HomeMy WebLinkAboutResolution No. 11-C39RESOLUTION NO. 11-C39
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF AZUSA, CALIFORNIA, MAKING FINDINGS
PURSUANT TO HEALTH AND SAFETY CODE SECTION
33433 AND APPROVING THE CONVEYANCE OF REAL
PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF AZUSA PURSUANT TO THAT CERTAIN
2011 DISPOSITION AND DEVELOPMENT AGREEMENT
(CHARVAT FAMILY) WITH THE CHARVAT FAMILY
LLC
WHEREAS, pursuant to the provisions of the California Community Redevelopment
Law (Health and Safety Code § 33000, et seq.), the City Council ("City Council") of the City of
Azusa ("City") approved and adopted its Merged Central Business District and. West End
Redevelopment Plan ("Redevelopment Plan") applicable to certain geographic areas within the
City ("Project Area") specified in the Redevelopment Plan; and
WHEREAS, the Redevelopment Agency of the City of Azusa ("Agency") is engaged in
activities to implement the Redevelopment Plan; and
WHEREAS, the Agency owns that certain real property generally described as 17525 E.
Arrow Highway, Azusa, California (Assessor's Parcel Nos. 8621-024-903 and 904) ("Developer
Property") and 17511 E. Arrow Highway, Azusa California (Assessor Parcel Number 8621-024-
001) ("Agency Parcel"); and
WHEREAS, Agency staff has negotiated the terms of that certain 2011 Disposition and
Development Agreement (Charvat Family) ("Agreement") with Charvat Family LLC, a
California limited liability company ("Charvat"), providing for, among other things, Agency
conveyance of the Developer Property to Charvat, Charvat's redevelopment of the Developer
Property as a 40,000 to 60,000 square foot retail store ("Project"), and the Agency's grant of an
easement to Charvat for the use of a portion of the Agency Parcel for reciprocal parking; and
WHEREAS, pursuant to Health and Safety Code Section 33433, the Agency prepared
and submitted to the City Council and made available for public review, a property disposition
summary report ("Summary Report") setting forth: (1) the cost of the Agreement to the Agency;
(2) the estimated value of the interest in the Developer Property to be conveyed to Charvat
pursuant to the Agreement; (3) an explanation of how the conveyance of the Developer Property
to Charvat pursuant to the Agreement will assist in the elimination of blight within the Project
Area; and (4) a copy of the Agreement; and
WHEREAS, pursuant to Health and Safety Code Sections 33431 and 33433, the Agency
caused notice of a joint public hearing before the City Council and the Agency's governing
board regarding the proposed Agency conveyance of the Developer Property to Charvat pursuant
to the Agreement to be published in a newspaper of general circulation within the City; and
WHEREAS, pursuant to the provisions of Health and Safety Code Section 33433, on
June 6, 2011, the City Council and the Agency's governing board held a noticed joint public
hearing regarding the proposed Agency conveyance of the Developer Property to Charvat
pursuant to the Agreement; and
WHEREAS, pursuant to the provisions of Health and Safety Code Section 33433, the
City Council, acting as the Agency's legislative body, must make certain findings and
determinations in connection with the Agency's conveyance of the Developer Property to
Charvat pursuant to the Agreement; and
WHEREAS, City staff has determined that the Project constitutes a "project" under the
California Environmental Quality Act, Public Resources Code Sections 21000, et seq.
("CEQA"), and has further determined that the Project is exempt from environmental review
under CEQA pursuant to Public Resources Code Section 21084 and Title 14 California Code of
Regulations Section 15332 because it is in -fill development (1) consistent with the applicable
general plan designation and all applicable general plan policies as well as with the applicable
zoning designation and regulations; (2) occurring within city limits on a project site of no more
than five acres substantially surrounded by urban uses; (3) the project site has no value as habitat
for endangered, rare or threatened species; (4) approval of the project would not result in any
significant effects relating to traffic, noise, air quality, or water quality; and (5) the site can be
adequately served by all required utilities and public services.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Azusa as
follows:
Section 1. The facts set forth in the recitals preceding this Resolution are true and
correct and are hereby incorporated into this Resolution.
Section 2. The City, acting as lead agency, hereby finds and determines that the
Project constitutes a "project" under CEQA, and further finds and determines that the Project is
exempt from environmental review under CEQA pursuant to Public Resources Code Section
21084 and Title 14 California Code of Regulations Section 15332 because it is in -fill
development (1) consistent with the applicable general plan designation and all applicable
general plan policies as well as with the applicable zoning designation and regulations; (2)
occurring within city limits on a project site of no more than five acres substantially surrounded
by urban uses; (3) the project site has no value as habitat for endangered, rare or threatened
species; (4) approval of the project would not result in any significant effects relating to traffic,
noise, air quality, or water quality; and (5) the site can be adequately served by all required
utilities and public services. The City authorizes and directs the City Clerk to file all appropriate
notices under CEQA with the County of Los Angeles, California, regarding the CEQA
compliance actions of the City contained in this Resolution, within five (5) days following the
date of adoption of this Resolution.
Section 3. The documents and materials constituting the administrative record of
proceedings on which this Resolution is based are located at the office of the City Clerk at 213 E.
Foothill Boulevard, Azusa, California 91702-2550. The custodian for these records is the City
Clerk.
Section 4. Based on the information made available in the Summary Report, the staff
report accompanying this Resolution, the oral presentation of staff and other written and oral
evidence presented to the City at or prior to the public hearing regarding the Agreement, the City
finds and determines that:
(a) The Agency's conveyance of the Developer Property to Charvat pursuant to the
Agreement will assist in the elimination of blight in the Project Area;
(b) The Agency's conveyance of the Developer Property to Charvat pursuant to the
Agreement for development as a retail store is consistent with the implementation plan adopted
by the Agency for the Project Area pursuant to Health and Safety Code Section 33490;
(c) The consideration to the Agency for the conveyance of the Developer Property to
Charvat pursuant to the Agreement is not less than the fair reuse value of the Developer Property
at the use and with the covenants, conditions and development costs imposed by the Agreement.
Section 5. The City hereby approves, consents to and authorizes Agency conveyance
of the Developer Property to Charvat pursuant to the Agreement.
Section 6. This Resolution shall take effect immediately upon its adoption.
Section 7. The City Clerk shall certify to the passage and adoption of this Resolution.
PASSED, APPROVED AND ADOPTED THIS 6th day of June, 2011.
oseph R. Rocha, Mayor
ATTEST:
Mendoza, City Clerk
I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the foregoing
Resolution No. 11-C39 was duly and regularly passed and adopted by the City Council of the
City of Azusa at a meeting thereof held on the 6th day of June, 2011, and was carried by the
following vote:
AYES COUNCIL MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA
NOES COUNCIL MEMBERS: NONE
ABSTAIN : COUNCIL MEMBERS: NONE
ABSENT : COUNCIL MEMBERS: NONE
Vera Mendoza, City Clerk
2011 DISPOSITION AND DEVELOPMENT AGREEMENT
(CRARVAT FAMILY)
by and between
the
REDEVELOPMENT AGENCY OF THE CITY OF AZUSA,
a public body, corporate and politic,
and
CHARVAT FAMILY LLC,
a California limited liability company
[Dated as of —, 2011 for reference purposes only]
45636.060015951390.9
2011 DISPOSITION AND DEVELOPMENT AGREEMENT
(CHARVAT FAMILY)
THIS 2011 DISPOSITION ND DEVELOPMENT AGREEMENT (Charvat Family)
(this "Agreement") is dated as of DtA te , 2011, for reference purposes only, and is
entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a
public body, corporate and politic, exercising governmental functions and powers, and organized
and existing pursuant to.the Community Redevelopment Law of the State of California, Health
and Safety Code Sections 33000, et seq. ("Agency"), and CHARVAT FAMILY LLC, a
California limited liability company ("Developer"). Agency and Developer are sometimes
referred to in this Agreement individually as a "Party" or collectively as the "Parties." The
Agency and Developer enter into this Agreement with reference to the following recited facts
(each a "Recital"):
RECITALS
A. The City owns and the Agency will acquire that certain real property generally
located at the northeast comer of the intersection of Azusa Avenue and Arrow Highway in the
City of Azusa, County of Los Angeles, California ("Property"), as more particularly described
in Exhibit "A -I" attached to this Agreement and incorporated herein by this reference.
B. The Property is located within the Agency's Redevelopment Plan
("Redevelopment Plan") for the Merged Central Business District and West End
Redevelopment Project Area ("Project Area").
C. Developer desires to purchase the Property, with the exception of a 9,856 square
foot parcel further described in Exhibit `B" attached hereto and incorporated herein by
reference, which shall remain under the Agency's ownership ("Agency Parcel"), for the purpose
of redeveloping that portion of the Property as a 40,000 to 60,000 square foot commercial retail
building, with such improvements more fully described in the Scope of Development attached to
this Agreement as Exhibit "C" and incorporated herein by this reference ("Project"). The
portion of the Property Developer desires to purchase and develop shall hereinafter be referred to
as the "Developer Property", and is further described in Exhibit "A-2".
D. In consideration for Agency's agreement to sell the Developer Property to
Developer, Developer covenants and agrees to operate the Business on the Developer Property
for a period of no less than fifteen (15) years.
E. The development of the Project on the Developer Property is expected to result in
the generation of significant new local sales tax revenues for the community.
F. The Project will provide significant public benefits to the community because
additional sales tax revenues generated by such activities represent a significant source of new
and additional public revenue, which may be used by the City for the funding of necessary public
services and facilities. The Agency has further determined that the Project serves the additional
public purpose of fostering a business and civic environment that may attract additional
businesses and investment in the community due to the availability of the increased public and
private services and economic activity resulting therefrom.
45636.0600 V6951390.9
G. The Agency desires to sell the Developer Property to Developer for the
development of the Project and Developer desires to purchase the Developer Property from the
Agency for the same purpose.
H. The Parties desire to enter into a reciprocal access and use easement agreement
("Reciprocal Easement Agreement") in order for employees of Developer and customers of the
Business to access the Business and for the Business to have sufficient parking for all employees
and customers.
NOW, THEREFORE, FOR. GOOD AND VALUABLE CONSIDERATION AND THE
MUTUAL PROMISES AND COVENANTS OF THE PARTIES SET FORTH IN THIS
AGREEMENT, THE AGENCY AND DEVELOPER AGREE, AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. In addition to the usage of certain words, terms or
phrases that are defined in the initial paragraph or Recitals of this Agreement, the following
words, terms and phrases are used in this Agreement, as follows, unless the particular context of
usage of a word, term or phrase requires another interpretation:
(a) "Affiliate" means and refers to any Person, directly or indirectly,
Controlling or Controlled by or under common Control with Developer, whether by direct or
indirect ownership of equity interests, by contract or otherwise.
(b) "Agency Deed" means and refers to a grant deed in substantially the
form of Exhibit "F" attached to this Agreement and incorporated herein by this reference,
conveying all of the Agency's interest in the Developer Property to Developer.
(c) "Agency Parties" means and refers, collectively, to the Agency, its
governing body, elected officials, employees, agents and attorneys.
(d) "Agency Party" means and refers, individually, to the Agency, its
governing body, elected officials, employees, agents and attorneys.
(e) "Agency's Title Notice Response" means and refers to the written
response of the Agency to the Title Notice, in which the Agency either elects to (i) cause the
removal from the Preliminary Report or, in the alternative, (ii) obtain title insurance in a form
reasonably satisfactory to Developer insuring against any matters disapproved in the Title
Notice, or (iii) elects not to take either action described in (i) or (ii).
(f) "BOE" means the State of California Board of Equalization and any
successor agency.
(g) "Business" means the sale of general merchandise, clothing, electronics,
house wares, or home goods to be transacted by Developer, from the building constructed on the
Developer Property by Developer, upon completion of the Project.
45636.0600 n5951390.9
(h) "Business Activities" means and refers to on-site and internet activities
of Developer's officers, directors, employees, agents or consultants which result in the sale or
lease of any tangible personal property located on the Developer Property, and which are subject
to local sale and use tax pursuant to Sales Tax Law.
(i) "CEQA" means and refers to the California Environmental Quality Act,
Public Resources Code Sections 21000, et seq.
0) , "Certificate of Completion" means and refers to the written certification
of the Agency that the Project is complete and in compliance with the terms and conditions of
this Agreement, in substantially the form of Exhibit "H" attached to this Agreement and
incorporated herein by this reference.
(k) "City" means and refers to the City of Azusa, California.
(1) "Claims" means and refers to any and all claims, losses, costs, damages,
expenses, liabilities, liens, actions, causes of action (whether in tort or contract, at law or in
equity, or otherwise), charges, awards, assessments, fines, and penalties of any kind (including
consultant and expert expenses, court costs, and reasonable attorneys' fees of counsel retained by
the Agency Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or
nature), and judgments, including, but not limited to, Claims for: (1) injury to any person
(including death at any time resulting from that injury); (2) loss of, injury or damage to, or
destruction of property (including all loss of use resulting from that loss, injury,, damage, or
destruction) regardless of where located, including the property of the Agency Parties to the
extent caused by Developer or its Affiliates; (3) any workers' compensation or prevailing wage
determination; and (4) all economic losses and consequential or resulting damage of any kind.
(m) ".Close of Escrow" means and refers to the recording of the Agency
Deed in the Official Records of the Recorder of the County of Los Angeles, California, and
completion of each of the actions set forth in Section 3.5 by the Escrow Holder for the Agency to
sell the Developer Property to Developer and Developer to purchase the Developer Property
from the Agency.
(n) "Completion Date" means and refers to the date on which the
construction and installation of the Project shall be completed by Developer, which shall occur
no later than twenty-four (24) months from the Effective Date.
(o) "Control" means and refers to possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a Person, whether by
ownership of equity interests, by contract or otherwise.
(p) "Controlling" and "Controlled" mean and refer to exercising or having
Control.
(q) "Deed of Trust" means and refers to a deed of trust or other security
instrument required by a Lender to be recorded against the Developer Property, to secure
Developer's performance under the associated Loan and related Loan Documents.
4563&0600
(r) "Developer's Official Action" means and refers to official action of
Developer in substantially the form attached to this Agreement as Exhibit "G" executed by the
authorized representative(s) of Developer.
(s) "Due Diligence Investigations" means and refers tQ Developer's due
diligence investigations of the Developer Property to determine the suitability of the Developer
Property for development of the Project or operation of the Business, including, without
limitation, investigations of the enviromnentat and geotechnical suitability of the Developer
Property, as deemed appropriate in the reasonable discretion of Developer, all at the sole cost
and expense of Developer.
(t) "Due Diligence Investigation Conclusion Notice" means and refers to a
written notice of Developer delivered to both the Agency and the Escrow Holder, prior to the end
of the Due Diligence Period, indicating Developer's acceptance of the condition of the
Developer Property or indicating Developer's rejection of the condition of the Developer
Property and refusal to accept a conveyance of fee title to the Developer Property, describing in
reasonable detail the actions that Developer reasonably believes are required to allow Developer
to accept the condition of the Developer Property.
(u) "Due Diligence Period" means and refers to the time period of ninety
(90) continuous days commencing on the day immediately following the Escrow Opening Date.
(v) "Earnest Money Deposit' means and refers to the amount of Fifteen
Thousand Dollars ($15,000.00), in cash or other immediately available funds.
(w) "Effective Date" means and refers to the first date on which the Agency
is in receipt of three (3) counterpart originals of this Agreement executed by the authorized
representative(s) of Developer and a certified copy of Developer's Official Action and this
Agreement has been approved by the Agency governing body, executed by the authorized
representative(s) of the Agency and delivered to Developer. Agency shall confirm the Effective
Date to Developer in writing within five (5) business days after the Effective Date.
(x) "Environmental Claims" means and refers to any .and all claims,
demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action,
judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation.
attorney fees, disbursements and costs of attorneys, environmental consultants and other experts,
and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever
directly or indirectly relating to or arising from any Environmental Matters: (i) arising from
Developer's Due Diligence Investigations, provided such claims do not extend to pre-existing
conditions merely discovered by Developer during Developers Due Diligence Investigations
except to the extent such conditions are exacerbated by Developer's Due Diligence
Investigations, (ii) occurring on or after the Close of Escrow; or (iii) arising from Developer's
construction or installation of the Project; (iv) provided the foregoing does not extend to
Environmental Matters existing prior to the Close of Escrow.
(y) "Environmental Laws" means and refers to all federal, state, local, or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of
45636.0600113951390.9 4
any governmental authority regulating, relating to, or imposing liability or standards of conduct
concerning any Hazardous Substance, or pertaining to occupational health or industrial hygiene
(to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations
relating to any Hazardous Substance on, under, or about the Developer Property), occupational
or environmental conditions on, under, or about the Developer Property, as now or may, at any
later time, be in effect, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA) [42 U.S.C. Section 9601 et seq.];
the Resource Conservation and Recovery Act of 1976 (RCRA) [42 U.S.C. Section 6901 et seg.];
the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) t33
U.S.C. Section 1251 et seg.]; the Toxic Substances Control Act (TSCA) [15 U.S.C. Section 2601
et seq.]; the Hazardous Materials Transportation Act (HMTA) [49 U.S.C. Section 1801 et seq.];
the Insecticide, Fungicide, Rodenticide Act [7 U.S.C. Section 6901. et seq.] the Clean Air Act [42
U.S.C. Section 7401 et seq.]; the Safe .Drinking Water Act [42 U.S.C. Section 300f et seq.]; the
Solid Waste Disposal Act [42 U.S.C. Section 6901 et seq.]; the Surface Mining Control and
Reclamation Act [30 U.S.C. Section 101 et seq.]; the Emergency Planning and Community Right
to Know Act [42 U.S.C. Section 11001 et seq.]; the Occupational Safety and Health Act [29
U.S.C. Section 655 and 6571; the California Underground Storage of Hazardous Substances Act
[Health and Safety Code Section 25280 et seq.]; the California Hazardous Substances Account
Act [Health and Safety Code Section 25300 et seq.]; the California Safe Drinking Water and
Toxic Enforcement Act [Health and Safety Code Section 24249.5 et seq.) the Porter -Cologne
Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of, or
regulations promulgated under the statutes cited above and any other federal, state, or local law,
statute, ordinance, or regulation, now in effect or later, enacted, that pertains to occupational
health or industrial hygiene, and only to the extent the occupational health or industrial hygiene
laws, ordinances, or regulations relating to any Hazardous Substance on, under, or about the
Developer Property, or the regulation or protection of the environment, including ambient air,
soil, soil vapor, groundwater, surface water, or land use.
(z) "Environmental Matters" means and refers to any of the following:
(1) The presence of Hazardous Substance on, in, under, from or
affecting all or any portion of the Developer Property;
(2), The storage, holding, handling, release, threatened release,
discharge, generation, leak, abatement, removal or transportation of any Hazardous Substance
on, in, under, from or affecting the Developer Property;
(3) The violation of any Governmental Requirements or the like by
Developer, its agents or contractors, relating to or governing in any way Hazardous Substances
on, in, under, from or affecting the Developer Property;
(4) The failure of Developer, its agents or contractors, to properly
complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations,
covenants and the like in connection with Developer's activities on the Developer Property;
(5) The implementation and enforcement by Developer, its agents
or contractors of any monitoring, notification or other precautionary measures that may, at any
4563 6.06001 \5951390.9
time, become necessary to protect against the release, potential release or discharge of any
Hazardous Substance on, in, under, from or affecting the Developer Property;
(6) The failure of Developer, its agents or contractors, in
compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or
dispose of any Hazardous Substance existing, stored or generated on, in, under or from the
Developer Property;
(7) Any investigation, inquiry, order, hearing, action or other
proceeding by or before any Governmental Agency in connection with any Hazardous Substance
on, in, under, from or affecting the Developer Property or the Business or the violation of any
Environmental Law relating to the Developer Property.
(aa) "Escrow" means and refers to an escrow, as defined in Civil Code
Section 1057, that is conducted by the Escrow Holder with respect to the Developer Property,
pursuant to this Agreement.
(bb) "Escrow Closing Date" means and refers to the earlier of: (1) the tenth
(10th) business day following the Escrow Holder's receipt of written confirmation from both the
Agency and Developer of the satisfaction or waiver of all conditions precedent to the Close of
Escrow or (2) October 30, 2011.
(cc) "Escrow Holder" means and refers to Four Seasons Escrow, Inc., 16101
Ventura Blvd., Suite 324, Encino, California 91436, Attn: Enid Tobias.
(dd) "Escrow Opening Date" means and refers to the date on which all of the
following have occurred: (1) a fully executed copy of this Agreement is deposited with the
Escrow Holder; and (2) the Earnest Money Deposit is deposited with the Escrow Holder. 1n no
event shall the Escrow Opening Date occur later than June 21, 2011.
(ee) "Event of Default" shall have the meaning ascribed to the term in
Section 10.2.
(ff) "Executive Director" means and refers to the Executive Director of the
Agency or his or her designee or successor in function.
(gg) "FIRPTA Affidavit" means and refers to an affidavit complying with
Section 1445 of the United States Internal Revenue Code.
(hh) "Form 593" means and refers to a California Franchise Tax Board Form
:S%WAJ
(ii) "Governmental Agency" means and refers to any and all courts, boards,
agencies, commissions, offices, or authorities of any nature whatsoever for any governmental
unit (federal, state, county, district, municipal, city, or otherwise), including the City, pursuant to
its general police power jurisdiction, whether now or later in existence with jurisdiction over the
Developer Property, the Business, or the construction or installation of any portion of the Project
on the Developer Property.
45636,0600 1 1595139(1.9
"Governmental Requirements" means and refers to every law,
ordinance, requirement, order, proclamation, directive, rule, and regulation of any Governmental
Agency applicable to the Agency, Developer, the Business, or the Developer Property, in any
way, including any development, use, maintenance, taxation, operation, or occupancy of, or
environmental conditions affecting the Agency, Developer, the Business or the Developer
Property, or relating to any taxes, or otherwise relating to this Agreement or any Party's rights,
obligations or remedies under this Agreement, or any Transfer of any of the foregoing, whether
in force on the date -of this Agreement or passed, enacted, modified, amended or imposed at
some later time, subject in all cases, however, to any applicable waiver, variance, or exemption.
(kk) "Hazardous Substance" means and refers to, without limitation,
substances defined as a "Hazardous Substance," "hazardous material," "toxic substance," "solid
waste," or "pollutant or contaminate" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the
Toxic Substances Control Act (TSCA) [15 U.S.C. Sections 2601, et seq.]; the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States
Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor
authority, as a Hazardous Substance [40 CFR Part 3021; and those substances defined as
"hazardous waste" in Section 25117 of the California Health and Safety Code or, as a
"Hazardous Substance" in Section 25316 of the California Health and Safety Code; other
substances, materials, and wastes that are, or become, regulated or classified as hazardous or
toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to
said laws, and shall also include manure, asbestos, polychlorinated biphenyl, flammable
explosives, radioactive material, petroleum products, and substances designated as a hazardous
substance pursuant to 33 U.S.C. Section 1321 or listed pursuant to 33 U.S.C. Section 1317.
(11) "Lender" means and refers to a state or federally chartered bank, trust
company (in its individual or trust capacity), insurance company with a financial rating of at least
A in the then current edition of A.M. Best's Insurance Guide, credit union, savings bank (state or
federal), pension, welfare or retirement fund or system, real estate investment trust, federal or
state agency regularly making or guaranteeing mortgage loans, investment bank, a subsidiary of
a Fortune 500 company (such as AT&T Capital Corporation or General Electric Capital .
Corporation) or any Person that is a wholly owned subsidiary of or is a combination of any one
or more of the foregoing Persons.
(mm) "Loan" means and refers, individually, to any loan that Developer shall
obtain from a Lender the proceeds of which are to be used and applied solely to pay the
reasonable costs of obtaining such loan and either: (1) the Purchase Price and the other costs of
acquiring the Developer Property through the Escrow, or (2) for construction or installation of
the Project. .
(nn) "Loan Documents" means and refers to the various documents and
instruments made by and between Developer and a Lender that evidence a Loan and the security
for repayment of such Loan.
45636.0600115951390.9 7
(oo) "Local Sales Tax Revenues" means and refers to the net Sales Tax
received by the City from the BOE pursuant to the application of the Sales Tax Law attributable
to Business Activities in a particular Operating Year. Local Sales Tax Revenues shall not
include: (i) Penalty Assessments, (ii) any Sales Tax levied by, collected for or allocated to the
State of California, the County of Los Angeles, or a district or any entity (including an allocation
to a statewide or countywide pool) other than City, (iii) any administrative fee charged by the
BOE, (iv) any Sales Tax subject to any sharing, rebate, offset or other charge imposed pursuant
to any applicable federal, state or local Governmental Requirement (except City's), (v) any Sales
Tax attributable to any transaction not consummated within the Operating Period, or (vi) any
Sales Tax (or other funds measured by Sales Tax) required by the State of California to be paid
over to another public entity (including the State) or set aside and/or pledged to a specific use
other than for deposit into or payment from the City's general fund.
. (pp) "Maintenance Deficiency" shall have the meaning ascribed to the term
in Section 5.5(b).
(qq) "Notice of Agreement' means and refers to the notice in substantially
the form of Exhibit "E" to this Agreement to be recorded against the Developer Property at the
Close of Escrow to provide constructive record notice of the existence and application of this
Agreement to the Developer Property.
(rr) "Opening Date" means and refers to the date on which Developer causes
the Business to be open for business to the general public, which shall occur by the earlier of: (i)
thirty (30) calendar days following the issuance of the Certificate of Completion for the Project,
or (ii) July 31, 2013.
(ss) "Operating Period" means and refers to the fifteen (15) consecutive
twelve (12) month periods commencing on the first calendar day of Operating Year 1 and ending
on the last calendar day of Operating Year 15.
(it) "Operating Year" means and refers, individually, to each of the fifteen
(15) consecutive twelve (12) month periods following the Opening Date, with the first Operating
Year commencing on the first calendar day of the first calendar quarter following the Opening
Date and with each twelve (12) month period referred to in this Agreement in consecutive
numerical order beginning with Operating Year 1 and ending with Operating Year 15.
(uu) "Party" means and. refers, individually, to either the Agency or
Developer, as applicable.
(vv) "Parties" means and refers, collectively, to the Agency and Developer. .
(ww) "PCO Report" means and refers to a preliminary change of ownership
report required under California Revenue and Taxation Code Section 480.3.
(xx) "Penalty Assessments" means and refers to penalties, assessments,
collection costs and other costs, fees or charges resulting from late or underpaid payments of
Sales Tax and which are levied, assessed or otherwise collected from Developer.
45636.0600115951390.9
(yy) "Permitted Encumbrance" means and refers to any Deed of Trust.
(zz) "Permitted Exceptions" means and refers to (i) any and all items shown
in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title
Policy that Developer does not disapprove, pursuant to Section 2.2, or that are otherwise
accepted or consented to by Developer; (ii) any exceptions from coverage under the proposed
Title Policy resulting from Developer's activities on the Developer Property; (iii) any lien for
non -delinquent Developer Property taxes and assessments; (iv) any applicable planning or
zoning Governmental Requirements; (v) this Agreement; (vi) the Agency Deed; (vii) any other
matter provided for in this Agreement.
(aaa) "Permitted Transfer" means and refers to any of the following types of
Transfers by Developer:
(1) Any Transfer of stock or equity of Developer that does not
change management or operational control of the Developer Property or the Business where the
Person to which such Transfer is made, expressly assumes the obligations of Developer under
this Agreement in a written instrument satisfactory to the Agency;
(2) Any Transfer of any interest in Developer irrespective of the
percentage of ownership (i) to any other owner of any interest in Developer; or (ii) to any
Affiliate; or (iii) to any other Person in which any holder of an interest (including any beneficial
interest) in Developer is a manager, officer or partner or in which any of the aforementioned is a
shareholder, member or partner (including a beneficial owner), where the Person to which such
Transfer is made, expressly assumes the obligations of Developer under this Agreement in a
written instrument satisfactory to the Agency;
(3) A lease of all or a portion of the Developer Parcel (including
any reciprocal easement rights) to Estate Liquidation Services, Inc., a California corporation;
(4) Notwithstanding any other provision of this Agreement, any
Transfer of any interest in Developer belonging to any of Mark Charvat, Julie Chat -vat, Jason
Charvat or Brian Charvat (collectively, the "Charvat Family Members") amongst any of the
Charvat Family Members, or by any of the Charvat Family Members to or from revocable or
irrevocable trusts established for the benefit of any one or more of the Charvat Family Members
("Charvat Trusts"); provided, however, that least 51 % of the interest in Developer continues to
be held by any one or more of the Charvat Family Members or by any one or more the Charvat
Trusts, or by a combination thereof. Such Transfer shall not require a written assumption of the
obligations of Developer to be made to Agency. Such Transfer shall only require written notice
to Agency upon completion of such Transfer.
(bbb) "Person" means and refers to any association, corporation, governmental
entity or agency, individual, joint venture, joint-stock company, limited liability company,
partnership, trust, unincorporated organization, or other entity of any kind.
(ccc) "Preliminary Report" means and refers to a preliminary report issued
by the Title Company in contemplation of the issuance of the Title Policy, accompanied by
95636.06101\5951390.9 9
copies of all documents listed in Schedule B of the report as exceptions to coverage under the
proposed Title Policy.
(ddd) "Prohibited Financial Assistance" means and refers to any direct or
indirect payment, subsidy, rebate or other similar or dissimilar monetary or nonmonetary benefit
including, without implied limitation, payment of land subsidies, relocation expenses, financial
incentives, public financing. property or sales tax relief or rebates, relief from public
improvement obligations, and payment for public improvements to or for the benefit of
Developer by any public or private person or entity.
(eee) "Project' means and refers to the construction and installation of the
approximately 40,000 to 60,000 square foot commercial retail building on the Developer
Property, including all required or associated on-site and off-site improvements, all hardscape
and all landscaping, all as specifically described in the Scope of Development attached hereto as
Exhibit C, and to be developed in accordance with plans and specifications approved by the City
and any conditions imposed by the City in its consideration of Developer's development
application.related to the Project.
(fff) "Public Improvements" means and refers to the public improvements
benefiting the Project, as further described in Exhibit I attached to this. Agreement and
incorporated herein by this reference.
(ggg) "Purchase Price" shall mean and refer to the amount of Three Million
Three Hundred Thirty -Three Thousand Three Hundred Twelve Dollars ($3,333,312).
(hhh) "Reciprocal Easement Agreement" means that certain reciprocal access
and use easement agreement to be entered into by and between Agency and Developer as set
forth in this Agreement, which shall include the following terms: (i) Agency and Developer shall
grant to each other, for the benefit of the Developer Property and the Agenev Parcel, a non-
exclusive access reciprocal easement for pedestrian and vehicular access, ingress and egress by
either of the Parties, their tenants, subtenants, licensees and concessionaires and their respective
employees, agents, contractors, customers, invitees and guests over paved portion of the
Developer Property and the Agency Parcel which are intended for such purposes; (ii) Agency
shall grant to Developer, for the benefit of the Developer Property, a non-exclusive easement for
parking on Agency Parcel; (iii) Developer shall grant to Agency, for the benefit of the Agency
Parcel, a non-exclusive easement for parking on Developer Property; (iv) Agency shall grant to
Developer, for the benefit of the Developer Property, a non-exclusive easement for a monument
sign with street visibility at a mutually agreeable location on the Agency Parcel; and (v) Agency
shall grant to Developer, for the benefit of the Developer Property, a non-exclusive easement for
maintenance of the landscape on Agency Parcel for so long as the Agency Parcel is owned by the
Agency.
(iii) "Redevelopment Plan Expiration Date" means the expiration of the
effectiveness of the Redevelopment Plan as may be amended from time to time, currently
November 6. 2033.
45636.060011,5951390-9 10
(jjj) "Sales Tax" means and refers to all sales and use tares levied under the
authority of the Sales Tax Law attributable to Business Activities, excluding Sales Tax which is
to be refunded to Developer because of an overpayment of Sales Tax.
(kkk) "Sales Tax Law" means (i) California Revenue and Taxation Code
Section 7200 et seq., (ii) any legislation allowing the City or other public agency with
jurisdiction in City to levy any form of Local Sales Tax on the operations of Developer, and (iii)
regulations of the BOE and other binding rulings and interpretations relating to (i) and (ii)
hereof. or (iv) any amendments, substitutions, replacements, re -numbering, or modifications to
any of the above referenced statutes and regulations by any successor law.
(111) "Schedule of Performance" means and refers to the schedule for the
performance of certain actions by the Agency or Developer, pursuant to the terms and conditions
of this Agreement, attached to this Agreement as Exhibit D.
(mmim) "Scope of Development" means and refers to the detailed description of
the primary elements of the Project attached to this Agreement as Exhibit C.
(mm) "Title Company" means and refers to Lawyers Title Company, Attn:
Brian Davis.
(000) "Title Notice" means and refers to a written notice from Developer to
the Agency indicating Developer's acceptance of the state of the title to the Developer Property,
as described in the Preliminary Report, or Developer's disapproval of specific matters shown in
Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy
for the Developer Property, describing in suitable detail the actions that Developer reasonably
believes are required to obtain Developer's approval of the state of the title to the Developer
Property.
(ppp) "Title Notice Waiver" means and refers to a written notice from
Developer to the Agency waiving Developer's previous disapproval in the Title Notice of
specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under
the proposed Title Policy for the Developer Property.
(qqq) "Title Policy" means and refers to an extended coverage ALTA owners'
policy of title insurance issued by the Title Company, with coverage in the full amount of the
Purchase Price and insuring fee title to the Developer Property vested in Developer.
(rrr) "Transfer" means and refers to any of the following:
(1) Any total or partial sale, assignment, conveyance, trust, power,
or transfer in any other mode or form, by Developer of more than a forty-nine percent (491/4)
interest in Developer's interest in this Agreement. the Developer Property, or the Business or a
series of such sales, assignments and the like that, in the aggregate, result in a disposition of
more than a forty-nine percent (49%) interest in Developer's interest in this Agreement, the
Developer Property or the Business; or
45636.0600 115 95 1 3 90.9 I I
(2) Any total or partial sate, assignment, conveyance, or transfer in
any other mode or form, of or with respect to any interest in Developer or a series of such sales,
assignments and the like that, in the aggregate, result in a disposition of more than a forty-nine
percent (49%) interest in any interest in Developer; or
(3) Other than a lease by Developer to Estate Liquidation Services,
Inc., any merger, consolidation, sale or lease of all or substantially all of the assets of Developer
or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of
more than a fogy -nine percent (49%) interest of all or substantially all of the assets of Developer;
or
(4) Any "change in ownership," as defined in Revenue and
Taxation Code Sections 60, et seq., of all or any portion of the Developer Property.
(5) The recordation of any deed of trust, mortgage, lien or similar
encumbrance against all or any portion of the Developer Property or the Business.
(sss) "Unavoidable Delay" means and refers to a delay in either Party
performing any obligation under this Agreement, except payment of money and circumstances
arising from or on account of any cause whatsoever beyond the Party's reasonable control,
despite such Party's reasonable diligent efforts; including industry -wide strikes, labor troubles or
other union activities (but only to the extent such actions affect similar persons at that time and
do not result from an act or omission of the Party), legal challenges to the Project, casualty, war,
acts of terrorism or riots. Unavoidable Delay shall not include delay caused by a Party's financial
condition, illiquidity, or insolvency.
(ttt) "Un -Permitted Encumbrance" means and refers to any mortgage, lien,
deed of trust, easement or other encumbrance recorded or asserted against the Developer
Property that is not a Permitted Encumbrance.
ARTICLE II
DEVELOPER PROPERTY ACQUISITION AND DISPOSITION
Section 2.1 Purchase and Sale. The Agency shall sell the Developer Property to
Developer and Developer shall purchase the Developer Property from the Agency pursuant to
the terms and conditions of this Agreement. For the purposes of exchanging funds and
documents to complete the sale from the Agency to Developer and the purchase by Developer
from the Agency of the Developer Property, pursuant to the terms and conditions of this
Agrcement, the Agency and Developer agree to open the Escrow with the Escrow Holder.
ARTICLE III of this Agreement constitutes the joint escrow instructions of the Parties to the
Escrow Holder for the conduct of the Escrow for the sale of the Developer Property. Developer
and the Agency shall execute the Escrow Holder's standard or general escrow instructions;
provided, however, that the provisions of this Agreement shall be controlling, in the event of any
conflict between the provisions of this Agreement and any such standard or general escrow
instructions requested by the Escrow Holder.
45636.0600n5951390.9 12
(a) Earnest Money Deposit. Concurrent with its opening of the Escrow,
Developer shall deposit the Earnest Money Deposit into the Escrow. Upon the Close of Escrow,
the Earnest Money Deposit shall be credited to Developer towards the Purchase Price. The
Earnest Money Deposit shall be refundable to Developer, except (i) upon the occurrence of an
Event of Default prior to the Close of Escrow, in which case the Earnest Money Deposit shall be
paid to the Agency pursuant to Section 10.3, and (ii) upon Developer's acceptance of the
Developer Property in a Due Diligence Investigation Conclusion Notice pursuant to Section 2.2,
at which time the Earnest Money Deposit shall be fully earned by the Agency and the Escrow
Holder shall promptly pay the Earnest Money Deposit to the Agency.
(b) At Close of Escrow. Pursuant to Section 3.3, Developer shall deposit
into the Escrow the amount of the Purchase Price, less the amount of the Earnest Money Deposit.
Section 2.2 Title Approval. As soon as practicable following the Escrow Opening
Date, the Agency shall obtain the Preliminary Report from the Title Company and deliver a copy
of the Preliminary Report to Developer. Within twenty (20) days following Developer's receipt
of the Preliminary Report, Developer shall deliver the Title Notice to the Agency. If Developer
fails to deliver the Title Notice to the Agency, within twenty (20) days following Developer's
receipt of the Preliminary Report, Developer will be deemed to disapprove the status of title to
the Developer Property and refuse to accept title to the Developer Property. Within twenty (20)
days following the earlier of the Agency's receipt of the Title Notice or expiration of the time
period provided in this Section 2.2 for delivery of the Title Notice, the Agency shall serve
Agency's Title Notice Response. If the Title Notice does not disapprove any matter in the
Preliminary Report, the Agency shall not be required to serve Agency's Title Notice Response.
If the Agency does not serve Agency's Title Notice Response, if necessary, within twenty (20)
days following its receipt of the Title Notice from Developer, the Agency shall be deemed to
elect not to cause any matter disapproved in the Title Notice to be removed from the Preliminary
Report or its effect to be insured against. If the Agency elects in Agency's Title Notice
Response to cause the removal of any matter disapproved in the Title Notice from the
Preliminary Report or its effect to be insured against, the Agency shall cause the removal of each
such matter from the Preliminary Report or insurance against its effect to be issued, prior to the
Escrow Closing Date. If the Agency elects or is deemed to have elected not to cause the removal
of any matter disapproved in the Title Notice from the Preliminary Report or its effect to be
insured against, then, within ten (10) days following the earlier of Developer's receipt of
Agency's Title Notice Response or the expiration of the time period provided in this Section 2.2
for delivery of Agency's Title Notice Response, Developer shall either: (1) refuse to accept the
title to and conveyance of the Developer Property, or (2) waive its disapproval of any matters set
forth in the Title Notice by delivering the Title Notice Waiver to the Agency. Failure by
Developer to deliver the Title Notice Waiver, where Agency's Title Notice Response or the
Agency's failure to serve Agency's Title Notice Response indicates or results in the Agency's
election not to cause the removal of any one or more matters disapproved in the Title Notice
from the Preliminary Report or its effect to be insured against, within ten (10) days following
Developer's receipt of Agency's Title Notice Response or expiration of the time period for the
Agency to deliver Agency's Title Notice Response under this Agreement, will be deemed
Developer's continued refusal to accept the title to and conveyance of the Developer Property, in
which case either the Agency or Developer shall have the right to cancel the Escrow and
terminate this Agreement, in their respective sole and absolute discretion, without liability to the
45636.0600 1 1595 1390.9 13
other Party or any other Person, by delivery of a written notice of termination to both the other
Party and the Escrow Holder, in which case the Parties and the Escrow Holder shall proceed
pursuant to Section 3.10.
Section 2.3 Due Diligence Investigations.
(a) Developer shall complete all of its Due Diligence Investigations within
the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost
and expense, subject to Section 2.3(g) hereof.
(b) The Agency licenses, permits and authorizes Developer to enter the
Developer Property for the sole purpose of conducting Developer's Due Diligence
Investigations, subject to all of the terms and conditions of this Agreement. Developer shall not
conduct any intrusive or destructive testing of any portion of the Developer Property, other than
low volume soil samples, without the Agency Executive Director's prior written consent.
Following the conduct of any Due Diligence Investigations on the Developer Property,
Developer shall restore the Developer Property to substantially its condition prior to the conduct
of such Due Diligence Investigations.
(c) Any Due Diligence Investigations of the Developer Property by
Developer shall not unreasonably disrupt any then existing use or occupancy of the Developer
Property or the operations of the Agency. The activities of Developer or its agents directly or
indirectly related to Developer's Due Diligence Investigations shall be subject to Developer's
indemnity, defense and hold harmless obligations pursuant to Section 10.9. Prior to commencing
any Due Diligence Investigations on the Developer Property, Developer shall deliver all copies
of policies or certificates of insurance required to be delivered pursuant to Section 5.1 1.
(d) Developer shall deliver a Due Diligence Investigation Conclusion Notice
to the Agency and the Escrow Holder prior to the end of the Due Diligence Period. If Developer
does not unconditionally accept the condition of the Developer Property by delivery of its Due
Diligence Investigation Conclusion Notice indicating such acceptance, prior to the end of the
Due Diligence Period, Developer shall be deemed to have rejected the condition of the
Developer Property and refused to accept conveyance of title to the Developer Property. If the
condition of the Developer Property is rejected or deemed rejected by Developer, then the
Agency or Developer shall have the right to cancel the Escrow and terminate this Agreement, in
their respective sole and absolute discretion, without liability to the other Party, or any other
Person, by delivery of a written notice of termination to the other Parry and the Escrow Holder,
in which case the Parties and the Escrow Holder shall proceed pursuant to Section 3.10.
(e) Except with respect to the express representations of Agency set forth in
this Agreement, Developer shall rely solely and exclusively upon the results of its Due Diligence
Investigations of the Developer Property, including, without limitation, investigations regarding
geotechnical soil conditions, compliance with applicable Governmental Requirements pertaining
to the use of the Developer Property by Developer and any other matters relevant to the
condition or suitability of the Developer Property for the Project, as Developer may deem
necessary or appropriate. Except with respect to the express representations of Agency set forth
in this Agreement, the Agency makes no representation or warranty to Developer relating to the
45636.0600115951390.9 14
condition of the Developer Property or suitability of the Developer Property for any intended use
or development by Developer.
(f) Developer shall accept all conditions of the Developer Property, and,
except with respect to the express representations of Agency set forth in this Agreement; without
any liability of the Agency whatsoever, upon Developer's acceptance of the condition of the
Developer Property indicated in its Due Diligence Investigation Conclusion Notice. Developer's
delivery of its Due Diligence Investigation Conclusion Notice indicating Developer's
unconditional acceptance of the condition of the Developer Property shall evidence Developer's
unconditional and irrevocable acceptance of the Developer Property in the Developer Property's
AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION, AND, EXCEPT AS TO
EXPRESS REPRESENTATIONS OF AGENCY SET FORTH IN THIS AGREEMENT,
WITHOUT WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR
CONDITION and with full knowledge of the physical condition of the Developer Property,,the
nature of the Agency's interest in and use of the Developer Property, all zoning, other land use
laws and other Governmental Requirements affecting the Developer Property, and of the
conditions, restrictions, encumbrances and all matters of record relating to the Developer
Property. Developer's delivery of its Due Diligence Investigation Conclusion Notice indicating
Developer's unconditional acceptance of the condition of the Developer Property shall constitute
Developer's representation and warranty to the Agency that Developer has received assurances
acceptable to Developer by means independent of the Agency or any agent of the Agency of the
truth of all facts material to Developer's acquisition of the Developer Property pursuant to this
Agreement, and that the Developer Property are being acquired by Developer as a result of its
own knowledge, inspection and investigation of the Developer Property and not as a result of any
representations made by the Agency or any Agency Party relating to the condition of the
Developer Property, unless such statement or representation is expressly and specifically set
forth in this Agreement. Except with respect to the express representations of Agency set forth
in this Agreement, the Agency hereby expressly and specifically disclaims any express or
implied warranties regarding the Developer Property.
(g) If either Party terminates this Agreement prior to the Close of Escrow
pursuant to Section 2.3(d), Developer shall deliver to Agency an executed assignment in a form
reasonably acceptable to the Agency of the Developer's right to use all soils reports, noise
studies, geotechnical studies, phase one and phase two environmental assessment reports,
grading plans, title reports, surveys, architectural plans, engineering plans, appraisals and any
other reports and studies and other materials relating to the Due Diligence Investigations ("Plans
and Studies"), together with copies of all of the Plans and Studies, on an AS -IS, WHERE -IS
basis, without warranty of any kind whatsoever by Developer. Such assignment shall not affect
Developer's obligations or duties concerning any of the Plans and Studies, including without
limitation any obligation to pay for any work done on the Plans and Studies. The Plans and
Studies shall be free of liens and encumbrances, and Developer shall use good faith,
commercially reasonable efforts to deliver to Agency an estoppel certificate in a form reasonably
acceptable to Agency from each person or entity which prepared such Plans and Studies,
authorizing Agency to use such Plans and Studies, and releasing Agency from any responsibility
or liability for paying any costs or fees for such Plans and Studies. In consideration thereof,
Agency shall pay the Developer an amount not to exceed Fifty Thousand Dollars ($50,000.00)
incurred by Developer for the preparation of the Plans and Studies ("Developer's Expenses").
45636.0600115951390.9 15
For purposes hereof, Developer's Expenses shall include Developer's actual third party costs of
the Plans and Studies. Developer shall submit to the Agency itemized documentation of
Developer's Expenses. The Agency shall pay to Developer the Developer's Expenses within
thirty (30) days of its receipt of full documentation of the Developer's Expenses. The Parties'
obligations pursuant to this Section 2.3(g) shall survive the expiration or termination of this
Agreement.
Section 2.4 Developer to Obtain all Project Approvals.
(a) Following the Escrow Opening Date, the Agency shall reasonably
consent, as necessary, to Developer processing necessary entitlements, permits or applications
with each Governmental Agency for development of the Project on the Developer Property,
including the Executive Director signing any such applications on behalf of the Agency, as the
owner of the Developer Property.
(b) Developer shall, within the time period(s) for such actions set forth in the
Schedule of Performance, prepare and submit a complete application and any other required
application, document, fee, charge or other item (including, without limitation, deposit, fund or
surety) required for construction or installation of the Project, pursuant to all Governmental
Requirements, to each necessary Governmental Agency for review and approval. The City's
zoning, building and land use regulations (whether contained in ordinances, the City's municipal
code, conditions of approval or elsewhere), shall be applicable to the construction and
installation of the Project on the Developer Property by Developer, pursuant to this Agreement.
Developer acknowledges that all plans and specifications and any changes to plans and
specifications for the Project shall be subject to all Governmental Requirements. No action by
the City or the Agency with reference to this Agreement or any related documents shall be
deemed to constitute a waiver of any required City or Agency permit, approval or authorization
regarding the Developer Property, the Business, Developer, any successor -in -interest of
Developer or any successor -in -interest to the Developer Property.
(c) The approval of this Agreement by the City or the Agency shall not be
binding on the City Council or the Planning Commission of the City regarding any approvals of
the Project required by such bodies. Developer obtains no right or entitlement to construct or
install the Project on the Developer Property or any portion of the Developer Property by virtue
of this Agreement. If any revisions of the Project are required by a Governmental Agency,
Developer shall promptly make any such revisions that are generally consistent with the Scope of
Development.
(d) Notwithstanding any provision to the contrary in this Agreement,
Developer agrees to accept and comply fully with any and all reasonable conditions of approval
applicable to all approvals, permits and other governmental actions regarding the construction or
installation of the Project on the Developer Property, generally consistent with this Agreement.
(e) To the extent feasible, the Agency agrees to assist with the expedition of
all permitting and approvals for the completion of the Project.
45636.06001%5 9513 90.9 16
(f) Developer and the Agency agree that the Agency shall not provide any
Financial assistance to Developer in connection with the construction or installation of the
Project. Developer shall be solely responsible for paying for the costs of all design work,
construction, labor, materials, fees, permit, application, surety bond and other expenses
associated with the Project. Developer shall pay any and all fees pertaining to the review and
approval of the Project by each Governmental Agency and utility service providers, including the
costs of preparation of all required construction, planning and other documents reasonably
required by each Governmental Agency or utility service provider pertinent to the construction
or installation of the Project on the Developer Property, including, but not limited to,
specifications, drawings, plans, maps, permit applications, land use applications, zoning
applications, environmental review and disclosure documents and design review documents.
Developer shall obtain any and all necessary governmental approvals, prior to the
commencement of applicable portions of construction and installation of the Project, and
Developer shall take reasonable precautions to ensure the safety and stability of surrounding
properties during the construction and installation of the Project.
(g) Developer shall obtain all entitlements, permits and other approvals for
construction and installation of the Project on the Developer Property from each Governmental
Agency, within the time periods for such actions set forth in the Schedule of Performance and no
later than the Close of Escrow, subject to any extensions of time authorized by this Agreement
upon the occurrence of an Unavoidable Delay.
Section 2.5 Demolition and Site Clearance; Termination of Leases; Removal of
Hazardous Material.
(a) As soon as practicable, the Agency shall, at Agency's sole cost and
expense, be responsible for all demolition and removal from Developer Property of existing on-
site pavements, walks, curbs, gutters, septic tanks and other improvements. The Agency shall,
within ten (10) days after the execution of this Agreement, provide to Developer copies of all
reports in the Agency's possession or to which the Agency has access, relating to the geological
or environmental condition of the Developer Property. Developer shall have until the expiration
of the Due Diligence Period in which to notify the Agency in writing of its disapproval of any
geological or environmental condition of the Developer Property and its election to terminate
this Agreement in the event that the Agency cannot, prior to conveying the Developer Property
to Developer, rectify such geological or environmental condition on the Developer Property to
Developer's reasonable satisfaction. A failure of Developer to object in writing on or before the
expiration of the Due Diligence Period shall be deemed a rejection of the condition of the
Developer Property as reflected in such reports.
(b) Agency shall use its best efforts to negotiate the termination of the lease
and removal of the billboard owned and operated by National
Advertising Company, dated November 4, 1985 prior to the Close of Escrow. Agency's failure
to achieve this goal of terminating the lease and removing the billboard prior to the Close of
Escrow shall not be a default under this Agreement and shall not result in any liability to the
Agency.
45636.0600115951390.9 1
(c) If the removal of the billboard located closest to/facing Arrow Highway
has not been removed by December 1, 2011, Developer shall be entitled to a delay in the
commencement of construction date set forth in the Schedule of Performance until such date as
the Arrow Highway billboard has been removed.
Section 2.6 Agency Representations and Warranties
Agency makes the following representations, covenants and warranties, as of the
Effective Date, which representations shall be true and correct as of the Closing Date, and
acknowledges that the execution of this Agreement by the Developer is made in material reliance
on such covenants, representations and warranties of Agency. Where "to Agency's knowledge"
or "knowledge" is referenced herein, such reference shall mean to the best, actual knowledge of
F. M. Delach, Executive Director of the Redevelopment Agency of the City of Azusa.
(a) Authority; Enforceability: Consents. Agency has taken or will take all
requisite action and obtained all requisite consents in connection with entering into this
Agreement, such that this Agreement is valid and enforceable against Agency in accordance with
its terms and each instrument to be executed by Agency pursuant to or in connection with this
Agreement will, when executed, be valid and enforceable against Agency in accordance with its
terms. No approval, consent, order or authorization of, or designation or declaration of any other
person, is required in connection with the valid execution, delivery or performance of this
Agreement by Agency.
(b) Litigation. There is no pending or, to Agency's knowledge, threatened
private or governmental litigation by any Governmental Agency or Person against Agency
relating to the Developer Property that might, if it and all other pending and threatened litigation
were adversely determined, result in a material adverse change in the Developer Property or its
operation or that challenges the validity of or otherwise materially adversely affects the
transactions contemplated by this Agreement.
(c) Other Proceedings. No attachments, execution proceedings, assignments
for the benefit of creditors, insolvency, bankruptcy, reorganization, or other proceedings are
pending or, to Agency's knowledge, threatened against Agency or Agency's interest in the
Developer Property, nor are any such proceedings contemplated by Agency.
(d) Governmental Action. Agency has no knowledge of, nor has Agency
received written notice of, any plan, study, or effort by any Person that in any way would
materially affect the use of the Developer Property or any portion of it for its current use or of
any intended public improvements that would result in any charge being levied against, or any
lien assessed on, the Property.
(e) Condemnation. Agency has received no notice of any presently pending
or contemplated special assessments or proceedings to condemn or demolish the Developer
Property or any part of it or any proceedings to declare the Developer Property or any part of it a
nuisance.
(f) Development Rights. Neither Agency nor, to Agency's knowledge has
any previous owner of the Developer Property, except by operation of law, sold, transferred,
45636.0600115951390,9 18
conveyed, or entered into any agreement regarding "air rights," "excess floor area ratio," or other
development rights or restrictions relating to the Developer Property, except as otherwise
expressly set forth in the Preliminary Report.
(g) Title to the Developer Property. Agency has, or intends to have prior to
Close of Escrow, good and marketable title to the Developer Property. Agency has no
knowledge of any unrecorded or undisclosed legal or equitable interest in the Developer Property
owned or claimed by anyone other than Agency, except the previously disclosed interest of the
City of Azusa. Agency has no knowledge that anyone will, at the Close of Escrow, have any
right to possession of the Developer Property, except as disclosed by this Agreement or
otherwise in writing to Developer. To Agency's knowledge, there are no unsatisfied mechanics'
or materialmen's lien rights on the Developer Property. To Agency's knowledge, no assessment
lien or bond encumbers the Developer Property, and no Governmental Agency has undertaken
any action that could give rise to an assessment lien affecting the Developer Property.
(h) No Hazardous Substances. To Agency's knowledge, there are no
environmental, health or safety hazards on, under, or about (including any area surrounding the
Developer Property) the Developer Property, including but not limited to soil and groundwater
conditions. Neither Agency nor, to Agency's knowledge, any third -Person (including but not
limited to Agency's predecessors in title to the Developer Property) has used or installed any
underground tank, or used, generated, manufactured, treated, stored, placed, deposited, or
disposed of on, under, or about the Developer Property or transported to or from the Developer
Property any Hazardous Substance.
(i) No Notice of Violation of Environmental Laws. To Agency's
knowledge, the Developer Property is not in violation of any Environmental Law. Agency has
not received any notice from any Governmental Agency that the Developer Property or any
adjoining property contains or may contain any Hazardous Substance in violation of any
Environmental Law or that Agency has stored, used or maintained any Hazardous Substance or
suffered, permitted, allowed or acquiesced in any storage, use or maintenance of any Hazardous
Substance on, in or under the Developer Property in violation of any Environmental Law.
0) No Other Representations or Warranties. Other than the express
representations and warranties contained in this Agreement, Agency makes no warranty or
representation, express or implied to Developer regarding the Developer Property.
Section 2.7 Agency Public Improvements. Agency shall, at Agency's sole cost and
expense, design and construct the Public Improvements. The Public Improvements shall be
initiated and completed within the times specified in Exhibit 1.
ARTICLE III
JOINT ESCROW INSTRUCTIONS
Section 3.1 Opening of Escrow. Developer shall cause the Escrow to be opened on
the Escrow Opening Date. Escrow Holder shall promptly confirm in writing to each of the
45636.0600115951390.9 19
Parties the date of the Escrow Opening Date. This ARTICLE Ill shall constitute the joint escrow
instructions of the Agency and Developer to Escrow Holder for conduct of the Escrow.
Section 3.2 Conditions to Close of Escrow. The conditions set forth below in this
Section 3.2 shall be satisfied or waived by the respective benefited Party on or before the Escrow
Closing Date or the Party benefited by any unsatisfied condition shall not be required to proceed
to close the Escrow.
(a) Developer's Conditions. Developer's obligation to purchase the
Developer Property from the Agency on the Escrow Closing Date shall be subject to the
satisfaction or waiver of each of the following conditions precedent, each of which can only be
waived in writing by Developer:
(1) Developer agrees to accept the title to and conveyance of the
Developer Property, pursuant to Section 2.2;
(2) Developer delivers its Due Diligence Investigation Conclusion
Notice to both the Agency and the Escrow Holder indicating Developer's unconditional
acceptance of the condition of the Developer Property, prior to the expiration of the Due
Diligence Period;
(3) The City's Planning Commission finds, pursuant to
Government Code Section 65402, that the Project is consistent with the City's General Plan;
(4) The Title Company is unconditionally committed to issue the
Title Policy to Developer, at the Close of Escrow;
(5) The Agency and Developer have entered into a mutually
agreeable Reciprocal Easement Agreement;
(6) The Agency deposits all of the items into the Escrow required
by Section 3.4; and
(7) Developer approves the Escrow Holder's final estimated
closing/settlement statement;
(8) The Agency shall have entered into an agreement to terminate
the leasehold interest of National Advertising Co, pursuant to the lease dated November 4, 1985,
and for the removal of the billboard facing Arrow Highway on or before November 30, 2011.
(9) Agency has caused the demolition and removal from Developer
Property of existing on-site pavements, walks, curbs, gutters, septic tanks and other
improvements, except the billboards.
(10) The Agency shall have processed necessary entitlements to
convey the Developer Property from the Agency to Developer as one legal parcel in compliance
with the Subdivision Map Act (California Government Code Section 66410 et seq.). Agency
45636.0600115951390.9 20
shall expedite the processing of the necessary entitlements to comply with this condition so as to
complete it as soon as practicable following the Escrow Opening Date;
(11.) The representations, warranties and covenants of Agency set
forth in Section 2.6 are true and correct in all material respects on the Effective Date and on the
Escrow Closing Date.
(b) Agency's Conditions. The Agency's obligation to sell the Developer
Property to Developer on or before the Escrow Closing Date shall be subject to the satisfaction
or waiver of each of the following conditions precedent, which can only be waived in writing by
the Agency:
(1) Developer deposited the Earnest Money Deposit into Escrow,
pursuant to Section 2.1(a).
(2) Developer agrees to accept the title to and conveyance of the
Developer Property, pursuant to Section, 2.2;
(3) Developer delivers its Due Diligence Investigation Conclusion
Notice to both the Agency and the Escrow Holder indicating Developer's unconditional
acceptance of the physical condition of the Developer Property, prior to the expiration of the Due
Diligence Period;
(4) The City's Planning Commission finds, pursuant to
Government Code Section 65402, that the Project is consistent with the City's General Plan;
(5) Developer submits to the Agency, at least ten (10) days prior to
the Escrow Closing Date, evidence satisfactory to the Agency, in the Agency's sole and absolute
discretion, that Developer has obtained all Governmental Agency approvals necessary for the
development of the Project on the Developer Property;
(6) Developer delivers to the Agency, at least ten (10) days prior to
the Escrow Closing Date, in form and substance acceptable to the Agency, a letter of
commitment from a Lender to make and fund a Loan to Developer at the Close of Escrow for the
construction and installation of the entire Project, in form and substance reasonably acceptable to
Agency;
(7) Developer delivers to the Agency, at least ten (10) days prior to
the Escrow Closing Date, in form and substance acceptable to the Agency, a legally binding
written contract between Developer and a licensed California general contractor experienced in
the construction and installation of projects similar to the Project for the construction and
installation of the Project on the Developer Property in accordance with the Scope of
Development, the Schedule of Performance, and building and landscaping plans and
specifications approved by the City, subject to any conditions of any such approvals, and which
contract requires Developer to provide payment security pursuant to Civil Code Section 3110.5.
Said contract shall state that it is contingent upon the consummation of the transactions set forth
in this Agreement;
45636.0600n5951390.9 21
(8) Developer deposits all of the items into Escrow required by
Section 3.3;
(9)
closing/settlement statement;
The Agency approves the Escrow Holder's final estimated
(10) The Agency and Developer have entered into a mutually
agreeable Reciprocal Easement Agreement;
(1 l) Developer performs all of its material obligations required to be
performed by Developer under this Agreement prior to Close of Escrow; and
(12) The representations, warranties and covenants of Developer set
forth in ARTICLE IX are true and correct in all material respects on the Effective Date and on
the Escrow Closing Date.
(13) Agency shall have obtained good and marketable title from the
City of the Developer and Agency Parcels.
Section 3.3 Developer's Escrow Deposits. Following satisfaction or waiver of each
of Developer's conditions to the Close of Escrow set forth in Section 3.2(a) and, at least, four (4)
business days prior to the Escrow Closing Date scheduled by the Escrow Holder in a writing
delivered to each of the Parties, Developer shall deposit the following funds and documents into
the Escrow and, concurrently, provide a copy of each such document to the Agency:
(a) Purchase Price. The Purchase Price, less the Earnest Money Deposit,
plus any additional funds required to be deposited into the Escrow by Developer under the terms
of this Agreement to close the Escrow, all in immediately available funds; and
(b) PCO Report. A PCO Report executed by the authorized representative(s)
of Developer;
(c) Acceptance of Agency Deed. The Certificate of Acceptance of the
Agency Deed, in substantially the form attached to the Agency Deed, executed by the authorized
representative(s) of Developer in recordable form;
(d) Notice of Agreement. The Notice of Agreement executed by the
authorized representative(s) of Developer in recordable form;
(e) Construction Loan Deed of Trust. A Deed of Trust securing a Loan to
Developer to finance construction and installation of the entire Project, executed by the
authorized representative(s) of Developer in recordable form; and
(f) Reciprocal Easement Agreement. The Reciprocal Easement Agreement,
in the form agreed to by and between the Parties, executed by the authorized representative(s) of
Developer in recordabie form.
45636.0600n5951390.9 22
Section 3.4 Agency's Escrow Deposits. Following satisfaction or waiver of each of
the Agency's conditions to Close of Escrow set forth in Section 3.2(b) and, at least, four (4)
business days prior to the Escrow Closing Date scheduled by the Escrow Holder in a writing
delivered to each of the Parties, the Agency shall deposit the following funds and documents into
the Escrow and, concurrently, provide a copy of each such document to .Developer:
(a) Agency Deed. The Agency Deed executed by the authorized
representative(s) of the Agency in recordable form;
(b) FIRPTA Affidavit. The FIRPTA Affidavit completed and executed by
the authorized representative(s) of the Agency;
(c) Notice of Agreement. The Notice of Agreement executed by the
authorized representative(s) of the Agency in recordable form; and
(d) Form 593. A Form 593 executed by the authorized representative(s) of
the Agency; and
(e) Reciprocal Easement Agreement. The Reciprocal Easement Agreement,
in the form agreed to by and between the Parties, executed by the authorized representative(s) of
the Agency in recordable form.
Section 3.5 Closing Procedure. When each of Developer's Escrow deposits, as set
forth in Section 3.3, and each of the Agency's Escrow deposits, as set forth in Section 3.4, are
deposited into the Escrow, the Escrow Holder shall request confirmation in writing from both the
Agency and Developer that each of their respective conditions to the Close of Escrow, as set
forth in Section 3.2, are satisfied or waived. Upon the Escrow Holder's receipt of written
confirmation from both the Agency and Developer that each of their respective conditions to the
Close of Escrow are either satisfied or waived, the Escrow Holder shall close the Escrow by
doing all of the following:
(a) Insertion of Dates. The Escrow Holder shall insert the Escrow Closing
Date into the Notice of Agreement, as the date of such document, prior to the recordation of such
document.
(b) Recordation of Documents. File the Agency Deed, with Developer's
certificate of acceptance attached, the Notice of Agreement, the Reciprocal Easement
Agreement, and each Deed of Trust with the Office of the Recorder of the County of Los
Angeles, California, for recordation in the order set forth in Section 3.7;
(c) Distribution of Recorded Documents. Distribute conformed copies of
each recorded document to the Party or person designated for such distribution in Section 3.7;
(d) PCO Report. File the PCO Report with the Office of the Recorder of the
County of Los Angeles, California;
(e) FIRPTA Affidavit. File the FIRPTA Affidavit with the United States
Internal Revenue Service;
45636.0600115951390.9 23
Board;
(1) Form 593. File the Form 593 with the State of California Franchise Tax
(g) Title Policv. Obtain and deliver to Developer the Title Policy;
(h) Purchase Price. Deliver the Purchase Price to the Agency, less the
Agency's share of the Escrow closing costs, and less any other charges to the account of the
Agency, and return all remaining funds held by the Escrow Holder for the account of Developer
to Developer, less Developer's share of the Escrow closing costs, and less any other charges to
the account of Developer.
(i) Report to IRS. Following the Close of Escrow and prior to the last date
on which such report is required to be filed with the Internal Revenue Service, if such report is
required pursuant to Section 6045(e) of the Internal Revenue Code, the Escrow Holder shall
report the gross proceeds of the purchase and sale of the Developer Property to the Internal
Revenue Service on Form 1099-B, W-9 or such other form(s) as may be specified by the Internal
Revenue Service pursuant to Section 6045(e). Upon the filing of such reporting form with the
Internal Revenue Service, the Escrow Holder shall deliver a copy of the filed form to the Agency
and Developer.
Section 3.6 Close of Escrow. Close of Escrow shall occur on or before the Escrow
Closing Date. If for any reason the Close of Escrow has not occurred on or before the Escrow
Closing Date, then any Party not then in default of this Agreement may cancel the Escrow and
terminate this Agreement, without liability to the other Party or any other Person for such
cancellation and termination, by delivering written notice of termination to both the other Party
and the Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 3.10.
Without limiting the right of either Party to cancel the Escrow and terminate this Agreement,
pursuant to the preceding sentence, if the Escrow does not close on or before the Escrow Closing
Date, and neither Party has exercised its contractual right to cancel the Escrow and terminate this
Agreement before such time, then the Escrow shall close as soon as reasonably possible
following the first date on which the Escrow Holder is in a position to close the Escrow, pursuant
to the terms and conditions of this Agreement.
Section 3.7 Recordation and Distribution of Documents. Escrow Holder shall
cause the following documents to be recorded in the official records of the Recorder of the
County of Los Angeles. California, in the following order at the Close of Escrow: (i) the Agency
Deed, with Developer's certificate of acceptance attached, (ii) the Notice of Agreement, (iii) the
Reciprocal Easement Agreement; (iv) each Deed of Trust, and (v) any other documents to be
recorded through the Escrow upon the joint instructions of the Parties. The Escrow Holder shall
deliver conformed copies of all documents recorded through the Escrow to the Agency and
Developer and any other person designated in the joint escrow instructions of the Parties to
receive a conformed copy of each such document, each showing all recording information.
Section 3.8 Escrow Closing Costs, Taxes and Title Policy Premium. The Agency
shall pay the Escrow fees and such other costs as the Escrow Holder may charge for the conduct
of the Escrow. The Escrow Holder shall notify Developer and the Agency of the costs to be
borne by each of them at the Close of Escrow by delivering the Escrow Holder's estimated
4S6360600 1 1595 1390.9 24
closing/settlement statement to both the Agency and Developer, at least, four (4) business days
prior to the Escrow Closing Date. The Agency shalt pay the premium charged by the Title
Company for the CLTA portion of the Title Policy, exclusive of any endorsements or other
supplements to the coverage of the Title Policy that may be requested by Developer. Developer
shall pay the cost to ALTA portion of the Title Policy, any endorsements to the Title Policy, any
and all recording fees, documentary transfer taxes and any and all other charges, fees and taxes
levied by a governmental authority relative to the conveyance of the Developer Property through
the Escrow and the cost of any endorsements or supplements to the coverage of the Title Policy
requests by Developer.
Section 3.9 Escrow Cancellation Charges. If the Escrow fails to close due to the
Agency's material default under this Agreement, the Agency shall pay all ordinary and
reasonable cancellation charges relating to the Escrow and the Title Policy. if the Escrow fails to
close due to Developer's material default under this Agreement, Developer shall pay all ordinary
and reasonable cancellation charges relating to the Escrow and Title Policy. If the Escrow fails
to close for any reason other than the material default of either Developer or the Agency,
Developer and the Agency shall each pay one-half (1/2) of any ordinary and reasonable
cancellation charges relating to the Escrow and the Title Policy.
Section 3.10 Escrow Cancellation. If the Escrow is cancelled and this Agreement is
terminated pursuant to a contractual right granted to a Party in this Agreement to cancel the
Escrow and terminate this Agreement, other than due to the default of a Party, the Parties shall
do each of the following:
(a) Cancellation Instructions. The Parties shall, within three (3) business
days following receipt of the Escrow Holder's written request, execute any reasonable Escrow
cancellation instructions requested by the Escrow Holder;
(b) Return of Funds and Documents. Within ten (10) days following receipt
by the Parties of a settlement statement from the Escrow Holder of cancellation charges
regarding the Escrow and the Title Policy, if any: (i) Developer or the Escrow Holder shall
return to the Agency any documents previously delivered by the Agency to Developer or the
Escrow Holder regarding the Escrow, (ii) the Agency or the Escrow Holder shall return to
Developer all documents previously delivered by Developer to the Agency or the Escrow Holder
regarding the Escrow; and (iii) the Escrow Holder shall return to Developer any funds deposited
into the Escrow, except as otherwise provided in either Section 2.1(a) or Section 10.3, less
Developer's share of customary and reasonable Escrow and title order cancellation charges
regarding the Escrow and the Title Policy, if any.
ARTICLE IV
PROJECT DEVELOPMENT
Section 4.1 Developer's Covenant to Undertake Project. Developer covenants to
and for the exclusive benefit of the Agency that Developer shall commence and complete the
development of the Project on the Developer Property, within the time period for such action set
forth in the Schedule of Performance. Developer covenants and agrees for itself, its successors
45636.0600115951390.9 25
and assigns that the .Developer Property shall be improved and developed with the Project, in
conformity with the terms and conditions of this Agreement, the Scope of Development, the
Schedule of Performance, any and all plans, specifications and similar development documents
required by this Agreement, except for such changes as may be mutually agreed upon in writing
by and between Developer and the Agency, and in conformity with all applicable Governmental
Requirements. The covenants of this Section 4.1 shall run with the land of the Developer
Property, until the earlier of the Opening Date or the fourth (Lth) anniversary of the date of the
Close of Escrow.
Section 4.2 Developer's Changes to Project Plans and Specifications During
Course of Construction. Developer shall have the right, during the course of construction of
the Project, to make "minor field changes," without seeking the approval of the Agency, if such
changes do not affect the type of use to be conducted within all or any portion of a structure.
"Minor field changes" shall be defined as those changes from the approved construction
drawings, plans and specifications that have no substantial effect on the Project and are made in
order to expedite the work of construction in response to field conditions. Nothing contained in
this Section 4.2 shall be deemed to constitute a waiver of or change in any Governmental
Requirements governing any such "minor field changes" or in any approvals by any
Governmental Agency otherwise required for any such "minor field changes."
Section 4.3 Construction Start and Completion of Project.
(a) Developer shall commence construction of the Project in accordance with
the Schedule of Performance and, thereafter, shall diligently proceed to complete the
construction of the Project, in a good and workmanlike manner, in accordance with the approved
plans, specifications and conditions for the Project approved by each Governmental Agency and
in accordance with the Schedule of Performance. On or before the Completion Date, Developer
shall:
(1) Record a Notice of Completion, in accordance with California
Civil Code Section 3093, for the entirety of the Project;
(2) Cause the Project to be inspected by each Governmental
Agency and correct any defects and deficiencies that may be disclosed by any such inspection;
(3) Cause all occupancy certificates and other licenses, permits and
authorizations necessary for the operation and occupancy of the Business to be duly issued.
(b) The Agency acting by and through its Executive Director may extend the
Completion Date for up to an additional sixty (60) days, in the aggregate. .
(c) After commencement of the work of improvement of the Project,
Developer shall not permit the work of improvement of the Project to cease or be suspended for
a time period in excess of thirty (30) calendar days, either consecutively or in the aggregate, for
any reason. Notwithstanding the foregoing, such thirty (30) calendar day period may be extended
by the Executive Director for up to an additional thirty (30) calendar days, in the aggregate.
4 563 6.0600 1 15951390.9 26
Section 4.4 Compliance with Laws. All work performed in connection with the
construction or installation of the Project shall comply with all Governmental Requirements.
Section 4.5 Schedule of Performance. All planning construction, installation and
other development obligations and responsibilities of Developer related to the Project shall be
initiated and completed within the times specified in the Schedule of Performance, or within
such reasonable extensions of such times granted by the Agency in writing or as otherwise
provided for in this Agreement.
Section 4.6 Attendance at Agency Meetings. Developer agrees to have one or more
of its employees or consultants who are knowledgeable regarding this Agreement and the
development of the Project, such that such person(s) can meaningfully respond to Agency or
Agency staff questions regarding the progress of the Project, attend meetings with Agency staff
or meetings of the Agency governing body, when requested to do so by Agency staff.
Section 4.7 Agency Right to Inspect Project and Developer Property. Officers,
employees, agents and representatives of the Agency shall have the right of. reasonable access to
the Developer Property, without the payment of charges or fees, during normal construction
hours, during the period of construction of the Project, upon reasonable notice by Agency to
Developer. The Parties agree that twenty-four (24) hours notice is reasonable. Any and all
officers, employees, agents or representatives of the Agency who enter the Developer Property
shall identify themselves at the construction management office or, if none, to the apparent on-
site construction supervisor on the Developer Property, upon their entrance on to the Developer
Property, and shall at all times be accompanied by a representative of Developer, while on the
Developer Property. Developer shall make a representative of Developer available for this
purpose at all times during normal construction hours, upon reasonable advance notice from the
Agency. The Agency shall indemnify and hold Developer harmless from injury, property
damage or liability arising out of the exercise by the Agency of the right of access to the
Developer Property provided in this Section 4.7, other than injury, property damage or liability
arising from the negligence or willful misconduct of Developer or its officers, agents or
employees or Developer's contractor. If in the Agency's reasonable judgment it is necessary, the
Agency shall have the further right, from time to time, to retain a consultant or consultants to
inspect the Project and verify compliance by Developer with the provisions of this Agreement.
Developer acknowledges and agrees that any such Agency inspections are for the sole purpose of
protecting the Agency's rights under this Agreement, are made solely for the Agency's benefit,
that the Agency's inspections may be superficial and general in nature, and are for the purposes
of informing the Agency of the progress of the Project and the conformity of the Project with the
terms and conditions of this Agreement, and that Developer shall not be entitled to rely on any
such inspection(s) as constituting the Agency's approval, satisfaction or acceptance of any
materials, workmanship, conformity of the Project with this Agreement or otherwise. Developer
agrees to make its own regular inspections of the work of construction and installation of the
Project to determine that the quality of the Project and all other requirements of the work of
construction and installation of the Project are being performed in a manner satisfactory to
Developer.
45636.06001 \5951390.9 27
Section 4.8 PREVAILING WAGES.
(a) DEVELOPER ACKNOWLEDGES THAT THE AGENCY HAS MADE
NO REPRESENTATION, EXPRESS OR IMPLIED, TO DEVELOPER OR ANY PERSON
ASSOCIATED WITH DEVELOPER REGARDING WHETHER OR NOT LABORERS
EMPLOYED RELATIVE TO THE CONSTRUCTION, INSTALLATION OR OPERATION
OF THE PROJECT MUST BE PAID THE PREVAILING PER DIEM WAGE RATE FOR
THEIR LABOR CLASSIFICATION, AS DETERMINED BY THE STATE OF CALIFORNIA,
PURSUANT TO LABOR CODE SECTIONS 1720, ET SEQ. DEVELOPER AGREES WITH
THE AGENCY THAT DEVELOPER SHALL ASSUME THE RESPONSIBILITY AND BE
SOLELY RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS
EMPLOYED RELATIVE TO THE CONSTRUCTION, INSTALLATION OR OPERATION
OF THE PROJECT MUST BE PAID THE PREVAILING PER DIEM WAGE RATE FOR
THEIR. LABOR CLASSIFICATION, AS DETERMINED BY THE STATE OF CALIFORNIA,
PURSUANT TO LABOR CODE SECTIONS 1720, ET SEQ.
(b) DEVELOPER, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND
ASSIGNS, WAIVES AND RELEASES THE AGENCY FROM ANY RIGHT OF.ACTION
THAT MAY BE AVAILABLE TO ANY OF THEM. PURSUANT TO LABOR CODE
SECTION 1.781. DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE
SECTION 1.542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS
SECTION 4.8, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR
THE RELEASE, WHICH IF
MATERIALLY AFFECTED
DEBTOR.
AT THE TIME OF EXECUTING
KNOWN BY HIM MUST HAVE
HIS SETTLEMENT WITH THE
BY INITIALING BELOW, DEVELOPER KNOWINGLY AND VOLUNTARILY
WANES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE
WAIVERS AND RELEASES OF THIS Section 4.8:
Initials of AjAhorized
Developer Rcpresentative
(c) ADDITIONALLY, DEVELOPER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS THE AGENCY, PURSUANT TO Section 10.9, AGAINST ANY
CLAIMS PURSUANT TO LABOR CODE SECTION 1781 ARISING FROM THIS
AGREEMENT OR THE CONSTRUCTION, INSTALLATION OR. OPERATION OF ALL OR
ANY PORTION OF THE PROJECT.
45636.06001'5951390.9 28
Section 4.9 Certificate of Completion.
(a) Following the completion of the Project, excluding any normal and minor
building "punch -list" items to be completed by Developer, and upon written request from
Developer for issuance of a Certificate of Completion, the Agency shall inspect the Project to
determine whether or not the Project has been completed in compliance with this Agreement. If
the Agency determines that the Project is complete and in compliance with this Agreement, the
Agency shall furnish. Developer with a Certificate of Completion for the Project. If the Agency
determines that the Project is not in compliance with this Agreement, the Agency shall send
written notice of each non -conformity to Developer, pursuant to Section 4.9(c).
(b) The Agency shall not unreasonably withhold the issuance of a Certificate
of Completion. A Certificate of Completion shall be evidence of the Agency's conclusive
determination of satisfactory completion of the Project pursuant to the terms of this Agreement.
After the recordation of a Certificate of Completion for the Project, any person then owning or
thereafter purchasing, leasing or otherwise acquiring any interest in the Developer Property
improved with the Project shall not (because of such ownership, purchase, lease or acquisition)
incur any obligation or liability under this Agreement regarding construction or installation of
the Project, except that such person shall be bound by any reservations, covenants, conditions,
restrictions and other interests affecting the Developer Property pursuant to this Agreement.
(c) if the Agency fails or refuses to issue a Certificate of Completion for the
Project, following a written request from Developer, the Agency shall, within fifteen (15)
calendar days following the Agency's receipt of Developer's written request or within three (3)
calendar days after the next regular meeting of the Agency governing body, whichever date
occurs later, provide Developer with a written statement setting forth the reasons for the
Agency's failure or refusal to issue a Certificate of Completion. The statement shall also contain
the Agency's opinion of the action(s) Developer must take to obtain a Certificate of Completion
from the Agency. If the reason for Developer's failure to complete the Project is confined to the
immediate unavailability of specific items or materials for construction or landscaping at a price
reasonably acceptable to Developer or other minor building "punch -list" items, the Agency may
issue its Certificate of Completion upon the posting of a bond or irrevocable standby letter of
credit by Developer in a form reasonably acceptable to the Agency in an amount representing the
fair value of the work on the Project remaining to be completed, as reasonably determined by the
Agency. If the Agency fails to provide such written statement, within the specified time period,
Developer shall be deemed, conclusively and without further action of the Agency, to have
satisfied the requirements of this Agreement with respect to the Project, as if a Certificate of
Completion had been issued by the Agency pursuant to this Agreement.
(d) A Certificate of Completion shall not be deemed to constitute a Notice of
Completion under Section 3093 of the California Civil Code, nor shall it act to terminate the
continuing covenants, restrictions or conditions contained in the Agency Deed or any other
instruments recorded against the Developer Property or set forth in this Agreement or otherwise.
A Certificate of Completion is not evidence of the compliance of the Project with any
Governmental Requirements. A Certificate of Completion shall not evidence the satisfaction of
any obligation of Developer to the Agency under this Agreement or otherwise, except
Developer's obligation to construct and install the Project.
45636,0600115951390.9 29
ARTICLE V
SPECIAL REDEVELOPMENT COVENANTS OF DEVELOPER
Section 5.1 Covenant to Maintain Developer Property on Tax Rolls.
(a) Developer shall cause the Developer Property to remain on the County of
Los Angeles, California, secured real property tax rolls until the Redevelopment Plan Expiration
Date.
(b) Until the Redevelopment Plan Expiration Date, Developer, for itself and
its successors and assigns, covenants and agrees to pay all property tax bills with respect to the
Developer Property and the Business on or before the last day for the timely payment of each
property tax installment on each December 10 and April 10 during such time period and to
timely pay all supplemental tax bills regarding the Developer Property issued by the County of
Los Angeles, California. Developer further covenants and agrees to provide to the Agency, on or
before each July 31 following the Opening Date, until the final anniversary of the Opening Date
prior to the Redevelopment Plan Expiration Date: (i) a true and correct copy of all property tax
assessment notices, property tax bills and property tax assessment correspondence by and
between Developer and the County of Los Angeles, California, regarding the Developer Property
and the Business, with respect to the preceding fiscal year of the County of Los Angeles,
California, and (ii) cancelled checks issued by Developer in payment of all property tax
payments made to the County of Los Angeles, California, regarding the Developer Property and
the Business, with respect to the preceding fiscal year of the County of Los Angeles, California.
(c) The covenants of this Section 5.1 shall run with the land of the Developer
Property and bind successive owners of the Developer Property, and shall remain in effect until
the Redevelopment Plan Expiration Date.
Section 5.2 Covenant Regarding the Operation of the Business; Restrictions on
the Use of the Developer Property. Developer covenants to the Agency to complete the Project
and cause the Business to be open to the public on the Opening Date, and to cause the Business
to continuously operate on the Developer Property throughout the entirety of the Operating
Period. For purposes of this Section 5.2 "continuously operate" means the Business shall not
cease to operate for a period of ninety (90) consecutive calendar days or more.
(a) Designation of City as Point of Sale. Developer shall designate the City
as the "point of sale" in all reports to the BOE for all Business Activities occurring on or through
the Developer Property. Developer shall cause the Business to, for the full Operating Period, at
its sole cost and expense, maintain all permits, contractual arrangements, licenses, and
registrations necessary for it to lawfully conduct Business Activities and to designate the City as
the "point of sale" in all reports and returns submitted to the BOE.
(b) Developer Property Use Restrictions. Developer covenants that the
Developer Property shall be used solely for operating the Business throughout the entirety of the
Operating Period. if Developer desires to change the use of the Developer Property during the
Operating Period, it shall obtain Agency's prior written approval to make such change, such
45636.06001\5951390.9 30
approval to be made in the Agency's sole but reasonable discretion. The following uses of the
Developer Property, or the building to be constructed thereon as part of the Project, shall not be
permitted: (i) divided and subleased for the purpose of storing personal property; (ii) divided and
subleased to other vendors to sell goods or services; or (iii) adult entertainment.
(c) Covenants Run With the Develoner Property. The covenants of this
Section 5.2 shall run with the Developer Property and bind successive owners to the Developer
Property, and shall remain in effect during the Operating Period.
Section 5.3 Developer's Covenant Not to Accept Prohibited Financial Assistance.
Developer covenants to the Agency that during the Operating Period, Developer shall not
directly or indirectly solicit, accept or enter into any agreement concerning any Prohibited
Financial Assistance from any other public or private person or entity, to the extent such
Prohibited Financial Assistance is given for the purpose of causing or would result in: (i) the
relocation of the point of sale for Business Activities from the City; or (ii) a material (i.e. five
percent (5%) or greater) reduction in the amount of Local Sales Tax Revenues which would be
generated from the Business Activities in the absence of such an agreement. The covenants of
this Section 5.3 shall run with the Developer Property and bind successive owners of the
Developer Property, and shall remain in effect during the Operating Period.
Section 5.4 No Conveyance to Tax Exempt Entity.
(a) Developer covenants and agrees that neither Developer, nor its
successors or assigns shall use or Transfer all or any portion of the Developer Property or the
Business to any Person, or for any use of all or any portion of the Developer Property or the
Business that is partially or wholly exempt from the payment of real property taxes or that would
cause the exemption of the payment of all or any portion of real property taxes otherwise
assessable regarding the Developer Property or the Business, without the prior written consent of
the Agency, during the Operating Period.
(b) Developer further covenants and agrees that, if all or any portion of the
Developer Property or the Business shall be used or transferred by Developer, its successors or
assigns, in any manner that causes the exemption from payment of all or any portion of ad
valorem property taxes otherwise assessable against all or any portion of the Developer Property
or the Business, prior to the expiration of the Operating Period, Developer, its successors or
assigns shall pay to the Agency, in lieu of payment of such taxes, an amount determined by the
Agency to be one percent (1.0%) of the "full cash value" of the portion of the Developer
Property and the Business subject to such exemption from payment of ad valorem property taxes
each year. The Agency's determination of "full cash value" for in -lieu payment purposes under
this Section 5.4(b) shall be established by the Agency each year, if necessary, by reference to the
ad valorem property tax valuation principles and practices generally applicable to a county
property tax assessor under Section I of Article XIIIA of the California Constitution. The
Agency's determination of "full cash value" and that an in -lieu payment is due shall be
conclusive on such matters. If the Agency determines that an amount is payable by Developer to
the Agency as an in -lieu payment under this Section 5.4(b) in any tax year, then such amount
shall be paid to the Agency for that tax year within forty-five (45) days following transmittal by
the Agency to Developer of an invoice for payment of the in -lieu amount.
45636.0600115951390.9 31.
(c) The covenants of this Section 5.4 shall run with the land of the Developer
Property and bind successive owners of the Developer Property, and shall remain in effect during
the Operating Period.
Section 5.5 Maintenance Condition of the Developer Property. Developer for
itself, its successors and assigns, covenants and agrees that:
(a) The entirety of the Developer Property shall be maintained by Developer
in good condition and repair and a neat, clean and orderly condition, ordinary wear and tear
excepted, including, without limitation, maintenance, repair, reconstruction and replacement of
any and all asphalt, concrete, landscaping, utility systems, irrigation systems, drainage facilities
or systems, grading, subsidence, retaining walls or similar support structures, foundations,
signage, ornamentation, and all other improvements on or to the Developer Property, now
existing or made in the future by or with the consent of Developer, as necessary to maintain the
appearance and character of the Developer Property. Developer's obligation to maintain the
Developer Property described in the immediately preceding sentence shall include, without
limitation, (i) maintaining the surfaces in a level, smooth and evenly covered condition with the
type of surfacing material originally installed or such substitute as shall in all respects be equal in
quality, use, and durability; (ii) removing all papers, mud, sand, debris, filth and refuse and
thoroughly sweeping areas to the extent reasonably necessary to keep areas in a clean and
orderly condition; (iii) removing or covering graffiti with the type of surface covering originally
used on the affected area, (iv) placing, keeping in repair and replacing any necessary and
appropriate directional signs, markers and lines; (v) operating, keeping in repair and replacing
where necessary, such artificial lighting facilities as shall be reasonably required; (vi) providing
security services as reasonably indicated; and (vii) maintaining, mowing, weeding, trimming and
watering all landscaped areas and making such replacements of plants and other landscaping
material as necessary to maintain the appearance and character of the landscaping, all at the sole
cost and expense of Developer. Developer's obligation to maintain the Developer Property
described in the two immediately preceding sentences is refmcd to in this Agreement as the
"Maintenance Standard." Developer may contract with a maintenance contractor to provide
for performance of all or part of the duties and obligations of Developer with respect to the
maintenance of the Developer Property; provided, however, that Developer shall remain
responsible and liable for the maintenance of the Developer Property, at all times.
(b) If, at any time following the Close of Escrow, there is an occurrence of
an adverse condition on any area of the Developer Property in contravention of the Maintenance
Standard (each such occurrence being a "Maintenance Deficiency"), then the Agency may
notify Developer in writing of the Maintenance Deficiency. If Developer fails to cure or
commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) calendar
days following its receipt of notice of the Maintenance Deficiency, the Agency may conduct a
public hearing, following transmittal of written notice of the hearing to Developer, at least, ten
(10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance
Deficiency exists and whether Developer has failed to comply with the provisions of this Section
5.5. If, upon the conclusion of the public hearing, the Agency finds that a Maintenance
Deficiency exists and remains uncured, the Agency shall have the right to enter the Developer
Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other
action at law or in equity that may then be available to the Agency to accomplish the abatement
45636.06001\5951390.9 32
of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a
Maintenance Deficiency on the Developer Property pursuant to this Section 5.5 that is not paid
within thirty (30) calendar days after written demand for payment from the Agency, shall accrue
interest at the rate of ten percent (10%) per annum, until paid.
(c) Graffiti, as defined in Government Code Section 38772, that has been
applied to any exterior surface of a structure or improvement on the Developer Property that is
visible from any public right-of-way adjacent or contiguous to the Developer Property, shall be
removed by Developer by either painting over the evidence of such vandalism with a paint that
has been color -matched to the surface on which the paint is applied, or graffiti may be removed
with solvents, detergents or water, as appropriate. if any such graffiti is not removed within
seventy-two (72) hours following the time of the discovery of the graffiti, the Agency shall have
the right to enter the Developer Property and remove the graffiti, without notice to Developer.
Any sum expended by the Agency for the removal of graffiti from the Developer Property
pursuant to this Section 5.5(c), shall be limited to an amount not to exceed Five Hundred Dollars
($500) per entry by the Agency. If any amount becoming due to the Agency under this Section
5.5(c) is not paid within thirty (30) calendar days after written demand to Developer from the
Agency, such amount shall accrue interest at the rate of ten percent (10%) per annum, until paid
in full.
(d) The obligations of Developer and its successors and assigns under
Section 5.5(a), Section 5.5(b) or Section 5.5(c) shall be secured by a lien against the Developer
Property. Developer hereby grants to the Agency a security interest in the Developer Property
with the power to establish and enforce a lien or other encumbrance against the Developer
Property, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure
the obligations of Developer and it successors under Section 5.5(a), Section 5.5(b) or Section
5.5(c), including the reasonable attorneys' fees and costs of the Agency associated with the
abatement of a Maintenance Deficiency or removal of graffiti. The recordation of the Agency
Deed and the Notice of Agreement shall provide record notice of such security interest in favor
of the Agency.
(e) The provisions of this Section 5.5, shall be a covenant running with the
land of the Developer Property and binding successive owners of the Developer Property until
the Redevelopment Plan Expiration Date and shall be enforceable by the Agency. Nothing in the
foregoing provisions of this Section 5.5 shall be deemed to preclude Developer from making any
alteration, addition, or other change to any improvement or landscaping on the Developer
Property that complies with applicable zoning and building regulations of the City.
Section 5.6 Obligation to Refrain from Discrimination. Developer covenants and
agrees for itself, its successors, its assigns and every successor -in -interest to all or any portion of
the Developer Property, that there shall be no discrimination against or segregation of any
person, or group of persons, on account of sex, marital status, race, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Developer Property nor shall Developer, itself or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-
tenants, sub -lessees or vendees of the Developer Property. The covenant of this Section 5.6 shall
45636.0600115951390 .9 33
be a covenant running with the land of the Developer Property and binding on successive owners
of the Developer Property, in perpetuity.
Section 5.7 Form of Non-discrimination and Non -segregation Clauses. Developer
covenants and agrees for itself, its successors, its assigns, and every successor -in -interest to all or
any portion of the Developer Property, that Developer, such successors and such assigns shall
refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or
enjoyment of all or any portion of the Developer Property on the basis of sex, marital status,
race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or
contracts pertaining to the Developer Property shall contain or be subject to substantially the
following non-discrimination or non -segregation covenants:
(a) In deeds: "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sub -tenants, sub -lessee, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land."
(b) In leases: "The Lessee herein covenants by and for itself... its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted
upon and subject to the following conditions: That there shall be no discrimination against or
segregation of any person or group of persons, on account of race, color, creed, religion, sex,
marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants lessees, sub -lessee, sub -tenants, or vendees in the premises herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person
claiming under or through it, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or occupancy, of tenants,
lessees, sub -lessees, sub -tenants, or vendees of the premises herein transferred." The foregoing
provision shall be binding upon and shall obligate the contracting party or parties and any
subcontracting party or parties, or other transferees under the instrument.
(d) The covenant of this Section 5.7 shall be a covenant running with the
land of the Developer Property and binding on successive owners of the Developer Property, in
perpetuity.
45636.06001\5951390.9 34
Section 5.8 Developer's Covenant to Defend this Agreement. Developer
acknowledges that the Agency is a "public entity" and/or a "public agency" as defined under
applicable California law. Therefore, the Agency must satisfy the requirements of certain
California statutes relating to the actions of public entities, including, without limitation, CEQA.
Also, as a public body, the Agency's action in approving this Agreement may be subject to
proceedings to invalidate this Agreement or mandamus. Developer assumes the risk of delays
and damages that may result to Developer from any third -party legal actions related to the
Agency's approval of this Agreement or the pursuit of the activities contemplated by this
Agreement, even in the event that an error, omission or abuse of discretion by the Agency is
determined to have occurred. If a third -party files a legal action regarding the Agency's approval
of this Agreement or the pursuit of the activities contemplated by this Agreement, the Agency
may terminate this Agreement on thirty (30) days advance written notice to Developer of the
Agency's intent to terminate this Agreement, referencing this Section 5.8, without any further
obligation to perform the terms of this Agreement and without any liability to Developer
resulting from such termination, unless Developer unconditionally agrees to indemnify and
defend the Agency, with legal counsel acceptable to the Agency, against such third -party legal
action, within thirty (30) calendar days following receipt of the Agency's notice of intent to
terminate this Agreement, including without limitation paying all of the court costs, attorney
fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and
the expenses of any and all financial or performance obligations resulting from the disposition of
the legal action. Any such agreement between the Agency and Developer must be in a separate
writing and reasonably acceptable to the Agency in both form and substance. Nothing contained
in this Section 5.8 shall be deemed or construed to be an express or implied admission that the
Agency may be liable to Developer or any other person for damages or other relief alleged from
any alleged or established failure of the Agency to comply with any statute, including, without
limitation, CEQA.
Section 5.9 Environmental Indemnity of the Agency by Developer.
(a) Developer agrees, at its sole cost and expense, to fully indemnify,, protect,
hold harmless, and defend (with counsel selected by Developer and approved by the Agency)
each and every Agency Parry from and against any and all Environmental Claims that may, at
any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, any
Agency Party.
(b) Developer shall pay to the Agency all costs and expenses including,
without limitation, reasonable attorneys' fees and costs, incurred by the Agency in connection
with enforcement of the aforementioned environmental indemnity.
(c) All obligations of Developer under the environmental indemnity given in
this Section 5.9 are payable on demand from the Agency. Any amount due and payable under
this Section 5.9 to the Agency that is not paid within thirty (30) calendar days after written
demand from the Agency for payment of such amount, with an explanation of the amounts
demanded, will bear interest from the date of the demand at the rate of ten percent (10%) per
annum or the maximum rate allowed by California law, whichever is less. Developer shall also
pay to the Agency all costs and expenses, including, without limitation, reasonable attorneys'
fees and costs, incurred by the Agency in connection with the environmental indemnity given in
45636.0600115951390 9 35
this Section 5.9 or the enforcement of such environmental indemnity. The environmental
indemnity given by Developer in this Section 5.9 will survive expiration or earlier termination of
this Agreement, until all Environmental Claims against the Agency Parties are completely barred
by applicable statutes of limitation.
Section 5.10 Insurance. Developer, to protect the Agency Parties against any and all
claims and liability for death, injury, loss and damage resulting from Developer's actions in
connection with this Agreement, the Developer Property and the Business, shall secure and
maintain the insurance coverage, described in and required by this Section 5.10, until the
Opening Date, subject to the provisions of Section 5.10(h), without limiting any insurance
coverage required to be obtained or maintained by Developer pursuant to any other document
associated with this Agreement. The Agency shall have no obligation under this Agreement,
until Developer provides the required policies and/or certificates to the Agency evidencing the
insurance required by this Section 5.10 and the Agency approves such evidence of insurance.
Developer shall maintain the following insurance coverage in full force and effect, until the
Opening Date, subject to Section 5.10(h):
(a) Workers' Compensation Insurance. Developer shall submit written proof
that Developer is insured against liability for workers' compensation in accordance with the
provisions of Section 3700 of the Labor Code. By executing this Agreement, Developer makes
the following certification, required by Section 1861 of the Labor Code:
1 am aware of the provisions of section 3700 of the Labor Code
which require every employer to be insured against liability for
workers' compensation or to undertake self-insurance in
accordance with the provisions of that code, and I will comply with
such provisions before commencing the performance of the work
of the Agreement.
(b) Developer Property Casualty Insurance. Insurance coverage insuring the
Developer Property and the Business against damage or loss by fire and such other. hazards
(including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil
commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the
broadest form of extended coverage endorsement available from time to time, in an amount not
less than the full insurable value of the Developer Property and the Business, with a deductible
amount not to exceed Twenty -Five Thousand Dollars ($25,000), providing all of the following
coverage:
(1) Against damage or loss by flood, if the Developer Property is
located in an area identified by the United States Secretary of Housing and Urban Development
or any successor or other appropriate authority (governmental or private) as an area having
special flood hazards and in which flood insurance is available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified,
supplemented, or replaced from time to time, on such basis and in such amounts as the Agency
may require;
45636.0600 115 9513 9 0.9 36
(2) A Builder's All Risk policy, with extended coverage, with
course of construction and completed value endorsements, for an amount at least equal to the full
insurable value of the Project, without gaps or lapsed coverage, for any completed portion of the
Project; and
(3) Against damage or loss by earthquake, in an amount and with a
deductible satisfactory to the Agency, if and to the extent such insurance is then customarily
required by Lenders holding security interests in property comparable to, and in the general
vicinity of, the Developer Property.
(4) Against damage or loss from perils of terrorism and acts of
terrorism, if and to the extent such insurance is then customarily required by Lenders holding
security interests in property comparable to, and in the general vicinity of, the Developer
Property.
(c) Commercial General Liability Insurance. Commercial General Liability
Insurance coverage, including, but not limited to, premises -operations, contractual liability
(specifically covering all indemnity and defense obligations of Developer pursuant to this
Agreement), products -completed operations hazards, personal injury (including bodily injury and
death), and broad form property damage for liability arising out of the construction and
installation of the Project and/or Developer's operation of the Developer Property and/or the
Business. The commercial general liability insurance coverage shall have minimum limits for
bodily injury and property damage liability of TWO MILLION DOLLARS ($2,000,000) each
occurrence and/or FOUR MILLION DOLLARS ($4,000,000) aggregate.
(d) Automobile Liability Insurance. Automobile Liability Insurance
coverage against claims of personal injury (including bodily injury and death) and property
damage covering all owned, leased, hired and non -owned vehicles used by Developer, with
minimum limits for bodily injury and property damage of ONE MILLION DOLLARS
($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such
insurance shall be provided by a business or commercial vehicle policy.
(e) Professional Errors and Omissions Insurance. If Developer hires a
consultant to provide design services, such as architectural or engineering services in connection
with all or any portion of the Project, Developer shall require each such consultant to provide
professional liability (errors and omissions) insurance, for liability arising out of, or in
connection with, the performance of such design services, with limits of not less than ONE
MILLION DOLLARS ($1,000,000).
(i) Contractor's Insurance. During the construction or the installation of the
Project, Developer shall require that each contractor performing work on the Project maintain the
following insurance coverage, at all times during the performance of such work:
(1) Each general contractor shall maintain Builder's Risk Insurance
to be written on an All Risk Completed Value form, in an aggregate amount equal to One
Hundred Percent (100%) of the full insurable value of the Project.
45636.M001 \5951390.9 37
(2) Each general contractor and each sub -contractor shall maintain
Commercial General Liability Insurance coverage with limits of not less than TWO MILLION
DOLLARS ($2,000,000) per occurrence and FOUR MILLION DOLLARS ($4,000,000)
aggregate to protect Developer during the construction and installation of the Project from claims
involving bodily injury and/or death and damage to the property of others.
(3) Each general contractor and each sub -contractor shall maintain
Automobile Liability Insurance coverage against claims of personal injury (including bodily
injury and death) and property damage covering all owned, leased, hired and non -owned vehicles
used in the performance of the contractor's obligations with minimum limits for bodily injury
and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO
MILLION DOLLARS ($2,000,000) aggregate. Such automobile liability insurance shall be
provided by a business or commercial vehicle policy.
(4). Each general contractor and each sub -contractor performing
work of construction or installation of the Project shall provide workers' compensation coverage
for all of such general contractor's or such sub -contractor's employees, unless the general
contractor's or sub -contractor's employees are covered by workers' compensation insurance
provided by Developer. If any class of employees engaged in work or services performed in
connection with the Project, is not covered by Labor Code Section 3700, Developer shall provide
and/or require each general contractor or sub -contractor to provide adequate workers'
compensation insurance covering such employees.
(g) The Commercial General Liability Insurance coverage required in
Section 5.10(c) and Section 5.10(1)(2), shall include an endorsement naming the Agency Parties,
as additional insured for liability arising out of or relates to this Agreement or the construction or
installation of the Project.
(h) If any of the insurance coverage required under this Agreement is written
on a claims -made basis, such insurance policy shall provide an extended reporting period
continuing through the fifth (51h) anniversary of the Opening Date. The requirements of this sub-
section (h) shall survive any expiration or termination of this Agreement and the recordation of
the Agency Deed and a Certificate of Completion for the Project.
(i) Subject to Section 5.10(h), all of the insurance coverage required under
this Section 5.10 shall be maintained by Developer or its contractors, as required by the terms of
this Agreement, and shall not be reduced, modified, or canceled without, at least, thirty (30)
calendar days prior written notice to the Agency. Also, phrases such as "endeavor to" and "but
failure to mail such notice shall impose no obligation or liability of any kind upon the company"
shall not be included in the cancellation wording of any certificates of insurance or any coverage
for the Agency Parties. Developer shall immediately obtain replacement coverage for any
insurance policy that is terminated, canceled, non -renewed, or whose policy limits are exhausted
or upon insolvency of the insurer that issued the policy.
6) All insurance obtained and maintained by Developer in satisfaction of the
requirements of this Agreement shall be fully paid for and non -assessable.
45636.0600 1'%5951390.9 38
(k) Failure by Developer to maintain all insurance coverage required by this
Section 5.10 in effect, as required in this Section 5.10, shall be an. Event of Default by
Developer. The Agency, at its sole option, may exercise any remedy available to it in connection
with such an Event of Default. The Agency may waive or modify the insurance coverage
requirements set forth in this Section 5.10 in the sole but reasonable discretion of the Agency's
Executive Director, upon written request by Developer to Agency. Alternatively, the Agency
may, at its sole option, purchase any such required insurance coverage and the Agency shall be
entitled to immediate payment from Developer of any premiums and associated costs paid by the
Agency for such insurance coverage. Any election by the Agency to purchase or not to purchase
insurance otherwise required by the terms of this Agreement to be carried by Developer shall not
relieve Developer of its obligation to obtain and maintain any insurance coverage required by
this Agreement.
Section 5.11 Forms of Insurance Policies; Additional Insured Endorsements;
Carrier Requirements; Evidence Of Insurance.
(a) All insurance to be obtained and maintained by Developer under Section
5.10 shall be issued by a company or companies listed in the then current "Best's Key Rating
Guide" publication with a minimum of an "A;VIII" rating and be admitted to conduct business in
the State of California by the State of California Department of Insurance.
(b) Primary Insured. Developer shall be the first or primary named insured
on each policy of insurance obtained or maintained by Developer in satisfaction of the insurance
requirements of this Agreement.
(c) Additional Insured Endorsements. The Agency Parties shall be named by
endorsement as additional insured under Developer's commercial general liability insurance
policy on an ISO Form CG 20 11 11 85 or equivalent form acceptable to the Agency, with such
modifications as the Agency may require. The Agency Parties shall also be named as additional
insured under Developer's automobile liability insurance policies on an endorsement form
acceptable to the Agency.
(d) Cross -Liability; Severability of Interests. Developer's commercial
general liability and automobile liability policies shall be endorsed to provide cross -liability
coverage for Developer and the Agency Parties and to provide severability of interests.
(e) Primary Insurance Endorsements for Additional Insured. Developer's
commercial general liability and automobile liability insurance policies shall be endorsed to
provide that the insurance afforded by those policies to the additional insured is primary and that
all insurance carried by the Agency Parties is strictly excess and secondary and shall not
contribute with Developer's commercial general liability or automobile liability insurance
policies.
(f) Scope of Coverage for Additional Insured. The coverage afforded to the
Agency Parties as additional insured under any policy of insurance obtained or maintained by
Developer in satisfaction of the insurance requirements of this Agreement must be at least as
45636.06001 \5951390.9 39
broad as that afforded to Developer and may not contain any terms, conditions, exclusions, or
limitations applicable to the Agency Parties that do not apply to Developer.
(g) Delivery of Certificate, Policy, and Endorsements. Before the Close of
Escrow, Developer shall deliver to the Agency all endorsements required by this Section 5.11
and original certificates of insurance for each insurance policy required to be obtained and
maintained by Developer under Section 5. 10, executed by an authorized agent of the insurer or
insurers, evidencing compliance with the liability insurance requirements of this Agreement.
The certificates shall provide for no less than thirty (30) calendar days' advance written notice to
the Agency from the insurer or insurers of any cancellation, non -renewal, or material change in
coverage or available limits of liability and shall confirm compliance with the liability insurance
requirements of this Agreement. Developer shall also deliver all required endorsements and
certificates to the Agency: (a) at least thirty (30) calendar days before the expiration date of any
insurance policy and (b) upon renewal of any insurance policy. Upon request from the Agency,
Developer shall deliver certified copies of all insurance policies obtained or maintained by
Developer in satisfaction of the insurance requirements of this Agreement. Receipt by the
Agency of evidence of insurance that does not comply with the requirements of this Agreement
shall not constitute a waiver of the insurance requirements of this Agreement.
(h) Concurrency of Primary, Excess, and Umbrella Policies. Developer's
liability insurance coverage may be provided by a combination of primary, excess, and umbrella
policies, but those policies must be absolutely concurrent in all respects regarding the coverage
afforded by the policies. The coverage of any excess or umbrella policy must be at least as broad
as the coverage of the primary policy.
(i) Insurance Independent of Indemnification. The insurance requirements
set forth in Section 5.10 and this Section 5.11 are independent of Developer's indemnification
and other obligations under this Agreement and shall not be construed or interpreted in any way
to satisfy, restrict, limit, or modify Developer's indemnification or other obligations or to limit
Developer's liability under this Agreement whether within, outside, or in excess of such
coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor
shall the provision of such insurance preclude the Agency from taking such other actions as are
available to it under any other provision of this Agreement or otherwise at law or in equity.
0) Deductibles and Self -Insured Retentions. All deductibles and self-
insured retentions under Developer's policies are subject to the Agency's prior written approval.
Developer shall pay any and all deductibles and self-insured retentions under all insurance
policies issued in satisfaction of the terms of this Agreement regarding any claims relating to the
Agency Parties.
(k) No Agency Representation Regarding Adequacy of Insurance. The
Agency makes no representation that the limits or forms of insurance coverage specified in this
Agreement are adequate to cover the property, the Business, business operations or obligations
under this Agreement.
(l) Waiver Of Subrogation. Developer shall cause each of the carriers
issuing any insurance policy obtained or maintained in satisfaction of the insurance requirements
45636.0600115951390.9 40
of this Agreement to waive any right of subrogation that such carrier may have or acquire in the
future against any or all of the Agency Parties in a form acceptable to the Agency.
(m) No Separate Insurance. Developer shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that required under Section
5.10, unless endorsed in favor of the Agency, as required by Section 5.10 or this Section 5.11.
(n) Full insurable Value. For purposes of this Agreement, the term "full
insurable value" means the actual cost of replacing the property in question, without allowance
for depreciation, as calculated from time to time (but not more often than once every calendar
year) by the insurance company or companies providing such insurance or, at the Agency's
request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by
Developer and approved by said insurance company or companies and the Agency. Developer
shall pay the cost of any such appraisal.
(o) Approval Not Warranty. No approval by the Agency of any insurer may
be construed to be a representation, certification, or warranty of its solvency and no approval by
the Agency as to the amount, type, or form of any insurance may be construed to be a
representation, certification, or warranty of its sufficiency by the Agency.
Section 5.12 Survival of Special Redevelopment Covenants. Each of the special
redevelopment covenants set fortli in this ARTICLE V shall be a covenant running with the land
of the Developer Property and binding on successive owners of the Developer Property for the
time period specifically set forth in each such special redevelopment covenant. Each such
special redevelopment covenant shall survive the Close of Escrow, execution and recordation of
the Agency Deed and issuance and recordation of a Certificate of Completion and any other
document related to conveyance of the Developer Property or construction or installation of the
Project, for the time period specifically set forth in each such special redevelopment covenant.
ARTICLE VI
FIN ANCING OF DEVELOPER PROPERTY ACQUISITION
AND PROJECT DEVELOPMENT
Section 6.1 No Un -Permitted Encumbrances. Developer shall not record and shall
not allow to be recorded against all or any portion of the Developer Property or the Project any
mortgage, deed of trust, encumbrance or lien that is not a Permitted Encumbrance. Developer
shall remove or shall have removed any Un -Permitted Encumbrance made or recorded against all
or any portion of the Developer Property or the Project or shall assure the satisfaction of any
such Un -Permitted Encumbrance to the satisfaction of the Agency. The covenants set forth in
this Section 6.1 regarding the placement of encumbrances on the Developer Property shall run
with the land of the Developer Property and bind successive owners of the Developer Property,
until recordation of the Certificate of Completion for the Project.
Section 6.2 Agency Right to Discharge Un -Permitted Encumbrances. After sixty
(60) calendar days prior written notice to Developer, the Agency shall have the right, but not the
obligation, to satisfy or remove any Un -Permitted Encumbrance against the Developer Property
45636.060015951390.9 41
or the Project and receive reimbursement from Developer for any amounts paid or incurred in
satisfying or removing any such Un -Permitted Encumbrance, upon demand. Nothing in this
Section 6.2, though, shall require Developer to pay or make provisions for the payment of any
tax, assessment, lien or charge that Developer is in the process of contesting the validity or
amount thereof, in good faith, and so long as such contest shall not subject all or any portion of
the Developer Property to forfeiture or sale.
Section 6.3 Rights of Lender and Agency Regarding Permitted Encumbrances.
(a) Developer shall promptly notify the Agency of any mortgage, deed of
trust or other financing, refinancing, encumbrance or lien asserted against or attached to all or
any portion of the Developer Property, prior to issuance of a Certificate of Completion for the
Project, whether by voluntary act of Developer or otherwise; provided, however, that no notice
of filing of preliminary notices or mechanic's liens need be given by Developer to the Agency,
prior to suit being filed to foreclose any such mechanic's lien.
(b) Whenever the Agency delivers any notice or demand to Developer
regarding any breach or default by Developer under this Agreement that, if not timely cured by
Developer, would entitle the Agency to terminate this Agreement, the Agency shall send a copy
of such notice to each Lender of which the Agency has received notice and a contact address for
transmittal of such notices. Whenever the Agency delivers any notice or demand to Developer
regarding any breach or default by Developer under this Agreement that, if not timely cured by
Developer, would entitle the Agency to exercise its power of termination over the fee estate of
all or any portion of the Developer Property, pursuant to Section 10.7, the Agency shall send a
copy of such notice or demand to each Lender of which the Agency has received notice and a
contact address for transmittal of such notice. Each Lender receiving a copy of any such notice
shall have the right, at its option, to commence the cure or remedy of any such default of
Developer and to diligently and continuously proceed with such cure or remedy, within the cure
period allowed to Developer under this Agreement, following its receipt of notice of the breach
or default. Nothing contained in this Agreement shall be deemed to permit or authorize any
Lender to undertake or continue the construction or installation of any portion of the Project
(beyond the extent necessary to conserve or protect improvements or construction already made),
without expressly assuming Developer's obligations under this Agreement by written agreement
satisfactory to the Agency, in which the Lender agrees to complete, in the manner provided in
this Agreement, the improvements to which the lien or title of the Lender relates and must
submit evidence satisfactory to the Agency that it has the qualifications and financial capability
necessary to perform such obligations.
(c) In any case where, ninety (90) calendar days after delivery of notice of a
breach or default of Developer under Section 6.3(b), an affected Lender has not exercised the
option provided in Section 6.3(b) to construct and install the applicable portions of the Project, or
has exercised the option, but has not proceeded diligently and continuously with construction or
installation, the Agency shall have the option, in the Agency's sole and absolute discretion, to
purchase the Loan of such Lender and any security interest of such Lender under its Loan
Documents, by payment to the Lender of the amount of its unpaid Loan, including principal,
accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the
Lender by Developer under its Loan Documents and, if the ownership of all or any portion of the
45636.0600115951390.9 42
Developer Property has vested in such Lender, the Agency, at its option, but not its obligation,
shall be entitled to a conveyance of any title or interest in the Developer Property vested in such
Lender from such Lender to the Agency or the Agency's designee.
(d) After expiration of the ninety (90) calendar day period, provided for in
Section 6.3(c), any affected Lender may demand, in writing, that the Agency act to exercise or
forego the option granted in Section 6.3(c). If the .Agency fails to exercise the right granted in
Section 6.3(c) within sixty (60) calendar days following the date of the Agency's receipt of such
written demand from a Lender, the Agency shall be conclusively deemed to have waived its right
of purchase of that Lender's Loan, pursuant to Section 6.3(c).
(e) In the event of a breach or default by Developer under any Loan
Documents, prior to the Opening Date, where the Lender has not exercised its option to complete
the Project under Section 6.3(b), the Agency may cure the default of Developer under the
applicable Loan Documents, but is under no obligation to do so, prior to completion of any sale
or foreclosure of all or any portion of the Developer Property under the applicable Loan
Documents. The Agency shall be entitled to reimbursement from Developer of all costs and
expenses incurred by the Agency in curing any default of Developer under any Loan Documents.
ARTICLE VII
MAINTENANCE AND DEVELOPMENT OF THE AGENCY PARCEL
Section 7.1 Maintenance of Agency Parcel. On or before November 30, 2011,
Agency shall, at Agency's sole cost and expense, demolish and remove all existing on-site
buildings and structures, pavements, walks, curbs, gutters and other improvements on the
Agency Parcel. Prior to June 1, 2012, Agency shall also landscape 6,000 sq. ft. of the Agency
Parcel, and shall pave and stripe 1956 sq. ft.. Developer shall, at Developer's sole cost and
expense, install a monument sign ("Monument Sign") at such time and with such design and
location as may be mutually agreed on by the Parties, to be located approximately at the corner
of the Agency Parcel facing the street. Developer shall maintain the Monument Sign. Developer
shall reimburse Agency for the costs of paving and striping said 3,856 sq. ft. area of the Agency
Parcel, with such reimbursement to be made within thirty (30) days of Agency's tender to
Developer of a written request for reimbursement, together with a copy of Agency's invoice
substantiating same. Developer shall, if required, pay prevailing wages for any work done
pursuant to or in accordance with this Section 7.1. Developer shall, at Developer's sole cost and
expense, maintain both the landscaped portion of the Agency Parcel as well as the portion used
for parking and for the Monument Sign. Agency shall, at Agency's sole cost and expense, pay
for the cost to water the landscaped portion of the Agency Parcel and for electricity for the
monument sign. Notwithstanding anything to the contrary set forth herein, Developer's
obligation to maintain any portion of the Agency Parcel shall be in effect for only so long as the
Agency owns the Agency Parcel. and such obligation shall terminate upon sale of the Agency
Property by Agency to a third parry.
Section 7.2 Development of the Agency Parcel. The Agency shall use reasonable
good faith efforts to develop the Agency Parcel as a full service restaurant ("Restaurant")
45636.06WV595139U.9 43
within five (5) years of the Effective Date in accordance with such plans and specifications as the
Agency shall draft and in accordance with all Federal, State and local laws, rules and regulations.
Section 7.3 Developer Purchase of Agency Parcel. if the Agency has not developed
the Agency Parcel as the Restaurant within five (5) years of the Effective Date, Developer shall
have the option to purchase the Agency Parcel from Agency at its then fair market value, taking
into account the restricted use conditions of such Agency Parcel set forth herein ("Fair Market
Value").
(a) Option Procedure.
(1) Developer shall exercise said option by delivering written notice to
Agency of Developer's exercise of the option to purchase the Agency Parcel, within thirty (30)
days following the five (5) year anniversary of the Effective Date. If Developer and Agency can
agree on an appraiser, Developer and Agency shall designate a qualified appraiser who shall
have had at least five (5) years experience relevant to vacant land in the ten (IA) mile radius
surrounding the City of Azusa (the "Appraiser") and the opinion of Fair Market Value as set
forth in an appraisal delivered by Appraiser to Developer and Agency shall establish the
purchase price of the Agency Parcel.. if Developer and Agency cannot agree on an Appraiser,
then each of Developer and Agency shall designate their own Appraisers. It is expected that all
Appraisers will familiarize themselves with this Agreement, the exhibits and riders hereto, and
such other documents as are deemed relevant by the Appraisers or either or both of them. Each
of the Appraisers shall submit to Developer and Agency, within sixty (60) days after his or her
appointment, a written determination of the then Fair Market Value.
(2) If the lower of the two appraisers' determinations is not less than ninety-
five percent (95%) of the other determination, then the average of the two determinations shall
be deemed to be the then Fair Market Value and conclusive and binding on the parties. If such be
not the case, then the Appraisers shall mutually select a third qualified and impartial Appraiser
who shall also have had at least five (5) years experience relevant to vacant land in the ten (10)
mile radius surrounding the City of Azusa (the "Third Appraiser"). The Third Appraiser shall
issue a determination of said Fair Market Value within sixty (60) days of his or her appointment
and the average of all three determinations shall be deemed to be the then Fair Market Value and
shall be conclusive and binding on the parties.
(3) The cost of these determinations shall be borne equally by Developer and
Agency.
45636.060015951390.9 44
(4) Developer and Agency shall open escrow within fifteen (15) days
following determination of the Fair Market Value as set forth hereinabove.
(5) Developer shall close escrow on the Agency Parcel not more than ninety
(90) days following the opening of escrow pursuant to this Section 7.3.
(6) Agency shall convey the Agency Parcel to the Developer by grant deed,
which shall provide that the agreement to convey the Agency Parcel is made and accepted upon
and subject to the following conditions:
(a) Use Restriction; No Speculation. That the Parties agree that the
Agency Parcel is being conveyed to the Developer for development and use solely as a parking
lot for the then remaining term of the Operating Period and not for speculation in undeveloped
land. Developer shall operate and maintain the Agency Parcel as a parking lot in accordance
with the City's applicable zoning requirements and the Redevelopment Plan for no less then the
remaining term of the Operating Period. All reasonably applicable covenants, conditions and
restrictions provided for in this Agreement and the Reciprocal Easement Agreement shall be
applied to the use and maintenance of the Agency Parcel upon its conveyance to Developer; and
(b) Discrimination.
(1) Standards. That there shall be no discrimination against or
segregation of any person or group of persons, on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure,
or enjoyment of the Agency Parcel nor shall Developer or any Person claiming under or through
Developer 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 Property.
(2) Interpretation. Notwithstanding 7.3(b)(1), with respect to
familial status, 7.3(b)(1) shall not be construed to apply to housing for older persons, as defined
in Section 12955.9 of the Government Code. With respect to familial status, nothing in 7.3(6)(1)
shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the
Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to 7.3(b)(1).
ARTICLE VIII
RECIPROCAL ACCESS AND PARKING EASEMENT
Section 8.1 Need For Reciprocal Easement Agreement. Developer and the Agency
acknowledge and agree that the Reciprocal Easement Agreement is necessary for Developer's
access to the Project on the Developer Property and upon completion of the Project, for access to
the Business by Developer's employees and customers. In addition, the Parties desire to provide
access to each other for use of the parking lot on the Developer Property and the Agency Parcel,
45636.06W[\5951390.9 45
without which Developer will not have sufficient parking required to operate the Business and
the Agency will not have sufficient parking required to operate the Restaurant. Developer also
requires that a monument sign be placed on the Agency Parcel that includes signage for the
Business located on the Developer Property and space for signage for the restaurant use
anticipated to be developed on the Agency Parcel. The monument sign shall identify the project
is located within the City of Azusa. The Parties shall each execute the Reciprocal Easement
Agreement prior to the Close of Escrow as set forth in Section 3.3(f) and Section 3.4(e)
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF DEVELOPER
Section 9.1 Representations and Warranties by Developer. Developer makes the
following representations, covenants and warranties, as of the Effective Date, and acknowledges
that the execution of this Agreement by the Agency is made in material reliance by the Agency
on such covenants, representations and warranties of Developer:
(a) Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement, such that this Agreement is valid and
enforceable against Developer in accordance with its terms and each instrument to be executed
by Developer pursuant to or in connection with this Agreement will, when executed, be valid and
enforceable against Developer in accordance with its terms. No approval, consent, order or
authorization of, or designation or declaration of any other person, is required in connection with
the valid execution, delivery or performance of this Agreement by Developer.
(b) if Developer becomes aware of any act or circumstance that would
change or render incorrect, in whole or in part, any representation or warranty made by
Developer under this Agreement, whether as of the date given or any time thereafter, whether or
not such representation or warranty was based upon Developer's knowledge and/or belief as of a
certain date, Developer will give immediate written notice of such changed fact or circumstance
to the Agency.
ARTICLE X
DEFAULTS, REMEDIES AND TERMINATION
Section 10.1 Defaults -General.
(a) Subject to any extensions of time provided for in this Agreement, failure
or delay by either Party to perform any term or provision of this Agreement shall constitute a
default under this Agreement; provided, however, that if a Party otherwise in default commences
to cure, correct or remedy such default, within thirty (30) calendar days after receipt of written
notice from the non -defaulting Party specifying such default, and shall diligently and
continuously prosecute such cure, correction or remedy to completion such Party shall not be
deemed to be in default under this Agreement; provided, however, that where any other time
limit for the completion of such cure, correction or remedy is specifically set forth in this
4563 6.06001159513 90.9 46
Agreement, then solely within such specified time limit), which shall be instead of and not in
addition to the time period otherwise provided in this Section 10.1(a).
(b) The non -defaulting Party shall give written notice of default to the Party
in default, specifying the default complained of by the non -defaulting Party. Delay in giving
such notice shall not constitute a waiver of any default nor shall it change the time of default.
(c) Any failure or delays by either Party in asserting any of its rights and/or
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by either Party in asserting any of its rights and/or remedies shall not deprive
either Party of its right to institute and maintain any action or proceeding that such Party may
deem necessary to protect, assert or enforce any such rights or remedies.
Section 10.2 Events of Default. In addition to other acts or omissions of Developer that
may legally or equitably constitute a default or breach of this Agreement, the occurrence of any
of the following specific events, prior to the Opening Date, shall constitute an "Event of
Default" under this Agreement and shall not be subject to the notice and opportunity to cure
provisions of Section 10.1:
(a) Any default by Developer under any Loan Documents for any purpose or
reason that remains uncured following any applicable notice and expiration of any applicable
cure period under such Loan Documents.
(b) Any default by Developer of any of the covenants or conditions of this
Agreement that is not cured to the Agency's reasonable satisfaction within thirty (30) days
following written notice of the default to Developer from the Agency or the expiration of another
applicable shorter cure period specifically set forth in this Agreement.
(c) Any failure of Developer to satisfy any of the requirements of Section
2.4.
(d) Any representation, warranty or disclosure made to the Agency by
Developer regarding this Agreement or the Project is materially false or misleading, whether or
not such representation or disclosure appears in this Agreement.
(e) Developer fails to make any payment or deposit of funds or provide any
bond or other security required under this Agreement or to pay any other charge set forth in this
Agreement, following seven (7) days' written notice of such failure to Developer from the
Agency.
(t} Any material deviation in the work of construction or installation of the
Project from the approved Scope of Development, without the prior written approval of the
Agency.
(g) The appearance of defective workmanship or materials and such defects
are not corrected or substantially corrected, within thirty (30) days after receipt of written notice
of such defective workmanship or materials to Developer from the Agency.
45636.0600)5951390.9 47
(h) Any portion of the Project encroaches over setback lines or the Developer
Property's boundaries, or violates any easement rights and the condition is not corrected, within
thirty (30) days following written notice of such encroachment or violation to Developer from
the Agency.
(i) The construction or installation of the Project is delayed or suspended for
a period in excess of that permitted under Section 4.3(c); or the development of the Project does
not proceed with due diligence, pursuant to the Schedule of Performance, subject to the
occurrence of an Unavoidable Delay; or the Project is not completed by the Completion Date.
0) There occurs any event of dissolution, reorganization or termination of
Developer that adversely and materially affects the operation or value of the Developer Property
or the Business, and such event is not corrected within five (5) days following written notice of
such event to Developer from the Agency.
(k) The occurrence of a Transfer, whether voluntarily or involuntarily or by
operation of law, in violation of the terms and conditions of this Agreement.
(1) Developer becomes insolvent or a receiver is appointed to conduct the
affairs of Developer under state or federal law;
(m) Developer's legal status as a California limited liability company
authorized by the Secretary of State of the State of California to transact business in California is
suspended or terminated.
Section 10.3 PRE-CLOSING LIQUIDATED DAMAGES TO THE AGENCY.
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS
AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE AGENCY MAY CANCEL THE
ESCROW, PURSUANT TO SECTION 3. 10, AND TERMINATE THIS AGREEMENT UPON
CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT, THE
AGENCY SHALL BE RELIEVED OF ANY OBLIGATION OF THE AGENCY UNDER THIS
AGREEMENT TO SELL OR CONVEY THE DEVELOPER PROPERTY TO DEVELOPER.
ANY SUCH ESCROW CANCELLATION AND TERMINAT10N OF THIS AGREEMENT
SHALL BE WITHOUT ANY LIABILITY OF THE AGENCY TO DEVELOPER OR ANY
OTHER PERSON ARISING FROM SUCH ACTION, T14E AGENCY AND DEVELOPER
ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO
ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY THE
AGENCY, IN THE EVENT OF A CANCELLATION OF THE ESCROW AND
TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF
DEFAULT BY DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF
ESCROW. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO
ASCERTAIN THE ACTUAL DAMAGES THE AGENCY WOULD SUFFER, IN THE
EVENT OF A CANCELLATION OF THE ESCROW AND TERMINATION OF THIS
AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY
DEVELOPER. UNDER THIS AGREEMENT PRIOR TO T14E CLOSE OF ESCROW, THE
AGENCY AND DEVELOPER AGREE THAT A REASONABLE ESTIMATE OF THE
AGENCY'S DAMAGES IN SUCH EVENT IS THE RETENTION BY THE AGENCY OF
45636,06001\5951390.9 48
THE ERNEST MONEY DEPOSIT. THEREFORE, UPON THE CANCELLATION OF THE
ESCROW AND TERMINATION OF THIS AGREEMENT BY THE AGENCY DUE TO THE
OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS
AGREEMENT, PRIOR TO THE CLOSE OF ESCROW, THE ESCROW HOLDER SHALL
IMMEDIATELY CANCEL THE ESCROW AND THE AGENCY SHALL RETAIN THE
EARNEST MONEY DEPOSIT. RECEIPT OF THE ERNEST MONEY DEPOSIT SHALL BE
THE AGENCY'S SOLE AND EXCLUSIVE REMEDY UPON THE CANCELLATION OF
THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE
OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER. THIS
AGREEMENT, PRIOR TO THE CLOSE OF ESCROW.
AO C �,
Irkials of Authorized Initials of Authoy zed
Agency Representative Developer Representative
Section 10.4 DEVELOPER'S WAIVER OF RIGHT TO SPECIFIC
PERFORMANCE AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO
CLOSE OF ESCROW.
(a) DEVELOPER WAIVES ANY RIGHT TO MAINTAIN AN ACTION
AGAINST THE AGENCY FOR SPECIFIC PERFORMANCE OF ANY TERM OR
PROVISION OF THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW. IN THE
EVENT OF THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE AGENCY, PRIOR
TO THE CLOSE OF ESCROW, DEVELOPER SHALL BE LIMITED TO RECOVERING
ANY AMOUNTS ACTUALLY EXPENDED BY DEVELOPER IN REASONABLE
RELIANCE ON THIS AGREEMENT, PRIOR TO THE DATE OF THE OCCURRENCE OF
THE EVENT OF DEFAULT BY THE AGENCY, NOT TO EXCEED AN AMOUNT EQUAL
TO THE CONSIDERATION REQUIRED TO BE PAID FOR USE OF THE PLANS AND
STUDIES PAID BY AGENCY AS SET FORTH IN SECTION 2.3(G). DEVELOPER
WAIVES ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE AGENCY
ARISING FROM AN EVENT OF DEFAULT BY THE AGENCY, PRIOR TO THE CLOSE
OF ESCROW. DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE
SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS
SECTION 10.4, WHICH CIVIL CODE SECTION READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
45636.06001 \5951390.9 49
(b) BY INITIALING BELOW, DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 10.4.
Initials orized
Developer Representative
Section 10.5 Legal Actions.
(a) Following the Close of Escrow, 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 available to that Party under this Agreement or at law or in equity. Such legal actions
must be instituted in the Superior Court of the State of California in and for the County of Los
Angeles, California, in any other appropriate court within the County of Los Angeles, California,
or in the applicable United States District Court.
(b) The laws of the State of California shall govern the interpretation and
enforcement of this Agreement, without regard to such laws' conflicts of laws principles. The
Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in
and relates to real property located in the City of Azusa, County of Los Angeles, California.
Section 10.6 Rights and Remedies are Cumulative. Except as otherwise expressly
stated in this Agreement, the rights and remedies of the Parties set forth in this Agreement 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 10.7 Agency Power of Termination Regarding the Developer Property.
(a) The Agency hereby reserves a power of termination pursuant to Civil
Code Sections 885.010, et .seq., exercisable by the Agency, in its sole and absolute discretion,
upon thirty (30) calendar days written notice to Developer referencing this Section 10.7, to
terminate the fee interest of Developer in the Developer Property and/or any improvements to the
Developer Property and revert such fee title in the Agency and take possession of all or any
portion of such real property and improvements, without compensation to Developer, upon the
occurrence of an Event of Default by Developer following the Close of Escrow and prior to the
expiration of the Operating Period.
(h) The thirty (30) calendar day written notice specified Section 10.7(a) shall
specify, as applicable, the Event of Default by Developer triggering the Agency's exercise of its
power of termination.
(c) The rights of the Agency under this Section 10.7 shall be subject and
subordinate to, shall be limited by and shall not defeat, render invalid or limit:
(1) Any Permitted Encumbrance; or
45636.0600 1 15951390.9 50
(2) Any leases, declarations of covenants, conditions and
restrictions, easement agreements or other recorded documents or interests applicable to the
Developer Property and specifically authorized by this Agreement or consented to in writing by
the Agency.
(d) Upon the Agency's exercise of its power of termination pursuant to this
Section 10.7, Developer or its successors or assigns shall convey fee title to the Developer
Property and all improvements on or to the Developer Property to the Agency by grant deed, in
accordance with Civil Code Section 1109, as such code section may hereafter be amended,
renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by
Developer and a notary in a manner suitable for recordation. The Agency may enforce its rights
pursuant to this Section 10.7 by. means of an injunctive relief or forfeiture of title action filed in
any court of competent jurisdiction.
(e) Upon the revesting in the Agency of title to the Developer Property,
whether by grant deed or court decree, the Agency shall exercise its reasonable good faith efforts
to resell the Developer Property at the Developer Property's then fair market value, as soon and
in such manner as the Agency shall, in its sole discretion, find feasible and consistent with the
objectives of the Redevelopment Plan, to a qualified and responsible Person or Persons (as
reasonably determined by the Agency) for a use or purpose consistent with the Redevelopment
Plan. Upon any such resale of all or a portion of the Developer Property, the proceeds received
by the Agency from such sale shall be applied, as follows:
(1) First, to pay any and all amounts required to release/reconvey
any Permitted Encumbrance recorded against the Developer Property; and
(2) Second, to reimburse the Agency on its own behalf or on behalf
of the City for all actual internal and third -party costs and expenses previously or currently
incurred by the Agency or the City related to the Developer Property, the Project or this
Agreement, including, but not limited to, customary and reasonable fees or salaries to third -party
consultants (including reasonable attorney fees and costs) in connection with the recapture,
management or resale of all or any portion of the Developer Property; all taxes, assessments and
utility charges paid by the City and/or the Agency with respect to all or any portion of the
Developer Property; any payment made or necessary to be made to discharge or prevent from
attaching or being made any subsequent encumbrances or liens due to obligations incurred by
Developer with respect to the acquisition of the Developer Property or the construction or
installation of the Project; and amounts otherwise owing to the Agency by Developer or its
successors or assigns pursuant to the terms of this Agreement; and
(3) Third, to the extent that any proceeds from such resale are,
thereafter, available, to reimburse Developer, or its successors in interest to the portion of the
Developer Property sold, the amount of: (1) the pro -rata portion of the Purchase Price paid to the
Agency; and (2) the pro -rata portion of the third -party costs actually incurred and paid by
Developer regarding the development of the Project, including, but not limited to, costs of cavy,
taxes, and other items as set forth in a cost certification to be made by Developer to the Agency,
prior to any such reimbursement and, which certification shall be subject to the Agency's
reasonable approval; provided, however, that Developer shall not be entitled to reimbursement
45636.06001%595139n.9 51
for any expenses to the extent that such expenses relate to any loans, liens or other encumbrances
that are paid by the Agency pursuant to the provisions of sub -sections (1) or (2), above; and
(4) Fourth, any portion of the proceeds from, the resale of the
Developer Property remaining after the foregoing applications shall be retained by the Agency,
as its sole and exclusive property. -
(f) IMMEDIATELY FOLLOWING THE THIRTY (30) DAY PERIOD
SPECIFIED IN SECTION 10.7(A), THE AGENCY, ITS EMPLOYEES AND AGENTS
SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY
PORTION OF THE DEVELOPER PROPERTY AND ANY IMPROVEMENTS ON OR TO
THE DEVELOPER PROPERTY, WITHOUT FURTHER NOTICE OR COMPENSATION TO
DEVELOPER. BY INITIALING BELOW, DEVELOPER HEREBY EXPRESSLY WAIVES,
TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT
DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES
MAY BE AMENDED, REPLACED, RENUMBERED OR SUBSTITUTED, OR UNDER ANY
OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
Initials of A0orized
Developer Representative
(g) DEVELOPER ACKNOWLEDGES AND AGREES THAT THE
AGENCY'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY
PURSUANT TO THIS SECTION 10.7 MAY WORK A FORFEITURE OF THE ESTATE IN
THE DEVELOPER PROPERTY CONVEYED TO DEVELOPER THROUGH THE AGENCY
DEED. DEVELOPER HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM. EXTENT
ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT
DEVELOPER MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED
TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL
PERFORMANCE OR COMPENSABLE DAMAGES. DEVELOPER FURTHER
EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND
ALL RIGHTS AND DEFENSES THAT DEVELOPER MAY HAVE UNDER CALIFORNIA
CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW
PRINCIPLE OF SIMILAR EFFECT. DEVELOPER ACKNOWLEDGES THAT THE TERMS
AND CONDITIONS OF THIS AGREEMENT REFLECT THE POSSIBILITY OF
FORFEITURE BY VIRTUE OF THE EXERCISE OF THE AGENCY'S POWER OF
TERMINATION PROVIDED IN THIS SECTION 10.7 AND FURTHER ACKNOWLEDGE
THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS
WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO THIS
SECTION 10.7.
Initials f Alfhorized
Developer Representative
45636.0600115951390 9 52
Section 10.8 Agency's Power of Termination as a Result in Change of Law.
Developer acknowledges that on January 10, 2011 Governor Jerry Brown proposed legislation to
eliminate California redevelopment agencies and the related funding source. As such, Developer
and Agency agree that if there is a change in the law, that in the Agency's reasonable discretion,
prevents the Agency or its successor from performing Agency's obligations hereunder prior to
the Close of Escrow, the Agency may terminate this Agreement by delivery of written notice to
Developer. Termination of this Agreement pursuant to this Section shall not be a default under
this Agreement and Developer shall not be entitled to damages as a result of this termination.
This is intended to constitute a present, binding, unconditional obligation of the Agency. If there
is such change in law following the Close of Escrow, Developer shall, at Developer's option,
terminate this Agreement and convey Developer property back to the Agency as provided for in
Section 10.7(e) or defend this .Agreement.
Section 10.9 Indemnification of the Agency.
(a) Indemnity. In addition to any other specific indemnification or defense
obligations of Developer set forth in this Agreement and to the fullest extent permitted by law,
Developer agrees to indemnify, defend (upon written request by the Agency and with counsel
reasonably acceptable to the Agency) and hold harmless each and all of the Agency Parties from
and against all Claims that are in any manner directly or indirectly caused, occasioned or
contributed to in whole or in part by:
(1) Any act, omission, fault or negligence, whether active or
passive, of Developer or Developer's officers, agents, employees, independent contractors or
subcontractors of any tier, relating in any manner to this Agreement or any work to be performed
by any such person related to this Agreement, the Developer Property, or the Business; or
(2) Any authority or obligation exercised or undertaken by
Developer under or pursuant to this Agreement; or
(3) Any breach or default in performance of any obligation of
Developer under this Agreement.
(b) Strict Liability. The indemnification obligation of Developer shall apply
regardless of whether liability without fault or strict liability is imposed or sought to be imposed
on one or more of the Agency Parties. The indemnification obligations of Developer shall not
apply to the extent that a final judgment of a court of competent jurisdiction establishes that a
Claim against Agency Party was proximately caused by the negligence or willful misconduct of
that Agency Party. In such event, however, Developer's indemnification obligations to all other
Agency Parties shall be unaffected.
(c) Independent of Insurance Obligations. Developer's indemnification
obligations pursuant to this Section 10.9 shall not be construed or interpreted as in any way
restricting, limiting, or modifying Developer's insurance or other obligations under this
Agreement and is independent of Developer's insurance and other obligations under this
Agreement. Developer's compliance with its insurance obligations and other obligations under
45636.06 00 115 951390,9 53
this Agreement shall not in any way restrict, limit, or modify Developers indemnification
obligations under this Agreement.
(d) Attorney Fees. The Agency Parties shall be entitled to recover their
reasonable attorney fees and actual costs incurred in enforcing Developer's indemnification
obligations pursuant to this Section 10.9.
(e) Survival of Indemnification and Defense Oblieations. Developer's
indemnification and defense obligations pursuant to this Section 10.9 shall survive the expiration
or earlier termination of this Agreement, until all Claims against any of the Agency Parties
involving any of the indemnified matters are fully, finally, and absolutely and completely barred
by the applicable statutes of limitations.
(f) Independent Duty to Defend. Developer's duty to defend the Agency
Parties is separate and independent of Developer's duty to indemnify the Agency Parties. The
duty to defend includes Claims for which the Agency Parties may be liable without fault or
strictly liable. The duty to defend applies regardless of whether the issues of negligence,
liability, fault, default, or other obligation on the part of Developer or the Agency Parties have
been determined. The duty to defend applies immediately, regardless of whether the Agency
Parties have paid any sums or incurred any detriment arising out of or relating (directly or
indirectly) to any Claims. It is the express intention of Developer and the Agency that the
Agency Parties be entitled to obtain summary adjudication or summary judgment regarding
Developer's duty to defend the Agency Parties at any stage of any Claim or suit within the scope
of this Section 10.9.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 Incorporation of Recitals. The Recitals of fact set forth preceding this
Agreement are true and correct and are incorporated into this Agreement in their entirety by this
reference.
Section 11.2 Parties to the Agreement. The Parties to this Agreement are the Agency
and Developer. The City is nota Party to this Agreement.
Section 11.3 Restrictions on Change in Management or Control of Developer and
Assignment or Transfer.
(a) Developer acknowledges that the qualifications and identity of Developer
are of particular importance to the Agency. Developer further recognizes and acknowledges that
the Agency has relied and is relying on the specific qualifications and identity of Developer in
entering into this Agreement with Developer and, as a consequence, Transfers (other than
Permitted Transfers) are permitted only as expressly provided in this Agreement.
(b) Except with respect to Permitted Transfers, Developer shall promptly
notify the Agency in writing of any and all changes whatsoever in the identity of the business
entities or individuals either comprising or in Control of Developer, as well as any and all
45636.0600115951390.9 - 54
changes in the interest or the degree of Control of Developer by any such person, of which
information Developer or any of its partners, members, shareholders or officers are notified or
may otherwise have knowledge or information. This Agreement may be terminated by the
Agency, without liability to Developer or any other Person, or the Agency may exercise any
other remedy available to the Agency under the terms of this Agreement, prior to the Opening
Date, if there is any Transfer, other than a Permitted Transfer, whether voluntary or involuntary
(other than such changes occasioned by the death or incapacity of any individual) that has not
been approved in writing by the Agency, prior to the time of such Transfer, provided, however,
that (i) the Agency shall first notify Developer in writing of its intention to terminate this
Agreement or to exercise any other remedy, and (ii) Developer shall have twenty (20) calendar
days following its receipt of such written notice to commence and, thereafter, diligently and
continuously proceed to cure the default of Developer and submit evidence of the initiation and
satisfactory completion of such cure to the Agency, in a form and substance reasonably
satisfactory to the Agency.
(e) Except as permitted in this Section 1.1.3 or with respect to a Permitted
Encumbrance or with respect to a Permitted Transfer, prior to the Opening Date, Developer shall
not cause or allow any Transfer, without the prior written approval of the Agency. Developer
recognizes that the qualifications and identity of Developer are of particular concern to the
Agency and that a Transfer is for all. practical purposes a transfer or disposition of the
responsibilities of Developer with respect to this Agreement, the Developer Property and/or the
Business and, therefore, Transfers are only allowed in accordance with the provisions of this
Section 11.3 and as Permitted Encumbrances or Permitted Transfers.
(d) Except as expressly -permitted in this Agreement, Developer represents to
the Agency that it has not made and agrees that it will not create or suffer to be made or created,
any Transfer, other than a Permitted Transfer, either voluntarily, involuntarily or by operation of
law, without the prior written approval of the Agency, until after the Opening Date. Any
Transfer, other than a Permitted Transfer, made in contravention of this Section 11.3 shall be
voidable at the election of the Agency and, if voided, shall be deemed to be an Event of Default
by Developer, whether or not Developer knew of or participated in such Transfer.
(e) Notwithstanding anything to the contrary contained herein, Developer is
not required to give the Agency advance notice of a Permitted Transfer. Additionally, the
Agency may, in its reasonable discretion, approve in writing any other Transfer requested by
Developer, provided the proposed transferee can satisfactorily demonstrate successful experience
in the development, ownership, operation, and management of a retail store of the same type as
the Project and expressly assumes in writing all of the obligations of Developer under this
Agreement. All instruments and other legal documents proposed to effect any proposed Transfer
shall be submitted to the Agency for review, at least, thirty-five (35) calendar days prior to the
Transfer, and the written approval or disapproval of the Agency shall be provided to Developer,
within thirty (30) calendar days following the Agency's receipt of Developer's request.
Section 11.4 Notices, Demands and Communications Between the Parties.
(a) Any and all notices, demands or communications submitted by either
Party to the other Party pursuant to or as required by this Agreement shall be proper, if in writing
45636.06001\5951390.9 55
and transmitted to the principal office of the Agency or Developer, as applicable, as designated
in Section 11.4(b) by one or more of the following methods: (i) messenger for immediate
personal delivery, (ii) a nationally recognized overnight delivery service, or (iii) registered or
certified United States Mail, postage prepaid, return receipt requested. Such written notices,
demands or communications may be sent in the same manner to such other addresses as either
Party may from time to time designate. Any such notice, demand or communication shall be
deemed to be received by the addressee, regardless of whether or when any return. receipt is
received by the sender or the date set forth on such return receipt, on the day that it is delivered
by personal delivery, on the date of delivery by a nationally recognized overnight courier service
or three (3) calendar days after it is placed in the United States Mail, as provided in this Section
11.4(a). Rejection, other refusal to accept or the inability to deliver a notice, demand or
communication because of a changed address of which no notice was given, shall be deemed
receipt of the notice, demand or communication.
(b) The following are the authorized addresses for the submission of notices,
demands or communications to the Parties:
To Developer: Charvat Family LLC
1006 Briarcliff Road
Monrovia, CA 91016
Attention: Mark Charvat
With courtesy copy to: Hill, Farrer & Burrill LLP
300 South Grand Avenue, 37th Floor
Los Angeles, CA 90071-3147
Attention: Stacey A. Sullivan.
To the Agency: Redevelopment Agency of the City of Azusa
213 East Foothill Boulevard
Azusa, CA 91702
Attention: Executive Director
With courtesy copy to: Best Best & Krieger, LLP
5 Park Plaza
Suite 1500
Irvine, CA 92614
Attention: Elizabeth Hull
Section 11.5 Conflict of Interest. No member, official or employee of the Agency
having any conflict of interest, direct or indirect, related to this Agreement, the Developer
Property or the Business shall participate in any decision relating to this Agreement. The Parties
represent and warrant that they do not have knowledge of any such conflict of interest.
Section 11.6 Warranty Against Payment of Consideration for Agreement.
Developer warrants 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. Third parties, for the purposes of
45636.0600"5951390.9 56
this Section 11.6, shall not include persons to whom fees are paid for professional services, if
rendered by attorneys, financial consultants, accountants, engineers, architects and the like when
such fees are considered necessary by Developer.
Section 11.7 Non -liability of Agency Officials and Employees. No Agency Party
shall be personally liable to Developer, or any successor in interest of Developer, in the event of
any default or breach by the Agency under this Agreement or for any amount that may become
due to Developer or to its successor, or on any obligations under the terms or conditions of this
Agreement, except as may arise from the gross negligence or willful acts of such Agency Party.
Section 11.8 Calculation of Time Periods. Unless otherwise specified, all references
to time periods in this Agreement measured in days shall be to calendar days, all references to
time periods in this Agreement measured in months shall be to consecutive calendar months and
all references to time periods in this Agreement measured in years shall be to consecutive
calendar years. Any reference to business days in this Agreement shall mean and refer to
business days of the Agency.
Section 11.9 Agency Attorneys' Fees and Costs. For the purposes of this Agreement,
all references to reasonable attorneys' fees and costs in reference to the Agency are intended to
include the salaries, benefits and costs of the City Attorney, as Agency General Counsel, and the
lawyers employed in the Office of the City Attorney.
Section 11.10 Unavoidable Delay; Extension of Time of Performance. Subject to
specific provisions of this Agreement, performance by either Party under this Agreement shall
not be deemed, or considered to be in default, where any such default is due to an Unavoidable
Delay. Any Party claiming Unavoidable Delay shall notify the other Party: (a) within ten (10)
days after such Party knows of any such Unavoidable Delay; and (b) within five (5) days after
such Unavoidable Delay ceases to exist. To be effective, any notice of an Unavoidable Delay
must describe the Unavoidable Delay in reasonable detail. The extension of time for an
Unavoidable Delay shall commence on the date of receipt of written notice of the occurrence of
the Unavoidable Delay by the Party not requesting an extension of time to perform due to such
Unavoidable Delay and shall continue until the end of the condition causing the Unavoidable
Delay. The Party seeking to be excused from performance shall exercise its best efforts to cure
the condition causing the Unavoidable Delay, within a reasonable time. Each Party expressly
agrees that adverse changes in economic conditions, of either Parry specifically or the economy
generally, or changes in market conditions or demand or changes in the economic assumptions of
either of them that may have provided a basis for entering into this Agreement shall not operate
to excuse or delay the performance of each and every one of each Party's obligations and
covenants arising under this Agreement. Both Parties expressly assume the risk of such adverse
economic or market changes, whether or not foreseeable, as of the Effective Date.
Section 11.11 Inspection of Books and Records. Prior to the Opening Date, the
Agency shall have the right at all reasonable times, at the Agency's cost and expense, to inspect
the books and records of Developer pertaining to the Developer Property and/or the Project.
Prior to the Opening Date, Developer shall also have the right at all reasonable times, at
Developer's sole cost and expense, to inspect the books and records of the Agency pertaining to
the Developer Property and/or the Project, to the extent relevant to Developer's obligations under
45636 0600M951390.9 57
this Agreement. Prior to the Opening Date, Developer shall permit the Agency to examine and
copy all books and account records and other papers relating to the construction and installation
of the Project. Prior to the Opening Date, Developer will use commercially reasonable efforts to
cause all of Developer's contractors, subcontractors and materialmen to cooperate with the
Agency to enable such examination.
Section 11.12 Real Estate Commissions. The Agency shall not be liable for any real
estate commissions, brokerage fees or finder fees that may arise from or be related to this
Agreement. Agency shall pay any fees or commissions or other expenses related to its retention
or employment of real estate brokers, agents or other professionals. Developer shall pay any fees
or commissions or other expenses related to its retention or employment of real estate brokers,
agents or other professionals.
Section 11.13 Binding on Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective heirs, executors, administrators,
legal representatives, successors and assigns.
Section 11.14 Entire Agreement.
(a) This Agreement shall be executed in three (3) counterpart originals, each
of which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument. This Agreement constitutes the entire understanding and Agreement of the
Parties regarding the Developer Property, the Business and the other subjects addressed in this
Agreement.
(b) This Agreement integrates all of the terms and conditions mentioned in
this Agreement or incidental to this Agreement, and supersedes all negotiations or previous
agreements between the Parties with respect to the Developer Property, the Business and the
other subjects addressed in this Agreement.
(c) None of the terms, covenants, restrictions, agreements or conditions set
forth in this Agreement shall be deemed to be merged with any deed conveying title to the
Developer Property, and this Agreement shall continue in full force and effect before and after
any such conveyances.
(d) All waivers of the provisions of this Agreement and all amendments to
this Agreement must be in writing and signed by the authorized representative(s) of both the
Agency and Developer.
Section 11.15 Survival of Indemnity Obligations. All general and specific indemnity
and defense obligations of the Parties set forth in this Agreement shall survive the expiration or
termination of this Agreement, the execution or recordation of the Agency Deed and/or the
issuance and recordation of the Certificate of Completion for the Project.
[Signatures on following pages]
45636.0600115951390.9 58
SIGNATURE PAGE
TO
2011 DISPOSITION AND DEVELOPMENT AGREEMENT
(CHAKVAT FAMILY)
IN WITNESS WHEREOF, the Agency and Developer have executed this 2011
Disposition and Development Agreement (Charvat Family) by and through the signatures of
their duly authorized representative(s) set forth below:
Dated:
Dated: (J�
EVI
By
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By: szcw1 9. oxln�
Agency Counsel
45636.0600145951390.9 59
Developer:
CHARVAT FAMILY LLC, a California
limited liabi ty company
By:
Name: A,,rk (_'liacvch t'
By:
Name: �..4ey. Cin4CY4
Its: 'fr eAcwA*7
AGENCY:
REDEVELOPMENT AGENCY OF THE
CITY OF AZUSA, a public body, corporate
and politic
By:
Name" F.M. Delach
Its: Executive Director
EXHIBIT A
EXHIBIT A-1
LEGAL DESCRIPTION OF THE PROPERTY
I "
!!! C iitir� at:oiPbift'irfthel SbOthe'6Y tine of said SedWm . 2j iiista+it-EaSte y:
ftlrdw,Z��
Is: 11, 3 n 103S!bflhe final Orderilf Ca e q
rid h m, Atio ,
50431, Page 3171 ;of Official RecoMsiAh'the Office of
of said County:and t—he-, tmtpo
tht of begiiinfin g of this
ce mintir
, we_,,flq#fterty,,Vardfjgl with said Westerly-41ne a
varaitet w"Ith',said S'- c'uther1VNl1'in'ew
thtficefftithOrlir parallet'wlth said WtsteflV linesWth
Adetindiftu the,r ffi 1aI Pifitof-tald lah
Exhibit "A"
45636.0600 1 �5951390 9 Property Legal Description
,
Asawirm1wotwPOW the distan
the:Own, Own, 13.04e'etfrdib tild-SduthwestIcd-rhet of`said SectibA 2;-thetic-61
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te bf 70
feet ; more driiesiAa the , Roq4 I erly
fine
I4of:ArroW Highwaya described' ribe.d'
ftpcel A0f.Parcefs-10-3 and 10-3S4f the ffndl 6rder.of Condemnatiop,
:rect3tded imgfta.50531, Pa301iAlf GtfficialAecdK* office
oftire:
County Recorder df said Ub pty,�hd itht true point of be.-q'mhIhg' df,M*,
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I
aSt ITLeTitlOneo Mwtherly-Alnel ta the Easterly'line of
Said South :half oft6e. Squthwest" u4rWv-of h W QWafter� ',,Sdu;thwdgt QMtet',-bf-
t e Sout of t6e
S�ittfdd Z,Ihence Southerly';WOg said!Essterl [Ine tothe No-fthVest 11,
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rife lafid bedInTa th
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—p
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ji� 257t�df'sald OffldW Retoe(W th6fice We
U ti00, i ed.' Northerly line to the009'Westeri
on
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N 693; Mena Slzuthwestedy TI
ayiewsihv Tue pmr0m
-Owt.o" t
[APN 8621-024-904 & APN 8621-024-903]
[APN: 8621-024-001]
Exhibit "A"
Property Legal Description
45636,0600 1 \5951390.9
rrt-
EXHIBIT A-2
LEGAL DESCRIPTION OF THE "DEVELOPER PROPERTY"
State of
2 Switeirly Ithebt S -61d $ewan distwnrkuteK
L -Southwest . . - c6mePpot4ald Sed-14ti"2- then
o -
Westerly line of said $ect.RP-2, a, distamc.9-pf'70'
Ndrthewiy line of f Ar'..r.o'w 1414hv"v. as describedin,
hd M-'3Szf'the Final Order -Of Condemnation,
?age the Office MIME
of
feet; thence Westerty parallel With said SoutherlyAlne w',
said
vakddlat
iN
4 5636,06001 15 9513 90 .9
Exhibit "A"
Property Legal Description
then
No##
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2;
cCien 1; lbonce someelyr,,410-- ve
ng�sat 1 astehy Meld the>Ndo
the 4esceoed In RO Final OA Condemn rce ift, 9Softhe
recorded --16' Bq P-880, " . I , � :the 1 .. .1 1 . .1
'FAqe- 95 Of Bald CIfficial Records; -thence
Jes&lbad
693;
.desice,ft d In iiald--Pwcel Mm. the
me Soth,u
vaid-
[APN 8621-024-904 & APN 8621-024-903]
Exhibit "A"
Property Legal Description
45636 06001\5951390.9
EXHIBIT B
LEGAL DESCRIPTION OF THE AGENCY PARCEL
APN: 8621-024-001
Exhibit `B"
Property Legal Description
45636.0606W951390.9
EXHIBIT "C"
SCOPE OF DEVELOPMENT
The Project shall consist of the following minimum elements:
An approximate 50,000 square foot, concrete tilt -up retail building. The interior build out will be
similar to the interior of a Costco store. The property will have a long term lease with. Estate
Liquidation Services, Inc., dba The Outlet by ELS ("ELS"). ELS will operate an approximate
40,000 square foot retail outlet store with approximately 10,000 square feet additional office and
storage space. The build outs will include employee break areas, restrooms, and offices. The
building will include a receiving area with two dock high doors. The customer entrance will face
Azusa Avenue. The project will have a fully landscaped parking with 175+ stalls. There will be
entrance and exits to the Developer Property on both Arrow Highway and Azusa Ave. The
project will have a monument erected on the corner of the Agency Parcel that will welcome
visitors to both the City of Azusa and The Outlet by ELS.
Exhibit "C"
Scope of Development
45636.0600115951390.9
EXHIBIT "D"
SCHEDULE OF PERFORMANCE
A. Days shall be calendar days, unless otherwise specified.
B. The Executive Director is authorized by the Agency -to make minor changes to the
schedule prior to the Completion Date resulting in an aggregate extension of the
Completion Date of sixty (60) calendar days or less.
C. Where the action/task is to be performed by the City, the Agency shall exercise its
reasonable efforts to obtain performance by the City.
D. All specific dates set forth in parentheses in this schedule are estimates only and not
binding on the Parties.
E. In the event of any conflict between this schedule and the Agreement, the terms and
provisions of the Agreement shall control.
F. All defined terms indicated by initial capitalization used in this schedule shall have the
meanings ascribed to the same terms in the Agreement.
Exhibit "D"
Schedule of Performance
45636.0600115951390 .9
Action
Date Action to be
Completed B
1.
Developer provides 3 counterpart executed originals of the
Agreement to Agency and a certified copy of Developer's
Official Action
2.
If Agency's Governing Board approves the Agreement,
Effective Date
Executive Director executes the Agreement (Section
I.I (WA
3.
Developer Opens Escrow and deposits a fully executed copy
Escrow Opening Date — no
of the Agreement and the Earnest Money Deposit into
later than June 21, 2011
Escrow Section I.l dd ).
4.
Agency delivers a copy of the Preliminary Title Report to
As soon as practicable
Developer (Section 2.2).
following Escrow Opening
Date
5.
Developer delivers the Title Notice to Agency (Section 2.2).
Within 20 days after receipt
of PreliminaryRe ort
6.
If applicable, Agency delivers the Title Notice Response to
Within 20 days after receipt
Developer (Section 2.2).
of Title Notice
7.
If applicable, Developer delivers the Title Notice Waiver to
Within 10 days after receipt
Agency Section 2.2).
of Title Notice Response
8.
Developer delivers copies of policies or certificates of
Prior to conducting Due
insurance Section 2.3(c)).
Diligence Investigations
9.
Developer conducts Due Diligence Investigations and
Within 40 days after the
delivers Due Diligence Investigation Conclusion Notice to
Escrow Opening Date
A eg ncy and Escrow Holder (Section 2.3(a), Section 2.3(4)).
Exhibit "D"
Schedule of Performance
45636.0600115951390 .9
Exhibit "D"
Schedule of Performance
45636.0600115931390.9
Action
Date Action to be
Completed By
10.
Developer's Escrow Deposits (Section 3.3):
At least 4 business days
a. Purchase Price less Earnest Money Deposit plus
prior to Escrow Closing
additional funds
Date
b. PCO Report
c. Certificate of Acceptance of Agency Deed
d. Notice of Agreement
e. Construction Goan Deed of Trust
f Reciprocal Easement Agreement
I l .
Agency's Escrow Deposits (Section 3.4):
At least 4 business days
a. Agency Deed
prior to Escrow Closing
b. FIRPTA Affidavit
Date
c. Notice of Agreement
d. Form 593
e. Reciprocal Easement Agreement
12.
Escrow Holder notifies Parties of Escrow costs (Section
4 business days prior to
—3.8).
Escrow Closing Date
13.
14.
Developer obtains all entitlements, permits, and other
Escrow Closing Date — no
approvals necessary to construct the Project (Section 2.4(g),
later than October 30, 2011
Section 1.1(bb)).
15.
Close of Escrow for the Developer Property; recordation and
Escrow Closing Date — no
of documents Section 3.6, Section 3.7).
later than October 30, 2011
—delivery
16.
Developer commences construction of the Project (Section
No later than December 1,
4.1).
2011.
17.
Developer completes construction of the Project, records a
Completion Date — 24
Notice of Completion, causes the Project to be inspected by
months after Effective Date,
Governmental Agencies and corrects any observed
which may be extended for
deficiencies, obtains all occupancy certificates and other
an additional 60 days
licenses necessary (Section 1.1(n), Section 4.3(a), Section
4.3 )(b)).
18.
Developer requests a Certificate of Completion, and Agency
inspects the Project and issues the Certificate of Completion
(Section 4.9(a)
19.
Business opens for business to the general public (Section
Opening Date — earlier of 30
1.1(rr)
calendar days after
Agency's issuance of
Certificate of Completion or
August 31, 2013
Exhibit "D"
Schedule of Performance
45636.0600115931390.9
EXHIBIT "E"
FORM OF NOTICE OF AGREEMENT
[Attached behind this cover page]
Exhibit "E"
Form Of Notice Of Agreement
45636.0600115951390.9
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Redevelopment Agency of the )
City of Azusa )
213 East Foothill Boulevard )
Azusa, CA 91702 }
Attention: Executive Director )
(Space Above Line For Use By Recorder)
[Recordation of this Document Is
Exempt From Fees Payable to the
Recorder Under Government Code
Section 27383]
REDEVELOPMENT AGENCY OF THE CITY OF AZUSA
Notice of Agreement
2011 Disposition and Development Agreement
(Developer)
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of
, 2011, Charvat Family LLC, a California limited liability company
("Developer"), and the Redevelopment Agency of the City of Azusa, a public body, corporate
and politic (the "Agency"), entered into an agreement entitled "2011 Disposition and
Development Agreement (Charvat Family)" (the "Agreement"). A copy of the Agreement is on
file with the Secretary of the Agency and is available for inspection and copying by interested
persons as a public record of the Agency at the Agency's offices located at 213 East Foothill
Boulevard, Azusa, California, during the regular business hours of the Agency.
The Agreement affects the real property described in Exhibit "I" attached to this Notice
of Agreement (the "Developer Property"). The meaning of defined terms, indicated by initial
capitalization, used in this Notice of Agreement shall be the same as the meaning ascribed to
such terms in the Agreement.
PLEASE TAKE FURTHER NOTICE that the Agreement contains certain community
redevelopment covenants running with the land of the Developer Property and other agreements
between Developer and the Agency affecting the Developer Property, including, without
limitation, (all section references are to the Agreement):
4.1 Developer's Covenant to Undertake Project. Developer covenants to and for
the exclusive benefit of the Agency that Developer shall commence and complete the
development of the Project on the Developer Property, within the time period for such action set
forth in the Schedule of Performance. Developer covenants and agrees for itself, its successors
45636.0600 1 159 5 1390.9
and assigns that the Developer Property shall be improved and developed with the Project, in
conformity with the terms and conditions of this Agreement, the Scope of Development, the
Schedule of Performance, any and all plans, specifications and similar development documents
required by this Agreement, except for such changes as may be mutually agreed upon in writing
by and between Developer and the Agency, and in conformity with all applicable Governmental
Requirements. The covenants of this Section 4.1 shall run with the land of the Developer
Property, until the earlier of the Opening Date or the fourth 4th anniversary of the date of the
Close of Escrow.
Section 5.1 Covenant to Maintain Developer Property on Tax Rolls.
(a) Developer shall cause the Developer Property to remain on the County of
Los Angeles, California, secured real property tax rolls until the Redevelopment Plan Expiration
Date.
(b) Until the Redevelopment Plan Expiration Date, Developer, for itself and
its successors and assigns, covenants and agrees to pay all property tax bills with respect to the
Developer Property and the Business on or before the last day for the timely payment of each
property tax installment on each December 10 and April 10 during such time period and to
timely pay all supplemental tax bills regarding the Developer Property issued by the County of
Los Angeles, California. Developer further covenants and agrees to provide to the Agency, on or
before each July 31 following the Opening Date, until the final anniversary of the Opening Date
prior to the Redevelopment Plan Expiration Date: (i) a true and correct copy of all property tax
assessment notices, property tax bills and property tax assessment correspondence by and
between Developer and the County of Los Angeles, California, regarding the Developer Property
and the Business, with respect to the preceding fiscal year of the County of Los Angeles,
California, and (ii) cancelled checks issued by Developer in payment of all property tax
payments made to the County of Los Angeles, California, regarding the Developer Property and
the Business, with respect to the preceding fiscal year of the County of Los Angeles, California.
(c) The covenants of this Section 5.1 shall run with the land of the Developer
Property and bind successive owners of the Developer Property, and shall remain in effect until
the Redevelopment Plan Expiration Date.
Section 5.2 Covenant Regarding the Operation of the Business; Restrictions on
the Use of the Developer Property. Developer covenants to the Agency to complete the Project
and cause the Business to be open to the public on the Opening Date, and to cause the Business
to continuously operate on the Developer Property throughout the entirety of the Operating
Period. For purposes of this Section 5.2 "continuously operate" means the Business shall not
cease to operate for a period of ninety (90) consecutive calendar days or more.
(a) Designation of City as Point of Sale. Developer shalt designate the City as
the "point of sale" in all reports to the BOE for all Business Activities occurring on or through
the Developer Property. Developer shall cause the Business to, for the full Operating Period, at
its sole cost and expense, maintain all permits, contractual arrangements, licenses, and
registrations necessary for it to lawfully conduct Business Activities and to designate the City as
the "point of sale" in all reports and returns submitted to the BOE.
45636.0600115951390.9
(b) Developer Pronerty Use Restrictions. Developer covenants that the
Developer Property shall be used solely for operating the Business throughout the entirety of the
Operating Period. If Developer desires to change the use of the Developer Property during the
Operating Period, it shall obtain Agency's prior written approval to make such change, such
approval to be made in the Agency's sole but reasonable discretion. The following uses of the
Developer Property, or the building to be constructed thereon as part of the Project, shall not be
permitted: (i) divided and subleased for the purpose of storing personal property; (ii) divided and
subleased to other vendors to sell goods or services; or (iii) adult entertainment.
(c) Covenants Run With the Developer Property. The covenants of this
Section 5.2 shall run with the Developer Property and bind successive owners to the Developer
Property, and shall remain in effect during the Operating Period.
Section 5.3 Developer's Covenant Not to Accept Prohibited Financial Assistance.
Developer covenants to the Agency that during the Operating Period, Developer shall not
directly or indirectly solicit, accept or enter into any agreement concerning any Prohibited
Financial Assistance from any other public or private person or entity, to the extent such
Prohibited Financial Assistance is given for the purpose of causing or would result in: (i) the
relocation of the point of sale for Business Activities from the City; or (ii) a material (i.e. five
percent (5%) or greater) reduction in the amount of Local Sales Tax Revenues which would be
generated from the Business Activities in the absence of such an agreement. The covenants of
this Section 5.3 shall run with the Developer Property and bind successive owners of the
Developer Property, and shall remain in effect during the Operating Period.
Section 5.4 No Conveyance to Tax Exempt Entity.
(a) Developer covenants and agrees that neither Developer, nor its successors
or assigns shall use or Transfer all or any portion of the Developer Property or the Business to
any Person, or for any use of all or any portion of the Developer Property or the Business that is
partially or wholly exempt from the payment of real property taxes or that would cause the
exemption of the payment of all. or any portion of real property taxes otherwise assessable
regarding the Developer Property or the Business, without the prior written consent of the
Agency, during the Operating Period.
(b) Developer further covenants and agrees that, if all or any portion of the
Developer Property or the Business shall be used or transferred by Developer, its successors or
assigns, in any manner that causes the exemption from payment of all or any portion of ad
valorem property taxes otherwise assessable against all or any portion of the Developer Property
or the Business, prior to the expiration of the Operating Period, Developer, its successors or
assigns shall pay to the Agency, in lieu of payment of such taxes, an amount determined by the
Agency to be one percent (1.0%) of the "full cash value" of the portion of the Developer
Property and the Business subject to such exemption from payment of ad valorem property taxes
each year. The Agency's determination of "full cash value" for in -lieu payment purposes under
this Section 5.4(b) shall be established by the Agency each year, if necessary, by reference to the
ad valorem property tax valuation principles and practices generally applicable to a county
property tax assessor under Section I of Article XIIIA of the California Constitution. The
Agency's determination of "full cash value" and that an in -lieu payment is due shall be
45636.06001\5951390.9
conclusive on such matters. If the Agency determines that an amount is payable by Developer to
the Agency as an in -lieu payment under this Section 5.4(b) in any tax year, then such amount
shall be paid to the Agency for that tax year within forty-five (45) days following transmittal by
the Agency to Developer of an invoice for payment of the in -lieu amount.
(c) The covenants of this Section 5.4 shall run with the land of the Developer
Property and bind successive owners of the Developer Property, and shall remain in effect during
the Operating Period.
Section 5.5 Maintenance Condition of the Developer Property. Developer for
itself, its successors and assigns, covenants and agrees that:
(a) The entirety of the Developer Property shall be maintained by Developer
in good condition and repair and a neat, clean and orderly condition, ordinary wear and tear
excepted, including, without limitation, maintenance, repair, reconstruction and replacement of
any and all asphalt, concrete, landscaping, utility systems, irrigation systems, drainage facilities
or systems, grading, subsidence, retaining walls or similar support structures, foundations,
signage, ornamentation, and all other improvements on or to the Developer Property, now
existing or made in the future by or with the consent of Developer, as necessary to maintain the
appearance and character of the Developer Property. Developer's obligation to maintain the
Developer Property described in the immediately preceding sentence shall include, without
limitation, (i) maintaining the surfaces in a level, smooth and evenly covered condition with the
type of surfacing material originally installed or such substitute as shall in all respects be equal in
quality, use, and durability; (ii) removing all papers, mud, sand, debris, filth and refuse and
thoroughly sweeping areas to the extent reasonably necessary to keep areas in a clean and
orderly condition; (iii) removing or covering graffiti with the type of surface covering originally
used on the affected area, (iv) placing, keeping in repair and replacing any necessary and
appropriate directional signs, markers and lines; (v) operating, keeping in repair and replacing
where necessary, such artificial lighting facilities as shall be reasonably required; (vi) providing
security services as reasonably indicated; and (vii) maintaining, mowing, weeding, trimming and
watering all landscaped areas and making such replacements of plants and other landscaping
material as necessary to maintain the appearance and character of the landscaping, all at the sole
cost and expense of Developer. Developer's obligation to maintain the Developer. Property
described in the two immediately preceding sentences is referred to in this Agreement as the
"Maintenance Standard." Developer may contract with a maintenance contractor to provide
for performance of all or part of the duties and obligations of Developer with respect to the
maintenance of the Developer Property; provided, however, that .Developer shall remain
responsible and liable for the maintenance of the Developer Property, at all times.
(b) If, at any time following the Close of Escrow, there is an occurrence of an
adverse condition on any area of the Developer Property in contravention of the Maintenance
Standard (each such occurrence being a "Maintenance Deficiency"), then the Agency may
notify Developer in writing of the Maintenance Deficiency. If Developer fails to cure or
commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) calendar
days following its receipt of notice of the Maintenance Deficiency, the Agency may conduct a
public hearing, following transmittal of written notice of the hearing to Developer, at least, ten
(10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance
45636.06001'6951390.9
Deficiency exists and whether Developer has failed to comply with the provisions of this Section
5.5. If, upon the conclusion of the public hearing, the Agency finds that a Maintenance
Deficiency exists and remains uncured, the Agency shall have the right to enter the Developer
.Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other
action at law or in equity that may then be available to the Agency to accomplish the abatement -
of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a
Maintenance Deficiency on the Developer Property pursuant to this Section 5.5 that is not paid
within thirty (30) calendar days after written demand for payment from the Agency, shall accrue
interest at the rate of ten percent (100%) per annum, until paid.
(c) Graffiti, as defined in Government Code Section 38772, that has been
applied to any exterior surface of a structure or improvement on the Developer Property that is
visible from any public right-of-way adjacent or contiguous to the Developer Property, shall be
removed by Developer by either painting over the evidence of such vandalism with a paint that
has been color -matched to the surface on which the paint is applied, or graffiti may be removed
with solvents, detergents or water, as appropriate. If any such graffiti is not removed within
seventy-two (72) hours following the time of the discovery of the graffiti, the Agency shall have
the right to enter the Developer Property and remove the graffiti, without notice to Developer.
Any sum expended by the Agency for the removal of graffiti from the Developer Property
pursuant to this Section 5.5, Section 5.5(c), shall be limited to an amount not to exceed Five
Hundred Dollars ($500) per entry by the Agency. If any amount becoming due to the Agency
under this Section 5.5(c) is not paid within thirty (30) calendar days after written demand to
Developer from the Agency, such amount shall accrue interest at the rate of ten percent (10%)
per annum, until paid in full.
(d) The obligations of Developer and its successors and assigns under
Section 5.5, Section 5.5(a), Section 5.5(b) or Section 5.5(c) shall be secured by a lien against the
Developer Property. Developer hereby grants to the Agency a security interest in the Developer
Property with the power to establish and enforce a lien or other encumbrance against the
Developer Property, in the manner provided under Civil Code Sections 2924, 2924b and 2924c,
to secure the obligations of Developer and it successors under Section 5.5, Section 5.5(a),
Section 5.5(b) or Section 5.5(c), including the reasonable attorneys' fees and costs of the Agency
associated with the abatement of a Maintenance Deficiency or removal of graffiti. The
recordation of the Agency Deed and the Notice of Agreement shall provide record notice of such
security interest in favor of the Agency.
(e) The provisions of this Section 5.5, shall be a covenant running with the
land of the Developer Property and binding successive owners of the Developer Property until
the Redevelopment Plan Expiration Date and shall be enforceable by the Agency. Nothing in the
foregoing provisions of this Section 5.5 shall be deemed to preclude Developer from making any
alteration, addition, or other change to any improvement or landscaping on the Developer
Property that complies with applicable zoning and building regulations of the City.
Section 5.6 Obligation to Refrain from Discrimination. Developer covenants and
agrees for itself, its successors, its assigns and every successor -in -interest to all or any portion of
the Developer Property, that there shall be no discrimination against or segregation of any
person, or group of persons, on account of sex, marital status, race, color, religion, creed,
45636.0600 115951390.9
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Developer Property nor shall Developer, itself or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-
tenants, sub -lessees or vendees of the Developer Property. The covenant of this Section 5.6 shall
be a covenant running with the land of the Developer Property and binding on successive owners
of the Developer Property, in perpetuity.
Section 5.7 Form of Non-discrimination and Non -segregation Clauses. Developer
covenants and agrees for itself, its successors, its assigns, and every successor -in -interest to all or
any portion of the Developer Property, that Developer, such successors and such assigns shall
refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or
enjoyment of all or any portion of the Developer Property on the basis of sex, marital status,
race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or
contracts pertaining to the Developer Property shall contain or be subject to substantially the
following non-discrimination or non -segregation covenants:
(a) In deeds: "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sub -tenants, sub -lessee, or vendees in the premises herein conveyed. The
foregoing covenants shall run with the land."
(b) In leases: "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted
upon and subject to the following conditions: That there shall be no discrimination against or
segregation of any person or group of persons, on account of race, color, creed, religion, sex,
marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants lessees, sub -lessee, sub -tenants, or vendees in the premises herein (eased."
(c) In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person
claiming under or through it, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or occupancy, of tenants,
lessees, sub -lessees, sub -tenants, or vendees of the premises herein transferred." The foregoing
provision shall be binding upon and shall obligate the contracting party or parties and any
subcontracting party or parties, or other transferees under the instrument.
45636.0600115951390.9
(d) The covenant of this Section 5.7 shall be a covenant running with the land
of the Developer Property and binding on successive owners of the Developer Property, in
perpetuity.
Section 5.8 Developer's Covenant to Defend this Agreement. Developer
acknowledges that the Agency is a "public entity" and/or a "public agency" as defined under
applicable California law. Therefore, the Agency must satisfy the requirements of certain
California statutes relating to the actions of public entities, including, without limitation, CEQA.
Also, as a public body, the Agency's action in approving this Agreement may be subject to
proceedings to invalidate this Agreement or mandamus. Developer assumes the risk of delays
and damages that may result to Developer from any third -party legal actions related to the
Agency's approval of this Agreement or the pursuit of the activities contemplated by this
Agreement, even in the event that an error, omission or abuse of discretion by the Agency is
determined to have occurred. If a third -party files a legal action regarding the Agency's approval
of this Agreement or the pursuit of the activities contemplated by this Agreement, the Agency
may terminate this Agreement on thirty (30) days advance written notice to Developer of the
Agency's intent to terminate this Agreement, referencing this Section 5.8, without any further
obligation to perform the terms of this Agreement and without any liability to Developer
resulting from such termination, unless Developer unconditionally agrees to indemnify and
defend the Agency, with legal counsel acceptable to the Agency, against such third -party legal
action, within thirty (30) calendar days following receipt of the Agency's notice of intent to
terminate this Agreement, including without limitation paying all of the court costs, attorney
fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and
the expenses of any and all financial or performance obligations resulting from the disposition of
the legal action, Any such agreement between the Agency and Developer must be in a separate
writing and reasonably acceptable to the Agency in both form and substance. Nothing contained
in this Section 5.8 shall be deemed or construed to be an express or implied admission that the
Agency may be liable to Developer or any other person for damages or other relief alleged from
any alleged or established failure of the Agency to comply with any statute, including, without
limitation, CEQA.
THIS NOTICE OF AGREEMENT is dated as of '20 _'
20_, and
has been executed on behalf of Developer and the Agency by and through the signatures of their
authorized representatives) set forth below. This Notice of Agreement may be executed in
counterparts and when fully executed each counterpart shall be deemed to be one original
instrument.
Developer:
CHARVAT FAMILY LLC, a California
limited liability company
ME
45636.0600115951390.9
Dated:
By:
Name:
Dated:
AGENCY:
REDEVELOPMENT AGENCY OF THE
CITY OF AZUSA, a public body, corporate
and politic
By:
Name: F.M. Detach
Its: Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
Agency Counsel
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
45636.0600115951390.9
EXHIBIT "I"
TO
NOTICE OF AGREEMENT
Developer Property Legal Description
[To be attached behind this cover page]
Exhibit "I"
Notice Of Agreement
45636.0600115951390.9
EXHIBIT "F"
FORM OF AGENCY DEED
[To be attached behind this cover page]
Exhibit "F'
Form Of Agency Deed
45636.0600115951390.10
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: }
Redevelopment Agency of the )
City of Azusa )
213 East Foothill Boulevard }
Azusa, CA 91702 }
Attention: Executive Director )
(Space Above Line For Use By Recorder)
[Recordation of this Document Is
Exempt From Fees Payable to the
Recorder Under Government Code
Section 27383]
REDEVELOPMENT AGENCY OF THE CITY OF AZUSA
GRANT DEED
PART ONE
For valuable consideration, the receipt of which is hereby acknowledged, the
Redevelopment Agency of the City of Azusa, a public body, corporate and politic (the
"Grantor'), hereby grants and conveys to Charvat Family LLC, a California limited liability
company ("Grantee"), that certain real property legally described in Exhibit "I" attached to this
Grant Deed and incorporated herein by this reference ("Developer Property").
PART TWO
The conveyance of the Developer Property by the Grantor to the Grantee in Part One is
subject to the following community redevelopment terms, conditions, covenants and restrictions:
Section 1. Conveyance Subiect to Terms of a Disnosition and Develoament
Agreement The Developer Property is conveyed subject to that certain 2011 Disposition and
Development Agreement (Charvat Family), dated as of between the Grantor
and the Grantee (the "Agreement''). The provisions of the Agreement are incorporated into this
Grant Deed by this reference and are deemed to be a part of this Grant Deed, as though fully set
forth in this Grant Deed. The Agreement contains certain community redevelopment covenants
running with the land of the Property and other agreements between the Developer and the
Agency affecting the Property, including, without limitation, covenants to construct and operate
a retail store and maintain the property on the tax rolls, including a right of the Agency to
recapture the property under certain circumstances, and on-going obligations to maintain the
property, all as set forth in the Agreement.
45636.06001\5957390. 101
Section 2. Condition of Devel9per Property, The Grantee acknowledges and agrees
that the Developer Property is conveyed by the Grantor to the Grantee in its "AS Is," "WHERE
IS" and "SUBJECT TO ALL FAULTS CONDITION," as of the date of recordation of this Grant
Deed, with no warranties, expressed or implied, as to the environmental or other physical
condition of the Developer Property, the presence or absence of any patent or Iatent
environmental or other physical condition on or in the Developer Property, or any other matters
affecting the Developer Property,
Section 3. Use Restriction. The Grantee covenants and agrees for itself, its
successors and assigns that the Property is restricted to the following uses:
Property shall be used solely for operating the Business
throughout the entirety of the Operating Period. If
Developer desires to change the use of the Developer
Property during the Operating Period, it shall obtain
Agency's prior written approval to make such change, such
approval to be made in the Agency's sole but reasonable
discretion. The following uses of the Developer Property,
or the building to be constructed thereon as part of the
Project, shall not be permitted: (i) divided and subleased
for the purpose of storing personal property; (ii) divided
and subleased to other vendors to sell goods or services; or
(iii) adult entertainment.
Section 4. Obligation to Refrain from Discrimination. Developer covenants and
agrees for itself, its successors, its assigns and every successor -in -interest to all or any portion of
the Developer Property, that there shall be no discrimination against or segregation of any
person, or group of persons, on account of sex, marital status, race, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Developer Property nor shall Developer, itself or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-
tenants, sub -lessees or vendees of the Developer Property. The covenant of Section 5.6 of the
Agreement shall be a covenant running with the land of the Developer Property and binding on
successive owners of the Developer Property, in perpetuity.
Section & Form of Non-discrimination and Non -segregation Clauses. Developer
covenants and agrees for itself, its successors, its assigns, and every successor -in -interest to all or
any portion of the Developer Property, that Developer, such successors and such assigns shall
refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or
enjoyment of all or any portion of the Developer Property on the basis of sex, marital status,
race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or
contracts pertaining to the Developer Property shall contain or be subject to substantially the
following non-discrimination or non -segregation covenants:
5.1 in deeds: "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there shall be no
45636.0005951390. 102
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the
grantee or any person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, sub -tenants, sub -lessee, or vendees in the premises herein `
conveyed. The foregoing covenants shall run with the land."
5.2 In leases: "The Lessee herein covenants by and for itself; its successors
and assigns, and all persons claiming under or through them, and this lease is made and
accepted upon and subject to the following conditions: That there shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed,
religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or
any person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants lessees, sublessee, sub -tenants, or vendees in the premises herein
leased"
5.3 In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry, in the sale, Iease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person
claiming under or through it, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or occupancy, of tenants,
lessees, sub -lessees, sub -tenants, or vendees of the premises herein transferred." The foregoing
provision shall be binding upon and shall obligate the contracting party or parties and any
subcontracting party or parties, or other transferees under the instrument.
5A The covenant of Section 5.7 of the Agreement shall be a covenant
running with the land of the Developer Property and binding on successive owners of the
Developer Property, in perpetuity.
Section 6. Agency Power of Termination Regarding the Developer Property. The
Agency hereby reserves a power of termination pursuant to Civil Cade Sections 885.610, et seq.,
exercisable by the Agency, in its sole and absolute discretion, upon thirty (30) calendar days
written notice to Developer referencing Section 10.7 of the Agreement, to terminate the fee
interest of Developer in the Developer Property and/or any improvements to the Developer
Property and revert such fee title in the Agency and take possession of all or any portion of such
real property and improvements, without compensation to Developer, upon the occurrence of an
Event of Default by Developer following the Close of Escrow and prior to the expiration of the
Operating Period pursuant to the provisions of Section 10.7 of the Agreement.
Section 7. Agency's Power of Termination as a Result in Change of Law Developer
acknowledges that on January 10, 2011 Governor Jerry Brown proposed legislation to eliminate
California redevelopment agencies and the related funding source. As such, Developer and
Agency agree that if there is a change in the law, that in the Agency's reasonable discretion,
4 5636.06 0 0115 95 13 9 0. 103
prevents the Agency or its successor from performing Agency's obligations hereunder prior to
the Close of Escrow, the Agency may terminate the Agreement by delivery of written notice to
Developer. Termination of the Agreement pursuant to this Section shall not be a default under
the Agreement and Developer shall not be entitled to damages as a result of this termination.
This is intended to constitute a present, binding, unconditional obligation ofthe Agency. If there
is such change in law following the Close of Escrow, Developer shall, at Developer's option,
terminate the Agreement and convey Developer property back to Agency as provided in Section
10.7(e) of the Agreement or defend the Agreement.
PART THREE
Section 1. Covenants Run with the Land of the Developer Property. Each of the
covenants and agreements contained in this Grant Deed touch and concern the Developer
Property and each of them is expressly declared to be a community redevelopment covenant that
runs with the land for the benefit of the Grantor or the City of Azusa, as the successor public
agency to the Grantor, and such covenants run with the land in favor of the Grantor for the entire
period that such covenants are in full force and effect, regardless of whether the Grantor is or
remains an owner of any land or interest in land to which such covenants relate. The Grantor, in
the event of any breach of any such covenants, has the right to exercise all of the rights and
remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to
enforce the curing of such breach, as provided in the Agreement or by law. The covenants
contained in this Grant Deed are for the benefit of and are enforceable only by the Grantor or the
City of Azusa, as the successor public agency to the Grantor, and shall survive the execution and
recordation of this Grant Deed and the issuance and recordation of each and every Certificate of
Completion, for the time period set forth above for each covenant.
Section 2. Costs and Attorneys' Fees for Enforcement Proceeding. If legal
proceedings are initiated to enforce the rights, duties or obligations of any of the covenants set
forth in this Grant Deed, then the prevailing party in such proceeding shall be entitled to collect
its reasonable attorney fees and costs from the other parry in addition to any other damages or
relief obtained in such proceedings.
Section 3. Effect of Unlawful Provision; Severability. In the event that any provision
of this Grant Deed is held to be invalid or unlawful by a final judgment of a court of competent
jurisdiction, such invalidity shall not affect the validity of any other provision of this Grant Deed.
[Signatures on following page]
45636.0600115951390. 104
IN WITNESS WHEREOF, the Grantor has caused this Gram Deed to be executed by its
authorized representative(s) on this _ day of 2011.
GRANTOR:
REDEVELOPMENT AGENCY OF THE
CITY OF AZUSA,
a public body, corporate and politic
0
F.M. Delach
Executive Director
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
45636.00001\5951390. 105
CERTIFICATE OF ACCEPTANCE OF
GRANT DEED
The undersigned hereby acknowledges acceptance by Charvat Family LLC, a California
limited liability company, the Grantee in the within Grant Deed, of the delivery of the subject
Developer Property described in the within Grant Deed from the Redevelopment Agency of the
City of Azusa, subject to all of the community Tedevelopment covenants expressly set forth or
incorporated within the Gram Deed.
GRANTEE:
CHARVAT FAMILY LLC, a California limited
liability company
By:
Its:
jALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
45636.0600115951390.10
EXHIBIT "G"
FORM OF OFFICIAL ACTION OF DEVELOPER
[To be attached behind this cover page]
Exhi bit "G"
Form Of Official Action of Developer
45636.0600115951390.9
CERTIFICATION OF AUTHORITY
The undersigned owners of Charvat Family LLC, a California limited liability
company ("Company"), do hereby certify that we are all of the owners of the Company, there
are no other owners and no consent or approval of any other person is required for the
undersigned to make the certifications set forth in this Certificate.
We further certify that the following named person(s):
1. Mark Charvat
2. Jason Charvat
are, without any additional or further consent of any person, authorized and empowered
for and on behalf of and in the name of the Company to: (1.) sign and deliver that certain 201.1
Disposition and Development Agreement (Charvat Family), dated as of ^'StAn-e, iv t golf, for
reference purposes only ("Agreement"), regarding the acquisition and improvement of certain
property owned by the Redevelopment Agency of the City of Azusa and located in the City of
Azusa, California, as more fully described in the Agreement, and performance of other
obligations of the Company as set forth in the Agreement; (2) sign and deliver all other
documents to be executed in connection with the transactions contemplated in the Agreement;
and (3) take all actions that may be considered necessary to complete the acquisition,
construction and obligations contemplated in the Agreement.
The authority conferred and certified to in this Certificate shall be. considered retroactive
and any and all acts authorized in this Certificate that were performed before the execution of
this Certificate are approved and ratified by the Company. The authority conferred and certified
to in this Certificate shall continue in full force and effect until the Executive Director of the
Redevelopment Agency of. the City of Azusa receives written notice from all of the owners of the
Company, as set forth herein, of the revocation of this Certificate.
We further certify that the activities covered by the authorities conferred and certified to
in this Certificate and the foregoing certifications constitute duly authorized activities of the
Company; that these authorities and certifications are now in full force and effect; and that there
is no provision in any document under which the Company is organized and/or that governs the
Company's continued existence limiting the power of the undersigned to grant such authority or
make the certifications set forth in this Certificate, and that the same are in conformity with the
provisions of all such documents.
Company' owners:
By:
Mark Charvat
By:.
Brian Charvat
45636.06001 \5951390.9
By: Q�� 14,y�
Julie Charvat
By:
son vat
EXHIBIT "H"
FORM OF CERTIFICATE OF COMPLETION
[Attached behind this cover page]
Exhibit "IT'
Form Of Certificate Of Completion
45636.0600115951390.9
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Redevelopment Agency of the )
City of Azusa )
213 East Foothill Boulevard )
Azusa, CA 91702 )
Attention: Executive Director )
(Space Above Line For Use By Recorder)
(Recordation of this Document Is
Exempt From Fees Payable to the
Recorder Under Government Code
Section 27383)
REDEVELOPMENT AGENCY OF THE CITY OF AZUSA
CERTIFICATE OF COMPLETION
We, Chairperson and Secretary of the Redevelopment
Agency of the City of Azusa (the "Agency") certify that:
By its Resolution No. _, adopted and approved , the Agency
resolved:
Section 1. The "Project" required to be constructed in accordance with that
certain 2011 Disposition and Development Agreement (Charvat Family) (the "Agreement"),
dated by and between the Agency and Charvat Family LLC, a California
limited liability company ("Developer"), on that certain real property specifically described in
the legal description(s) attached to this Certificate of Completion as Exhibit "I" (the "Developer
Property"), is complete in accordance with the provisions of the Agreement.
Section 2. This Certificate of Completion constitutes conclusive evidence of the
Agency's determination of Developer's satisfaction of its obligation under the Agreement to
construct and install the Project on the Developer Property. Notwithstanding any provision of
this Certificate of Completion, the Agency may enforce any covenant surviving this Certificate
of Completion in accordance with the terms and conditions of the Agreement, including but not
limited to Article V. The Agreement is an official record of the Agency and a copy of the
Agreement may be inspected in the office of the Secretary of the Agency located at 213 East
Foothill Boulevard, Azusa, California, during the regular business hours of the Agency.
1 of 2
45636.06001\5951390.9
DATED AND ISSUED this _ day of
Chairperson
Secretary
2 of 2
4S636,0600 h5951390-9
EXHIBIT "I"
AGENCY PUBLIC IMPROVEMENTS
]Attached behind this cover page]
45636.06001\5951}90.9 Exhibit "P'
Agency Public Improvements
Description of Public Improvements
There is an existing 8 -inch water line along Azusa Avenue that dead -ends just north of the
Property. Agency shall tie the capped 8 -inch water line into the existing City water system but
extending it approximately 800 feet south to Arrow Highway.
There is very old and abandoned 6" line (c. 1941).on the Property that runs north along Azusa
Avenue from Arrow Highway which shall not be removed but will remain abandoned.
Approximate cost of the public improvements is $150,000.
Agency shall complete construction of the Public Improvements prior to the Close of Escrow
45636.0600 1\59513 90.9 Exhibit" r
Agency Public Improvements