HomeMy WebLinkAboutD-2 - Staff Report, Performance Truck DDASCHEDULED ITEM
D-2
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: KURT E. CHRISTIANSEN, FAICP, ECONOMIC AND COMMUNITY
DEVELOPMENT DIRECTOR
DATE: APRIL 17, 2017
SUBJECT: CONSIDERATION OF A DISPOSITION AND DEVELOPMENT AGREEMENT
(“DDA”) BETWEEN THE CITY OF AZUSA AND PERFORMANCE TRUCK
REPAIR, LLC, FOR DEVELOPMENT OF REAL PROPERTY GENERALLY
LOCATED AT 943 VERNON IN THE CITY (APN 8605-015-907) AND PURSUANT
TO THE CLASS 1 AND CLASS 32 EXEMPTIONS UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT
SUMMARY:
The City of Azusa (“City”) is the owner of 943 Vernon Avenue in the City (“Property”). The City has
been negotiating with the adjacent property owner, Performance Truck Repair, LLC (“Developer”)
regarding the sale and expansion of their commercial vehicle repair business. On April 3, 2017, the City
adopted Resolution No. 2017-C24 declaring the City’s intention to sell the Property. Pursuant to
Government Code Section 37420, the City is conducting a public hearing to consider sale of the
Property. Staff has determined that the Disposition and Development Agreement (DDA) is categorically
exempt from the California Environmental Quality Act (“CEQA”) pursuant to California Code of
Regulations, title 14, sections 15301 (Existing facilities) and 15332 (Class 32: In-fill development). The
proposed action opens the public hearing and adopts a resolution approving a DDA with the Developer
to allow the sale of the Property to Developer and for the City to ensure the development of the Property
in accordance with the DDA.
APPROVED
CITY COUNCIL
4/17/2017
Performance Truck
April 17, 2017
Page 2 of 4
RECOMMENDATION:
Staff recommends that the City Council take the following actions:
1) Open the public hearing and receive testimony from the public regarding the proposed sale of the
Property;
2) Close the public hearing, and, if any protests were received regarding the sale of the Property,
overrule the protest by a 4/5 majority vote;
3) Approve the attached City resolution no. 2017-C26 approving the DDA with Performance Truck
Repair, LLC, for the sale and development of the Property, and finding that the DDA is
categorically exempt from CEQA pursuant to State CEQA Guidelines sections 15301 and 15332;
and
4) Authorize the Mayor to execute the DDA, in a form acceptable to the City Attorney, on behalf of
the City.
DISCUSSION:
The City and Developer are interested in developing the Property as an expansion of Developer’s
existing business. By entering into the DDA, the City and the Developer intend for the City to sell the
Property to Developer and ensure that Developer develops the Property in accordance with the DDA.
In accordance with California Government Code Section 37420 et seq., the City must hold a public
hearing to accept any written protests received from interested parties and, if no protests are received, or
if the city council votes to overrule a protest by a 4/5 majority, the City Council may adopt a resolution
finding that the public interest and convenience require the sale of the Property and proceed with the
sale of the Property.
The City has found that the Developer’s proposed acquisition of the Property and subsequent
construction and completion of the commercial development on the Property pursuant to the terms of
this Agreement is in the best interest of the City and the health, safety and welfare of the City’s
taxpayers and residents and is in accordance with the public purposes set forth in applicable law.
Implementation of this Agreement will further the goals and objectives of the City’s general plan by: (i)
strengthening the City’s land use and social structure, and (ii) alleviating economic and physical blight
on the Property and in the surrounding community.
As part of the consideration for the City to convey the Property to Developer the City shall receive an
additional payment (“Covenant Payment”) in an amount not to exceed Five Hundred Thousand Dollars
($500,000). The Covenant Payment from Developer to City shall be paid by the tenth (10) anniversary
of the Escrow Closing Date. The Covenant Payment may be satisfied through any combination of the
following means:
• Developer shall provide City with a credit, redeemable by the City at the City’s discretion, for
goods and services including but not limited to:
o a zero-emission, all-electric shuttle bus for pilot transit agency program;
o Maintenance and service of City transit vehicles;
Performance Truck
April 17, 2017
Page 3 of 4
o Purchase of zero-emission, all-electric shuttle buses;
o installation of charging infrastructure for zero emission, all-electric shuttle buses;
o maintenance, training, service and support for such zero emission, all-electric shuttle
buses and other City vehicles.
• Cash payment. Sales tax revenue received pursuant to Bradley Burns Sales and Use Tax by City
from Developer’s sales, services or leases
ENVIRONMENTAL IMPACT:
City staff has determined that the DDA is categorically exempt from further environmental review under
CEQA because
A. State CEQA Guidelines section 15301 (Class 1: Existing facilities) because:
1. Class 1 consists of the operation, repair, maintenance, permitting…or minor
alteration of existing public or private structures, facilities, mechanical
equipment, or topographical features, involving negligible or no expansion of use
beyond that existing at the time of the lead agency’s determination. According
to Section 15301, the “key consideration is whether the project involves
negligible or no expansion of an existing use”; and
2. The Agreement is consistent with the following type of example provided in
Section 15301: “Additions to existing structures provided that the addition will
not result in an increase of more than 1) 50 percent of the floor area of the
structures before the addition, or 2,500 square feet, whichever is less; or 2)
10,000 square feet if the project is in an area where public services and facilities
are available to allow for maximum development permissible in the General Plan
and the area in which the project is located is not environmentally sensitive.
B. State CEQA Guidelines section 15332 (Class 32: In-fill development) because:
1. The Agreement is consistent with the applicable general plan designation and all
applicable general plan policies as well as applicable zoning designations and
regulations;
2. The proposed development in the Agreement occurs within the City limits on a
project site of no more than five acres substantially surrounded by urban uses;
3. The City Property in the Agreement has no value as habitat for endangered, rare,
or threatened species;
4. Approval of the Agreement would not result in any significant effects relating to
traffic, noise, air quality, or water quality; and
5. The City Property in the Agreement can be adequately served by all required
utilities and public services.
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April 17, 2017
Page 4 of 4
FISCAL IMPACT:
The City shall sell the Property to Developer for the purchase price of $1,036,000 and up to $500,000
through the Covenant Payment.
Prepared by: Reviewed and Approved:
Kurt E. Christiansen, FAICP Louie F. Lacasella
Economic and Community Development Director Management Analyst
Reviewed and Approved:
Troy L. Butzlaff, ICMA-CM
City Manager
Attachments:
1) Disposition and Development Agreement
2) Resolution No. 2017-C26 approving the Disposition and Development Agreement
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
CITY OF AZUSA,
a California municipal corporation,
and
PERFORMANCE TRUCK REPAIR, LLC,
a California limited liability company
[Dated as of _________, 2017, for reference purposes only]
45635.01000\29057912.6
ATTACHMENT 1
DISPOSITION AND DEVELOPMENT AGREEMENT
(Performance Truck)
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this “Agreement”) is
dated as of _________, 2017 for reference purposes only, and is entered into by and between
the City of Azusa, a California municipal corporation (the “City) and Performance Truck
Repair, LLC, a California corporation (the “Developer”) (collectively, the “Parties,” and each a
“Party”). The Parties enter into this Agreement with reference to the following recited facts
(collectively, the “Recitals,” and each a “Recital”):
RECITALS
A. The City owns that certain real property generally located at 943 Vernon Ave,
Azusa, California, and as more particularly described in the legal description(s) attached to this
Agreement as Exhibit “A” and depicted as APN 8605-015-907 (the “Property”); and
B. The Developer proposes to acquire the Property, construct certain improvements
on the Property as described in the definition of “Project” set forth in Article 1 of this
Agreement; and
C. The City desires to sell and the Developer desires to purchase the Property for
the purpose of development of the Project on the Property on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH THE PARTIES ACKNOWLEDGE, AND
PURSUANT TO THE PROMISES AND COVENANTS SET FORTH IN THIS
AGREEMENT, THE PARTIES AGREE, AS FOLLOWS:
ARTICLE 1
DEFINITIONS
Defined Terms. In addition to the usage of certain words, terms or phrases1.1
that are defined in the initial paragraph, the Recitals or in the body 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:
“Approvals” means any and all licenses, permits, approvals, consents,1.1.1
certificates (including certificate(s) of occupancy), rulings, variances, authorizations, or
amendments to any of the foregoing, as shall be necessary or appropriate under any Law to
commence, perform, or complete any construction, demolition, installation, use, maintenance,
repair, occupancy or operation of the Project.
“Automobile Liability Insurance” means insurance coverage against1.1.2
claims of Personal injury (including bodily injury and death) and property damage covering all
owned, leased, hired and non-owned vehicles used by the Developer regarding the Project,
45635.01000\29057912.6 1
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.
“Bankruptcy Law” means Title 11, United States Code, and any1.1.3
other or successor State or Federal statute relating to assignment for the benefit of creditors,
appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium,
reorganization, or similar matters.
“Bankruptcy Proceeding” means any proceeding, whether voluntary1.1.4
or involuntary, under any Bankruptcy Law.
“Builder’s Risk Insurance” means “All Risk” builder’s risk insurance1.1.5
on a completed value (non-reporting) basis, in an amount sufficient to prevent coinsurance, but
in any event not less than 100% of replacement value, including cost of debris removal, but
excluding foundation and excavations, naming The City and The Developer, as their interests
may appear. Such insurance shall also: (a) contain a waiver of subrogation against
subcontractors; (b) state that “permission is granted to complete and occupy”; (c) cover, for
replacement value, all materials and equipment on or about any offsite storage location
intended for use for the Project; and (d) provide for a deductible not exceeding Ten Thousand
Dollars ($10,000).
“CEQA” means the California Environmental Quality Act, Public1.1.6
Resources Code Sections 21000, et seq.
“CEQA Document ” means any Negative Declaration (mitigated or1.1.7
otherwise) or any Environmental Impact Report (including any addendum, amendment,
subsequent or supplemental document) required by any Government to issue any discretionary
Approval required for the Project.
“Certificate of Completion” means the written certification of the City1.1.8
that the Project is complete and in compliance with the terms and conditions of this
Agreement, in substantially the form of Exhibit “F” to this Agreement.
“City Deed” means the deed in substantially the form of Exhibit “C”1.1.9
to this Agreement, conveying all of the City’s interest in the Property to the Developer and
reserving necessary easements for ingress and egress to the City’s adjacent parcel.
“City Manager” means the City Manager of the City or his or her1.1.10
designee or successor in function.
“City Parties” means, collectively, the City, its governing body,1.1.11
elected officials, employees, agents and attorneys.
“City Party” means, individually, the City, its governing body, elected1.1.12
officials, employees, agents or attorneys.
45635.01000\29057912.6 2
“City’s Title Notice Response” means the written response of the1.1.13
City to the Developer’s Title Notice, in which the City elects to either: (i) cause the removal
from the Preliminary Report of any matter disapproved in the Developer’s Title Notice, (ii)
obtain title insurance in a form reasonably satisfactory to the Developer insuring against the
effects of any matters disapproved or conditionally approved in the Developer’s Title Notice,
(iii) otherwise satisfy the Developer regarding any matter disapproved or conditionally
approved in the Developer’s Title Notice, or (iv) not to take any action described in either (i),
(ii) or (iii).
“Claims” means any and all claims, losses, costs, damages, expenses,1.1.14
liabilities, liens, actions, causes of action (whet her in tort, contract or under statute, at law, in
equity or otherwise), charges, awards, assessments, fines or penalties of any kind (including
consultant and expert fees and expenses, Legal Costs of counsel retained by the City Parties,
expert fees, costs of staff time and investigation costs of whatever kind or nature), and
judgments, including, but not limited to, claims for: (i) injury to any Person (including death at
any time resulting from that injury); (ii) 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 City Parties; (iii) any workers’ compensation claim
or determination; (iv) any Prevailing Wage Action; or (v) any Environmental Claim.
“Close of Escrow” means the recording of the City Deed in the1.1.15
official records of the County and completion of each of the actions set forth in Section 3.7 by
the Escrow Agent for the conveyance of the Property from the City to the Developer.
“Contractor’s Insurance” means Contractor’s comprehensive general1.1.16
and automobile liability insurance for not less than One Million Dollars ($1,000,000) for
personal injury and One Million Dollars ($1,000,000) for broad form property damage,
including premises-operations liability, contractor’s protective liability for all subcontractors’
operations, completed operations, contractual liability (referring to the indemnity provisions of
the applicable construction contract(s)), and automobile liability (owned and non-owned), and
for any foundation, excavation, or demolition work, an endorsement that such operations are
covered and that the “XCU Exclusions” have been deleted, which insurance may be in the form
of a single limit policy or policies.
“Control” means possession, directly or indirectly, of the power to1.1.17
direct or cause the direction of the management and policies of a Person, whether by
ownership of Equity Interests, by contract or otherwise.
“Controlling” and “Controlled” mean exercising or having Control.1.1.18
“County” means the County of Los Angeles, California.1.1.19
“Covenant Period” means the fifteen (15) years commencing on the1.1.20
date of issuance of a Certificate of Completion for the Project.
“Default ” means any Monetary Default or Non-Monetary Default.1.1.21
45635.01000\29057912.6 3
“Default Interest ” means interest at an annual rate equal to the lesser1.1.22
of: (a) ten percent (10%) per annum; or (b) the Usury Limit.
“Deposit ” means the amount of Two Hundred Thousand Dollars1.1.23
($200,000) paid in immediately available funds.
“Developer Official Action” means the official action of the1.1.24
Developer authorizing the Developer’s entry into and performance of this Agreement, in
substantially the form attached to this Agreement as Exhibit “E,” executed by the authorized
representative(s) of the Developer.
“Developer Parties” means, collectively, the directors, officers,1.1.25
employees and agents of the Developer.
“Developer Party” means, individually, the directors, officers,1.1.26
employees or agents of the Developer.
“Developer’s Title Notice” means a written Notice from the1.1.27
Developer to both the City and the Escrow Agent indicating the Developer’s acceptance of the
state of the title to the Property, as described in the Preliminary Report, or the Developer’s
disapproval of specific matters shown in Schedule B of the Preliminary Report, as exceptions
to coverage under the proposed Title Policy, describing in suitable detail the actions that the
Developer reasonably believes are indicated to obtain the Developer’s approval of the state of
the title to the Property.
“Developer’s Title Notice Waiver” means a written Notice from the1.1.28
Developer to both the City and the Escrow Agent waiving the Developer’s previous
disapproval in the Developer’s Title Notice of specific matters shown in Schedule B of the
Preliminary Report, as exceptions to coverage under the proposed Title Policy.
“Due Diligence Completion Notice” means a written Notice of the1.1.29
Developer delivered to both the City and the Escrow Agent, prior to the end of the Due
Diligence Period, indicating the Developer’s unconditional acceptance of the condition of the
Property or indicating the Developer’s rejection or conditional acceptance of the condition of
the Property and refusal to accept a conveyance of fee title to the Property, describing in
reasonable detail the actions that the Developer reasonably believes are indicated to allow the
Developer to unconditionally accept the condition o f the Property.
“Due Diligence Investigations” means the Developer’s due diligence1.1.30
investigations of the Property to determine the suitability of the Property for development or
operation of the Project, including, without limitation, investigations of the environmental and
geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of
the Developer, all at the sole cost and expense of the Developer.
“Due Diligence Period” means the one hundred and eighty (180)1.1.31
calendar day period commencing on the day immediately following the Effective Date and
45635.01000\29057912.6 4
ending at 5:00 p.m. Pacific Time on the one hundred eightieth (180th) consecutive day
thereafter.
“Effective Date” means the first date on which all of the following1.1.32
have occurred: (i) the City has received two (2) counterpart originals of this Agreement
executed by the authorized representative(s) of the Developer; (ii) the City has received a
certified copy of the Developer Official Action executed by the authorized representative(s) of
the Developer; (iii) this Agreement has been approved by the City governing body; (iv) this
Agreement has been executed by the authorized representative(s) of the City; (v) an original of
this Agreement executed by the authorized represent ative(s) of the City has been delivered by
the City to the Developer.
“Escrow” means an escrow, as defined in Civil Code Section 10571.1.33
and Financial Code Section 17003(a), that is conducted by the Escrow Agent with respect to
the conveyance of Property from the City to the Developer, pursuant to this Agreement.
“Escrow Agent ” means Fidelity National Title Company or such1.1.34
other Person mutually agreed upon in writing by the City and the Developer.
“Escrow Closing Date” means the earlier of: (i) on or before the1.1.35
fifth (5th) business day following the Escrow Agent’s receipt of written confirmation from both
the City and the Developer of the satisfaction or waiver of all conditions precedent to the
Close of Escrow or (ii) March 15, 2017.
“Escrow Opening Date” means the first date on which a fully1.1.36
executed copy of this Agreement and the Deposit are deposited with the Escrow Agent.
“Event of Default ” means the occurrence of any one or more of the1.1.37
following:
Monetary Default. A Monetary Default that continues for(a)
seven (7) days after Notice from the non-defaulting Party, specifying in reasonable detail the
amount of money not paid and the nature and calculation of each such payment.
Prohibited Liens. Failure of the Developer to cause any(b)
Prohibited Lien to be released within fifteen (15) days after Notice of such lien to the
Developer.
Bankruptcy or Insolvency. The Developer ceases to do(c)
business as a going concern, ceases to pay its debt s as they become due or admits in writing
that it is unable to pay its debts as they become due, or becomes subject to any Bankruptcy
Proceeding (except an involuntary Bankruptcy Proceeding dismissed within sixty (60) days
after commencement), or a custodian or trustee is appointed to take possession of, or an
attachment, execution or other judicial seizure is made with respect to, substantially all of the
Developer’s assets or the Developer’s interest in t his Agreement (unless such appointment,
45635.01000\29057912.6 5
attachment, execution, or other seizure was involuntary and is contested with diligence and
continuity and vacated and discharged within sixty (60) days).
Transfer. The occurrence of a Transfer, other than a(d)
Permitted Transfer, whether voluntarily or involunt arily or by operation of Law, in violation of
the terms and conditions of this Agreement.
Non-Monetary Default. Any Non-Monetary Default, other(e)
than those specifically addressed in Sections 1.1.50(b) through 1.1.50(d), that is not cured
within thirty (30) days after Notice to the Developer describing the Non-Monetary Default in
reasonable detail, or, in the case of a Non-Monetary Default that cannot with reasonable due
diligence be cured within thirty (30) days after such Notice, if the Developer does not do all of
the following: (i) within thirty (30) days after the City’s Notice, advise the City of the
Developer’s intention to take all reasonable steps to cure such Non-Monetary Default; (ii) duly
commence such cure within such period, and then diligently prosecute such cure to completion;
and (iii) complete such cure within a reasonable time under the circumstances.
“Federal” means the government of the United States of America.1.1.38
“Final” means, relative to an Approval or any CEQA Document,1.1.39
when all administrative appeal periods regarding such matter have expired, all administrative
appeals or challenges regarding such matter (if any) have been resolved to both the City’s and
the Developer’s reasonable satisfaction, all statut ory periods for challenging such matter have
expired, all litigation or other proceedings (if any) challenging any such matter have been
resolved to both the City’s and the Developer’s reasonable satisfaction and all appeal periods
relating to any such litigation or other proceedings have expired.
“FIRPTA Affidavit ” means an affidavit complying with Section 14451.1.40
of the United States Internal Revenue Code.
“Form 593” means a California Franchise Tax Board Form 593-C.1.1.41
“Improvements” means the public improvements on the Property to1.1.42
be constructed and installed by Developer pursuant to the conditions of City plan review and
Approvals as described in the Scope of Development, Exhibit “G” attached hereto and
incorporated herein by reference.
“Indemnify” means, where this Agreement states that any Indemnitor1.1.43
shall “indemnify” any Indemnitee from, against, or for a particular matter, that the Indemnitor
shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against
any and all loss, cost, claims, liability, penalties, judgments, damages, and other injury,
detriment, or expense (including Legal Costs, interest and penalties) that the Indemnitee suffers
or incurs: (a) from, as a result of, or on account of the particular matter; or (b) in enforcing
the Indemnitor’s indemnity obligation. “Indemnified” shall have the correlative meaning.
45635.01000\29057912.6 6
“Indemnitee” means any Person entitled to be Indemnified under the1.1.44
terms of this Agreement.
“Indemnitor” means a Party that agrees to Indemnify any other1.1.45
Person.
“Insurance Documents” means certified copies of insurance policies,1.1.46
original certificates of insurance or endorsements evidencing all insurance coverage required to
be obtained by the Developer, pursuant to Section 4.10.
“Law” means all laws, ordinances, requirements, orders,1.1.47
proclamations, directives, rules, and regulations of any Government applicable to the Property
or the Project, in any way, including any development, use, maintenance, taxation, operation,
or occupancy of, or environmental conditions affect ing the Property or the Project, or relating
to any taxes, or otherwise relating to this Agreement or any Party’s rights or remedies under
this Agreement, or any Transfer of any of the foregoing, whether in force on the Effective
Date or passed, enacted, or imposed at some later time, subject in all cases, however, to any
applicable waiver, variance, or exemption.
“Legal Costs” of any Person means all reasonable costs and expenses1.1.48
such Person incurs in any legal proceeding (or other matter for which such Person is entitled to
be reimbursed for its Legal Costs), including reasonable attorneys’ fees, court costs and
expenses and consultant and expert witness fees.
“Liability Insurance” means general comprehensive public liability1.1.49
insurance against claims for Personal injury, death or property damage occurring upon, in, or
about the Property, the Project adjoining streets o r passageways, providing coverage for a
combined single limit of One Million Dollars ($1,000,000) for any one occurrence. The City
may increase such limit up to once every three (3) years, upon at least one hundred eighty
(180) days’ Notice to the Developer, provided that any increased limit: (a) does not exceed
the limit initially set forth in this Section 1.1.71 multiplied by the CPI Adjustment Factor,
rounded to the nearest multiple of One Hundred Thousand Dollars ($100,000).
“Maintenance Deficiency” shall have the meaning ascribed to the term1.1.50
in Section 5.3.2.
“Maintenance Standard” shall have the meaning ascribed to the term1.1.51
in Section 5.3.1.
“Monetary Default ” means any failure by either Party to pay or1.1.52
deposit, when and as this Agreement requires, any amount of money, or evidence of any
insurance coverage, whether to or with a Party or a third-party.
“Mortgage” means any mortgage, deed of trust, security deed,1.1.53
contract for deed, deed to secure debt, or other vo luntary real property (including leasehold)
security instrument(s) or agreement(s) intended to grant real property (including leasehold)
security for any obligation (including a purchase-money or other promissory note) encumbering
45635.01000\29057912.6 7
the Property, as entered into, renewed, modified, consolidated, increased, decreased, amended,
extended, restated, assigned (wholly or partially), collaterally assigned, or supplemented from
time to time, unless and until paid, satisfied, and discharged of record. If two or more such
mortgages are consolidated or restated as a single lien or held by the same Mortgagee, then all
such mortgages so consolidated or restated shall constitute a single Mortgage. A participation
interest in a Mortgage (or partial assignment of the secured loan) does not itself constitute a
Mortgage.
“Mortgagee” means a holder of any Mortgage and its successors and1.1.54
assigns.
“Non-Monetary Default ” means the occurrence of any of the1.1.55
following, except to the extent constituting a Monetary Default: (i) any failure of a Party to
perform any of its obligations under this Agreement ; (ii) a Party’s failure to comply with any
material restriction or prohibition in this Agreement; or (iii) any other event or circumstance
that, with passage of time or giving of Notice, or both, or neither, would constitute a Default
under this Agreement.
“Notice” means any consent, demand, designation, election, Notice,1.1.56
or request relating to this Agreement, including any Notice of Default. All Notices must be in
writing.
“Notice of Default ” means any Notice claiming or giving Notice of a1.1.57
Default or alleged Default.
“Notice of Agreement ” means a notice, in substantially the form of1.1.58
Exhibit “D” to this Agreement, to be recorded against the Property at the Close of Escrow to
provide constructive record notice of the existence and application of this Agreement to the
Property.
“Notify” means give a Notice.1.1.59
“PCO Report ” means a preliminary change of ownership report1.1.60
required under California Revenue and Taxation Code Section 480.3.
“Performance Schedule” means the schedule for the performance of1.1.61
certain actions by the City or the Developer, pursuant to the terms and conditions of this
Agreement, attached to this Agreement as Exhibit “B.”
“Permitted Encumbrance” means any Mortgage and any other1.1.62
document required or allowed to be recorded against the Property by the express terms of this
Agreement.
“Permitted Exceptions” means: (i) any and all items shown in1.1.63
Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title
Policy that the Developer does not disapprove or co nditionally approve or that are otherwise
accepted or consented to by the Developer; (ii) any exceptions from coverage under the
45635.01000\29057912.6 8
proposed Title Policy resulting from the Developer’s activities on the Property; (iii) any lien for
non-delinquent property taxes or assessments; (iv) any Laws applicable to the Property; (v) this
Agreement; (vi) the City Deed; (vii) any other matt er provided for in this Agreement.
“Person” means any association, corporation, governmental entity or1.1.64
City, individual, joint venture, joint-stock company, limited liability company, partnership, trust,
unincorporated organization, or other entity of any kind.
“Pre-Closing Liquidated Damages Amount ” means the amount of1.1.65
Twenty Five Thousand Dollars ($25,000).
“Preliminary Report ” means a preliminary report issued by the Title1.1.66
Company in contemplation of the issuance of the Tit le Policy, accompanied by copies of all
documents listed in Schedule B of the report, as exceptions to coverage under the proposed
Title Policy.
“Prevailing Wage Action” means: (i) any determination by the State1.1.67
Department of Industrial Relations that prevailing wage rates should have been paid, but were
not, (ii) any determination by the State Department of Industrial Relations that higher
prevailing wage rates than those paid should have been paid, (iii) any administrative or legal
action or proceeding arising from any failure to co mply with the California Labor Code
provisions regarding prevailing wage payments, including maintaining certified payroll records
pursuant to California Labor Code 1776, or (iv) any administrative or legal action or
proceeding to recover wage amounts pursuant to California Labor Code Section 1781.
“Prohibited Encumbrance” means any mortgage, lien, deed of trust,1.1.68
easement, mechanic’s lien or other encumbrance recorded or asserted against the Property or
the Project that is not a Permitted Encumbrance.
“Project ” means the development and expansion of facilities for the1.1.69
repair, refurbishment, maintenance, design and construction of commercial passenger vehicles,
including all required parking, all required or associated on-site and off-site improvements, all
hardscape and all landscaping, all as specifically described in Exhibit “G” attached hereto and
incorporated herein by reference, and all to be developed in accordance with the terms and
conditions of this Agreement, plans and specifications approved by the City and any conditions
imposed by the City in its approval of the Developer’s development application(s) related to
the Project.
“Project Completion Date” means May 18, 2018.1.1.70
“Property Insurance” means insurance providing coverage for the1.1.71
Project and the Property, against loss, damage, or destruction by fire and other hazards
encompassed under the broadest form of property insurance coverage then customarily used for
like properties in the County (except earthquake or war risk) from time to time, in an amount
equal to one hundred percent (100%) of the Full Replacement Value (without deduction for
depreciation) of the Project (excluding excavations and foundations) and in any event sufficient
to avoid co-insurance, with “ordinance or law” coverage. Such insurance may contain a
45635.01000\29057912.6 9
deductible clause not exceeding Five Thousand Dollars ($5,000) multiplied by the then current
CPI Adjustment Factor. To the extent customary for like properties in the County at the time,
such insurance shall include coverage for explosion of steam and pressure boilers and similar
apparatus located on the Property; coverage for terrorism; coverage against damage or loss by
flood, if the Property is located in an area in which flood insurance is available under the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as such
laws may be amended, modified or replaced from time to time; an “increased cost of
construction” endorsement; and an endorsement covering demolition and cost of debris
removal.
“Property Insurance Proceeds” means net proceeds (after reasonable1.1.72
costs of adjustment and collection, including Legal Costs) of Property Insurance, when and as
received by the Developer.
“Property Transfer” means any “change in ownership,” as defined in1.1.73
Revenue and Taxation Code Sections 60, et seq., of all or any portion of the Property.
“Purchase Price” means the amount of One Million Thirty Six1.1.74
Thousand Dollars ($1,036,000) in cash.
“Record”, “recorded”, “recording” or “recordation” each mean1.1.75
recordation of the referenced document in the official records of the Recorder of the County.
“Senior” when referring to multiple Deeds of Trust, means the Deed1.1.76
of Trust that is most senior in lien. Where “Senio r” is used as a comparative term as against
any specified Deed of Trust, such term refers to any Deed of Trust that is senior in lien to
such specified Deed of Trust. Priority of liens shall be determined under Section 3.7 of this
Agreement. If only one Deed of Trust exists, then it shall be deemed the “Senior” Deed of
Trust.
“State” means the State of California.1.1.77
“Title Company” means Fidelity National Title Company or such1.1.78
other title insurance company as mutually agreed upon between the City and the Developer in
writing.
“Title Policy” means a standard owner’s policy of title insurance1.1.79
issued by the Title Company, with coverage in the amount of the Purchase Price and insuring
fee title to the Property vested in the Developer, subject to the Permitted Exceptions.
“Transfer” of any property, right or obligation means any of the1.1.80
following, whether by operation of law or otherwise, whether voluntary or involuntary, and
whether direct or indirect: (a) any assignment, co nveyance, grant, hypothecation, mortgage,
pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property,
right or obligation, or of any legal, beneficial, o r equitable interest or estate in such property,
right or obligation or any part of it (including the grant of any easement, lien, or other
encumbrance); (b) any conversion, exchange, issuance, modification, reallocation, sale, or other
45635.01000\29057912.6 10
transfer of any direct or indirect Equity Interest(s) in the owner of such property, right or
obligation by the holders of such Equity Interest(s); (c) any transaction described in “b”
affecting any Equity Interest(s) or any other interest in such property, right or obligation or in
any such owner (or in any other direct or indirect owner at any higher tier of ownership)
through any manner or means whatsoever; or (d) any transaction that is in substance equivalent
to any of the foregoing. A transaction affecting Equity Interests, as referred to in clauses “b”
through “d,” shall be deemed a Transfer by the Operator even though the Operator is not
technically the transferor. A “Transfer” shall not , however, include any of the foregoing
(provided that the other Party to this Agreement has received Notice of such occurrence)
relating to any Equity Interest: (a) that constitutes a mere change in form of ownership with
no material change in beneficial ownership and constitutes a tax-free transaction under federal
income tax law and the State real estate transfer t ax; (b) to member(s) of the immediate
family(ies) of the transferor(s) or trusts for their benefit; or (c) to any Person that, as of the
Commencement Date, holds an Equity Interest in the entity whose Equity Interest is being
transferred.
“Unavoidable Delay” means a delay in either Party performing any1.1.81
obligation required to be performed by such Party under this Agreement, except payment of
money, 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 do not result from an act
or omission of the Party), casualty, war, acts of t errorism or riots. Unavoidable Delay shall
not include delay caused by a Party’s financial condition, illiquidity, or insolvency.
“Usury Limit ” means the highest rate of interest, if any, that Law1.1.82
allows under the circumstances.
“Waiver of Subrogation” means a provision in, or endorsement to,1.1.83
any Liability Insurance, Automobile Liability Insurance or Property Insurance policy, by which
the insurance carrier agrees to waive rights of recovery by way of subrogation against any
Person for any loss such policy covers.
“Workers’ Compensation Insurance” means worker’s compensation1.1.84
insurance complying with the provisions of State Law and an employer’s liability insurance
endorsement, with commercially standard limits, covering all employees of the Developer, its
contractors and vendors.
ARTICLE 2
PROPERTY DISPOSITION
Purchase and Sale. The City shall sell the Property to the Developer and the2.1
Developer shall purchase the Property from the City, pursuant to the terms and conditions of
this Agreement. For the purposes of exchanging funds and documents to complete the sale
from the City to the Developer and the purchase by the Developer from the City of the
Property, the City and the Developer agree to open Escrow with the Escrow Agent. The
provisions of ARTICLE 3 of this Agreement are the joint escrow instructions of the Parties to
45635.01000\29057912.6 11
the Escrow Agent for the conduct of Escrow. If requested by the Escrow Agent, the
Developer and the City shall execute the Escrow Agent’s reasonable standard or general
escrow instructions. Any provision in the Escrow Agent’s standard or general escrow
instructions that purports to exculpate the Escrow Agent from or require the Developer or the
City to indemnify the Escrow Agent against the Escrow Agent’s negligence or willful
misconduct shall be deemed “unreasonable” and shall not be included in any standard or
general escrow instructions requested by the Escrow Agent. In the event of any conflict
between the provisions of this Agreement and any such standard or general escrow instructions
requested by the Escrow Agent, the provisions of this Agreement shall be controlling.
Payment of Purchase Price. The Developer shall deposit the cash portion of2.2
the Purchase Price into Escrow, as follows.
Deposit . Within five (5) days following the opening of Escrow, the2.2.1
Developer shall deposit the Deposit into the Escrow. The Deposit shall become non-
refundable upon the termination of the Due Diligence Period. Upon the Close of Escrow, the
Deposit shall be credited to the Developer toward t he Purchase Price and paid to the City as
part of the Purchase Price. Should Escrow fail to close following the termination of the Due
Diligence Period, the Deposit shall be forfeited by Developer and shall be paid to the City upon
the cancelation of Escrow.
At Close of Escrow. At least one (1) business day preceding the2.2.2
Escrow Closing Date, the Developer shall deposit into the Escrow the Purchase Price, less the
amount of the Deposit.
Title Approval.2.3
Developer’s Title Notice. Within five (5) days after the Effective2.3.1
Date of this Agreement, the City shall request the Preliminary Report from the Title Company,
with instructions to the Title Company to deliver a copy of the Preliminary Report to the
Developer concurrent with delivery of the Preliminary Report to the City. Within thirty (30)
days following the Developer’s receipt of the Preliminary Report, the Developer shall deliver
the Developer’s Title Notice to the City.
Failure to Deliver Developer’s Title Notice. If the Developer fails to2.3.2
deliver Developer’s Title Notice to the City, within thirty (30) days following the Developer’s
receipt of the Preliminary Report, the Developer will be deemed to disapprove the status of
title to the Property and refuse to accept title to the Property.
City’s Title Notice Response. Within fifteen (15) days following the2.3.3
earlier of the City’s receipt of Developer’s Title Notice or expiration of the time period
provided in this Section 2.3 for delivery of Develo per’s Title Notice, the City shall serve City’s
Title Notice Response. If the Developer’s Title Notice does not disapprove or conditionally
approve any matter in the Preliminary Report or the Developer fails to deliver the Developer’s
Title Notice, the City shall not be required to serve City’s Title Notice Response. If the City
does not serve City’s Title Notice Response, if necessary, within fifteen (15) days following its
receipt of the Developer’s Title Notice, the City shall be deemed to elect not to take any
45635.01000\29057912.6 12
action in reference to the Developer’s Title Notice. If the City elects in City’s Title Notice
Response to take any action in reference to the Developer’s Title Notice, the City shall take
such action, prior to the Escrow Closing Date.
Developer’s Title Notice Waiver. If the City elects or is deemed to2.3.4
have elected not to take any action in reference to the Developer’s Title Notice, then within
seven (7) days following the earlier of (1) the Developer’s receipt of City’s Title Notice
Response or (2) the expiration of the time period provided in Section 2.3 for delivery of City’s
Title Notice Response, the Developer shall either: (i) refuse to accept the title to and
conveyance of the Property, or (ii) waive its disapproval or conditional approval of any matters
set forth in the Developer’s Title Notice by delivering the Developer’s Title Notice Waiver to
the City. Failure by the Developer to timely deliver the Developer’s Title Notice Waiver,
where City’s Title Notice Response or the City’s failure to serve City’s Title Notice Response
indicates or results in the City’s election not to take any action in reference to the Developer’s
Title Notice, will be deemed the Developer’s continued refusal to accept the title to and
conveyance of the Property, in which case either the City or the Developer shall have the right
to cancel the Escrow and terminate this Agreement, in their respective sole and absolute
discretion, until such time (if ever) as the Developer delivers the Developer’s Title Notice
Waiver. Any termination of this Agreement and cancellation of the Escrow pursuant to this
Section 2.3.4 shall be without liability to the other Party or any other Person, and shall be
accomplished by delivery of a written Notice of termination to both the other Party and the
Escrow Agent, in which case the Parties and the Escrow Agent shall proceed pursuant to
Section 3.11.
Developer Due Diligence Investigations.2.4
License to Enter. The City licenses and permits the Developer to2.4.1
enter the Property solely for the purpose of undert aking and completing such Due Diligence
Investigations as the Developer deems necessary and appropriate. The license provided in this
Section 2.4.1 shall expire at the earlier of: (i) the end of the Due Diligence Period or (ii) the
date of Developer’s delivery of the Due Diligence Completion Notice. The Developer shall
conduct all of its Due Diligence Investigations at its sole cost and expense. The Developer
shall abide by any reasonable additional condition(s) of entry onto the Property required by the
City, whether or not set forth in this Agreement. Any Due Diligence Investigations of the
Property by the Developer shall not unreasonably disrupt any then existing use or occupancy of
the Property or the operations of the City.
Limitations. The Developer shall not conduct any intrusive or2.4.2
destructive testing of any portion of the Property, other than low volume soil samples, without
the City Manager’s prior written consent. Following the conduct of any Due Diligence
Investigations on the Property, the Developer shall restore the Property to substantially its
condition prior to the conduct of such Due Diligence Investigations.
Indemnity; Insurance. The activities of the Developer or its agents2.4.3
directly or indirectly related to the Developer’s Due Diligence Investigations shall be subject to
the Developer’s indemnity, defense and hold harmless obligations under this Agreement. Prior
to commencing any Due Diligence Investigations on t he Property, the Developer shall deliver
45635.01000\29057912.6 13
copies of policies or original certificates of all Liability Insurance required to be delivered
pursuant to Section 4.10.
Due Diligence Completion Notice. The Developer shall deliver a2.4.4
Due Diligence Completion Notice to the City and the Escrow Agent prior to the end of the
Due Diligence Period. If the Developer does not unconditionally accept the condition of the
Property by delivery of its Due Diligence Completio n Notice indicating such acceptance, prior
to the end of the Due Diligence Period, the Developer shall be deemed to have rejected the
condition of the Property and refused to accept conveyance of title to the Property. If the
condition of the Property is rejected or deemed rejected by the Developer, then the City or the
Developer shall have the right to cancel the Escrow and terminate this Agreement, in their
respective sole and absolute discretion, until such time (if ever) as the City receives the Due
Diligence Completion Notice stating the Developer’s unconditional acceptance of the condition
of the Property. Any termination of this Agreement and cancellation of the Escrow, pursuant
to this Section 2.4.4, shall be without liability t o the other Party or any other Person, and shall
be accomplished by delivery of a written Notice of termination to the other Party and the
Escrow Agent, in which case the Parties and the Escrow Agent shall proceed pursuant to
Section 3.11.
No Representations or Warranties. The Developer shall rely solely2.4.5
and exclusively upon the results of its Due Diligence Investigations of the Property, including,
without limitation, investigations regarding geotechnical soil conditions, compliance with all
Laws applicable to the development or use of the Property by the Developer and any other
matters relevant to the condition or suitability of the Property for the development or operation
of the Project, as the Developer may deem necessary or appropriate. The City makes no
representation or warranty, express or implied, to the Developer relating to the condition of the
Property or suitability of the Property for any intended use or development by the Developer.
Acceptance of Property “AS-IS.” The Developer shall accept all2.4.6
conditions of the Property, without any liability o f the City Parties whatsoever, upon the
Developer’s unconditional acceptance of the condition of the Property indicated in its Due
Diligence Completion Notice. The Developer’s delivery of its Due Diligence Completion
Notice indicating the Developer’s unconditional acceptance of the condition of the Property
shall evidence the Developer’s unconditional and irrevocable acceptance of the Property in the
Property’s AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION, WITHOUT
WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION and
with full knowledge of the physical condition of the Property, the nature of the City’s interest
in and use of the Property, all Laws applicable to the Property, the Permitted Exceptions and
of any and all conditions, restrictions, encumbrances and all matters of record relating to the
Property. The Developer’s delivery of its Due Diligence Completion Notice indicating the
Developer’s unconditional acceptance of the condition of the Property shall constitute the
Developer’s representation and warranty to the City that the Developer has received assurances
acceptable to the Developer by means independent of the City or any agent of the City of the
truth of all facts material to the Developer’s acquisition of the Property pursuant to this
Agreement, and that the Property is being acquired by the Developer as a result of its own
knowledge, inspection and investigation of the Property and not as a result of any
45635.01000\29057912.6 14
representation(s) made by the City or any employee, official, consultant or agent of the City
relating to the condition of the Property, unless such statement or representation is expressly
and specifically set forth in this Agreement. The City hereby expressly and specifically
disclaims any express or implied warranties regarding the Property.
City Pre-Closing Document Approval.2.5
Developer Delivery of Documents. The Developer shall deliver all of2.5.1
the following described documents to the City, at least, forty-five (45) calendar days prior to
the Escrow Closing Date:
All Insurance Documents;(a)
Any covenants, conditions or restrictions proposed for the(b)
Property; and
City Approval. Within thirty (30) calendar days after the City2.5.2
receives any item required to be delivered to the City by the Developer pursuant to Section
2.5.1, the City shall Notify the Developer whether or not such submitted matter is reasonably
acceptable to the City. Any Notice from the City stating that a particular submitted matter is
not acceptable to the City shall also state the act ions that the City reasonably believes are
required to make such matter acceptable to the City. Within thirty (30) calendar days after
receipt of any Notice from the City stating that a submitted matter is not acceptable to the
City, the Developer shall appropriately revise any matter disapproved by the City in a manner
intended in good faith to obtain the City’s approval of such matter and re-submit such matter
to the City for approval. The process applicable t o the City’s consideration of the initial
submittal of any matter shall apply to any re-submittal of such matter, following its disapproval
by the City. If the City fails to Notify the Developer that it does not approve of any submitted
matter within the requisite thirty (30) calendar period, then the City shall be deemed to have
approved such matter.
City Relocation Assistance.2.6
Relocation. A 4000 square foot portion of the property is the2.6.1
subject of a Temporary Right of Entry and License Agreement by and between City and
Developer. The Parties agree and acknowledge that t he License Agreement shall be terminated
at the time of sale of the Property and that Develo per is not entitled to and shall waive any
right to Relocation Benefits that may due pursuant to Government Code Section 7260 et. seq.
The remainder of the Property is vacant, and therefore, the City has no known relocation and
related obligations.
ARTICLE 3
JOINT ESCROW INSTRUCTIONS
Opening of Escrow. The City and the Developer shall cause the Escro w to be3.1
opened within five (5) days following the Effective Date of this Agreement. The Escrow
45635.01000\29057912.6 15
Agent shall promptly confirm the Escrow Opening Dat e in writing to each of the Parties. The
Escrow Closing Date shall be on or before March 15, 2017, unless the Escrow Closing Date is
extended as provided in this Agreement. This ARTICLE 3 shall constitute the joint escrow
instructions of the City and the Developer to the Escrow Agent for conducting of the Escrow.
Escrow Agent Authority. The City and the Developer authorize the Escrow3.2
Agent to:
Charge. Pay and charge the City and the Developer for their3.2.1
respective shares of the applicable fees, charges and costs payable by either the City or the
Developer regarding the Escrow;
Settlement/Closing Statements. Release each Party’s Escrow3.2.2
settlement/closing statement to the other Party; and
Document Recording. Record any instruments delivered for3.2.3
recording through the Escrow in the official records of the Recorder of the County, pursuant
to the joint instructions of the Parties.
Developer’s Conditions to Close of Escrow. Provided that the failure of any3.3
such condition to be satisfied is not due to a Default under this Agreement by the Developer,
the Developer’s obligation to purchase the Property from the City 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 the Developer:
Title. The Developer agrees to accept the title to and conveyance of3.3.1
the Property, pursuant to Section 2.3;
Due Diligence. The Developer delivers its Due Diligence Complet ion3.3.2
Notice to both the City and the Escrow Agent indicating the Developer’s unconditional
acceptance of the condition of the Property, prior to the expiration of the Due Diligence
Period;
Title Policy. The Title Company is, upon payment of the Title3.3.3
Company’s standard premium for such an insurance po licy, irrevocably and unconditionally
committed to issue the Title Policy to the Developer, at the Close of Escrow;
Consistency Finding. The Planning Commission of the City has3.3.4
determined that the disposition of the Property to this Agreement is consistent with the City’s
General Plan, in accordance with Government Code Section 65402;
Approvals. Final issuance of all discretionary Approvals required3.3.5
from any Government to construct, install or operat e the applicable portion of the Project on
the Property, on terms and conditions reasonably acceptable to the Developer;
CEQA Documents. Final adoption, approval or certification of the3.3.6
CEQA Documents, if any;
45635.01000\29057912.6 16
City Escrow Deposits. The City deposits all of the items into the3.3.7
Escrow required by Section 3.6;
Settlement/Closing Statement . The Developer approves the Escrow3.3.8
Agent’s final estimated closing/settlement statement; and
City’s Material Obligations. The City performs all of its material3.3.9
obligations required to be performed by the City under this Agreement prior to the Close of
Escrow.
City’s Conditions to Close of Escrow. Provided that the failure of any such3.4
condition to be satisfied is not due to a Default under this Agreement by the City, the City’s
obligation to sell the Property to the Developer on or before 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 the City:
Deposit . The Developer deposited the Deposit into Escrow, pursuant3.4.1
to Section 2.2.1;
Title. The Developer agrees to accept the title to and conveyance of3.4.2
the Property, pursuant to Section 2.3;
Due Diligence. The Developer delivers its Due Diligence Complet ion3.4.3
Notice to both the City and the Escrow Agent indicating the Developer’s unconditional
acceptance of the Property, prior to the expiration of the Due Diligence Period;
Approvals. Final issuance of all discretionary Approvals required3.4.4
from any Government to construct, install or operat e the applicable portion of the Project on
the Property, on terms and conditions reasonably acceptable to the Developer, including but
not limited to building permits;
CEQA Documents. Final adoption, approval or certification of the3.4.5
CEQA Documents, if any;
Title Policy. The Title Company is upon payment of the Title3.4.6
Company’s standard premium for such insurance policy, irrevocably and unconditionally
committed to issue the Title Policy to the Developer, at the Close of Escrow;
Insurance Documents. The Developer delivers the Insurance3.4.7
Documents and the City has approved all such evidence of insurance, all pursuant to Section
2.6;
Developer’s Escrow Deposits. The Developer deposits all of the3.4.8
items into the Escrow required by Section 3.5;
Settlement/Closing Statement . The City approves the Escrow3.4.9
Agent’s final estimated closing/settlement statement;
45635.01000\29057912.6 17
Consistency Finding. The Planning Commission of the City has3.4.10
determined that the disposition of the Property pursuant to this Agreement is consistent with
the City’s General Plan, in accordance with Government Code Section 65402; and
Developer’s Material Obligations. The Developer performs all of its3.4.11
material obligations required to be performed by the Developer under this Agreement prior to
the Close of Escrow.
Developer’s Escrow Deposits. At least one (1) business day prior to the3.5
Escrow Closing Date scheduled by the Escrow Agent in a writing delivered to both of the
Parties, the Developer shall deposit the following described funds and documents into the
Escrow and, concurrently, provide a copy of each such document to the City:
Purchase Price. The Purchase Price, less the amount of the Deposit,3.5.1
plus any additional funds required to be deposited into the Escrow by the Developer under the
terms of this Agreement to close the Escrow, all in immediately available funds;
PCO Report . A PCO Report executed by the authorized3.5.2
representative(s) of the Developer;
Insurance Documents. Any copies of insurance policies or original3.5.3
certificates of insurance required to be delivered to the City by the Developer on or before the
Close of Escrow, pursuant to Section 2.6;
Acceptance of City Deed. The Certificate of Acceptance of the City3.5.4
Deed, in substantially the form attached to the Cit y Deed, executed by the authorized
representative(s) of the Developer in recordable fo rm;
Notice of Agreement . The Notice of Agreement executed by the3.5.5
authorized representative(s) of the Developer in recordable form;
Other Funds and Documents. Such other funds or documents3.5.6
required from the Developer under the terms of this Agreement to close the Escrow or by the
Escrow Agent in the performance of the Escrow Agent’s contractual or statutory obligations
regarding the Escrow.
City’s Escrow Deposits. At least one (1) business day prior to the Escrow3.6
Closing Date scheduled by the Escrow Agent in a writing delivered to both of the Parties, the
City shall deposit the following described funds and documents into the Escrow and,
concurrently, provide a copy of each such document to the Developer:
City Deed. The City Deed executed by the authorized3.6.1
representative(s) of the City in recordable form;
FIRPTA Affidavit . The FIRPTA Affidavit completed and executed3.6.2
by the authorized representative(s) of the City;
45635.01000\29057912.6 18
Notice of Agreement . The Notice of Agreement executed by the3.6.3
authorized representative(s) of the City in recordable form;
Form 593. A Form 593 executed by the authorized representative(s)3.6.4
of the City; and
Other Funds and Documents. Such other funds or documents3.6.5
required from the City under the terms of this Agreement to close the Escrow or by the
Escrow Agent in the performance of the Escrow Agent’s contractual or statutory obligations
regarding the Escrow.
Closing Procedure. When each of the Developer’s Escrow deposits, as set3.7
forth in Section 3.5, and each of the City’s Escrow deposits, as set forth in Section 3.6, are
deposited into the Escrow, the Escrow Agent shall request confirmation in writing from both
the Developer and the City that each of their respective conditions to the Close of Escrow, as
set forth in Section 3.3 and Section 3.4, respective, are satisfied or waived. Upon the Escrow
Agent’s receipt of written confirmation from both t he City and the Developer that each of their
respective conditions to the Close of Escrow are either satisfied or waived, the Escrow Agent
shall schedule the Escrow Closing Date by written Notice to both Parties and, thereafter, shall
close the Escrow by doing all of the following:
Recordation and Distribution of Documents. Escrow Agent shall file3.7.1
the following documents with the office of the Reco rder of the County for recording in the
official records of the County, in the following order, at the Close of Escrow: (i) the City
Deed, with the Developer’s certificate of acceptance attached, (ii) the Notice of Agreement,
(iii) Senior Construction Loan Mortgage, and (iv) any other documents to be recorded through
the Escrow upon the joint instructions of the Parties. The Escrow Agent shall deliver
conformed copies of all documents filed for recording in the official records of the County and
originals or copies of all other documents delivered through the Escrow to the City, the
Developer and any other Person designated in the joint escrow instructions of the Parties to
receive an original or conformed copy of each such document. Each copy of a document filed
for recording shall show all recording information. The Parties intend and agree that this
Section 3.7 shall establish the relative priorities of the documents to be recorded in the official
records of the County through the Escrow, by providing for recordation of senior interests
prior in time to junior interests, as provided in t his Section 3.7;
PCO Report . File the PCO Report with the office of the Recorder of3.7.2
the County of Los Angeles, California;
FIRPTA Affidavit . File the FIRPTA Affidavit with the United States3.7.3
Internal Revenue Service;
Form 593. File the Form 593 with the State of California Franchise3.7.4
Tax Board;
Title Policy. Obtain and deliver the Title Policy to the Developer;3.7.5
45635.01000\29057912.6 19
Funds. Deliver the Purchase Price and all other funds held by the3.7.6
Escrow Agent for the account of the City to the Cit y, less the City’s share of the Escrow
closing costs, and less any other charges to the account of the City, and return all remaining
funds held by the Escrow Agent for the account of t he Developer to the Developer, less the
Developer’s share of the Escrow closing costs, and less any other charges to the account of
the Developer.
Report to IRS. Following the Close of Escrow and prior to the last3.7.7
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 t he Internal Revenue Code, the Escrow
Agent shall report the gross proceeds of the purchase and sale of the Property to the Internal
Revenue Service on Form 1099-B, Form W-9 or such ot her form(s) as may be specified by the
Internal Revenue Service pursuant to Section 6045(e) or the associated Federal regulations.
Upon the filing of such reporting form with the Int ernal Revenue Service, the Escrow Agent
shall deliver a copy of the filed form to both the City and the Developer.
Close of Escrow. The Close of Escrow shall occur on or before the Escrow3.8
Closing Date. The Parties may mutually agree to change the Escrow Closing Date by joint
written instruction to the Escrow Agent. 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 Agent. Thereafter, the Parties and the
Escrow Holder shall proceed pursuant to Section 3.10 and Section 3.11. Without limiting the
right of either Party to cancel the Escrow and terminate this Agreement, pursuant to the first
sentence of this Section 3.8, 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 the first date on which the Escrow Holder is in a position to close the
Escrow, then the Escrow shall close as soon as reasonably possible following the first date on
which the Escrow Agent is in a position to close the Escrow, pursuant to the terms and
conditions of this Agreement.
Escrow Closing Costs, Taxes and Title Policy Premium. The City and the3.9
Developer shall each pay one-half (1/2) of the Escrow fees and such other costs as the Escrow
Agent may charge for the conduct of the Escrow. The City shall pay the premium charged by
the Title Company for the Title Policy, exclusive o f any endorsements or other supplements to
the coverage of the Title Policy that may be requested by the Developer, and any documentary
transfer tax relating to the conveyance of the Property from the City to the Developer through
the Escrow that is due at the Close of Escrow. The Developer shall pay any and all recording
fees, any and all other charges, fees and taxes levied by a Government arising or relating to the
conveyance of the Property through the Escrow and t he cost of any endorsements or
supplements to the coverage of the Title Policy requested by the Developer. The Escrow
Agent shall Notify both the Developer and the City of the costs to be borne by each of them at
the Close of Escrow by delivering the Escrow Agent’s estimated closing/settlement statement
to both the City and the Developer, at least four (4) business days prior to the Escrow Closing
Date.
45635.01000\29057912.6 20
Escrow Cancellation Charges. If the Escrow fails to close due to an Event of3.10
Default attributable to the City, the City shall pay all customary and reasonable cancellation
charges regarding cancellation of the Escrow and the Title Policy order, if any. If the Escrow
fails to close due to an Event of Default attributable to the Developer, the Developer shall pay
all customary and reasonable cancellation charges regarding cancellation of the Escrow and the
Title Policy order, if any. If the Escrow fails to close for any reason other than an Event of
Default attributable to either the Developer or the City, the Developer and the City shall each
pay one-half (1/2) of any customary and reasonable cancellation charges regarding cancellation
of the Escrow and the Title Policy order, if any.
Escrow Cancellation. If the Escrow is cancelled and this Agreement is3.11
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 an Event of Default attributable to the
other Party, the Parties shall pay any associated costs in accordance with Section 3.10 and do
each of the following:
Cancellation Instructions. The Parties shall, within three (3) business3.11.1
days following receipt of the Escrow Agent’s written request, execute any reasonable Escrow
cancellation instructions requested by the Escrow Agent; and
Return of Funds and Documents. Within seven (7) days following3.11.2
receipt by the Parties of a settlement statement from the Escrow Agent of cancellation charges
regarding cancellation of the Escrow and the Title Policy order, if any: (i) the Developer or
the Escrow Agent, respectively, shall return to the City any documents previously delivered by
the City to the Developer or the Escrow Agent regarding the Escrow, (ii) the City or the
Escrow Agent, respectively, shall return to the Developer all documents previously delivered by
the Developer to the City or the Escrow Agent regarding the Escrow; (iii) the Escrow Agent
shall return to the Developer any funds deposited into the Escrow by the Developer, except as
otherwise provided in Section 7.2, less the Developer’s share of any customary and reasonable
cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any, in
accordance with Section 3.10; and (iv) the Escrow Holder shall return to the City any funds
deposited into the Escrow by the City, less the Cit y’s share of any customary and reasonable
cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any, in
accordance with Section 3.10.
Escrow Notices. All notices and communications from the Escrow Agent to3.12
the Parties shall be given in the manner provided in Section 8.5 of this Agreement.
ARTICLE 4
PROJECT DEVELOPMENT
Developer Covenant to Develop Project. The Developer covenants to and for4.1
the exclusive benefit of the City that the Developer shall commence and complete the
development of the Project and the Improvements on the Property, within the time period for
such action set forth in the Performance Schedule. The Developer covenants and agrees for
itself, its successors and assigns that the Propert y shall be improved and developed with the
45635.01000\29057912.6 21
Project, in conformity with the terms and conditions of this Agreement and all applicable Laws
and conditions of each Government. The covenants o f this Section 4.1 shall run with the land
of the Property, until the earlier of: (i) the dat e of issuance of a Certificate of Completion for
the Project or (ii) the fifteenth (15th) anniversary of the date of the Close of Escrow.
Developer Changes to Project Plans and Specifications During Course of4.2
Construction. The Developer shall have the right, during the course of construction of the
Project, to make “minor field changes,” without seeking the approval of the City, if such
changes do not affect the type of use to be conduct ed 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
Approvals governing any such “minor field changes” or in any Approvals by any Government
otherwise required for any such “minor field changes.”
Construction Start and Completion of Project.4.3
The Developer shall commence construction and installation of the4.3.1
Project in accordance with the Performance Schedule. Thereafter, the Developer shall
diligently proceed to complete the construction and installation of the Project, in a good and
workmanlike manner, in accordance with the Performance Schedule and all applicable Laws
and all Approvals for the Project issued by each Go vernment.
Compliance with Laws. All work performed in connection with the4.4
construction or installation of the Project shall comply with all applicable Laws and Approvals.
Performance Schedule. All planning construction, installation and other4.5
development obligations and responsibilities of the Developer related to the Project shall be
initiated and completed within the times specified in the Performance Schedule, or within such
reasonable extensions of such times granted by the City Manager or as otherwise provided for
in this Agreement.
City Right to Inspect Project and Property. The City Parties shall have the4.6
right of reasonable access to the Property, without the payment of charges or fees, during
normal construction hours, during the period of construction or installation of the Project. Any
and all City representatives who enter the Property shall identify themselves at the construction
management office or, if none, to the apparent on-site construction supervisor on the Property,
upon their entrance onto the Property, and shall at all times be accompanied by a
representative of the Developer, while on the Property. The Developer shall make a
representative of the Developer available for this purpose at all times during normal
construction hours, upon reasonable advance Notice from the City. The City shall indemnify
and hold the Developer harmless from injury, property damage or liability to the extent arising
out of the exercise by the City of the right of access to the Property provided in this Section
4.6, except to the extent that any such injury, pro perty damage or liability arises from the
negligence or willful misconduct of any of the Developer Parties. If in the City’s reasonable
judgment it is necessary, the City shall have the further right, from time to time, at its own
45635.01000\29057912.6 22
cost, to retain a consultant or consultants to inspect the Project and verify compliance by the
Developer with the provisions of this Agreement. The Developer acknowledges and agrees
that any such City inspections are for the sole purpose of protecting the City’s rights under this
Agreement, are made solely for the City’s benefit, that the City’s inspections may be superficial
and general in nature, and are for the purposes of informing the City of the progress of the
Project and the conformity of the Project with the terms and conditions of this Agreement, and
that the Developer shall not be entitled to rely on any such inspection(s) as constituting the
City’s approval, satisfaction or acceptance of any materials, workmanship, conformity of the
Project with this Agreement or otherwise. The Developer agrees to make its own regular
inspections of the work of construction and installation of the Project to determine that the
progress and 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 the Developer.
PREVAILING WAGES.4.7
THE DEVELOPER AGREES WITH THE CITY THAT THE4.7.1
DEVELOPER SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY
RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS EMPLOYED
RELATIVE TO THE CONSTRUCTION OR INSTALLATION OF THE PROJECT MUST
BE PAID THE PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR
CLASSIFICATION, AS DETERMINED BY THE STATE, PURSUANT TO LABOR CODE
SECTIONS 1720, ET SEQ.
THE DEVELOPER, ON BEHALF OF ITSELF, ITS4.7.2
SUCCESSORS, AND ASSIGNS, WAIVES AND RELEASES THE CITY FROM ANY
RIGHT OF ACTION THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO
LABOR CODE SECTION 1781. THE DEVELOPER ACKNOWLEDGES THE
PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND
RELEASE CONTAINED IN THIS SECTION 4.7, WHICH 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.
BY INITIALING BELOW, THE DEVELOPER KNOWINGLY4.7.3
AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 4.7:
_________________
Initials of Authorized
Developer Representative
ADDITIONALLY, THE DEVELOPER SHALL INDEMNIFY,4.7.4
DEFEND AND HOLD HARMLESS THE CITY, PURSUANT TO SECTION 7.6, AGAINST
45635.01000\29057912.6 23
ANY CLAIMS PURSUANT TO LABOR CODE SECTION 1781 ARISING FROM THIS
AGREEMENT OR THE CONSTRUCTION OR INSTALLATION OF ALL OR ANY
PORTION OF THE PROJECT.
Insurance. The Developer, to protect the City Parties against any and all4.8
claims and liability for death, injury, loss and damage resulting from the Developer’s actions in
connection with this Agreement, the Property and the Project, shall, at the Developer’s sole
cost and expense, until issuance of a Certificate of Completion for the Project, maintain the
following insurance (or its then reasonably available equivalent): (a) Liability Insurance; (b)
Property Insurance; (c) Builder’s Risk Insurance; and (d) Worker’s Compensation Insurance.
Additionally, the Developer, to protect the City Parties, shall cause its contractors and
subcontractors, at their sole cost and expense, unt il issuance of a Certificate of Completion for
the Project, to maintain Contractor’s Insurance.
Nature of Insurance. All Liability Insurance, Property Insurance,4.8.1
Automobile Liability Insurance and Contractor’s Insurance policies this Agreement requires
shall be issued by carriers that: (a) are listed in the then current “Best’s Key Rating
Guide—Property/Casualty—United States & Canada” publication (or its equivalent, if such
publication ceases to be published) with a minimum financial strength rating of “A” and a
minimum financial size category of “VII”; and (b) are admitted to do business in the State of
California by the California Department of Insurance. The Developer may provide any
insurance under a “blanket” or “umbrella” insurance policy, provided that (i) such policy or a
certificate of such policy shall specify the amount(s) of the total insurance allocated to the
Property and the Project, which amount(s) shall equal or exceed the amount(s) required by this
Agreement and shall not be reduced for claims made for other properties; and (ii) such policy
otherwise complies with this Agreement.
Policy Requirements and Endorsements. All insurance policies this4.8.2
Agreement requires shall contain (by endorsement or otherwise) the following provisions:
Insured. Liability Insurance, Automobile Liability Insurance(a)
and Contractor’s Insurance policies shall name the City Parties as “additional insured.”
Property Insurance Policies shall name the City as a “loss payee.” The coverage afforded to
the City Parties shall be at least as broad as that afforded to the Developer and may not
contain any terms, conditions, exclusions, or limitations applicable to the City Parties that do
not apply to the Developer.
Primary Coverage. All policies shall be written as primary(b)
policies, not contributing to or in excess of any coverage that the City Parties may carry.
Contractual Liability. Liability Insurance policies shall(c)
contain contractual liability coverage, for the Developer’s indemnity obligations under this
Agreement. The Developer’s obtaining or failure to obtain such contractual liability coverage
shall not relieve the Developer from nor satisfy any indemnity obligation of the Developer
under this Agreement.
45635.01000\29057912.6 24
Deliveries to the City. Prior to the commencement of any(d)
Due Diligence Investigations, and no later than twenty (20) days before any insurance required
by this Agreement expires, is cancelled or its liability limits are reduced or exhausted, the
Developer shall deliver to the City certificates of insurance evidencing the Developer’s
maintenance of all insurance this Agreement requires. Each insurance carrier shall give the City
no less than thirty (30) calendar days’ advance written Notice of any cancellation, non-renewal,
material change in coverage or available limits of liability under any insurance policy required
by this Agreement. 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 City Parties.
Waiver of Certain Claims. The Developer shall attempt in(e)
good-faith to cause the insurance carrier for each Liability Insurance, Automobile Liability
Insurance and Property Insurance policy to agree to a Waiver of Subrogation, if not already in
the policy. To the extent that the Developer actually obtains insurance with a Waiver of
Subrogation, the Parties release each other, and their respective authorized representatives,
from any claims for damage to any Person or property that are caused by or result from risks
insured against under such insurance policies.
No Representation. Neither Party makes any representation(f)
that the limits, scope, or forms of insurance coverage this Agreement requires are adequate or
sufficient.
No Claims Made Coverage. None of the insurance coverage(g)
required under this Agreement may be written on a claims-made basis.
Fully Paid and Non-Assessable. All insurance obtained and(h)
maintained by the Developer in satisfaction of the requirements of this Agreement shall be fully
paid for and non-assessable.
City Option to Obtain Coverage. During the continuance of(i)
an Event of Default arising from the Developer’s failure to carry any insurance required by this
Agreement, the City may, at its sole option, purchase any such required insurance coverage and
the City shall be entitled to immediate payment from the Developer of any premiums and
associated costs paid by the City for such insurance coverage. Any amount becoming due and
payable to the City under this Section 4.8 that is not paid within fifteen (15) calendar days
after written demand from the City 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. Any
election by the City to purchase or not to purchase insurance otherwise required by the terms
of this Agreement to be carried by the Developer shall not relieve the Developer of its
obligation to obtain and maintain any insurance coverage required by this Agreement.
Cross-Liability; Severability of Interests. All Liability(j)
Insurance and Contractor’s Insurance shall be endorsed to provide cross-liability coverage for
the Developer and the City Parties and to provide severability of interests.
45635.01000\29057912.6 25
Deductibles and Self-Insured Retentions. The Developer shall(k)
pay or cause to be paid 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 City Parties.
No Separate Insurance. The Developer shall not carry(l)
separate or additional insurance concurrent in form or contributing in the event of loss with
that required under this Agreement, unless endorsed in favor of the City, as required by this
Agreement.
Insurance Independent of Indemnification. The insurance(m)
requirements of this Agreement are independent of the 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 the Developer’s indemnification or other obligations or to limit
the 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 City from taking such other actions as are
available to it under any other provision of this Agreement or otherwise at law or in equity.
Certificate of Completion.4.9
Issuance. Following the completion of the Project, excluding any4.9.1
normal and minor building “punch-list” items to be completed by the Developer, the Developer
may request that the City inspect the completed Pro ject and issue a Certificate of Completion
for the Project. Following the City’s receipt of such a written request from the Developer, the
City shall promptly inspect the Project to determine whether or not the Project has been
completed in compliance with this Agreement. If the City determines that the Project is
complete (excluding any such outstanding “punch-list” items) and in compliance with this
Agreement, the City shall issue a Certificate of Co mpletion for the Project to the Developer. If
the City determines that the Project is not complet e or not in compliance with this Agreement,
the City shall send written Notice of each non-conformity to the Developer, within fifteen (15)
calendar days following the City’s receipt of the Developer’s written request for a Certificate
of Completion or within three (3) calendar days aft er the next regular meeting of the City
governing body, whichever date occurs later, provide the Developer with a written statement
setting forth the reasons for the City’s failure or refusal to issue a Certificate of Completion.
The statement shall also contain the City’s opinion of the action(s) the Developer must take to
obtain a Certificate of Completion from the City. If the reason for the 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 the Developer or other
minor building “punch-list” items, the City may, in its sole and absolute discretion, issue a
Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by
the Developer, in form and substance reasonably acceptable to the City, in an amount
representing the fair value of the work on the Project remaining to be completed, as reasonably
determined by the City. If the City fails to provide such written statement, within the specified
time period, the Developer shall be deemed, conclusively and without further action of the
City, to have satisfied the requirements of this Agreement with respect to the construction and
installation of the Project, as if a Certificate of Completion had been issued by the City
45635.01000\29057912.6 26
pursuant to this Agreement, and the same shall irrevocably be deemed to have been issued as
of such date for all purposes of this Agreement.
Effect . A Certificate of Completion shall only be evidence of the4.9.2
City’s conclusive determination of satisfactory completion of the construction and installation
of the Project in accordance with the terms of this Agreement. A Certificate of Completion
shall not constitute a Notice of Completion under Section 3093 of the California Civil Code,
nor shall it act to terminate the continuing reservations, covenants, restrictions or conditions
contained in the City Deed or any other instruments recorded against the Property or set forth
in this Agreement or otherwise. A Certificate of Completion is not evidence of the compliance
of the Project with any Laws or Approvals. A Certificate of Completion shall not evidence the
satisfaction of any obligation of the Developer to the City under this Agreement or otherwise,
other than the Developer’s obligation to construct and install the Project. 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 Property or the Project shall not
(because of such ownership, purchase, lease or acquisition) incur any obligation or liability
under this Agreement regarding construction or inst allation of the Project, but such Person
shall be bound by any reservations, covenants, conditions, restrictions and other interests
affecting the Property pursuant to this Agreement.
ARTICLE 5
SPECIAL DEVELOPMENT COVENANTS OF THE DEVELOPER
Covenant to Maintain Property on Tax Rolls.5.1
Covenant . The Developer covenants to cause the Property to remain5.1.1
on the County secured real property tax rolls, cont inuously, from the Close of Escrow, until
the end of the Covenant Period.
Payment of Taxes. During the Covenant Period, the Developer, for5.1.2
itself and its successors and assigns, covenants and agrees to pay all property tax bills with
respect to the Property and all improvements on or to the Property 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 Property
issued by the County. The Developer further covenants and agrees to provide to the City,
upon the City’s written request, (i) a true and correct copy of all property tax assessment
notices, property tax bills and property tax assessment correspondence by and between the
Developer and the County regarding the Property and all improvements on or to the Property,
with respect to the preceding fiscal year of the Co unty and (ii) cancelled checks issued by the
Developer in payment of all property tax payments made to the County regarding the Property
and all improvements on or to the Property, with respect to the preceding fiscal year of the
County.
45635.01000\29057912.6 27
Covenant Running with the Land. The covenants of this Section 5.15.1.3
shall run with the land of the Property, binding successive owners of the Property from the
Close of Escrow, until the end of the Covenant Period, and shall be enforceable by the City.
No Conveyance to Tax Exempt Entity.5.2
Covenant . The Developer covenants and agrees that during the5.2.1
Covenant Period, neither the Developer, nor its successors or assigns shall Transfer all or any
portion of the Property or the Project to any Perso n or use all or any portion of the Property
or the Project for any use, that is partially or wholly exempt from the payment of property
taxes or that would cause the exemption of the payment of all or any portion of property taxes
otherwise assessable regarding the Property or the Project, without the prior written consent of
the City, prior to the expiration of the Covenant Period.
Covenant Running with the Land. The covenants of this Section 5.25.2.2
shall run with the land of the Property, binding successive owners of the Property from the
Close of Escrow until the end of the Covenant Perio d, and shall be enforceable by the City.
Maintenance Condition of the Property. The Developer for itself, its5.3
successors and assigns, covenants and agrees that:
Maintenance Standard. The entirety of the Property and the Project5.3.1
shall be maintained by the Developer in good condit ion and repair and in a neat, clean and
orderly condition, ordinary wear and tear and casualty 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 Property, now existing or made in the future by or
with the consent of the Developer, as necessary to maintain the appearance and character of
the Project and the Property. The Developer’s obligation to maintain the Project and the
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 the Developer. The Developer’s obligation to maintain the Project
and the Property described in the two immediately preceding sentences is, collectively, referred
to in this Agreement as the “Maintenance Standard.” The Developer may contract with a
maintenance contractor to provide for performance o f all or part of the duties and obligations
of the Developer with respect to the maintenance of the Project and the Property; provided,
45635.01000\29057912.6 28
however, that the Developer shall remain responsible and liable for the maintenance of the
Project and the Property, at all times.
Maintenance Deficiency. If, at any time following the Close of5.3.2
Escrow, there is an occurrence of an adverse condit ion on any area of the Project or the
Property in contravention of the Maintenance Standard (each such occurrence being a
“Maintenance Deficiency”), then the City may Notify the Developer in writing of the
Maintenance Deficiency. If the Developer fails to cure or commence and diligently pursue to
cure the Maintenance Deficiency within thirty (30) calendar days following the Developer’s
receipt of Notice of the Maintenance Deficiency, the City may conduct a public hearing,
following transmittal of written Notice of the hearing to the Developer, at least, ten (10) days
prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency
exists and whether the Developer has failed to comply with the provisions of this Section 5.3.
If, upon the conclusion of the public hearing, the City finds that a Maintenance Deficiency
exists and remains uncured, the City shall have the right to enter the Project and the 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 t he City to accomplish the abatement of the
Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance
Deficiency pursuant to this Section 5.3 shall be reimbursed to the City by the Developer, within
thirty (30) calendar days after written demand for payment from the City. Any amount
expended by the City for the abatement of a Maintenance Deficiency pursuant to this Section
5.3 that is not reimbursed to the City by the Developer within thirty (30) calendar days after
written demand to the Developer for such reimbursement, shall accrue interest at the lesser of:
(i) the rate of ten percent (10%) per annum or (ii) the Usury Limit, until paid in full.
Graffiti. Graffiti, as defined in Government Code Section 38772, that5.3.3
has been applied to any exterior surface of a structure or improvement on the Property, that is
visible from any public right-of-way adjacent or co ntiguous to the Property, shall be removed
by the 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 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 t he graffiti, the City shall have the right to
enter the Property and remove the graffiti, without Notice to the Developer. Any sum
expended by the City for the removal of graffiti Property pursuant to this Section 5.3 shall be
reimbursed to the City by the Developer, within thirty (30) calendar days after written demand
for payment from the City. Any amount expended by the City for the removal of graffiti
pursuant to this Section 5.3 that is not reimbursed to the City by the Developer within thirty
(30) calendar days after written demand to the Developer for such reimbursement, shall accrue
interest at the lesser of: (i) the rate of ten percent (10%) per annum or (ii) the Usury Limit,
until paid in full.
Lien Rights. The obligations of the Developer and its successors and5.3.4
assigns under this Section 5.3 shall be secured by a lien against the Property. The Developer
hereby grants to the City a security interest in the Property with the power to establish and
enforce a lien or other encumbrance against the Property, in the manner provided in Civil Code
Sections 2924, 2924b and 2924c, to secure the obligations of the Developer and it successors
45635.01000\29057912.6 29
under this Section 5.3, including the reasonable at torneys’ fees and costs of the City associated
with the abatement of a Maintenance Deficiency or removal of graffiti. The recordation of the
City Deed and the Notice of Agreement shall provide record Notice of such security interest in
favor of the City.
Covenant Running with the Land. The covenant of this Section 5.35.3.5
shall be a covenant running with the land of the Property, binding successive owners of the
Property, throughout the Covenant Period, and shall be enforceable by the City.
Obligation to Refrain from Discrimination. The Developer covenants and5.4
agrees for itself, its successors, its assigns and every successor-in-interest to all or any portion
of the Property, that there shall be no discriminat ion against or segregation of any Person, or
group of Persons, on account of gender, sexual orientation, marital status, race, color, religion,
creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property nor shall the Developer, itself or any Person claiming under or
through it, establish or permit any such practice o r practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of purchasers, the
Developers, lessees, sub-the Developers, sub-lessees or vendees of the Property. The covenant
of this Section 5.4 shall be a covenant running wit h the land of the Property and binding on
successive owners of all or any portion of the Property, until the City issues a Certificate of
Completion for the Project.
Form of Non-discrimination and Non-segregation Clauses. The Developer5.5
covenants and agrees for itself, its successors, it s assigns, and every successor-in-interest to all
or any portion of the Property, that the 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 Property on the basis of gender, sexual orientation,
marital status, race, color, religion, creed, ancestry or national origin of any Person. All deeds,
leases or contracts pertaining to the Property or any part thereof shall contain or be subject to
substantially the following non-discrimination or non-segregation covenants:
In deeds: “The grantee herein covenants by and for itself, its5.5.1
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, gender, sexual orientation, 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 the Developers, lessees, sub-the Developers, sub-lessee,
or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
In leases: “The Lessee herein covenants by and for itself, its5.5.2
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, gender, sexual orientation, marital status, national origin, or ancestry, in
the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
45635.01000\29057912.6 30
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 the Developers lessees, sub-lessee, sub-the
Developers, or vendees in the premises herein leased.”
In contracts: “There shall be no discrimination against or segregation5.5.3
of any Person or group of persons on account of race, color, creed, religion, gender, sexual
orientation, 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 the Developers, lessees, sub-lessees, sub-the Developers, 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.
Use Covenant. Developer hereby covenants that the Property shall be used5.6
exclusively for the design, building, assembly and refurbishing of commercial vehicles or
commercial vehicle repair services. No other use shall be permitted without the express written
consent of the City. The covenant of this Section 5.6 shall be a covenant running with the land
of the Property, binding successive owners of the Property, throughout the Covenant Period,
and shall be enforceable by the City.
Covenant Payment. As part of the consideration for the City to convey the5.7
Property to Developer the City shall receive an additional payment (“Covenant Payment”) in an
amount not to exceed Five Hundred Thousand Dollars ($500,000). The Covenant Payment
from Developer to City shall be paid by the tenth (10) anniversary of the Escrow Closing Date.
The Covenant Payment may be satisfied through any combination of the following means:
Developer shall provide City with a credit, redeemable by the City at5.7.1
the City’s discretion,for goods and services including but not limited to:
a zero-emission, all-electric shuttle bus for pilot transit agency(a)
program;
Maintenance and service of City transit vehicles;(b)
Purchase of zero-emission, all-electric shuttle buses;(c)
installation of charging infrastructure for zero emission, all-(d)
electric shuttle buses;
maintenance, training, service and support for such zero(e)
emission, all-electric shuttle buses and other City vehicles.
Cash payment.5.7.2
45635.01000\29057912.6 31
Sales tax revenue received pursuant to Bradley Burns Sales and Use5.7.3
Tax by City from Developer’s sales, serices or leases
Any goods sold to or services received by City shall be at dealer cost5.7.4
and not subject to mark up.
The Covenant Payment shall be in addition to any other fees, costs,5.7.5
or charges regularly incurred as part of the develo pment in the City.
Developer’s obligation to make any remaining Covenant Payment5.7.6
shall terminate upon Developer permenantly ceasing operations on the Property. Developer
shall provide written notice to City of Developer’s intent to cease operations thirty (30) days
prior. Notice shall be provided in accordance with this Agreement.
Survival and Enforcement of Special Development Covenants.5.8
Covenants Running with the Land. Each of the special development5.8.1
covenants set forth in this ARTICLE 5 touch and concern the Property and constitute
covenants running with the Property and binding upon successive owners of the Property for
the time period set forth in each specific covenant.
Survival. Each such special development covenant shall survive the5.8.2
Close of Escrow, execution and recordation of the City Deed and issuance and recordation of
each and every Certificate of Completion, Certificate of Occupancy and any other document
related to conveyance of the Property or construction or installation of the Project, for the time
period specifically set forth in each such special development covenant.
Enforcement . These special development covenants may be enforced5.8.3
by the City regardless of whether the City currently owns or continues to own an interest in
any property benefited by any such covenants. The Developer irrevocably stipulates and agrees
that breach of any of the special development covenants set forth in this ARTICLE 5 will
result in great and irreparable damage to the City, and will result in damages to the City that
are either impracticable or extremely difficult to quantify. Accordingly, upon the breach of any
special development covenant set forth in this ARTICLE 5, the City may institute an action for
injunctive relief and/or for damages regarding such breach.
ARTICLE 6
DEFAULTS, REMEDIES AND TERMINATION
Defaults.6.1
Events of Default . In addition to other acts or omissions of a Part y6.1.1
that may legally or equitably constitute a Default or breach of this Agreement, the occurrence
of any of the following specific events shall constitute an “Event of Default” under this
Agreement:
45635.01000\29057912.6 32
Monetary Default. If a Monetary Default occurs and(a)
continues for seven (7) days after Notice from the City, specifying in reasonable detail the
amount of money not paid and the nature and calculation of each such payment.
Bankruptcy or Insolvency. If the Developer ceases to do(b)
business as a going concern, ceases to pay its debt s as they become due or admits in writing
that it is unable to pay its debts as they become due, or becomes subject to any Bankruptcy
Proceeding (except an involuntary Bankruptcy Proceeding dismissed within sixty (60) days
after commencement), or a custodian or trustee is appointed to take possession of, or an
attachment, execution or other judicial seizure is made with respect to, substantially all of the
Developer’s assets or the Developer’s interest in t his Agreement (unless such appointment,
attachment, execution, or other seizure was involuntary and is contested with diligence and
continuity and vacated and discharged within sixty (60) days).
Breach of Representation or Warranty. Any representation,(c)
warranty or disclosure made to the City by the Developer regarding this Agreement, the
Property or the Project is materially false or misleading, whether or not such representation or
disclosure appears in this Agreement.
Deposit of Funds, Bonds or Other Security. If the Developer(d)
fails to make any deposit of funds or provide any bond or other security required under this
Agreement within seven (7) days’ after Notice of such Default to the Developer.
Insurance. If the Developer fails to obtain, maintain or(e)
replace any insurance coverage required under this Agreement within seven (7) days’ after
Notice of such Default to the Developer.
Material Deviation in Project. Any material deviation in the(f)
work of construction or installation of the Project from the approved Project description,
without the prior written approval of the City that is not corrected within fifteen (15) days’
following written Notice of such Default.
Project Progress.(g)
The construction or installation of the Project does not(i)
commence by the time provided for such commencement in the Performance Schedule.
The Project is not completed by the Project(ii)
Completion Date.
Non-Monetary Default. If any Non-Monetary Default, other(h)
than those specifically addressed in Section 7.1, o ccurs and the Developer does not cure such
Non-Monetary Default within thirty (30) days after Notice from the City describing the Default
in reasonable detail, or, in the case of a Non-Monetary Default that cannot with reasonable due
diligence be cured within thirty (30) days from such Notice, if the Developer shall not: (a)
within thirty (30) days after the City’s Notice, advise the City of the Developer’s intention to
take all reasonable steps to cure such Non-Monetary Default; (b) duly commence such cure
45635.01000\29057912.6 33
within such period, and then diligently prosecute such cure to completion; and (c) complete
such cure within a reasonable time under the circumstances.
Transfer. The occurrence of a Transfer other than a(i)
Permitted Transfer, whether voluntarily or involunt arily or by operation of Law, in violation of
the terms and conditions of this Agreement.
PRE-CLOSING LIQUIDATED DAMAGES TO THE CITY. DURING6.2
THE CONTINUANCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER
THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE CITY MAY CANCEL
THE ESCROW AND TERMINATE THIS AGREEMENT. UPON CANCELLATION OF
THE ESCROW AND TERMINATION OF THIS AGREEMENT, THE CITY SHALL BE
RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT TO SELL OR CONVEY
THE PROPERTY TO THE DEVELOPER. ANY SUCH ESCROW CANCELLATION AND
TERMINATION OF THIS AGREEMENT SHALL BE WITHOUT ANY LIABILITY OF
THE CITY TO THE DEVELOPER OR ANY OTHER PERSON. THE CITY AND THE
DEVELOPER ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND
IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE
SUFFERED BY THE CITY, IN THE EVENT OF A CANCELLATION OF THE ESCROW
AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF A
DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE
OF ESCROW. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO
ASCERTAIN THE ACTUAL DAMAGES THAT THE CITY 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 THE
DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE
CITY AND THE DEVELOPER AGREE THAT A REASONABLE ESTIMATE OF THE
CITY’S DAMAGES IN SUCH EVENT IS THE PRE-CLOSING LIQUIDATED DAMAGES
AMOUNT. THEREFORE, UPON THE CANCELLATION OF THE ESCROW AND
TERMINATION OF THIS AGREEMENT BY THE CITY DUE TO THE OCCURRENCE
OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT,
PRIOR TO THE CLOSE OF ESCROW, THE PARTIES AND THE ESCROW AGENT
SHALL PROCEED PURSUANT TO SECTION 3.11 TO CANCEL THE ESCROW. THE
ESCROW HOLDER SHALL IMMEDIATELY CANCEL THE ESCROW AND PAY THE
PRE-CLOSING LIQUIDATED DAMAGES AMOUNT TO THE CITY, FROM FUNDS OF
THE DEVELOPER HELD IN THE ESCROW UPON ESCROW CANCELLATION.
RECEIPT OF THE PRE-CLOSING LIQUIDATED DAMAGES AMOUNT SHALL BE THE
CITY’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 THE DEVELOPER UNDER THIS AGREEMENT,
PRIOR TO THE CLOSE OF ESCROW.
_______________________ _______________________
Initials of Authorized Initials of Authorized
City Representative Developer Representative
45635.01000\29057912.6 34
DEVELOPER’S WAIVER OF RIGHT TO SPECIFIC PERFORMANCE6.3
AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF
ESCROW.
THE DEVELOPER WAIVES ANY RIGHT TO MAINTAIN AN6.3.1
ACTION AGAINST THE CITY FOR SPECIFIC PERFORMANCE OF ANY TERM OR
PROVISION OF THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW. DURING
THE CONTINUANCE OF AN EVENT OF DEFAULT BY THE CITY, PRIOR TO THE
CLOSE OF ESCROW, THE DEVELOPER SHALL BE LIMITED TO RECOVERING ANY
AMOUNTS ACTUALLY EXPENDED BY THE DEVELOPER IN REASONABLE
RELIANCE ON THIS AGREEMENT, PRIOR TO THE DATE OF THE OCCURRENCE OF
THE DEFAULT BY THE CITY, NOT TO EXCEED AN AGGREGATE AMOUNT OF
_________________ DOLLARS ($_________). THE DEVELOPER WAIVES ANY RIGHT
TO RECOVER ANY OTHER SUMS FROM THE CITY ARISING FROM A DEFAULT BY
THE CITY, PRIOR TO THE CLOSE OF ESCROW. THE DEVELOPER
ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE
TO THE WAIVERS AND RELEASES CONTAINED IN THIS SECTION 6.3, 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.
BY INITIALING BELOW, THE DEVELOPER KNOWINGLY6.3.2
AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 6.3.
_______________________
Initials of Authorized
Developer Representative
Legal Actions. Following the Close of Escrow, either Party may institute legal6.4
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, at law or in equity regarding
any Default. Any such legal action must be instituted in the Superior Court of the State of
California in and for the County, in any other appropriate court within the County, or in the
United States District Court with jurisdiction in t he County.
Rights and Remedies are Cumulative. Except as otherwise expressly stated6.5
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.
45635.01000\29057912.6 35
Indemnification.6.6
Obligations. The City shall Indemnify the Developer Parties and the6.6.1
Developer shall Indemnify the City Parties against any wrongful intentional act or negligence of
the Indemnitor. The Developer shall also Indemnify the City Parties against any and all of the
following: (a) any Application made at the Developer’s request; (b) any Due Diligence
Investigations by the Developer; (c) use, occupancy, management or operation of the Project;
(d) any agreements that the Developer (or anyone claiming through the Developer) makes
regarding the Project; (e) the condition of the Pro ject or, or of any vaults, tunnels,
passageways or space under, adjoining or appurtenant to the Property; and (f) any accident,
injury or damage whatsoever caused to any Person in or on the Property or the Project.
Notwithstanding anything to the contrary in this Agreement, no Indemnitor shall be required to
Indemnify any Indemnitee to the extent of the Indemnitee’s wrongful intentional acts or
negligence.
Limitation on Liability of the City. Following the Close of Escrow,6.6.2
the Developer is and shall be responsible for operation of the Property and the Project and the
City shall not be liable for any injury or damage t o any property (of the Developer or any other
Person) or to any Person occurring on or about the Property or the Project, except to the
extent caused by the City’s wrongful intentional act or negligence.
Strict Liability. The indemnification obligations of an Indemnitor6.6.3
shall apply regardless of whether liability without fault or strict liability is imposed or sought to
be imposed on one or more Indemnitees.
Independent of Insurance Obligations. The Developer’s6.6.4
indemnification obligations under this Agreement shall not be construed or interpreted as in any
way restricting, limiting, or modifying the Developer’s insurance or other obligations under this
Agreement and is independent of the Developer’s insurance and other obligations under this
Agreement. The Developer’s compliance with its insurance obligations and other obligations
under this Agreement shall not in any way restrict, limit, or modify the Developer’s
indemnification obligations under this Agreement and are independent of the Developer’s
indemnification and other obligations under this Agreement.
Survival of Indemnification and Defense Obligations. The indemnity6.6.5
and defense obligations under this Agreement shall survive the expiration or earlier termination
of this Agreement, until all claims against any of the Indemnitees involving any of the
indemnified matters are fully, finally, absolutely and completely barred by applicable statutes of
limitations.
Independent Duty to Defend. The duty to defend under this6.6.6
Agreement is separate and independent of the duty t o Indemnify. The duty to defend includes
claims for which an Indemnitee may be liable without fault or strictly liable. The duty to
defend applies immediately upon notice of a Claim, regardless of whether the issues of
negligence, liability, fault, default or other obligation on the part of the Indemnitor or the
Indemnitee have been determined. The duty to defend applies immediately, regardless of
whether the Indemnitee has paid any amounts or incurred any detriment arising out of or
45635.01000\29057912.6 36
relating (directly or indirectly) to any claims. It is the express intention of the Parties that an
Indemnitee be entitled to obtain summary adjudication or summary judgment regarding an
Indemnitor’s duty to defend the Indemnitee, at any stage of any claim or suit, within the scope
of the Indemnitor’s indemnity obligations under this Agreement.
Indemnification Procedures. Wherever this Agreement requires any6.7
Indemnitor to Indemnify any Indemnitee:
Prompt Notice. The Indemnitee shall promptly Notify the Indemnitor6.7.1
of any claim. To the extent, and only to the extent, that the Indemnitee fails to give prompt
Notice of a Claim and such failure materially prejudices the Indemnitor in providing indemnity
for such claim, the Indemnitor shall be relieved of its indemnity obligations for such claim.
Selection of Counsel. The Indemnitor shall select counsel reasonably6.7.2
acceptable to the Indemnitee. Counsel to Indemnitor’s insurance carrier that is providing
coverage for a claim shall be deemed reasonably sat isfactory. Even though the Indemnitor
shall defend the action, Indemnitee may, at its opt ion and its own expense, engage separate
counsel to advise it regarding the claim and its defense. The Indemnitee’s separate counsel
may attend all proceedings and meetings. The Indemnitor’s counsel shall actively consult with
the Indemnitee’s separate counsel. The Indemnitor and its counsel shall, however, fully control
the defense, except to the extent that the Indemnit ee waives its rights to indemnity and defense
for such claim.
Cooperation. The Indemnitee shall reasonably cooperate with t he6.7.3
Indemnitor’s defense of the Indemnitee, provided the Indemnitor reimburses the Indemnitee’s
actual out of pocket expenses (including Legal Cost s) of such cooperation.
Settlement . The Indemnitor may, with the Indemnitee’s consent, not6.7.4
to be unreasonably withheld, settle a claim. The Indemnitee’s consent shall not be required for
any settlement by which all of the following occur: (a) the Indemnitor procures (by payment,
settlement, or otherwise) a release of the Indemnit ee from the subject claim(s) by which the
Indemnitee need not make any payment to the claimant; (b) neither the Indemnitee nor the
Indemnitor on behalf of the Indemnitee admits liability; (c) the continued effectiveness of this
Agreement is not jeopardized in any way; and (d) the Indemnitee’s interest in the Project is not
jeopardized in any way.
Insurance Proceeds. The Indemnitor’s obligations shall be reduced6.7.5
by net insurance proceeds the Indemnitee actually receives for the matter giving rise to
indemnification obligation.
City Option to Purchase Following Conveyance.6.8
The City shall have the right at its option to terminate this6.8.1
Agreement and to repurchase the Property (“Option t o Purchase”) with all improvements
thereon, if after conveyance of the Property to the Developer the Property is no longer utilized
for Performance Truck Repair business activities.
45635.01000\29057912.6 37
This Option to Purchase shall be subordinate and subject to and be6.8.2
limited by and shall not defeat, render invalid or limit:
Any mortgage, deed of trust or other security instrument(a)
permitted by this Agreement; or
Any rights or interests provided in this Agreement for the(b)
protection of the holder of such mortgages, deeds o f trust or other security instruments.
Option Procedure.6.8.3
Within thirty (30) days of the triggering events set forth in(a)
Section 6.8.1, Developer shall provide City written notice that the Option to Purchase can be
exercised by the City (“Developer’s Notice”).
City shall exercise said option by delivering writt en notice to(b)
Developer of City’s intent to exercise the option to repurchase the Property within forty-five
(45) days of receipt of Developer’s Notice. If Developer and City can agree on an appraiser,
Developer and City shall designate a qualified appraiser who shall have had at least five (5)
years experience in the ten (10) 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 City shall establish the purchase price of the Property. If Developer and City
cannot agree on an Appraiser, then each of Developer and City 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
City, within sixty (60) days after his or her appointment, a written determination of the then
Fair Market Value.
If the lower of the two appraisers' determinations is not less(c)
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 City and Developer. 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
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.
The cost of these determinations shall be borne equally by(d)
Developer and Agency.
Escrow and Terms of Repurchase.6.8.4
Developer and City shall open escrow within fifteen (15) days(a)
following determination of the Fair Market Value as set forth hereinabove.
45635.01000\29057912.6 38
City shall close escrow on the Property not more than one(b)
hundred eighty (180) days following the opening of escrow pursuant to this Section 6.8.
City shall pay fair market value as determined by t he process(c)
set forth in Section 6.8.3(b) or some other amount as reasonably negotiated by the parties at
the time. Developer shall provide City with a comprehensive environmental indemnity for the
Property that shall survive the close of escrow and reconveyance of the Property to the City.
Grant Deed. Upon the City’s exercise of its Option to Purchase6.8.5
pursuant to this Section 6.8 (including the payment and delivery of all amounts due to
Developer as set forth in Section 6.8.4), the Developer or its successors or assigns shall convey
fee title to the Property, or applicable portion thereof, , to the City by grant deed, in
accordance with Civil Code Section 1109, as such co de section may hereafter, from time to
time, be amended, renumbered, replaced or substitut ed. Such conveyance shall be duly
acknowledged by the Developer and a notary in a manner suitable for recordation. The City
may enforce its rights pursuant to this Section 6.8 by means of an injunctive relief or forfeiture
of title action filed in any court of competent jurisdiction.
ARTICLE 7
GENERAL PROVISIONS
Incorporation of Recitals. The Recitals set forth preceding this Agreement are7.1
true and correct and are incorporated into this Agreement in their entirety by this reference.
Restrictions on Change in Management or Control of the Developer,7.2
Assignment and Transfer.
Restrictions. The Developer acknowledges that the qualificatio ns and7.2.1
identity of the Developer are of particular importance and concern to the City. The Developer
further recognizes and acknowledges that the City has relied and is relying on the specific
qualifications and identity of the Developer in entering into this Agreement with the Developer
and, as a consequence, Transfers are permitted only as expressly provided in this Agreement.
The Developer represents to the City that it has no t made and agrees that it will not create or
suffer to be made or created, any Transfer, other t han a Permitted Encumbrance either
voluntarily, involuntarily or by operation of law, without the prior written approval of the City,
which may be given, withheld or conditioned in the City’s sole and absolute discretion until
after the issuance of a Certificate of Project Completion for the Project. Any Transfer made in
contravention of this Section 7.2 shall be voidable at the election of the City. The Developer
agrees that the restrictions on Transfers set forth in this Section 7.2 are reasonable. City
acknowledges and agrees that at any time following the issuance of a Certificate of Completion
for the Project, Developer may Transfer the Propert y and/or refinance the Property without
City approval or complying with Section 7.2.2 below, provided that all covenants set forth in
Article 5 of this Agreement, entitled “Special Development Covenants of Developer” shall
survive any such Transfer or refinancing and remain in full force and effect for the duration of
the Covenant Period.
45635.01000\29057912.6 39
Delivery of Transfer Documents. All instruments and other legal7.2.2
documents proposed to effect any proposed Transfer shall be submitted to the City for review,
at least, thirty-five (35) calendar days prior to t he proposed date of the Transfer, and the
written approval, disapproval or conditions of the City shall be provided to the Developer,
within thirty (30) calendar days following the City’s receipt of the Developer’s request.
Legal Challenges. The Developer acknowledges that the City is a “public7.3
entity” and/or a “public agency” as defined under applicable California law. Therefore, the City
must satisfy the requirements of certain California statutes relating to the actions of public
entities, including, without limitation, CEQA. Also, as a public entity, the City’s action in
approving this Agreement may be subject to proceedings to challenge or invalidate this
Agreement or mandamus. The Developer assumes the risk of delays and damages that may
result to the Developer from any third-party legal actions related to the City’s approval of this
Agreement or pursuit of the activities contemplated by this Agreement, even in the event that
an error, omission or abuse of discretion by the City is determined to have occurred. If a
third-party files a legal action regarding the City’s approval of this Agreement or the pursuit of
the activities contemplated by this Agreement, the City may terminate this Agreement on thirty
(30) days advance written Notice to the Developer o f the City’s intent to terminate this
Agreement, referencing this Section 7.3, without any further obligation to perform the terms of
this Agreement and without any liability to the Developer or any other Person resulting from
such termination, unless the Developer unconditionally agrees in writing to indemnify and
defend the City, with legal counsel acceptable to t he City, against such third-party legal action,
within thirty (30) calendar days following the date of the City’s Notice of intent to terminate
this Agreement, including without limitation paying all Legal Costs, 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 written defense and indemnity agreement between the City and the Developer must be in
a separate writing and reasonably acceptable to the City in both form and substance. Nothing
contained in this Section 7.3 shall be deemed or co nstrued to be an express or implied
admission that the City may be liable to the Develo per or any other Person for damages or
other relief alleged regarding any alleged or established failure of the City to comply with any
Law. If the City and the Developer have not entered into a written defense and indemnity
agreement, pursuant to this Section 7.3, within thirty (30) calendar days following the date of
the City’s notice of intent to terminate this Agreement, then this Agreement shall terminate,
without further Notice or action by either Party, o n the fortieth (40th) day following the date of
the City’s notice of intent to terminate this Agreement.
City Manager Implementation. The City shall implement this Agreement7.4
through its City Manager. The City Manager is hereby authorized by the City to issue
approvals, interpretations, waivers and enter into certain amendments to this Agreement on
behalf of the City, to the extent that any such act ion(s) does/do not materially or substantially
change the Project or cause the City to incur any o bligation exceeding Twenty-Five Thousand
Dollars ($25,000). All other actions shall require the consideration and approval of the City
governing body. Nothing in this Section 7.4 shall restrict the submission to the City governing
body of any matter within the City Manager’s authority under this Section 7.4, in the City
Manager’s sole and absolute discretion, to obtain t he City governing body’s express and
45635.01000\29057912.6 40
specific authorization on such matter. The specific intent of this Section 7.4 is to authorize
certain actions on behalf of the City by the City Manager, but not to require that such actions
be taken by the City Manager, without further consideration by the City governing body.
Notices, Demands and Communications Between the Parties.7.5
Notices. Any and all Notices submitted by either Party to the other7.5.1
Party pursuant to or as required by this Agreement shall be proper, if in writing and
transmitted to the principal office of the City or the Developer, as applicable, set forth in
Section 7.5.2, by one or more of the following methods: (i) messenger for immediate Personal
delivery, (ii) a nationally recognized overnight (one-night) delivery service (i.e., Federal
Express, United Parcel Service, etc.) or (iii) registered or certified United States Mail, postage
prepaid, return receipt requested. Such Notices may be sent in the same manner to such other
addresses as either Party may designate from time to time, by Notice. Any Notice 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 when delivery has been attempted twice, as evidenced by the written report
of the courier service) or four (4) calendar days after it is deposited with the United States
Postal Service for delivery, as provided in this Section 7.5.1. Rejection, other refusal to accept
or the inability to deliver a Notice because of a changed address of which no Notice was given
or other action by a Person to whom Notice is sent, shall be deemed receipt of the Notice.
Addresses. The following are the authorized addresses for t he7.5.2
submission of Notices to the Parties, as of the Effective Date:
To the Developer:
To the City:
With courtesy copy to:
Warranty Against Payment of Consideration for Agreement. The7.6
Developer represents and warrant that: (i) neither have employed or retained any Person to
solicit or secure this Agreement upon an agreement or understanding for a commission,
percentage, brokerage, or contingent fee, excepting bona fide employees of the Developer and
(ii) no gratuities, in the form of entertainment, gifts or otherwise have been or will be given by
the Developer or any agents, employees or representatives to any elected or appointed official
or employee of the City in an attempt to secure this Agreement or favorable terms or
conditions for this Agreement. Breach of the representations or warranties of this Section 7.6
45635.01000\29057912.6 41
shall automatically terminate this Agreement, witho ut further notice to or action by either Party
and the Developer shall immediately refund any payments made to the Developer by the City
pursuant to this Agreement, prior to the date of any such termination.
Relationship of Parties. The Parties each understand and agree that the City7.7
and the Developer are independent contracting entit ies and do not intend by this Agreement to
create any partnership, joint venture, or similar business arrangement, relationship or
association between them.
Survival of Agreement. All of the provisions of this Agreement shall be7.8
applicable to any dispute between the Parties arising from this Agreement, whether prior to or
following expiration or termination of this Agreement, until any such dispute is finally and
completely resolved between the Parties, either by written settlement, entry of a non-appealable
judgment or expiration of all applicable statutory limitations periods and all terms and
conditions of this Agreement relating to dispute resolution and limitations on damages or
remedies shall survive any expiration or terminatio n of this Agreement.
Conflict of Interest. No member, officer, official or employee of the City7.9
having any conflict of interest, direct or indirect , related to this Agreement, the Property or the
development or operation of the Project 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.
Non-liability of Officials, Employees and Agents. No City Party shall be7.10
personally liable to the Developer, or any successor in interest of the Developer, in the event of
any Default or breach by the City under this Agreement or for any amount that may become
due to the Developer or to its successor, or on any obligations under the terms or conditions
of this Agreement, except as may arise from the negligence or willful intentional acts of such
City Party.
Calculation of Time Periods. Unless otherwise specified, all references to time7.11
periods in this Agreement measured in days shall be to consecutive 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
consecutive business days of the City.
Principles of Interpretation. No inference in favor of or against any Party7.12
shall be drawn from the fact that such Party has drafted any part of this Agreement. The
Parties have both participated substantially in the negotiation, drafting, and revision of this
Agreement, with advice from legal and other counsel and advisers of their own selection. A
word, term or phrase defined in the singular in this Agreement may be used in the plural, and
vice versa, all in accordance with ordinary principles of English grammar, which shall govern
all language in this Agreement. The words “include” and “including” in this Agreement shall
be construed to be followed by the words: “without limitation.” Each collective noun in this
Agreement shall be interpreted as if followed by the words “(or any part of it),” except where
the context clearly requires otherwise. Every reference to any document, including this
45635.01000\29057912.6 42
Agreement, refers to such document, as modified from time to time (excepting any
modification that violates this Agreement), and includes all exhibits, schedules, addenda and
riders to such document. The word “or” in this Agreement includes the word “and.”
Governing Law. The Laws of the State shall govern the interpretation and7.13
enforcement of this Agreement, without application of 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.
City Attorney Fees and Costs. For the purposes of this Agreement, all7.14
references to reasonable attorneys’ fees and costs in reference to the City are intended to
include the salaries, benefits and costs of the City Attorney, as City General Counsel, and the
lawyers employed in the Office of the City Attorney who provide legal services regarding the
particular matter, pro-rated to an hourly rate, in addition to any fees and costs of outside
counsel to the City.
Unavoidable Delay; Extension of Time of Performance.7.15
Notice. Subject to any specific provisions of this Agreement stating7.15.1
that they are not subject to Unavoidable Delay or o therwise limiting or restricting the effects of
an Unavoidable Delay, performance by either Party under this Agreement shall not be deemed,
or considered to be in Default, where any such Default is due to the occurrence of an
Unavoidable Delay. Any Party claiming an 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 t o 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 no t claiming 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 claiming an extension of time to perform due to an Unavoidable
Delay shall exercise its commercially reasonable best efforts to cure the condition causing the
Unavoidable Delay, within a reasonable time.
ASSUMPTION OF ECONOMIC RISKS. EACH PARTY7.15.2
EXPRESSLY AGREES THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF
EITHER PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN
MARKET CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC
ASSUMPTIONS OF EITHER PARTY 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. ANYTHING IN THIS
AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE PARTIES EXPRESSLY
ASSUME THE RISK OF UNFORESEEABLE CHANGES IN ECONOMIC
CIRCUMSTANCES AND/OR MARKET DEMAND/CONDITIONS AND WAIVE, TO THE
GREATEST LEGAL EXTENT, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION
BASED IN WHOLE OR IN PART ON ECONOMIC NECESSITY, IMPRACTICABILITY,
CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR
45635.01000\29057912.6 43
SIMILAR THEORIES. THE PARTIES AGREE THAT ADVERSE CHANGES IN
ECONOMIC CONDITIONS, EITHER OF THE PARTY SPECIFICALLY OR THE
ECONOMY GENERALLY, OR CHANGES IN MARKET CONDITIONS OR DEMANDS,
SHALL NOT OPERATE TO EXCUSE OR DELAY THE STRICT OBSERVANCE OF
EACH AND EVERY ONE OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND
REQUIREMENTS OF THIS AGREEMENT. THE PARTIES EXPRESSLY ASSUME THE
RISK OF SUCH ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER OR NOT
FORESEEABLE AS OF THE EFFECTIVE DATE.
_______________________ _______________________
Initials of Authorized Initials of Authorized
Representative(s) of City Representative(s) of Developer
Real Estate Commissions. The City shall not be responsible for any real estate7.16
brokerage or sales commissions, finder fees or similar charges that may arise from or be related
to this Agreement. The Developer shall be solely responsible for any real estate brokerage or
sales commissions, finder fees or similar charges that may arise from or be related to this
Agreement that are claimed by any Person engaged by the Developer relating to the Property,
the Project or this Agreement. Further, the Develo per shall Indemnify the City from any such
claims for real estate brokerage or sales commissio ns, finder fees or similar charges, in
accordance with Section 7.7.
Binding on Successors and Assigns. This Agreement shall be binding upon7.17
and inure to the benefit of the Parties and their respective legal representatives, successors and
assigns.
No Other Representations or Warranties. Except as expressly set forth in7.18
this Agreement, no Party makes any representation o r warranty material to this Agreement to
any other Party.
Tax Consequences. Developer acknowledges this Agreement and agrees that it7.19
shall bear any and all responsibility, liability, costs, and expenses connected in any way with
any tax consequences experienced by the Developer related to this Agreement or the Close of
Escrow.
No Third-Party Beneficiaries. Nothing in this Agreement, express or implied,7.20
is intended to confer any rights or remedies under or by reason of this Agreement on any
Person other than the Parties and their respective permitted successors and assigns, nor is
anything in this Agreement intended to relieve or discharge any obligation of any third-Person
to any Party or give any third-Person any right of subrogation or action over or against any
Party.
Execution in Counterparts. This Agreement may be executed in two or more7.21
counterpart originals, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document .
45635.01000\29057912.6 44
Entire Agreement.7.22
Integrated Agreement . This Agreement includes __ pages and __7.22.1
exhibits, which constitute the entire understanding and Agreement of the Parties regarding the
Premises, conveyance of the Property and the other subjects addressed in this Agreement. 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 Premises, conveyance of the Property and the other subjects addressed in
this Agreement.
No Merger. None of the terms, covenants, restrictions, agreements7.22.2
or conditions set forth in this Agreement shall be deemed to be merged with any deed
conveying title to any portion of the Premises, any lease or sublease of any part of the
Premises and this Agreement shall continue in full force and effect before and after any such
instruments.
Waivers Must be in Writing. All waivers of the provisions of this7.22.3
Agreement and all amendments to this Agreement must be in writing and signed by the
authorized representative(s) of both the City and t he Developer.
Exhibits. The exhibits attached to this Agreement are described as follows:7.23
Exhibit A: Property Legal Description
Exhibit B: Performance Schedule
Exhibit C: Form of City Deed
Exhibit D: Form of Notice of Agreement
Exhibit E: Form of Official Action of Developer
Exhibit F: Form of Certificate of Completion
Exhibit G: Scope of Development
Execution of this Agreement. Following execution of three (3) counterpart7.24
originals of this Agreement and the Developer Official Action by the authorized
representative(s) of the Developer and prompt delivery of such executed documents to the City
this Agreement shall be subject to review and appro val by the City governing body, in its sole
and absolute discretion, no later than forty-five (45) calendar days after the date of such
delivery to the City. If the City governing body has not approved this Agreement within the
time period specified in the immediately preceding sentence, then no provision of this
Agreement shall be of any force or effect for any purpose and any prior execution or approval
of this Agreement by either Party shall be null and void.
Time Declared to be of the Essence. As to the performance of any obligation7.25
under this Agreement of which time is a component, the performance of such obligation within
the time specified is of the essence.
No Waiver. Failure to insist on any one occasion upon strict compliance with7.26
any term, covenant, condition, restriction or agreement contained in this Agreement shall not
45635.01000\29057912.6 45
be deemed a waiver of such term, covenant, or condition, restriction or agreement, nor shall
any waiver or relinquishment of any rights or powers under this Agreement at any one time or
more times, be deemed a waiver or relinquishment of such right or power at any other time or
times.
[Signatures on following page]
45635.01000\29057912.6 46
SIGNATURE PAGE
TO
201_ DISPOSITION AND DEVELOPMENT AGREEMENT
(Performance Truck)
IN WITNESS WHEREOF, the City and the Developer have executed this 2016
Disposition and Development Agreement (Performance Truck) by and through the signatures of
their duly authorized representative(s) set forth below:
CITY:
By:
Name:
Its:
Attest:
By:
City Clerk
DEVELOPER:
By:
Name:
Its:
By:
Name:
Its:
APPROVED AS TO FORM:
By:
City Attorney
45635.01000\29057912.6 47
ESCROW AGENT CONSENT
[INSERT NAME OF TITLE INSURANCE COMPANY] accepts that certain 2016
Disposition and Development Agreement, dated _______________, 2016, by and between the
City of Azusa , a California municipal corporation , and Performance Truck Repair, a
California limited liability company, agrees to act as “Escrow Agent” pursuant to such
agreement and agrees to be bound by all provisions of such agreement applicable to it as the
Escrow Agent.
ESCROW AGENT:
[INSERT NAME OF TITLE
INSURANCE COMPANY]
By:
Name:
Its:
Dated:
Escrow Agent Consent
45635.01000\29057912.6
EXHIBIT “A”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
PROPERTY LEGAL DESCRIPTION
Exhibit “A”
Property Legal Description
45635.01000\29057912.6
EXHIBIT “B”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
PERFORMANCE SCHEDULE
A. Days shall be calendar days, unless otherwise specified.
B. The City Manager is authorized by the City to make minor changes to the
schedule prior to the Project Completion Date resulting in an aggregate extension of the
Project Completion Date of ninety (90) calendar days or less.
C. All specific dates set forth in parentheses in this schedule are estimates only and
not binding on the Parties.
D. In the event of any conflict between this schedule and the Agreement, the terms
and provisions of the Agreement shall control.
E. All defined terms indicated by initial capitalization used in this schedule shall
have the meanings ascribed to the same terms in the Agreement.
Action Date Action to be
Completed By
1. Effective Date of Agreement
2. Escrow Opening Date [Developer - §3.1] Within 5 days after
Effective Date
3. Preliminary Report delivered to Developer [City - §2.3] As soon as practicable
following the Escrow
Opening
4. Delivery of Due Diligence Completion Notice to City and
Escrow Agent [Developer - §2.4]
Within __ days after
Effective Date
5. Close of Escrow [§3.7]On or before Escrow
Closing Date
6. Commencement of construction and installation of Project
[Developer-§4.4]
Within __ calendar
days after Close of
Escrow
7. Completion of construction and installation of Project
[Developer-§4.4]
On or before Project
Completion Date
Exhibit “B”
Performance Schedule
45635.01000\29057912.6
EXHIBIT “C”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
FORM OF CITY DEED
[Attached behind this cover page]
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
AT THE REQUEST OF AND
WHEN RECORDED MAIL TO:
No recording fee required; this document is exempt
from fee pursuant to Section 6103 of the California
Government Code
SPACE ABOVE THIS LINE FOR RECORDER’S USE
CITY DEED WITH RESERVATION OF EASEMENT
For a valuable consideration, receipt of which is hereby acknowledged.
The City of , a California municipal corporation (“Grantor” or
“City”), hereby grants to , a California limited liability company
(“Grantee” or “Developer”), that certain real property described in Exhibit “A” attached hereto
and incorporated herein by this reference (“Propert y”).
SECTION 1
RESERVATION OF EASEMENT
RESERVING AND EXCEPTING THEREFROM a permanent, non-exclusive
easement ("Easement") over and across that portion of the Property, as the "Servient
Tenement", described and depicted in EXHIBIT B attached hereto and incorporated herein by
reference ("Easement Parcel") for purposes of vehicular and pedestrian ingress and egress at
all times to and from, and as an appurtenance to and for benefit of, that certain real property
situated in the City of Azusa, County of Los Angeles, State of California and more fully
described in EXHIBIT C attached hereto and incorporated herein by reference, as the
"Dominant Tenement".
The Easement and Grantor's rights thereunder are expressly made subject to the
following conditions, covenants and agreements:
1. Grantee shall be obligated to install, repair, replace and/or maintain the
vehicular and pedestrian driveways, sidewalks and paths (collectively, "Paths") within the
Easement Parcel, and any and all installation, repair, replacement and/or maintenance of the
Paths shall be undertaken solely by Grantee and solely at Grantee's cost and expense
2. Grantor covenants and agrees to indemnify, defend and hold Grantee and
Grantee's officials, officers, employees and agents, free and harmless from any and all actual or
alleged death, injury and damages to the person(s) and property of Grantor, its contractors,
agents, employees and invitees arising from, or alleged to arise from, the exercise of the
Easement rights reserved herein.
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
3. Grantee shall have the right to use the Easement Parcel for any
purpose that does not interfere with Grantor's use of the Easement and exercise of Grantor's
rights and privileges thereof.
SECTION 2
DEVELOPMENT RESTRICTIONS PURSUANT TO
DISPOSITION AND DEVELOPMENT AGREEMENT
The Property is conveyed in accordance with and subject to that certain1.
Disposition and Development Agreement (“DDA”) dated _________, entered into between
Grantor and Grantee, a copy of which is on file with the City at its offices as a Public Record
and which is incorporated herein by reference. The DDA requires the Developer to construct
and meet other requirements as set forth therein. All terms used herein shall have the same
meaning as those used in the DDA.
The Grantee acknowledges and agrees that the Property is quitclaimed by the2.
City to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS
CONDITION," as of the date of recordation of this City Deed, with no warranties, expressed
or implied, as to the environmental or other physical condition of the Property, the presence or
absence of any patent or latent environmental or other physical condition on or in the Property,
or any other matters affecting the Property.
Covenant to Maintain Property on Tax Rolls.3.
a. Covenant . The Developer covenants to cause the Property to remain on
the County secured real property tax rolls, continuously, from the Close of Escrow, until the
end of the Covenant Period.
b. Payment of Taxes. During the Covenant Period, the Developer, for itself
and its successors and assigns, covenants and agrees to pay all property tax bills with respect
to the Property and all improvements on or to the Property 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 Property issued by
the County. The Developer further covenants and agrees to provide to the City, upon the
City’s written request, (i) a true and correct copy of all property tax assessment notices,
property tax bills and property tax assessment correspondence by and between the Developer
and the County regarding the Property and all impro vements on or to the Property, with
respect to the preceding fiscal year of the County and (ii) cancelled checks issued by the
Developer in payment of all property tax payments made to the County regarding the Property
and all improvements on or to the Property, with respect to the preceding fiscal year of the
County.
c. Covenant Running with the Land. The covenants of this Section shall
run with the land of the Property and bind successive owners of the Property from the Close
of Escrow, until the end of the Covenant Period.
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
No Conveyance to Tax Exempt Entity.4.
a. Covenant . The Developer covenants and agrees that during the
Covenant Period, neither the Developer, nor its successors or assigns shall Transfer all or any
portion of the Property or the Project to any Perso n or use all or any portion of the Property
or the Project for any use, that is partially or wholly exempt from the payment of property
taxes or that would cause the exemption of the payment of all or any portion of property taxes
otherwise assessable regarding the Property or the Project, without the prior written consent of
the City, prior to the expiration of the Covenant Period.
b. Covenant Running with the Land. The covenants of this Section shall
run with the land of the Property and bind successive owners of the Property for the duration
of the Covenant Period.
Maintenance Condition of the Property. The Developer for itself, its successors5.
and assigns, covenants and agrees that:
a. Maintenance Standard. The entirety of the Property and the Project shall
be maintained by the Developer in good condition and repair and in a neat, clean and orderly
condition, ordinary wear and tear and casualty 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 Property, now existing or made in the future by or
with the consent of the Developer, as necessary to maintain the appearance and character of
the Project and the Property. The Developer’s obligation to maintain the Project and the
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 the Developer. The Develo per’s obligation to maintain the Project
and the Property described in the two immediately preceding sentences is, collectively, referred
to in this Agreement as the “Maintenance Standard.” The Developer may contract with a
maintenance contractor to provide for performance o f all or part of the duties and obligations
of the Developer with respect to the maintenance of the Project and the Property; provided,
however, that the Developer shall remain responsible and liable for the maintenance of the
Project and the Property, at all times.
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
b. Maintenance Deficiency. If, at any time following the Close of Escrow,
there is an occurrence of an adverse condition on any area of the Project or the Property in
contravention of the Maintenance Standard (each such occurrence being a “Maintenance
Deficiency”), then the City may Notify the Developer in writing of the Maintenance Deficiency.
If the Developer fails to cure or commence and diligently pursue to cure the Maintenance
Deficiency within thirty (30) calendar days following the Developer’s receipt of Notice of the
Maintenance Deficiency, the City may conduct a public hearing, following transmittal of written
Notice of the hearing to the Developer, at least, t en (10) days prior to the scheduled date of
such public hearing, to verify whether a Maintenance Deficiency exists and whether the
Developer has failed to comply with the provisions of this Section. If, upon the conclusion of
the public hearing, the City finds that a Maintenance Deficiency exists and remains uncured, the
City shall have the right to enter the Project and the 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 City to accomplish the abatement of the Maintenance Deficiency. Any sum
expended by the City for the abatement of a Maintenance Deficiency pursuant to this Section
shall be reimbursed to the City by the Developer, within thirty (30) calendar days after written
demand for payment from the City. Any amount expended by the City for the abatement of a
Maintenance Deficiency pursuant to this Section that is not reimbursed to the City by the
Developer within thirty (30) calendar days after written demand to the Developer for such
reimbursement, shall accrue interest at the lesser of: (i) the rate of ten percent (10%) per
annum or (ii) the Usury Limit, until paid in full.
c. Graffiti. Graffiti, as defined in Government Code Section 38772, that
has been applied to any exterior surface of a structure or improvement on the Property, that is
visible from any public right-of-way adjacent or contiguous to the Property, shall be removed
by the 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 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 t he graffiti, the City shall have the right to
enter the Property and remove the graffiti, without Notice to the Developer. Any sum
expended by the City for the removal of graffiti Property pursuant to this Section shall be
reimbursed to the City by the Developer, within thirty (30) calendar days after written demand
for payment from the City. Any amount expended by the City for the removal of graffiti
pursuant to this Section that is not reimbursed to the City by the Developer within thirty (30)
calendar days after written demand to the Developer for such reimbursement, shall accrue
interest at the lesser of: (i) the rate of ten percent (10%) per annum or (ii) the Usury Limit,
until paid in full.
d. Lien Rights. The obligations of the Developer and its successors and
assigns under this Section shall be secured by a lien against the Property. The Developer
hereby grants to the City a security interest in the Property with the power to establish and
enforce a lien or other encumbrance against the Property, in the manner provided in Civil Code
Sections 2924, 2924b and 2924c, to secure the obligations of the Developer and it successors
under this Section including the reasonable attorneys’ fees and costs of the City associated with
the abatement of a Maintenance Deficiency or removal of graffiti. The recordation of the City
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
Deed and the Notice of Agreement shall provide reco rd Notice of such security interest in
favor of the City.
e. Covenant Running with the Land. The covenant of this Section shall be
a covenant running with the land of the Property, binding successive owners of the Property,
throughout the Covenant Period, and shall be enforceable by the City.
Obligation to Refrain from Discrimination. The Developer covenants and agrees6.
for itself, its successors, its assigns and every successor-in-interest to all or any portion of the
Property, that there shall be no discrimination against or segregation of any Person, or group
of Persons, on account of gender, sexual orientatio n, marital status, race, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property nor shall the Developer, itself or any Person claiming under or
through it, establish or permit any such practice o r practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of purchasers, the
Developers, lessees, sub-the Developers, sub-lessees or vendees of the Property. The covenant
of this Section shall be a covenant running with the land of the Property and binding on
successive owners of all or any portion of the Property, until the City issues a Certificate of
Completion for the Project.
Form of Non-discrimination and Non-segregation Clauses. The Developer7.
covenants and agrees for itself, its successors, its assigns, and every successor-in-interest to all
or any portion of the Property, that the 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 Property on the basis of gender, sexual orientation,
marital status, race, color, religion, creed, ancestry or national origin of any Person. All deeds,
leases or contracts pertaining to the Property or any part thereof 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 thro ugh them, that there shall be no
discrimination against or segregation of, any Person or group of persons on account of race,
color, creed, religion, gender, sexual orientation, 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 the Developers, lessees, sub-the Developers, 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 thro ugh them, and this lease is made and
accepted upon and subject to the following conditio ns: That there shall be no discrimination
against or segregation of any Person or group of persons, on account of race, color, creed,
religion, gender, sexual orientation, 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 segregat ion with reference to the selection, location,
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
number, use, or occupancy, of the Developers lessees, sub-lessee, sub-the Developers, 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, gender, sexual
orientation, 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 the Developers, lessees, sub-lessees, sub-the Developers, 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.
Use Covenant. Developer hereby covenants that the Property shall be used8.
exclusively for the design, building, assembly and refurbishing of commercial passenger vehicles
or truck repair services, limited to transmission and engine repair. No other use shall be
permitted without the express written consent of the City. .
The covenants contained in this City Deed shall remain in effect in perpetuity9.
unless specified otherwise; provided, however, that if the state law requiring such covenants
changes such that such covenants are not required t o remain in effect in perpetuity, such
covenants shall terminate at such earlier date as may be permitted by state law.
The covenants in this City Deed shall be binding fo r the benefit of Grantor, the10.
City of Azusa and, if applicable, any successor in interest to said parties. Such covenants shall
run in favor of the Grantor and such aforementioned parties for the entire period during which
such covenants shall be in force and effect, without regard to whether the Grantor is or
remains an owner of any land or interest therein to which such covenants relate. The right to
exercise all of the right and remedies, and to maintain any actions at law or suits in equity or
contained and this Grant Deed shall be for the benefit of and shall be enforceable only by the
Grantor and such aforementioned parties.
The covenants contained in this City Deed shall be deemed to be covenants11.
running with the land and shall bind and benefit future purchasers, encumbrances and
transferee.
EXECUTED ON ___________________, 2016, in ____________________, California.
CITY:
THE CITY OF AZUSA, a California
municipal corporation
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
Dated: ______________________________ By: _________________________________
Name:
Its:
ATTEST:
By: _________________________________
City Clerk
APPROVED AS TO FORM:
_____________________________________
City Attorney
[NOTE: All signatures must be notarized]
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
EXHIBIT “A” TO
CITY DEED
Property Legal Description
Exhibit “C”
Form Of City Deed
45635.01000\29057912.6
EXHIBIT “D”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
FORM OF NOTICE OF AGREEMENT
[Attached behind this cover page]
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
______________________________________________________________________________
(Space Above Line For Use By Recorder)
[Recordation of this Document Is
Exempt From Fees Payable to the
Recorder Under Government
Section Code 27383]
CITY OF
Notice of Agreement
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of
_________, 201_, , a California limited liability company (the “Developer”)
and the City of , a California municipal corporation (the “City”), entered
into an agreement entitled “Disposition and Development Agreement” (the “Agreement”). A
copy of the Agreement is on file with the City Clerk and is available for inspection and copying
by interested persons as a public record of the Cit y during the regular business hours of the
City.
The Agreement affects the real property (the “Property”) described in Exhibit “A”
attached to this Notice of Agreement. The meaning of defined terms used in this Notice of
Agreement shall be the same as set forth in the Agreement.
PLEASE TAKE FURTHER NOTICE that the Agreement contains certain community
development covenants running with the land of the Site and other agreements between the
Developer and the City affecting the Site, including, without limitation, (all section references
are to the Agreement):
“5.1 Covenant to Maintain Property on Tax Rolls.
5.1.1 Covenant . The Developer covenants to cause the Property to remain on
the County secured real property tax rolls, continuously, from the Close of Escrow, until the
end of the Covenant Period.
5.1.2 Payment of Taxes. During the Covenant Period, the Developer, for itself
and its successors and assigns, covenants and agrees to pay all property tax bills with respect
to the Property and all improvements on or to the Property on or before the last day for the
timely payment of each property tax installment on each December 10 and April 10 during
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
such time period and to timely pay all supplemental tax bills regarding the Property issued by
the County. The Developer further covenants and agrees to provide to the City, upon the
City’s written request, (i) a true and correct copy of all property tax assessment notices,
property tax bills and property tax assessment correspondence by and between the Developer
and the County regarding the Property and all impro vements on or to the Property, with
respect to the preceding fiscal year of the County and (ii) cancelled checks issued by the
Developer in payment of all property tax payments made to the County regarding the Property
and all improvements on or to the Property, with respect to the preceding fiscal year of the
County.
5.1.3 Covenant Running with the Land. The covenants of this Section 5.1
shall run with the land of the Property and bind successive owners of the Property from the
Close of Escrow, until the end of the Covenant Period.
5.2 No Conveyance to Tax Exempt Entity.
5.2.1 Covenant . The Developer covenants and agrees that during t he
Covenant Period, neither the Developer, nor its successors or assigns shall Transfer all or any
portion of the Property or the Project to any Perso n or use all or any portion of the Property
or the Project for any use, that is partially or wholly exempt from the payment of property
taxes or that would cause the exemption of the payment of all or any portion of property taxes
otherwise assessable regarding the Property or the Project, without the prior written consent of
the City, prior to the expiration of the Covenant Period.
5.2.2 In-Lieu Payment . The Developer further covenants and agrees that, if all
or any portion of the Property or the Project shall be used or Transferred by the 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
Property or the Project, prior to the expiration of the Covenant Period, the Developer, its
successors or assigns shall pay to the City, in lieu of payment of such taxes, an amount
determined by the City to be one percent (1.0%) of the “full cash value” of the portion of the
Property or the Project subject to such exemption from payment of ad valorem property taxes
each year. The City’s determination of “full tax value” for in-lieu payment purposes under this
Section 5.2.2 shall be established by the City each year, if necessary, by reference to the ad
valorem property tax valuation principles and pract ices generally applicable to a county
property tax assessor under Section 1 of Article XIIIA of the California Constitution. If the
City determines that an amount is payable by the Developer to the City as an in-lieu payment
under this Section 5.2.2 in any tax year, then such amount shall be paid by the Developer to
the City for that tax year, within thirty (30) calendar days following transmittal by the City to
the Developer of an invoice for payment of the in-lieu amount. Any in-lieu amount invoiced
by the City that is not paid to the City by the Developer within thirty (30) calendar days
following the date of the invoice shall accrue interest at the rate of the lesser of ten percent
(10%) per annum or the maximum rate allowed by law, until paid.
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
5.2.3 Covenant Running with the Land. The covenants of this Section 5.2
shall run with the land of the Property and bind successive owners of the Property for the
duration of the Covenant Period.
5.3 Maintenance Condition of the Property. The Developer for itself, its
successors and assigns, covenants and agrees that:
5.3.1 Maintenance Standard. The entirety of the Property and the Project shall
be maintained by the Developer in good condition and repair and in a neat, clean and orderly
condition, ordinary wear and tear and casualty 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 Property, now existing or made in the future by or
with the consent of the Developer, as necessary to maintain the appearance and character of
the Project and the Property. The Developer’s obligation to maintain the Project and the
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 the Developer. The Develo per’s obligation to maintain the Project
and the Property described in the two immediately preceding sentences is, collectively, referred
to in this Agreement as the “Maintenance Standard.” The Developer may contract with a
maintenance contractor to provide for performance o f all or part of the duties and obligations
of the Developer with respect to the maintenance of the Project and the Property; provided,
however, that the Developer shall remain responsible and liable for the maintenance of the
Project and the Property, at all times.
5.3.2 Maintenance Deficiency. If, at any time following the Close of Escrow,
there is an occurrence of an adverse condition on any area of the Project or the Property in
contravention of the Maintenance Standard (each such occurrence being a “Maintenance
Deficiency”), then the City may Notify the Developer in writing of the Maintenance Deficiency.
If the Developer fails to cure or commence and diligently pursue to cure the Maintenance
Deficiency within thirty (30) calendar days following the Developer’s receipt of Notice of the
Maintenance Deficiency, the City may conduct a public hearing, following transmittal of written
Notice of the hearing to the Developer, at least, t en (10) days prior to the scheduled date of
such public hearing, to verify whether a Maintenance Deficiency exists and whether the
Developer has failed to comply with the provisions of this Section 5.3. If, upon the conclusion
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
of the public hearing, the City finds that a Maintenance Deficiency exists and remains uncured,
the City shall have the right to enter the Project and the 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 City to accomplish the abatement of the Maintenance
Deficiency. Any sum expended by the City for the abatement of a Maintenance Deficiency
pursuant to this Section 5.3 shall be reimbursed to the City by the Developer, within thirty (30)
calendar days after written demand for payment from the City. Any amount expended by the
City for the abatement of a Maintenance Deficiency pursuant to this Section 5.3 that is not
reimbursed to the City by the Developer within thirty (30) calendar days after written demand
to the Developer for such reimbursement, shall accrue interest at the lesser of: (i) the rate of
ten percent (10%) per annum or (ii) the Usury Limit , until paid in full.
5.3.3 Graffiti. Graffiti, as defined in Government Code Section 38772, that
has been applied to any exterior surface of a structure or improvement on the Property, that is
visible from any public right-of-way adjacent or co ntiguous to the Property, shall be removed
by the 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 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 t he graffiti, the City shall have the right to
enter the Property and remove the graffiti, without Notice to the Developer. Any sum
expended by the City for the removal of graffiti Property pursuant to this Section 5.3 shall be
reimbursed to the City by the Developer, within thirty (30) calendar days after written demand
for payment from the City. Any amount expended by the City for the removal of graffiti
pursuant to this Section 5.3 that is not reimbursed to the City by the Developer within thirty
(30) calendar days after written demand to the Developer for such reimbursement, shall accrue
interest at the lesser of: (i) the rate of ten percent (10%) per annum or (ii) the Usury Limit,
until paid in full.
5.3.4 Lien Rights. The obligations of the Developer and its successors and
assigns under this Section 5.3 shall be secured by a lien against the Property. The Developer
hereby grants to the City a security interest in the Property with the power to establish and
enforce a lien or other encumbrance against the Property, in the manner provided in Civil Code
Sections 2924, 2924b and 2924c, to secure the obligations of the Developer and it successors
under this Section 5.3, including the reasonable attorneys’ fees and costs of the City associated
with the abatement of a Maintenance Deficiency or removal of graffiti. The recordation of the
City Deed and the Notice of Agreement shall provide record Notice of such security interest in
favor of the City.
5.3.5 Covenant Running with the Land. The covenant of this Section 5.3 shall
be a covenant running with the land of the Property, binding successive owners of the
Property, throughout the Covenant Period, and shall be enforceable by the City.
5.4 Obligation to Refrain from Discrimination. The Developer covenants and
agrees for itself, its successors, its assigns and every successor-in-interest to all or any portion
of the Property, that there shall be no discrimination against or segregation of any Person, or
group of Persons, on account of gender, sexual orientation, marital status, race, color, religion,
creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
enjoyment of the Property nor shall the Developer, itself or any Person claiming under or
through it, establish or permit any such practice o r practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of purchasers, the
Developers, lessees, sub-the Developers, sub-lessees or vendees of the Property. The covenant
of this Section 5.4 shall be a covenant running wit h the land of the Property and binding on
successive owners of all or any portion of the Property, until the City issues a Certificate of
Completion for the Project.
5.5 Form of Non-discrimination and Non-segregation Clauses. The Developer
covenants and agrees for itself, its successors, it s assigns, and every successor-in-interest to all
or any portion of the Property, that the 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 Property on the basis of gender, sexual orientation,
marital status, race, color, religion, creed, ancestry or national origin of any Person. All deeds,
leases or contracts pertaining to the Property or any part thereof shall contain or be subject to
substantially the following non-discrimination or non-segregation covenants:
5.5.1 In deeds: “The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or thro ugh them, that there shall be no
discrimination against or segregation of, any Perso n or group of persons on account of race,
color, creed, religion, gender, sexual orientation, 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 the Developers, lessees, sub-the Developers, sub-lessee,
or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
5.5.2 In leases: “The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or thro ugh them, and this lease is made and
accepted upon and subject to the following conditio ns: That there shall be no discrimination
against or segregation of any Person or group of persons, on account of race, color, creed,
religion, gender, sexual orientation, 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 segregat ion with reference to the selection, location,
number, use, or occupancy, of the Developers lessees, sub-lessee, sub-the Developers, or
vendees in the premises herein leased.”
5.5.3 In contracts: “There shall be no discrimination against or segregation of
any Person or group of persons on account of race, color, creed, religion, gender, sexual
orientation, 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 the Developers, lessees, sub-lessees, sub-the Developers, or vendees of the
premises herein transferred.” The foregoing provision shall be binding upon and shall obligate
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
the contracting party or parties and any subcontracting party or parties, or other transferees
under the instrument.
5.6 Use Covenant . Developer hereby covenants that the Property shall be7.27
used exclusively for the design, building, assembly and refurbishing of commercial vehicles or
commercial vehicle repair services. No other use shall be permitted without the express written
consent of the City. The covenant of this Section 5.6 shall be a covenant running with the land
of the Property, binding successive owners of the Property, throughout the Covenant Period,
and shall be enforceable by the City.
THIS NOTICE OF AGREEMENT is dated as of _________, 201_, and has been executed on
behalf of the parties to the Agreement on the date indicated next to the signatures of their
authorized officers. This Notice of Agreement may be executed in counterparts and when fully
executed each counterpart shall be deemed to be one original instrument.
CITY
CITY OF
Dated:By:
City Manager
ATTEST:
______________________________
City Clerk
APPROVED AS TO FORM:
City Attorney
DEVELOPER
Dated:By:
Its
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
Dated:By:
Its
[ALL SIGNATURES MUST BE NOTARIZED]
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
EXHIBIT “A”
TO
NOTICE OF AGREEMENT
Property Legal Description
[To be attached behind this cover page]
Exhibit “D”
Form Of Notice Of Agreement
45635.01000\29057912.6
EXHIBIT “E”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
FORM OF OFFICIAL ACTION OF DEVELOPER
[To be attached behind this cover page]
Exhibit “E”
Form Of Official Action Of Developer
45635.01000\29057912.6
CERTIFICATION OF LLC AUTHORITY
The undersigned members of , a California limited liability company (the
“LLC”), do certify that we are all of the members o f the LLC and that there are no other
members.
We further certify that any one (1) of the following named persons:
_____________________
_____________________
_____________________
be, and they are, authorized and empowered for and on behalf of and in the name of the LLC
to execute and deliver that certain DISPOSITION AND DEVELOPMENT AGREEMENT ,
dated __________ (the “Agreement”), to purchase certain property, generally, located at
California, to perform the other obligations of the LLC set forth
in the Agreement and all other documents to be executed in connection with the transactions
contemplated in the Agreement, and to take all actions that may be considered necessary to
conclude the transactions contemplated in the Agreement.
The authority conferred shall be considered retroactively, and any and all acts authorized in this
document that were performed before the execution of this certificate are approved and
ratified. The authority conferred shall continue in full force and effect until the City shall have
received notice in writing from the LLC of the revocation of this certificate.
We further certify that the activities covered by the foregoing certifications constitute duly
authorized activities of the LLC; that these certifications are now in full force and effect; and
that there is no provision in any document under which the LLC is organized and/or that
governs the LLC's continued existence limiting the power of the undersigned to make the
certifications set forth in this certificate, and that the same are in conformity with the
provisions of all such documents.
LLC Members:
______________________________
______________________________
______________________________
Exhibit “E”
Form Of Official Action Of Developer
45635.01000\29057912.6
EXHIBIT “F”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
FORM OF CERTIFICATE OF COMPLETION
[To be attached behind this cover page]
45635.01000\29057912.6
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
[Fee Exempt - Gov’t Code §
273831
(Space above for Recorder’s Use)
THE CITY OF _________
CERTIFICATE OF COMPLETION
I, [], City Manager of the City of (the “City”)
certify that:
By its Resolution No. ______, adopted and approved , ____, the
City resolved:
Section 2. The Project described as required to be
constructed in accordance with that certain Disposition and Development Agreement dated
________ (the “Agreement”), between the City and , a California limited
liability company (the “Developer”), on that certain real property specifically described in the
legal description(s) attached to this Certificate of Completion as Exhibit A (the “Site”), is
complete in accordance with the provisions of the Agreement.
This Certificate of Completion constitutes conclusive evidence of the City’s
determination of the Developer’s satisfaction of its obligation under the Agreement to construct
and install the Project on the Site, including any and all buildings, parking areas, landscaping
areas and related improvements necessary to support or meet any requirements applicable to
the Project and its use and occupancy on the Site, whether or not such improvements are
located on or off the Site or on other property subject to the Agreement, excluding any normal
and customary tenant improvements and minor building “punch list” items. Notwithstanding
any provision of this Certificate of Completion, the City may enforce any covenant surviving
this Certificate of Completion in accordance with the terms and conditions of the Agreement,
and the City Deed by which the Site was conveyed to the Developer by the City under the
Agreement. The Agreement is an official record of the City and a copy of the Agreement may
be inspected in the office of the City Clerk located at
during the regular business hours of the City.
DATED AND ISSUED this ____ day of , ____.
ATTEST: By: City Clerk
45635.01000\29057912.6
“EXHIBIT A” TO
CERTIFICATE OF COMPLETION
Property Legal Description
45635.01000\29057912.6
EXHIBIT “G”
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
Scope of Development
Improvements include but are not limited to: public street construction, hardscape, landscape,
storm drain, sanitary sewer, domestic water, paving, curb, gutter, sidewalk, drive approaches,
parkway improvements, street lights, striping, and signage all together with appurtenances and
appurtenant work pertaining to any and all of the forgoing.
45635.01000\29057912.6
45635.01000\29057912.6
45635.01000\29641182.1
RESOLUTION NO. 2017-C26
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT
AGREEMENT WITH THE CITY OF AZUSA AND PERFORMANCE
TRUCK, LLC FOR THE SALE AND DEVELOPMENT OF 943 VERNON
AVENUE (APN 8605-015-907) AND FINDING THE ACTION EXEMPT
PURSUANT TO THE CLASS 1 AND CLASS 32 EXEMPTIONS UNDER
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS, the City of Azusa, California (“City”) is the owner of certain real property
generally located at 943 Vernon Avenue in the City of Azusa, California (APN 8605-015-907 )
(“City Property”); and
WHEREAS, Developer desires to acquire the City Property, and to redevelop it with a
commercial development and has negotiated a Disposition and Development Agreement with the
City (“Agreement”); and
WHEREAS, on April 3, 2017, the City adopted Resolution No. 2017-C24 declaring the
City’s intention to sell the City Property and setting time for a public hearing to consider the sale
of the property; and
WHEREAS, the Agreement is categorically exempt from the California Environmental
Quality Act (“CEQA”) pursuant to California Code of Regulations, title 14, sections 15301
(Existing Facilities) and 15332 (Class 32: In-fill development); and
WHEREAS, Developer’s proposed acquisition of the City Property and subsequent
construction and completion of the development of the property is in the public interest and
convenience of the City and the community, and the health, safety and welfare of the City’s
taxpayers and residents and will further the goals and objectives of the City’s general plan by: (i)
strengthening the City’s land use and social structure, and (ii) alleviating economic and physical
blight on the City Property and in the surrounding community.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, DOES HEREBY RESOLVE AND FIND AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
Section 2. Findings. The City Council intends to sell the City Property to Developer
and, based upon the Recitals and all other information and testimony provided, finds that the
public interest and convenience require the sale of the City Property to Developer.
Section 3. Hearing. Pursuant to California Government Code section 37423, a duly
noticed public hearing was held by the City on April 17, 2017.
ATTACHMENT 2
45635.01000\29641182.1
Section 4. CEQA Compliance. In accordance with the California Environmental
Quality Act (Pub. Resources Code, § 21000 et seq.: “CEQA”) and the State CEQA Guidelines
(14 Cal. Code Regs., § 15000 et seq.), the City Council finds that the Agreement is exempt under
the following categorical exemptions:
A. State CEQA Guidelines section 15301 (Class 1: Existing facilities) because:
1. Class 1 consists of the operation, repair, maintenance, permitting…or minor
alteration of existing public or private structures, facilities, mechanical
equipment, or topographical features, involving negligible or no expansion of
use beyond that existing at the time of the lead agency’s determination.
According to Section 15301, the “key consideration is whether the project
involves negligible or no expansion of an existing use”; and
2. The Agreement is consistent with the following type of example provided in
Section 15301: “Additions to existing structures provided that the addition
will not result in an increase of more than 1) 50 percent of the floor area of the
structures before the addition, or 2,500 square feet, whichever is less; or 2)
10,000 square feet if the project is in an area where public services and
facilities are available to allow for maximum development permissible in the
General Plan and the area in which the project is located is not
environmentally sensitive.
Therefore, for the foregoing reasons, the Agreement would be categorically exempt pursuant to
State CEQA Guidelines, section 15301.
B. State CEQA Guidelines section 15332 (Class 32: In-fill development) because:
1. The Agreement is consistent with the applicable general plan designation and
all applicable general plan policies as well as applicable zoning designations
and regulations;
2. The proposed development in the Agreement occurs within the City limits on
a project site of no more than five acres substantially surrounded by urban
uses;
3. The City Property in the Agreement has no value as habitat for endangered,
rare, or threatened species;
4. Approval of the Agreement would not result in any significant effects relating
to traffic, noise, air quality, or water quality; and
5. The City Property in the Agreement can be adequately served by all required
utilities and public services.
Therefore, for the foregoing reasons, the Agreement would be categorically exempt
pursuant to State CEQA Guidelines, section 15332.
45635.01000\29641182.1
Section 5. Approval of Agreement. The City hereby approves the Agreement, in
substantially the form attached to this Resolution as Exhibit “A,” subject to any non-substantive
revisions approved by the City Attorney and authorizes the Mayor to sign and enter into the
Agreement and direct the City Manager to perform the obligations of the City pursuant to the
Agreement.
Section 6. Severability. If any provision of this Resolution or the application of any
such provision to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of this Resolution that can be given effect without the invalid
provision or application, and to this end the provisions of this Resolution are severable. The City
declares that the City would have adopted this Resolution irrespective of the invalidity of any
particular portion of this Resolution.
Section 7. Certification. The City Clerk of the City of Azusa shall certify to the
adoption of this Resolution.
Notice of Exemption. The City hereby directs staff to prepare, execute, and file a Notice
of Exemption for the City within five (5) working days of the passage and adoption of this
Resolution.
Section 8. Effective Date. This Resolution shall become effective immediately upon
its adoption.
PASSED, APPROVED and ADOPTED this ______ day of ____, 2017.
____________________________________
Joseph Romero Rocha
Mayor
ATTEST:
____________________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
45635.01000\29641182.1
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2017-C26 was duly adopted
by the City Council of the City of Azusa, at a regular meeting of said City Council held on the
17th day of April 2017, by the following vote of the Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
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EXHIBIT A
DISPOSITION AND DEVELOPMENT AGREEMENT
[Attached behind this cover page]