Hemet City Council
December 13, 2022

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RIV #4830-8901-9593 v1
DRAFT 1 SUBDIVISION IMPROVEMENT AGREEMENT
BOND NO. ___________________
INITIAL PREMIUM: ___________________

SUBJECT TO RENEWAL

CITY OF HEMET
TRACT MAP 33824 IMPROVEMENTS

FORM OF LABOR AND MATERIAL BOND
KNOW ALL MEN BY THESE PRESENTS:

WHEREAS the City of Hemet California (“City”) and D.R. Horton Los Angeles Holding Company, Inc., a California corporation (“Principal”), have executed an agreement for work consisting of, but not limited to, the furnishing all labor, materials, tools, equipment, services, and incidentals for all grading, roads, paving, curbs and gutters, pathways, storm drains, sanitary sewers, utilities, drainage facilities, traffic controls, landscaping, street lights, and all other required facilities for Tract Map No. 33824 (“Public Improvements”); WHEREAS, the Public Improvements to be performed by Principal are more particularly set forth in that certain Subdivision Improvement Agreement dated December 13, 2022 (“Improvement Agreement”);
WHEREAS, the Improvement Agreement is hereby referred to and incorporated herein by reference; and
WHEREAS, Principal is required to furnish a bond in connection with the Improvement Agreement providing that if Principal or any of its subcontractors shall fail to pay for any materials, provisions, or other supplies, or terms used in, upon, for, or about the performance of the Public Improvements, or for any work or labor done thereon of any kind, or for amounts due under the provisions of Title 15 (commencing with section 3082) of Part 4 of Division 3 of the California Civil Code, with respect to such work or labor, that the Surety on this bond will pay the same together with a reasonable attorney’s fee in case suit is brought on the bond.

NOW, THEREFORE, Principal and _________________________ (“Surety”), a corporation organized and existing under the laws of the State of _________________, and duly authorized to transact business under the laws of the State of California, are held and firmly bound unto City and to any and all material men, persons, companies or corporations furnishing materials, provisions, and other supplies used in, upon, for or about the performance of the Public Improvements, and all persons, companies or corporations renting or hiring teams, or implements or machinery, for or contributing to the Public Improvements to be done, and all persons performing work or labor upon the same and all persons supplying both work and materials as aforesaid excepting the Principal, the sum of Two Hundred Forty-Six Thousand Dollars, ($246,000), said sum being not less than 100% of the total cost of the Public Improvements under the terms of the Improvement Agreement, we bind ourselves, our heirs, executors and administrators, successors and assigns jointly and severally, firmly by these presents.

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RIV #4830-8901-9593 v1
DRAFT 2 SUBDIVISION IMPROVEMENT AGREEMENT
THE CONDITION OF THIS OBLIGATION IS SUCH that if the Principal, his or its subcontractors, heirs, executors, administrators, successors, or assigns, shall fail to pay for any materials, provisions, or other supplies or machinery used in, upon, for or about the performance of the Public Improvements, or for work or labor thereon of any kind, or fail to pay any of the persons named in California Civil Code Section 3181, or amounts due under the Unemployment Insurance Code with respect to work or labor performed by any such claimant, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the contractor and his subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work and labor, and all other applicable laws of the State of California and rules and regulations of its agencies, then said Surety will pay the same in or to an amount not exceeding the sum specified herein.

As part of the obligation secured hereby, and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered.

This bond is executed and filed to comply with Section 66499 et seq. of the California Government Code as security for payment to contractors, subcontractors, and persons furnishing labor, materials, or equipment for construction of the Public Improvements or performance of the Improvement Agreement. It is hereby expressly stipulated and agreed that this bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the California Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.

Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Improvement Agreement, or to any plans, profiles, and specifications related thereto, or to the Public Improvements to be constructed thereunder, shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition.

IN WITNESS WHEREOF, the seal and signature of the Principal is hereto affixed, and the corporate seal and the name of the Surety is hereto affixed and attested by its duly authorized Attorney-in-Fact at _____________________, this _____ day of _______________, ______.

Principal Surety
By: By:

Its: Managing Member Attorney-In-Fact
(print name) (print name)

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RIV #4830-8901-9593 v1
DRAFT 3 SUBDIVISION IMPROVEMENT AGREEMENT
NOTE: APPROPRIATE NOTARIAL ACKNOWLEDGMENTS OF EXECUTION

BY PRINCIPAL AND SURETY, AND A COPY OF THE POWER OF

ATTORNEY TO LOCAL REPRESENTATIVES OF THE BONDING
COMPANY MUST BE ATTACHED TO THIS BOND.

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RIV #4833-2180-7817 v1 - 1 -
CITY COUNCIL RESOLUTION NO. 2022-XXX

CITY OF HEMET
Hemet, California
RESOLUTION NO. 2022-XXX

A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF

HEMET, CALIFORNIA,

APPROVING REPLACEMENT

SUBDIVISION IMPROVMENET

AGREEMENT, ACCEPTING

PUBLIC IMPROVEMENTS,

REDUCTION OF IMPROVEMENT
SECURITY TO 25% OF THE

ORIGINAL VALUE FOR TRACT
MAP NO. 33824, LOCATED IN

MCSWEENY FARMS, SOUTH OF

MCSWEENY PARKWAY AND

EAST OF SOUTH VILLAGE
LOOP (D.R. HORTON LOS

ANGELES HOLDING COMPANY,
INC., A CALIFORNIA

CORPORATION), AND RELEASE

OF EXISTING SUBDIVISION

IMPROVEMENT AGREEMENT

AND IMPROVEMENTE

SECURITY PROVIVDED BY

MCSWEENY RECOVERY

ACQUISITION, LLC
WHEREAS, Tract Map 33824, submitted for approval
by McSweeny Recovery Acquisition, LLC., a Delaware
Limited Liability Company (“Developer”), and approved by the City of Hemet on September 28, 2016; and
WHEREAS, D.R. Horton Los Angeles Holding, a
California Corporation (“Builder”) has acquired the land known

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as Tract Map 33824 from Developer (a copy of which is
attached as Exhibit “B”); and
WHEREAS, the Developer and Builder have completed
all the public improvements to the satisfaction of the City Engineer as required by Subdivision Improvement Agreement known as Riverside County Recorder’s Document No. 2016- 0436389 (“Existing Agreement”) and are requesting a
reduction of Improvement Security to 25% of the original value for Tract Map No. 33824; and
WHEREAS, to meet and continue the requirements
established as a prerequisite to final approval of Tract Map No. 33824, Builder agreed to enter into a Subdivision
Improvement Agreement superseding and replacing Existing Agreement, together with good and sufficient security, in conformance with the City Attorney’s approved format, for approval and execution by the City; and
WHEREAS, upon recordation of the replacement
Subdivision Improvement Agreement and Improvement
Security by Builder, the previously recorded Existing
Agreement shall be released by the Interim City Manager or designee; and
WHEREAS, the Subdivision Improvement Agreement
and good and sufficient security have been accepted by the City; and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY
COUNCIL OF THE CITY OF HEMET AS FOLLOWS:

SECTION 1. RECITALS

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The foregoing recitals are true and correct.

SECTION 2. APPROVAL OF REPLACEMENT

SUBDIVISION IMPROVEMENT AGREEMENT
A. The Subdivision Improvement Agreement attached
hereto as Exhibit “A” is approved and the Interim
City Manager is authorized to execute it and the
City Clerk is authorized to attest thereto.

B. Public Improvements associated with Tract Map No.
33824 that are complete are now to be accepted by
the City
C. Said improvement security shall be reduced to 25% of the original value and is accepted as good and
sufficient, subject to approval as to form and
content thereof by the City Attorney,
D. Upon recordation of the Replacement Subdivision
Improvement Agreement, the Interim City Manager,
or his designee, is authorized to release the existing
Subdivision Improvement Agreement and
Improvement Security.

E. Pursuant to Government Code Section 66458, Tract
Map No. 33824 was previously approved, and City
accepted the real property described therein.

SECTION 3. CERTIFICATION
This Resolution shall take effect immediately upon its
adoption by the City Council. The City Clerk shall attest to and certify the vote adopting this Resolution.

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PASSED, APPROVED AND ADOPTED this 13th day
of December 2022.

Malcolm Lilienthal, Mayor
ATTEST:
_____________________________
John Paul Maier, City Clerk

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State of California )
County of Riverside )
City of Hemet )
I, John Paul Maier, City Clerk of the City of Hemet, do hereby certify that the foregoing resolution was adopted by the Hemet City Council on the 13th day of December, 2022 and was passed by the following vote:

AYES: Council Members:

NOES: Council Member:

ABSTAIN: Council Member:

ABSENT: Council Member:
_________________
________________
John Paul Maier, City
Clerk

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City of Hemet
City Council Meeting

STAFF REPORT

Meeting: City Council Meeting - Dec 13 2022
Department: Public Works
Submitted by: Eddie Pust, Interim City Manager
Noah Rau, Public Works Director/City Engineer;

☐ Receive and File ☒ Consent Calendar ☐ Business Item ☐ Public Hearing

TITLE:

A Resolution of the City Council of the City of Hemet, California, Approving Replacement Subdivision Improvement Agreement, Acceptance of Public Improvements, Reduction of Improvement Security to 25% of the original value for Tract Map No. 33824-1, located in McSweeny Farms, south of McSweeny Parkway and east of South Village Loop (Richmond American Homes, a California Corporation), and release of existing Subdivision Improvement Agreement and Improvement Security provided by McSweeny Recovery Acquisition, LLC

RECOMMENDED ACTION:

It is respectfully recommended that the City Council:

Adopt a Resolution of the City Council of the City of Hemet, California, Approving Replacement Subdivision Improvement Agreement, Acceptance of Public Improvements, Reduction of Improvement Security to 25% of the original value for Tract Map No. 33824-1, located in McSweeny Farms, south of McSweeny Parkway and east of South Village Loop (Richmond American Homes, a California Corporation), and release of existing Subdivision I mprovement Agreement and Improvement Security provided by McSweeny Recovery Acquisition, LLC.

BACKGROUND:

At a regularly scheduled City Council meeting held on September 28, 2016, the City Council approved Tract Map No. 33824 -1, along with the Subdivisi on Improvement Agreement ("Agreement"), and accepted the Performance Bond and Material and Labor Bond ("Bonds"). The Agreement was executed by McSweeny Recovery Acquisition, LLC, ("Developer"), who also secured the Bonds necessary to ensure the public imp rovements associated with Tract Map No. 33824 -1 would be completed.

The Developer has since sold Tract Map No. 33824 -1 to Richmond American Homes, a California Corporation ("Builder"). All of the public improvements have been completed by both the Devel oper and the Builder to the satisfaction of the City Engineer.

ANALYSIS:

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Tract Map No. 33824 -1 provides for the development of 77 single family residential units and all associated road and utility improvements located in McSweeny Farms Specific Plan Area, south of McSweeny Parkway and east of South Village Loop. Now that the D eveloper and Builder have completed all of the public improvements associated with the approval of Tract Map No. 33824-1 to the satisfaction of the City Engineer, the Developer and Builder are requesting a reduction in the Improvement Security to 25% of th e original values identified in the original Subdivision Improvement Agreement known as Riverside County Recorder’s Document No. 2016 -0436390 (“Existing Agreement”).

Section 12.2 "Partial Release" of the Existing Agreement allows the City Council to part ially release a portion of the Improvement Security as the public improvements are accepted by the City. The Developer and Builder filed a Notice of Completion with the Riverside County Recorder's office to signify the completion of public improvements.

The next step in the process is consideration of the replacement of the reduced agreement for the subdivision work and accepting the new bonds to warranty the work per the requirements of the Existing Agreement.

The City Attorney has reviewed and appr oved the Subdivision Improvement Agreements and the Improvement Bond forms. Staff recommends that the City Council accept the replacement subdivision agreement and public improvement bonds and release the agreement and bonds provided by the Developer.

DISCUSSION:

Certified record drawings have been provided for the public improvements as required by Section 10.3 of the Subdivision Improvement Agreement.

PREVIOUS COUNCIL ACTION:

• City Council meeting of September 28, 2016 - City Council approved Tract Map No. 33824-1; subdivision improvement agreement; and accepted offers of dedication and improvement bonds from the developer.

STRATEGIC PLAN INTEGRATION:

GOAL ONE: QUALITY OF LIFE:

To ensure that Hemet is safe, clean, attractive and comfortable for all who live, work, and visit.

Objective 1: Enhance the visual appearance of the community to make it attractive and reduce blight through construction of new homes.

FISCAL IMPACT:

There are no impacts to the General Fund with this City Council action.

ALTERNATIVE(S):

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1. Do not approve the Resolution to replace the Subdivision Improvement Agreement and Improvement Security

2. Provide alternate direction to staff

REVIEWED BY LEGAL:

☒ Staff report ☒ Resolution
☐ Ordinance ☒ Agreement

ATTACHMENT(S):

TR 33824-1 Subdivision Improvement Agm-RAINTREE
mb452_071_076
Reso Approving replacement SIA for Final Tract Map 33824-1 Exhibit A-Subdivision Improvement Agreement - Final Tract Map No. 33824-1-DRAFT

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2016-0436390
IfW1.”.IR1R4i1'fl!|.'v’W.'JF.H.\".rTl'P.'fI
I
L— —""
F?(971/
10/05/2015@1205PMFee:$0.00ANDWHENRECORDEDRETURNTO: Page1°‘*9RecordedinOfficialRecords(Documentexemptfromrecordingfees goténtygiazRiversidepursuanttoGOV-Code§ RgsggsorwgggntyClet-k—Recorcler*CITYOFHEMET |Attn:CityManager445EastFloridaAvenue RAExam511Hemet,California92543 PageDAPCORMiscLongRFD1stPgAdtlPgCertCCV \SIZENCORSMF4NCHGI’:

SUBDIVISIONIMPROVEMENTAGREEMENTFINALTRACTMAP33824-1
ByandBetween
THECITYOFHEMET,amunicipalcorporation
and
McSweenyRecoveryAcquisition,LLC,aDelawarelimitedliabilitycompany Dated:

RIV#4836—39l7-8284V2

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3_\_
Anggsk2 municipalcorporaticSwanyRec (1liabilitycompany
SUBDIVISIONIMPROVEMENTAGREEMENTFINALTRACTMAP33824-1
ThisSubdivisionImprovementAgreement(“Agreement”)isenteredintoasofthisdayof 016byandbetweentheCityofHemet,a on(“City”)andM overyAcquisition,LLC,aDelawarelimite .CityandDeveloperaresometimeshereinafterindividuallyreferredtoas“Party”andhereinaftercollectivelyreferredtoasthe“Parties.”RECITALSA.DeveloperhassubmittedtoCityanapplicationforapprovalofa?naltractmapforrealpropertylocatedwithinCity,alegaldescriptionofwhichisattachedheretoasExhibit“A”.Thetractmapisidenti?edinCityrecordsasTractMapNo.33824-l.On 20__,theCityconditionallyapprovedTractNo.33824-1.B.DeveloperhasnotcompletedalloftheworkormadeallofthePublicImprovementsrequiredbytheSubdivisionMapAct(GovernmentCodesections66410_e_tgq),(“MapAct”)theCityOrdinances,theconditionsofapprovalforTractNo.33824-l,orotherordinances,resolutions,orpoliciesofCityrequiringconstructionofimprovementsinconjunctionwiththesubdivisionofland.C.PursuanttoCityOrdinancesandtheapplicableprovisionsoftheMapAct,DeveloperandCityenterintothisAgreementforthetimelyconstructionandcompletionofthePublicImprovementsandthefurnishingofthesecuritytherefor,acceptabletotheCityEngineerandCityAttorney,forTractNo.33824-l.D.CityhasauthoritytoenterintothisSubdivisionImprovementAgreementpursuanttoGovernmentCodeSections66499— 66499.10.E.PursuanttoGovernmentCodeSection66499,Developer’sexecutionofthisAgreementandtheprovisionofthesecurityaremadeinconsiderationofCity’sapprovalofthefinalmapforTractNo.33824-l.DEFINEDTERMS“Developer”shallmeanMcSweenyRecoveryAcquisition,LLC.Theterm“Developer”shallalsoincludeallassignees,totheextentpermittedunderthisAgreement,oftherightsandobligationsofDeveloperunderthisAgreement,andanysuccessor-in-interesttoDeveloperhavingalegaland/orequitableinterestintheProperty.“EstimatedCosts”shallmeantheCityEngineer’sapproximationoftheactualcosttoconstructthePublicImprovements,includingthereplacementcostforalllandscaping.

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“LitigationExpenses”shallmeanallcostsandexpenses,totheextentreasonableinamount,actuallyandnecessarilyincurredbyapartyingoodfaithintheprosecutionofanactionorproceeding,including,butnotlimitedto,courtcosts,?ling,recording,andservicefees,copyingcosts,exhibitproductioncosts,specialmediarentalcosts,attorneys’fees,feesforinvestigators,witnessfees(bothlayandexpert),travelexpenses,depositionandtranscriptcostsandanyothercostorexpense,theawardofwhichacourtofcompetentjurisdictionmaydeterminetobejustandreasonable.“MapAct”shallmeantheSubdivisionMapAct,GovernmentCodeSections66410etseq.“Property”shallmeanthealloftherealpropertycontainedwithintheboundariesofTractMapNo.33824-1locatedintheCityofHemet,California,asismoreparticularlydescribedinthelegaldescriptionandtractdiagramattachedheretoandincorporatedherebybyreferenceatAttachment“A”.“PublicImprovements”shallinclude,butnotbelimitedto,allgrading,roads,streets,paving,curbsandgutters,sidewalks,paseos,pathways,trails,sanitarysewers,utilities,stormdrains,detentionandretentionbasinsandotherdrainagefacilities,traf?ccontrols,landscaping,streetlightsandallotherfacilitiesrequiredtobeconstructedanddedicatedtotheCityorotherpublicentityasconditionsofapprovalofTentativeTractMapNo.33824-1andasshownindetailontheplans,andspeci?cationswhichhavebeenapprovedbytheCityandincorporatedintoTractMapNo.33824-1.ThePartiesagreethatthePublicImprovementstobecompletedbyDeveloperaremorespeci?callydescribedinthediagramorplanattachedheretoandincorporatedhereinbyreferenceasAttachment“B.Notwithstanding,Attachment“B”,DevelopershallremainobligatedtoconstructandcompleteallofthePublicImprovementsrequiredasconditionsofapprovalforTentativeTractMap33824-1.“RequiredInsurance”shallmeantheinsurancerequiredtobemaintainedbyDeveloperunderSection17.“Security”shallmeansuretybondsintheamountsandunderthetermsofSection12orothersecurityapprovedbyCityEngineerorCityAttorney.“TractNo33824-1”shallmeanthe?nalmappreparedandapprovedbytheCityforTentativeTractMapNo.33824-1.“Warranty”shallmeantheoneyearperiodfollowingcompletionofthePublicImprovementsbyDeveloperandtheacceptanceofthePublicImprovementsbytheCityinwhichDeveloperwarrantsandguaranteesallPublicImprovements.OPERATIVEPROVISIONSNOW,THEREFORE,inconsiderationofthemutualpromisesandcovenantsmadebythepartiesandcontainedhereandotherconsideration,thevalueandadequacyofwhichareherebyacknowledged,thepartiesagreeasfollows:1.EFFECTIVENESS.ThisAgreementshallnotbeeffectiveunlessanduntilallfour(4)ofthefollowingconditionsaresatis?edintheorderprovided:

RIV#4836-3917-8284V2 _ _

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inalMa];andAgreementAggroval
RecordAgreement
RecordFinalMag
Pre-amgrovalofPlansandSgeci?cations

1.1Security.DeveloperprovidesCitywiththeSecurityofthetypeandintheamountsrequiredbythisAgreement;1.2F .TheCityCounciloftheCity(“CityCouncil”)approvesthe?nalmapforTractNo.33824-1andthisAgreement;1.3 .DeveloperandCityexecutetheAgreementandCityrecordsthisAgreementintheRecorder’sOf?ceoftheCountyofRiverside;and1.4 .Developerrecordsthe?nalmapforTractNo.33824-1intheRecorder’sOf?ceoftheCountyofRiverside.Iftheabovedescribedconditionsarenotsatis?edintheorder,mannerandwithinthetimeprovidedunderthisAgreement,thisAgreementshallautomaticallyterminatewithoutneedoffurtheractionbyeitherCityorDeveloper.2.PUBLICIMPROVEMENTS.Developershallconstructorhaveconstructedatitsowncost,expense,andliabilitythePublicImprovements,asde?nedherein,withinthetimeandinthemannerrequiredunderthisAgreement.ConstructionofthePublicImprovementsshallincludeanytransitionsand/orotherincidentalworkdeemednecessaryfordrainageorpublicsafety.TheDevelopershallberesponsibleforthereplacement,relocation,orremovalofanycomponentofanyirrigationwaterorsewersystemincon?ictwiththeconstructionorinstallationofthePublicImprovements.Suchreplacement,relocation,orremovalshallbeperformedtothecompletesatisfactionoftheCityEngineerandtheownerofsuchwaterorsewersystem.Developerfurtherpromisesandagreestoprovideallequipment,tools,materials,labor,tests,designwork,andengineeringservicesnecessaryorrequiredbyCitytofullyandadequatelycompletethePublicImprovements.2.1PriorPartialConstructionofPublicImnrovements.WhereconstructionofanyPublicImprovementshasbeenpartiallycompletedpriortothisAgreement,DeveloperagreestocompletesuchPublicImprovementsorassuretheircompletioninaccordancewiththisAgreement.2.2Permits:Notices:UtilitvStatements.Priortocommencinganywork,Developershall,atitssolecost,expense,andliability,obtainallnecessarypermitsandapprovalsandgiveallnecessaryandincidentalnoticesrequiredforthelawfulconstructionofthePublicImprovementsandperformanceofDeveloper’sobligationsunderthisAgreement.Developershallconducttheworkinfullcompliancewiththeregulations,rules,andotherrequirementscontainedinanypermitorapprovalissuedtoDeveloper.Priortocommencinganywork,Developershall?leawrittenstatementwiththeCityClerkandtheCityEngineer,signedbyDeveloperandeachutilitywhichwillprovideutilityservicetotheProperty,attestingthatDeveloperhasmadealldepositslegallyrequiredbytheutilityfortheextensionandprovisionofutilityservicetotheProperty.2.3 .DeveloperisprohibitedfromcommencingworkonanyPublicImprovementuntilallplansandspeci?cationsforsuchPublicImprovementhavebeensubmittedtoandapprovedbytheCityEngineer,orhisorherdesignee.ApprovalbytheCityEngineershallnotrelieveDeveloperfromensuringthatallPublicImprovementsconformwithallotherrequirementsandstandardssetforthinthisAgreement.

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QualityofWork;Comgli
AlterationstaImprovements

2.4 anceWithLawsandCodes.Theconstructionplansandspeci?cationsforthePublicImprovementsshallbepreparedinaccordancewithallapplicablefederal,stateandlocallaws,ordinances,regulations,codes,standards,andotherrequirements.ThePublicImprovementsshallbecompletedinaccordancewithallapprovedmaps,plans,speci?cations,standarddrawings,andspecialamendmentstheretoon?lewithCity,aswellasallapplicablefederal,state,andlocallaws,ordinances,regulations,codes,standards,andotherrequirementsapplicableatthetimeworkisactuallycommenced.2.5StandardofPerformance.Developeranditscontractors,ifany,shallperformallworkrequiredtoconstructthePublicImprovementsunderthisAgreementinaskillfulandworkmanlikemanner,andconsistentwiththestandardsgenerallyrecognizedasbeingemployedbyprofessionalsinthesamedisciplineintheStateofCalifornia.Developerrepresentsandmaintainsthatitoritscontractorsshallbeskilledintheprofessionalcallingnecessarytoperformthework.Developerwarrantsthatallofitsemployeesandcontractorsshallhavesuf?cientskillandexperiencetoperformtheworkassignedtothem,andthattheyshallhavealllicenses,permits,quali?cationsandapprovalsofwhatevernaturethatarelegallyrequiredtoperfonnthework,andthatsuchlicenses,permits,quali?cationsandapprovalsshallbemaintainedthroughoutthetennofthisAgreement.2.6 .Allworkshallbedoneandimprovementsmadeandcompletedasshownonapprovedplansandspeci?cations,andanysubsequentalterationsthereto.IfduringthecourseofconstructionandinstallationofthePublicImprovementsitisdetenninedthatthepublicinterestrequiresalterationsinthePublicImprovements,DevelopershallundertakesuchdesignandconstructionchangesasmaybereasonablyrequiredbyCity.Anyandallalterationsintheplansandspeci?cationsandthePublicImprovementstobecompletedmaybeaccomplishedwithoutgivingpriornoticethereoftoDeveloper’ssuretyforthisAgreement.2.7OtherObligationsReferencedConditionsofTentativeManApproval.Inadditiontotheforegoing,DevelopershallsatisfyalloftheconditionsofapprovalonthetentativemapfortheProperty.Theconditionsofapprovalwhichhavenotbeensatis?edpriortothedateofthisAgreementareidenti?edonExhibit“D”hereto.3.MAINTENANCEOFPUBLICIMPROVEMENTSANDLANDSCAPING.CityshallnotberesponsibleorliableforthemaintenanceorcareofthePublicImprovementsuntilCityformallyapprovesandacceptstheminaccordancewithitspoliciesandprocedures.CityshallexercisenocontroloverthePublicImprovementsuntilapprovedandaccepted.AnyusebyanypersonofthePublicImprovements,oranyportionthereof,shallbeatthesoleandexclusiveriskoftheDeveloperatalltimespriortoCity’sacceptanceofthePublicImprovements.DevelopershallmaintainallthePublicImprovementsinastateofgoodrepairuntiltheyarecompletedbyDeveloperandapprovedandacceptedbyCity,anduntilthesecurityfortheperformanceofthisAgreementisreleased.Maintenanceshallinclude,butshallnotbelimitedto,repairofpavement,curbs,gutters,sidewalks,signals,parkways,watermains,andsewers;maintainingalllandscapinginavigorousandthrivingconditionreasonablyacceptabletoCity;removalofdebrisfromsewersandstonndrains;andsweeping,repairing,andmaintainingingoodandsafeconditionallstreetsandstreetimprovements.ItshallbeDeveloper’sresponsibilitytoinitiateallmaintenancework,butifitshallfailtodoso,itshallpromptlyperfonnsuchmaintenanceworkwhennoti?edtodosobyCity.IfDeveloperfailstoproperly RIV#4836-3917-8284V2

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prosecuteitsmaintenanceobligationunderthissection,CitymaydoallworknecessaryforsuchmaintenanceandthecostthereofshallbetheresponsibilityofDeveloperanditssuretyunderthisAgreement.CityshallnotberesponsibleorliableforanydamagesorinjuryofanynatureinanywayrelatedtoorcausedbythePublicImprovementsortheirconditionpriortoacceptance.4.CONSTRUCTIONSCHEDULE.UnlessextendedpursuanttothisSection4.1ofthisAgreement,DevelopershallfullyandadequatelycompleteorhavecompletedthePublicImprovementswithinoneyear(12months)followingapprovalofthe?nalmapforTractNo.33824-1.4.lExtensions.Citymay,initssoleandabsolutediscretion,provideDeveloperwithadditionaltimewithinwhichtocompletethePublicImprovements.ItisunderstoodthatbyprovidingtheSecurityrequiredunderSection12.0e_tE1.ofthisAgreement,DeveloperanditssuretyconsentinadvancetoanyextensionoftimeasmaybegivenbyCitytoDeveloper,andwaivesanyandallrighttonoticeofsuchextension(s).Developer’sacceptanceofanextensionoftimegrantedbyCityshallconstituteawaiverbyDeveloperanditssuretyofalldefenseoflaches,estoppel,statutesoflimitations,andotherlimitationsofactioninanyactionorproceeding?ledbyCityfollowingthedateonwhichthePublicImprovementsweretohavebeencompletedhereunder.Inaddition,asconsiderationforgrantingsuchextensiontoDeveloper,CityreservestherighttoreviewtheprovisionsofthisAgreement,including,butnotlimitedto,theconstructionstandards,thecostestimatesestablishedbyCity,andthesuf?ciencyoftheimprovementsecurityprovidedbyDeveloper,andtorequireadjustmentstheretowhenwarrantedaccordingtoCity’sreasonablediscretion.4.2AccrualofLimitationsPeriod.AnylimitationsperiodprovidedbylawrelatedtobreachofthisAgreementorthetermsthereofshallnotaccrueuntilDeveloperhasprovidedtheCityEngineerwithwrittennoticeofDeveloper’sintenttoabandonorotherwisenotcompleterequiredoragreeduponPublicImprovements.5.GRADING.DeveloperagreesthatanyandallgradingdoneortobedoneinconjunctionwithconstructionofthePublicImprovementsordevelopmentofTractNo.33824-lshallconformtoallfederal,state,andlocallaws,ordinances,regulations,andotherrequirements,includingCity’sgradingregulations.Allgrading,landscaping,andconstructionactivitiesshallbeperformedinamannertocontrolerosionandprevent?oodingproblems.TheCityEngineershallhavetheauthoritytorequireerosionplanstoprescribereasonablecontrolsonthemethod,manner,andtimeofgrading,landscaping,andconstructionactivitiestopreventnuisancestosurroundingproperties.Plansshallincludewithoutlimitationtemporarydrainageanderosioncontrolrequirements,dustcontrolprocedures,restrictionsontruckandotherconstructiontrafficroutes,noiseabatementprocedures,storageofmaterialsandequipment,removalofgarbage,trash,andrefuse,securingthejobsitetopreventinjury,andsimilarmatters.InordertopreventdamagetothePublicImprovementsbyimproperdrainageorotherhazards,thegradingshallbecompletedinaccordancewiththetimescheduleforcompletionofthePublicImprovementsestablishedbythisAgreement,andpriortoCity’sapprovalandacceptanceofthePublicImprovementsandreleaseoftheSecurityassetforthinSection12.0e_t$1.ofthisAgreement.6.UTILITIES.Developershallprovideutilityservices,includingwater,sewer,power,gas,andtelephoneservicetoserveeachparcel,lot,orunitoflandwithinTractNo.

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Dcveloper’sNoticeofComgletion
33824-1inaccordancewithallapplicablefederal,state,andlocallaws,rules,andregulations,including,butnotlimitedto,theregulations,schedulesandfeesoftheutilitiesoragenciesprovidingsuchservices.Exceptforcommercialorindustrialproperties,Developershallalsoprovidecabletelevisionfacilitiestoserveeachparcel,lot,orunitoflandinaccordancewithallapplicablefederal,state,andlocallaws,rules,andregulations,including,butnotlimitedto,therequirementsofthecablecompanypossessingavalidfranchisewithCitytoprovidesuchservicewithinCity’sjurisdictionallimits.Allutilitiesshallbeinstalledunderground.7.FEESANDCHARGES.Developershall,atitssolecost,expense,andliability,payallfees,charges,andtaxesarisingoutofconstructionofthePublicImprovements,including,butnotlimitedto,allplancheck,designreview,engineering,inspection,andotherservicefees,andanyimpactorconnectionfeesestablishedbyCityordinance,resolution,regulation,orpolicy,orasestablishedbyCityrelativetoTractNo.33824-1,orasrequiredbyothergovernmentalagencieshavingjurisdictionoverTractNo.33824-1.8.CITYINSPECTIONOFPUBLICIMPROVEMENTS.Developershall,atitssolecost,expense,andliability,andatalltimesduringconstructionofthePublicImprovements,maintainreasonableandsafefacilitiesandprovidesafeaccessforinspectionbyCityofthePublicImprovementsandareaswhereconstructionofthePublicImprovementsisoccurringorwilloccur.IftheCityinspectorrequestsit,theDeveloperatanytimebeforeacceptanceofthePublicImprovementsshallremoveoruncoversuchportionsofthe?nishedworkasmaybedirectedwhichhavenotpreviouslybeeninspected.Afterexamination,theDevelopershallrestoresaidportionsoftheworktothestandardsrequiredhereunder.InspectionorsupervisionbytheCityshallnotbeconsideredasdirectcontroloftheindividualworkmenonthejobsite.City’sinspectorshallhavetheauthoritytostopanyandallworknotinaccordancewiththerequirementscontainedorreferencedinthisAgreement.TheinspectionoftheworkbyCityshallnotrelieveDeveloperorthecontractorofanyobligationstoful?llthisAgreementashereinprovided,andunsuitablematerialsorworkmayberejectednotwithstandingthatsuchmaterialsorworkmayhavebeenpreviouslyoverlookedoraccepted.9.ADMINISTRATIVECOSTS.IfDeveloperfailstoconstructandinstallalloranypartofthePublicImprovementswithinthetimerequiredbythisAgreement,orifDeveloperfailstocomplywithanyotherobligationcontainedherein,DeveloperanditssuretyshallbejointlyandseverallyliabletoCityforalladministrativeexpenses,fees,andcosts,includingreasonableattorney’sfeesandcosts,incurredinobtainingcompliancewiththisAgreementorinprocessinganylegalactionorforanyotherremediespermittedbylaw.10.ACCEPTANCEOFIMPROVEMENTS;AS-BUILTORRECORDDRAWINGS.TheCityCouncilmay,initssoleandabsolutediscretion,acceptfullycompletedportionsofthePublicImprovementspriortosuchtimeasallofthePublicImprovementsarecomplete,whichshallnotreleaseormodifyDeveloper’sobligationtocompletetheremainderofthePublicImprovementswithinthetimerequiredbythisAgreement.10.1 .UponthetotalorpartialacceptanceofthePublicImprovementsbyCity,Developershall?lewiththeRecorder’sOf?ceoftheCountyofRiversideanoticeofcompletionfortheacceptedPublicImprovementsinaccordancewithCaliforniaCivilCodesection3093,atwhichtimetheacceptedPublicImprovementsshallbecomethesoleandexclusivepropertyofCitywithoutpaymenttherefor.

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CigAccegtanceofPublicImgrovements
Develgper’sObligationtoProvideAs~BuiltorRecordDrawings

10.2 .IfTractNo.33824-1wasapprovedandrecordedasasinglephasemap,CityshallnotacceptanyoneormoreoftheimprovementsuntilallofthePublicImprovementsarecompletedbyDeveloperandapprovedbyCity.IssuancebyCityofoccupancypermitsforanybuildingsorstructureslocatedonthePropertyshallnotbeconstruedinanymannertoconstituteCity’sacceptanceorapprovalofanyPublicImprovements.10.3Notwithstandingtheforegoing,CitymaynotacceptanyPublicImprovementsunlessanduntilDeveloperprovidesone(1)setof“as-built”orrecorddrawingsorplanstotheCityEngineerforallsuchPublicImprovements.Thedrawingsshallbecerti?edandshallre?ecttheconditionofthePublicImprovementsasconstructed,withallchangesincorporatedtherein.11.W ARRANTYANDGUARANTEE.DeveloperherebywarrantsandguaranteesallPublicImprovementsagainstanydefectiveworkorlabordone,ordefectivematerialsfurnishedintheperformanceofthisAgreement,includingthemaintenanceofalllandscapingwithinthePropertyinavigorousandthrivingconditionreasonablyacceptabletoCity,foraperiodofone(1)yearfollowingcompletionoftheworkandacceptancebyCity.DuringtheWarranty,Developershallrepair,replace,orreconstructanydefectiveorotherwiseunsatisfactoryportionofthePublicImprovements,inaccordancewiththecurrentordinances,resolutions,regulations,codes,standards,orotherrequirementsofCity,andtotheapprovaloftheCityEngineer.Allrepairs,replacements,orreconstructionduringtheWarrantyshallbeatthesolecost,expense,andliabilityofDeveloperanditssurety.AstoanyPublicImprovementswhichhavebeenrepaired,replaced,orreconstructedduringtheWarranty,DeveloperanditssuretyherebyagreetoextendtheWarrantyforanadditionalone(1)yearperiodfollowingCity’sacceptanceoftherepaired,replaced,orreconstructedPublicImprovements.NothinghereinshallrelieveDeveloperfromanyotherliabilityitmayhaveunderfederal,state,orlocallawtorepair,replace,orreconstructanyPublicImprovementfollowingexpirationoftheWarrantyoranyextensionthereof.Developer’swarrantyobligationunderthissectionshallsurvivetheexpirationorterminationofthisAgreement.12.SECURITY;SURETYBONDS.PriortoCity’sapprovalandexecutionofthisAgreement,DevelopershallprovideCitywithsuretybondsintheamountsandunderthetermssetforthbelow.TheamountoftheSecurityshallbebasedontheCityEngineer’sEstimatedCosts.IfCitydeterminesatanytimepriortoDeveloper’scompletionofthePublicImprovementsunderSection4[ConstructionSchedule],initssoleandabsolutediscretion,thattheEstimatedCostshavechanged,DevelopershalladjusttheSecurityintheamountrequestedbyCity.Developer’scompliancewiththisprovision(Section12.0e_t?q.)shallinnowaylimitormodifyDeve1oper’sindemni?cationobligationprovidedinSection16.0ofthisAgreement.12.1PerformanceBond.ToguaranteethefaithfulperformanceofthePublicImprovementsandalltheprovisionsofthisAgreement,toprotectCityifDeveloperisindefaultassetforthinSection18.0e_tseq.ofthisAgreement,andtosecureDeveloper’sone—yearguaranteeandwarrantyofthePublicImprovements,includingthemaintenanceofalllandscapinginavigorousandthrivingcondition,DevelopershallprovideCityafaithfulperfonnancebondintheamountofOneMillionTwoHundredandFifty-ThreeThousandandFiveHundredDollars($1,253,500.00),whichsumshallbenotlessthanonehundredpercent(100%)oftheEstimatedCosts.

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AdditionalReguirements
Develoner’sLiabili?

12.2PartialRelease.TheCityCouncilmay,initssoleandabsolutediscretionanduponrecommendationoftheCityEngineer,partiallyreleaseaportionorportionsoftheSecurityprovidedunderthissectionasthePublicImprovementsareacceptedbyCity,providedthatDeveloperisnotindefaultonanyprovisionofthisAgreementorconditionofapprovalforTractNo.33824-1,andthetotalremainingSecurityisnotlessthantwenty-?vepercent(25%)oftheEstimatedCosts.AllSecurityprovidedunderthissectionshallbereleasedattheendoftheWarrantyperiod,oranyextensionthereofasprovidedinSection11.0ofthisAgreement,providedthatDeveloperisnotindefaultonanyprovisionofthisAgreementorconditionofapprovalforTractNo.33824-1.12.3Labor&MaterialBong.Tosecurepaymenttothecontractors,subcontractors,laborers,materialmen,andotherpersonsfurnishinglabor,materials,orequipmentforperformanceofthePublicImprovementsandthisAgreement,DevelopershallprovideCityalaborandmaterialsbondintheamountofOneMillionTwoHundredandFifty-ThreeThousandandFiveHundredDollars($1,253,500.00),whichsumshallnotbelessthanonehundredpercent(100%)oftheEstimatedCosts.TheSecurityprovidedunderthissectionmaybereleasedbywrittenauthorizationoftheCityEngineeraftersix(6)monthsfromthedateCityacceptsthe?nalPublicImprovements.TheamountofsuchSecurityshallbereducedbythetotalofallstopnoticeormechanic’slienclaimsofwhichCityisaware,plusanamountequaltotwentypercent(20%)ofsuchclaimsforreimbursementofCity’santicipatedadministrativeandlegalexpensesarisingoutofsuchclaims.12.4 .ThesuretyforanysuretybondsprovidedasSecurityshallhaveacurrentA.M.Best’sratingofnolessthanA:VIII,beabankorinsurancecompanylicensedtotransactsuretybusinessinCalifornia,andshallbesatisfactorytoCity.AspartoftheobligationsecuredbytheSecurityandinadditiontothefaceamountoftheSecurity,theDeveloperoritssuretyshallsecurethecostsandreasonableexpensesandfees,includingreasonableattorney’sfeesandcosts,incurredbyCityinenforcingtheobligationsofthisAgreement.TheDeveloperanditssuretystipulateandagreethatnochange,extensionoftime,alteration,oradditiontothetermsofthisAgreement,thePublicImprovements,ortheplansandspeci?cationsforthePublicImprovementsshallinanywayaffectitsobligationontheSecurity.12.5FormofSecurity.TheevidenceoftheSecurityshallbeprovidedontheformssetforthinAttachment“C”,unlessotherformsaredeemedacceptablebytheCityEngineerandtheCityAttorney,andwhensuchformsarecompletedtothesatisfactionofCity,theformsandevidenceoftheSecurityshallbeattachedheretoasAttachment“C”andincorporatedhereinbythisreference.12.6 .WhilenoactionofDevelopershallberequiredinorderforCitytorealizeonitssecurityunderanySecurityinstrument,DeveloperagreestocooperatewithCitytofacilitateCity’srealizationunderanySecurityinstrument,andtotakenoactiontopreventCityfromsuchrealizationunderanySecurityinstrument.NotwithstandingthegivingofanySecurityinstrumentorthesubsequentexpirationofanySecurityinstrumentoranyfailurebyanysuretyor?nancialinstitutiontoperformitsobligationswithrespectthereto,DevelopershallbepersonallyliableforperformanceunderthisAgreementandforpaymentofthecostofthelaborandmaterialsfortheimprovementsrequiredtobeconstructedorinstalledherebyandshall,withinten(10)daysafterwrittendemandtherefor,delivertoCitysuchsubstituteSecurityasCityshallrequiresatisfyingtherequirementsinthisSection12.

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13.MONUMENTSECURITY .PriortoCity’sexecutionofthisAgreement,toguaranteepaymenttotheengineerorsurveyorforthesettingofallsubdivisionboundaries,lotcorners,andstreetcenterlinemonumentsforTractNo.33824-1incompliancewiththeapplicableprovisionsofCity’sMunicipaland/orDevelopmentCode(“SubdivisionMonuments”),DevelopershalldepositcashwithCityintheamountof{NineteenThousandTwo-HundredFiftyDollars}($19,250),whichsumshallnotbelessthanonehundredpercent(100%)ofthecostsofsettingtheSubdivisionMonumentsasdeterminedbytheCityEngineer.SaidcashdepositmaybereleasedbywrittenauthorizationoftheCityEngineerafterallrequiredSubdivisionMonumentsareacceptedbytheCityEngineer,CityhasreceivedwrittenacknowledgmentofpaymentinfullfromtheengineerorsurveyorwhosettheSubdivisionMonuments,andprovidedDeveloperisnotindefaultofanyprovisionofthisAgreementorconditionofapprovalforTractNo.33824-1.14.LIEN.TosecurethetimelyperformanceofDeveloper’sobligationsunderthisAgreement,includingthoseobligationsforwhichsecurityhasbeenprovidedpursuanttoSections12.0e_t?n,and13.0ofthisAgreement,DeveloperherebycreatesinfavorofCityalienagainstallportionsofthePropertynotdedicatedtoCityorsomeothergovernmentalagencyforapublicpurpose.AstoDeveloper’sdefaultonthoseobligationsforwhichsecurityhasbeenprovidedpursuanttoSections12.0e_t?g.and13.0ofthisAgreement,Cityshall?rstattempttocollectagainstsuchsecuritypriortoexercisingitsrightsasacontractlienholderunderthissection.15.SIGNSANDADVERTISING.DeveloperunderstandsandagreestoCity’sordinances,regulations,andrequirementsgoverningsignsandadvertisingstructures.DeveloperherebyagreeswithandconsentstothesummaryremovalbyCity,withoutnoticetoDeveloper,ofallsignsorotheradvertisingstructureserected,placed,orsituatedinviolationofanyCityordinance,regulation,orotherrequirement.RemovalshallbeattheexpenseofDeveloperanditssurety.DeveloperanditssuretyshallindemnifyandholdCityfreeandharmlessfromanyclaimordemandarisingoutoforincidenttosigns,advertisingstructures,ortheirremoval.16.INDEMNIFICATION.Developershalldefend,indemnify,andholdharmlessCity,itselectedof?cials,of?cers,employees,andagentsfromanyandallactualorallegedclaims,demands,causesofaction,liability,loss,damage,orinjury,topropertyorpersons,includingwrongfuldeath,whetherimposedbyacourtoflaworbyadministrativeactionofanyfederal,state,orlocalgovernmentalbodyoragency,arisingoutoforincidenttoanyacts,omissions,negligence,orwillfulmisconductofDeveloper,itspersonnel,employees,agents,orcontractorsinconnectionwithorarisingoutofconstructionormaintenanceofthePublicImprovements,orperformanceofthisAgreement.Thisindemni?cationincludes,withoutlimitation,thepaymentofallpenalties,?nes,judgments,awards,decrees,attorneys’fees,andrelatedcostsorexpenses,andthereimbursementofCity,itselectedof?cials,of?cers,employees,and/oragentsforalllegalexpensesandcostsincurredbyeachofthem.Thisindemni?cationexcludesonlysuchportionofanyclaim,demand,causeofaction,liability,loss,damage,penalty,?ne,orinjury,topropertyorpersons,includingwrongfuldeath,whichiscausedsolelyandexclusivelybythegrossnegligenceorwillfulmisconductofCityasdeterminedbyacourtoradministrativebodyofcompetentjurisdiction.Developer’sobligationtoindemnifyCityshallsurvivetheexpirationorterminationofthisAgreement,andshallnotberestrictedtoinsuranceproceeds,ifany,receivedbyCity,itselectedof?cials,of?cers,employees,oragents.

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AdditionalInsured;Separationofinsureds
rima?Insurance,‘WaiverofSubrogation

17.INSURANCE17.1Types,‘Amounts.Developershallprocureandmaintain,andshallrequireitscontractorstoprocureandmaintain,duringconstructionofanyPublicImprovementpursuanttothisAgreement,insuranceofthetypesandintheamountsdescribedbelow.IfanyoftheRequiredInsurancecontainsageneralaggregatelimit,suchinsuranceshallapplyseparatelytothisAgreementorbenolessthantwotimesthespeci?edoccurrencelimit.17.1.1GeneralLiability.DeveloperanditscontractorsshallprocureandmaintainoccurrenceVersiongeneralliabilityinsurance,orequivalentform,withacombinedsinglelimitofnotlessthan$3,000,000peroccurrenceforbodilyinjury,personalinjury,andpropertydamage.17.1.2BusinessAutomobileLiability.Developeranditscontractorsshallprocureandmaintainbusinessautomobileliabilityinsurance,orequivalentform,withacombinedsinglelimitofnotlessthan$1,000,000peroccurrence.Suchinsuranceshallincludecoveragefortheownership,operation,maintenance,use,loading,orunloadingofanyvehicleowned,leased,hired,orborrowedbytheinsuredorforwhichtheinsuredisresponsible.17.1.3Workers’Compensation.Developeranditscontractorsshallprocureandmaintainworkers’compensationinsurancewithlimitsasrequiredbytheLaborCodeoftheStateofCaliforniaandemployers’liabilityinsurancewithlimitsofnotlessthan$1,000,000peroccurrence,atalltimesduringwhichinsuredretainsemployees.17.1.4ProfessionalLiability.ForanyconsultantorotherprofessionalwhowillengineerordesignthePublicImprovements,liabilityinsuranceforerrorsandomissionswithlimitsnotlessthan$1,000,000peroccurrence,shallbeprocuredandmaintainedforaperiodof?ve(5)yearsfollowingcompletionofthePublicImprovements.Suchinsuranceshallbeendorsedtoincludecontractualliability.17.2Deductibles.Anydeductiblesorself-insuredretentionsmustbedeclaredtoandapprovedbyCity.AttheoptionofCity,either:(a)theinsurershallreduceoreliminatesuchdeductiblesorself-insuredretentionsasrespectsCity,itselectedof?cials,of?cers,employees,agents,andvolunteers;or(b)Developeranditscontractorsshallprovidea?nancialguaranteesatisfactorytoCityguaranteeingpaymentoflossesandrelatedinvestigationcosts,claims,andadministrativeanddefenseexpenses.17.3 .TheRequiredInsuranceshallnameCity,itselectedof?cials,of?cers,employees,agents,andV olunteersasadditionalinsuredswithrespecttoworkperformedbyoronbehalfofDeveloperoritscontractors,includingmaterials,parts,orequipmentfurnishedinconnectiontherewith.TheRequiredInsuranceshallcontainstandardseparationofinsuredprovisions,andshallcontainnospeciallimitationsonthescopeofitsprotectiontoCity,itselectedof?cials,of?cers,employees,agents,andV olunteers.17.4P .TheRequiredInsuranceshallbeprimarywithrespecttoanyinsuranceorself-insuranceprogramscoveringCity,itselectedof?cials,of?cers,employees,agents,andvolunteers.AllpoliciesfortheRequired RIV#4836-3917-8284V2 _ _

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Certi?cates;Veri?cation
Term;CancellationNotice
FailuretoRemedy;CigAction
InsuranceshallprovidethattheinsurancecompanywaivesallrightofrecoverybywayofsubrogationagainstCityinconnectionwithanydamageorharmcoveredbysuchpolicy.17.5 .DeveloperanditscontractorsshallfurnishCitywithoriginalcerti?catesofinsuranceandendorsementseffectingcoveragefortheRequiredInsurance.Thecerti?catesandendorsementsforeachinsurancepolicyshallbesignedbyapersonauthorizedbythatinsurertobindcoverageonitsbehalf.Allcerti?catesandendorsementsmustbereceivedandapprovedbyCitybeforeworkpursuanttothisAgreementcanbegin.Cityreservestherighttorequirecomplete,certi?edcopiesofallrequiredinsurancepolicies,atanytime.17.6 .DeveloperanditscontractorsshallmaintaintheRequiredInsuranceforthetermofthis/Agreementandshallreplaceanycerti?cate,policy,orendorsementwhichwillexpirepriortothatdate.AllpoliciesshallbeendorsedtoprovidethattheRequiredInsuranceshallnotbesuspended,voided,reduced,canceled,orallowedtoexpireexcepton30days’priorwrittennoticetoCity.17.7InsurerRating.UnlessapprovedinwritingbyCity,allRequiredInsuranceshallplacedwithinsurerslicensedtodobusinessintheStateofCaliforniaandwithacurrentA.M.BestratingofatleastA:VIII.18.DEFAULT;NOTICE;REMEDIES.18.1Notice.IfDeveloperneglects,refuses,orfailstoful?llortimelycompleteanyobligation,term,orconditionofthisAgreement,orifCitydeterminesthereisaviolationofanyfederal,state,orlocallaw,ordinance,regulation,code,standard,orotherrequirement,CitymayatanytimethereafterdeclareDevelopertobeindefaultorviolationofthisAgreementandmakewrittendemanduponDeveloperoritssurety,orboth,toimmediatelyremedythedefaultorviolation.Developershallcommencetheworkrequiredtoremedythedefaultorviolationwithinten(10)daysofthewrittendemandfromtheCity.Ifthedefaultorviolationconstitutesanimmediatethreattothepublichealth,safety,orwelfare,Citymayprovidethedemandverbally,andDevelopershallcommencetherequiredworkwithintwenty-four(24)hoursthereof.ImmediatelyuponCity’sissuanceofthedemandtoremedythedefault,DeveloperanditssuretyshallbeliabletoCityforallcostsofconstructionandinstallationofthePublicImprovementsandallotheradministrativecostsexpensesasprovidedforinSection9.0ofthisAgreement.18.2 .IftheworkrequiredtoremedythenoticeddefaultorviolationisnotdiligentlyprosecutedtoasubstantialcompletionacceptabletoCitywithinareasonabletimedesignatedbytheCity,Citymaycompleteallremainingwork,arrangeforthecompletionofallremainingwork,and/orconductsuchremedialactivityasinitssoleandabsolutediscretionitbelievesisrequiredtoremedythedefaultorviolation.Allsuchworkorremedialactivityshallbeatthesoleandabsolutecost,expense,andliabilityofDeveloperanditssurety,withoutthenecessityofgivinganyfurthernoticetoDeveloperorsurety.City’srighttotakesuchactionsshallinnowaybelimitedbythefactthatDeveloperoritssuretymayhaveconstructedany,ornoneoftherequiredoragreeduponPublicImprovementsatthetimeofCity’sdemandforperformance.IntheeventCityelectstocompleteorarrangeforcompletionoftheremainingworkandimprovements,Citymayrequire RIV#4836-3917-8284v2 _ -

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AuthorigytoEnterAgreement
Coogeration;FurtherA
Construction;References;Cagtions
allworkbyDeveloperoritssuretytoceaseinordertoallowadequatecoordinationbyCity.Notwithstandingtheforegoing,ifconditionsprecedentforreversiontoacreagecanbemetandiftheinterestsofCitywillnotbeprejudicedthereby,CitymayalsoprocessareversiontoacreageandthereafterrecoverfromDeveloperoritssuretythefullcostandexpenseincurred.18.3OtherRemedies.NoactionbyCitypursuanttoSection18.0g$1.ofthisAgreementshallprohibitCityfromexercisinganyotherrightorpursuinganyotherlegalorequitableremedyavailableunderthisAgreementoranyfederal,state,orlocallaw.Citymayexerciseitrightsandremediesindependentlyorcumulatively,andCitymaypursueinconsistentremedies.Citymayinstituteanactionfordamages,injunctiverelief,orspeci?cperformance.19.GENERALPROVISIONS.19.1 .EachPartywarrantsthattheindividualswhohavesignedthisAgreementhavethelegalpower,right,andauthoritymakethisAgreementandbindeachrespectiveParty.19.2_ c_ts.ThePartiesshallfullycooperatewithoneanother,andshalltakeanyadditionalactsorsignanyadditionaldocumentsasmaybenecessary,appropriate,orconvenienttoattainthepurposesofthisAgreement.19.3 .ItbeingagreedthePartiesortheiragentshaveparticipatedinthepreparationofthisAgreement,thelanguageofthisAgreementshallbeconstruedsimply,accordingtoitsfairmeaning,andnotstrictlyfororagainstanyParty.Anytermreferencingtime,days,orperiodforperformanceshallbedeemedcalendardaysandnotworkdays.AllreferencestoDeveloperincludeallpersonnel,employees,agents,andsubcontractorsofDeveloper,exceptasotherwisespeci?edinthisAgreement.AllreferencestoCityincludeitselectedof?cials,of?cers,employees,agents,andvolunteersexceptasotherwisespeci?edinthisAgreement.Thecaptionsofthevariousarticlesandparagraphsareforconvenienceandeaseofreferenceonly,anddonotde?ne,limit,augment,ordescribethescope,content,orintentofthisAgreement.19.4Notices.Allnotices,demands,invoices,andwrittencommunicationsshallbeinwritinganddeliveredtothefollowingaddressesorsuchotheraddressesasthePartiesmaydesignatebywrittennotice:CITY:CityofHemetAttn:AlexanderP.Meyerhoff,CityManager445E.FloridaAvenueHemet,CA92543 RIV#4836-3917-8284v2 _ -Page 16 of 60

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Amendment,"Modi?cation
AssignmentorTransferofAgreement
BindingEffect
NoThirdPargBene?
nvalidiggSeverabilig
DEVELOPER:McSweenyFarmsRecoveryAcquisition,LLCc/oRaintreeInvestmentCorporationAttn:MatthewVillalobos5796ArmadaDrive,Suite375Carlsbad,CA92008Dependinguponthemethodoftransmittal,noticeshallbedeemedreceivedasfollows:byfacsimile,asofthedateandtimesentprovidedtheoriginaliscontemporaneouslydepositedwithUnitedStatesPostalServiceanddeliveredbyregularmail;bymessenger,asofthedatedelivered;andbyU.S.Mail?rstclasspostageprepaid,asof72hoursafterdepositintheU.S.Mail.19.5 . Nosupplement,modi?cation,oramendmentofthisAgreementshallbebindingunlessexecutedinwritingandsignedbybothParties.19.6Waiver.City’sfailuretoinsistuponstrictcompliancewithanyprovisionofthisAgreementortoexerciseanyrightorprivilegeprovidedherein,orCity’swaiverofanybreachofthisAgreement,shallnotrelieveDeveloperofanyofitsobligationsunderthisAgreement,whetherofthesameorsimilartype.TheforegoingshallbetruewhetherCity’sactionsareintentionalorunintentional.Developeragreestowaive,asadefense,counterclaimorsetoff,anyandalldefects,irregularitiesorde?cienciesintheauthorization,executionorperformanceofthePublicImprovementsorthisAgreement,aswellasthelaws,rules,regulations,ordinancesorresolutionsofCitywithregardstotheauthorization,executionorperformanceofthePublicImprovementsorthisAgreement.19.7 .Developershallnotassign,hypothecate,ortransfer,eitherdirectlyorbyoperationoflaw,thisAgreementoranyinteresthereinwithoutpriorwrittenconsentofCity.Anyattempttodososhallbenullandvoid,andanyassignee,hypothecatee,ortransfereeshallacquirenorightorinterestbyreasonofsuchattemptedassignment,hypothecation,ortransfer.Unlessspeci?callystatedtothecontraryinCity’swrittenconsent,anyassignment,hypothecation,ortransfershallnotreleaseordischargeDeveloperfromanydutyorresponsibilityunderthisAgreement.19.8 .Eachandallofthecovenantsandconditionsshallbebindingonandshallinuretothebene?toftheParties,andtheirsuccessors,heirs,personalrepresentatives,orassigns.ThissectionshallnotbeconstruedasanauthorizationforanyPartytoassignanyrightorobligation.19.9_ cilaries.Therearenointendedthirdpartybene?ciariesofanyrightorobligationassumedbytheParties.19.10I .IfanyportionofthisAgreementisdeclaredinvalid,illegal,orotherwiseunenforceablebyacourtofcompetentjurisdiction,theremainingprovisionsshallcontinueinfullforceandeffect.

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Attorneys’FeesandCosts
RelationshigBetweenTheParties
EffectiveDateofAgreement.cithasbeenformallyapprovedby
Alexandr .Meyoff

19.11ConsenttoJurisdictionandVenue.ThisAgreementshallbeconstruedinaccordancewithandgovernedbythelawsoftheStateofCalifornia.AnylegalactionorproceedingbroughttointerpretorenforcethisAgreement,orwhichinanywayarisesoutoftheParties’activitiesundertakenpursuanttothisAgreement,shallbe?ledandprosecutedintheappropriateCaliforniaStateCourtintheCountyofRiverside,California.EachPartywaivesthebene?tofanyprovisionofstateorfederallawprovidingforachangeofvenuetoanyothercourtorjurisdictionincluding,withoutlimitation,achangeofvenuebasedonthefactthatagovernmentalentityisapartytotheactionorproceeding,orthatafederalrightorquestionisinvolvedorallegedtobeinvolvedintheactionorproceeding.Withoutlimitingthegeneralityoftheforegoingwaiver,DeveloperexpresslywaivesanyrighttohavevenuetransferredpursuanttoCaliforniaCodeofCivilProcedureSection394.19.12 .Ifanyarbitration,lawsuit,orotherlegalactionorproceedingisbroughtbyonePartyagainsttheotherPartyinconnectionwiththisAgreementortheProperty,theprevailingparty,whetherby?naljudgmentorarbitrationaward,shallbeentitledtoandrecoverfromtheotherpartyallLitigationExpenses.Anyjudgment,order,orawardenteredinsuchlegalactionorproceedingshallcontainaspeci?cprovisionprovidingfortherecoveryofLitigationExpenses.19.13 .ThePartiesherebymutuallyagreethatneitherthisAgreement,anymaprelatedtoTractNo.33824-1,noranyotherrelatedentitlement,permit,orapprovalissuedbyCityforthePropertyshalloperatetocreatetherelationshipofpartnership,jointVenture,oragencybetweenCityandDeveloper.Developer’scontractorsandsubcontractorsareexclusivelyandsolelyunderthecontrolanddominionofDeveloper.NothinghereinshallbedeemedtomakeDeveloperoritscontractorsanagentorcontractorofCity.19.14Counterparts.ThisAgreementmaybeexecutedincounterpartoriginals,whichtakentogether,shallconstituteoneandthesameinstrument.19.15 ThisAgreementshallnotbecomeeffectiveuntilthedat theCityandexecutedbytheappropriateauthoritiesofCityandDeveloper.INWITNESSWHEREOF,thepartiesheretohaveexecutedthisAgreementonthedateandyear?rst-abovewritten. CITYOFHEMET By:PCityManager
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EricVa1
ENTITY .

MARSHAROJAS.StateofNewYorkNctaryPublicNo.MROEOSABB1Quali?edInSu?folkCounty CummissinnExpiresOctoher1.2017
I uthcnz
ATTEST:

SarahMcComasCityClerk

APPROVEDASTOFORM
By:S.CityAttorney
McSweenyFarmsRecoveryAcquisition,LLC
By: By:J Shumaker arrIts:AuthorizedSignatoryts:A Signatory NOTE:DEVELOPER’SSIGNATURESSHALLBEDULYNOTARIZED,ANDAPPROPRIATEATTESTATIONSSHALLBEINCLUDEDASMAYBEREQUIREDBYTHEBYLAWS,ARTICLESOFINCORPORATION,OROTHERRULESORREGULATIONSAPPLICABLETODEVELOPER’SBUSINESS RIV#4836-3917-8284v2 _ _Page 19 of 60

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EXHIBIT“A”LEGALDESCRIPTIONOFPROPERTYTRACTNO.33824-1
RIV#4836-3917-8284V2 SUBDIVISIONIMPROVEMENTAGREEMENT

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EXHIBIT“B”LISTOFPUBLICIMPROVEMENTSTRACTNO.33824-1
RIV#4836-3917-8284v2 SUBDIVISIONIMPROVEMENTAGREEMENT

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EXHIBIT“C”SURETYBONDSANDOTHERSECURITYTRACTNO.33824-1AsevidenceofunderstandingtheprovisionscontainedinthisAgreement,andoftheDeveloper’sintenttocomplywithsame,theDeveloperhassubmittedthebelowdescribedsecurityintheamountsrequiredbythisAgreement,andhasaf?xedtheappropriatesignaturesthereto:PERFORMANCEBONDPRINCIPALAMOUNT:$1,253,500Surety:Lexon/IronshoreAttomey—in-fact:Address:IronshoreSpecialtyInsuranceCo.P.O.Box3407NewYork,NY .1008 LABOR&MATERIALBONDPRINCIPALAMOUNT:$1,253,500Surety:Lexon/IronshoreAttorney-in-fact:Address:IronshoreSpecialtyInsuranceCo.P.O.Box3407NewYork,NY ,1008 CASHMONUMENTSECURITY:$19,250AmountdepositedperCashReceiptNo. Date:
1 SUBDIVISIONIMPROVEMENTAGREEMENTRIV#4836-3917-8284V2Page 22 of 60

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RIV #4833-2180-7817 v1 - 1 -
CITY COUNCIL RESOLUTION NO. 2022-XXX

CITY OF HEMET
Hemet, California
RESOLUTION NO. 2022-XXX

A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF

HEMET, CALIFORNIA,

APPROVING REPLACEMENT

SUBDIVISION IMPROVEMENT

AGREEMENT, ACCEPTING

PUBLIC IMPROVEMENTS,

REDUCTION OF IMPROVEMENT
SECURITY TO 25% OF THE

ORIGINAL VALUE FOR TRACT
MAP NO. 33824-1, LOCATED IN

MCSWEENY FARMS, SOUTH OF

MCSWEENY PARKWAY AND

EAST OF SOUTH VILLAGE

LOOP (RICHMOND AMERICAN
HOMES., A CALIFORNIA

CORPORATION), AND RELEASE

OF EXISTING SUBDIVISION

IMPROVEMENT AGREEMENT

AND IMPROVEMENT SECURITY

PROVIVDED BY MCSWEENY
RECOVERY ACQUISITION, LLC.

WHEREAS, Tract Map 33824-1, submitted for approval
by McSweeny Recovery Acquisition, LLC., a Delaware
Limited Liability Company (“Developer”), and approved by the City of Hemet on September 28, 2016; and
WHEREAS, Richmond American Homes., a California
Corporation (“Builder”) has acquired the land known as Tract Map 33824-1 from Developer (a copy of which is attached as Exhibit “B”); and

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WHEREAS, the Developer and Builder have completed
all the public improvements to the satisfaction of the City Engineer as required by Subdivision Improvement Agreement known as Riverside County Recorder’s Document No. 2016- 0436390 (“Existing Agreement”) and are requesting a
reduction of Improvement Security to 25% of the original value for Tract Map No. 33824-1; and
WHEREAS, to meet and continue the requirements
established as a prerequisite to final approval of Tract Map No. 33824-1, Builder agreed to enter into a Subdivision Improvement Agreement superseding and replacing the
Existing Agreement, together with good and sufficient
security, in conformance with the City Attorney’s approved format, for approval and execution by the City; and
WHEREAS, upon recordation of the replacement
Subdivision Improvement Agreement and Improvement
Security by Builder, the previously recorded Existing
Agreement shall be released by the Interim City Manager or designee; and
WHEREAS, the Subdivision Improvement Agreement
and good and sufficient security have been accepted by the City; and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY
COUNCIL OF THE CITY OF HEMET AS FOLLOWS:

SECTION 1. RECITALS
The foregoing recitals are true and correct.

SECTION 2. APPROVAL OF REPLACEMENT

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SUBDIVISION IMPROVEMENT AGREEMENT
A. The Subdivision Improvement Agreement attached
hereto as Exhibit “A” is approved and the Interim
City Manager is authorized to execute it and the
City Clerk is authorized to attest thereto.

B. Public Improvements associated with Tract Map No.
33824-1 that are complete are now to be accepted
by the City
C. Said improvement security shall be reduced to 25% of the original value and is accepted as good and
sufficient, subject to approval as to form and
content thereof by the City Attorney,
D. Upon recordation of the Replacement Subdivision
Improvement Agreement, the Interim City Manager,
or his designee, is authorized to release the existing
Subdivision Improvement Agreement and
Improvement Security.

E. Pursuant to Government Code Section 66458, Tract
Map No. 33824-1 was previously approved, and
City accepted the real property described therein.

SECTION 3. CERTIFICATION
This Resolution shall take effect immediately upon its
adoption by the City Council. The City Clerk shall attest to and certify the vote adopting this Resolution.

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PASSED, APPROVED AND ADOPTED this 13th day
of December 2022.

Malcolm Lilienthal, Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________
John Paul Maier, City Clerk Steven Graham, City Attorney

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State of California )
County of Riverside )
City of Hemet )
I, John Paul Maier, City Clerk of the City of Hemet, do hereby certify that the foregoing resolution was adopted by the Hemet City Council on the 13th day of December, 2022 and was passed by the following vote:

AYES: Council Members:

NOES: Council Member:

ABSTAIN: Council Member:

ABSENT: Council Member:
_________________
________________
John Paul Maier, City
Clerk

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RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
(Document exempt from recording fees
pursuant to Cal. Gov. Code § 27383)

CITY OF HEMET
Attn: City Manager
445 East Florida Avenue
Hemet, California 92543
THIS SPACE FOR RECORDER’S USE ONLY

SUBDIVISION IMPROVEMENT AGREEMENT
FINAL TRACT MAP 33824-1
By and Between

THE CITY OF HEMET,
a municipal corporation
and
Richmond American Homes, a California Corporation
DATED December 13, 2022

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SUBDIVISION IMPROVEMENT AGREEMENT
FINAL TRACT MAP 33824-1
This Subdivision Improvement Agreement (“Agreement”) is entered into as of this 13th day of December, 2022 by and between the City of Hemet, a municipal corporation (“City”) and Richmond American Homes, a California corporation (“Builder”). City and Builder are sometimes hereinafter individually referred to as “Party” and hereinafter collectively referred to as the “Parties.”

RECITALS
A. City of Hemet has previously approved Tract Map No. 33824-1 on September 28, 2016, along with proper and sufficient security.

B. McSweeny Recovery Acquisition, LLC, a Delaware Limited Liability Company, (“Developer”) has not completed all of the work or made all of the Public Improvements required by the Subdivision Map Act (Government Code sections 66410 et seq.), (“Map Act”) the City Ordinances, the conditions of approval for Tract No. 33824-1, or other ordinances, resolutions, or policies of City requiring construction of improvements in conjunction with the subdivision of land.

C. Builder has acquired the land known as Tract Map 33824-1 from Builder.

D. The City desires to enter into this Agreement amending and superseding the Subdivision Improvement Agreement by and between the City of Hemet, a municipal corporation and Builder, also known as Riverside County Recorder Office Document No. 2016- 0436390 (“Original Subdivision Improvement Agreement”).

E. Builder has not completed all of the work or made all of the Public Improvements required by the Subdivision Map Act (Government Code sections 66410 et seq.), (“Map Act”) the City Ordinances, the conditions of approval for Tract No. 33824-1, or other ordinances, resolutions, or policies of City requiring construction of improvements in conjunction with the subdivision of land.

F. Pursuant to City Ordinances and the applicable provisions of the Map Act, Builder and City enter into this Agreement for the timely construction and completion of the Public Improvements and the furnishing of the security therefor, acceptable to the City Engineer and City Attorney, for Tract Map No. 33824-1.

G. City has authority to enter into this Subdivision Improvement Agreement pursuant to Government Code Sections 66499 – 66499.10.

H. Pursuant to Government Code Section 66499, Builder’s execution of this Agreement and the provision of the security are made in consideration of City’s approval of the final map for Tract Map No. 33824-1.

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DEFINED TERMS
“Builder” shall mean Richmond American Homes, a California corporation. The term “Builder” shall also include all assignees, to the extent permitted under this Agreement, of the rights and obligations of Builder under this Agreement, and any successor-in-interest to Builder having a legal and/or equitable interest in the Property.
“Developer” shall mean McSweeny Recovery Acquisition, LLC, a Delaware Limited Liability Company. The term “Developer” shall also include all assignees, to the extent permitted under this Agreement, of the rights and obligations of Developer under this Agreement, and any successor-in-interest to Developer having a legal and/or equitable interest in the Property. “Estimated Costs” shall mean the City Engineer’s approximation of the actual cost to construct the Public Improvements, including the replacement cost for all landscaping. “Litigation Expenses” shall mean all costs and expenses, to the extent reasonable in amount, actually and necessarily incurred by a party in good faith in the prosecution of an action or proceeding, including, but not limited to, court costs, filing, recording, and service fees, copying costs, exhibit production costs, special media rental costs, attorneys’ fees, fees for investigators, witness fees (both lay and expert), travel expenses, deposition and transcript costs and any other cost or expense, the award of which a court of competent jurisdiction may determine to be just and reasonable.
“Map Act” shall mean the Subdivision Map Act, Government Code Sections 66410 et seq. “Property” shall mean the all of the real property contained within the boundaries of Tract Map No. 33824-1 located in the City of Hemet, California, as is more particularly described in the legal description and parcel diagram attached hereto and incorporated hereby by reference at Attachment “A”.
“Public Improvements” shall include, but not be limited to, recertification of rough graded pads, finish grade, repair existing streets, curbs and gutters, sidewalks, water systems, sanitary sewers, utilities, and drainage facilities (if any), landscaping, street lights and all other facilities required to be constructed and dedicated to the City or other public entity as conditions of approval of Tentative Tract Map No. 33824-1 and as shown in detail on the plans, and specifications which have been approved by the City and incorporated into Tract Map No. 33824-1. The Parties agree that the Public Improvements to be completed by Builder are more specifically described in the diagram or plan attached hereto and incorporated herein by reference as Attachment “B.

Notwithstanding, Attachment “B”, Builder shall remain obligated to construct and complete all of the Public Improvements required as conditions of approval for Tract Map No. 33824-1, a full copy of which is on file with and may be obtained from the Engineering Department of the City of Hemet.
“Required Insurance” shall mean the insurance required to be maintained by Builder under Section 17.
“Security” shall mean surety bonds in the amounts and under the terms of Section 12 or other security approved by City Engineer or City Attorney.

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“Tract No 33824-1.” shall mean the final map prepared and approved by the City for tentative tract map no. 33824-1.
“Warranty” shall mean the one year period following completion of the Public Improvements by Builder and the acceptance of the Public Improvements by the City in which Builder warrants and guarantees all Public Improvements.

OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by the parties and contained here and other consideration, the value and adequacy of which are hereby acknowledged, the parties agree as follows:

1.SUPERSESSION. This Agreement supersedes and replaces the Original Subdivision Improvement Agreement in its entirety. Upon execution of this Agreement by the Builder, the Original Subdivision Improvement Agreement shall be of no further force and effect unless reinstated.

2.EFFECTIVENESS. This Agreement shall not be effective unless and until all four (4) of the following conditions are satisfied in the order provided:

2.1Security. Builder provides City with the Security of the type and in the amounts required by this Agreement;

2.2Final Map and Agreement Approval. The City Council of the City of Hemet (“City Council”) previously approved the final map for Tract Map No. 33824-1 and now approves this Agreement;

2.3Record Agreement. Builder and City execute the Agreement and City records this Agreement in the Recorder’s Office of the County of Riverside; and If the above described conditions are not satisfied in the order, manner and within the time provided under this Agreement, this Agreement shall automatically terminate without need of further action by either City or Builder.

3.PUBLIC IMPROVEMENTS. Builder shall construct or have constructed at its own cost, expense, and liability the Public Improvements, as defined herein, within the time and in the manner required under this Agreement. Construction of the Public Improvements shall include any transitions and/or other incidental work deemed necessary for drainage or public safety. The Builder shall be responsible for the replacement, relocation, or removal of any component of any irrigation water or sewer system in conflict with the construction or installation of the Public Improvements. Such replacement, relocation, or removal shall be performed to the complete satisfaction of the City Engineer and the owner of such water or sewer system. Builder further promises and agrees to provide all equipment, tools, materials, labor, tests, design work, and engineering services necessary or required by City to fully and adequately complete the Public Improvements.

3.1Prior Partial Construction of Public Improvements. Where construction of any Public Improvements has been partially completed prior to this Agreement,

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Builder agrees to complete such Public Improvements or assure their completion in accordance with this Agreement.

3.2Permits; Notices; Utility Statements. Prior to commencing any work, Builder shall, at its sole cost, expense, and liability, obtain all necessary permits and approvals and give all necessary and incidental notices required for the lawful construction of the Public Improvements and performance of Builder’s obligations under this Agreement. Builder shall conduct the work in full compliance with the regulations, rules, and other requirements contained in any permit or approval issued to Builder. Prior to commencing any work, Builder shall file a written statement with the City Clerk and the City Engineer, signed by Builder and each utility which will provide utility service to the Property, attesting that Builder has made all deposits legally required by the utility for the extension and provision of utility service to the Property.

3.3Pre-approval of Plans and Specifications. Builder is prohibited from commencing work on any Public Improvement until all plans and specifications for such Public Improvement have been submitted to and approved by the City Engineer, or his or her designee.

Approval by the City Engineer shall not relieve Builder from ensuring that all Public Improvements conform with all other requirements and standards set forth in this Agreement.

3.4Quality of Work; Compliance With Laws and Codes. The construction plans and specifications for the Public Improvements shall be prepared in accordance with all applicable federal, state and local laws, ordinances, regulations, codes, standards, and other requirements. The Public Improvements shall be completed in accordance with all approved maps, plans, specifications, standard drawings, and special amendments thereto on file with City, as well as all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements applicable at the time work is actually commenced.

3.5Standard of Performance. Builder and its contractors, if any, shall perform all work required to construct the Public Improvements under this Agreement in a skillful and workmanlike manner, and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Builder represents and maintains that it or its contractors shall be skilled in the professional calling necessary to perform the work. Builder warrants that all of its employees and contractors shall have sufficient skill and experience to perform the work assigned to them, and that they shall have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the work, and that such licenses, permits, qualifications and approvals shall be maintained throughout the term of this Agreement.

3.6Alterations to Improvements. All work shall be done and improvements made and completed as shown on approved plans and specifications, and any subsequent alterations thereto. If during the course of construction and installation of the Public Improvements it is determined that the public interest requires alterations in the Public Improvements, Builder shall undertake such design and construction changes as may be reasonably required by City. Any and all alterations in the plans and specifications and the Public Improvements to be completed may be accomplished without giving prior notice thereof to Builder’s surety for this Agreement.

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4.MAINTENANCE OF PUBLIC IMPROVEMENTS AND LANDSCAPING.

City shall not be responsible or liable for the maintenance or care of the Public Improvements until City formally approves and accepts them in accordance with its policies and procedures.

City shall exercise no control over the Public Improvements until approved and accepted. Any use by any person of the Public Improvements, or any portion thereof, shall be at the sole and exclusive risk of the Builder at all times prior to City’s acceptance of the Public Improvements.

Builder shall maintain all the Public Improvements in a state of good repair until they are completed by Builder and approved and accepted by City, and until the security for the performance of this Agreement is released. Maintenance shall include, but shall not be limited to, repair of pavement, curbs, gutters, sidewalks, signals, parkways, water mains, and sewers; maintaining all landscaping in a vigorous and thriving condition reasonably acceptable to City; removal of debris from sewers and storm drains; and sweeping, repairing, and maintaining in good and safe condition all streets and street improvements. It shall be Builder’s responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City. If Builder fails to properly prosecute its maintenance obligation under this section, City may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Builder and its surety under this Agreement.

City shall not be responsible or liable for any damages or injury of any nature in any way related to or caused by the Public Improvements or their condition prior to acceptance.

5.CONSTRUCTION SCHEDULE. Unless extended pursuant to this Section 4.1 of this Agreement, Builder shall fully and adequately complete or have completed the Public Improvements within three (3) years (36 months) following approval of the final map for Tract No. 33824-1.

5.1Extensions. City may, in its sole and absolute discretion, provide Builder with additional time within which to complete the Public Improvements. It is understood that by providing the Security required under Section 12.0 et seq. of this Agreement, Builder and its surety consent in advance to any extension of time as may be given by City to Builder, and waives any and all right to notice of such extension(s). Builder’s acceptance of an extension of time granted by City shall constitute a waiver by Builder and its surety of all defense of laches, estoppel, statutes of limitations, and other limitations of action in any action or proceeding filed by City following the date on which the Public Improvements were to have been completed hereunder. In addition, as consideration for granting such extension to Builder, City reserves the right to review the provisions of this Agreement, including, but not limited to, the construction standards, the cost estimates established by City, and the sufficiency of the improvement security provided by Builder, and to require adjustments thereto when warranted according to City’s reasonable discretion.

5.2Accrual of Limitations Period. Any limitations period provided by law related to breach of this Agreement or the terms thereof shall not accrue until Builder has provided the City Engineer with written notice of Builder’s intent to abandon or otherwise not complete required or agreed upon Public Improvements.

5.3 Builder Obligations Do Not Terminate. Notwithstanding the construction schedule and option for extensions provided in Sections 4.1 and 4.2, Builder’s failure to complete the Public Improvements or to otherwise satisfy all conditions of approval, or City’s non-extension of the time referenced in those sections shall not terminate or otherwise

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relieve the Builder of the obligation to complete the Public Improvements and conditions of approval and such obligations shall survive the term of this Agreement and shall survive until satisfied in full unless waived or modified by formal action of the City Council.

6.GRADING. Builder agrees that any and all grading done or to be done in conjunction with construction of the Public Improvements or development of Tract Map No. 33824-1 shall conform to all federal, state, and local laws, ordinances, regulations, and other requirements, including City’s grading regulations. All grading, landscaping, and construction activities shall be performed in a manner to control erosion and prevent flooding problems. The City Engineer shall have the authority to require erosion plans to prescribe reasonable controls on the method, manner, and time of grading, landscaping, and construction activities to prevent nuisances to surrounding properties. Plans shall include without limitation temporary drainage and erosion control requirements, dust control procedures, restrictions on truck and other construction traffic routes, noise abatement procedures, storage of materials and equipment, removal of garbage, trash, and refuse, securing the job site to prevent injury, and similar matters.

In order to prevent damage to the Public Improvements by improper drainage or other hazards, the grading shall be completed in accordance with the time schedule for completion of the Public Improvements established by this Agreement, and prior to City’s approval and acceptance of the Public Improvements and release of the Security as set forth in Section 12.0 et seq. of this Agreement.

7.UTILITIES. Builder shall provide utility services, including water, sewer, power, gas, and telephone service to serve each parcel, lot, or unit of land within Tract Map No. 33824-1 in accordance with all applicable federal, state, and local laws, rules, and regulations, including, but not limited to, the regulations, schedules and fees of the utilities or agencies providing such services. Except for commercial or industrial properties, Builder shall also provide cable television facilities to serve each parcel, lot, or unit of land in accordance with all applicable federal, state, and local laws, rules, and regulations, including, but not limited to, the requirements of the cable company possessing a valid franchise with City to provide such service within City’s jurisdictional limits. All utilities shall be installed underground.

8.FEES AND CHARGES. Builder shall, at its sole cost, expense, and liability, pay all fees, charges, and taxes arising out of construction of the Public Improvements, including, but not limited to, all plan check, design review, engineering, inspection, and other service fees, and any impact or connection fees established by City ordinance, resolution, regulation, or policy, or as established by City relative to Tract Map No. 33824-1, or as required by other governmental agencies having jurisdiction over Tract Map No. 33824-1.

9.CITY INSPECTION OF PUBLIC IMPROVEMENTS. Builder shall, at its sole cost, expense, and liability, and at all times during construction of the Public Improvements, maintain reasonable and safe facilities and provide safe access for inspection by City of the Public Improvements and areas where construction of the Public Improvements is occurring or will occur. If the City inspector requests it, the Builder at any time before acceptance of the Public Improvements shall remove or uncover such portions of the finished work as may be directed which have not previously been inspected. After examination, the Builder shall restore said portions of the work to the standards required hereunder. Inspection or supervision by the City shall not be considered as direct control of the individual workmen on the job site. City’s inspector shall have the authority to stop any and all work not in accordance with the

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requirements contained or referenced in this Agreement. The inspection of the work by City shall not relieve Builder or the contractor of any obligations to fulfill this Agreement as herein provided, and unsuitable materials or work may be rejected notwithstanding that such materials or work may have been previously overlooked or accepted.

10.ADMINISTRATIVE COSTS. If Builder fails to construct and install all or any part of the Public Improvements within the time required by this Agreement, or if Builder fails to comply with any other obligation contained herein, Builder and its surety shall be jointly and severally liable to City for all administrative expenses, fees, and costs, including reasonable attorney’s fees and costs, incurred in obtaining compliance with this Agreement or in processing any legal action or for any other remedies permitted by law.

11.ACCEPTANCE OF IMPROVEMENTS; AS-BUILT OR RECORD
DRAWINGS. The City Council may, in its sole and absolute discretion, accept fully completed portions of the Public Improvements prior to such time as all of the Public Improvements are complete, which shall not release or modify Builder’s obligation to complete the remainder of the Public Improvements within the time required by this Agreement.

11.1Builder’s Notice of Completion. Upon the total or partial acceptance of the Public Improvements by City, Builder shall file with the Recorder’s Office of the County of Riverside a notice of completion for the accepted Public Improvements in accordance with California Civil Code section 3093, at which time the accepted Public Improvements shall become the sole and exclusive property of City without payment therefor.

11.2City Acceptance of Public Improvements. If Tract Map No. 33824-1 was approved and recorded as a single phase map, City shall not accept any one or more of the improvements until all of the Public Improvements are completed by Builder and approved by City. Issuance by City of occupancy permits for any buildings or structures located on the Property shall not be construed in any manner to constitute City’s acceptance or approval of any Public Improvements.

11.3Builder’s Obligation to Provide As-Built or Record Drawings.

Notwithstanding the foregoing, City may not accept any Public Improvements unless and until Builder provides one (1) set of “as-built” or record drawings or plans to the City Engineer for all such Public Improvements. The drawings shall be certified and shall reflect the condition of the Public Improvements as constructed, with all changes incorporated therein.

12.WARRANTY AND GUARANTEE. Builder hereby warrants and guarantees all Public Improvements against any defective work or labor done, or defective materials furnished in the performance of this Agreement, including the maintenance of all landscaping within the Property in a vigorous and thriving condition reasonably acceptable to City, for a period of one (1) year following completion of the work and acceptance by City. During the Warranty, Builder shall repair, replace, or reconstruct any defective or otherwise unsatisfactory portion of the Public Improvements, in accordance with the current ordinances, resolutions, regulations, codes, standards, or other requirements of City, and to the approval of the City Engineer. All repairs, replacements, or reconstruction during the Warranty shall be at the sole cost, expense, and liability of Builder and its surety. As to any Public Improvements which have been repaired, replaced, or reconstructed during the Warranty, Builder and its surety hereby agree to extend the

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Warranty for an additional one (1) year period following City’s acceptance of the repaired, replaced, or reconstructed Public Improvements. Nothing herein shall relieve Builder from any other liability it may have under federal, state, or local law to repair, replace, or reconstruct any Public Improvement following expiration of the Warranty or any extension thereof. Builder’s warranty obligation under this section shall survive the expiration or termination of this Agreement.

13.SECURITY; SURETY BONDS. Prior to City’s approval and execution of this Agreement, Builder shall provide City with surety bonds in the amounts and under the terms set forth below. The amount of the Security shall be based on the City Engineer’s Estimated Costs.

If City determines at any time prior to Builder’s completion of the Public Improvements under Section 4 [Construction Schedule], in its sole and absolute discretion, that the Estimated Costs have changed, Builder shall adjust the Security in the amount requested by City. Builder’s compliance with this provision (Section 12.0 et seq.) shall in no way limit or modify Builder’s indemnification obligation provided in Section 16.0 of this Agreement.

13.1Performance Bond. To guarantee the faithful performance of the Public Improvements and all the provisions of this Agreement, to protect City if Builder is in default as set forth in Section 18.0 et seq. of this Agreement, and to secure Builder’s one-year guarantee and warranty of the Public Improvements, including the maintenance of all landscaping in a vigorous and thriving condition, Builder shall provide City a faithful performance bond in the amount of Three Hundred Thirteen Thousand and Three Hundred Seventy Five Dollars, ($313,375), which sum shall be not less than one hundred percent (100%) of the Estimated Costs.

13.2Partial Release. The City Council may, in its sole and absolute discretion and upon recommendation of the City Engineer, partially release a portion or portions of the Security provided under this section as the Public Improvements are accepted by City, provided that Builder is not in default on any provision of this Agreement or condition of approval for Tract Map No. 33824-1, and the total remaining Security is not less than twenty-five percent (25%) of the Estimated Costs. All Security provided under this section shall be released at the end of the Warranty period, or any extension thereof as provided in Section 11.0 of this Agreement, provided that Builder is not in default on any provision of this Agreement or condition of approval for Tract Map No. 33824-1.

13.3Labor & Material Bond. To secure payment to the contractors, subcontractors, laborers, material men, and other persons furnishing labor, materials, or equipment for performance of the Public Improvements and this Agreement, Builder shall provide City a labor and materials bond in the amount of, which sum shall not be less than one hundred percent (100%) of the Estimated Costs. The Security provided under this section may be released by written authorization of the City Engineer after six (6) months from the date City accepts the final Public Improvements. The amount of such Security shall be reduced by the total of all stop notice or mechanic’s lien claims of which City is aware, plus an amount equal to twenty percent (20%) of such claims for reimbursement of City’s anticipated administrative and legal expenses arising out of such claims.

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13.4Additional Requirements. The surety for any surety bonds provided as Security shall have a current A.M. Best’s rating of no less than A:VIII, be a bank or insurance company licensed to transact surety business in California, and shall be satisfactory to City. As part of the obligation secured by the Security and in addition to the face amount of the Security, the Builder or its surety shall secure the costs and reasonable expenses and fees, including reasonable attorney’s fees and costs, incurred by City in enforcing the obligations of this Agreement. The Builder and its surety stipulate and agree that no change, extension of time, alteration, or addition to the terms of this Agreement, the Public Improvements, or the plans and specifications for the Public Improvements shall in any way affect its obligation on the Security.

13.5Form of Security. The evidence of the Security shall be provided on the forms set forth in Attachment “C”, unless other forms are deemed acceptable by the City Engineer and the City Attorney, and when such forms are completed to the satisfaction of City, the forms and evidence of the Security shall be attached hereto as Attachment “C” and incorporated herein by this reference.

13.6Builder’s Liability. While no action of Builder shall be required in order for City to realize on its security under any Security instrument, Builder agrees to cooperate with City to facilitate City’s realization under any Security instrument, and to take no action to prevent City from such realization under any Security instrument. Notwithstanding the giving of any Security instrument or the subsequent expiration of any Security instrument or any failure by any surety or financial institution to perform its obligations with respect thereto, Builder shall be personally liable for performance under this Agreement and for payment of the cost of the labor and materials for the improvements required to be constructed or installed hereby and shall, within ten (10) days after written demand therefor, deliver to City such substitute Security as City shall require satisfying the requirements in this Section 12.

14.MONUMENT SECURITY. Prior to City’s execution of this Agreement, to guarantee payment to the engineer or surveyor for the setting of all subdivision boundaries, lot corners, and street centerline monuments for Tract No. 33824-1 in compliance with the applicable provisions of City’s Municipal and/or Development Code (“Subdivision Monuments”), Builder shall deposit cash with City in the amount of Nineteen Thousand Two- Hundred Fifty Dollars ($19,250), which sum shall not be less than one hundred percent (100%) of the costs of setting the Subdivision Monuments as determined by the City Engineer. Said cash deposit may be released by written authorization of the City Engineer after all required Subdivision Monuments are accepted by the City Engineer, City has received written acknowledgment of payment in full from the engineer or surveyor who set the Subdivision Monuments, and provided Builder is not in default of any provision of this Agreement or condition of approval for Tract Map No. 33824-1.

15.LIEN. To secure the timely performance of Builder’s obligations under this Agreement, including those obligations for which security has been provided pursuant to Sections 12.0 et seq. and 13.0 of this Agreement, Builder hereby creates in favor of City a lien against all portions of the Property not dedicated to City or some other governmental agency for a public purpose. As to Builder’s default on those obligations for which security has been provided pursuant to Sections 12.0 et seq. and 13.0 of this Agreement, City shall first attempt to collect against such security prior to exercising its rights as a contract lienholder under this section.

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16.SIGNS AND ADVERTISING. Builder understands and agrees to City’s ordinances, regulations, and requirements governing signs and advertising structures. Builder hereby agrees with and consents to the summary removal by City, without notice to Builder, of all signs or other advertising structures erected, placed, or situated in violation of any City ordinance, regulation, or other requirement. Removal shall be at the expense of Builder and its surety. Builder and its surety shall indemnify and hold City free and harmless from any claim or demand arising out of or incident to signs, advertising structures, or their removal.

17.INDEMNIFICATION. Builder shall defend, indemnify, and hold harmless City, its elected officials, officers, employees, and agents from any and all actual or alleged claims, demands, causes of action, liability, loss, damage, or injury, to property or persons, including wrongful death, whether imposed by a court of law or by administrative action of any federal, state, or local governmental body or agency, arising out of or incident to any acts, omissions, negligence, or willful misconduct of Builder, its personnel, employees, agents, or contractors in connection with or arising out of construction or maintenance of the Public Improvements, or performance of this Agreement. This indemnification includes, without limitation, the payment of all penalties, fines, judgments, awards, decrees, attorneys’ fees, and related costs or expenses, and the reimbursement of City, its elected officials, officers, employees, and/or agents for all legal expenses and costs incurred by each of them. This indemnification excludes only such portion of any claim, demand, cause of action, liability, loss, damage, penalty, fine, or injury, to property or persons, including wrongful death, which is caused solely and exclusively by the gross negligence or willful misconduct of City as determined by a court or administrative body of competent jurisdiction. Builder’s obligation to indemnify City shall survive the expiration or termination of this Agreement, and shall not be restricted to insurance proceeds, if any, received by City, its elected officials, officers, employees, or agents.

18.INSURANCE.

18.1Types; Amounts. Builder shall procure and maintain, and shall require its contractors to procure and maintain, during construction of any Public Improvement pursuant to this Agreement, insurance of the types and in the amounts described below. If any of the Required Insurance contains a general aggregate limit, such insurance shall apply separately to this Agreement or be no less than two times the specified occurrence limit.

18.1.1General Liability. Builder and its contractors shall procure and maintain occurrence version general liability insurance, or equivalent form, with a combined single limit of not less than $3,000,000 per occurrence for bodily injury, personal injury, and property damage.

18.1.2Business Automobile Liability. Builder and its contractors shall procure and maintain business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for the ownership, operation, maintenance, use, loading, or unloading of any vehicle owned, leased, hired, or borrowed by the insured or for which the insured is responsible.

18.1.3Workers’ Compensation. Builder and its contractors shall procure and maintain workers’ compensation insurance with limits as required by the Labor

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Code of the State of California and employers’ liability insurance with limits of not less than $1,000,000 per occurrence, at all times during which insured retains employees.

18.1.4Professional Liability. For any consultant or other professional who will engineer or design the Public Improvements, liability insurance for errors and omissions with limits not less than $1,000,000 per occurrence, shall be procured and maintained for a period of five (5) years following completion of the Public Improvements. Such insurance shall be endorsed to include contractual liability.

18.2Deductibles. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either: (a) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City, its elected officials, officers, employees, agents, and volunteers; or (b) Builder and its contractors shall provide a financial guarantee satisfactory to City guaranteeing payment of losses and related investigation costs, claims, and administrative and defense expenses.

18.3Additional Insured; Separation of Insureds. The Required Insurance shall name City, its elected officials, officers, employees, agents, and volunteers as additional insureds with respect to work performed by or on behalf of Builder or its contractors, including materials, parts, or equipment furnished in connection therewith. The Required Insurance shall contain standard separation of insured provisions, and shall contain no special limitations on the scope of its protection to City, its elected officials, officers, employees, agents, and volunteers.

18.4Primary Insurance; Waiver of Subrogation. The Required Insurance shall be primary with respect to any insurance or self-insurance programs covering City, its elected officials, officers, employees, agents, and volunteers. All policies for the Required Insurance shall provide that the insurance company waives all right of recovery by way of subrogation against City in connection with any damage or harm covered by such policy.

18.5Certificates; Verification. Builder and its contractors shall furnish City with original certificates of insurance and endorsements effecting coverage for the Required Insurance. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. All certificates and endorsements must be received and approved by City before work pursuant to this Agreement can begin. City reserves the right to require complete, certified copies of all required insurance policies, at any time.

18.6Term; Cancellation Notice. Builder and its contractors shall maintain the Required Insurance for the term of this Agreement and shall replace any certificate, policy, or endorsement which will expire prior to that date. All policies shall be endorsed to provide that the Required Insurance shall not be suspended, voided, reduced, canceled, or allowed to expire except on 30 days’ prior written notice to City.

18.7Insurer Rating. Unless approved in writing by City, all Required Insurance shall placed with insurers licensed to do business in the State of California and with a current A.M. Best rating of at least A:VIII.

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19.DEFAULT; NOTICE; REMEDIES.

19.1Notice. If Builder neglects, refuses, or fails to fulfill or timely complete any obligation, term, or condition of this Agreement, or if City determines there is a violation of any federal, state, or local law, ordinance, regulation, code, standard, or other requirement, City may at any time thereafter declare Builder to be in default or violation of this Agreement and make written demand upon Builder or its surety, or both, to immediately remedy the default or violation. Builder shall commence the work required to remedy the default or violation within ten (10) days of the written demand from the City. If the default or violation constitutes an immediate threat to the public health, safety, or welfare, City may provide the demand verbally, and Builder shall commence the required work within twenty-four (24) hours thereof.

Immediately upon City’s issuance of the demand to remedy the default, Builder and its surety shall be liable to City for all costs of construction and installation of the Public Improvements and all other administrative costs expenses as provided for in Section 9.0 of this Agreement.

19.2Failure to Remedy; City Action. If the work required to remedy the noticed default or violation is not diligently prosecuted to a substantial completion acceptable to City within a reasonable time designated by the City, City may complete all remaining work, arrange for the completion of all remaining work, and/or conduct such remedial activity as in its sole and absolute discretion it believes is required to remedy the default or violation. All such work or remedial activity shall be at the sole and absolute cost, expense, and liability of Builder and its surety, without the necessity of giving any further notice to Builder or surety. City’s right to take such actions shall in no way be limited by the fact that Builder or its surety may have constructed any, or none of the required or agreed upon Public Improvements at the time of City’s demand for performance. In the event City elects to complete or arrange for completion of the remaining work and improvements, City may require all work by Builder or its surety to cease in order to allow adequate coordination by City. Notwithstanding the foregoing, if conditions precedent for reversion to acreage can be met and if the interests of City will not be prejudiced thereby, City may also process a reversion to acreage and thereafter recover from Builder or its surety the full cost and expense incurred.

19.3Other Remedies. No action by City pursuant to Section 18.0 et seq. of this Agreement shall prohibit City from exercising any other right or pursuing any other legal or equitable remedy available under this Agreement or any federal, state, or local law. City may exercise it rights and remedies independently or cumulatively, and City may pursue inconsistent remedies. City may institute an action for damages, injunctive relief, or specific performance.

20.GENERAL PROVISIONS.

20.1Authority to Enter Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority make this Agreement and bind each respective Party.

20.2Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement.

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20.3Construction; References; Captions. It being agreed the Parties or their agents have participated in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party.

Any term referencing time, days, or period for performance shall be deemed calendar days and not work days. All references to Builder include all personnel, employees, agents, and subcontractors of Builder, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

20.4Notices. All notices, demands, invoices, and written communications shall be in writing and delivered to the following addresses or such other addresses as the Parties may designate by written notice:

CITY:

City of Hemet
Attn: City Manager
445 E. Florida Avenue
Hemet, CA 92543
BUILDER:

Richmond American Homes, a California Corporation
Attn: Larry Liebel
391 N. Main Street, Suite 205
Corona, CA 92880
Depending upon the method of transmittal, notice shall be deemed received as follows: by facsimile, as of the date and time sent provided the original is contemporaneously deposited with United States Postal Service and delivered by regular mail; by messenger, as of the date delivered; and by U.S. Mail first class postage prepaid, as of 72 hours after deposit in the U.S.

Mail.

20.5Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

20.6Waiver. City’s failure to insist upon strict compliance with any provision of this Agreement or to exercise any right or privilege provided herein, or City’s waiver of any breach of this Agreement, shall not relieve Builder of any of its obligations under this Agreement, whether of the same or similar type. The foregoing shall be true whether City’s actions are intentional or unintentional. Builder agrees to waive, as a defense, counterclaim or set off, any and all defects, irregularities or deficiencies in the authorization, execution or performance of the Public Improvements or this Agreement, as well as the laws, rules, regulations, ordinances or resolutions of City with regards to the authorization, execution or performance of the Public Improvements or this Agreement.

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20.7Assignment or Transfer of Agreement. Builder shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without prior written consent of City. Any attempt to do so shall be null and void, and any assignee, hypothecatee, or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation, or transfer. Unless specifically stated to the contrary in City’s written consent, any assignment, hypothecation, or transfer shall not release or discharge Builder from any duty or responsibility under this Agreement.

20.8Binding Effect. Each and all of the covenants and conditions shall be binding on and shall inure to the benefit of the Parties, and their successors, heirs, personal representatives, or assigns. This section shall not be construed as an authorization for any Party to assign any right or obligation.

20.9No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

20.10Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

20.11Consent to Jurisdiction and Venue. This Agreement shall be construed in accordance with and governed by the laws of the State of California. Any legal action or proceeding brought to interpret or enforce this Agreement, or which in any way arises out of the Parties’ activities undertaken pursuant to this Agreement, shall be filed and prosecuted in the appropriate California State Court in the County of Riverside, California. Each Party waives the benefit of any provision of state or federal law providing for a change of venue to any other court or jurisdiction including, without limitation, a change of venue based on the fact that a governmental entity is a party to the action or proceeding, or that a federal right or question is involved or alleged to be involved in the action or proceeding. Without limiting the generality of the foregoing waiver, Builder expressly waives any right to have venue transferred pursuant to California Code of Civil Procedure Section 394.

20.12Attorneys’ Fees and Costs. If any arbitration, lawsuit, or other legal action or proceeding is brought by one Party against the other Party in connection with this Agreement or the Property, the prevailing party, whether by final judgment or arbitration award, shall be entitled to and recover from the other party all Litigation Expenses. Any judgment, order, or award entered in such legal action or proceeding shall contain a specific provision providing for the recovery of Litigation Expenses.

20.13Relationship Between The Parties. The Parties hereby mutually agree that neither this Agreement, any map related to Tract Map No. 33824-1, nor any other related entitlement, permit, or approval issued by City for the Property shall operate to create the relationship of partnership, joint venture, or agency between City and Builder. Builder’s contractors and subcontractors are exclusively and solely under the control and dominion of Builder. Nothing herein shall be deemed to make Builder or its contractors an agent or contractor of City.

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20.14Counterparts. This Agreement may be executed in counterpart originals, which taken together, shall constitute one and the same instrument.

20.15Effective Date of Agreement. This Agreement shall not become effective until the date it has been formally approved by the City and executed by the appropriate authorities of City and Builder.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first-above written.

CITY OF HEMET
By:___________________________
City Manager
ATTEST:
___________________________
City Clerk

APPROVED AS TO FORM
By:_______________________________
City Attorney

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RICHMOND AMERICAN HOMES, A CALIFORNIA CORPORATION
By: By:
_________________________________
Its: ______________________________ Its: ___________________________ NOTE: BUILDER’S SIGNATURES SHALL BE DULY NOTARIZED, AND

APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE

REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR
OTHER RULES OR REGULATIONS APPLICABLE TO BUILDER’S
BUSINESS ENTITY.

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RIV #4830-8901-9593 v1
DRAFT

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

COUNTY OF
On __________, ____ before me, ________________, personally appeared ________________, proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: ______________________________________

OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form

CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT

INDIVIDUAL

CORPORATE OFFICER
_______________________________

TITLE(S)

PARTNER(S) LIMITED

GENERAL

ATTORNEY-IN-FACT

TRUSTEE(S)

GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________

TITLE OR TYPE OF DOCUMENT
___________________________________

NUMBER OF PAGES
___________________________________

DATE OF DOCUMENT
___________________________________

SIGNER(S) OTHER THAN NAMED ABOVE

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RIV #4830-8901-9593 v1
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

COUNTY OF
On __________, ____ before me, ________________, personally appeared ________________, personally known to me - OR - proved to me on the basis of satisfactory evidence to be the person(s) whose names(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.

WITNESS my hand and official seal.
__________________________________________
(SIGNATURE OF NOTARY)

OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form

CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT

INDIVIDUAL

CORPORATE OFFICER
_______________________________

TITLE(S)

PARTNER(S) LIMITED

GENERAL

ATTORNEY-IN-FACT

TRUSTEE(S)

GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________

TITLE OR TYPE OF DOCUMENT
___________________________________

NUMBER OF PAGES
___________________________________

DATE OF DOCUMENT
___________________________________

SIGNER(S) OTHER THAN NAMED ABOVE

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RIV #4830-8901-9593 v1
DRAFT 1 SUBDIVISION IMPROVEMENT AGREEMENT
EXHIBIT “A”

LEGAL DESCRIPTION OF PROPERTY
TRACT NO. 33824-1

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RIV #4830-8901-9593 v1
DRAFT 1 SUBDIVISION IMPROVEMENT AGREEMENT
EXHIBIT “B”

LIST OF PUBLIC IMPROVEMENTS
TRACT NO. 33824-1

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RIV #4830-8901-9593 v1
DRAFT 1 SUBDIVISION IMPROVEMENT AGREEMENT
EXHIBIT “C”

SURETY BONDS AND OTHER SECURITY
TRACT NO. 33824-1
As evidence of understanding the provisions contained in this Agreement, and of the Builder’s intent to comply with same, the Builder has submitted the below described security in the amounts required by this Agreement, and has affixed the appropriate signatures thereto:

PERFORMANCE BOND PRINCIPAL AMOUNT: $ 313,375
Surety:

Attorney-in-fact:

Address:

MATERIAL AND LABOR BOND PRINCIPAL AMOUNT: $ 313,375
Surety:

Attorney-in-fact:

Address:

CASH MONUMENT SECURITY: $ 19,250
Amount deposited per Cash Receipt No. Date:

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RIV #4830-8901-9593 v1
DRAFT 1 SUBDIVISION IMPROVEMENT AGREEMENT
BOND NO. ___________________
INITIAL PREMIUM: ___________________

SUBJECT TO RENEWAL

CITY OF HEMET
TRACT MAP NO. 33824-1 IMPROVEMENTS

FORM OF PERFORMANCE BOND
KNOW ALL MEN BY THESE PRESENTS:

WHEREAS the City of Hemet, California (“City”) and Richmond American Homes, a California Corporation, a California corporation (“Principal”), have executed an agreement for work consisting of, but not limited to, the furnishing all labor, materials, tools, equipment, services, and incidentals for all grading, roads, paving, curbs and gutters, pathways, storm drains, water system, sanitary sewers, utilities, drainage facilities, traffic controls, landscaping, street lights, and all other required facilities for Tract Map No. 33824-1 (“Public Improvements”); WHEREAS, the Public Improvements to be performed by Principal are more particularly set forth in that certain Subdivision Improvement Agreement dated December 13, 2022 (“Improvement Agreement”);
WHEREAS, the Improvement Agreement is hereby referred to and incorporated herein by reference; and
WHEREAS, Principal is required by the Improvement Agreement to provide a good and sufficient bond for performance of the Improvement Agreement, and to guarantee and warranty the Public Improvements constructed thereunder.

NOW, THEREFORE, Principal and _________________________________ (“Surety”), a corporation organized and existing under the laws of the State of __________, and duly authorized to transact surety business under the laws of the State of California, are held and firmly bound unto City in the sum of Three Hundred Thirteen Thousand and Three Hundred Seventy Five Dollars, ($313,375), said sum being not less than one hundred percent (100%) of the total cost of the Public Improvements as set forth in the Improvement Agreement, we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly and severally, firmly by these presents.

THE CONDITION OF THIS OBLIGATION is such, that if Principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions, agreements, guarantees, and warranties in the Improvement Agreement and any alteration thereof made as therein provided, to be kept and performed at the time and in the manner therein specified and in all respects according to their intent and meaning, and to indemnify and save harmless City, its officers, employees, and agents, as stipulated in the Improvement Agreement, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

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RIV #4830-8901-9593 v1
DRAFT 2 SUBDIVISION IMPROVEMENT AGREEMENT
As part of the obligation secured hereby, and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered.

Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Improvement Agreement, or to any plans, profiles, and specifications related thereto, or to the Public Improvements to be constructed thereunder, shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition.

This bond is executed and filed to comply with Section 66499 et seq. of the Government Code of California as security for performance of the Improvement Agreement and security for the one-year guarantee and warranty of the Public Improvements.

IN WITNESS WHEREOF, the seal and signature of the Principal is hereto affixed, and the corporate seal and the name of the Surety is hereto affixed and attested by its duly authorized Attorney-in-Fact at _______________________, this _____ day of _______________, ______.

Principal Surety
By: By:

Its: Managing Member Attorney-In-Fact
(print name) (print name)
NOTE: APPROPRIATE NOTARIAL ACKNOWLEDGMENTS OF EXECUTION

BY PRINCIPAL AND SURETY, AND A COPY OF THE POWER OF

ATTORNEY TO LOCAL REPRESENTATIVES OF THE BONDING
COMPANY MUST BE ATTACHED TO THIS BOND.

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RIV #4830-8901-9593 v1
DRAFT 1 SUBDIVISION IMPROVEMENT AGREEMENT
BOND NO. ___________________
INITIAL PREMIUM: ___________________

SUBJECT TO RENEWAL

CITY OF HEMET
TRACT MAP 33824-1 IMPROVEMENTS

FORM OF LABOR AND MATERIAL BOND
KNOW ALL MEN BY THESE PRESENTS:

WHEREAS the City of Hemet California (“City”) and Richmond American Homes, a California Corporation, a California corporation (“Principal”), have executed an agreement for work consisting of, but not limited to, the furnishing all labor, materials, tools, equipment, services, and incidentals for all grading, roads, paving, curbs and gutters, pathways, storm drains, sanitary sewers, utilities, drainage facilities, traffic controls, landscaping, street lights, and all other required facilities for Tract Map No. 33824-1 (“Public Improvements”); WHEREAS, the Public Improvements to be performed by Principal are more particularly set forth in that certain Subdivision Improvement Agreement dated December 13, 2022 (“Improvement Agreement”);
WHEREAS, the Improvement Agreement is hereby referred to and incorporated herein by reference; and
WHEREAS, Principal is required to furnish a bond in connection with the Improvement Agreement providing that if Principal or any of its subcontractors shall fail to pay for any materials, provisions, or other supplies, or terms used in, upon, for, or about the performance of the Public Improvements, or for any work or labor done thereon of any kind, or for amounts due under the provisions of Title 15 (commencing with section 3082) of Part 4 of Division 3 of the California Civil Code, with respect to such work or labor, that the Surety on this bond will pay the same together with a reasonable attorney’s fee in case suit is brought on the bond.

NOW, THEREFORE, Principal and _________________________ (“Surety”), a corporation organized and existing under the laws of the State of _________________, and duly authorized to transact business under the laws of the State of California, are held and firmly bound unto City and to any and all material men, persons, companies or corporations furnishing materials, provisions, and other supplies used in, upon, for or about the performance of the Public Improvements, and all persons, companies or corporations renting or hiring teams, or implements or machinery, for or contributing to the Public Improvements to be done, and all persons performing work or labor upon the same and all persons supplying both work and materials as aforesaid excepting the Principal, the sum of Three Hundred Thirteen Thousand and Three Hundred Seventy Five Dollars, ($313,375), said sum being not less than 100% of the total cost of the Public Improvements under the terms of the Improvement Agreement, we bind ourselves, our heirs, executors and administrators, successors and assigns jointly and severally, firmly by these presents.

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RIV #4830-8901-9593 v1
DRAFT 2 SUBDIVISION IMPROVEMENT AGREEMENT
THE CONDITION OF THIS OBLIGATION IS SUCH that if the Principal, his or its subcontractors, heirs, executors, administrators, successors, or assigns, shall fail to pay for any materials, provisions, or other supplies or machinery used in, upon, for or about the performance of the Public Improvements, or for work or labor thereon of any kind, or fail to pay any of the persons named in California Civil Code Section 3181, or amounts due under the Unemployment Insurance Code with respect to work or labor performed by any such claimant, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the contractor and his subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work and labor, and all other applicable laws of the State of California and rules and regulations of its agencies, then said Surety will pay the same in or to an amount not exceeding the sum specified herein.

As part of the obligation secured hereby, and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered.

This bond is executed and filed to comply with Section 66499 et seq. of the California Government Code as security for payment to contractors, subcontractors, and persons furnishing labor, materials, or equipment for construction of the Public Improvements or performance of the Improvement Agreement. It is hereby expressly stipulated and agreed that this bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the California Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.

Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Improvement Agreement, or to any plans, profiles, and specifications related thereto, or to the Public Improvements to be constructed thereunder, shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition.

IN WITNESS WHEREOF, the seal and signature of the Principal is hereto affixed, and the corporate seal and the name of the Surety is hereto affixed and attested by its duly authorized Attorney-in-Fact at _____________________, this _____ day of _______________, ______.

Principal Surety
By: By:

Its: Managing Member Attorney-In-Fact
(print name) (print name)

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RIV #4830-8901-9593 v1
DRAFT 3 SUBDIVISION IMPROVEMENT AGREEMENT
NOTE: APPROPRIATE NOTARIAL ACKNOWLEDGMENTS OF EXECUTION

BY PRINCIPAL AND SURETY, AND A COPY OF THE POWER OF

ATTORNEY TO LOCAL REPRESENTATIVES OF THE BONDING
COMPANY MUST BE ATTACHED TO THIS BOND.

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City of Hemet
City Council Meeting

STAFF REPORT

Meeting: City Council Meeting - Dec 13 2022
Department: Public Works
Submitted by: Eddie Pust, Interim City Manager
Noah Rau, Public Works Director/City Engineer;

☐ Receive and File ☒ Consent Calendar ☐ Business Item ☐ Public Hearing

TITLE:

A Resolution of the City Council of the City of Hemet, California, Approving Replacement Subdivision Improvement Agreement and Improvement Security for Tract Map No. 33824-2, located in McSweeny Farms, south of McSweeny Parkway and east of South Village Lo op ( KB Home Coastal Inc., a California Corporation) and release of existing Subdivision Improvement Agreement and Improvement Security provided by McSweeny Recovery Acquisition, LLC

RECOMMENDED ACTION:

It is respectfully recommended that the City Council:

Adopt a Resolution of the City Council of the City of Hemet, California, Approving Replacement Subdivision Improvement Agreement and Improvement Security for Tract Map No. 33824-2, located in McSweeny Farms, south of McSweeny Parkway and east of South Village Loop ( KB Home Coastal Inc., a California Corporation ) and release of existing Subdivision Improvement Agreement and Improvement Security provided by McSweeny Recovery Acquisition, LLC.

BACKGROUND:

At a regularly scheduled City Council meeting held on September 27, 2016, the City Council approved Tract Map No. 33824 -2, along with the Subdivision Improvement Agreement ("Agreement"), and accepted the Performance Bonds and Labor and Material Bonds ("Bonds"). The Agreement were executed by McSween y Recovery Acquisition, LLC, ("Developer"), who also secured the Bonds necessary to ensure the public improvements associated with this Tract Map would be completed.

The Developer has since sold Tract Map No. 33824-2 to KB Home Coastal Inc., a California Corporation ("Builder"). The remainder of the public improvements are to be completed by Builder and will require a replacement Subdivision Improvement Agreement and associated bonds.

ANALYSIS:

21.Q

Tract Map No. 33824-2 provides for the development of single family residential units and all associated road and utility improvements located in McSweeny Farms Specific Plan Area, south of McSweeny Parkway and east of South Village Loop. Now that the Dev eloper has sold the property associated with Tract Map No. 33824 -2 to the Builder, the next step in the process is consideration of the replacement agreement for the subdivision work and accepting the new bonds to guarantee completion of the work. At the same time, the Developer is requesting the release of the Subdivision Improvement Agreement and associated bonds.

DISCUSSION:

The City Attorney has reviewed and approved the Subdivision Improvement Agreements and the Improvement Bond forms. Staff recommends that the City Council accept the replacement subdivision agreement and public improvement bonds and release the agreement and bonds provided by the Developer

PREVIOUS COUNCIL ACTION:

1. City Council meeting of September 27, 2016 - City Council approved Tract Map No. 33824 -2; subdivision improvement agreement; and accepted offers of dedication and improvement bonds from the developer.

STRATEGIC PLAN INTEGRATION:

GOAL ONE: QUALITY OF LIFE:

To ensure that Hemet is safe, clean, attractive and comfortable for all who live, work, and visit.

Objective 1: Enhance the visual appearance of the community to make it attractive and reduce blight.

FISCAL IMPACT:

There are no impacts to the General Fund with this City Council action.

ALTERNATIVE(S):

1. Do not approve the Resolution to replace the Subdivision Improvement Agreement and Improvement Security

2. Provide alternate direction to staff

REVIEWED BY LEGAL:

☒ Staff report ☒ Resolution
☐ Ordinance ☒ Agreement

ATTACHMENT(S):
33824-2 Subdivision Improvement Agreement-Raintree
Reso Approving replacement SIA for Final Tract Map 33824-2

21.Q

33824 McSweeny Subdivision Improvement Agreement - Final Tract Map No. 338242 notarized- DRAFT
McSweeny TR 33824-2 Final Map

21.Q

20160436391
XInew.1'1i1!Wt!-W5r!I’(.YImil
1?}
10/05/201601:05PMFee:$0.00Page1of19RecordedinOfficialRecordsCountyofRiversidePeterRldanaFlssessor-—CountyC1erk—RecoI-derJ llll RECORDEDATTHEREQUESTOFANDWHENRECORDEDRETURNTO:(DocumentexemptfromrecordingfeespursuanttoCal.Gov.Code§27383)CITYOFHEMETAttn:CityManager445EastFloridaAvenue RAExamHemet, PageDAPCORMiscLongRFD1stPgAdtlPgCertH -/\SIZENCORSMFNIZHG‘T:

SUBDIVISIONIMPROVEMENTAGREEMENTFINALTRACTMAP33824-2
ByandBetween
THECITYOFHEMET,amunicipalcorporation
and
McSweenyRecoveryAcquisition,LLC,aDelawarelimitedliabilitycompany Dated:9522
CC

21.Q

Au\;\4z'V2016byandbetw ofHemet,unicipalcorporaticSwenyRecoveryAcquisitionawarelim liabilitycompany SUBDIVISIONIMPROVEMENTAGREEMENTFINALTRACTMAP33824-2
ThisSubdivisionImprovementAgreement(“Agreement”)isenteredintoasofthisLdayof eentheCityam on(“City”)andM ,LLC,aDelited .CityandDeveloperaresometimeshereinafterindividuallyreferredtoas“Party”andhereinaftercollectivelyreferredtoasthe“Parties.”RECITALSA.DeveloperhassubmittedtoCityanapplicationforapprovalofa?naltractmapforrealpropertylocatedwithinCity,alegaldescriptionofwhichisattachedheretoasExhibit“A”.Thetractmapisidenti?edinCityrecordsasTractMapNo.33824-2.On 20_,theCityconditionallyapprovedTractNo.33824-2.B.DeveloperhasnotcompletedalloftheworkormadeallofthePublicImprovementsrequiredbytheSubdivisionMapAct(GovernmentCodesections66410e_tgm),(“MapAct”)theCityOrdinances,theconditionsofapprovalforTractNo.33824-2,orotherordinances,resolutions,orpoliciesofCityrequiringconstructionofimprovementsinconjunctionwiththesubdivisionofland.C.PursuanttoCityOrdinancesandtheapplicableprovisionsoftheMapAct,DeveloperandCityenterintothisAgreementforthetimelyconstructionandcompletionofthePublicImprovementsandthefurnishingofthesecuritytherefor,acceptabletotheCityEngineerandCityAttorney,forTractNo.33824-2.D.CityhasauthoritytoenterintothisSubdivisionlrnprovementAgreementpursuanttoGovernmentCodeSections66499— 66499.10.E.PursuanttoGovernmentCodeSection66499,Developer’sexecutionofthisAgreementandtheprovisionofthesecurityaremadeinconsiderationofCity’sapprovalofthe?nalmapforTractNo.33824-2.DEFINEDTERMS“Developer”shallmeanMcSweenyRecoveryAcquisition,LLC.Theterm“Developer”shallalsoincludeallassignees,totheextentpermittedunderthisAgreement,oftherightsandobligationsofDeveloperunderthisAgreement,andanysuccessor-in-interesttoDeveloperhavingalegaland/orequitableinterestintheProperty.“EstimatedCosts”shallmeantheCityEngineer’sapproximationoftheactualcosttoconstructthePublicImprovements,includingthereplacementcostforalllandscaping.

21.Q

itigu“LtionExpenses”shallmeanallcostsandexpenses,totheextentreasonableinamount,actuallyandnecessarilyincurredbyapartyingoodfaithintheprosecutionofanactionorproceeding,including,butnotlimitedto,courtcosts,?ling,recording,andservicefees,copyingcosts,exhibitproductioncosts,specialmediarentalcosts,attorneys’fees,feesforinvestigators,witnessfees(bothlayandexpert),travelexpenses,depositionandtranscriptcostsandanyothercostorexpense,theawardofwhichacourtofcompetentjurisdictionmaydeterminetobejustandreasonable.“MapAct”shallmeantheSubdivisionMapAct,GovernmentCodeSections66410etseq.“Property”shallmeanthealloftherealpropertycontainedwithintheboundariesofTractMapNo.33824-2locatedintheCityofHemet,California,asismoreparticularlydescribedinthelegaldescriptionandtractdiagramattachedheretoandincorporatedherebybyreferenceatAttachment“A”.“PublicImprovements”shallinclude,butnotbelimitedto,allgrading,roads,streets,paving,curbsandgutters,sidewalks,paseos,pathways,trails,sanitarysewers,utilities,stormdrains,detentionandretentionbasinsandotherdrainagefacilities,traf?ccontrols,landscaping,streetlightsandallotherfacilitiesrequiredtobeconstructedanddedicatedtotheCityorotherpublicentityasconditionsofapprovalofTentativeTractMapNo.33824-2andasshownindetailontheplans,andspeci?cationswhichhavebeenapprovedbytheCityandincorporatedintoTractMapNo.33824-2.ThePartiesagreethatthePublicImprovementstobecompletedbyDeveloperaremorespeci?callydescribedinthediagramorplanattachedheretoandincorporatedhereinbyreferenceasAttachment“B.Notwithstanding,Attachment“B”,DevelopershallremainobligatedtoconstructandcompleteallofthePublicImprovementsrequiredasconditionsofapprovalforTentativeTractMap33824-2.“RequiredInsurance”shallmeantheinsurancerequiredtobemaintainedbyDeveloperunderSection17.“Security”shallmeansuretybondsintheamountsandunderthetermsofSection12orothersecurityapprovedbyCityEngineerorCityAttorney.“TractNa33824-2”shallmeanthe?nalmappreparedandapprovedbytheCityforTentativeTractMapNo.33824-2.“Warranty”shallmeantheoneyearperiodfollowingcompletionofthePublicImprovementsbyDeveloperandtheacceptanceofthePublicImprovementsbytheCityinwhichDeveloperwarrantsandguaranteesallPublicImprovements.OPERATIVEPROVISIONSNOW,THEREFORE,inconsiderationofthemutualpromisesandcovenantsmadebythepartiesandcontainedhereandotherconsideration,thevalueandadequacyofwhichareherebyacknowledged,thepartiesagreeasfollows:1.EFFECTIVENESS.ThisAgreementshallnotbeeffectiveunlessanduntilallfour(4)ofthefollowingconditionsaresatis?edintheorderprovided:

RIV#4836—3917-8284V

21.Q

FinalMagandAgreementAgproval
RecordAgreement
RecordFinalMag
uctionofPublicImprovements
Permits‘,Notices;UrQStatements
Pre-apgrovalofPlansandSpeci?cations

1.1Security.DeveloperprovidesCitywiththeSecurityofthetypeandintheamountsrequiredbythisAgreement;1.2 .TheCityCounciloftheCity(“CityCouncil”)approvesthe?nalmapforTractNo.33824-2andthisAgreement;1.3 .DeveloperandCityexecutetheAgreementandCityrecordsthisAgreementintheRecorder’sOf?ceoftheCountyofRiverside;and1.4 .Developerrecordsthe?nalmapforTractNo.33824-2intheRecorder’sOf?ceoftheCountyofRiverside.Iftheabovedescribedconditionsarenotsatis?edintheorder,mannerandwithinthetimeprovidedunderthisAgreement,thisAgreementshallautomaticallyterminatewithoutneedoffurtheractionbyeitherCityorDeveloper.2.PUBLICIMPROVEMENTS.Developershallconstructorhaveconstructedatitsowncost,expense,andliabilitythePublicImprovements,asde?nedherein,withinthetimeandinthemannerrequiredunderthisAgreement.ConstructionofthePublicImprovementsshallincludeanytransitionsand/orotherincidentalworkdeemednecessaryfordrainageorpublicsafety.TheDevelopershallberesponsibleforthereplacement,relocation,orremovalofanycomponentofanyirrigationwaterorsewersystemincon?ictwiththeconstructionorinstallationofthePublicImprovements.Suchreplacement,relocation,orremovalshallbeperformedtothecompletesatisfactionoftheCityEngineerandtheownerofsuchwaterorsewersystem.Developerfurtherpromisesandagreestoprovideallequipment,tools,materials,labor,tests,designwork,andengineeringservicesnecessaryorrequiredbyCitytofullyandadequatelycompletethePublicImprovements.2.1PriorPartialConstr .WhereconstructionofanyPublicImprovementshasbeenpartiallycompletedpriortothisAgreement,DeveloperagreestocompletesuchPublicImprovementsorassuretheircompletioninaccordancewiththisAgreement.2.2 .Priortocommencinganywork,Developershall,atitssolecost,expense,andliability,obtainallnecessarypermitsandapprovalsandgiveallnecessaryandincidentalnoticesrequiredforthelawfulconstructionofthePublicImprovementsandperformanceofDeveloper’sobligationsunderthisAgreement.Developershallconducttheworkinfullcompliancewiththeregulations,rules,andotherrequirementscontainedinanypermitorapprovalissuedtoDeveloper.Priortocommencinganywork,Developershall?leawrittenstatementwiththeCityClerkandtheCityEngineer,signedbyDeveloperandeachutilitywhichwillprovideutilityservicetotheProperty,attestingthatDeveloperhasmadealldepositslegallyrequiredbytheutilityfortheextensionandprovisionofutilityservicetotheProperty.2.3 .DeveloperisprohibitedfromcommencingworkonanyPublicImprovementuntilallplansandspeci?cationsforsuchPublicImprovementhavebeensubmittedtoandapprovedbytheCityEngineer,orhisorherdesignee.ApprovalbytheCityEngineershallnotrelieveDeveloperfromensuringthatallPublicImprovementsconformwithallotherrequirementsandstandardssetforthinthisAgreement.

RIV#4836-3917-8284V2 _ -

21.Q

QualitvofWork;Comp
Alterationstolmgruvemcnts
OtherObligationsReferencedinConditionsofTentativeMapAggroval

2.4 lianceWithLawsandCodes.Theconstructionplansandspeci?cationsforthePublicImprovementsshallbepreparedinaccordancewithallapplicablefederal,stateandlocallaws,ordinances,regulations,codes,standards,andotherrequirements.ThePublicImprovementsshallbecompletedinaccordancewithallapprovedmaps,plans,speci?cations,standarddrawings,andspecialamendmentstheretoon?lewithCity,aswellasallapplicablefederal,state,andlocallaws,ordinances,regulations,codes,standards,andotherrequirementsapplicableatthetimeworkisactuallycommenced.2.5StandardofPerformang.Developeranditscontractors,ifany,shallperformallworkrequiredtoconstructthePublicImprovementsunderthisAgreementinaskill?ilandworkmanlikemanner,andconsistentwiththestandardsgenerallyrecognizedasbeingemployedbyprofessionalsinthesamedisciplineintheStateofCalifornia.Developerrepresentsandmaintainsthatitoritscontractorsshallbeskilledintheprofessionalcallingnecessarytoperformthework.Developerwarrantsthatallofitsemployeesandcontractorsshallhavesuf?cientskillandexperiencetoperformtheworkassignedtothem,andthattheyshallhavealllicenses,permits,quali?cationsandapprovalsofwhatevernaturethatarelegallyrequiredtoperformthework,andthatsuchlicenses,permits,quali?cationsandapprovalsshallbemaintainedthroughoutthetermofthisAgreement.2.6 .Allworkshallbedoneandimprovementsmadeandcompletedasshownonapprovedplansandspeci?cations,andanysubsequentalterationsthereto.IfduringthecourseofconstructionandinstallationofthePublicImprovementsitisdeterminedthatthepublicinterestrequiresalterationsinthePublicImprovements,DevelopershallundertakesuchdesignandconstructionchangesasmaybereasonablyrequiredbyCity.Anyandallalterationsintheplansandspeci?cationsandthePublicImprovementstobecompletedmaybeaccomplishedwithoutgivingpriornoticethereoftoDeveloper’ssuretyforthisAgreement.2.7.Inadditiontotheforegoing,DevelopershallsatisfyalloftheconditionsofapprovalonthetentativemapfortheProperty.Theconditionsofapprovalwhichhavenotbeensatis?edpriortothedateofthisAgreementareidenti?edonExhibit“D”hereto.3.MAINTENANCEOFPUBLICIMPROVEMENTSANDLANDSCAPING.CityshallnotberesponsibleorliableforthemaintenanceorcareofthePublicImprovementsuntilCityformallyapprovesandacceptstheminaccordancewithitspoliciesandprocedures.CityshallexercisenocontroloverthePublicImprovementsuntilapprovedandaccepted.AnyusebyanypersonofthePublicImprovements,oranyportionthereof,shallbeatthesoleandexclusiveriskoftheDeveloperatalltimespriortoCity’sacceptanceofthePublicImprovements.DevelopershallmaintainallthePublicImprovementsinastateofgoodrepairuntiltheyarecompletedbyDeveloperandapprovedandacceptedbyCity,anduntilthesecurityfortheperformanceofthisAgreementisreleased.Maintenanceshallinclude,butshallnotbelimitedto,repairofpavement,curbs,gutters,sidewalks,signals,parkways,watermains,andsewers;maintainingalllandscapinginavigorousandthrivingconditionreasonablyacceptabletoCity;removalofdebrisfromsewersandstormdrains;andsweeping,repairing,andmaintainingingoodandsafeconditionallstreetsandstreetimprovements.ItshallbeDeveloper’sresponsibilitytoinitiateallmaintenancework,butifitshallfailtodoso,itshallpromptlyperformsuchmaintenanceworkwhennoti?edtodosobyCity.IfDeveloperfailstoproperly RIV#48363917-8284V

21.Q

Extensions
Period
prosecuteitsmaintenanceobligationunderthissection,CitymaydoallworknecessaryforsuchmaintenanceandthecostthereofshallbetheresponsibilityofDeveloperanditssuretyunderthisAgreement.CityshallnotberesponsibleorliableforanydamagesorinjuryofanynatureinanywayrelatedtoorcausedbythePublicImprovementsortheirconditionpriortoacceptance.4.CONSTRUCTIONSCHEDULE.UnlessextendedpursuanttothisSection4.1ofthisAgreement,DevelopershallfullyandadequatelycompleteorhavecompletedthePublicImprovementswithinoneyear(12months)followingapprovalofthe?nalmapforTractNo.33824-2.4.1 .City,may,initssoleandabsolutediscretion,provideDeveloperwithadditionaltimewithinwhichtocompletethePublicImprovements.ItisunderstoodthatbyprovidingtheSecurityrequiredunderSection12.0e_ts_eq.ofthisAgreement,DeveloperanditssuretyconsentinadvancetoanyextensionoftimeasmaybegivenbyCitytoDeveloper,andwaivesanyandallrighttonoticeofsuchextension(s).Developer’sacceptanceofanextensionoftimegrantedbyCityshallconstituteawaiverbyDeveloperanditssuretyofalldefenseoflaches,estoppel,statutesoflimitations,andotherlimitationsofactioninanyactionorproceedingfiledbyCityfollowingthedateonwhichthePublicImprovementsweretohavebeencompletedhereunder.Inaddition,asconsiderationforgrantingsuchextensiontoDeveloper,CityreservestherighttoreviewtheprovisionsofthisAgreement,including,butnotlimitedto,theconstructionstandards,thecostestimatesestablishedbyCity,andthesuf?ciencyoftheimprovementsecurityprovidedbyDeveloper,andtorequireadjustmentstheretowhenwarrantedaccordingtoCity’sreasonablediscretion.4.2AccrualofLimitations.AnylimitationsperiodprovidedbylawrelatedtobreachofthisAgreementorthetermsthereofshallnotaccrueuntilDeveloperhasprovidedtheCityEngineerwithwrittennoticeofDeveloper’sintenttoabandonorotherwisenotcompleterequiredoragreeduponPublicImprovements.5.GRADING.DeveloperagreesthatanyandallgradingdoneortobedoneinconjunctionwithconstructionofthePublicImprovementsordevelopmentofTractNo.33824-2shallconformtoallfederal,state,andlocallaws,ordinances,regulations,andotherrequirements,includingCity’sgradingregulations.Allgrading,landscaping,andconstructionactivitiesshallbeperformedinamannertocontrolerosionandprevent?oodingproblems.TheCityEngineershallhavetheauthoritytorequireerosionplanstoprescribereasonablecontrolsonthemethod,manner,andtimeofgrading,landscaping,andconstructionactivitiestopreventnuisancestosurroundingproperties.Plansshallincludewithoutlimitationtemporarydrainageanderosioncontrolrequirements,dustcontrolprocedures,restrictionsontruckandotherconstructiontraf?croutes,noiseabatementprocedures,storageofmaterialsandequipment,removalofgarbage,trash,andrefuse,securingthejobsitetopreventinjury,andsimilarmatters.InordertopreventdamagetothePublicImprovementsbyimproperdrainageorotherhazards,thegradingshallbecompletedinaccordancewiththetimescheduleforcompletionofthePublicImprovementsestablishedbythisAgreement,andpriortoCity’sapprovalandacceptanceofthePublicImprovementsandreleaseoftheSecurityassetforthinSection12.0e_t?g.ofthisAgreement.6.UTILITIES.Developershallprovideutilityservices,includingwater,sewer,power,gas,andtelephoneservicetoserveeachparcel,lot,orunitoflandwithinTractNo.

RIV#4836-3917-8284v2

21.Q

DeveloncwsNoticeofCompletion
33824-2inaccordancewithallapplicablefederal,state,andlocallaws,rules,andregulations,including,butnotlimitedto,theregulations,schedulesandfeesoftheutilitiesoragenciesprovidingsuchservices.Exceptforcommercialorindustrialproperties,Developershallalsoprovidecabletelevisionfacilitiestoserveeachparcel,lot,orunitoflandinaccordancewithallapplicablefederal,state,andlocallaws,rules,andregulations,including,butnotlimitedto,therequirementsofthecablecompanypossessingavalidfranchisewithCitytoprovidesuchservicewithinCity’sjurisdictionallimits.Allutilitiesshallbeinstalledunderground.7.FEESANDCHARGES.Developershall,atitssolecost,expense,andliability,payallfees,charges,andtaxesarisingoutofconstructionofthePublicImprovements,including,butnotlimitedto,allplancheck,designreview,engineering,inspection,andotherservicefees,andanyimpactorconnectionfeesestablishedbyCityordinance,resolution,regulation,orpolicy,orasestablishedbyCityrelativetoTractNo.33824-2,orasrequiredbyothergovernmentalagencieshavingjurisdictionoverTractNo.33824-2.8.CITYINSPECTIONOFPUBLICIMPROVEMENTS.Developershall,atitssolecost,expense,andliability,andatalltimesduringconstructionofthePublicImprovements,maintainreasonableandsafefacilitiesandprovidesafeaccessforinspectionbyCityofthePublicImprovementsandareaswhereconstructionofthePublicImprovementsisoccurringorwilloccur.IftheCityinspectorrequestsit,theDeveloperatanytimebeforeacceptanceofthePublicImprovementsshallremoveoruncoversuchportionsofthe?nishedworkasmaybedirectedwhichhavenotpreviouslybeeninspected.Afterexamination,theDevelopershallrestoresaidportionsoftheworktothestandardsrequiredhereunder.InspectionorsupervisionbytheCityshallnotbeconsideredasdirectcontroloftheindividualworkmenonthejobsite.City’sinspectorshallhavetheauthoritytostopanyandallworknotinaccordancewiththerequirementscontainedorreferencedinthisAgreement.TheinspectionoftheworkbyCityshallnotrelieveDeveloperorthecontractorofanyobligationstoful?llthisAgreementashereinprovided,andunsuitablematerialsorworkmayberejectednotwithstandingthatsuchmaterialsorworkmayhavebeenpreviouslyoverlookedoraccepted.9.ADMINISTRATIVECOSTS.IfDeveloperfailstoconstructandinstallalloranypartofthePublicImprovementswithinthetimerequiredbythisAgreement,orifDeveloperfailstocomplywithanyotherobligationcontainedherein,DeveloperanditssuretyshallbejointlyandseverallyliabletoCityforalladministrativeexpenses,fees,andcosts,includingreasonableattorney’sfeesandcosts,incurredinobtainingcompliancewiththisAgreementorinprocessinganylegalactionorforanyotherremediespermittedbylaw.10.ACCEPTANCEOFIMPROVEMENTS;AS-BUILTORRECORDDRAWINGS.TheCityCouncilmay,initssoleandabsolutediscretion,acceptfullycompletedportionsofthePublicImprovementspriortosuchtimeasallofthePublicImprovementsarecomplete,whichshallnotreleaseormodifyDeveloper’sobligationtocompletetheremainderofthePublicImprovementswithinthetimerequiredbythisAgreement.l0.l .UponthetotalorpartialacceptanceofthePublicImprovementsbyCity,Developershall?lewiththeRecorder’sOf?ceoftheCountyofRiversideanoticeofcompletionfortheacceptedPublicImprovementsinaccordancewithCaliforniaCivilCodesection3093,atwhichtimetheacceptedPublicImprovementsshallbecomethesoleandexclusivepropertyofCitywithoutpaymenttherefor.

21.Q

CigAcccgtanceofPubliclmgrovements
Develo1'ger’sObligationtoProvideAs-BuiltorRecordDrawings

10.2 .IfTractNo.33824-2wasapprovedandrecordedasasinglephasemap,CityshallnotacceptanyoneormoreoftheimprovementsuntilallofthePublicImprovementsarecompletedbyDeveloperandapprovedbyCity.IssuancebyCityofoccupancypermitsforanybuildingsorstructureslocatedonthePropertyshallnotbeconstruedinanymannertoconstituteCity’sacceptanceorapprovalofanyPublicImprovements.10.3Notwithstandingtheforegoing,CitymaynotacceptanyPublicImprovementsunlessanduntilDeveloperprovidesone(1)setof“as-built”orrecorddrawingsorplanstotheCityEngineerforallsuchPublicImprovements.Thedrawingsshallbecerti?edandshallre?ecttheconditionofthePublicImprovementsasconstructed,withallchangesincorporatedtherein.11.W ARRANTYANDGUARANTEE.DeveloperherebywarrantsandguaranteesallPublicImprovementsagainstanydefectiveworkorlabordone,ordefectivematerialsfurnishedintheperformanceofthisAgreement,includingthemaintenanceofalllandscapingwithinthePropertyinavigorousandthrivingconditionreasonablyacceptabletoCity,foraperiodofone(1)yearfollowingcompletionoftheworkandacceptancebyCity.DuringtheWarranty,Developershallrepair,replace,orreconstructanydefectiveorotherwiseunsatisfactoryportionofthePublicImprovements,inaccordancewiththecurrentordinances,resolutions,regulations,codes,standards,orotherrequirementsofCity,andtotheapprovaloftheCityEngineer.Allrepairs,replacements,orreconstructionduringtheWarrantyshallbeatthesolecost,expense,andliabilityofDeveloperanditssurety.AstoanyPublicImprovementswhichhavebeenrepaired,replaced,orreconstructedduringtheWarranty,DeveloperanditssuretyherebyagreetoextendtheWarrantyforanadditionalone(1)yearperiodfollowingCity’sacceptanceoftherepaired,replaced,orreconstructedPublicImprovements.NothinghereinshallrelieveDeveloperfromanyotherliabilityitmayhaveunderfederal,state,orlocallawtorepair,replace,orreconstructanyPublicImprovementfollowingexpirationoftheWarrantyoranyextensionthereof.Developer’swarrantyobligationunderthissectionshallsurvivetheexpirationorterminationofthisAgreement.12.SECURITY;SURETYBONDS.PriortoCity’sapprovalandexecutionofthisAgreement,DevelopershallprovideCitywithsuretybondsintheamountsandunderthetermssetforthbelow.TheamountoftheSecurityshallbebasedontheCityEngineer’sEstimatedCosts.IfCitydeterminesatanytimepriortoDeveloper’scompletionofthePublicImprovementsunderSection4[ConstructionSchedule],initssoleandabsolutediscretion,thattheEstimatedCostshavechanged,DevelopershalladjusttheSecurityintheamountrequestedbyCity.Developer’scompliancewiththisprovision(Section12.0gLq.)shallinnowaylimitormodifyDeveloper’sindemni?cationobligationprovidedinSection16.0ofthisAgreement.12.1PerformanceBond.ToguaranteethefaithfulperformanceofthePublicImprovementsandalltheprovisionsofthisAgreement,toprotectCityifDeveloperisindefaultassetforthinSection18.0gts_eg.ofthisAgreement,andtosecureDeveloper’sone-yearguaranteeandwarrantyofthePublicImprovements,includingthemaintenanceofalllandscapinginavigorousandthrivingcondition,DevelopershallprovideCityafaithfulperformancebondintheamountofOneMillionEightHundredandForty-SevenThousandandFiveHundredDollars($1,847,500.00),whichsumshallbenotlessthanonehundredpercent(100%)oftheEstimatedCosts.

RIV#4836-3917-8284v2 - -

21.Q

AdditionalReguiremems
FormofSecurig
Develoger’sLiahilig

12.2PartialRelease.TheCityCouncilmay,initssoleandabsolutediscretionanduponrecommendationoftheCityEngineer,partiallyreleaseaportionorportionsoftheSecurityprovidedunderthissectionasthePublicImprovementsareacceptedbyCity,providedthatDeveloperisnotindefaultonanyprovisionofthisAgreementorconditionofapprovalforTractNo.33824-2,andthetotalremainingSecurityisnotlessthantwenty-?vepercent(25%)oftheEstimatedCosts.AllSecurityprovidedunderthissectionshallbereleasedattheendoftheWarrantyperiod,oranyextensionthereofasprovidedinSection11.0ofthisAgreement,providedthatDeveloperisnotindefaultonanyprovisionofthisAgreementorconditionofapprovalforTractNo.33824-2.12.3Labor&MaterialBy.Tosecurepaymenttothecontractors,subcontractors,laborers,materialmen,andotherpersonsfurnishinglabor,materials,orequipmentforperformanceofthePublicImprovementsandthisAgreement,DevelopershallprovideCityalaborandmaterialsbondintheamountofOneMillionEightHundredandForty-SevenThousandandFiveHundredDollars($1,847,500.00),whichsumshallnotbelessthanonehundredpercent(100%)oftheEstimatedCosts.TheSecurityprovidedunderthissectionmaybereleasedbywrittenauthorizationoftheCityEngineeraftersix(6)monthsfromthedateCityacceptsthe?nalPublicImprovements.TheamountofsuchSecurityshallbereducedbythetotalofallstopnoticeormechanic’slienclaimsofwhichCityisaware,plusanamountequaltotwentypercent(20%)ofsuchclaimsforreimbursementofCity’santicipatedadministrativeandlegalexpensesarisingoutofsuchclaims.12.4 .ThesuretyforanysuretybondsprovidedasSecurityshallhaveacurrentA.M.Best’sratingofnolessthanA:VlIl,beabankorinsurancecompanylicensedtotransactsuretybusinessinCalifornia,andshallbesatisfactorytoCity.AspartoftheobligationsecuredbytheSecurityandinadditiontothefaceamountoftheSecurity,theDeveloperoritssuretyshallsecurethecostsandreasonableexpensesandfees,includingreasonableattomey’sfeesandcosts,incurredbyCityinenforcingtheobligationsofthisAgreement.TheDeveloperanditssuretystipulateandagreethatnochange,extensionoftime,alteration,oradditiontothetermsofthisAgreement,thePublicImprovements,ortheplansandspeci?cationsforthePublicImprovementsshallinanywayaffectitsobligationontheSecurity.12.5 .TheevidenceoftheSecurityshallbeprovidedontheformssetforthinAttachment“C”,unlessotherformsaredeemedacceptablebytheCityEngineerandtheCityAttorney,andwhensuchformsarecompletedtothesatisfactionofCity,theformsandevidenceoftheSecurityshallbeattachedheretoasAttachment“C”andincorporatedhereinbythisreference.12.6 .WhilenoactionofDevelopershallberequiredinorderforCitytorealizeonitssecurityunderanySecurityinstrument,DeveloperagreestocooperatewithCitytofacilitateCity’srealizationunderanySecurityinstrument,andtotakenoactiontopreventCityfromsuchrealizationunderanySecurityinstrument.NotwithstandingthegivingofanySecurityinstrumentorthesubsequentexpirationofanySecurityinstrumentoranyfailurebyanysuretyor?nancialinstitutiontoperformitsobligationswithrespectthereto,DevelopershallbepersonallyliableforperformanceunderthisAgreementandforpaymentofthecostofthelaborandmaterialsfortheimprovementsrequiredtobeconstructedorinstalledherebyandshall,withinten(10)daysafterwrittendemandtherefor,delivertoCitysuchsubstituteSecurityasCityshallrequiresatisfyingtherequirementsinthisSection12.

21.Q

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EE-"1"'EE"';""l.."'$5.-IE:-y.;~';:
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13.MONUMENTSECURITY .PriortoCity’sexecutionofthisAgreement,toguaranteepaymenttotheengineerorsurveyorforthesettingofallsubdivisionboundaries,lotcomers,andstreetcenterlinemonumentsforTractNo.33824-2incompliancewiththeapplicableprovisionsofCity’sMunicipaland/orDevelopmentCode(“SubdivisionMonuments”),DevelopershalldepositcashwithCityintheamountof{TwentyFiveThousandFive-HundredDollars}($25,500),whichsumshallnotbelessthanonehundredpercent(100%)ofthecostsofsettingtheSubdivisionMonumentsasdeterminedbytheCityEngineer.SaidcashdepositmaybereleasedbywrittenauthorizationoftheCityEngineerafterallrequiredSubdivisionMonumentsareacceptedbytheCityEngineer,CityhasreceivedwrittenacknowledgmentofpaymentinfullfromtheengineerorsurveyorwhosettheSubdivisionMonuments,andprovidedDeveloperisnotindefaultofanyprovisionofthisAgreementorconditionofapprovalforTractNo.33824-2.14.LIEN.TosecurethetimelyperformanceofDeveloper’sobligationsunderthisAgreement,includingthoseobligationsforwhichsecurityhasbeenprovidedpursuanttoSections12.0e_ts_eq.and13.0ofthisAgreement,DeveloperherebycreatesinfavorofCityalienagainstallportionsofthePropertynotdedicatedtoCityorsomeothergovernmentalagencyforapublicpurpose.AstoDeveloper’sdefaultonthoseobligationsforwhichsecurityhasbeenprovidedpursuanttoSections12.0e_t$3.and13.0ofthisAgreement,Cityshall?rstattempttocollectagainstsuchsecuritypriortoexercisingitsrightsasacontractlienholderunderthissection.15.SIGNSANDADVERTISING.DeveloperunderstandsandagreestoCity’sordinances,regulations,andrequirementsgoverningsignsandadvertisingstructures.DeveloperherebyagreeswithandconsentstothesummaryremovalbyCity,withoutnoticetoDeveloper,ofallsignsorotheradvertisingstructureserected,placed,orsituatedinviolationofanyCityordinance,regulation,orotherrequirement.RemovalshallbeattheexpenseofDeveloperanditssurety.DeveloperanditssuretyshallindemnifyandholdCityfreeandharmlessfromanyclaimordemandarisingoutoforincidenttosigns,advertisingstructures,ortheirremoval.16.INDEMNIFICATION.Developershalldefend,indemnify,andholdharmlessCity,itselectedof?cials,of?cers,employees,andagentsfromanyandallactualorallegedclaims,demands,causesofaction,liability,loss,damage,orinjury,topropertyorpersons,includingwrongfuldeath,whetherimposedbyacourtoflaworbyadministrativeactionofanyfederal,state,orlocalgovernmentalbodyoragency,arisingoutoforincidenttoanyacts,omissions,negligence,orwillfulmisconductofDeveloper,itspersonnel,employees,agents,orcontractorsinconnectionwithorarisingoutofconstructionormaintenanceofthePublicImprovements,orperformanceofthisAgreement.Thisindemni?cationincludes,withoutlimitation,thepaymentofallpenalties,?nes,judgments,awards,decrees,attorneys’fees,andrelatedcostsorexpenses,andthereimbursementofCity,itselectedof?cials,of?cers,employees,and/oragentsforalllegalexpensesandcostsincurredbyeachofthem.Thisindemni?cationexcludesonlysuchportionofanyclaim,demand,causeofaction,liability,loss,damage,penalty,?ne,orinjury,topropertyorpersons,includingwrongfuldeath,whichiscausedsolelyandexclusivelybythegrossnegligenceorwillfulmisconductofCityasdeterminedbyacourtoradministrativebodyofcompetentjurisdiction.Developer’sobligationtoindemnifyCityshallsurvivetheexpirationorterminationofthisAgreement,andshallnotberestrictedtoinsuranceproceeds,ifany,receivedbyCity,itselectedof?cials,of?cers,employees,oragents.

21.Q

Tmes;Amounts
Deductible:

AdditionalInsured;Separationoflnsureds
PrimaryInsurance;WaiverofSubrogation

17.INSURANCE.17.1 .Developershallprocureandmaintain,andshallrequireitscontractorstoprocureandmaintain,duringconstructionofanyPublicImprovementpursuanttothisAgreement,insuranceofthetypesandintheamountsdescribedbelow.IfanyoftheRequiredInsurancecontainsageneralaggregatelimit,suchinsuranceshallapplyseparatelytothisAgreementorbenolessthantwotimesthespeci?edoccurrencelimit.17.1.1GeneralLiability.Developeranditscontractorsshallprocureandmaintainoccurrenceversiongeneralliabilityinsurance,orequivalentform,withacombinedsinglelimitofnotlessthan$3,000,000peroccurrenceforbodilyinjury,personalinjury,andpropertydamage.17.1.2BusinessAutomobileLiability.Developeranditscontractorsshallprocureandmaintainbusinessautomobileliabilityinsurance,orequivalentform,withacombinedsinglelimitofnotlessthan$1,000,000peroccurrence.Suchinsuranceshallincludecoveragefortheownership,operation,maintenance,use,loading,orunloadingofanyvehicleowned,leased,hired,orborrowedbytheinsuredorforwhichtheinsuredisresponsible.17.1.3Workers’Compensation.Developeranditscontractorsshallprocureandmaintainworkers’compensationinsurancewithlimitsasrequiredbytheLaborCodeoftheStateofCaliforniaandemployers’liabilityinsurancewithlimitsofnotlessthan$1,000,000peroccurrence,atalltimesduringwhichinsuredretainsemployees.17.1.4ProfessionalLiability.ForanyconsultantorotherprofessionalwhowillengineerordesignthePublicImprovements,liabilityinsuranceforerrorsandomissionswithlimitsnotlessthan$1,000,000peroccurrence,shallbeprocuredandmaintainedforaperiodof?ve(5)yearsfollowingcompletionofthePublicImprovements.Suchinsuranceshallbeendorsedtoincludecontractualliability.17.2 .Anydeductiblesorself—insuredretentionsmustbedeclaredtoandapprovedbyCity.AttheoptionofCity,either:(a)theinsurershallreduceoreliminatesuchdeductiblesorself—insuredretentionsasrespectsCity,itselectedof?cials,officers,employees,agents,andvolunteers;or(b)Developeranditscontractorsshallprovidea?nancialguaranteesatisfactorytoCityguaranteeingpaymentoflossesandrelatedinvestigationcosts,claims,andadministrativeanddefenseexpenses.17.3 .TheRequiredInsuranceshallnameCity,itselectedof?cials,officers,employees,agents,andvolunteersasadditionalinsuredswithrespecttoworkperformedbyoronbehalfofDeveloperoritscontractors,includingmaterials,parts,orequipmentfumishedinconnectiontherewith.TheRequiredInsuranceshallcontainstandardseparationofinsuredprovisions,andshallcontainnospeciallimitationsonthescopeofitsprotectiontoCity,itselectedof?cials,of?cers,employees,agents,andvolunteers.17.4 .TheRequiredInsuranceshallbeprimarywithrespecttoanyinsuranceorself-insuranceprogramscoveringCity,itselectedof?cials,of?cers,employees,agents,andvolunteers.AllpoliciesfortheRequired RIV#4836-3917-8284V2 - -

21.Q

Certificates;Veri?cation
Term;CancellationNotice
L2
FailuretoRemedy;CigAction
InsuranceshallprovidethattheinsurancecompanywaivesallrightofrecoverybywayofsubrogationagainstCityinconnectionwithanydamageorharmcoveredbysuchpolicy.17.5 .Developerandits"contractorsshallfurnishCitywithoriginalcerti?catesofinsuranceandendorsementseffectingcoveragefortheRequiredInsurance.Thecerti?catesandendorsementsforeachinsurancepolicyshallbesignedbyapersonauthorizedbythatinsurertobindcoverageonitsbehalf.Allcerti?catesandendorsementsmustbereceivedandapprovedbyCitybeforeworkpursuanttothisAgreementcanbegin.Cityreservestherighttorequirecomplete,certi?edcopiesofallrequiredinsurancepolicies,atanytime.17.6 .DeveloperanditscontractorsshallmaintaintheRequiredInsuranceforthetermofthisAgreementandshallreplaceanycerti?cate,policy,orendorsementwhichwillexpirepriortothatdate.AllpoliciesshallbeendorsedtoprovidethattheRequiredInsuranceshallnotbesuspended,voided,reduced,canceled,orallowedtoexpireexcepton30days’priorwrittennoticetoCity.17.7Insurer.UnlessapprovedinwritingbyCity,allRequiredInsuranceshallplacedwithinsurerslicensedtodobusinessintheStateofCaliforniaandwithacurrentA.M.BestratingofatleastA:VIII.18.DEFAULT;NOTICE;REMEDIES.18.1Notice.IfDeveloperneglects,I'6?lSCS,orfailsto?il?llortimelycompleteanyobligation,term,orconditionofthisAgreement,orifCitydeterminesthereisaviolationofanyfederal,state,orlocallaw,ordinance,regulation,code,standard,orotherrequirement,CitymayatanytimethereafterdeclareDevelopertobeindefaultorviolationofthisAgreementandmakewrittendemanduponDeveloperoritssurety,orboth,toimmediatelyremedythedefaultorviolation.Developershallcommencetheworkrequiredtoremedythedefaultorviolationwithinten(10)daysofthewrittendemandfromtheCity.Ifthedefaultorviolationconstitutesanimmediatethreattothepublichealth,safety,orwelfare,Citymayprovidethedemandverbally,andDevelopershallcommencetherequiredworkwithintwenty-four(24)hoursthereof.ImmediatelyuponCity’sissuanceofthedemandtoremedythedefault,DeveloperanditssuretyshallbeliabletoCityforallcostsofconstructionandinstallationofthePublicImprovementsandallotheradministrativecostsexpensesasprovidedfo'rinSection9.0ofthisAgreement.18.2 .IftheworkrequiredtoremedythenoticeddefaultorviolationisnotdiligentlyprosecutedtoasubstantialcompletionacceptabletoCitywithinareasonabletimedesignatedbytheCity,Citymaycompleteallremainingwork,arrangeforthecompletionofallremainingwork,and/orconductsuchremedialactivityasinitssoleandabsolutediscretionitbelievesisrequiredtoremedythedefaultorviolation.Allsuchworkorremedialactivityshallbeatthesoleandabsolutecost,expense,andliabilityofDeveloperanditssurety,withoutthenecessityofgivinganyfurthernoticetoDeveloperorsurety.City’srighttotakesuchactionsshallinnowaybelimitedbythefactthatDeveloperoritssuretymayhaveconstructedany,ornoneoftherequiredoragreeduponPublicImprovementsatthetimeofCity’sdemandforperformance.IntheeventCityelectstocompleteorarrangeforcompletionoftheremainingworkandimprovements,Citymayrequire RIV#4836-3917-8284V2 _ _

21.Q

AuthoriggtoEnterAgreement
ooperation;FurtherActs
Construction;References:Cagtions
allworkbyDeveloperoritssuretytoceaseinordertoallowadequatecoordinationbyCity.Notwithstandingtheforegoing,ifconditionsprecedentforreversiontoacreagecanbemetandiftheinterestsofCitywillnotbeprejudicedthereby,CitymayalsoprocessareversiontoacreageandthereafterrecoverfromDeveloperoritssuretythefullcostandexpenseincurred.18.3OtherRemedies.NoactionbyCitypursuanttoSection18.0e_t§e_q.ofthisAgreementshallprohibitCityfromexercisinganyotherrightorpursuinganyotherlegalorequitableremedyavailableunderthisAgreementoranyfederal,state,orlocallaw.Citymayexerciseitrightsandremediesindependentlyorcumulatively,andCitymaypursueinconsistentremedies.Citymayinstituteanactionfordamages,injunctiverelief,orspecificperformance.19.GENERALPROVISIONS.19.1 .EachPartywarrantsthattheindividualswhohavesignedthisAgreementhavethelegalpower,right,andauthoritymakethisAgreementandbindeachrespectiveParty.19.2Q .ThePartiesshallfullycooperatewithoneanother,andshalltakeanyadditionalactsorsignanyadditionaldocumentsasmaybenecessary,appropriate,orconvenienttoattainthepurposesofthisAgreement.19.3 .ItbeingagreedthePartiesortheiragentshaveparticipatedinthepreparationofthisAgreement,thelanguageofthisAgreementshallbeconstruedsimply,accordingtoitsfairmeaning,andnotstrictlyfororagainstanyParty.Anytermreferencingtime,days,orperiodforperformanceshallbedeemedcalendardaysandnotworkdays.AllreferencestoDeveloperincludeallpersonnel,employees,agents,andsubcontractorsofDeveloper,exceptasotherwisespeci?edinthisAgreement.AllreferencestoCityincludeitselectedof?cials,of?cers,employees,agents,andvolunteersexceptasotherwisespeci?edinthisAgreement.Thecaptionsofthevariousarticlesandparagraphsareforconvenienceandeaseofreferenceonly,anddonotde?ne,limit,augment,ordescribethescope,content,orintentofthisAgreement.19.4Notices.Allnotices,demands,invoices,andwrittencommunicationsshallbeinwritinganddeliveredtothefollowingaddressesorsuchotheraddressesasthePartiesmaydesignatebywrittennotice:CITY:CityofHemetAttn:AlexanderP.Meyerhoff,CityManager445E.FloridaAvenueHemet,CA92543 RIV

21.Q

ment;Modi?cation
n
AssignmentorTransferofAgreement
BindingEffect
:1PargBene?ciaries
DEVELOPER:McSweenyFarmsRecoveryAcquisition,LLCc/oRaintreeInvestmentCorporationAttn:MatthewVillalobos5796ArmadaDrive,Suite375Carlsbad,CA92008Dependinguponthemethodoftransmittal,noticeshallbedeemedreceivedasfollows:byfacsimile,asofthedateandtimesentprovidedtheoriginaliscontemporaneouslydepositedwithUnitedStatesPostalServiceanddeliveredbyregularmail;bymessenger,asofthedatedelivered;andbyU.S.Mail?rstclasspostageprepaid,asof72hoursa?erdepositintheU.S.Mail.19.5Amend. Nosupplement,modi?cation,oramendmentofthisAgreementshallbebindingunlessexecutedinwritingandsignedbybothParties.19.6.City’sfailuretoinsistuponstrictcompliancewithanyprovisionofthisAgreementortoexerciseanyrightorprivilegeprovidedherein,orCity’swaiverofanybreachofthisAgreement,shallnotrelieveDeveloperofanyofitsobligationsunderthisAgreement,whetherofthesameorsimilartype.TheforegoingshallbetruewhetherCity’sactionsareintentionalorunintentional.Developeragreestowaive,asadefense,counterclaimorsetoff,anyandalldefects,irregularitiesorde?cienciesintheauthorization,executionorperformanceofthePublicImprovementsorthisAgreement,aswellasthelaws,rules,regulations,ordinancesorresolutionsofCitywithregardstotheauthorization,executionorperformanceofthePublicImprovementsorthisAgreement.19.7 .Developershallnotassign,hypothecate,ortransfer,eitherdirectlyorbyoperationoflaw,thisAgreementoranyinteresthereinwithoutpriorwrittenconsentofCity.Anyattempttodososhallbenullandvoid,andanyassignee,hypothecatee,ortransfereeshallacquirenorightorinterestbyreasonofsuchattemptedassignment,hypothecation,ortransfer.Unlessspeci?callystatedtothecontraryinCity’swrittenconsent,anyassignment,hypothecation,ortransfershallnotreleaseordischargeDeveloperfromanydutyorresponsibilityunderthisAgreement. ’

19.8 .Eachandallofthecovenantsandconditionsshallbebindingonandshallinuretothebene?toftheParties,andtheirsuccessors,heirs,personalrepresentatives,orassigns.ThissectionshallnotbeconstruedasanauthorizationforanyPartytoassignanyrightorobligation.19.9Q0Thir .Therearenointendedthirdpartybene?ciariesofanyrightorobligationassumedbytheParties.19.10Invalidi.IfanyportionofthisAgreementisdeclaredinvalid,illegal,orotherwiseunenforceablebyacourtofcompetentjurisdiction,theremainingprovisionsshallcontinueinfullforceandeffect.

RIV#4836-3917-8284V2 - _

21.Q

andVenue
Attorneys’FeesandCasts
RelationshipBetweenTheParties
Countergarts
DateofAgreement
Alexaner.

19.11ConsenttoJurisdiction.ThisAgreementshallbeconstruedinaccordancewithandgovernedbythelawsoftheStateofCalifornia.AnylegalactionorproceedingbroughttointerpretorenforcethisAgreement,orwhichinanywayarisesoutoftheParties’activitiesundertakenpursuanttothisAgreement,shallbe?ledandprosecutedintheappropriateCaliforniaStateCourtintheCountyofRiverside,California.EachPartywaivesthebene?tofanyprovisionofstateorfederallawprovidingforachangeofvenuetoanyothercourtorjurisdictionincluding,withoutlimitation,achangeofvenuebasedonthefactthatagovernmentalentityisapartytotheactionorproceeding,orthatafederalrightorquestionisinvolvedorallegedtobeinvolvedintheactionorproceeding.Withoutlimitingthegeneralityoftheforegoingwaiver,DeveloperexpresslywaivesanyrighttohavevenuetransferredpursuanttoCaliforniaCodeofCivilProcedureSection394.19.12 .Ifanyarbitration,lawsuit,orotherlegalactionorproceedingisbroughtbyonePartyagainsttheotherPartyinconnectionwiththisAgreementortheProperty,theprevailingparty,whetherby?naljudgmentorarbitrationaward,shallbeentitledtoandrecover?'omtheotherpartyallLitigationExpenses.Anyjudgment,order,orawardenteredinsuchlegalactionorproceedingshallcontainaspeci?cprovisionprovidingfortherecoveryofLitigationExpenses.19.13 .ThePartiesherebymutuallyagreethatneitherthisAgreement,anymaprelatedtoTractNo.33824-2,noranyotherrelatedentitlement,permit,orapprovalissuedbyCityforthePropertyshalloperatetocreatetherelationshipofpartnership,jointventure,oragencybetweenCityandDeveloper.Developer’scontractorsandsubcontractorsareexclusivelyandsolelyunderthecontrolanddominionofDeveloper.NothinghereinshallbedeemedtomakeDeveloperoritscontractorsanagentorcontractorofCity.19.14.ThisAgreementmaybeexecutedincounterpartoriginals,whichtakentogether,shallconstituteoneandthesameinstrument.19.15Effective.ThisAgreementshallnotbecomeeffectiveuntilthedateithasbeenformallyapprovedbytheCityandexecutedbytheappropriateauthoritiesofCityandDeveloper:INWITNESSWHEREOF,thepartiesheretohaveexecutedthisAgreementonthedateandyear?rst-abovewritten. CITYOFHEMET By:PCityManager
RIV#4836-3917-8284V2 - -

21.Q

‘(:13AQ3")3/mx/’g,_)Sarah
ai
/I/L/1.é~
’
y‘ v /1 By:Joathan "c arrulhonSignatory
ETITY .

StaleoROGOSACountychar1,
ATTEST:

McComasCityClerk

APPROVEDASTOFORM
BEricS.VCityAttorney
McsweenyFarmsRecoveryAcquisition,LLC
ShumakerIts:AuthorizedSignatoryIts:A
NOTE:DEVELOPER’SSIGNATURESSHALLBEDULYNOTARIZED,ANDAPPROPRIATEATTESTATIONSSHALLBEINCLUDEDASMAYBEREQUIREDBYTHEBYLAWS,ARTICLESOFINCORPORATION,OROTHERRULESORREGULATIONSAPPLICABLETODEVELOPER’SBUSINESS MARSHAROJASNotaryPublic,fNewYorkNo.01861QualifiedinSuffolkCommissionExpiresOct2017 RIV#4836-3917-8284v2 _ _

21.Q

EXHIBIT“A”LEGALDESCRIPTIONOFPROPERTYTRACTNO.33824-2

SUBDIVISIONIMPROVEMENTAGREEMENT

21.Q

"I"""I"'I-
ZZ
EXHIBIT“B”LISTOFPUBLICIMPROVEMENTSTRACTNO.33824-2
RIV#4836-3917-8284v2 SUBDIVISIONIMPROVEMENTAGREEMENT

21.Q

EXHIBIT“C”SURETYBONDSANDOTHERSECURITYTRACTNO.33824-2AsevidenceofunderstandingtheprovisionscontainedinthisAgreement,andoftheDeveloper’sintenttocomplywithsame,theDeveloperhassubmittedthebelowdescribedsecurityintheamountsrequiredbythisAgreement,andhasaf?xedtheappropriatesignaturesthereto:PERFORMANCEBONDPRINCIPALAMOUNT:$1,847,500Surety:Lexon/IronshoreAttorney-in-fact:Address:IronshoreSpecialtyInsuranceCoP.O.Box3407NewYork,NY ,1008 LABOR&MATERIALBONDPRINCIPALAMOUNT:$1,847,500Surety:Lexon/IronshoreAttomey-in-fact:Address:IronshoreSpecialtyInsuranceCo.P.O.Box3407NewYork,NY .1008 CASHMONUMENTSECURITY:$25,500AmountdepositedperCashReceiptNo. Date:
1 SUBDIVISIONIMPROVEMENTAGREEMENT

21.Q

RIV #4833-2180-7817 v1 - 1 -
CITY COUNCIL RESOLUTION NO. 2022-XXX
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CITY OF HEMET
Hemet, California
RESOLUTION NO. 2022-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEMET, CALIFORNIA, APPROVING REPLACEMENT

SUBDIVISION IMPROVMENET AGREEMENT AND
IMPROVEMENT SECURITY FOR TRACT MAP NO. 33824-
2, LOCATED IN MCSWEENY FARMS, SOUTH OF

MCSWEENY PARKWAY AND EAST OF SOUTH VILLAGE
LOOP (KB HOME COASTAL INC., A CALIFORNIA

CORPORATION) AND RELEASE OF EXISTING

SUBDIVISION IMPROVEMENT AGREEMENT AND

IMPROVEMENTE SECURITY PROVIVDED BY
MCSWEENY RECOVERY ACQUISITION, LLC.

WHEREAS, Tract Map 33824-2, submitted for approval by McSweeny Recovery Acquisition, LLC., a Delaware Limited Liability Company (“Developer”), and approved by the City of Hemet on September 28, 2016; and
WHEREAS, KB Home Coastal Inc., a California Corporation (“Builder”) has acquired the land known as Tract Map 33824-2 from Developer (a copy of which is attached as Exhibit “B”); and
WHEREAS, to meet and continue the requirements established as a prerequisite to final approval of Final Tract Map No. 33824-2, Builder agreed to enter into a Subdivision Improvement Agreement superseding and replacing Subdivision Improvement Agreement known as Riverside County Recorder’s Document No. 2016- 0436391 (“Existing Agreement”), together with good and sufficient security, in conformance with the City Attorney’s approved format, for approval and execution by the City; and
WHEREAS, upon recordation of the replacement Subdivision Improvement Agreement and Improvement Security by Builder, the previously recorded Existing Agreement shall be released by the Interim City Manager or designee; and

21.Q

RIV #4833-2180-7817 v1 - 2 -
CITY COUNCIL RESOLUTION NO. 2022-XXX
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WHEREAS, the Subdivision Improvement Agreement and good and sufficient security have been accepted by the City; and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HEMET AS FOLLOWS:

SECTION 1. RECITALS
The foregoing recitals are true and correct.

SECTION 2. APPROVAL OF REPLACEMENT SUBDIVISION IMPROVEMENT

AGREEMENT
A. The Subdivision Improvement Agreement attached hereto as Exhibit “A” is approved and the Interim City Manager is authorized to execute it and the City Clerk is authorized to attest thereto.

B. Said improvement security is accepted as good and sufficient, subject to approval as to form and content thereof by the City Attorney,
C. Upon recordation of the Replacement Subdivision Improvement Agreement, the Interim City Manager, or his designee, is authorized to release the existing Subdivision Improvement Agreement and Improvement Security.

D. Pursuant to Government Code Section 66458, Tract Map No. 33824-2 was previously approved, and City accepted the real property described therein.

SECTION 3. CERTIFICATION
This Resolution shall take effect immediately upon its adoption by the City Council. The City Clerk shall attest to and certify the vote adopting this Resolution.

21.Q

RIV #4833-2180-7817 v1 - 3 -
CITY COUNCIL RESOLUTION NO. 2022-XXX
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PASSED, APPROVED AND ADOPTED this 13th day of December 2022.

Malcolm Lilienthal, Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________
John Paul Maier, City Clerk Steven Graham, City Attorney

21.Q

RIV #4833-2180-7817 v1 - 4 -
CITY COUNCIL RESOLUTION NO. 2022-XXX
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State of California )
County of Riverside )
City of Hemet )
I, John Paul Maier, City Clerk of the City of Hemet, do hereby certify that the foregoing resolution was adopted by the Hemet City Council on the 13th day of December, 2022 and was passed by the following vote:

AYES: Council Members:

NOES: Council Member:

ABSTAIN: Council Member:

ABSENT: Council Member:
_________________________________
John Paul Maier, City Clerk

21.Q

ORDEDATTHEREQUESTOFWHENRECORDEDRETURNT
THECITYOFHEMET,amunicipalcorporation
KBHOMECOASTALINC.,aCaliforniacorporation
IV(:48
R.-\i-T
RECAND(DocumentexemptfromrecordingfeespursuanttoCa].Gov.Code§27383)0:

CITYOFHEMETr-.Attn:CityManager445EastFloridaAvenueHemet,California92543 THISSPACEFORRECORDER’SUSEONLY
SUBDIVISIONIMPROVEMENTAGREEMENTFINALTRACTMAP33824-2
ByandBetween
and
30-8901-vl

21.Q

ThisSubdivisionImprovementAgreement(“Agreement”)isenteredintoasofthis13thdayofSeptember,2022(“EffectiveDate")byandbetweentheCityofl-lemet,amunicipalcorporation(“City”)andKBHOMECoastalInc,aCaliforniacorporation(“Builder”).CityandBuilderaresometimeshere eferredtoas“Party”andhereinaftercollectivelyE5. ofH iouslyoper securi
ngandsupersedingthemeritAgre andbetw CityofHemet,a municipalloperalso Riveside RecorerOfficeDocumentNo. requiredbytheSubdivisionMapAct(GovernmentC sections664l0gt_s_eg.),(“MapAct”)theCityOrdinances,theconditionsofapprovalfor ctNo.33824-2,orotherordinances,resolutions,orpoliciesofCityrequiringconstructionmprovementsinconjunctionwiththesubdivisionofland, F. PursuantOrdinancesappl ionsoftheMapBuilrandCityenter Agreementmely andcompleionoPnblImprovements2 efurnishoftheMapNo.824-2.

H._PursuanttoGovernmentSecti49‘)Bui ecutionAgreementandtheprovisionofthesecurimade sidetion approv?nalmapforTractMapNo.33824-2.

SUBDIVISIONIMPROVEMENTAGREEMENTFINALTRACTMAP33824-2
inafterindividuallyrreferredtoasthe“’PartiRECITALSA.CityemethasprevapprovedTractMapNo.33824-2onSeptember28,2016,alongwithprandsufficientty.B.McSweenyRecoveryAcquisition,LLC,aDelawareLi(“Developer”)hasnotcompletedalloftheWorkormadeallof C.BuilderhasacquiredthelandknownasTractMap33824-2fromDeveloper.D.TheCitydesirestoenterintothisAgreementamendiSubdivisionImproveementby eenthecorporationandDeveknownasr Countyd2016-0436391(“OriginalSubdivisionImprovementAgreement”).E.BuilderhasnotcompletedalloftheworkormadeallofthePublicImprovementsodeTraofitoCityandtheicableprovis Act,de intothis fortheti constructiont ftheic andth ingsecuritytherefor,acceptabletotheCityEngineerandCityAttorney,forTract33G.CityhasauthoritytoenterintothisSubdivisionImprovementAgreementpursuanttoGovernmentCodeSections66499— 66499.10.Codeon66 lder’sex ofthistyareinconraofCity’saloftheRIV#4830-890]-9593V

21.Q

“Builder”shallmeanKBl-IO corporation. Builder”shallalsoincludeallassignees,totheextentpermittenderhisAgreem ghtsandobligationsofBuilderunderthisAgreement,andanyccess '
legaland/orequitableinterestintheProperty.“Developer”shallmeanMcSweenyRecoveiyAcquisition,LLC,aDelawareLimitedLiabilityCompany.Theterm“Developer”shallalsoincludeallassignees.totheextentpermittedunderthisAgreement,oftherightsandobligationsofDeveloperunderthisAgreement,andanysuccessor»in-interesttoDeveloperhavingalegaland/orequitableinterestintheProperty.“EsrimaterlCosts”shallmeantheCityEngineer‘approximatofthethePublicImprovements,includingthereplacemetcostforall dscapicanallcostsandexpenses,totheextentreasonableinamount,actu and sarincurredbyapartyingoodfaithintheprosecutionofanactionorprocng,i ng, notlimitedto,courtcosts,?ling,recording,andservicefees,copyingcosts,exhibitproductioncosts,specialmediarentalcosts,attorneys’fees,feesforinvestigators,witnessfees(bothlayandexpert),travelexpenses,depositionandtranscriptcostsandanyothercostorexpense,theawardofwhichacourtofcompetentjurisdictionmaydeterminetobejustandreasonable. “Property"
shallmeanalloftherealpropecontainedwithintheboundariesofTractMapNo.33824-2locatedintheCityofHemet,Calri1ia,asismoreparticularlydescribedinthelegaldescriptionandparceldiagramattachederetoandincorporatedherebybyreferenceatAttachment“A”. ’shallinclude,butnotbelimitedto,recertificationofroughgradedpads,?nishgrade,repairexistingstreets,curbsandgutters,sidewalks,watersystems,sanitarysewers,utilities.anddrainagefacilities(ifany),landscaping,streetlightsandallotherfacilitiesrequiredtobeconstructedanddedicatedtotheCityorotherpublicentityasconditionsofapprovalofTentativeTractMapNo.3382432andasshownindetailontheplans.andspeci?cationswhichhavebeenapprovedbytheCityandincorporatedintoTractMapNo,3382432.ThePartiesagreethatthePubliclmprovementstobecompletedbyBuilderaremorespecificallydescribedinthediagramorplanattachedheretoandincorporatedhereinbyreferenceasAttachment“B.Notwithstanding,Attachment“B”,BuildershallremainobligatedtoconstructandcompleteallofthePublicImprovementsrequiredasconditionsofapprovalforTractMapNo.33824-2,afull “RequireSection1
“Security”shallmeasuretybondintheamountssecurityapprovedbyityEngineerrCityAttorney DEFINEDTERMSMECoastalInc.,aCaliforniaTheterm“du tl ent,oftherisuor-1n—1nteresttoBuilderhavinga I
s ionactualcosttoconstruct11 Ianng.“LitigationExpenses”shallmallyneceslyieedincludibut 11Insurance”shallmeantheinsurancerequiredtobemaintainedbyBuilderunder8. andunderthetermsofSection13orotherC 0 RIV#4830-8901-vl

21.Q

inalManandAgreementAggroval
“TractN033824-2.”shallmeanthe?nalmappreparedandapprovedbytheCityfortentativetractmapno.33824-2.“Warranty”shallmeantheoneyearperiod-.followingcompletionofthePublicImprovementsbyBuilderandtheacceptanceofthePublicImprovementsbytheCityinwhichBuilderwarrantsandguaranteesallPublicImprovements.OPERATIVEPROVISIONSNOW,THEREFORE,inconsiderationofthemutualpromisesandcovenantsmadebythepartiesandcontainedhereandotherconsideration,thevalueandadequacyofwhichareherebyacknowledged,thepartiesagreeasfollows:
' l. SUPERSESSION.ThisAgreementsupersedesandreplacestheOriginalSubdivisionImprovementAgreementinitsentirety.UponexecutionofthisAgreementbytheBuilder,theOriginalSubdivisionImprovementAgreementshallbeofnofurtherforceandeffectunlessreinstated.2.EFFECTIVENESS.ThisAgreementshallnotbeeffectiveunlessanduntilallfour(4)ofthefollowingconditionsaresatis?edintheorderprovided:2.1Security.BuilderprovidesCitywiththeSecurityofthetypeandintheamountsrequiredbythisAgreement;2.2F .TheCityCounciloftheCityofHemet(“CityCouncil”)previouslyapprovedthe?nalmapforTractMapNo.33824-2andnowapprovesthisAgreement;2.3RecordAgreement.BuilderandCityexecutetheAgreementandCityrecordsthisAgreementintheRecorder’sOf?ceoftheCountyofRiverside;and’ Iftheabovedescribedconditionsarenotsatis?edintheorder,mannerandwithinthetimeprovidedunderthisAgreement,thisAgreementshallautomaticallyterminatewithoutneedoffurtheractionbyeitherCityorBuilder.3.PUBLICIMPROVEMENTS.Buildershallconstructorhaveconstructedatitsowncost,expense,andliabilitythePublicImprovements,asdefinedherein,withinthetimeandinthemannerrequiredunderthisAgreement.ConstructionofthePublicImprovementsshallincludeanytransitionsand/orotherincidentalworkdeemednecessaryfordrainageorpublicsafety.TheBuildershallberesponsibleforthereplacement,relocation,orremovalofanycomponentofanyirrigationwaterorsewersystemincon?ictwiththeconstructionorinstallationofthePublicImprovements.Suchreplacement,relocation,orremovalshallbeperformedtothecompletesatisfactionoftheCityEngineerandtheownerofsuchwaterorsewersystem.Builderfurtherpromisesandagreestoprovideallequipment,tools,materials,labor,tests,designwork,andengineeringservicesnecessaryorrequiredbyCitytofullyandadequatelycompletethePublicImprovements. \

3.1PriorPartialConstructionofPublicImnrovements.WhereconstructionofanyPublicImprovementshasbeenpartiallycompletedpriortothisAgreement, RIV#4830-8901-9593vl

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Builagreeswith5Agree
whichwillprovideutilityservicetotheProperty,attestingthatBuilderhasmadealldepositslegallyrequiredbytheutilityfortheextensionandprovisionofutilityservicetotheProperty.Pre-approvalPlansandSpeci?cations.

OualitvofWk; omjlianceWithwsandC es.

3.6 AlterationstoImrovements.Allworkshallbedoneandimprovementsmadeandcompletedasshownonapprovedplansandspeci?cations,andanysubsequentalterationsthereto.lfduringthecourseofconstructionandinstallationofthePublicImprovementsitisdetenninedthatthepublicinterestrequiresalterationsinthePublic maps,plans,speci?cations,standarddrawings,andspecialamendmentstheretoon?lewithCity,aswellasallapplicablefederal,state,andlocallaws,ordinances,regulations,codes,standards,andotherrequirementsapplicableatthetimeworkisactuallycommenced. representsandmaintainsthatitoritscontrac
RIV#4830-8901-vl

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Extensions
Period

4.MAINTENANCEOFPUBLICIMPROVEMENTSANDLANDSCAPING.CityshallnotberesponsibleorliableforthemaintenanceorcareofthePublicImprovementsuntilCityfonnallyapprovesan-daacceptstheminaccordancewithitspoliciesandprocedures.CityshallexercisenocontroloverthePublicImp-rovementsuntilapprovedandaccepted.AnyusebyanypersonofthePublicImprovements,oranyportionthereof,shallbeatthesoleandexclusiveriskoftheBuilderatalltimespriortoCity’sacceptanceofthePublicImprovements.BuildershallmaintainallthePublicImprovementsinastateofgoodrepairuntiltheyarecompletedbyBuilderandapprovedandacceptedbyCity,anduntilthesecurityfortheperformanceofthisAgreementisreleased.Maintenanceshallinclude,butshallnotbelimitedto,repairofpavement,curbs,gutters,sidewalks,signals,parkways,watermains,andsewers;maintainingalllandscapingina,vigorousandthrivingconditionreasonablyacceptabletoCity;removalofdebrisfromsewersandstormdrains;andsweeping,repairing,andmaintainingingoodandsafeconditionallstreetsandstreetimprovements.ItshallbeBuilder’sresponsibilitytoinitiateallmaintenancework,butifitshallfailtodoso,itshallpromptlyperformsuchmaintenanceworkwhennoti?edtodosobyCity.IfBuilderfailstoproperlyprosecuteitsmaintenanceobligationunderthissection,CitymaydoallworknecessaryforsuchmaintenanceandthecostthereofshallbetheresponsibilityofBuilderanditssuretyunderthisAgreement.CityshallnotberesponsibleorliableforanydamagesorinjuryofanynatureinanywayrelatedtoorcausedbythePublicImprovementsortheirconditionpriortoacceptance.Notwithstandingtheabove,Builder’sobligationstomaintainpursuanttothisSection4maybeassignedtoahomeowner’sassociationcreatedbyBuilderuntilsuchtimeasthePublicImprovementsareapprovedandacceptedbyCity.5.CONSTRUCTIONSCHEDULE.UnlessextendedpursuanttothisSection5.1ofthisAgreement,BuildershallfullyandadequatelycompleteorhavecompletedthePublicImprovementswithinone(1)year(12months)followingtheEffectiveDateofthisAgreement.5.1 .Citymay,initssoleandabsolutediscretion,provideBuilderwithadditionaltimewithinwhichtocompletethePublicImprovements.ItisunderstoodthatbyprovidingtheSecurityrequiredunderSection13e_tLq.ofthisAgreement,BuilderanditssuretyconsentinadvancetoanyextensionoftimeasmaybegivenbyCitytoBuilder,andwaivesanyandallrighttonoticeofsuchextension(s).Builder’sacceptanceofanextensionoftimegrantedbyCityshallconstituteawaiverbyBuilderanditssuretyofalldefenseoflaches,estoppel,statutesoflimitations,andotherlimitationsofactioninanyactionorproceeding?ledbyCityfollowingthedateonwhichthePublicImprovementsweretohavebeencompletedhereunder.Inaddition,asconsiderationforgrantingsuchextensiontoBuilder,CityreservestherighttoreviewtheprovisionsofthisAgreement,including,butnotlimitedto,theconstructionstandards,thecostestimatesestablishedbyCity,andthesufficiencyoftheimprovementsecurityprovidedbyBuilder,andtorequireadjustmentstheretowhenwarrantedaccordingtoCity’sreasonablediscretion.5.2AccrualofLimitations.AnylimitationsperiodprovidedbylawrelatedtobreachofthisAgreementorthetermsthereofshallnotaccrueuntilBuilderhasprovidedtheCityEngineerwithwrittennoticeofBuilder’sintenttoabandonorotherwisenotcompleterequiredoragreeduponPublicImprovements.5.3BuilderObligationsDoNotTerminate.NotwithstandingtheconstructionscheduleandoptionforextensionsprovidedinSections5.1and5.2,Builder’s RIV#4830-8901-9593v]

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failuretocompletethePublicImprovementsortootherwisesatisfynditionsfapproval,City‘snon-extensionofthetimereferencedinthosesectionsshal terminatorotherwrelievetheBuilderoftheobligation‘tocompletethePublicImpapprovalandsuchobligationsshall.-survivethetermaofthisAgreemsatis?edinfullunlesswaivedormodi?edbyformalactionoftheCity meofgrading,landscaping,andconstructionactivitiestopreventnuisancestosurroundingproperties.Plansshallincludewithoutlimitationtemporarydrainage InordertopreventdamagetothePublicImprovementsbyimproperdrainaget.herhazards,thegradingshallbecompletedinaccordancewiththetimescheduleforcompleofthePublicImprovementsestablishedbythisAgreement,andpriortoCity’srovalan ptanPublicImprovementsandreleaseoftheSecurityassetforthSection?gAgreement. provideinstallationofcabletelevisionconnectionstoserveeachparcel,lot.orunitoflandinaccordancewithallapplicablefederal,state,andlocallaws,rules,andregulations,including,butnotlimitedto,therequirementsofthecablecompanypossessingavalidfranchisewithCitytoprovidesuchservicewithinCity’sjurisdictionallimits;providedhowever,Buildershallnotberesponsibleforanyend~userpaymentsforcabletelevisionser '
installedunderground.
regulation,orpolicy.orasestablishedbyCityrelativetoTractMapNo.33824-2,orasrequiredbyothergovernmentalagencieshavingjurisdictionoverTractMapNo.3382~1~2. co33
onthemethod,manner,andti

7.UTILITIES.
allco 0 orInot e iserovementsandconditionsofentandshallsurviveuntilCouncil. prevent?oodingproblems.Thetoprescribereasonablecontrols or0tionappdacceccofthein 13e_t.ofthis
vices.Allutilitiesshallbe
RIV#4830-8901-vl

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ideredasdirectcontroloftheindividualworkmenonthejob31.134City’stheauthorityto.»,stop2 inaccordancewiththeTheinspectionoftheworkbyCityderorthecontractorofanyobligationstoful?llthisAgreementasherein tallpartofthe Improvementswithinlthetimerequred Agre uildcomplywi otherobligationcontainedherein,Bui dits etyshalljointlyeverallyhablCityforalladministrativee s,includreasonttorney’sfeescosts,i obtainingcomplianceany diespermtiedbylaw.

Builder’:NoticeofComIetion..Improvements
CiAccetanceofPublicImrovements.asinglephasemap,PublicImprovements Builder’sObligationProvideAs-BuiltorRecordDrawings.Notwithstanding ImprovementsBuilderprovides directedwhichhavensaidportionsofthew.Cityshallnotbeconsinspectorshallhave myandallworknotrequirementscontainshallnotrelieveBuilprovided,andunsuitaborworkmayhavebeen raccepted.10.ADMINISTRATIVECOSTS.IfBuilderfailstoconstructandinsalloranyPublic i bythisement,orifBerfailstothany lderansurbeands eto xpenses,fees,andcostingablea andncurredin withthisAgreementorinprocessinganylegalactionorforotherremei ll1 UponthetotalorpartialacceptanceofthePublicbyCity,Buildershall?lewiththeRecorder’sOfficeoftheCountyof ll.2 IfTractMapNo.33824-2wasapprovedandrecordedas Cityshallnotacceptanyoneormoreoftheimprovementsuntilallofthe arecompletedbyBuilderandapprovedbyCity.IssuancebyCityofoccupancypermitsforanybuildingsorstructureslocatedonthePropertyshallnotbeconstruedinanymannertoconstituteCity’sacceptanceorapprovalofanyPublicImprovements11.3 totheforegoing,CitymaynotacceptanyPublicunlessanduntilone(1)setof“as-built”orrecorddrawingsorplanstotheCityEngineerforallsuchPublicImprovementsThedrawingsshallbecerti?edandshallre?ecttheconditionofthe ances,resolutions,regulations.RIV#4830—890l-9593v1DRAFT

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dtotheapproaloftheCityEngineer.Allrepairs,replacements. Warrantyshalbeatthesolecost.expense,andliabilityofBuilderurety.stomyPublicImprovementswhichhavebeenrepaired,replaced,orreconstructedduringtheWan'r.;,ity,Bnil structidui
relieveBuilder?'oinanyhaveunderfederal,state,orlocallawrepair,replace,orreconstructanyubliImprovementfollowingexpirationoftheWarrantyanyextensionthereof,Builder’swarranty allsurvivethexpirationAgreeme

13. SECUR1Agreement,Buildershal
compliancewithLh ;s_eg.)shallinnoway[it
'
indemni?cationobligationprovi 17ofthisAgreement.

PerformanceBond,ToguaranteethefaithfulperfonnancthePultheprovisionsofthisAgreement,toprotectCityifBuilderdefaul9gts_eq.ofthisAgreement,andtosecureBuilder’sliclmproveinent‘ vigorou
'
nancebondi theamount ndredandForty- ndFiveHunred,847 SevenThousandahallbenotlesstha.nonehundredosts. provementsareaccepte ity,provi6ultonanvprovisionofthisAgreementorcondit approval_,andthetotall'E!1‘[]alIlln‘7Securityisnotlesstha.ntweiifiveercentdCostsAllSecurityprovidedunderthissectionshallbe easeattheend Warranperiod,oranyextensiontheieofasprovidedinAgr providethatBuilderisnotind ' dandevenThousandandFiveHundredDollars,($1,847,500)whichsumshallbele0%)oftheEstimatedCosts.TheSecurityprovidemaybereleasbywrittennthorizationtyEngineeraftersix(6)inCityacceptst finalPublilmprovemethetotalofal amountofsuchSecurityshtopnotic imsofwhichCityisaware codes,standards,orotherrequirementsofCity,anOITCCODon'ingtheanditss AWarrantyforanreplaced,orrecono lPcobligationunderthissectionshnt. TY; N.1pro s1IfCitydeterminesaSection5[Construchavechanged,Buil(Section13e_1dedinSection13.1ImprovementsandalsetforthinSection1warrantyofthePub' sandthriofOneiDollars,($1,500),EstimatedC13.2J
(25%)oftheEstimateofthetyeement,dconditionofapprovalfo13.3subcontractors,labor6.PSonehundredpercent10ed a oftheCihe c nts.Thels eormechanic’slienclaDRAFT p-I toor orterminationofthisvvalandexecutionofthissandunderthetennsset mitormodifyBuilder’s
eofblicisintasone-yearguaranteeandiHdpercent(100%)ofthe,initssoleandabsolutediscretion"onorportionsoftheclbyC dedionof forW‘PreldSection12ofthisthisAgreementor tothecontractors,labor,materials,orment,BuildershalldreForty—notssthandunderthissectiononthsfromthedateallbereducedby,plusanamount

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equa perceadmi legal
AdditionalReuirements.ThesuretyforanysuretybondsprovidedascurrentA.M.Best’srating0 nolessthanA:Vlll,beabankorinsurance

13.5FormofSecuri, TheevidenceoftheSecurityshallbeprovidedonthefomtssetforthinAttaclunent“C”,unlessotherformsaredeemedacceptablebytheCityEngineerandtheCityAttorney,andwhensuchformsarecompletedtothesatisfactionofCity,thefonnsandevidenceoftheSecurityshallbeattachedheretoasAttachment“C"and '
ference.

13.6Builder’:Liabili, WhilenoactionofBuildershallherequiredinorderforCitytorealizeonitssecurityunderanySecurityinstrument,BuilderagreestocooperatewithCitytofacilitateCity’srealizationunderanySecurityinstrument,andtotakenoactiontopreventCityfromsuchrealizationunderanySecurityinstrument.NotwithstandingthegivingofanySecurityinstrumentorthesubsequentexpirationofanySecurityinstrumentoranyfailurebyanysuretyor?nancialinstitutiontoperformitsobligationswithrespectthereto,Buildershallbe guaranteepaymenttotheengineerorsurveyorforthesettingofallsubdivisionboundaries,lotcorners,andstreetcenterlinemonumentsforTractNo.33824-2incomplancewiththeapplicableprovisionsofCity’sMunicipaland/orDevelopmentCode(“Subdivision Monuments,andprovidedBuilderisnotindefaultofanyprov‘
'
conditionofapprovalforTractMapNo.33824-2.
ltotwentynistrativeand

13.4Securityshallhavea
lncorporatedhereinbythisre
RIV#4830-890]-9593vl ergovernmentalagencyfor

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ances,gulations,andrequirementsgoverningsignsandadvertisingstructures.BuilderyagrewithandconsentstothesummaryremovalbyCity,withoutnoticetoBuilder,ofadvertisingstructureserected,placed,orsituatedinviolationofanyCityilderanditsurety ndemand‘holCityfree ‘mlessfromanyclaimorsingoutofoincidsigns,ertisingtructures, ins,demands,causesofaction,liability,loss,dama, ry,topropclucling '
imposedbyacourtofl administrafederalstate,orlo ernmentalbodyoragency,arislany ssionegligence,lfulmisconductofBuilder,it rsonnempa.gen trac '
i ‘
mainancecement.Thisinmniticlimitation,thepaymen ?nes,dgmentsawarddecrees,attorneys’fees,andrelatedcostsorexpe irnbur ctedofficials,officers,employees,and/oragent egalexpenses yeachofthem.Thisindemni?cationexcludesportonofany ofaction,liability,loss,,orinjury,topropertyorersons,udingwrong?ildeath,whichiscausedsolelyandexclusivelybythegrossn ligencewillfulmisconduofCitydetenninedbyacourtoradministrativebodyofcompetentjurisdiction.Builder’bligationindemnifyCityshallsurvivetheexpirationorterminationofthisAgreemeishedinSection12ofthisAgreement,andshallectedofficials,officers,e itscntracalentform
l6.SIGNSANDADVERTISING.Builderunderstanordinre'
herebesallsignsorotherordinance,regulation,orotherrequirement.surety.Bu' s shalli nifyd andhaidemandari r entto advs ortheirremoval.17.INDwarrantyperiodestaandholdharmlessactualorallegedclai ge,orinjuertyorpersons,in wrongfuldeath,whetheraworby tiveactionofanyI, calgov Engoutoforincidenttoacts,omins, orwil :speel,loyees,ts,orcontorsinconnectionwithorarisingoutofconstructionortenofthePublicImprovements,orperformanceofthisAgr de '
ationincludes,withouttofallpenalties,ju , s,nses,andtheresementofCity,itselesforall1 andcostsincurredbonlysuchi claim,demand,causedamage,penalty,?ne p incleg or ct ass0 toantfortheone(1)yearwarrantyperiodestabl Inotberestrictedtoinsuranceproceeds,ifany,receivedbyCity,itse mployees,oragents.18.INSURANCE.l8.l .Buildershallprocureandmaintain,andshallrequirerovementpursuantofthey telytoinoce 1limitle _ lpropertydamagewhich ry,excessand/orself-insurance.

RIV#4830-890]-9593VI

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183AdditionalInsured;SeparationofInsureds.TheRequiredInsuranceshallnameCity.itselectedofficials,o?icers,employees,agents.andvolunteersasadditional Term'CancellationNotice.___u_____é___
RIV#4830-8901-vl

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18.7InsurerRating. approxieidCity,Requilnsura placedwithinsurerslicens business alifornandwitcurren estratingofatleastA:VIH. ceaseinordertoallowadequatecoordinationbyCity.Notwithstandingtheforegoing,ifconditionsprecedentforreversiontoacreagecanbemetandiftheinterestsofCitywillnotbeprejudicedthereby,Citymayalsoprocessareversiontoacreageandtherea?errecoverfromBuilderoritssuretythefullcostandexpenseincurred. exerciseitrightsandremediesindependentlyorcumulatively,andCitymaypursueinconsistentremedies.Citymayinstituteanactionfordamages,injunctiverelief,orspeci?cperformance.

Unlessnceshall edtodotA.M.B19.DEFAULT;NOTICE;REMEDIES.
inwritingbyintheStateofC

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20.1Authori' toEnterAarcementch} warran individualswhoha ignedthAgreementhavethelegalpower,t,.anthority Agreementandbin chrespeiveParty, Cooeratian'FurtherActs.ThePartiesshallfullycooperatewithoneadditionalactsorsignanyadditionaldocumentsasmaybenecessary,toattainthepurposesofthisAgreement. agentshaveparticipatedinthepreparationofthisAgreement,thelanguageofthisAgreementshallbeconstruedsimply,accordingtoitsfairmeaning,andnotstrictlyfororagainstanyParty.Anytermreferencingtime.days,orpeiioclforperformanceshallbedeemedcalendardaysandnotworkdays.AllreferencestoBuilderincludeallpersonnel,employees,agents,and content,orintentofthisAgreement.

Noticesotic mands, writteinwritingan vered t fol] addres raddrignatebywri otice:

CityofHemetAttn:CityManager445E.FloridaAvenueHemet,CA92543 BUILDER:

KBHOMECoastaAttn:ScottHansen0InlandValleyDomar,CA92595Dependinguponthemethodoftransmittal.noticeshallbedeemedreceivedasfollows:byfacsimile,asofthedateandtimesentprovidedtheoriginaliscontemporaneouslydepositedwithUnitedStatesPostalServiceanddeliveredbyregularmail;bymessenger,asofthedatedelivered;andbyU.S.Mailfirstclasspostageprepaid,asof72hoursafterdepositintheU.S.

Amendment‘Modi?cation.lemenodi?catamend greementshallbebindingunle writinsigned GENERALPROVISIONS.ves isdea ct20.2another,andshalltakeanyappropriate,orconvenient20.3

20.4shallbe ddelimaydes ttennCITY:
3631Wild

20.5mentofthisA
.Eaartytsthattherighdaumakethis
Allntothees,deinvoices,andowing ncommunicationssesorsuchotheessesastheParties lInc.,aCaliforniaCorporationrive,Suite300
~Nosuppt,m ion,orssexecutedingandbyboth_]3_RIV#4830-890]-9593v1

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‘
insistuponstrictcompliancewithanyprovisionofthisAgreemortoexerciseanyrightor; ivilegcprovidedherein,orCity’swaiverofanybreachofthisgreement,shallnotrelieveBuilderofany.ofitsobligationsunderthisAgreement.wherofthesameorsimilartyj betruewhetherCity’s '
orunintentional.Builderagreestowaive,asadefense,counterclaimoratoff, defects,irregularitiesordeficienciesintheauthorization,executionorerform PublicImprovementsorthisAgreement,aswellasthelaws,rules,regulationordinancesrresolutionCitywithregardstotheauthorization,executionorperforinanofthePubllmproveme1'thisAgreement.

BindingEffect andalloftheovenantsandconditionsshallbein theParties,antheirsuccessors,heirs,personalrepres This otbeconstrueasanauthorizationforanyPartytoassi ion.

NoThirdPar' Bene?ciaries,ghtorobligationassumedbythePa2 l0Invalidi- Severabiliortion Agreemedeclaredegal,otherwiseunenforceableby compesdiction,mainingshallntinueinfullforceandeffect

20.6Waiver.City’sfailuretoent )1‘Aeth )e.Theforegoingshallactionsareintentionals anyandallp anceofthes, o sofce ic nts0

20.8 .Eachcbindingonandshalluretothebene?tof dentatives,orassigns.sectionshalln dgnanyrightorobligat20.9 Therearenointendedthirdpartybene?ciariesofanyri rties.O. .Ifanyp ofthisntisinvalid,illor acourtof tentjurithereprovisionsco20.11 tration,lawsuit,orotherlegalPartyinconnectionwiththisjudgmentorarbitrationaward,onExpenses.Anyjudgment,1containaspeci?cprovisionRIV#4830-890]-9593vl

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20.13RelatitmshiBetweenTheParties.ThePartiesherebymutuallyagreethatneitherthisAgreement,anymaprelatedtoTractMapNo.33824-2,noranyotherrelatedentitlement,permit,orapprovalissuedbyCityforthePropertyshalloperatetocreatetherelationshipofpartnership,jointventure,oragencybetweenCityandBuilder.--Builder’s contractorofCity.

20.14Countemans.greementgethershallconstitutethesame
EffectiveDateofAreement.ithasbeenformallyapprovedby
ThisA maybeexecutedincounterpartoriginals,whichtakento oneandinstrument._20.15 ThisAgreementshallnotbecomeeffectiveuntilthedate theCityandexecutedbytheappropriateauthoritiesofCityandBuilder.,INWITNESSWHERE

CITYOFHEMET
ByCityManagerATTEST:

CityClerk

APPROVEDASTOFORM
ByCityAttorney
_15_RIV#4830—890]-9593VI

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OASTALIorporatiunKBHOMECaCaliforniac
By:Its:

NOTE:
7/
RIV#4830—890l—9593VIDRAFT
NC.,
Its:
»--.

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l. JUDITHumzsE- umryPuhik-camonmniversmeCountyECmnmlssiun12mmMy(mum.Expiressep22,mo

CALIFORNIAALL-PURPOSEACKNOWLEDGMENT
Anotarypublicorotherofficercompletingthiscertificateverifiesonlytheidentityoftheindividualwhosignedthedocument,towhichthiscertificateisattached,andnotthetruthfulness,accuracy,orvalidofthatdocument.

StateofCalifornia}CountyofRiversideOnNovember07.2022beforeme,JudithMireles,NotaryPublic,personallyappearedVernellWilliamswhoprovedtomeonthebasisofsatisfactoryevidencetobetheperson(s)whosename(s)is/aresubscribedtothewithininstrumentandacknowledgedtomethathe/sheftheyexecutedthesameinhis/herltheirauthorizedcapacity(ies),andthatbyhis/henltheirsignature(s)ontheinstrumenttheperson(s),ortheentityuponbehalfofwhichtheperson(s)acted,executedtheinstrument.IcertifyunderPENALTYOFPERJURYunderthelawsoftheStateofCaliforniathattheforegoingparagraphistrueandcorrect.WITNESSmyhandandofficialseal J ireles,NotaryPublic (SEAL)

21.Q

tarypu oror car ' ' '
caeVernresonl);_fl1e
executedtheinstrument.

EH]
OTHER
Anoblicwhosignedthedocumenttowhichthiscerti?cidentityofthetruthfulness,accuracy,orvalidityofthatdocument.ateisattached;andnotthe

STATEOFCALIFORNIACOUNTYOF
Signature:

CAPACITYCLAIMEDBYSIGNERINDIVIDUALCORPORATEOFFICERTITLEORTYPEOFDOCUMENTTITLE(S):1PARTNER(S)E]LIMITEDGENERALNUMBEROFPAGESATTORNEY-IN-FACT:] TRUSTEE(S)GUARDIAN/CONSERV ATORDATEOFDOCUMENTSIGNERISREPRESENTING:(NAMEOFPERSON(S)ORENTITY(IES))SIGNER(S)OTHERTHANNAMEDABOVE r,
RIV#4830»89OI-9593vI

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Anotarypublicorotherof?cercompletingthiscerti?cateties g_ideindividualwhosignedthedocumenttowhichthiscerti?eaatta mlintruthfulness,accuracy,orvaliditynfthatdocument. 1 .____
9 7__;_,
El
_j.;€,%9.:~
OPTIONALThougdatabelowisnot iredbyla ayprovevalu gprevendulentrealtachmethisform DOCUMENT__}}__.___é_
lM[TEDENERALElE]ElEl _é‘_,_€?._._}’%.‘€€__NERISREPRESMEorPERSON( 5fG’N§R(g* ’”’ “””
’
" *
_&$‘_,‘;i,‘.4&..%_%;_;‘___L 9

STATEOFCALIFORNIACOUNTYOF
(NA
, beforeme,
hthetfrau requntofCAPACITYCLAIMEDBYSIGNERINDIVIDUALCORPORATEOFFICERTITLE(S)PARTNER(S)[JLGATTORNEY-IN-FACTTRUSTEE(S)GUARDIAN/CONSERV ATOROTHER ENTING:s)ORENTITY(IES))
w,itm
ntityoftheotthe
personallyappeared
WITNESSmyhandandof?cialseal(SIGNATUREOFNOTARY)

TITLEORTYPEOF

NUMBEROFPAGES

DATEOFDOCUMENT

OTHERAMEDABO) THANN
RIV#4830—89OI-9593v1

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EXHIBIT“A”LEGALDESCRIPTIONOFPROPERTYTRACTNO.33824-2
RIV#4830—S‘)0I-9593VI SUBDIVISIONIMPROVEMENTDRAFT

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//
[ATTACHED]
RIV#4830-8901-9593VI SUBDIVISIONIMPROVEMENTDRAFT

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MATESurety:

ONUMENTSECURITY:eposiledperCashReceiptN
j______
greement,andhasaf?xedtheappropnates1gnatPERFORMANCEBONDPRINCIPALAMOUNT$1,847,500Surety:Attorney-in-fact:Address:

RIALANDLABORBONDPRINCIPALAMOUNT:Attorney-in-fact:Address CASHMAmountd
RIV#4830—89OI-9593v1
Agreement,
,p

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City of Hemet
City Council Meeting

STAFF REPORT

Meeting: City Council Meeting - Dec 13 2022
Department: Public Works
Submitted by: Eddie Pust, Interim City Manager
Noah Rau, Public Works Director/City Engineer;

☐ Receive and File ☒ Consent Calendar ☐ Business Item ☐ Public Hearing

TITLE:

A Resolution of the City Council of the City of Hemet, California, Approving a First Amendment to Funding, Construction and Acquisition Agreement for Certain Improvements Within the McSweeny Farms Dis Community a Facilities Funded be to Development Through and Established trict Administered by the California Statewide Communities Development Authority (CSCDA)

RECOMMENDED ACTION:

It is respectfully recommended that the City Council:

Adopt a Resolution of the City Council of the City of Hemet, California, Approving a First Amendment to Funding, Construction and Acquisition Agreement for Certain Improvements Within the McSweeny Farms Facilities and Established District Community Through Funded be to Development a Administered by the California Statewide Communities Development Authority (CSCDA).

BACKGROUND:

On March 12, 2019, the Hemet City Council approved a Resolution for the Construction Funding and Acquisition Agreement ("Agreement") for McSweeny Farms, which allowed the City to construct certain improvements associated with the McSweeny Farms Specific Plan area, and which are funded by a previously established Community Facilities District ("CFD") by CSCDA. The Agreement ensures that the City will not incur any direct or indirect costs or liability b y virtue of the City agreeing to construct improvements properly Recovery McSweeny of are the Acquisition, that responsibility LLC ("Developer").

Since execution of the Agreement, several projects funded through the CFD are near completion, with one major project, State Street Bridge crossing State Street, yet to begin.

ANALYSIS:

The City of Hemet and the Developer both mutually agree to amend this Agreement to transfer all remaining improvement work back to the Developer. The purpose of the First Amendment to the

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Agreement is to amend Exhibit A to the original funding agreement t o re-classify certain construction improvements now to be constructed by, or on behalf of the Developer.

All existing improvement projects identified in the original Agreement that are under construction by the City and funded by the CFD will remain with the City for completion.

DISCUSSION:

The public improvements for this development are more typical for a developer to undertake and is a drain on City resources, therefore, it is staff's desire to have the remaining improvements constructed by the developer.

PREVIOUS COUNCIL ACTION:

• March 12, 2019 - City Council approved the revised Form Construction Funding and Acquisition Agreement for McSweeny Farms
• March 8, 2016 - City Council adopted Resolution No. 4662, which authorized the California Statewide Communities Development Authority to form a Community Facilities District to fund certain improvements within the McSweeny Farms Development area.

STRATEGIC PLAN INTEGRATION:

GOAL ONE: QUALITY OF LIFE:

To ensure that Hemet is safe, clean, attractive and comfortable for all who live, work, and visit.

Objective 1: Enhance the visual appearance of the community to make it attractive and reduce blight.

FISCAL IMPACT:

This action will have no impact on the City's General Fund. All improvements under construction or transferred back to the developer will be funded by the CFD.

ALTERNATIVE(S):

• Do not approve the Resolution amending the Agreement
• Provide alternate direction to staff.

REVIEWED BY LEGAL:

☒ Staff report ☒ Resolution
☐ Ordinance ☒ Agreement

ATTACHMENT(S):

Reso Approving First Amendment to CSCDA
DOCS-#212191-v2-First_Amendment_to_Funding__Construction_and_Acquisition...

Local Agency Certificate for City of Hemet (McSweeny) 4128-5460-5890 3

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CC_RESO_2019-04857 McSweeny Farms Phase 2 & 3

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RIV #4833-2180-7817 v1 - 1 -
CITY COUNCIL RESOLUTION NO. 2022-XXX

CITY OF HEMET
Hemet, California
RESOLUTION NO. 2022-XXX

A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF

HEMET, CALIFORNIA,

APPROVING A FIRST

AMENDMENT TO FUNDING,

CONSTRUCTION AND

ACQUISITION AGREEMENT

FOR CERTAIN IMPROVEMENTS

WITHIN THE MCSWEENY

FARMS DEVELOPMENT TO BE

FUNDED THROUGH A

COMMUNITY FACILITIES

DISTRICT ESTABLISHED AND

ADMINISTERED BY THE

CALIFORNIA STATEWIDE

COMMUNITIES DEVELOPMENT

AUTHORITY (CSCDA)
WHEREAS, California Statewide Communities
Development Authority (the “Authority”), City of Hemet (the “City”) and McSweeny Recovery Acquisition, LLC, a Delaware limited liability company (the “Developer”) entered into a Funding, Construction and Acquisition Agreement with an effective date of March 12, 2019 (the “Original Funding Agreement”) relating to the Authority’s Community Facilities District No. 2018-02 (McSweeny) (the “Community Facilities District”).

WHEREAS, In 2020, the Community Facilities District
issued a first series of bonds secured by special taxes in

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Improvement Area No. 1 of the Community Facilities District (the “IA No. 1 Series 2020 Bonds”) for the purpose of funding a portion of the costs of certain Construction Improvements pursuant to the Original Funding Agreement. From the
proceeds of the IA No. 1 Series 2020 Bonds, $9,552,766.00 was deposited in the Series 2020 Construction Account of the Acquisition and Construction Fund established pursuant to the Indenture for the IA No. 1 Series 2020 Bonds to be held by the Trustee for the IA No. 1 Series 2020 Bonds and disbursed to fund the Construction Improvements. In addition to those funds, the Developer made an Advance of $2,434,648.63
which has also been held by the Trustee in the Series 2020 Developer Deposit Construction Account. The City has
determined that the funds remaining on deposit in the Series 2020 Construction Account are sufficient to complete the Construction Improvements that are or will be constructed by, or on behalf of the City and, as a result, the funds in the Series 2020 Developer Deposit Construction Account are not needed for their intended purpose and may be released to the Developer; and
WHEREAS, The City and Developer now intend that all
the remaining Improvements shall be constructed by, or on behalf of, the Developer as Acquisition Improvements. The purpose of this First Amendment to Funding, Construction and Acquisition Agreement (the “First Amendment”) is to amend Exhibit A to the Original Funding Agreement to re-classify certain Construction Improvements as Acquisition

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Improvements now to be constructed by, or on behalf of
Developer.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY
COUNCIL OF THE CITY OF HEMET AS FOLLOWS:

SECTION 1. RECITALS
The foregoing recitals are true and correct.

SECTION 2. APPROVAL OF FIRST AMENDMENDMENT
A. The First Amendment to Funding Construction and
Acquisition Agreement attached hereto is hereby
approved, and the Interim City Manager or
designee is authorized to execute, in the final form
and format as approved by the City Attorney.

B. Except as expressly modified herein, Resolution 4662 and Resolution 4857 remains in full force and effect.

SECTION 3. CERTIFICATION
This Resolution shall take effect immediately upon its
adoption by the City Council. The City Clerk shall attest to and certify the vote adopting this Resolution.

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PASSED, APPROVED AND ADOPTED this 13th day
of December 2022.

Malcolm Lilienthal, Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________
John Paul Maier, City Clerk Steven Graham, City Attorney

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State of California )
County of Riverside )
City of Hemet )
I, John Paul Maier, City Clerk of the City of Hemet, do hereby certify that the foregoing resolution was adopted by the Hemet City Council on the 13th day of December, 2022 and was passed by the following vote:

AYES: Council Members:

NOES: Council Member:

ABSTAIN: Council Member:

ABSENT: Council Member:
_________________
________________
John Paul Maier, City
Clerk

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#212191 v2 9186.3

FIRST AMENDMENT TO FUNDING,

CONSTRUCTION AND ACQUISITION AGREEMENT

RECITALS
A. California Statewide Communities Development Authority (the “Authority”), City of Hemet (the “City”) and McSweeny Recovery Acquisition, LLC, a Delaware limited liability company (the “Developer”) entered into a Funding, Construction and Acquisition Agreement with an effective date of March 12, 2019 (the “Original Funding Agreement”) relating to the Authority’s Community Facilities District No. 2018-02 (McSweeny) (the “Community Facilities District”).

B. In 2020, the Community Facilities District issued a first series of bonds secured by special taxes in Improvement Area No. 1 of the Community Facilities District (the “IA No. 1 Series 2020 Bonds”) for the purpose of funding a portion of the costs of certain Construction Improvements pursuant to the Original Funding Agreement. From the proceeds of the IA No. 1 Series 2020 Bonds, $9,552,766.00 was deposited in the Series 2020 Construction Account of the Acquisition and Construction Fund established pursuant to the Indenture for the IA No. 1 Series 2020 Bonds to be held by the Trustee for the IA No. 1 Series 2020 Bonds and disbursed to fund the Construction Improvements. In addition to those funds, the Developer made an Advance of $2,434,648.63 which has also been held by the Trustee in the Series 2020 Developer Deposit Construction Account. The City has determined that the funds remaining on deposit in the Series 2020 Construction Account are sufficient to complete the Construction Improvements that are or will be constructed by, or on behalf of the City and, as a result, the funds in the Series 2020 Developer Deposit Construction Account are not needed for their intended purpose and may be released to the Developer.

C. The City and Developer now intend that all of the remaining Improvements shall be constructed by, or on behalf of, the Developer as Acquisition Improvements. The purpose of this First Amendment to Funding, Construction and Acquisition Agreement (the “First Amendment”) is to amend Exhibit A to the Original Funding Agreement to re-classify certain Construction Improvements as Acquisition Improvements now to be constructed by, or on behalf of Developer.

For purposes of the Original Funding Agreement, as amended by this First Amendment, Authority, City and Developer are sometimes hereinafter referred to as “Party” and, collectively, as the “Parties.”

AGREEMENT
Section 1.01. Definitions. All capitalized terms used in this First Amendment that are not otherwise defined herein shall have the meanings ascribed to them in the Original Funding Agreement.

Section 1.02. Exhibit A. Exhibit A to the Original Funding Agreement is amended to read as set forth in Exhibit A to this First Amendment.

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#212191 v2 9186.3 2
[Signature Page Follows]

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#212191 v2 9186.3 3
IN WITNESS WHEREOF, the Parties have executed this First Amendment as of November 2, 2022.

CITY OF HEMET
By: _____________________________________
[Authorized Officer]
ATTEST:

City Clerk
By: ________________________________
McSWEENY RECOVERY ACQUISITION, LLC,
a Delaware limited liability company
By:_____________________________________
____________, its Authorized Signatory

CALIFORNIA STATEWIDE COMMUNITIES

DEVELOPMENT AUTHORITY
By:_____________________________________
Authorized Signatory

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A-1#181910 v4 9186.2

EXHIBIT A TO THE FIRST AMENDMENT TO FUNDING, CONSTRUCTION

AND ACQUISITION AGREEMENT

DESCRIPTION OF CONSTRUCTION IMPROVEMENTS, ACQUISITION

IMPROVEMENTS AND ELIGIBLE PORTIONS

CONSTRUCTION IMPROVEMENTS

1. PHASE 1 PUNCH LIST DATED 3/7/19 TO COMPLETE SUNCAL
IMPROVEMENTS:
a. State Street
•Complete asphalt paving (place final cap)
•Place traffic signage & striping
•Raise manholes and valve covers to grade
•Place fire hydrant spotters
•Repair/replace, complete LLMD/CFD maintained landscape improvements (Newport Road to McSweeny Parkway)
•Install traffic signals
o Modify Existing Signal at State and Domenigoni Parkway o State Street and McSweeny Parkway
o State Street and South Village Loop
b. South Village Loop
•Complete asphalt paving (place final cap), crack seal and slurry coat •Place Fire Hydrant spotters
•Repair/replace, complete LLMD/CFD maintained landscape improvements
•Place traffic signage and striping
c. Newport Road
•Repair gate slab to detention basin
•Complete asphalt paving (place final cap)
•Place traffic signage and striping
•Place Fire Hydrant spotters
•Repair/replace, complete LLMD/CFD maintained Landscape improvements (Excluding Perimeter of Private Park)

2. MCSWEENY PARKWAY CROSSING OVER CACTUS VALLEY WASH
a. Complete the full section of the McSweeny Parkway Crossing over Cactus Valley Wash to include the following:
•Purchase, Construct Foundation, and Install precast 3 cell arch structure •Realign temporary “Arizona crossing” to ultimate alignment of McSweeny Parkway
•Complete section of McSweeny Parkway over new cell arch structure

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A-2#181910 v4 9186.2

ACQUISITION IMPROVEMENTS

1. PHASE 1 AND 2 OFFSITE CITY IMPROVEMENTS PER MCSWEENY FARMS FAIR SHARE ANALYSIS DATED 12/5/18
a. Traffic Signal and associated intersection Improvements •Warren Road at Simpson Road (Fair Share Contribution)
•State Street at Whittier Avenue (Fair Share Contribution) •State Street at Newport Road (Fair Share Contribution)

2. CACTUS VALLEY WASH IMPROVEMENTS
a. Storm Drain Improvements
•Line A
•Line C
•Line D
•Line E
•Water Quality Line E
•Line X
•Laterals CP-7 and CP-8
•Cactus Valley Channel
b. State Street Crossing Over Cactus Valley Wash
•Traffic Control and Temporary Detour Road
•Purchase, Construct Foundation, and Install precast 3 cell arch structure •Complete section of State Street over new cell arch structure •Complete all supporting drainage facilities, including but not limited to, inlet and outlet structures and rip rap as required

3. PHASE 3 OFFSITE CITY IMPROVEMENTS
a. Street Improvements
•Gibbel Road (State Street to East Boundary)
b. Signal Improvements
•West Project Access at Gibbel Road
•McSweeny Parkway at Gibbel Road

4. PHASE 2 LLMD/CFD MAINTAINED LANDSCAPING
a. State Street (McSweeny Parkway to Gibbel Road)
b. Newport Road and South Village Loop along Perimeter of Private Park c. Cactus Valley Wash Trails and landscaping

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A-3#181910 v4 9186.2

5. PHASE 3 PROJECT ROAD IMPROVEMENTS
a. McSweeny Parkway (North Village Loop to Gibbel Road) b. North Village Loop

6. PHASE 3 PARK IMPROVEMENTS
a. PA 37: 5 acre active public park

7. PHASE 3 DRAINAGE IMPROVEMENTS
a. Avery Canyon Wash
b. Lorenz Canyon Wash

ELIGIBLE PORTIONS
For each Acquisition Improvement, Eligible Portions shall include each of the following:
(1) The real property or interest therein that is necessary for the construction of the Acquisition Improvement and/or is required in order to convey Acceptable Title.
(2) Design, engineering and other soft costs incurred with respect to the Acquisition Improvement prior to the award of the construction contract.

Installation of discrete horizontal or vertical segments of the Acquisition Improvement such as, depending on the type of Acquisition Improvement, grading and trenching; installation of water, sewer or storm drain lines, lift and pump stations, basins, storage tanks, treatment facilities, initial road paving, final asphalt cap, traffic signals, street lighting, landscaping, park facilities, trails, etc.

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4128-5460-5890.3
$[PAR]

CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2018-02, IMPROVEMENT AREA NO. 1 (MCSWEENY)
SPECIAL TAX BONDS, SERIES 2022
Dated: [Closing Date]

CLOSING CERTIFICATE OF THE CITY OF HEMET
I serve as the Finance Director for the City of Hemet (“Local Agency”). As the Finance Director to the Local Agency and solely within the course and scope of my employment with the Local Agency as the Finance Director, I have examined such matters of fact as I have considered appropriate for purposes of this certification, except where a specified fact confirmation procedure is stated to have been performed (in which case I have with your consent performed the stated procedure), and except where a statement is qualified as to knowledge (in which case we have with your consent made no or limited inquiry as specified below). Based on the foregoing and expressly subject to the disclaimers outlined in this letter, the undersigned, an authorized officer of the CITY OF HEMET (the “Local Agency”), hereby certifies as follows:

1. The meetings of the Local Agency relating to a) the proceedings taken in connection with the Local Agency’s authorization of the California Statewide Communities Development Authority (the “Authority”) to form the California Statewide Communities Development Authority Community Facilities District No. 2018-02 (McSweeny) (the “Community Facilities District”), and issue bonds for such Community Facilities District; and b) the Local Agency’s execution and delivery of the Funding, Construction and Acquisition Agreement for McSweeny Farms Specific Plan, dated as of March 12, 2019 (the “Local Agency Acquisition Agreement”); were duly called and held, and Resolution Nos. 4662 and 4857 of the City Council of the Local Agency (collectively, the “Local Agency Resolution”) were duly adopted or enacted and are in full force and effect and has not been amended, modified or supplemented in any way, except to the extent that Resolution No. 4857 amended Resolution No. 4662.

2. The Local Agency has full legal right, power and authority to execute, deliver and carry out the transactions contemplated by the Local Agency Acquisition Agreement and the Local Agency Acquisition Agreement has been duly authorized and executed by the Local Agency. Except as disclosed to the Authority, the Acquisition Agreement has not been amended, modified or supplemented.

3. The adoption of the Local Agency Resolution and the execution and delivery by the Local Agency of the Local Agency Acquisition Agreement do not violate any applicable law, regulation or judgment, order or decree of any court or any public or governmental agency or authority of the State of California or the federal government of the United States of America and do not conflict with, or result in the breach of any of the provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Local Agency is a party or by which it or its properties is or may be bound.

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2 4128-5460-5890.3

4. To my knowledge and after consultation with the City Attorney for the Local Agency, no order, consent, permission, approval, authorization or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of the Local Agency Acquisition Agreement or the Local Agency Resolution, except as have been obtained or made and as are in full force and effect.

5. To my knowledge and after consultation with the City Attorney for the Local Agency, the Local Agency is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument to which the Local Agency is a party or is otherwise subject, which breach or default would materially adversely affect the transactions contemplated by the Local Agency Acquisition Agreement or the Local Agency Resolution, and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, resolution, agreement or other instrument to which the Local Agency is a party or is otherwise subject.

6. To my knowledge and after consultation with the City Attorney for the Local Agency, there are no actions, suits, proceedings, inquiries or investigations, at law or in equity, before or by any court, governmental agency, public board or body which are pending and have been served against the Local Agency, or against the titles of its officers to their respective offices, or seeking to restrain or to enjoin the application of the proceeds of the Bonds in accordance with the Local Agency Resolution, or in any way contesting or affecting the validity or enforceability of the Local Agency Acquisition Agreement, or the powers of the Local Agency or its authority with respect to the Local Agency Resolution, the Local Agency Acquisition Agreement or any action on the part of the Local Agency contemplated by said documents.

7. The Tax Certifications attached hereto as Exhibit A are true and correct.

All capitalized terms not otherwise defined herein shall have the meaning given such terms in the Bond Purchase Contract, dated ____, 2022, between the California Statewide Communities Development Authority and RBC Capital Markets, LLC, as underwriter.

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3 4128-5460-5890.3
IN WITNESS WHEREOF, the undersigned has executed this CLOSING CERTIFICATE OF THE CITY OF HEMET as of the date first above written.

CITY OF HEMET
By:

Finance Director

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A-1
4128-5460-5890.3
Exhibit A
Tax Certifications of Local Agency
The Local Agency hereby makes the following representations of facts and expectations and covenants to comply with the requirements of this Tax Certification in connection with its participation in the California Statewide Communities Development Authority Community Facilities District No. 2018-02, Improvement Area No. 1 (McSweeny) Special Tax Bonds, Series 2022 (the “Bonds”), in an aggregate principal amount of $[PAR]. The representations and covenants contained in this Tax Certification are designed to support the conclusion that the interest paid on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”).

1.1 Use of Improvements. A portion of the proceeds of the Bonds (the “Proceeds”) will be used by the Local Agency to finance the acquisition and construction of certain public improvements (the “Improvements”) identified in the Local Agency Resolution, including but not limited to Newport Road and South Village Loop Phase 2 Landscaping and Cactus Valley Wash improvements including State Street Crossing & Widening. The Local Agency or another local government agency will own, and for the entire useful life of the reasonably expects to own, all of the Improvements. To the extent any of the Improvements are sold to an entity that is not a local government agency, the procedures outlined in the SCIP Manual available from the Authority will be followed. The Local Agency will not allow any of the Proceeds or any of the Improvements to be used (for example, by lease or other contract) in the trade or business of any nongovernmental persons (other than in their roles as members of the general public) and will not loan any of the Proceeds to any person or entity. All of the Improvements will be used in the performance of essential governmental functions of the Local Agency or another state or local government agency.

The average expected useful life of the Improvements is at least 20 years.

1.2 Timing of Expenditures. The Local Agency reasonably expects that all of the Proceeds will be spent for the governmental purpose of the Participation within three years. In addition, the Local Agency reasonably expects that at least 5% of the Proceeds will be spent, or that the Local Agency has or will incur a binding obligation to a third party involving an expenditure of such amount, within six months. The Local Agency reasonably expects that construction or acquisition of the Improvements will proceed with due diligence to completion and that the allocation of proceeds to expenditures for the Improvements will proceed with due diligence. Other than with respect to capitalized interest, none of the Proceeds will be used to pay principal of or interest on any obligations.

1.3 Expenditure of Proceeds. Proceeds and other deposits relating to the Bonds are not treated as spent on the Improvements until the Local Agency makes a transfer to a person unrelated to the Local Agency and such transfer represents a payment for the Improvements. A payment for the Improvements will occur if Proceeds or other deposits relating to the Bonds are transferred from the construction fund either (a) to the Local Agency and actually used to make a payment to a person unrelated to the Local Agency no later than three days after the transfer or (b) directly to a third party at the direction of the Local Agency to pay the cost of the Improvements, (c) to the Local Agency to reimburse the Local Agency of costs of the

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A-2
4128-5460-5890.3
Improvements paid before the date of the transfer. To the extent Proceeds or other deposits relating to the Bonds are transferred to the Local Agency to reimburse the Local Agency for costs of Improvements paid before the date of the transfer, Proceeds will only be treated as spent if (a) such costs are for Preliminary Expenditures or (b) (i) such costs were originally paid no earlier than 60 days prior to [Closing Date], and (ii) the disbursement of Proceeds to reimburse the Local Agency for such costs occurs within 18 months of the date the costs were paid or 18 months of the date the respective Improvements was placed in service (whichever is later), but in no case more than 3 years after the date the costs were paid by the Local Agency. Preliminary Expenditures include architectural, engineering, surveying, soil testing, costs of issuing the Bonds, and similar costs paid with respect to the Improvements in an aggregate amount not exceeding 20% of the Proceeds. However, Preliminary Expenditures do not include land acquisition, site preparation or similar costs incident to the commencement of construction.

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1444 ,
4 1 1

07...;2K...
1 31
4 CITY OF HEMET
5 Hemet, California
9 RESOLUTION NO. 4857
8 9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEMET, 10 CALIFORNIA AMENDING RESOLUTION NO. 4662 AND APPROVING 11 A REVISED FUNDING CONSTRUCTION AND ACQUISITION
12 AGREEMENT FOR THE MCSWEENY FARMS PHASE 2 AND 3
13 IMPROVEMENTS
14 15 WHEREAS, on March 8, 2016, the City Council adopted Resolution No. 4662, 16 i which authorized the California Statewide Communities Development Authority 17 (" Authority") to form a Community Facilities District (" CFD") within the City to fund the 18 construction of certain improvements to benefit the McSweeny Farms development 19 project; and
20 WHEREAS, Section 16 of and Exhibit C to Resolution No. 4662 approved a form 21 Construction Funding and Acquisition Agreement and authorized the City Manager or 22 his designee to execute the Agreement in substantially that form; and 23 WHEREAS, subsequently McSweeny Farms Recovery Acquisition, LLC, ( the 24 " Developer") has requested that the approved form Construction Funding and 25 Acquisition Agreement be substantially modified to require the City to construct certain 26 identified improvements with the CFD bond proceeds, whereas the approved form of 27 the Agreement required the Developer to construct all of the identified improvements; 28 and
29 WHEREAS, Exhibit B to Resolution No. 4662 identified a list of improvements 30 eligible for funding through the CFD and the budgeted amount for each identified 31 improvement, which the City desires to update to provide more detail on the identified 32 improvements and the funding priorities for the CFD Bond proceeds, recognizing that 33 while estimated costs are provided in the CFD Bond prospectus, the actual costs will 34 be dependent upon the construction bids received at the commencement of the 35 individual capital improvement projects; and
36 NOW THEREFORE, BE IT RESOLVED by the Council of the City of Hemet that it does 37 hereby find, determine, declare and resolve as follows:
38 Section 1. Section 16 of Resolution No. 4662 is hereby amended to read as 39 I follows:
40 The form of the Funding, Construction and Acquisition Agreement attached 41 hereto as Exhibit C is hereby approved, and the City Manager or such officer's CITY COUNCIL RESOLUTION NO. 4857

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1 designee ( the " Authorized Officer") is authorized to execute, and deliver to the 2 Developer and the Authority the Funding, Construction and Acquisition 3 Agreement on behalf of the City in substantially that form, with such changes as 4 shall be approved by the Authorized Officer after consultation with the City 5 Attorney and the Authority' s bond counsel, such approval to be conclusively 6 evidenced by the execution and delivery thereof."
7 Section 2. The Construction Funding and Acquisition Agreement attached as 8 Exhibit C to Resolution No. 4662 is hereby replaced with the Funding Construction and 9 Acquisition Agreement attached hereto as Exhibit A.
10 Section 3. Exhibit B to Resolution No. 4662 is hereby replaced with the 11 " DESCRIPTION OF CONSTRUCTION IMPROVEMENTS, ACQUISITION 12 IMPROVEMENTS AND ELIGIBLE PORTIONS" in Exhibit A to the Agreement attached 13 hereto as Exhibit A.
14 Section 4. Except as expressly modified herein, Resolution No. 4662 remains 15 in full force and effect.
16 Section 5. The City Council hereby approves delivery of a certified copy of this 17 resolution to the Authority' s Bond Counsel, Orrick, Herrington & Sutcliffe LLP. 18 Section 6. This Resolution shall take effect upon its adoption. 19 20 NOW, THEREFORE, the City Council of the City of Hemet does hereby resolve:
21 22
23 PASSED, APPROVED, AND ADOPTED this
12th
day of March, 2019
24 25
26 dIP
27 4
28 onnie Wright, Mayor/
29 30
31 32 ATTEST: APPROVED AS O FORM:
33 34
35 L
ekt\'\(,
Uvitti
36 Sarah McComas, City Clerk Eric S. Vail, City Attorney 37 38
39 40
41 42
CITY COUNCIL RESOLUTION NO. 4C57

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1 State of California
2 County of Riverside
3 City of Hemet
4 5 I, Sarah McComas, City Clerk of the City of Hemet, do hereby certify that the 6 foregoing Resolution is the actual Resolution adopted by the City Council of the City 7 of Hemet and was passed at a regular meeting of the City Council on the 12th
day of
8 March, 2019 by the following vote:
9 10 AYES: Council Members Krupa, Meyer and Perciful, Mayor Pro Tern Brown and 11 Mayor Wright
12 NOES:
13 ABSTAIN:
14 ABSENT:
15 16
17 18 0 k.
19 Sarah McComas, City Clerk
20 21
22 23
24 25
26 27
28 CITY COUNCIL RESOLUTION NO. 4857

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FUNDING, CONSTRUCTION AND ACQUISITION

AGREEMENT FOR MCSWEENY FARMS SPECIFIC PLAN

BY AND AMONG

CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,

CITY OF HEMET
AND

MCSWEENY RECOVERY ACQUISITION, LLC
Dated as of 2019
181910 v4 9186. 2

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FUNDING, CONSTRUCTION AND ACQUISITION AGREEMENT
Recitals
A. The parties to this Funding, Construction and Acquisition Agreement ( the Agreement") are the California Statewide Communities Development Authority ( the Authority"), City of Hemet ( the " City"), and McSweeny Recovery Acquisition, LLC, a Delaware limited liability company( the" Developer").

B. The effective date of this Agreement is - 2019.

C. The Developer has applied for the financing of certain public capital improvements to be constructed by or on behalf of the City ( the " Construction Improvements") and certain public capital improvements to be constructed by or on behalf of the Developer and acquired by the City ( each, an " Acquisition Improvement" and, collectively, the " Acquisition Improvements" and with the Construction Improvements, the " Improvements") through the Authority. The Improvements are to be owned and operatedby the City and the financing is to be accomplished through a community facilities district that has been established and administered by the Authority under and pursuant to the Mello- Roos Community Facilities Act of 1982 — California Government Code Sections 53311 and following ( the " Act"). On March 8, 2016, the City adopted Resolution No. 16-011 authorizing the Authority to form a community facilities district ( the " Community Facilities District") within the territorial limits of the City and designate improvement areas within the Community Facilities Agreement ( each, an Improvement Area") to finance the Improvements. On November 1, 2018, the Authority formed the Community Facilities District and, on the same date, a landowner election was conducted for each Improvement Area in which all of the votes were cast unanimously in favor of conferring the Community Facilities District authority on the Authority Commission.

D. The Authority intends to levy special taxes within each Improvement Area ( the Special Taxes") and issue bonds for each Improvement Area securedby the Special Taxes, in one or more series, to fund, among other things, all or a portion of the Improvements. The portion of the proceedsof such Special Taxes (including prepayments) and bonds allocable to the cost of the Improvements, together with interest earned thereon, is referred to herein as the Available Amount".

E. The Community Facilities District will provide financing for the City' s construction of the Construction Improvements and the acquisition by the City of the Acquisition Improvements and the payment of the Acquisition Price ( as defined herein) of the Acquisition Improvements from the Available Amount. Attached hereto as Exhibit A is a description of the Construction Improvements and the Acquisition Improvements, which includes authorized discrete and usable portions, if any, of the Acquisition Improvements, pursuant to Section 53313. 51 of the Act, to be acquired from the Developer.

F. The parties anticipate that, upon completion of the Acquisition Improvements and subject to the terms and conditions of this Agreement, the City will acquire the completed Acquisition Improvements. In addition to the extent the Developer advancesfunds to the City 181910 v4 9186. 2 1Page 24 of 46

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for the Construction Improvements ( each, an" Advance"), such Advances by the Developer shall be reimbursed from the Available Amount.

G. Any and all monetary obligations of the City arising out of this Agreement are the special and limited obligations of the City payable only from the Available Amount or Advances by the Developer, andno other fundswhatsoeverof the City shall be obligatedthereforunder any circumstances.

H. Attached to this Agreement are Exhibit A ( Description of the Construction Improvements, Acquisition Improvements and the Eligible Portions thereof), Exhibit B- 1 Disbursement Request Form for Acquisition Improvements), Exhibit B- 2 ( Disbursement Request Form for Construction Improvements) and Exhibit C ( Bidding, Contracting and Construction Requirements for Acquisition Improvements), all of which are incorporated into this Agreement for all purposes.

Agreement

ARTICLE I
DEFINITIONS; COMMUNITY FACILITIES DISTRICT FORMATION AND

FINANCING PLAN
Section 1. 01. Definitions. As used herein, the following capitalized terms shall have the meanings ascribed to them below:

Acceptable Title" means free and clear of all monetary liens, encumbrances, assessments, whether any such item is recorded or unrecorded, and taxes, except (i) those items which are reasonably determined by the City Engineer not to interfere with the intended use and therefore are not required to be cleared from the title, and ( ii) the lien of the Community Facilities District or any other community facilities district or assessmentdistrict provided that the property owned by the City is exempt from suchtaxation or assessment.

Acquisition and Construction Fund" means each "City of Hemet Community Facilities District Acquisition and Construction Fund" established by the Authority pursuant to the Resolution and Section 1.03 hereof for the purpose of funding the Improvements.

Acquisition Improvement" means a public capital improvement described as such in Exhibit A hereto.

Acquisition Price" means the total amount eligible to be paid to the Developer upon acquisition of an Acquisition Improvement as provided in Section 2. 03, not to exceed the Actual Cost of the Acquisition Improvement.

Actual Cost" meansthe total cost of an Acquisition Improvement, asdocumented by the Developer to the satisfaction of the City and as certified by the City Engineer in an Actual Cost Certificate including, without limitation, ( a) the cost of constructing such Acquisition Improvement including grading, labor, material and equipment costs, ( b) the cost of designing and engineering the Acquisition Improvement, preparing the plans and specifications and bid 181910 v4 91862 2Page 25 of 46

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documents for such Acquisition Improvement, and the costs of inspection, materials testing and construction staking for such Acquisition Improvement, ( c) the cost of any performance, payment and maintenance bonds and insurance, including title insurance, required hereby for such Acquisition Improvement, ( d) the cost of any real property or interest therein that is either necessary for the construction of such Acquisition Improvement ( e. g., temporary construction easements, haul roads, etc.), or is required to be conveyed with such Acquisition Improvement in order to convey Acceptable Title thereto to the City or its designee, ( e) the cost of environmental evaluation or mitigation required for such Acquisition Improvement, ( f) the amount of any fees actuallypaid by the Developerto governmentalagenciesin orderto obtainpermits, licensesor other necessary governmental approvals and reviews for such Acquisition Improvement, ( g) the cost for construction and project management, administration and supervision services for such Acquisition Improvement, ( h) the cost of all professional services related to such Acquisition Improvement, including engineering, accounting, legal, financial, appraisal and similar professional services, and ( i) the costs of construction financing incurred by the Developer with respect to such Acquisition Improvement.

Actual Cost Certificate" means a certificate prepared by the Developer detailing the Actual Cost of an Acquisition Improvement, or an Eligible Portion thereof, to be acquired hereunder, asmay be revised by the City Engineer pursuant to Section 2.03.

Advance" means an advance of funds by the Developer to the City for one or more Construction Improvements or any portion thereof.

Agreement" means this Acquisition Agreement, dated as of[ 1, 2019.

Authority" meansthe California Statewide Communities Development Authority.

Authority TrustAgreement"meansa TrustAgreemententeredinto by theAuthority and an Authority Trustee in connection with the issuanceof bonds.

Authority Trustee" means the financial institution identified as trustee in an Authority Trust Agreement.

Available Amount" shall have the meaning assigned to the term in Recital D.

Bonds" meansbonds or other indebtednessissued by the Authority that are to be repaid with Special Taxes.

City" means the City of Hemet, California.

City Engineer" means the Engineer of the City or his/her designee who will be responsiblefor administeringthe constructionand acquisitionof the Improvementshereunder.

The City Engineermay elect to retain a third party to perform any or all tasksof the City Engineer pursuant to this Agreement and all costs incurred by the City for such third party shall be funded by the Developer and/or reimbursed from the Available Amount.

Code" means the Government Code of the State of California. 181910 v4 9186. 2 3Page 26 of 46

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Community Facilities District" shall have the meaning assignedto the term in Recital C.

Construction Improvement" means a public capital improvement described as such in Exhibit A hereto.

Developer" means McSweeny Recovery Acquisition, LLC, a Delaware limited liability company, and its successors and assigns.

Disbursement Request Form" means ( i) a requisition for payment of funds from an Acquisition and Construction Fund for an Acquisition Improvement, or an Eligible Portion thereof in substantially the form contained in Exhibit B- 1 hereto and ( ii) a requisition for payment of funds from an Acquisition and Construction Fund for a Construction Improvement in substantially the form contained in Exhibit B-2 hereto.

Eligible Portion" shall have the meaning ascribedto it in Section 2.03 below.

Improvement Area" means an improvement area of the Community Facilities District designatedas suchby the Authority in accordancewith the Act.

Installment Payment" means an amount equal to ninety percent ( 90%) of the Actual Cost of an Eligible Portion.

Project" means the development of the property in the Community Facilities District, including the design and construction of the Acquisition Improvements and the other public and private improvements to be constructed by the Developer within the Community Facilities District.

Resolution" means City of Hemet Resolution No. 16- 011, adopted March 8, 2016, authorizing the execution and delivery of this Agreement.

Special Taxes" means annual special taxes, and prepaymentsthereof, authorized by the Community Facilities District to be levied by the Commission of the Authority within each Improvement Area.

Title Documents" means, for each Acquisition Improvement acquired hereunder, a grant deed or similar instrument necessary to transfer title to any real property or interests therein including easements), or an irrevocable offer of dedication of such real property with interests therein necessaryto the operation, maintenance, rehabilitation and improvement by the City of the Acquisition Improvement ( including, if necessary, easements for ingress and egress) and a bill of sale or similar instrument evidencing transfer of title to the Acquisition Improvement other than said real property interests) to the City, where applicable.

Section 1. 02. Establishment of Community Facilities District. Developer has requestedtheCity to permit theAuthority to providefor financingof theImprovementsthrough the establishment and authorization of the Community Facilities District and the City agreedby its adoption of the Resolution. The Community Facilities District was established by the Authority on November 1, 2018, and through the successfullandowner election held that same day with respect to each Improvement Area of the Community Facilities District, the 181910 v4 9186. 2 4Page 27 of 46

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Commissionof the Authority is authorizedto levy the SpecialTaxesandto issuethe Bondsto finance the Improvements. Developer and the City agree to reasonably cooperate with one anotherandwith the Authority in the completionof the financingthroughthe issuanceof the Bonds in one or more series for each Improvement Area.

Section 1. 03. Deposit and Use of Available Amount.
a) Prior to the issuance of Bonds for each Improvement Area, Special Taxes collectedby theAuthority (including from prepaymentsof SpecialTaxes) in excessof amounts requiredto pay administrativeexpensesof the CommunityFacilities District shallbe deposited in an Acquisition and Construction Fund established for such purpose and may be disbursed to i) pay the AcquisitionPrice of Acquisition Improvementsand InstallmentPaymentsin accordance with Article II of this Agreement and ( ii) to reimburse Advances for Construction Improvementsandto paythe City' s costsof the ConstructionImprovementsin accordancewith Article III of this Agreement. All funds in the Acquisition and Construction Fund shall be considered a portion of the Available Amount, and upon the issuance of the Bonds of the applicable Improvement Area, the Acquisition and Construction Fund shall be transferred to the Authority Trusteeto beheldin accordancewith theAuthority TrustAgreement. b) Upon the issuance of the Bonds of an Improvement Area, the Authority will causetheAuthority Trusteeto establishandmaintaintheAcquisition andConstructionFund for the purpose of holding all funds for the Improvements. All earnings on amounts in the Acquisition and Construction Fund shall remain in the Acquisition and Construction Fund for use as provided herein and pursuant to the Authority Trust Agreement. Money in the Acquisition and Construction Fund shall be available to respond to delivery of Disbursement RequestFormsby the City andDeveloperandto bepaidto theCity, Developeror their designee to paythecostsof Improvements, asspecifiedin Articles II andIII hereof. In theeventthereare insufficient funds in the Acquisition and Construction Fund to pay all pending Disbursement Requestsin full, Disbursement Requestssubmitted by City or its designeeshall be given priority.

Upon completion of all of the Improvements and the payment of all costs thereof, any remaining funds in the Acquisition and Construction Fund ( less any amount determined by the City as necessary to reserve for claims against the account) ( i) shall be applied to pay the costs of any additional Acquisition Improvements eligible for acquisition with respect to the Project, as approved by the Authority and, to the extent not so used, ( ii) shall be applied by the Authority to call Bonds or to reduce Special Taxes asthe Authority shall determine.

Section 1. 04. No City Liability; City Discretion; No Effect on Other Agreements. In no event shall any actual or alleged act by the City or any actual or alleged omission or failure to act by the City related to the subject matter of this Agreement subject the City to monetary liability therefor. Further, nothing in this Agreement shall be construed as affectingthe Developer's or the City' s duty to perform their respectiveobligationsunder any other agreements, public improvement standards, land use regulations or subdivision requirements related to the Project, which obligations are and shall remain independent of the Developer' s andthe City' s rights and obligations under this Agreement. 181910 v4 91862 5Page 28 of 46

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ARTICLE II

DESIGN, CONSTRUCTION AND ACQUISITION OF ACQUISITION

IMPROVEMENTS
Section 2. 01. Letting and Administering Design Contracts. The Developer has awarded and administered, or will award and administer, engineering design contracts for the Acquisition Improvements to be acquired from Developer. All eligible expenditures of the Developer for design engineering and related costs in connection with the Acquisition Improvements (whether as an advance to the City or directly to the design consultant) shall be reimbursed at the time of acquisition of the Acquisition Improvements. The Developer shall be entitled to reimbursement for any design costs of the Acquisition Improvements only out of the Acquisition Price as provided in Section 2.03 and shall not be entitled to any payment for design costs independent of the acquisition of Acquisition Improvements.

Section 2. 02. Letting and Administration of Construction Contracts; Indemnification. State law requires that all Acquisition Improvements not completed prior to the formation of the Community Facilities District shall be constructed as if they were constructed under the direction and supervision, or under the authority, of the City. In order to assure compliance with those provisions, except for any contracts entered into prior to the date hereof, Developer agreesto comply with the requirements set forth in Exhibit C hereto with respect to the bidding and contracting for the construction of the Acquisition Improvements. The Developer agreesthat all the contracts shall call for payment of prevailing wages as required by the Labor Code of the State of California. The Developer' s indemnification obligation set forth in Section 4.01 of this Agreement shall also apply to any alleged failure to comply with the requirements of this Section, and/or applicable State laws regarding public contracting and prevailing wages.

Section 2. 03. Sale of Acquisition Improvements. The Developer agrees to sell to the City eachAcquisition Improvementto beconstructedby Developer (includinganyrights-of- way or other easementsnecessary for the Acquisition Improvements, to the extent not already publicly owned), when the Acquisition Improvement is completed to the satisfaction of the City for an amount not to exceed the lesser of( i) the Available Amount from time to time or ( ii) the Actual Cost of the Acquisition Improvement. Exhibit A, attached hereto and incorporated herein, contains a list of the Acquisition Improvements. Portions of an Acquisition Improvement eligible for Installment Payments prior to completion of the entire Acquisition Improvement are described as eligible, discrete and usable portions in Exhibit A ( each, an " Eligible Portion"). At the time of completion of each Acquisition Improvement, or Eligible Portion thereof, the Developer shall deliver to the City Engineer a written request for acquisition, accompaniedby an Actual Cost Certificate, and by executed Title Documents for the transfer of the Acquisition Improvement where necessary. In the event that the City Engineer finds that the supporting paperworksubmittedby theDeveloperfails to demonstratetherequiredrelationshipbetweenthe subject Actual Cost and eligible work, the City Engineer shall advise the Developer that the determination of the Actual Cost ( or the ineligible portion thereof) has been disallowed and shall request further documentation from the Developer. If the further documentation is still not adequate, the City Engineermay revisethe Actual Cost Certificate to deleteany disallowed items and the determination shall be final and conclusive. 181910 v4 9186. 2 6Page 29 of 46

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Certain soft costs for the Acquisition Improvements, such as civil engineering, may have been incurred pursuant to single contracts that include work relating also to the private portions of the Project. In those instances, the total costs under such contracts will be allocated to each Acquisition Improvementasapprovedby the City Engineer. Wherea specificcontracthasbeen awarded for design or engineering work relating solely to an Acquisition Improvement, one hundred percent ( 100%) of the costs under the contract will be allocated to that Acquisition Improvement. Amounts allocated to an Acquisition Improvement will be further allocated amongthe Eligible Portionsof that Acquisition Improvement, if any, in the sameproportionas the amount to be reimbursed for hard costs for each Eligible Portion bears to the amount to be reimbursed for hard costs for the entire Acquisition Improvement. Costs will be allocated to each Acquisition Improvement as approved by the City Engineer. The costs of certain environmental mitigation required to mitigate impacts of the public and private portions of the Project will be allocated to eachAcquisition Improvement as approvedby the City Engineer.

Section 2. 04. Conditions Precedent to Payment of Acquisition Price. Payment to the Developer or its designee of the Acquisition Price for an Acquisition Improvement from the Acquisition and Construction Fund shall in every case be conditioned first upon the determinationof the City Engineer, pursuantto Section2.03, that theAcquisition Improvement satisfiesall City regulationsandordinancesandis otherwisecompleteandreadyfor acceptance by the City, and shall be further conditionedupon satisfactionof the following additional conditions precedent:
a) The Developer shall have provided the City with lien releases or other similar documentation satisfactory to the City Engineer as evidence that none of the property including anyrights-of-way or othereasementsnecessaryfor theoperationandmaintenanceof the Acquisition Improvement, to the extent not already publicly owned) comprising the Acquisition Improvement, and the property which is subject to the special taxes of the CommunityFacilitiesDistrict, is not subjectto anyprospectivemechanicslien claim respecting the Acquisition Improvements.
b) The Developer shall be current in the payment of all due and payable generalproperty taxes, and all specialtaxesof the Community Facilities District, on property owned by the Developer or under option to the Developer within the Community Facilities District.
c) The Developer shall certify that it is not in default with respectto any loan securedby any interest in the Project.
d) The Developer shall have provided the City with Title Documents needed to provide the City with title to the site, right- of- way, or easement upon which the subject Acquisition Improvement is situated. All such Title Documents shall be in a form acceptable to the City and shall convey Acceptable Title. The Developer shall provide a policy of title insurance as of the date of transfer in a form acceptable to the City Engineer and the City Attorney insuringthe City asto the interestsacquiredin connectionwith theacquisitionof any interestfor which sucha policy of title insuranceis not requiredby anotheragreementbetween the City and the Developer. Each title insurance policy required hereunder shall be in the amount equal to the Acquisition Price. The amount paid to the Developer or its designee upon 181910 v4 9186. 2 7

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satisfaction of the foregoing conditions precedent shall be the Acquisition Price less all Installment Paymentspaid previously with respectto the Acquisition Improvement.

Section 2. 05. Payment for Eligible Portions. The Developer may submit an Actual Cost Certificate to the City Engineer with respectto any Eligible Portion. Paymentto the Developer or its designee from the Acquisition and Construction Fund of an Installment Payment with respect to such Eligible Portion shall in every case be conditioned first upon the determinationof the City Engineer, pursuantto Section2.03, that the Eligible Portionhasbeen completed in accordance with the applicable plans and specifications and that the Eligible Portion satisfies all City regulations and ordinances and is otherwise complete and, where appropriate, is ready for acceptance by the City, and shall be further conditioned upon satisfaction of the following additional conditions precedent:
a) The Developer shall have provided the City with lien releases or other similar documentationsatisfactoryto the City Engineerasevidencethatthe property (including anyrights-of-way or othereasementsnecessaryfor theoperationandmaintenanceof theEligible Portion, to the extent not alreadyownedby the City) comprisingthe Eligible Portion is not subject to any prospective mechanicslien claim respecting the Eligible Portion. b) The Developer shall be current in the payment of all due and payable general property taxes, and all special taxes of the Community Facilities District, on property ownedby the Developeror under option to the Developerwithin the Community Facilities District.
c) The Developer shall have provided the City with Title Documents needed to provide the City with title to the site, right- of- way, or easement upon which the subject Eligible Portion is situated. All such Title Documents shall be in a form acceptable to the City Engineer and shall be sufficient, upon completion of the Acquisition Improvement of which the Eligible Portion is a part, to convey Acceptable Title. d) Payment and performance bonds, from a bonding company with an A.M.

Best rating of at least " A-" or its equivalent, applying to plans and specifications for the Acquisition Improvement approved by the City, shall be in place to secure completion of the Acquisition Improvement of which the Eligible Portion is a part.

Section 2. 06. Disbursement Request Form. Upon a determination by the City Engineerto paytheAcquisition Priceof anAcquisition Improvementpursuantto Section2.04 or to payanInstallmentPaymentfor anEligible Portionpursuantto Section2.05, theCity Engineer shall cause a Disbursement Request Form substantially in the form attached hereto as Exhibit B- 1 to be submitted to the Authority and Authority Trustee, and the Authority or Authority Trusteeshall makepaymentdirectly to the Developeror its designeeof the amount requested from an Acquisition and Construction Fund. The City and the Developer acknowledge and agreethat the Authority or Authority Trustee shall make payment strictly in accordancewith the Disbursement Request Form and shall not be required to determine whether or not the Acquisition Improvement or Eligible Portion has been completed or what the Actual Costs may be with respect to the Acquisition Improvement or Eligible Portion. The Authority or Authority 181910 v4 9186. 2 8Page 31 of 46

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Trusteeshallbe entitledto rely on theexecutedDisbursementRequestForm on its facewithout any further duty of investigation.

In the event that the Actual Cost of an Acquisition Improvement or the Installment Payment for an Eligible Portion is in excess of the Available Amount, the Authority or Authority Trustee shall withdraw all funds remaining in the Acquisition and Construction Fund and shall transfer those amounts to the Developer or its designee. The unpaid portion of the Actual Cost shallbepaid from fundsthatmay subsequentlybe depositedin theAcquisitionandConstruction Fund from a subsequent issuance of Bonds, from the portion of prepayments of Special Taxes that areavailableto be usedfor financingAcquisition Improvements, or from availableSpecial Tax revenues, if any of thoseoccurs.

Section 2. 07. Limitation on Obligations. In no event shall the City be required to pay the Developer or its designeemore than the amountsheld in the Acquisition and Construction Fund.

ARTICLE III

CONSTRUCTION IMPROVEMENTS
Section 3. 01. Administration of Contracts for Construction Improvements.

Notwithstandinganythingin this Agreementto the contrary, the Developershallbe responsible for all costs of the Construction Improvements that are in excess of the Available Amount and the City shall be under no obligation to advanceany City funds for the Construction Improvements. The Developer shall , through a third party selected by the City Engineer, manage the bidding and construction process with respect to the construction of each Construction Improvement in accordance with the requirements of the City and the administration of eachcontract enteredinto by the City for eachConstruction Improvement at its sole cost and expense. Developer shall submit a deposit in an amount to be determined by the City Engineerfrom which the City maydrawto coverany andall costsit incurswith respectto the bidding processand the administrationof contractsfor the ConstructionImprovements, including but not limited to the costs of staff and consultant time communicating with Developer and its third party manager and reviewing work product. Developer shall replenish this deposit upon reasonable demand from the City. The City' s sole responsibility shall be as the awarding body for each such contract. All payments under such construction contracts shall be made by direct disbursement from the applicable Acquisition and Construction Fund, to the extent of the Available Amount, or by Advances from the Developer.

Section 3. 02. Funding of Construction Improvements and Advances. The City may submit a DisbursementRequestForm directly to the Authority Trusteefor the funding of costs of a Construction Improvement or for the reimbursement for prior City funding of a Construction Improvement. The Authority or Authority Trustee shall make payment directly to the City or its designeein the amount requestedfrom the applicable Acquisition and Construction Fund. The City and Developer agreethat the Authority or Authority Trustee shall make paymentstrictly in accordancewith the DisbursementRequestForm and shall not be required to determine any of the items specified in the Disbursement Request Form. The 181910 v4 9186. 2 9Page 32 of 46

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Authorityor AuthorityTrusteeshallbe entitledto rely onthe executedDisbursementRequest Form on its face without any further duty of investigation.

The Developerand City agreethe first priority for disbursementsfrom the Acquisition and Construction Fund shall be for the Construction Improvements and reimbursement of Advances. The City and Developer shall provide a written notice of the total expected cost of the ConstructionImprovementsand all amountsin the Acquisition and ConstructionFund in excess of such total shall be available to fund the Acquisition Improvements.

To the extent the Developer is required to make Advances, the City and Developer shall executeaDisbursementRequestFormdirectly to theAuthority Trusteefor thereimbursementof such Advances to the Developer from the Acquisition and Construction Fund.

ARTICLE IV

MISCELLANEOUS
Section 4. 01. Indemnification and Hold Harmless.
a) Indemnificationof Authority. TheDeveloperherebyassumesthedefense of, and indemnifies and savesharmless the Authority and its officers, directors, employees and agents, includingtheAuthorityTrustee, fromandagainstall actions, damages, claims, lossesor expensesof everytypeanddescriptionto whichtheymaybesubjectedor put, by reasonof, or resultingfrom or allegedto haveresultedfrom the actsor omissionsof theDeveloperor its agentsandemployeesarisingout of anycontractfor the design, engineeringandconstructionof the Acquisition Improvements entered into by the Developer, by the City with respect to the ConstructionImprovements, or arising out of any allegedmisstatementsof fact or alleged omissionof a materialfactmadeby theDeveloper, its officers, directors, employeesor agentsto theAuthority's underwriter, financialadvisor, appraiser, districtengineeror bondcounselor regardingtheDeveloper, its proposeddevelopments, its propertyownershipandits contractual arrangementscontainedin the official statementrelating to the Authority financing (provided that the Developer shall have been furnished a copy of the official statementand shall not have objected thereto) Except as set forth in this Section 4.01, no provision of this Agreement shall in anyway limit theextentof theresponsibilityof theDeveloperfor paymentof damagesresulting from the operations of the Developer, its agents and employees. Nothing in this Section 4.01 shall be understood or construed to mean that the Developer agrees to indemnify the Authority or any of their respective officers, directors, employees or agents, for any wrongful acts or omissions to act of the Authority or its officers, employees, agents or any consultants or contractors, including the Authority Trustee.
b) Indemnification of City. The Developer hereby assumesthe defense of, andindemnifiesandsavesharmlessthe City, andits officers, directors, employeesandagents, from and against all actions, damages, claims, lossesor expensesof every type and description includingreasonableattorneys' feesandcosts) towhichtheymaybesubjectedorput,byreason of, or resultingfrom or allegedto haveresultedfrom theactsor omissionsof theDeveloper, any third party hired by Developerto perform servicesrelatedto the Improvementspursuantto Section3.01, anythird partyhired by theCity for thedesign, engineering, or constructionof the 181910 v4 9186. 2 10Page 33 of 46

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Construction Improvements, and their respective officers, directors, employees and agents, arising out of or in any way related to the design, engineering or construction of the Improvements, or arising out of or in any way relatedto any allegedmisstatementsof fact or alleged omission of a material fact made by the Developer, its officers, directors, employees or agentsto the Authority' s underwriter, financial advisor, appraiser, district engineeror bond counselor regardingthe Developer, its proposeddevelopments, its propertyownershipandits contractual arrangementscontained in the official statement relating to the Authority financing provided that the Developer shall have been furnished a copy of the official statement and shall not have objected thereto). With respect to Developer' s indemnity obligations arising from acts or omissionsby third partieshiredby Developeror City, Developershallbejointly andseverally liable with the third parties; provided, further, that nothing in this Section 4.01 shall limit in any manner the City' s rights against any of the Developer' s architects, engineers, contractors or other consultants. Except as set forth in this Section 4.01, no provision of this Agreement shall in any way limit the extentof the responsibilityof the Developerfor paymentof damagesresulting from the operations of the Developer, its agents and employees. Nothing in this Section 4.01 shall be understood or construed to mean that the Developer agreesto indemnify the City or any of its officers, directors, employees or agents, for any wrongful acts, willful misconduct, or active negligence of the City, or its officers, employees, agentsor any consultants or contractors.

Additionally, theDevelopershallindemnify, protect, defend, andhold harmless, theCity, and/or any of its officials, officers, employees, agents, departments, agencies, and instrumentalities thereof, from any and all claims, demands, law suits, writs of mandamus, and other actions and proceedings ( whether legal, equitable, declaratory, administrative or adjudicatory in nature), and alternative dispute resolutions procedures (including, but not limited to arbitrations, mediations, and other such procedures), brought against the City, and/or any of its officials, officers, employees, agents, departments, agencies, and instrumentalities thereof, that challenge, attack, or seekto modify, setaside, void, or annul, the any actionof, or anypermit or approvalissuedby, the City and/or any of its officials, officers, employees, agents, departments, agencies, and instrumentalities thereof( including actions approved by the voters of the City), for or concerning the Improvements or this Agreement, whether such actions are brought under the California Environmental Quality Act, the Planning and Zoning Law, the Subdivision Map Act, Code of Civil Procedure Section 1085 or 1094. 5, or any other state, federal, or local statute, law, ordinance, rule, regulation, or any decision of a court of competent jurisdiction.

City shall promptly notify the Developer of any action brought and request that Developer defend the City. It is expressly agreed that Developer may select legal counsel providing the Developer' s defenseand the City shall have the right to approve separatelegal counselproviding the City' s defense. The Developer shall reimburse City for any attorneys' fees, costs and expenses directly and necessarily incurred by the City in the course of the defense. Developer agrees that City will forward monthly invoices to Developer for attorneys' fees, costs and expenses it has incurred related to its defense of any action and Developer agrees to timely payment within thirty( 30) days of receipt of the invoice. Within fourteen (14) days of an action beingcommenced, Developeragreesto postadequatesecurityor a cashdepositwith City in an amountto covertheCity' s estimatedattorneys' fees, costsandexpensesincurredby City in the course of the defense in order to ensure timely payment of the City' s invoices. The amount of the security or cashdeposit shall be determined by the City. City shall cooperatewith Developer in the defenseof any action.
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Section 4. 02. Audit. TheCity shallhavetheright, duringnormalbusinesshours anduponthegiving of ten days' written noticeto theDeveloper, to review all booksandrecords of the Developerpertaining to costsand expensesincurredby the Developer (for which the Developer seeks reimbursement pursuant to this Agreement) in constructing the Acquisition Improvements.

Section 4. 03. Cooperation. The City and the Developer agree to cooperate with respect to the completion of the financing of the Acquisition Improvements by the Authority throughthe levy of theCommunityFacilitiesDistrict SpecialTaxesandissuanceof Bonds. The City andthe Developeragreeto meetin goodfaith to resolveany differenceson futurematters which arenot specifically covered by this Agreement.

Section 4. 04. General Standard of Reasonableness. Any provision of this Agreement which requires the consent, approval or acceptanceof either party hereto or any of their respective employees, officers or agents shall be deemed to require that the consent, approval or acceptancenot be unreasonably withheld or delayed, unless the provision expressly incorporates a different standard. The foregoing provision shall not apply to provisions in the Agreement which provide for decisions to be in the sole discretion of the party making the decision.

Section 4. 05. Third Party Beneficiaries. The Authority and its officers, employees, agents or any consultants or contractors are expressly deemed third party beneficiaries of this Agreement with respect to the provisions of Section 4. 01. It is expressly agreedthat, except for the Authority with respect to the provisions of Section4.01, there areno third party beneficiariesof this Agreement, including without limitation any ownersof bonds, any of the City' s or the Developer' s contractors for the Acquisition Improvements and any of the City' s, the Authority' s or the Developer' s agents and employees.

Section 4. 06. Conflict with Other Agreements. Nothing contained herein shall be construedas releasingthe Developeror the City from any condition of developmentor requirementimposedby any other agreementbetweenthe City andthe Developer, and, in the event of a conflicting provision, the other agreement shall prevail unless the conflicting provision is specifically waived or modified in writing by the City and the Developer.

Section 4. 07. Notices. All invoices for payment, reports, other communication and notices relating to this Agreement shall be mailed to:
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If to the City:

City of Hemet
445 E. Florida Avenue
Hemet, California 92543
Attention: City Manager
With a copy to:

Burke, Williams & Sorensen, LLP
1770 Iowa Ave., Suite 240
Riverside, CA 92507
Attn: Erica L. Vega, Esq.

If to the Authority:

California Statewide Communities Development Authority
1100 K Street, Suite 101
Sacramento, CA 95814
Attention: Treasurer
If to the Developer:

McSweeny Recovery Acquisition, LLC
5796 Armada Drive, Suite 375
Carlsbad, CA 92008
Attention: Patrick Parker
With a copy to:

O' Neil LLP
19900 Macarthur Blvd., Suite 1050
Irvine, CA 92612
Attn: John P. Yeager
Either party may changeits addressby giving notice in writing to the other party.

Section 4. 08. Severability. If any part of this Agreement is held to be illegal or unenforceableby a court of competentjurisdiction, the remainderof this Agreementshall be given effect to the fullest extent reasonably possible.

Section 4. 09. Governing Law. This Agreement and any dispute arising hereundershall be governedby and interpretedin accordancewith the laws of the Stateof California.

Section 4. 10. Waiver. Failure by a party to insist upon the strict performance of anyof theprovisionsof thisAgreementbytheotherparty, orthefailureby apartyto exerciseits 181910 v4 9186. 2 13Page 36 of 46

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