EXHIBIT 10.6
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
LANCASTER REDEVELOPMENT AGENCY
"AGENCY",
and
REXHALL INDUSTRIES, INC.
"DEVELOPER"
IN THE
AMARGOSA
REDEVELOPMENT PROJECT AREA
TABLE OF CONTENTS
Page
I. SUBJECT OF AGREEMENT
[Section 1.01] Purpose of Agreement .............................. 1
[Section 1.02] The Redevelopment Plan ............................ 1
[Section 1.03] The Site .......................................... 1
[Section 1.04] Parties to the Agreement .......................... 1
[Section 1.05] Prohibition Against Change in Ownership,
Management and Control of Developer ............... 2
II. ACQUISITION AND DISPOSITION OF THE SITE
[Section 2.01] Disposition of the Site ........................... 3
A. Agency Site Acquisition .......................... 3
B. Sale and Purchase ................................ 3
C. Payment of the Purchase Price .................... 3
[Section 2.02] Escrow ............................................ 4
A. Escrow Agent ..................................... 4
B. Developer's Costs ................................ 4
C. Agency's Costs ................................... 4
D. Escrow Agent's Authority ......................... 5
[Section 2.04] Form of Deed for the Conveyance ................... 6
[Section 2.05] Condition of Title ................................ 6
[Section 2.06] Time for and Place of Delivery of Deed ............ 6
[Section 2.07] Recordation of Grant Deed and Right-of-Easements .. 7
[Section 2.08] Title Insurance ................................... 7
[Section 2.09] Taxes and Assessments ............................. 7
[Section 2.10] Condition of the Site ............................. 7
[Section 2.11] Preliminary Work .................................. 8
[Section 2.12] Environmental Matters ............................. 8
A. Definitions ...................................... 8
B. Environmental Site Evaluation .................... 9
C. Obligation of Developer to Remediate the Site .... 10
D. Agency's Indemnification of Developer ............ 10
E. Developer's Indemnification of Agency ............ 11
[Section 2.13] Conditions Precedent to the Conveyance ............ 11
[Section 2.14] Employment Incentive Program ...................... 12
III. DEVELOPMENT OF THE SITE
[Section 3.02] Construction Drawings and Related Documents ....... 17
[Section 3.03] Agency Approval of Plans, Drawings, and Related
Documents ......................................... 17
[Section 3.04] Cost of Construction .............................. 18
[Section 3.05] Construction Schedule ............................. 18
[Section 3.06] Bodily Injury and Property Damage Insurance ....... 18
[Section 3.07] City and Other Governmental Agency Permits ........ 19
[Section 3.08] Rights of Access .................................. 19
[Section 3.09] Local, State and Federal Laws ..................... 19
[Section 3.10] Anti-discrimination During Construction ........... 20
[Section 3.11] Taxes, Assessments, Encumbrances and Liens ........ 20
[Section 3.12] Prohibition Against Transfer of the Site, the
Buildings or Structures Thereon and Assignment
of Agreement ...................................... 20
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[Section 3.13] No Encumbrances Except Mortgages, Deeds of
Trust, Sale and Lease-Back for Development ........ 20
[Section 3.14] Holder Not Obligated to Construct
Improvements ...................................... 21
[Section 3.15] Notice of Default to Mortgagee or Deed of Trust
Holders ........................................... 21
[Section 3.17] Right of the Agency to Cure Mortgage or Deed of
Trust Default ..................................... 22
[Section 3.18] Right of the Agency to Satisfy Other Liens on
the Site After Title Passes ....................... 22
[Section 3.19] Release of Construction Covenants ................. 23
IV. USE OF THE SITE
[Section 4.01] Uses .............................................. 24
[Section 4.02] Effect and Duration of Covenants .................. 26
[Section 4.03] Maintenance of the Site ........................... 26
[Section 4.04] Rights of Access .................................. 26
[Section 4.05] Effect of Violation of the Terms and Provisions
of this Agreement After Completion of
Construction ...................................... 26
V. GENERAL PROVISIONS
[Section 5.01] Notices, Demands and Communications Among the
Parties ........................................... 27
[Section 5.02] Conflicts of Interest ............................. 27
[Section 5.03] Enforced Delay .................................... 27
[Section 5.04] Non-liability of Officials and Employees of the
Agency ............................................ 28
VII. DEFAULTS AND REMEDIES
[Section 6.01] Defaults-General .................................. 28
[Section 6.02] Institution of Legal Actions ...................... 29
[Section 6.03] Applicable Law .................................... 29
[Section 6.04] Acceptance of Service of Process .................. 29
[Section 6.05] Rights and Remedies Are Cumulative ................ 29
[Section 6.06] Inaction Not a Waiver of Default .................. 29
[Section 6.07] Remedies and Rights Prior to Conveyance ........... 29
A. Default by Agency ................................ 30
B. Default by Developer ............................. 30
[Section 6.08] Remedies of the Parties for Default After the
Conveyance ........................................ 30
A. Termination and Damages .......................... 30
B. Action for Specific Performance .................. 30
C. Reentry and Revesting of Title in the Agency
After Conveyance ................................. 31
VIII. SPECIAL PROVISIONS
[Section 7.01] Submission of Documents to the Agency for
Approval .......................................... 33
[Section 7.02] Real Estate Commission ............................ 33
[Section 7.03] Successors In Interest ............................ 33
[Section 7.04] Amendments to this Agreement ...................... 33
[Section 7.05] Project Sign ...................................... 33
[Section 7.06] Ground Breakings and Grand Openings - Coordination
with Agency Staff ................................. 34
[Section 7.07] Developer Requested Amendments .................... 34
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[Section 7.08] Administration..................................... 34
VIII. ENTIRE AGREEMENT, WAIVERS
[Section 8. 01] Entire Agreement, Waivers......................... 35
IX. ACCEPTANCE OF AGREEMENT BY AGENCY, AND RECORDATION
[Section 9. 01] Time for Acceptance of Agreement by the
Agency............................................. 35
[Section 9.02] Recordation........................................ 35
ATTACHMENTS
ATTACHMENT NO. 1 SITE MAP
ATTACHMENT NO. 2 LEGAL DESCRIPTION
ATTACHMENT NO. 3 SCOPE OF DEVELOPMENT
ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 5 AGENCY GRANT DEED
ATTACHMENT NO. 6 RELEASE OF CONSTRUCTION COVENANTS
ATTACHMENT NO. 7 MEMORANDUM OF AGREEMENT
ATTACHMENT NO. 8 SIGN PROGRAM
ATTACHMENT NO. 9 LRA EVENT INFORMATION FORM
ATTACHMENT NO. 10 EMPLOYMENT PROGRAM PROMISSORY NOTE
ATTACHMENT NO. 11 PURCHASE PRICE PROMISSORY NOTE
ATTACHMENT NO. 12 CERTIFICATE OF QUALIFYING EMPLOYEES
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DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is entered
into by and between the LANCASTER REDEVELOPMENT AGENCY, a public body,
corporate and politic, (the "Agency") and REXHALL INDUSTRIES, INC., a California
Corporation (the "Developer"). The Agency and the Developer hereby agrees as
follows:
I. SUBJECT OF AGREEMENT
[Section 1.01] Purpose of Agreement. The purpose of this Agreement is
to effectuate the Redevelopment Plan (as hereinafter defined) for the Amargosa
Redevelopment Project (the "Project") by providing for the disposition and
development of certain property situated within the Project Area (the "Project
Area") for the expansion of the existing recreational vehicle manufacturing
facility. That portion of the Project Area to be developed pursuant to this
Agreement (the "Site") is depicted on the "Site Map" attached hereto as
Attachment No. 1 and incorporated herein by reference. This Agreement is entered
into for the purpose of developing the Site and not for speculation in land
holding. Completing the development on the Site pursuant to this Agreement is in
the vital and best interest of the City of Lancaster, California (the "City")
and the health, safety, and welfare of its residents, and in accord with the
public purposes and provisions of applicable state and local laws and
requirements.
[Section 1.02] The Redevelopment Plan. The Amargosa Redevelopment
Project was approved and adopted on October 17, 1983 by Ordinance No. 321, and
amended by Ordinance No. 672 adopted on December 5, 1994, and by Ordinance No.
727 adopted on March 27, 1997, of the City Council of the City of Lancaster;
said ordinances and the Redevelopment Plan as so approved (the "Redevelopment
Plan") are incorporated herein by reference.
[Section 1.03] The Site. The Site is that portion of the Project Area
designated on the Site Map (Attachment No. 1). The Site is approximately 13.98
acres in size. The Site is located within the Avenue H Industrial Park and is to
be developed in accordance to the regulations and development standards outlined
for HI (Heavy Industrial) zone of Lancaster's Zoning Ordinance. The legal
description for the Site is attached hereto as Attachment No. 2 and is
incorporated herein by this reference.
[Section 1.04] Parties to the Agreement. The Agency is a public body,
corporate and politic, exercising governmental functions and powers and
organized and existing under the Community Redevelopment Law of the State of
California. The principal office of the Agency is located at 44933 North Fern
Avenue, Lancaster, California 93534.
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"Agency", as used in this Agreement, includes the Lancaster
Redevelopment Agency, and any assignee of or successor to its rights, powers and
responsibilities.
The Developer is Rexhall Industries, Inc. a California Corporation. The
principal office address of the Developer for the purposes of this Agreement is
46147 7th Street West, Lancaster, California 93534. The principal mailing
address of Developer for the purposes of this Agreement is the same as
identified above.
[Section 1.05] Prohibition Against Change in Ownership, Management and
Control of Developer. The qualifications and identity of the Developer are of
particular concern to the Agency. It is because of those qualifications and
identity that the Agency has entered into this Agreement with the Developer. No
voluntary or involuntary successor in interest of the Developer shall acquire
any rights or powers under this Agreement except as expressly set forth herein.
The Developer shall not assign all or any part of this Agreement or any
rights hereunder without the prior written approval of the Agency, which the
Agency may reasonably withhold provided, however, that the Agency shall not
unreasonably withhold its approval of an assignment if the assignment is to an
entity which includes the Developer as a general partner or majority shareholder
and (1) the assignee entity shall expressly assume respective obligations of the
Developer pursuant to this Agreement in writing satisfactory to the Agency; (2)
the original Developer shall remain fully responsible for the performance and
liable for the obligations of the Developer pursuant to this Agreement; and (3)
the assignee is financially capable of performing the duties and discharging the
obligations it is assuming. The Developer shall promptly notify the Agency in
writing of any and all changes whatsoever in the identity of the persons in
control of the Developer and the degree thereof.
All of the terms, covenants and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the Developer and the permitted
successors and assigns of the Developer. Whenever the term "Developer" is used
herein, such term shall include any other permitted successors and assigns as
herein provided.
The restrictions of this Section 1.05 shall terminate and be of no
further force and effect upon issuance by the Agency of a "Release of the
Construction Covenants" for all improvements to be provided by the Developer
pursuant to this Agreement as described in the Scope of Development (Attachment
No. 3). Upon completion of the Developer Improvements, the Developer shall
request in writing to the Agency the issuance of the Release of Construction
Covenants pursuant to Section 3.19 of this Agreement. Within
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thirty (30) days of said written request, the Agency shall either issue the
Release of Construction Covenants, or provide a written statement identifying
specific reasons for the Agency's refusal to issue the Release of Construction
Covenants.
II. ACQUISITION AND DISPOSITION OF THE SITE
[Section 2.01] Disposition of the Site.
A. Sale and Purchase.
In accordance with and subject to all the terms, covenants and
conditions of this Agreement, and specific escrow instructions as specified
herein, the Agency agrees to sell the Site to the Developer and the Developer
agrees to buy the Site from the Agency and pay therefore the amount of One
Dollar and Fifty Cents ($1.50) per square foot, for a total of $913,453, herein
referred to as the "Purchase Price".
B. Payment of the Purchase Price.
The Developer shall execute with the Agency an Employment Program
Promissory Note (Attachment No. 10) which will provide a credit toward a portion
of the Purchase Price in the amount of $300,000, combined with a separate
Promissory Note for the balance of the Purchase Price (Attachment No. 11) in the
amount of $613,453. The above mentioned Promissory Notes combined equal the
total value of Purchase Price of $913,453. The Developer shall execute and
deposit said Notes with the Escrow Agency prior to the close of escrow, along
with funds in the amount of One Dollar ($1.00) which entitles the Developer to
water credits required for development of the Site in an amount not to exceed
$70,501.
The cash portion of the Purchase Price, including Buyer's escrow
charges and other cash charges, if any, shall be deposited with the Escrow
Holder, no later than the business day prior to the escrow closing date,
provided Seller's documents have been deposited in escrow.
Should the Agency fail to deliver the Site to the Developer consistent
with this Agreement, then the Developer may request in writing to the Agency
that this Agreement be terminated. In no event will the transfer of the Site
occur later than thirty (30) days following completion of all the conditions
precedent to the conveyance by the Developer and Agency, as specified in Section
2.13 of this Agreement.
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[Section 2.02] Escrow.
A. Escrow Agent. The Agency agrees to open an escrow ("Escrow")
with Antelope Valley Escrow Company, or with another mutually agreeable escrow
company (the "Escrow Agent") in Lancaster, by the time established therefor in
the "Schedule Performance" attached hereto as Attachment No. 4 and incorporated
herein by this reference. The escrow described in this Section 2.02 shall be
referred to as "Escrow", and the conveyance as provided for in Section 2.03 and
2.04 shall be referred to as "Conveyance". This Agreement constitutes the joint
basic escrow instructions of the Agency and the Developer for the Conveyance and
a duplicate original of this Agreement shall be delivered the Escrow Agent upon
the opening of Escrow. The Agency and Developer shall provide such additional
escrow instructions as shall be necessary for and consistent with this
Agreement. The Escrow Agent is hereby empowered to act under this Agreement, and
the Escrow Agent, upon indicating within five (5) days after opening of Escrow
its acceptance of the provisions of this section 2.02, in writing, delivered to
the Agency and the Developer, shall carry out its duties as the Escrow Agent
hereunder.
B. Developer's Costs. Except as otherwise indicated, the
Developer shall submit or pay in Escrow to the Escrow Agent all of the following
items and costs after the Escrow Agent has notified the Developer of the amount
of such fees, charges and costs, but not earlier than ten (10) days prior to the
scheduled date for closing Escrow:
1. one half (1/2) of the escrow fee; and
2. Fees for recording and filing all documents required in this
Agreement other than the Grant Deed recording fees;
3. cost of drawing the deed, if any; and
4. the costs of any extended coverage, American Land Title
Association insurance coverage, if required, includes any land
survey costs, or other title policy in excess of the premium
for the standard coverage (CLTA) policy to be provided by
Agency pursuant to Section 2.08.
C. Agency's Costs. The Agency shall pay in escrow to Escrow Agent
the following fees, charges and costs promptly after the Escrow Agent has
notified the Agency of the amount of such fees, charges and costs, but not
earlier than ten (10) days prior to the scheduled date for closing Escrow:
1. one half (1/2) of the escrow fee; and
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2. Ad valorem taxes, if any, upon the Site for any time prior to
the Conveyance; and
3. costs of drawing the Grant Deed, if any; and
4. the cost of any documentary transfer taxes on the Grant Deed;
and
5. the cost of a premium for a California Land Title Association
(CLTA) Standard Policy of title insurance insuring the Site in
the amount of estimated market value.
D. Escrow Agent's Authority. The Escrow Agent is authorized to:
1. Pay, and charge the Agency and Developer, respectively, for
any fees, charges and costs payable under this Section 2.02 of
this Agreement. Before such payments or charges are made, the
Escrow Agent shall notify the Agency and the Developer of the
fees, charges and costs necessary to clear title and close
Escrow.
2. Disburse funds and deliver the Agency Grant Deed (Attachment
No. 5) and other documents to the parties entitled thereto
when the conditions of this Escrow have been fulfilled by the
Agency and the Developer.
3. Record any instruments delivered through this Escrow, if
necessary or proper, to vest title of the Site in the
Developer, all in accordance with the terms and provisions of
this Agreement.
All funds received in this Escrow shall be deposited by the Escrow
Agent with other escrow funds of the Escrow Agent in an interest earning general
escrow account or accounts with any state or national bank doing business in the
State of California. Such funds may be transferred to any other general escrow
account or accounts. All disbursements shall be made by check of the Escrow
Agent. All adjustments are to be made on the basis of a thirty (30) day month.
If this Escrow is not in condition to close on or before the time for
conveyance established in Section 2.03 of this Agreement because of a failure of
either party to perform any of the Conditions Precedent to the Conveyance or
because either party has committed some other default which is not cured in time
for the close of Escrow, the Escrow Agent shall cancel and not close Escrow, and
return without demand all papers, documents and money deposited in Escrow to the
party who deposited said papers, documents and money into Escrow. In the event
Escrow is canceled pursuant to this paragraph, the rights of the parties shall
be established by Section 6.07 of this Agreement.
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Any amendment to these escrow instructions shall be in writing and
signed by both the Agency and the Developer. At time of any amendment, the
Escrow Agent shall agree to carry its duties as the Escrow Agent under such,
amendment.
All communications from the Escrow Agent to the Agency Developer shall
be directed to the addresses and in the manner established in Section 5.01 of
this Agreement for notices, and communications between the Agency and the
Developer.
The liability of the Escrow Agent under this Agreement limited to
performance of the obligations imposed upon it under Sections 2.02 through 2.13,
inclusive, of this Agreement.
[Section 2.03] Conveyance of Title and Delivery of Possession. Subject
to any extensions of time mutually agreed upon between Agency and the Developer,
the Conveyance shall be completed prior to the date specified therefor in the
Schedule of Performance attached hereto as Attachment No. 4 and incorporated
herein by reference. Said Schedule of Performance is subject to revision from
time to time as mutually agreed upon in writing between the Developer and the
Agency. The Agency and the Developer agree to perform all acts necessary for
conveyance title in sufficient time for title to be conveyed in accordance with
the foregoing provisions.
Developer shall only be entitled to limited access to the Site before
the Conveyance as permitted in Section 2.11 of the Agreement.
[Section 2.04] Form of Deed for the Conveyance. The Agency shall convey
to the Developer title to the Site in the condition provided in Section 2.05 of
this Agreement by grant deed in the form of the Agency Grant Deed in Attachment
No. 5 (the "Agency Grant Deed").
[Section 2.05] Condition of Title. The Agency shall convey to the
Developer fee simple merchantable title to the Site free and of all recorded and
unrecorded liens, encumbrances, assessment leases and taxes, except for the
Redevelopment Plan; the Right Way Easements and other provisions contained in
the Agency Grant Deed (Attachment No. 5); and such other encumbrances to which
Developer may consent. The condition of title shall be compared with and not
preclude development of the improvements currently existing on the Site or the
Developer Improvements which are built pursuant to this Agreement (collectively,
the "Improvements"). The parties shall act reasonably in evaluation of any
encumbrances and shall act diligently and promptly to conform the condition of
title to that required for the Developer to proceed with the development of the
Developer Improvements.
[Section 2.06] Time for and Place of Delivery of Deed. Subject to
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any mutually agreed upon extension of time, the Agency shall deposit the Agency
Grant Deed (Attachment No. 5) with the Escrow Agent at least ten (10) days
before the date established for the date of the Conveyance pursuant to the
Schedule of Performance (Attachment No. 4).
[Section 2.07] Recordation of Grant Deed and Right-of-Easements. The
Escrow Agent shall record the Agency Grant Deed in the land records of the
Office of the County Recorder for Los Angeles County, and shall deliver to the
Developer a title insurance policy insuring title in conformity with Section
2.08 of this Agreement.
[Section 2.08] Title Insurance. Concurrently with recordation of the
Agency Grant Deed (Attachment No. 5) conveying title to the Site with a mutually
acceptable title company (the "Title Company"), which shall provide and deliver
to Developer a title insurance policy (the "Title Policy") issued by the Title
Company insuring that the title to the Site is vested in Developer in the
condition required by Section 2.05 of this Agreement. The Title Company shall
provide the Agency with a copy of the Title Policy and the Title Policy shall be
for the estimated market value of the Site as established by the Agency (the
"Title Insurance Amount") . The Agency shall pay for those costs incurred for or
related to a CLTA standard policy of title insurance.
The Developer shall pay the costs of any extended coverage in excess of the
premium for the standard coverage (CLTA) policy, including any land survey
costs, American Land Title Association (ALTA) insurance coverage and for any
endorsements required by the Title Company to deal with Mineral Rights and
Surface Easements, if any.
[Section 2.09] Taxes and Assessments. Ad valorem taxes, assessments and
all other taxes, if any, on the Site, levied, assessed or imposed for any period
prior to the Conveyance shall be borne by the Agency. Ad valorem taxes,
assessments and all other taxes on the Site levied, assessed or imposed after
the Conveyance, including such taxes or assessments imposed on the Site shall be
borne by the Developer.
[Section 2.10] Condition of the Site. The Developer, at its sole cost
and expense, has the right to further investigate and determine, or cause to be
investigated and determined, the soil and environmental conditions of the Site
for the development to be constructed by Developer. As part of the investigation
of the soil and environmental conditions pursuant to this Section 2.10, the
Developer has the right to provide further analysis at its sole cost and expense
as required by Section 2.12.
If the environmental conditions of the Site are in all respects
entirely suitable for the use or uses to which the Site will be put, Developer
shall provide Agency a certificate (the
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"Certificate of Acceptance") certifying such suitability consistent with this
Section 2.10. Such Certificate of Acceptance shall in no way offset or limit the
Agency's indemnification" the Developer except in cases where it is determined
that the Developer or their agents, employees, contractors or invitees either
introduced, deposited, or otherwise caused contamination occur on the Site as
provided in this Section and in Section 2.12D.
In addition to a general statement acknowledging the good condition of
the Site's environmental condition, the Certificate of Acceptance shall include
a statement that the soil condition of the Site is entirely suitable for the
development of the Site construction of the Developer Improvements, and the use
or uses which the Site will be put. If the soil conditions of the Site are not
in all respects entirely suitable for the use or uses which the Site will be
put, then it is the sole responsibility and obligation of Developer to take such
actions as may be necessary to place the Site in a condition entirely suitable
for the development of the Site, and the construction of the Developer
Improvements.
[Section 2.11] Preliminary Work. Prior to the Conveyance, the Developer
or representatives of Developer shall have the right access to the Site at all
reasonable times for the purpose of obtaining data and making surveys and tests
necessary to carry this Agreement.
Any preliminary work undertaken on the Site by Developer prior to the
closing of Escrow shall be done only after written consent of the Agency, which
consent shall not be unreasonably withheld or delayed, and at the sole cost and
expense of Developer.
The Developer shall save, protect, defend, indemnify and harmless the
Agency and the City against any claims resulting all preliminary work, access or
use of the Site undertaken pursuant to this Section 2.11. Copies of data,
surveys and tests obtained or made by the Developer on the Site
pursuant to this Section 2.11 shall be filed with the Agency within fifteen (15)
days after receipt by the Developer. Any preliminary work by Developer shall be
undertaken only after securing any necessary permits from the appropriate
governmental agencies.
[Section 2.12] Environmental Matters.
A. Definitions. For the purposes of this Agreement, the following
terms shall have the meanings herein specified:
(1) The term "Hazardous Materials" shall mean (i) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended
from time to time, and regulations promulgated thereunder; (ii) any "hazardous
substance
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as defined by the Carpenter-Presley-Tanner Hazardous - Substance Account Act
(California Health and Safety Code Sections 25300 et seq.) , as amended from
time to time, and regulations promulgated thereunder; (iii) friable asbestos;
(iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline (refined and
unrefined) and their respective by-products and constituents; and (vi) any other
substance, whether in the form of a solid, liquid, gas or any other form
whatsoever, which by any "Governmental Requirements" (as defined in Subparagraph
(3) of Paragraph A of this Section 2.12) either requires special handling in its
use, transportation, generation, collection, storage, handling, treatment or
disposal, or is defined as "hazardous" or harmful to the environment.
(2) The term "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the
improvements, facilities, soil, groundwater, air or other elements on, in or of
the Site by Hazardous Materials, or the contamination of the buildings,
facilities, soil, groundwater, air or other elements on, in or of any other
property as a result of Hazardous Materials at any time (whether before or after
the date of this Agreement) emanating from the Site.
(3) The term "Governmental Requirements" shall mean all laws,
ordinances, statutes, codes, rules, regulations, orders and decrees of the
United States, the state, the county, the city, or any other political
subdivision in which the Site is located, and of any other political
subdivision, agency or instrumentality exercising jurisdiction over the Agency,
the Developer, or the Site.
3. Environmental Site Evaluation.
(1) Developer's Right to Conduct Site Evaluation. Developer
shall have the right to conduct an environmental site evaluation upon the Site
at its sole expense and cost, if so desired. If the environmental condition of
the Site is in all respects entirely suitable for the development of the Site,
the construction of the Developer Improvements, and the use or uses to which,
the Site will be put, Developer shall provide to the Agency the Certificate of
Acceptance required by Section 2.10 of this Agreement.
(2) Right to Terminate. If there are environmental problems on
the site or any portion thereof as determined by the Developer in their sole and
absolute discretion, including, but not limited to, the existence of hazardous
materials or hazardous materials contamination on all or part of the site, the
Agency and/or Developer shall have the right to terminate this agreement at any
time prior to the receipt by the Agency from the Developer of the Certificate of
Acceptance required by section 2.10 of this Agreement, said termination to be
effective immediately upon the date of a written notice of termination. Upon
written notice,
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either party may terminate this Agreement because of environmental problems
encountered after receipt by the Agency from the Developer of the Certificate of
Acceptance required by Section 2.10 of this Agreement, and prior to the issuance
of a Release of Construction Covenants.
C. Obligation of Developer to Remediate the Site. Notwithstanding
the obligation of Developer to indemnify Agency pursuant to Paragraph "E" of
this Section 2.12 or any other obligations of the Developer pursuant to this
Agreement, if there are environmental problems and the Agency and Developer
elect not to terminate this Agreement', Developer shall, at its sole cost and
expense, promptly take (i) all actions required by any federal, state or local
governmental agency or political subdivision or any Governmental Requirements
with respect to the entire Site, and (ii) all actions necessary to make full
economic use of the Site for the purposes described in this Agreement, which
actions, requirements or necessity arise from the presence upon, about or
beneath the Site of any Hazardous Materials or Hazardous Materials Contamination
regardless of when such Hazardous Materials or Hazardous Materials Contamination
were introduced to the Site and regardless of who is responsible for introducing
such Hazardous Materials or Hazardous Materials Contamination to the Site (the
"Site Remediation"). The Site Remediation shall include, but not be limited to,
investigation of the environmental condition of the Site, the preparation of any
feasibility studies or reports and the performance of any cleanup, remedial,
removal or restoration work required. If this Agreement is not terminated
pursuant to Paragraph B of this Section 2.12, Developer shall take all actions
necessary to promptly restore the Site to an environmentally sound condition for
uses contemplated by this Agreement, notwithstanding any lesser standard of
remediation allowable under applicable Governmental Requirements. Developer's
obligations under this Paragraph C of this Section 2.12 shall be referred to as
the "Site Remediation" and shall survive until such time as all of the Hazardous
Materials and Hazardous Materials Contamination existing at the time of the
Conveyance on, in or under the Site or any part thereof are completely removed
from the Site and all Governmental Requirements are complied with for said
Hazardous Materials and Hazardous Materials Contamination.
D. Agency's Indemnification of Developer. Agency shall save,
protect, defend, indemnify and hold harmless Developer from and against any and
all liabilities, suits, actions, claims, demands, penalties, damages (including,
without limitation, penalties, fines and monetary sanctions), losses, costs or
expenses (including, without limitation, consultants' fees, investigation and
laboratory fees, reasonable attorneys fees and remedial and response costs)
which may now or in the future be incurred or suffered by Developer because of
any actions actually taken by the Agency or expressly authorized by the Agency.
In no event shall the Agency indemnify or otherwise be liable to Developer for
(i) any omissions or failures to act, (ii) any acts
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of third parties acting without the express authorization of the Agency, whether
said acts occurred before, during or after Agency's ownership of the Site,
except that the Agency shall indemnify and otherwise be liable to the Developer
for Hazardous Materials or Hazardous Materials Contamination deposited,
occurring or existing on or under the Site prior to the close of Escrow.
Agency's obligations under this Section 2.12 shall survive after the close of
Escrow, the completion of the Conveyance and the issuance of the Release of
Construction Covenants.
E. Developer's Indemnification of Agency. Except as provided in
Paragraph D of this Section 2.12, Developer shall save, protect, defend,
indemnify and hold harmless Agency from and against any and all liabilities,
suits, actions, claims, demands, penalties, damages (including, without
limitation, penalties, fines and monetary sanctions), losses, costs or expenses
(including, without limitation, consultants' fees, investigation and laboratory
fees, reasonable attorneys' fees and remedial and response costs) (the forgoing
are hereinafter collectively referred to as "Liabilities") which may now or in
the future be incurred or suffered by Agency by reason of, resulting from, in
connection with or arising in any manner whatsoever as a direct or indirect
result of (i) the Developer's ownership of all or any part of the Site, (ii) any
act or omission on the part of the Developer or their agents, employees,
contractors or invitees, (iii) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from the Site of any Hazardous
Materials or Hazardous Materials Contamination only as a result of acts or
actions of the Developer or their agents, employees, contractors or invitees,
(iv) the environmental condition of the Site, and (v) any Liabilities incurred
under any Governmental Requirements relating to Hazardous Materials. Developer's
obligations under this Section 2.12 shall survive after the close of Escrow, the
completion of the Conveyance and the issuance of the Release of Construction
Covenants, and shall be a covenant running with the land in perpetuity, binding
on all successors and assigns of Developer's interest in either this Agreement
or the Site.
[Section 2.13] Conditions Precedent to the Conveyance. Prior to and as
conditions to the close of Escrow and the Conveyance, the Developer or Agency,
as indicated below, shall complete all of the following by the respective times
established therefor in the Schedule of Performance (Attachment No. 4):
1. the Developer shall not be in material default of this
Agreement;
2. the Developer shall have obtained any necessary land use
approvals and entitlements from the City, including but not
limited to a Site Plan Review approval through the Department
of Community Development, building permits and/or grading
permits through the City's Building and
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Engineering Departments, and shall have performed all other
necessary acts in accordance to the Schedule of Performance
(Attachment No. 4) including but not limited to submission of
all necessary documents, fees or any other materials,
necessary to obtain building and grading permits for the
Developer Improvements;
3. the Developer shall have provided reasonable proof to the
Agency that the Developer has obtained a binding loan
commitment or that other funds are available for all of the
Developer Improvements;
4. the Developer shall have provided, for Agency review and
approval, proof of insurance (certificates) conforming to
Section 3.06 of this Agreement;
5. the Developer shall have completed its soils and environmental
site evaluation of the Site and shall have provided Agency
with a Certificate of Acceptance regarding suitability of
soil, and the environmental condition of the Site as it
relates to its suitability for construction of the Developer
Improvements, all pursuant to Sections 2.10 and 2.12 of this
Agreement;
6. the Developer shall have complied with all the requirements of
Section 2.12 of this Agreement, including, but not limited to,
the completion of the Site Remediation, if any;
7. the Developer shall have completed all necessary acts required
herein for the close of Escrow and the execution of the
Conveyance; and
The foregoing items numbered 1 to 7 inclusive, together constitute the
"Conditions Precedent to the Conveyance".
[Section 2.14] Employment Incentive Program.
Pursuant to the Redevelopment Plan, the Agency and City of Lancaster
(the "City") have entered into an "incentive program" to enhance job creation
and the economic development efforts of the City. To assist in providing new
employment opportunities, the Agency is willing to offer incentives to
businesses by investing a portion of the revenues typically received as a result
of the development of a new project. In exchange, the business would agree to
meet specific performance requirements in order to be eligible for the program.
The Developer represents that the expansion of the recreational vehicle
manufacturing facility will produce a minimum of 120 employees to as high as 600
employees which is likely to create additional job opportunities for the
community upon the project's completion. Completing the development on the Site
and the operation of this project pursuant
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to this Agreement is in the vital and best interest of the City and the health,
safety, morals and welfare of its residents, and in accord with the public
purposes and provisions of applicable state and local laws and requirements
under which the Project has been undertaken.
In consideration for the Developer's improvement of the Site, and the
expansion of the recreational vehicle manufacturing facility, and subject to the
execution of an Employment Program Promissory Note by the Developer
substantially in the form of Attachments No. 10 and No. 11, the Agency agrees to
offer the Developer 13.98 acres of land.
The Developer has agreed to provide a total of 600 Annualized Full-Time
Equivalent Employees (the "Qualifying Employees") within five (5) years of the
completion of the expansion. For purposes of this Agreement, years one (1)
through five (5) of the businesses' operation will be considered as the
"Determination Period" .
The number of persons constituting Qualifying Employees during any
annual period shall equal the sum of (i) the number of "Full Time Employees" for
such annual period plus (ii) the number of "Composite Full Time Employees" for
such annual period, calculated in "accordance with the following:
(a) In order to qualify as a Full Time Employee of Developer
for the applicable annual period, a person must be a salaried or hourly
employee, or an individual who is a dedicated (i.e., performing
substantially all services for Developer) independent contractor, who
is employed at the Site not less than thirty-two (32) hours per week
for not less than fifty-two (52) weeks (such fifty-two (52) week
calculation to be inclusive of vacations, holidays, disability leaves
required pursuant to state law, sick leave and similar benefits
generally afforded employees generally deemed to be full time employees
by prevailing community standards) during the corresponding annual
period; to be countable, substantially all hours worked must be
accomplished at the Site on matters for Developer, except that hours of
a sales person or designated technical or engineering representatives
whose duties include outside sales or work with other agencies or
companies, will be includable so long as the sales person or designated
technical or engineering representatives is based at the Site and has
substantially all clerical and office support provided at the Site. An
employee who is terminated during any annual period, and the employee
who replaces such terminated employee in such position, shall be
aggregated for purposes of the foregoing calculation. The Developer
shall provide substantiation to the Executive Director (or his
designee) as to replacement of terminated employees, and the Executive
Director (or his designee) shall in good faith
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review whether the employees involved are countable for purpose of the
foregoing calculation.
(b) For purposes of this Agreement, one Composite Full Time
Employee shall be deemed to exist for each one thousand five hundred
thirty six (1536) hours (thirty-two (32) hours per week times forty-eight
(48) weeks, not inclusive of vacations, holidays, disability leaves, sick
leaves, or similar benefits) of work performed by part-time employees
(other than qualifying Full Time Employees), contract employees,
independent contractors, or temporary personnel (collectively, "Part Time
Employees") at the Site, subject to the following limitations: To be
included in such calculation any such individual must perform at least
nineteen (19) hours of work for no less than forty-eight weeks in the
applicable Annual period; any Part Time Employee or independent
contractor terminated during any annual period and any individual who
replaces such terminated Part Time Employee or independent contractor in
such position shall aggregated for purposes of the foregoing calculation.
Hours worked in one annual period shall be countable with
respect to that annual period and cannot be carried forward or carried
back to be applied as to a different annual period.
(c) The total number of Qualifying Employees shall be
evidenced annually by the Developer's delivery to the Agency of the
"Certificate of Employees" attached hereto as Attachment No. 12 on each
of the first through the fifth anniversaries following the issuance of a
Release of Construction Covenants subject to the terms of this Agreement,
and at other times upon the written request of Agency.
(d) Qualifying Employees shall include only those employees
which are paid (exclusive of benefits and overhead) no less than
the following wages for their service to the Project, and may include
other employees as long as such additional Employee's wages are not
less than the lowest position on the following list:
Job Classification Minimum Wage
- ------------------ ------------
1) Lamination $5.75
2) Doors $5.75
3) Welding $5.75
4) Floors $5.75
5) Walls-Foam $5.75
6) Cabinet Shop $5.75
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Job Classification Minimum Wage
- ------------------ ------------
7) Cabinet Setting $ 5.75
8) Electrical $ 5.75
9) Plumbing $ 5.75
10) Pre-Final 1 $ 5.75
11) Upholstery $ 5.75
12) Pre-Final 2 $ 5.75
13) Pre-Final 3 $ 5.75
14) Paint $ 5.75
15) Mechanic $ 5.75
16) Final Finish $ 5.75
17) Receiving $ 5.75
18) Research & Development $ 5.75
19) Production Managers $ 5.75
20) On-Line Inspection $ 5.75
21) Utility $ 5.75
22) Maintenance $ 5.75
23) Janitor $ 5.75
24) Fiberglass $ 5.75
25) Service $ 5.75
26) Service/Administration $20,000/Year
27) Sales $30,000/Year
28) Sales/Clerical $16,000/Year
29) Administration/Clerical $20,000/Year
30) Administration/Officers $50,000/Year
In the event that the Developer sells the Site without the Agency's
prior written consent prior to the end of the Determination Period or does not
meet the minimum requirements for employment, the Agency is entitled to a refund
if there is an overall shortfall during the Determination Period. Any refunds to
the Agency will not exceed the market value of the land offset by the Agency,
and will become payable at the end of the Determination Period, if applicable.
In the event the Developer determines at any time prior to the end of
the Determination Period that the Developer will be unable to meet the
requirements of this Section, Developer may transfer the Site to the Agency
pursuant to Section 6.08 (C).
For purposes of calculating refunds, each full-time Qualifying Employee
identified in a given year will represent one (1) Annualized Full-Time
Equivalent Employment Unit (AFTEEU). The Developer is obligated to provide the
cumulative total of the AFTEEUs for the Determination Period. Based on the
information provided above, the total number of AFTEEUs for the Determination
Period is 600 AFTEEUs, which is calculated as follows:
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Qualifying
Employees AFTEEU's
--------- --------
End of Year 1 120 120
End of Year 2 120 120
End of Year 3 120 120
End of Year 4 120 120
End of Year 5 120 120
--- ---
Cumulative Total N/A 600
However, the Developer may accelerate the number of Qualifying
Employees beyond the specific number listed for each year to the point where the
actual cumulative total of AFTEEUs meets or exceeds 600 AFTEEUs. As a benchmark,
Developer is to be given credit for all full time Qualifying Employees above the
figure set in the agreement between Developer and Agency dated February 14,
1994, and all addendums to that said agreement.
1. At the conclusion of the Determination Period, the actual
cumulative total of AFTEEUs are calculated by adding together the total number
of full-time Qualifying Employees, or AFTEEUs, reported by the Developer on each
of the Certificate of Employees (Attachment No. 12).
2. If any time on or before the end of the Determination Period
the actual cumulative total of AFTEEUs meets or exceeds 600 AFTEEUs, repayment
of the full amount of the Promissory Note shall be forgiven and the Agency shall
convey the Note to the Developer. Upon the Developer satisfying the provisions
of the Employment Incentive Program of this Section 2.14, the Developer shall
have no further obligation under this Agreement except that such party shall be
bound by (I) any covenants contained in the Agency Grant Deed (Attachment No.
5), lease, mortgage, deed of trust, contract, other instrument or transfer, or
other documents establishing covenants on the Site in accordance with the
provisions of Section 4.01 of this Agreement, (ii) the provisions of Section
7.03 of this Agreement, which shall be applicable according to its terms, and
(iii) any terms, covenants or conditions in this Agreement that pursuant to the
terms of this Agreement survive after the close of Escrow, the completion of the
Conveyance, the issuance of the Release of Construction Covenants, and the
conveyance of the Employment Program Promissory Note to the Developer.
3. If the number of AFTEEUs is less than 600, then the Agency is
due a refund. The refund shall be determined by first dividing $300,000, the
value of the Employment Program Promissory Note (Attachment No. 10), by 600
(Cumulative Total AFTEEUs). The product of this division is then rounded to the
nearest whole dollar and multiplied by the shortfall in AFTEEUs. The result of
this calculation is the amount then due the Agency.
4. If any amount is due under the Employment Program Promissory
Note, it must be paid within thirty (30) days of demand as indicated in the
Employment Program Promissory Note (Attachment No. 10). Upon the Developer
satisfactorily meeting the minimum obligation of providing 600 AFTEEUs through
the Employment Incentive Program, or upon full payment of any refund that may be
due to the Agency at the end of the Determination Period, the Note will be
re-conveyed or delivered to the Developer.
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III. DEVELOPMENT OF THE SITE
[Section 3.01] Scope of Development. The Site shall be developed as
provided in the Scope of Development attached hereto as Attachment No. 3 and
incorporated herein by reference. All Improvements to be completed by the
Developer as indicated on the Scope of Development, are referred to in this
Agreement as the "Developer Improvements".
The development shall include any plans and specifications submitted to
the City for approval, and shall incorporate or show compliance with all
applicable California Environmental Quality Act mitigation measures.
[Section 3.02] Construction Drawings and Related Documents. By the time
set forth therefor in the Schedule of Performance (Attachment No. 4), the
Developer shall prepare and submit to the City, construction drawings, and
related documents for development of the Site for architectural review and
approval.
Agency staff shall review Developer's drawings and plans in conjunction
with the City's review. Developer does not need to submit separate drawings and
plans to the Agency.
Developer shall make application to the City for all approvals
necessary under the statutes, code, ordinances and resolutions of the City and
any other statutes(s) or code(s) applicable to the Improvements which require
approval, including, but not limited to, all approvals for permits, licenses,
and certificates of occupancy.
If any revisions or corrections shall be required by the City, or any
other official, agency, department, division or bureau of the City having
jurisdiction, the Developer and the Agency shall cooperate to accommodate such
requirements.
[Section 3.03] City Approval of Plans, Drawings, and Related Documents.
Provided that the submissions by the Developer are made timely and are complete,
the City shall approve or disapprove the plans, drawings and related documents
referred to in Sections 3.02 of this Agreement within the times established in
the Schedule of Performance (Attachment No. 4). Approval of said plans,
drawings, and related documents shall not be unreasonably withheld. Any
disapproval shall state in writing the reasons for disapproval. The Developer,
upon receipt of a disapproval based upon powers reserved by the City and Agency
hereunder, shall revise such portions and resubmit to the City as soon as
possible after receipt of the notice of disapproval as provided in the Schedule
of Performance (Attachment No. 4).
If the Developer desires to make any substantial changes in the
construction plans after their initial approval by the City, the Developer shall
submit any proposed change(s) to the City and
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Agency for its approval. If the construction plans, as modified by the proposed
change(s), conform to the requirements of Section 3.02 of this Agreement and the
Scope of Development (Attachment No. 3) the Agency shall approve the proposed
change(s) and not the Developer in writing within 30 days after submission to
the Agency unless rejected, in whole or in part, by written notice thereof by
the Agency to the Developer, setting forth the reasons therefor, and such
rejection shall be made within said 30-day period.
[Section 3.04] Cost of Construction. The cost of constructing Developer
Improvements on the Site shall be borne exclusively the Developer. Said
Developer Improvements shall either be completed, or Developer shall have posted
the necessary bonds security prior to the issuance of the Release of
Construction Covenants.
[Section 3.05] Construction Schedule. After the Conveyance, the
Developer shall promptly begin and thereafter diligently prosecute to
completion the construction of the Developer Improvements. Developer shall begin
and complete all construction and development within the times specified in the
Schedule of Performance (Attachment No. 4).
[Section 3.06] Bodily Injury and Property Damage Insurance. The
Developer shall save, protect, defend, assume all responsibility for, indemnify
and hold the Agency, its officers and employees harmless from, all claims or
suits for, and damages to, property and injuries to persons, including
accidental death (including attorneys fees and costs), which may be caused by
the Developer or their agent's, employee's, contractor's or invitee's respective
activities under this Agreement, whether such activities or performance thereof
be by the Developer or anyone directly or indirectly employed or contracted by
the Developer and whether such damage shall accrue or be discovered before or
after termination of this Agreement. The Developer shall take out and maintain
during the life of this Agreement, a commercial general liability policy in the
amount of One Million Dollars ($1,000,000) aggregate limit and One Million
Dollars ($1,000,000) per occurrence limit policy, and shall protect the
Developer, City Agency from claims for such damages.
The Developer shall furnish a certificate of insurance countersigned by
an authorized agent of the insurance carrier form of the insurance carrier
setting forth the general provision of the insurance coverage verified by an
endorsement to the policy of insurance as stated in the certificate. This
countersigned certificate and policy endorsement shall name the City and the
Agency and their respective offices, agents, and employees as additional
insureds under the policy. The certificate by the insurance carrier and policy
endorsement shall contain a state of obligation on the part of the carrier to
notify City and the Agency of any material change, cancellation or termination
of
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coverage at least thirty (30) days in advance of the effective date of any such
material change, cancellation or termination. Coverage provided hereunder by the
Developer shall be primary insurance and not contributing with any insurance
maintained by the Agency or City, and the policy shall contain such an
endorsement. The insurance policy shall contain a waiver of subrogation for the
benefit of the City and the Agency. The required certificate and policy
endorsement shall be furnished by the Developer at the time set forth for
completion of all Conditions Precedent to the Conveyance in the Schedule of
Performance (Attachment No. 4).
The Developer shall also furnish or cause to be furnished to the Agency
evidence satisfactory to the Agency that any contractor with whom it has
contracted for the performance of work on the Site or otherwise pursuant to this
Agreement carries workers compensation insurance as required by law. The
obligations set forth in this Section shall remain in effect only until a
Release of Construction Covenants has been furnished for the Developer
Improvements as hereafter provided in Section 3.19 of this Agreement.
[Section 3.07] City and Other Governmental Agency Permits. Before
commencement of construction or development of any buildings, structures or
other works of improvement upon the Site, the Developer shall secure or cause to
be secured all permits which may be required by the City or any other
governmental agency affected by such construction, development or work. It is
understood that the Developer's obligation is to pay all necessary fees that
become due prior to the issuance of the Release of Construction Covenants with
the exception of up to $217,797 in Traffic Impact, Traffic Signalization and
Drainage Impact Fees otherwise levied upon the new 200,000 square foot
building. The Developer shall timely submit to the City final drawings with
final corrections to obtain a building permit. The Agency shall assist the
Developer where possible to expedite the processing of required permits. As part
of the acquisition of the Site, Developer shall purchase for One Dollar ($1.00),
water credits from the Agency valued at up to $70,501 to be submitted with the
Purchase Price prior to the close of escrow.
[Section 3.08] Rights of Access. For the purpose of assuring compliance
with this Agreement, representatives of the Agency and the City shall have the
right of access to the Site, without charges or fees, at any time during the
period of construction for the purposes of this Agreement, including, but not
limited to, the inspection of the work being performed in constructing the
Developer Improvements, so long as they comply with all safety rules. Such
representatives of the Agency or of the City shall be those who are so
identified in writing by the Executive Director of the Agency. The Agency shall
hold the Developer harmless from any bodily injury or related damages arising
out of the activities of the Agency and the City as referred to in this Section
3.08.
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[Section 3.09] Local, State and Federal Laws. The Developer shall carry
out the construction of the Developer Improvements in conformity with all
applicable laws, including all applicable federal and state labor standards,
provided, however, Developer and its contractors, successors, assigns,
transferees, and lessees are not waiving their rights to contest any such laws,
rules or standards.
[Section 3.10] Anti-discrimination During Construction. The Developer,
for itself and its successors and assigns, agrees in the construction of the
Developer Improvements provided for in this Agreement, the Developer will not
discriminate against an employee or applicant for employment because of race,
color, creed, religion, age, sex, marital status, handicap, national origin or
ancestry.
[Section 3.11] Taxes, Assessments, Encumbrances and Liens. The
Developer shall pay when due all ad valorem taxes, assessments and other taxes
on the Site which are levied subsequent to the Conveyance. Prior to issuance of
a Release of Construction Covenants pursuant to Section 3.19, the Developer
shall not place or allow to be placed on the Site or any part thereof any
mortgage, trust deed, encumbrance or lien other than as expressly allowed by
this Agreement. The Developer shall remove or have removed any levy or
attachment made on the Site or any part thereof, or assure the satisfaction
thereof within a reasonable time but in any event prior to a sale thereunder.
Nothing herein contained shall be deemed to prohibit the Developer from
contesting the validity or amounts of any tax assessment, encumbrance or lien,
nor to limit the remedies available to the Developer with respect thereto.
[Section 3.12] Prohibition Against Transfer of the Site, the Buildings
or Structures Thereon and Assignment of Agreement. Prior to the issuance by the
Agency of a Release of Construction Covenants (pursuant to Section 3.19 of this
Agreement) as to any building or structure, the Developer shall not, except as
permitted by this Agreement, without prior written approval by Agency, make any
total or partial sale, transfer, conveyance, assignment or lease of the whole or
any part of the Site or of buildings or structures on the Site. This prohibition
shall not be deemed to prevent the granting of temporary or permanent easements
or permits to facilitate the development of the Site prohibit or restrict the
leasing of any part or parts of a building or a parcel where the transfer of a
parcel is to the proposed operator or end user of the parcel in order to allow
construction of that portion of the Project for ground lease or sale by
Developer, or to prohibit the leasing of existing improvements on the Site.
Notice of any allowable transfer under this Section 3.12 shall be sent to the
Agency's Executive Director.
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[Section. 3.13] No Encumbrances Except Mortgages, Deeds of Trust, Sale
and Lease-Back for Development. Mortgages, deeds of trust and sales and leases
back are to be permitted before completion of the construction of the Developer
Improvements, but only for the purpose of securing loans of funds to be used for
the construction of improvements on the Site, and any other purposes necessary
and appropriate in connection with development under this Agreement. The
Developer shall notify the Agency in advance of any mortgage, deed of trust or
sale and lease-back financing, if the Developer proposes to enter into the same
before completion of the construction of all of the improvements on the Site.
The words "mortgage" and "trust deed" as used hereinafter shall include sale and
lease-back. The Developer shall not enter into any such conveyance for financing
without the prior written approval of the Agency's Executive Director, or a
designated Agency representative, which approval Agency agrees to give if any
such conveyance for financing is for the purpose of construction or take-our
financing for the Project which is the subject of this Agreement and if it is
given to a responsible financial or lending institution or other reasonably
acceptable person or entity (the "Lender") . The approval from the Agency may be
based on evidence, other than the financing documents, such as a letter from the
Lender that certifies that the financing documents limit the use of the loan
proceeds, including all costs of financing, to the purposes of constructing the
Developer Improvements or portions thereof pursuant to the Scope of Development
(Attachment No. 3) and for no other purpose.
[Section 3.14] Holder Not Obligated to Construct Improvements. The
holder of any mortgage or deed of trust authorized by this Agreement shall not
be obligated by the provisions of this Agreement to construct or complete the
Developer Improvements or to guarantee such construction or completion; nor
shall any covenant or any other provision in the deed for the Site be construed
so to obligate such holder. Nothing in this Agreement shall be deemed to
construe, permit or authorize any such holder to devote the Site to any uses or
to construct any improvements thereon, other than those uses or improvements
provided for or authorized by this Agreement.
[Section 3.15] Notice of Default to Mortgagee or Deed of Trust Holders;
Right to Cure. With respect to any mortgage or deed of trust granted by
Developer as provided herein, whenever the Agency shall deliver any notice or
demand to Developer with respect to any breach or default by the Developer in
connection to this Agreement, the Agency shall at the same time deliver to each
holder of record of any mortgage or deed of trust authorized by this Agreement a
copy of such notice or demand. Each such holder shall (insofar as the rights of
the Agency are concerned) have the right, at its option, within sixty (60) days
after the receipt of the notice, to cure or remedy or commence to cure or remedy
any such default and to add the cost thereof to the mortgage debt and the lien
of its mortgage. Nothing contained in this Agreement
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shall be deemed to permit or authorize such holder to undertake continue the
construction or completion of the Developer Improvements (beyond the extent
necessary to conserve or protect the Developer Improvements or construction
already made) with first having expressly assumed the Developer's obligations,
as applicable, to the Agency by written agreement satisfactory to the Agency.
The holder, in that event, must agree to complete, in the manner provided in
this Agreement, the improvements to which lien or title of such holder relates,
and submit evidence satisfactory to the Agency that it has the qualifications
and financial responsibility necessary to perform such obligation. Any such
holder properly completing such improvement shall be entitled, upon compliance
with the requirements of Section 3.19 of this Agreement, to a Release of
Construction Covenants (as herein defined). In the event that the such holder
wishes to transfer its foreclosed interest to another developer, the Agency
shall have the right to reasonably approve the proposed transferee.
[Section 3.16] Failure of Holder to Complete Improvements. In case
where, sixty (60) days after default by the Developer in completion of
construction of Developer Improvements under the Agreement, the holder of any
mortgage or deed of trust creating a lien or encumbrance upon the Site or any
part thereof has not exercised the option to construct, or if it has exercised
the option and has not proceeded diligently with construction, the Agency may
purchase the mortgage or deed of trust by payment the holder of the amount of
the unpaid mortgage or deed of trust debt, including principal and interest and
all other sums secured by the mortgage or deed of trust. If the ownership of the
site or any part thereof has vested in the holder, the Agency, if it so desires,
shall be entitled to a conveyance from the holder to Agency upon payment to the
holder of an amount equal to the sum of the following:
1. The unpaid mortgage or deed of trust debt at the time title
became vested in the holder (less all appropriate credits,
including those resulting from collection application of
rentals and other income received during foreclosure
proceedings);
2. All expenses with respect to foreclosure;
3. The net expense, if any (exclusive of general overhead
incurred by the holder as a direct result of the subsequent
management of the Site or part thereof;
4. The costs of any improvements made by such holder;
5. An amount equivalent to the interest that would have accrued
on the aggregate of such amounts had all such amounts become
part of the mortgage or deed of trust debt and such debt had
continued in existence to the date of payment by the Agency.
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[Section 3.17] Right of the Agency to Cure Mortgage or Deed of Trust
Default. In the event of a mortgage or deed of trust default or breach by the
Developer prior to the completion of the construction of the Developer
Improvements on the Site or any part thereof and the holder of any mortgage or
deed of trust has not exercised its option to construct, the Agency may cure the
default. In such event, the Agency shall be entitled to a lien upon the Site to
the extent that such costs and disbursements are incurred by the Agency in
curing such default. Any such lien shall be subject to the construction
financing mortgages or deeds of trust.
[Section 3.18] Right of the Agency to Satisfy Other Liens on the Site
After Title Passes. After the Conveyance, but prior to the completion of
Developer Improvements, and after the Developer has had written notice and has
failed after a reasonable time, but in any event not less than thirty (30) days,
to challenge, cure, adequately bond against, or satisfy any liens or
encumbrances on its respective portions of the Site which are not otherwise
permitted under this Agreement, the Agency shall have the right but no
obligation to satisfy any such liens or encumbrances.
[Section 3.19] Release of Construction Covenants. Promptly after
completion of all construction and development required by this Agreement to be
completed by the Developer upon the Site in conformity with this Agreement, the
Agency shall furnish the Developer, upon written request, a Release of
Construction Covenants substantially in the form of Attachment No. 6 hereto (the
"Release of Construction Covenants"). The Agency shall not unreasonably withhold
any such Release of Construction Covenants. The Release of Construction
Covenants shall be a conclusive determination of satisfactory completion of the
construction required by this Agreement upon the Site and the Release of
Construction Covenants shall so state.
After recordation of the Release of Construction Covenants, any party
then owning or thereafter purchasing, leasing or otherwise acquiring any
interest therein shall not (because of such ownership, purchase, lease or
acquisition), incur any obligation or liability under this Agreement except that
such party shall be bound by (i) any covenants contained in the Agency Grant
Deed (Attachment No. 5), lease, mortgage, deed of trust, contract, other
instrument or transfer, or other documents establishing covenants on the Site in
accordance with the provisions of Section 4.01 of this Agreement, (ii) the
provisions of Section 7.03 of this Agreement, which shall be applicable
according to its terms, and (iii) any terms, covenants or conditions in this
Agreement that pursuant to the terms of this Agreement survive after the close
of Escrow, the completion of the Conveyance, or the issuance of the Release of
Construction Covenants.
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A Release of Construction Covenants shall be in such form as to permit
it to be recorded in the Recorder's Office of Los Angeles County.
If the Agency refuses or fails to furnish a Release of Construction
Covenants for the Site, or part thereof, after written request from the
Developer, the Agency shall, within thirty (30) days of written request
therefor, provide the Developer with a written statement of the reasons the
Agency refused or failed to furnish a Release of Construction Covenants. The
statement shall also contain Agency's opinion of the action of the Developer
must take to obtain a Release of Construction Covenants. If the reason for such
refusal is confined to the immediate availability of specific items of materials
for landscaping, the Agency will issue its Release of Construction Covenants
upon the posting of a bond by the Developer with the Agency in an amount
representing a fair value of the work not completed. If the Developer submits
its request for a Release Construction Covenants by certified mail to the
Agency's Executive Director and the request refers to the 30-day time period for
Agency to respond or the Release of Construction Covenants would be "deemed
approved" then, in the event the Agency has failed provide such written
statement, within said thirty (30) day period, the Release of Construction
Covenants shall be deemed approved and issued pursuant to this Section (Section
3.19), and the restrictions regarding the change in ownership, management and
control of the Developer shall terminate and be of no further force and effect
pursuant to Section 1.05 of this Agreement.
Such Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation the Developer to any holder of
any mortgage, or any insurer of mortgage securing money loaned to finance the
improvements, or part thereof. Such Release of Construction Covenants is not a
notice of completion as referred to in the California Civil Code Section 3093.
IV. USE OF THE SITE
[Section 4.01] Uses. The Developer covenants and agrees for itself, its
successors, its assigns, and every successor in interest to the Site or any part
thereof, that during construction and thereafter, the Developer, such successors
and such assignees shall devote the Site to the uses specified in the
Redevelopment Plan, the Agency Grant Deed (Attachment No. 5), and this Section
4.01 for the periods of time specified therein. The foregoing covenant shall
remain in effect for the life of the Redevelopment Plan and shall run with the
land; and
The Developer covenants to carry out all of its undertaking pursuant to
this Agreement, including, without limitation, the construction and operation of
a recreational vehicle manufacturing
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facility, and to establish and maintain the business within the City of
Lancaster.
The Developer covenants by and for itself and any successors in
interest that there shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex,
marital status, disability, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall
the Developer itself or any person claiming under or through them establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, subleases or vendees of the Site. The foregoing covenants
shall run with the land in perpetuity.
The Developer shall refrain from restricting the rental, sale or lease
of the Site on the basis of race, color, creed, religion, sex, marital status,
disability, national origin or ancestry of any person. All such deeds, leases or
contracts shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
1. In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and
assigns, and all persons claiming under or through them, that
there shall be no discrimination against or segregation of,
any person or group of persons on account of race, color,
creed, religion, sex, marital status, disability, national
origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the land herein
conveyed, nor shall the grantee himself or herself or any
person claiming under or through him or her, establish or
permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees
or vendees in the land herein conveyed. The foregoing
covenants shall run with the land in perpetuity."
2. In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and
assigns, and all persons claiming under or through him or her,
and this lease is made and accepted upon and subject to the
following conditions:
"There shall be no discrimination against or
segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, disability,
ancestry or national origin in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the
premises herein leased nor shall the lessee himself or
herself, or any person claiming under
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or through him or her, establish or permit any such practice
or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of
tenants, lessees, sublessees, subtenants or vendees in the
premises herein leased. "
3. In contracts: "There shall be no discrimination again or
segregation of, any person, or group of persons or account of
race, color, creed, religion, sex, marital status, disability,
ancestry or national origin, in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the premises,
nor shall the transferred himself or herself or any person
claiming under or through him or her, establish or permit any
such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, subleases or
vendees of the premises."
[Section 4.02] Effect and Duration of Covenants. After issuance of a
Release of Construction Covenants with regard to the Site, all of the terms,
covenants, agreements or conditions set forth this Agreement shall cease and
terminate excepting only the following provisions which shall survive as follows
in accordance with their provisions.
(a) Section 4.03 (Maintenance) shall remain in effect until such
time that the termination date of the Redevelopment Plan, as
amended from time to time.
(b) Section 2.12 (relating to Environmental Matters) and Section
4.01 (relating to Anti-discrimination) shall remain in effect
in perpetuity.
(c) Sections 2.01 and 4.01 (relating to Uses) shall be enforceable
according to their terms.
(d) Article VI (relating to Defaults and Remedies) shall remain in
effect to the extent necessary to enforce other provisions of
this Agreement.
[Section 4.03] Maintenance of the Site. The Developer shall maintain
all of the right-of-way Easements, Improvements, Developer Improvements, and the
landscaping on the Site, without exception or limitation, and shall keep the
Site free from any accumulation of debris or waste materials (the
"Maintenance").
If, at any time, the Developer fails to perform any Maintenance, and
said condition is not corrected after expiration of thirty (30) days from the
date of written notice from the Agency, either the Agency or the City may
perform the necessary Maintenance and Developer shall pay such costs as are
reasonably incurred for such Maintenance.
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Issuance of a Release of Construction Covenants by the Agency shall not
affect the Developer's obligations under this Section 4.03.
[Section 4.04] Rights of Access. The Agency, for itself and for the
City and other public agencies, at their sole risk and expense, reserves the
right to enter the Site or any part thereof at all reasonable times for the
purpose of construction, reconstruction, maintenance, repair or service of any
public improvements or public facilities located on the Site. Any such entry
shall be made only after reasonable notice to Developer, and Agency shall
indemnify and hold Developer harmless from any costs, claims, damages or
liabilities pertaining to any entry under this Section 4.04.
[Section 4.05] Effect of Violation of the Terms and Provisions of this
Agreement After Completion of Construction. The covenants established in this
Agreement and the deeds shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the Agency, its
successors and assigns, as to those covenants which are for its benefit.
The Agency is deemed the beneficiary of the terms and provisions of
this Agreement and of the covenants running with the land, for and in its own
rights and for the purposes of protecting the interests of the community and
other parties, public or private, in whose favor and for whose benefit this
Agreement and the covenants running with the land have been provided. The
Agreement and the covenants shall run in favor of the Agency, without regard to
whether the Agency has been, remains or is an owner of any land or interest
therein in the Site. The Agency shall have the right, if the Agreement or
covenants are breached, to exercise all rights and remedies, and to maintain any
actions or suits at law or in equity or other proper proceedings to enforce the
curing of such breaches to which it or any other beneficiaries of this Agreement
and covenants may be entitled.
V. GENERAL PROVISIONS
[Section 5.01] Notices, Demands and Communications Among the Parties.
Written notices, demands and communications among the parties shall be
sufficiently given if delivered by hand (and a receipt therefor is obtained or
is refused to be given) or dispatched by registered or certified mail, postage
prepaid, return receipt requested, to the principal offices of the parties. Such
written notices, demands and communications may be sent in the same manner to
such other addresses as a party may from time to time designate by mail as
provided in this Section 5.01. Any written notice, demand or communication shall
be deemed received immediately if delivered by hand and shall be deemed received
on the tenth day from the date it is postmarked if delivered by
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registered or certified mail.
[Section 5.02] Conflicts of Interest. No member, official or employee
of the Agency shall have any personal interest, direct or indirect, in this
Agreement, nor shall any member, official or employee participate in any
decision relating to the Agreement which affects his personal interests or the
interests of any corporation, partnership or association in which he is directly
or indirectly interested.
The Developer warrants, to its own actions, that, it has not paid or
given, and will not pay or give, any third party any money or other
consideration for obtaining this Agreement.
[Section 5.03] Enforced Delay; Extension of Times of Performance. In
addition to specific provisions of this Agreement, performance by either party
hereunder shall not be deemed to be in default, and all performance and other
dates specified in this Agreement shall be extended, where delays or defaults
are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes;
fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation unusually severe weather; inability to
secure necessary labor, materials or tools; delays of any contractor,
subcontractor or supplier; acts or omissions of the other party; acts or failure
to act of the City or any other public or governmental agency or entity (other
than the acts or failures to act of the Agency which shall not excuse
performance by the Agency); or any other causes beyond the control or without
the fault of the party claiming an extension of time to perform. Notwithstanding
anything to the contrary in this Agreement, an extension of time for any such
cause shall be for the period of the forced delay and shall commence to run from
the time of the commencement of the cause, notice by the party claiming such
extension is sent to the other party within thirty (30) days of the commencement
of the cause. Times of performance under this Agreement may also be extended
writing by the mutual agreement of Agency and Developer.
The Developer is not entitled pursuant to this Section 5.03 to an
extension of time to perform because of past, present, or future difficulty in
obtaining suitable temporary or permanent financing for the development of the
Site.
[Section 5.04] Non-liability of Officials and Employees of Agency. No
member, official or employee of the Agency or the City shall be personally
liable to the Developer, or any successor in interest, in the event of any
default or breach by the Agency (or the City) or for any amount which may become
due to the Developer or its respective successors, or on any obligations under
terms of this Agreement.
During periods of construction on the Site and until such
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time as the City has issued to the Developer the Release of Construction
Covenants for the construction of improvements on the Site, the Developer agrees
to, and shall, indemnify and hold the Agency and the City harmless from and
against all liability, loss, damage, costs, or expenses (including attorney's
fees and court costs) arising from or as a result of the death of any persons or
any accident or injury, loss, or damage whatsoever caused to any person or to
the property of any person which shall occur on or adjacent to the Site and
which shall be directly or indirectly caused by any acts done thereon or any
errors or omissions of the Developer and its agents, servants, employees, and
contractors.
VI. DEFAULTS AND REMEDIES
[Section 6.01] Defaults-General. Subject to the extensions of time set
forth in Section 5.03, failure or delay by any party to perform any term or
provision of this Agreement constitutes a default under this Agreement. The
party who so fails or delays must immediately commence to cure, correct, or
remedy such failure or delay, and shall complete such cure, correction or remedy
with diligence.
The injured party shall give written notice of default to the party in
default, specifying the default complained of by the injured party. Except as
required to protect against further damages and except for Sections 3.11 and
3.12 of this Agreement for which actions may be commenced immediately, the
injured party may not institute proceedings against the party in default until
thirty (30) days after giving such notice. Failure or delay in giving such
notice shall not constitute a waiver of any default, nor shall it change the
time of default.
[Section 6.02] Institution of Legal Actions. In addition to any other
rights or remedies and subject to the restrictions in Section 6.01, either party
may institute legal action to cure, correct or remedy any default, to recover
damages for any default, or to obtain any other remedy consistent with the
purpose of this Agreement. Such legal actions must be instituted in the Superior
Court of the County of Los Angeles, State of California, in an appropriate
municipal court in that county, or in the Federal District Court in the Central
District of California.
[Section 6.03] Applicable Law. The laws of the State of California
shall govern the interpretation and enforcement of this Agreement.
[Section 6.04] Acceptance of Service of Process. In the event that any
legal action is commenced by the Developer against the Agency, service of
process on the Agency shall be made by personal service upon the Executive
Director or in such other manner as may be provided by law.
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In the event that any legal action is commenced by the Agency against
the Developer, service of process on the Developer shall be made by personal
service upon the Developer or in such other manner as may be provided by law,
and shall be valid whether made within or without the State of California.
[Section 6.05] Rights and Remedies Are Cumulative. Except as otherwise
expressly stated in this Agreement, the rights and remedies of the parties are
cumulative, and the exercise by either party of one or more of such rights or
remedies shall not preclude the exercise by it, at the same or different times,
of any other rights or remedies for the same default or any other default by the
other party.
[Section 6.06] Inaction Not a Waiver of Default. Any failures delays by
either party in asserting any of its rights and remedies as to any default shall
not operate as a waiver of any default of any such rights or remedies, or
deprive either such party of its right to institute and maintain any
actions or proceedings which it may deem necessary to protect, assert or enforce
any such rights or remedies.
[Section 6.07] Remedies and Rights Prior to Conveyance.
A. Default by Agency. Prior to the Conveyance, if Agency
fails to complete any of the Conditions Precedent to the Conveyance which it is
required to complete or commits some other default of this Agreement which is
not cured at the time for close of Escrow and the execution of the Conveyance
pursuant to the Schedule of Performance (Attachment No. 4), the Developer shall
have all rights afforded by law or in equity.
B. Default by Developer. Prior to the Conveyance, the
Developer fails to complete any of the Conditions Precedent the Conveyance which
it is required to complete or commits some other default of this Agreement which
is not cured at the time for the close of Escrow and the execution of the
Conveyance pursuant to the Schedule of Performance (Attachment No. 4), this
Agreement and all rights and obligations thereunder, shall immediately terminate
as of the date of a written notice sent by the Agency the Developer, and neither
the Agency nor the Developer shall have any claim or remedy for damages or other
relief against the other except that in no event shall Developer be relieved of
its obligation to indemnify the Agency as provided in Paragraph E of Section
2.12 of this Agreement.
[Section 6.08] Remedies of the Parties for Default After the
Conveyance.
A. Termination and Damages. After the Conveyance, if
either the Developer or the Agency defaults with regard to any of the provisions
of this Agreement, the non-defaulting party shall serve written notice of such
default upon the defaulting party.
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If the default is not cured by the defaulting party within thirty (30) days
after service of the notice of default, the non-defaulting party may terminate
this Agreement and the defaulting party shall be liable to the other party for
any damages caused by such default. In addition to any other remedies afforded
by this Agreement or by law or in equity, including but not limited to
prosecuting a lawsuit for breach of contract as provided in this Agreement, the
Agency may either (1) complete the Developer Improvements, or (2) retain any and
all City-related application fees, permit and plan check fees, and development
impact fees until the dispute between the parties is resolved. The prevailing
party will be awarded reasonable costs and attorneys fees incurred in connection
with enforcement of its rights under this Agreement.
B. Action for Specific Performance. After the
Conveyance, if either the Developer or the Agency defaults with regard to any of
the provisions of this Agreement, the non-defaulting party shall serve written
notice of such default upon the defaulting party. If the default is not cured by
the defaulting party within thirty (30) days after service of the notice of
default, the non-defaulting party may at its option institute an action for
specific performance of the terms of this Agreement. The Developer hereby
stipulates that the Agency has a valid and enforceable right to sue for specific
performance of this Agreement and waives all claims that the legal remedy is
adequate. In addition to any other remedies afforded by this Agreement or by law
or in equity, including but not limited to prosecuting a lawsuit for breach of
contract as provided in this Agreement, the Agency may either (1) complete the
Developer Improvements, or (2) retain any and all fees until the dispute between
the parties is resolved. Under all circumstances, the Agency shall be entitled
to the Costs actually incurred by the Agency.
C. Reentry and Revesting of Title in the Agency After
Conveyance. The Agency has the additional right, at its option, to reenter and
take possession of the Site, with all improvements thereon, and terminate and
revest in the Agency the estate conveyed to the Developer, if after conveyance
of title and prior to the end of the Determination Period as provided in Section
2.14 of this Agreement, the Developer (or its successors in interest) shall;
1. Fail to start the construction of the Developer Improvements
as required by this Agreement for a period of forty-five (45)
days after written notice thereof from the Agency; or
2. Abandon or substantially suspend construction of the Developer
Improvements required by this Agreement for a period of
forty-five (45) days after written notice thereof from the
Agency; or
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3. Transfer or suffer any involuntary transfer of the or any part
thereof in violation of this Agreement
4. Notify the Agency of the Developer's determination the
Developer desires to transfer the Site to the pursuant to
Section 2.14.
Such right to reenter, terminate and revest shall be subject to and be
limited by and shall not defeat, render invalid or limit;
(a) any mortgage or deed of trust permitted by the
Agreement; or
(b) any rights or interests provided in this Agreement
for the protection of the holders of such mortgages
or deeds of trust.
Upon the revesting in the Agency of title to the site as provided in
this Section 6.08-C, the Agency shall, pursuant to its responsibilities under
state law, use its best efforts to resell the Site as soon and in such manner as
the Agency shall find feasible and consistent with the objectives of such law
and Redevelopment Plan, as it may be amended, to a qualified and responsible
party or parties (as determined by the Agency) who will assume the obligation of
making or completing the Improvements, or such other improvements in their stead
as shall be satisfactory to the Agency and in accordance with the uses specified
for such Site or part thereof in the Redevelopment Plan. Upon such resale of the
Site, the proceeds thereof shall be applied:
(a) First, to pay on all costs and expenses incurred by
the Agency, including, but not limited to, any
expenditures by the Agency or the City in connection
with the recapture, management and resale of the Site
or part thereof (but less any income derived by the
Agency from the Site or thereof in connection with
such management); all taxes, assessments, and water
or sewer charges with respect to the Site or part
thereof which the Developer has not paid (or, in the
event the site is exempt from taxation or assessment
of such charges during the period of ownership
thereof by the Agency, an amount, if paid, equal to
such taxes, assessments, or charges as would have
been payable if the Site were not so exempt); any
payments made or necessary to be made to discharge
any encumbrances or liens existing on the site or
part thereof at the time of revesting of title
thereto in the Agency or to discharge or prevent from
attaching or being made any subsequent encumbrances
or liens due to obligations, defaults or acts of the
Developer, its successors or
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transferees; any expenditures made or obligations
incurred with respect to the making or completion of
the improvements or any part thereof on the Site, or
part thereof; and in the event additional proceeds
are thereafter available, then
(b) Second, to reimburse the Developer, its successor or
transferee, up to the amount equal to the sum of (i)
the Purchase Price paid to the Agency by the
Developer for the Site, (ii) the costs incurred for
the development of the Site and for the improvements
existing on the Site at the time of the re-entry and
repossession, less (iii) any gains or proceeds
withdrawn or made by the Developer as a result of the
sale of any portion of the Site or the improvements
thereon.
Any balance remaining after such reimbursements shall be retained by
the Agency as its property.
The rights established in this Section 6.08 are not intended to be
exclusive of any other right, power or remedy, but each and every such right,
power, and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy authorized herein or now or hereafter existing
at law or in equity. These rights are to be interpreted in light of the fact
that the Agency will convey the Site to the Developer for development, and not
for speculation in undeveloped land.
VIII.SPECIAL PROVISIONS
[Section 7.01] Submission of Documents to the Agency for Approval.
Whenever this Agreement requires the Developer to submit plans, drawings or
other documents to the City for approval, said plans, drawings or other
documents shall be accompanied by a letter of transmittal to the Agency stating
that they are being submitted and will be deemed approved unless rejected by the
City within the stated time. If there is no time specified herein for such City
or Agency action, the Developer may submit a letter requiring Agency approval or
rejection of documents within thirty (30) days after submission of said plans.
[Section 7.02] Real Estate Commission. Both the Agency and the
Developer represent to the other party that it has not engaged the services of
any finder or broker and that it is not liable for any real estate commissions,
broker's fees, or finder's fees which may accrue by means of the acquisition of
the Site, and agrees to hold harmless the other party from such commissions or
fees as are alleged to be due from the party making such representations.
[Section 7.03] Successors In Interest. The terms, covenants, conditions
and restrictions of this Agreement shall extend to and
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shall be binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the Developer.
Upon the termination of the restrictions imposed by Section 1.05 of
this Agreement, which terminate upon the issuance by the Agency of a Release of
Construction Covenants, all of the terms, covenants, conditions and restrictions
of this Agreement which do not terminate upon the issuance by the Agency of the
Release of Construction Covenants for the entire Site shall remain in effect
pursuant to their terms.
[Section 7.04] Amendments to this Agreement. Developer and Agency agree
to mutually consider reasonable requests for amendments to this Agreement which
may be made by lending institutions, or Agency's Counsel or financial
consultants, provided said requests are consistent with this Agreement and would
not substantially alter the basic business terms included herein.
[Section 7.05] Project Sign. Developer agrees to construct, erect, and
maintain upon the Site during construction, through the issuance of a Release of
Construction Covenants, a Project sign which identifies the Project as an
Agency assisted activity pursuant to the Sign Program which is attached hereto
as Attachment No. 8 and incorporated herein by this reference.
[Section 7.06] Ground Breakings and Grand Openings - Coordination with
Agency Staff. To insure proper protocol and recognition of Agency Board/City
Council members, the Developer shall cooperate with Agency/City staff in the
organization of any project-related ground breakings, grand openings or any
other such inaugural events/ceremonies sponsored by the Developer celebrating
the development which is the subject of this Agreement. At least two weeks prior
to any such event, the Developer shall provide Agency/City with the completed
Event Information Form (Attachment No.9).
[Section 7.07] Developer Requested Amendments. All amendments requested
by Developer shall be prepared and processed at Developer's sole expense. Before
Agency commences any work on such an amendment, Developer shall deposit with the
Agency an amount equal to the Agency's estimate of expenses to be incurred in
connection with such an amendment. Developer shall make additional deposits as
requested from time to time by the Agency. In the event Developer fails to make
any requested deposit, Agency shall cease work on such amendment until all
deposits have been made.
[Section 7.08] Administration. This Agreement shall be administered and
executed by the Agency's Executive Director, or his designated representative,
following approval of this Agreement by the Agency. The Agency shall maintain
authority of this Agreement through the Executive Director (or his authorized
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representative). The Executive Director shall have the authority to issue
interpretations, waive provisions and enter into amendments of this Agreement on
behalf of the Agency so long as such actions do not substantially change the
uses or development permitted on the Site, or add to the costs to the Agency as
specified herein as agreed to by the Agency Board, and such amendments may
include extensions in time specified in the Schedule of Performance. All other
waivers or amendments shall require the written consent of the Agency Board.
VIII. ENTIRE AGREEMENT, WAIVERS
[Section 8.01] Entire Agreement, Waivers. This Agreement is executed in
three (3) duplicate originals, each of which is deemed to be an original. This
Agreement includes pages 1 through 36 and Attachments 1 through 12, which
constitute the entire understanding and agreement of the parties.
This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations or previous
agreements between the parties or their predecessors in interest with respect to
all or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in writing
signed by the appropriate authorities of the Agency and the Developer, and all
amendments hereto must be in writing signed by the appropriate authorities of
the Agency and the Developer.
In any circumstance were under this Agreement either party is required
to approve or disapprove any matter, approval shall not be unreasonably
withheld.
IX. ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION
[Section 9.01] Time for Acceptance of Agreement by the Agency. This
Agreement, when executed by the Developer and delivered to the Agency, must be
authorized, executed and delivered by the Agency on or before thirty (30) days
after signing and delivery of this Agreement by Developer or this Agreement
shall be void, except to the extent that the Developer shall consent in writing
to a further extension of time for the authorization, execution and delivery of
this Agreement. The date of this Agreement shall be the date when it shall have
been signed by the Agency.
[Section 9.02] Recordation. The parties agree to permit the recordation
of this Agreement or a Memorandum of Agreement, substantially in the form
attached hereto as Attachment No. 7, against the Site in the Office of the
Recorder for the County of Los Angeles, California.
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IN WITNESS WHEREOF, the Agency and the Developer have signed this
Agreement on the respective dates set forth below.
"DEVELOPER":
11-16-98 By: /s/ WILLIAM J. REX
- ----------------- ----------------------------------
Date of Signature WILLIAM J. REX, President
Rexhall Industries, Inc.
"AGENCY":
LANCASTER REDEVELOPMENT AGENCY
a public body corporate and politic.
12/15/98 By: /s/ JAMES C. GILLEY,
- ----------------- ----------------------------------
Date of Agreement JAMES C. GILLEY,
Executive Director
ATTEST:
By: /s/ DONNA M. GRINDEY
----------------------------
DONNA M. GRINDEY, CMC
Agency Secretary
APPROVED AS TO FORM AND
LEGAL CONTENT:
STRADLING YOCCA CARLSON & RAUTH,
a professional corporation
By: /s/ [ILLEGIBLE]
----------------------------
Agency Counsel
APPROVED AS TO PROGRAM:
By: /s/ [ILLEGIBLE]
----------------------------
Redevelopment Director
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EMPLOYMENT PROGRAM PROMISSORY NOTE
Lancaster, California
Note Amount: $300,000 September 5, 2002
1. FOR VALUE RECEIVED, in accordance with the terms and provision of
the Disposition and Development Agreement the undersigned ("Maker") promises to
pay to the order of the LANCASTER REDEVELOPMENT AGENCY ("Holder"), at 44933
North Fern Avenue, Lancaster, California 93534 or such other place as the Holder
may from time to time designate in writing, the "Note Amount" (as herein
defined), in lawful money of the United States of America, together with
interest and other charges as set forth below, until fully paid.
2. This Promissory Note is made and delivered pursuant to and in
implementation of the Disposition and Development Agreement by and between the
Holder and the Maker dated December 13, 1998 (the "DDA"), a copy of which is on
file as a public record with the Holder and is incorporated herein by reference.
The DDA provides for the disposition of the property, on behalf of the Marker,
and for the repayment of monies by the Maker to the Holder in the event Maker
fails to perform its obligations under the DDA Section 2.14 - Employment
Incentive Program. The Promissory Note is made to assure performance of the
Maker (the "Developer") pursuant to the DDA (Section 2.14), and to provide
security for the Holder (the "Agency") as to execution of this Promissory Note,
the Holder would not enter into the DDA. Unless definitions of terms are
expressly set out at length herein, each term shall have the same definition as
set forth in the DDA.
3. The failure of the Maker to timely pay in full when due the "Note
Amount" (as hereinafter defined) shall constitute a default of Maker under the
terms of this Promissory Note. In the event the Maker fails to timely pay in
full when due the Note Amount, any portion which is not timely paid in full
shall accrue interest at the rate of 10 percent (10%) per annum.
4. Pursuant to Section 2.14 of the DDA, the Maker shall pay to the
Holder an amount equal to $300,000 (the "Note Amount"). The Note Amount shall
either be paid in cash or in Annualized Full-Time Equivalent Employment Units
pursuant to the DDA.
5. The Note Amount, together with interest accrued thereon, if
applicable, shall be paid within thirty (30) days of the termination by the
Agency of the DDA pursuant of Article VI (Defaults and Remedies).
6. Upon payment in full of the Note Amount, or forgiveness of the
Promissory Note, the Holder shall return this Promissory Note to the Maker.
7. The Maker shall pay reasonable attorneys' fees and costs and
expenses incurred by the Holder hereof in connection with any default or in any
action or other proceeding brought to enforce any of the provisions of this
Promissory Note.
8. Upon satisfactory compliance of all the terms and conditions of the
Employment Incentive Program (Section 2.14) of the DDA with respect to the
employment requirements, repayment of the full amount of this Promissory Note
shall be forgiven.
9. In the event that the Developer does not meet the minimum job
requirements as stated in Section 2.14, the Agency is entitled to a refund of
for each job there is a shortfall in the Developer's obligation for a given
year. Any refunds to the Agency will not exceed the offset of the land by the
Agency, and will become payable at the end of the five (5) year period.
REXHALL INDUSTRIES INC., a
By: /s/ William J. Rex
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WILLIAM J. REX, President