar to those
operated under the tradenames Costco , Sam's, BJ's, Price Smart, Jetro or Smart and Final . This
covenant shall be binding on the Restricted Property and Costco shall have the right to record a
document containing this restrictive covenant against any Restricted Property (whether currently
owned or acquired after the date hereof by City or any other of City's Entities) and City (or other
City's Entities, as applicable) shall cooperate with Costco in recording such document. City, on
its own behalf and on behalf of each of City' s Entities, acknowledges that the breach of the
foregoing restrictive covenant may cause immediate and irreparable harm for which damages are
not an adequate remedy and that, to protect against such harm, Costco may seek and obtain from
a court of competent jurisdiction the issuance of a restraining order or injunction to prohibit any
actual or threatened breach. Such an action for a restraining order or injunction is in addition to
and does not limit any and all other remedies provided by law or equity.
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ATTACHMENT NO , 7
FORM OF MEMORANDUM OF AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO :
Costco Wholesale Corporation
999 Lake Drive
Issaquah, WA 98027-5367
Attn : Seth S . Katz
Corporate Counsel
APN :
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT ("Memorandum") is made as of the
day of , 201 _, by and between the City of Ukiah, a municipal corporation
(herein called " City" ), and COSTCO WHOLESALE CORPORATION, a Washington
corporation (herein called " Costco " ), with reference to the fact set forth below.
City and Costco heretofore have entered into that certain Agreement dated ,
201 _, (the "Agreement") for the development of public infrastructure and of improvements to the
real property (the " Site") legally described in Exhibit A attached hereto and incorporated herein
by this reference. The parties hereto wish to record this Memorandum to give notice of said
Agreement and specifically certain terms thereof that survive until issuance of a certificate of
occupancy of the Site (the "Certificate of Occupancy") , as set forth below :
1 . Transfers Prior to Certificate of Occupancy . Without the prior written consent of
City, prior to issuance of the Certificate of Occupancy, Costco shall not directly or indirectly,
voluntarily or involuntarily sell, assign, transfer, dispose of or further encumber or agree to sell,
assign, transfer, dispose of or further encumber or suffer to exist any other lien against all or any
portion of or any interest in the Site, except for any sale or transfer that is expressly permitted by
the terms of Agreement; provided, however, Costco is a publicly-traded company and any
change in ownership of Costco ' s publicly-traded capital stock shall not constitute an assignment,
sale, transfer, change in ownership or other transaction precluded by the foregoing restrictions .
Also notwithstanding anything in the Agreement to the contrary, Costco shall be entitled to
assign Costco ' s right, title and interest in the Site, without City ' s consent, (i) to a subsidiary,
affiliate or parent of Costco or any other entity which controls, is controlled by or is under
common control with Costco , provided Costco shall not be released from its obligations or
liabilities hereunder; (ii) to a successor of Costco as a result of a merger or consolidation; or (iii)
to a limited liability company the members of which include a majority composed of Costco
and/or entities controlled by, controlling or under common control with, Costco .
2 . Option to Repurchase Prior to Certificate of Occupancy. Costco hereby grants to
City the option to repurchase the Site and all improvements subsequently constructed thereon
upon the terms and provisions more fully set forth in Section 506 of the Agreement, which
USW 804510561 .2
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provisions are incorporated herein by this reference thereto . As more fully provided in such
Section 506 :
a. The term of the option shall commence upon the recordation of this
Memorandum and shall continue until issuance of the Certificate of Occupancy.
b . The option shall be exercisable by City in each and every one of the
following circumstances :
( 1 ) Costco ' s failure to commence construction of approved
improvements on the Site by the time specified in Attachment No . 3 of the Agreement, for any
reason whatsoever, subject to notice pursuant to Section 504 of the Agreement and extension
pursuant to Section 604 of the Agreement; for purposes of this provision, Costco shall be deemed
to "commence construction" when and only when Costco has commenced rough grading on the
Site pursuant to a permit issued by City for the construction of the improvements provided for
the Agreement; or
(2) Once construction has been commenced in accordance with
subparagraph ( 1 ) above, abandonment or substantial suspension of construction of the
improvements through completion where such abandonment or suspension has not been cured by
a resumption of work within ninety (90) days after written notice of such abandonment or
suspension from City, subject to extension pursuant to Section 604 of this Agreement; or
(3 ) The violation by Costco of the restriction on transfer set forth in
Paragraph 2 of this Memorandum .
C, City's option shall be subordinate and subject to and be limited by and
shall not defeat, render invalid or limit:
( 1 ) Any mortgage, deed of trust or other security instrument permitted
by this Agreement; or
(2) Any rights or interests provided in this Agreement for the
protection of the holder of such mortgages, deeds of trust or other security instruments; or
(3 ) Any utility or other easements or permits granted by Costco to
facilitate the development of the Site in accordance with the Scope of Development.
3 . The covenants contained in this Memorandum shall be binding for the benefit of
the City, its successors and assigns, and any successor in interest to the Site or any part thereof,
and such covenants shall run in favor of the City and such aforementioned parties for the entire
period during which such covenants shall be in force and effect, without regard to whether the
City is or remains an owner of any land or interest therein to which such covenants relate . The
City and such aforementioned parties, in the event of any breach of any such covenants, shall
have the right to exercise all of the rights and remedies and to maintain any actions at law or
suits in equity or other proper proceedings to enforce the curing of such breach. The covenants
contained in this Memorandum shall be for the benefit of and shall be enforceable only by the
City, its successors and such aforementioned parties .
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4 . Any modification or amendment of any instrument of record to which Costco has
agreed its title to the Site may be subject and which changes the uses or development permitted
on the Site or changes the restrictions or controls that apply to the Site or otherwise affects the
use of the Site shall require the prior written consent of Costco . Amendments to such
instruments applying only to other property in the Redwood Business Park shall require the
consent of Costco to the extent such amendments may affect the Site or access to the Site.
5 . In the event of any express conflict between this Memorandum and the
Agreement, the provisions of the Agreement shall control .
6 . This Memorandum may be executed in counterparts, each of which shall be
deemed to be an original and all of which, together, shall constitute but one and the same
Memorandum.
71 The provisions of this Memorandum automatically shall terminate and no longer
be of any force or effect following issuance of a certificate of occupancy for Costco ' s
improvements to be constructed on the Site. The parties agree to record a copy of the certificate
of occupancy, quitclaim of this Memorandum or other document reasonably requested by Costco
to evidence such termination.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date
first above written.
CITY OF UKIAH,
a municipal corporation
By :
Jane Chamber, City Manager
ATTEST:
Kristine Lawler
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The provisions of this Memorandum are hereby approved and accepted.
COSTCO WHOLESALE CORPORATION,
a Washington corporation
By:
Title :
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ACKNOWLEDGMENTS
USW 804510561 . 13
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EXHIBIT A
LEGAL DESCRIPTION OF THE SITE
LANDS OF CITY OF UKIAH , SUCCESSOR AGENCY FOR DISSOLVED UKIAH
REDEVELOPMENT AGENCY, A PUBLIC BODY
LOT 1
REAL PROPERTY SITUATE IN THE CITY OF UKIAH , COUNTY OF MENDOCINO , STATE OF
CALIFORNIA, DESCRIBED AS FOLLOWS :
BEING ALL OF LOTS G1 , G21 G31 F8 & F10 AND A PORTION OF LOT F11 AS SAID LOTS ARE
SHOWN ON THAT PARCEL MAP M . S . 97-07 RECORDED JULY 28 , 1997 IN MAP CASE 2 , DRAWER
64 AT PAGES 21 & 22 , OFFICIAL RECORDS OF MENDOCINO COUNTY, TOGETHER WITH A
PORTION OF PARCEL 1 AS SHOWN ON THAT PARCEL MAP M . S . 04-51 RECORDED OCTOBER 2 ,
2006 IN MAPS , DRAWER 74 AT PAGES 4 THROUGH 6 , OFFICIAL RECORDS OF MENDOCINO
COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS :
BEGINNING AT THE NORTHWEST CORNER OF SAID LOT F8 , ALSO BEING A POINT ON THE
EASTERLY RIGHT OF WAY FOR AIRPORT PARK BOULEVARD AS SHOWN ON SAID PARCEL MAP
M . S . 97-07 ;
THENCE ALONG THE NORTHERLY LINE OF SAID LOTS F8 & G3 , NORTH 84 040'22" EAST A
DISTANCE OF 585 . 28 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY FOR U . S . HIGHWAY
1011 SAID POINT ALSO BEING THE NORTHEAST CORNER OF LOT G3 , AS SAID HIGHWAY AND
LOT ARE SHOWN ON SAID PARCEL MAP M . S . 97-07 ;
THENCE ALONG THE EASTERLY LINES OF SAID LOTS G3 , G21 G1 AND SAID PARCEL 1 , ALSO
BEING THE WESTERLY RIGHT OF WAY OF SAID HIGHWAY, THE FOLLOWING FIVE (5) COURSES :
1 ) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 327 . 57 FEET;
2 ) THENCE SOUTH 05 021 ' 28" EAST A DISTANCE OF 100 . 13 FEET;
3) THENCE SOUTH 02 029'45" EAST A DISTANCE OF 400 . 04 FEET;
4) THENCE SOUTH 00 038' 06" WEST A DISTANCE OF 100 . 19 FEET;
5 ) THENCE SOUTH 02 029' 15" EAST A DISTANCE OF 530 . 19 FEET;
THENCE LEAVING SAID EASTERLY LINES AND SAID WESTERLY RIGHT OF WAY, SOUTH
84 040' 22" WEST A DISTANCE OF 103 . 48 FEET;
THENCE NORTH 31 037' 13 " WEST A DISTANCE OF 249 . 94 FEET ,
THENCE SOUTH 84 040'22 " WEST A DISTANCE OF 38 . 33 FEET;
THENCE NORTH 32 045'47" WEST A DISTANCE OF 331 . 26 FEET ;
THENCE SOUTH 84 040 '22 " WEST A DISTANCE OF 102 . 89 FEET TO A POINT ON THE WESTERLY
LINE OF SAID LOT F11 , SAID POINT ALSO BEING ON THE EASTERLY RIGHT OF WAY OF SAID
AIRPORT PARK BOULEVARD ;
THENCE ALONG THE WESTERLY LINES OF SAID LOTS F11 , F10 & F8 , ALSO BEING SAID
EASTERLY RIGHT OF WAY, NORTH 05 036144" WEST A DISTANCE OF 937 . 97 FEET TO THE POINT
OF BEGINNING . CONTAINING 15 . 2989 ACRES OF LAND , MORE OR LESS .
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