HomeMy WebLinkAboutR39-Economic Development Agency
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT:
Joint Public Hearing Disposition and
Development Agreement by and between the
Redevelopment Agency of the City of San
Bernardino and In-N-Ont Burgers, Inc., a
California corporation (Central City North
Redevelopment Project Area)
DATE: June 27, 2011
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SVDODSis of Previous Commission/CounciVCommittee Action(s):
On January 21, 2010, Redevelopment Committee Members Baxter and Brinker unanimously voted to recommend that the
Community Development Commission of the City of San Bernardino consider approval of a Redevelopment Project Study and
Exclusive Right to Negotiate Agreement with In-N-Out Burgers, Inc.
On June 20, 20 II, the Community Development Commission of the City of San Bernardino and the Mayor and Common
Council ofthe City of San Bernardino continued the joint public hearing to July 5, 20 II.
On July 5, 2011, the Community Development Commission ofthe City of San Bernardino and the Mayor and Common Council
of the City of San Bernardino continued the joint public hearing to July 18,2011.
__________________.__._______________~w_______________.___~__________________________________~~__________________._________________________________~_
Recommended Motion(s):
Open/Close Joint Public Hearing
(Mavor and Common Council)
A: Resolution of the Mayor and Common Council of the City of San Bernardino consenting to a Disposition and
Development Agreement by and between the Redevelopment Agency of the City of San Bernardino ("Agency")
and In-N-Out Burgers, Inc., a California corporation - Southeast comer of 5th and "H" Streets (Central City North
Redevelopment Project Area)
(Communitv Develooment Commission)
B: Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing
the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency") to execute
a Disposition and Development Afeement by and between the Agency and In-N-Out Burgers, Inc., a California
corporation - Southeast comer of 5 and "H" Streets (Central City North Redevelopment Project Area)
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Contact Person(s):
Mike Trout
Phone:
(909) 663-1044
Project Area(s):
Central City North Redevelopment
Proj ect Area
Ward(s):
Supporting Data Attached:
o Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s)
FUNDING REQUIREMENTS:
Amount: $ 200,000
Source:
Land Sale Proceeds
Signature:
ErnilA.
Budget Authority:
Financial Officer
10,
ri
Fiscal Review:
xecutive Director Lori Panzino-
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Commission/Council Notes:
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P:\Agendas\Comm Dev CommissiQn\CDC 2011\07-18.]] In-N-Out Burgers, Ine _ DDA SR (Con't)doc
COMMISSION MEETING AGENDA
Meeting Date: 07/18/2011
Agenda Item Number: -.tL'b"f
N..e.w ~Jt..LIP
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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JOINT PUBLIC HEARING - DISPOSITION AND DEVELOPMENT
AGREEMENT - IN-N-OUT BURGERS, INC., A CALIFORNIA
CORPORATION - SOUTHEAST CORNER 5TH AND "H" STREETS
(CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On April 2, 2007, the Agency acquired title to 755 West 5th Street (APN: 0134-093-40), the Royal
Motel. Subsequent to the acquisition, the Agency relocated all tenants and caused that the motel be
demolished. All relocations and demolition were completed in January 2008. The site is
approximately 22,500 square feet.
On January 7, 2008, the Agency acquired title to 795 West 5th Street (APN: 0134-093-41), the Paradise
Motel. Subsequent to the acquisition, the Agency relocated all tenants and caused that the motel be
demolished. All relocations and demolition were completed in June 2008. The site is approximately
33,750 square feet.
755 and 795 West 5th Street are contiguous properties and are located at the southeast comer of 5th and
"H" Streets, and are herein referred to collectively as the Property (the "Property").
Since 2004, the State of California (the "State") has been acquiring properties and relocating homes
and businesses on both sides of the 1-215 Freeway (the "1-215") as part of the 1-215 widening project
through downtown San Bernardino. One of the properties, located on 2nd Street adjacent to the
northbound 2nd Street off-ramp of the 1-215 (the "Site"), is owned by In-N-Out Burgers, Inc., a
California corporation (the "INOB"), which currently operates a restaurant with a drive-thru on the
Site. The State has acquired the Site through condemnation authority and INOB is required to be off
the Site prior to January 1,2012
In April/May of 2008, representatives of INOB met with Agency Staff concerning possible relocation
sites for a new INOB restaurant. Several locations were discussed for the relocation including the
Property. The new restaurant design would be somewhat similar to the design of the INOB restaurant
located at Tippecanoe A venue and Harriman Place in San Bernardino wherein there would be a single
drive-thru lane.
On July 6, 2009, the Agency received a letter from INOB wherein INOB expressed an interest in
purchasing approximately 45,000 - 55,000 square feet of land at the location of the Property. The
Property is approximately 56,250 square feet.
On March I, 2010, the Community Development Commission of the City of San Bernardino (the
"Commission") adopted Resolution No. CDC/2010-8 approving a Redevelopment Project Study and
Exclusive Right to Negotiate Agreement (the "ERN") by and between the Agency and INOB.
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P:\AgendasIComm Dev Commission\CDC 2011\07-18_11 In-N-Qut Burgers, Inc. _ DDA SR (Con't) doc
COMMISSION MEETING AGENDA
Meeting Date: 071l8/20II
Agenda Item Number: Je.-.-=?:.,
Economic Development Agency Staff Report
In-N-Out Burgers, Inc. - DDA
Page 2
Since approval of the ERN, INOB and the Agency have been working towards a development
agreement for the Property. In the course of INOB due diligence investi~ations it was discovered that,
prior to the Paradise Motel having been built at the southeast corner of 5 and "H" Streets, there was a
fueling station that was demolished in approximately 1963.
In October 2010, through the services of an environmental consultant (the "Consultant"), an
Underground Storage Tank (the "UST") was discovered buried on the Property and eight (8) areas of
contamination around the site of the former Paradise Motel. When the UST was excavated it was
discovered that there was still a quantity of waste oil in the UST that had never been evacuated.
In December 2010, working with the San Bernardino County Fire Department (the "SBCoFD"), the
Consultant evacuated the waste oil, removed the UST, removed some contaminated soil and disposed
of each in accordance with the SBCoFD approved plan and the State of California regulations
concerning USTs and waste products. Once the contaminated soil was disposed of clean soil was used
to fill in the former UST pit thus closing the UST issue. The next issue was to deal with were the eight
(8) areas of soil contamination.
From October thru December 2010, the Consultant took soil samples and soil vapor samples from the
eight (8) areas to determine the extent of the contamination, type of contamination and the
concentrations of the contamination. Following the results of the sampling, it was determined that the
next course of action was to involve the Regional Water Quality Control Board (the "RWQCB").
In early January 2011, Agency Staff, INOB and the Consultant started meeting with the RWQCB to
discuss the soil contamination issue. Through additional sampling and discussions with the RWQCB it
was determined that there were only two (2) of the eight (8) areas that needed further action. As a
result, a shallow extraction well and a deep extraction well were dug at both of the remaining two (2)
areas.
With additional soil vapor testing it was determined that the greatest concentrations of Total Petroleum
Hydrocarbons (the "TPH") were found in the shallow soil depth of 20 to 35 feet below the ground
surface. These results were presented to the RWQCB and they recommended doing a pilot test using a
soil vapor extraction (the "SVE") method to determine if this method would be acceptable for the TPH
remediation.
On March 9,2011, the Consultant had the SVE equipment installed on the Property and began the pilot
SVE test. The test was for a period of 3 days. The results of the test showed that this method did
produce somewhat lower TPH soil vapor concentrations. After further discussions with the RWQCB,
the Consultant prepared and submitted a remediation plan, using the SVE method, to the RWQCB.
In mid-May 2011, the Consultant had the SVE equipment re-installed on the Property. The remediation
plan called for the SVE equipment to run 24/7 for a period of three (3) weeks. Readings of the SVE
equipment would be performed once a week to determine not only the drop, if any, in the TPH
concentration levels but also how quickly they dropped.
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P:\AgendasIComm Dev CommissionlCDC 2011\07-18-11 In_N_Out Burgers, Inc. _ DDA SR (Con't) doc
COMMISSION MEETING AGENDA
Meeting Date: 07/18/2011
Agenda Item Number: ~3&f
Economic Development Agency Staff Report
In-N-Out Burgers, Inc. - DDA
Page 3
Below is a summary of the Total Petroleum Hydrocarbons lab results (in ppb) from the four (4)
extraction wells. There were minor Volatile Organic Compounds (the "VOCs") detected in some of
the samples but in concentrations well below any action levels.
Wen Start of SVE Week #1 Week #2 Week #3 Percent
Remediation (5/18) (5/25) (6/1) Reduction
2A shallow 1,700 557 568 210 88
2A deep 69 NS 49.7 37.6 46
3A shallow 5,600 707 640 125 98
3A deep 430 NS 201 119 72
NS - not sampled as well was shut off to focus on shallow zone
CURRENT ISSUE:
The Agency and INOB have been working towards a Disposition and Development Agreement (the
"DDA") for the sale of and development of the Property by INOB. Below are the salient deal points of
the proposed DDA.
· INOB will acquire two (2) parcels (APNs: 0134-093-40 and 0134-093-41).
· The combined acreage of the Property is 1.29 acres.
· The Agency will pay the cost for all remediation activities, including the installation of a vapor
barrier beneath the foot print of the restaurant.
· INOB will construct an approximately 4,000 square foot, single lane drive-thru window
restaurant with indoor and outdoor seating.
· INOB will acquire the Property for the appraised fair market value of $844,000 and relocate the
2nd Street facility to 5th and H Streets.
· The ERN Fee of $50,000, previously paid by INOB, will be applied towards the purchase price
· $200,000 from the sale of the Property will be held back in escrow to be used to finance any
necessary remediation of additional contamination discovered during the construction of the
restaurant. After issuance of a Certificate of Occupancy the remaining balance will be returned
to the Agency.
· The Agency will indemnifY INOB against any liability arising from contamination that may be
on the Property, prior to the close of escrow, which is unknown to the Agency, except any
contamination from the Newmark Plume or contamination that migrates from other sites,
except from known contamination from the INCO site located directly north of the Property.
ENVIRONMENTAL IMPACT:
The proposed new project description has been reviewed under the California Environmental Quality
Act ("CEQA") and it has been determined that the project qualifies for a Categorical Exemption, Class
32 (Guidelines Section 15332) as an infill project.
_____________________________u.______________._________________________________________~___________________________________________________________________________________
P:\Agendas\Comm Dev Commisslon\CDC 2011\07-] 8-11 In-N-Qut Burgers, Inc. - DDA SR (Con'I),doc
COMMISSION MEETING AGENDA
Meeting Date: 07/18/2011
Agenda Item Number: ~1
Economic Development Agency Staff Report
In-N-Out Burgers, Inc. - DDA
Page 4
FISCAL IMPACT:
The Agency expects to expend approximately $200,000 for the completed pre-construction
remediation and vapor barrier. Additionally, $200,000 from the Property sale proceeds will be returned
in escrow to cover the expenses for the remediation of any unanticipated contamination, if it is
determined that remediation is required, that may be discovered during the construction of the
restaurant. Following construction the $200,000 or balance thereof shall be returned to the Agency.
Prior to proposed DDA with INOB, the following are the costs incurred by the Agency in connection
with the acquisition of the Property:
1. Site Acquisition (2 parcels)
2. Relocation Costs (13 tenants)
3. Demolition, including asbestos and lead paint abatement (2 motels)
4. Environmental Investigations
5. Legal Expenses (condemnation)
6. Misc. (appraisals, legal notices, etc.)
TOTAL
$6,302,259.00
$ 408,175.00
$ 312,700.00
$ 27,781.00
$ 22,150.00
$ 37,008.00
$7,110,073.00
It is estimated that, once the project is completed, the site will generate approximately $16,000/year in
tax increment revenues (approximately $400,000 during the remaining life of the Project Area).
RECOMMENDATION:
That the Mayor and Common Council and the Community Development Commission adopt the
attached Resolutions.
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P:\Agendas\Comm Dev Commission\CDC 2011\07-18-11ln-N-OutBurgers, Inc_. DDA SR(Con'I).doc
COMMISSION MEETING AGENDA
Meeting Date: 07/18/2011
Agenda Item Number: ~~q
SUMMARY REPORT PURSUANT TO SECTION 33433 CALIFORNIA COMMUNITY
REDEVELOPMENT LAW ON A DISPOSITION AND DEVELOPMENT AGREEMENT,
CONCERNING THE DEVELOPMENT OF CERTAIN REAL PROPERTY, BY AND
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO ("AGENCY") AND IN-N-OUT BURGERS, INC., A CALIFORNIA
CORPORATION ("DEVELOPER")
INTRODUCTION
The following Summary Report has been prepared pursuant to Section 33433 of the California
Health and Safety Code. The report sets forth certain details of the proposed Disposition and
Development Agreement ("DDA") by and between the Agency and the Developer.
The DDA between the Agency and the Developer is for the development of certain parcels of
land located at the southeast comer of 5th & "H" Streets in the City of San Bernardino (APN's:
0134-093-40 and 0134-03-41) ("Site"). The Site is approximately 56,250 square feet of vacant
land. The Site is located within the Central City North Redevelopment Project Area ("Project
Area").
This Summary Report is based upon information contained within the DDA and is organized into
the following seven sections:
I. Salient Points of the DDA: This section includes a description of the Improvements,
and the major responsibilities imposed on the Developer and the Agency by the DDA.
The Agenda Staff Report for the joint public hearing of July 18, 201 I, pertaining to the
DDA contains the specific details on the structure of the DDA.
II. Cost of the DDA to the Al!:encv: This section details the total anticipated costs to the
Agency associated with implementing the DDA.
III. Estimated Value of the Interests to be Conveved Determined at the Hil!:hest Use
Permitted Under the Redevelopment Plan: This section estimates the value of the
interests determined at the highest and best use permitted under the existing zoning, and
the requirements imposed by the Central City North Redevelopment Project Area
Redevelopment Plan ("Redevelopment Plan").
IV. Estimated Reuse Value of the Interests: This section summarizes the valuation
estimate for the Site based on the required use, and with the conditions and covenants
required by the DDA.
V. Consideration Received and Comparison with Established Fair Reuse Value: This
section describes the compensation to be received by the Agency and explains any
difference between the compensation to be received and the established fair reuse value
of the Site.
l
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P:\Agendas\Agcnda Atlachments\Summal1' Reports\2011\07"18-11 In-N-Ollll3urgers Summary Report (Con'Orlan
VI. Blil!:ht Elimination: This section describes the existing blighting conditions on the Site,
and explains how the DDA will assist in alleviating the blighting influence pursuant to
the redevelopment plan.
VII. Conformance with the Implementation Plan: This section describes how the DDA
achieves goals identified in the Agency's adopted Implementation Plan.
This Summary Report and the DDA are to be made available for public inspection prior to the
approval of the DDA.
I. SALIENT POINTS OF THE AGREEMENT
The DDA provides for the construction, by the Developer, of a new restaurant.
A. Project Description:
The Developer intends to construct an approximate 4,000 square foot single lane drive-thru
restaurant, with indoor and outdoor seating, on approximately 56,250 square feet (1.29 acres) of
land, including other on-site and off-site improvements required under the City approved
Conditions of Approved for the project. The Site consists of 2 parcels located at the southeast
comer of 5th & "H" Streets in the City of San Bernardino.
B. Developer Responsibilities:
The DDA requires the Developer to complete the following activities:
I. Acquire the Site for development for the appraised fair market value of $844,000.
2. Record new parcel map reflecting the combining of the Site parcels.
3. Construct an approximate 4,000 square foot single lane drive-thru restaurant including
indoor and outdoor seating.
4. Complete all required on-site and off-site improvements per the City approved
Conditional of Approval.
5. The Developer shall be financially responsible for the completion of all on-Site and off-
Site Improvements.
C. Agency Responsibilities:
Under the DDA, the Agency must complete or cause the following activities:
I. The Agency shall exercise its best efforts to assist the Developer in obtaining necessary
permits for the development of the Site.
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2. The Agency shall execute and shall record a Certificate of Completion, with the County
of San Bernardino, after all Improvements have been completed, inspected and the City
has issued a final Certificate of Occupancy.
3. The ERN fee of $50,000, previously paid by the Developer, shall be applied to the
purchase price.
4. Fund the cost of all remediation activities to including the installation of a vapor barrier
beneath footprint of the restaurant.
5. Indemnify the Developer against any liability arising from contamination that may be on
the Site, prior to the close of escrow, which is unknown to the Agency, except any
contamination from the Newmark Plume.
6. Will hold back $200,000, in an escrow account, from the sale proceeds of the Site to be
used to finance any necessary remediation of additional contamination that may be
discovered during the construction of the restaurant.
7. At the opening of escrow either AHS will execute a Grant Deed for the Site and enter it
into the escrow or AHS will provide the Agency with a Quitclaim Deed for the Site and
the Agency will execute a Grant Deed for the Site and enter it into the escrow.
II. COST OF THE AGREEMENT TO THE AGENCY
Originally there had been two (2) operating motels (Royal and Paradise) of the Site. As part of
the Agency's attempt to eliminate blight and prepare the downtown area for new development
the Agency acquired the Site. Below are the costs incurred by the Agency prior to the proposed
DDA with the Developer:
1. Site Acquisition (2 parcels)
2. Relocation Costs (13 tenants)
3. Demolition, including asbestos and lead paint abatement (2 motels)
4. Environmental Investigation
5. Legal Expenses
6. Miscellaneous (appraisals, legal notices, etc.)
TOTAL
$6,302,259.00
$ 408,175.00
$ 312,700.00
$ 27,781.00
$ 22,150.00
$ 37.008.00
$7,110,073.00
Prior to the time of the commencement of construction by the Developer, the Agency will have
spent approximately $200,000 for the remediation of contamination found on the Site during the
due diligence investigations conducted by the Developer. Additionally, $200,000 from the
proceeds of the sale of the Site will be held back in an escrow account to finance any remediation
of additional contamination found on the Site during construction activities. Whatever balance
of the $200,000 that is remaining, after construction is completed and issuance of a Certificate of
Occupancy has occurred, will be returned to the Agency.
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III. ESTIMATED VALUE OF THE INTERESTS DETERMINED AT THE HIGHEST
AND BEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN
Pursuant to Section 33433 of the California Health and Safety Code, this section presents an
analysis of the fair market value of the subject Site at the highest and best use, estimated to be
$844,000.00 which is based on an appraisal report dated June 24, 2010 conducted by Smothers
Appraisal Services (the "Appraisal").
Highest and best use is defined as "That reasonable and probable use that supports the highest
present value, as defined, as of the effective date of the appraisal. Alternatively, that use, from
among reasonable probably and legal alternative uses, found to be physically possible,
appropriately supported, financially feasible, and which results in the highest land value".
The proceeding definition refers specifically to the highest and best use of the land as though
vacant.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS
The appraisal valued, as vacant land, for the Site was $844,000 without any improvements.
V. CONSIDERATION RECEIVED AND COMPARISON WITH THE FAIR REUSE
VALUE
The Agency used funds from a Low/Moderate Income Housing Bond issue to accomplish the
acquisition and assemblage of the Site parcels. The estimated construction value, after all the
Improvements to the Site have been completed under the DDA, is $1.6 million, with annual
gross tax increment revenue to the Agency of $16,000 ($400,000 in Tax Increment Revenue
during the life of the Project Area.
VI. BLIGHT ELIMINATION
The sale of this Site will help eliminate blighting conditions in the Central City North
Redevelopment Project Area, by placing the Site on the property tax rolls, by eliminating any
annual expense to the Agency, by increasing property values and by creating additional
employment opportunities.
VII. CONFORMANCE WITH THE AB1290 IMPLEMENTATION PLAN
The primary ABI290 Implementation Plan program objective for the Central City North
Redevelopment Project Area is to eliminate conditions, which negatively impact economic
development of the community by acquiring, removing, and rehabilitating properties designated
as deficient, deteriorated, or dilapidated. To that end, the Agency plans to enter into the DDA
with the Developer for the completion of the Improvements for the Site.
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND
BETWEEN THE AGENCY AND IN-N-OUT BURGERS, INC., A
CALIFORNIA CORPORATION - SOUTHEAST CORNER OF 5TH AND "H"
STREETS (CENTRAL CITY NORTH REDEVELOPMENT PROJECT
AREA)
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a
9 community redevelopment agency duly created, established and authorized to transact business and
10 exercise its powers, all under and pursuant to the California Community Redevelopment Law (the
11 "CRL"), codified under Division 24, Part I of the California Health and Safety Code commencing at
12 Section 33000; and
13 WHEREAS, the City of San Bernardino (the "City") is a charter city organized and existing
14 under the Constitution and laws of the State of California; and
15 WHEREAS, the Community Development Commission of the City of San Bernardino (the
16 "Commission") is the governing board of the Agency; and
17 WHEREAS, the Mayor and Common Council of the City of San Bernardino (the "Mayor
18 and Common Council") is the legislative body of the Agency; and
19 WHEREAS, on April 2, 2007, the Agency acquired title to 755 West 5th Street (APN: 0134-
20 093-40), the Royal Motel, approximately 22,500 square feet; and
21 WHEREAS, on January 7, 2008, the Agency acquired title to 795 West 5th Street (APN:
22 0134-093-41), the Paradise Motel, approximately 33,750 square feet; and
23 WHEREAS, 755 and 795 West 5th Street are contiguous properties and are located at the
24 southeast corner of 5th and "H" Streets within the Central City North Redevelopment Project Area
25 (the "Project Area"), and herein referred to collectively as the Property (the "Property"); and
26 WHEREAS, the State of California (the "State") has acquired, through eminent domain
27 authority, the current location of the In-N-Out Burgers (the "lNOB") facility located on 2nd Street
28 adjacent to the easlside of the 1-215 Freeway for use in the 1-215 widening project; ancl
P:\Agendas\Resolutions\ResolUlions\201 ]\07-18-11 lo-N-Ollt Burgers, Inc, DDA CDC Rcso (Con't)doc
1 WHEREAS, the State will take possession of the INOB facility on 2nd Street no later than
2 January 1,2012; and
3 WHEREAS, the proposed INOB DDA provides for the development of the Property by the
4 Developer for use as a drive-thru restaurant including any required on-site and/or off-site
5 improvements; and
6 WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
7 San Bernardino County SUN newspaper on June 6, 2011 and June 13, 2011, regarding the
8 consideration and approval of the proposed INOB DDA; and
9
WHEREAS, on June 20, 2011, the Commission and the Mayor and Common Council
10
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continued the joint public hearing to July 5, 2011; and
WHEREAS, on July 5, 2011, the Commission and Mayor and Common Council continued
13 the joint public hearing to July 18, 2011; and
14
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
15 Code Section 33433 (the "Report") that describes the salient points of the proposed INOB DDA and
16
identifies the cost of the proposed INOB DDA to the Agency; and
17
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WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act (the
"Act") Guidelines the Agency has reviewed the proposed use of the Property and has determined
19
20 that the project, as identified in the proposed INOB DDA, qualifies for a Categorical Exemption,
21 Class 32 (Guidelines Section 15332) as the project meets all four (4) requirements for an Infill
22 Project; and
23 WHEREAS, the development of the Property by INOB will create jobs, generate tax
24 increment revenues for the Project Area, aid in eliminating blight and will further implement the
25 purposes of the Central City North Redevelopment Project Area Plan.
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CTTY OF SAN BERt'\!ARDINO DOES HEREBY RESOLVE. DETERMINE AND ORDER, AS
28
FOLLOWS:
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1
Section 1.
The information set forth in the above recitals of this Resolution are true and
2 correct and are incorporated herein by this reference.
3
Section 2.
On July 18, 2011, the Commission conducted a full and fair joint public
4 hearing with the Mayor and Common Council relating to the approval of the proposed !NOB DDA.
5 The minutes of the Agency Secretary for the July 18,2011 meeting of the Commission shall include
6 a record of all communication and testimony submitted to the Commission by interested persons
7 relating to the joint public hearing and the approval ofthe proposed !NOB DDA.
8
Section 3.
On July 18,2011,2011, during a joint public hearing with the Commission,
9 the Mayor and Common Council voted and consented to the proposed !NOB DDA attached as
10 Exhibit "A".
Section 4.
The Commission hereby receives and approves the Summary Report and the
11
12 other written materials submitted to the Commission at the meeting at which this Resolution is
13 adopted. The Summary Report contains information required under Health and Safety Code Section
14 33433.
15
Section 5.
This Resolution is adopted in satisfaction of the provisions of Health and
16 Safety Code Section 33433 relating to the terms and conditions set forth in the proposed !NOB
17 DDA. A copy of the proposed !NOB DDA, in the form submitted at this joint public hearing, is on
18 file with the City Clerk. The Commission hereby finds and determines that the proposed !NOB
19 DDA is consistent with the Central City North Redevelopment Project Area Plan, the Five-Year
20 Implementation Plan and the City's General Plan.
21
Section 6.
The Commission hereby approves the proposed !NOB DDA and authorizes
22 the Interim Executive Director of the Agency to execute the proposed !NOB DDA, attached as
23 Exhibit "A", on behalf of the Agency together with such technical and conforming changes as may
24 be recommended by the Interim Executive Director and approved by the Agency Counsel and the
25 City Attorney. The Interim Executive Director of the Agency or such other designated
26 representative of the Agency is further authorized to do any and all things and take any and all
27 actions as may be deemed necessary or advisable to effectuate the pllrposes of the !NOB DDA,
28 inclllding making non-substantive modifications to the fNOB DDr\.
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26 III
27 III
28 / / /
This Resolution shall take effect from and after its date of adoption by this
4
P:\Agendas\Resolulions\Resolutions\2011\07-18-11 In-N-Out Burgers,lnc., DDA CDC Reso (Con't) doc
8 Development Commission of the City of San Bernardino at a
, 201 I, by the following vote to wit:
9 thereof, held on the day of
10 Commission Members: Aves
11 MARQUEZ
12 VACANT
13 BRINKER
14 SHORETT
15 KELLEY
16 JOHNSON
17 MCCAMMACK
18
19
20
21
The foregoing Resolution is hereby approved this
1
2
3
4
5
6
7
22
23
24
25
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO
EXECUTE A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND
BETWEEN THE AGENCY AND IN-N-OUT BURGERS, INC., A
CALIFORNIA CORPORATION - SOUTHEAST CORNER OF 5TH AND "H"
STREETS (CENTRAL CITY NORTH REDEVELOPMENT PROJECT
AREA)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
meeting
Navs
Abstain
Absent
Secretary
day of
,201 I.
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
Approved as to Form:
~: By: f2~s1eg11 ~
28
5
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1
Exhibit "A"
2
Disposition and Development Agreement
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6
P\Agendas'>Resolutions\Resolutions\201l\07.IS.]] In-N-Out Burgers, Inc., DDA CDC Reso iCon't) doc
2011
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
IN-N-OUT BURGERS, A CALIFORNIA CORPORATION
(CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA)
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
Section 1.05.
Section 1.06.
ARTICLE II
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
Section 2.07.
Section 2.08.
Section 2.09.
Section 2.10.
Section 2.11.
Section 2.12.
Section 2.13.
Section 2.14.
Section 2.15.
Section 2.16.
Section 2.17.
Section 2.18.
Section 2.19.
Section 2.20.
Section 2.21.
Section 2.22.
Section 2.23.
Section 2.24.
Section 2.25.
ARTICLE III
Section 3.01.
Section 3.02.
Section 3.03.
TABLE OF CONTENTS
Page
Purpose of Agreement................ ............... .... ........... .... ...................... .... ........... I
The Project ........... ............. ................................. ........ .... .... ............................... I
Parties to the Agreement................................................................................... I
Defined Terms ................... ..... ........ ............. ........................... .................... ...... I
Restrictions Against Change in Ownership, Management and Control of the
Developer and Assignment of Agreement........................................................ 4
Benefit to Project Area...................................................................................... 5
DISPOSITION OF THE PROPERTY.............................................................. 6
Purchase and Sale of the Property .................................................................... 6
Deposit .................................. ..................... .... ............. .... .................................. 6
Opening and Closing of Escrow ....................................................................... 7
Escrow Instructions........................................................................................... 8
Conveyance of Title to the Property................................................................. 8
Additional Closing Obligations of the Agency............................................... 10
Closing Obligations ofthe Developer............................................................. 10
Inspections and Review.................................................................................. II
Due Diligence Investigation of the Property By the Developer ..................... 13
Due Diligence Notice...................................................................................... 14
Books and Records ......................................................................................... 14
Condition of the Property and the Developer's Release................................. 14
Review and Approval of Condition of Title by the Developer....................... IS
Survey. . ............ ........ ........ ........ ......... ................. ........... ...... ....... .......... ..... ...... IS
Extension of Due Diligence Period................................................................. IS
Developer's Conditions Precedent to Close Escrow for the Property ............ 16
Agency's Conditions Precedent to Close Escrow For the Property............... 17
Distribution of Documents to the Developer .................................................. 18
Satisfaction of Conditions..... ....................................... ........ .......... ................. 18
RESERVED .................................................................................................... 18
Prorations, Closing Costs, Possession ............................................................ 18
RESERVED .................................................................................................... 19
RESERVED .................................................................................................... 19
Representations and Warranties...................................................................... 19
Damage, Destruction and Condemnation ....................................................... 22
DEVELOPMENT OF THE PROJECT .:...................:....-:...:..~.............:::......~ 23-
Development ofthe Project by Developer ...................................................... 23
RESERVED .................................................................................................... 28
Taxes and Assessments ....................................... ........ .................................... 28
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Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
Section 3.08.
ARTICLE IV
Section 4.0l.
Section 4.02.
Section 4.03.
Section 4.04.
ARTICLE V
Section 5.0l.
Section 5.02.
Section 5.03.
Section 5.04.
Section 5.05.
Section 5.06.
ARTICLE VI
Section 6.01
Section 6.02
ARTICLE VI I
Section 7.0l.
Section 7.02.
Section 7.03.
Section 7.04.
Section 7.05.
Section 7.06.
Section 7.07.
Section 7.08.
Section 7.09.
Section 7.10.
Section 7.n.
Section 7.12.
Section 7.13.
Section 7.14.
Section 7.15.
RESERVED ....................................................................................................28
Security Financing; Right of Holders ............................................................. 28
Right of the Agency to Satisfy Other Liens on the Property after Conveyance
of Title............................................................................................................. 31
Certificate of Completion ...... ... ..... ............................ ........................ ............. 31
RESERVED .................................................................................................... 32
USE OF THE SITE.........................................................................................32
Uses ........................... ................................... .............. ............. ........................ 32
Maintenance of the Property ........................................................................... 33
Obligation to Refrain from Discrimination..................................................... 33
Form of Nondiscrimination and Nonsegregation Clauses ..............................33
DEFAULTS, REMEDIES AND TERMINATION........................................ 35
Defaults - General..... ........................ ......................... ............. ............ ............ 35
Legal Actions ......... ........ ........ ............ ........................ .............................. ....... 35
Rights and Remedies are Cumulative............................................................. 36
Damages; Specific Performance ..................................................................... 36
RESERVED .................................................................................................... 36
Agency Rights of Termination Following Close of Escrow........................... 36
ENVIRONMENTAL, INDEMNIFICATION AND REMEDIATION........37
Environmental Work............ ............. ................. ...................... ..37
Environmental Indemnification............. .......................... ... .... .........41
GENERAL PROVISIONS ............................................................................. 42
Notices, Demands and Communications Between the Parties ....................... 42
Conflict of Interest .. ............ ....... .............................. ... ........ ..... .................. ..... 43
Warranty Against Payment of Consideration for Agreement......................... 43
Nonliability of Agency Officials and Employees........................................... 44
Enforced Delay: Extension of Time of Performance...................................... 44
Inspection of Books and Records ................................................................... 45
Approvals ............. ................. .............................. ........ ....... ..... .... .................... 45
Real Estate Commissions.... ................ ............ ..... ... .... .... ................ .... ............ 45
Indemnification............................................................................................... 45
Release of Developer from Liability............................................................... 46
AItomeys' tees .................................................... ... ..... ... .... ..... ....... .... ........ .... 40-
Effect............................................................................................................... 46
Press Release................................................................................................... 46
Authority......................................................................................................... 46
Severability ..................................................................................................... 46
11
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Section 7.16.
ARTICLE VIII
Section 8.01.
Section 8.02.
ARTICLE IX
Section 9.01.
EXHIBIT "A"
EXHIBIT "B"
EXHIBIT "c"
EXHIBIT "D"
EXHIBIT "E"
EXHIBIT "F"
EXHIBIT "G"
EXHIBIT "H"
EXHIBIT "I"
EXHIBIT "J"
EXHIBIT "K"
Construction and Interpretation of Agreement ...............................................46
ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH GRANT
DEED; WAIVERS AND AMENDMENTS................................................... 47
Entire Agreement; Counterparts ..................................................................... 47
No Merger; Waivers and Amendments .......................................................... 47
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND
RECORDATION ............................................................................................ 47
Execution and Recordation.............................................................................47
- LEGAL DESCRIPTION OF THE PROPERTY
ASSESSOR PARCEL MAP
- SCOPE OF DEVELOPMENT
- SCHEDULE OF PERFORMANCE
- AGENCY GRANT DEED
- CERTIFICATE OF COMPLETION
- NOTICE OF AGREEMENT
FORM OF ASSIGNMENT OF INTANGIBLES
EXISTING CONT AMINA TION
LOCATION OF SVEE
HOLDBACK AGREEMENT
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2011
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND IN-N-OUT BURGERS, A CALIFORNIA CORPORATION
TIllS 2011 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement")
is entered into as of , 2011 (the "Effective Date"), by and between the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic (the "Agency") and IN-N-OUT BURGERS, a California corporation (the
"Developer"). The Agency and the Developer hereby agree as follows:
Section 1.01. Purpose of Agreement. The purpose of this Agreement is to implement
the Redevelopment Plan by providing for the purchase and redevelopment by the Developer of
the Property (as defined below) in accordance with and pursuant to this Agreement. As of the
Effective Date of this Agreement, the Property is owned by the Agency and shall be conveyed by
the Agency to the Developer subject to the terms, covenants and conditions of this Agreement.
The redevelopment of the Property pursuant to this Agreement is in the vital and best interests of
the City and of the health, safety and welfare of its residents, and is in accordance with the public
purposes and provisions of applicable state and local laws. The Agency has determined that the
development and the use of the Property contemplated by this Agreement are consistent with the
Redevelopment Plan for the Project Area (as defined below).
Section 1.02. The Proiect. Promptly following the conveyance by the Agency to the
Developer of the Property, the Developer shall commence and complete the construction,
development, and installation of the Improvements at, on or in Property, in accordance with this
Agreement.
Section] .03. Parties to this Agreement.
(a) The Agency is a public body, corporate and politic, exercising governmental
functions and powers and organized and existing under Chapter 2 of the Community
Redevelopment Law of the State of California (Health and Safety Code Section 33020, et seq.).
The principal office of the Agency is located at 20 I North "E" Street, Suite 30 I, San Bernardino,
California 92401.
(b) The Developer is a California corporation. The principal office and mailing
address of the Developer for purposes of this Agreement is as set forth in Section 7.01 below.
(c) Except as set forth in Article VI, the City of San Bernardino is not a party to this
Agreement and shall have no obligations pursuant to this Agreement.
Section 1.04. Defined Ternls. In addition to the usage of certain tenns which have
defined meanings as set forth elsewhere in this Agreement certain other words and phrases are
defined as follows:
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"AffUiate" means (a) any Person which, directly or indirectly (including through one or
more intermediaries), controls or is controlled by or is under common control with any other
Person, including any Subsidiary of a Person, and (b) with respect to Developer, any franchisee
of Developer or any other Developer Affiliate. For purposes of this definition, the term
"control" (including the correlative meanings of the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession, directly or
indirectly (including through one or more intermediaries), of the power to direct or cause the
direction of the management and policies of such Person, through the ownership or control of
voting securities, partnership interests or other equity interests or otherwise.
"Agency" means the Redevelopment Agency of the City of San Bernardino, a publi.c
body, corporate and politic.
"Agreement" means this 201 I Disposition and Development Agreement, by and
between the Agency and the Developer, as amended from time to time. The Agreement means
and also includes all exhibits and schedules attached thereto.
"Approvals" shall mean all applicable land use approvals, ail conditions of approval, all
permits and other approvals, legally required by the City or any and all other governmental
authority or utility as a condition of development of the Project and construction of the
Improvements in accordance with this Agreement, and operation of the business of Developer
thereon during business hours acceptable to Developer with drive-through facilities and patio
seating in accordance with Developer's plans and specifications, and provision of utility service
thereto, including, without limitation, approval of any required site assessment and human health
risk assessment, water service permits or "will serve" letters, and public easement abandonment
or dedication.
"City" means the City of San Bernardino located in the County of San Bernardino, State
of California.
"County" means the County of San Bernardino located in the State of California.
"Developer" means In-N-Out Burgers, a California corporation, its permitted successors
and pennitted assigns, subject to the tenus, covenants and conditions of this Agreement.
"Due Diligence Notice" means the Due Diligence Notice to be provided by the
Developer to the Agency in accordance with this Agreement.
"ERN" means that certain Redevelopment Project Study and Exclusive Right to
Negotiate Agreement, dated as of March 29, 2010, by and between Developer and the Agency.
"ERN Fee" means the Exclusive Right to Negotiate Fee in the amount of Fifty Thousand
Dollars ($50,000) paid to the Agency by the Developer pursuant to Section 5 of the ERN.
"Escrow" means the escrow created in connection with and relating to conveyance of the
Property from Agency to Developer.
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"Executive Director" or "Interim Executive Director" shall mean the person who is
then appointed and acting as the chief executive officer of the Agency and who is authorized to
exercise all administrative and executive functions on behalf of the Agency.
"Holdback Agreement" shall have the meaning provided in Section 2.16(7) of this
Agreement.
"Holdback Amount" shall have the meaning provided in Section 2.16(7) of this
Agreement.
"Improvements" mean and refer any and all buildings, structures, improvements and/or
fixtures hereafter located on or at the Property. The Improvements, as generally described in the
Scope of Development attached hereto as Exhibit "C". include, without limitation, the
construction of a drive-thru restaurant including signage, patio, landscaping, trash enclosure,
parking, ingress, egress, including off-site improvements.
"Intangibles" mean all of the Agency's right, title, and interest in, and to all existing
warranties and guaranties (express or implied) issued to the Agency in connection with the
Property, and all existing pennits, entitlements, licenses, approvals, and authorizations issued by
or submitted to any governmental entity or utility in connection with the Property.
"Laws" mean all federal, state, municipal and local laws, statutes, codes, rules,
regulations, ordinances and orders, now or hereafter existing, as amended from time to time.
The Laws shall include, without limitation, the Americans with Disabilities Act of 1990
("ADA").
"Notice of Agreement" means the Notice of Agreement, dated of even date of this
Agreement, as executed and acknowledged by and between the Agency and the Developer. The
form of the Notice of Agreement is attached hereto and incorporated herein by this reference as
Exhibit "G".
"Official Records" means the Official Records of the County of San Bernardino,
California.
_ _"Person"nJeafisah)' corporation, partnership, limited liability company; co -tenancy,
joint venture, individual, business trust, real estate investment trust, trust, banking association,
federal or state savings and loan institution, or any other legal entity, whether or not a party to
this Agreement.
- -- "PrelimInary Titfe-1{epoif'"^ means -tne- prelimInary-report prepareil oy-- tbe-TiUe-
Company in connection with the Property.
"Project" means the construction, development, installation and completion by the
Developer of the Improvements, subject to the terms, covenants and conditions of this
Agreement.
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"Property" means that certain unimproved land located in the City of San Bernardino,
County of San Bernardino, State of California, Assessor Parcel Numbers 0 I 34-093-40-0-000 and
0134-093-41-0-000, as more particularly described in Exhibit "A" attached hereto and
incorporated herein by this reference. The term "Property" shall also include the Improvements.
"Project Area" means the Central City North Redevelopment Project Area in the City of
San Bernardino, County of San Bernardino, State of California.
"Purchase Price" means the purchase price paid by the Developer to the Agency in
connection with the sale by the Agency and the purchase by the Developer of the Property,
subject to the terms, covenants and conditions of this Agreement, and is defined in Section 2.01
of this Agreement.
"Redevelopment Plan" means the Redevelopment Plan for the Project Area.
"Schedule of Performance" means the Schedule of Performance on which the Agency
and the Developer shall describe in detail the schedule of performance in connection with the
construction, development, and completion of the Project. The Schedule of Performance is
attached hereto and incorporated herein by this reference as Exhibit "D".
"Scope of Development" means the construction, development, and completion by the
Developer of the Improvements. The Scope of Development is described in Exhibit "C" to this
Agreement which Exhibit "C" is attached hereto and incorporated herein by this reference.
"State" means the State ofCalifomia.
"Subsidiary" means any corporation, partnership, limited liability company, business
trust or other legal entity with respect to which a Person owns; directly or indirectly (including
through one or more internlediaries), more than fifty percent (50%) of the voting stock or
partnership, membership or other equity interest, respectively.
Section] .05. Restrictions Against Change in Ownership. Management and Control of
the Developer and Assignment of Agreement.
(a) The qualifications and identity of the Developer are of particular importance to
the Agency. The Agency relied on these qualifications and identity in entering into this
Agreement with the Developer. Prior to issuance of a Certificate of Completion for the Project
as provided in Section 3.07 below, except as expressly set forth herein below, Developer shall
not transfer or assign all or any of the Developer's rights or obligations set forth in this
Agreement (heremafter, coflectlveJy;:I" 1 ransfer') and no voluntary or involuntary successor-
in-interest of the Developer shall acquire any rights or power under this Agreement except
pursuant to an assignment approved in advance in writing by the Interim Executive Director of
the Agency, which approval shall not be unreasonably withheld, delayed or conditioned.
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(b) (i) The Agency's approval of a Transfer shall not be required in connection
with a Transfer to any of the following: (A) an Affiliate or successor, by operation of law, of
Developer (i.e., a change in Developer's name, a change in the form of the entity comprising
Developer, or a change in the state of Developer's incorporation); (B) any entity into which or
with which Developer or any Affiliate of Developer may merge, or to any corporation or other
business entity or company that results from a reorganization or consolidation by or with
Developer; (C) a duly qualified franchisee of Developer; (0) a joint venture in which Developer
is a joint venture partner responsible for the conduct of the business in the Project; or (E) any
corporation or other business entity or company to which Developer sells all, or substantially all,
of its assets or all, or substantially all, of its corporate shares.
(ii) The Agency's consent shall also not be required with respect to (A) a
Transfer concurrently with the sale of the Project and a lease back by Developer or an Affiliate
of Developer, or (B) except as provided in Section 3.05 below, an assignment as security for an
indebtedness to a recognized institutional lender such as a bank or insurance company.
Additionally, for the avoidance of doubt and in no way limiting the generality of the provisions
of this Section 1.05, no issuance, sale, conveyance or transfer of Developer's or any of its
Affiliates' stock or assets or equity interest, including, without limitation, pursuant to a merger,
consolidation or stock exchange, shall be deemed a Transfer for which the Agency's consent is
required.
(c) The Interim Executive Director of the Agency shall approve or disapprove any
requested Transfer requiring Agency approval pursuant to this Section 1.05, within ten (10)
business days after receipt of a written request for approval from the Developer, together with
such documentation as may be reasonably required by the Interim Executive Director of the
Agency, to evaluate the proposed transaction and the proposed assignee's or transferee's
experience and qualifications, including the proposed assignment and assumption agreement by
which the assignee expressly agrees to assume all rights and obligations of the Developer under
this Agreement arising after the effective date of the assignment, and in which the assignee or
transferee agrees to assume, or the Developer expressly remains responsible for, all performance
and obligations of the Developer arising prior to the effective date of the Transfer. If the
transferee assumes all of Developer's rights and obligations under this Agreement, then
Developer shall be released from all further liabilities and obligations under this Agreement.
The assignment and assumption agreement shall be in a fonn reasonably acceptable to the
Agency's and Developer's respective legal counsel. No later than the date the Transfer becomes
effective, the Developer shall deliver to the Agency the fully executed assignment and
assumption agreement.
(d) The limitations on a Transfer set forth in this Section] .05 shall apply until such
time as a Certificate of Completion is approved by the Agency and filed for recordation as
proVIded 1Il :SectIOn :5.U/.
Section 1.06. Benefit to Proiect Area. The Agency has determined that the conveyance
by the Agency to the Developer of the Property, or any portion thereof, will materially assist in
the elimination of blight and the implementation of the Redevelopment Plan for the Project Area.
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ARTICLE II
DISPOSITION OF THE PROPERTY
Section 2.01. Purchase and Sale of the ProPertv.
Subject to the terms, covenants, conditions and provisions of this Agreement the Agency
agrees to sell to the Developer and the Developer agrees to purchase from the Agency the
Property at and for EIGHT HUNDRED FORTY FOUR THOUSAND DOLLARS ($844,000)
(the "Purchase Price"), which is the fair market value of the Property as determined by an
appraisal (the "Appraisal") completed by an independent and qualified MAl appraiser (the
"Appraiser"). The Developer has previously paid to the Agency the ERN Fee which shall be
applied as a credit to the Purchase Price. The balance of the Purchase Price, in the amount of
SEVEN HUNDRED THOUSAND NINETY-FOUR DOLLARS ($794,000), as additional cash,
to be deposited to the Escrow by the Developer as provided in Article II of this Agreement.
Section 2.02. ERN Fee.
(a) The Agency acknowledges receipt of the ERN Fee from Developer. Promptly
after the Effective Date of this Agreement, the Agency shall deliver to Escrow Holder a fully
executed copy of this Agreement and shall cause the Escrow to be opened as provided in Section
2.03. At the Close of Escrow (as defined below), the ERN Fee shall be applied as a credit to the
Purchase Price.
(b) The ERN Fee (less an amount equal to the customary and reasonable escrow
cancellation charges of the Escrow Holder) shall be returned to the Developer in the event that:
(i) the Agency or the Developer terminates this Agreement pursuant to
Sections 2.03(b) or failure of any of the conditions precedent to Close of
Escrow are not timely satisfied or waived, for a reason other than the
default of Developer; or
(ii)
the conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2.16 are not satisfied by the
Agency or other entities, as appropriate (unless satisfaction has been
waived by the Developer), and this Agreement is terminated; or
(iii) the Property is materially damaged prior to the Close of Escrow (as
defined below), or an action of eminent domain is commenced by a
governmental entity with respect to the Property prior to the Close of
Escrow, and the Developer elects to ternlinate this Agreement pursuant to
Section 2.25; or
(iv) tI1is Agreement tenninates or Close of Escrow does not occur due to a
default by Agency.
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(c) In the event the Close of Escrow does not occur due to a default by Developer, the
ERN Fee shall be retained by the Agency as liquidated damages for such default. DEVELOPER
AND AGENCY AGREE THAT BASED UPON THE CIRCUMSTANCES NOW EXISTING,
KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ESTABLISH AGENCY'S DAMAGES BY REASON OF A DEFAULT BY
DEVELOPER PRIOR TO THE CLOSE OF ESCROW. ACCORDINGLY, DEVELOPER AND
AGENCY AGREE THAT IN THE EVENT OF A DEFAULT BY DEVELOPER PRIOR TO
THE CLOSE OF ESCROW, AGENCY SHALL BE ENTITLED TO RETAIN THE ERN FEE,
PLUS ANY ACCRUED INTEREST THEREON, AS LIQUIDATED DAMAGES AS ITS
SOLE AND EXCLUSIVE REMEDY.
Developer's Initials
Agency's Initials
Section 2.03. Opening and Closing of Escrow.
(a) The transfer and sale of the Property shall take place through the Escrow to be
administered by Fidelity National Title Company or such other escrow or title insurance
company mutually agreed upon by the Developer and the Agency (the "Escrow Holder" or
"Title Company"). The Escrow shall be deemed open upon the receipt by the Escrow Holder of
a fully executed copy of this Agreement. The Escrow Holder shall promptly confirm to the
parties the escrow number and the title insurance order number assigned to the Escrow.
(b) Subject to any extensions of time pursuant to Section 2.15 hereof, in the event that
the Developer has not delivered its Due Diligence Notice to the Agency and the Escrow Holder
within ninety (90) calendar days from the Effective Date for any reason, tllen in such event this
Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or
the Developer, whereupon the ERN Fee shall be returned by the Escrow Holder to the Developer
(less an amount equal to the customary and reasonable escrow cancellation charges payable to
the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties
shall each be relieved and discharged from all further responsibility or liability under this
Agreement.
(c) The words "Close of Escrow", "Closing Date" and "Closing" shall mean and
refer to the date when: (i) the Escrow Holder is in receipt of the Escrow documents from the
parties, (ii) the Escrow Holder is in a position to comply with the final written escrow closing
instructions from the parties, (iii) the Escrow Holder is in a position to cause the Agency Grant
Deed in connection with the Property to be recorded in the Official Records, (iv) the Escrow
Holder is in a position in connection with the Escrow relating to the Property to record the
Notice of Agreement in the Official Records, (v) the Escrow Holder has received all required
monies and all instruments, agreements, documents, certificates and estoppels, as executed and
acknowledged, in recordable fonn where applicable, to Close the Escrow, (vi) the Escrow Holder
has received an executed seller and buyer's closing statement from the Developer and from the
Agency, (vii) the date of recordation of the Agency Grant Deed in the Official Records; and (ix)
the Escrow Holder is in a position to deliver to the Developer the Property Title Policy.
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Section 2.04. Escrow Instructions. This Agreement also constitutes the initial escrow
instructions of the parties to the Escrow Holder. The Agency and Developer shall provide such
additional instructions as shall be necessary and consistent with this Agreement. Upon any
tennination of this Agreement or cancellation of the Escrow, the Developer shall be solely
responsible for the payment of the escrow cancellation costs of the Escrow Holder, the Escrow
Holder shall forthwith return all monies (as provided in this Agreement) and documents, less
only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as
set forth herein.
Section 2.05. Convevance of Title to the Propertv.
(a) On or before 12:00 noon on the business day preceding the Closing Date for the
Escrow the Agency shall deliver to the Escrow Holder a grant deed in substantially the form
attached hereto as Exhibit "E" (the "Agency Grant Deed") duly executed and acknowledged by
the Agency. Title to the Property shall be conveyed in fee simple subject only to Pennitted
Exceptions (as defined below).
(b) The obligation of the Agency and Developer under this Agreement to close
Escrow shall be subject to the satisfaction (or express written waiver by the benefited Party) of
each of the following conditions (collectively, the "Closing Conditions"):
(i) For Develooer's benefit: there shall have been no change to the physical
condition of the Property and no new title exceptions after the Due Diligence Notice has been
given that, in either case, could adversely affect the development, use or operation of the Project.
(ii) For Develooer's benefit: Agency's removal (or Title Company's
reasonably insuring over) any title exceptions disapproved by Developer in accordance with
Developer's Objection Notice (as defined below).
(iii) For both oarties' benefit: the representations and warranties of the
Agency and Developer contained in this Agreement being true and correct.
(iv) For both oarties' benefit: the delivery by Agency and Developer of all
documents and funds required to be delivered pursuant to Sections 2.06 and 2.07 hereof.
(v) For Develooer's benefit: the Title Company shall have committed to issue
lifthe Close ofEsCiow a 2006 ALTA Owner's policy of title insurance with extended coverage
issued by Escrow Holder to Developer (or Developer's assignee as permitted by this Agreement)
at Close of Escrow pursuant to a title commitment, and such additional endorsements as may be
reasonably requested by Developer, including, without limitation, the endorsements requested in
the DevelolJet's ObjectiOfj Notice (collectiVely;' the "Title Policy"). . The Title PoliCy Willbe-
dated not earlier than the date of recordation of the Agency Grant Deed from the Agency to
Developer (or Developer's assignee as permitted by this Agreement), will name Developer (or
Developer's assignee as pernlitted by this Agreement) as the insured, and will insure Developer's
fee simple title to the Property (including all easements and appurtenances thereto), subject only
to the Pennitted Exceptions, in an amount equal to at least the Purchase Price plus the
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reasonable, anticipated costs of the Project. The Title Policy shall also insure that the
transactions contemplated by this Agreement are in strict compliance with the Subdivision Map
Act (Govt. Code ~~66410-66499.37).
(vi) For Developer's benefit: all conditions to the issuance of the building
penn it required for the development and construction the Project shall have been satisfied (with
the exception of payment of fees).
(vii) For Developer's benefit: all Approvals, consents or authorizations
required for the development, construction, operation or use of the Project (excluding certificates
of occupancy and the like that cannot be issued until completion of construction) shall have been
obtained.
(viii) For Developer's benefit: with regard to the Approvals and all permits
required for grading and the construction of the Improvements, all administrative appeals periods
shall have expired; with regard to compliance with CEQA, the statutes of limitation therefor
shall have expired; and with regard to each, no unresolved challenge thereto shall be in
existence.
(ix) For both parties' benefit: Developer and Agency shall have performed,
observed and complied with all covenants, agreements and conditions required by this
Agreement to be performed, observed and complied with on its part prior to or as of the Close of
Escrow.
(x) For Developer's benefit: upon the request of a holder of any mortgage,
deed of trust or other security authorized by this Agreement, the Agency shall enter into an
agreement with such lender, providing for notice and cure rights of such lender and for such
other matters as the parties may agree, all upon terms and conditions as may be reasonably
acceptable to the Agency.
(c) Title to the Property shall be conveyed subject only to:
(i) non-delinquent current real property taxes and assessments not yet due and
payable for the tax year dUling which the conveyance occurs which are levied or imposed for any
period commencing after conveyance of the Property to Developer;
(ii) all title exceptions approved by Developer pursuant to Section 2.13 below,
which includes the effect ofthe Redevelopment Plan for the Project Area;
(iii) the provisions of the Agency Grant Deed;
and
(iv) the applicable provisions of this Agreement and the Notice of Agreement;
(v) any matters affecting title to the Property which arise out of the actions of
Developer or its agents and representatives (collectively, the "Permitted Exceptions").
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Section 2.06. Additional Closine Oblieations of the Aeency. On or before 12:00 noon
on the business day preceding the Closing Date for the Escrow (and unless indicated otherwise),
the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the
Developer) the following documents and other items:
(J) a certificate of non-foreign status executed by the Agency, in the
customary form provided by the Escrow Holder, and a California
Franchise Tax Board Form 590-RE executed by the Agency;
(2) all soils, seismic, geologic, drainage, and environmental reports, and
surveys, with respect to the Property, if any, which the Agency has in its
possession and/or control to the extent that originals of such items have
not been delivered previously by the Agency to the Developer pursuant to
Section 2.08 below;
(3) two (2) duplicate original copies of the Closing Statement described in
Section 2.21, duly executed by the Agency;
(4) evidence of the existence, organization and authority of the Agency and of
the authority of persons executing documents on behalf of the Agency
reasonably satisfactory to the Escrow Holder and Title Company;
(5) any other documents, instruments, funds and records required to be
delivered to the Developer under the terms of this Agreement, which have
not been previously delivered;
(6) one (1) original of the Notice of Agreement, executed and acknowledged
by the Agency (in connection with the Escrow relating to the Property);
(7) one (1) original of the Agency Grant Deed, executed and notarized by the
Agency, to convey the Property to Developer (or Developer's assignee as
pennitted by this Agreement);
(8) one (1) original, executed by the Agency, of an assignment to Developer
(or its assignee pennitted by this Agreement) of all of Agency's rights to
the Intangibles duly executed by the Agency substantially in the form
attached hereto as Exhibit "H" (the "Assignment (Intangibles)");
(9) two (2) duplicate originals of the Holdback Agreement (as defined below)
duly executed by the Agency.
Section 2.07. Closine Oblieations of the Developer. On or before 12:00 noon on the
business day preceding the Closing Date for the Escrow, the Developer shall deliver to the
Escrow Holder the following documents and other items:
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(1) one (1) original of the Agency Grant Deed, as executed and notarized by
the Developer, accepting the conveyance of the Property from the Agency
to the Developer (or Developer's assignee as permitted by this
Agreement); and
(2) two (2) duplicate original copies of the Closing Statement, duly executed
by the Developer;
(3) one (1) original of the Notice of Agreement, executed and acknowledged
by the Developer (in connection with the Escrow relating to the Property);
(4) evidence of the existence, organization and authority of the Developer and
of the authority of persons executing documents on behalf of the
Developer reasonably satisfactory to the Escrow Holder and the Title
Company;
(5) any other documents, instruments or funds required to be delivered by the
Developer under the terms of this Agreement, which have not previously
been delivered;
(6) two (2) duplicate originals of the Holdback Agreement (as defined below)
duly executed by the Developer;
(7) the balance of the Purchase Price (subject to the Holdback Amount).
Section 2.08. Inspections and Review.
(a) Due Diligence Items. Within five (5) business days after the Effective Date of
this Agreement the Agency shall deliver true, correct and complete copies or originals of the
following documents and items (collectively, "Due Diligence Items") to the Developer to the
extent not previously provided to Developer by the Agency:
(l) copies of all soils, seismic, geologic, drainage, engineering, environmental
and similar type reports and surveys including, but not Jimited to, any
Property Environmental Site Assessments, surveys, relating to the
Property, if any, in the possession or the control of the Agency.
(2) notices of violations, including, but not limited to, zoning ordinances,
development or building codes affecting the Property within the Agency's
possession or control.
(3) disclosure of any legal matters affecting the use, occupancy or condition
of the Property within the knowledge ofthe Agency.
(b) Certain Definitions. For the purpose of this Agreement, the terms set forth below
shall have the following meaning:
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(i) "Environmental Laws" means all federal, state, local, or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of
any government authority regulating, relating to, or imposing liability of standards
of conduct concerning any Hazardous Substance (as later defined), or pertaining
to occupational health or industrial hygiene (and only to the extent that the
occupational health or industrial hygiene laws, ordinances, or regulations relate to
Hazardous Substances on, at, in, above, under, from or about the Property),
occupational or environmental conditions on, under, or about the Property, as now
or may at any later time be in effect,. including without limitation, the
Comprehensive Environmental Response, Compensation. and Liability Act. of
1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation
and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean
Water Act, also known as the Federal Water Pollution Control Act ("FWPCA")
[33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15
USC Section 2601 et seq.]; the Hazardous Materials Transportation Act
("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide,
Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section
7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the
Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining
Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency
Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the
Occupational Safety and Health Act [29 USC Section 655 and 657]; the
California Underground Storage of Hazardous Substances Act [H & S C Section
25288 et seq.]; the California Hazardous Substances Account Act [H & S C
Section 25300 et seq.]; the Califomia Safe Drinking Water and Toxic
Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water
Quality Act [Water Code Section 13000 et seq.] together with any amendments of
or regulations promulgated under the statutes cited above and any other federal,
state, or local law, statute, ordinance, or regulation now in effect or later enacted,
as amended from time to time, that pertains to occupational health or industrial
hygiene, and only to the extent the occupational health or industrial hygiene laws,
ordinances, or regulations relate to Hazardous Substances on, at, in, above, under,
from or about the Property, or the regulation or protection of the environment,
including ambient air, soil, soil vapor, groundwater, surface water, or land use.
(ii) "Hazardous Substances" includes without limitation:
those substances included within the definitions of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," or
"pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any-
other environmental law; and
those substances listed in the United States Department of Transportation
(DOT)Table [49 CFR ]72.10J], or by the EPA, or any successor agency, as
hazardous substances [40 CFR Part 302]; and
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other substances, materials, and wastes that are or become regulated or classified
as hazardous or toxic under federal, state, or local laws or regulations; and
any material, waste, or substance that is:
(1) a petroleum or refined petroleum product,
(2) asbestos,
(3) polychlorinated biphenyl,
(4) designated as a hazardous substance pursuant to 33 USC Section
1321 or listed pursuant to 33 USC Section 1317,
(5) a flammable explosive,
(6) a radioactive material,
(7) lead or lead-containing materials.
Section 2.09. Due Diligence Investigation of the Propertv By the Developer.
(a) Within ninety (90) calendar days from and after the Effective Date of this
Agreement and subject to the extensions of time set forth below in Section 2.15, the Developer
shall have the right to examine, inspect and investigate the Property (the "Due Diligence
Period") to determine whether the condition of Property is acceptable to the Developer and to
obtain such development project approvals from the City for the improvement of the Project, as
the Developer may require in its sole and absolute discretion.
(b) During the Due Diligence Period, the Agency shall permit the Developer, its
engineers, analysts, contractors and agents to conduct such physical inspections and testing of
the Property as the Developer deems prudent with respect to the physical condition of the
Property, including the inspection or investigation of soil and subsurface soil geotechnical
condition, drainage, seismic and other geological and topographical matters, surveys the
potential presence of any Hazard(jus .Substan.ces, if any;
(c) Any such investigation work on the Property may be conducted by the Developer
and/or its agents during any normal business hours upon twenty-four (24) hours prior notice to
the Agency, which notice will include a reasonable description of any investigation work or tests
-to-be conduered by tlfe-Developer on the -Property. . Up-onllfe -Agency'.s request,-tIie-Developer
will provide the Agency with copies of any test results.
(d) During the Due Diligence Period, the Developer shall also have the right to
investigate all matters relating to the zoning, use and compliance with other applicable laws
which relate to the use and development and improvement of the Property. The Developer may
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submit an application to the City and any other regulatory agency with jurisdiction for any and
all necessary development project approvals for the Project. The Agency hereby consents to the
submission of such development project approval applications by the Developer.
(e) The Agency shall cooperate fully to assist the Developer in completing such
inspections and investigations of the condition of the Property and submittal of such
development project approval applications. The Agency shall have the right, but not the
obligation, to accompany the Developer during such investigations and/or inspections. The
Developer shall pay for all costs and expenses associated with the conduct of all such Due
Diligence investigation including the cost of submitting any development project approval
application as relates to the Project to any regulatory jurisdiction.
Section 2.1 O. Due Diligence Notice. Within ninety (90) calendar days following the
Effective Date, the Developer shall complete its investigation of the Property (subject to any
extensions of time as provided in Section 2. I 5 and deliver a Due Diligence Notice signed by the
Developer (the "Due Diligence Notice") to the Escrow Holder which either:
(i) indicates that the Developer accepts the condition of the Property, or;
(ii) contains a description of the matters or exceptions relating to the condition
of the Property which the Developer was not able to accept or resolve to
its satisfaction during the Due Diligence Period. In the event that there are
matters that the Developer is unable to accept or resolve, such matters
shall be deemed conditions to Closing for the benefit of the Developer and
the Closing Date shall automatically be deemed extended for such period
as maybe necessary to resolve such matters.
Section 2.11. Books and Records. As part of the Developer's due diligence
investigations during the Due Diligence Period, the Developer shall be afforded full opportunity
by the Agency to examine all books and records which relate to the Property in the possession of
the Agency and/or the Agency's agents or employees, including the reasonable right to make
copies of such books and records. During the Due Diligence Period, the Agency will make
sufficient staff available to assist the Developer with obtaining access to infom1ation relating to
the Property which is in the possession or control of the Agency.
Section 2.12. Condition of the Property. Developer acknowledges and agrees that,
except as expressly set forth herein, including, without limitation, Article VI, Developer is
acquiring the Property in its "AS IS" condition, WITH ALL F AUL TS, IF ANY, AND, EXCEPT
AS EXPRESSLY SET FORTH HEREIN, WITHOUT ANY WARRANTY, EXPRESS OR
IMPLIED and neither Agency nor any agents, representatives, officers, or employees of Agency
have made any representations or warranties, direct or indirect, oral or written, express or
implied, to Developer or any agents, representatives, or employees of Developer with respect to
the condition of the Property, its fitness for any particular purpose, or its compliance with any
laws, and Developer is not aware of and does not rely upon any such representation to any other
party. Except as expressly set forth herein, neither Agency nor any of its representatives is
making or shall be deemed to have made any express or implied representation or warranty, of
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any kind or nature, as to (a) the physical, legal or financial status of the Property, (b) the
Property's compliance with applicable laws, (c) the accuracy or completeness of any information
or data provided or to be provided by Agency, or (d) any other matter relating to the Property.
The provisions of this Section 2.12 shall survive the Close of Escrow for the Property.
Section 2.13. Review and Approval of Condition of Title bv the Developer.
(a) Within fifteen (15) calendar days following the Effective Date of this Agreement
the Agency shall cause to be delivered to the Developer a preliminary title report describing the
state of title of the Property, together with (i) copies of all exceptions specified therein and with
all easements plotted and (ii) a survey prepared in compliance with ALTAI ASCM standards and
in a form acceptable to the Title Company for the deletion of the standard survey exception in
the Property Title Policy relating to boundaries, without the addition of further exceptions unless
the same are acceptable to the Developer in its sole and absolute discretion (the "Preliminary
Title Report"). The Developer shall notify the Agency in writing of any objections the
Developer may have to the title exceptions contained in the Preliminary Title Report for the
Property (the "Developer's Objection Notice") prior to the expiration of the Due Diligence
Period in connection with the Escrow. The Developer may condition its approval on the
Agency's cure of any matters objected to by the Developer.
(b) The Agency covenants not to further encumber and not to place any further liens
or encumbrances on the Property, including, but not limited to, covenants, conditions,
restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other
possessory interests without the prior written consent of the Developer. Upon the issuance of
any amendment or supplement to the Preliminary Title Report which adds additional exceptions,
the foregoing right of review and approval shall also apply to said amendment or supplement
(provided that the period for the Developer to review such amendment or supplement shall be the
later ofthe expiration of the Due Diligence Period for the Escrow or ten (10) calendar days from
receipt of the amendment or supplement) and the Escrow shall be deemed extended by the
amount of time necessary to allow such review and approval in the time and manner set forth
above.
Section 2.14. Survev. The Developer has at its sole cost and separate expense obtained
a survey of the Property prepared by a land surveyor duly licensed by the State of California and
in compliance with ALTAlASCM standards (the "Survey").
Section 2.15. Extension of Due Diligence Period.
(a) In the event the Agency fails to provide to the Developer the documents and other
information required by Sections 2.08 and 2.11 by the date(s) set forth therein, the Due Diligence
PllriGM{lr such inf{lfffiatHm-ffian-b~~ed--by-ooce (1) day--{{lr--eaeh-clay of the-delay 1,y the
Agency to permit the Developer to perform an adequate due diligence review not to exceed thirty
(30) calendar days in connection with the Property. The Developer will promptly notify the
Agency of any documents the Agency has failed to deliver to the Developer within the time
periods provided in Sections 2.08 and 2.11.
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(b) In the event that the Interim Executive Director reasonably makes a finding that
the Developer has undertaken substantial work to complete its investigation of the Property, the
Interim Executive Director shall upon the written request of the Developer, authorize an
extension of the Due Diligence Period for an additional sixty (60) calendar days upon written
notice to the Agency on or before the end of the Due Diligence Period in connection with the
Escrow.
Section 2.16. Develooer's Conditions Precedent to Close Escrow for the Pronertv. In
addition to the Closing Conditions set forth in Section 2.05 above, the Developer's obligation to
complete the purchase of the Property and to Close the Escrow thereto shall be conditioned upon
the fulfillment of the following conditions precedent, all of which shalJ be satisfied (or waived in
writing pursuant to Section 2. I 9) prior to the Close of Escrow for the Property:
(I) The Agency shall not have defaulted on any material term of this
Agreement to be performed prior to the Close of Escrow by the Agency
hereunder, and each representation and warranty made by the Agency in
this Agreement shall remain true and correct;
(2) the Developer's approval of the Preliminary Title Report within the time
period specified in Sections 2. I3 and cure of objectionable items by the
Agency;
(3) the Developer's approval of the contents of all Due Diligence Items, and
the other investigations of the Property made by the Developer and/or its
designees pursuant to Sections 2.08 and 2.09 herein on or before the
expiration of the Due Diligence Period in connection with the Escrow, or
such later date if such Due Diligence Period is extended pursuant to
Section 2.15 or any other provision hereof The Developer shall be
deemed to have disapproved such Due Diligence Items unless they are
approved (conditionally or otherwise) on or before 5:00 p.m. on the day of
the Due Diligence Period in connection with the Escrow, or such later date
if such Due Diligence Period is extended pursuant to Section 2. I 5 or any
other provision hereof;
(4)
the Title Company has committed to issue the Title Policy in connection
with the PropeJiy, whichever applies, in favor of the Developer in the form
described in Section 2.05;
(5) the Developer has received purchase money and construction financing, if
applicable, to enable the Developer to purchase, to construct, to develop
and to install the Improvements in connection with the Property;
(6) the Agency shall have satisfied (or waived satisfaction of, as applicable)
each of the conditions precedent set forth in Sections 2.05, 2.06 and 2.17;
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(7) on or prior to Closing, Developer and the Agency shall execute an Escrow
Holdback Agreement and Escrow Instructions substantially in the form
attached hereto as Exhibit "K" ("Holdback Agreement") setting forth the
terms and conditions under which the Holdback Amount (defined below)
shall be disbursed. The Holdback Amount shall be a portion of the
Purchase Price in the amount of Two Hundred Thousand Dollars
($200,000) the ("Holdback Amount"), which amount shall be held back
for payment for Remediation pursuant to Article VI hereof;
(8) The Agency shall have executed the documents contemplated in Section
2.05 and 2.06 hereofin such form as to allow the recordation of the
Agency Grant Deed and the Notice of Agreement in the Official Records,
and shall have executed and acknowledged, if required, all other
instruments, documents, agreements, certificates and estoppels, as
reasonably required by the Agency or the Escrow Holder, subject to the
Holdback, to close the Escrow relating to the Property; and
(9) the Escrow Holder is in a condition to close the Escrow, subject to the
Holdback, in connection with the Property.
Section 2.17. Agencv's Conditions Precedent to Close Escrow For the Propertv. The
Agency's obligation to convey the Property to the Developer shall be conditioned upon the
fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in
writing pursuant to Section 2.19) prior to the Close of Escrow:
(I) the Developer has accepted the condition of title of the Property, subject to
Article VI, on or before the date set forth in Section 2.13, as such time
period may be extended pursuant to Section 2.15 or any other provision
hereof;
(2) the Developer shall not be in default of any material term of this
Agreement to be performed prior to the Close of Escrow by the Developer
hereunder and each representation and warranty of the Developer made in
this Agreement shall remain true and correct;
(3) the Developer shall have satisfied (or waived satisfaction of, as applicable)
each of the conditions precedent set forth in Sections 2.05 and 2. I 6;
(4) The Developer shall have executed the documents contemplated in
Section 2.07 hereofin such form as to allow the recordation of the Agency
Grant Deed and the Notice of Agreement in the Official Records, shall-
have deposited the balance of the Purchase Price and all other amounts
due and owing by the Developer in connection with this Agreement and
the Closing of the Escrow relating to the Property, and shall have executed
and acknowledged, if required, all other instruments, documents,
agreements, certificates and estoppels, as reasonably required by the
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Agency or the Escrow Hoider to close the Escrow, subject to the
Holdback, relating to the Property; and
(5) the Escrow Holder is in a condition to close the Escrow, subject to the
Holdback, in connection with the Property.
Section 2.18. Distribution of Documents to the Develooer. After the Closing Date by
Escrow Holder, the Escrow Holder shall deliver to the Developer within three (3) business days
following the Closing Date in connection with the Escrow for the Property, conformed copies of
the Agency Grant Deed in connection with the transfer of the Property and all other documents
recorded in the Official Records concurrently therewith, as recorded, the Assigmnent
(Intangibles), the balance of the documents executed and delivered by the parties at Closing, and
the policy of title insurance issued by the Title Company in favor of the Developer.
Section 2.19. Satisfaction of Conditions.
(a) Where satisfaction of any of the foregoing conditions requires action by the
Developer or by the Agency, each party shall use its commercially reasonable efforts, in good
faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing
conditions requires the approval of a party, such approval shall be in such party's sole and
absolute discretion.
(b) Either party may waive any of the conditions set forth in this Agreement as to
items that are intended to be performed by the other party, but any such waiver as to performance
by the other party shall be effective only if contained in a writing signed by the applicable party
and delivered to the Escrow Holder.
Section 2.20. RESERVED
Section 2.21. Prorations. Closing Costs. Possession.
(a) Real and personal property taxes for the Property shall be prorated by the parties
to the applicable Closing Date on the basis of a three hundred sixty-five (365) day year in
accordance with the settlement statements approved by the Agency and Developer.
(b) The. Developer. shall be_ entitled to exclusive possession Mthe Property
immediately upon the Close of the Escrow.
(c) The Agency shall pay one hundred percent (100%) of the cost of the premium for
the Title Policy equal to the cost of a CL T A owner's coverage policy of title insurance on the
Property for <;overa-g-ein1heanmlJnt-uf the-PurChase Ptice~ -t6getl1erwilh- aU--fitle cnarges-
reasonably requested by the Developer to remove disapproved itenls shown on the Preliminary
Title Report pursuant to Sections 2.13 and 2.14 above) but subject to Section 2.05 above. The
Agency shall pay one-half (J/2) of the customary and reasonable escrow fees which may be
charged by the Escrow Holder in connection with the Close of Escrow.
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(d) The Developer shall be responsible for paying the difference in cost between a
CLTA policy of title insurance and the cost of an ALTA extended owner's policy of title
insurance that is to be delivered to the Developer at the Close of Escrow for the Property in
addition to the cost of all title endorsements, plus one-half (1/2) of the cost of recording the
Agency Grant Deed and the Notice of Agreement in connection with the Escrow relating to the
Property, together with one-half (1/2) of the cost of the customary and reasonable escrow fees
charged by the Escrow Holder in connection with the Close of Escrow for the Property.
(e) Any other Escrow-related transaction expenses or escrow closing costs incurred
by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the
parties to this Agreement in the manner customary in San Bernardino County, California.
(f) No later than three (3) business days prior to the Closing Date in connection with
the Escrow, the Escrow Holder shall prepare for approval by the Developer and the Agency a
closing statement ("Closing Statement") on the Escrow Holder's standard form indicating,
among other things, the Escrow Holder's estimate of all closing costs, and pay-off amounts for
the release and reconveyance of all liens secured by the Property, and prorations made pursuant
to this Agreement. The Developer and the Agency shall assist the Escrow Holder in determining
the amount of all prorations.
Section 2.22. RESERVED
Section 2.23. RESERVED
Section 2.24. Reoresentations and Warranties.
(a) Warranties and Reoresentations bv the Agencv. The Agency hereby makes the
following representations, covenants and warranties as of the date of this Agreement and as of
the Close of Escrow that:
(1) Warranties True. Each and every undertaking and obligation of the
Agency under this Agreement shall be perfonned by the Agency timely
when due; and that all representations and warranties of the Agency under
this Agreement and its exhibits shall be true in all material respects at tile
Closing as though they were made at the time of Closing.
(2) Due Organization. The Agency is a community redevelopment agency,
duly formed and operating under the laws of California. The Agency has
the legal power, right and authority to enter into this Agreement and to
execute the instruments and documents referenced herein, and to
consummate the transactions contemplated hereby.
(3) Requisite Action. The Agency has taken all requisite action and obtained
all requisite consents in connection with entering into this Agreement and
the instruments and documents referenced herein and the consummation
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of the transactions contemplated hereby, and no consent of any other party
is required.
(4) Enforceability of Al!I'eement. The persons executing any instruments for
or on behalf of the Agency have been authorized to act on behalf of the
Agency and that this Agreement is valid and enforceable against the
Agency in accordance with its terms and each instrument to be executed
by the Agency pursuant hereto or in connection therewith will, when
executed, be valid and enforceable against the Agency in accordance with
its terms. No approval, consent, order or authorization of, or designation
or declaration of any other person, is required in connection with the valid
execution and delivery of and compliance with this Agreement by the
Agency.
(5) Title. Prior to the Closing Date, the Agency will be the owner of (and the
Developer will acquire hereunder) the entire right, title and interest in the
Property to effectively vest in the Developer good and marketable fee
simple title to the Property, that the Developer will acquire the Property
free and clear of all liens, encumbrances, claims, rights, demands,
easements, leases or other possessory interests, agreements, covenants,
conditions, and restrictions of any kind or character (including, without
limiting the generality of the foregoing, liens or claims for taxes,
mortgages, conditional sales contracts, or other title retention agreement,
deeds of trust, security agreements and pledges and mechanics lien)
except: (i) the matters described in Section 2.05, and (ii) the exceptions to
title approved by the Buyer pursuant to Section 2.13.
(6) No Litigation. There are no pending or, to the best of the Agency's
knowledge, threatened claims, actions, allegations or lawsuits of any kind,
whether for personal injury, property damage, property taxes or otherwise,
that could materially and adversely affect the value or use of the Property
or prohibit the sale thereof, nor to the best of the Agency's knowledge, is
there any governmental investigation of any type or nature pending or
threatened against or relating to the Property or the transactions
contemplated hereby.
(7) Operation and Condition Pending Closing. Between the date of this
Agreement and the Close of Escrow, the Agency will continue to manage,
operate and maintain the Property in the same manner as existed prior to
the execution ofthis Agreement.
(8) Contracts. There are no contracts or agreements to which the Agency is a
party relating to the operation, maintenance, development, improvement
or ownership of the Property which will survive the Close of Escrow.
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(9) Develooment ofProiect. Although the Agency makes no representation or
warranty that the Property is suitable for the development or operation of
the Project, the Agency has no present knowledge of any condition of the
Property which would prevent its development in accordance with the
Scope of Development.
(10) Soecial Studies Zone. The Property, whichever applies, is not located
. within a designated earthquake fault zone pursuant to California Public
Resources Code Section 2621.9 and a designated area that is particularly
susceptible to ground shaking, liquefaction, landslides or other ground
failure during an earthquake pursuant to California Public Resources Code
Section 2694.
(11) The Agencv's Knowledge. For purposes of this Section 2.24(a), the tenus
"to the best of the Agency's knowledge" or "to the Agency's knowledge"
shall mean the actual knowledge of Interim Executive Director, Emil A.
Marzullo, without independent investigation.
(i) If the Agency becomes aware of any act or circumstance which would
change or render incorrect, in whole or in part, any representation or warranty made by the
Agency under this Agreement, whether as of the date given or any time thereafter through the
Closing Date and whether or not such representation or warranty was based upon the Agency's
knowledge and/or belief as of a certain date, the Agency will give immediate written notice of
such changed fact or circumstance to the Developer, but such notice shall not release the Agency
of its liabilities or obligations with respect thereto.
(ii) All representations and warranties contained in this Section 2.24(a) are or
shall be true and correct on the date hereof and on the Closing Date and the Agency's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow.
(b) Warranties and Representations bv the Developer. The Developer makes the
following representations, covenants and warranties as of the date of this Agreement and as of
the Close of Escrow that:
(I)
The Developer is a duly organized and validly existing California
corporation. The Developer has the legal right, power and authority to
enter into this Agreement and the instruments and documents referenced
herein and to consummate the transactions contemplated hereby. The
persons executing this Agreement and the instruments referenced herein
on behalf of the Developer hereby represent and warrant that such persons -
have the power, right and authority to bind the Developer.
(2) The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the
instruments and documents referenced herein and the consummation of
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the transactions contemplated hereby, and no consent of any other party is
required.
(3) This Agreement is, and all agreements, instruments and documents to be
executed by the Developer pursuant to this Agreement shall be, duly
executed by and are or shall be valid and legally binding upon the
Developer and enforceable in accordance with their respective terms.
(4) Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a
default under any other agreement, document, instrument or other
obligation to which the Developer is a party or by which the Developer
may be bound, or under law, statute, ordinance, rule, governmental
regulation or any writ, injunction, order or decree of any court or
governmental body applicable to the Developer or to the Property.
All representations and warranties contained in this Section 2.24(b) are or shall be true and
correct on the date hereof and on the Closing Date and the Developer's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow.
Section 2.25. Damage. Destruction and Condemnation.
(a) Prior to the Agency's delivery of possession of the Property to the Developer at
the Close of Escrow, the risk of loss or damage to the Property shall remain upon the Agency. If
the Property suffers damages as a result of any casualty prior to the Close of Escrow which may
materially diminish its value, then the Agency shall give written notice thereof to the Developer
promptly after the occurrence of the casualty. The Developer can elect to either: (i) accept the
Property in its damaged condition; or (ii) the Developer may tenninate this Agreement and
recover the ERN Fee, as set forth in Section 2.02. The Developer shall continn the exercise of
its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar
days of its receipt of notice from the Agency.
(b) In the event that, prior to the Close of Escrow for the Property, any governmental
entity shall commence any actions of eminent domain or similar type proceedings to take any
portion of the Property, the Agency shall give prompt written notice thereof to the Developer,
and the Developer shall have the option either: (i) to elect not to acquire the Property and
tenninate this Agreement and recover the ERN Fee, as set forth in Section 2.02; or (ii) the
Developer may complete the acquisition of the Property under this Agreement, in which case the
Developer shall be entitled to all the proceeds of such taking; provided however, that the Agency
agrees that it shall not settle or compromise the proceedings before the Close of Escrow, without -
the Developer's prior written consent, which consent will not be unreasonably withheld,
conditioned, or delayed. The Developer shall continn the exercise of its election under
subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days of its receipt ofvnotice from the Agency.
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ARTICLE III
DEVELOPMENT OF THE PROJECT
Section 3.01. Development of the Proiect bv the Developer.
(a) Scope of Development: Schedule of Perfonnance. It is the intent of the parties
that promptly following the Close of Escrow for the Property the Developer shall COmmence the
construction and development of the Project in accordance with applicable Approvals. In
connection with the Project, the Developer shall, without limitation, design, construct, develop,
and complete the Improvements located at, on or in connection with the Property in accordance
with the Scope of Development and the tenns, covenants and conditions of this Agreement (the
"Construction"). The scope of the Construction is generally described in the Scope of
Development.
(b) The City's zoning ordinance and the City's building requirements will be
applicable to the use and development of the Property. The Developer acknowledges that any
change in the plans for the development of the Property as set forth in the Scope of Development
shall be subject to the City's zoning ordinance and building requirements. No action by the
Agency or by the City with reference to this Agreement or related documents shall be deemed to
constitute a waiver of any City requirements which are applicable to the Property or to the
Developer, any successor in interest of the Developer or any successor in interest pertaining to
the Property except by modification or variance approved by the City consistent with this
Agreement.
(c) The Scope of Development for the Project is hereby approved by the Agency
upon execution of this Agreement as to the minimum requirements thereof subject to the final
development and building permit approvals (including payment of all fees) to be obtained by the
Developer from the City prior to the Close of Escrow. The Project shall be developed and
completed by the Developer in confonnance with this Agreement and the Scope of Development
for the Property, all applicable Laws, and any and all other plans, specifications and similar
development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and between the Developer and the Agency.
(d) The approval of the Scope of Development by the Agency hereunder shall not be
binding upon the City Councilor the Planning Commission of the City with respect to any
approvals of the Project required by such other bodies. If any revisions of the Scope of
Development as approved by the Agency shall be required by another government official,
agency, department or bureau having jurisdiction over the development of the Property the
Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or to
obtain approvals of-any such Tevisions- which hav~-been-made by-the Developer ancrliive
thereafter been approved by the Agency. The Agency shall not unreasonably withhold approval
of such revisions.
(e) Notwithstanding any provision to the contrary in this Agreement, the Developer
shall and comply with any and all conditions of approval applicable to all permits and other
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governmental actions imposed by the City and all other governmental agencies and regulatory
agencies affecting the development of the Property.
(f) The Developer shaIl cause landscaping plans in connection with development of
the Property to be prepared by a licensed landscape architect. The Developer shaIl prepare and
submit to the City for its approval, preliminary landscaping plans for Property which are
consistent with City Code requirements. These plans shall be prepared, submitted and approved
within the times respectively established in the Schedule of Performance and shall be consistent
with the Scope of Development.
(g) The Developer shall prepare and submit to the City development plans,
construction drawings and related documents for the development of the Property consistent with
the Scope of Development. The development plans, construction drawings and related
documents shall be in the form of drawings, plans and specifications (collectively, the
"Construction Documents").
(h) During the preparation of all Construction Documents in connection with the
development of the Property, the Developer shall provide to the Agency, upon Agency's request,
progress reports to advise the Agency of the status of the preparation by the Developer, and the
submission to and review by the City of Construction Documents. The Developer shall
communicate and consult with the Agency as frequently as is reasonably necessary to facilitate
any such Construction Documents submitted by the Developer to the City being processed in a
timely fashion.
(i) The Agency shall have the right of reasonable architectural review and approval
of building exteriors and design of the structures to be constructed on the Property to be
constructed for the Project which approval shaIl not be unreasonably withheld, conditioned, or
delayed. The Agency shall also have the right to review all Construction Documents in order to
determine that they are consistent with this Agreement and with the Scope of Development. If
the Agency shall reasonably detennine that Construction Documents are not consistent with this
Agreement and with the Scope of Development, it shall notifY the Developer in writing of such
determination. The Developer, upon receipt of such notice from the Agency, shall promptly
revise the applicable Construction Documents in a manner that addresses the inconsistency with
the Scope of Development and shaIl resubmit such revised applicable Construction Documents
to the Agency no later than thirty (30) calendar days after its receipt of such notice from the
Agency.
(j) The Developer shall timely submit to the City for its review and approval any and
all Construction Documents, as required by the City. Any failure by the City to approve any of
such Construction Documents or to issue necessary permits for the development of the Property
wlllim thIrty (jU) calendar days ot receIpt thereot shall constItute an enforced delay hereunder,
and the Schedule of Performance shall be extended by that period of time beyond said thirty (30)
calendar day period in which the City approves said Construction Documents; provided,
however, that in the event that the City disapproves of any of such Construction Documents, the
Developer shall within thirty (30) calendar days after receipt of such disapproval reasonably
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revise and resubmit such Construction Docwnents in accordance with the City's requirements
and in such form and substance so as to obtain the City's approval thereof.
(k) The Agency shall in good faith use its best efforts to cause the City to approve in
timely fashion any and all Construction Documents submitted by the Developer which are
consistent with the Scope of Development.
(I) The Agency shall reasonably approve any modified or revised Construction
Documents as long as such Construction Documents are generally consistent with the Scope of
Development and any other Construction Documents, which have been approved by the Agency.
. Upon any. disapproval of Construction Documents, the Agency shall provide in writing the reasons
for such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly
revise such disapproved portions of the Construction Documents in a manner that addresses the
reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain
the Agency's approval thereof. The Developer shall resubmit such revised Construction
Documents to the Agency as soon as possible after its receipt of the notice of disapproval and, in
any event, no later than thirty (30) calendar days thereafter. The Agency shall reasonably
approve or disapprove such revised Construction Documents in the same manner and within the
same times as provided in this Section for approval or disapproval of Construction Documents
initially submitted to the Agency.
(m) If the Developer desires to make any change in the Construction Documents after
their review by the Agency for consistency with the Scope of Development, the Developer shall
submit the proposed change in writing to the Agency for its reasonable review for consistency
with the Scope of Development. The Agency shall notifY the Developer in writing of any
determination that the change is not consistent with the Scope of Development, within thirty (30)
calendar days after submission to the Agency. If the Developer desires to make any change in
the Construction Documents after their approval by the City, the Developer shall submit the
proposed change to the City for approval. The Agency shall use its best efforts to cause the City
to review and approve or disapprove any such change as provided in Section 3.01 (k) hereof.
(n) The Developer, upon receipt of a notice of disapproval by the Agency and/or the
City, may revise such portions of the proposed change in Construction Documents as are rejected
and shall thereafter resubmit such revisions to the Agency and/or the City for approval in the
manner provided in Section 3.01 (I) hereof.
(0) The Developer shall have the right during the course of construction to make
changes in construction of structures and "minor field changes" without seeking the approval of
the Agency; provided, however, that such changes do not affect the type of use to be conducted
within all or any portion of a structure. Said "minor field changes" shall be defined as those
changes from Ihe approved ConsIrucTion Documems which have no substantIal effect on the
improvements and are made in order to expedite the work of construction in response to field
conditions. Nothing contained in this Section shall be deemed to constitute a waiver of or
change in the City's Building Code requirements governing such "minor field changes" or in any
and all approvals by the City otherwise required for such "minor field changes."
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(P) Subject to the prOVISIOns of Article VI below, the cost of constructing all
Improvements on the Project in addition to all off-site improvements which, if any, are required
by the City as a condition of approval for the Project, shall be borne by the Developer. The
Developer shall comply with all applicable State Laws relative to the payment of prevailing
wages to third party contractors engaged by Developer with respect to those components of the
Project which are public improvements or other public infrastructure intended to be dedicated to
a governmental agency, including the off-site public improvements, and the Developer shall
provide written verification of such compliance to the Agency upon written request from the
Agency to the Developer.
(q) The Developer shall at its expense cause to be prepared, and shall pay any and all
fees pertaining to the review and approval of the development project approvals by the City,
including the cost and preparation of all required construction, planning and other documents
reasonably required by governmental bodies pertinent to the development of the Property, as
appropriate, hereunder including, but not limited to, specifications, drawings, plans, maps, permit
applications, land use applications, zoning applications and design review documents.
(r) The Developer shall pay for any and all costs, including but not limited to the
costs of design, construction, relocation and securing of permits for utility improvements and
connections, which may be required in developing the Property. The Developer shall obtain any
and all necessary approvals prior to the commencement of applicable portions of said
construction, and the Developer shall take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
(s) (i) Subject to Section 7.05, the Developer shall commence the work of
improvements in connection with the Project within sixty (60) calendar days following the
issuance of building permits for the Project and thereafter shall diligently prosecute such
construction to completion. Subject to Section 7.05, the Developer shall substantially complete
the Project no later than one hundred eighty (J 80) calendar days following commencement of
construction, subject to at least one sixty (60) calendar day extension; provided, however, that
notwithstanding said stated commencement date the Developer shall have at least one hundred
twenty (J 20) calendar days from the Close of Escrow of the Property and receipt of all required
construction and building pennits to commence all such activities, subject to Section 7.05. The
Developer shall diligently submit the required applications to the City in preparation for the
receipt of all construction and building permits to timely commence and complete the Project by
the time limits required herein.
(ii) Any and all time periods hereunder shall be extended for any times
attributable to delays, which are not the fault of the performing party and are caused by the other
party, other than periods for review and approval or reasonable disapprovals of Construction
Documents or applications for pennits as provided in this Agreement.
(t) During the period of construction of the Project, the Developer's project manager
shall provide oral progress reports to the Agency when and as reasonably requested by the
Agency but in no event more fi-equently tllaJl every four (4) weeks. In addition, the Developer's
project manager will attend Agency meetings when requested to do so by Agency Staff.
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(u) (i) Before commencement of any demolition or construction work by
Developer on any portion of the Property owned by Developer, Developer shaH obtain and
maintain in force until completion of such work (A) "all risk" builder's risk insurance, including
coverage for vandalism and malicious mischief, in a form and amount and with a company
reasonably acceptable to the Agency, and (B) workers' compensation insurance covering all
persons employed by Developer in connection with work on the Project, or any portion thereof.
During the construction of Improvements on any portion of the Property by Developer, such
builder's risk insurance shall cover improvements in place and all material and equipment at the
job site furnished under contract, but shall exclude contractors', subcontractors', and
construction managers' tools and equipment and property owned by contractors' and
subcontractors' employees.
(ii) Each architect engaged by Developer shall provide professional liability
insurance with a limit of liability of at least One Million Dollars ($1,000,000.00).
(iii) Upon Agency's written request, Developer shall also furnish or cause to
be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it
has contracted for the performance of work on the Property or otherwise pursuant to this
Agreement carries workers' compensation insurance as required by law.
(iv) With respect to each policy of insurance required above, Developer and
each of Developer's contractors and architects shall furnish to the Agency a certificate on the
insurance carrier's form setting forth the general provisions of the insurance coverage promptly
after written request by Agency showing the additional insureds. The certificate shall also be
furnished by Developer prior to commencement of construction of any Improvements.
(v) All such policies required by this Section shall contain (A) language to the
effect that the policies cannot be cancelled or materially changed except after thirty (30) days'
written notice by the insurer to the Agency, and (B) a waiver of the insurer of all rights of
subrogation against the Agency and the other additional insureds. All such insurance shall have
deductibility limits which shall be commercially reasonable.
(v) The Developer shall carry out its construction of the Project in conformity with all
applicable Laws, including, without limitation, all applicable state labor standards, requirements
and prevailing wage laws.
(w) The Developer shall, at its own expense, secure or shall cause to be secured, any
and all permits which may be required for such construction, development or work by the City or
any other governmental agency having jurisdiction thereof. The Agency shall cooperate in good
faith with the Developer in the Developer's efforts to obtain from the City or any other
appropriate governmental agency any and all such pennits applicable to the development of the
Property.
(x) Officers, employees, agents or representatives of the Agency shall have the right
of reasonable access to the Property without the payment of charges or fees, during normal
construction hours during the period of construction of the Project for the purpose of verifying
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compliance by the Developer within the terms of this Agreement. Such officers, employees,
agents or representatives of the Agency shall be those persons who are so identified by the
Interim Executive Director. Any and all officers, employees, agents or representatives of the
Agency who enter the Property pursuant hereto shall identifY themselves at the job site office
upon their entrance on to the Property, and shall at all times be accompanied by a representative
of the Developer while on the Property; provided, however, that the Developer shall make a
representative of the Developer available for this purpose at all times during normal construction
hours upon reasonable notice from the Agency. The Agency shall indemnifY and hold the
Developer harmless from injury, property damage or liability arising out of the exercise by the
Agency and/or the City of this right of access, other than injury, property damage or liability
relating to the sole negligence of the Developer or its officers, agents or employees.
(y) The Agency shall inspect relevant portions of the construction site prior to issuing
any written statements reflecting adversely on the Developer's compliance with the terms and
conditions of this Agreement pertaining to development of the Property; provided, however, the
Agency shall defer to the City with respect to any aspect of the construction which as been
approved or "signed off" by the City.
Section 3.02. RESERVED.
Section 3.03. Taxes and Assessments. The Developer shall pay prior to delinquency all
real property taxes and assessments assessed and levied on or against the Property subsequent to
the Close of Escrow for the Property. Nothing herein contained shall be deemed to prohibit the
Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien,
nor to limit the remedies available to the Developer in respect thereto.
Section 3.04. RESERVED.
Section 3.05. Securitv Financing: Right of Holders. The Developer will have the
obligation to obtain conventional financing or to use its own equity funds to purchase the
Property and to construct, develop, and complete the Improvements on the Property pursuant to
this Agreement. The Agency shall use best efforts to cooperate with the Developer to obtain any
conventional loan financing in connection with the purchase of the Property and the construction,
development, and completion of the Improvements on the Property
(a)_ Notwithstanding any provision of Section 1.05 to the contrary, mortgages, deeds
of trust, or any other form of lien required for any reasonable method of financing the
construction and improvement of the Property and/or the financing of the purchase, construction
and improvement of the Property (the "Construction Financing") and one or more mortgages,
deeds of trust, or other fomls of lien required for any reasonable financing that takes out the
construclioilfiriancirig (siiigtila.rlyand collectively, the- "PermitiieritFinancmg"}ispermitted.-
The Developer shall notifY the Agency in writing in advance of any mortgage, deed of trust, or
other form oflien for Construction Financing or for Permanent Financing. The Developer shall
not enter into any such conveyance for Construction Financing without the prior written approval
of the Agency, which approval shall not be unreasonably withheld, delayed or conditioned.
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(b) The Developer shall promptly notify the Agency of any mortgage, deed of trust or
other encumbrance or lien that has been created with respect to the Property prior to the issuance
of the Certificate of Completion whether by voluntary act of the Developer or otherwise;
provided, however, that no notice of filing of preliminary notices or mechanic's liens need be
given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien.
(c) The words "mortgage" and "deed of trust" as used herein shall be deemed to
include all other customary and appropriate modes of financing real estate construction and land
development.
(d) The holder of any mortgage, deed of trust or other security interest authorized by
this Agreement shall in no manner be obligated by the provisions of this Agreement to construct
or complete the Improvement of the Property or to guarantee such construction or completion.
(e) Whenever the Agency shall deliver any notice or demand to the Developer with
respect to any breach or default by the Developer in the completion of construction of the
Improvements, or any breach or default of any other obligations which, if not cured by the
Developer, entitle the Agency to terminate this Agreement or exercise its right to re-enter the
Property, the Agency shall at the same time deliver to each holder of record of any mortgage,
deed of trust or other security interest authorized by this Agreement a copy of such notice or
demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the
right, at its option, to commence the cure or remedy of any such default and to diligently and
continuously proceed with such cure or remedy, within one hundred twenty (120) calendar days
after the receipt of the notice; and to add the cost thereof to the security interest debt and the lien
of its security interest. If such default shall be a default which can only be remedied or cured by
such holder upon obtaining possession, such holder shall seek to obtain possession with diligence
and continuity through a receiver or otherwise, and shall remedy or cure such default within one
hundred twenty (120) calendar days after obtaining possession; provided that in the case of a
default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot
be commenced, within such one hundred twenty (120) calendar day period, such holder shall
have such additional time as is reasonably necessary to remedy or cure such default of the
Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such
holder to undertake or continue the construction or completion of the Improvements (beyond the
extent necessary to conserve or protect the Improvements or construction already made) or to
operate the Project without first having expressly assumed the Developer's obligations by written
agreement satisfactory to the Agency. The holder in that event must submit evidence
satisfactory to the Agency that it has the qualifications and financial responsibility necessary to
perform such obligations. Any such holder that undertakes and completes construction of the
Improvements on the Property in accordance herewith shall be entitled, upon written request
made to the Agency, to be issued the Certificate of Completion by the Agency.
(f) In any case where, one hundred eighty (180) calendar days after default by the
Developer the holder of any mortgage, deed of trust or other security interest creating a lien or
encumbrance upon the Property, or any portion thereof, has not exercised the option to construct
the applicable portions of the Project or to operate the Project following completion of
construction, or has exercised the option but has not proceeded diligently and continuously
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perfoIlIled construction or operation of the Project as the case may be, the Agency may purchase
the mortgage, deed of trust or other security interest by payment to the holder of the amount of
the unpaid debt, including principal, accrued and unpaid interest, late charges, costs, expenses
and other amounts payable to the holder by the Developer under the loan documents between
holder and the Developer. If the ownership of the Property has vested in the holder, the Agency
may at its option (but does not have an obligation to) seek a conveyance from the holder to the
Agency upon payment to the holder of an amount equal to the sum of the following:
(I) The unpaid mortgage, deed of trust or other security interest debt,
including principal, accrued and unpaid interest, late charges, costs,
expenses and other amounts payable to the holder by the Developer under
the loan documents between the holder and the Developer, at the time title
became vested in the holder (less all appropriate credits, including those
resulting from collection and application of rentals and other income
received during foreclosure proceedings).
(2) All expenses, if any, incurred by the holder with respect to foreclosure.
(3) The net expenses, if any (exclusive of general overhead), incurred by the
holder as a direct result of the subsequent ownership or management of the
Property such as insurance premiums and real estate taxes.
(4) The cost of any improvements made by such holder.
(5) An amount equivalent to the interest that would have accrued on the
aggregate on such amounts had all such amounts become part of the
mortgage or deed of trust debt and such debt had continued in existence to
the date of payment by the Agency.
(6) After expiration of the aforesaid one hundred eighty (I80) calendar day
period, the holder of any mortgage, deed of trust or other security affected
by the option created by this Section, may demand, in writing, that the
Agency act pursuant to the option granted hereby. If the Agency fails to
exercise the right herein granted within sixty (60) calendar days from the
date of such written demand, the Agency shall be conclusively deemed to
have waived such right of purchase of the Property or the mortgage, deed
of trust or other security interest.
(g) In the event of a default or breach by the Developer of a mortgage, deed of trust
or other security interest with respect to the Property, or any portion thereof, where the holder
has nOI exercIsed lIS opnon to complete the development or to operate the Project, the Agency
may cure the default but is under no obligation to do so prior to completion of any foreclosure.
In such event, the Agency shall be entitled to reimbursement from the Developer of all direct and
verifiable costs and expenses incurred by the Agency in curing the default. The Agency shall
also be deemed to have a lien of the Agency as may arise under this Section 3.05(g) upon the
Property, or any portion thereof, to the extent of such costs and disbursements. Any such lien
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shall be subordinate and subject to mortgages, deeds of trust or other security instruments
executed by the Developer for the purpose of obtaining the Construction Financing or for the
purpose of obtaining the Permanent Financing as authorized herein.
Section 3.06. Right of the Agency to Satisfy Other Liens on the Prooertv after
Convevance of Title. After the conveyance, of title to the Property by the Agency to the
Developer and after the Developer has had a reasonable time to challenge, cure or satisfY any
unauthorized liens or encumbrances on the Property the Agency shall after one hundred twenty
(I20) calendar days prior written notice to the Developer have the right to satisfY any such liens
or encumbrances; provided, however, that nothing in this Agreement shall require the Developer
to payor make provisions for the payment of any tax, assessment, lien or charge so long as the
Developer in good faith shall contest the validity or amount thereof, and so long as such delay in
payment shall not subject the Property, or any portion thereof, to forfeiture or sale.
Section 3.07. Certificate of Como let ion.
(a) Following the written request therefor by the Developer and the completion of
construction of the Project excluding any normal and minor building "punch-list" items to be
completed by the Developer, the Agency shall furnish the Developer with a Certificate of
Completion for the Property in the form set forth in Exhibit "F" attached hereto and incorporated
herein by this reference.
(b) The Agency shall not unreasonably withhold the issuance of a Certificate of
Completion in connection with the Project. A Certificate of Completion shall be, and shall so
state, that it is a conclusive detennination of satisfactory completion of construction of the
Project. After the recordation of the Certificate of Completion in connection with the Project,
any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the
Property identified in the Certificate of Completion shall not (because of such ownership,
purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that
such party shall be bound by any covenants contained in the grant deed or other instrument of
transfer which grant deed or other instrument of transfer shall include the provisions of Section
4.0] through 4.04, inclusive, of this Agreement.
(c) Any Certificate of Completion shall be in such form as to permit it to be recorded
in the Official Records.
(d) If the Agency refuses or fails to furnish a Certificate of Completion in connection
with the Project after written request from the Developer, the Agency shall, within the later of (i)
forty-five (45) calendar days after Agency receipt of the written request or (ii) within three (3)
business days after the second regular meeting as conducted by the Agency for which an agenda
item may by timely submitted for such regular meeting agenda, provide to the Developer a-
written statement setting forth the reasons with respect to the Agency's refusal or failure to
furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of
the action the Developer must take to obtain a Certificate of Completion in connection with the
Project. If the reason for such refusal is confined to the immediate unavailability of specific
items or materials for construction or landscaping at a price reasonably acceptable to the
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Developer, the Agency may issue its Certificate of Completion in connection with the Project
upon the posting of a bond or irrevocable letter of credit, reasonably approved as to form and
substance by the.Agency Counsel and obtained by the Developer in an amount representing a
fair value of the work not yet completed as reasonably determined by the Agency. If the Agency
shall have failed to provide such written statement within the foregoing period, the Developer
shall be deemed conclusively and without further action of the Agency to have satisfied the
requirements of this Agreement with respect to the Property as if a Certificate of Completion had
been issued therefor. For purposes of this subsection (d), it shall be considered reasonable if the
Agency response as to the failure or refusal to issue a Certificate of Completion is based upon
deficiencies or lack of compliance by the Developer with the building plans and site plans as
approved by the Community. Development Department (formerly Development Services
Department) of the City, provided, however, it shall be considered unreasonable if the City has
issued a certificate of occupancy for the Project, in which case the Agency shall be obligated to
issue the Certificate of Completion.
(e) A Certificate of Completion shall not constitute evidence of compliance with or
satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a
mortgage securing money loaned to finance the improvements described herein, or any part
thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as
referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the
continuing covenants or conditions subsequent contained in the Agency Grant Deed.
Section 3.08. RESERVED
ARTICLE IV
USE OF THE SITE
Section 4.0 I. Uses.
(a) The Developer covenants and agrees that upon completion of the development of
the Project that the portion of the Property that is to be improved as a restaurant or as may
otherwise be pennitted by the applicable City zoning and City Development Code requirements
shall be used solely for such purposes. The covenant of this Section 4.01(a) shall run with the
land for the term as set forthin the Agency Grant Deed..
(b) The Developer further covenants and agrees that the Property shall be improved
and developed in accordance with this Agreement, the Scope of Development and/or the
Schedule of Perfornlance, subject to Section 7.05. The Developer covenants to develop the
Property in confonnity with all applicable Laws. The covenants of this Section 4.01 (b) shall also
run with the land for the term as set forth in the Agency Grant Deed in connection with the
Property.
(c) Neither the Developer, nor its assigns or successors, shall use or otherwise
voluntarily sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, or any
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portion thereof, to any entity or party, or for any use of the Property that is partially or wholly
exempt from the payment of real property taxes pertinent to the Property, or any portion thereof,
or which would cause the exemption of the payment of all or any portion of such real property
taxes. The covenant of this Section 4.01 (c) shall run with the land for the term as set forth in the
Agency Grant Deed in connection with the Property.
Section 4.02. Maintenance of the Pronertv. The Developer covenants and agrees to
maintain the Property consistent with the maintenance level substantially comparable to other
similar developments of similar age and quality as the Project located in the City of San
Bernardino, California. The Developer covenants and agrees to maintain the Property in a good
condition free from any accumulation of debris or waste material, subject to normal construction
job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the
landscaping required to be planted in accordance with the Agreement, the Scope of Development
and/or the Schedule of Performance. In the event the Developer fails to perform the maintenance
as required herein, the Agency shall have the right, but not the obligation, to enter the Property
and undertake, such maintenance activities. In such event, the Developer (or such successor as
may then own the Property) shall reimburse the Agency for all reasonable sums incurred by it for
such maintenance activities as set forth in the Agency Grant Deed for the Property. The
covenant of this Section 4.02 shall run with the land for the term as set forth in the Agency Grant
Deed for the Property.
Section 4.03. Obligation to Refrain from Discrimination. Developer covenants and
agrees that there shall be no discrimination against or segregation of any person or group of
persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
California Government Code, as those bases are defined in sections 12926, 12926.1, subdivision
(m) and paragraph (I) of subdivision (p) of section 12955, and Section 12955.2 of the California
Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of
the Property; nor shall Developer or any person claiming under or through it, establish or permit
any practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the
Property. The covenant of this Section 4.03 shall run with the land in perpetuity.
Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. Developer
covenants and agrees that it shall refrain from restricting the sale, lease, sublease, rental, transfer,
use, occupancy, tenure or enjoyment of the Property, or any part thereof, on the basis, of age,
race, color, religion, creed, sex, sexual orientation, marital status, national origin, ancestry,
familial status, source of income, medical condition, mental or physical disability or any other
protected classes of persons and groups of persons as may be considered as such by any local,
State or Federal law and as shall be required pursuant to Health & Safety Code Sections 33050,
33435 and Section 33436. All deeds, leases or contracts pertaining to the Property shall contain
oroesuojeCt fOsiilistantiiillYthe folloWing nondiScDmmationor nonsegiegation Clauses: -- --
(J) In deeds: "The Grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons
claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of
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any basis listed in subdivision (a) or (d) of Section 12955 of the California
Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (I) of subdivision (P) of Section 12955,
and Section 12955.2 of the California Government Code, 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 him or her, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees in the premises herein conveyed. The foregoing covenants shall
run with the land."
(2) In leases: "The Lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons
claiming under or through him or her, and this lease is made and accepted
upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any
person or group of persons, on account of any basis listed in subdivision
(a) or (d) of Section 12955 of the California Government Code, as those
bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (I) of subdivision (P) of Section 12955, and Section 12955.2 of
the California Government Code, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment ofihe premises herein leased nor
shall the lessee himself or herself, or any person claiming under or through
him or her, establish or pennit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or
vendees in the premises herein leased."
(3) In contracts: "There shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section ]2955 of the California Government
Code, as those bases are defined in Sections 12926, ] 2926.1, subdivision
(m) and paragraph (I) of subdivision (p) of Section 12955, and Section
12955.3 of the California Government Code, in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the
transferee or any person claiming under or through it, establish or pennit
any practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees,
subtenants, suolessees, or vendees ot ll1e lanc1:--Tfie toregomg 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. The covenant of this Section 4.04 shall run with the land in
perpetuity.
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ARTICLE V
DEFAULTS. REMEDIES AND TERMINATION
Section 5.01. Defaults - General.
(a) In the event that a breach or default may occur prior to the Close of Escrow,the
remedies of the parties shall be as set forth in Article II of this Agreement.
(b) From and after the Close of Escrow for the Property, and subject to the extensions
of time set forth in Sections 3.01(s) and 7.05 hereof, failure or delay by either party to perfonn
any term or provision of this Agreement shall constitute a default under this Agreement;
provided, however, that if a party otherwise in default commences to cure, correct or remedy
such default within thirty (30) calendar days after receipt of written notice specifying such
default and shall diligently and continuously prosecute such cure, correction or remedy to
completion (and where any time limits for the completion of such cure, correction or remedy are
specifically set forth in this Agreement, then within said time limits), such party shall not be
deemed to be in default hereunder.
(c) The injured party shall give written notice of default to the party in default,
specifying the default complained of by the nondefaulting party. Delay in giving such notice
shall not constitute a waiver of any default nor shall it change the time of default.
(d) Any failure or delay by either party in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies.
Delays by either party in asserting any of its rights and remedies shall not deprive either party of
its right to institute and maintain any actions or proceedings which it may deem necessary to
protect, assert or enforce any such rights or remedies.
Section 5.02. Legal Actions.
(a) In addition to any other rights or remedies, either party may institute legal action
to cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in
the Superior Court of the County of San Bernardino, State of California, in any other appropriate
court in that County, or in the Federal District Court in the Central District of California.
(b) The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
(c) If any legal actIOn IS commenced by Developer against the Agency, or by Agency
against Developer, service of process on the Agency shall be made by personal service upon the
Interim Executive Director or Secretary of the Agency, or in such other manner as may be
provided by law. If any legal action is commenced by Agency against Developer, service of
process 011 Developer shall be made by personal service on Amold M. Wensillger, 4199 Campus
Drive, 9th Floor, Irvine, California 92612, or in such other manner as may be provided by law.
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Developer agrees, for the benefit of the Agency, that it shall designate an agent for service of
process in the State of California in the manner prescribed by law.
Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights
and remedies expressly declared to be exclusive in Article II of this Agreement as relates to a
default or breach occurring before the Close of Escrow for the Property, the rights and remedies
of the parties as set forth in this Article V following the Close of Escrow for the Property are
cumulative and the exercise by either party of one or more of such rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for the
same default or any other default by the other party.
Section 5.04. Damal!es: Specific Performance. If either party defaults with regard to
any provision of this Agreement, the nondefaulting party shall serve written notice of such
default upon the defaulting party. If the defaulting party does not diligently commence to cure
such default after service of the notice of default and promptly complete the cure of such default
within a reasonable time after the service of written notice of such a default, then the non-
defaulting party shall be entitled to maintain an action for damages or an action for specific
performance in addition to such other remedies as it may have at law or in equity; provided,
however, that in the event of a breach by the Developer of its obligations under Article II of this
Agreement prior to the Close of Escrow for the Property, the Agency shall not be entitled to
bring an action against the Developer for specific performance and shall be entitled only to the
liquidated damages set forth in Section 2.02 hereof.
Section 5.05. RESERVED.
Section 5.06. Al!encv Ril!hts of Termination Followinl! Close of Escrow. After the
Close of Escrow and until issuance of the Certificate of Completion, Agency shall have the right
to terminate this Agreement by providing thirty (30) day written notice to Developer in the event
that any of the following defaults shall occur, subject to Developer's right to cure such default
within thirty (30) days after Developer's receipt of such notice:
(a) Developer suffers or permits a Transfer to occur not permitted by this Agreement
or otherwise consented to by the Agency and such breach is not cured within the time periods
provided in Section 5.01 of this Agreement; or
(b) Developer fails to commence or complete construction of the Project as required
by this Agreement for a period of ninety (90) days after written notice from Agency to
Developer, provided that Developer has not an extension or postponement to which Developer
may be entitled pursuant to Sections 3.01(s) and/or 7.05 of this Agreement; or
(c) Developer otherwise materially breaches this Agreement, and such breach is not
cured within the time periods provided in Section 5.01 of this Agreement.
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ARTICLE VI
ENVIRONMENTAL. INDEMNIFICATION AND REMEDIATION
Section 6.01. Environmental Work
(a) Additional Defined Terms. The following terms are defined as follows:
(i) "Activities" is defined in Section 6.01(b) below.
(ii) "Agency Parties" is defined in Section 6.01 (c)(i) below.
(iii) "Developer Caused Contamination" is defined in Section 6.01(b) below.
(iv) "Developer's Environmental Consultant" means a reputable
environmental consultant retained by Developer in connection with its development of the
Project and any Hazardous Substances located on, around or under the Property, including the
Existing Contamination.
(v) "Environmental Claim" or "Environmental Claims" is defined in
Section 6.02(a) below.
(vi) "Environmental Laws" is defined in Section 2.08(b )(i) above.
(viii) "Exhibit I Contamination" is defined in Section 6.01 (b) below.
(viii) "Existing Contamination" is defined in Section 6.01 (b) below.
(ix) "Governmental Regulatory Authority" means any federal, state or local
court, governmental entity, unit, department or agency or as may be directed by any
governmental agency with jurisdiction over the Property.
(x) "Hazal'dous Substances" is defined in Section 2.08(b)(ii) above.
(xi) "INCO Site" means the site of the former INCa service station, which
site is located to the north of the Property and referenced in one or more of the reports referenced
in Exhibit "I" hereto, which site is sometimes referred to as 796 West 5th Street.
(xii) "Indemnified Parties" is defined in Section 6.02(a) below.
(xiii) "Investigation(s)" shall mean any observation, inquiry, examination,-
sampling, monitoring, analysis, exploration, research, inspection, canvassing, questioning and/or
surveying of or concerning the Property, or any adjacent or affected properties (but only to the
extent required by any Governmental Regulatory Authority), including the improvements
thereon, or any air, soil, soil vapor, sUlface water or groundwater, and the surrounding
population or properties, or any of them, to ascertain, test, monitor, characterize, or evaluate the
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nature, existence, source, extent, impact, or any other aspect of any Hazardous Substances
existing or reasonably believed to be existing therein, or which are otherwise required by
applicable Law, including, without limitation, Environmental Laws, any Governmental
Regulatory Authority, and/or reasonably recommended in writing by the Project Environmental
. Consultant.
(xiv) "Project Environmental Consultant" means Robert J. Stechmann, Jr., of
Stechmann Geoscience, Inc. or any other replacement reputable environmental consultant, who
shall be an individual reasonably acceptable to Developer.
(xv) "Release" (with respect to Hazardous Substances) shall mean any
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, dumping or presence on or under the Property of any
Hazardous Substance.
(xvi) "Remediate" or "Remediation" shall mean any and all cleanup, removal,
containment, abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure,
restoration or other mitigation or remediation of Hazardous Substances or Releases (l) required
by any (x) Governmental Regulatory Authority having jurisdiction over the Property, or air or
water located thereon or (y) applicable Environmental Laws, (2) required to achieve a "no
further action" or "closure letter", or similar site closure for the Property reasonably acceptable
to Developer, and/or (3) required, as reasonably determined by agreement of Developer's
Environmental Consultant and the Project Environmental Consultant, to permit the Property to
be used in the manner permitted hereunder without known or reasonably suspected adverse
health risks to the public or to Developer's employees, customers, invitees, or contractors, and/or
the Improvements to be constructed and maintained on the Property. "Remediate" or
"Remediation" shall also be deemed to include (A) the abandonment, closure and/or removal, as
applicable, of (I) remediation and monitoring equipment, (2) as to any soil or water that must be
excavated, pumped, or otherwise handled to build the Project, the costs to transport, remove,
dispose of, and/or treat any soil or water incurred because of the presence of Hazardous
Substances in such sailor water, and/or (3) any underground storage tanks or other underground
improvements, including, but not limited to, fuel lines, sumps, grease traps, hydraulic lifts, or
any other underground improvement that at an time contained Hazardous Substances, to the
fullest extent required by applicable Law, including Environmental Laws, and/or which need to
be removed for Developer to construct and operate the Improvements as reasonably determined
by Developer and (B) the installation of a vapor banier and/or vapor extraction system for the
building to be constructed by Developer as part of the Improvements. The quality and design of
any such soil vapor banier (although paid for by Agency) shall be acceptable to Developer in its
sole, but reasonable discretion.
(xvi) "SVEE" is defined in Section 6.01 (c) below.
--...---- --_ ___ - __ __ ._,____ ________ -0 ___ ____ _ _ _ ____ ___ _.__ ~
(b) Investigation and Remediation Responsibility. Agency and Developer
acknowledge that the Property is contaminated with Hazardous Substances referenced in the
reports or remedial action plans listed on Exhibit "I" (the "Exhibit I Contamination"). For
purposes of this Agreement, "Existing Contamination" means and is limited to (i) Exhibit I
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Contamination, (ii) any other Hazardous Substances existing on or under the Property as of the
Closing and (iii) any Hazardous Substances that migrate onto or under the Property after the
Closing from the INCa Site. Developer and Agency agree that in no event shall Existing
Contamination include any Hazardous Substances that migrate on or under the Property after the
Closing, except for any Hazardous Substances from the INCa Site. At no cost to Developer,
Agency shall be responsible for performing any and all Investigation(s) and/or Remediation of
Existing Contamination (collectively the "Activities") on or about the Property, which Activities
shall be undertaken pursuant to Section 6.01 (c). Without limiting the above obligations, Agency
expressly acknowledges that it shall be responsible for Remediating any Hazardous Substances
that may be located in water in, around, or under the Property, but only to the extent that the
same constitutes Existing Contamination. Agency shall promptly notifY Developer upon .its
discovery, or its receipt of any written notice, of any Hazardous Substances existing on, under, or
around the Property, which Hazardous Substances are not Existing Contamination, and provide
Developer with (i) all test results and reports undertaken by, or generated under the direction of,
the Project Environmental Consultant and (ii) all communications received from, or sent to, any
Governmental Regulatory Authority regarding the Property. Developer shall promptly notifY
Agency upon its discovery, or its receipt of any written notice, of any Hazardous Substances
existing on, under, or around the Property, which Hazardous Substances are not Existing
Contamination. However, Agency shall not be responsible for Investigations or Remediating
necessitated by any Hazardous Substances placed on, under, or around the Property by
Developer or any agent, employee, tenant or contractor thereof ("Developer Caused
Contamination").
(c) License To Perform Activities. All Investigations and Remediation shall be
undertaken by Agency in accordance with this subsection (c).
(i) If and when Developer is the fee owner of the Property, Developer hereby
grants to Agency and its respective agents, employees, consultants (including the Project
Environmental Consultant), and contractors (collectively "Agency Parties"), a limited right and
non-exclusive license to enter onto the Property to perform the Activities and as may otherwise
be set forth in this Agreement.
(ii) The scope, extent and timing of all Activities to be performed on the
Property by Agency and/or Agency Parties shall be at a mutually agreeable time. Agency shall
provide at least ten (J 0) business days notice to Developer of the date, time, and details for
planned Activities at the Property. Should Developer object to the schedule for the Activities or
that the same is not consistent with the terms of this Article VI, Developer shall notifY Agency of
its objection no later than three (3) business days prior to the scheduled Activities and provide
reasonable alternative dates and the parties will cooperate in rescheduling the Activities, or such
a description of such changes that are necessary to cause such Activities, including any
Remediation, to conform to the teons of this Agreement, as applicable.
(iii) All Activities to be performed by Agency and/or Agency Parties shall be
conducted in an expeditious and diligent manner and at such time so as to minimize any noise,
vapors, odors, vibrations, aesthetic. appearance, disruption or delay in the development, use or
operation of the Property by Developer. Among other things, Agency shall cause all such
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Activities to occur when any business being conducted on the Property is not open to the public,
or during off-peak hours (which off-peak hours shall be provided by Developer to Agency upon
request), unless the nature of Activities or applicable Law require that they occur at other times.
In performing the Activities, Agency and/or the Agency Parties shall comply with all applicable
Laws, including, without limitation, Environmental Laws, and shall ensure that no liens attach to
the Property as a result of or related to the Activities to be performed. All Activities shall be
performed at no expense to Developer. Agency shall inform all Agency Parties performing work
pursuant to this Article VI of the obligations imposed hereby, including the insurance obligations
set forth below.
(iv) Without limiting subpart (iii) above, all soil vapor extraction equipment
("SVEE") shall be enclosed (within a structure or casing reasonably acceptable Developer),
operated as quietly as possible, and located on the property owned by Agency located
immediately adjacent to the Property, in the location shown on Exhibit "J" attached hereto and
incorporated herein by reference, or on another location agreed upon by the parties hereto, and
all costs of supplying power, insuring, and otherwise operating the SVEE shall be the
responsibility of the Agency.
(v) Developer shall give Agency notice prior to commencing construction of
the Improvements on the Property as specified below so as to allow, among other things, Agency
to be present on the Property if any Hazardous Substances or conditions requiring Remediation
are discovered during the course of such construction. No such failure to give such notice and/or
the construction of the Improvements, however, shall serve in any way to diminish, reduce, or
absolve Agency from having to perform any of its obligations imposed by this Article VI.
(vi) Agency shall cause the Project Environmental Consultant to consult
regularly with Developer and/or Developer's Environmental Consultant during the course of any
Activities being conducted on the Property.
(vii) In the event Agency shall fail to perform the Activities as required by this
Article VI in any manner and such failure continues for a period of five (5) days after notice
thereof is delivered to Agency (or such lesser notice as is reasonably practical in the event of an
emergency), then, in addition to any other remedies granted to Developer hereunder, or pursuant
to applicable Law, Developer shall be permitted to cause Agency and any Agency Parties to
cease such Activities until said failure or breach is cured.
(viii) Before any Activities are commenced on the Property, Agency shall carry,
and require the Agency Parties performing any Activities, to carry the following insurance
throughout the course of such Activities until the same are completed: (a) Workers'
Compensation insurance in compliance with all applicable Laws and (b) commercial general
liability Insurance covenng clanns tor bodIly InJury, personal Injury and property damage an SIng
out of the Activities in the amounts of not less than $1,000,000.00 combined single limit per
occurrence, and not less than $2,000,000.00 aggregate; and (c) automobile liability insurance in
an amount not less than $1,000,000.00 covering all automobiles and equipment owned and/or
operated by Agency and/or Agency Parties, as applicable. The liability policies described herein
shall name Developer as an additional insured by way of an endorsement reasonably acceptable
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to Developer, and shall be maintained in effect during the entire time that the Activities are being
conducted on or around the Property. Additionally, such insurance shall be primary and no
insurance of Developer shall be called upon to contribute to a loss, and shall not be cancelled or
materially modified without first giving Developer thirty (30) days' advance written notice of
cancellation or material modification. Before commencing any Activities or entering the
Property for any purpose, Agency or any applicable Agency Party shall provide Developer with
copies of the certificates of insurance and endorsements evidencing the insurance coverage
required hereunder. Thereafter, such certificates and endorsements shall also be provided upon
request by Developer. In the event that any of the insurance requirements set forth above are not
satisfied, Developer may suspend Agency's and Agency Parties' right to conduct Activities until
such time as the required insurance is procured and evidence thereof produced to Developer. The
insurance required under this section may be satisfied by inclusion of the Property within the
coverage of a so-called "blanket" policy or policies of insurance, provided that the coverage
afforded Developer will not be diminished by reason thereof and that the requirements set forth
in this section are otherwise satisfied.
(ix) Agency, at its sole cost and expense, shall restore, or cause to be restored,
the surface areas of the Property disturbed by the Activities to as near as possible the condition
as existed prior to the start of the Activities, including repaving and landscaping as necessary, as
soon as possible after any required Activities have been completed. Without limiting the above,
any and all monitoring wells and SVEE shall be removed and/or plugged in a manner consistent.
with industry practice and as may be required by applicable Law, including, without limitation,
Enviromnental Laws.
(x) The license granted under this Article VI is intended as a temporary
license to enter onto the Property to conduct the Activities and not as a grant of an easement, a
joint venture, or any other interest between the parties.
(d) Certain Remedv For Nonoerfonnance. If Agency is in default of any obligations
under this Article VI after the expiration of all applicable notice and cure periods as specified in
Article V hereof, and such default continues for thirty (30) days after the receipt of an additional
notice thereof delivered to Agency by Developer, which notice shall cite to this subsection (d),
then Developer shall be entitled, but shall not be obligated, to perfonn the applicable obligations
of Agency hereunder to cure such default. In such event, Agency shall reimburse Developer for
any and all costs reasonably incun'ed by Developer in perfornling Agency's obligations under
this Article VI within no later than fifteen (15) days after Agency's receipt of an invoice
detailing such costs. The remedy set forth in this subsection (d) is not exclusive, but cumulative
and is in addition to any other remedies allowed hereunder or by applicable Law.
(e) Additional Environmental Covenants. To the extent consistent with Developer's _
construction schedule, and at Developer's request, Agency and Agency Parties (including the
Project Environmental Consultant) will take all necessary steps during Activities and thereafter
to qualifY Agency and Developer for immunities provided by the Polanco Act (California Health
and Safety Code section 33459.3) as to the Existing Contamination.
Section 6.02 Environmental Indemnity
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(a) The Agency shall indemnity, protect, defend (with counsel reasonably acceptable
to Developer), and hold hannless Developer and its directors, officers, employees, agents,
invitees, contractors, licensees, assigns, affiliates, lenders, and successors-in-interest to the
Property (collectively, the "Indemnified Parties") from and against any and all Environmental
Claims (as defined below) resulting or arising from: (i) the Existing Contamination even where
exacerbated by any construction activities of Developer; (ii) any default or breach of the
Agency's obligations under this Article VI; or (iii) the performance of the Activities.
Notwithstanding the above, however, Agency's obligations as set forth above shall not apply to
the extent that any Environmental Claims are caused by Developer Caused Contamination.
"Environmental Claim" or "Environmental Claims" shall mean any and all claims, actions,
causes of action, demands, orders, or other means of seeking or recovering losses, damages,
liabilities, costs, expenses (including attorneys' fees, fees of expert witnesses, and consultants'
and court and litigation costs), costs and expenses attributable to the existence, Release,
threatened Release, presence, reporting, storage, treatment, removal, transportation and/or
disposal of any Hazardous Substances, including, without limitation, compliance with judicial or
regulatory orders and all losses, damages, liabilities, costs, expenses, requirements, fines,
penalties, liens, taxes, or any type of compensation whatsoever, direct or indirect, known or
unknown, foreseen or unforeseen.
(b) The indemnities and other obligations set forth in this Article VI shall survive the
Close of Escrow and termination of this Agreement.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. Notices. Demands and Communications Between the Parties. Any and all
notices, demands or communications submitted by any party to another party pursuant to or as
required by this Agreement shall be proper if given in writing by (a) personal delivery,
(b) reputable overnight delivery service with proof of delivery, (c) United States Mail, postage
prepaid, registered or certified mail, return receipt requested, or (d) legible facsimile
transmission, sent, to the principal office of the Agency and the Developer as set forth below.
Such written notices, demands and communications may be sent in the same manner to such
other addresses as either party may from time to time designate as provided in this Section. Any
notice so given shall be deemed to have been given upon receipt or refusal to accept delivery, or,
in the case of facsimile transmission, as of the date of the facsimile transmission provided that an
original of such facsimile is also sent to the intended addressee by means described in
clauses (a), (b) or (c) above.
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To the Developer:
In-N-Out Burgers
13502 Hamburger Lane
Baldwin Park, California 91706-5885
Attention: Real Estate Department
Telephone: (626) 813-8263
Fax: (626) 338-9173
Overnil!ht Deliveries Only:
In-N-Out Burgers
13752 Francisquito Avenue
Baldwin Park, California 91706
Attention: Real Estate Department
Telephone: (626) 813-7363
With a copy to:
Miller Starr Regalia
1331 North California Blvd., 5th Floor
Walnut Creek, California 92596
Attention: JoAnne L. Dunec
Telephone: (925) 935-9400
Fax: (925) 933-4 I 26
To the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 9240 I -1507
Attn.: Emil A. Marzullo, Interim Executive Director
Telephone: (909) 663-1044
Fax: (909) 888-94 I 3
with copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Attn.: Timothy J. Sabo or Elizabeth Martyn
Telephone: (909) 387-] 130
Fax: (909) 387-1138
. -
Section 7.02. Conflict of Interest. No member, official or employee of the Agency
having any conflict of interest, direct or indirect, related to this Agreement and the development
of the Property shall participate in any decision relating to this Agreement. The Agency
represents and warrants that it does not have knowledge of any such conflict of interest.__
-- . ...---- ..--.---... ---_._---'.,- ------ --------- ----- - ----- -.-.-----
- - ____ __ - _"______n ___ .._____ __
Section 7.03. Warranty Against Payment of Consideration for Agreement. The
Developer warrants that it has not paid or given, and will not payor give, any third party any
money or other consideration for obtaining this Agreement. Third parties, for the purposes of
this Section, shall not include persons to whom fees are paid for professional services if rendered
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by attorneys, financial consultants, accountants, engineers, architects and the like when such fees
are considered necessary by the Developer.
Section 7.04. Nonliabilitv of Officials and EmDlovees.
(a) No member, official, agent, legal counselor employee of the Agency shall be
personally liable to Developer in the event of any default or breach the Agency or for any
amount which may become due to the Developer or on any obligations under the terms of this
Agreement.
(b) No member, manager, partner, shareholder, director, officer, agent, legal counsel
or employee of Developer shall be personally liable to the Agency or the City in the event of any
default or breach the Developer or for any amount which may become due to the Agency or the
City or on any obligations under the terms of this Agreement.
Section 7.05. Enforced Delay: Extension of Time of Performance.
(a) In addition to specific provisions of this Agreement, performance by either party
hereunder shall not be deemed to be in default, or considered to be a default, where delays or
defaults are due to the force majeure including, without limitation, events of war, insurrection,
strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public
enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-
caused delays, inability to secure necessary labor, materials or tools, delays of any contractors,
subcontractor or supplier (which are not attributable to the fault of the party claiming an
extension of time to prepare or acts or failure to act of any public or governmental agency or
entity) or any delay caused by a third party, including, without limitation, independent vendors
and suppliers, whose performance is not within the control of the Developer. An extension of
time for any such force majeure cause shall be for the period of the enforced delay and shall
commence to run from the date of occurrence of the delay; provided, however, that the party
seeking to invoke such force majeure provision has duly given written notice to the other party
within ten (10) calendar days of the date that the force majeure event has occurred specifying (i)
the date from which the enforced deJay shall commence and the actual or the expected final date,
as applicable, for which an enforced delay extension of time of performance is then being
sought, and (ii) the detailed description of the particular circumstances, events, facts or
occurrences which have give rise to the force majeure.
(b) The inability of the Developer to obtain a satisfactory commitment from a
construction lender for the improvement of the Property or to satisfY any other condition of this
Agreement relating to the redevelopment of the Property shall not be deemed to be a force
maieure event or otherwise provide grounds for the assertion of the existence of a delay under
this Section 7.05. The parties hereto expressly acknowledge and agree that changes in either
general economic conditions or changes in the economic assumptions of any of them which may
have provided a basis for entering into this Agreement and which occur at any time after the
execution of this Agreement, are not force majeure events and do not provide any party with
grounds for asserting the existence of a delay in the performance of any covenant or undertaking
which may arise under this Agreement. Each party expressly assumes the risk that changes in
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general economic conditions or changes in such economic assumptions relating to the terms and
covenants of this Agreement could impose an inconvenience or hardship on the continued
performance of such party under this Agreement, but that such inconvenience or hardship is not a
force majeure event and does not excuse the performance by such party of its obligations under
this Agreement.
Section 7.06. RESERVED
Section 7.07. Approvals.
(a) Approvals required of the Agency, or any officers, agents or employees of the
Agency, shall not be unreasonably withheld, conditioned, or delayed, and approval or
disapproval shall be given within the time set forth in the Schedule of Performance or, ifno time
is given, within a reasonable time.
(b) All amendments or modifications to this Agreement whether substantive or those
which are of routine or technical nature, including minor adjustments to the Schedule of
Performance, shall require the official action of the governing body of the Agency to approve
any and all such items.
Section 7.08. Real Estate Commissions. Any Broker fees, commissions or payments
shall be paid for by the Developer and shall not be taken out of the sales price proceeds for the
Property payable to the Agency. The Agency shall not be liable for any real estate commissions,
brokerage fees or finder fees which may arise from or related to this Agreement.
Section 7.09. Indemnification. Each party (the "Indemnifying Party") agrees to
indemnifY, protect, defend and hold the other, and their officers, employees and agents (the
"Indemnified Parties"), harmless from and against, without limitation, all actions, causes of
action, claims, demands, damages, judgments, costs, expenses and penalties (including, without
limitation, attorneys' fees, court costs, consultant fees and costs, and all attorneys' fees and court
costs incurred in connection with all appeals), to the extent arising from or related to any uncured
default by the IndemnifYing Party hereunder or any intentional misconduct or negligent act or
omission of the Indemnifying Party, its agents, employees and/or independent contractors (and
the successors and/or assigns of each of them) in perfonning, omitting, or failing to perform, in
its obligations hereunder (collectively, the "Claims"); provided, however, that (i) the foregoing
indemnity obligation shall not apply to the extent any Claims arise out of any default by the
Indemnified Parties in performing its obligations set forth in this Agreement or to the extent the
Indemnified Parties have engaged in any intentional misconduct or are guilty of negligence and
(ii) the foregoing indemnity obligation shall not cover any Claim for exemplary or punitive
damages unless the Indemnifving Partv is guilty of malice. The Indemnified parties shall give
the Indemnifying Party written notice of the occurrence of any Claim for which it seeks
indemnity under this Section as promptly as practicable following such party's knowledge of the
occurrence of such matter and the Indemnifying Party shall reasonably cooperate with the other
in the defense of any such Claim. This indemnity provision shall survive the execution, delivery,
expiration and/or termination of this Agreement and shall apply to the City in the same manner
as it shall be applicable to the Agency.
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Section 7.10. Release of the Developer from Liabilitv. Notwithstanding any provision
herein to the contrary, the Developer shall be relieved of any and all liability for the obligations
of the Developer hereunder with regard to the Project when the Certificate of Completion for the
Project has been issued by the Agency hereunder with respect thereto, other than any covenants
and obligations contained in the Agency Grant Deed by which the Property is conveyed to the
Developer.
Section 7.11. Attornevs' Fees. If any party hereto files any action or brings any action
or proceeding against the other arising out of this Agreement, or is made a party to any action or
proceeding brought by a third party, then as between the Developer and the Agency, the
prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages,
its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate
action or proceeding brought to recover such attorneys' fees. In the event the City becomes a
party to any such action or proceeding or otherwise pursuant to Section 7.09 hereof, the words
"reasonable attorneys' fees" in the case of the Agency shall include the salaries, costs and
overhead oflawyers employed in the Office of the City Attorney of the City of San Bernardino.
Section 7.12. Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators, legal representatives,
successors and assigns.
Section 7.13. Press Releases. The Developer agrees to discuss any press releases it may
propose relating to the Project with the Interim Executive Director ofthe Agency or his designee,
prior to publication, for accuracy and consistency of the information. The Agency shall not issue
any press release relating to the Project without the Developer's prior written consent.
Section 7. 1 4. Authoritv. Each party represents and warrants that the person executing
this Agreement on its behalfhas the authority to execute this Agreement on behalf of such party.
Section 7.15. Severabilitv. If any tenn, provision or portion of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or provision or
portion thereof to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each such tenn and provision of this Agreement
shall be valid and enforced to the fullest extent permitted by law.
Section 7. I 6. Construction and Internretation of Agreement. Headings at the beginning
of each Section, paragraph and subparagraph are solely for the convenience of the parties and are
not a part of this Agreement. Whenever required by the context of the Agreement, the singular _
shall include the plural and the masculine shall include the feminine and vice versa. This
Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if
both parties had prepared the same.
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ARTICLE VIII
ENTIRE AGREEMENT: COUNTERPARTS:
NO MERGER WITH AGENCY GRANT DEED: WAIVERS AND AMENDMENTS
Section 8.01. Entire A2reement: Counterparts.
(a) This Agreement (including Exhibit "A", Exhibit "B", Exhibit "e", Exhibit "D",
Exhibit "E", Exhibit "F", Exhibit "G", Exhibit "H", Exhibit "I", Exhibit "J", and Exhibit "K"
attached hereto) integrates all of the terms and conditions mentioned herein or incidental hereto,
and supersedes all negotiations or previous agreements between the parties with respect to all or
any portion of the Property and the development thereof. This Agreement terminates and
supersedes the following agreements: (i) the ERN (except for applying the ERN Fee, together
with interest thereon, as a credit to the Purchase Price as provided in the ERN and in this
Agreement), and (ii) the Right of Entry and Access Agreement, dated as of March 29,2010, by
and between the Agency and the Developer.
(b) This Agreement shall be executed in four (4) duplicate originals each of which is
deemed to be an original.
Section 8.02. No Merger: Waivers and Amendments.
(a) None of the terms, covenants, agreements or conditions set forth in this
Agreement shall be deemed to be merged with the Agency Grant Deed conveying title to the
Property and this Agreement shall continue in full force and effect before and after such
conveyance.
(b) All waivers of the provisions of this Agreement and all amendments hereto must
be in writing and signed by the appropriate authorities of the Agency and the Developer.
(c) No waiver of any breach of any covenant or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof, or any other covenant or
provision herein contained. No extension of the time for perfonnance of any obligation or act to
be perfonned herein shall be deemed to be an extension of the time for performance of any other
obligation or act to be performed under this Agreement.
ARTICLE IX
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION
Section 9.01. Execution and Recordation.
(a) Following its execution by the Developer and prompt delivery thereafter to the
Agency, this Agreement shall be subject to the review and approval by the governing board of
the Agency in its sole and absolute discretion within forty-five (45) calendar days after the date
of signature by the Developer. In the event that the Agency has not approved, executed and
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12926.1, subdivision (m) and paragraph (I) of subdivision (P) of Section 12955, and Section
12955.2 of the California Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person
claiming under or through himself, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing
covenants shall run with the land."
(b) In leases: "The Lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
That there shall be no discrimination against or segregation of, any person
or group or persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of
the California Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the California Government Code, in the leasing, subleasing, transferring, use, or enjoyment of
the land herein leased nor shall the lessee himself, or any person claiming under or through him,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the land herein leased."
(c) In contracts: "There shall be no discrimination against or
segregation of, any person or group or persons on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the California Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and
Section 12955.2 of the California Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person
claiming under or through him, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the land."
The foregoing shall be a covenant running with the land in perpetuity.
3. No violation or breach of the covenants, 'conditions, restrictions,
provfsJons or limitations contained in this AgenciGrimt Deed shall defeat or render invalid or in
any way impair the lien or charge of any mortgage, deed of trust or other financing or security
instrument permitted by the Agreement; provided, however, that any successor of Grantee to the
Property shall be bound by_such remainingcovel1ants,_collditi~ns, restrictioIlS,limita.tions lind_
--provislons',- - whether'- such successor's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale or otherwise.
4. The covenants contained in this Agency Grant Deed against
discrimination and segregation shall remain in effect in perpetuity.
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5. The Grantee covenants and agrees that upon completion of the
development of the Project that the portion of the Property that is to be improved as a restaurant
shall be used solely for such purposes or as may otherwise be permitted by the applicable City
zoning and City Development Code requirements. The covenants of this Section 5 shall also run
with the land until the earlier of (a) date on which the Certificate of Completion in connection
with the Property is recorded or (b) the fifth (5th) anniversary date of recordation of this Agency
Grant Deed in connection with the Property.
6. The Grantee further covenants and agrees that the Property shall be
improved and developed in accordance with the Agreement, the Scope of Development and the
Schedule of Performance. The Grantee covenants to develop the Property in conformity with all
applicable Laws. The covenants of this Section 6 shall also run with the land until the earlier of
(a) the date on which the Certificate of Completion in connection with the Property is recorded,
or (b) the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection
with the Property.
7. The Grantee shall not use or otherwise sell, transfer, convey, assign, lease,
leaseback or hypothecate the Property, or any portion thereof, to any entity or party, or for any
use of the Property, or any portion thereof, that is partially or wholly exempt from the payment
of real property taxes pertinent to the Property, or any portion thereof, or which would cause the
exemption of the payment of all or any portion of such real property taxes. The covenants of this
Section 7 shall also run with the land until the earlier of (a) the date on which the Certificate of
Completion in connection with the Property is recorded, or (b) the fifth (5th) anniversary date of
recordation of this Agency Grant Deed in connection with the Property.
8. The Grantee covenants and agrees to maintain the Property consistent with
the maintenance level substantially comparable to other similar developments of similar age and
quality as the Project located in the City of San Bernardino, California. The Grantor covenants
and agrees to maintain the Property in a good condition free from any accumulation of debris or
waste material, subject to normal construction job-site conditions, and shall maintain in a neat,
orderly, healthy and good condition the landscaping required to be planted in accordance with
this Agreement, the Scope of Development and the Schedule of Performance. In the event the
Grantee, or its successors or assigns, fails to perfonn the maintenance as required herein, the
Agency shall have the right, but not the obligation, to enter the Property and undertake, such
maintenance activities. In such event, the Grantee (or such successor as. may then own the
Property) shall reimburse the Agency for all reasonable sums incurred by it for such maintenance
activities as set forth in the Agency Grant Deed for the Property. The covenants of this Section 8
shall also run with the land until the earlier of (a) the date on which the Certificate ofCompJetion
in connection with the Property is recorded, or (b) the fifth (5th) anniversary date of recordation
of this Agency Grant Deed in connection with the Property.
9. The covenants contained in this Agency Grant Deed shall be binding for
the benefit of the Grantor and its governmental successors and assigns, and such covenants shall
run in favor of the Grantor for the entire period during which such covenants shall be in full force
and effect, without regard to whether the Grantor is or remains an owner of any land or interest
herein to which such covenants relate. The Grantor, in the event of any breach of any such
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covenants, shall have the right to exercise all of the rights and remedies, and to maintain any
actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach
as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed
shall be for the benefit of and shall be enforceable only by the Grantor and its governmental
successors.
IN WITNESS WHEREOF, the Grantor and the Grantee have caused this
instrument to be executed on their behalf by their respective officers thereunto duly authorized
this day of , 2011.
GRANTOR:
Redevelopment Agency of the City of San
Bernardino,
a public body, corporate and politic
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
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NOTARY ACKNOWLEDGMENT
State of California
County of
)
) SS.
)
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument, and acknowledged to me that helshelthey executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certifY under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary Public
Place Notary Seal Above
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NOTARY ACKNOWLEDGMENT
State of California
County of
)
) SS.
)
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument, and acknowledged to me that he/she/they executed the same in hislher/their
authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
. Signature of Notary Public
Place Notary Seal Above
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EXHIBIT" A"
Legal Description for Agency Grant Deed
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN
BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL A: (APN: 0134-093-40-0-000)
PARCEL I:
LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO,
COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED
IN BOOK 7 OF MAPS. PAGE I, RECORDS OF SAID COUNTY.
EXCEPT THE WEST 200 FEET.
PARCEL 2:
THAT PORTION OF LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
PER PLAT RECORDED IN BOOK 7 OF MAPS. PAGE I, RECORDS OF SAID COUNTY,
DESCRIBED AS FOLLOWS:
BEGINNING 150 FEET EAST OF THE NORTHWEST CORNER OF LOT 5; THENCE EAST
50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT 5; THENCE WEST 50
FEET; THENCE NORTH TO THE POINT OF BEGINNING.
PARCEL B: (APN: 0134-093-41-0-000)
PARCEL I:
THAT PORTION OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY
OF SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN
BOOK 7. PAGE] OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT 100 FEET EAST OF THE NORTHWEST CORNER OF SAID
LOT; THENCE EAST 50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT;
THENCE WEST 50 FEET; THENCE NORTH TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
T-HE-NGR-'FH--31-05-F-EE:r--GF-T-HE'-W~--HA~-F-BF--L-e'f 4, DWeK:-Z6;-iN-'fHE-eIr~
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
SHOWN BY MAP ON FILE IN BOOK 7. PAGE 1 OF MAPS, RECORDS OF SAN
BERNARDINO COUNTY, CALIFORNIA.
PARCEL 3:
THE SOUTH 37.5 FEET OF THE NORTH 75 FEET OF THE WEST 150 FEET OF LOT 4,
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BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 7. PAGE I OF MAPS,
RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA.
PARCEL 4:
PORTIONS OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK
7. PAGE I OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRffiED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID LOT 5; THENCE EAST 100
FEET; THENCE SOUTH 150 FEET, MORE OR LESS, TO THE SOUTH LINE OF SAID LOT
5; THENCE WEST 100 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE
NORTH 150 FEET, MORE OR LESS, TO THE POINT OF BEGINNING.
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EXHIBIT "F"
CERTIFICATE OF COMPLETION
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CERTIFICATE OF COMPLETION
WHEN RECORDED, MAIL TO:
In-N-Out Burgers
13502 Hamburger Lane
Baldwin Park, California 9 1706-5885
Attn: Real Estate Department
No fee for recording pursuant to
Goverrunent Code Section 27383
(Space Above Line For Use By Recorder)
CERTIFICATE OF COMPLETION
I , , the Interim Executive Director of the
Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the
"Agency") hereby certify as follows:
Section I. The improvements required to be constructed in accordance with that
certain 201 I Disposition and Development Agreement (the "Agreement") dated ,201 I,
by and between the Agency and In-N-Out Burgers, a California corporation (the "Developer"),
on Assessor's Parcel Number 0134-093-40-0-000 and Assessor's Parcel Number 0134-093-41-0-
000 (the "Property") more fully described in Exhibit "A" attached hereto and incorporated
herein by this reference has been completed in accordance with the provisions of said
Agreement. A Notice of Agreement has been recorded with the County Recorder's Office for
the County of San Bernardino, State of California (the "Official Records"), on , as
Instrument Number . All terms not defined herein shall have the meanings
ascribed to them in the Agreement.
Section 2. This Certificate of Completion shall constitute a conclusive
determination of satisfaction of the agreements and covenants contained in the Agreement and
incorporated by reference in the Agency Grant Deed with respect to the obligations of the
Developer to construct and develop the Project, excluding any normal and customary tenant
improvements and minor building "punch-list" items, and including any and all buildings and
any and all parking, landscaping and related improvements necessary to support or which meet_
the requirements applicable to the Project and its use and occupancy of the Property, whether or
not said improvements are on the Property or on other property subject to the Agreement, ad as
described in the Agreement, the Scope of Development, and Schedule of Performance, and to
otherwise comply with the Developer's obligations under the Agreement with respect to the
Property and the dates for the beginning and completion of construction of improvements
thereon under the Agreement. The Certificate of Completion shall not affect the rights of the
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Agency to enforce any covenant in the Agency Grant Deed pursuant to which the Property was
conveyed under the Agreement. Said Agreement is an official record of the Agency and a copy
of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency
of the City of San Bernardino located at 201 North "E" Street, Suite 301, San Bernardino,
California, during regular business hours.
Section 3. The Property to which this Certificate of Completion pertains is more
fully described in Exhibit "A" attached hereto.
DATED AND ISSUED this
day of
,201_.
Redevelopment Agency
of the City of San Bernardino
By:
Emil A. Marzullo, Interim Executive Director
NOTARY ACKNOWLEDGMENT
State of California
County of
)
) SS.
)
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument, and acknowledged to me that he/she/they executed the same in hislher/their
authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument. . ... - ....
I certify under PENALTY OF PERJURY under the laws of the State of California that the
fore$oi~gE.aJ"a.waPl1is _true_ an~correct. ___ _.. ____ . ._______
WITNESS my hand and official seal.
Signature of Notary Public
Place Notary Seal Above
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EXHIBIT "A"
Legal Description of the Property for Certificate of Completion
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN
BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL A: (APN: 0134-093-40-0-000)
PARCEL 1:
LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO,
COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED
IN BOOK 7 OF MAPS. PAGE J, RECORDS OF SAID COUNTY.
EXCEPT THE WEST 200 FEET. .
PARCEL 2:
THAT PORTION OF LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE I, RECORDS OF SAID COUNTY,
DESCRIBED AS FOLLOWS:
BEGINNING 150 FEET EAST OF THE NORTHWEST CORNER OF LOT 5; THENCE EAST
50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT 5; THENCE WEST 50
FEET; THENCE NORTH TO THE POINT OF BEGINNING.
PARCEL B: (APN: 0134-093-41-0-000)
PARCEL 1:
THAT PORTION OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY
OF SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN
BOOK 7. PAGE I OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT 100 FEET EAST OF THE NORTHWEST CORNER OF SAID
LOT; THENCE EAST 50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT;
THENCE WEST 50 FEET; THENCE NORTH TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
THE NORTH 37.5 rEEl UVTHFWESTHALTUFLOI 4, tlCOCK-:2o,1NIHFCITTOr
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
SHOWN BY MAP ON FILE IN BOOK 7. PAGE 1 OF MAPS, RECORDS OF SAN
BERNARDINO COUNTY, CALIFORNIA.
PARCEL 3:
THE SOUTH 37.5 FEET OF THE NORTH 75 FEET OF THE WEST 150 FEET OF LOT 4,
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BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 7, PAGE 1 OF MAPS,
RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA.
PARCEL 4:
PORTIONS OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK
7. PAGE 1 OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRffiED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID LOT 5; THENCE EAST 100
FEET; THENCE SOUTH 150 FEET, MORE OR LESS, TO THE SOUTH LINE OF SAID LOT
5; THENCE WEST 100 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE
NORTH 150 FEET, MORE OR LESS, TO THE POINT OF BEGINNING.
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EXHIBIT "G"
NOTICE OF AGREEMENT
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RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Exempt from Recording Fee per
Government Code Section 27383
(Space above for Recorder's Use)
NOTICE OF AGREEMENT
The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public body, corporate and politic (the "Agency"), and IN-N-OUT
BURGERS, a California corporation (the "Developer") are parties to that certain 2011
DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement"), dated as of
_, 2011, for reference purposes only, by and between the Agency and the
Developer. Said Agreement contains obligations, covenants and restrictions affecting certain
real property (the "Property") which is legally described on Exhibit "A" attached hereto and
incorporated herein by this reference. The Agreement is a public record of the Agency and is
available for inspection and copying at the Agency's offices located at 201 North "E" Street,
Suite 301, San Bernardino, California.
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Date:
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Fonn and Legal Content:
By:
Agency Counsel
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NOTARY ACKNOWLEDGMENT
State of California
County of
)
) SS.
)
On before me, a Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are ,subscribed to the within
instrument, and acknowledged to me that helshelthey executed the same in hislher/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity(ies) upon behalf of which the person(s) acted, executed the instrument.
I certifY under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary Public
Place Notary Seal Above
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EXHIBIT" A"
Legal Description of Property
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN
BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL A: (APN: 0134-093-40-0-000)
PARCEL 1:
LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO,
COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED
IN BOOK 7 OF MAPS. PAGE J, RECORDS OF SAID COUNTY.
EXCEPT THE WEST 200 FEET.
PARCEL 2:
THAT PORTION OF LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
PER PLAT RECORDED IN BOOK 7 OF MAPS. PAGE], RECORDS OF SAID COUNTY,
DESCRIBED AS FOLLOWS:
BEGINNING 150 FEET EAST OF THE NORTHWEST CORNER OF LOT 5; THENCE EAST
50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT 5; THENCE WEST 50
FEET; THENCE NORTH TO THE POINT OF BEGINNING.
PARCEL B: (APN: 0134-093-41-0-000)
PARCEL 1:
THAT PORTION OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY
OF SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN
BOOK 7. PAGE] OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT 100 FEET EAST OF THE NORTHWEST CORNER OF SAID
LOT; THENCE EAST 50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT;
THENCE WEST 50 FEET; THENCE NORTH TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
THE NORTH 37.5 FEET OF THE WEST HALF OF LOT 4, BLOCK 26, IN THE CITY OF
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
SHOWN BY MAP ON FILE IN BOOK 7. PAGE I OF MAPS, RECORDS OF SAN
BERNARDINO COUNTY, CALIFORNIA.
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PARCEL 3:
THE SOUTH 37.5 FEET OF THE NORTH 75 FEET OF THE WEST 150 FEET OF LOT 4,
BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 7. PAGE 1 OF MAPS,
RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA.
PARCEL 4:
PORTIONS OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK
7. PAGE 1 OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID LOT 5; THENCE EAST 100
FEET; THENCE SOUTH 150 FEET, MORE OR LESS, TO THE SOUTH LINE OF SAID LOT
5; THENCE WEST 100 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE
NOR TH 150 FEET, MORE OR LESS, TO THE POINT OF BEGINNING.
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EXHIBIT "H"
ASSIGNMENT (INTANGIBLES)
[follows behind this page]
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ASSIGNMENT
This ASSIGNMENT (this "Assignment") is made as of , 2011 by the
Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic
("Assignor") in favor of In-N-Out Burgers, a California corporation ("Assignee"), pursuant to
that certain DISPOSITION AND DEVELOPMENT AGREEMENT, by and between Assignor
and Assignee, dated , 2011 (the "DDA"). All defined terms used herein and not
otherwise defined herein shall have the meaning ascribed to such terms in the DDA.
For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby sells, conveys, grants, delivers, transfers and assigns to
Assignee, all of the Intangibles (as defined in the DDA), to the extent that they are related to that
certain real property located in the City of San Bernardino, County of San Bernardino, State of
California, which is more particularly described in Schedule I attached hereto and incorporated
herein by this reference (the "Real Property"):
The provisions of this Assignment shall be binding upon and shall inure to the benefit of
the successors and assigns of Assignor and Assignee, respectively.
ASSIGNOR:
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
ASSIGNEE:
In-N-Out Burgers,
a California corporation
By:
Carl G. Van Fleet
Executive Vice President of Planning
and Development
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Schedule 1 to Assilmment
Real Property
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN
BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL A: (APN: 0134-093-40-0-000)
PARCEL 1:
LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO,
COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED
IN BOOK 7 OF MAPS, PAGE], RECORDS OF SAID COUNTY,
EXCEPT THE WEST 200 FEET.
PARCEL 2:
THAT PORTION OF LOT 5, BLOCK 26, CITY OF SAN BERNARDINO, IN THE CITY OF
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 1, RECORDS OF SAID COUNTY,
DESCRIBED AS FOLLOWS:
BEGINNING 150 FEET EAST OF THE NORTHWEST CORNER OF LOT 5; THENCE EAST
50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT 5; THENCE WEST 50
FEET; THENCE NORTH TO THE POINT OF BEGINNING.
PARCEL B: (APN: 0134-093-41-0-000)
PARCEL 1:
THAT PORTION OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY
OF SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN
BOOK 7. PAGE] OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
BEGINNING AT A pOINt 100 FEET EAST 01' THE NORTHWEST CORNER OF SAID
LOT; THENCE EAST 50 FEET; THENCE SOUTH TO THE SOUTH LINE OF SAID LOT;
THENCE WEST 50 FEET; THENCE NORTH TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
THE NORTH 37.5 FEET OF THE WEST HALF OF LOT 4, BLOCK 26, IN THE CITY OF
SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS
SHOWN BY MAP ON FILE IN BOOK 7, PAGE 1 OF MAPS, RECORDS OF SAN
BERNARDINO COUNTY, CALIFORNIA.
P:\Agendas\Agenda A1tachments\Agenda Attachments\Agnnts-Amend 201 I\07.J8.IIID-N..Qut Burgen - DDA.doc
PARCEL 3:
THE SOUTH 37.5 FEET OF THE NORTH 75 FEET OF THE WEST 150 FEET OF LOT 4,
BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 7. PAGE I OF MAPS,
RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA.
PARCEL 4:
PORTIONS OF LOT 5, BLOCK 26, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK
7. PAGE I OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID LOT 5; THENCE EAST 100
FEET; THENCE SOUTH 150 FEET, MORE OR LESS, TO THE SOUTH LINE OF SAID LOT
5; THENCE WEST 100 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE
NORTH 150 FEET, MORE OR LESS, TO THE POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agenda Attachments\Agnnts.Amend 2011\07-18-1] In-N-Oul Burgers - DDA.doc
EXHIBIT "I"
EXISTING CaNT AMINA nON
P:\Agendas\Agenda Attachment~\Agenda A1taehments\Agnnts.Amend 201 1\07- J 8-11 In-N-out Burgers - DDA.doc
EXISTING CONTAMINATION
Any tenns not otherwise defined herein shall have the meanings ascribed to them in the
Disposition and Development Agreement (as amended from time to time) to which this Existing
Contamination is attached as Exhibit "I".
The listing of each report, work plan, proposal, test or result below shall be understood to also
refer to and include all prior or other reports referenced therein, all tests and results or findings
referenced therein, all proposals for future actions referenced therein, and all updates to such
report, work plan, proposal, test or result.
(* denotes major report more likely to contain many other reports, data, or test references)
*Stechmann Geoscience, Inc. ("SGI") Phase II Environmental Site Assessment 795 West 7th
Street-Proposed In-N-Out Burger ("INOB") Restaurant San Bernardino California ("Site")
transmitted to California Regional Water Quality Control Board ("RWQCB") c/o Valerie Jahn-
Bull
*SOl March 7, 2011 Revised Site Assessment Work Plan to RWQCB
SGI February 18,2011 Soil and vapor result map and related test results emailed to RWQCB
SGI February 8, 2011 Additional Site Assessment Work Plan to RWQCB
SGI February 8, 2011 Additional Site Assessment Work Plan for small waste oil tank letter to
San Bernardino County Fire Department ("SBCFD") c/o Mr. Crutsinger
SGI February 4,2011 cost estimate reAdditional Site Investigation, UST Remediation, and SVE
Pilot Test" transmitted via email to Agency c/o Mike Trout
SGI January 14, 2011 Additional Site Assessment Proposal
*Terracon Consultants, Inc. ("Terracon") January 13,2011 "Supplemental Site Investigation"
report
Terracon January 13,2011 "Supplemental Soil Gas Investigation Proposal emailed to Agency
*Terracon December 28,2010 "Underground Storage Tank Pennanent Removal From Service"
Terracon soil vapor probes in November of 201 0 and any reported results
Terracon October 26,2010 Proposal for Limited Site Investigation to INOB
TelTacon October 19, 20 I 0 Limited Site Investigation report to INOB
P:\Agendas\Agenda Anachments\Agendl Attachments\Agnnts-Amend 201 J\07-J8-llln-N.Qut Burgers - DDA.doc
Terraeon soil borings and geophysical survey of Site in September 2010, and any reported
results, including inter alia Terraeon September 10, 2010 Boring Location Map with Geophysical
Survey Results
*Terraeon July 13, 2010 Draft Phase I Environmental Site Assessment
P:\Agendas\Agenda Attacmncnts\Agenda Attachmcnts\Agrrnts-Amend 2011\07-18-1 IIn-N..()ul Burgers - DDA.doc
EXHIBIT "J"
LOCA nON OF SVEE
[Attached]
P:\Agendas\Agenda Attachments\Agenda Attachmcnts\Agnnts-Amcnd 2011\07.18-11In-N-Oul Burgers - DDA.doc
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EXHIBIT "K"
HOLDBACK AGREEMENT
[Attached]
P:\Agendas\Agenda Attachmcnts\Agenda Attachments\Agnnts-Amend 2011 \07-18.1 J In-N-Out Burgers - DDA.doc
ESCROW HOLDBACK AGREEMENT AND ESCROW INSTRUCTIONS
THIS ESCROW HOLDBACK AGREEMENT AND ESCROW
INSTRUCTIONS (the "Agreement") is made as of , 2011 (the "Effective
Date") by and among IN-N-OUT BURGERS, a California corporation, ("DEVELOPER"), and
the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic, ("AGENCY") and FIDELITY NATIONAL TITLE COMPANY
("FIDELITY").
RECITALS
This Agreement is made with reference to and reliance upon the following facts:
A. DEVELOPER and AGENCY have entered into that certain 2011
Disposition and Development Agreement dated as of ,2011 (the "DDA") pursuant
to which AGENCY is selling to DEVELOPER certain property to be improved by
DEVELOPER located in the City of San Bernardino, County of San Bernardino, State of
California (the "Property").
B. Pursuant to the DDA, AGENCY is to cause certain Remediation of the
Property and satisfY certain other obligations as specified more fully in Article VI of the DDA
(collectively "Agency's Work").
C. Pursuant to the DDA, AGENCY and DEVELOPER wish to provide for a
portion of the Purchase Price to be deposited with FIDELITY at Closing to be held and disbursed
in accordance with this Agreement in the event that not all Agency's Work is completed by the
Closing Date.
THEREFORE, the parties hereto agree as follows:
]. Defined Terms: All initially capitalized terms used but not defined herein
shall have the meanings given to such terms in the DDA.
2. Appointment of Escrow Agent: DEVELOPER and AGENCY hereby
appoint and designate FIDELITY as "Escrow Agent" to act as Escrow Agent under this
Agreement. FIDELITY agrees to so act as Escrow Agent in accordance with the tenns and
provisions of this Agreement.
3. Establishment of Agencv's Work Account: Upon Closing, DEVELOPER
and AGENCY hereby instruct FIDELITY to withhold and retain from the Purchase Price
otherwise payable to AGENCY an amount equal to the Holdback Amount. FIDELITY shall
deposit the Holdback Amount in an interest bearing account satisfactory to DEVELOPER and-
AGENCY (the "Agency's Work Account"). All interest accrued on the Agency's Work Account
first shall be applied to cover the costs of the Account and thereafter shall be reported under
AGENCY's taxpayer identification number which AGENCY shall provide to FIDELITY.
4. Disbursements from Agencv's Work Account: Funds held in the
Agency's Work Account shall be disbursed only for Agency's Work and payment of Fidelity's
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costs. If and when all of Agency's Work is completed by AGENCY and there has been a
termination under Section 5 below, AGENCY shall jointly notify FIDELITY in writing of such
facts with a copy to DEVELOPER. Upon such notification, FIDELITY shall release the
Holdback Amount to Agency, provided that all lien releases have been delivered to
DEVELOPER. Notwithstanding the above, if prior to the termination of this Agreement as
specified in Section 5 below, AGENCY fails to perform any Agency's Work as required under
the DDA and DEVELOPER has complied with the provisions of Section 6.01(d) of the DDA,
then DEVELOPER shall be entitled to have the funds in the Agency's Work Account released to
it to reimburse DEVELOPER for any and all costs reasonably incurred by DEVELOPER in
performing Agency's Work as permitted by Section 6.01(d) of the DDA.
5. Term and Termination: This Agreement shall terminate upon the earlier
of (i) a Polanco determination as to the Property providing for the requisite statutory immunities
or (ii) a site closure letter for the Property, but in no event shall either such event be deemed to
have occurred before the first anniversary of the date of this Agreement; or (ii) two (2) years
from the date hereof. Upon termination, all remaining funds shall be returned to the AGENCY
(or its successor entity), minus any costs reasonably owing to Fidelity.
6. Duties of FIDELITY: The parties hereto agree that the duties of
FIDELITY shall be limited to holding and disbursing the funds as provided herein and in so
doing, may and shall rely upon the written demand of DEVELOPER as provided herein.
FIDELITY shall not be concerned with nor required to acknowledge any conflicting demand or
notice and shall be liable to neither party for failing to recognize or acknowledge any notice or
demand.
7. Payment to Escrow Agent: The fees and reasonable out of pocket costs of
FIDELITY will be borne by AGENCY. As set out here, FIDELITY shall be entitled to
withdraw from the Agency's Work Account its out of pocket costs and fees prior to
disbursement of the funds in said accounts provided that said fees and costs have been disclosed
to DEVELOPER and AGENCY a minimum of two (2) business days in advance of any such
withdrawal.
8. Indemnification: DEVELOPER and AGENCY hereby jointly and
severally agree to defend, indemnify and hold FIDELITY hannless from any and all claims,
demands, causes of action, judgnlents, losses, damages, liabilities, costs and expenses (including
reasonable attorneys' fees) arising out of or in any way related to the performance by FIDELITY
of its duties under this Agreement except for any claim that arises out of the intentional or willful
misconduct or negligence of FIDELITY or any intentional or willful breach of its duties under
this Agreement.
9. Notices: Any notice to be given hereunder to either party hereto or to-
Escrow Agent shall be in writing and shall be given either by personal delivery (including
express or courier service), or by registered or certified mail, with return receipt requested,
postage prepaid and addressed as follows:
To the Developer:
In-N-Out Burgers
13502 Hamburger Lane
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Baldwin Park, California 91706-5885
Attention: Real Estate Department
Telephone: (626) 8 \3-8263
Fax: (626) 338-9173
Ovemight Deliveries Only:
In-N-Out Burgers
\3752 Francisquito Avenue
Baldwin Park, California 91706
Attention: Real Estate Department
Telephone: (626) 8 \3-7363
With a copy to:
Miller Starr Regalia
1331 North California Blvd., 5th Floor
Walnut Creek, California 92596
Attention: JoAnne L. Dunec
Telephone: (925) 935-9400
Fax: (925) 933-4126
To the Agency:
Redevelopment Agency of the City of San Bernardino
20] North "E" Street, Suite 30]
San Bernardino, California 92401-1507
Attn.: Emil A. Marzullo, Interim Executive Director
Telephone: (909) 663-1044
Fax: (909) 888-94 \3
with copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Attn.: Timothy J. Sabo or Elizabeth Martyn
Telephone: (909) 387-] \30
Fax: (909) 387-] \38
To Escrow Agent:
Fidelity Nationa] Title Company
Attn:
Telephone:
--Pix:-- -- -----------
Any Party may, by written notice to the others and to Escrow Agent, designate a different
address, which shall be substituted for the one, specified above. Any written notice given
hereunder shall be deemed to have been delivered upon its receipt or upon the second attempt at
delivery, as evidenced by the regular records of the person or entity attempting delivery.
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10. Judicial Reference: In the event a dispute arises between the parties
concerning the subject matter of this Agreement, any party may have the right within the thirty
(30) day period following such party's written notice to the other and the other's consent, to
institute a reference proceeding in accordance wi.th the provisions of California Code of Civil
Procedure Sections 638, et seq. (or any similar successor statute) for a determination to be made
which shall be binding upon the parties as if tried before a court or jury. The parties agree
specifically as to the following:
10.1 Within five (5) business days after service of a demand by a party
hereto, the parties shall agree upon a single referee who shall then try all issues, whether of fact
or law, and then report a finding and judgment thereon. If the parties are unable to agree upon a
referee, either party may seek to have one appointed, pursuant to California Code of Civil
Procedure, Section 640, by the presiding judge or law and motion judge of the San Bernardino
County Superior Court.
10.2 The compensation of the referee shall be such charge as is
customarily charged by the referee for like services. The cost of such proceedings shall initially
be borne equally by the parties. However, the prevailing party in such proceedings shall be
entitled, in addition to all other costs, to recover its contribution for the cost of the reference as
an item of damages and/or recoverable costs.
10.3 If any party requests a reporter, then a reporter shall be present at
all proceedings, and the fees of such reporter shall be borne by the party requesting such reporter.
Such fees shall be an item of recoverable costs. Only a party hereto shall be authorized to
request a reporter.
10.4 The referee shall apply all California Rules of Procedure and
Evidence and shall apply the substantive law of California in deciding the issues to be heard.
Notice of any motions before the referee shall be given, and all matters shall be set at the
convenience of the referee.
10.5 The referee's decision under California Code of Civil Procedure
Section 644 shall stand as the judgment of the court, subject to appellate review as provided by
the laws of the State of California.
10.6 The parties agree that they shall in good faith endeavor to cause
any such dispute to be decided within ninety (90) days. The date of hearing for any proceeding
shall be determined by agreement of the parties and the referee, or if the parties cannot agree,
then by the referee.
10.7 The referee shall have the power to award damages and other
relief.
II. Attornevs' Fees: If any action or proceeding is instituted to enforce or
interpret any provision of this Agreement or resolve any dispute arising therefrom or related
thereto, the prevailing party therein shall be entitled to recover its attorneys' fees and costs from
the losing party.
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12. Counteroarts: This Agreement may be executed in counterparts, each of
which shall constitute an original, but all of which together shall constitute one and the same
instrument. The signature page of any counterpart may be detached therefrom without impairing
the legal effect of the signature(s) thereon provided such signature page is attached to any other
counterpart identical thereto except having additional signature pages executed by the other
party. Counterparts may be delivered by facsimile provided that original executed counterparts
are delivered to the recipient on the next business day following the facsimile transmission.
13. Entire Agreement: This Agreement along with the DDA constitutes the
entire agreement between the parties pertaining to the subject matter hereof and shall supersede
all prior and contemporaneous agreements, representations, negotiations and understandings of
the parties, oral or written. No waiver of any term or condition of this Agreement shall be a
continuing waiver thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AGENCY:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO,
a public body, corporate and politic
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Fom1 and Legal Content:
By:
Agency Counsel
[Signatures continued on next page]
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ESCROW AGENT
DEVELOPER
FIDELITY NATIONAL TITLE
COMPANY
IN-N-OUT BURGERS, a California corporation
By:
Name:
Carl G. Van Fleet
Executive Vice President of Planning
and Development
By:
Title:
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