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HomeMy WebLinkAbout06708 - FAR WEST INDUSTRIES, CASH DEPOSIT AND SETTLEMENT AGR AND RELEASE FOR MURANO DEV 33933 CASH DEPOSIT AGREEMENT Repair of Enamor Court, Community of Murano City of Palm Springs, California THIS CASH DEPOSIT AGREEMENT (this "Agreement") is dated and entered into as of May 6, 2015, by and between Far West Industries, a California corporation ("Far West"), and the City of Palm Springs, a California charter city the "City"). Far West and the City may hereinafter sometimes be referred to individually as the"Party" or, collectively, as the "Parties." RECITALS A. The City and P.S. Avenida Caballeros/San Rafael, LLC, a Delaware limited liability company ("Subdivider") entered into that certain Subdivision Improvement Agreement dated August 1, 2006 ("Subdivision Agreement"), which provides, inter alia, for the installation and completion, at Subdivider's expense, of certain public improvement work required by the City in connection with the approval of the Tract Map for Tract 33933 located within the City (the "Subdivision"). B. Subdivider also provided the City with a faithful performance bond in the original amount of$1,080,000 to cover installation and completion of street improvements, water system improvements, adjustments in sewer manholes and the sewer system throughout the Subdivision, all more fully set forth in the Subdivision Agreement (the "Bond"). (Warranty?) The Bond was issued by International Fidelity Insurance Company ("IFIC") and is held by the City. C. Subdivider installed most of the land improvements and lots and constructed and sold fifteen (15) homes to individual buyers. Included in the land improvements completed by Subdivider were two (2) of the foul (4) streets within the Subdivision (i.e., the final cap, manholes were raised to final grade and all west and dry utilities had been installed on those two (2) streets). The two (2) streets completed by Subdivider were Enamor Court and Azure Court. D. Subdivider subsequently defaulted under its construction loan and the lender foreclosed on the forty-two unsold lots. Far West acquired those lots directly from the lender pursuant to a Grant Deed recorded on October 14, 2011, as Document No. 20 1 1-0454865, in the Official Records of the County of Riverside, State of California. E. Far West has now completed homes on all of the lots it acquired, completed construction of the two (2) remaining streets and all homes have been sold, except for Lot 54 within the Subdivision ("Lot 54"). Lot 54 is in escrow and is scheduled to close on April 24, 2015. F. Far West has requested that the City issue a certificate of occupancy for Lot 54 (the "Certificate of Occupancy"). The City, however, has stated that, as a condition to its issuance of the Certificate of Occupancy, the asphalt on Azure Court must be cleaned and re- sealed and that the entirety of Enamor Court must be removed and replaced. Far West asserts that it is not its responsibility to perform such repairs and replacement, but instead, is the responsibility of Subdivider. ORIGINAL BID AND10R AGREEMENT G:\Murano-Palm Springs\Land DevelopmenlWgmement for Cash Deposit--Enamor Court v2.doc G. The City and Far West have now reached an agreement with regard to the repair of Azure Court and the replacement of Enamor Court (the "Street Repairs"). In order to cause the Certificate of Occupancy to be issued, Far West will provide the City with a cash deposit in the amount of Forty-Seven Thousand Five Hundred and no/100 Dollars ($47,500.00), which sum is the estimated cost to perform the Street Repairs. The City, in turn, will assign to Far West its rights under the Bond and Subdivision Agreement and Far West will pursue a claim against the Bond issued by IFIC to pay for the Street Repairs. AGREEMENT NOW THEREFORE, in consideration of the recitals (which are incorporated herein by reference), covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Within five (5) business days of full execution of this Agreement, the City agrees to make written demand upon the Subdivider to commence within twenty (20) days, and to diligently pursue the completion of, the Street Repairs (the "City Demand"). In the event that the Subdivider does not agree in writing, within five (5) business days of receipt of the City Demand, to commence and complete the Street Repairs in accordance with said City Demand, or if the Subdivider does not timely commence or does not diligently pursue the completion of the Street Repairs following receipt of the City Demand, the City hereby unconditionally and irrevocably authorizes Far West's counsel, on behalf of the City, to draw up and make a claim on the Bonds to pay for the costs of completing and performing the Street Repairs ("Bond Claim"). If said Bond Claim is not promptly honored and fully paid by the surety, the City hereby unconditionally and irrevocably authorizes Far West's counsel to file suit on behalf of the City against the surety in order to execute on and enforce the Bond Claim and to seek recovery on and under the Bond ("Enforcement Action"). Far West shall have the right, but not the obligation, to make Bond Claim and to pursue any Enforcement Actions. Any funds recovered by the City pursuant to the Bond Claim or an Enforcement Action or otherwise recovered from an issuer of the Bond ("Recovered Funds") shall be held in trust in the Escrow (as hereafter defined) and distributed in accordance with the terms of this Agreement. The City further agrees to fully cooperate with Far West and its counsel in connection with the making of the Bond Claim and the pursuit of the Enforcement Actions, including the execution of any documents related thereto or required thereby. Subject to the reimbursement provisions contained herein with respect to any Recovered Funds, Far West agrees to pay for any costs it incurs in making said Bond Claim or pursuing the Enforcement Action. Far West has provided the City with a cost estimate for completion of the Street Improvements as described in Section 2 of the Agreement. This cost estimate will be used as the basis for the amount claimed against the Bond. The City agrees that any Recovered Funds first shall be paid to Far West up to the amount of funds actually expended or needed in order to complete the Street Repairs, plus the amount of any legal fees and costs and expert witness and consultant fees and costs incurred by Far West in connection with the Bond 2 U: Murano-Palm Springs\Land DevelopmcntWgrccment for Cash Deposit--Enamor Court v2.doc Claim, the Enforcement Action, the drafting and negotiating of this Agreement and any activities related to the foregoing(collectively, the "Reimbursable Items"). 2. Far West will provide the City with a total cash deposit of Forty-Seven Thousand Five Hundred and no/100 Dollars ($47,500.00) (the "Cash Deposit'). Twenty-Four Thousand and no/100 Dollars ($24,000.00) of the Cash Deposit will be satisfied by Far West's dust control cash deposit that is currently being held by the City and will be redesignated for use as a portion of the Cash Deposit. Far West shall deliver to the City a check in the amount of Twenty-Three Thousand Five Hundred and no/100 Dollars ($23,500.00) for the balance of the Cash Deposit. 3. Upon receipt of the Cash Deposit, the City will immediately issue a Certificate of Completion on Lot 54. 4. Notwithstanding Far West's pursuit of the claim with IFIC against the Bond, Far West hereby agrees to cause the Street Repairs to be performed and completed on or before May 1, 2016. Upon completion of the Street Repairs and acceptance of same by the City, which acceptance will not be unreasonably withheld, the City will release the Cash Deposit to Far West. 5. Except as specifically limited by the terms of this Agreement, any Party to this Agreement shall have the right to enforce, by proceedings at law or in equity, all rights, terms and conditions now or hereafter imposed or created by the provisions of this Agreement, or any amendment thereto, including the right to prevent the violation of any such rights, terms and conditions and the right to recover damages for such violation. 6. All rights, options, and remedies of the Parties under this Agreement are cumulative, and no one of them shall be exclusive of any other, and the Parties hereto shall have the right to pursue any one or all of such rights, options, and remedies, or any other remedy or relief that may be provided by law, whether or not stated in this Agreement. 7. Failure by any Party hereto to enforce any right, term or condition herein contained, shall not be deemed a waiver of such right on any such future breach of the same or any other term or condition contained herein. 8. All notices required or permitted to be delivered hereunder shall be in writing and shall be delivered in person or by overnight express carrier or by United States registered or certified mail with return receipt requested, by facsimile or e-mail with confirmation of receipt. If delivered in person, such notices shall be effective on the date of delivery and, if sent by overnight express carrier, shall be effective on the next business day immediately following the day sent and, if so mailed, shall be effective at the time of deposit in any U.S. Post Office or collection box with postage prepaid and, if sent by facsimile or e-mail, shall be deemed effective on the day when sent. All notices shall be addressed as follows: If to City: City of Palm Springs, California 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 3 G Wurano-Palm SpringsTand Devclopment\Agreement for Cash Deposit--Enamor Court Q.doc Telephone: (760) 322-8380 Facsimile: Attention: Assistant City Manager/City Engineer Email: marcus.fuller(a�palmsprin�,,s-ca. ,ov If to Transferee: Far West Industries 2922 Daimler Street Santa Ana, CA 92705 Telephone: (949) 224-1970 Facsimile: (949) 224-1963 Attention: Ira Glasky Email: igIasky(ii)farwestindustries.com or at such other addresses as either party hereto may designate by giving written notice thereof to the other party hereto in the aforesaid manner. 13. This Agreement contains the entire agreement of the Parties hereto relating to the rights herein granted and the obligations herein assumed. If any clause, sentence, or other portion of the terms, conditions, covenants and restrictions of this Agreement shall become illegal, null, or void for any reason, or be held by a court of competent jurisdiction to be so, the remaining portion will remain in full force and effect. The Parties shall in no event be deemed to be partners of one another by reason of the terms of this Agreement. In the event of any dispute between the Parties hereto involving the performance or interpretation of the covenants or conditions contained in this Agreement or arising out of the subject matter of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, expert witness fees, expenses and costs, including costs on appeal and costs in any bankruptcy proceeding (including any post-petition proceedings). Each individual executing this Agreement represents that he or she is duly authorized to execute and deliver this Agreement on behalf of the Party for which he or she is signing, and that this Agreement is binding upon the Party for which he or she is signing in accordance with its terms. This Agreement is deemed to have been made in the State of California, and its interpretation, its construction and the remedies for its enforcement or breach are to be applied pursuant to, and in accordance with the laws of the State of California for contracts made and to be performed therein. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 14. The only parties to this Agreement are Far west and the City. There are no third party beneficiaries and this Agreement is not intended, and shall not be construed, to benefit, or be enforceable by any other person whatsoever. 15. Each Party shall deliver such further documents and instruments, and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. 4 G:Nurano-Palm Springs\Land DevelopmentWgreement for Cash Deposit--Enamor Court v2.doc "Far West": FAR WEST INDUSTRIES, a California corporation By Scott f issoy, President "City": CITY OF PALM SPRIN a municipal corporation of the State of California By Name: Title: Date: 21,414kl-14- David H. Ready, City Manager Date: James Thompson, City Clerk C of Staff APPROVED BY CITY COUNCIL 1 L AxAb AM/rzu RM TY ATTORNEY DATE 5 G Nurano-Palm Springs\Land Development\Agreement for Cash Deposit--Enamor Court v2.doc SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Mutual Release (the "Agreement") is dated as of 4 , 2016 (the "Effective Date") by and among the City of Palm Springs, California, a California charter city ("City"), P.S. Avenida Caballeros/San Rafael, LLC, a Delaware limited liability company ("Avenida"), and Far West Industries, a California corporation ("FWI"). The City, Avenida, and FWI may sometimes be referred to in this Agreement as a"Party" and, collectively, as the "Parties." RECITALS WHEREAS, the City and Avenida entered into that certain Subdivision Improvement Agreement dated as of August 1, 2006, recorded in Riverside County on October 25, 2006 as Document 2006-0783108 (the"SIA"), covering a residential subdivision known as Tract 33933 - Murano ("Property"). WHEREAS, pursuant to the SIA, Avenida agreed to construct, install or cause to be constructed or installed certain Works of Improvement, as defined in the SIA ("Improvements") in connection with the development of the Property and to guarantee such Improvements against defective materials and workmanship for a period of one (1) year from the date of final acceptance by the City. WHEREAS, pursuant to the SIA, Avenida furnished Security Instruments (as defined in the SIA) to the City in the form of a Faithful Performance Bond in the penal sum of $2,384,500.00, a Labor and Materials Bond in the penal sum of$1,192,250.00, and a Bond for Maintenance and Warranty of Improvements in the penal sum of$357,675.00 (collectively, the "Bonds"), each assigned No. 431032 and issued by International Fidelity Insurance Company, a New Jersey corporation (the "Surety"), to secure the performance of, payment for and warranty of certain Improvements, respectively. WHEREAS, in 2011, prior to the completion of the development of the Property, MB Financial Bank, N.A. completed a non-judicial foreclosure proceeding, took title, either directly or through an affiliate, to the Property, and subsequently transferred title to the Property to FWI. WHEREAS, in 2015, FWI completed those Improvements not previously completed by Avenida and accepted by the City, sought the City's acceptance of all Improvements and requested Certificates of Occupancy for the final lots built out by FWI on the Property. WHEREAS, the City required that FWI address alleged defects in Azure Court and Enamor Court (the "Alleged Defective Work"), installed by Avenida. After FWI entered into a Cash Deposit Agreement with the City, the City agreed to issue the requested Certificates of Occupancy to FWI prior to the resolution of the Alleged Defective Work. WHEREAS, FWI sought to enforce a claim against the Bonds with respect to the Alleged Defective Work by submitting a claim with the Surety. The Surety denied the claim on or about September 3, 2015. WHEREAS, on or about April 18, 2016, the City Attorney for the City sent a letter to Avenida and the Surety asserting a default by Avenida under the SIA with respect to the Alleged Defective Work. WHEREAS, Avenida and the Surety have denied they are in default under the SIA or Bonds and that there is an enforceable claim against the Bonds. Nevertheless, Avenida has agreed to make a payment to the City in full and complete satisfaction of all claims of the City and FWI under the SIA and the Bonds, including the Alleged Defective Work. WHEREAS, the Parties, in order to avoid the time and expense of litigation, desire to amicably adjust, compromise, settle and waive each and all their respective claims or causes of action and to enter into a settlement agreement by which such claims are released in full, it being the intention of the Parties that this Agreement extinguishes all claims by each Party against the other Party which were asserted, or which could have been asserted, or which otherwise relate to, or arise out of, the SIA, the Works of Improvement, the Bonds, and the development of the Property, in accordance with the terns and subject to the conditions set forth in this Agreement. NOW THEREFORE, the Parties agree as follows: 1. Recitals The Recitals are hereby incorporated into this Agreement as if fully set forth herein. 2. Escrow Deposit by Avenida and the City (a) Within five (5) business days after the full execution and delivery of this Agreement by the Parties: (i) Avenida will cause to be delivered by wire transfer the amount of Twenty Five Thousand Dollars ($25,000.00) (the "Avenida Payment") to an escrow agent of FWI's choosing (the "Escrow Agent") and; (ii) the City will deliver to the Escrow Agent an original signed release that provides that Avenida shall be fully released from all obligations and liability under the SIA and the Bonds in the form attached to this Agreement as Exhibit A (the "Avenida Release"). The Escrow Agent shall not distribute or release the Avenida Payment nor the Avenida Release except in accordance with the express terms and conditions of this Agreement. 3. Repair of Enamor Court and Azure Court (a) Upon confirmation by Escrow Agent that both the Avenida Payment and the Avenida Release have been deposited with the Escrow Agent, FWI will proceed to timely repair the Alleged Defective Work originally installed by Avenida (the "Repair Work"). 4. Inspection of Enamor Court and Azure Court (a) Following the completion of the Repair Work by FWI and subsequent to the acceptance and approval of the Repair Work by the City, the City shall issue a notice of acceptance (the "Acceptance") and provide an original copy of the Acceptance to the Escrow Agent. 5. Release of Avenida Payment, Acceptance and Avenida Release (a) Within five (5) business days after receipt of the Acceptance, the Escrow Agent shall (i) release to FWI, by wire transfer to an account designated by FWI, the Avenida Payment; (ii) send to FWI the Acceptance; and (iii) send to Avenida the Avenida Release. (b) Subject to the terms and conditions of this Agreement, FWI will use its cormnercially reasonable efforts to take, or cause to be taken, all actions necessary or desirable to complete the Repair Work within sixty(60) calendar days after deposit of the Avenida Payment and the Avenida Release with the Escrow Agent. 6. Releases and Covenants Not-to-Sue. (a) In consideration of the execution and delivery of this Agreement by Avenida and the making of the Avenida Payment by Avenida, the City and FWI, individually and on behalf of its respective parents, subsidiaries, heirs, representatives, officers, directors, governing bodies, shareholders, partners, members, managers, employees, divisions, affiliates, agents, insurers, beneficiaries, successors, and assigns (collectively, the "Releasing Parties"), intending to make a full, complete, and general release, unconditionally and irrevocably releases and forever discharges Avenida, and all of their present and former parent entities, subsidiaries, affiliates, partners, officers, directors, shareholders, members, managers, employees, agents, heirs, administrators, attorneys, successors, beneficiaries, and assigns (collectively, the "Released Parties"), from any liability for any and all known and unknown claims, counterclaims, controversies, actions, causes of action, demands, debts, damages, costs, attorney fees, or liabilities of any nature whatsoever in law or in equity that have arisen out of events that have occurred from the beginning of time until the date hereof arising from or related to the Alleged Defective Work, the SIA, or the Bonds which the Releasing Parties have asserted or could assert against any of the Released Parties. (b) In consideration of the making of the Avenida Payment by Avenida, each of the Releasing Parties, intending to make a full, complete, and general release, unconditionally and irrevocably releases and forever discharges, Surety, and all of its present and former parent entities, subsidiaries, affiliates, partners, officers, directors, shareholders, members, managers, employees, agents, heirs, administrators, attorneys, successors, beneficiaries, and assigns (collectively, the "Surety Released Parties"), from any liability for any and all known and unknown claims, counterclaims, controversies, actions, causes of action, demands, debts, damages, costs, attorney fees, or liabilities of any nature whatsoever in law or in equity that have arisen out of events that have occurred from the beginning of time until the date hereof arising from or related to the Alleged Defective Work, the SIA, or the Bonds which the Releasing Parties have asserted or could assert against any of the Surety Released Parties. Further, the City fully exonerates all Bonds. The Parties acknowledge and agree that the Surety and the Surety Released Parties are third-party beneficiaries of this Agreement. (c) The Releasing Parties covenant and agree that with regard to the claims released in this Agreement, the SIA, or the Bonds, they will never sue, institute, prosecute, cause to prosecute, assist in prosecuting, or permit to be prosecuted any proceeding in any court or any administrative or arbitration forum, or otherwise allege or assert any claim (including by way of counterclaim, defense, or set off to any legal action against it) against any of the Released Parties or the Surety Released Parties, or bring any claim against them or allege any liability of them for, any claims, controversies, actions, causes of action, demands, debts, monies due on accounts, obligations, judgments, damages, or liabilities of any nature whatsoever which are released or covered by the release in this Agreement. (d) Each Party represents and warrants to each other Party that it has neither made nor caused to be made any assignment or transfer of any right, claim, demand, or cause of action covered by the above releases and that each is the sole and absolute legal and equitable owner of all thereof. (e) The Parties represent they have carefully read the Release and Covenant Not-To-Sue on Released Claims in this Section 3 and fully understand their terns and import, and voluntarily consent thereto. Recognizing that the Parties may hereinafter discover material facts in addition to, or different from, those they now know, or believe, to be true with respect to the subject matter of this Agreement and with respect to any claims, the Parties nonetheless affirm their intention to settle and release any and all claims, counterclaims, disputes, and/or differences identified in the Releases and Covenants Not-To-Sue, known or unknown, suspected or unsuspected, fully, finally, and forever. (f) Civil Code Section 1542 Waiver. With respect to the foregoing releases, each Party hereby acknowledges and represents that it has been fully informed by its respective counsel of the contents of, and hereby expressly waives any and all rights and benefits conferred by, the provisions of California Civil Code Section 1542, which states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." 7. No Admission of Liability. The execution of this Agreement shall not constitute the admission by any Party of the existence of any default (including, but not limited to, any default under the SIA or the Bonds), any claims, or enforceability of any claims. The Parties understand, agree, and acknowledge that the consideration being provided pursuant to this Agreement is not, is not intended to be, and shall not be construed to be, in any way whatsoever now or at any time in the future for any purpose or in any future proceeding an admission of liability, responsibility or enforceability of any kind with respect to any claim. Neither this Agreement, nor any of the terms or provisions hereof, nor the substance of this Agreement or any of its terms or provisions, shall be offered or received into evidence in any proceeding as evidence of or to prove the liability, obligation, or wrongdoing of any type or nature whatsoever on the part of any Party, or to prove an admission or concession of any liability, obligation, or wrongdoing by any Party. 8. Confidentiality. The Parties acknowledge and agree that the terns of this Agreement are confidential to the fullest extent permitted by law. To the maximum extent permitted by law, and except as required (a) by law or regulation, or (b) to enforce the terns of this Agreement against a Party to this Agreement, neither the terms and conditions of this Agreement nor copies of this Agreement and the terms and conditions hereof, may be provided to anyone other than the Parties to this Agreement, their subsidiaries and affiliated companies, accountants, consultants, current and potential financing sources (including lenders), attorneys and/or insurers or potential insurers, all of whom shall be bound to hold such information in strict confidence. Upon receipt of a court order requiring a disclosure in contravention of this Agreement, the Party receiving such order shall provide reasonable notice thereof to the other Party, to allow that Party, at its sole expense, the opportunity to quash the order or seek similar relief. 9. Attorneys' Fees, Costs, and Expenses. Each Party shall bear its own attorneys' fees, experts' and consultants' fees, and all other costs and expenses of any kind incurred in connection with or related in any way to this Agreement, and all claims, allegations, litigation, or other matters to be compromised, dismissed, resolved or released pursuant to this Agreement. 10. Exception for Breach of this Agreement. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement is deemed to release any other Party for any breach of this Agreement. 11. Entire Agreement. Except as may be expressly set forth in this Agreement, the Parties to this Agreement declare and represent that no promise, inducement, or agreement not expressed in this Agreement has been made or offered to them and that this Agreement contains and represents the entire agreement between the Parties and that the terms of this Agreement are contractual and are not merely recitals. 12. Governing Law. This Agreement is entered into pursuant to and shall be construed and interpreted in accordance with the laws of the State of California, without regard to conflicts of law principles. 13. Consultation with Counsel. Each Party to this Agreement, before executing this Agreement, had an opportunity to consult with counsel with respect to the full force and effect of this Agreement and each of the terms and provisions hereof, and each Party fully understands and intends the full force and effect of this Agreement and each of its terms and provisions. Each Party to this Agreement has had a full and complete opportunity to investigate any and all matters believed by it to be appropriate or prudent for investigation or understanding prior to entering into this Agreement. 14. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. The Parties intend that each representation, warranty and covenant contained in this Agreement will have independent significance. If any Party has breached or violated, or if there is an inaccuracy in, any representation, warranty or covenant contained in this Agreement in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached or violated, or in respect of which there is not an inaccuracy, will not detract from or mitigate the fact that the Party has breached or violated, or there is an inaccuracy in, the first representation, warranty or covenant. 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. 16. Successors and Assigns. This Agreement shall be binding upon the Parties, their agents, representatives, heirs, predecessors, successors, and assigns, including any receiver or trustee in bankruptcy. 17. No Third Party Beneficiaries. Except with respect to the Surety and the Surety Released Parties (each of which is and shall be a third-party beneficiary of this Agreement), this Agreement is made solely for the benefit of the Parties and shall not give rise to any rights of any kind to any third parties. 18. Severability. Each term and provision of this Agreement, whenever possible, shall be interpreted in such a manner as to be effective and valid under applicable law. If any term or provision of this Agreement shall be determined through arbitration or judicial proceeding to be invalid or unenforceable, such determination shall apply only to such term or provision and shall not invalidate or make unenforceable any other term or provision of this Agreement. 19. Representations of the Parties. Each of the Parties has the full right and authority to execute, deliver and perform its obligations under this Agreement, which execution, delivery and performance (a) have been duly authorized by all necessary proceedings, (b) do not and will not require any notice to, or any consent or approval of, any person or entity (except for such as have been duly obtained and given in writing and are in full force and effect) and (c) do not and will not violate or conflict with, or result in or permit the acceleration of any indebtedness or the creation of any lien under, any organizational documents of such Party, any agreement to which such Party is a party or by which such Party or any of its property is bound, or any laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions, interpretations, orders or decrees of any court or other governmental authority binding on or affecting such Party or any of its property. 20. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by facsimile or earnail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 17): If to the City: David H. Ready, City Manager City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Email: cityinanager@palmsprings-ca.gov Facsimile: (760) 323-8207 with a copy to: Office of the City Attorney City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: Doug Holland, City Attorney Email: douglas.holland@palmsprings-ca.gov Facsimile: (760) 323-8207 If to Avenida: c/o The Enterprise Companies 710 W. Oakdale Chicago, IL 60657 Attn: Ronald B. Shipka, Jr. Email:jr@theenterprisecompanies.com Facsimile: (773) 348-1271 with a copy to: Brown, Udell, Pomerantz & Delrahim, Ltd. 1332 North Halsted Street, Suite 100 Chicago, IL 60642 Attn: Glenn Udell, Esq. Email: gudellLc8bupolaw.com Facsimile: (312) 475-1188 and with a copy to: International Fidelity Insurance Company 550 Kirkland Way, Suite 400 Kirkland, WA 98033 Attn: Louis J. White Email: lwhite c�ific.com Facsimile: (714) 602- 6249 If to FWL• Scott Lissoy Far West Industries 2922 Daimler Street Santa Ana, CA 92705 Email: scott(r farwestindustries.com Facsimile: (949) 224-1963 with a copy to: Ira Glasky, Esq. Far West Industries 2922 Daimler Street Santa Ana, CA 92705 Email: iglaskyafarwestindustries.com Facsimile: (949) 224-1963 21. Further Assurances. From and after the Effective Date, each Party shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary under applicable laws and execute and deliver such documents and other papers as may be required to carry out the provisions of this Agreement and to consummate, perform and make effective the settlement contemplated by this Agreement. 22. Amendment. This Agreement may not be changed, modified or discharged orally, but may only be changed, modified or discharged by an instrument in writing signed by all Parties to this Agreement. Notwithstanding the foregoing, no provision of this Agreement (including, specifically, but without limitation, Sections 3(a), 3(b), 14, and 17 and this Section k 19) that could or does adversely affect the rights of, or the releases granted to, the Surety and any Surety Released Party may be changed, modified or discharged without the prior written consent of the Surety, which consent may be withheld in its sole and absolute discretion. [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. THE CITY OF PALM SPRINGS, CALIFORNIA, a California charter city -- Name: David H. Ready VY" Title: City Manager A7IY Y ATTEST: B . N : James Thompson APPFIONED BY GTM COUNCIL e: City Clerk r (p?Z78 P.S. AVENIDA CABAL/liabilitompany RAFAEL, LLC, a Delaware limited By: California Develorises, Inc. a California corpo its manager By: 1 a .Name: Ronald Shipka, Jr. t?OOIPA Title: Presideny FAR WEST INDUSTRIES, a California co rpo ation By: Name: Scott L';soy Title: Preside t EXHIBIT A FORM OF AVENIDA RELEASE attached RELEASE This Release (this "Release") is entered into by the City of Palm Springs, California, a California charter city (the "City"), as of the Af-bh day of Cr,4ob ✓ 12016, A. Concurrently herewith, the City, P.S. Avenida Caballeros/San Rafael, LLC, a Delaware limited liability company ("Avenida"), and Far West Industries, a California corporation ("FWI") entered into that certain Settlement Agreement and Release (the "Settlement Agreement") dated of even date hereof. The City, Avenida, and FWI may sometimes be referred to in this Release as a "Party" and, collectively, as the "Parties." All capitalized terms not otherwise defined herein shall have the meaning given such term in the Settlement Agreement. B. The subject of the Settlement Agreement is the repair of certain street improvements installed by Avenida in a residential subdivision known as Tract 33933 —Murano (the "Property"), the payment of funds to FWI and the release of Avenida's obligations and liability under the Subdivision Improvement Agreement dated as of August 1, 2006 by and between the City and Avenida(the "SIA") and the security instruments furnished by Avenida for the benefit of the City as required by the SIA (the "Bonds"), all as more fully set forth in the Settlement Agreement. C. FWI has agreed to complete the Repair Work as set forth in the Settlement Agreement. However, prior to such Repair Work being commenced, Avenida has agreed to deliver to the Escrow Agent the amount of Twenty Five Thousand Dollars ($25,000.00) and the City will deliver to the Escrow Agent this executed Release to fully release Avenida from all obligations and liability under the SIA and Bonds, as described and defined in the Settlement Agreement. NOW THEREFORE, in consideration of the recitals (which are incorporated herein by reference), covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Upon the completion of the Repair Work by FWI and delivery by the City of the Acceptance to the Escrow Agent, the City, intending to make a full, complete, and general release, unconditionally and irrevocably releases and forever discharges Avenida, and all of their present and former parent entities, subsidiaries, affiliates, partners, officers, directors, shareholders, members, managers, employees, agents, heirs, administrators, attorneys, successors, beneficiaries, and assigns (collectively, the "Released Parties"), from any liability for any and all known and unknown claims, counterclaims, controversies, actions, causes of action, demands, debts, damages, costs, attorney fees, or liabilities of any nature whatsoever in law or in equity that have arisen out of events that have occurred from the beginning of time until the date hereof arising from or related to the SIA, or the Bonds, and the obligations of the Released Parties thereunder, which the City has asserted or could assert against any of the Released Parties. Further, the City fully exonerates all Bonds. 1 C:\Users\DouglwHlAppData\Local\Microsoft\Windows\Tempormy Internet Files\Contenl.Outlook\343E5S36\Settlement Agreement Release.doc Entered into as of the date above first written. THE CITY OF PALM SPRINGS, CALIFORNIA, a California charter city APP OV AS TO FORM By Name: David H. Ready IDA - /d ATT ,Title: City Manager ATTEST: APPROVED 6Y 0"'D*MtL A b 7 : James Thompso e: City Clerk j ofn 41,z c t b 2 C:\Users\Dougiw]4\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\343E5S36\Settlement Agreement Relcase.doc SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Mutual Release (the "Agreement") is dated as of September 28, 2016 (the "Effective Date") by and among the City of Palm Springs, California, a California charter city ("City"), P.S. Avenida Caballeros/San Rafael, LLC, a Delaware limited liability company ("Avenida"), and Far West Industries, a California corporation ("FWI"). The City, Avenida, and FWI may sometimes be referred to in this Agreement as a "Party" and, collectively, as the "Parties." RECITALS WHEREAS, the City and Avenida entered into that certain Subdivision Improvement Agreement dated as of August 1, 2006, recorded in Riverside County on October 25, 2006 as Document 2006-0783108 (the "SIA"), covering a residential subdivision known as Tract 33933 - Murano ("Property"). WHEREAS, pursuant to the SIA, Avenida agreed to construct, install or cause to be constructed or installed certain Works of Improvement, as defined in the SIA ("Improvements") in connection with the development of the Property and to guarantee such Improvements against defective materials and workmanship for a period of one (1) year from the date of final acceptance by the City. WHEREAS, pursuant to the SIA, Avenida furnished Security Instruments (as defined in the SIA) to the City in the form of a Faithful Performance Bond in the penal sum of $2,384,500.00, a Labor and Materials Bond in the penal sum of$1,192,250.00, and a Bond for Maintenance and Warranty of Improvements in the penal sum of$357,675.00 (collectively, the "Bonds"), each assigned No. 431032 and issued by International Fidelity Insurance Company, a New Jersey corporation (the "Surety"), to secure the performance of, payment for and warranty of certain Improvements, respectively. WHEREAS, in 2011, prior to the completion of the development of the Property, MB Financial Bank, N.A. completed a non-judicial foreclosure proceeding, took title, either directly or through an affiliate, to the Property, and subsequently transferred title to the Property to FWI. WHEREAS, in 2015, FWI completed those Improvements not previously completed by Avenida and accepted by the City, sought the City's acceptance of all Improvements and requested Certificates of Occupancy for the final lots built out by FWI on the Property. WHEREAS, the City required that FWI address alleged defects in Azure Court and Enamor Court (the "Alleged Defective Work"), installed by Avenida. After FWI entered into a Cash Deposit Agreement with the City, the City agreed to issue the requested Certificates of Occupancy to FWI prior to the resolution of the Alleged Defective Work. WHEREAS, FWI sought to enforce a claim against the Bonds with respect to the Alleged Defective Work by submitting a claim with the Surety. The Surety denied the claim on or about September 3, 2015. WHEREAS, on or about April 18, 20I6, the City Attorney for the City sent a letter to Avenida and the Surety asserting a default by Avenida under the SIA with respect to the Alleged Defective Work. WHEREAS, Avenida and the Surety have denied they are in default under the SIA or Bonds and that there is an enforceable claim against the Bonds. Nevertheless, Avenida has agreed to make a payment to the City in full and complete satisfaction of all claims of the City and FWI under the SIA and the Bonds, including the Alleged Defective Work. WHEREAS, the Parties, in order to avoid the time and expense of litigation, desire to amicably adjust, compromise, settle and waive each and all their respective claims or causes of action and to enter into a settlement agreement by which such claims are released in full, it being the intention of the Parties that this Agreement extinguishes all claims by each Party against the other Party which were asserted, or which could have been asserted, or which otherwise relate to, or arise out of, the SIA, the Works of Improvement, the Bonds, and the development of the Property, in accordance with the terms and subject to the conditions set forth in this Agreement. NOW THEREFORE, the Parties agree as follows: 1_ Recitals The Recitals are hereby incorporated into this Agreement as if fully set forth herein. 2. Escrow Deposit by Avenida and the City (a) Within five (5) business days after the full execution and delivery of this Agreement by the Parties: (i) Avenida will cause to be delivered by wire transfer the amount of Twenty Five Thousand Dollars ($25,000.00) (the "Avenida Payment") to an escrow agent of FWPs choosing (the "Escrow Agent") and; (ii) the City will deliver to the Escrow Agent an original signed release that provides that Avenida shall be fully released from all obligations and liability under the SIA and the Bonds in the form attached to this Agreement as Exhibit A (the "Avenida Release"). The Escrow Agent shall not distribute or release the Avenida Payment nor the Avenida Release except in accordance with the express terms and conditions of this Agreement. 3. Repair of Enamor Court and Azure Court (a) Upon confirmation by Escrow Agent that both the Avenida Payment and the Avenida Release have been deposited with the Escrow Agent, FWI will proceed to timely repair the Alleged Defective Work originally installed by Avenida (the"Repair Work"). 4. Inspection of Enamor Court and Azure Court (a) Following the completion of the Repair Work by FWI and subsequent to the acceptance and approval of the Repair Work by the City, the City shall issue a notice of acceptance (the "Acceptance") and provide an original copy of the Acceptance to the Escrow Agent. 5. Release of Avenida Payment, Acceptance and Avenida Release (a) Within five (5) business days after receipt of the Acceptance, the Escrow Agent shall (i) release to FWI, by wire transfer to an account designated by FWI, the Avenida Payment; (ii) send to FWI the Acceptance; and(iii) send to Avenida the Avenida Release. (b) Subject to the terms and conditions of this Agreement, FWI will use its commercially reasonable efforts to take, or cause to be taken, all actions necessary or desirable to complete the Repair Work within sixty (60) calendar days after deposit of the Avenida Payment and the Avenida Release with the Escrow Agent. 6. Releases and Covenants Not-to-Sue. (a) In consideration of the execution and delivery of this Agreement by Avenida and the making of the Avenida Payment by Avenida, the City and FWI, individually and on behalf of its respective parents, subsidiaries, heirs, representatives, officers, directors, governing bodies, shareholders, partners, members, managers, employees, divisions, affiliates, agents, insurers, beneficiaries, successors, and assigns (collectively, the "Releasing Parties"), intending to make a full, complete, and general release, unconditionally and irrevocably releases and forever discharges Avenida, and all of their present and former parent entities, subsidiaries, affiliates, partners, officers, directors, shareholders, members, managers, employees, agents, heirs, administrators, attorneys, successors, beneficiaries, and assigns (collectively, the "Released Parties"), from any liability for any and all known and unknown claims, counterclaims, controversies, actions, causes of action, demands, debts, damages, costs, attorney fees, or liabilities of any nature whatsoever in law or in equity that have arisen out of events that have occurred from the beginning of time until the date hereof arising from or related to the Alleged Defective Work, the SIA, or the Bonds which the Releasing Parties have asserted or could assert against any of the Released Parties- (b) In consideration of the making of the Avenida Payment by Avenida, each of the Releasing Parties, intending to make a full, complete, and general release, unconditionally and irrevocably releases and forever discharges, Surety, and all of its present and former parent entities, subsidiaries, affiliates, partners, officers, directors, shareholders, members, managers, employees, agents, heirs, administrators, attorneys, successors, beneficiaries, and assigns (collectively, the "Surety Released Parties"), from any liability for any and all known and unknown claims, counterclaims, controversies, actions, causes of action, demands, debts, damages, costs, attorney fees, or liabilities of any nature whatsoever in law or in equity that have arisen out of events that have occurred from the beginning of time until the date hereof arising from or related to the Alleged Defective Work, the SIA, or the Bonds which the Releasing Parties have asserted or could assert against any of the Surety Released Parties. Further, the City fully exonerates all Bonds. The Parties acknowledge and agree that the Surety and the Surety Released Parties are third-party beneficiaries of this Agreement. (c) The Releasing Parties covenant and agree that with regard to the claims released in this Agreement, the SIA, or the Bonds, they will never sue, institute, prosecute, cause to prosecute, assist in prosecuting, or permit to be prosecuted any proceeding in any court or any administrative or arbitration forum, or otherwise allege or assert any claim (including by way of counterclaim, defense, or set off to any legal action against it) against any of the Released Parties or the Surety Released Parties, or bring any claim against them or allege any liability of them for, any claims, controversies, actions, causes of action, demands, debts, monies due on accounts, obligations, judgments, damages, or liabilities of any nature whatsoever which are released or covered by the release in this Agreement. (d) Each Party represents and warrants to each other Party that it has neither made nor caused to be made any assignment or transfer of any right, claim, demand, or cause of action covered by the above releases and that each is the sole and absolute legal and equitable owner of all thereof (e) The Parties represent they have carefully read the Release and Covenant Not-To-Sue on Released Claims in this Section 3 and fully understand their terms and import, and voluntarily consent thereto. Recognizing that the Parties may hereinafter discover material facts in addition to, or different from, those they now know, or believe, to be true with respect to the subject matter of this Agreement and with respect to any claims, the Parties nonetheless affirm their intention to settle and release any and all claims, counterclaims, disputes, and/or differences identified in the Releases and Covenants Not-To-Sue, known or unknown, suspected or unsuspected, fully, finally, and forever. (f) Civil Code Section 1542 Waiver. With respect to the foregoing releases, each Party hereby acknowledges and represents that it has been fully informed by its respective counsel of the contents of, and hereby expressly waives any and all rights and benefits conferred by, the provisions of California Civil Code Section 1542, which states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." 7. No Admission of Liability. The execution of this Agreement shall not constitute the admission by any Party of the existence of any default (including, but not limited to, any default under the SIA or the Bonds), any claims, or enforceability of any claims. The Parties understand, agree, and acknowledge that the consideration being provided pursuant to this Agreement is not, is not intended to be, and shall not be construed to be, in any way whatsoever now or at any time in the future for any purpose or in any future proceeding an admission of liability, responsibility or enforceability of any kind with respect to any claim. Neither this Agreement, nor any of the terms or provisions hereof, nor the substance of this Agreement or any of its terms or provisions, shall be offered or received into evidence in any proceeding as evidence of or to prove the liability, obligation, or wrongdoing of any type or nature whatsoever on the part of any Party, or to prove an admission or concession of any liability, obligation, or wrongdoing by any Party. 8. Confidentiality. The Parties acknowledge and agree that the terms of this Agreement are confidential to the fullest extent permitted by law. To the maximum extent permitted by law, and except as required (a) by law or regulation, or (b) to enforce the terms of this Agreement against a Party to this Agreement, neither the terms and conditions of this Agreement nor copies of this Agreement and the terms and conditions hereof, may be provided to anyone other than the Parties to this Agreement, their subsidiaries and affiliated companies, accountants, consultants, current and potential financing sources (including lenders), attorneys and/or insurers or potential insurers, all of whom shall be bound to hold such information in strict confidence. Upon receipt of a court order requiring a disclosure in contravention of this Agreement, the Party receiving such order shall provide reasonable notice thereof to the other Party, to allow that Party, at its sole expense, the opportunity to quash the order or seek similar relief. 9. Attorneys' Fees. Costs. and Expenses. Each Party shall bear its own attorneys' fees, experts' and consultants' fees, and all other costs and expenses of any kind incurred in connection with or related in any way to this Agreement, and all claims, allegations, litigation, or other matters to be compromised, dismissed, resolved or released pursuant to this Agreement. 10. Exception for Breach of this Agreement. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement is deemed to release any other Party for any breach of this Agreement. 11. Entire Agreement. Except as may be expressly set forth in this Agreement, the Parties to this Agreement declare and represent that no promise, inducement, or agreement not expressed in this Agreement has been made or offered to them and that this Agreement contains and represents the entire agreement between the Parties and that the terms of this Agreement are contractual and are not merely recitals. 12. Governing Law. This Agreement is entered into pursuant to and shall be construed and interpreted in accordance with the laws of the State of California, without regard to conflicts of law principles. 13. Consultation with Counsel. Each Party to this Agreement, before executing this Agreement, had an opportunity to consult with counsel with respect to the full force and effect of this Agreement and each of the terms and provisions hereof, and each Party fully understands and intends the full force and effect of this Agreement and each of its terms and provisions. Each Party to this Agreement has had a full and compete opportunity to investigate any and all matters believed by it to be appropriate or prudent for investigation or understanding prior to entering into this Agreement. 14. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. The Parties intend that each representation, warranty and covenant contained in this Agreement will have independent significance. If any Party has breached or violated, or if there is an inaccuracy in, any representation, warranty or covenant contained in this Agreement in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached or violated, or in respect of which there is not an inaccuracy, will not detract from or mitigate the fact that the Party has breached or violated, or there is an inaccuracy in, the first representation, warranty or covenant. 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. 16. Successors and Assigns. This Agreement shall be binding upon the Parties, their agents, representatives, heirs, predecessors, successors, and assigns, including any receiver or trustee in bankruptcy. 17. No Third Party Beneficiaries. Except with respect to the Surety and the Surety Released Parties (each of which is and shall be a third-party beneficiary of this Agreement), this Agreement is made solely for the benefit of the Parties and shall not give rise to any rights of any kind to any third parties. 18. Severability. Each term and provision of this Agreement, whenever possible, shall be interpreted in such a manner as to be effective and valid under applicable law. If any term or provision of this Agreement shall be determined through arbitration or judicial proceeding to be invalid or unenforceable, such determination shall apply only to such term or provision and shall not invalidate or make unenforceable any other term or provision of this Agreement. 19. Representations of the Parties. Each of the Parties has the full right and authority to execute, deliver and perform its obligations under this Agreement, which execution, delivery and performance (a) have been duly authorized by all necessary proceedings, (b) do not and will not require any notice to, or any consent or approval of, any person or entity (except for such as have been duly obtained and given in writing and are in full force and effect) and (c) do not and will not violate or conflict with, or result in or permit the acceleration of any indebtedness or the creation of any lien under, any organizational documents of such Party, any agreement to which such Party is a party or by which such Party or any of its property is bound, or any laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions, interpretations, orders or decrees of any court or other governmental authority binding on or affecting such Party or any of its property. 20. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 17): If to the City: David H. Ready, City Manager City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Email: cityinanager@palmsprings-ca.gov Facsimile: (760) 323-8207 with a copy to: Office of the City Attorney City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: Doug Holland, City Attorney Email: douglas.holland@palmsprings-ca.gov Facsimile: (760) 323-8207 If to Avenida: c/o The Enterprise Companies 710 W. Oakdale Chicago, IL 60657 Attn: Ronald B. Shipka, Jr. Email:jr@theenterprisecompanies.com Facsimile: (773) 348-1271 with a copy to: Brown, Udell, Pomerantz & Delrahim, Ltd. 225 West Illinois Street, Suite 300 Chicago, IL 60654 Attn: Glenn Udell, Esq. Email: gudellLajbupolaw.com Facsimile: (312)475-1 188 and with a copy to: International Fidelity Insurance Company 550 Kirkland Way, Suite 400 Kirkland, WA 98033 Attn: Louis J. White Email: (white atific.com Facsimile: (714) 602- 6249 If to FWI: Scott Lissoy Far West Industries 2922 Daimler Street Santa Ana, CA 92705 Email: scottna farwestindustri es.coin Facsimile: (949) 224-1963 with a copy to: Ira Glasky, Esq. Far West Industries 2922 Daimler Street Santa Ana, CA 92705 Email: iyiaskvctfarwestindustries.com Facsimile: (949) 224-1963 21. Further Assurances. From and after the Effective Date, each Party shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary under applicable laws and execute and deliver such documents and other papers as may be required to carry out the provisions of this Agreement and to consummate, perform and make effective the settlement contemplated by this Agreement. 22. Amendment. This Agreement may not be changed, modified or discharged orally, but may only be changed, modified or discharged by an instrument in writing signed by all Parties to this Agreement. Notwithstanding the foregoing, no provision of this Agreement (including, specifically, but without limitation, Sections 3(a), 3(b), 14, and 17 and this Section 19) that could or does adversely affect the rights of, or the releases granted to, the Surety and any Surety Released Party may be changed, modified or discharged without the prior written consent of the Surety, which consent may be withheld in its sole and absolute discretion. [Remainder of Page Intentionally Lefi Blank.] IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. THE CITY OF PALM SPRINGS, CALIFORNIA, a California charter city By: Name: David H. Ready Title: City Manager ATTEST: By: Name: James Thompson Title: City Clerk P.S. AVENIDA CABALLEROSISAN RAFAEL, LLC, a Delaware limited liability company By: California Development Enterprises, Inc- a California corporation, its manager By: Name: Ronald B. Shipka, Jr. Title: President FAR WEST INDUSTRIES, a California corporation By: Name: Scott Lissoy Title: President IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. THE CITY OF PALM SPRINGS, CALIFORNIA, a California charter city By: Name: David H. Ready Title: City Manager ATTEST: By: Name: James Thompson Title: City Clerk P.S. AVENIDA CABALLEROS/SAN RAFAEL, LLC, a Delaware limited liability company By: California Development Enterprises, Inc. a California corporation, its manager By: Name: draU. ipka, Jr. Title::-resident FAR WEST INDUSTRIES, a California corporation By: Name: Scott Lissoy Title: President IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. THE CITY OF PALM SPRINGS, CALIFORNIA, a California charter city By: Name: David H. Ready Title: City Manager ATTEST: By: Name: James Thompson Title: City Clerk P.S. AVENIDA CABALLEROS/SAN RAFAEL, LLC, a Delaware limited liability company By: California Development Enterprises, Inc. a California corporation, its manager By: Name: Ronald B. Shipka,Jr. Title: President FAR WEST INDUSTRIES, a California co ration By: Name: Scott Lissoy Title: President EXHIBIT A FORM OF AVENIDA RELEASE attached RELEASE This Release (this "Release") is entered into by the City of Palm Springs, California, a California charter city(the "City"), as of the day of 12016. A. Concurrently herewith, the City, P.S. Avenida Caballeros/San Rafael, LLC, a Delaware limited liability company ("Avenida"), and Far West Industries, a California corporation ("FWI") entered into that certain Settlement Agreement and Release (the "Settlement Agreement") dated of even date hereof. The City, Avenida, and FWI may sometimes be referred to in this Release as a "Party" and, collectively, as the "Parties." All capitalized terns not otherwise defined herein shall have the meaning given such term in the Settlement Agreement. B. The subject of the Settlement Agreement is the repair of certain street improvements installed by Avenida in a residential subdivision known as Tract 33933 — Murano (the "Property"), the payment of funds to FWI and the release of Avenida's obligations and liability under the Subdivision Improvement Agreement dated as of August 1, 2006 by and between the City and Avenida(the "SIA") and the security instruments furnished by Avenida for the benefit of the City as required by the SIA (the "Bonds"), all as more fully set forth in the Settlement Agreement. C. FWI has agreed to complete the Repair Work as set forth in the Settlement Agreement. However, prior to such Repair Work being commenced, Avenida has agreed to deliver to the Escrow Agent the amount of Twenty Five Thousand Dollars ($25,000.00) and the City will deliver to the Escrow Agent this executed Release to fully release Avenida from all obligations and liability under the SIA and Bonds, as described and defined in the Settlement Agreement. NOW THEREFORE, in consideration of the recitals (which are incorporated herein by reference), covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Upon the completion of the Repair Work by FWI and delivery by the City of the Acceptance to the Escrow Agent, the City, intending to make a full, complete, and general release, unconditionally and irrevocably releases and forever discharges Avenida, and all of their present and former parent entities, subsidiaries, affiliates, partners, officers, directors, shareholders, members, managers, employees, agents, heirs, administrators, attorneys, successors, beneficiaries, and assigns (collectively, the "Released Parties"), from any liability for any and all known and unknown claims, counterclaims, controversies, actions, causes of action, demands, debts, damages, costs, attorney fees, or liabilities of any nature whatsoever in law or in equity that have arisen out of events that have occurred from the beginning of time until the date hereof arising from or related to the SIA, or the Bonds, and the obligations of the Released Parties thereunder, which the City has asserted or could assert against any of the Released Parties. Further, the City fully exonerates all Bonds. I:1Mi mno-Palm SpringsVConespondenceASettlement Agmement Release.doc Entered into as of the date above first written. THE CITY OF PALM SPRINGS, CALIFORNIA, a California charter city By: Name: David H. Ready Title: City Manager ATTEST: By: Name: James Thompson Title: City Clerk 2 1:Qvtumno-Palm Springs\Correspondence\Settlement Agreement Releasedoc