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EXHIBIT 10.6
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
LANCASTER REDEVELOPMENT AGENCY
"AGENCY",
and
REXHALL INDUSTRIES, INC.
"DEVELOPER"
IN THE
AMARGOSA
REDEVELOPMENT PROJECT AREA
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TABLE OF CONTENTS
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I. SUBJECT OF AGREEMENT
[Section 1.01] Purpose of Agreement ..............................
1
[Section 1.02] The Redevelopment Plan ............................
1
[Section 1.03] The Site ..........................................
1
[Section 1.04] Parties to the Agreement ..........................
1
[Section 1.05] Prohibition Against Change in Ownership,
Management and Control of Developer ............... 2
II. ACQUISITION AND DISPOSITION OF THE
SITE
[Section 2.01] Disposition of the Site ...........................
3
A. Agency Site
Acquisition .......................... 3
B. Sale and Purchase
................................ 3
C. Payment of the
Purchase Price .................... 3
[Section 2.02] Escrow ............................................
4
A. Escrow Agent
..................................... 4
B. Developer's Costs
................................ 4
C. Agency's Costs
................................... 4
D. Escrow Agent's
Authority ......................... 5
[Section 2.04] Form of Deed for the Conveyance ...................
6
[Section 2.05] Condition of Title ................................
6
[Section 2.06] Time for and Place of Delivery of Deed ............
6
[Section 2.07] Recordation of Grant Deed and Right-of-Easements ..
7
[Section 2.08] Title Insurance ...................................
7
[Section 2.09] Taxes and Assessments .............................
7
[Section
2.10] Condition of the Site .............................
7
[Section 2.11] Preliminary Work ..................................
8
[Section 2.12] Environmental Matters .............................
8
A. Definitions
...................................... 8
B. Environmental Site
Evaluation .................... 9
C. Obligation of
Developer to Remediate the Site .... 10
D. Agency's
Indemnification of Developer ............ 10
E. Developer's
Indemnification of Agency ............ 11
[Section 2.13] Conditions Precedent to the Conveyance ............
11
[Section 2.14] Employment Incentive Program ......................
12
III. DEVELOPMENT OF THE SITE
[Section 3.02] Construction Drawings and Related Documents .......
17
[Section 3.03] Agency Approval of Plans, Drawings, and Related
Documents ......................................... 17
[Section 3.04] Cost of Construction ..............................
18
[Section 3.05] Construction Schedule .............................
18
[Section 3.06] Bodily Injury and Property Damage Insurance .......
18
[Section 3.07] City and Other Governmental Agency Permits ........
19
[Section 3.08] Rights of Access ..................................
19
[Section 3.09] Local, State and Federal Laws .....................
19
[Section 3.10] Anti-discrimination During Construction ...........
20
[Section 3.11] Taxes, Assessments, Encumbrances and Liens ........
20
[Section 3.12] Prohibition Against Transfer of the Site, the
Buildings or Structures Thereon and Assignment
of Agreement ...................................... 20
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[Section 3.13] No Encumbrances Except Mortgages, Deeds of
Trust, Sale and Lease-Back for Development ........ 20
[Section 3.14] Holder Not Obligated to Construct
Improvements ...................................... 21
[Section 3.15] Notice of Default to Mortgagee or Deed of Trust
Holders ........................................... 21
[Section 3.17] Right of the Agency to Cure Mortgage or Deed of
Trust Default ..................................... 22
[Section 3.18] Right of the Agency to Satisfy Other Liens on
the Site After Title Passes ....................... 22
[Section 3.19] Release of Construction Covenants .................
23
IV. USE OF THE SITE
[Section 4.01] Uses ..............................................
24
[Section 4.02] Effect and Duration of Covenants ..................
26
[Section 4.03] Maintenance of the Site ...........................
26
[Section 4.04] Rights of Access ..................................
26
[Section 4.05] Effect of Violation of the Terms and Provisions
of this Agreement After Completion of
Construction ...................................... 26
V. GENERAL PROVISIONS
[Section 5.01] Notices, Demands and Communications Among the
Parties
........................................... 27
[Section 5.02] Conflicts of Interest .............................
27
[Section 5.03] Enforced Delay ....................................
27
[Section 5.04] Non-liability of Officials and Employees of the
Agency ............................................ 28
VII. DEFAULTS AND REMEDIES
[Section 6.01] Defaults-General ..................................
28
[Section 6.02] Institution of Legal Actions ......................
29
[Section 6.03] Applicable Law ....................................
29
[Section 6.04] Acceptance of Service of Process ..................
29
[Section 6.05] Rights and Remedies Are Cumulative ................
29
[Section 6.06] Inaction Not a Waiver of Default ..................
29
[Section 6.07] Remedies and Rights Prior to Conveyance ...........
29
A. Default by Agency
................................ 30
B. Default by
Developer ............................. 30
[Section 6.08] Remedies of the Parties for Default After the
Conveyance ........................................ 30
A. Termination and
Damages .......................... 30
B. Action for Specific
Performance .................. 30
C. Reentry and
Revesting of Title in the Agency
After Conveyance ................................. 31
VIII. SPECIAL PROVISIONS
[Section 7.01] Submission of Documents to the Agency for
Approval .......................................... 33
[Section 7.02] Real Estate Commission ............................
33
[Section 7.03] Successors In Interest ............................
33
[Section 7.04] Amendments to this Agreement ......................
33
[Section 7.05] Project Sign ......................................
33
[Section 7.06] Ground Breakings and Grand Openings -
Coordination
with Agency Staff ................................. 34
[Section 7.07] Developer Requested Amendments ....................
34
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[Section 7.08] Administration.....................................
34
VIII. ENTIRE AGREEMENT, WAIVERS
[Section 8. 01] Entire Agreement, Waivers.........................
35
IX. ACCEPTANCE OF AGREEMENT BY AGENCY, AND
RECORDATION
[Section 9. 01] Time for Acceptance of Agreement by the
Agency............................................. 35
[Section 9.02] Recordation........................................
35
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ATTACHMENTS
ATTACHMENT NO. 1 SITE MAP
ATTACHMENT NO. 2 LEGAL
DESCRIPTION
ATTACHMENT NO. 3 SCOPE OF
DEVELOPMENT
ATTACHMENT NO. 4 SCHEDULE OF
PERFORMANCE
ATTACHMENT NO. 5 AGENCY GRANT
DEED
ATTACHMENT NO. 6 RELEASE OF
CONSTRUCTION COVENANTS
ATTACHMENT NO. 7 MEMORANDUM OF
AGREEMENT
ATTACHMENT NO. 8 SIGN PROGRAM
ATTACHMENT NO. 9 LRA EVENT
INFORMATION FORM
ATTACHMENT NO. 10 EMPLOYMENT PROGRAM
PROMISSORY NOTE
ATTACHMENT NO. 11 PURCHASE PRICE
PROMISSORY NOTE
ATTACHMENT NO. 12 CERTIFICATE OF
QUALIFYING EMPLOYEES
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DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is
entered
into by and between the LANCASTER
REDEVELOPMENT AGENCY, a public body,
corporate and politic, (the "Agency") and
REXHALL INDUSTRIES, INC., a California
Corporation (the "Developer"). The Agency
and the Developer hereby agrees as
follows:
I. SUBJECT OF AGREEMENT
[Section 1.01] Purpose of Agreement. The purpose of this Agreement
is
to effectuate the Redevelopment Plan (as
hereinafter defined) for the Amargosa
Redevelopment Project (the "Project") by
providing for the disposition and
development of certain property situated
within the Project Area (the "Project
Area") for the expansion of the existing
recreational vehicle manufacturing
facility. That portion of the Project Area
to be developed pursuant to this
Agreement (the "Site") is depicted on the
"Site Map" attached hereto as
Attachment No. 1 and incorporated herein by
reference. This Agreement is entered
into for the purpose of developing the Site
and not for speculation in land
holding. Completing the development on the
Site pursuant to this Agreement is in
the vital and best interest of the City of
Lancaster, California (the "City")
and the health, safety, and welfare of its
residents, and in accord with the
public purposes and provisions of
applicable state and local laws and
requirements.
[Section 1.02] The Redevelopment Plan. The Amargosa
Redevelopment
Project was approved and adopted on October
17, 1983 by Ordinance No. 321, and
amended by Ordinance No. 672 adopted on
December 5, 1994, and by Ordinance No.
727 adopted on March 27, 1997, of the City
Council of the City of Lancaster;
said ordinances and the Redevelopment Plan
as so approved (the "Redevelopment
Plan") are incorporated herein by
reference.
[Section 1.03] The Site. The Site is that portion of the Project
Area
designated on the Site Map (Attachment No.
1). The Site is approximately 13.98
acres in size. The Site is located within
the Avenue H Industrial Park and is to
be developed in accordance to the
regulations and development standards outlined
for HI (Heavy Industrial) zone of
Lancaster's Zoning Ordinance. The legal
description for the Site is attached hereto
as Attachment No. 2 and is
incorporated herein by this reference.
[Section 1.04] Parties to the Agreement. The Agency is a public
body,
corporate and politic, exercising
governmental functions and powers and
organized and existing under the Community
Redevelopment Law of the State of
California. The principal office of the
Agency is located at 44933 North Fern
Avenue, Lancaster, California 93534.
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"Agency", as used in this Agreement, includes the Lancaster
Redevelopment Agency, and any assignee of
or successor to its rights, powers and
responsibilities.
The Developer is Rexhall Industries, Inc. a California Corporation.
The
principal office address of the Developer
for the purposes of this Agreement is
46147 7th Street West, Lancaster,
California 93534. The principal mailing
address of Developer for the purposes of
this Agreement is the same as
identified above.
[Section 1.05] Prohibition Against Change in Ownership, Management
and
Control of Developer. The qualifications
and identity of the Developer are of
particular concern to the Agency. It is
because of those qualifications and
identity that the Agency has entered into
this Agreement with the Developer. No
voluntary or involuntary successor in
interest of the Developer shall acquire
any rights or powers under this Agreement
except as expressly set forth herein.
The Developer shall not assign all or any part of this Agreement or
any
rights hereunder without the prior written
approval of the Agency, which the
Agency may reasonably withhold provided,
however, that the Agency shall not
unreasonably withhold its approval of an
assignment if the assignment is to an
entity which includes the Developer as a
general partner or majority shareholder
and (1) the assignee entity shall expressly
assume respective obligations of the
Developer pursuant to this Agreement in
writing satisfactory to the Agency; (2)
the original Developer shall remain fully
responsible for the performance and
liable for the obligations of the Developer
pursuant to this Agreement; and (3)
the assignee is financially capable of
performing the duties and discharging the
obligations it is assuming. The Developer
shall promptly notify the Agency in
writing of any and all changes whatsoever
in the identity of the persons in
control of the Developer and the degree
thereof.
All of the terms, covenants and conditions of this Agreement shall
be
binding upon and shall inure to the benefit
of the Developer and the permitted
successors and assigns of the Developer.
Whenever the term "Developer" is used
herein, such term shall include any other
permitted successors and assigns as
herein provided.
The restrictions of this Section 1.05 shall terminate and be of
no
further force and effect upon issuance by
the Agency of a "Release of the
Construction Covenants" for all
improvements to be provided by the Developer
pursuant to this Agreement as described in
the Scope of Development (Attachment
No. 3). Upon completion of the Developer
Improvements, the Developer shall
request in writing to the Agency the
issuance of the Release of Construction
Covenants pursuant to Section 3.19 of this
Agreement. Within
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thirty (30) days of said written request,
the Agency shall either issue the
Release of Construction Covenants, or
provide a written statement identifying
specific reasons for the Agency's refusal
to issue the Release of Construction
Covenants.
II. ACQUISITION AND DISPOSITION OF THE SITE
[Section 2.01] Disposition of the Site.
A. Sale
and Purchase.
In accordance with and subject to all the terms, covenants and
conditions of this Agreement, and specific
escrow instructions as specified
herein, the Agency agrees to sell the Site
to the Developer and the Developer
agrees to buy the Site from the Agency and
pay therefore the amount of One
Dollar and Fifty Cents ($1.50) per square
foot, for a total of $913,453, herein
referred to as the "Purchase Price".
B.
Payment of the Purchase Price.
The Developer shall execute with the Agency an Employment
Program
Promissory Note (Attachment No. 10) which
will provide a credit toward a portion
of the Purchase Price in the amount of
$300,000, combined with a separate
Promissory Note for the balance of the
Purchase Price (Attachment No. 11) in the
amount of $613,453. The above mentioned
Promissory Notes combined equal the
total value of Purchase Price of $913,453.
The Developer shall execute and
deposit said Notes with the Escrow Agency
prior to the close of escrow, along
with funds in the amount of One Dollar
($1.00) which entitles the Developer to
water credits required for development of
the Site in an amount not to exceed
$70,501.
The cash portion of the Purchase Price, including Buyer's
escrow
charges and other cash charges, if any,
shall be deposited with the Escrow
Holder, no later than the business day
prior to the escrow closing date,
provided Seller's documents have been
deposited in escrow.
Should the Agency fail to deliver the Site to the Developer
consistent
with this Agreement, then the Developer may
request in writing to the Agency
that this Agreement be terminated. In no
event will the transfer of the Site
occur later than thirty (30) days following
completion of all the conditions
precedent to the conveyance by the
Developer and Agency, as specified in Section
2.13 of this Agreement.
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[Section 2.02]
Escrow.
A.
Escrow Agent. The Agency agrees to open an escrow ("Escrow")
with Antelope Valley Escrow Company, or
with another mutually agreeable escrow
company (the "Escrow Agent") in Lancaster,
by the time established therefor in
the "Schedule Performance" attached hereto
as Attachment No. 4 and incorporated
herein by this reference. The escrow
described in this Section 2.02 shall be
referred to as "Escrow", and the conveyance
as provided for in Section 2.03 and
2.04 shall be referred to as "Conveyance".
This Agreement constitutes the joint
basic escrow instructions of the Agency and
the Developer for the Conveyance and
a duplicate original of this Agreement
shall be delivered the Escrow Agent upon
the opening of Escrow. The Agency and
Developer shall provide such additional
escrow instructions as shall be necessary
for and consistent with this
Agreement. The Escrow Agent is hereby
empowered to act under this Agreement, and
the Escrow Agent, upon indicating within
five (5) days after opening of Escrow
its acceptance of the provisions of this
section 2.02, in writing, delivered to
the Agency and the Developer, shall carry
out its duties as the Escrow Agent
hereunder.
B.
Developer's Costs. Except as otherwise indicated, the
Developer shall submit or pay in Escrow to
the Escrow Agent all of the following
items and costs after the Escrow Agent has
notified the Developer of the amount
of such fees, charges and costs, but not
earlier than ten (10) days prior to the
scheduled date for closing Escrow:
1. one
half (1/2) of the escrow fee; and
2. Fees
for recording and filing all documents required in this
Agreement other than the Grant Deed recording fees;
3.
cost of drawing
the deed, if any; and
4. the
costs of any extended coverage, American Land Title
Association insurance coverage, if required, includes any land
survey costs, or other title policy in excess of the premium
for the standard coverage (CLTA) policy to be provided by
Agency pursuant to Section 2.08.
C.
Agency's Costs. The Agency shall pay in escrow to Escrow Agent
the following fees, charges and costs
promptly after the Escrow Agent has
notified the Agency of the amount of such
fees, charges and costs, but not
earlier than ten (10) days prior to the
scheduled date for closing Escrow:
1. one
half (1/2) of the escrow fee; and
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2. Ad
valorem taxes, if any, upon the Site for any time prior to
the Conveyance; and
3.
costs of drawing the Grant Deed, if any; and
4. the
cost of any documentary transfer taxes on the Grant Deed;
and
5. the
cost of a premium for a California Land Title Association
(CLTA) Standard Policy of title insurance insuring the Site in
the amount of
estimated market value.
D.
Escrow Agent's Authority. The Escrow Agent is authorized to:
1. Pay,
and charge the Agency and Developer, respectively, for
any fees, charges and costs payable under this Section 2.02 of
this Agreement. Before such payments or charges are made, the
Escrow Agent shall notify the Agency and the Developer of the
fees, charges and costs necessary to clear title and close
Escrow.
2.
Disburse funds and deliver the Agency Grant Deed (Attachment
No. 5) and other documents to the parties entitled thereto
when the conditions of this Escrow have been fulfilled by the
Agency and the Developer.
3.
Record any instruments delivered through this Escrow, if
necessary or proper, to vest title of the Site in the
Developer, all in accordance with the terms and provisions of
this Agreement.
All funds received in this Escrow shall be deposited by the
Escrow
Agent with other escrow funds of the Escrow
Agent in an interest earning general
escrow account or accounts with any state
or national bank doing business in the
State of California. Such funds may be
transferred to any other general escrow
account or accounts. All disbursements
shall be made by check of the Escrow
Agent. All adjustments are to be made on
the basis of a thirty (30) day month.
If this Escrow is not in condition to close on or before the time
for
conveyance established in Section 2.03 of
this Agreement because of a failure of
either party to perform any of the
Conditions Precedent to the Conveyance or
because either party has committed some
other default which is not cured in time
for the close of Escrow, the Escrow Agent
shall cancel and not close Escrow, and
return without demand all papers, documents
and money deposited in Escrow to the
party who deposited said papers, documents
and money into Escrow. In the event
Escrow is canceled pursuant to this
paragraph, the rights of the parties shall
be established by Section 6.07 of this
Agreement.
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Any
amendment to these escrow instructions shall be in writing and
signed by both the Agency and the
Developer. At time of any amendment, the
Escrow Agent shall agree to carry its
duties as the Escrow Agent under such,
amendment.
All communications from the Escrow Agent to the Agency Developer
shall
be directed to the addresses and in the
manner established in Section 5.01 of
this Agreement for notices, and
communications between the Agency and the
Developer.
The liability of the Escrow Agent under this Agreement limited
to
performance of the obligations imposed upon
it under Sections 2.02 through 2.13,
inclusive, of this Agreement.
[Section 2.03] Conveyance of Title and Delivery of Possession.
Subject
to any extensions of time mutually agreed
upon between Agency and the Developer,
the Conveyance shall be completed prior to
the date specified therefor in the
Schedule of Performance attached hereto as
Attachment No. 4 and incorporated
herein by reference. Said Schedule of
Performance is subject to revision from
time to time as mutually agreed upon in
writing between the Developer and the
Agency. The Agency and the Developer agree
to perform all acts necessary for
conveyance title in sufficient time for
title to be conveyed in accordance with
the foregoing provisions.
Developer shall only be entitled to limited access to the Site
before
the Conveyance as permitted in Section 2.11
of the Agreement.
[Section 2.04] Form of Deed for the Conveyance. The Agency shall
convey
to the Developer title to the Site in the
condition provided in Section 2.05 of
this Agreement by grant deed in the form of
the Agency Grant Deed in Attachment
No. 5 (the "Agency Grant Deed").
[Section 2.05] Condition of Title. The Agency shall convey to
the
Developer fee simple merchantable title to
the Site free and of all recorded and
unrecorded liens, encumbrances, assessment
leases and taxes, except for the
Redevelopment Plan; the Right Way Easements
and other provisions contained in
the Agency Grant Deed (Attachment No. 5);
and such other encumbrances to which
Developer may consent. The condition of
title shall be compared with and not
preclude development of the improvements
currently existing on the Site or the
Developer Improvements which are built
pursuant to this Agreement (collectively,
the "Improvements"). The parties shall act
reasonably in evaluation of any
encumbrances and shall act diligently and
promptly to conform the condition of
title to that required for the Developer to
proceed with the development of the
Developer Improvements.
[Section 2.06] Time for and Place of Delivery of Deed. Subject
to
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any mutually agreed upon extension of time,
the Agency shall deposit the Agency
Grant Deed (Attachment No. 5) with the
Escrow Agent at least ten (10) days
before the date established for the date of
the Conveyance pursuant to the
Schedule of Performance (Attachment No.
4).
[Section 2.07] Recordation of Grant Deed and Right-of-Easements.
The
Escrow Agent shall record the Agency Grant
Deed in the land records of the
Office of the County Recorder for Los
Angeles County, and shall deliver to the
Developer a title insurance policy insuring
title in conformity with Section
2.08 of this Agreement.
[Section 2.08] Title Insurance. Concurrently with recordation of
the
Agency Grant Deed (Attachment No. 5)
conveying title to the Site with a mutually
acceptable title company (the "Title
Company"), which shall provide and deliver
to Developer a title insurance policy (the
"Title Policy") issued by the Title
Company insuring that the title to the Site
is vested in Developer in the
condition required by Section 2.05 of this
Agreement. The Title Company shall
provide the Agency with a copy of the Title
Policy and the Title Policy shall be
for the estimated market value of the Site
as established by the Agency (the
"Title Insurance Amount") . The Agency
shall pay for those costs incurred for or
related to a CLTA standard policy of title
insurance.
The Developer shall pay the costs of any
extended coverage in excess of the
premium for the standard coverage (CLTA)
policy, including any land survey
costs, American Land Title Association
(ALTA) insurance coverage and for any
endorsements required by the Title Company
to deal with Mineral Rights and
Surface Easements, if any.
[Section 2.09] Taxes and Assessments. Ad valorem taxes, assessments
and
all other taxes, if any, on the Site,
levied, assessed or imposed for any period
prior to the Conveyance shall be borne by
the Agency. Ad valorem taxes,
assessments and all other taxes on the Site
levied, assessed or imposed after
the Conveyance, including such taxes or
assessments imposed on the Site shall be
borne by the Developer.
[Section 2.10] Condition of the Site. The Developer, at its sole
cost
and expense, has the right to further
investigate and determine, or cause to be
investigated and determined, the soil and
environmental conditions of the Site
for the development to be constructed by
Developer. As part of the investigation
of the soil and environmental conditions
pursuant to this Section 2.10, the
Developer has the right to provide further
analysis at its sole cost and expense
as required by Section 2.12.
If the environmental conditions of the Site are in all respects
entirely suitable for the use or uses to
which the Site will be put, Developer
shall provide Agency a certificate (the
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"Certificate of Acceptance") certifying
such suitability consistent with this
Section 2.10. Such Certificate of
Acceptance shall in no way offset or limit the
Agency's indemnification" the Developer
except in cases where it is determined
that the Developer or their agents,
employees, contractors or invitees either
introduced, deposited, or otherwise caused
contamination occur on the Site as
provided in this Section and in Section
2.12D.
In addition to a general statement acknowledging the good condition
of
the Site's environmental condition, the
Certificate of Acceptance shall include
a statement that the soil condition of the
Site is entirely suitable for the
development of the Site construction of the
Developer Improvements, and the use
or uses which the Site will be put. If the
soil conditions of the Site are not
in all respects entirely suitable for the
use or uses which the Site will be
put, then it is the sole responsibility and
obligation of Developer to take such
actions as may be necessary to place the
Site in a condition entirely suitable
for the development of the Site, and the
construction of the Developer
Improvements.
[Section 2.11] Preliminary Work. Prior to the Conveyance, the
Developer
or representatives of Developer shall have
the right access to the Site at all
reasonable times for the purpose of
obtaining data and making surveys and tests
necessary to carry this Agreement.
Any preliminary work undertaken on the Site by Developer prior to
the
closing of Escrow shall be done only after
written consent of the Agency, which
consent shall not be unreasonably withheld
or delayed, and at the sole cost and
expense of Developer.
The Developer shall save, protect, defend, indemnify and harmless
the
Agency and the City against any claims
resulting all preliminary work, access or
use of the Site undertaken pursuant to this
Section 2.11. Copies of data,
surveys and tests obtained or made by the
Developer on the Site
pursuant to this Section 2.11 shall be
filed with the Agency within fifteen (15)
days after receipt by the Developer. Any
preliminary work by Developer shall be
undertaken only after securing any
necessary permits from the appropriate
governmental agencies.
[Section 2.12] Environmental Matters.
A.
Definitions. For the purposes of this Agreement, the following
terms shall have the meanings herein
specified:
(1) The term "Hazardous Materials" shall mean (i) any
"hazardous
substance" as defined by the Comprehensive
Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C.
Section 9601 et seq.), as amended
from time to time, and regulations
promulgated thereunder; (ii) any "hazardous
substance
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as defined by the Carpenter-Presley-Tanner
Hazardous - Substance Account Act
(California Health and Safety Code Sections
25300 et seq.) , as amended from
time to time, and regulations promulgated
thereunder; (iii) friable asbestos;
(iv) polychlorinated biphenyls; (v)
petroleum, oil, gasoline (refined and
unrefined) and their respective by-products
and constituents; and (vi) any other
substance, whether in the form of a solid,
liquid, gas or any other form
whatsoever, which by any "Governmental
Requirements" (as defined in Subparagraph
(3) of Paragraph A of this Section 2.12)
either requires special handling in its
use, transportation, generation,
collection, storage, handling, treatment or
disposal, or is defined as "hazardous" or
harmful to the environment.
(2) The term "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing
or hereafter occurring) of the
improvements, facilities, soil,
groundwater, air or other elements on, in or of
the Site by Hazardous Materials, or the
contamination of the buildings,
facilities, soil, groundwater, air or other
elements on, in or of any other
property as a result of Hazardous Materials
at any time (whether before or after
the date of this Agreement) emanating from
the Site.
(3) The term "Governmental Requirements" shall mean all laws,
ordinances, statutes, codes, rules,
regulations, orders and decrees of the
United States, the state, the county, the
city, or any other political
subdivision in which the Site is located,
and of any other political
subdivision, agency or instrumentality
exercising jurisdiction over the Agency,
the Developer, or the Site.
3.
Environmental Site Evaluation.
(1) Developer's Right to Conduct Site Evaluation. Developer
shall have the right to conduct an
environmental site evaluation upon the Site
at its sole expense and cost, if so
desired. If the environmental condition of
the Site is in all respects entirely
suitable for the development of the Site,
the construction of the Developer
Improvements, and the use or uses to which,
the Site will be put, Developer shall
provide to the Agency the Certificate of
Acceptance required by Section 2.10 of this
Agreement.
(2) Right to Terminate. If there are environmental problems on
the site or any portion thereof as
determined by the Developer in their sole and
absolute discretion, including, but not
limited to, the existence of hazardous
materials or hazardous materials
contamination on all or part of the site, the
Agency and/or Developer shall have the
right to terminate this agreement at any
time prior to the receipt by the Agency
from the Developer of the Certificate of
Acceptance required by section 2.10 of this
Agreement, said termination to be
effective immediately upon the date of a
written notice of termination. Upon
written notice,
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either party may terminate this Agreement
because of environmental problems
encountered after receipt by the Agency
from the Developer of the Certificate of
Acceptance required by Section 2.10 of this
Agreement, and prior to the issuance
of a Release of Construction Covenants.
C.
Obligation of Developer to Remediate the Site. Notwithstanding
the obligation of Developer to indemnify
Agency pursuant to Paragraph "E" of
this Section 2.12 or any other obligations
of the Developer pursuant to this
Agreement, if there are environmental
problems and the Agency and Developer
elect not to terminate this Agreement',
Developer shall, at its sole cost and
expense, promptly take (i) all actions
required by any federal, state or local
governmental agency or political
subdivision or any Governmental Requirements
with respect to the entire Site, and (ii)
all actions necessary to make full
economic use of the Site for the purposes
described in this Agreement, which
actions, requirements or necessity arise
from the presence upon, about or
beneath the Site of any Hazardous Materials
or Hazardous Materials Contamination
regardless of when such Hazardous Materials
or Hazardous Materials Contamination
were introduced to the Site and regardless
of who is responsible for introducing
such Hazardous Materials or Hazardous
Materials Contamination to the Site (the
"Site Remediation"). The Site Remediation
shall include, but not be limited to,
investigation of the environmental
condition of the Site, the preparation of any
feasibility studies or reports and the
performance of any cleanup, remedial,
removal or restoration work required. If
this Agreement is not terminated
pursuant to Paragraph B of this Section
2.12, Developer shall take all actions
necessary to promptly restore the Site to
an environmentally sound condition for
uses contemplated by this Agreement,
notwithstanding any lesser standard of
remediation allowable under applicable
Governmental Requirements. Developer's
obligations under this Paragraph C of this
Section 2.12 shall be referred to as
the "Site Remediation" and shall survive
until such time as all of the Hazardous
Materials and Hazardous Materials
Contamination existing at the time of the
Conveyance on, in or under the Site or any
part thereof are completely removed
from the Site and all Governmental
Requirements are complied with for said
Hazardous Materials and Hazardous Materials
Contamination.
D.
Agency's Indemnification of Developer. Agency shall save,
protect, defend, indemnify and hold
harmless Developer from and against any and
all liabilities, suits, actions, claims,
demands, penalties, damages (including,
without limitation, penalties, fines and
monetary sanctions), losses, costs or
expenses (including, without limitation,
consultants' fees, investigation and
laboratory fees, reasonable attorneys fees
and remedial and response costs)
which may now or in the future be incurred
or suffered by Developer because of
any actions actually taken by the Agency or
expressly authorized by the Agency.
In no event shall the Agency indemnify or
otherwise be liable to Developer for
(i) any omissions or failures to act, (ii)
any acts
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of third parties acting without the express
authorization of the Agency, whether
said acts occurred before, during or after
Agency's ownership of the Site,
except that the Agency shall indemnify and
otherwise be liable to the Developer
for Hazardous Materials or Hazardous
Materials Contamination deposited,
occurring or existing on or under the Site
prior to the close of Escrow.
Agency's obligations under this Section
2.12 shall survive after the close of
Escrow, the completion of the Conveyance
and the issuance of the Release of
Construction Covenants.
E.
Developer's Indemnification of Agency. Except as provided in
Paragraph D of this Section 2.12, Developer
shall save, protect, defend,
indemnify and hold harmless Agency from and
against any and all liabilities,
suits, actions, claims, demands, penalties,
damages (including, without
limitation, penalties, fines and monetary
sanctions), losses, costs or expenses
(including, without limitation,
consultants' fees, investigation and laboratory
fees, reasonable attorneys' fees and
remedial and response costs) (the forgoing
are hereinafter collectively referred to as
"Liabilities") which may now or in
the future be incurred or suffered by
Agency by reason of, resulting from, in
connection with or arising in any manner
whatsoever as a direct or indirect
result of (i) the Developer's ownership of
all or any part of the Site, (ii) any
act or omission on the part of the
Developer or their agents, employees,
contractors or invitees, (iii) the presence
on or under, or the escape, seepage,
leakage, spillage, discharge, emission or
release from the Site of any Hazardous
Materials or Hazardous Materials
Contamination only as a result of acts or
actions of the Developer or their agents,
employees, contractors or invitees,
(iv) the environmental condition of the
Site, and (v) any Liabilities incurred
under any Governmental Requirements
relating to Hazardous Materials. Developer's
obligations under this Section 2.12 shall
survive after the close of Escrow, the
completion of the Conveyance and the
issuance of the Release of Construction
Covenants, and shall be a covenant running
with the land in perpetuity, binding
on all successors and assigns of
Developer's interest in either this Agreement
or the Site.
[Section 2.13] Conditions Precedent to the Conveyance. Prior to and
as
conditions to the close of Escrow and the
Conveyance, the Developer or Agency,
as indicated below, shall complete all of
the following by the respective times
established therefor in the Schedule of
Performance (Attachment No. 4):
1. the
Developer shall not be in material default of this
Agreement;
2. the
Developer shall have obtained any necessary land use
approvals and entitlements from the City, including but not
limited to a Site Plan Review approval through the Department
of Community Development, building permits and/or grading
permits through the City's Building and
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Engineering Departments, and shall have performed all other
necessary acts in accordance to the Schedule of Performance
(Attachment No. 4) including but not limited to submission of
all necessary documents, fees or any other materials,
necessary to obtain building and grading permits for the
Developer Improvements;
3. the
Developer shall have provided reasonable proof to the
Agency that the Developer has obtained a binding loan
commitment or that other funds are available for all of the
Developer Improvements;
4. the
Developer shall have provided, for Agency review and
approval, proof of insurance (certificates) conforming to
Section 3.06 of this Agreement;
5. the
Developer shall have completed its soils and environmental
site evaluation of the Site and shall have provided Agency
with a Certificate of Acceptance regarding suitability of
soil, and the environmental condition of the Site as it
relates to its suitability for construction of the Developer
Improvements, all pursuant to Sections 2.10 and 2.12 of this
Agreement;
6. the
Developer shall have complied with all the requirements of
Section 2.12 of this Agreement, including, but not limited to,
the completion of the Site Remediation, if any;
7. the
Developer shall have completed all necessary acts required
herein for the close of Escrow and the execution of the
Conveyance; and
The foregoing items numbered 1 to 7 inclusive, together constitute
the
"Conditions Precedent to the
Conveyance".
[Section 2.14] Employment Incentive Program.
Pursuant to the Redevelopment Plan, the Agency and City of
Lancaster
(the "City") have entered into an
"incentive program" to enhance job creation
and the economic development efforts of the
City. To assist in providing new
employment opportunities, the Agency is
willing to offer incentives to
businesses by investing a portion of the
revenues typically received as a result
of the development of a new project. In
exchange, the business would agree to
meet specific performance requirements in
order to be eligible for the program.
The Developer represents that the expansion
of the recreational vehicle
manufacturing facility will produce a
minimum of 120 employees to as high as 600
employees which is likely to create
additional job opportunities for the
community upon the project's completion.
Completing the development on the Site
and the operation of this project
pursuant
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to this Agreement is in the vital and best
interest of the City and the health,
safety, morals and welfare of its
residents, and in accord with the public
purposes and provisions of applicable state
and local laws and requirements
under which the Project has been
undertaken.
In consideration for the Developer's improvement of the Site, and
the
expansion of the recreational vehicle
manufacturing facility, and subject to the
execution of an Employment Program
Promissory Note by the Developer
substantially in the form of Attachments
No. 10 and No. 11, the Agency agrees to
offer the Developer 13.98 acres of
land.
The Developer has agreed to provide a total of 600 Annualized
Full-Time
Equivalent Employees (the "Qualifying
Employees") within five (5) years of the
completion of the expansion. For purposes
of this Agreement, years one (1)
through five (5) of the businesses'
operation will be considered as the
"Determination Period" .
The number of persons constituting Qualifying Employees during
any
annual period shall equal the sum of (i)
the number of "Full Time Employees" for
such annual period plus (ii) the number of
"Composite Full Time Employees" for
such annual period, calculated in
"accordance with the following:
(a) In order to qualify as a Full Time Employee of Developer
for the applicable annual period, a person must be a salaried or
hourly
employee, or an individual who is a dedicated (i.e., performing
substantially all services for Developer) independent contractor,
who
is employed at the Site not less than thirty-two (32) hours per
week
for not less than fifty-two (52) weeks (such fifty-two (52)
week
calculation to be inclusive of vacations, holidays, disability
leaves
required pursuant to state law, sick leave and similar benefits
generally afforded employees generally deemed to be full time
employees
by prevailing community standards) during the corresponding
annual
period; to be countable, substantially all hours worked must be
accomplished at the Site on matters for Developer, except that
hours of
a sales person or designated technical or engineering
representatives
whose duties include outside sales or work with other agencies
or
companies, will be includable so long as the sales person or
designated
technical or engineering representatives is based at the Site and
has
substantially all clerical and office support provided at the Site.
An
employee who is terminated during any annual period, and the
employee
who replaces such terminated employee in such position, shall
be
aggregated for purposes of the foregoing calculation. The
Developer
shall provide substantiation to the Executive Director (or his
designee) as to replacement of terminated employees, and the
Executive
Director (or his designee) shall in good faith
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review whether the employees involved are countable for purpose of
the
foregoing calculation.
(b) For purposes of this Agreement, one Composite Full Time
Employee shall be deemed to exist for each one thousand five
hundred
thirty six (1536) hours (thirty-two (32) hours per week times
